[AusNOG] Long live the NBN. The NBN is dead?! [personal]

[Matthew Moyle-Croft]

Matthew,
That's a bit of a straw man argument.  You can follow that to it's logical conclusion which is that we should only invest in infrastructure in Sydney and Melbourne because the rest is irrelevant.

Some context:

Assume 8 year cost for NBN is AU$43b.  Assume that it's spent smoothly (it's not, but just say).  That's $5.4b/year.  It's 0.4% of GDP (~$1238b).  Federal Government has revenue of ~AU$300 billion per year. So it's about 1.8% of that. (1)

Each year the Government spends, for example, $124billion on Social Security.  $18billion on defence.

(1) http://www.budget.gov.au/2008-09/content/fbo/html/part_1.htm Table 1

In roughly same time period as the NBN the Government plans to spend around $12billion on just 72 F-35 JSFs, for example and the Navy around $25billion on some new submarines.    So, for about the same cost as the NBN you get just a few defence toys. (If you say NBN might blow out in cost, then I _assure you_ that the defence ones will make NBN look like nothing!).

It's very easy to get upset and worried about big numbers with no context.   Building big things costs big dollars.   Just because it's a big number doesn't mean it's not worth doing.   Not doing it doesn't always give you a long term saving, just like delaying replacing your timing belt on your car doesn't mean you actually incur as saving long term.

MMC

On 11/08/2010, at 4:59 PM, Matthew Zobel wrote:

You're missing the point.   If I proposed that the government built a 4 lane highway (bi-directional) to every town in Australia for $100bn I'd be shot down in a microsecond.  Why, because we just can't justify the cost.  No one would argue that a small town in outback vic/nsw with a population of 100 needs a massive highway.  So why should we do the same for internet?

Your example below is rather apt for proving my point.  We build highways when and where there needed.  We don't build them to every town on the off chance that we might find a use for them at some point in the future.

On Wed, Aug 11, 2010 at 4:40 PM, Jeremy Begg <jeremy at vsm.com.au<mailto:jeremy at vsm.com.au>> wrote:
Hi,

I've been watching this discussion over the past couple of months both here
and on LinkedIn and I continue to be amazed by the short-sightedness of some
people.  If the country was left to the exceedingly "dry" economics being
espoused by some here, we'd have no country at all.

>> But if the true cost is $50k vs $5k for the NBN your effectivily saying
>> it's not economical to run fibre to your house.  That pretty much kills the
>> "business case" for the NBN right there.  Why should the tax payer subsidise
>> running fibre to your house when most everyone else won't get any real
>> benefit from it.

On that logic there's no sense in paying for paved roads beyond a few
arterials in each city.

Remember, the cost is being amortised over 50 years.  And in 10 years time
we *will* be wanting more than 12Mbit/second bandwidth.  Has anyone heard
about something called "The Cloud" :-)

I was at a Hewlett-Packard seminar today which included presentations on
various virtualisation technologies (no surprises there).  What was
interesting was the number of scenarios where remote access and remote
management would be made much more practical by a solid, fast broadband
network.

>> No-one here has given even one compelling reason for FTTH.
>>
>> IPTV
>> Smart Metering
>> coverged phone line and data (VoIP)
>> Teleconferrencing
>> etc
>>
>> none of these offer any real value to the average tax payer.

In terms of the taxes I pay I'm very average and I see value in all of those
things.

Regards,

       Jeremy Begg
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