VIC Govt attacks Fed rural broadband scheme

Stan Beer
Sunday, 11 September 2005 10:50

Business IT - Networking

The Victorian Government has attacked the Federal Government's Higher Bandwidth Incentive Scheme (HiBIS), claiming it is seriously flawed, according to a report it commissioned.

HiBIS is a $157.8 million initiative of the Australian Government to provide ISPs with incentive payments to supply higher bandwidth services in regional, rural and remote areas at prices comparable to those available in metropolitan areas.

"The Bracks Government commissioned ACIL Tasman to analyse the potential impact on Victoria of the Federal Government's HiBIS scheme. While the report indicates some positive aspects, it is somewhat alarming that the report indicates areas of real need may be missing out," the Victorian Minister for Information and Communication Technology, Marsha Thomson, said.

"Given recent evidence indicating Telstra's under investment in telecommunications infrastructure in recent years, it is legitimate to be concerned that taxpayer's money is being used - under HiBIS - to fund infrastructure that should have already been provided."

According to the Victorian Government, the ACIL Tasman report reveals that HiBIS may have had a negative effect on future infrastructure investment and competition because:

'¢ half of the new subscribers under HiBIS were in areas where there was enough demand to justify broadband services without subsidy;
'¢ large numbers of metropolitan households cannot access metropolitan equivalent services but are excluded from the HiBIS program; and
'¢ it may not be sustainable for some of the services to be continued once the subsidy is finished.

"In light of these problems, I am particularly concerned that money for proposed programs, such as HiBIS, under Connect Australia could be wasted if they are not designed properly," Thomson said.

"We have already seen more than 60% of the HiBIS subsidy going to Telstra, suggesting that retrospective payments favour Telstra and put smaller competitors at a disadvantage.

"With $1 billion dollars at stake, the Howard Government must address the flaws in these programs to ensure that this money is not wasted and the programs deliver improvements to regional and metropolitan fringe areas that do not have adequate broadband access.

"I sincerely hope that the states are provided with a real opportunity to have input to the design of the programs as committed to by Senator Helen Coonan at the recent Online Council.

"I believe the ACIL Tasman report commissioned by the Victorian Government will be invaluable in informing the Commonwealth Government of the smart way forward.

"If Australia is to keep pace with developments in next generation broadband technology, such as Fibre-to-the-Home, upgrades to higher grade DSL, and innovative wireless platforms, then it is critical to get these programs right."

The ACIL Tasman report is available on the Broadband Access Office at www.mmv.vic.gov.au/broadband/