[AusNOG] Screw the NBN, says TPG: We'll do our own FTTB

Wed Sep 18 08:13:17 EST 2013

I don't think you did either!

Sent from my iPhone

On 18/09/2013, at 6:24, Mark ZZZ Smith <markzzzsmith at yahoo.com.au> wrote:

> +1
> 
> I think those who yearn for a government owned telecommunications monopoly probably haven't experienced one, and don't know the difference that having  competition has made in regards to service costs, diversity of different services, both in variety and range of quality (silver service down to take away), and other economic benefits such as employment in the industry, vendor opportunity etc.. Ausnog itself, and the economic benefits the conference provides, wouldn't exist in a government telecommunications monopoly environment, so these conversations and debates wouldn't even be occurring.
> 
> 
> (Regarding PMG, I've recently seen people who remember it saying that it stood for "Public Money Grabbers".)
> 
> 
> 
> From: Bevan Slattery <bevan at slattery.net.au>
> To: Robert Hudson <hudrob at gmail.com>; Paul Wallace <paul.wallace at mtgi.com.au> 
> Cc: ausnog at lists.ausnog.net 
> Sent: Tuesday, 17 September 2013 10:51 PM
> Subject: Re: [AusNOG] Screw the NBN, says TPG: We'll do our own FTTB
> 
> **NOT FOR PUBLICATION OR REPORTERS**
> 
> > But take a look at the HFC rollout maps, and tell me just how successful market forces have been in providing decent infrastructure to everyone.
> 
> Do you care to provide an understanding of the history of how this occurred?  (read below)
> > Take a look at the inequality of access to decent telecommunications infrastructure provided by an organisation who are legally obligated to provide fair access for all (and still fail miserably to do so).
> It seems you are arguing that where there is no competition the standard of service often fails to keep pace/be inferior (which I agree with).  So I'm not sure what your argument is.
> > How well has the model you propose worked so far? Really?
> Bandwidth to Australia in 2000 cost $6,000/mbps.  TCNZ, Optus and Verizon risked $1.1B to build Southern Cross.  Competition ensued.  Bandwidth dropped to $2,000 in 12 months and some 8 years later to $250/mbps in a comfy duopoly.  PPC-1 was built and bandwidth dropped to $60/Mbps within 24 months.  Wholesale for big bandwidth is now (close) to sub $10/Mbps.  I expect that with the new submarine cable systems coming online in the next 3 years transit/bandwidth will be around $1/Mbps within 5 years.
> 
> It's important to note the previous NBN Co CVC fee was $20/Mbps from the house to the POI and increasing.  That is 2000% more than international bandwidth costs before half the network is deployed…
> 
> There was a Government owned monopoly.  Then there were entrepreneurs who committed to invest in infrastructure where they could afford to in order to improve the value for you, the punter.  Names like Malone, Teoh, Hackett, Marburg, Preen, Baxter, Bhartia, Ashton, Kestelman and companies like AAPT, Powertel, Primus, Internode, iiNet, Vodafone, 3, RequestDSL, Eftel, BigAir, Optus, TPG, Netspace, Westnet, IP1, Amcom, Comindico, PIPE Networks, Nextgen Networks have all invested money to deliver greater value and competition to the public.
> 
> If it wasn't for Optus committing Billion$ to build the original HFC network to bypass the last mile monopoly then there would probably be no HFC network at all.  Sadly at the time the Government owned telecommunication company engaged in "van following" to overbuild the competing carrier (Optus) and halt their progress.  It worked.
> 
> And Telstra's commitment and build out of NEXTG was remarkable and leading.
> 
> It was competition from carriers committed to building DSLAM's that saw the HFC networks reduce their pricing as ADSL became more available and more importantly more AFFORDABLE.  It took Internode, iiNet, TPG, Primus, Netspace, Eftel etc. to offer auto-trained ADSL2+ before others provided same and they ended up providing that nationally.  For a shareholder based company to invest they have a higher standard and level of return to achieve, because for said companies the risks are higher and the Directors could go to jail if they get it wrong.
> 
> > And again - the NBN does *not* cost us (the nation) $37b. Or even $90b if you choose to believe Turnbull's build costs.
> 
> Sorry but it does "cost" money.  However, what determines whether this cost is an expense or an investment is the realistic and real prospect of returns.  Now I personally believe that the cost to construct is substantially higher than the $37B.  But hey what would I know?  I also think the commercial "return" would not be commercial.  My guess would be somewhere around 3%-4% with the CVC fee at the current $20/Mbps levels.  I'm not saying that this is not acceptable (or acceptable), I'm just saying that this is realistic.  I also acknowledge there is a cost to maintain the copper.  I'm not sure what that is, but there is also a cost to maintain the fibre (considerably less though).
> > It costs us the interest on those amounts, but only until the loans are paid back/bonds mature (and the rates are stupidly low)- and then the country owns a modern, high tech infrastructure that will drive the nation forward.
> There are numerous examples of government investment in infrastructure with the expectations of commercial returns – returns that never eventuated and investments that were written down or written off (Aussat?).  It is only an investment until it proves to not yield a return.  Some pop and some don’t.   The deployment time for a FttP will take at least 9 years so it will be sometime to do so.  Also a CVC fee of $20/Mbps is counter productive and a direct imposition to reduce the economic benefit of the FttP investment.  Again I'm not saying it shouldn't be done, I'm just saying people need to be realistic and the CVC needs to either go , or be drastically reduced – that will impact yield (by how much?).  Let's not get started on the PoI's…
> 
> As for the FttN NBN the reality is that Telstra is the most logical candidate to roll it out.  So TPG either have to wait for the (almost) inevitable mid-span copper cut or take much of the risk out of play for many of their subscribers.  They chose the later.  It's not "cherry picking" it's common sense.
> 
> I'm not going to advocate loudly it should be one technology or another, but those on this list not paying $79/month for an ADSL1 256kbps/64kbps connection with a 300MB monthly download quota should perhaps respect what competitive infrastructure investment delivers.  The whole "government owned telecommunications infrastructure monopoly protected by legislation" has been done before it was called the Post Master General and it sucked...  Big time.
> 
> [b]
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> 
> 
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