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

[Paul Brooks]

On 11/08/2010 5:13 PM, Tim McCullagh wrote:
> ----- Original Message -----
>
>     *From:* Paul Brooks <mailto:pbrooks-ausnog at layer10.com.au>
>     **
>>
>
>     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.
>     You are assuming that the market based price will be the same as
>     it is now. In which case you are dreaming
>
Prove I'm dreaming Tim, with evidence.
International experience seems to indicate this is a reasonable outcome. 
I can't find the actual presentation anywhere else, but if you look at
http://www.bloobble.com/broadband-presentations/presentations?itemid=1894, 
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.
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.

>     The *price* of a current new copper landline connection is around
>     $300
>     *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*
>

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.

>     - 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.
>     *They sure will.  Ask the people of south east Queensland what
>     happened to their water charges*
>      Fibre cable doesn't cost that much more than copper cable - a
>     fibre connection need not be priced so much higher.
>     *Absolute rubbish and I suspect you know that as well.   Stop
>     misrepresenting the situation.*
>     **
>
>     *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 *
>     **
>     *Yes I have done it and I do know the costs*
>
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.


>
>     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,
>     *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.*
>
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.




>      which is something that a government entity can do,
>     *WHAT was the point of deregulations and selling Telstra now that
>     we're heading back 25 years?
>     Maybe they rename NBN to PMG or have all the kiddies on here
>     forgotten about the PMG*
>
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.
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.
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.
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.

>      but a purely commercial organisation perhaps cannot.
>     *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*
>
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'.


-- 
Paul Brooks               |         Mob +61 414 366 605
Layer 10 Advisory         |         Ph  +61 2 9402 7355
-------------------------------------------------------
Layer 10 - telecommunications strategy&  network design

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