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NBN receives funding boost in Federal Budget

The National Broadband Network (NBN) received a funding boost in last night’s Federal Budget, with the Rudd Government allocating additional funding to implement the NBN through to 2014.

NBNco DBCDEThe Federal Government will provide $15 million over four years through 2013-14 for the continued support of the implementation of the NBN. Of this, $12.9 million will be provided to the Department of Broadband, Communications and the Digital Economy (DBCDE) and $2.1 million to the Department of Finance and Deregulation.

The funding announced is being provided to fund policy and regulatory support for the NBN rather than direct investment in the NBN itself, with funds allocated to oversee the contract with Nextgen Networks to construct the Regional Backbone Blackspots transmission links as well as manage the Government’s shareholding in NBN Co Ltd.

In addition, the Government will provide $24 million over five years to the Australian Competition and Consumer Commission (ACCC) to establish and administer the proposed regulatory arrangements for the National Broadband Network. Funding for the ACCC for regulatory oversight over the NBN is provided for the ACCC to administer the NBN Co regulatory framework, including assessment of price and non-price terms and conditions for access. With funding also allocated to the ACCC to report to Government on the regulatory issues surrounding NBN Co and issues surrounding competition within the provision of broadband services by competitors and resellers.

The cost of this measure will be fully recovered by the Australian Communications and Media Authority from annual carrier licence charges collected under the Telecommunications (Carrier Licence Charges) Act 1997.

The 2010-11 Budget also makes what is deemed ‘appropriate provision’ for the roll-out of NBN, which will include up front capital costs and significant planning costs through NBN Co.

The Government plans to respond in the coming months to the NBN Implementation Study which will give a clearer picture over what the NBN implementation costs will be in the coming years. The Government expects the NBN to generate a rate of return on its equity investment sufficient to cover its cost of funds.