Search continues for broadband policy

03 May 2007

Broadband is a looming political issue in this year's Australian federal election, with the government under fire over the slow pace of national implementation and providers in conflict with regulators over the competition regime.

National carrier Telstra, led by chief executive Sol Trujillo, has spent most of the last year arguing with the government over plans to build a A$4 billion ($3.35 billion) fiber to the node network, but the federal opposition, which leads by a large margin in the opinion polls, has entered the fray with its own broadband policy.

Although at least 50% of Australian households now have services the providers describe as broadband, the local definition is only 256 kbps or faster.

Opposition leader Kevin Rudd recently unveiled his Labor Party's plan for a public-private partnership with a carrier - on a commercial basis - that would generate revenue for the government.

Rudd's plan would cost up to A$9 billion, with A$4.7 billion coming from the government, and offer minimum speeds of 12 Mbps. Labor claims its planned network would take five years to build and reach 98% of Australian homes and businesses.

His policy was endorsed by leading telecom analyst Paul Budde, who said that after ten years of making policy 'on the fly' it was refreshing to see a political party with a strong broadband policy.

Governments in Australia, said Budde, had been like a 'bush fire brigade addressing spot fires, but not the core' with broadband policy.

In opposition to Telstra's planned A$4 billion network, a group of nine competitors - led by SingTel Optus and popularly known as the G9 - is proposing to build its own A$3.8 billion network.

Offering 12 Mbps based on ADSL2+, the network would take three years to build but would only cover metropolitan areas. Telstra says it would not use any G9 capacity if the network was built, a decision which risks its commercial viability.

Telstra, however, is refusing to build its network because it says the government's regulations - administered by the Australian Competition and Consumer Commission (ACCC) - are anti-investment.

'They have not allowed for any aggressive change in terms of infrastructure, which I think is important for the future of Australia,' Trujillo said recently.

The GG9, for its part, is threatening legal action if the government strikes a deal with Telstra to build its network. Led by its largest member, Optus, the group claims that up to A$1 billion in broadband investments would be 'torched' if any deal was done with Telstra.

Optus chief Paul O'Sullivan has called the current broadband debate 'hysterical,' and has called for a short, open tender process for the broadband network, which he said could be completed by September.

In the hot-house pre-election environment, however, the hysteria is likely to continue and no decision on broadband is likely to be made until Australians vote for a new government later this year.

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