opinion When you ask the man on the street in Sydney what their opinion is of Shadow Communications Minister and multi-millionaire Malcolm Turnbull, you tend to get the same reaction over and over again.
“He’s an arrogant prick,” any taxi driver taking you into the city on a Friday night will tell you. “But you have to give him credit for sticking to his guns. That carbon thing …”
Turnbull – alternately ‘the Earl of Wentworth’ or ‘the Silver Fox’, as he is known variously amongst Sydney’s larrikins and gentle ladyfolk – has indeed earned himself a reputation amongst the punters which many politicians would envy.
The politician embodies the upper class lifestyle and demeanour which the best residents of Sydney’s wealthy Eastern suburbs enjoy, courtesy of both his privileged upbringing at Vaucluse Public School and Sydney Grammar Prep, followed by a finishing layer at Sydney University … as well as, perhaps, his natural inclination. This lends itself to a aura of arrogance about the man – he feels he is usually right – mediated by a sense of grandeur and gravitas which you cannot ignore.
In person, you feel as if Turnbull has that quality which would lend itself well to being Australia’s first President; a fact reinforced by his constant referencing of the classics in his writing. And yet he also shares with his rival Tony Abbott an aura which is necessary for all politicians – a fellowship with the everyday man. Seeing Turnbull in action at the Paddington RSL, clad in his casual leather jacket, collar and slacks, quipping about how Labor’s internet filter is “dead, buried and cremated, and if it shows any signs of revival it will then be exorcised,” leaves you in no doubt that the MP has the common touch. Turnbull’s laugh is an easy one.
Underlying all of this is the public’s very front-of-mind memory about the former Opposition Leader’s refusal to back down in the face of extreme opposition from Liberal Party ranks regarding his personal support for Labor’s Carbon Pollution Reduction Scheme proposal in late 2009.
Like the knifing of Kevin Rudd by Julia Gillard, Turnbull’s decision to stand by his principles on this matter has endured in Australia’s public consciousness. In fact, despite the negative political consequences of his actions at the time, Turnbull’s idealism has only reinforced his public image as one of the few members of Australia’s fickle political arena who are prepared to stand by their word – come what may.
But there’s a problem with idealistic individuals like Turnbull. The one chink in the armour of a leader such as the member for Wentworth is the difficulty they face when going up against an opponent even more idealistic and principled as themselves.
Such an opponent, Turnbull has found over the past year in the person of NBN Co Mike Quigley.
Like Turnbull himself, Quigley is quintessentially Australian and widely respected as a leader, an individual of integrity and above all, a man of his word, a fact easily demonstrated by his personal history and time leading portions of US and French networking giant Alcatel-Lucent, as well as the off-the-record accounts and extreme loyalty of his current employee base at NBN Co.
Over the past 21 months since his appointment to lead NBN Co, the executive’s primary success has been the concrete definition of his company’s roles and responsibilities as an independent entity within Australia’s fast-evolving political arena. By strictly defining NBN Co as a government business entity which is responsible only for implementing government policy, not setting it, Quigley has been able to navigate a safe path through the nebulous and treacherous maze which Communications Minister Stephen Conroy and the Rudd/Gillard Government have set for him.
Along the way, Quigley has faced down countless personal, professional and political storms that threatened to engulf him. The confused separation of NBN Co’s Tasmanian subsidiary. The uncertainty and potential obliteration of the 2010 Federal election. The deal with Telstra. And above all, the allegations of bribery at the former employer of Quigley and his CFO Jean-Pascal Beaufret, US and French networking giant Alcatel-Lucent.
With the exception of Quigley’s contentious decision to out the NBN as being capable of gigabit speeds during a critical point of the Federal Election (which continues to dog the executive), he has maintained both his nerve and integrity through the entire process – more so, to a great degree, than his political masters have been able to.
This convoluted process, which Quigley has been hit head-on with while continuing to deliver on construction efforts relating to the NBN, and the creation of a company around it, have left the NBN Co CEO in an unassailable position. While some may disagree with NBN Co’s exact approach, Quigley’s personal reputation in the telecommunications industry which he has devoted his life to serving is now impressive.
In addition, unlike Turnbull, Quigley has no need to pander to the popular opinion when it comes to the vagaries of Australia’s telecommunications market. His appointment is not dependent upon the voting interests of the public – the entire nation is his electorate, yet it will never get the chance to directly fire him.
And yet, Turnbull continues to assault him.
In what may have been a flippant remark this week, the Earl of Wentworth criticised Quigley in relation to the bribery scandal which over the past year engulfed his former employer, Alcatel-Lucent, slamming the CEO for not disclosing a US SEC investigation into the matter during his hiring process to lead NBN Co.
“It is remarkable that Mr Quigley and Mr Beaufret apparently did not consider a bribery scandal involving their previous employer was a matter they should raise with their future employer,” Turnbull said in an article by The Australian. Taken on their own, the MP’s comments would not be that unusual. After all, Turnbull is only attacking Labor’s chief plumber – the man who is responsible for implementing the Government’s vision. It’s a fitting approach for a member of the Opposition.
And yet, this is not the first time Turnbull has publicly attacked Quigley’s credibility.
In December last year Turnbull demanded the Federal Government “immediately respond” to the Alcatel-Lucent bribery scandal, specifically highlighting Quigley’s role in the company. “NBN Co claims neither Mr Quigley nor Mr Beaufret were aware of these bribery schemes,” said Turnbull in a statement. “But both men owe the Australian public a far more detailed explanation.” And then, today, in a friendly interview on 2UE radio in Sydney, Turnbull went further:
“… he’s got to acknowledge that there was a very serious misallocation or misappropriation of the company’s funds, of Alcatel’s funds … for criminal purposes in a fairly systematic way. And ultimately if you are the Chief Financial Officer, if something goes wrong with the finances of the company the buck ends up on your desk, and you are ultimately responsible.”
All of this adds up to an attack on, principally, Quigley’s character, which been demonstratably unimpeachable since he took his role at NBN Co – and, according to those who knew the executive before that time – beforehand. Turnbull is, of course, also attacking Beaufret directly. But we may take this as something of a side show. It is not coincidence that Beaufret – a French national – was appointed to lead NBN Co with Quigley. They are a partnership, a package. An attack on one is an attack on the other.
To say that Turnbull is caught between a rock and a hard place when it comes to his criticism of Quigley is an understatement. On the one hand, he is facing the need to maintain his own high profile and continue to see his name in the press, despite (in terms of his own standards) his political exile as Shadow Communications Minister. He would, of course – and, as he has pointed out, he only lost the ability to by one vote – be rather leading his own political party.
And yet, on the other hand, Turnbull is facing a man of a character which, unlikely though it is, exceeds his own. Quigley is the survivor of life-taking cancer, the internal intrigues of a major multinational corporation, an engineer at heart, and above all, a quiet man, a man dragged reluctantly into public life to discharge his debt to society.
Press conferences with Quigley are a privilege; a matter of letting his ideas expand into the room. With Turnbull, they are a matter of containing his ego long enough to get him to challenge his own ideas. It’s hard to say what the immediate future is for Turnbull in the communications portfolio. As the National Broadband Network continues to be rolled out, the politician will be forced to publicly realise, as he undoubtedly already does privately, that the Coalition’s stark opposition to the project is increasingly fruitless and will need to be discarded as the percentage of Australia connected to Government-funded fibre increases.
But one thing will remain constant throughout the next few years. If Turnbull continues to attack Mike Quigley in public, he will only erode the only real political asset which is left to him: His own integrity. When two opposing forces of seemingly equal strength face off against each other, it is inevitable that the one with the most fault lines will give way.
Turnbull knows this. It is why, despite his obvious interest in and passion for his portfolio, the MP has met with Quigley only once that the public knows about — in late 2010. Turnbull knows that direct confrontations between himself and Communications Minister Stephen Conroy will prove fruitful, due to Conroy’s penchant for mis-speaking; engagement with Quigley will not.
Turnbull has already been forced to make too many political compromises to prevail against a man who has never given in … nor faced the voters on election day. Quigley is the real deal. And the sooner the Earl of Wentworth realises that, the better.
Image credit: Office of Malcolm Turnbull
Yeah… and… ?
I’m shocked at your disillusionment. I tried my best to provide you with entertaining content on a Friday afternoon and this what I get. I sulk :)
and??? and the article highlights that there really is not much substance or objectivity when Turnbull discusses the NBN. Of course this is to be expected though, Abbott and the rest of his zoo crew chums ordered him to “destroy” the NBN and it seems he has run out of angles… I’m not surprised.
No need to sulk, I loved it :-)
Cheers :)
Me too. Nice one Renai.
The problem for the NBN crew is that Conroys idiocy takes all the limelight off Quigley
+1
I think that if we didn’t have Conroy we’d be in a much better position overall. He seems to know nothing about the area he is actually Minster for.
Well Conroy was before a union powerbroker, so hes he really doesn’t know anything in this portfolio
You could argue that another major issue with Quigley is that regardless of how much he may know about technology, he is politically movated by the fact he is being asked to do something by the government (regardless if he agrees with it or not). Scott Rodie on WP also made comments to similar effect (i.e. we are being asked and legally forced to do this due to the government, so we have no choice but to do these things)
Given the options the man has for his career right now, as well as a considerable personal fortune, if he is in disagreement with the project, why does he not step down and find something more suited to his ideals?
I’m glad you posted this here instead of in 100+ twitter posts! #renairant FTW!
What was the response when you asked “man on the street in Sydney what their opinion is of ” Mike Quigley?
Who?
lol – sums it up nicely I think.
it must be interesting for him……
And one word explaines it all. JELOUSY.
No that word would be SPELLING
I disagree, the word is POINTLESS
*In addition, unlike Turnbull, Quigley has no need to pander to the popular opinion when it comes to the vagaries of Australia’s telecommunications market. His appointment is not dependent upon the voting interests of the public – the entire nation is his electorate, yet it will never get the chance to directly fire him.*
given that the NBN is a political project, Quigley’s appointment is essentially a political one. also, consider:
(i) Quigley’s past criticism of Coalition broadband policy
(ii) Turnbull’s publicly “attacking” the NBN Co. top management now
i’d say if Turnbull inherits Conroy’s portfolio, Quigley will either volunteer his resignation or get sacked.
“… he’s got to acknowledge that there was a very serious misallocation or misappropriation of the company’s funds, of Alcatel’s funds … for criminal purposes in a fairly systematic way. And ultimately if you are the Chief Financial Officer, if something goes wrong with the finances of the company the buck ends up on your desk, and you are ultimately responsible.”
multinational companies engage in bribery all the time, especially when dealing with government contracts. it’s a fact of modern, commercial life that doing business and sealing deals in corrupt countries means paying bribes. i find it hard to believe that regional BDM’s would arrange multi-million dollar bribes w/o tacit approval from the very top.
*And yet, on the other hand, Turnbull is facing a man of a character which, unlikely though it is, exceeds his own. Quigley is the survivor of life-taking cancer, the internal intrigues of a major multinational corporation, an engineer at heart, and above all, a quiet man*
Turnbull’s achievements are quite remarkable:
(i) as an undergrad law student, wrote articles in legal journals criticising the decisions of senior judges
(ii) wrote articles for The Bulletin and retained as personal counsel to Kerry Packer while still in 20’s(?)
(iii) represented KP in the notorious “Goanna Affair” during the Costigan Commission investigations
(iii) as the rep for Fairfax junk bond-holders, had the balls to threaten and torpedo KP’s bid for Fairfax
(iv) took on the British establishment and won the Spycatcher case against the British Government
(v) co-founded his own merchant bank/advisory firm with Nick Whitlam (Turnbull & Partners)
(vi) appointed exec chairman of Goldman Sachs (Aust)
(vii) wrestled seat of Wentworth from long-sitting member in Lib pre-selections
etc, etc…..
Turnbull ain’t no slouch – nah, Quigley doesn’t measure up to Turnbull at all.
*a man dragged reluctantly into public life to discharge his debt to society.*
getting paid $1.8mln a year… one hell of a way to discharge your debt to society.
*As the National Broadband Network continues to be rolled out, the politician will be forced to publicly realise, as he undoubtedly already does privately, that the Coalition’s stark opposition to the project is increasingly fruitless and will need to be discarded as the percentage of Australia connected to Government-funded fibre increases.*
government projects are terminated/abandoned all the time.
@ToshP300 “government projects are terminated/abandoned all the time.”
You are correct, however Conroy is fully aware of this and slowly but surely he is making it harder and harder for the Coalition to scrap the project if they ever get into Government during the building phase of the NBN.
I congratulate Conroy on his cunningness and desire to see the NBN through. If he manages to pass enough legislation and sign enough contracts for the NBN the Coalition will be unable to cancel the project without massive financial penalties being paid out for termination of contracts.
I for one certainly hope that Conroy makes it so difficult and expensive for the Coalition to cancel the NBN that they have no other choice but to see it through, providing that they actually get in to Government within the build time.
“he is making it harder and harder for the Coalition to scrap the project if they ever get into Government during the building phase of the NBN.”
It’s half way through 2011 and we are not currently in the ‘building phase’ of the project we are in the ‘pilot phase’ of the project, the building phase of the project has been started again as the previous built tender process that took about 12 months was cancelled.
Telstra has still not decided on any agreement with the Government, let alone scheduled a date to put any Telstra directors recommendation to shareholders for approval, the Optus negotiations (assuming they have even started) still has to be finalised as well.
By 2013 the limited areas of Australia that have been completed will remain on FTTH, who owns that infrastructure beyond then is what a change of Government will determine.
Any contracts made between now and election day 2013 on which the contract term takes infrastructure build beyond 2013 would indeed be optimistic in the extreme, and could be cancelled by the Coalition instantly if they won power.
How instant it can be can be demonstrated how Conroy canceled the OPEL contracts when the Rudd led Labor won Government from Howard and his Communications Minister Coonan, within the first months of obtaining office.
Optus would be well aware of how easy that can be done, they headed up OPEL in partnership with the Futuris Corporation (Elders).
BTW I think events will unfold much bigger than the NBN before 2013 that will force an early election anyway.
Well put.
Coalition can just freeze the public funding to NBNCo when they get re-elected
Bye bye NBN
(Of course there is still the issue of all that stinky legislation that was put in which will be harder to remove)
*however Conroy is fully aware of this and slowly but surely he is making it harder and harder for the Coalition to scrap the project if they ever get into Government during the building phase of the NBN…. If he manages to pass enough legislation and sign enough contracts for the NBN the Coalition will be unable to cancel the project without massive financial penalties being paid out for termination of contracts…. I for one certainly hope that Conroy makes it so difficult and expensive for the Coalition to cancel the NBN that they have no other choice but to see it through, providing that they actually get in to Government within the build time.*
assuming the Coalition wins the next federal elections, they’ll have to deal with the following issues:
(i) contracts with private builders
a massive project like the NBN rolled-out over such a long timeframe faces myriad hurdles/risks. the “political risk” associated with a change in Government is merely one of many.
it’s hard to believe the “investment intentions” contained in the plans put forward by NBN Co. are set in stone. rather, i would suggest that there’s room to maneouvre, or implement adjustments, should circumstances not evolve according to current expectations.
contracts, no matter how detailed, can’t cover every contingency. viewed in this context, there’s likely to be some escape clauses in the signed contracts, for both NBN Co. and the private builders, in such an eminently risky undertaking.
even assuming that private builders or equipment suppliers were to sue for damages for foregone profits on the entire $36bln contract:
$36bln x 5% (say) operating margin = $1.8bln… which is “trivial” in the context of potential future losses avoided.
also, NBN Co. is a “limited liability” company. any judgment for damages against NBN Co. will have to be satisfied by liquidating the company’s own balance sheet with zero recourse to the Government.
(ii) Telstra agreement on shutting down copper network
the reason why Telstra insists on “leasing” the exchanges, ducts, conduits, etc to NBN Co. as opposed to selling them is because they’re hedging the possibility that the NBN will end up being scrapped.
the current $13bln deal with NBN Co. represents “bare minimum” compensation for shutting down the copper network. you could interpret it as the DCF valuation of future fixed revenues assuming current ULL pricing and no network upgrades.
Malcolm has publicly praised Telstra’s contingency plan of upgrading the CAN to a low-cost, blended mix of FTTP, FTTN and exchange DSL. if this plan was implemented in concert with a favourable revision of access pricing, the value of Telstra’s CAN would increase significantly.
hence, Telstra would be more than happy to re-assume its current role as a network owner operator. (of course, Telstra’s competitors are terrified of this potential outcome.)
(iii) completed portions of NBN
assuming that most of the early roll-out is concentrated in the least viable, regional areas, the completed portions of the NBN will be largely “worthless”. in other words, NBN Co. will have to write-off substantial portions of the capitalised building costs as the completed infrastructure will never generate the required revenue to allow the full recovery of “book value”.
one possible scenario is Telstra, in re-assuming its role as national fixed network owner, picking up the hodge-podge of assets at “20c on the dollar”.
bottomline, i don’t see any insurmountable difficulties in scrapping the NBN.
Sorry about the spelling. Jealousy really is pointless.
“getting paid $1.8mln a year… one hell of a way to discharge your debt to society”
Especially if you donate it to research, which he did………………………
Renai,
It’s a tough spot for Malcolm, I agree.
Personally, I think he’s actually a fan of the NBN, but he cannot bring himself to say it.
It goes against his ideals, and the party line, but it’s also almost without a doubt ultimately going to be a great investment for the country.
I think that’s the main reason he’s been so ineffectual at landing any real punches on the NBN itself.
He lacks the will, but he has a certain image to uphold.
There’s no other real reason for his almost beneath him attempts at character assasination, hyperbole when it comes to costs, and of course his apparent love of wireless.
For someone so gifted and genuine, it’s got to be hard on the man to fight against something he knows in his heart is the right thing to do.
Isn’t it interesting how much attention he paid to the legislation, and the ammendments he offered.
All of them are genuinely good additions.
Why would he do this if he truly believed it was a poor idea?
Making the best of a bad situation? Possibly, but something in me doubts it.
I work in communications. I have worked for a couple of providers now, and my nature puts me as an idealistic advocate of what’s fair. Our industry at the moment is anything but fair for the customers. Trust me, I’ve seen some really messed up problems that, genuinely had high probabilities of affecting people’s livelyhoods.
I hate it. It needs major reform. Considering how soul destroyingly difficult it is to drive improvement from within a provider, wiping the slate and starting from scratch is likely the best way to do this. I mean this. If you want to know why most customer service reps end up sounding like they don’t care, it’s simply because they’ve given up trying to fix the system, and switch off to protect their sanity.
If Turnbull retakes the reins from Abbot at the next election, I’m going to be in a very difficult position.
I would vote for Turnbull because he is an articulate intelligent man, who I am sure I could have some great conversations with. I’m quite sure he’d make a much better PM than the last bunch. The last one I have genuine respect for is Keating. Rudd was ok, failed to articulate his vision very well and failed to inspire his staff, who are ultimately the implementers.
However, if Turnbull retains his stance against the NBN, I might be forced to vote with my personal interests, and the longer term interests of the nation despite the Faustian nature of the deal.
Renai, it is very hard for me to respect this man who has deliberately, calculatedly and methodically wasted hundreds of hours of publicly funded parliamentary time in both chambers and several committees with false, disingenuous, futile and time consuming debate, and supplied material for several luddite colleagues to do the same. The few of his amendments which survived are totally different from the dozens of rubbish ones which were defeated after hours of intentionally wasted time.
His mission, which he chose to accept, was to “demolish the NBN”. The mechanism was to oppose, delay and confuse, to defat the project if possible, and if not then to minimise the progress by the next election in order to be able to point to time and cost over-runs and government mismanagement.
Mr Turnbull’s integrity would have been shown if he had instead argued in favour of the NBN but with coalition oversight of its financials, BEFORE the 2010 election. The mind-numbingly foolish announcement by Tony Abbott on the Sunday afternoon six days before the election that he would offer neither fibre nor Telstra separation if elected proved the death-knell of a coalition that should have romped home.
Then, instead of learning from that misjudgement, Turnbull and Abbott spent weeks failing to climb down off their high horse and secure the independents’ support. Malcolm Turnbull knows that wireless cannot deliver most services, and that the market will never deliver good services to the neglected third of the nation. He also knows that his iPad preferentially uses Wi-Fi when available, which is practically 100% of the time in Vaucluse and Capital Hill.
So, the sooner he confirms publicly what most technical readers have already worked out, that he personally supports the universal (and therefore public-funded) fibre rollout, and admits that his contrary actions were merely carrying out orders as a loyal foot-soldier of his leader, the sooner he can aspire to regaining some respect.
Fred how gracious to acknowledge the intellectual capacity of Malcolm Turnbull and to pompously express your view that Malcolm may be in possession of intelligence that would allow equal conversation with you.
Could it be that Malcolm Turnbull knows that the NBN would be a good idea BUT simply believes that satisfactory results could be achieved for a lot less cost to the Australian taxpayer. Fred with your vast knowledge perhaps you should be the next Minister for Communications?
Good afternoon, SydneyLa.
Nice try, but Mr Turnbull is intelligent enough to know that satisfactory results (defined as universal broadband of 12 Mbps) cannot be achieved for less than the NBN budget.
The reason is that a private corporation owns the copper infrastructure, otherwise FTTN could have been delivered for around $15 billion without having to also compensate Telstra with $20 billion to spend on building its own superior FTTP network in competition (as Phil Burgess confirmed they were planning to do, on last week’s Four Corners). As you know, FTTN is costly to operate and maintain (requiring power-hungry DSLAM cabinets on every residential block), and is not even upgradeable to FTTP. An NBN comprising 12 Mbps wireless in the fibre footprint would require 75,000 fibre-fed wireless towers (Australia has10,000 now), and would again be dearer yet inferior to fibre.
And have you noticed that since the Senate passed the legislation last month your Telstra shares have climbed nearly 15%, and that Telstra is increasing its capacity to deliver high-revenue video services when more than 20% of the nation has a fast enough broadband connection to become an IPTV customer (Foxtel, T-Box, AFL deals, etc).
Anyway, I’m pleased to see that you no longer use your former arguments that the NBN would hurt Telstra, and continue to pray for your full conversion to the universal fibre future.
” Mr Turnbull is intelligent enough to know that satisfactory results (defined as universal broadband of 12 Mbps) cannot be achieved for less than the NBN budget.”
No that is your ‘opinion’ that it cannot be achieved for less than that, Turnbull asserts otherwise
“The reason is that a private corporation owns the copper infrastructure, otherwise FTTN could have been delivered for around $15 billion without having to also compensate Telstra with $20 billion”
Of course you overlook the billions that will be given to Telstra and Optus to compensate them for the HFC shutdown, may in hindsight make the $20 billion look like a bargain.
“As you know, FTTN is costly to operate and maintain (requiring power-hungry DSLAM cabinets on every residential block)”
Oh really -so what are the power consumption figures of FTTN relative to power consumption figures of FTTH oh wise one?
“and is not even upgradeable to FTTP.”
Yes it is, that is totally incorrect.
“An NBN comprising 12 Mbps wireless in the fibre footprint would require 75,000 fibre-fed wireless towers (Australia has10,000 now), and would again be dearer yet inferior to fibre.”
No one has proposed a total wireless solution instead of fixed line including the current Coalition, your projection is a total fantasy.
“And have you noticed that since the Senate passed the legislation last month your Telstra shares have climbed nearly 15%”
yeah funny how they also rose at the recent AFL media rights announcement of which Telstra had a major share, share rises and falls are due to all sorts of influences your assertion that it is just about the NBN is not correct.
No that is your ‘opinion’ that it cannot be achieved for less than that, Turnbull asserts otherwise
I think in this case it all depends on what you consider satisfactory. I don’t consider what Turnbull proposes as satisfactory, but I do however agree the the NBN in it’s current from is overkill. The fact is, it is still an opinion in Turnbull’s case, and yours, as well.
Of course you overlook the billions that will be given to Telstra and Optus to compensate them for the HFC shutdown, may in hindsight make the $20 billion look like a bargain.
Without a breakdown of the Telstra deal, nor a deal with Optus anywhere near completely, we do not know how much compensation this is, if any at all. Do you not remember the discussion we had a few months ago now where I pointed out that as yet Optus have not been offered a deal?
Oh really -so what are the power consumption figures of FTTN relative to power consumption figures of FTTH oh wise one?
Assuming the source data is accurate (found here), FTTH consumes 13% less energy compared to a FTTH with VDSL2+.
Yes it is, that is totally incorrect.
True, but often when explaining that it is asserted that this will allow better competition, the fabled “get only want it you want”, i.e. if you want FTTH you get FTTH and everyone else will be fine at FTTN. This assertion is false in that it has to be upgraded per cabinet. So if you happen to fall out of the FTTH footprint you’re out of luck until the infrastructure provider decides otherwise.
yeah funny how they also rose at the recent AFL media rights announcement of which Telstra had a major share, share rises and falls are due to all sorts of influences your assertion that it is just about the NBN is not correct.
Although correlation does not imply causation your statement that he is incorrect is equally untrue. You do not have enough data to disprove his assertion, just like he doesn’t have enough data to prove it.
No that is your ‘opinion’ that it cannot be achieved for less than that, Turnbull asserts otherwise
Turnbull’s (and your) position is as much an opinion as anyone elses. Because someone disagrees with you doesn’t invalidate their position. I do not agree with Turnbull’s assessment of the situation, nor do I think the NBN in it’s current form is actually the best solution.
Of course you overlook the billions that will be given to Telstra and Optus to compensate them for the HFC shutdown, may in hindsight make the $20 billion look like a bargain.
As we don’t have a breakdown of the Telstra deal and no deal has been offered to Optus as yet, we cannot determine if they will be compensated for their HFC, nor how much. Remember that discussion we had a few months ago about Optus and the NBN deal? That conversation still applies here.
Oh really -so what are the power consumption figures of FTTN relative to power consumption figures of FTTH oh wise one?
A quick Google came up with a estimate of 13% less energy consumption for FTTH GPON over FTTN VDSL2. You can review the source here.
Yes it is, that is totally incorrect. (FTTN upgradable)
What is incorrect however is the common assertion I hear from people pushing FTTN that it will assist in free market in that you can run FTTH to only those who request to service, which is false. FTTN cabinets do not have enough space to hold multiple providers, thus it is up to the infrastructure provider (in this case Telstra) to upgrade the cabinets if and when they see fit, be it to VDSL2 or GPON. In terms of competition FTTN will likely take us back to an era before ULL and LLS, thus making Telstra the dominate provider of Broadband Services.
yeah funny how they also rose at the recent AFL media rights announcement of which Telstra had a major share, share rises and falls are due to all sorts of influences your assertion that it is just about the NBN is not correct.
You do not have a enough data to disprove that the NBN had anything to do with the Telstra share price raise in the same way he doesn’t have enough data to prove it.
No that is your ‘opinion’ that it cannot be achieved for less than that, Turnbull asserts otherwise
Depends entirely on your definition of satisfactory. It is my opinion that Turnbull’s plan is an unsatisfactory outcome, as is the NBN in it’s current from. Turnbull’s position is as much as opinion as mine, or Francis’.
Of course you overlook the billions that will be given to Telstra and Optus to compensate them for the HFC shutdown, may in hindsight make the $20 billion look like a bargain.
As we don’t know the breakdown of the current Telstra deal and what part of it is compensation for the HFC network nor has their been a deal offered to Optus for their HFC network there is no way to know much that will cost, if anything. Do you not remember that conversation we had a few months ago about the Optus and NBN deal? That still applies here.
Oh really -so what are the power consumption figures of FTTN relative to power consumption figures of FTTH oh wise one?
According to this document by the FTTH Council APAC FTTH GPON consumes above 13% less energy than FTTN VDSL2.
yeah funny how they also rose at the recent AFL media rights announcement of which Telstra had a major share, share rises and falls are due to all sorts of influences your assertion that it is just about the NBN is not correct.
I don’t recall him saying the share rise was just about the NBN, just that they could possibly be related. Considering the timing it is possible, but without further analysis we can’t be sure. After all correlation does not imply causation.
alain, I did not dispute the fact that Mr Turnbull blithely “asserts” there is a cheaper universal 12 Mbps broadband solution that fibre.
But I do dispute that he “believes” it, as SydneyLa says he does, because the costs of building FTTN, wireless-without-fibre or a combination of the two are now well known to be higher – much higher – than the mix defined by NBNCo which delivers fibre all the way to your premises.
FTTN cannot be upgraded to FTTP, rather it must be overbuilt from scratch. With FTTN, a separate fibre for each premises is NOT laid from the exchange to the node, but merely sufficient fibre to support the bandwidth of the node, which is then served by a multiplexor in the cabinet to the existing copper (for which Telstra would have to be paid “just compensation”, since they own all the copper). When you later decide to build FTTP, you have to start from the exchange again, this time feeding at least one separate fibre for each premises. That is, FTTN must be completely bypassed, not upgraded, to deliver FTTP.
And yes, fibre is easily the most environmentally friendly way to deliver high bandwidth. I am no “wise one”, but anyone who knows a fact can Google the details . This electrical seminar paper from Tellabs Inc. states it nicely with actual numbers from US Department of Energy field studies (using GPON fibre vs copper saved 80% or $18 per user annually in electricity costs at 10.5 cents per KWh, so you can double that for Australian electricity prices which are around 20 cents/KWh. For ten million fibred premises, $36 in electricity savings means $360 million saved annually, and far less equipment to maintain):
Tellabs Inc. writes:
“In terms of power usage, the optical LAN is significantly “greener.” In the 2,000-user example, active-Ethernet consumes more than 10 watts per user, where optical LAN consumes less than 2 watts per user. Based on the Department of Energy’s estimated 2010 commercial rate of 10.5 cents per kilowatt hour, the optical LAN solution achieves a power consumption savings of more than 80% over the active-Ethernet LAN. Comparing annual operating expenditures (OpEx) for utility costs, the optical LAN saves $72,000 versus the active-Ethernet LAN.
A typical legacy active-Ethernet LAN serving up to 2,016 end-users requires 90 rack units. And because most active-Ethernet LAN switches occupy one rack for the switch, and two additional racks for running the large bundles of copper cables, a 2,016-user active-Ethernet LAN would occupy 18 equipment racks. Contrast that with a scenario in which an optical LAN serves up to 2,048 optical network terminals (ONTs) and 7,700 end-users. Thanks to the OLT’s 90% greater density, this solution requires only 1 equipment rack and 9 rack units.”
“No-one has proposed a wireless-only solution” – wrong. Malcolm Turnbull has proposed wireless alone as the solution for the 40% of Australians who have no broadband. And he thinks market forces will suffice for the cities, so he offers nothing for cities. Tell that to those stuck behind RIMs in post-1990 subdivisions in Sydney.
And finally, I already mentioned the AFL in the next sentence. I agree with you, passage of the NBN legislation has indeed meant that Foxtel, T-Box, AFL deals, etc, are no longer limited to a modest 20% potential customer base because everyone will have enough bandwidth to purchase them. Hundreds more mainstream and niche video products will form a major part of Telstra’s future revenues, hence my confidence that we will see a meteoric rise in Telstra’s share price after shareholder approval of the deal. (But I’m still very glad I sold my T1 shares at $8.50 when they just started to nosedive.)
@Francis
“But I do dispute that he “believes” it,”
Really?, once again you are giving a opinion on what he does or doesn’t believe, I could say Conroy doesn’t really believe that the NBN will have 70% uptake to justify its existence financially, but then he won’t be Comms Minister nor will Gillard be PM at that end of the build timeline anyway to answer to anything.
“FTTN cannot be upgraded to FTTP, rather it must be overbuilt from scratch”
Better tell Bell Canada they have got it all wrong then and they should have employed you as primary consultant.
“Bell Canada: Start with FTTN
Canada’s ILECs compete with CATV operators and other LECs. The ILECs are experiencing access line erosion due to these competitors and also mobile cellular services. Canadian regulatory policies now allow the ILECs to enter video-service markets. As a result, Bell Canada, representing almost two-thirds of Canadian households and wireline subscribers, has formulated a plan to start with FTTN and upgrade to FTTH in subsequent years. The two-stage upgrade is designed to provide a rapid entry into video markets. The cabinets deployed at the FTTN nodes can later be re-used to upgrade the network with fibre-based PON systems. FTTN construction has been underway, with remote VDSL DSLAMs being installed in access nodes and buildings for the past two years.”
http://www.icf.at/en/6001/different_approaches_to_broadband.html
I’ll repeat this bit in case you missed it.
‘The cabinets deployed at the FTTN nodes can later be re-used to upgrade the network with fibre-based PON systems.’
Also thanks for the copy and paste comparing fibre to copper which is not the same as comparing FTTN to FTTH, neither is optical LAN vs active Ethernet LAN.
“No-one has proposed a wireless-only solution” – wrong.”
Then you go on and say Turnbull proposes a 40% wireless solution (I am not sure you have got that right anyway), but heads up Francis – 40% is not 100%, which is what a wireless only solution means, which is certainly not your fantasy BS prediction of 75,000 fibre fed towers.
“I agree with you, passage of the NBN legislation has indeed meant that Foxtel, T-Box, AFL deals, etc, are no longer limited to a modest 20% potential customer base because everyone will have enough bandwidth to purchase them.”
Of course you overlook that customers today that have HFC passing their residence can get of all of that from two suppliers, the vast majority give it a miss, somehow the magic that is called the NBN FTTH will mean they will suddenly change their minds and buy it – why?
alain, What Mark Newton says disagrees with what you believe/think is possible as regards a FTTN/FTTH upgrade path.
However a number of commentators continue to bring up the possibility of a FTTN network. At face value it makes sense that FTTN would be a stepping stone to FTTH. However according to Mark Newton from Internode FTTN doesn’t provide an upgrade path to FTTH that doesn’t involve replacing the FTTN infrastructure. FTTN doesn’t bring FTTH/FTTP any closer, but it does push it several billion dollars further away.
The only reason dialup modems became faster is because the achievable speed could be upgraded cheaply by upgrading the endpoints.
That doesn’t apply to broadband, because all of the broadband systems proposed, including the ones we’re currently using, require equipment in “the middle” which is locked to a specific generation of technology.
No ADSL1 DSLAM will ever provide a link faster than 8 Mbits/sec without a forklift-upgrade, regardless of how far technology marches. No ADSL2+ DSLAM will ever provide a link faster than 24Mbit/sec (+/- fudge factors) without a forklift upgrade regardless of how far technology marches. If an FTTN network is built and all the cabinets are filled with ADSL2+ DSLAMs, it’ll never get faster.
In an FTTP build, the glass fibre in your house goes all the way back to switching hardware at an aggregation point (e.g., telephone exchange building). In the same way that the CAN provides a continuous electron path from the aggregation point to the customer, FTTP provides a continuous photon path.
So the fibre network used to build FTTN will only be useful for FTTP if it’s installed with enough cores to connect each house in the neighbourhood serviced by the pre-FTTP node.
Which is isn’t. It never is. Nobody’s pulling high-density cables into RIM cabinets. Usually 12 cores at most.
If someone is going to contrast FTTN against FTTP/FTTH, it’s important that they understand that the technical and economic differences between them mean that there’s no upgrade path from one to the other. This notion that FTTN is a “stepping stone” to something else is pure fantasy. If an FTTN network is built you’d better like it, because it’ll be around for a long, long time to come.”
– Mark Newton2
Even if we couldn’t upgrade a FTTN network to FTTH it wouldn’t matter since it would be a lot cheaper, right? It depends if Telstra Chairman Donald McGauchie was correct in stating that the FTTN NBN would have cost $25 billion3. This would have meant with Telstra only providing $5b, the FTTN NBN would only have been around $6b less in terms of government investment compared to the current FTTH NBN plan (assuming a $26b government investment).
FTTN uses more electricity than FTTH, produces more greenhouse gases than FTTH, features a bigger carbon footprint than FTTH, requires more maintenance in terms of changing batteries and collings fans than the simple splitter boxes used by FTTH hubs, requires larger fridge sized cabinets on every second street around Australia compared to postbox size FTTH hubs, yields slower download speeds than FTTH at the same time as using hardware that stifles competition. An FTTN cabinet is approximately ~(50x120x150)cm LxWxH. An FTTH Cabinet is approximately ~(47x37x68)cm LxWxH and eight times smaller in volume. Which one would you like in your street ?
TOO EASY!!! NEXT
What Mark Newton is saying is deceitful anyways.
Obviously if you upgrade from FTTN to FTTH, you will have to remove the DSLAMS and cards that were used, but we have those anyways now (which would be reused in the FTTN).
On the other hand, all the fiber cores that were installed to FTTN nodes can be reused, you just need to replace the last mile from copper to fiber (which you would have to do with a FTTH anyways), and replace anything inside the node with FTTH equipment (usually a passive *PON splitter system).
FTTN uses more electricity than FTTH, produces more greenhouse gases than FTTH, features a bigger carbon footprint than FTTH, requires more maintenance in terms of changing batteries and collings fans than the simple splitter boxes used by FTTH hubs, requires larger fridge sized cabinets on every second street around Australia compared to postbox size FTTH hubs, yields slower download speeds than FTTH at the same time as using hardware that stifles competition.
False
You are not calculating the power required by the ONT’s on the users premises. FTTH networks require just as much power, its just that the power is used by different people in different places. With FTTH you have to convert the optical signal into an electric one
An FTTN cabinet is approximately ~(50x120x150)cm LxWxH. An FTTH Cabinet is approximately ~(47x37x68)cm LxWxH and eight times smaller in volume. Which one would you like in your street ?
Jesus, we should have had a revolt when they put transformers that are like 4 times the size everywhere around the place
http://www.nbnnews.info/debunking-a-bit-of-fttn-fud/
Wow, that FTTN node is really making my eyes bleed *cough cough*
Please spread your FUD bullshit somewhere else, all the people that are bagging out FTTN are doing so because they are being promised the golden goose. FTTN is being deployed around the world, and the only reason its not being deployed here is because of political reasons
The rest of your points are complete tripe
I’d more believe someone of the caliber of Mark Newton 100 times over than a lot of the FUD/Bull**** lies spread by a couple (deteego, alain) of Liberal SHILLS that do nothing more then sprout Liberal ideology. And lets face it that’s what it’s all about with you guys, isn’t it? It’s the Liberal way or not at all, simple as that. You guys are the ones that are making it all political. Which political parties have you voted for (both Federal and state) in the past 30 years. Me I’ve voted for Liberal, Labor, Greens, Independents over those same 30 years in both State and Federal politics depending on the policies at the time.
If Malcolm Turnbull became the opposition leader before the next election and also supported Labor’s NBN in that it continued the rollout, I would be voting Liberal (don’t particularly like Conroy) Would you two clowns vote differently? I highly doubt it as it’s more likely Liberal all the way to the grave with you two.
RESISTANCE IS FUTILE
You have not answered one single point made in dispute of your claims and decided that best course of action which is more akin to a very embarrassed retreat is to go for the personal attack smokescreen strategy asserting complete unfounded rubbish about political motivation.
Love your work.
Listen m8, it is pointless debating with people like you and deteego because your beliefs and the way you think is not going to change no matter what is said. You’re either for it or you’re against it, simple as that. I’ve been around long enough to know that the NBN as visioned by Labor will be of great benefit to Australia if given the chance to be completed. If it doesn’t happen because it gets “canned” or gets nobbled to such an extent that it is no longer “THE NBN”, then a great opportunity would have been lost and it will never be visited by any political party again.
Australia was in the top five countries in the world according to living standards/economic wealth per head in the late sixties. The NBN would be our best hope of getting back up there again, but without it will accelerate our slide down the ranks into the lower bottom portions and will continue to do so. Other nations will pass us like we’re standing still and Australia will become even a less significant country then it is already now.
RESISTANCE IS FUTILE
@Avid Gamer
“Listen m8, it is pointless debating with people like you and deteego ”
You don’t debate, I wouldn’t mind if you did, you made some points the points were refuted with valid explanations why which you could have refuted but no you go off on a stupid political motivation crusade and petty name calling, and some waffle about Australia losing its ‘position in the World’ unless we blow $43 billion on FTTH.
So the other four countries have a major national FTTH footprint that’s why they are in the top 5?, and if they don’t they will drop out unless they have one planned on the scale Australia does? of course not, complete rubbish.
Its nice that you suck up to a single guy that shares the same viewpoint you do, but Mark Newton hasn’t rolled out an FTTN, Verizon/Bell have, and so does many places in Europe
What Mark Newton is saying is a furphy, because you would have to get rid of the ADSL equipment to build an FTTH network from the bat anyways, its just with FTTN that you do it later
However I wouldn’t expect an “avid gamer” to actually be impartial in this manner
If Malcolm Turnbull became the opposition leader before the next election and also supported Labor’s NBN in that it continued the rollout, I would be voting Liberal
Nice to see that you think the internet is more important then everything else
RESISTANCE IS FUTILE
Indeed the NBN is going down
Don’t let my “avid gamer” fool you, it’s nothing if all you think I do is play computer games 24/7 because I don’t.
“If Malcolm Turnbull became the opposition leader before the next election and also supported Labor’s NBN in that it continued the rollout, I would be voting Liberal
Nice to see that you think the internet is more important then everything else”
It is very important, just that Luddites like you just don’t know how important it is going to be in years/generations to come.
“RESISTANCE IS FUTILE
Indeed the NBN is going down”
“It ain’t over to the fat lady sings” or “don’t count your chickens before they hatch” m8. It’s not a foregone conclusion that the NLP are going to steam roll the next election and the sky is going to all of a sudden turn blue and everything is rosy again.
RESISTANCE IS FUTILE
“What Mark Newton says disagrees with what you believe/think is possible as regards a FTTN/FTTH upgrade path.”
Well who is Mark Newton? – and it’s not ME you or he needs to disagree with, take it up with Bell Canada that a few people in Australia says you have got it wrong.
BTW Bell C are really hurting they ‘got it wrong’.
http://www.itworldcanada.com/blogs/nw-watch/2010/02/04/bce-inc-profits-up-84-per-cent/52826/
“FTTN uses more electricity than FTTH, produces more greenhouse gases than FTTH, features a bigger carbon footprint than FTTH, ”
How about some proper research with figures to back your assertion up, while you are at it don’t forget to factor into your analysis the extra carbon footprint produced by all the extra optical fibre that has to be manufactured for FTTH, the extra greenhouse gases in the manufacture of the FTTH boxes that is required to be installed FOR EVERY SINGLE RESIDENCE taking FTTH, the extra greenhouse gases produced for all the rechargeable batteries needed for the UPS in the FTTH box and that will eventually require replacement FOR EVERY SINGLE RESIDENCE taking FTTH.
Look forward to the result.
Sydneyla,
I find your tone ironic.
Suggesting that someone is both intelligent and accessable is a complement.
I highly doubt I could have a conversation with many other MP’s without getting bored.
If that makes me pompous, so be it. I have low tolerance for fools.
As for the sarcastic comment on being a minister, I think I’d be more suited to an advisor role.
Playing politics doesn’t suit me.
Fred please believe me when I tell you that my Minister comment was not meant to be sarcastic. If you interpret it that way it could be an indication of self doubt.
But you did not answer my question that it may be possible that Malcolm Turnbull, while believing the NBN to be an advantageous project, could be achieved for less cost in other ways.
It depends on your definition of cheaper.
DSL is certainly a cheaper option at face value.
But let’s look a little deeper. Four major issues stand out.
1) Getting access to Telstra’s copper will involve higher compensation costs than just accessing the pits. CAPEX
3) Each roadside box needs power. A LOT more power than fibre. OPEX
4) Repairs are an ongoing issue with DSL as we speak. Copper is not as reliable. OPEX
5) It runs out of potential at around 200mbit. Enough for the 80percentile for maybe 10-20 years, but not 50. Delayed OPEX.
Wireless?
Well, assuming you can get wireless to work as well as DSL, then you’re pushing the existing wireless carriers to the side or you’re trusting them to deliver the quality you demand.
There’s only one carrier of three that doesn’t have constant complaints about coverage and call quality.
Calls require ~64kbit. If you can’t get a call through reliably, you’ve got buckley’s chance of high speed data. To Telstra’s credit, the live streams from a moving vehicle during cyclone Yasi were remarkably smooth. Of course, while the towers were being battered, they most likely only had a couple of users brave enough to be out there using it.
Yes, 4% of the NBN is slated for wireless. No one has ever called that ideal, but at some point there’s an economic reality to be realised. Personally, I wouldn’t expect the wireless to last much beyond the initial roll out in many areas. I expect the usual political scope creep that will extend the roll out. That, or the NBN will just decide when it comes time to replace towers to simply do it. The up side to wireless in NBN plan is it should bring more areas online faster.
I suspect that’s the main motive of the Liberal ‘plan’ – expedience.
Honestly have you read their policy? It’s utterly lacking in any detail or even hints of understanding the issues. It’s so vague it makes Telstra’s 13 page FTTN submission look good.
Do I think they can do it cheaper?
At face value; easy.
Anyone can put some extractors and an air filter on their FJ Holden and make it seem faster for cheaper.
Underneath, you realise you’re using petrol at a rate of 15L/100 highway cycle, and it’s still going to fall apart in 5 years if you don’t keep throwing money at it.
I use that analogy because everyone loves to use the Ferrari analogy. In fact, it’s not a Ferrari. The Fibre design chosen was the cheapest of the current generation fixed line technologies. It’s the Commodore Executive of the network world.
I know you’re going to point at DSL, but DSL is not a current technology you would use when rolling out a new network. Remember, without massive dollars, you’re not getting access to Telstra’s copper. So pointing at DSL is not the answer.
The best way for the NBN fibre to be cheaper is to roll it out in the denser areas first. Rolling it out in the rural areas first adds significant upfront labour and materials cost; and delays the payback income.
This is just an economic reality.
So yes, they could probably do something that would appear similar cheaper. It wouldn’t last as long, be as cheap to run, or deliver significant performance improvements as time passed.
GPON is expected in the next decade or so, to top 40gbit and the physical network should last 50 years.
Wireless and copper have no hope of delivering that.
*DSL is certainly a cheaper option at face value.*
the rational solution to upgrading the broadband infrastructure for a country with a dispersed geography such as ours, is to implement an optimised, low-cost, blended mix of FTTP, FTTN and local loop DSL, which takes into account important micro-market considerations such as differentiated market demand, consumer affordability and cost parameters.
“one-size-fits-all” solutions (viz. Labor’s NBN), and the necessary embedded cross-subsidies, generate pricing distortions and huge losses in economic efficiency.
*Getting access to Telstra’s copper will involve higher compensation costs than just accessing the pits.*
shutting down Telstra’s copper network also involves compensation, viz. $13bln HoA. this $13bln compensation essentially reflects the present value of “cumulative future profits” forgone.
however, there’s a crucial economic difference between:
(a) acquiring or leasing Telstra’s fixed network to build FTTN:
(i) if the Government spends $15bln to build FTTN, whilst leasing the CAN for $13bln, the incremental capital servicing burden on access charges is $15bln. the $13bln CAN valuation is already reflected in current ULL pricing.
(ii) the $13bln paid to Telstra would be capitalised on NBN Co.’s balance sheet as an “asset”, or alternatively, “capitalised leasing rights”.
and
(b) acquiring or leasing Telstra’s fixed network to shut it down:
(i) when the Government spends $36bln, in addition to the $13bln paid to Telstra, the incremental capital servicing burden on access charges is $36bln.
(ii) the $13bln paid to Telstra is immediately expensed, and along with the $36bln capital investment on the new fibre network, is recouped from access charges.
NBN Co. is essentially pouring money ($13bln) down the drain by acquiring the copper network just to shut it down, instead of maximising the CAN’s “economic value-in-use” by deploying it in areas where it still remains the most cost-efficient means of providing broadband access.
*Each roadside box needs power. A LOT more power than fibre. OPEX*
FTTP networks require power too – they just consume energy at different points of the infrastructure as compared to FTTN.
*Repairs are an ongoing issue with DSL as we speak. Copper is not as reliable. OPEX*
fixed infrastructure requires “ongoing repair”…. shit, tell that to Scientific American – hell of a scoop.
copper is just as reliable as fibre. moreover, optical fibre is comparatively more fragile in handling.
*It runs out of potential at around 200mbit. Enough for the 80percentile for maybe 10-20 years, but not 50. Delayed OPEX.*
who the hell builds infrastructure to satisfy requirements half a century from now?
do you even appreciate the massive real opportunity cost of immediately incurring that so-called “delayed OPEX” over the course of 50 years? do you even understand the mechanics of “compound interest”?
*Personally, I wouldn’t expect the wireless to last much beyond the initial roll out in many areas. I expect the usual political scope creep that will extend the roll out.*
i expect the NBN will get axed within 3 years.
Good morning to you Francis, and I cannot find your interesting, and expertly delivered, commentary on the NBN events to contain discrepancies. One point, however, I would like Mr Turnbull to confirm your assertion that he is in agreement with you that a NBN cannot be provided for less than that projected by the present delivery plan.
Thank you, Sydney.
Actually, Mr Turnbull often claims that an NBN can be done for less than $36 billion, but in vague and incomplete terms. It’s like the old joke, “Cheap, Good, Fast – choose any two.” We would either get a cheap and fast NBN that was not good, a cheap and good NBN that was not fast, or a good and fast NBN that was not cheap.
A taxpayer-funded NBN must also be universal, and Mr Turnbull advocates perpetuating the market model which has denied broadband to 40% of Australians after 15 years.
So I’m not holding my breath, at least whilever he is in opposition.
“Mr Turnbull advocates perpetuating the market model which has denied broadband to 40% of Australians after 15 years.”
Where did you get that 40% figure from, so that means in 1995 40% of Australians were denied BB and in 2011 the figure is still 40%- is that right?
*A taxpayer-funded NBN must also be universal, and Mr Turnbull advocates perpetuating the market model which has denied broadband to 40% of Australians after 15 years.*
well, guess what? the current Conroy/Labor NBN is a “market model” too (albeit a heavily-distorted and monopolised “market”).
by shifting the NBN off-budget into an investment vehicle, the entire $50bln cost will have to be recouped from access charges paid by retail subscribers.
the small “7% ROI” subsidy is relatively trivial.
No, Tosh, the market model is the one where Telstra and other companies are allowed to build infrastructure for profit.
After fifteen years, this model left half of all ADSL connections running slower than 2 Mbps (cf ABS, 20 September 2010), and over a third of the country without ADSL at all, while Optus and Telstra HFC ran side-by-side in several suburbs of Sydney and Melbourne.
The NBN, by contrast, sees a wholly government-owned company build universal infrastructure to all premises and wholesale it to the market at a common price, regardless of the geographic location or last-mile technology to the customer premises.
But you are absolutely correct about the off-budget construction cost being recouped from wholesale access charges. When you extend the historical increase in data consumption per user over the next decade, the NBNCo growth forecasts prove to be laughably conservative. These revenues (especially as many customers upsize their service at their own expense to get IPTV services) will certainly repay the construction cost by the mid 2020s without the public ever needing to sell this cash cow.
*the market model is the one where Telstra and other companies are allowed to build infrastructure for profit.*
when infrastructure is “profitable”, that means:
(i) the capital invested in building said infrastructure has been productively deployed relative to other investment options;
(ii) the economic “value-in-use” of the infrastructure, as reflected in its revenue generation, is proportionate to the underlying cost structure.
profitabie infrastructure = good economic outcome.
*After fifteen years, this model left half of all ADSL connections running slower than 2 Mbps (cf ABS, 20 September 2010), and over a third of the country without ADSL at all.*
okay, you claim that:
(i) “a third (or 3.3/10) of the population has no ADSL”
(ii) “40% (or 4/10) of the population has been denied broadband”
proposition (i) implies that ~7/10 of the pop. has ADSL. so, at most, ~3/10 of the pop. has no access to broadband. this, patently, contradicts your claim in proposition (ii).
the natural conclusion to draw is that none of your quoted statistics are reliable.
*The NBN, by contrast, sees a wholly government-owned company build universal infrastructure to all premises and wholesale it to the market at a common price, regardless of the geographic location or last-mile technology to the customer premises.*
couple of observations:
(i) yes, Australia will be the ONLY country in the world to re-nationalise the fixed-line comms. network.
(ii) “one-size-fits-all” solutions (viz. 93% FTTP) are never the most economically-efficient means of providing infrastructure.
(iii) uniform wholesale pricing, across different market segments, geographies and technological platforms will result in massive distortion of prices, incentives, consumption and investment patterns, generating allocative and productive inefficiencies, leading to economic losses across the broader economy.
*When you extend the historical increase in data consumption per user over the next decade, the NBNCo growth forecasts prove to be laughably conservative.*
(i) consumption of any good is a function of price. the historical growth in “data consumption per user” has been driven by sharp falls in the “price of data”. this has been possible due to the bypassing of Telstra AVGC charges via ULL competition and competitive backhaul.
NBN Co.’s extortionary CVC charges will reverse these gains by introducing an “artificial data bottleneck”, thereby, making “data consumption” more expensive than the present status quo.
(ii) NBN Co.’s revenue forecasts are laughable (full-stop). because the AVC curve is relatively flat (across the different speed tiers), NBN Co.’s revenue model is driven largely by CVC revenue.
NBN Co.’s corporate plan essentially uses Hong Kong’s historical broadband traffic growth as a benchmark to project CVC revenue growth. this is ridiculous:
(i) HK’s fibre infrastructure has a totally different cost structure, due to the fact that the vast majority of residents live, packed like sardines, in geographically-concentrated, high-rise apartment towers. (that’s roughly the equivalent of compressing our entire population into Sydney CBD high-rise condo’s.)
(ii) HK’s fibre network does not have a $20/Mbps wholesale data charge.
if NBN Co.’s revenue forecasting “methodology” (i.e. arbitrary benchmarking against a country with totally dissimilar infrastructure costs while ignoring the crucial impact of variable tariffs on data consumption) was submitted as part of a MBA project thesis, it would record an immediate FAIL grade.
(but, hey… this is a $50bln “government project”… so whaddaya expect?….after all, taxpayers’ hip-pockets are bottomless pits, right? just throw in a couple of fancy charts and send Quigley in to practise his well-rehearsed, “technical marvels of fibre” marketing spiel from his Alcatel days…. and you have the votes of the gullible Independents… hook, line and sinker.)
*These revenues (especially as many customers upsize their service at their own expense to get IPTV services)*
well, normally, when you have a fibre network with a flat access charge, this leaves room for other retail players to “value-add” by offering services on top, e.g. IPTV, etc. however, by imposing a fixed, linear capacity charge of $20/Mbps, NBN Co.’s basically robbing all the “value-added” from any potential value-adding service provider.
*will certainly repay the construction cost by the mid 2020s without the public ever needing to sell this cash cow.*
“will certainly repay the construction cost by mid-2020’s”? err… lemme take a look at NBN Co.’s own financial projections as contained in their corporate plan:
(i) from 2022 to 2025, NBN Co. will have generated cumulative levered free cash flow of $8bln
(ii) as compared to cumulative cash outflow of $40bln in the period leading up to 2022.
hmmm… amidst the fog… it’s hard to see the cow… are those tusks i see? looks more like an elephant… ;)
You try running a business outside the metropolitan area.
Then you might understand how badly some of us NEED the NBN!
I might not be able to compete business vs business against the big boys, but I can sure compete against them with my little online store.
Its either old people or Telstra shareholders who dont want the NBN. Both have no vision for the future.
*I might not be able to compete business vs business against the big boys, but I can sure compete against them with my little online store.*
getting other businesses/people to subsidise your fibre connection for your “little online store” isn’t true “competition”.
Jason how insulting you are to the elderly and how totally wrong you are in your reference to Telstra shareholders. I do think that a fibre NBN would be good, who doesn’t? But the reality of delivery when considering cost and logistics of the exercise is sobering.
As I have told Senator Conroy, if he can deliver the NBN as planned he will be remembered by the Labor Party (and by Australians) as a politician with vision to equal the vision splendid that was demonstrated by R.F.X Connor whose plans for gas transportation, if implemented, would have prospered Australia.
So we should be asking serious questions of Mr Turdball about his involvement with Goldman Sachs during his time there?
Whats good for the goose and all…..
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