[AusNOG] Rod Simms should resign [was] News: ACCC opening up Œsuperfast' broadband networks to competition

[Jared Hirst]

I think you put into perspective the real issue here and what everyone has
been trying / wanting to say.

Breaking it down like this shows everyone what is really happening, and why
the smaller guys can't be price competitive with the bigger guys and
deliver the speeds and data packs.

Good summary, thanks! I will be using this for internal training :)

On Sat, Jul 30, 2016 at 10:01 PM, Bevan Slattery <bevan at slattery.net.au>
wrote:

> ***REMEMBER AUSNOG RULES JOURNO¹S*** :)
>
> So what I meant to say is if Rod Simms and the ACCC want ³truth in
> advertising² providers should be saying:
>
> ³Your $60 broadband plan on the NBN will provide a guaranteed 580kbps of
> service regardless of access speed and we will use traffic shaping to
> deliver you more²
>
> ³Your $60 broadband plan will not support a guaranteed single Netflix
> stream in so we have deployed traffic shaping technology across the
> network so we can delay non-time sensitive/bandwidth insensitive traffic
> and reduce the quality of the Netflix stream to the point that it can now
> work during peak times and while you start to notice degradation, but not
> enough for hieroglyphics.  If the CVC fee was between $2-$5/mbps this
> would not be an issue, but the ACCC believes that the cost to connect your
> house next door to the NBN PoI to the NBN PoI should be twice to three
> times as expensive as connecting the NBN PoI to a website hosted on the
> other side of the planet."
>
> [b]
>
> On 30/07/2016 9:26 pm, "Bevan Slattery" <bevan at slattery.net.au> wrote:
>
> >Sorry ­ I¹ve watched this from afar for too long and have really had
> >enough.
> >
> >The ACCC has absolutely have zero understanding as to the catastrophic
> >effect of their decisions/endorsements and the ³ghosts of Christmas past²
> >are now starting to come back to haunt them.  But instead of admitting
> >their incompetance and failure, they are trying to point that it is
> >Government¹s fault.  I¹m sorry Rod and Co. but you are the ACCC and your
> >absolute fundamental role is to protect consumers.  The ACCC had absolute
> >power to stop, alter, fix the SAU, block the sale of fixed line
> >infrastructure and even force price reductions in access charges.
> >
> >Rod Simms Chairman of the ACCC for the past 5 years this week said that
> >³privatisations is severely damaging the economy"
> >
> >
> https://www.theguardian.com/australia-news/2016/jul/27/acccs-rod-sims-says
> >-privatisations-severely-damaging-economy
> >
> >"He says governments have created private monopolies without sufficient
> >regulation to stop those monopolies overcharging users ­ and the public
> >knows it and has a right to be angry.²
> >
> >2014 the same Rod Simms ³argues the benefits of privatisation"
> >
> http://www.abc.net.au/news/2014-01-06/accc-chairman-sims-floats-privatisat
> >i
> >on-of-power-post/5185970
> >"The Australian Competition and Consumer Commission chairman Rod Sims
> >says
> >the root and branch review of competition policy by the Federal
> >Government
> >should be as broad as possible, as privatisation and more competitive
> >markets offer the best possibility of productivity improvements.
> >Mr Sims says, for a start, state governments should privatise energy
> >companies, a move he believes will bring down electricity prices.
> >"When the private sector owns assets that does provide better incentives
> >for better performance," he told ABC's News Radio."
> >
> >
> >As for the NBN the single largest monopoly currently operating in
> >Australia - well it was completely created and reviewed under the ACCC¹s
> >watch.  In fact the ACCC green lighted every single piece of
> >price-fixing,
> >monopoly creating, competition destroying piece of the puzzle, selling
> >out
> >almost 20 years of delivering infrastructure based competition to ensure
> >that Australian consumers will by 2020 be HAVE THE MOST EXPENSIVE
> >BROADBAND SERVICE IN THE DEVELOPED WORLD.
> >
> >Think this is an exaggeration?  Ok.  Let¹s do the dance:
> >
> >1.  ACCC created the PoI mess themselves
> ><
> https://www.accc.gov.au/regulated-infrastructure/communications/national-
> >b
> >roadband-network-nbn/nbn-points-of-interconnect-pois>
> >
> >- NBN Co decides to overturn the proposed 14 PoI¹s and establish 121 PoI¹s
> >- Could have offered both with reduced CVC to collect from local FAN/PoI
> >locally for significantly reduced CVC rate
> >- Decided to push out to 121 only
> >- not change the CVC rate for local access (Yes $20 still)
> >- increased costs as now ISP¹s need to backhaul to PoI without any
> >reduction in CVC
> >- reduced competition as only ISP¹ with enough subscribers to each PoI
> >can
> >justify access
> >
> >2.  ACCC approves Access and CVC costs
> >
> ><
> https://www.accc.gov.au/system/files/ACCC%20Final%20Decision%20on%20the%2
> >0Special%20Access%20Undertaking%20lodged%20by%20NBN%20Co%20on%2019%20Novem
> >b
> >er%202013.pdf>
> >
> >- ACCC not only approved the entire mess including the two main costs
> >Access and CVC
> >- ACCC approved $20mbps CVC charge and tail access fees which are aligned
> >to 2002 access technologies (ADSL)
> >
> >3.  ACCC was instrumental in dismantling any competition to the NBN
> >- 2012 ACCC approved the entire sale of Telstra¹s Copper and HFC network
> >to NBN Co. for $11B reducing competition
> >- 2012/2015 ACCC the entire sale of Optus¹ HFC network to NBN Co. for
> >$800m reducing competition
> >- ACCC therefore approved every existing ADSL/VDSL and HFC competition
> >from main capital cities (sorry Canberra)
> >- ACCC therefore approved the removal of almost any competitive tension
> >for the NBN to change its pricing
> >- ACCC declared new rates for Superfast Broadband services this week.
> >$27.50 access and $17.50/mbps for CVC charges
> >
> >So now we have an ACCC that is asking providers to become ³more
> >transparent² as to how fast their broadband service is and how much they
> >are throttling the service.  Really?  Are the ACCC that ridiculously out
> >of touch and inept?  Well obviously - yes.
> >
> >So to help the ACCC I¹m going to help you with this.
> >
> >* All your customers have $60/month for a broadband service
> >* That¹s just over $54 EX gst (and a credit card charge)
> >* NBN Co charge $30 for a 25/5 tail
> >* that leaves ISP¹s with $24 to pay for:
> >- CVC
> >- backhaul + NBN PoI interconnection/colo
> >- national backhaul and international capacity
> >- tech support
> >- company overheads/costs/compliance
> >- profit
> >
> >So assume the provider wants to make 10% profit on the service meaning
> >$5.40 that leaves $18.60 for
> >- CVC
> >- backhaul + NBN PoI interconnection/colo
> >- national backhaul and international capacity
> >- tech support
> >- company overheads/costs/compliance
> >
> >So assume tech support is $5/sub/month average then that leaves
> >$13.60/month for:
> >- CVC
> >- backhaul + NBN PoI interconnection/colo
> >- national backhaul and international capacity
> >
> >
> >
> >
> >Assume national backhaul and international capacity is $5/mbps (assuming
> >quite a lot of peering) and $1/mbps average for NBN PoI backhaul along
> >with a CVC charge of is $17.50 then the average bandwidth cost per mbps
> >delivered is $23.50 (majority CVC)
> >
> >So what you are left with is $13.60 worth of bandwidth/backhaul with an
> >average cost of $23.50/Mbps.
> >$13.60/month divided by $23.50/mbps/month = ~0.587Mbps average
> >consumption
> >or 170GB/month
> >
> >THIS IS THE REALITY OF THE ACCC¹s DECISION.
> >EVERY WAY YOU CUT IT THE BEST AVERAGE DOWNLOAD SPEED ACROSS THE GROUP FOR
> >A $60 USER ON THE NBN ISŠ.
> >0.580Mbps or 180GB per month
> >
> >There is only two strategies a user can get more than this:
> >
> >1.  Pay more.  If you paid ten dollars extra ($70/month) you can get an
> >extra average consumption of 0.38Mbps/month
> >2.  Hope.  They need to hope/rely on users using less and there being no
> >peaks (which is what traffic shaping is designed to help reduce)
> >3.  Competition.  They can access an alternate provider with a better
> >offering.  Like a HFC provider or another VDSL provider for them to
> >access
> >or to force the NBN to change their pricing.
> >
> >Oh wait.  That¹s right the ACCC approved the removal of all those
> >competitors.  So yeah.  Pay more or hope. Good luck with that.
> >
> >Time to accept your role as being the Chairman of the ACCC and approving
> >the worst example of anti-competitive, price fixed, monopoly
> >infrastructure which will deliver the most expensive broadband in the
> >developed world.  Time for you to resign.
> >
> >[b]
> >
> >
> >
> >
> >
> >
>
>
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