This article is by Darryl Adams, a government worker and internet tragic. A former IT worker, he still pines for the days of IBM keyboards that go CRUNCH and the glow of green screens. He can be found on on Twitter or on Facebook. Check out his site oz-e-books.com for more articles about e-book readers, retailers, formats and news (or will have when Darryl can be drawn away from reading Delimiter). The views expressed here do not reflect the views of his employer, the ATO.
opinion There is a lot of debate in the IT realm regarding the NBN project. Some — such as Shadow Communications Minister Malcolm Turnbull — are saying a cost/benefit analysis should be done, while others are saying it should be have been left in the hands of private enterprise.
On this point, I have no choice but to call “SHENANIGANS!”.
The National Broadband Network is going to cost a lot of money. It is replacing an aging copper network with a state-of-the-art fibre network. Look at the nature of the POTS (plain old telephone system). It was created as a public utility by the Post Master General (the precursor to both Australia Post and Telstra), and much of the system is a hundred years old.
The POTS system was deployed in places in Australia where there would never be a recoup on the installation costs, rural areas being the prime example. Even smaller towns would take years of service to recoup the costs of laying, servicing and upgrading the network. Much of the costs were born by the profitable areas (cities and business users), with the income used to subsidised the less profitable zones.
Yet it was done. It was done because the public benefit outweighed the cost.
Look at all the uses found for the simple copper wire network that were never envisioned when the system was started. Fax machines, the Internet, video, conference calls, voice mail, voice recognition systems, banking, retailing, medical and interactive television are just some of the technologies that use the POTS.
With a national high speed fibre network, all these services and much more that we can not perceive yet will arrive. We should not be blind to quantifying value of the benefit in terms of immediate financial outcomes. It may be science fiction today, but we could be laying the groundwork for such amazing technologies as teleporting or such mundane things such as the bedrock to restructure our cities to allow working form home to become a way of life.
Even the cost of building the NBN will have flow-on effects — this is because of the economic multiplier effect. To illustrate this, a little thought exercise:
- The Government pays $100 to a contractor for his part in the NBN project
- The Contractor saves $30 in a bank and spends $70 on groceries
- The Grocer spent $50 on suppliers of their goods, and spends $20 on a haircut
- The Barber pays $15 for his costs, and spends $5 on lunch
- And so on
This is good on two levels for the government: The GST is levelled on the goods and services consumed at every step in the multiplier effect, and the value of spending the money has a wide-ranging effect. This is also the thinking behind many of the stimulus projects like the Tax Bonus, the capital works projects and the home installation program.
To but it bluntly, any attempt to gauge the benefit of a network like the NBN is little more than posturing. We are building the network partly because we DON’T know what can be done with it.
And why can’t the NBN be built by private enterprise? Traditionally in Australia the big infrastructure projects have been built by governments. Private enterprise is extremely efficient in raising capital. However, the need to return profit makes the intangible returns harder to justify.
Things like the US highway system, the German Autobahn, and even the internet were created for military needs. The use of these products for commercial and civilian use was barely understood at the time, and now all three are dominated by services never envisioned by their designers.
So quit your yammering, and learn to love the NBN.
Image credit: T. Rolf, royalty free
Wholeheartedly agree, but you’ll no doubt start another massive Delimiter comment thread!
You talk about the flow on effect from the money. This expenditure by the government also creates problems with over expansion, and waste. Yes the money is good while it lasts. However the hairdresser getting more business from the contractors building the NBN might not be able to keep up with increased demand. So she might train a new hairdresser, by some new supplies etc, burrowing capital to finance her business expansion. She does very well for the few months of building in her town. Everyone of course has more money due to the flow on effect. However once that revenue stream goes away, as does all government stimulant. The hairdresser is left with debt, an extra employee and spare equipment that has now depreciated in value.
So what does she do. Fires the new employee. Saves her money to repay the money she burrowed or refills her bank account. Now we have that hairdresser paying out less then before, and so the flow on effect continues in reverse. AKA recession.
That is of cause the major problem with government infrastructure, and I remember seeing the ghost towns in TAS and the Snowy Mountains from when the dams where finished….
The ideal situation is that new uses and income will be generated to replace to govt money. However we need to be carefull to not create industry that is non sustainable, as the water allocation debate from the irrigation schemes is clearly showing.
It is a complex equation. I have another article tomorrow about private v public funding….
While I do agree with the basic concepts. For example insulated homes are good for everybody, real free energy savings. Better internet is good for everybody. However the government really fucks up economics. The worst waste from the roofing scheme was all the wasteful expansion in the industry. With whole companies, machines, training setup for filling a fake demand. I don’t know for sure, but the price of insulation probably halved since the scheme ended. Home prices for example are just stupid.
2010 -> $500 000
2017 -> $1 000 000
2024 -> $2 000 000
2031 -> $4 000 000
That is the stupidity of 10% growth. I did the maths of buying a house. so rent vs interest on $300 000, rates, maintenance etc. Buying a house is already literally throwing your money away unless you factor in this vastly unsustainable growth system. House prices have to crash. All this NBN and stimulus is really going to cost us in the decade to come.
Housing is a bad example as it is a finite supply and growing demand due to internal and external migration. The preasure on house prices is also prone to over heating, and when it explodes, generally the correction is not as big as needed (partly because of the growing demand).
Internet (apart from IPv4 addressess) is really infanite. It is easy to add extra capacity. The one area where private enterprise has done extreamly well is the overseas backbone pipes. It is not trivial but a lot easier to lay undersea pipes between land massess than to build up to the node into a city. One ship and a honking huge cable is all you need, and the return to capital can generally be calculated before the wire is layed down.
I wasn’t comparing costs. The point was at the current 6% interest, you could have your capital in the banking system and cover 115% – 130% of the cost of renting. You could live in a better house then you could buy, not have to worry about maintenance, and rates.
600 000 in the bank = 700 a week interest.
700 a week rents a very nice house despite your so called demand.
No rates, No maintenance, and No insurance. I just don’t see how the cost of buying a house is justified.
As for the NBN, I like the idea. However the government should allow the private sector to build it. So why hasn’t the private sector already built a profitable NBN? Red-tape, competition laws and governmental uncertainty.
700 a week might rent you a nice house, but then you end up with 600,000 in the bank, earning 700 dollars a week and 10 years later inflation means that same 700 dollar a week house now rents for 940 dollars per week.
Remember; if you are earning 6%, you have to subtract 3% for inflation. So you are only getting 3% to spend on your house (the other 3% has to go to maintaining the relative “amount” of money you have in the bank, VS what it is now worth…)
So your 600,000 dollars nets you 350 dollars per week.
Now you are talking about renting a pretty average house.
Then there’s tax. that 600,000 dollars earns 36,000 dollars per year. Lets be kind and subtract 10% for tax.
Leaving 32,400 dollars.
But you have to store 18,000 in the bank to offset inflation (half of 36,000 – inflation doesn’t pay attention to tax!)
so 32,400 – 18,000 is 14,400.
So instead of buying your house for 600,000 dollars you stick it in the bank at a guaranteed 6%. After you fix the loss of value due to inflation (3% per year), after tax (at a low rate of 10%) you have 14,400 per year to spend on renting your house. That is 276 dollars per week.
Certainly not bad. I wouldn’t be complaining about a free 276 dollars per week. If I was living by myself I think I can get a 1 bedroom (or 1.5 bedroom if I’m lucky) apartment in the neighbourhood of my current house.
As a comparison, I bought my house right at the start of 2009 and got a bargain 2 bedroom 8 year old property for 400,000 dollars. Due to the stupid growth in prices I think it *might* be worth between 450 and 500,000. I am not calling it money in the bank, I am just using it as a comparison to the mythical 600,000 in an interest bearing account.
Basically, I think my house at mates-rates would net 300 per week rent. (certainly there are worse properties in my area renting for higher).
Best thing about property ownership, is I pay all my tax at the end in capital gains. And all my savings are held in an offset account that effectively reduces the interest I pay on my property. I don’t have to pay tax on that money (because it isn’t paid to me, it is money not *charged* to me). Have fun with my numbers (I might have many huge errors there). I came to the same conclusion as you (money in the bank >>> everything) but my value was closer to 2 million dollars to live happily, sadly not a figure anyone would give me. (Though at a stretch with my wife our combined income could have gotten us 700,000 dollar loan, a far cry from the 2 million I need to live by myself happily.)
And the renter, unlike owner occupiers, bargains in a market in which land tax is a cost to be covered. I suspect many renters don’t know this but you could live in a two bedroom doll’s house in inner Sydney and your landlord has to find $100 a week in land tax or more.
And who cops the backwash from that? Year in and year out and its not going to stop.
Oh geez. Where does the $100 come from in the first place? Sorry but this just reads like another NBN fanboy story. “Shut up everyone or we wont get our fibre”! Why is it an issue to ask how much will the Taxpayer be subsidising this? Why is that a problem? What are you scared of?
Seriously it’s like watching some kids to yelling at others to stop complaining or we don’t get the ice cream. I don’t mean to be rude but the author has obviously never run a business.
How about some due diligence so we know the REAL cost. DO you care if it’s 40bill, 80bill to the taxpayer?
So I for one will not shut up and do what I’m told. Sorry :)
Jimboot,
It seems that the NBN is a politcal hot potato. Your either for it or against it & alot of emphasis on peoples beliefs on the matter, for the averge Joe Blo in the street is aligned to what politcal party people support, Labour or Liberal.
It should be put into context that ALOT MORE public monies are & will be spent on things like wars & defence yet hardly a word is poken about these monies being accounted for yet the NBN debate rages out of control online unlike no other issue I have seen before. There are also alot of misleading one sided articles being published by some newspapers which are aligned to certain politcal parties.
So your argument about the $$$$ is valid but it needs to be put into context relative to other spending against what benefits it will provide & keep providing way into the future.
Poopy – I’m not a Labor supporter, and I completely support the NBN.
Jim, simply put, the money comes from our taxes.
In a way, I dont care what the cost is.
Because what is taxation for in the first place?
Taxes pays for the services that benefit a large portion of the society that would be unfunded if left to private enterprise.
There is an article in the NY Times talking about the shift from infrastructure projects by governments to paying for generous worker entitlements (which a far more generous than I can expect from the PSS super scheme).
Call me old fashion, but why can governments today not make the big projects they did from colonisation up to the early 70’s?
I’ve used the example of the electricity grid before.
When the grid was proposed, people exclaimed that there was no need for it – “I have a perfectly good paraffin lamp here, why do I need electric light bulbs?”
Imagine what would not have been developed right around the world without the electricity grid. There would be no television, computers, modern health care, etc, etc.
Right now, Australia’s broadband infrastructure is a paraffin lamp.
The NBN is the new-fangled electricity grid, waiting to be used by all the technologies to come, that would not be possible without it.
You don’t care what the cost is eh, your blind trust in the Government to ‘look after us’ is admirable but entirely misplaced.
You obviously have selective amnesia about the recent Labor Government insulation debacle, or maybe you are of the opinion ‘you win some you lose some’, it’s taxpayers money who cares.
The NBN rollout has to be good thing because we are spending even more taxpayer dollars than the insulation rollout, so therefore the principle of ‘bigger is better’ must apply.
Sorry, going to be snarky here alain.
The Home insulation had many goal, home insulation was a minor part.
What everyone seems to miss is that the scheme was designed to inject money to the house building sector, one of the major bellweathers of economic health.
The major idea behind the intervention was in the words of Dr Henry “Go fast, Go hard”. If Garrett’s department was allowed to manage the project properly, it would create an acreditation program and training and inspection regime. However, the plan for the home insulation was most likely discussed by the “kitchen cabinet” of Rudd, Swann and Gillard and was dumped on Garrett’s lap and he was told to “do it now”.
The scheme attracted some cowboy element, which will always happen if you have a project like this, however, the thinking would have been for the home builders who where not working on house building would do the insulation for the short term.
Houses burnt down and people died. In reality it was a very small percentage, and part of it would be becuase of faulty or unlicenced electrical work.
The failure was to ensure that the workers where trained in OH&S and basic electrical saftey. Had the department had time to sit down and work this out, they would have been able to point out the risks to the minister. It was politically unpleasant to wait, as it defeated the purpose of the plan to inject money quickly.
So, while the Home insulation was a debarcle, it also was a stunning success in its main job, keeping the housing building sector alive during a housing downturn. Please find another red herring to use please.
Darryl – Garret’s department didn’t have to sit down and think about the risks – they were laid out in black and white in a report they commission from Minter Ellison, but chose to ignore.
I think you are suffering from a massive case of denial over the insulation program’s failures.
And for you to say the deaths were only a small percentage is absolutely disgusting. Try explaining that to the family’s of the workers who were killed, especially when the Government had been informed by Minters that this was a huge risk.
That’s why you will never see a proper CBA on the NBN, it’s the standard Government approach, you never commission a report unless you know what the outcome will be, in this instance a proper CBA has a very high chance of a negative outcome, the solution is simple in such circumstances, don’t do one.
Keep it general, vague and use terms like nation building, reverse engineering (the latest!) and compare it with the overland telegraph, Snowy River scheme etc.
That should keep the punters happy.
Meanwhile, how many other workers (especially truck drivers) have died in industrial accidents during the same time? But these unfortunates did it (and keep doing it) discretely, out of the public eye, and nobody then or now thinks about them. And they certainly don’t rant about them in Parliament, in blogs and in News Limited media on a daily basis.
What was the rate of death among new insulation installers (lets say, less than 2 years industry experience) before the insulation scheme, and what was the rate during, and now after?
If you don’t have that figure, or don’t even have the slightest clue what that figure was, or the person telling you it was a disaster doesn’t say: “My figure regarding death of new insulation installers states it is worse” then you are a fool for listening to them.
What was the rate of shoddy installations before, after and during the scheme. (in per 100 houses, not in number).
The difference in these average values is the “cost” and the indicator as to how big a so-called disaster this scheme was. I have never seen these figures. They have never been referenced. Nebulous statements like “The report said there might be deaths!!!” never explained what it meant.
PS.
These deaths are bad. Not good, not a stamp of approval for the scheme. They are an **indicator** as to how bad the scheme made the industry. If you can’t divorce yourself from the hysteria and compare the numbers then your comments can’t be taken seriously, because you aren’t capable of examining the issue properly.
Yes. Deaths installing insulation are bad. But if you had the same rate of deaths over 10 years vs over 2 years ** but you save hundreds of tonnes of CO2/electricity/money due to reduced energy bills of the houses insulated sooner **. How is that a bad thing?
There is no insulation debacle, stop listening to Abbot’s bs, the insulation scheme had a 2% complaint rate, TWO PERCENT, that is bloody fantastic….
And on that note, it wasnt a 2% house-burnt-down rate, 2% complaint rate… you know how people complain about the slightest things…
The Auditor Generals report on the insulation scheme had ‘nice’ things to say about it as well, but you don’t want to go there.
@daryl at least your honest & don’t care about the cost. However that is extremely dangerous attitude for a democracy.
@michael why is it an issue to ask how much the taxpayer has to foot the bill? We got an electricity grid but we didnt get 3 phase power to the home as standard!
@Jimbot – if you were designing an electricity grid to build from scratch today, would it not make sense to roll out three phase to each house, even if it were just a drop to the box? Especially with the growth of three phase aircon, and the possible future arrival of 480v fast chargers for electric cars, this would be a godsend for the populace. In fact, you’d be mad not to do it that way if you add up the cost of rewiring each house to accommodate these current and future services.
It’s going to be a cliche, but “Do it once, do it right and do it with fibre.”
I do not care about the cost per se, but if there is corruption or other shenigans, I would expect the Audior General or the Ombudsman to jump in. Thats why we have them.
Has anyone worked out in today’s money the cost of the POTS system? I would sugest it would be more than the NBN.
Would certainly be similar.
How did you come to that conclusion, roll some dice? – perhaps you should be doing the NBN CBA.
Actually, in Chile, they replaced a lot of their copper network with optical and even after installation, made a PROFIT. Cu is expensive! much more expensive per foot than fibre. And copper degrades much faster than fibre. (The install cost for the landline copper was actually much more than ALL of the current mobile network in todays dollars, or so my engineering uni lecturer told me.)
The NBN is going to change the landscape.
People with vested interests in the status quo will not like it.
This especially includes ISPs and current carriers.
Hang on, wasn’t Turnbull involved with one of them?
@Jimbot – Rolling out 3ph power to each premises is probably not wise, because it will never get pass through the cost benefit analysis, if anyone were ever to do one. Simply because the majority of the nation won’t ever exceed the capacity of running on 1ph supply. I can see how this can be used as an argument. Fibre = good (3ph = good) both give you extra capacity and most of us will never reach the full capacity of the line. But hey, business and school will.
The real downside to existing ‘aging’ copper network or wireless technology that I can see is that the loss of bandwidth with increasing distance increases pretty much exponentially. For example, copper, this really depend on quality of the line. I’m currently renting and I live 100m from nearest exchange, I get 12Mbps? Theoretically I should be getting at least 20Mbps. The last place I rented I couldn’t get ADSL2 at all, because I lived at end of the line and under Telstra’s pair gain system…there’s no hope unless Telstra decides to open a new exchange (highly unlikely as we all know). Wireless…let’s no go there…
Fibre on the other hand has no loss on the line and I’m guaranteed 100Mbps. So, there’s no way I’m supporting the existing copper network. Australia need an upgrade on our internet connections and we need it NOW!
@Dec – 480V fast charge system will only be commercial based at this stage. (Unless you got $15k lying around). Most vehicles will be charged during offpeak time under 240V/32A or 15A chargging.
“Fibre on the other hand has no loss on the line and I’m guaranteed 100Mbps.”
How does that work BTW? Magic?
attenuation (dB) = 10 . log10( Input (W)/ Output (W))
and…..
The NBN is building a PON remember?
Here’s an interesting site to look at.
http://www.dannychoo.com/post/en/1653/Japan+Optic+Fiber+Internet.html
“Some speed tests using Radish. A bit slow today for some reason. Download speed is 64Mbps. Its gone up to about 74Mbps before.”
OFT, like all other transmission media, slows down when shared. No free rides in this universe (yet).
“Upload speed is 55Mbps.”
And so pretty on the skyline! ;-)
Addinall. Queensland.
Keep in mind we have a few things japan does not, for a start quota’s to stop excessive use, also our GPON will deliver a comitted 78Mbit our of the box, let alone higher bursts, theirs has much higher contention.
“We are building the network partly because we DON’T know what can be done with it.”
That is a classic Mr DA, and that sort of statement is supposed to be in support of the NBN?
Priceless!
Exactly, it is priceless.
If the gov’t were spending the same billions of dollars on other infrastructure the benefit would be pretty obvious!
And the multiplier effect shown in the article is of course only one part of the consideration – the primary other part being the opportunity cost. Do we really have nothing better to spend this money on?
As much as I would love to brag about having the world’s best Internet connection throughout my home country, I think not…
The private industry has done nothing to benifit the last 10 years, the sale of Telstra as well as Billing system that Telstra currently uses is the biggest mistakes in history of Telecommunications.
Jimboot,
Where does discounts on Health and Education come from? From the simular place NBN will come from.
Us the tax payers.
It has been reported that overhead fibre optic cable only has a life span of 15 years. Is this true?
Proberbly, as they are putting up new wire around my place, and I was one of the first areas to get it.
However, this is irrelevent, as NBN will be using Telstra underground infrastructure. Optus only put arial cables up because they could not get access to the telstra pipes
Optus put the cable through the trees under the electricity wires using the existing overhead electricity poles because it was the cheapest way to do it.
I remember the origional debates on the Optus rollout.
Where they could, they did go underground. In Sydney for example they used electricity tunnels.
It was too expensive to replicate the telstra cabling underground, so it made sense to put them in the air.
It was Telstra bastardry, and I am old enough to rember it.
SO GET OFF MY LAWN!
Yes, so like I said it was cheaper, just like the electricity companies infrastructure, anyone can ring up and get their existing overhead wire from the street changed to a underground connection to their switchboard, but it will cost you heaps, that’s why 99.99999% don’t bother.
No see below (taken from http://www.nbnexplaied.org):
Some commentators have claimed that the lifespan of fibre optic cable will be less than 15 years, especially when installed overhead.
According to Nortel Networks’ Ryan Perera this is not the case. “We can run 100gig on 15 year old fibre. The age of the fibre has nothing to do with it any more, thanks to the dispersion compensation techniques we use”.[vi]”
One reason why “…old fibre still works so well is the extreme care that went into its design. Telephone cable engineers already knew how to make cable that would survive for long times buried underground or suspended from poles. Adapting that technology to glass fibres, while adding plastics to protect the fibre from the environment by hermetically sealing the glass, and using the then-new technology of aramid fibres to prevent stress on the glass itself, led to the creation of fibre optic cables that have lifetimes well over the 20 years of current use.
Another factor in the lifetime of fibre is that it needs no maintenance. Connectors are effectively sealed from dirt in patch panels, and splices are sealed in enclosures that prevent moisture from entering. There is no need to disconnect terminations to clean, inspect or test them.” [vii]
In 2006 Sterlite Technology, a fibre optic cable manufacturer, published a report on the lifetime of their fibre optic cable. The calculations provided suggest that under normal conditions the typical lifespan of their fibre optic cable is 60 years[viii].
The biggest problem is that we have SCARCE amount of capital to spend. I am sure that if experts were asked (Infrastructure Australia jumps to mind) any number of projects could be found that could have both a short and long term effect on our GDP and enable us to raise the funds to invest in telecommunications as the demand emerges. What will occur while the government is missing? The private sector will fill the gap as it is currently its’ responsibility and why not drive expansion in the market by expanding demand instead of expanding supply and hoping they will come.
Just as an aside on your economic multiplier, keynesian economic theory is all well and good BUT be careful it does not always give the answer you want. During the GFC the multiplier effect on the government stimulus package was about 0.9. That is for every $1 spent by the government, there was a corresponding increase in expenditure within the entire economy of $0.9.
If a cost benefit analysis will return a good result for the NBN then why not do one to silence the critics?
No it’s not harquebus!
It has a lifespan of between 30-50 years and can do speeds up to 70 terrabits (wireless doesn’t even come close).
We spend more than 43 billion a year on defence and health and around 10 on negative gearing.
For something that is costing *shock* 5 billion *shock* a year that will add to the economy (plus give internet access to people who cannot currently get it) tell me again why we shouldn’t do this?
If we had the same thinking back when the electricity grid/phone system was being rolled out we would not have electricity or phone calls today.
Where’s the vision?
I am concerned about the cost. I did some simple research and I find that $43B over 8 years is less than 2% of federal govt expenditure. Doesn’t seem so bad after all. I am quite happy for 2% of my tax to go into building something of such significance.
Hhmm…Darryl works for the Government, and he doesn’t care about the cost. Friedman anyone?:
There are four ways in which you can spend money. You can spend your own money on yourself. When you do that, then you really watch out what you’re doing, and you try to get the most for your money.
Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I’m not so careful about the content of the present, but I’m very careful about the cost.
Then, I can spend somebody else’s money on myself. And if I spend somebody else’s money on myself, then I’m sure going to have a good lunch!
Finally, I can spend somebody else’s money on somebody else. And if I spend somebody else’s money on somebody else, I’m not concerned about how much it is, and I’m not concerned about what I get. And that’s government.
At what point are we also going to consider the cost of replacing the existing copper?
The current POTS is old and crappy, and whilst some lucky ones are getting > 12 MBps many many people don’t get anywhere near this. The copper is only going to deteriorate further, splicing it and joining it makes it perform worse. At some point it’s going to have to be replaced.
Telstra have no incentive to do it, and they’re understandably only doing the minimum required of them. So meanwhile we’re in limbo with copper that’s quietly getting worse and worse as the world is moving to it needing to be better. Personally I’m glad we’ve got a government with the foresight to spend some money to fix this.
Sticking our heads in the sand and doing nothing forever is not an option.
What was the annoucement today? $662M for 170 “real” customers? “Real” in the sense that their ISPs aren’t being charged for NBN service.
Even on NBN’s projected 20,000 premises in a year’s time, that is only 1% of the number of premises they should have passed if they were on schedule.
NBN staff seem to outnumber customers. NBN staff seem on average to earn more than the Minister. the NBN is a great idea but something is dreadfully wrong with the execution of this project.
Many people seem to be missing the fact that the current rollout is a TRIAL.
When they finish the trial sites on the mainland, they will be installing FTTH in up to 30 locations at once.
Many people seem to be missing the fact that the current trial ISPs are not being charged for accessing the NBN.
What in christ difference does it make when you are arguing how fast the rollout is progressing??
But, I would argue the ISP’s are still paying for transit out of Tasmania (one of the most expensive locations in Australia) – international transit, IP’s, wholesale NBNCo isnt the only cost ISP’s must pay.
Just as the number of builders of a house outnumber those who live in it.
As to earnings, wouldn’t you rather have the NBN designed by people who know what they are doing and are otherwise in demand in the rest of the world, rather than by people who driven by their ambition to be seen to be “important” and who are prepared to rock up to Parliament day after day and listen to the circus that passes for Question Time?
If we have a choice where our taxes are spent, I want my tax spent on the NBN
The government plans to buy 100 JSFs for $16 billion
Government’s plans to acquire 12 submarines to replace the trouble-plagued Collins class vessels.
“The Australian Strategic Policy Institute (ASPI), in a study last year, put a price tag of $9 billion on buying off-the-shelf European submarines, and $36 billion on an Australian design and build.”
The only ones that want $43bn NBN fibre are the script kiddies that want to download more pr0n & illegal copyright. These geeks need to log off once in a while, get outside & see that $43bn can be better spent on hospitals, schools, roads & rail.
Your a idiot idiot. Do you know half a million business customers are still using dialup?? You know there are 1.2 million RIM’s preventing even business from getting internet, and in some cases a phone??
It’s not just script kiddies that require a first world internet connection, we have a several hundred billion dollar IT economy in Australia….
Onto ‘omg spend it on something else’ hospitals schools roads & rail are all state issues, but despite that the federal government spends $560bn, $320bn, and $120bn on those in the same timespan as the NBN.
The NBN is 1% of the budget for something that covers 100% of the country ffs.
With industrial strength broadband you would need less spent on roads. And when Labor spend more on schools, there was an outcry about that too. Meanwhile John Menadue, the father of Medibank says we have more hospital beds than comparable countries.
But they are such nice, warm motherhood ideas aren’t they?
Gav, your numbers are so dodgy, that I suspect you got them from the same place that the ALP got their dodgy mining tax numbers.
500k businesses on dialup on purpose, laughable. $43bn NBN is 1% of annual budget, wow, I didn’t know that we had a $4.3 trillion dollar annual budget.
500k business are on dialup, check the ABS stats..
The NBN is 1% of the budget. The NBN isnt going to cost $43bn, and it isnt a 1 year project.
$320bn budget * 10yr project = $3,2 trillion.
1% of 3,2 trillion = $32bn.
The NBN is expected to cost somewhere in the region of $26bn.
Okay so it’s not 500k anymore, that was the old ABS stats, but still – 180,000 business users on dialup is pretty bad.
And the 1% of budget comment still stands.
@Gav,
The people who are still on dial-up, are there, by far, because they want to be.
Dearest Gav,
At the end of June 2010, there were 9.6 million active internet subscribers in Australia.
The phasing out of dial-up internet connections continued with nearly 92% of internet connections now being non dial-up.
Australians also continued to access increasingly faster download speeds, with 71% of access connections offering a download speed of 1.5Mbps or greater.
Digital subscriber line (DSL) continued to be the major technology for connections, accounting for 44% of the total internet connections. However, this percentage share has decreased since December 2009 when DSL represented 47% of the total connections.
Mobile wireless (excluding mobile handset connections) was the fastest growing technology in internet access, increasing to 3.5 million in June 2010. This represents a 21.7% increase from December 2009.
As for business (and government) dial-up, there are a total of 180,000 dial up accounts still in operation.
Source, Australian Bureau of Statistics, 8153.0 Internet Usage
http://www.abs.gov.au/ausstats/abs@.nsf/mf/8153.0/
“Internet access in the home is dependent on a range of factors such as affordability, the reliability of Internet connections and service providers, and the interest and capability of potential users of the Internet. Socioeconomic characteristics, such as family composition, educational attainment and income are also related to rates of household Internet access.”
Source, Australian Bureau of Statistics, 4102.0. Australian Social Trends 2008
http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/4102.0Chapter10002008
ibid.
“In 2006, people aged 15 years and over, who had higher levels of educational attainment, had higher rates of household Internet access. People with a Bachelor degree or above had the highest rate of household Internet access (88%), whereas those without a non-school qualification had the lowest access rate (63%).
Higher levels of income were also associated with higher rates of household Internet access. The highest rate of household access was for people in the highest income quintile (89%), while people in households in the lowest income quintile were least likely to have Internet access (47%).
The influence of educational attainment on household Internet access reduces as household income increases. In the bottom two income quintiles, there was a considerable difference in Internet access according to the level of educational attainment. Those with a Bachelor degree or above had higher rates of Internet access than those with lower levels of educational attainment.
In households with relatively higher incomes (top three income quintiles), there were high levels of Internet access regardless of educational attainment. For example, in the top income quintile, those with a Bachelor degree or above (92%) had a similar access rate to those who did not have a non-school qualification (85%).”
This is quite important. A number of demographic factors are at play when discussing that nn% of Australians are not connected to the internet. Many do not want to be, and many can not afford to be.
ibid.
“According to the 2005-06 Household Use of Information Technology survey, 40% of Australian households did not have access to the Internet. The main reasons Australian households did not have Internet access at home were that the people within the household had no use for the Internet at home (24%), or had a lack of interest in the Internet (23%).
Around one-fifth (22%) of households in the bottom two equivalised (that is, adjusted to take account of differing household size and composition) income quintiles stated high cost as the main reason for not having Internet access.”
This is important enough to repeat. ***** The main reasons Australian households did not have Internet access at home were that the people within the household had no use for the Internet at home (24%), or had a lack of interest in the Internet (23%). ********
That is, 47% of the 40% of Australians not connected AT ALL, simply DO NOT WANT TO BE.
or;
******* one-fifth (22%) of households in the bottom two equivalised (that is, adjusted to take account of differing household size and composition) income quintiles stated high cost as the main reason for not having Internet access. ********
Can’t afford it.
Now. So far we have seen fixed line subscriptions slowing, as the market has saturated, Wireless continuing to experience double digit growth. Putting a FTTH NBN in around the country is unlikely to sway those who have little or no interest in the internet, and for the fiscally challenged, it will broaden the digital divide. A subscription to the NBN via IRP is not going to come in at entry level xDSL (Dodo, $9.90 pm). The people who consider a tenner to be too much are not going to find $50 pm regardless of how fast it can run.
World market. The rest of the world has put FTTH deployment on hold. The USA, Japan, South Korea, Sweden, Finland, Norway, Thailand … et al, have either deployed, or are deploying 3.9G wireless in the shape of 802.16m or LTE in response to the market requirement for a MOBILE and device independent internet experience. This is in preparation for 4G in the shape of 802.16n or LTE-Advanced. This will provide a GLOBAL ROAMING internetwork including location awareness, content awareness and all services being packet-switched based on a flat architecture using IPv6 addressing. LTE is currently rated at 100 Mbps, served by FTTN. In real life the 100 Mbps will never be reached, as is the case with fiber GPON. OFT is not magic. Share the pipe, and resource goes down. Telstra have undertaken trials in Australia and delivered 80 Mbps over 75 Km LTE.
So, what concerns me about this $43 BILLION spend?
1. We seem to be building a network that a large percentage of Australians don’t want. From the ABS data, and looking at the recent take-up levels of the FTTH NBN trials in Tasmania and Armidale. Under 50% accepting a FREE installation, and a VERY small percentage actually using the connection. About 5%.
2. We seem to be building a network that people don’t really need. I have been asking the supporters of a FTTH NBN what it wil be used for. The only concrete application to date seems to be faster and fatter television. All well and good if you like the telly, but I would suggest that on the order of importance of national infrastucture, it deserves last place. As an example: I use the internet every day, for a minimum of12 hours (my machines never turn off in fact, so when I am not sitting at the things, they are still working). I have two internet accounts. A shared fixed line, that gives me about 4 Mbps for $10 pm. I probably should mention I have been an ITC contractor for 27 years, starting at about the same time CP/M was starting to tumble to newcomers like PC-DOS, MS-DOS, DR-DOS and a few others. And a great deal of that work has been R&D or networking for places like STALLION, Paradox Digital, Telstra, OPTUS, iiNet, The Australian Bureau of Statistics and several large government departments. So, what do I do with my crummy old ADSL 1 connection?
2.1. I support my existing customer base. The speed is more than adequate for that purpose.
2.2. I read the Australian, and various BLOGS fed by links from GOOGLE news (like this one).
2.3. I write computer programs on my local machines and deploy them to my staging areas in the USA, and finally to my customers. Contrary to popular belief, computer applications are not that large.
2.4. I use USENET in much the same fashion as I have done since 1989. Same groups, aus.politics, aus.flame, and much the same speed and bandwidth use.
2.5. I build my work environment(s). Last week I built myself a new WAMP machine. (W)indows – Apache 2.n – MySQL – PHP. All in an MSI based stack. On my slow old network it took 41 seconds to download after Google found the site for me in 0.08 seconds. 184 MB when unpacked. My, that was almost a waste of a minute of my life. Yesterday I downloaded a postgreSQL Enterprise suite. That was slightly larger and took 71 seconds.
2.6. I use my computer for guitar lessons. I downloaded 50 lessons on video, plus TABs, plus sheet music, plus backing tracks, and the total space requirement was (is) 4.52 GB. That download will keep me busy in real-life for about 5 years. Led Zepplin I, II, III, IV and greatest hits in a folder, 363 MB.
2.7. My fourth degree is coming along just fine at ADSL 1 speed (for my first two, I had NO internet access, just a library card). And I can access the world’s largest genetic (proteomic) databases and pull experiments down in a matter of seconds. http://www.ebi.ac.uk/pride/
The internet IS my business, and it is well served at speeds below ADSL2+ and well below the 100 Mbps that is VDSL.
2.8. Email. Works the same as it did under UUCP, except the address format has changed, and the world invented SPAM.
2.9. Shopping. I buy stuff off the net. Not much, but travel tickets and stuff like that.
2.10. I play games. Not often, but now and again I’ll download a hidden object game (about 150MB) or play Vampire Wars or Mafia Wars from Zynga. No problems with the speed.
3. We seem to be building a network that many will not be able to afford. The NBN is yet to put an access price on service, which in itself is bizarre, but the industry is guesstimating around $30 pm for the wholesale portion. So, $40-$50 per month for 25 Mbps – 60GB seems a fair guess. Students, the unemployed, pensioners, the under-employed, people struggling with house mortgages are still goin to be under-represented in our digital future. This is not easy to fix. It is NOT fixed by making internet access MORE expensive.
4. We seem to be building a network that is obsolete before it starts. Not OFT, that will not become dated in my lifetime, but the architecture and the topology of the proposed NBN.
The world is demanding, and building:
4.1. Peak download rates of 326.4 Mbit/s for 4×4 antennas, and 172.8 Mbit/s for 2×2 antennas (utilizing 20 MHz of spectrum).
4.2. Peak upload rates of 86.4 Mbit/s for every 20 MHz of spectrum using a single antenna.
4.3. Five different terminal classes have been defined from a voice centric class up to a high end terminal that supports the peak data rates. All terminals will be able to process 20 MHz bandwidth.
4.4. At least 200 active users in every 5 MHz cell. (Specifically, 200 active data clients)
4.5. Sub-5 ms latency for small IP packets
4.6. Increased spectrum flexibility, with supported spectrum slices as small as 1.4 MHz and as large as 20 MHz (W-CDMA requires 5 MHz slices, leading to some problems with roll-outs of the technology in countries where 5 MHz is a commonly allocated amount of spectrum, and is frequently already in use with legacy standards such as 2G GSM and cdmaOne.) Limiting sizes to 5 MHz also limited the amount of bandwidth per handset
4.7. In the 900 MHz frequency band to be used in rural areas, supporting an optimal cell size of 5 km, 30 km sizes with reasonable performance, and up to 100 km cell sizes supported with acceptable performance. In city and urban areas, higher frequency bands (such as 2.6 GHz in EU) are used to support high speed mobile broadband. In this case, cell sizes may be 1 km or even less.
4.8. Good support for mobility. High performance mobile data is possible at speeds of up to 350 km/h, or even up to 500 km/h, depending on the frequency band used.[9]
4.9. Co-existence with legacy standards (users can transparently start a call or transfer of data in an area using an LTE standard, and, should coverage be unavailable, continue the operation without any action on their part using GSM/GPRS or W-CDMA-based UMTS or even 3GPP2 networks such as cdmaOne or CDMA2000)
4.10. Support for MBSFN (Multicast Broadcast Single Frequency Network). This feature can deliver services such as Mobile TV using the LTE infrastructure, and is a competitor for DVB-H-based TV broadcast.
A large amount of the work is aimed at simplifying the architecture of the system, as it transits from the existing UMTS circuit + packet switching combined network, to an all-IP flat architecture system.
Source, Wikpedia. http://en.wikipedia.org/wiki/3GPP_Long_Term_Evolution
I am of the opinion that a FTTH NBN is quite possibly the WORST architecture we could choose if the idea is to ‘future proof” Australian telecommunications. Bizarre.
The concept that Australia is just waiting around for NBNCo to start rolling out fiber is nonsense. Telstra, OPTUS, iiNet, TPG, AAPT, Internode et al. already have ~9 million Km of fiber in the ground, a lot of it dark. Overbuilding is an extreme waste of money. Every business that wants broadband already has it. Every University has it. Every research facility has it. Every software house has it. Every government department has it.
The proposed NBN structure is based on providing fast internet access to those who already have fast internet access, and ignoring those who do not. Spending $2-3 BILLION implementing VDSL in every exhange in the country will serve the population as well as a FTTH NBN, and leave R&D money available to join in ith the rest of the world implementing Internet 3 as 4G LTE-Advanced.
@Darryl – “SO GET OFF MY LAWN!”
Hmmm. When you were tap tapping on a keyboard, so was I. And I haven’t stopped being an ITC contractor. Having a concern about the architecture, and suitability for purpose of a nation’s telecommunications infrastructure is hardly ‘yammering’. The NBN as it stands is a bad project. It has no KPIs, no SLAs, no business case, no risk analysis. It is being made up on the fly, which is a sure sign of doom and waste as time marches on. The project is shrouded in secrecy, mostly to cover up the fact that the people involved in building the pig of a thing don’t have much of a clue either. City first, no wait, bush first, no wait, both together. Telegraph poles, no underground, why not both? 100 Mbps, NAH! 1 Gbps!! Well, 25 Mbps anyay, errrr, 12 Mbps for those bush folk. “Whaddya mean we can’t do 12 Mbps on OPTUS C1 using spare Ku-Band?”. NBNCo announced yesterday that AUSTAR would likely get the nod for satellite system coverage. Good choice.
Optus (and Defence) C1
———————————-
Satellite Type: Space Systems/Loral (SS/L): LS-1300
Launch Date: 11 June 2003
Location: 156° east
Design Life: 15 Years
Equipment: 24 Ku band transponders, 4 (+1) Ka band transponders, 4 X band transponders, 6 UHF transponders
Partially funded by the Australian Government (Defence Department) – Optus C1’s use is shared between Defence and Telecommunications, in particular the supply of Television services to Australia. Mitsubishi Electric was the prime contractor responsible for manufacturing all the Optus C1 communications systems.
The Ku band Transponders are exclusively used for Television Services, mainly:
Foxtel rent a considerable amount of satellite capacity for the transmission of their Foxtel Digital service (and onsold to ***Austar for their Austar Digital service***).
Optus operate the Remote Area Broadcasting Services Aurora, allowing Free to Air television to be accessed via satellite in areas that may not be able to access FTA services via terrestrial means. The service is also used in a commercial capacity by a number of organisations for satellite linkups.
ABC – via the Aurora service allowing access to state tailored feeds of ABC TV in New South Wales, Victoria, Queensland, South Australia, Western Australia and Northern Territory, Radio National in all Australian states except Northern Territory, Local Regional ABC radio, Classic FM in all states except Tasmania, Triple J in New South Wales, Victoria and Tasmania, and News Radio.
Commercial TV – via satellite & cable viewers to watch the Seven Network, the Nine Network & the Network Ten programs are rebroadcast on digital TV.
The remaining transponders (being Ka band, X band and UHF) are exclusive for Defence/Military use.
Wiki.
To get STTN to distribute 12 Mbps you need a beam focussed Ka band bird with a down rate of 20-40 Mbps, and AUSTAR don’t own one…….
And then you need LTE from the Earth station to the consumer, and I haven’t heard much from NBNCo apart from 3G (at 4 Mbps).
This project makes pink bats, and million dollar school tuck shops seem well planned and executed…..
Addinall. Queensland.
I’ve gotta say, nice post…
Now the parts I disagree with…..
[A subscription to the NBN via IRP is not going to come in at entry level xDSL (Dodo, $9.90 pm). The people who consider a tenner to be too much are not going to find $50 pm regardless of how fast it can run]
Your forgetting it must be bundled with a phone from Dodo, which makes it $39 per month.
[World market. The rest of the world has put FTTH deployment on hold. The USA, Japan, South Korea, Sweden, Finland, Norway, Thailand … et al, have either deployed, or are deploying 3.9G wireless in the shape of 802.16m or LTE in response to the market requirement for a MOBILE and device independent internet experience. This is in preparation for 4G in the shape of 802.16n or LTE-Advanced. ]
Keeping in mind all of those countries already have widespread FTTH coverage, if we had 90% FTTH coverage I’d be 100% behind building some wireless network, but as it stands we already have 3 wireless networks and only one decaying fixed line network outside of limited HFC coverage (I’d be laughing if I could get it..)
[1. We seem to be building a network that a large percentage of Australians don’t want. From the ABS data, and looking at the recent take-up levels of the FTTH NBN trials in Tasmania and Armidale. Under 50% accepting a FREE installation, and a VERY small percentage actually using the connection. About 5%.]
The figure I remember was 55% of people in these towns accepted the connection, which I think is pretty good, how many policies usually effect 55% of people?
Some things to remember:
* We are rolling it out to 3 sites in country towns, we are not rolling it out to the city where take-up rates would be higher.
* According to people living in Smithton Telstra doorknocked the area when NBNco announced it was going to launch a network in Smithton, Telstra offered ‘deal-of-a-lifetime’ when it was still under Sol’s leadership and locked people into 2yr contracts.
[2. We seem to be building a network that people don’t really need. ]
Keep in mind it is a 8yr project including the 2 already passed, right now, maybe only 5% of people are unahppy with their connections, but one thing to keep in mind is moores law:
http://nbnexplained.org/wordpress/wp-content/uploads/2010/10/100910_1805_Whydoweneed13.jpg
That 5% might grow, to, say, 50% of people unhappy with their connection in 8 years, and by then if we decide ‘okay it’s time to build it now’ 4 years later, halfway through the rollout, maybe 80% would be unhappy…
[[3. We seem to be building a network that many will not be able to afford. The NBN is yet to put an access price on service, which in itself is bizarre, but the industry is guesstimating around $30 pm for the wholesale portion. So, $40-$50 per month for 25 Mbps – 60GB seems a fair guess. Students, the unemployed, pensioners, the under-employed, people struggling with house mortgages are still goin to be under-represented in our digital future. This is not easy to fix. It is NOT fixed by making internet access MORE expensive.]]
The industry is guesstimating $30pm for voice and data, not just data, that’s cheaper than we pay right now.. I disagree it is making it more expensive.
As I mentioned earlier, you look at TPG and Dodo’s offerings for $9 $19 etc. – WOW NBN IS BAD …. until you realize you need to bundle a phone for $30, making the total $39-$49
[4. We seem to be building a network that is obsolete before it starts. Not OFT, that will not become dated in my lifetime, but the architecture and the topology of the proposed NBN.
The world is demanding, and building:]
huh??? explain?? How is 78Mbit/s comitted out of the box with upgrade path to over 1 gigabit comitted obsolete. The backbone of the NBN network will be capable of seveal terrabits…
[4.1 – 4.10]
I disagree.
Pretty picture of the ABS statistics put into a graph:
http://i.imgur.com/XGCc4.png
People use fixed lines for heavy lifting, no matter how much you sugar coat wireless it is no match for fixed line mobility aside.
[[The concept that Australia is just waiting around for NBNCo to start rolling out fiber is nonsense. Telstra, OPTUS, iiNet, TPG, AAPT, Internode et al. already have ~9 million Km of fiber in the ground, a lot of it dark. Overbuilding is an extreme waste of money. Every business that wants broadband already has it. Every University has it. Every research facility has it. Every software house has it. Every government department has it.]]
I disagree entirely that every business or university that wants broadband already has it, as mentioned, there are 1,2 million RIM’s in Australia, that blocks DSL.
You can’t expect people to pay the $60k for 100Mbps if they are a small business.
That aside we are not overbuilding any of this, that fiber runs to exchanges, the exchanges will house POI’s – NBNco are only building fibre from the POI to the house.
The ONLY thing that is being ‘overbuilt’ is the copper, and quite frankly that isnt a sad story in the least.
[The proposed NBN structure is based on providing fast internet access to those who already have fast internet access, and ignoring those who do not. ]
You think everyone inside that 93% has fast internet??? What do you even deem fast? I know of loads of guys living in new estates 30 minutes from the CBD that can’t even get 256kbps ADSL1 due to overloaded rim’s and are outside 3G coverage..
[Spending $2-3 BILLION implementing VDSL in every exhange in the country will serve the population as well as a FTTH NBN]
It won’t, another pretty picture:
http://nbnexplained.org/wordpress/wp-content/uploads/2010/10/1.jpg
Unless your within spitting distance of the exchange there is no difference, not to mention it’s highly asymetric.
They absolutely will NOT be even attempting to use Optus C1 – it doesn’t even support the correct radio frequency band for internet connectivity…
“So quit your yammering, and learn to love the NBN.”
Internet tragics MAY be all agog at a FTTH NBN, but from a quants POV, let’s look at what is being used now. The ISPs are desperately trying (and have been for some time) to get rid of dial-up. It is a PIA for AAA (nice TLAs hey? ;-). This has been my experience at OPTUS (twice), Telstra, Paradox, That’s IT and iiNet as an internet specialist. Yet it persists. Some people like it. Also, when we have a look at the following Bell curve, bear in mind that high speed (fiber, HFC) is available to a large percentage of Australians RIGHT NOW.
Telstra offers cable with speed plans of up to 8, 17 and 30 Mb down, and 128, 256 Kb and 1Mb up. Telstra through its ISP BigPond provides these cable internet services, and currently has the largest cable internet network in Australia, covering the main Australian capitals (Sydney, Melbourne, Brisbane, Perth, Adelaide and the Gold Coast).
Optus through its ISP OptusNet offers one standard speed of up to 20 Mbit down and 128Kb up. These cable incumbents in Australia are ramping up speeds to keep product parity with the more competitive ADSL2+ services.
Neighbourhood Cable, a rural Australian cable provider, allows users to opt for a shaped plan at a lower cost (with speeds similar to those of ADSL providers) or an “uncapped” service, which promises download speeds of up to 30 Mbit/s and upstream speeds of 2 Mbit/s.
TransACT provides cable internet in the Australian Capital Territory, specifically Canberra, at affordable prices at with speeds up to 10Mb per second.
A good few million people live near high speed internet.
The following figures reflect what people have PURCHASED from Australian ISPs. This reflects the WANTS and NEEDS of the Australian communications marketplace.
June 2010. Source, Australian Bureau of Statistics.
<256 kbps (dial-up) 803,000 (least cost 24 mbps (cable) 635,000 (greater cost ~ $80 – $250)
Speed (cost)
————————————————————-
********
*****
**************
***********************************
**************************
******
————————————————————–
OK. log-Normal (ish).
What does that (should) tell us about the Australian internet marketplace?
People want it fast enough to work, and it should cost the same as a carton of beer.
This trend is very inelastic (demand). The only way to get the market to consume
more ‘internet’ is to move the price towards the preferred median.
Current NBN pricings from IRPs
25 mbps $110
50 mbps $120
100 mbps $140
(with 200GB)
It should be noted that currently an entry level NBN IRP account can be had for
25/2 mbps 15GB $30pm
The NBN is providing the wholesale bandwidth FREE OF CHARGE at these
prices. No-one knows what will happen to these prices in the short term.
Curiously, if you have a NEED FOR SPEED, entry level,
100/8 mbps 15GB $60pm
makes little sense, as you ill be able to use your connection flat out for about 20 minutes a month….
If they keep the 25/2 15GB at $30 or less, I’d consider it, perhaps, maybe.
Addinall. Queensland.
The table should read:
24 mbps 635,000 (highest cost broadband)
********
*****
***************
***********************************
**************************
******
Sorry ’bout that. Must have hit a backspace at the wrong moment!
Addinall. Queensland.
Nope. The BLOG editor is spitting on greater and less than notation. One more try
less than 256 kbps 803,000
256-512 kbps 504,000
512-1.5 mbps 1475,000
1.5-8 mbps 3553,000
8-24 mbps 2600,000
greater than 24 mbps 635,000
********
*****
***************
***********************************
**************************
******
Sorry.
Addinall. Queensland.
[Telstra offers cable with speed plans of up to 8, 17 and 30 Mb down, and 128, 256 Kb and 1Mb up. Telstra through its ISP BigPond provides these cable internet services, and currently has the largest cable internet network in Australia, covering the main Australian capitals (Sydney, Melbourne, Brisbane, Perth, Adelaide and the Gold Coast).]
If only I could get it :-)
[Optus through its ISP OptusNet offers one standard speed of up to 20 Mbit down and 128Kb up. These cable incumbents in Australia are ramping up speeds to keep product parity with the more competitive ADSL2+ services.]
If only I could get it :-)
[Neighbourhood Cable, a rural Australian cable provider, allows users to opt for a shaped plan at a lower cost (with speeds similar to those of ADSL providers) or an “uncapped” service, which promises download speeds of up to 30 Mbit/s and upstream speeds of 2 Mbit/s.]
If only I could get it :-)
[TransACT provides cable internet in the Australian Capital Territory, specifically Canberra, at affordable prices at with speeds up to 10Mb per second.]
If only I could get it :-)
(you seen the prices on this btw?? it’s absolutely ridiculous, even 10Mb is like $90)
[The following figures reflect what people have PURCHASED from Australian ISPs. This reflects the WANTS and NEEDS of the Australian communications marketplace.]
No it does not, it would only effect the wants if every service for sale had 100% coverage, many of the guys on DSL would be on HFC/FTTH if they could, and who knows, maybe even people on FTTH would rather be on DSL.
Myself, I’d kill for HFC/FTTH and happily pay $100+ a month for it.
[[The NBN is providing the wholesale bandwidth FREE OF CHARGE at these
prices. No-one knows what will happen to these prices in the short term.]]
But…. they still need to pay
Rackspace in suburb POI
POI in whatever suburb > Hobart link
Rackspace in Hobart
Hobart > Melbourne link
Rackspace in Melbourne
Melbourne > Sydney link
Rackspace in Sydney
Sydney > International link
Then ofcourse IP adressing, email hosting, support staff…
Wholesale bandwidth is only one of many costs, please consider how Tasmania is up there with Northern Territory for bandwidth costs also, wonder why no ISP wants to touch NT or Tas with a 10ft pole as far as DSLAM installations go? ;-)
[makes little sense, as you ill be able to use your connection flat out for about 20 minutes a month….]
So? That same arguement can be applied to DSL, 3G, whatever…
iiNet sell 200GB for $49 on NBN.
Once again, good effort, we may not see eye to eye but you put alot of work into your comments.
As per usual, the call to can the NBN (heh) is based on the notion there is no need and it costs too much.
Further, the continued claims for a need for a CBA on the project (as that that will somehow make it all okay) are about as transperant as you can get.
An analysis will show (quite rightly) that short-term returns won’t cover the cost. Surprise! Same situation existed as the PMG deployment ramped up to replace the overland telegraph. So, obviously it’s a huge white elephant and we shouldn’t waste the funds!
Rubbish. Taxes are supposed to be spent on improving our lot. I’d humbly suggest replacing the CAN with it’s sucessor is actually a very *good* investment. Why? Good question.
Where does Telstra’s multi-billion dollar profits come from? A nation-wide network. Made up of several different technologies. Some of which have had several decades to provide returns. Even though it’s (not of it’s own volition) require to compete, care of the TPA, it *still* manages to turn a rather considerable profit.
The NBN represents a government sponsored and part-funded enterprise to build the next ‘Telstra’ from an infrastructure perspective. Fibre, wireless, etc. In so doing it removes a recalcitrant, monopolistic and investor-driven private-enterprise money printing machine with an equal-access, standarised partly-government centric money printing machine.
Where do you think some of the profits that will eventuate from the NBN will go? Iceland?
It’s very very simplistic to looke at the raw costs of the NBN, look at a five (or 7) year arc with private enterprise goggles and say “no sir, I don’t like it! where’s the return?!”.
Spread that investment cost, over 3 decades. Now tell me it’s still a crap investment. How about 50? Where do you draw the line? If you are going to (inevitably) compare to the CAN – it’s something like a centurie’s worth of life.
And there-in, is the very salient point. The notion that a cost-benefit analysis will somehow prove the NBN a waste is, in fact a furphy. Because the longer the term is, the less the input costs have any relevance, until the return potential over 50+ years absolutely dwarves any input.
As a comercial entity, in the short term. The NBN fails on ROI. Obviously. That’s why the Libs keep demanding it. Because they can waive a report and say “look, we are right!!” – of course they’ll ask you to ignore those apparently insignifcant pages betwen 30 and 35 that show the long term returns in fact paint a very different picture.
The NBN isn’t a private sector endeavour specifically. Looking at it, just like any other private sector build is to ignore a basic input variable (time, long term). Applying the same rules, (short term ROI) from a CBA perspective would result in figures that become increasingly meaningless over the long term.
What has been achieved over the humble copper tail, is nothing short of staggering. It has, however, perhaps made us rather complacent in the process.
Labor should do a CBA for the NBN when the Libs do one for dashing off to Iraq.
Libs should put their money where their mouth is, and do a cost-benefit analysis for NOT building the NBN…and where is the cost-benefit analysis for their broadband plan?
Hmmm…
Brilliant – as long as no one does a CBA for [insert name here] it therefore justifies the NBN rollout by the default option of doing nothing.
That’s the type of business acumen Australia needs, for me I’m back to reading the Auditor Generals report on another Labor major project, the insulation debacle.
See my cost benefit analysis here – http://valman.blogspot.com/2010/07/my-cost-benefit-analysis-on-nbn.html
I found that to achieve a positive NPV, the NBN needs to add between 0.5 and 1.0% to GDP per annum. Approx $7 billion per annum, proportional to % build complete from network 50% complete. I add NPV for NBN Co, including projected revenue, depreciation, operating costs, but no interest.
“The NBN isn’t a private sector endeavour specifically.”
Yes it is, the end user of the NBN cannot use it until they buy a plan with a nice margin from the private sector.
This is where your and others ridiculous analogies with the telegraph and the PMG which was a essential service with no alternatives fall apart, I cannot remember reading that these original rollouts were available from 209 retail outlets (the number of ISP’s in Australia).
The NBN infrastructure is popular with ISP’s because they are not funding it – no surprises there as to what motivates their ‘boundless enthusiasm’ .
Spot on. I haven’t heard of any plans for free public wifi. Also the notion that you can fix a monopoly wholesale problem by creating a new monopoly seems pythonesque to me.
There is a non-subtle difference between a wholesale only supplier and a wholesale + retail supplier. The later always has a conflict-of-interest between retail and wholesale.
Telstra has amply demonstrated that potential.
Yes, it builds things on occasion that may not have a sharp return; but, ultimately, it is still required to provide returns to the share holder. That means, despite the occasional effort to build to remote areas, it still has to be highly profitable.
There is also a not so subtle difference between the NBN Co monopoly and the Telstra monopoly, Telstra is a private company with its last mile and access to exchanges under the Government mandated legislative control of the ACCC.
Telstra also has wholesale competitors in that ISP’s can buy wholesale ADSL and Naked DSL access from Telstra competitors like SingTel Optus and iiNet .
NBN Co is a monopoly but not only that it is a sole wholesaler Government owned monopoly, and it’s in their interest to ensure the NBN FTTH rollout and uptake is a success, if they have to ‘adjust’ legislation to ensure its success that’s what they will do.
Using taxpayer money to ‘buy’ the Telstra and Optus customer base is a prime example of what I mean.
If the NBN is so great and Optus and Telstra are supposedly right behind it why do they have to ‘buy’ their customers?
“nice plan”? 209 competitors? Aren’t you a member of the camp which keeps telling us the only way to get a good deal for customers is for the market to be one in which competitors are free to bid for your business?
The competition among the free enterprise ISPs looks pretty fierce to me. Are you saying it will be different when the playing field is levelled?
I was not talking about competition at the retail level but competition at the wholesale level where the Government owned monopoly can legislate to ensure the NBN rollout has no competitors.
Oh they wouldn’t do that surely?
Too late.
http://www.itnews.com.au/News/235401,conroy-readies-new-laws-to-curb-nbn-competitors.aspx
Makes the Telstra monopoly look like the BB wholesalers friend, at least Telstra didn’t have the legislative power to make laws to ensure it had no competitors.
@AddINall Some quality commenting there! The Ku band LOL. I dont suppose you have a blog? I’d love to republish just your comment (if that’s cool with Renae_) & link back to here.
Thank you Jimboot.
I should have a BLOG, but I don’t. I make a goodly proportion of my salary doing it for other people, and my website NEVER gets any attention.
You may re-publish my comments, but if you wouldn’t mind attribute the author as addinall@addinall.net
I rarely get into the BLOGOSPHERE, as I have just seen here, it is all to easy for people to fall back on insults and empty spin to justify a pre-determined stance on an issue with almost zero analysis. I have been building networks and network applications in Australia, and around the world for longer than I care to remember, and the NBN architecture concerns me, as I firmly believe it is the WRONG approach.
If I am to be re-BLOGGED, could you please inform me of where? As you notice, I do not use a mon-de-net, never have done, mostly because I stand by my opinions and analysis. However, that is the same name that goes on my quotations and contract negotiations, so I like to keep track of what is being said and where.
@Brendan
If you refer to my comments, than I suggest you re-read them with a little more care. And as for Telstra being recalcitrant, they just won an ATUG excellence prize for rolling out FTTN and some FTTP all the way into Arnhem Land (a partnership with Rio-Tinto) and are now planning a roll-out to Grooyte. That link will NEVER turn a profit. It’s a charity infrastructure job. And no, I don’t work for Telstra. I did once, Internetworking Specialist – Brisbane, and a great company IMHO.
@Richard Ure
That statement is just silly, and one of the reasons people like myself avoid BLOGs most of the time.
@Gav
Thanks. I’ll get back to your comments as they require that I clarify or expand upon my item points and to address some of your concerns in regards to my arguments.
As for the Ku band proposed service; I put Ku band into Arnhem land a decade ago. Doing it again is a waste of time and effort.
Cheers all.
Addinall. Brisbane.
Which bit is silly? The Iraq CBA or the NBN one? You comment has hardly advanced the debate.
Thanks Addinall republished http://jimboot.com/the-nbn-is-a-bad-idea
now I am scared. mark Day supports the NBN: http://www.theaustralian.com.au/business/opinion/lets-focus-on-the-big-picture-of-the-national-broadband-network/story-e6frg9tf-1225939886830?referrer=email&source=AIT_email_nl&emcmp=Ping&emchn=Newsletter&emlist=Member
The usual subs at News Limited must be away at the printers’ picnic. Or perhaps they are engrossed reading Bruce Guthrie’s book.
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