[AusNOG] Aust Govt will build National Broadband Network, no company will be awarded the tender.

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----- Original Message ----- 
  From: Matthew Moyle-Croft 
  To: Bevan Slattery 
  Cc: lists ; ausnog at ausnog.net 
  Sent: Saturday, April 11, 2009 11:40 PM
  Subject: Re: [AusNOG] Aust Govt will build National Broadband Network,no company will be awarded the tender.


  So,
  What do you propose as a valid alternative?
  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. 


  - FTTN is a crap idea (so crap that even Krudd and Conroy could see it).

  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.

  - The current Cu CAN is starting to near end of life and is straining to provide broadband at the speeds they want to everyone. 

  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.

   Even fixing this would require something looking much like FTTN anyway (eg. nodes to fill in black spots etc).
  - It's only going to get more expensive to do (inflation etc).

  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.


  I'm not convinced this is commercially infeasible, but it's a close call I'll admit (and mostly hinges on take up rates).

  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.  


  But if the government wants to do something game changing then what's the real problem in doing so?

  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. 


  Many people seem to be saying this is a bad idea and yet propose no alternative which has any real consideration.

  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.  



  regards Tim
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