[AusNOG] "The NBN" will run on copper for *ever*

[Mark Delany]

> I would rather the Government stepped away, let the industry roll
> fibre, or whatever out as needed.

Industry has had over a decade to do exactly this and it hasn't
happened. Apart from cherry-picking and guaranteed monopolies, no ISP
has seriously invested in nation-wide, last mile infrastructure. How
long exactly do you want to give them? 20 more years, 30 more years,
50 years?

Remember, we're talking about nation-wide last mile here. That's a
completely different investment proposition compared to placing a
coupla DSLAM racks in busy exchanges. Vastly different. Orders of
magnitude different. Decades-long investment horizons different.

As a thought experiment, if you look at iinet's 2014 annual return, a
reasonable deduction is that they spend no more than $100M a year on
new plant and equipment. Probably less. Very little of that is last
mile investment - as we know.

Realistically, iinet might be able to commercially justify $20M a year
on last-mile investment. Maybe. But I doubt it's that much. Just for
kicks though, let's assume five times that amount, or 10% of their
total revenue for this experiment.

Iinet have approximately a 10% market share and assuming the NBN costs
about $30B, then iinet needs to invest around $3B to upgrade their
existing customer-base to NBN. Assuming iinet have this mythical spare
$100M a year, then they'll complete the upgrade in a mere 30 years.

IInet probably has a 3-5 year investment horizon. Certainly not 30
years.

It's obviously much more complicated than this, but broadly, there is
a huge chasm between what the industry could afford to do - especially
given their investment horizons - and what needs to be done. As
history has long made plain.


Mark.