Australia - broadband contract cancelled

Conroy knocks Opel broadband plan

THE Federal Government says it terminated a $958 million contract to build a rural broadband network because the project fell short of delivering coverage to 90 per cent of under-serviced premises.

Broadband and Communications Minister Stephen Conroy has announced today the cancellation of a contract the former Howard coalition government signed off for the Opel WiMAX network, a joint venture project by Optus and Elders.

Senator Conroy said his department had determined the network would cover only 72 per cent of "identified under-served premises" and so failed to meet the terms of the contract.

Opel's contract required it to provide coverage to 90 per cent of under-served homes, he said.

"On the basis of (the department's) assessment, the Government determined that Opel's implementation plan did not satisfy the condition precedent of the funding agreement, and as a result the contract has been terminated," Senator Conroy said.

Senator Conroy said Opel submitted its implementation plan in early January.

The network was to provide broadband coverage for 638,000 square kilometres across all states and territories.

"This was the final failed broadband plan produced by the former coalition government," Senator Conroy said.

He said the Rudd Government had committed $4.7 billion to build a high-speed, open access, fibre-based national broadband network.

"The new network will deliver minimum speeds of 12Mbps to 98 per cent of Australian homes and businesses," Senator Conroy said.

He said the remaining 2 per cent would continue to receive support through the Government's $95 million investment in the Australian Broadband Guarantee for 2008-2009.