[AusNOG] "Sewer broadband provider dumped" - Brisbane fibre plan scrapped

Wed Feb 23 17:48:54 EST 2011

On 23/02/2011, at 1:07 PM, Bevan Slattery wrote:

From: Matthew Moyle-Croft [mailto:mmc at internode.com.au]
Sent: Wednesday, 23 February 2011 2:13 PM
To: Bevan Slattery
Cc: Damien Morris; ausnog at ausnog.net<mailto:ausnog at ausnog.net>
Subject: Re: [AusNOG] "Sewer broadband provider dumped" - Brisbane fibre plan scrapped

A few comments:

- Cost to access a customer is either $17/month for ULL or it's ~$30ish as you need LSS and wholesale line rental.

Cost is $6.50 for Band 1 or $16.00 for band 2.  Even if I took your price of $17 you are looking at a rate of $25 for copper limited bandwidth from home to PoP.  Under a 1TB of data transferred (excluding IP) this would equate to $25-v-$85 (or worse case including a $10/Mbps backhaul charge $115)

Band 1 is very small.

The 1TB figure is interesting.   Why did you decide to use that?  The number of customers using 1TB a month is very, very small.  At an average of 1TB/month the CVC price will be much lower than the rate you quote.  It's also unreasonable to think that anyone provisions 1-1  ratio for residential.  (NBNCo pricing for CVC drops as average increases - if you'd gone to their presentations recently you'd know that).

Given that ~80 of the 120 POIs are "metro" it's likely DF will continue to be a viable backhaul strategy, so the cost of $10/mbps for the backhaul is probably a bit high, even if the non-metro price was higher due to distance.

- DF is only available to a subset of the exchanges of people covered by the NBN.  So, you then need to start averaging the wholesale costs for the areas NOT covered.

Firstly, I said that was to the majority of metro exchanges which is entirely accurate.  Secondly the “subset” of metro is a majority or metro.  By some research I did at PIPE 2 years ago we had DF to exchanges that covered over 6 million people.  From recollection a further 50 (large) exchanges have been installed since then.  Add to that that AMCOM, ESTA etc. in WA and SA I would expect DF to be available to almost 8 million people.  If you read the AGM presentations by companies like iiNet and TPG you will note their “on-net” customer base is higher than their “off-net”.  The vast majority of these are fed by dark fibre.

"Almost 8 million" is a long way short of ~20million to be covered by fibre.   It gives you an idea of the size of the non-competitive area and thus where the wholesale cost starts to rise significantly.   This means that the cost of us, as an ISP to deliver to

You are worried about a tinkering of a $5/month delta on ULL (which I am happy to take an average approach including some Band 3 regionals) but don’t have an issue with the extra $60/month for NBN?  Huh?

You've picked some numbers to make the difference so high.  The actual cost based on project customer behaviour does not produce such a cost difference on average across all customers (national averaged pricing and all that).

So, it's easy to create a bit of strawman about what the best-case is for this, but this doesn't represent the average cost.

No strawman, just stating economic fact.  Pushing out a NBN press release with a view to keeping the “headline” wholesale price down to $25/user based upon a user contention ratio of 1:250 on a 12Mb/s (average 48Kbps over a month) service is just amazing.  That’s the same bandwidth as getting unlimited dial-up.  Why didn’t they have a table showing costs under a variety of plans?

They actually have a calculator to figure it out.   Again, they presented it at the roadshow recently.   Some of us who have eyeball customers have a fair idea of what this'll cost for different classes of customers now and in the future due to forecast drops in port and cvc pricing compared to existing costs both on our own ports and via wholesale ports.

The silence on the NBN pricing is deafening.

Maybe you're just not part of the conversation.   Did you goto any of the roadshows?  Or have any meetings with NBNCo?

Here’s a little bit of irony.  International bandwidth pricing without competition was around $300/Mbps 3 years ago.  With competition it’s now $35/Mbps.  Within the next 12 months it will be cheaper to get bandwidth from Iraq (Internet) to Sydney than from a the house next door to the PoI to the PoI.  Sorry – that’s a bit extreme (but true).  I should have said in 12 months it will be cheaper to get bandwidth (transit) from anywhere in the world to Sydney, than from anywhere in the PoI to the PoI.

International pricing has always been too high.   It's coming down.  That's good.

MMC

Who’s clutching at straws?

[b]
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Matthew Moyle-Croft
Peering Manager and Team Lead - Commercial and DSLAMs
Internode /Agile
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