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On 11/08/2010 2:15 PM, Grahame Lynch wrote:
<blockquote
cite="mid:AANLkTimZ_sYN3_jpVysMSNJzaoALHNSSa7UThBT38Z8r@mail.gmail.com"
type="cite"><br>
<br>
<div class="gmail_quote">On 11 August 2010 11:04, Paul Brooks <span
dir="ltr"><<a moz-do-not-send="true"
href="mailto:pbrooks-ausnog@layer10.com.au">pbrooks-ausnog@layer10.com.au</a>></span>
wrote:<br>
<blockquote class="gmail_quote"
style="border-left: 1px solid rgb(204, 204, 204); margin: 0px 0px 0px 0.8ex; padding-left: 1ex;">
<div class="im"><br>
</div>
Perhaps your need hasn't changed. Mine has, and over the next 10 - 30<br>
years I suspect it will change more. I no longer have a single PC shared<br>
by all in the household - I have several, each capable of saturating far<br>
more capacity than thye one I had 10 years ago, along with several<br>
people who all want to access network resources simultaneously. I'm<br>
currently finding sub-1 Mbps upstream speeds quite limiting - and<br>
economically and productively limiting - and others do too.<br>
</blockquote>
<div>Paul I accept all that but I ask a question.</div>
<div> </div>
<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>
<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>
<br>
The *price* of a current new copper landline connection is around $300
- 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. Fibre
cable doesn't cost that much more than copper cable - a fibre
connection need not be priced so much higher.<br>
<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, which is something that a
government entity can do, but a purely commercial organisation perhaps
cannot. 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>
<br>
Most estimates of efficient rollout *cost* come to around the $2000 -
$2500 per house mark. <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.<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.<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,
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>
-- <br>
<pre class="moz-signature" cols="86">Paul Brooks | Mob +61 414 366 605
Layer 10 Advisory | Ph +61 2 9402 7355
-------------------------------------------------------
Layer 10 - telecommunications strategy & network design</pre>
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