NBN Co won't get extra budget following failed tender

Communications minister, Senator Stephen Conroy, has rejected suggestions that the budget for the NBN is too low, following the NBN Co's decision to place its tenders on hold due to its belief the offers were too expensive.

Communications minister, Senator Stephen Conroy, has rejected suggestions that the budget for the National Broadband Network (NBN) is too low, following NBN Co's decision to place its tenders on hold due to its belief the offers were too expensive.

"We support the NBN in seeking to get the absolute best value for Australian taxpayers," he said on ABC television at the weekend.

"There's often a notion that as it's a government project we can squeeze a little bit more [budget] out but NBN Co have a mission from the government, which they are delivering on, to get best value for money."

NBN Co was now looking at a new tenders process, Conroy claimed, but would not comment directly on whether additional funds would be provided to the government owned business.

NBN Co has told Computerworld Australia that any "plan B" partner will not receive the entirety of the fibre build-out budget.

Conroy also commented on claims from Internode boss, Simon Hackett, that the costing model proposed for the NBN would all but wipe out small ISPs under current arrangements.

However, Conroy did not dismiss Hackett's argument or the suggestion that smaller ISPS would be forced to buy from Telstra or Optus rather than directly from the NBN Co.

"I expect there to be changes in the market," he said. "Wholesale aggregators may come into the market, but the complaint being made from Internode is an important contribution and it would have been great for Internode to have made that to the ACCC."

"The critique Simon Hackett at Internode is using that a newly established company will want to access all 121 points of interconnect (PoI). That is an assumption. There are many who will argue that a newly established company will not want to access all of the 121 sites at the beginning. They would want to grow to become a national company. A startup company won't necessarily try to be a national company on day one."

Follow Tim Lohman on Twitter: @tlohman

Follow CIO Australia on Twitter: @CIO_Australia

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