THE Gillard government has promised to bridge the gap between Australia's sluggish internet speeds and those in most wealthy countries by offering basic broad-band services that are expected to cost households less than $60 a month.
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The business plan for the $36 billion national broadband network, published yesterday, gave the clearest signal yet of what the network will cost the 70 per cent of households the government expects to sign up by 2025.
NBN Co plans to sell its slowest service of 12 megabits a second to retail providers for $24 a month, and estimates households will be charged $53 to $58 for the most basic offering.
As well as high-speed internet access, the most basic package is expected to include national and local phone calls.
Broadband played a crucial role in securing independent support for Labor, and the plan said NBN Co would earn more than the government bond rate even though it included a subsidy for rural areas.
But with most households expected to opt for a basic service, the long-awaited document reignited the political debate over the project's economic and social value.
The opposition also attacked the government for a three-year delay in the project, which will be completed by 2021, not 2018 as previously planned.
On publishing the business plan, the Communications Minister, Stephen Conroy, pledged to lift Australia up the ladder in broadband services, after the Organisation for Economic Co-operation and Development this month said prices were higher here than in 26 other developed nations.
While he would not predict retail prices, Senator Conroy said the wholesale-only network would drive prices lower by sparking fierce competition.
Connecting every premises via fibre, wireless or satellite would make Australia a world leader in internet capacity, he said.
''Australia has some of the highest broadband prices in the OECD and some of the slowest speeds. The capacity of the network will make us a world leader.''
But the plan says most consumers will not use the network's full capacity between 2012 and 2028, signing up instead to the basic package.
The Opposition Leader, Tony Abbott, said the government had failed to show the network would be used by households for much other than watching videos, television or gaming.
''We are not against using the internet for all these things, but do we really want to invest $50 billion of hard-earned taxpayers' money in what is essentially a video entertainment system?'' he said, including a $13.8 billion payment to Telstra in the network's cost.
The NBN Co chairman, Mike Quigley, said demand for ''computing power'' had shot up exponentially in recent decades and he could not see why that would not continue.
Besides providing wholesale prices, NBN Co's business plan said the project would make its first profit in 2021 and start paying back taxpayer funds and debt by 2033.
For this to occur, the government must next year finalise a $13.8 billion deal with Telstra that will allow NBN Co to use the telco giant's infrastructure.
While the project is not commercial, the Prime Minister, Julia Gillard, said it would return taxpayer funds ''plus interest''. She called it the ''telecommunications development of our century''.
Responding to the delay in the project, Senator Conroy said this had been caused by a government promise to connect 2 million homes scheduled to be built this decade.
By the next election, due in 2013, NBN Co aims to have passed 1.7 million homes, of which 570,000 are forecast to connect to the network.
Mr Abbott and the opposition broadband spokesman, Malcolm Turnbull, did not say what they would do if, by 2013, more than a million consumers were already connected to the network, though Mr Turnbull has previously pledged not to ''tear up'' the network.
