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<DIV>----- Original Message ----- </DIV>
<BLOCKQUOTE dir=ltr
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=mmc@internode.com.au href="mailto:mmc@internode.com.au">Matthew
Moyle-Croft</A> </DIV><BR>
<DIV>
<DIV>On 12/08/2010, at 8:09 PM, Tim McCullagh wrote:</DIV>
<BLOCKQUOTE type="cite">
<DIV><FONT class=Apple-style-span color=#000000><FONT face=Arial
size=2></FONT><BR></FONT>Then it was sold because the community said it was
to inflexible expensive <BR>and those in power said that we needed
competition to fix it.</DIV></BLOCKQUOTE>
<DIV><BR></DIV>
<DIV>That's not the reason it was sold ...</DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2><STRONG>I was referring to the introduction of
Optus as a second carrier</STRONG></FONT></DIV><BR>
<BLOCKQUOTE type="cite">
<DIV>Then Optus rolled out a cable network and Telstra rolled out the same
<BR>network. None of them made money. Optus made a deal with
Telstra to reduce <BR>its exposure to some costs. Everyone then said
don't invest we will resell <BR>Telstras network. Telstra said fine
but the wholesale price will be similar <BR>to telstras retail price.
The industry complained to the government and the <BR>ACCC.
Governments on both sides with the ACCC tried to level the pricing,
<BR>some services were declared and the ACCC stuck its nose into the market
<BR>which resulted in less competitive infrastructure<BR></DIV></BLOCKQUOTE>
<DIV><BR></DIV>
<DIV>I think that's a bit of a wierd take.</DIV>
<DIV><BR></DIV>
<DIV>Telstra, being fully vertically/horizontally integrated and having, well,
ALL the customers and profit and infrastructure is a hard beast to start out
competing against when you start at the beginning. It's a
monopoly and it is happy to use it's market power to squish.</DIV><FONT
face=Arial size=2></FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2><STRONG>Absolutely this is where regulation
comes in to the mix </STRONG></FONT></DIV>
<DIV><BR></DIV>
<DIV>Optus, in the above example, experienced this. Telstra didn't need
a cable network, but did it just to stop Optus. It was quite effective
as a strategy for Telstra.</DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2><STRONG>Exactly and the regulatory environment
was very lacking. There should have been a tender to see who could
buy the rights to build such a network (paytv) to introduce network
competition which would have involved say some third party access undertakings
and say a 5 year or so honeymoon period. The same could apply to
building an NBN</STRONG></FONT></DIV>
<DIV><BR></DIV>
<BLOCKQUOTE type="cite">
<DIV>.......<BR>......<BR>then<BR>we ended up where we are today.
Noone investing in fixed line <BR>infrastructure other than Telstra
other than greenfield estates. I still <BR>fail to see why
Telstra should have to spend the capital to get small <BR>returns on
investment in what is a risky business, especially with <BR>governments
forever sticking their nose in without understanding the
<BR>consequences.<BR></DIV></BLOCKQUOTE>
<DIV><BR></DIV>
<DIV>How is Telstra's business "risky"? Seriously? Look at their
annual report, the profitability and tell me where the risk is?</DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2><STRONG>If the governement is going to build
theNBN and close down the Telstra copper network, then how or why would
Telstra want to keep spending $5billion or more on capital works? Why
was there a 10% decrease in telstras profit margin released today?
I think that answers it.</STRONG></FONT></DIV>
<DIV><BR></DIV>
<DIV><BR></DIV>
<BLOCKQUOTE type="cite">
<DIV><BR>I often wonder what a difference we would be seeing today if the
conduit <BR>network was open access at inexpensive rates, yes something as
simple as <BR>that may have revoltionised fixed line networks. It
would have resulted in <BR>multiple networks
................perhaps<BR></DIV></BLOCKQUOTE>
<DIV><BR></DIV>
<DIV>Conduit is indeed available. But, that's only part of the
story.</DIV>
<DIV><STRONG>But at $6 per meter pa that destroys any case for rolling out
ftth</STRONG></DIV>
<DIV><BR></DIV>
<BLOCKQUOTE type="cite">
<DIV><BR>I will be as brave as to state that the reason we are in the
situation we <BR>are today is because of governement interference in the
market without <BR>addressing the structural ramifications of such
interference. Eg the <BR>megapop dial deal done with
Telstra before one election and labors NBN which <BR>has basically put all
development on hold for 3 years to give 2 of many
<BR>examples<BR></DIV></BLOCKQUOTE>
<DIV><BR></DIV>
<DIV>FTTN started WELL before Labor - remember back in 2005 when Sol came to
town? </DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2><STRONG>Yes and Telstra couldn't get the
regulatory certainty to build it. If any Telco spends the capital they
should be able ot get a return</STRONG></FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV> That was the problem. Blaming Labor for that is, well, a
bit wrong.<BR></DIV>
<DIV><FONT face=Arial size=2><STRONG>I don't see where I was blaming labor for
the fttN. I gave 2 examples one a coalition decision and one labor
decision. I have met conroy a couple of times and he is a total
goose. His announcement today regarding download limits only reinforces
my perception.</STRONG></FONT><BR></DIV>
<BLOCKQUOTE type="cite">
<DIV><BR>Going down the NBN path will take competition back 30 years.
As for those <BR>that say that the new model will be about
service, yeh right. If there is a <BR>fault we will all have to report
it to NBN (monopoly tell someone who cares <BR>network) and wait for them to
test and fix as opposed to logging into our <BR>own systems and determining
what the problem is and just fixing it. I can <BR>see vividly the case
of storm damage and massive delays, unless NBN has <BR>staff sitting around,
not likely<BR></DIV></BLOCKQUOTE>
<DIV><BR></DIV>
<DIV>I think you're just trying to see failure. </DIV><FONT
face=Arial size=2></FONT></BLOCKQUOTE>
<BLOCKQUOTE dir=ltr
style="PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px"><FONT
face=Arial size=2>Ru<STRONG>bbish we should learn the lessons from the past
and not repeat them, and I have 20+ years associated with maintaining external
plant infrastructure, performed operations research at state level on
external plant in Telstra, should I go on.............. I will
probably look back on this discussion and say I knew that would
happen in just a year or so. I may have even been thinking that
today if the NBN had been rolled out in Melbourne. I hope I am
wrong, but so far I have not seen any analysis on how maintainable Ftth is on
power poles. i am not saying on all power poles routes, but mainly the
suburban green leefy areas like I saw on the Tele early this
morning.</STRONG></FONT>
<DIV><BR></DIV>
<BLOCKQUOTE type="cite">
<DIV><BR>The more I think about this the more I see it as a back to the
future dumb <BR>idea. I am not into the wank factor of having fibre
like some. I just want <BR>something that works and that I can afford
and this is what my customers <BR>tell me as well<BR></DIV></BLOCKQUOTE>
<DIV><BR></DIV>
<DIV>I want something that works and doesn't break every year (as my phone
line at home does because of no maintenance of the CAN). I'd also like
something which scales in the future.</DIV>
<DIV><BR></DIV>
<DIV>Again, tell me -> how would, if we didn't do NBN, fix the regulatory
environment and how would your suggestions be valid for the next 40-50
years?</DIV><FONT face=Arial size=2></FONT></BLOCKQUOTE>
<BLOCKQUOTE dir=ltr
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<DIV><FONT face=Arial size=2><STRONG>I offered a couple of examples
above. There are more things that could be done in that area without
throwing away 3 existing networks and establishing the PMG mk 2. There
is no reason the CAN can't be made reliable and can't meet the needs of
Australians with evolutionary upgrades as the need arises. I can state
this with the authority and the expertise to do so. I have maintained
such a CAN network and been responsible for reducing the fault rates from
40+% pa to 3% of services per year. </STRONG></FONT></DIV>
<DIV><STRONG><FONT face=Arial size=2></FONT></STRONG> </DIV>
<DIV><STRONG><FONT face=Arial size=2>I don't have all the answers, but I would
start with a radcomms type of forum and bring all the carriers together to
thrash out what would encourage investment in open access
infrastructure. I would do it in an open environment and I would if I
was the minister make it clear that this is the place to thrash out the future
industry regulation which would be given a reasonable amount of
time before any changes would be made. I would also ask carriers to
put their money where there mouth is. If a carrier wants to make a claim
then they may be asked to back it up, in order to exclude the tyre kickers
making unrealistic claims. I remember going to the
productivity commission a few years ago now and being able to sit there and
eye ball a very senior Telstra Executive who was handling the truth
carelessly and ask 3 questions and have him back track completely, as soon as
he recognised who I was. That is why an open forum is important, it
stops some handling the truth carelessly or making unfounded statements
without review. Regulation is not Intellectual property so no
carrier should have a problem discussing it in an open forum. It really
isn't something that can be specified in a short email</FONT></STRONG></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><BR></DIV>
<DIV>Otherwise maybe you don't actually have a plan other than to do nothing
and wait for failure?</DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2><STRONG>Absolute rubbish. I started rolling
out FTTH in 2005 in a brownfield environment. Before it became
sexy. It was soveriegn risk that brought it to a halt, and I could write
a book on the issues. I still have a large amount of equipment
stored in order to kick off again if I so choose too. I am still
deploying the necessary conduit infrastucture in strategic areas.
I have written to Conroy and spoke to him about some of the solutions.
In doing so I have always stated I don't have all the answers but I have
offered some solutions that I know have worked. I may as well have been
talking to the pot plant in my office, he is a goose and I have no that
is absolutely NO faith in the abilities of his DBCDE department. After
speaking to some of the Gibson Q and other so called consulatants I have come
to realise that many of the so called experts or claim to be experts have no
idea. Then when I asked some of the early deployers in FTTH in
greenfield deployments whether they had been consulted by either DBCDE
or NBNco and I am yet to find any that have, I get very concerned about the
quality of expertise being used. Most of the support is
coming from those consultants that are looking for a new funding source to
suck on and those that think fibre is sexy. Many of the same people are
under some false illusion that the price will be the same as now. It may
start there but it will quickly rise like power water and council rates have
in recent years. They are dreaming to think otherwise. Talking 40
year ammortisation timeframes is plain stupidity. I could go on but I
need to get a life and do some other things right
now</STRONG></FONT></DIV>
<DIV><BR></DIV>
<BLOCKQUOTE type="cite">
<DIV><BR><STRONG>regards<BR><BR>Tim</STRONG>
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