Australian gridlock raises doubts on broadband project

PHIL REID/The Dominion Post

NO WORRIES: Communications Minister Steven Joyce says Australia's broadband plans have nothing to do with New Zealand.

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Communications Minister Steven Joyce has brushed off suggestions that uncertainty over Australia's broadband policy could have a knock-on effect in New Zealand.

Australian Labor Party leader Julia Gillard has promised to spend up to A$43 billion (NZ$54b) building a National Broadband Network. It would roughly parallel the New Zealand government's $1.35b ultrafast broadband initiative to lay fibre to three-quarters of homes and businesses.

But with the Liberal-led coalition opposed to the NBN and the contest between the parties tied, the fate of the Australian scheme has become a bargaining chip in power-broking talks with a handful of independent MPs.

Some industry experts have suggested fewer applications might be developed for the fibre-optic network in New Zealand, if Australia did not build the NBN.

Sydney-based telecommunications analyst Paul Budde said any change in Australia's broadband policy could trigger fresh scrutiny of the New Zealand initiative. That made it more important that the New Zealand government was "transparent" about the UFB scheme and explained the costs and benefits, he said.

Mr Joyce said the outcome of the Australian election would have no bearing on the New Zealand government's broadband plans.

There is speculation politicians in Australia might seek a middle road between Labor's information super-highway and the Liberal-led coalition's broadband byway, as they seek to escape election gridlock.

The four independents and one Green MP who will decide who next rules Australia have talked up the importance of better broadband and one of the independents, Tony Windsor, has come close to explicitly backing the NBN.

Liberal Party leader Tony Abbott signalled his willingness to rethink his party's policy for a much lesser A$6.3b investment in broadband, but did not indicate how far he might move. "I intend to be very pragmatic, but within the broad policy parameters which we discussed during the election," he said.

The Australian Financial Review reported that with many other issues to be taken into account and the backroom dealing having only just begun, it was not clear the independents' stance and the coalition's new-found flexibility would be sufficient to secure the future of the NBN in its current form under a possible coalition government.

That view appeared to be shared by financial analysts. "There is now greater probability of a change in scope of NBN," said Sameer Chopra, an analyst at Bank of America Merrill Lynch.

Mr Budde said the situation in Australia could go several ways: "One is that the independents see [broadband] as so important that they support Labor and the NBN. Or they could force the Liberals to come back with a better broadband plan. I think there is a middle road. There is a possibility to compromise on the NBN on cost and ... for the Liberals to be a little more progressive."

The Australian Information Industry Association said it was seeking "urgent talks" with the independents to emphasise the impact that abandoning the NBN would have on regional Australia. Chief executive Ian Birks said he believed the coalition was aware its broadband policy had been "undercooked".

Brisbane-based Gartner telecommunications analyst Geoff Johnson believed the NBN had been a vote-winner for Labor, despite its poor showing. "Where Labor had swings against it, it was because the state governments were pretty clearly on the nose, and in Western Australia because of the mining tax."

- © Fairfax NZ News