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Australia to Build $31B Fiber Broadband Network

The Australian government said today it will spend up to A$43 billion ($30.67 billion) to help set up a national broadband network. This is far from a purely socialist undertaking, however, as private sector involvement is expected as well. Regardless of where the funding comes from, the scope of the project is such that it’s going to revolutionize the Australian landscape.

By 2018 at least 90 percent of Australians will have access to speeds of around 100 megabits per second, mostly through a fiber network that will be built by a company formed expressly for this task. The remaining 10 percent will get their broadband via wireless or satellite links. The network is expected to be complete in 7-8 years, but the government plans to sell its stake in the company within five years.

Local incumbent Telstra will face some serious competition and will likely be forced to step up its game. “It’s time for us to bite the bullet on this,” Prime Minister Kevin Rudd said in a statement. “The initiative announced today is a historic nation-building investment focused on Australia’s long-term national interest.”

And while one should take everything a politician says with a pound of salt, in this case Rudd is right. Just like investments in railroad systems and highways transformed societies over the past two centuries, broadband networks can do the same for societies in the new millennium. Exposure to next-generation broadband gives entrepreneurs and engineers a chance to tinker and come up with some interesting ideas. Had it not been for early exposure to broadband in Sweden, Niklas Zennstrom and Janus Friis couldn’t have come up with Skype. And having met some of the entrepreneurs out of Australia, I know it’s only a matter of time before we start seeing innovative ideas bubble up from Down Under. Other countries would be well-advised to a cue from the Aussies!

10 Responses to “Australia to Build $31B Fiber Broadband Network”

  1. Geoffrey

    Glad to see you picked this one up, Om. There is no question that the quality of broadband infrastructure in Australia, even within metropolitan areas, is lacking. However, it is important to note that Australia has a highly dispersed population base. Assuming government involvement in the provison of this infrastructure is desirable, tax dollars would be better spent improving broadband infrastructure within the key centres of economic activity alone. Productivity dividends would be similar, yet the cost to the Australian people would be much lower. Providing 100Mbps connectivity to 90% of Australian households is not commercially feasible and the prospective private sector partners are aware of this.

    I understand your reasoning in terms of the potential for this broadband inititaitve to spur greater entrepreneurial activity, but I don’t agree that broadband speed is a key constraint to more innovative ideas – and more importantly, more world class technology companies – originating in Australia. Rather, the let-the-government-fix-it mentality and the resulting ‘nanny state’ solution so feverishly championed by Rudd are the core hindrances to greater Australian entrepreneurialism.

  2. “Other countries would be well-advised to a cue from the Aussies!” – nothing could be further from the truth, if you read between the lines Conroy is using this to push his agenda of imposing a mandatory internet filter on Australians which we have been bitterly protesting against. Our 3 main ISPs wouldn’t come on board, so he wants to roll out his own network, undoubtably with filtering built in. No thanks!!!

    What we really need down here is more bandwidth not speed, uncapped data plans are something we can only dream of at the moment.

  3. Steve Ducat

    Let’s see if Rudd and his mates (we know it will be his mates who get the contract) can pull this off without messing it up totally.. hopefully some of his mates have IT skills..

    • Steve

      I am not sure what happens — on paper this is a clear and concise plan and very un-politician like. I would say, I am cautiously optimistic for all you my Australian readers