Telcos failed, so Rudd will build broadband

Rudd Government will build and operate super fast broadband system after rejecting proposals from current telecommunication providers

The Federal Government will establish a new company to build and operate a super fast broadband system after claiming current telecommunication providers are not suited to the task.

Prime Minister Kevin Rudd today ruled out giving an existing telecommunications company the power to upgrade Australia’s broadband system, instead opting for a multi-billion dollar public-private venture.

Rudd says the Government will become a majority shareholder in the company, which, alongside private sector involvement, will spend $43 billion over eight years on the new network. According to Rudd, the proposals from private companies failed to provide value for money.

He says his way will connect 90 percent of all homes, schools and workplaces with broadband services 100 times faster than those currently used.

The network is also intended to connect all premises in Australia with wireless and satellite technologies and support 25,000 local jobs each year.

However, the company is expected to eventually become privatised, with Rudd saying the Government will sell down its interest within five years.

The Government’s plan has received a mixed response, with the Coalition claiming regional Australians have been ignored.

"Regional Australians will miss out or have to wait years longer than anyone else, and at best receive broadband one-eighth as fast as the cities," Opposition spokesman on trade, transport and regional development Warren Truss says.

"The Rudd Government has cemented in place a two-speed economy, leaving 10 percent of Australians out of its plans. This will affect not just people living in remote communities but also the residents of significant regional towns."

The ACTU has backed the Government, however, saying it will pull Australia into the 21st century.

ACTU Assistant Secretary Tim Lyons says the initiative will also have greater benefits beyond faster internet services.

"The Government investment in this project will maximise Australian jobs, encourage business investment, boost consumer demand and confidence and mitigate the worst impacts of the economic downturn," Lyons says.

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