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NBN Co lights up on mainland

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Australia’s controversial national broadband network took one small step towards actual deployment with the click of a specially-constructed media-stunt red button officially activating the first mainland site in Armidale, NSW yesterday.

Two years into the project, NBN Co still have some significant hurdles to clear before getting the A$36 billion construction project up to speed.

The network has 600 customers in Tasmania, the first pilot site, and is targeting 800 customers on the mainland by September. The Armidale portion of the network can reach 2500 premises but launched with seven customers. Another NBN pilot site Townsville was slated to be the first city activated, but cyclone Yasi hit the area earlier this year.

NBN Co still needs to finalise a network closure and access contract with Telstra. Despite persistent speculation that the deal is weeks away neither board signed off on the deal.

Under the public terms of the agreement, Telstra will be paid $9 billion to shut down its copper network and make its access ducts and pipes available for NBN’s fibre deployment.

The Australian Competition and Consumer Commission also needs to approve the deal and the details of Telstra’s interim separation of its wholesale and retail businesses.

NBN Co is also yet to name the lucky network construction contractor that would reap around $12 billion for the full-scale rollout. The network operator called off the onerous tender process citing high prices, and leaving 14 potential bidders dangling.

Communications minister Stephen Conroy maintains that the tender process was called off in early April because the companies had tried to “rip off” NBN Co. "That is why they suspended the previous process - because they weren't getting prices that were inside their business plan," he said.

However, it is hard to believe that any vendor would have the temerity to try and fudge numbers placed in front of Alcatel Lucent stalwarts, NBN CEO Mike Quigley and CFO Jean-Pascal Beaufret.

In light of the rip-off allegations, NBN Co has been negotiating deals directly with individual companies in the last six weeks.

The incessant white noise surrounding Quigley and Beaufret’s prior careers at Alcatel during the bribery scandal means the NBN Co executive team will be under more pressure and scrutiny than ever to negotiate a water tight, transparent agreement within budget. ®

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