That being the case, the Government has upped the ante, declaring that it will do the job itself. Not only that, it has announced that the network will be able to carry up to 100 megabits a second, much faster than the 12Mbps system it had called tenders for. Better again, the new network will be fibre-to-the-home instead of to the node, meaning much faster information transfers for households and much greater capacity for future system upgrades.

Aside from anything else, this is smart politics. After years when government investment in infrastructure was considered unfashionable, the global financial crisis has made publicly funded projects popular again. Indeed, the crisis has probably meant that most private organisations couldn't have managed the $47 billion project even if they'd wanted to. Under the Government's plan, they are welcome to become investors in the network, on the Government's terms.

The announcement has interesting implications for Telstra, long seen as the single biggest roadblock preventing Australia from attaining anything approaching world-standard internet speeds. Until now it hasn't been in Telstra's interest to hurry, since its size and its control of the existing copper-wire infrastructure has made it difficult to compete against. The Government announcement should act as a goad and an incentive to Telstra. A goad, because Telstra won't be able to afford to stand by and let itself by bypassed by a new broadband network. An incentive because Telstra, having failed to submit a compliant tender for the network, now has a chance to invest in it after all.