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<DIV>----- Original Message ----- </DIV>
<BLOCKQUOTE
style="PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black"><B>From:</B>
<A title=pbrooks-ausnog@layer10.com.au
href="mailto:pbrooks-ausnog@layer10.com.au">Paul Brooks</A> </DIV>
<DIV style="FONT: 10pt arial"><STRONG></STRONG> </DIV>
<BLOCKQUOTE
cite=mid:AANLkTimZ_sYN3_jpVysMSNJzaoALHNSSa7UThBT38Z8r@mail.gmail.com
type="cite">
<DIV class=gmail_quote>
<DIV>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....</DIV></DIV></BLOCKQUOTE>
<DIV><BR>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.<BR></DIV>
<DIV><FONT face=Arial color=#0000ff size=2>You are assuming that the market
based price will be the same as it is now. In which case you are
dreaming</FONT></DIV><FONT face=Arial size=2></FONT></BLOCKQUOTE>
<BLOCKQUOTE
style="PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV><BR>The *price* of a current new copper landline connection is around
$300 </DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2><STRONG>When a new phone line is connected in
many areas it uses copper that has potentially been in the ground for many
years and at a time when the cost of installation was a lot lower than
today or was contributed to by a developer whan the
estate was developed. Either way the costs are sunk cost. In the
case of ftth not only does the leadin need to be built but the backbone the
head end a new gateway etc. To the network operator the cost of
connecting a copper leadin may be something like less than the $300
remembering that the trench is paid for by the customer or is provided when
the power is connected etc therefore3 or 4 lengths of pvc pipe, 2 or 3 bends
and 30 meters of cable plus minimal labour. In the case of ftth, a new
lead in is required in many cases a gateway additional after the building is
built building wiring etc etc etc. There would be little left out
of $2000 for the leadin alone which has to be recovered. But
I think you know this</STRONG> </FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV>- 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.</DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2><STRONG>They sure will. Ask the people of
south east Queensland what happened to their water
charges</STRONG></FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV> Fibre cable doesn't cost that much more than copper cable - a fibre
connection need not be priced so much higher.</DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2><STRONG>Absolute rubbish and I suspect you know
that as well. Stop misrepresenting the
situation.</STRONG></FONT></DIV><STRONG><FONT face=Arial
size=2></FONT></STRONG></BLOCKQUOTE>
<BLOCKQUOTE
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<DIV><STRONG><FONT face=Arial size=2>A copper cable cost about $0.30 per meter
and fibre costs $1.77. The labour on copper is 10 to 15 minutes to
install a couple of connectors worth about 15 cents. The labour on fibre
is much longer splicing fibres is not a 5 minute job. Splice trays are
about $7.50 splice protectors enclosures I could go on. If you use
connectorised solutions a 20 meter connectorised leadin cable is about $75 to
$80 </FONT></STRONG></DIV>
<DIV><STRONG><FONT face=Arial size=2></FONT></STRONG> </DIV>
<DIV><STRONG><FONT face=Arial size=2>Yes I have done it and I do know the
costs</FONT></STRONG></DIV>
<DIV><FONT face=Arial size=2></FONT><BR>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,</DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2><STRONG>What is the currrent cost in Tasmania per
house connected. I am sure it is more than that including fibre back to
the head ends etc and some of it is on power poles.</STRONG></FONT></DIV>
<DIV><FONT face=Arial size=2><STRONG>Over many decade you must be
kidding. The fibre infrastructure may have a lifespan of decades however
the electronics will be about 7 to 10 years. This is a business with
technical obsolecense how on earth can you amortise it over decades.? If
you work out the repayments returns at 10 or 20 years there is little
difference.</STRONG> </FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV> which is something that a government entity can do,</DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><STRONG>WHAT was the point of deregulations and selling Telstra now that
we're heading back 25 years?<BR>Maybe they rename NBN to PMG or have all the
kiddies on here forgotten about the PMG</STRONG></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV> but a purely commercial organisation perhaps cannot. </DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2><STRONG>I guess you are saying that there is not
a business case for a commercial organisation in which case you are saying
that there is no business case for the government which means the taxpayer
will need to subsidise the network capital and or opex costs. That is
different to what conroy said. He said it was viable. I guess he doesn't
know what he is talking about</STRONG></FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV>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.<BR></DIV>
<DIV><FONT face=Arial size=2><STRONG>That may be true for some of the hardware
but we are talking about $50 to 100 per customer for hardware. But on a
large scale the administration and overhead costsa are much larger. Look
at BER for the answer. Where the schools negotiated with their builder
they got there per sq meter rate 30 to 50% below the public schools. The
same will apply for NBN. A lot of waste, graft and kickbacks, and we
will all have to pay for it. It is much better to let a commercial
operator make sure they get bang for their buck. We don't need to
go back to the PMG days</STRONG></FONT></DIV><FONT face=Arial
size=2></FONT></BLOCKQUOTE>
<BLOCKQUOTE
style="PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV><BR>Most estimates of efficient rollout *cost* come to around the $2000 -
$2500 per house mark. </DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2><STRONG>I still believe in the fairy god mother
and the easter bunny too</STRONG></FONT></DIV><FONT face=Arial
size=2></FONT></BLOCKQUOTE>
<BLOCKQUOTE
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<DIV><BR>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.</DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2><STRONG>$2000 over 20 years will require a
payment of $16.73 plus gst plus administration charges plus profit
margin... need I say any more and that is just for the customer install,
no opex costs etc</STRONG></FONT><BR><BR>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 buying it.</DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2><STRONG>Yes but someone else is taking the risk
on getting a return from the money they invest to enable you to rent
it</STRONG></FONT><BR><BR>Since I don't have to pay $5000 for a connection to
the current ubiquitious access network, and that seems to be reasonably
profitable, </DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2><STRONG>"Are you serious", do you not understand
that the current network was built over many decades and much of it is paid
for which means the business owner does not need to get a return on it in the
same way as a network operator would if they were building from scratch today.
</STRONG></FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV>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.<BR><BR><STRONG>Your kidding aren't you. You must have a better
understanding than that</STRONG></DIV>
<DIV><STRONG></STRONG> </DIV>
<DIV><STRONG>regards</STRONG></DIV>
<DIV><STRONG></STRONG> </DIV>
<DIV><STRONG></STRONG> </DIV>
<DIV><STRONG>Tim</STRONG></DIV></BLOCKQUOTE></BODY></HTML>