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Australia vs. U.S. in broadband stimulus plans

Australia and the U.S. see broadband as important, but the two countries have different ideas of how to build those networks and stimulate their economies.

When it comes to broadband, Australia isn't messing around.

Earlier this week the Australian government announced a new plan to build a new fiber-optic communications network that will cost the government about 43 billion Australian dollars or roughly $31 billion in U.S. money. The new national network, which will be built by a yet-to-be-named state-controlled company, will provide broadband speeds of 100 Mbps to about 90 percent of Australian homes, schools, and businesses by 2018. The other 10 percent will get broadband access via wireless technology.

The new network will be fast enough to allow Australians to watch multiple high-definition videos at once and download loads of other multimedia content all at once. Only a small number of countries today offer speeds that high to consumers, including South Korea, Japan, France, and Germany.

Prime Minister Kevin Rudd said the government is taking this aggressive step because he believes a fiber-optic network is essential to stimulate the ailing economy. He also believes it will increase Australia's productivity and competitiveness with respect to other nations.

U.S. President Barack Obama also believes that broadband is crucial to keeping America competitive in the world. The U.S. has consistently fallen short of other nations when it comes to broadband. A year ago, the International Telecommunications Union ranked the U.S. 15th in the world when it comes to broadband. Australia was ranked 12th.

Even though both countries see broadband as an important way to stimulate the economy and a good investment for future productivity and innovation, they are going about it in very different ways. Instead of controlling the deployment of new telecommunications infrastructure, the U.S. plans to provide funding to the private sector as well as local and state governments to build infrastructure and invest in new services as they see fit.

Congress has allocated $7.2 billion as part of its overall economic stimulus package to increase broadband penetration and coverage and to provide faster, more affordable service to as many Americans as possible. As part of the new legislation, the Federal Communications Commission has also been tasked with coming up with a national broadband policy.

On Wednesday, the FCC opened up discussion to help establish a national broadband policy. While the stimulus investment is certainly a start, the U.S. government has made no strides to build infrastructure itself. Instead, it will rely on a public/private partnership to improve the national broadband network.

It will be interesting to see which approach proves to be most successful. Will Australia move more quickly up the ladder of productivity and technological innovation due to its investment in broadband? Or will the government sink billions of dollars into a project that is unsustainable in the free market?

On the flip side, will the approach taken by the U.S. really improve broadband access, penetration and speeds? Or will the investment only boost already affluent and broadband-rich regions, such as large cities? I'm very interested to hear what readers think about Australia's plans with respect to what the U.S. is doing, so please share your thoughts in the comment section below.