Government spends $43 billion to establish National Broadband Network

Tenders thrown out with Government going it alone through new company

The Federal Government will establish a new public company to build the next-generation National Broadband Network (NBN) across Australia.

In a press conference this morning, Prime Minister Kevin Rudd said it would spend $43 billion to create a new wholesale-only fibre optic network across Australia. The government-majority owned National Broadband Network Corporation will work in partnership with the private sector over the next 7-8 years to build the network across regional and capital cities.

The network will provide access of up to 100Mbps to end users and cover over 90 per cent of the nation.

Prime Minister Rudd said it then planned to sell-off its stake in the operations within five years of it being established. The decision represented a historic moment in Australia’s history, and was the largest infrastructure project ever laid out, he said.

“This injects a new player into the broadband market… a national, wholesale, open access broadband network,” he said. “It sets up a path for economic recovery and building a 21st century economy withy 21st century jobs.”

Rudd claimed the network would provide 25,000 jobs every year during the lifetime of the project, and up to 37,000 jobs during its peak. It will also add $37 billion to GDP, he said.

The decision follows month of negotiations with private consortiums under the NBN tender.

“We have tested the market but that has not produced an outcome which makes the best use of the taxpayers’ dollar,” Rudd said. “Right now we are dealing with a capital constrained world. We have acted on the advice of an expert panel... otherwise we wouldn’t be here.

“There were two options – sit back, or get on and do it. And we intend to [get on and] do that.”

The first step will see the Government outlay $250 million and build a fibre optic backbone in regional Australia, Senator Stephen Conroy said.

“The conditions are that it is open access and wholesale only,” he said. “We will have an implementation study over the next eight or nine months to work out the issues and challenges.”

The Government will also work with the Tasmanian Government on its proposal for high-speed services in that state and hoped to get things rolling by mid-year.

“We’re negotiating with the Tasmanian Government over the next 24 hours as to the rollout… we believe they are ready to go,” Conroy said.

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