[AusNOG] NBN: "i want a pony! but can I afford it"

PRK ausnog at digitaljunkie.net
Sat Aug 14 01:27:34 EST 2010


On 13 August 2010 15:19, Tim McCullagh <technical at halenet.com.au> wrote:

>  ----- Original Message -----
>
>   *From:* Matthew Moyle-Croft <mmc at internode.com.au>
>
>
>
> Again, the deal on the table is to decommission Telstra Cu.
>
> *At a the cost of reducing competition.   I suspect many will move to
> mobile solutions as a fixed line replacement.  In fact I am seeing that now
> *
>
>
> Where does your assumption, that replacing Telstra's copper with NBNCo
fibre reduces competition, come from?

In the current model, an ISP has three options:
1) Buy a DSLAM / Phone port off a wholesale provider.
2) Install their own equipment (DSLAM / Voice gear) in the exchange.
3) Don't provide a service.

Realistically, only the larger companies (iiNet, Internode, Optus, etc) can
go with the second option - there's a pretty big cost barrier to entry for
new ISPs to put in DSLAMs. Also, the copper provider gets a monthly fee for
the copper and also the colo costs of having the equipment in the exchanges.

Option 1) is doable, but you're subject to the wholesale rate, plus you have
to pay for the network connection to the wholesale provider, and you don't
get the same discount as the wholesale provider gives their own retail arm,
so you're at a cost disadvantage to start with.

Both of these serve to limit competition.

Assuming an NBNCo world, everyone is on the same field, purchasing services
at the same costs, and able to differentiate on all the other aspects.

Where do you see that providing less competition?


There's also an assumption above that the trend towards mobile internet will
continue.

Given what's available with ADSL at the moment (coverage, line quality,
speeds, etc), it's not surprising that mobile Internet can be a more
attractive option - in the home it's compensating for a lack of other
options. If you compare mobile Internet to dedicated fibre (instead of
current ADSL), the balance may swing back the other way. Additionally, the
widespread availability of high speeds may lead to a change in the pattern
of applications, and swing things back to fibre (IPTV, video conferencing,
the next big bandwidth intensive app, etc). I'm not saying it will have that
affect, but it can't be ruled out.


Add into the mixing pot the ability to run multiple services over the fibre.
At the moment, you can get DSL from one provide and phone from another, over
your copper pair. With fibre in a wholesale model, there's no reason you
can't add in TV from a third provider, a dedicated work VPN from a fourth,
perhaps a school WAN interconnect from a fifth, etc. As long as the
incentive is there for the wholesaler to sell as many different services on
the link.

All up, fibre seems a lot more future proof than wireless - as long as the
monopoly is controlled in a way where it can only wholesale, not retail, to
provide a mechanism for competition.

prk.
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