[AusNOG] FTTH - Dreaming?

Sat Aug 16 17:06:01 EST 2008

Hi All

----- Original Message ----- 
From: "Curtis Bayne" <curtis at bayne.com.au>
To: <ausnog at ausnog.net>
Sent: Saturday, August 16, 2008 3:18 PM
Subject: Re: [AusNOG] FTTH - Dreaming?

> Yup, just as I expected. First paragraph and they're bashing Telstra 
> already.

The first paragraph was not Telstra bashing.  It was a well thought out way 
of trying to address the issues that faced Optus in the 90's when thye 
decided to roll out a pay tv network.  To set the record straight.  Telstra 
had no interest in rolling out Pay TV or dial up internet as it did with 
dragging its heals on ADSL etc.  It however did take the view that it needed 
to match Optus in a market protection strategy.  There were and are a number 
of other things it did at the time to prevent Optus from gaining market 
share and return oin capital.  The first paragraph is therefore explained 
the way it is,  so that the larger well balance sheet resourced incumbents 
who ever they may be cannot misuse their market dominance to essentially 
undertake market protection strategies designed to discourage competition.

How would everyone feel if what happened to Optus happened to commercial 
deployments they undertook and Telstra decided to spend millions or hundreds 
of millions to see the competition disappear.  Lets take another 
hyperthetical example.   Lets say a smaller less balance sheet enabled 
carrier decided to deploy an international cable to reduce transit costs. 
Then lets say Telstra decided to let them build it nearly,  then telstra 
decided to drop the price of data to levels that make it difficult for that 
network to be payed for  or lets say that Telstra says to the market you can 
sell ADSL 2 if you buy your backhaul from us.   Is that fair competition.? 
Is that misuse of market power?  Of course not because it is allowing 
consumers choice, or at least that has been the way the ACCC has been 
approaching it..   Then the poor little carrier runs into financial trouble 
and Telstra offers to bail them out.  Then what happens to the price?  I 
think everyone should get the jist of this, which brings me back to my 
comments in the first paragraph.

>
> Dear reporters: Telstra is here, they're the reason a number of rural 
> Australians have access to DSL/ISDN where it would never have been 
> profitable to do so.

That 2 is not necessarily correct in so far as it was government policy ie 
megapop that stopped a lot of the rural deployments by other lower cost 
providers.  Many of the rural ISP's ran for cover after having the 
government subsidise telstra to roll out megapop which had major cost 
advantages to Telstra and put those with rural based networks at a 
disadvantage.  This subsidisation of telstra amounted to $800Million ish 
upto 2004

>  I'm not saying that the sun shines from their behind, but it frustrates 
> me deeply when nobody gives credit where credit is due.

If you want to give credit fine.  But if you want to rebut what was 
essentially a few thoughts on how FTTH may get deployed then reference the 
massive amounts of subsidies Telstra has received in the form of government 
grants and USO payments.  Please don't take that the wrong way.  I am just 
saying there needs to be some balance and everything needs to be put on the 
table. Perhaps there is a better way perhaps not

>
> In my personal experience, Telstra have a fantastic network

Yes they do.

>- you get what you pay for.

Yes that is true.  If you are a residential customer you can get an ADSL 2 
tail with 20 MB / 1 MB data transfer capability, but if you are a business 
customer a 10 MB DSL tail will set you back $9000 - 10000 per month.  Just 
goes to show how you can get what you pay for.   But that is not the object 
of the discussion

>I am probably lying. Your mileage my vary. Please don't flame me.

No flame intended.   Just a clarification on the original article and some 
additional comments

I have spent a lot of time looking at these and other senarios in order to 
find strategies to address the associated issues.  I recon you could nearly 
write a book on this stuff, but who would want to read such a depressing 
piece of writing.   My conclusion is that unless the government through its 
industry regulation prevents incumbents from undertaking market protection 
strategies then there is so much risk involved that very little will happen 
and a technology that offers so much is unlikely to get deployed.  On the 
other hand if they did provide some say 5 year protection then we may well 
see a much different result.  It may either have the effect of making the 
incumbents deploy themselves before others saw a market niche or it may 
provide the certainty to allow so niche market type deployments that may be 
the catalyst for larger deployments.  That was the basis of the original 
comments

Regards

Tim

> Regards,
> Curtis

>
> Managing Director
> SONET Telecomunications
> ________________________________________
> From: ausnog-bounces at lists.ausnog.net [ausnog-bounces at lists.ausnog.net] On 
> Behalf Of Bevan Slattery [Bevan.Slattery at staff.pipenetworks.com]
> Sent: Saturday, 16 August 2008 8:06 AM
> To: bruce at tubes.net.au; ausnog at ausnog.net
> Subject: Re: [AusNOG] FTTH - Dreaming?
>
> Gold!
>
> ----- Original Message -----
> From: ausnog-bounces at lists.ausnog.net <ausnog-bounces at lists.ausnog.net>
> To: ausnog at ausnog.net <ausnog at ausnog.net>
> Sent: Sat Aug 16 07:31:00 2008
> Subject: [AusNOG]  FTTH - Dreaming?
>
>
> We need a 4 point plan to ensure success with this idea, i have done a
> rough plan up... feel free to correct me if im wrong.
>
>
> 1, Build FTTH Network
> 2, Free Internets
> 3, ???
> 4, 600 billion profit.
>
>
> Regards,
>
> Bruce
>
> On Sat, 16 Aug 2008, McDonald Richards wrote:
>
>> AusNOGers,
>>
>>
>>
>> While working on the early hours of a Saturday morning as I know so many 
>> of
>> us do I stumbled across this gem of an article. I'd love to know who
>> actually edits and fact checks this junk before they publish it online.
>>
>>
>>
>> http://business.theage.com.au/business/fibre-to-the-home-a-musthave-only-gov
>> ernment-can-provide-20080814-3vr0.html
>>
>>
>>
>> Some of the quotes are absolute gold.
>>
>>
>>
>> "The Federal Government should build and control a FTTH network capable 
>> of
>> speeds of at least 100 megabits a second. This would require a capital
>> expenditure of about $15-20 billion but this cost is easily justified."
>>
>>
>>
>> "The Government should maximise public use of a FTTH network by charging 
>> a
>> modest annual administration fee of $50-100 but nothing for actual use. 
>> This
>> would cover the network's administrative and minimal running costs.
>> (Maintaining our copper network reportedly costs a lot more - about $600
>> million a year.)"
>>
>>
>>
>> "A FTTH network would give Australians free national phone calls and fast
>> access to the internet. And its applications would have obvious social 
>> and
>> commercial benefits."
>>
>>
>>
>> In fact I think I had a good chuckle at almost every paragraph. Don't 
>> even
>> get me started on the technical points! With the cost analysis of 98% 
>> FTTN
>> coverage done by Pipe coming it at ~16 billion I'd love to know how the
>> author of this article believes an FTTH network can be built by the
>> government for "about 15-20 billion". They didn't even reference the 
>> total
>> population coverage and there's only a 5 billion dollar window in that
>> highly scientific cost estimate - which is more than Labor plan to
>> contribute in total to FTTN!
>>
>>
>>
>> I hope you all enjoy it as much as I did.
>>
>>
>>
>> Macca
>>
>>
>>
>>
>>
>>
>>
>>
>>
>>
>>
>>
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