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<DIV>----- Original Message ----- </DIV>
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<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black"><B>From:</B>
<A title=mmc@internode.com.au href="mailto:mmc@internode.com.au">Matthew
Moyle-Croft</A> </DIV>
<DIV style="FONT: 10pt arial"><B>To:</B> <A
title=Bevan.Slattery@staff.pipenetworks.com
href="mailto:Bevan.Slattery@staff.pipenetworks.com">Bevan Slattery</A> </DIV>
<DIV style="FONT: 10pt arial"><B>Cc:</B> <A title=technical@halenet.com.au
href="mailto:technical@halenet.com.au">lists</A> ; <A title=ausnog@ausnog.net
href="mailto:ausnog@ausnog.net">ausnog@ausnog.net</A> </DIV>
<DIV style="FONT: 10pt arial"><B>Sent:</B> Saturday, April 11, 2009 11:40
PM</DIV>
<DIV style="FONT: 10pt arial"><B>Subject:</B> Re: [AusNOG] Aust Govt will
build National Broadband Network,no company will be awarded the tender.</DIV>
<DIV><BR></DIV>So,
<DIV>What do you propose as a valid alternative?</DIV><FONT face=Arial
size=2></FONT></BLOCKQUOTE>
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<DIV>
<DIV><FONT face=Arial color=#0000ff size=2>The alternative is let the market
do it commercially. Some new estates have fibre to the home, the
design is being experimented with in these commercially viable places, which
will result in a much wider roll out when the applications exist and a
business case can be made viable. Done this way will result in lower
capital expenditure and lower access prices. </FONT></DIV></DIV>
<DIV><BR></DIV>
<DIV>- FTTN is a crap idea (so crap that even Krudd and Conroy could see
it).</DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial color=#0000ff size=2>It is not a crap idea, it is a
means to an end for Telstra. No other company would do it this
way. However picture it this way, you need to crawl before you
walk.</FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV>- The current Cu CAN is starting to near end of life and is straining to
provide broadband at the speeds they want to everyone. </DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial color=#0000ff size=2>I think you are exagerating that a
bit. You and I may want faster access, but we are not
representitive of the market. What percentage of customers subscribe to
8000/384 or beyond services. It is not high and it needs to rise to make
the FTTH business case stand up. The growth is still not suggesting that
the need will result any time soon. Many people do not have the
means to pay more than $40 per month. Many pensioners tell me $30 is all
they can afford for internet.</FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV> Even fixing this would require something looking much like FTTN
anyway (eg. nodes to fill in black spots etc).</DIV>
<DIV>- It's only going to get more expensive to do (inflation etc).</DIV>
<DIV> </DIV>
<DIV><FONT face=Arial color=#0000ff size=2>I am not sure that assumption is
correct either. the price of much of the FTTH equipment is continuing to
fall. Customer electronics were $1000 3 years ago, now they are
$400. My supplier tells me they will halve over the next couple of
years. As demand rises the cost of passing a home will fall based on customers
connected etc etc. It may cost $100 today to install the cable and $105
in 2 years time, but the cost of financing the $100 for it to be idle is more
than $105. I am finding the price is still falling not rising at
all.</FONT></DIV>
<DIV><BR></DIV>
<DIV>I'm not convinced this is commercially infeasible, but it's a close call
I'll admit (and mostly hinges on take up rates).</DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2><FONT color=#0000ff>it absolutely hinges on take
up rates, which is going to be influenced by the price to the consumer which
is influenced by the cost of deployment. My fibre network would be
many times larger than it is now if there was some business certainty around
government regulations. It was a government departments
interpretation that stopped it dead in it tracks. The issue has now expired,
but all the uncertainty around NBN etc delays further deployment.
This whole issue could be solved by regulation. In saying that
there needs to be incentive for network owners to deploy such
infrastructure.</FONT> </FONT></DIV>
<DIV><BR></DIV>
<DIV>But if the government wants to do something game changing then what's the
real problem in doing so?</DIV>
<DIV> </DIV>
<DIV><FONT face=Arial color=#0000ff size=2>It will kill innovation. It
duplicates existing infrastructure that was paid for by shareholders, it is to
expensive and governments are not good at keeping a lid on costs, and there is
currently no business case. These issues need to be addressed and
answered before big commitments are made. How do you recon your
employer would like have their investments being put at risk? Or how
would you feel if you had invested a ship load of money into a network to have
that investment put at risk. This will affect a much larger section of
the industry than just Telstra. </FONT></DIV>
<DIV><BR></DIV>
<DIV>Many people seem to be saying this is a bad idea and yet propose no
alternative which has any real consideration.</DIV><FONT face=Arial
size=2></FONT></BLOCKQUOTE>
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<DIV> </DIV>
<DIV><FONT face=Arial color=#0000ff size=2>I don't remember anyone saying FTTH
is a bad idea, many including me are saying there needs to be a business case
to support it. In order for the business case to gain traction, there
needs to be research into how to deploy it commercially. Governments are
never good at that. Telstra has a massive cost advantage in that they
already have 95% of the network in place to support deployment to the 90%
the government is proposing to build to. </FONT></DIV>
<DIV><FONT face=Arial color=#0000ff size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2></FONT><BR></DIV>
<DIV>regards Tim</DIV></BLOCKQUOTE></BODY></HTML>