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

[Bevan Slattery]

MMC Wrote:

>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).

There's logic there that just breaks my head.

1.  First of all we all hear that we need to build the NBN because of the "massive bandwidth requirements and how we all need 12Mb/s all the time" and I agree technically on that level, but the business plan now taxes users for the bandwidth consumed negating that benefit.   Every Mb/s consumed is $20/month usage tax.
2.  If you don't think that people will be consuming more traffic over the next 3-5 years and that plans such at 1TB will become more normal than why are we building this again?
3.   I agree no-one provisions 1-1 ratio in residential.  However, it's equally incorrect to assume that ISP's don't buy bandwidth for their "peak" demand.  I gave an example of where the usage is perfect from an ISP perspective yet 100% consumed.  The same could be said about users using an average of 70% of quota (excluding shaping this happens as an average) yet overall 24-hour actual traffic consumption to potential consumption is 70%.  Think the midnight to 6am period or the business hours for residential providers (shaping or off-peak conditions do apply).
4.  You feel that it's progress that 8 million users will no longer have the choice of a $25/month for unlimited bandwidth from house to PoP ADSL option, to an NBN $25/month + $20/Mbps/month option?

> "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

Broken logic again.  Disconnect those 8 million Australian who have choice and create a monopoly for the 20 million with a pricing structure that is essentially a tax on traffic?  Naked bundles is where the big growth is these days (outside of wireless).

> 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).

You can put *any* number in your model for bandwidth consumption of the basic NBN product and it will *always* be higher.  Just that this is a broken argument whereby people say we need the speed or we'll be left behind, but people want to use yesterday's traffic models for costing.  Haven't you realised that the whole $25/user wholesale was a number plucked so the Government didn't "lie" when they said "it will be cheaper than Broadband today"?  It's based upon a 250:1 contention ratio!  If that's the future and is what it takes to be affordable, then where do I sign!!

>  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.

OK.  So obviously, you understand the business of operating large scale networks better than I.   What is it going to cost for a 100GB, 250Gb, 500GB customer under NBN compared to naked?  Put up your calculations for disclosure.  Where have I erred in my financial modelling?  Is the model wrong or are you just tweaking numbers based upon sweet whispers in your ear about softly promised volume discounts and PoI discounts at some indeterminate time in the future.  Can you point me to the actual numbers.  I'd be happy to put them in my calc.

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

No - perhaps they've lost my contact details :)  I thought this was supposed to be a public process in which all the information is made available to the public.  I have been relying on information in the public domain.  Is there information that is only provided behind closed doors?  What are these guaranteed discounts you talk about?  Isn't this an open and transparent process as promised?

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

Broken logic again.  That's because there was no competition in International Transmission in Australia much like the new NBN.  So under your model the Naked delivery of a L2 tail to 8 million Australians is going up to the point international transit is cheaper than house-PoI and you're not alarmed by that?  And unlike the L2 naked world today where you own the port and dark fibre there is no material incremental cost of delivery for all the way to the autosynch speed of the copper,  but in the NBN world where you get taxed more per BYTE you take, that makes sense?  The logic here is that lack of infrastructure competition creates inefficient markets which you think is good and bad?  Good when it suits your argument and just don't discuss it when it's bad?

I encourage you to support your argument by putting up your numbers and substantiate them.

Also I think it's remarkable people keep clutching to the future justification of combining WLR+LSS as a winner, when if you sat in the market in 8 years' time when this comes up, you will realise that market would have almost mostly evaporated by then whether through naked/VoIP or just wireless primary lines anyway.

Eagerly awaiting your financial model! :)

[b]

PS:  I remember reading in the Implementation Study that the NBN can proceed without Telstra and with all the copper staying in the ground.  I wonder what happened to that?  Why do we need to recreate a new monopoly with a bit-tax on consumption?





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