NBN to roll out to rural areas first

Dylan Bushell-Embling
09 Sep 2010

Australia's NBN will be deployed first in regional centers outside the major cities in a compromise that the project's critics have claimed will cost billions and could undermine its business case.

The Australian Labor party has pledged to build the fiber network to regional areas as part of a pledge to independent MPs to convince them to form a minority government. It also promised price parity between urban and rural areas through cross-subsidies.

As a result, the estimated 89% of Australians living in urban areas will have to wait to access the NBN, and may have to pay higher prices than they normally would to do so.

Prime Minister Julia Gillard has confirmed that the rollout will now prioritize regional Australia, the Sydney Morning Heraldsaid.

The change could undermine the business case for the NBN, which had initially relied on earning money from city services to help fund the rollout to less profitable areas, opposition finance spokesman Andrew Robb toldtheAustralian.

“This new regional roll-in strategy means there will be billions of dollars worth of borrowed taxpayer funds to come through,” he said.

But industry experts Bevan Slattery, founder of PIPE Networks, and Peter Coroneos, chairman of the Internet Industry Association, told the Herald that the government was right in prioritizing regional areas.

Australia's NBN project, which could cost up to A$43 billion ($39.4b), aims to deliver 1Gbps FTTH to up to 93% of Australia's population, connecting the remainder through a wireless network.

This broadband policy was one of the key reasons cited by two independent MPs for choosing to side with Labor this week, giving the party a knife-edge one-seat majority in the parliament.


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