Senator the Hon Stephen Conroy

Minister for Broadband, Communications and the Digital Economy

DEPUTY LEADER OF THE GOVERNMENT IN THE SENATE

OPEL Networks Funding Agreement not to proceed

The Minister for Broadband, Communications and the Digital Economy, Senator Stephen Conroy, today announced that the OPEL Networks broadband network will not proceed.

OPEL Networks' Implementation Plan, submitted to the Department of Broadband, Communications and the Digital Economy (DBCDE) on January 9, failed to meet the terms of a contract made with the previous Government.

The Rudd Government publicly committed to honouring the contract between the Commonwealth and OPEL. A condition precedent of the contract stated that OPEL would provide coverage reasonably equivalent to 90% of under-served premises identified by the then Department of Communications, Information Technology and the Arts as being within its coverage area.

“DBCDE performed an analysis of the detailed testing and mapping undertaken by OPEL, and determined that the OPEL network would cover only 72% of identified under-served premises,” Senator Conroy said.

“On the basis of DBCDE's assessment, the Government determined that OPEL's Implementation Plan did not satisfy the condition precedent of the funding agreement, and as a result the contract has been terminated.”

The previous Government executed a $958 million Funding Agreement with OPEL Networks Pty Ltd, a joint venture between Optus Networks Pty Ltd and Elders Telecommunications Infrastructure Pty Ltd, for the provision of a broadband network covering identified under-served areas and premises across regional Australia .

A precondition of the funding agreement was that OPEL undertake testing and mapping to substantiate the service coverage set out in its proposal. In particular, OPEL was required to confirm its proposal would provide coverage reasonably equivalent to 90% of under-served premises identified by the Department. OPEL's testing was verified by the Australian Communications and Media Authority and Enex TestLab.

DBCDE undertook a detailed assessment of the testing and mapping contained in OPEL's Implementation Plan. The assessment found that OPEL did not achieve the required service coverage.

“This was the final failed broadband plan produced by the former Coalition Government,” Senator Conroy said.

“The Rudd Government has committed up to $4.7 billion to build a high-speed, open access, fibre based National Broadband Network. The new network will deliver minimum speeds 12Mbps to 98% of Australian homes and businesses.”

“The remaining 2% will continue to receive support through the Government's $95 million investment in the Australian Broadband Guarantee for 2008-2009. In addition to this, at the same time as it issues the request for proposals for the National Broadband Network, the Government will call for comments on policy and funding initiatives to improve access to affordable broadband in these remote areas into the future,” Senator Conroy said.

ends 

Date: 2 April 2008
Contact: Tim Marshall 0408 258 457