[AusNOG] Long live the NBN. The NBN is dead?! [personal]
pbrooks-ausnog at layer10.com.au
Wed Aug 11 15:38:39 EST 2010
On 11/08/2010 2:15 PM, Grahame Lynch wrote:
> On 11 August 2010 11:04, Paul Brooks <pbrooks-ausnog at layer10.com.au
> <mailto:pbrooks-ausnog at layer10.com.au>> wrote:
> Perhaps your need hasn't changed. Mine has, and over the next 10 - 30
> years I suspect it will change more. I no longer have a single PC
> by all in the household - I have several, each capable of
> saturating far
> more capacity than thye one I had 10 years ago, along with several
> people who all want to access network resources simultaneously. I'm
> currently finding sub-1 Mbps upstream speeds quite limiting - and
> economically and productively limiting - and others do too.
> Paul I accept all that but I ask a question.
> Are you personally prepared to pay for the real cost of that service
> since you experience a private benefit or productivity gain? Or should
> the cost of that be partly borne by others who don't necessarily share
> the productivity gain? That seems to be the nub of the issue here -
> most people will pay $40-50 a month for broadband but they wouldn't
> pay the implied $3,000-5,000 per household connection and activation
> cost of the NBN budget directly if asked to...in strict economic
> terms, it is a transfer from non-high speed broadband users to high
> speed broadband users where costs are very hazily proportioned between
> public and private interest criteria....
I'm prepared to pay a market-based price - what I don't accept is the
assumption that that market-based price is necessarily going to be so
much higher than what I pay now.
The *price* of a current new copper landline connection is around $300 -
if the *cost* to the network provider is higher than this, they will be
collecting the extra as a component of my monthly service rental. Fibre
cable doesn't cost that much more than copper cable - a fibre connection
need not be priced so much higher.
I don't accept that a household connection *cost* needs to be $3000 -
$5000, especially if - like the current network - the common costs are
amortised over a period of many decades, which is something that a
government entity can do, but a purely commercial organisation perhaps
cannot. It also comes down to the huge economies of scale that can be
generated when building this infrastructure on a massive scale - tens of
thousands of houses, not tens of houses.
Most estimates of efficient rollout *cost* come to around the $2000 -
$2500 per house mark.
If I had to pay that upfront (and add a margin, as the provider
presumably needs a small but positive profit) I would probably baulk -
but if it is amortised over two decades by the provider it would be $11
per month, which I will gladly pay.
If I'm going to pay for the infrastructure establishment all up front
with a $5000 charge - or even $2500 - then I'd better be getting it
with no ongoing charges, or enough to cover maintenance only - a couple
of dollars at most per month. And then when I move out to another place
in 5 years I would want to recover a portion of that connection fee from
the new occupiers of the house. I'm renting the network connection, not
Since I don't have to pay $5000 for a connection to the current
ubiquitious access network, and that seems to be reasonably profitable,
I can't see why the new network would be any different - unless we
thining so short-term that we vastly reduce the payback period where the
monthly fees cease paying for the cost and start becoming cream.
Paul Brooks | Mob +61 414 366 605
Layer 10 Advisory | Ph +61 2 9402 7355
Layer 10 - telecommunications strategy& network design
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