[AusNOG] NBN: "i want a pony! but can I afford it"

[Tim McCullagh]

----- Original Message -----
      From: Matthew Moyle-Croft

      According to Quigley in Commsday today:


      "NBN Co CEO Mike Quigley also told media that the project in Tasmania had come in at between 5- 10 percent under budget, with the total budget of the project reportedly around A$37 million."


      That, for a fairly small set of builds (5000 houses in 3 sites) .  

      Ok lets take those figures.  $37 million / 5000  = $7400 per home passed
      Now take it that only 50% have taken up connection to it  means $14800 if all of the 50% take it up which is unlikely
  If the Telstra CAN is decommissioned then you expect take up to be 50%?

  So are you saying the government should reduce competition.  Now we are getting into a serious socialist mentality.  
  That aside it will depend on the price.  Telstra fixed lines demand is falling and is being substituted by mobiles due to lower cost and mobility reasons.
  Yes given the price the NBN will have to charge eventually I can see customers electing to substitute fixed with mobile.  It is already happening. I am seeing people move from fixed to mobile due to the cost.  As a result 50% may end up being the take up.   If as a business you offered to give someone a free connection no strings attached so that they could be connected and only 50% took it up I would reasonably expect that the other 50% didn't want what you were offering.   Perhaps that is telling you something 



  Do  you think that, as I said above, it was for a small build, that it's actually going to be the same cost for the whole thing?

  Being run by the government Absolutely


  I'd also ask -> you claim you were going to roll this out yourself in a brownfield?    Why do you object to others doing so? 

  I don't I welcome it but do it with their own money.  Base it on a business plan and go for it

  Or is this another "well, it's only good if it's me doing it thing"?

  Please you must have a better argument than that see my comment above





      Now lets say that we want to get a 6% return as per conroys undertaking, assuming the 50% takeup over 40 years (not likely but I will humour those that talk this crap)

      This equals a loan payment of $81.43 before GST and opex costs per month on a 12 payment a year basis for NBN to just pay back the cost  of their NBN build over 40 years.  I can see customers signing up for 40 year contracts NOT.  And we need to remember this is all borrowed money.  Even if we did it on an interest only basis we would need to repay $31 per month excluding gst opex and data charges.  As I understand it most lenders also what their money back at some point.

      So what do you recon should be the charge to the RSP's and what do you recon will be the charge that has to be passed onto the customer including GST?
      Then do "ALL" customers have the ability to pay that? 
      Now tell me I am wrong and back it up with your figures.


  I disagree with the underlying cost assumptions, you seem to be the most pessimistic, so you get the absolute worst case,.

  I gave a best case repayment on an interest only loan and a payment based on Conroys 6% return (unrealistic) so how can that be pessimistic?
  Be specific, you keep demanding I put up or shutup, do the same. 
  What assumptions do you disagree with or is your argument lost for words.  I have used your figures take up rates and a loan calculator to calculate the repayments.  Remember this is borrowed money and needs to be repaid with interest.


  Again, the deal on the table is to decommission Telstra Cu.  

  At a the cost of reducing competition.   I suspect many will move to mobile solutions as a fixed line replacement.  In fact I am seeing that now



  Stuff goes up.  Wah.   

  Tell that to the pensioners, those on the average wage paying off mortages and struggling to survive that make up a large percentage of the population.  You and I are not in that boat, but I talk to those people all the time.  They tell me their budget is $30 to $50 no more end of story.   NBN will cost more than that


  You've taken a small, first trial site and extrapolated only worse case. 

  Rubbish please explain how I have done that and back it up with facts.

    The NBNCo have done a fair bit of modeling to show it's a much better case than that.  I know you'll just go "I don't believe it", but hey, some people do know what they're doing.

  Yes, and some have done it.   I know the pricing of installing duct cable splicing etc etc and I to have modelled it.  I am confident in my model and any reduction in NBNco equipment pricing will be more than substituted by my lower labour costs.    NBNco  modelling if it is so, why don't they announce their pricing for the next 5 years and subject it to scrutiny.  Because it doesn't stack up.  They will come in with a cheap price and it will rise above CPI every year for years to come as opposed to the reductions in real prices using copper.

  I don't care who provides my services as long as they are affordable.  I remember the PMG days the early Telecom days and the Telstra days.  Government monopolies are always loose with their money and rarely if ever get value for money.  BER is a case in point to back up my arguement.  Please back up yours.

   
  How many can't even get ADSL2 or ADSL1?   

  Yes and as I have stated repeatedly that is where the focus should be, but isn't.  The focus is on over building 2 cable networks an adsl network and where  3 or more mobile networks exist and removing the competition of the 2 cable networks and the adsl network by closing them down.   Please catch up


  You keep whining but offer NO alternate plan other than to do nothing.   

  Rubbish.    I believe the telco sector has to be either fully privately owned or fully publically owned.  When it was publically owned there was higher prices and lower service so private ownership is more desirable.   In areas where the market fails to deliver, governments should call tenders to fix the issues and so on.   I don't believe we should reduce competition, but in the same way I don't believe that the competition should be distorted by government programs.  I also recognise that governments are like you and I and have limited resources and should only spend what is necessary and that it should be in an efficient manner.  NBNco doesn't fit that.  There are many more deserving projects like water to guarantee Australias food production capabilities and to provide the water necessary like Adelaide so that those regions can feed and water themselves.  There is a need for very fast trains to take the pressure of the larger cities, there is a need for the inland railway to get trucks off the road and to ensure that Australian ports can achieve there proper capacity and so we can earn foreign income so we can buy fancy new comms equipment etc etc.  But the bottom line is Governments are like you and I and have limited resources


    Lots of people want better and that's right now, let alone in 10,20,30,40 years.

  Define lots and how much are they prepared to pay?
  only 50% took up the NBN free offer in Tassie  so lots may not be the majority after all.  That is me backing up my statement with facts.  How many of those 50% would have paid to take it up?  So how important was it really



  Really?   Where have you been?

  Providing solutions where adsl doesn't exist with my own money.  where have you been?


      Some on this list should go and sit on a 512/128 sat  service for a month with low download limits and high excess charges, then you would have an appreciation of how good your current solutions are.  Some also need to realise that much of the wealth of this country originates from the regions.  Without the regions the standard of living in the cities would be nothing like it is.   We can compared ourselves with Japan korea etc, but that is stupid as well,  look at the population desnities and land mass, or tell me you want to live in a large appartment block like caged chickens.   I think not.  Our lifestyle comes at a cost and higher comms costs is part of that due to the amount of investment per customer required.
  So, your arguing that doing better broadband in regional areas is a good or bad thing?   Not clear Tim.

  I would have thought you would have been able to work out that in regional areas were you don't have any other option than an expensive crap sat service, that is where the focus should be until there is at least choice in regional areas before we go and spend $43 billion increasing city speed from 8 to 20 Mbps to 100 Mbps or more.   But I think you know that .   I have stated it at least 10 times now.  Show me other than in your ABG areas where that is currently happening. 


  Better Satellite, better wireless coverage, a fair bit of regional fibre and I'll bet it's not something that stops in 8 years.

  Better satellite yeh right.  Are you kidding.  Residential Sat has latency that  makes many applications not worth using.   And what year is that new satellite going ot be launched by NBN.  Why does NBN need to launch there own when there are a number of operators that can fill that space sooner?  Should I go on nah
  Better wireless by NBN  when
  regional fibre  when

  A couple of quensland test sites for fibre 1 in Toowoomba 1 in Townsville hardly places that don't have options now

  I've been around a long time too.   I keep looking to the future with knowing what's happened.   I had a 2400bps modem once, I'm glad things keep getting better rather than just going "well that's it".

  No one is saying anythink about not improving.  It is about spending $43 billion to overbuild perfectly servicable ADSL and cable newtworks with borrowed money, no business case etc and going back wards 30 years to the PMG days with reduced competition





  See my earlier posts regarding what $43b represents.  I'd argue that spending a similar amount on some more submarines and a few fighter planes (piloted planes now? Really) over the same time period is going to add far less to the economy than an NBN.

  So your saying defence doesn't matter just goes to show you don't know what they do, get a grip


  But hey, let's all get scared of a big boogey man number and not do anything.

  You are being silly should I state it again.  That is not what is being said

  And yet you STILL OFFER NO LONGER TERM ALTERNATIVE.

  Rubbish


  No one has that objects to the NBN.   No one has articulated a plan as to how not doing NBN now is going to be better over the long term, over the next 10,20,30,40 years.

  That is not the case and if you have a crystal ball that you can see what willbe needed in 10 20 30 or 40 years then I am sure we would all like to have a look at it. To take that line of thinking from a different perspective are you saying that you should buy a new car today becasue you have a flat tyre and you never know you may need a new cat in 10 20 30 or 40 years.  I know that is silly but so is the statement it is replying to.


  NBN has a concrete future, not doing it seems to be wishful, hopeful thinking that something "might happen" in the future if we do nothing now.
  Something will happen, there will be incremetal improvements the same as there has since the dial days and those will address  customers needs.  To say otherwise is being silly.  NBN is just one way to get there without considering all the others.  Blinker type stuff.   


  This is what's really frustrating.  A lot of people whining that "well, we don't want to spend a lot of money now, because, well, it's not me doing it and governents shouldn't do it because, well, I'm happy with what i've got now" and offering no future long term solution.

  Rubbish you keep using the same argument without any basis to it.


  No solutions for even 10 years time.  

  Do you buy your new car now that you think you will need in 10 years time? No.  so why do you want to buy your network infrastructure now when you don't know what you will need in 10 years time

   No actual changes to the regulatory environment, nothing.

  I don't see you putting anything forward just rehashing the same crap


  It's hard to take the "do a temporary patch job now" concept seriously when it's not combined with long term vision of what we'll need.

  How many ways do I have to state that that is not what is being proposed


  You say you've been around a long time in this industry, are you seriously saying that we've reached the end and we should not move forward?   

  More broken record

  What about your kids/grandkids will need?   
  Who know what they will need.  Give me a look at that crystal ball you have


  We should be taking on these big projects to improve the future.  Imagine what'd happened if someone said "Snowy River project, too expensive, no point, we can do something later".   

  There was a need for the snowy project and there was no other option that met the needs at the time, that is why it was done. 


  regards

  Tim
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