blog The controversial clause in Telstra’s National Broadband Network agreement prohibiting the telco from promoting its wireless solutions as a direct alternative to the NBN’s fibre continues to draw interest, despite protestations from Telstra chief executive David Thodey that the clause would only have a minor impact on his company’s operations.
In an interview this morning with the ABC’s Inside Business program (full video and transcription here), Thodey had this to say;
“The only constraint, and it’s a very, very minor constraint, is to directly put a little pamphlet in someone’s house that says, “Do not buy NBN fixed broadband, buy our wireless broadband instead. That’s the only constraint. We will be promoting our wonderful Next G wireless network, which, as you know, is going to an LTE spectrum. Be it, what, 80 megabits per second? And we will be promoting that product very, very strongly … I don’t think it’s an issue at all.”
So Telstra won’t directly promote Next G as a NBN substitute. But will it price it similarly, achieving direct competition by default? That was interviewer Alan Kohler’s next question … and Thodey didn’t really answer it, noting only that Telstra would price Next G based on “its value” and the flexibility it gave customers.
Now the interesting thing is, if you look at Telstra’s current pricing plans, you’ll note that its wireless offerings are not actually that different from its fixed broadband offerings when it comes to price — especially at the low end. For $19.95 a month, you can get either a 1GB Next G mobile broadband plan, or a 2GB ADSL or HFC cable plan.
It’s only when you get to the moderate and top-end of Telstra’s plans that things diverge wildly … $69.95 a month, for example, buys you a 200GB ADSL or HFC cable plan, but for the same price you’ll only get 12GB of quota from Telstra’s mobile network.
Interestingly, though, most people are predicting that broadband prices will rise when the NBN comes in; and the onset of LTE and Telstra’s regular quota increases on its mobile network (especially anticipated to increase as more capacity arrives through LTE) means that pricing on the two poles or fixed and wireless broadband might actually gradually be converging anyway. With this in mind, the question needs to be asked whether Telstra won’t need to directly promote its Next G network as a direct substitute for the NBN — because its pricing will do that for it anyway.
Image credit: Telstra
Whats going to be interesting is when a situation occurs where more customers then NBNCo anticipated will flock to NextG, even though Telstra didn’t advertise it as an alternative, what is NBNCo going to do next? It puts both companies in a retardedly awkward position, something that should have never occurred. In any case this is unlikely to happen, since Labor will most likely lose the next election
For light users, NextG LTE is a serious threat to NBNCo’s viability, especially taking into account how large the light user demographic is compared to medium/heavy users (how do you think Telstra still has around 50% market share with those low quota plans?)
Light users may well move to wireless in the short to medium term.
Over the longer term, light users become comparable to today’s moderate users and moderate users become comparable to today’s heavy users.
The driving force behind this, of course will be applications.
Without applications, we’d still be happy with 56k.
All technology is somewhat cyclical.
A generation ago, we had terminal > server computing.
Then it went nearly 100% discrete PC’s with local applications and processing.
We’re currently seeing a shift into the “cloud” which is nothing more than a fancy name for the old terminal>server relationship.
Once upon a time, international telephone calls were primarily satellite based. They shifted to cable, and now we’re seeing a new generation of satellites cabable of delivering decent latency.
It’s just a matter of time
So, if you think that a relatively high uptake of wireless in the first few years is some sort of death knell for the NBN, think again. It will cycle back.
look at the most successful of the recent crop of billion-dollar “digital apps”…
you don’t need a huge pipe to use the services provided by Facebook, Groupon, LinkedIn, etc…
you don’t need 100mbit to blog…
why should the “economic value” of video apps be tied to “resolution” (hence, bandwidth requirements) as opposed to “content”?
why do Youtube and other video sites offer different resolutions for its videos?
“real value” is generated by using “limited bandwidth” more intensively or more efficiently.
quality of use beats quantity of use.
Interesting how you talk about quality as a result of low bandwidth.
Have you watched something on Youtube on 240p?
Compare it to 1080p, which by the way, is unlikely to be anywhere close to the end point for our incessant need for more detail.
It’s impossible currently to stream even standard 1080p, but in the future it will be commonplace.
Whether that represents value is not up to me to say, however there are enormous environmental benefits to cutting down on printing optical discs, packaging them, boxing them up, shipping them, storing them, displaying them under flourescent lights for weeks to months before selling them to someone, who in all likelyhood will only watch it once.
So before you complain that building a network that may only be used to its fullest potential for mere entertainment, is a waste of resources, consider how many resources will be wasted otherwise.
“Interesting how you talk about quality as a result of low bandwidth.
Have you watched something on Youtube on 240p?
Compare it to 1080p, which by the way, is unlikely to be anywhere close to the end point for our incessant need for more detail.”
Maybe you dont understand that you don’t require to stream HD from any video to get the content off it. When I am watching a video about a lecture, I watch it in standard definition and I get the same amount of information that I need if I was to watch it in HD.
I do not require to see the wrinkles on peoples faces
“It’s impossible currently to stream even standard 1080p, but in the future it will be commonplace.”
Jesus, I must be doing the impossible on my net connection, as most other Australians that I know of. (You do realized, that 1080p when compressed with something like h.264, requires around ~4mbits of data at most depending on what type of compression you use)
“Whether that represents value is not up to me to say, however there are enormous environmental benefits to cutting down on printing optical discs, packaging them, boxing them up, shipping them, storing them, displaying them under flourescent lights for weeks to months before selling them to someone, who in all likelyhood will only watch it once.”
As there are enormous benefits to not being tied to a desk and being able to use the internet wherever you please. It looks like the latter is growing more then the former
Funny, because the H264 wiki article states that the High Profile (HiP)
encoding used by Bluray and DVB requires 25,000kbit/s.
More than even the top .05% of DSL customers.
You appear to be talking about 720p, which can work on 4mbit.
As I have been stating for a while now, it is imperative of the government’s and NBN Co to ensure prices for fixed line connections remain as low as possible in order to prevent convergence of pricing, as well as increase uptake for NBNCo services in general.
Something they can’t do if they try to continue with this “The NBN will pay for itself in full” notion. Which although possible, shows poor planing on the part of Labor. If a lot of the benefits are indirect as Labor have asserted (like to healthcare and business) why then must you get the NBN to pay for itself in full?
Something they can’t do if they try to continue with this “The NBN will pay for itself in full” notion. Which although possible, shows poor planing on the part of Labor. If a lot of the benefits are indirect as Labor have asserted (like to healthcare and business) why then must you get the NBN to pay for itself in full?
Because the Labor government spent all of its money on stupid schemes, and we are now in debt. They don’t have any money to spend on the NBN, and the fact that NBN will expect a return, in best case scenario, like 20 years, its basically money down the drain up until that time (even if you believe the reports dodgy predictions)
The above means its both political poison and economic stupidity, and unfortunately all of Australia has to pay for it
NBN wouldn’t have been such a bad idea if it was built out of the surplus and NBNCo wasn’t expected to pay back debt + interest, (that and if they fixed all the trivial current problems with the network instead of leaving people a decade to wait before any decent net improvements). However none of this happened, and in reality NBN is just a political solution for Labor, one thats not large enough, because to be honest, really not that many people care about the internet that much
The issue isn’t pricing or payback. It’s the caps. Eliminate the CVC charge and raise the AVC charge a few $/month, and suddenly every connection becomes uncapped. Why is the FTTH network capped? Why is there a “contention charge”? It’s nonsense. There is no contention or congestion issues on an all fiber network.
essentially, jacking-up the cost base of the fixed-line infrastructure by an unnecessary extent hurts the entire industry…. even RSPs like Telstra that would otherwise make more money by offering fixed-line value-added products in addition to wireless.
when NBNco needs to pull in as much in wholesale revenue as the entire industry is currently earning at the retail level, there just isn’t much margin left for retail players to so-called “innovate” or value-add. that’s what happens when you roll-out white elephant fibre connections all over the country which has to be subsidised by the price-inelastic, high ARPU user base.
it’s an impending financial / fiscal train wreck.
genuine innovation or productivity growth is about making the most of limited resources – it’s about doing more with less. any fool can increase “output” in any sector by jacking up “inputs” or increasing the cost base of the “factors of production” (or otherwise diverting resources into the sector).
what is really challenging or profitable in terms of economic productivity is increasing “output” (in value terms) while maintaining the same level of “inputs” (in cost terms).
in other words, indiscriminately pushing fibre everywhere is the dumb way to achieve “growth” – it’s the way promoted by dumb politicians and ignorant “broadband evangelists” who understand little about how the real world works.
Us power users know that wireless cannot compare to optic fibre for a variety of reasons, such as wireless will always have higher latency and that a lot of us want speeds exceeding 100mbps.
It appears most of you POWER users a don’t read and b could careless whether kids get a needed new classroom as long as you get you super fast broadband to play games and video conference with other losers how can’t get out of their chair cause their as fat as you! Why should we have to pay for your lazy life style! We all ready have to pay for new hospital beds that can take your load! Do some research their are already yes I said it ALREADY wireless network excessed your requirements… Telstra are thinking peak speeds of 80mbps and latency BELOW current ADSL! grow up and stop wanting everyone else to provide YOU with what you want. The government is here to provide what we NEED and 100Mbps to the home is NOT what is needed!
The David Thodey interview was very revealing and reflects great credit on David and his Team.
From a basis of horrific blackmail threats against Telstra, David and his Team have negotiated a result that is exciting for Telstra and could prove to be the saviour of the Gillard Government. The best thing to come out of this agreement will be the end of the constant demand by Telstra opponents for regulation on Telstra that damages Telstra and financially benefits themselves.
I do not think that there will be a problem with the Telstra shareholder vote of acceptance but the ACCC may have a problem with allowing the NBN Co/Optus agreement to proceed as this would remove the last chance for the ACCC to maintain a competitor for the NBN. This should not concern Senator Conroy as the Optus buy-out is not critical to the NBN success as the Telstra deal is.
“I do not think that there will be a problem with the Telstra shareholder vote of acceptance”
I don’t entirely agree with that, if the Telstra share price trend between now and October is a continuing fall the vote of acceptance is definitely not a known.
I noticed Telstra have come out very quickly pushing their NextG product’s future upgrades, which is the smart thing to do.
I guess there will a avalanche of wireless marketing BEFORE the ‘don’t mention the wireless’ clause of the agreement is legally binding post October (assuming a yes vote). :)
“And we will be promoting that product very, very strongly … I don’t think it’s an issue at all.”
@Sydney, you could be taken half seriously, until you start the typical threats/blackmail rhetoric.
Any such steps were only reprisals for the uncooperative incumbents arrogance…
Seriously the threats and blackmail emanated firstly, from SolCo (I will differentiate and call the old Telstra SolCo, because theres is a stark contrast between the disgraceful Sol Telstra and the new improved David Telstra – before you launch into your normal “defensive”, disparaging opponent BS) to the Howard government.
SolCo of course said that they would build FTTN in the cities (and ensure their monopoly for years to come) but only if they received maximum ROI and of course said, and don’t think we’ll let anyone else build anything (think OPEL and their campaign to stop it)…so threats/blackmail!
Then the Rudd government caved in and gave SolCo what they wanted, no OPEL, with one would assume more back scratching cooperation, by offering further opportunities for SolCo to again renew the monopoly FTTN via the RFP to build an NBN. But this time SolCo submitted a non-compliant bid… sigh!
This basically ****ed up the government’s whole NBN plan, ened the close palsy relationship between the Rudd government and SolCo and necessitated the NBN overhaul, Telstra separation etc…
But AGAIN, DO NOT DOUBT IT SYD, it was Sol’s fault nobody else’s and the sooner you stop the NWAT rhetoric and understand this, the sooner you may start to be taken seriously. Until then imo, you have, are and will be perceived to be nothing more than a Telstra puppet/slave to his TLS shares…!
Sadly I do agree with the sentiment in some ways though, as it is David’s Telstra, not Sol’s Telstra which has to clean up Sol’s mess. But Sol was employed and ratified by you shareholders (one would assume) so…!
Say what you like about Sol’s reign but there is one thing he did that Telstra is reaping the benefit from multiple times over, he fast tracked the NextG rollout.
No competitor comes close to Telstra’s NextG spread and speed, and the thousands of SIO’s every month and healthy ARPU’s are increasingly filling the gap from rapidly falling fixed line revenue.
Are Conroy and the NBN Co worried about Telstra NextG, LTE and beyond? – you betcha.
@ alain…
Yes… I actually agree with you when you stop the FUD!
NextG is imo, a great network and now with pricing more competitive (due imo to the onset of the NBN) more Aussies can enjoy the benefits and superiority thereof.
My wife’s mobile reception is far superior on NextG than mine is on Optus and I will soon be going to NextG myself too (sick of having to go outside to get reception). And this is the big competitor to fibre – good thing it’s mobile otherwise I wouldn’t be able to use it in my home…LOL!
You seem to actually know a bit about the NextG network alain – a Telstra employee perhaps?
But considering Sol started his Telstra tenure mid 2005 (July iirc) and NextG was rolled out in November 2005 iirc), I’d suggest Sol just kept the reigns on what had already been started rather than being instrumental.
But sadly after an almost rational comment, your inevitable FUD starts up again… never mind, short lived 5 seconds of rationality is more than I expected from you today.
Well done Tiger!
RS let us forget ancient history and focus on the present and the future. I totally agree that Sol did not understand that to do business in Australia a great deal of brown-nosing and doffing of the hat had to be done. That is not the style of United States business nor of Sol. I agree David Thodey is doing an excellent job and his quiet style does not make waves.
The good thing that will come out of the sale of the Telstra Wholesale Division is the fact that Telstra will be allowed to compete strongly without the calls from Telstra opponents for regulation that restricts Telstra from delivering cheaper and better services to Australian consumers. RS do you agree that with the removal of the vertically integrated Telstra unrestricted competition should occur?
No Sydney…
While ever you insist on speaking of blackmail and threats, the whole picture of why the government was put into such a situation (due to Sol’s arrogance) not simply the current situation, needs to be conveyed…
But Syd again, you talk SolCo/NWAT rubbish. Telstra’s opponents only called for themselves to receive their rightful entitlements. How many times must you lie about it. And seriously, because you are corrected, it DOES NOT make me a disparaging opponent, so please. It makes me one who doesn’t like BS being touted as fact, due to ones own financial stake!
It was SolCo who inevitable trudged off to court to try to stop/reduce needed regulations and raise prices (fair enough trying to raise access prices that’s simply business) but they lost, because they were LEGALLY wrong… which makes your claims WRONG too.
The main cases I recall – one in relation to PSTN ownership, where the High Court said “Telstra DO NOT have the rights over the PSTN they believe they do” and again enshrined access laws.
And later, Telstra being fined $18m for disallowing that very access to exchanges…
These were the sorts of RIGHTS Telstra’s opponents were wanting. They weren’t asking for anything over and above their legal entitlements. So you are either mistaken or lying!
In saying that, of course they also tried to minimise access fees. But as I said with Telstra wanting to raise them, that’s business…
So please!
As for your question… like the other FUDsters you are good at asking, but not much on answering eh?
I still have this one (unanswered by both you and alain) – “Do think it would be wasteful for the NBN to pay Telstra for customers to migrate to the NBN and then have them not actually migrate to the NBN”?
Yes or no?
Your turn, then I will gladly answer your’s…fair’s fair!
Don’t expect an answer RS, I’ve noticed when syd is backed into a corner he will just come up with a lame attempt to be pragmatic… I think it’s safe to assume they want it both ways and they’ve invested much time in opposing the NBN so admitting they were wrong is simply not an option in this case.
I didn’t see any corner nor do I see any being ‘backed in’ at all, the pro-NBN fantasy world, it is amazing
Sydney? Why are you using two different user names? Is this allowed?
You didn’t answer me either alain, but here you are trolling none-the-less (from within that corner)…LOL!
RS you horrify and disappoint me. Did you really mean that you do NOT agree with unrestricted competition? In answer to YOUR question RS I would say could you tell me, in all honesty, how customers could be stopped from transferring from one RSP to another if it is their desire to do so?
In fact it is probably illegal for the NBN Co to request such an agreement from Telstra as collusion is, under law, strictly forbidden. I do think the the NBN Co/Telstra agreement is about the best that could be achieved but the Optus deal is a different matter altogether.
The ACCC must disapprove and deny the Optus customer buy-out by the NBN Co and Optus must be advised to remain as a competitor for the NBN so as to avoid a monopoly NBN Co. Despite very great differences in the past RS I do think that we are slowly getting onto the same page, which is good.
Sydney –
“Do YOU think it would be wasteful for the NBN to pay Telstra for customers to migrate to the NBN and then have them not actually migrate to the NBN”?
YES OR NO?
It’s not ****ing rocket science! I’m not talking about legalities, the contract, OPTUS? What does Sydney Lawrence, Sydney, Sydneyla, Atilla… think?
As for your first paragraph, WTF? I said I will answer you IF YOU EVER answer me. Please don’t go NWAT/FUDding up my reply…!
@RS
1. Do you think it would be wasteful to connect a residence to the NBN FTTH install a brand new ONT box then find out the residence just uses wireless BB and voice anyway?
2. Do you think it would be wasteful to pull down a perfectly working HFC connection pay Optus or Telstra a fee to ‘compensate them’ for that, connect that same residence up to the NBN FTTH and the residence just uses it in exactly in the same way they used BB and voice on the HFC connection they had before?
YES or NO? It’s not rocket science.
LOL alain… if you have even one ball…
You still didn’t answer me… YES or NO????????
Then rest assured I will answer you, because I have two…!
Oh and I have another one for you Fizz, do you think it is wasteful to disconnect a residence from the PSTN, pay Telstra compensation for that disconnection so that residence can then plug their 10 year old phone into the phone port on the NBN Co ONT, explain that the UPS battery inside will require replacement at some point, tell them not to use the other unused BB port because it might be confusing (put tape over it), and they can then use it for voice calls just like they did when they had PSTN, right down to the frequency of the dial tone?
These ‘wasteful’ type questions can go all day and night eh RS?
Yes they can elaine, only difference I have the balls to answer every one of them…
Whereas, you are unable to answer even one…
Sorry to break the news to you, but ????????? or !!!!!!!!! or FUDster or FUD!!!!! FUD FUD and more FUD repeated over and over is not ‘answering’.
@alain…
A 1. No
A 2. No
There, you are easily fixed, gee that was hard eh [sic]?
Both of your idiotic, childish evasions masquerading as questions (because you do not have the balls to answer my one simple question) answered.
I know you are unable to manage answering my more meaningful and topical question… but your turn, give it a shot tiger… I await with anticipation your further avoidance and simplistic but, but, but reply!
ok we can all play games – NO.
Games? You asked I answered….AGAIN for those sans comprehension, my answer is No and No…
As for you… LOL, Mr Contradiction…
Who says the NBN is wastage.
Then says “NO” it isn’t wastage for NBNCo to pay Telstra for clientele to migrate, who don’t actually migrate…!
Please, please stop the endless humorous, imbecilic contradictions my sides are splitting…
Oh you are serious… LOL even more so then!
Few have grasped the reasons for this clause, which benefits Telstra’s mobile cost of sales, too!
David Thodey will not always be Telstra’s CEO, and there is a risk that a coalition government and a short-sighted future CEO might white-ant the fibre footprint by tricking customers into choosing inferior wireless when they could have had fibre and used a faster, more reliable Wi-Fi solution for their domestic wireeless needs.
By maximising the fibre footprint to every premises in Australia for which it is the cheapest solution (cf May 2010 NBN Implementation Report), Telstra will need fewer towers and encounter less congestion, lowering its costs to provide wireless broadband, and improving the user experience of Telstra wireless. What is more, every premises with a fibre NTU increases the pool of potential Foxtel customers, and users of Telstra’s offsite data storage facilities that are now under construction.
We already know where fibre should be laid for a future-proof national infrastructure, and it is in everyone’s interest that NBNCo install an NTU on the wall of every premises that should have one.
Meanwhile, there is nothing to stop a customer buying wireless from Telstra at any time, nor compelling them to purchase a fibre service from any retail provider. It is simply not in Telstra’s commercial interests to talk a homeowner within the fibre footprint into refusing its free installation, as some mischievous politicians shamefully persist in doing.
two things that occur to me also: the clause seems to be rather broadly written, and i would suggest from context it is most targeted at FIXED wireless services, not so much the mobile wireless. so i can see clearly where Thodey is quite comfortable with the clause and doesnt regard it as a big deal for Telstra, 20Y lifetime notwithstanding.
and with regard to the 20Y part, the spectrum market will be very very different by that stage, and i fully expect that wireless spectrum will be fully saturated by then. i dont expect that the spectrum for wireless services will support the kinds of speeds that NBNco should be retailing by that point in time – say its a 10Gbps market then – its the old bits per hz and the fact that the higher in hz you go the shorter your broadcast range becomes for a given broadcast power. my personal feeling is spectrum physics limitations are more likely to be reached than not, so wireless and fttp options wont be as comparable as they are now. Again i can see why Thodey would be comfortable with the clause in that circumstance. the whole thing is rather a storm in a teacup, to me.
BTW i happen to feel removal of vertical integration is good but that will happen automatically as Telstra migrates over to fibre. i know the small guys would very much like it to be a post integration world NOW but realistically speaking i think they are just going to have to wait a bit longer. it does concern me that telstra will still carry significant weight in the market but on the other hand because it will be customer service and offerings driving customer movements driving the market – seeing as everyone will be selling the same thing….. some folk like iinet westnet and internode, who are consistently top of the tree in customer service should be able to grow their business still without some of the historical distortive effects holding them back.
(that exchange access suit mentioned earlier is a good example, and being able to switch a customer between RSPs without needing to do a truck roll to move jumpers is another one. the usual 1 month wait to get a naked service disappears as well, all of which make things a lot more pleasant for a consumer seeking a service).
*David Thodey will not always be Telstra’s CEO, and there is a risk that a coalition government and a short-sighted future CEO might white-ant the fibre footprint*
it’s a virtual certainty that the next Liberal Government will rip Labor’s NBN into shreds.
Telstra’s chairwoman has made it clear that the company only agreed to the deal with NBNco because the Labor Government was holding a gun to its head – this does not constitute an endorsement of the NBN in any shape or form whatsoever.
*by tricking customers into choosing inferior wireless when they could have had fibre and used a faster, more reliable Wi-Fi solution for their domestic wireeless needs.*
the whole point of wireless is to access the internet away from home-based fixed broadband. domestic wireless roaming is useless when you’re on a train or at the beach.
wireless may be inferior to fibre in terms of technical performance characteristics but what matters is relative “economic value”.
firstly, wireless is mobile and allows you to access the internet ANYWHERE you go. fixed broadband is tethered to your home.
secondly, light users are a major demographic in the retail internet market. the roll-out of LTE will further increase the attractiveness of wireless broadband for light users relative to fixed broadband. building the $50bln NBN will make fixed broadband more expensive and further decrease its attractiveness to light users.
the migration of a big chunk of light users to wireless is merely ONE of MANY ways that NBNco could face financial ruin.
*By maximising the fibre footprint to every premises in Australia for which it is the cheapest solution (cf May 2010 NBN Implementation Report)*
“cheapest solution” to achieve what? relative to what universe of possible alternatives? merely wireless and satellite? what about building fibre nodes?
why is the chart of average cost per premise of connecting to FTTP in the McKinsey Report so flat up till the 93rd percentile when ULL prices set by the ACCC virtually double as you jump from one band to a neighbouring band?
why does the chart of average cost per premise only reflect the distribution of population densities and not take into account the DISTANCE between “densities”?
why did the Labor Government pay McKinsey millions of dollars for this kind of garbage analysis?
why did McKinsey prostitute its reputation for millions of dollars? (whoops…. i think that question contains its own answer.)
*Telstra will need fewer towers and encounter less congestion, lowering its costs to provide wireless broadband, and improving the user experience of Telstra wireless.*
the wireless product set is entirely different to fixed broadband in the sense that demand for wireless internet access is independent of residential fixed broadband capability. free 1Gbit home internet is completely useless to me when i need to access the internet away from home.
Telstra will build as many towers as it needs as long as there’s a sufficient consumer market to pay off the cost of constructing new wireless networks. (notice how Telstra doesn’t need to shutdown or buy-out competitor’s wireless networks to justify upgrading to LTE.)
assuming that traffic on Telstra’s wireless network is routed via its own extensive national network of fibre backhaul, building the NBN doesn’t affect Telstra’s cost of providing wireless broadband.
“network congestion” does not “cost” service-providers anything. “network congestion” is merely a form of “quantity rationing” that is easily alleviated by implementing a proper pricing structure to ration network capacity using “price” instead.
in fact, some service-providers’ business models are built around “imposing” network congestion, i.e. selling cheap internet access with high contention ratios by oversubscribing purchased network capacity.
*What is more, every premises with a fibre NTU increases the pool of potential Foxtel customers, and users of Telstra’s offsite data storage facilities that are now under construction.*
that would be true if fibre was only pushed to households that actually utilise the connection sufficiently to offset the costs of laying the dedicated infrastructure.
by indiscriminately pushing fibre to every premise regardless of cost or necessity, you create a financial burden on “economic” connections to subsidise “uneconomic” connections. the resultant cross-subsidy makes “economic” connections more expensive to use and makes value-adding apps such as IPTV less viable than otherwise.
*We already know where fibre should be laid for a future-proof national infrastructure, and it is in everyone’s interest that NBNCo install an NTU on the wall of every premises that should have one.*
“future-proofing” only makes sense in a world where opportunity costs are zero – that is not the world that we inhabit. building Labor’s NBN will destroy the cost-competitiveness of our fixed-line sector and introduce all kinds of distortions leading to huge economic losses.
*Meanwhile, there is nothing to stop a customer buying wireless from Telstra at any time, nor compelling them to purchase a fibre service from any retail provider.*
you’re right here, the “wireless clause” is a toothless tiger – it’s the best NBNco could do to counter the very real “wireless threat” (but piss-weak attempt indeed).
*It is simply not in Telstra’s commercial interests to talk a homeowner within the fibre footprint into refusing its free installation*
the pertinent question here is, “wireless and fixed” subscribers aside, would Telstra make a higher margin from selling a “sole wireless” connection or a “sole NBN fibre” connection?
given the higher fixed costs embedded in “fixed-line” infrastructure (i.e. trenching fibre as opposed to building towers), the “fixed” form of broadband access is most suitable for subscribers who use the internet intensively or are willing to outlay greater amounts on value-added products.
on this basis, it makes more economic sense for light users to access the internet wirelessly, and for Telstra to market to them accordingly. there’s no conspiracy or trickery here – unlike government monopolies, private enterprises have to develop cost-effective solutions that satisfy market parameters.
those who want to use the internet intensively should generally resort to a fixed-line, or pay a premium if they insist on accessing bandwidth-intensive apps through a wireless network. with a proper pricing structure, network congestion is not an issue on fixed or wireless networks.
Conspiracy theories, BS and FUD… thank you Tosh…
Back to the Bush & Bush memoirs now…!
“Conspiracy theories, BS and FUD… thank you Tosh…”
Wow the detail to everyone of Tosh’s points is overwhelming, the extensive research that went into that response, it must have taken you all of 5 secs.
Yes alain, 5 seconds is all it takes to disprove such baseless FUD…
Thank you for recognising it…!
in terms of the choice between “wireless” and “fixed” for light users, the introduction of the CVC charge further tilts the choice in favour of “wireless” relative to the current status quo for “entry-level” subscribers.
currently, ISPs offer fixed broadband plans across a range of quotas with higher data plans reaping higher margins than entry-level plans. to the extent that ISPs are targeting a certain “average margin” across all plans, the relatively low price point of entry-level fixed broadband plans is being “subsidised” by the premium data plans.
now, the effect of the CVC charge is to introduce another layer of variable costs for ISPs correlating with “data usage” which currently doesn’t exist on the copper last-mile. to maintain margins earned on the higher quota plans, the prices on these plans will have to rise offset the CVC data toll (for a given contention ratio).
this will trigger plan changes by subscribers on the margin. to maintain the same distribution of subscribers across the entire spectrum of plans, the prices on the entry-level plans will either have to rise for the same quota, or entry-level quotas will have to be adjusted downwards for the same price point.
the net result is the same – the price, $/GB, will be higher on “entry-level” fixed broadband plans in absolute terms and, more crucially, also in relative terms vis-a-vis wireless “entry-level” plans.
this is the real killer for NBNco as wireless operators continue to roll-out faster networks which improve the value proposition of “entry-level” wireless products; and they can’t do anything about it because Labor’s NBN isn’t a “rational business proposition” but an arbitrary political outcome reverse-engineered into a supposedly “viable business case”.
this “wireless clause” is basically a harbinger of the future if we continue down the current path. if Labor hangs on to power for another decade, the next logical step for Conroy is to kill wireless growth in an overt fashion (i.e. use excuses such as health risks from radiation, resident protests against placement of towers, etc).
alain I despair that we can ever bring RS, Rizz , Robbie Stephens or HC or Hubert Cumberford up to speed with a level of intelligence that is required to understand the complexities of the proposed NBN.
What is the use of questioning the wireless restriction clause when it is illegal and if it was used the perpetrators could be jailed for cartel collusion? I know this fact is beyond the mental understanding of some but it a fact just the same. The reason it was placed in the contract was to drive an opponent (Telstra) from being a competitor to the NBN monopoly. Not allowed folks.
OK Australians have an agreement (subject to ratification of several points) and as this agreement is the only thing that the Gillard Government has going for it at the moment let the build commence at full speed. But when the NBN budget runs out of control and the timetable runs years behind and Telstra dominates all RSP opponents by the delivery of superior products and service costs let us not hear a restart of the cries of fowl from Telstra opponents.
“alain I despair that we can ever bring RS, Rizz , Robbie Stephens or HC or Hubert Cumberford up to speed with a level of intelligence that is required to understand the complexities of the proposed NBN.”
You cant even answer a simple yes or no question that RS asked you so you really cant be talking about anyone elses intelligence. More to the point it seems I was right about you, I dont think you can be taken seriously in this debate anymore.
“You cant even answer a simple yes or no question that RS asked you so you really cant be talking about anyone elses intelligence. More to the point it seems I was right about you, I dont think you can be taken seriously in this debate anymore.”
No actually I think the wall of text gave you a brain seizure so you are unable to answer any of the points that Toshp3000 raised
But anyways continue HC, no amount f rational debate will prove you wrong
“No actually I think the wall of text gave you a brain seizure so you are unable to answer any of the points that Toshp3000 raised”
You are not following this thread very well are you, tosh has not asked me any questions, his conversation is with Francis Young however speaking of unanswered questions you never answered mine, why is that? did two lines of text give you a brain seizure???
“But anyways continue HC, no amount f rational debate will prove you wrong”
Rational debate? I suppose that haphazard argument about “foresight” you gave us in the other thread was rational. Hint: stick to the topic and dont get distracted if you want people to think you are rational.
Ummm dat ego, that’s ToshP300 as in the notebook (one would assume) can you get anything right…!
And look at that wall of text…LOL
Very first answer… “it’s a virtual certainty that the next Liberal Government will rip Labor’s NBN into shreds”.
http://delimiter.com.au/2011/06/23/gillards-rip-it-out-claims-ludicrous-says-turnbull/
Epic fail straight up and down hill from there…!
http://www.isd.toshiba.com.au/retail/satellite-p300.htm
;)
she’s a beauty, ain’t she? ^.-
Yes dat ego loves the Tosh P3000 [sic]…!
READ MY LIPS LAWRENCE….
“Do YOU think it would be wasteful for the NBN to pay Telstra for customers to migrate to the NBN and then have them not actually migrate to the NBN”?
YES OR NO?
I asked you this yesterday and again today. Once I receive a simple yes or no, I will gladly answer you.
But no… in typical NWAT style you ignore my question, go off on some idiot tangent then accuse me of avoiding your question…ffs.
I never thought I’d have to tell someone twice my age to grow up…!
toshP300 thank you for your detailed explanation of the NBN situation.
Be advised for future reference that the NBN fanatics have a very limited concentration span and any correspondence over two paragraphs is absolutely wasted on these deniers, lol, but keep trying.
HC you say I can’t be taken seriously anymore. I am comforted by the fact that is only one fools opinion. lol.
“HC you say I can’t be taken seriously anymore.”
That’s right.
“I am comforted by the fact that is only one fools opinion.”
You know what they say: ignorance is bliss.
You may be half my age RS but the sad fact is you have half my IQ. lol.
Says he down $500K on his TLS shares and been WRONG at every turn…
So, whatever…!
Don’t think the fact that you personally attacked and DID NOT AGAIN ANSWER THE QUESTION, went unnoticed either Syd!
Don’t mind him RS, syd is just exercising his “freedom of absolute free speech” but just so you know it’s only a “personal attack” if you were to say something innocuous… and yes right on queue syd decides to get pragmatic again… I suppose it is good way to avoid a question he doesn’t want to answer.
RS everything is rolling on and the future is very exciting. The personal attacks were fun but let’s keep our eye on the NBN ball and have a ceasefire on things not concerned with the NBN. We should keep our focus on the important things and not the personal insulting trivia.
Sydney, a week ago at ZD you sobbed and asked me to leave you alone, let bygones and move on…(as you initiated the personal unpleasantness at NWAT many moons ago)…
The next day over at iTnews, YOU started the BS, again…
So…!
one more comment bumps this article into most popular….. ;)
BUMP. Another record.
More interest with Tony Abbott hitting the front and Julia hitting the bottom.
I don’t know about price parity but wireless subscriptions have certainly doubled fixed line subscription parity.
“Wireless broadband subscription numbers in Australia are now double that of fixed-line broadband, according to statistics released by the Organisation for Economic Cooperation and Development (OECD).”
“Analysts have foreshadowed more consolidation in the ISP market as opportunities in garnering more ADSL subscriber numbers become increasingly scarce.”
http://www.arnnet.com.au/article/391531/oecd_stats_australian_wireless_broadband_numbers_eclipse_fixed-line_services_/
The business case for the NBN is based on 70% takeup of services- tell them they are dreaming.
70% of premises connecting to the NBN alone won’t do it. you need the majority of these 70% to SPEND lots of $$$ on premium services. that’s the whole rationale of pushing fibre to everyone.
What’s also mind boggling amazing is that the NBN business case predicts that by 2025 only 16.3% of households will be wireless only, seeing we are at around 13% and rising in 2011 that is one incredible pessimistic prediction, I cannot think why can you?
:)
Oh the business case you all says is BS assumptions and can’t be trusted, is now gospel, Mr. Contradiction…?
Ooh and alain, also, tell us AGAIN how you promote “taxpayer wastage” by wanting NBNCo to pay Telstra for customers who are meant to migrate, but don’t…LOL!
Ouch! that post obviously hit a nerve RS, time for the Detour sign to be pulled out again with some desperate off topic diversion tactics eh?
LOL… You spoke of business case and so did I.
So as usual your backwards, contradictory logic, in such a stupid reply, shines through…
“http://www.arnnet.com.au/article/391531/oecd_stats_australian_wireless_broadband_numbers_eclipse_fixed-line_services_/”
Australia has more people than households. News at 11.
@HC
You ignored this bit, I wonder why?
“Analysts have foreshadowed more consolidation in the ISP market as opportunities in garnering more ADSL subscriber numbers become increasingly scarce.”
You also ignored the OECD report statistics in conjunction with the growth of wireless ONLY households currently at around 13% and the amazing NBN Co business case prediction that this figure will only be 16.25% in 2025.
Those pro-NBN filtered glasses work really well, do they do 3D as well?
I ignored nothing.
So what…
You already agreed with me (begrudgingly) in a previous thread, that wireless is not a replacement for fixed, or are you going to CONTRADICT yourself yet again…?
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