Conroy: no guarantee of 98 percent NBN coverage

Stephen Withers
Thursday, 27 November 2008 08:01

Business IT - Networking

Stephen Conroy, the Minister for Broadband, Communications and the Digital Economy, has said there is no guarantee that the National Broadband Network (NBN) will cover 98 percent of Australians and businesses. The Minister made breathtaking admission under intense scrutiny from the media.

The opportunity to submit proposals to build the NBN closed yesterday. The government received a total of six proposals (including Telstra's brief non-compliant entry). One of the central requirements of the request for proposals was that the NBN should achieve 98 percent coverage.

During a media conference late yesterday afternoon, Conroy was repeatedly asked about the 98 percent coverage issue.

He initially described that as "the objective" and eventually conceded that it could not be guaranteed.

Some analysts doubt that it will be delivered. Guy Cranswick, an analyst at IBRS, said it is "unlikely that the actual network will actually deliver what was promised, in reach or speed. That is a problem that could have been dealt with by stronger policy planning at the outset."

Conroy went on to say "It's our election commitment to deliver 12 megabits to 98 percent of Australians and businesses. That is clearly the Rudd Government's election promise and we'll deliver on our election promise."

This implies that if the successful proposal to build the NBN does not deliver the promised coverage, the government will take separate steps to provide broadband to marginal areas.

Conroy stressed that the $4.7 billion that the government was prepared to put into the NBN was a maximum figure. One possibility is that if what is regarded as the best proposal falls short of 98 percent coverage, some of that funding will be held back to spend on one or more additional projects to bring the total footprint up to the reach needed to meet the government's promise.

These comments appear to vindicate Telstra's position that 98 percent coverage could not be achieved on the government's budget. The company's proposal would deliver 12Mbps or better to 90 percent of the population.