23/07
20 March 2007

Administrative arrangements for
Australian Broadband Guarantee

The Minister for Communications, Information Technology and the Arts, Senator the Helen Coonan, today provided further details of the $162.5 million Australian Broadband Guarantee.

The Australian Broadband Guarantee builds on the achievements of the highly successful HiBIS and Broadband Connect subsidy programs that have already provided broadband access to over 1 million Australian premises.

The Australian Broadband Guarantee will particularly target difficult blackspot areas to ensure that all Australians can access affordable broadband regardless of where they live.

It will also complement the $600 million Broadband Connect infrastructure program which will rollout sustainable, high speed, open access broadband networks in regional, rural and remote areas of Australia.

Current eligible Broadband Connect and/or Metropolitan Broadband Connect registered providers who are able to rapidly connect customers to new broadband infrastructure, will be offered fast-track interim registration under the new program.

“These arrangements will ensure that all Australians are able to access the benefits of the Australian Broadband Guarantee from 2 April 2007 through contacting one of a number of registered broadband providers.

“Registered broadband providers in regional areas who have recently installed new infrastructure as part of the Broadband Connect subsidy program, and who may not have had a reasonable opportunity to recoup a portion of the costs, will be entitled to claim subsidies for connecting new customers under the Australian Broadband Guarantee,” Senator Coonan said.

The transitional arrangements will also allow existing Metropolitan Broadband Connect providers to roll-over their existing service areas into the Australian Broadband Guarantee and for registered providers to expand into new metropolitan and outer metropolitan service areas from 2 April 2007. These arrangements will enable the rapid roll-out of Australian Broadband Guarantee services in these areas.

From 1 July 2007, further expansion of service delivery areas will occur on a rolling basis to ensure continued focus on areas of unmet need.

“This selection process will provide an orderly process for selecting high quality broadband services to be eligible to receive a subsidy under the Australian Broadband Guarantee. It will also avoid unnecessary duplication between terrestrial broadband providers and remove overlap with the forthcoming Broadband Connect Infrastructure program,” Senator Coonan said.

From 1 July 2008, funds from earnings of the Government’s $2 billion Communications Fund will be available to continue the Australian Broadband Guarantee if required to ensure all Australians have access to broadband regardless of where they live.

Further details of the arrangements are included in the attached industry fact sheet, with full details to be made available in the Australian Broadband Guarantee –Guidelines which will be released for comment on the DCITA Web site on 23 March 2007.

Industry Fact Sheet
Australian Broadband Guarantee Transitional Phase

The Australian Broadband Guarantee will be implemented from 2 April 2007. To ensure a smooth and rapid transition to the new scheme, particularly for existing Broadband Connect and Metro Broadband Connect registered providers, transitional arrangements will be put in place to operate from 2 April until 30 June 2007.
These transitional arrangements are also designed to enable rapid registration of providers and the offering of Australian Broadband Guarantee services to eligible premises across Australia in the immediate future.

This fact sheet outlines the key transitional elements from the industry perspective, particularly current Broadband Connect and Metro Broadband Connect providers. These transitional arrangements should be read in the context of the draft Australian Broadband Guarantee Transition Guidelines, which will also be released in the immediate future.

What are the transitional arrangements for Broadband Connect providers?

Registration of providers

• Broadband Connect Providers will be offered a funding agreement under the Australian Broadband Guarantee until 30 June 2007, provided they meet the following conditions:
• • They are offering retail services via either their own “last-mile” infrastructure or via satellite; that is, they are not wholesalers or simply re-sellers of other end-to-end wholesale services;
  • They can demonstrate that they have the ability to connect customers in the transitional period; that is, they have eligible terrestrial infrastructure in place or can offer satellite services immediately;
  • The services being offered are metro-comparable, taking into account the new Australian Broadband guarantee rates of $1000 (ex GST) for terrestrial services and $2500 (ex GST) for satellite services; and
  • They have complied satisfactorily with their obligations under their Broadband Connect funding agreement.
• ‘Fast-tracking’ registration in this way will enable rapid commencement of connections and claims under the Australian Broadband Guarantee from the commencement of the program on 2 April 2007, ensuring a seamless transition for consumers, while allowing a full assessment of transitional providers and other applicants in the lead-up to the full phase of the program from 1 July 2007.

Terrestrial service areas in regional areas

• Terrestrial service areas in regional areas (Broadband Connect areas) will be limited in the transitional 3 months to areas where broadband ‘last mile’ infrastructure has been implemented by a registered Broadband Connect provider this year, assessed on a case-by case basis according to the following criteria:
• • The areas must have been registered with the Department under Broadband Connect as Mapped Service Areas in 2006- 07, or be included in applications to vary service areas submitted before 31 December 2006;
  • There must have been no claims submitted under Broadband Connect for the areas prior to 1 January 2007;
  • Providers must demonstrate that relevant ‘last mile’ infrastructure is material and new, and is not simply an enhancement of infrastructure deployed prior to 1 January 2007; and
  • Providers must demonstrate that the infrastructure is in place and would allow connection of customers and claims to be made immediately on registration of the service area.
• All Service Areas registered in regional areas under the transitional phase will cease on 30 June 2007.
• The exclusivity arrangements for terrestrial providers will not be fully implemented until 1 July 2007. Until then eligibility of premises for terrestrial Australian Broadband Guarantee services will be assessed based on these limited registered service areas. However, in these areas, if a metro-comparable broadband service is available from a provider other than an Australian Broadband Guarantee provider registered for that area, the premises will not be eligible for an incentive payment.
• • This will mean that terrestrial incentive payments will be limited to premises where the only metro-comparable service available is an Australian Broadband Guarantee service registered for that area.
  • The proposed definition of ‘metro-comparable service’ under the Australian Broadband Guarantee will be included in the draft Transitional Guidelines, to be released later this week.

Satellite providers

• The rules applying to satellite providers will be fully operational from the beginning of the transitional phase, that is:
• • Satellite services will attract an incentive payment under the program where no metro-comparable terrestrial broadband service is available to the premises, either through a registered Australian Broadband Guarantee terrestrial service or a non-registered metro-comparable service.

What are the transitional arrangements for Metro Broadband Connect providers?

• Metro Broadband Connect Providers will be offered a funding agreement under the Australian Broadband Guarantee until 30 June 2007, provided they meet the following conditions:
• • The services being offered are metro-comparable, taking into account the new Australian Broadband guarantee rates of $1000 (ex GST) for terrestrial services; and
  • They have complied satisfactorily with their obligations under their Metro Broadband Connect (or Broadband Connect) funding agreement.
• Recognising the objective of encouraging rapid roll-out of new infrastructure to cover metropolitan broadband blackspots, the following special arrangements will apply for metropolitan areas:
• • All service areas (rather than certain Mapped Service Areas) of existing Metro Broadband Connect providers who are registered under the Australian Broadband Guarantee can be registered;
  • Any registered Australian Broadband Guarantee Provider may apply for new service areas in metropolitan areas (on a non-exclusive basis) from 2 April 2007, provided such areas can be enabled quickly and services offered in the transitional phase; and
  • Any service areas that remain exclusive on 1 July 2007 could be re-registered under the full Australian Broadband Guarantee program, subject to the proposed processes to select new service areas (to be published in the draft Transitional Guidelines later this week).