Australian companies wanting to download film and television direct to homes stand to gain enormously from the Australian government’s decision to take over the project to build a major national broadband fibre network.

 

‘This is the single largest infrastructure decision in Australia’s history,’ said Prime Minister Kevin Rudd today at a press conference at Parliament House in Canberra.

‘The government will move ahead and build and operate, in partnership with the private sector, a super-fast broadband network that will be up to 100 times faster than what many people use now.’

About $31bn (A$43bn) will be spent over eight years on the project, which will support about 25,000 jobs, on average each year, for the life of the project.

Not surprisingly, companies such as Quickflix, Australia’s largest independent online movie rental company, moved quickly to congratulate the government on its move.

‘This initiative will be the next major breakthrough in helping us stream feature length movies on a high speed network without interruptions or excessive download charges,’ said founder and executive director Stephen Langsford.

Quickflix has over 35,000 movies in its library and delivers 130,000 DVDs per month that have been ordered over the internet.

The government called for tenders last year from the private sector for the construction and operation of a network but says none of the five bids provided value for money. It has now terminated that process.

Overall there has been a mixed response to the news. Some commentators have expressed astonishment at the notion that such a network can be commercially viable and that the plan does not take enough account of wireless technology.

Others compliment the government on doing what has to be done, and on coming up with a plan that allows the country’s major telecommunications company, Telstra, back to the table - it was excluded from tendering when its bid did not meet the guidelines.

The government will directly invest $3.35bn ($4.7bn) into the project once it has established a company, in which it will be the majority shareholder. It will sell down its interest to the private sector within five years of the network being fully operational.

‘Fast-speed broadband is absolutely essential for our nation’s economic future, for productivity growth, our global competitiveness and for creating jobs for the future,’ said Rudd.

Topics