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Telstra requests more funding for provision of broadband services under HiBIS.

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Wednesday 14 September 2005

Telstra requests more funding for provision of broadband services under HiBIS


MARK COLVIN: Telstra is asking the Federal Government for more mo ney, when it comes to its already dominant share of subsidies for providing broadband access to remote or rural parts of Australia. 


Telstra is the main provider in the HiBIS scheme, which is subsidised by the Federal Government.  


While there are other smaller providers, Telstra enjoys a 60 per cent share of the $160 million scheme. But the company says it wants more. 


Alison Caldwell reports. 


ALISON CALDWELL: Since April last year, the HiBIS scheme has been the Federal Government's solution for consumers in rural and remote communities who couldn't afford to access broadband services. 


Under the HiBIS scheme, regional customers can access those broadband services at prices comparable to those available to customers in the cities. 


At a press conference yesterday, the Treasurer Peter Costello was asked about the money for the future proofing fund, and how and when it would be made available. 


Mr Costello named HiBIS as a central component of the Government's plan.  


PETER COSTELLO: We will set side $2 billion and it's anticipated that that will be part of the proceeds of the Telstra sale.  


ALISON CALDWELL: (inaudible) money (inaudible) 


PETER COSTELLO: Well, no there's another element here. There's the HiBIS scheme, I forget the technical name but that's another billion or so dollars which is going to be rolling out.  


ALISON CALDWELL: The Federal Government subsidises the scheme to the tune of $160 million and as recently as July this year, the Communications Minister Helen Coonan announced a further $50 million to keep the scheme going until December. 


Telstra receives the lion's share of the subsidies, around 60 per cent, while smaller competitors soak up what's left. 


Since Monday though, Telstra's been telling its internet service providers and its customers that the money's dried up, and that as of next week, it can no longer pass on the HiBIS subsidy. 


Some internet service providers have told PM , they're suspicious about the timing of Telstra's announcement. 


Those suspicions are shared by the Independent MP, Peter Andren. 


PETER ANDREN: The thing is that if this subsidy goes you can still get satellite with the withdrawal of this subsidy but it's going to cost you $104 for the most basic two way service a month as opposed to $69, and you're going to have to pay for the installation fee.  


So, it is not now an affordable option for the vast majority of people. It's all got a very, very smelly appearance about it because they don't want this information out until the bill is through.  


ALISON CALDWELL: A spokeswoman for Senator Coonan says there are another eight registered satellite broadband providers in the HiBIS scheme and consumers should shop around for the best deal with those providers. 


Perhaps not surprisingly, Telstra isn't referring their customers to those other providers. 


Jim Lawrence Plant runs a small hire business in Little Hartley, near Lithgow in New South Wales.  


He recently approached Telstra about HiBIS. 


JIM LAWRENCE PLANT: When I put this to Telstra it was, oh well if we go on the HiBIS scheme we would be able to do something for you but we can't do that because there's no more money left. I thought, well that's a bit strange.  


ALISON CALDWELL: For its part, Telstra says it should be receiving more than its 60 per cent share of the subsidy.  


Rod Bruem is a spokesman for Telstra. 


ROD BRUEM: Well the money's run out because it was a finite amount of money and there was an artificial ceiling put in there drawn up by the bureaucrats in Canberra who said that Telstra could only have 60 per cent of the money available. That's now been used up. There's still money in the scheme but Telstra can't obtain it.  


ALISON CALDWELL: So you're giving people really, just a week's notice that the money is about to run out. 


ROD BRUEM: Well, we're still hopeful that the Government will come to the party and raise this 60 per cent limit so we can continue to offer subsidies to satellite services and keep upgrading exchanges in rural and regional Australia.  


ALISON CALDWELL: You recorded a $4 billion profit last financial year. Why do you need more money, more of the share?  


ROD BRUEM: Well, since the day the first share in Telstra was sold Telstra has had to behave and act like a company and that is we cannot provide loss-making services. So we think the 60 per cent limit should be changed.  


ALISON CALDWELL: But in the meantime those people who want broadband are going to have to pay the full cost of the satellite installation.  


ROD BRUEM: Well that is a concern to us as well and we can keep going until September 20th and we need to find a solution before then. 


MARK COLVIN: Telstra Spokesman Rod Bruem, with Alison Caldwell.