April 7, 2009

Australia To Build Massive New Broadband Infrastructure

Australia on Tuesday announced it would build a $31 billion dollar broadband network itself rather than contract the deal.

Prime Minister Kevin Rudd said a new government company would be responsible for building the network, but it would receive support from the private sector.

Rudd said the nation's current network is slowing down business and hurting the local economy. He likened the new massive Web infrastructure plan to the birth of electricity in the 20th century.

"Just as railway tracks laid out the future of the 19th century and electricity grids the future of the 20th century, so broadband represents the core infrastructure of the 21st century," said Rudd.

"Slow broadband is holding our national economy back."

The new network is expected to be up to 100 times faster than the current one.

"It's time for us to bite the bullet on this. The initiative announced today is a historic nation-building investment focused on Australia's long-term national interest," Rudd said.

The nation's existing copper wire network is slower than in most developed nations, meanwhile the rate of Internet services is more expensive than other nations.

According to the plan, which faces parliament approval, Australia's center-left government would sell its majority stake five years after the new fiber-optic network was fully operational.

The prime minister made the surprise decision after a consortium of Australian businessmen and telecoms industry veterans had been widely expected to take over the deal.

"The tender process was enveloped in controversy after the country's largest phone company, Telstra Corp, was dumped from the running in December, after the government panel overseeing bids said its proposal did not fit requirements," according to Reuters.

Telstra chairman Donald McGauchie said he looked forward to constructive talks with government over the construction process, but said the new plan would have little impact on business because it would take years to build.

"None of the national proposals offered value for money to the Australian taxpayer," Rudd said.

He said construction would begin early next year, and 90 percent of Australian homes and businesses would be able to receive a faster connection as a part of the plan. Rudd estimated building the network would take 7-8 years.

He added that the new infrastructure would support up to 37,000 new jobs in the midst of a recession. Analysts estimate the network would add A$37 billion to the national economy.


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