From
http://business.theage.com.au/telstr...0403-238r.html
SIR Humphrey famously remarked in Yes Minister after Jim Hacker sought his
advice: "Minister, if you really want to tell them that, you can, but it
would be a very brave decision on your part."
Well, Communications Minister Stephen Conroy has been brave and canned the
billion-dollar contract with Opel, the Optus-Elders joint venture that
planned to deliver broadband in rural areas using fixed and wireless
technologies.
The contract was awarded in the middle of last year by former minister Helen
Coonan on departmental advice that Opel's ambitious plans, involving
unproven WiMAX radio technology, could solve the problems of rural broadband
access.
That Conroy has cancelled the contract should come as no surprise. It was
awarded even before Opel had wireless spectrum and the network plans and
coverage claimed can only be described as extraordinary.
Quite how Opel could have submitted a business plan that warranted $1 billon
in government subsidy when it didn't have spectrum and the necessary radio
plans remains a mystery. It was only in January that Opel secured spectrum
after paying Austar $65 million for wireless licences that are not suited to
widespread rural coverage.
In return for $1 billion, Opel promised to match the funding, largely in
kind, which meant Elders shop fronts and existing Optus mobile phone sites
and towers. And it was questionable how much of the money was to be spent on
delivering new rather than duplicate infrastructure, as part of the Opel
funding seemed destined to replicate Telstra links that Optus now rents for
commercial mobile phone services in rural areas.
With Telstra keeping the pressure on by pursuing the tender award through
the courts, Conroy could no longer ignore Opel's fanciful claims, especially
as they started to confront benchmarks for rolling out the network. Based on
a departmental assessment in January, it appears Opel could only deliver 75%
of their promised radio coverage.
Nor, given that the expert broadband panel has begun work on awarding the
$4.7 billion subsidy for a national fibre-optic high-speed network, could
Conroy ignore the overlap between the Opel network and his own rural
broadband plans.
But while Conroy might feel pleased that his earlier criticisms of Opel have
been vindicated, he will have his own policy demons to confront as his
expert group's work progresses. If the Opel plan was based on a fiction,
that WiMAX operating at high frequencies could serve rural areas, his own
broadband plans based on a competitive tender are also badly flawed.
Only Telstra can build a national network within the subsidy on offer. Quite
how Conroy confronts the obvious contradictions and problems in his own
policy will test the mettle of the Sir Humphreys in his own department and
demonstrate just how brave the minister really is.