Promises, promises: Government changes tack on NBN

Stuart Corner
Tuesday, 07 April 2009 08:06

Opinion and Analysis

After his speech at the Atug conference on 13 March Conroy gave a doorstop during which he was questioned at length about the imminent NBN announcement, and during which he gave every impression that the RFP would run its intended course.

He re-iterated the Government's commitment to its March 2007 promise of FTTN delivering a minimum of 12Mbps to 98 percent of the population saying: "This is one of the major election conferences of Kevin Rudd. He talked about it in his first [pre-election press conference] and be talked about it in the last."

Well now it is 100Mbps to 90 percent via FTTH and 12Mbps to the remaining 10 percent via a mixture of wireless and satellite. Not quite the same: satellite has latency and wireless, depending on the technology and topology, might have contention issues that limit available throughput to less than what an FTTN would deliver.

He also said that, after failing to meet the requirements of the NBN RFP, "They [Telstra] cannot get back in the process." Seems to me that now Telstra stands at least equal to and probably ahead of any other bidders in getting back in the process. And that is what the market seems to think. As The Australian reported this morning: "Shares in Telstra hit $3.36 at the opening bell as it rose 4.7 percent, the highest level in more than a month, after prime minister Kevin Rudd announced a new government-created company would build and operate the national network."

And Conroy was asked would the government consider rerunning the RFP? No, he said. "We would be open to serious legal challenge if we decided to rerun the process."

Scrapping it entirely and starting afresh is, of course, not a rerun, and I would have to say long overdue, but it does nothing to compensate for the millions of dollars invested by NBN hopefuls in responding to the RFP. And one would have to wonder what the beancounters at SingTel are saying after having kissed goodbye to the second batch of a few million dollars spend by Optus in responding to Australian Government telecoms tenders that went nowhere (remember Opel?). They might well be thinking that there are other markets that offer greater certainty.