[AusNOG] Help with NBN questions.

[Tim McCullagh]

----- Original Message ----- 
From: "Daniel Hooper" <dhooper at emerge.net.au>


>" I'm pretty sure the PIPE's, Internode's, IINET's, TPG's and the rest of 
>us could have a damn good crack at some pretty serious network build-outs 
>in hard to reach places with some serious government funding.
> "
>
> Haven't we seen this already with the Government's broadband guarantee 
> project, broadband connect & HIBIS ?
>
> Unfortunately the big boys didn't nibble,

Yes they did.  Telstra enabled a bucket load of exchanges, which has enables 
IINET and co to sit on top of Telstra and make returns with little risk.

> a bunch of dodgy fly by providers got going and soon sunk when they 
> realised the OPEX to keep the show a float didn't exist from the 5 
> customers they sourced in remote area's.

That is CRAP,  it is a pity you didn't do a little more research.

Your "dodgy bros" had to have professional business plans etc to be 
approved.  What happened is that small operators ( existing ISPs with more 
than 5 years experience) moved into the Wireless and some cable business 
space and DCITA and DBCDE, cut the legs out from under them and went further 
by favouring satellite based operators.  What  sort of competitive advantage 
do you think you would have if  as a wireless operator you needed to build 
towers and deploy infrastructure for $1100 subsidy for each customer 
connected with no guarantees as to the number of customers you could 
connect, with the department ruling that because the infrastructure was 
built for over 12 months that you should have got your money back and cut 
off the elligibility to subsidy payments.  As oppossed to satellite 
operators that had no such restriction and made about $1k profit per 
connection.   I know a number or your "dodgy fly by night providers" that 
went down because they spent money and installed broadband to customers in 
line with the funding deeds to have the department change the rules mid 
stream and not pay them.  Do some research on March 2007 and the actions of 
the department.   One fellow I know had committed to 4.5 million in 2007 
when most of the damage happened only to have the department change the 
rules and leave that company holding massive commitments.   The main problem 
was that the department kept running out of money and providers had to spend 
weeks and many thousands of dollars preparing new applications for HiBIS, 
HiBIS mk2,  Broadband connect, broadband connect mks2 etc, ABG then ABG TP 
then ABG mk2 3 4 etc.  And each time your "dodgy operators" did prepare them 
they had the rules changed.  Dealing with the DBCDE or previously DCITA is 
like doing a deal with a con man.  But the biggest problem was the 
departments facination with Satellite.

A little more research next time

The bottom line is really that the regulations need to be set and the market 
needs to be able to deploy were it is feasible, where it is not then some 
form of tender or incentive needs to be paid.  The first thing that the 
department and the minister needs to do is recognise that they don't have 
the answers.  What may suit in one area may not be the best solution in 
another.   Hence the minister and his department needs to set a 
specification of what they will provide incentives for, and have it over a 
sufficiently long enough period that the market will provide the solutions.

We don't need the industry nationalised, we just need to have a base on 
which to build that won't sink every time a minister of one of his goons 
gets a bright idea

If conroy was serious about NBN he should buy all the shares in Telstra and 
do what he likes with it.  Silly as that may seem it is no sillier than the 
NBN.  Everyone needs to understand that the pricing being bandied around is 
simply introductory pricing. From memory page 33 says that the ACCC should 
allow NBN co to raise the pricing to allow it to get a return on investment. 
Given it appears as if there is some expectation that the average price per 
property will be $4300 plus and maybe as high as $7500  then to get a return 
on that is going to require an access charge higher than $20 to $30 per 
month to get even a 6% return.    All the NBN distraction has done is delay 
solutions.

We don't need the industry to run itself down, there are others out there 
that are more than willing to help out.  They are the ignorant ones we all 
know them, the arm chair experts. As an industry we need to come up with 
solutions.  As an industry we also need to recognise the need for those that 
take the risk to get a fair return.

regards

Tim McCullagh