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Australia's broadband plan too expensive, report finds

Fox Business News | February 9, 2011 | Rebecca Thurlow

SYDNEY -(Dow Jones)- Australia’s plan to build a high-speed Internet network across the country will cost taxpayers 24 times more than South Korea’s broadband plan but deliver services at one tenth the speed, according to a report by the Economist Intelligence Unit released Wednesday.

Australia’s minority Labor government, led by Prime Minister Julia Gillard, plans to build a 41 billion Australian dollar (US$40.47 billion) fiber network to deliver high speed broadband to homes across the vast nation. The rollout would mark the costliest infrastructure project in the country’s history and has been criticized by the opposition National-Liberal coalition for being too expensive and not relying heavily enough on private sector funding.

The EIU report says Australia’s plan to spend 7.6% of annual budget revenues on its National Broadband Network is “colossal” and “exorbitant”. By comparison, South Korea plans to spend less than 1% of annual budget revenues to realize its broadband goals while encouraging the private sector investment, the report says.

A spokeswoman for Australian Communications Minister Stephen Conroy defended the government’s investment in the network and said comparing Australia with Korea is “like comparing apples to oranges”.

Investment in Australia’s road, rail, telecommunications and utility infrastructure faces vastly different factors than countries such as South Korea,” she said.

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