Monday, April 6, 2009

Australian Government to Build National FTTP Wholesale Network

The Australian government rejected all five bids for the next generation national broadband network and instead announced plans to build the A$43 billion (US$30.7 billion) FTTP network itself.

Under the Rudd Government's new national broadband network every house, school and business in Australia will get access to affordable fast broadband. The plan calls for the government to set-up a new entity that would install fiber connections to ninety percent of Australian homes and businesses over an eight year period. The network will deliver wholesale services of 100 Mbps or better. Locations outside the fiber footprint would be served by high-speed (12 Mbps) wireless connections. Private investors could take a minority stake in the project and after five years the government would sell its majority stake. The Government's investment in the company will be funded through the Building Australia Fund and the issuance of Aussie Infrastructure Bonds (AIBs), which will provide an opportunity for households and institutions to invest in the national broadband network.

Australia's Prime Minister Kevin Rudd described the initiative as the largest infrastructure project ever undertaken by the Australian government.
The project is expected to create 25,000 and possibly as many as 37,000 jobs during the peak of installation.

The Government said it decided to terminate its NBN Request for Proposals (RFP) process on the basis of advice from the independent Panel of Experts that none of the national proposals offered value for money. The Panel noted the rapid deterioration of the global economy had a significant impact on the process.

The project is also expected to represent the biggest reform in the nation's telecommunications in two decades because it delivers separation between the infrastructure provider and retail service providers. The aim is for better and fairer infrastructure access for service providers, greater retail competition, and better services for families and businesses.

The next steps for the Government include:

  • Commence an implementation study to determine the operating arrangements, detailed network design, ways to attract private sector investment -- for roll-out early 2010, and ways to provide procurement opportunities for local businesses.

  • Fast-track negotiations with the Tasmanian Government, as recommended by the Panel of Experts, to build upon its NBN proposal to begin the rollout of a FTTP network and next generation wireless services in Tasmania as early as July--an immediate start on a nation-wide investment.

  • Implement measures to address 'black spots' through the timely rollout of fibre optic transmission links connecting cities, major regional centres and rural towns - delivering improvements to telecommunication services in the short term.

  • Progress legislative changes that will govern the national broadband network company and facilitate the rollout of fibre networks, including requiring greenfields developments to use FTTP technology from 1 July 2010.

  • Make an initial investment in the network of $4.7 billion.

  • Commence a consultative process on necessary changes to the existing telecommunications regulatory regime.
  • In December 2008. Telstra was excluded from any further consideration in Australia's National Broadband Network (NBN) Request for Proposals (RFP) process. Senator Stephen Conroy, Austalia's Minister for Broadband Communications and the Digital Economy, said Telstra "excluded itself" from the NBN process for failing to submit a Small and Medium Enterprise (SME) Participation Plan, which is one of five mandatory requirements of the RFP. He also confirmed that the five proponents who have made public statements about their participation in the process Acacia, Axia, Optus-Terria, TransACT and the Tasmanian Government have all met the requirements and conditions for participation.


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