Opel axing raises broadband fears

Opel axing raises broadband fears

The Federal Government's decision to pull the plug on the Opel wireless network has left industry representatives wondering how long regional users will have to wait for high-speed broadband connectivity.

Opel, a joint venture between Optus and Elders, was allocated $958 million for the construction of a WiMax based rural and regional broadband network by the former Howard government. The network was to be made available by mid-2009.

In a statement issued last week, Minister for Broadband, Communications and the Digital Economy, Senator Stephen Conroy, canned the deal, claiming Opel failed to meet contract terms. Although the Rudd Government committed to honouring the contract, this was based on the proviso that the network covered 90 per cent of underserved premises identified by the then Department of Communications, Information Technology and the Arts.

In an analysis, the department found the Opel network would cover only 72 per cent of identified underserved premises.

Optus parent, Singapore Telecommunications, has issued an ASX statement claiming its Opel network was capable of meeting the objectives of the government's Broadband Connect Infrastructure Program. Since the government's announcement last June, Optus claims to have forked out more than $15 million on the project.

The Australian Telecommunications User Group (ATUG) said it was disappointed by the government's decision to drop Opel and questioned how regional areas would now access high-speed broadband. "With ISDN being withdrawn, end-users wind up with a choice between dial-up and NextG, which currently does not offer metro comparable broadband pricing," ATUG stated.

The group also expressed concern over the lack of wireless broadband options available in regional areas, and pointed out satellite connectivity through the Australian Broadband Guarantee (ABG) was costly and limited.

Managing director of South Australia-based ISP Internode, Simon Hackett, also claimed alternative wireless broadband technologies were an integral part of providing services to the bush. The company is rolling out its own WiMax network in rural areas of South Australia.

With the Opel plan dead, the Federal Government will focus on developing its $4.7 billion National Broadband Network (NBN). The fibre-to-the-node (FTTN) network will be developed in partnership with the private sector and aims to deliver a minimum of 12Mbps broadband access to 98 per cent of the country. The remaining 2 per cent of Australians will be supported through the ABG.

The government has established a panel of experts to assess proposals for the NBN, with the intention of putting a tender out mid-year. While the Australian Information Industry Association (AIIA) remains technology agnostic, its CEO, Sheryle Moon, said the organisation hoped the FTTN network would go ahead sooner rather than later.

"If this decision [to can Opel] helps them to execute on that [FTTN network] faster, then it's a good thing," she said. "The government has set a tight timeframe given the complexity and nature of the tender, but seems to be very focused on delivering on that promise."

Although supportive of the NBN, ATUG said it could take considerable time for the network to reach those users. Internode's Hackett also questioned the rollout timeframe. "With the cancellation of Opel, the solution timeframes for the widespread metro-comparable bush broadband have stretched from less than two years for Opel out to 2014 at least. The NBN project has a target completion date of 'five years after commencement', and commencement can not realistically happen before 2009," he said.

Other ISPs have also lashed out at the government's NBN plan, claiming it will limit customer choice in regional communities. iiNet general manager of regulatory affairs, Steve Dalby, said the NBN will leave customers paying higher fees while stifling third-party ISP competition unless the government undertakes a major reform of its regime. According to telecommunications analyst, Paul Budde, the government's expert broadband panel must deal with current problems ISPs face when accessing Telstra's network as well as ensure open access to next-generation FTTN infrastructure.

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