Subsidy Glitch For Bush Broadband

The Age

Tuesday September 26, 2006

NICK MILLER

Roll-out of broadband internet to the bush could grind to a halt as the Federal Government dithers over details of its subsidy plan, Internode managing director Simon Hackett warns.

Last Friday the Adelaide-based telco launched the final stage of a network using a microwave backbone and wireless technology to bring ADSL speeds and prices to the Coorong region of South Australia. But a similar project in the Yorke Peninsula scheduled for December will be the last of its kind while uncertainty remains over the Government's plans, Mr Hackett says.

Communications Minister Helen Coonan last week released the guidelines for applications for large-scale broadband projects in the Government's $600 million Broadband Connect subsidy program, which will replace the Broadband Connect funding, currently paid on a per-customer basis.

A spokeswoman for Senator Coonan says the old funding is guaranteed only to the end of this financial year.

"There may need to be some transitional funding (after June 2007) but a concrete decision will be made once the successful (applicants) have been decided," she says.

But Mr Hackett says if the funding deadline isn't extended immediately, scores of projects will be put on hold.

Owing to the time it takes to get a project built and then attract customers, it is already too late to start a new one unless and until the per-customer model is extended, he says.

"Yorke Peninsula is the last we can get out safely," Mr Hackett says.

He claims to have four more projects approved by local councils, and promising discussions with other councils, but all depend on the funding continuing.

"It has taken a few years for people to get a hang of (the old funding model) but it is working very well now. It is annoying to get the hang of it only to be cut off at the knees."

Internode's Coorong project began in 2001 with a 34 Mbps microwave link from Adelaide via Murray Bridge to four main towns in the Coorong region. From those towns it built ADSL2+ networks offering download speeds unavailable even in some inner-city suburbs.

The third stage of the scheme, launched last week, uses rings of 16 solar-powered radio towers using Motorola Canopy technology to offer ADSL-equivalent speeds to customers between the towns.

The project was only viable with Broadband Connect money, Mr Hackett says. It pays for the roughly $1000 cost of connecting each customer. Another $400,000 from the State Government helped pay for infrastructure, and the Coorong District Council provided work, money and personnel.

The key to any regional data project is funding the backbone links, says the council's IT co-ordinator, Kym Cleggett. If that is well designed, once capital costs are paid it will be sustainable and profitable.

"People are thrilled with the result," he says. "One family is 50 km from the nearest town and getting 1.5 Mbps broadband at the same price and data allowance as the Adelaide metro area."

Mr Hackett says: "This could be done in a lot of places as long as (the old) Broadband Connect money is kept. We need the grant support to cover the initial costs of the network."

NEXT LESSON

How Broadband Connect works:

? Old model: ISPs are paid for each customer connected before next July. Cost: $278 million (including a move to new model)

? New model: The Government will support a few big infrastructure projects. Cost: $600 million

© 2006 The Age

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