[AusNOG] NBNCo releases its response to industry consultation

Mon Mar 29 14:15:11 EST 2010

Hi Bevan and John,

With respect, I think your comments regards the small fibre to the home operator are a little off the mark.  I suspect I know who you are referring to, however you comments fail to acknowledge that,  if it was not for some of the small operators (even in the dialup days and the early ADSL days)  then it is highly unlikely telstra would have even started doing fibre to the home or offerring other services.   Some of the catalyst for devlopers using the small operators was to pull telstra into line and force them to offer such services.  The issues some operators didn't recognise in the early days was that they would need to achieve substantial deployment densities to enable them to upgrade their backhaul links, or in one case an operator was told a planned fibre deployment was going to happen which he could connect to,  which didn't and he had no plan B.  Personally I wouldn't use unlicensed radio for such a backhaul service, but many do successfully.

While some of the comments have merit they ignore the reality that NBN may not have even been on the table if some of the small operators hadn't dragged Telstra into that space which has then dragged other operators into the space.  Any issues within these small ftth deployments would be relativley inexpensive to fix properly, other than backhaul. While I acknowledge that some of the deployments have not lived up to there initial expectations that may have been due to a number of reasons.  Some of the early deployments had some budgetary limitations.  Developers wanted the cheapest price, and the operators hadn't factored in backhaul costs as the networks customer usage grew.  This was new technology in a low margin space.  It is very easy to be critical in hindsight,  at the time these operators were starting, they had no previous deployments to learn from, and they were offering services in the consumer space as opposed to the commercial space where the margins are much higher.   I am sure Pipe would have charged a commercial price to "save" the operator concerned.    

The issues associated with backhaul were in some cases over looked, which was a bad mistake.  It is a mistake that can be addressed and fixed.  If backhhaul wasn't such an issue then such deployments would be easy.  But the reality is that backhaul is the most constraining issue affecting facing the industry today (due to building viable business cases for its deployment).  The last mile that NBN is going to address is not where the bottleneck is.  Most consumer space customers are after the cheapest price, not the fastest service, which really questions the need for the NBN at all. All the screaming from the industry regarding Telstras anti competitive tactics is what is driving the need for the NBN at this point, plus I suspect some of the media industry.  What really amazes me is that those screaming the loudest are not prepared to invest in competitive infrastructure, other than DSLAMS or commercial high margin services.  If it is so easy why haven't they done it?  Why aren't the same companies deploying DSLAMS in "all" the same exchanges as Telstra?.  Which brings me back to the willingness to criticise a small FTTH operator.  You really owe them an apology.  

My point however is that many companies start off as small, and in same cases the revenue streams allow some to grow into larger companies, particularly where government departments put their business with such companies.  I therefore find it a little hard to criticise any operator that has had a go, whether successful or not.  Also by not naming the operator a slur has been cast over all the small deployments unfairly.   I haven't seen either Pipe or Agile internode offering to deploy infrastructure in this space and I find the criticism just a tad inappropriate, and outside of your areas or expertise. 

What worries me the most though, is that you both have influence with governments and yet you may be behaving in exactly the same manner as Telstra and are probably simply pushing your own agenda in the policy space while at the same time criticising Telstra.  Your comments would seem to suggest that you have forgotten where your businesses have come from.  Both started off as small operators.

My apologies for being so blunt, but I do think this needed to be said for balance purposes.    To much of the NBN policy is being driven by the response to the noise form the industry as opposed to the needs of customers.   Ftth will come regardless of NBN, but I don't see NBN co providing the innovation in the future the same as Telstra has failed to do so now.  In Telstras case I suspect it delayed due to commercial return on investment decisions and regulatory issues, I suspect we will therefore replace one monopoly with another and we will be back in the same space in the future, unless NBN co ensures it keeps modenising its network.  What I see though is no catalyst to ensure this happens in the current model especially if telstra folds its copper into the NBN.  I still remember what it was like in the old telecom days.  I guess we are going to visit those days again and we will see this debate start again.  Perhaps a look back to the future could avoid some of those issues, but I won't hold my breath waiting.  Personally I would like to see duct access made available and let all carriers go for it.  Putting fibre in is cheap, the expense is in the duct access and the backhaul.  Then we would achieve some real competition and innovation.   Paying $6 to $8 per meter for duct access kills any retail business case, however is commercially viable in the commercial space.   

Just my 2 cents worth 

Regards

Tim  
  ----- Original Message ----- 
  From: John Lindsay 
  To: Paul Brooks 
  Cc: ausnog at lists.ausnog.net 
  Sent: Monday, March 29, 2010 9:11 AM
  Subject: Re: [AusNOG] NBNCo releases its response to industry consultation

  No amount of customer complaints through the TIO will fix the underlying problem if the original service delivery platform is inadequate.

  The final "solution" is the customer ends up with no access at all.

  In this case Pipe providing backhaul fixed an ugly mess caused by an overly optimistic retailer.

  In other cases Telstra end up providing the bare minimum USO service with support for superfast 19.2K modem. Amazingly many local governments are willing to accept this from a property developer.

  Australian Broadband Guarantee provides a 512K minimum service so if you're not getting ADSL or Optus 3G you can have satellite while you wait for the NBN.

  I can't see the current government getting any telco legislation through in the life of the parliament.  It isn't clear what the opposition's policies are on broadband but Paul Fletcher gave an interview on Friday that I haven't listened to in which he appears to be signalling a Liberal government would cave to Telstra on the basis that not doing so would not be fair to Telstra shareholders.

  How doing so would be fair to all Australians is not spelt out.

  A summary of the interview is here:

  http://www.itwire.com/it-industry-news/strategy/37892-fletcher-backs-telstra-in-alan-jones-chat

  jsl
  --
  John Lindsay - GM Regulatory and Corporate Affairs - Internode and Agile

  On 28/03/2010, at 10:38 PM, Paul Brooks wrote:

    On 27/03/2010 11:11 AM, Bevan Slattery wrote:
      The developer could not legally take back the infrastructure he paid for as it was now owned by the FttH operator.  The development started to get a bad name.  Apparently there were people in the estate with serious health issues and a first line service was critical.  It almost went completely pear-shaped and for a last minute plea to us, I agreed to backhaul the operator back to the city. Incredibly scary.

    Yup, that sort of crap happens, no question. You'd have to think that those services wouldn't be treated as 'equivalent to what NBNCo would do themeselves', and in that case the initial operators should and would be taken over/overbuilt and the problem fixed when NBNCo get to that location. Incidentally (and possibly off-list) why weren't the operators of that development subject to legal action or at the very least complaints through the TIO - or did that happen?

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