Administration of the Regional Backbone Blackspots Program

Abstract

This report assesses the effectiveness of the Department of Broadband, Communications and the Digital Economy’s administration of the Regional Backbone Blackspots Program, including the establishment and ongoing management of the program. Broadband is considered worldwide to be an important technology that enables the achievement of productivity gains and economic and social development via vastly enhanced communications capacities compared to previous communications technologies. In 2007, the Government announced its intention to facilitate the construction of a National Broadband Network (NBN) which would be available to all Australians. A request for proposals process to construct the NBN was undertaken in 2008, but as the Government considered that the proposals did not provide value for money, on 7 April 2009, the Government announced its decision to terminate the process. At the same time, the Minister for Broadband, Communications and the Digital Economy (the Minister) announced the establishment of a company to build and operate a new, superfast NBN; and also announced a measure to develop a backbone network for broadband where there was a lack of competitive wholesale backbone infrastructure and services. This measure was intended to improve broadband services and to fast‐track the installation of some NBN infrastructure. Details of the measure, the $250 million Regional Backbone Blackspots Program (RBBP), were announced by the Minister on 23 April 2009. Under the RBBP, the Government has funded the construction of a network of fibre‐optic transmission backhaul across Australia, with the Government retaining ownership of the backhaul infrastructure. Backhaul transmission links (also known as ‘backbone’) carry the Internet traffic between urban locations, and competitive backhaul is a critical element in the provision of an affordable broadband service to users. Under the RBBP, the backhaul infrastructure passes through specific regional locations, selected by the Government, where there was a lack of competitive backhaul services, that is, a ‘competitive blackspot’ for backhaul. Competitive blackspots occur where there is a single provider of backhaul infrastructure and, as a result, there is little competitive pressure on the existing provider, and limited opportunity for others, to deliver cheaper or better services. The RBBP network comprises some 6000 kilometres of fibre‐optic backhaul across six states and territories, with service‐ready points of interconnection for 100 regions. There is provision for further access points approximately every 10 kilometres along each backhaul route. Enhancing the competitive supply of backhaul in specific locations via RBBP was intended to assist broadband and telephony providers to improve the range, quality and prices of the services they offered in rural and regional areas. The Government’s objectives for the RBBP were to: deliver an economic stimulus in the short to medium term; encourage better service outcomes for consumers in regional communities, including higher quality services and reduced costs, by improving the supply of backbone transmission services into regional communities in the short to medium term; and put in place key infrastructure in the medium to long term that would contribute to the NBN. This audit assesses the effectiveness of the Department of Broadband, Communications and the Digital Economy so far in meeting these objectives