Australian Government to Build the New Broadband Network

By April 7, 2009 Uncategorized No Comments

This morning, Kevin Rudd announced that despite the tender process that has been going on for more than 6 months now, the national broadband network contract will not be going to any of the tendering companies, or any existing company at all. Instead, the Government will oversee the project in partnership with a private company, and the Government will be the majority owner, until completion in 8 years.

Rudd updated his Twitter account this morning, announcing this historic infrastructure decision, to which you can now see the backlash, here.

Optus and the other tendering companies must be furious today. Telstra is likely to be quietly optimistic.

Telstra was the only one of the big providers who submitted a ‘tender’ for the National Broadband Network without spending lots of time and tonnes of money on it – which got them disqualified initially, but in hindsight was a genius saving of time and money now that the tenders are obsolete. Also, Telstra will be allowed to participate in this new idea – an infuriating turnaround which has not taught Telstra a lesson at all.

There are many pro’s and con’s to this idea, and the Opposition hasn’t even had a chance to rebut yet, but my concerns are:

  • A non competitive cost to the consumer that needs to also build in the cost of Government bureaucracy
  • The same Government bureaucracy meaning it is unlikely it will be completed in the 8 year time frame
  • A concern about the proposed filter, and how this will be implemented in a Government owned broadband network
  • The long time frame, and did I mention Government Bureaucracy, which is unlikely to be able to take into consideration upgrades and advances in technology – of which we are already quite far behind
  • The fact that Telstra is likely to get involved, and that they therefore did not get the comeuppance that the rest of Australia thought was due
  • Did they just use the long, expensive tender process to grab the ideas of Optus, Sing-Tel, etc. ? And did Telstra know this?
  • Telstra Mach 3
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