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On 11/08/2010 5:13 PM, Tim McCullagh wrote:
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<div>----- Original Message ----- </div>
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<div
style="background: rgb(228, 228, 228) none repeat scroll 0% 0%; -moz-background-clip: border; -moz-background-origin: padding; -moz-background-inline-policy: continuous; font-family: arial; font-style: normal; font-variant: normal; font-weight: normal; font-size: 10pt; line-height: normal; font-size-adjust: none; font-stretch: normal;"><b>From:</b>
<a moz-do-not-send="true" title="pbrooks-ausnog@layer10.com.au"
href="mailto:pbrooks-ausnog@layer10.com.au">Paul Brooks</a> </div>
<div
style="font-family: arial; font-style: normal; font-variant: normal; font-weight: normal; font-size: 10pt; line-height: normal; font-size-adjust: none; font-stretch: normal;"><strong></strong> </div>
<blockquote
cite="mid:AANLkTimZ_sYN3_jpVysMSNJzaoALHNSSa7UThBT38Z8r@mail.gmail.com"
type="cite">
<div class="gmail_quote">
<div><br>
</div>
</div>
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<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 size="2" color="#0000ff" face="Arial">You are assuming
that the market based price will be the same as it is now. In which
case you are dreaming</font></div>
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</blockquote>
Prove I'm dreaming Tim, with evidence. <br>
International experience seems to indicate this is a reasonable
outcome. I can't find the actual presentation anywhere else, but if you
look at <br>
<a class="moz-txt-link-freetext"
href="http://www.bloobble.com/broadband-presentations/presentations?itemid=1894">http://www.bloobble.com/broadband-presentations/presentations?itemid=1894</a>,
slides
10 and 11, you'll see several countries where FTTH connections
are priced lower than ADSL2+ connections, and most countries have FTTH
connections in the 30 - 40 Euro range.<br>
Yes, this is Europe, we are here, population densities differ, and we
don't know if these services are available to 97% of the population or
20%. But it does show that the expectation is not entirely unreasonable.<br>
<br>
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<div>The *price* of a current new copper landline connection is
around $300 </div>
<div> </div>
<div><font size="2" face="Arial"><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> <br>
</font></div>
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</blockquote>
<br>
I agree. The cost to the provider is higher than the price usually
charged to the customer. The shortfall is usually recovered through a
component of the monthly rental.<br>
<br>
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<div> </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 size="2" face="Arial"><strong>They sure will. Ask the
people of south east Queensland what happened to their water charges</strong></font></div>
<div> </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 size="2" face="Arial"><strong>Absolute rubbish and I
suspect you know that as well. Stop misrepresenting the situation.</strong></font></div>
<strong></strong></blockquote>
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<div><strong><font size="2" face="Arial">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></strong> </div>
<div><strong><font size="2" face="Arial">Yes I have done it and I
do know the costs</font></strong></div>
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</blockquote>
Yes, I have done it too. copper and fibre. Purchased in large enough
quantities, external network grade copper and fibre drop cables aren't
so different, and the labour to string both of them 35 meters from the
eaves to the pole on the street, or haul them through a conduit costs a
lot more than a few connectors, or a fusion splice - and
is much the same for both.<br>
<br>
<br>
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<div><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> </div>
<div><font size="2" face="Arial"><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>
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</blockquote>
You may be sure in your own head Tim - but you don't know, and neither
do I. We'll both have to wait for NBNCo to open the kimono on that one,
after the mainland trials. I know that what the costs were in the
TransACT network, which is not so different.<br>
<br>
<br>
<br>
<br>
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<div><font size="2" face="Arial"> </font></div>
<div> </div>
<div> which is something that a government entity can do,</div>
<div> </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>
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</blockquote>
Many people here think that was a mistake - that they should have only
sold
the retail part, and kept the infrastructure part in government hands.<br>
We don't have much of a problem with governments building reservoirs,
or highways, or ports, or hospitals, or any number of other very
expensive infrastructure things that have a long payback period - or
perhaps no payback period depending on what you include in the business
case.<br>
Look at how successful it has been getting private industry to run
basic infrastructure, like the
electricity network, or the water network - your example in South East
Queensland is a case in point.<br>
Don't get me wrong, I'm all for private enterprise building whatever
they can get away with. I'm just not averse to governments building
what private enterprise cannot.<br>
<br>
<blockquote cite="mid:025701cb3924$ba1782e0$6500a8c0@hal" type="cite">
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<div> but a purely commercial organisation perhaps cannot. </div>
<div> </div>
<div><font size="2" face="Arial"><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>
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Many on this list have argued for years that Conroy doesn't know what
he is talking about! That aside, I guess I am saying nothing of the
sort, so please don't try to put words in my mouth. In this case I'm
suggesting there may well be a viable business case - if you are
prepared to have a business case spanning several decades. A commercial
organisation may need to have a positive return after 3 years, in which
case this won't meet its ROI hurdle. A government can take a longer
term view, and can also include many other factors into the business
case that a commercial operator may not be able to - like reduction in
health costs, reduced travel, carbon reduction etc through increased
telecommuting. 'No business case for a commercial operator' does NOT
imply 'no business case for government' or 'no business case for
society'.<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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