Economy

When will we get faster broadband?

SmartCompany /

It could be mid-2009 before the construction of a new fibre-to-the-node broadband network can begin, a leading technology analyst says.

Ovum broadband research director David Kennedy says the tendering process and complex regulatory changes required are likely to take at least until 2009. That could mean just half of Australian households will be hooked up to the new network by 2012 – well into what would be the Rudd Government’s second term.

“It’s a huge agenda and it’s just not realistic to think it will be settled for 18 months,” Kennedy says. “Construction will take us well into 2012 and beyond, so building a broadband network is a long-term project that will extend well into the term of Parliament after this one.”

Once a new communications minister is appointed, the first step they will have to take is establish a tender process to decide who will receive the $4.7 billion in public funds to construct the network.

Kennedy says at this stage Telstra shapes as the most likely winner of any tender process.

“If you were a betting man, you’d have your money on Telstra: they’ve got the financial resources on hand to do it and they own the existing network. By contrast the G9 don’t have those things in place, although no doubt they’ll be moving quickly,” Kennedy says.

Telstra says it could begin laying fibre for the new network in just 48 hours if it is selected as the Federal Government’s partner in rolling out the new broadband network.

“We’re prepared with a plan, with the money and the talent and technology to get the job done,” Telstra’s director of regulatory affairs Phil Burgess told reporters yesterday. “Within 48 hours we can start digging holes.”

But all that assumes Telstra has agreed to the regulatory environment Labor puts in place – something former communications minister Helen Coonan has failed to do over the past year.

Labor communications spokesman Stephen Conroy has signalled he wants a stricter separation of Telstra’s wholesale and retail arms and oversight of the network by the Australian Competition and Consumer Commission.

Conroy will have to twist Telstra’s arm – and cleverly use the lure of access to $4.7 billion in government funding – to reach agreement on the regulatory changes, according to Ovum’s Kennedy.

“If you look at the tactical situation, the only difference between Coonan’s position and Conroy’s is that Conroy has got a lot of money to spend. That’s the only source of extra leverage available, so yes he will be relying on that heavily to leverage to get the right regulatory settings in place,” Kennedy says.

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