Australia - broadband

Broadband plan essential for bush: Libs

The federal opposition has accused the Rudd government of pulling the plug on regional Australia by cancelling the Opel broadband project, as the consortium behind the plan indicated it may pursue compensation.

The government on Wednesday terminated the $958 million Opel contract, signed by the Howard government, saying it fell short of a promised coverage of 90 per cent of under-serviced premises across regional Australia.

The Opel network was a 50-50 joint venture project undertaken by Optus and Elders that was meant to deliver broadband access to an area of 638,000 square kilometres across the country in 2009.

Opposition Leader Brendan Nelson told reporters in Adelaide that regional Australians would suffer in the wake of the decision.

"I think it is important that Australians understand what Mr Rudd's government did yesterday is pull the plug on regional Australia," he said.

Opposition communications spokesman Bruce Billson said Communications Minister Stephen Conroy should have the departmental advice he relied on to make his decision independently assessed.

"From the industry perspective the Opel proponents were outperforming the contract specifications, not underperforming them," he told AAP.

Les Wozniczka, chief executive of Futuris - the parent company of rural services firm Elders - said the consortium partners had not yet decided whether to challenge the government's decision or seek compensation.

"Based on the technical data delivered to the department, the Opel project does meet all of its coverage requirements," he told ABC radio.

"How we fight is to yet to be determined.

"But I think certainly we will demonstrate to all that the joint venture has been invalidly terminated."

Mr Wozniczka said he would have to think carefully about doing business with Labor again, and warned the Opel decision would further entrench Telstra's monopoly.

Farmers in NSW called on the government to review broadband technology in the bush, saying there would be no support for better broadband services in country areas without Opel.

NSW Farmers Association rural spokesman Alan Brown said although the government had committed to building a fibre broadband network for 98 per cent of Australian homes and businesses, he was "very concerned about the remaining two per cent that won't be covered".

"Rural and regional NSW wants to know what mechanisms the government will put in place to ensure this two per cent of the population is not forgotten in this drive for technological advance," Mr Brown said in a statement.

The government says that two per cent will be supported through the $95 million Australian Broadband Guarantee for 2008-2009.

"We are committed to ensuring all Australians, no matter where they live, have access to high-speed broadband," Senator Conroy said.