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Controversy over the National Broadband Network

23 April, 2008
By Allison Orr

The government in Australia has pledged to pour $4.7 billion of taxpayer funds into a National Broadband Network which is expected to provide broadband to 98 per cent of Australians at minimum speeds of 12Mbps.  The plan will also decrease broadband quality and cost differences between metropolitan and rural and remote areas, so that all Australians have access to first-class broadband no matter where they live.  Under the plan, the Government will ensure that people who don’t have access to the new fibre network will have access to the best new fixed line, wireless of satellite technology.

In March, the Minister for Broadband, Communications and the Digital Economy, Senator Stephen Conroy, named a panel of experts to assess proposals to roll-out the national network, planned to be underway by the end of 2008.  The Minister also invited industry and interested members of the public to provide submissions to the panel of experts.

At the beginning of April, the Government released the request for proposal (RFP) documents, but the documents have been largely criticised for the lack of detail, lack of transparency, and for handing complete discretion to government.  One commentator called it "all buzzwords and no substance".  The Federal Opposition has raised concerned about the inclusion of a gag order in the tender which prohibits bidders from discussing it publicly, and Opposition communications spokesman Bruce Billson has said the tender process is "appalling" and that it would be something that Robert Mugabe "would be pleased to call his own". 

Furthermore, there has been concern that the RFP is biased and appears to put Telstra in a very strong position to win the contract, with JP Morgan telco analyst Laurent Horrut remarking that: "If there was any doubt left in the market whether Telstra will win the FTTN [fibre to the node] tender, the reading of the RFP should have removed it." 

Delays in the provision of information are also creating an unfair advantage for Telstra.  Proposals on how to build the network are due to the Minister in 14 weeks, but the design of such a network could take 6 to 12 months, and requires information about existing networks, such as where nodes are placed in relation to houses and the lengths and location of copper wires.  Conroy demanded in March that telcos release this information, but it is still not available from the Minister's office.  This is information that Telstra already has, leaving rivals handicapped in the bidding process.  Members of the Optus-led G9 consortium, which will rival Telstra's bid to build the national network, are deeply concerned and are expected to provide a response within the next week.

Senator Conroy has responded by saying that the RFP documents deliberately avoided being overly detailed and prescriptive to keep the process open to all tenders.  He has assured the industry that the process would undergo close probity scrutiny and would be transparent.  In a speech in Sydney last week, Conroy emphasised his willingness to consider boosting structural reforms in a bid to stop Telstra's rivals pulling out of the tendering process altogether.

David Forman of the Competitive Carriers Coalition has called for all the bids to be publicly examined by the Australian Competition and Consumer Commission.

In other news, researchers at CERN (the European Organisation for Nuclear Research) in Geneva have developed a new network of fibre-optic cables that could render broadband infrastructure obsolete.  "The Grid" is more than 10,000 times faster than a typical broadband connection.

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