At a Canberra press conference on Tuesday morning the Australian government said it had not found any of the bids for a National Broadband Network satisfactory. Bidders such as Acacia, Optus, and Axia Netmedia, were rejected. Instead of accepting an NBN bid, Prime Minister Kevin Rudd said the federal government would do it themselves, in partnership with the private sector.
Australia’s government now plans to build a nation-wide, A$43 billion ($31 billion) high-speed broadband network in partnership with private industry.
The goal is to get 90 percent of homes and business up to 100Mbps speeds with a fiber optic connection, with 12Mbps wireless / satellite for the rest.
The Australian government will be the majority shareholder. The network will be operated separately from retail telcos such as Telstra and Optus. It will be Australia’s biggest public-private partnership. The government would sell its majority stake five years after the network, although the plan requires parliamentary approval.
Prime Minister Kevin Rudd said on Tuesday the government would ask private companies to join the country’s biggest infrastructure project to deliver internet services up to 100 times faster than the current copper telephone network.
In April 2008, the Minister for Broadband, Communications and the Digital Economy, Senator the Hon Stephen Conroy, announced the release of a Request for Proposals to roll out and operate a new, open access, high-speed, fibre-based broadband network.
The project will be a challenge due to the country’s vast distances and inhospitable terrain. The fibre-optic network was central to Rudd’s winning election campaign in late 2007.
A consortium comprising wealthy Australian businessmen and telecoms industry veterans had been favorite to win the project ahead of Optus, which is owned by Singapore Telecommunications, and Canada’s Axia NetMedia.
The country’s largest phone company, Telstra, was dumped from the running in December, after the government panel overseeing bids said its proposal did not fit requirements. Thanks to the decades-long monopoly of Telstra, and the failure of previous governments to plan for a broadband network, most Australians still use dial-up services to access the Internet.
Rudd said the new network would be built with money from a A$20 billion national infrastructure fund and the sale of bonds, following an initial government investment of A$4.7 billion. Private sector investment would be capped at 49 percent. The network would operate on a wholesale-only, open access basis, separating retail operations and allowing Optus, Telstra and other companies to build services into the system.
Rudd estimated building the network would take 7-8 years, presenting a risk that voters could be alienated by the long delay as the government faces re-election late next year.
Axia NetMedia Corporation announced today that the Government of Australia has terminated its National Broadband Network Request for Proposal (“RFP”) process and thus will not be awarding a contract to any of the qualified bidders under that RFP process. Axia provides Real Broadband IP services and operates no conflict Open Access Next Generation Networks. Axia has networks in Alberta, France and Singapore as well as Australia.