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<DIV><FONT face=Arial size=2>Last night I saw reference to 70% of the network
being on power poles and only 30% underground. emm I hope they don't get
bush fires, cyclones, cars running into poles, garbage trucks pulling the cables
down etc etc etc. Copper cable is easy to locate and make
temporary repairs quickly, not to mention copper is a lot tougher than
fibre. I fellow can locate and make temp repairs to copper cable, fibre
splices need to be prepaired and protected making temporary repairs that would
take 15 minutes on copper take 4 or 5 hours and more than 1 person on
fibre. If the $43Bn cost estimate is based on 70% aerial deployment then
it may well blow out to $100BN + if it were to all be put
underground.</FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2>I really don't think Conroy has had very good
advise. It would be lovely after a storm taking OTDRs and fusion splicers
out to locate and repair faults or having to rebuild networks after bush
fires. The more I look at this the worse the decision appears. Dont
get me wrong, I think fibre to the home is the right way to go, but from what I
have seen this is not based on either a good business case or good engineering
design, let alone demonstrated need for it. It looks more like a way
to get even with Telstra, however I suspect if it is built it will have other
collateral damage. ie the networks that have been built by others such as
NextGEN, Pipe, UEcomm, Opticom etc etc. In the meantime it will discourage
investment.</FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2>The question regarding Telstra. I suspect
they will be looking very seriously at expanding their network to
either do VDSL or FTTH in strategic areas. Startegic areas are those that
have existing high value demand for such services. Telstra already has
that information. Others will need to get it via estimation
etc. They have 95% of the network in place including duct. Even
if they are forced to divest of their HFC cable network, their new FTTH network
will enable them to retain those customers on their HFC cable network on a lower
cost of ownership network. Also having the ability to to deliver sooner
will also allow them to charge more in the short term which will allow them to
recover some of the deployment costs more quickly. NextG all over
again</FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2>There is also the issue of the FTTH network only
going to populations of 1000 or more. The government plan is attempting to
cherry pick the profitable areas. This means that of the 32% of the
population that don't currently have speeds, over a third will now be
forever destined to receive either satellite or wireless. I would suggest
more satellite than wireless.</FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2>The biggest issue with the NBN decision is that I
suspect there will be little if any investment going forward, which will only do
2 things. Either or allow Telstra to build out its network and cement its
position and or leave consumers with little or no other alternatives going
forward. This decision to build the NBN mk2 will only benefit
those telcos that were comfortable reselling services to customers.
Eventually because the business case is non existent and there will be cost over
runs, consumers will pay more. Governments are not good at building to a
budget. </FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2>Then there is the issue as to how much demand and
how many applications currently exist to create the need for 100MB, but we won't
go there, other than to say that building a 100 MB network to do what a 1MB
network will do is like driving a 10 ton truck to do the grocery shopping.
Another more accurate analogy would be that you can only go shopping in a
2009 Holden Statesman. Not everyone has the need or the ability to pay for
a statesman, the same applies to FTTH. Currently the speeds are deployed
as the need arises and the 1 to 5% early adopters pay a premium, what this
network will do is make the 95+% pay a premium for something they don't need or
want to pay for, when the reality sinks in I guess the public support
behind the project will decline.</FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2>My analysis would be that if Rudd is as keen as he
is to build FTTH then he needs to buy/ re nationalise Telstra and build out
the Telstra network and separate it etc. That would be a cheaper way to do
it. The current NBN mk2 is simply dumb. The NBN process of trying to
solve a solution for 32% of the country was flawed from the start because it
excluded all the smaller telcos from submitting solutions. It also looks
like it is a result of not having advisors with Telco network install and design
expertise and EXPERIENCE. To many people reading to many books advising
governments mixed with competitive telcos with self interest trying to get
even with Telstra. A more sensible way would have been to change the
regulations to encourage sharing and network investment while at the same time
allowing investors to obtain a return on investment. If the regulations
were set up as such and the government got out of the road and let the industry
do what is financially viable with the certainty that comes with the need to
make such investments then the market would provide the solutions. In
other areas the governement would need to provide incentives to invest, probably
with an open access requirements. The network would then develop as the
demand develops. Might I also add that not all government assistance needs
to be in cash form. Governments could also use their business as a
catalyst to encourage investment etc. This would result in a better
outcome for taxpayers who ultimately pay for all of this. </FONT></DIV>
<DIV> </DIV>
<DIV> </DIV>
<DIV>Regards<BR> <BR>Tim<BR> </DIV>
<BLOCKQUOTE dir=ltr
style="PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV style="FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black"><B>From:</B>
<A title=lists@glenno.com href="mailto:lists@glenno.com">Glenn Powell</A>
</DIV>
<DIV style="FONT: 10pt arial"><B>To:</B> <A title=td_miles@yahoo.com
href="mailto:td_miles@yahoo.com">Tony</A> </DIV>
<DIV style="FONT: 10pt arial"><B>Cc:</B> <A title=ausnog@ausnog.net
href="mailto:ausnog@ausnog.net">ausnog@ausnog.net</A> ; <A
title=technical@halenet.com.au
href="mailto:technical@halenet.com.au">lists</A> </DIV>
<DIV style="FONT: 10pt arial"><B>Sent:</B> Friday, April 10, 2009 9:48
AM</DIV>
<DIV style="FONT: 10pt arial"><B>Subject:</B> Re: [AusNOG] ALERT: Aust Govt
will build National Broadband Network, no company will be awarded the
tender.</DIV>
<DIV><BR></DIV>Id like to be a fly on the wall at Telstra right about
now.....<BR><BR>1. Do they sit back and hope they pick up a sizeable chunk of
equity in the new company and sizeable part of the design and build (even
though we all know the current CEO really does not like wholesaling).<BR>2.
Outside of their cable network, do they speed up the deployment of road side
cabinets and start to deploy VDSL2 or Fibre.<BR>3. Drop their retail prices by
50% sign up customers to 36month plans and attempt to make the economics look
very bad for the NBN.<BR><BR>The appointment of the next Telstra CEO became
very interesting as of Tuesday....<BR><BR>-----Original
Message-----<BR><B>From</B>: Tony <<A
href="mailto:Tony%20%3ctd_miles@yahoo.com%3e">td_miles@yahoo.com</A>><BR><B>To</B>:
<A href="mailto:ausnog@ausnog.net">ausnog@ausnog.net</A>, lists <<A
href="mailto:lists%20%3ctechnical@halenet.com.au%3e">technical@halenet.com.au</A>><BR><B>Subject</B>:
Re: [AusNOG] ALERT: Aust Govt will build National Broadband Network, no
company will be awarded the tender.<BR><B>Date</B>: Tue, 7 Apr 2009 14:20:58
-0700 (PDT)<BR><BR><PRE>It all depends whether you want to be optimistic or pessimistic about it.
Uptake is an issue, but on the subject of price I don't think the final figures you've quoted are unreasonable ($80-$100 per month).
If you look at Internode's current FTTH offering as an example:
<A href="http://www.internode.on.net/pdf/products/home-fibre-pricelist.pdf">http://www.internode.on.net/pdf/products/home-fibre-pricelist.pdf</A>
The base plan (25/1Mbps, with 5GB quota) is $50pm. I believe this includes NodePhone (SIP phone service), but if you want a traditional PSTN interface, that is an extra $25pm. That's a total of $75 per month.
If you want to really start playing with figures, you can factor in inflation. If the debt is taken out in todays money, but repaid in the future it works to your advantage. $75 today at 3% inflation is $95 in 8 years time when it's finished. If you extrapolate that to your 40 year payoff period (48 years from now, allowing 8 years to build), then it becomes $310 per month. As long as you pay the interest only on the debt, the debt doesn't increase.
regards,
Tony.
(If I've got any of my figures wrong, feel free to correct me, it is early)
--- On Tue, 7/4/09, lists <<A href="mailto:technical@halenet.com.au">technical@halenet.com.au</A>> wrote:
> From: lists <<A href="mailto:technical@halenet.com.au">technical@halenet.com.au</A>>
> Subject: Re: [AusNOG] ALERT: Aust Govt will build National Broadband Network, no company will be awarded the tender.
> To: <A href="mailto:ausnog@ausnog.net">ausnog@ausnog.net</A>
> Date: Tuesday, 7 April, 2009, 8:33 PM
> Hi All,
>
> I don't like to be a wet blanket however personally I don't
> see how this can
> be based on a viable business model.
>
> $43, 000 million is $2000 per Australian ouch.
> It would be to depressing
> to dived the number by the number of tax payers
>
> using rounded figures there are about 10 million homes
> = 4300 per home investment
> assuming ever house 1. uses the internet and 2. takes up
> the service and 3.
> a 40 year payback period with a 7.5% return (very
> long given the
> electronics will have a lifespan of 10 or so years) then
> the business will
> need to charge at least $28.30 ex to pay for the
> investment. plus add
> running costs margin etc etc. So I guess there will
> not be any change out
> of $40.
>
> The above is so totally unrealistic
> It is more likely the internet penetration is around 50% of
> which x% will
> want a fixed connection. So best case is the monthly
> fee will need to be
> twice the $28.30 at least = 56.50 +
> GST. How many customers want to pay
> $80 to $100 per month for broadband? If there is not a
> large take up the
> figures simply get worse
>
> of the 50% some will use mobile broadband
>
> All this equalls a bad investment. There
> should be more emphasis on
> filling black spots were there is a need/demand than
> wasting money
> duplicating existing infrastructure. While some may
> believe it will bring
> Telstra to heal I doubt it. This could end up being a
> white elephant,
> especially if Telstra decides to build FTTH and other
> retail operators
> decide to build out there own networks. Then there is
> the issue of what it
> will do to the business models of companies that have
> deployed ADSL 2+
> dslams. What a financial mess, perhaps sanity will
> prevail. Perhaps the
> government will buy back all the Telstra shares and
> restructure it to what
> they want. Who knows? This decision seems
> rushed and ill thought out
>
> Regards
>
> Tim
>
>
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