The Federal Opposition yesterday accused the Rudd government of showing total contempt toward the people of rural Australia by cancelling the OPEL project.
The government made the decision based on testing and mapping which showed the network would provide only 72 per cent coverage to the Australian population instead of the mandated 98 per cent.
Instead the government will move ahead with plans to build a $4.7 billion broadband network to be completed within five years.
Shadow Minister for the Digital Economy, Bruce Billson, described the government's decision as disappointing and disturbing.
Billson said Labor has proposed a vague, city-centric fibre broadband network, with no detail or explanation on how this network will deliver high-speed services to remote Australia.
The OPEL network was to utilise a combination of technologies, including state-of-the-art WiMAX and fibre backhaul to deliver broadband services to about 900,000 households over 638,000 square kilometres.
The previous federal government had committed $958 million in public funds towards the project .
OPEL partners Futuris and Optus rejected the government's claim that contract conditions will not be met.
Billson said by its very nature Labor's planned fibre-to-the-node broadband network will result in the duplication of services in and around capital cities.
"This lack of clarity and contempt for the people of rural, regional and remote Australia is all the more disturbing in light of the termination of the OPEL contract," he said.
"It comes at a time when Labor is moving to raid the $2 billion Communications Fund to help buy its way out if its broadband muddle; the fund estbalished by the former government to address telecommunications needs of the bush in perpetuity.
"Interestingly, Telstra has also amped up its anti-OPEL rhetoric."
BIllson said this scandalous redirection of public funding away from areas of service disadvantage demands a full and frank explanation from Broadband Minister Stephen Conroy.
He also demanded answers to 13 questions on the implications of the cancelled deal which is published on the Shadow Minister's Web site.
Ovum analyst, Nathan Burley, said the announcement is significant but not surprising.
"We are more surprised that it took so long," Burley said.
"The new Minister Stephen Conroy had attacked the funding, the award procedure, OPEL coverage claims and its chosen WiMax technology when he was in Opposition.
"Instead, he advocated a Fibre to the Node Network to 98 per cent of Australia households."
Moreover, as soon as the government came into office it launched a $4.7 billion tender for its network.