[AusNOG] NBN Legislation

[Samantha]

My 2c

The problem is if you dangle a carrot in front of enough people who don't
know better sooner than later you will have an arseload of happy little
vegimites
The problem here is that the "majority" with their blinkers on and there
devices for selective hearing will not listen to the minority who know
better.

The government says it will be good for business, now up here in cairns,
they are being told that there emails will get there faster, banking
transactions will be quicker and business will be faster and better...
I sit back and chuckle, it may be the point, but when will ms make the
difference, and chuckle at the comments you hear around the place. (trust me
they must like garden vegies)

So coming back to the comments made here,
Why would people be interested in "new technologies, advancements" when they
are happy as pigs in ^(*( with what there being fed.

Bevan's comments on a "IT Communism - are ringing true"


Sam


-----Original Message-----
From: ausnog-bounces at lists.ausnog.net
[mailto:ausnog-bounces at lists.ausnog.net] On Behalf Of Bevan Slattery
Sent: Saturday, 27 November 2010 8:30 PM
To: Brad Gould; Mark Smith
Cc: ausnog at ausnog.net
Subject: Re: [AusNOG] NBN Legislation

Hi Brad,


> It *appears* that the gov has just defined a new "pstn" standard service.

That is an oversimplification. This insidious piece of legislation is all
about removing carriers ability to make independent investment decisions to
deploy capital efficiently.  It is about economically stranding the fibre
assets.  What the Government has effectively done is choke off all the
capital and investment in competitive infrastructure under the guise of
'harmonising standards'.   Infrastructure based competitive carriers are no
longer able to consider each network extension, or individual product on its
own independent situation.  Every day carriers make decisions on where to
invest based upon the opportunities in front of them and in working with
their customers.

So an example would be Internode wants to connect to their PoP in Brisbane
to a corporate client 2kms off PIPE fibre with a 1GbE metroE service (an
extension cost of $60k and a monthly increase in duct rental of $1,200).
Now before PIPE can sell Internode any services PIPE would need to create a
non-discriminatory access regime between PIPE and Internode with the fact
that this regime (Network FAA if you will) needs to apply to *all* future
customers.  Now if the Network FAA says that PIPE will sell their 1GbE
metroE service for $1,000 per month, PIPE would be unable extend its network
to offer Internode this service because frankly, it would lose money.

Regrettably unlike NBN Co. companies like PIPE, Nextgen, Optus, AAPT etc. do
not have unlimited funds and more importantly understand they need to
provide a greater return on their investment than their WACC.  NBN Co. has
already demonstrated that on an optimistic basis they may be able to produce
a 6% return on invested capital some 5% LESS than their WACC over 30 YEARS.
In fact NBN Co. is estimating it's WACC is 25% per year for the first 3
years.  So unlike all other carriers out there, NBN Co. does not have
company Directors who will be personally liable to shareholders for their
decisions, NBN Co. and the Government is prepared to wipe away billions of
dollars in investment dollars (the delta between its RoE and the WACC).

> 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.

Sorry - the "market" hasn't been broken.  Just the structure of one player
in the industry and that is Telstra.  This legislation is about destroying
the competitive carrier infrastructure players.   It's not a "correction",
but a further abuse of market power by the shareholder of the new monopoly.
Time for a few people to wake up and smell the coffee...

[b]
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