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Red tape blamed as ISPs snub rural incentive

Red tape blamed as ISPs snub rural incentive

The Higher Bandwidth Incentive Scheme (HiBIS) may give rural Australians increased and affordable access to broadband, but some Internet Service Providers (ISPs) feel left out of the picture.

Telstra has applied for 60 per cent of the $107.8 million government grant aimed at increasing broadband services for people in regional, rural and remote Australia. This is the maximum amount allowed to any single ISP.

But some of Telstra’s rivals have suggested that the HiBIS grant is skewed towards supporting Telstra, rather than customers in the bush. They have cited red tape and an inability to fund the required infrastructure as reasons for not applying. So far only WA’s iinet has applied for the grant.

One ISP which won’t be applying for HiBIS funding is Netspace.

Managing director, Stuart Marburg, said that while the grant scheme was a boon for regional customers, it would largely be Telstra’s show.

“Most of the funding is in laying out infrastructure, which is costly even with financial assistance. Most ISP’s just don’t have that kind of money available,” he said.

Pacific Internet managing director, Dennis Muscat, said the amount of red tape involved in applying for the grant was horrendous, and smaller ISPs did not have the resources to deal with it.

“We are committed to the bush and our broadband barometer shows that country areas are crying out for higher bandwidth services — there’s a 50 per cent broadband penetration in cities compared with 20 per cent in non-metro regions,” he said.

“However, we won’t be seeking any HiBIS assistance. We haven’t got the luxury of our own regulatory department of red-tape experts.”

Muscat said rather than applying now for a slice of the grant, Pacific Internet would wait to see what opportunities arise from the rollout and possibly seek some kind of subsidy at the back-end.

Although Muscat was happy that regional and rural customers would have increased broadband access, he questioned the intent of the scheme.

“It makes me wonder whether the red tape is actually a benefit for Telstra because they are the only ones already set up to deal with government,” he said. “I’d have to ask whether the scheme is designed to encourage investment and competition in telecommunications as is claimed, or just purely to give Telstra the push it needs to extend services into regional Australia.”

But a spokesperson for Telstra rejected the notion that the grant would translate into a free ride for the incumbent telco. He said the scheme was open and available to any ISP who wanted to apply.

“Telstra makes no apology for going after funding that benefits its rural and regional customers,” the spokesperson said. “The guidelines specifically open the way to other providers by limiting Telstra’s share of the scheme to 60 per cent.”

Managing director of iinet, Michael Malone, agreed that applying for a HiBIS grant was complicated.

“The form is 35 pages, and the accompanying notes are 90 odd, but we are not dealing with a simple matter,” he said. “Of course, it will require a lot of paperwork.”

iinet will be applying for some of the grant in order to lay infrastructure in areas that would not otherwise be viable in Western Australia, the Northern Territory and regional Victoria.

“Our customer base is regional Australia, and with the HiBIS money we will be better able to deliver reliable and fast service to these areas,” Malone said. “Although costly and time consuming, applying for HiBIS funding is ultimately a worthwhile process for us.”


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