The previous Government’s 18 June 2007 announcement that it would give close to $1 billion of taxpayers’ money to SingTel Optus and Elders (OPEL) to duplicate broadband infrastructure and services that Telstra already provides has been widely criticised.

And rightly so. This funding decision is highly questionable for these important reasons:

1. It is one thing to artificially manufacture competition and welcome foreign investment into Australia, but this is a gift of a massive sweetener to a foreign owned company that has no track record of delivering services in the bush.
    
2. The Government is paying for technology that is not proven, will not provide the speeds that are being claimed, has serious coverage issues, and doesn’t meet the requirements of the people it is supposed to serve.
    
3. It is a massive duplication of services that already exist. The Government is wasting $958M of tax dollars to build a wireless broadband network when Telstra’s Next GTM network - a superior technology to OPEL’s WiMAX already covers 98.8% of the population. See for yourself:
   
   
   In addition the funding for ADSL2+ in regional and outer metro exchanges does not appear to provide ADSL to people who don’t already have it. Telstra believes that all the locations receiving funding for ADSL2+ already have ADSL and, in fact, many of them already have ADSL2+ or are linked to exchanges that are enabled for ADSL2+.
    
4. The tender process was conducted in a legally questionable manner. At some stage during the process, the tender amount increased by almost 60%, but only the winning bidder seems to have been told of this increase. The original tender was for $600M but the Government increased the amount to $958M however the only bidder who seems to be informed was SingTel Optus - OPEL.
    
5. Is this funding really a back-door way to fund SingTel Optus, through OPEL, to build a competing 3G network to Telstra’s Next G™ network on the cheap? With its $958M of taxpayer money, SingTel Optus - OPEL is getting 1,361 government-funded mobile base stations and thousands of kilometres of transmission links. No one in the Government has ruled out allowing SingTel - Optus to use this taxpayer funded sites and links for their 3G network in direct competition to Telstra’s shareholder funded Next G™ network.
    
6. What is OPEL contributing to this network? The Minister has claimed that OPEL is contributing more than $900M of its own money. However Telstra believes the number is actually only $200M. The remaining $700M is ‘funny money’ made up of in-kind subsidies that SingTel Optus is providing OPEL to use its existing network.