[AusNOG] News: Minister Conroy contemplating Government-Fundedundersea cable?

[Terry Sweetser (SkyMesh CTO)]

I'm enjoying this debate immensely.

And I don't think it is that off-topic.

IMO, I don't think funding the NBN is a major issue for this list, given 
it's part "nation building" and part "social policy", funding is a 
political issue before it is a NOG issue.

There are, however, NOG issues which also are very relevant to our hip 
pockets.

Some things I have issue with:
[0] The NBN is expensive at the wholesale level.
[1] There are two many POIs.
[2] CVC charges are not good value for 80%+ of the network.
[3] The tail charges are too expensive at the 12M and 25M speed levels.

Overall, on [0], it's hard to argue against the social policy issues and 
not get told "don't ignore the bush".  Sadly, 12M and 25M (soon) over 
wireless and satellite do not really compare well with FTTP on all 
technical fronts.  FTTP at the high end speeds represents good value for 
2012, and very unlikely to be good value later in the decade.  Paying 
$20 per Mbps (while free for the 1st 150M for now, not free later) looks 
like fantastic value for wireless around Mackay or Satellite to central 
Australia, for FTTP at an average range of 5km is ridiculously expensive.

There's a major "not level playing field" paradigm with the POIs. The 
ACCC has truly shafted every low cap and small rsp in the NBN wholesale 
market space.  The only telco with the lowest capex to reach every POI 
is the incumbent.  The philosophy of having a new monopoly was to break 
the incumbent's hold on the CAN: this has not happened yet, and it is 
now evident that the NBN will facilitate market domination for many 
years by the incumbent while the rest of the RSPs have to fund with real 
capex getting to these many POIs. That's [1].

So on [2], in order to obtain "social equality" between FTTP, wireless 
and satellite coverage, without addressing the severe technical 
shortcomings of wireless and satellite in comparison to FTTP: the CVC 
charge has to be "high".  I say "high" as the bandwidth is being fed to 
the network very close to the population it services for 80% of the 
planned network.  There's that other 20%, some FTTP, all wireless and 
all satellite where that per Mbps cost to NBN far exceeds $20/Mbps.  
Satellite bandwidth for data is extremely expensive compared to FTTP.  
There are spectrum limitations on wireless which make it a dead-end 
technology for the low density areas NBN plan to service with LTE.  
Spectrum is not cheap, getting more to accommodate wireless growth on 
NBN will be major capex.

Lastly, regarding [3]: compare the current practice of obtaining 
exchange space, buying/laying back-haul and obtaining ULL/SSS from the 
incumbent, *with* paying for NNI, CVC and AVC on NBN. Your fixed costs 
are likely comparable to NBN levied fixed costs, in fact NBN will be 
cheaper.  Now, "per client" costs on NBN have suddenly jumped from $xx 
to $yy, and I'll speculate that $yy > 3*$xx.  If you're an owner of 
back-haul to the exchange, you have a low opex "per client", but you 
will not enjoy that low cost on NBN.  It seems to me that the RSPs 
sitting in the middle 75% of the market right now are not looking at a 
good deal for NBN, they're likely rather shocked and dismayed at the opex.

In summary, the current POI model makes NBN too expensive, RSPs are 
paying for the bulk of the transit of data around the NBN on their own 
networks, before they even get the to POI.

CVC bandwidth at $20/Mbps for FTTP would be a lot more value for money 
and palatable if the coverage was a whole state, not just 1 CSA.

(If anyone wants a quote for publishing anything above, please contact 
me first, I consider this to be private conversation amongst friends.)

http://about.me/terry.sweetser

On 01/10/12 01:00, ausnog at ausnog.net wrote:
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