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

[David Napier]

Hi All,

I'm usually quiet on the lists (safer for my employers) but every few
years I'll pipe up something on the list-du-jour - and I as haven't had
any coffee today either, here comes a rant ;)



First of all - independantly of any views of my employer - my opinion on
the FTTH is overwhelmingly positive. Not because of any short to medium
term commerical goals, short to medium term degredation of the copper
access or even to download content faster. It's simply the long term
opportunity cost of not doing so now.



I'm sure that we're all in agreement that the current copper network will
not support the integration of technology into society as we move forward
to 2025, 2050 or beyond. Like any medium, copper has finite limits with
respect to distance, digital data transmission speeds and latency - and
these limitations will make areas of technology such as smart grid/smart
health/distance education either more troublesome technically or
financially. And these are projects where significant benefits are being
recognised today - with a number of players making concurrent (and
overlapping) investments.



This leaves the issue in timing and ownership - which are IMO the only
areas of debate.
 I agree with the multitude of posters that have said that there are many
public utilites that are require investment. I live in an area of Sydney
serviced by two hospitals and both of these hospitals have featured
regularly in the media for the state of disrepair and danger presented to
patients and doctors - and being a father of two children this isn't
falling on deaf ears. These are but two of the hospitals, schools...etc
that need money not to improve, but just to maintain current services.
Other than federalising such services, only transfers from the federal
coffers to the states *may* resolve these issues.



But a situation has developed in recent times that most people on this
list have experienced - the inflection point where the viability of
maintaining an existing system is questionable. Certainly, we can invest
money into (potentially) legacy systems - but is it more cost effective to
significantly change the game? Whilst the government's costs are well
under my ballpark calculations for such a deployment (and may be above or
below other's expectations) - my question is, when will there again be
such an opportunity to develop what is likely to prove to be a long term
necessity for society?



It has been pointed out by the beer coaster business cases here, let alone
the NBN reponses, that there seems to be a market failure with respect to
the steps to get from 2009->2050 - it is simply not possible for a private
organisation to generate the required ROI and develop a national
telcommunication network. Thus the government is able to kill two birds
with one stone

- Provide the access network to support new applications for
telecommunications services.

- Infrastructure spend to re-employ resources in areas that have been
affected by demand elasticity (contruction, trades, transportation...etc)



Certainly, there is an attrative business case for focused networks and I
commend the providers that have taken the initative. But the risk here is
that it may create the situation of significant overbuild as the highest
ROI locations are cherry picked by a number of competing player. Tim
pointed out that there are some 2.2M households on overlapped FTTX
networks and given the recent behaviour  I have no reason to believe that
this wouldn't be the case again. Note that I'm not saying that duplication
is a bad thing - just that this is the path we are on today.



I understand that a government developed NBN will create a massive market
disruption here. Viable business cases may become unviable, voters may pay
more for less, regulation rescinds IP freedom and like always, some crooks
will try to take advantage of the situation. And the elephant in the room
is that we may have a new telecom orbiting a small forest moon.



And, as always, I wear my asbetos underwear understanding that others will
differ in opinion. But I can summarise with the simple example. In my home
I have both Telstra Cable and IInet ADSL2+ services and I am have
available Optus HFC, unwired, numerous 3G services and, until recently,
iBurst. Whereas there are medical faculties that still need to *fax*
images to specialists in capital cities to determine if someone is well
enough to travel for an operation. The role of business is to generate
profit - the role of government is to provide services for the benefit of
the population.



Cheers,



D



PS. Now to find and respond to the pole post from Bev...


</rant>
<snip>