[AusNOG] Flogging a dead horse

Tue Aug 17 09:21:10 EST 2010

Andrew,

Tim's clients are representitve of the regional users we are attempting to reach with the NBN. Dismissing his anecdotal knowlege in favor of percieved demand and napkin math with little/no visibility of the demographic is foolhardy at best.

Yes, the government often spends a lot of money on projects which benefit only a few - but these are (sanity permitting) for projects which are totally infeasible by a private enterprise.

As I have mentioned before, if organizations require large amounts of connectivity, they should work this into their business model. Rio Tinto did that when they trenched 700km of fibre string across the Nullabour to replace an old microwave network (which replaced an analogue troposcatter tie!).

Justifying wasteful expenditure by pointing out other wasteful expenditure is not a good argument - the rebuttal for which I will refrain, suffice to say that yes, I am concerned about defence/education/gov advertising/etc misspending, but I am not accomplished in the economic models of those fields and therefore am unqualified to comment.

Sent from my HTC Touch Pro

-----Original Message-----
From: Andrew Oskam <percy at th3interw3bs.net>
Sent: Tuesday, 17 August 2010 1:39 AM
To: Tim McCullagh <technical at halenet.com.au>
Cc: <ausnog at lists.ausnog.net> <ausnog at lists.ausnog.net>; Paul Brooks <pbrooks-ausnog at layer10.com.au>
Subject: Re: [AusNOG] Flogging a dead horse

And this is the very problem we all face but, in my opinion, will have to make do with.

While I support the fact that you may very well indeed have clients that don't need a Clydesdale (fibre) there are others that do. But at the same time, there are plenty of things in this country we ALL do t need but we end up paying for it anyway. It's pretty obvious that we all have our own needs but the govt can't make us all happy.

Just because your or your clients don't need something... It doesn't make them any more important than the rest of us. I hate to be blunt but that's just how I see it.

Sent from my iPhone 
-------------
Andrew Oskami

On 16/08/2010, at 4:08 PM, "Tim McCullagh" <technical at halenet.com.au> wrote:

> Well I am very glad you wrote that because I can demonstrate how it is not only not applicable to the topic at hand, but it also demonstrate very poor business planning as well.
>  
> The anology below is flawed because you are assumming everyone needs to pull the cart with ever increasing loads which is not the case.  Your analogy is like saying everyone in the subrban street needs a mini bus because one family in the street had 7 children.  That is clearly not the case with broadband.  Some in the street may have a pony and some may have a push bike.  Some may require an always on connection with speed not important, whereas others may require speed.
>  
> On the issue of financial viability and business planning, the local taxi company doesn't purchase minibuses to pick up all their fares.  They have some mini buses and some commodores and falcons, because some customers want something different and it is more economical to increase their demand by having different choices and minimising costs by deploying more efficient vehicles for different tasks.  This is the same choice that customers will make to.  Many of these customers are non technical people that want to access email and a small amount of web surfing and perhaps a little voip.   What suits them best is generally what suits their budget.  With mobility becoming ever more important to some customers, then some are substituting their mobile products as fixed line replacements.
>  
> I guess the debate has come down to the differences in perspective from those that sign the front of the cheques and those that sign the backs.  More importantly those that sign the backs of the cheques have not been told how much they are going to have to put on the front of the cheques they sign to have access.  It is at this point that some will be informed enough to make a choice and will then be in the front of the cheque category at which time their financial ability to pay will influence the decission (reality will set in).  For some of us we may not balk at $100 or more per month, but we are not the majority and our demand will not make NBN economical.   The whole business case comes down to takeup.  The more capital that is spent the higher will be the monthly charges necessary to gain the required return.  The same applies to takeup.  The larger the takeup the cheaper it will be to get the return.  The issue then becomes how to maximise takeup.  At present there are a number of alternatives like ADSL, mobile wireless, fixed wireless etc.  Even tough the question has been asked many times I have never seen an answer to the question "what percentage of ADSL customers are asking for the highest speed as their demand priority?"  or is it that people sign up to plans they can afford.  This will very much determine the take up.  Many want the fastest speeds but when it comes to capacity to pay choose other plans. There is not a snow flakes chance in hell that the NBN pricing once the political games are played out will be cheaper than the current ADSL offerings.  It is a major investment and will require a higher price to pay for it.   The danger with NBN is that many won't have the ability to pay which will drive more onto the mobile wireless networks and degrade the quality of service on mobile wireless networks.  Some much for providing solutions for the future.  NBN risks driving demand from the current fixed networks to the mobile networks making even incremental upgrades uneconomic in the fixed network.  The trend of fixed to mobile substitution has been happening for some time.
>  
>  
> regards
>  
> Tim
> 
> ----- Original Message -----
> From: Paul Brooks
> To: ausnog at lists.ausnog.net
> Sent: Monday, August 16, 2010 2:19 PM
> Subject: [AusNOG] Flogging a dead horse (was Re: NBN: "i want a pony! but can I afford it"
> 
> I want a Clydesdale, not a pony.
> 
> For many many years my faithful pony has served me well, pulled my little milkcart, and when the workday is done she happily provided pony rides for each of my children. How happy they were, queuing up to take their turn for a fast trot around the meadow, pretending to be light-horsemen with all the other children on their ponies. I remember when I first bought dear Copper, she was so sprightly and quick, especially when compared to the old days when I used to have to pull the barrow myself.
> 
> But as the years have passed my milk business has grown, and my cart has grown heavier and  heavier as I try to do more, and ask my faithful Copper to step up to the increased load. My workday has got longer, and encroached on the time my children want to have fun - and they have also grown heavier as well over the years. I've seen others in my predicament harness two, four, even six ponies together side-by-side to pull the heavier loads they have been fortunate enough to grow to need - and this works for a while, but there is a limit to how many can work together. 
> 
> Now my poor Copper is lying on her side, panting, willing but unable to pull my double-decker milk-trailer - and when she does manage to get it going forwards, she certainly can't get it moving in reverse, and she has always struggled in the hilly areas out of town where she can only go very slowly, and some roads are so long or steep she can't go there at all, and I can't sell my milk to the people living there - nor can they get a pony of their own.
> 
> Now I know I can spend about $6k on a visit from the vet - he can give her some injections, bandage her knees, keep her on her feet - but I know that I'll just have to do the same bandaid measures in a few years time, and even then she'll never be able to pull the cart any faster, or cover a wider territory than she's already doing. I could invest in some more ponies and harness them together like others have - but while I know they can pull    more, six ponies don't move any more  quickly down the road than one does, and still can't go up long steep hills, let alone reverse back down them.
> 
> The other day I saw a Clydesdale - a hulking great beast that can effortlessly pull huge loads - certainly it will pull my new cart, with a lot of capacity for my milk business to grow, pulling multiple milk-trailers in a roadtrain. It can take on the hilly areas out of town without even slowing down or losing breath - and it can pull a haycart at the same time, big enough for not just one child, but the whole family to ride on and have fun at the same time, and the neighbours too. Its almost as easy for it to go backwards as forwards, which opens up new possibilities.
> 
> Unfortunately a Clydesdale is fairly expensive - $43k someone has estimated - but after that they are relatively cheap to keep fed and watered, especially compared to the constant vet bills and ongoing costs for poor dear Copper. Some people can't work out why I would want to spend that sort of money on a horse - but they are generally the ones that live on the flat, where their little ponies can run faster than here.
> Over time, the constant outgoings to keep the pony going will surely be more expensive than the purchase cost of the Clydesdale - but I can't find anyone who can help me work out the ongoing maintenance costs, everyone seems to be fixated on the purchase price and nothing else. I'm not sure if I should spend a bit more now, and get a bit more, or spend more over time flogging a horse already at its limit.
> 
> P.
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