Australia bets big on broadband future | Connect Asia

Australia bets big on broadband future

Australia bets big on broadband future

Updated 18 January 2012, 20:15 AEDT

After the Australian government's surprise multi-billion dollar national broadband announcement, the question is expensive folly or a visionary act of infrastructure investment? If it happens, the government says it'll be the largest infrastructure project Australia's ever seen.

But critics say it's a fiasco and the costly imagining of a self-aggrandising prime minister.

Presenter: Linda Mottram, Canberra correspondent

Speaker: Kevin Rudd, Australia's Prime Minister; Malcolm Turnbull, Liberal leader; Paul Budde, telecommunications analyst; David Kennedy, telecommunications analyst

MOTTRAM: Australia's Prime Minister Kevin Rudd in full visionary flight.

RUDD: Just as railway tracks laid out the future of the nineteenth cenury, and electricity grids, the future of the twentieth century, so broadband represents the core infrastructure of the twenty-first century.

MOTTRAM: Though it didn't impress Mr Rudd's opponent, the Liberal leader Malcolm Turnbull.

TURNBULL: I think he has become intoxicated with his own magnificence.

MOTTRAM: Beyond the imagery, Mr Turnbull - a highly successful barrister and merchant banker in a previous life - has more fundamental concerns.

TURNBULL: What we are talking about here is 43 billion [Australian] dollars of taxpayers' money, all of which will be borrowed, all of which will be committed to a venture where the Prime Minister has been unable to provide one skerrick of financial information to justify a 43 billion dollar investment.

MOTTRAM: Forty-three billion dollars is what Kevin Rudd estimates it will cost to build Australia's new national broadband network, through a 51 per cent public owned company. The aim is to reach 90 per cent of Australian households and businesses using optical fibre all the way. It'll take eight years to build, the government says. And it'll improve internet speeds in Australia by up to 100 times - vital since Australia is at the bottom half of oeCD countries on broadband takeup, well behind major competitors like Japan, Singapore and South Korea. It was a surprise announcement. What was expected was the name of the winner of a 10 billion dollar private tender to build the network more quickly and cheaply using optical fibre only to a local box called the node, then carrying the signals to homes and businesses using old-fashioned copper wire - the so-called fibre-to-the-node. But with the impact of the global financial crisis, no bidder could do even that much. So 20 months on, the government has abandoned the plan.

Telecommunications analyst Paul Budde says its turned out to be a rich opportunity.

BUDDE: Forget about fibre-to-the-node which is a half way house, straight go into fibre-to-the-home then you start future proofing the future of Australia and that makes much more sense.

MOTTRAM: Fellow analyst, David Kennedy, agrees.

KENNEDY: This network will be in place for many, many years. It will be the backbone of Australia's information economy for decades.

MOTTRAM: Another driver in the government's decision was the role of Australia's obstructive, privatised telco, Telstra, which refused even to put a full bid in for the broadband tender. Paul Budde again.

BUDDE: Telstra obstructed the whole situation, every year after year after year. So in the end Telstra manoeuvred itself totally out of the plans and that actually provided the government with a unique opportunity to start with a clean plate.

MOTTRAM: There are other questions though. The Australian Financial Review newspaper has quoted a Goldman Sachs JB Were analysis as saying the clear, sustained and accelerating shift to wireless poses significant risk to any future demand for broadband services.

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