[AusNOG] NBN Legislation

Sat Nov 27 15:51:00 EST 2010

On Sat, 27 Nov 2010 12:59:01 +1030
Brad Gould <bradley at internode.com.au> wrote:

> And this stops the provider offering a cheaper, lower speed service how?
> 

Because they have to pay for and put in infrastructure to
support a service they never intend to offer. Their cost base is
artificially increased with no benefit to themselves and their
end-customer. Their end-customer will have to pay artificially higher
prices for the service than necessary to cover those unnecessary and
mandated infrastructure costs.

> It *appears* that the gov has just defined a new "pstn" standard service. 
> 
> Everyone gets 240v, 50hz

They're interoperability standards. They encourage a competitive
market, because vendors can't use customer lock-in to create a
product supply monopoly. In the NBN co-context that'll be industry
standards like Ethernet framing, 1000BASE-T interconnects etc.

> and mostly 20amps at minimum.  There is nothing intrinsically wrong,
> as public policy, increasing that to 30 amps, or indeed 25Mbps.
> 

And they're service parameters. Why should the government force me to
have (and eventually pay for in some way or another) a 30 amp feed to
my house when I'd be quite adequately suited with a 20 amp feed, both
operating at 240v, 50hz? The money I save on not paying for larger
mains feeds is money that I can spend somewhere else. If I'm forced to
pay for something I don't need, and as my spending capacity has a limit,
another deserving market/industry misses out. The result is unnecessary
things existing, and things that I consider necessary, and would spend
my money on if I could afford it, won't exist (which may be as
simple as a monthly Internet quota increase, and the corresponding
employment and products that are created to supply that increased
Internet service.) This is the broken window fallacy.

> Forward looking policy is sadly lacking from all governments. Sure you may disagree with the arbitrary values chosen, but the market has been broken due to policy failure for years, and some people are going to get hurt when a correction is applied - cold comfort for some.
>  

Unfortunately if the new policy is also a failure, the tax payers will
be left carrying the can (like having to now inspect homes for badly
installed insulation because the government created a bubble in that
industry, sucking in the fly-by-nighters. ). If it is rushed and ill
considered policy, the chances of policy failure go up.

Regards,
Mark.

> Brad 
> 
> --
> Brad Gould
> Network Engineer
> Internode Network Engineer
> 
> 
> 
> On 27/11/2010, at 11:52, "Mark Smith" <nanog at 85d5b20a518b8f6864949bd940457dc124746ddc.nosense.org> wrote:
> 
> > On Sat, 27 Nov 2010 11:11:50 +1100
> > Dmitri Kalintsev <dek735 at gmail.com> wrote:
> > 
> >> Bevan et al,
> >> 
> >> My reading of this says that the intent appears to be to ensure that:
> >> 
> >> - If you're building new infrastructure, it will need to be capable of
> >> providing L2 service (for example, you can't buy a wholesale L2 over HFC
> >> today);
> >> 
> >> - If you've re offering a high-speed L2 service, it meets at least base set
> >> of requirements (which are to match those of NBN Co, and judging from the
> >> technical product descriptions they have released to date, this should not
> >> be very hard);
> >> 
> >> Also, it appears to me that you're free to offer however complex and
> >> advanced L2 services *in addition* to the said "base bitstream L2 service"
> >> and price them as you wish. Here's your differentiation - differentiate
> >> away, as longs as you *also* offer a base service, at a regulated price
> >> point. I think this might actually help innovation, rather than hamper it.
> >> 
> > 
> > It discourages and prevents innovation, because it prevents people
> > offering a cheaper and less capable but quite acceptable service to
> > the target market. As an analogy, imagine if the government in the 1940s
> > mandated that all restaurants needed to provide seating, cutlery and
> > porcelain or glass crockery. That would have prevented the innovations
> > of drive through service, take away and fast food restaurants. I'm sure
> > most of us have utilised those "lower quality services" at some time or
> > other.
> > 
> > If the government had mandated that phone services must be PSTN quality
> > and availability, then we'd be unlikely to have mobile phones, because
> > when we have and use a mobile, we trade off quality and availability of
> > service for the convenience of mobility. Fortunately they didn't.
> > 
> > Innovation needs to be able to happen in both directions - value add,
> > at an increased cost, and value "reduce", at a reduced cost, which
> > provides a product or service to a market that formally wasn't catered
> > to, because it was being overshot.
> > 
> > http://books.google.com.au/books?id=SZQnfdM9O7wC&lpg=PP1&ots=ZjhdT5CUp6&dq=seeing%20what%20is%20next&pg=PA4#v=onepage&q&f=false
> > 
> > 
> > 
> >> Then again, I'm not a lawyer either.
> >> 
> >> Regarding Bevan's example with fibre in the basement - if my interpretation
> >> is correct, then you're free to add a switch and provide a service, as long
> >> as in doing so you're *also* establishing an ability to provide a "new
> >> world-compliant" service to a potential wholesale purchaser, wishing to
> >> serve somebody (else?) in the same building with a "universal bitstream L2
> >> service" which he then would be able to buy from you at the regulated price.
> >> 
> >> -- D
> >> 
> >> On Fri, Nov 26, 2010 at 10:33 PM, Bevan Slattery
> >> <Bevan.Slattery at nextdc.com>wrote:
> >> 
> >>> On top of that - ACMA/ACCC will be deciding on what products and technical
> >>> standards everyone will use (loss of innovation) and everyone must offer
> >>> non-discriminatory pricing even though the competitive infrastructure
> >>> providers have 'risked' their capital to build these networks.  Pricing
> >>> regime will also be regulated along with any volume discounts.  You can go
> >>> to any provider and get the same vanilla service as determined by the
> >>> Government and NBN Co..  So with innovation and product differentiation
> >>> removed, those that have the cheapest cost of equity/debt will win.  And
> >>> it's not hard to guess who that is.
> >>> 
> >>> This is simply economic and technical communism.  Welcome to the new world
> >>> order.
> >>> 
> >>> [b]
> >>> 
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