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  • News - Written by on Tuesday, October 25, 2011 14:49 - 74 Comments

    FTTN would be “a litigator’s picnic”, says Optus

    news The nation’s number two telco Optus has described the idea of getting Telstra to give up part of its copper network for a fibre to the node upgrade as “a litigator’s picnic”, due to the complex legal issues around compensation for the telco handing over its property.

    Over the past few weeks, the Coalition appears to have evolved its alternative National Broadband Network policy to focus squarely on the so-called fibre to the node network rollout style which was rejected by the Labor Federal Government’s expert NBN committee in early 2009. The current NBN project revolves around a fibre to the home network.

    However, speaking to a parliamentary committee on the NBN yesterday, Optus director of government and corporate affairs Maha Krishnapillai described the potential FTTN model as being legally difficult. “You will be aware that we did put forward a proposal for fibre to the node on NBN Mark 1, if you like, and part of that assessment process was very clear that there would be significant compensation issues to pay to Telstra for either buying out or shutting down components of that last mile copper,” the executive said.

    “It was impossible for us to put a specific dollar figure because effectively there are some tests around the High Court you would probably need to go to. I would make the observation that clearly that is a litigator’s picnic and there would be significant compensation, I think.” The issue is believed to revolve around a section of the Constitution which states that the Government must compensate property-owners for the value of their property if it acquires it.

    However, Krishnapillai also noted there were difficulties with the FTTN approach in general. “Certainly there are advantages and disadvantages on any broadband proposal we have seen as part of government policy, but there are significant issues that remain in today’s regulation of the copper network that would remain in the fibre to the node network,” he said. “They are simply moving the node from an exchange deeper into the network but you still have the same gatekeeper issue at the node.”

    “We have indicated that we have had some concerns, I guess, around where the gatekeeper power remains. If Telstra remains in control of the copper from the node to the customer’s premises, we are in exactly the same position as we were beforehand in terms of having to trust and hope a regulator can enforce quality of service, pricing and enforcement of those services, as we do today. In other words, the last mile would not change whatsoever, so whatever we have today—and we do not think it is satisfactory today—will be what we have with a fibre to the node network.”

    However, Krishnapillai noted later on during the proceedings that Optus’ view on a national fibre to the node network would change if, as Shadow Communications Minister Malcolm Turnbull put it, “the copper between the node and the customers’ present premises was not owned by Telstra or controlled by Telstra in any way”. “Absolutely,” said Krishnapillai. “We have said all the way through that the key issue for us is the ability of a wholesale provider to discriminate against a variety of retail providers, particularly itself.”

    Asked by Labor Senator Doug Cameron whether Telstra’s ownership of its copper network could be “removed”, the Optus executive said it was not a question that he could answer directly.

    opinion/analysis
    It is interesting that as certain aspects of the NBN are delayed more and more (first by the agreement with Telstra, then by construction contractors, and perhaps recently by the delay in Telstra’s Structural Separation Agreement being signed off by the Australian Competition and Consumer Commission), debate in the sector is turning more and more towards what would happen if the Coalition wins the next Federal Election and rolls the project back somewhat — or at least pauses and modifies it.

    It’s hard to know whether Turnbull and the Coalition are completely serious about the FTTN plan they have advanced over the past few weeks, or whether — as the Liberal MP seems to do so often — Turnbull is forming policy while learning about the whole concept himself on the run (for those who doubt this statement, consider Turnbull’s HFC revelation after returning from Korea).

    But Optus’ statements this week in Parliament reveal that the telco, at least, takes the prospect of being faced with a FTTN NBN proposal seriously. And it’s not a vision of the future which appears particularly enticing to the SingTel subsidiary.

    And why would it be? Under a FTTN NBN, Optus would lose a great deal of the ground it has gained with the current FTTH NBN. It would lose a vast chunk of government investment in the telco sector, its $800 million customer migration deal would likely die — even as its legacy HFC cable network would live — and it would be forced anew into a future dealing with Telstra constantly as a wholesale provider — a future which it had hoped to avoid with the formation of NBN Co.

    Optus’ statement also forms somewhat of a reality check for Turnbull. Like it or lump it, the Member for Wentworth must face the fact that Telstra’s deal with NBN Co will structurally separate it in the long run. It remains extremely unclear, as Krishnapillai pointed out, whether a similar deal could be satisfactorily signed with respect to fibre to the node. And at that point, Telstra would also be dealing with the issue from a position of renewed strength.

    Welcome to your new life as Communications Minister, Mr Turnbull is what Optus is saying. If you want to push through a FTTN NBN policy and break Telstra’s will in the process, you’re going to have to have balls of steel, endless patience, boundless energy, and a level of tenacity in dealing with regulation in the telecommunications sector the equal of … dare we say it? Communications Minister Stephen Conroy.

    Image credit: Capcom/Nintendo (Phoenix Wright: Ace Attorney video game)

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    1. Posted 25/10/2011 at 3:05 pm | Permalink |

      Another problem would be that unlike the current situation where providers place DSLAMs in exchanges that cover a reasonably wide area, we’d end up with having having smaller versions of these at each cabinet.

      Or, and probably due to size restrictions of the cabinets, a single mini-DSLAM providing all last mile services.

      The question is who would manage the DSLAM? Telstra, NBN Co? Who would own the copper? Telstra, NBN Co?

      This type of setup would be a pure nightmare across the industry for all players.

      • Someyoungguy
        Posted 25/10/2011 at 4:57 pm | Permalink |

        I would think there would be greater flexibility under FTTN. Just think about it.

        FTTP is basically a govt monopoly, when it is sold off it will be a private monopoly, they will control all the fibre all the access.

        With FTTN the last mile copper would still remain Telstra, but of course would fall under some regulatory system like ULL, which is pretty good.

        The Cabinet allows for great flexibility, for example, the cabinet could be owned by NBN, but the ports can be either wholesaled by NBN or could be sold off on demand in a kind of auction or traded.

        The fibre itself could be from Telstra or NBN.

        Most importantly, the network access and backhaul would not be controlled exculsuvely by one entity.

        FTTN effectively breaks up the monopoly.

        • Posted 25/10/2011 at 5:50 pm | Permalink |

          So the copper would be owned/managed by Telstra, the cabinets would be owned/managed by NBN Co, and service providers would be required to provide backhaul to the (estimated 70000) cabinets?

          And you don’t see a problem with this?
          Or how complicated the management would be?

          • Someyoungguy
            Posted 25/10/2011 at 6:02 pm | Permalink |

            not sure where you got the 70,000 number from, but one thing for sure is that NBNCo would not have to acquire the entire Telstra CAN. It could for instance just use fibres from telstra to build to the node, essentially it does not have to do a single thing but install a node, the same thing that Telstra would do if they were to build it. some reasonable arrangement in access cost could be arranged.

            As you can see, FTTN and the ownership of the network could be divided up and there are many possiblities, but it is possible because there isnt a hugh $43bn it needs to recover. In essence, it means a network would be viable to be built privately, as opposed to a government take over, but that is just going back to the original Liberal/Labor broadband approach. It could well have worked if the bidders put together an honest proposal, but of course because of their greed to hijack Telstra of its assets, they screwed it up, and so too th govt, and hence this FTTP plan is now in place.

            • daniel
              Posted 25/10/2011 at 6:30 pm | Permalink |

              Depending on how fast you want the FTTN, the requirement of the FTTN cabinets would need to increase, this would also increase the amount of power requirements.

              The idea for FTTN is rubbish and stupid, end of story.

              Investing twice in a single industry is the most silly idea ever, it’s wasteful of dollars, and wasteful of duplication.

              The DSLAMs would be much closer to FTTP, Gov monopoly = bad is just rubbish, NBNCO do not own the infrastructure that it gets from Telstra.

              • Francis Young
                Posted 25/10/2011 at 7:52 pm | Permalink |

                Daniel is right about the power. The US state of Ohio found that replacing copper ADSL with fibre to premises reduced the power consumption of a CBD phone network by 80%!

                It beggars belief that allegedly environmentally-aware Mr Turnbull says he wants to build at least 20,000 (cf Telstra 2009) new electrified cabinets in every suburban street, each choc-full of hot, power-hungry switches and cooling fans, to gain an extra km from the copper instead of laying passive, future-proof fibre.

              • deteego
                Posted 25/10/2011 at 10:19 pm | Permalink |

                You do realize Francis, that with FTTH, the power cost is roughly the same as any copper based network, however what is happening is that the power load is being offset onto the consumers through the ONT

                So yes, it would be cheaper for whoever is running the network, but its more expensive (via power bills) to the consumers

              • Duideka
                Posted 26/10/2011 at 1:58 am | Permalink |

                @Deteego I don’t agree.

                When you recieve DSL the DSLAM and MODem go through 6 stages of modulation and filtering.

                When you recieve FTTH there is _zero_ stages of modulation and filtering, it just passes the data along without toying with it.

                Basically what I’m saying is a ONT uses hardly anything, and a modem that does nothing other than act as a ethernet switch with a ppp/dhcp client uses far less power than a modem converting and filtering all sorts of nonsense.

              • deteego
                Posted 26/10/2011 at 5:45 pm | Permalink |

                You should probably have a look at the links KnightKaos posted in the other article

                Also I suggest you would have a look at how much watts the ONT takes. Having to convert optical signals to electrical signals at such a high rate that FTTP does, or every single premise, is much more expensive then modulation

            • Posted 25/10/2011 at 6:49 pm | Permalink |

              meh, I should have guessed you were just going to spill Telstra propoganda

            • Francis Young
              Posted 25/10/2011 at 7:45 pm | Permalink |

              Someyoungguy sounds like one of the same old well-meaning coalition stooges to me.

              Which part of “Telstra still owns the last ten million copper links to premises” don’t you get?

              In 2009, compensation to Telstra was going to be $15 to 20 billion, before any construction even begins, and FTTN construction was impossible inside the $4.7 billion target, coming in closer to $10 billion, for a total between $25 and $35 billion, capped at copper speeds!

              Outside FTTN-equipped towns, another $26 billion still has to be spent on two satellites, regional and black spot wireless, network operations, and considerable fibre backhaul.

              In 2011 Telstra remains the only game in town when it comes to the copper to premises, so FTTN again lets Telstra name its own price for access to customers.

              By contrast, FTTP will cost $12 billion in total to lay to every premises in cities and towns down to 1000 inhabitants, and it lasts between 40 (according to pessimists) and 100 (according to British Telecom) years, with no speed bottlenecks as switch technology improves.

              Building FTTP is truly a no-brainer. Sometimes Malcolm Turnbull seems like one, too (along with 0.55% of Telstra shareholders).

        • MD
          Posted 25/10/2011 at 6:25 pm | Permalink |

          We wouldn’t be building the NBN if Telstra had not have been sold as a single company in the first instance.

          Remember, if you go FTTN, there is nothing stopping Telstra from laying it’s own fiber to houses bypassing the cabinets in the process. Now, no other company is going to be able to compete with that. Remember the HFC network?

          Did you somehow forget that infrastructure competition doesn’t work?

    2. Anonymous
      Posted 25/10/2011 at 3:12 pm | Permalink |

      The competition benefits of removing Telstra control over the last mile is something that has never been valued in the NBN price debate but is a significant value-add. The NBN policy as it stands brings not only a ubiquitous, high speed network but ALSO one that is controlled independently of the retailers. The importance of this should not be underestimated- if I had to choose, I’d prefer an independent copper CAN over a Telstra-controlled fibre one.

      Of course, the “deal” between NBNCo & Telstra worries me somewhat, I think Telstra is being given too much but the overall policy is good (independent CAN + high speed + ubiquitous).

      • Someyoungguy
        Posted 25/10/2011 at 6:04 pm | Permalink |

        the retailers have no control at all, everything is wholesaled through NBNCo

        • Anonymous
          Posted 25/10/2011 at 6:08 pm | Permalink |

          As opposed to now, where CAN access is controlled by telstra who competes with them as well.

        • Pepe
          Posted 25/10/2011 at 7:42 pm | Permalink |

          rubbish…

          then tell us why the current rsp’s nbn plans are different to, dare one say competing with each other…

          • alain
            Posted 27/10/2011 at 11:55 am | Permalink |

            You mean like ADSL, ADSL2+ and HFC plans are different across ISP’s today?

        • Francis Young
          Posted 25/10/2011 at 8:02 pm | Permalink |

          No, Someyoungguy, each retailer pays the same wholesale access fees set by NBNCo and approved by parliament, and each is in full control of the way they package their offerings to the market. Some will offer loss-leading multi-terabyte plans, some will offer great customer services, just like any other retail competition environment.

          Building FTTN would simply hand Telstra a $20 billion compensation war chest with which it has already stated (on Four Corners) that it will certainly build fibre to premises. Customers will of course choose superior Telstra FTTP instead of the coalition-built FTTN, which would become a $30 billion ($20 billion compo plus $10 billion construction) white elephant, and never recover its costs.

          Or, for $26.7 billion we can supply FTTP to 93%, LTE wireless to all and two satellites for remote and blanket coverage at 12 Mbps, AND the $26.7 billion investment comes back to the public purse from wholesale revenue.

          Now, who calls himself an economist, Mr Turnbull?

    3. Chris
      Posted 25/10/2011 at 3:14 pm | Permalink |

      My “last mile” of copper periodically drops ADSL (and sometimes the POTS voice service) when heavy rain gets water into the connection pit. Target resolution time: 5 days.

      Roll on fibre to the door, say I

      • Posted 25/10/2011 at 3:56 pm | Permalink |

        Under the FTTN plan there would be no pits, rather an above ground cabinet (or maybe underground sealed cabinet) with a direct copper run from there to the premises.

        • Ryan
          Posted 25/10/2011 at 6:06 pm | Permalink |

          The FTTN plan is to re-use the existing copper in the existing pits or on the existing poles. It would simply be re-terminated in a cabinet closer to the premises, so there’s a shorter length of old copper in the picture.

          No-one is suggesting pulling out and re-running all the old copper (that would cost more than the FTTH build), so old copper, bad joints and water in pits would persist as problems in an FTTN network.

          • Posted 26/10/2011 at 8:32 pm | Permalink |

            No-one is suggesting pulling out and re-running all the old copper (that would cost more than the FTTH build), so old copper, bad joints and water in pits would persist as problems in an FTTN network.

            You’re right, and I wasn’t suggesting that either, what I was saying is you just take the current pits as they stand now and put the cabinets where they are.

            This way you don’t need to do any cutting of the copper as it’s jumpered there already, and is on a direct run to the customer, this saves work and install costs. And you have the added benefits of being able to properly seal it, so unlike the current pit you should be able to prevent against water problems and the like.

        • Francis Young
          Posted 25/10/2011 at 8:09 pm | Permalink |

          You’re making things up, aren’t you, Terry Green? For FTTN, every 200 metres there will be an ELECTRIFIED cabinet, served by new fibre running back to the exchange and an electricity supply. (And who pays the power bill? Taxpayers.) The existing copper along your street will then be cut and reconnected to these boxes, but none of it will be relaid. It is so stupid, really, which is why the idea got canned in 2009.

          • Posted 26/10/2011 at 12:27 am | Permalink |

            Every 200m would be FTTC (Fiber to the Curb), FTTN would put the cable run at 1000m give or take.

            As for the power, how exactly do you think the telco networks operate now? On fairy dust?

            And yes, the copper in place would be used, I never said anything to the contrary.

            Thanks for playing.

        • Duideka
          Posted 26/10/2011 at 2:00 am | Permalink |

          If this was the case they would need essentially build the copper network from scratch, the copper already runs via pits to get to peoples houses, mine does.

          If a FTTN network was to be built, the most sensible approach would be to install cabinets on top of where the trunk of copper cables runs and splice them in, and slowly but surely move up the chain until you get to the last houses.

          I know, I know;
          > FTTN
          > Sensible

          ;)

          • Posted 26/10/2011 at 10:05 am | Permalink |

            If a FTTN network was to be built, the most sensible approach would be to install cabinets on top of where the trunk of copper cables runs and splice them in, and slowly but surely move up the chain until you get to the last houses.

            No, the most sensible place to install them would be a place where the copper is already jumpered (splicing is fibre).

            For example in a location, like, I don’t know, an already existing pit.

    4. Marnie
      Posted 25/10/2011 at 3:35 pm | Permalink |

      Telstra will never let go of the copper network.
      Its a huge cash cow for them.

      Turnbull is just dreaming.
      If he wants control of the copper, he is going to have to buy it from Telstra.

    5. Guest
      Posted 25/10/2011 at 4:58 pm | Permalink |

      Telstra has ran the cooper network into the ground. Even if they did install FTTN the amount of repair required around the country would be astronomical.

      • alain
        Posted 27/10/2011 at 11:53 am | Permalink |

        How do you know?

    6. Brendan
      Posted 25/10/2011 at 7:06 pm | Permalink |

      Turnbull would have to legislate to gain access to the “last mile”; he cannot compele a Mexican Jumping bean to move without legislation, let alone the nation’s telecommunications monopoly.

      Telstra is not interested in the CAN. Copper investment has all but ceased (maintenance of not-withstanding). Telstra have now signed on to the NBN, after the best part of three years of hard fought negotiations.

      People may not like Conroy, but to achieve that, when the Coalition couldn’t achieve any progress in over 10+ years of occupation, is no mean feat.

      As much as the FTTN argument keeps surfacing, the exact same reasons FTTH was selected apply to Turnbull, as they did early in NBN formation.

      Turnbull will struggle to get anything done in any first term. Which means zero certainty for the industry for the next 3+ years. We’ve seen the consequences. It’s time to move on and git ‘r done.

      I really think he (Turnbull) has to look seriously at whether they can work towards an NBN based on the existing design.

    7. toshP300
      Posted 26/10/2011 at 8:28 am | Permalink |

      *The nation’s number two telco Optus has described the idea of getting Telstra to give up part of its copper network for a fibre to the node upgrade as “a litigator’s picnic”*

      LOL

      well, if you don’t try to force Telstra to divest its rightful and legal ownership of the last-mile access network, there would be no “litigation problem”.

      it’s funny how Singtel Optus likes to generate a blaze of media propaganda about how “evil” a vertically-integrated Telstra is and how it will be a massive disaster if Telstra remains so… yet, back in its home territory, Singtel refuses to “structurally separate” itself…. LOL

      can’t believe ppl are stupid enough to fall for this shit.

      FACT:

      all the major telcos in the world are vertically-integrated… NTT, Korea Telecom, China Telecom, Deutsche Telekom, British Telecom, Virgin Media, Dutch KPN, Telecom Italia, France Telecom, US ILECs, Verizon, AT&T… and all of them have invested in some form of FTTN/FTTC/FTTH… WITHOUT the draconian and forced/artificial imposition of “structural separation” or government renationalisation of fixed-line infrastructure.

      back when Alcatel was preferred vendor for Telstra’s FTTN bid, even Mike Quigley argued that structurally separating Telstra was too complex (and unnecessary)…

      we really need to stop living in a bubble of fiction, spin and bullshit propagated by the Infrastructure Rapers’ Coalition and the associated vested interests.

      • Dbremner
        Posted 26/10/2011 at 9:10 am | Permalink |

        Well this post makes it obviouslt which side your bread is buttered and your motives for opposing the NBN.

      • Brendan
        Posted 26/10/2011 at 10:51 am | Permalink |

        “well, if you don’t try to force Telstra to divest its rightful and legal ownership of the last-mile access network, there would be no “litigation problem”.”

        So how do you gain access to it again? Telstra has proven repeatedly that it will flout the rules, regardless of competition notices.

        “yet, back in its home territory, Singtel refuses to “structurally separate” itself.”

        Everywhere you look, the vertically integrated, monopoly structures show the _same_ general outcomes.

        And Telstra (in NZ) has a long history of demanding open access to Telecom infrastructure. Your point?

        Australia is not New Zealand, or anywhere else. Legislation is valid _here_. What happens here is relevant. What companies do, in _other_ legislative areas has no real bearing on the Australian market; you can draw parallels, sure, but situations and legislation can be wildly different from country to country.

        The only real similarities are that where a Wholesale + Retail Monopoly is established, the broader market suffers. Everything else is semantics.

        • toshP300
          Posted 26/10/2011 at 11:52 am | Permalink |

          *So how do you gain access to it again? Telstra has proven repeatedly that it will flout the rules, regardless of competition notices.*

          if you’re talking about existing ADSL services, these “access seekers” on Telstra’s copper network have already grabbed SIXTY PERCENT of the retail market share. (all of this without bearing a single dollar of the capital risk of carrying the last-mile infrastructure on their balance sheets.) Telstra’s 40% retail market share is among the lowest incumbent market shares in the world.

          if wholesale margins alone on the CAN were sufficient to allow Telstra to recoup its cost of capital, then any money the retail business generates would be a “bonus”. but that’s not how it works. Telstra is currently paying the bills from a pool of revenue generated by “wholesale margins” and “retail margins”.

          when the ACCC is socialising away the value of your network and giving away wholesale access for next to nothing, Telstra needs all the retail margins it can hang onto. they would be insane not to do everything they can to preserve their remaining retail market share to make up the revenue deficit.

          that’s the way the game has been played.

          if you’re talking about upgrading to FTTN/VDSL services, the rational approach in terms of cost and efficiency is to simultaneously cut all copper tails across to new fibre nodes/cabinets and move these access-seekers over to a TW bitstream product. this idea of cutting some lines over and not others and having multiple roadside cabinets for access-seekers to install their own DSLAM cards is COMPLETELY NUTS. (note that NBNco’s wholesale product is exactly a TW bistream product.)

          if you’re just undercutting TW’s bitstream pricing by building your business model around accessing unbundled products which are artificially priced lower by the ACCC, that’s not “competition”, that’s not “innovation”, that’s not “value-adding” in any meaningful sense. you’re just engaging in regulatory pricing arbitrage. a mug’s game that doesn’t make the industry healthier because it doesn’t reward capital investment in new infrastructure.

          *Everywhere you look, the vertically integrated, monopoly structures show the _same_ general outcomes.*

          i dunno what specific outcomes you’re referring to but most markets with these vertically-integrated structures have upgraded to FTTN/FTTC/FTTH as well as experiencing trend decline in retail product pricing.

          *And Telstra (in NZ) has a long history of demanding open access to Telecom infrastructure. Your point?*

          so, they are all hypocrites. everyone likes to portray “wholesale-only, open access” as the “Holy Grail” as long as it’s not applied onto their own infrastructure. “wholesale-only, open access” regimes simply do not exist in the real world telco markets. you can’t get away from this fact.

          even Mike Quigley in a previous reincarnation as Alcatel chief rubbished “structural separation” and “wholesale-only, open access networks:

          http://www.zdnet.com.au/alcatel-slams-rival-fibre-proposal-139255989.htm

          • Anonymous
            Posted 26/10/2011 at 12:25 pm | Permalink |

            … Okay. That’s enough Tosh.

            Why should the fact that Telstra only has a 40% retail market share matter? It doesn’t. Diddiums. What are you trying to say, that the ULL/LLS prices are too low for Telstra to recover capital costs? Where is your evidence for this?

            Then moving everyone onto a bitstream product for FTTN? Hmm. Why don’t you go look at how the Chorus cabinets in New Zealand work, because they are exactly the model you called completely nuts. Why does it work there? What is it about Australia that changes the viability of the model?

            So, to become an ISP you don’t add value? You don’t install better more efficient DSLAMs, you don’t invest in better backhaul? The only new infrastructure it doesn’t reward is the last mile copper, because by design that is the incumbents responsibility.

            I don’t know what you’re trying to say here Tosh, but quite frankly what you have said doesn’t seem to align with reality.

            • deteego
              Posted 26/10/2011 at 5:48 pm | Permalink |

              ULL/LLS prices are the fifth lowest in the world according to the OECD. And that is without taking into account our spacial geographical features

              Everything else that gets added ontop is not directly Telstra’s responsibility

              • Anonymous
                Posted 26/10/2011 at 7:42 pm | Permalink |

                That’s irrelevant, the relevant point is, are ULL/LSS prices too low for Telstra to effectively do their job as an incumbent? Saying they’re firth lowest in OECD tends towards this conclusion, yes, but does not actually prove it.

                The answer to that question doesn’t actually matter, because my point with that post was that Tosh needs to check his facts and conclusions. The idea that a cost effective and efficient approach to FTTN is to only provide bitstream products is one obvious example, an example you should be familiar with as you have argued against it on several occasions.

                • deteego
                  Posted 27/10/2011 at 11:57 pm | Permalink |

                  Well actually the fact that the ULL/LLS is the lowest does (help) prove Tosh’s point, that Telstra actually may be getting very little money out of fixed line copper internet since ACCC forced the ULL/LLS prices to be so low (which have historically been decreasing ever since the prices were introduced)

                  Remember regarding fixed line internet, Telstra only gets that 16$ per customer + $2 for LLS, nothing more. ACCC determines this price, and also states how much profit Telstra gets from this charge (which specifically for fixed line internet, its barely profitable).

                  Which of course equates to Telstra not actually getting enough capital to expand its network properly (or upgrade it)

              • toshP300
                Posted 26/10/2011 at 8:37 pm | Permalink |

                @NK

                one thing you gotta realise is that critics of Labor’s extravagant fibre white elephant project are a diverse bunch of people who don’t necessarily share the same POV on every issue about broadband.

                for example, deet is a firm believer in structural separation. i’m not, but that’s perfectly fine, because unlike NBN cheerleaders, we don’t sing from the same hymm book..

                we are completely genuine in our expression of our individual opinions… unlike NBN cheerleaders who pretend to engage in forum debate but never concede a point for fear of even tarring the sacred, fragile NBN cow with anything remotely negative.

                (oh, btw, just because “cabinet competition” is “viable” doesn’t mean it’s the most cost effective or efficient approach from a macro perspective. i thought you NBN diehards are deadset against “infrastructure duplication” ;))

              • Anonymous
                Posted 26/10/2011 at 9:33 pm | Permalink |

                As a critic (and by the way, critic does not mean “not in support of”) of the NBN, I am aware that people have varying points of view about Broadband.

                However, tosh, you clearly have the interests of the consumer and industry way down your list of priorities here if you are against structure separation of Telstra. From your post I get the distinct feeling that you would rather Telstra had complete, and unrivalled control of all fixed line infrastructure in Australia, is this true?

                (oh, btw, just because “cabinet competition” is “viable” doesn’t mean it’s the most cost effective or efficient approach from a macro perspective. i thought you NBN diehards are deadset against “infrastructure duplication” ;))

                Clearly you have no idea how FTTN cabinet competition actually works if this is what you think. It has been proven that in a macro-economic sense that cabinet competition is actually a very effective and efficient approach. It does not actually, if done correctly like it has been in the UK and NZ, result in infrastructure duplication (i.e. you don’t end up with two phone cables into people’s home from competing providers).

                The reason being is a provides a platform for competition allowing providers to install competing backhaul, i.e. it “rewards new infrastructure” in the mid-mile. However, I don’t think you like competition at all Tosh, because obviously providers installing competing back-haul in order to undercut Telstra’s bit-stream pricing is only, what did you call it, “regulatory pricing arbitrage”?

              • toshP300
                Posted 27/10/2011 at 6:29 am | Permalink |

                *However, tosh, you clearly have the interests of the consumer and industry way down your list of priorities here if you are against structure separation of Telstra.*

                so, instead of addressing the merits of structural separation and complex issues such as “value capture” and explaining why it has never been implemented in any major telco market, why vertical integration has not been an impediment to NGN investment overseas, why European telco regulators are against structural separation and why the loudest voice calling for structural separation of Telstra has resisted separation in its home market, you try to deflect the debate towards impugning a “bias against consumer/industry interests” on my part?

                *From your post I get the distinct feeling that you would rather Telstra had complete, and unrivalled control of all fixed line infrastructure in Australia, is this true?*

                how does pointing out that Telstra has amongst the lowest incumbent telco market share in the world in terms of retail access lines lead to “Telstra should have complete unrivalled control”? complete hyperbole.

                *Clearly you have no idea how FTTN cabinet competition actually works if this is what you think.*

                nice diplomatic, precursor statement to engage friendly discussion/debate: “clearly you have no idea”.

                *It has been proven that in a macro-economic sense that cabinet competition is actually a very effective and efficient approach.*

                really? axiomatic proof? so you don’t subscribe to Popper’s critique of logical positivism?

                *It does not actually…. result in infrastructure duplication (i.e. you don’t end up with two phone cables into people’s home from competing providers).*

                how does “cabinet competition” under conventional FTTN implementations result in two phone cables under ANY scenario? ever occur to you that the inefficiencies arise from dicking around with “multiple cabinets” and having multiple teams of technicians loitering our streets?

                *The reason being is a provides a platform for competition allowing providers to install competing backhaul, i.e. it “rewards new infrastructure” in the mid-mile.*

                more “infrastructure duplication” in the eyes of many pro-NBN government monopoly advocates.

                *However, I don’t think you like competition at all Tosh*

                and i think you’re a born-again Satanist who worships at the altar of a giant plasticine idol of Lady Gaga. that was fun?

                *because obviously providers installing competing back-haul in order to undercut Telstra’s bit-stream pricing is only, what did you call it, “regulatory pricing arbitrage”?*

                you know what? if the ACCC mandated that Apple Store wholesales iPads to me at $1/unit so i can undercut Apple, i could lease the shop right adjacent to every Apple Store in every Westfield at a 50% rental premium and still make a motza and create brand new “value chains”. Apple pricing is ree-dick-ulous! what a great idea! i’m gonna be rich!

              • Anonymous
                Posted 27/10/2011 at 11:03 am | Permalink |

                how does pointing out that Telstra has amongst the lowest incumbent telco market share in the world in terms of retail access lines lead to “Telstra should have complete unrivalled control”? complete hyperbole.

                That’s actually not where I was drawing that conclusion from, go figure. I mean that wouldn’t mak any sense. However, I did say “from your post”. I wasn’t highlighting that particular paragraph, you can’t look at that point in isolation and say that is where I drew it from. That is a strawman. So to clear things up: I drew this conclusion from here:

                the rational approach in terms of cost and efficiency is to simultaneously cut all copper tails across to new fibre nodes/cabinets and move these access-seekers over to a TW bitstream product

                This particular approach with give the incumbent complete monoploy control, and would actually achieve the same outcomes in terms of competition as the NBN would, except that the incumbent is now not actually under threat from any competition, meaning it would achieve retail dominance because it could always undercut it’s competitors. Which is what the ACCC has been told multiple times that Telstra is apparently doing with their bitstream products.

                Which leads me back to your first paragraph:

                so, instead of addressing the merits of structural separation and complex issues such as “value capture” and explaining why it has never been implemented in any major telco market, why vertical integration has not been an impediment to NGN investment overseas, why European telco regulators are against structural separation and why the loudest voice calling for structural separation of Telstra has resisted separation in its home market, you try to deflect the debate towards impugning a “bias against consumer/industry interests” on my part?

                The reason structural separation has never been implemented is because the Telco has played ball in all other cases. It has operationally separated and usually even separated the accounting for the operation, which Telstra has not. Since Telstra refuses to play ball, well, we have to deal with this one way or another.

                So yes, I will call you biased, because by being against the structural separation of Telstra will simultaneously wanting to move them to a position of complete market control when FTTN comes out, your position will royally screw up the market in Australia, which was pretty bad to begin with.

                nice diplomatic, precursor statement to engage friendly discussion/debate: “clearly you have no idea”

                I’ve ceased being diplomatic with you Tosh because you spend most of your time insulting others rather than actually addressing points, and when you do address points you go off on tangential rants or attack strawmen. You are irksome. Not only that but your point of view on how the Broadband Market works is nieve.

                really? axiomatic proof? so you don’t subscribe to Popper’s critique of logical positivism?

                Since it (FTTN ULL competition) has been implemented in the United Kingdom, New Zealand to named two, as I stated already, which you seem to have ignored, then yes it is axiomatic that the approach is considered to work on a macro scale, otherwise they wouldn’t have implemented on account of the concerns you just raised.

                Afterall, if we apply your reasoning to the current ULL situation, then imagine all the inefficiency that have happened over the years due to the installation of competing DSLAMs and back-haul. Oh the macro-economic inefficiency!

                how does “cabinet competition” under conventional FTTN implementations result in two phone cables under ANY scenario?

                Isn’t that what I just said. And that is what infrastructure duplication is, it is duplicating redundant infrastructure. Backhaul isn’t redundant, DSLAM cards aren’t redundant if provisioned accurately. Two copper pairs on the other hand…

                ever occur to you that the inefficiencies arise from dicking around with “multiple cabinets” and having multiple teams of technicians loitering our streets?

                First off there are not multiple cabinets in FTTN, there is one cabinet, with space to have multiple ONTs and DSLAM cards, as well as, often, space for OLTs if providers want to offer FTTH and are willing to pay for the last mile trenching. Please, go have a lot at the specifications for a Chorus Cabinet as an example.

                Second, there are other ways to deal with the problem of having too many contractors “loitering” as you put it. One viable method is “sub-contracting”, i.e. the incumbent does all the trival work like hooking up customers, for a fee, another is to install fault tolerant (install once and forget) equipment in the cabinets. Providers already have an incentive, due to high labour costs, to do these things. What makes you think they will drop these practices?

                more “infrastructure duplication” in the eyes of many pro-NBN government monopoly advocates.

                No it isn’t, because that infrastructure is not redundant.

                you know what? if the ACCC mandated that Apple Store wholesales iPads to me at $1/unit so i can undercut Apple, i could lease the shop right adjacent to every Apple Store in every Westfield at a 50% rental premium and still make a motza and create brand new “value chains”. Apple pricing is ree-dick-ulous! what a great idea! i’m gonna be rich!

                Okay, here’s the thing, if Telstra was structurally seperated, or at least operationally and in accounting, it would be able to tell the ACCC that “hey, look, we’re making a loss in our infrastructure department, put up your ULL pricing or we will be unable to maintain and upgrade the network.”

                It’s all well and good dropping the price of iPads to $1/wholesale, but if Apple can’t afford to actually make them at that price, then the ACCC will get overuled, or the government will be forced to provide an ongoing subsidy.

              • toshP300
                Posted 27/10/2011 at 12:46 pm | Permalink |

                @NK

                *This particular approach with give the incumbent complete monoploy control…. except that the incumbent is now not actually under threat from any competition, meaning it would achieve retail dominance*

                where did i say that TW FTTN bitstream products shouldn’t be subject to strict price regulation? where did i say Telstra’s retail market share can’t be capped at say, 50%?

                *because it could always undercut it’s competitors. Which is what the ACCC has been told multiple times that Telstra is apparently doing with their bitstream products.*

                how is Bigpond undercutting other ISPs when Bigpond quotas are notoriously shitty for the same comparative price points? how is it Telstra’s fault that ISPs prefer to cherry pick and only build “competitive backhaul” and access dirt cheap unbundled TW products where the numbers stack up? how is it Telstra’s fault that the ACCC rejected Telstra’s repeated demands to abolish different ESAs and implement a uniform ULL price (akin to NBN uniform wholesale pricing) which would immediately eradicate the “regional ESA margin squeeze” issue?

                *The reason structural separation has never been implemented is because the Telco has played ball in all other cases. It has operationally separated and usually even separated the accounting for the operation, which Telstra has not.*

                LOL

                Telstra implemented accounting and operational separation many moons ago.

                here’s your beloved Mike Quigley’s realist take on the situation before he was co-opted as a Conroy DBCDE crony:

                http://www.zdnet.com.au/alcatel-slams-rival-fibre-proposal-139255989.htm

                paraphrasing: “Telstra requires light regulation from ACCC to implement FTTN because infrastructure investment is a very risky business”.

                gee, i wonder who’s court the ball is in? experienced telco executives with decades of real world business experience or dipshit, ideological, diagram-staring, model-wielding regulators.

                *Since it (FTTN ULL competition) has been implemented in the United Kingdom, New Zealand… then yes it is axiomatic that the approach is CONSIDERED TO WORK on a macro scale* [MY BOLD]

                i’ve already said i don’t dispute “workability”…. i question the efficiency and necessity…

                *Afterall, if we apply your reasoning to the current ULL situation, then imagine all the inefficiency that have happened over the years due to the installation of competing DSLAMs and back-haul. Oh the macro-economic inefficiency!*

                do you think Telstra’s “competitors” would bother installing their own DSLAMs if bitstream pricing and unbundled pricing were equivalent? why does the artificial regulatory-enforced arbitrage even exist in the first place? why not have a single unified bitstream product set which is strictly regulated instead? isn’t this exactly NBNco’s proposed approach?

                *First off… there is one cabinet, with space to have multiple ONTs and DSLAM cards,…….. the incumbent does all the trival work like hooking up customers, for a fee…*

                exactly…why even bother? just have an overarching bitstream product set that is strictly regulated in terms of price with mandated industry standards for upgrading the cards to the latest tech with appropriate adjustments to pricing, etc. why make everything immensely complicated unless you’re just trying to set up another window for opportunistic “access-seekers” to cherry-pick nodes, arbitrage and undercut the USO and cross-subsidy burdened incumbent?

                this is precisely why NBNco’s adopted the TW bitstream pricing model – because it makes a lot of sense. (what doesn’t make sense is NBNco’s overcapitalised balance sheet which is what happens when you go bonkers indiscriminately pushing fibre everywhere.)

                *as well as, often, space for OLTs if providers want to offer FTTH and are willing to pay for the last mile trenching*

                cherry-picking… gee, i wonder how Telstra, saddled with all those money-losing rural USOs, will react…

                *Okay, here’s the thing, if Telstra was…. seperated…at least operationally and in accounting*

                once more with feeling…. THEY ARE.

                *it would be able to tell the ACCC that “hey, look, we’re making a loss in our infrastructure department, put up your ULL pricing or we will be unable to maintain and upgrade the network.”*

                LOL… who’s being “nieve” [sic] now? i refer you once more to Mike Quigley’s trinket of gold wisdom:

                “Telstra requires light regulation”.

              • Anonymous
                Posted 27/10/2011 at 1:38 pm | Permalink |

                where did i say that TW FTTN bitstream products shouldn’t be subject to strict price regulation? where did i say Telstra’s retail market share can’t be capped at say, 50%?

                How would you enforce a 50% market share? Yes I can imagine it now.

                “I’m sorry, we would love to take your services, but due to the fact we have too many customers we cannot, I’m going to have to ask you to sign up to one of our competitors.”

                The regulation of a artificial market cap will just be to hard to enforce. So you need to think of another way to manage the market, what if the retail entity acted independently of the wholesale one? Then you only need to price regulate.

                how is Bigpond undercutting other ISPs when Bigpond quotas are notoriously shitty for the same comparative price points?

                Do not confuse pricing of ULL plans with pricing of bitstream products, in the bitstream space Bigpond products are actually more cost effective.

                how is it Telstra’s fault that ISPs prefer to cherry pick and only build “competitive backhaul” and access dirt cheap unbundled TW products where the numbers stack up?

                It isn’t, but that doesn’t justify them underpricing their retail products so they come out to cost less than their bit-stream products, which is what they have been accused of on multiple occasions.

                If they had truly implemented accounting separation, then in the situations when they do this, their wholesale or retail operation would have made a loss. So it sounds like to me that accounting separation that happened many moons ago was smoke and mirrors.

                how is it Telstra’s fault that the ACCC rejected Telstra’s repeated demands to abolish different ESAs and implement a uniform ULL price (akin to NBN uniform wholesale pricing) which would immediately eradicate the “regional ESA margin squeeze” issue?

                Didn’t the ACCC recently abolish different ESAs and implement a uniform ULL price? I don’t recall…

                Telstra implemented accounting and operational separation many moons ago

                Apparently that didn’t fix the problem did it? I’m sorry but it’s all well and good saying that other Telecom’s don’t need it, but unfortunately, other Telecom’s aren’t Telstra. And Telstra is who we need to deal with. I know you love them and all the money their share make you, but this isn’t about your wallet Tosh.

                i’ve already said i don’t dispute “workability”…. i question the efficiency and necessity..

                do you think Telstra’s “competitors” would bother installing their own DSLAMs if bitstream pricing and unbundled pricing were equivalent? why does the artificial regulatory-enforced arbitrage even exist in the first place? why not have a single unified bitstream product set which is strictly regulated instead? isn’t this exactly NBNco’s proposed approach?

                I’m sorry, what, I thought you were saying that ISPs were supposed to add value. Isn’t that how competition works? The NBN allows this by allowing competitors to pick and mix price points and unfortunately has to submit to this model because ULL is infeasible in the NBN world, as to enable it would add a very significant amount to the already high price.

                However, in the FTTN world you can afford to allow providers to differentiate themselves even further, and for the sake of enabling competition, making the market as “free” as possible is only a good thing.

                exactly…why even bother? just have an overarching bitstream product set that is strictly regulated in terms of price with mandated industry standards for upgrading the cards to the latest tech with appropriate adjustments to pricing, etc. why make everything immensely complicated unless you’re just trying to set up another window for opportunistic “access-seekers” to cherry-pick nodes, arbitrage and undercut the USO and cross-subsidy burdened incumbent?

                Wait, I thought you didn’t support the NBN? Because that is exactly what the NBN is doing.

                Unfortunately, as you know from this, doing this is expensive. Keeping everything technologically current requires a lot of capital, which is very hard to recover. So if you do this, you need to massively over-provision, like the NBN does, which is why it will cost around $30b to build.

                FTTN overcomes this problem by allowing providers to upgrade if and when they are ready. For someone who wants “light” regulation you seem to be supporting something that is very complicated to regulate. If we follow you proposal, then question is now, when do you upgrade.

                I can imagine, under your model, in 10 years time, a new standard, VDSL3, coming out, and Telstra refusing to upgrade to it because it would be too expensive and of marginal benefit, and the regulator forcing their hand, bringing up bitstream prices up to 20% and destabilising the entire market. Or worse, the technology never being available at all.

                cherry-picking… gee, i wonder how Telstra, saddled with all those money-losing rural USOs, will react…

                Cherry picking legislation is a fools errand. Even the NBN is “cherry picking” the best 93% of people to run fibre to (which may be too many people but still). The problem is, however, is when the minimum level of access suffers. Which is why Turnbull is saying 12Mbps as his “minimum”.

                I don’t think that is a good enough minimum for the next 20 years. I think we should be aiming for a FTTN implementation that offers of a minimum of around 20Mbps (denser nodes), and I support the NBN because I further think that the NBN will work out to be cheaper than a dense FTTN network.

                I don’t however think that providers should be prevented from building networks to only areas where there are demand, however I am concerned about the granularity we currently have when it comes to this. By this I mean that there might be a pocket of high demand for a service hidden in a region where there is none.

                once more with feeling…. THEY ARE.

                I conceed this point and counter with, it wasn’t very effective was it?

                LOL… who’s being “nieve” [sic] now? i refer you once more to Mike Quigley’s trinket of gold wisdom:

                “Telstra requires light regulation”.

                Do you really think that the ACCC will allow the incumbent provider to go bankrupt just because they want to artificially lower the ULL pricing? No seriously, because that is what you are asserting here.

                And further, as I have said about, light regulation is not bitstream pricing. Bitstream pricing requires heavier regulation that ULL.

              • toshP300
                Posted 27/10/2011 at 2:49 pm | Permalink |

                @NK

                let me redraft your statement:

                “I’m sorry, we would love to take your services, but due to the fact that the local exchange has no more free ports, we cannot.”

                gee, doesn’t that currently happen?

                in any event, i was only throwing the retail cap out there as an idea to assuage your paranoid fears of “Telstra retail domination”.

                *in the bitstream space Bigpond products are actually more cost effective.*

                no, they’re not. Dodo and Exetel plans on TW DSLAMs have always offered better quotas for the same price points than Bigpond.

                *but that doesn’t justify them underpricing their retail products*

                there’s a thing called “retail pricing parity” which offers services at same prices regardless of whether you living in NK’s Sydney mansion or out in the sticks that the Government has never complained about.

                *so they come out to cost less than their bit-stream products*

                i’ve already told you that the ACCC has rejected Telstra’s strident requests for uniform ULL pricing on numerous occasions. the steep ULL pricing curve is set entirely by the ACCC. why the hell should Telstra undercut the ULL prices set by the ACCC? are you mad? or just slightly deranged?

                *Didn’t the ACCC recently abolish different ESAs and implement a uniform ULL price?*

                they consolidated bands 1/2/3 ESAs. this is to facilitate the transition to the NBN taking into account the $11bln compensation Telstra is receiving from NBNco. new game, new story.

                *And Telstra is who we need to deal with.*

                there we go again… the Telstra “bogeyman”…

                *I know you love them and all the money their share make you, but this isn’t about your wallet Tosh.*

                when did i say i own Telstra shares? you have sunk to a new low by falsely impugning your opponent with some implied fictitious bias.

                *However, in the FTTN world you can afford to allow providers to differentiate themselves even further*

                in terms of the economic mechanisms of capital recovery, value capture, internal cross-subsidies, etc, there is no fundamental difference between FTTH and FTTN. what is good for NBNco should be good for Telstra.

                *it would be too expensive and of marginal benefit*

                so, you don’t implement the upgrade or “overprovision”. which is why the Coalition will dismantle NBNco.

                *and the regulator forcing their hand, bringing up bitstream prices up to 20% and destabilising the entire market.

                why would the regulator willingly destabilise the entire market? i’d swear, you concoct some of the most absurd, internally-contradictory tautologies.

                *Or worse, the technology never being available at all.*

                how is it “worse” if it’s too expensive and of marginal benefit like you say?

                *I don’t however think that providers should be prevented from building networks to only areas where there are demand*

                LOL

                another absurd statement. who’s “preventing” Optus from pushing fibre to Whoop Whoop? the only thing stopping them is their “commonsense” (which the Labor Govt and DBCDE bureaucratic clowns lack).

                “By this I mean that there might be a pocket of high demand for a service hidden in a region where there is none.”

                so, you’re telling me Alice Springs doesn’t have more shops, infrastructure, etc than the surrounding arid bush settlements?

                *Do you really think that the ACCC will allow the incumbent provider to go bankrupt*

                who says Telstra is going bankrupt? declining capital values and profitability alone are sufficient to inhibit further capital expenditures, be it maintenance or upgrades.

              • Anonymous
                Posted 27/10/2011 at 4:11 pm | Permalink |

                let me redraft your statement:

                “I’m sorry, we would love to take your services, but due to the fact that the local exchange has no more free ports, we cannot.”

                gee, doesn’t that currently happen?

                Which is one of the reasons that Broadband Policy is on the table in the first place. No one in their right mind is going to sanction a proposal that doesn’t fix one of the primary symptoms of the issue they are trying to address.

                in any event, i was only throwing the retail cap out there as an idea to assuage your paranoid fears of “Telstra retail domination”.

                So you’re modifying your plan on the fly to appease my concerns? Very reassuring. Why don’t you get into politics, you’ll fit right in.

                no, they’re not. Dodo and Exetel plans on TW DSLAMs have always offered better quotas for the same price points than Bigpond.

                Oh yay, two budget providers who skim on bandwidth and offer you a highly contended service. So let’s just ignore the other providers like iiNet and Internode who charge way more than BigPond do for similar quotas shall we?

                there’s a thing called “retail pricing parity” which offers services at same prices regardless of whether you living in NK’s Sydney mansion or out in the sticks that the Government has never complained about.

                i’ve already told you that the ACCC has rejected Telstra’s strident requests for uniform ULL pricing on numerous occasions. the steep ULL pricing curve is set entirely by the ACCC. why the hell should Telstra undercut the ULL prices set by the ACCC? are you mad? or just slightly deranged?

                Non-sequitor much? I said.

                …that doesn’t justify them underpricing their retail products so they come out to cost less than their bit-stream products, which is what they have been accused of on multiple occasions.

                Where does Telstra undercutting ULL come into that statement at all? I said, the bit-stream prices they were offering were allegedly more than what they were charging their customers in the retail sector. ULL is a completely different pricing model.

                That means that as Telstra dropped it’s retail pricing to compete with ULL providers, it left its bitstream pricing the same, which, if Telstra was accounting seperated, would mean that the retail arm would make a loss on it’s retail products. Make sense now?

                they consolidated bands 1/2/3 ESAs. this is to facilitate the transition to the NBN taking into account the $11bln compensation Telstra is receiving from NBNco. new game, new story.

                So they consolidated the bands. Okay, and don’t you think Turnbull would have got the bands consolidated in the FTTN network as well? The bands were a stupid idea, but that still doesn’t justify the behaviour of Telstra I am referring to does it.

                there we go again… the Telstra “bogeyman”…

                Defend them all you like, they are still not the same company as the shining examples you chose from Europe. If they are different enough that we have to treat them differently, then we shall. Simple as that.

                when did i say i own Telstra shares? you have sunk to a new low by falsely impugning your opponent with some implied fictitious bias.

                No, I was merely pointing out that “saving Telstra”, and giving them a dominate incumbent position and any benefits that incur, including dividends to Shareholds (you’re not a shareholder? You should be, they’ve been quite profitable and likely will continue to be even post NBN), should not be a consideration here. I’m not going to let the fact I am a Telstra customer affect my decisions here, and nor should you. Telstra is just a company.

                in terms of the economic mechanisms of capital recovery, value capture, internal cross-subsidies, etc, there is no fundamental difference between FTTH and FTTN. what is good for NBNco should be good for Telstra.

                *facepalm* I just explained in great detail why it is different, by since you need me to lay it out explicitly: you can limit your exposure to risk by only upgrading select areas of demand. That is the fundamental difference between FTTN and FTTH on a national scale.

                so, you don’t implement the upgrade or “overprovision”. which is why the Coalition will dismantle NBNco.

                Don’t confuse me outlying a specific technology change, an incremental upgrade to DSL, with a general principle, upgrading Broadband infrastructure will be of marginal benefit, they are distinct concepts.

                DSL has behaviour characteristics that mean an upgrade of a DSLAM from one variant to a faster variant will result in minimal benefits to all affected customers. If the best you can get on ADSL2+ is 16Mbps, chances are the best you can get on VDSL2 is 16Mbps.

                why would the regulator willingly destabilise the entire market? i’d swear, you concoct some of the most absurd, internally-contradictory tautologies.

                Because the regulator has been mandated to make sure that the incumbent provides the most up to date technology available, which is what you specified, here:

                …with mandated industry standards for upgrading the cards to the latest tech with appropriate adjustments to pricing, etc.

                I was only responding to your statement. You seem to agree that such regulation is going to be a nightmare, so thus I have proved my point.

                how is it “worse” if it’s too expensive and of marginal benefit like you say?

                Once again, you seem to be confusing a specific circumstance to a general principle. In this case the specific circumstance is that only a select few will actually benefit from the upgrade and the rest can happily be left on legacy hardware. ADSL2+ and VDSL2 have pretty much the same performance/distance curve, however the upper limit to what VDSL2 can actually obtain is much higher. Customers below the threshold of ADSL2+, i.e. 24Mbits, can be left on an ADSL2+ DSLAM quite happily.

                another absurd statement. who’s “preventing” Optus from pushing fibre to Whoop Whoop? the only thing stopping them is their “commonsense” (which the Labor Govt and DBCDE bureaucratic clowns lack).

                You just turned my statement completely around. Optus currently only builds where there is demand, which means they can build up in Whoop whoop if they want. I agree that this is okay. However Cherry Picking provisions mean that Optus has to ensure they build to everyone fairly, or build to select areas as a wholesale only provider as “part” of the NBN. That is what I am referring to here.

                so, you’re telling me Alice Springs doesn’t have more shops, infrastructure, etc than the surrounding arid bush settlements?

                Again you turned my statement around. So you understand, there is a town with 10,000 people, and then there is a settlement of 500 people. The large town is serviced by four exchanges with 2500 people each, and the small town with just one exchange, which services a further 2000 people in nearby villages and farms, none of which want VDSL2.

                Everyone in the small town wants VDSL2, whereas in the large town, only 5500 people want VDSL2, about 1000 for the three outer exchanges, and everyone in the central exchange. Let’s say the provider only has enough capital to service the equivalent of 2 exchanges.

                To maximum exposure to customers he would pick the central exchange, and one other in the large town. The small town misses out, despite the fact that everyone wants it.

                Now, let’s take the same example, but split every exchange into a maximum of 500 people instead (and the provider can now provide 10 different exchanges). In this situation, the small town will actually get the VDSL2 DSLAMs.

                Understand now?

                who says Telstra is going bankrupt? declining capital values and profitability alone are sufficient to inhibit further capital expenditures, be it maintenance or upgrades

                *facepalm* If they can’t afford to pay for maintenance or upgrades but still have to provide the infrastructure at a certain price as outlined by the ACCC, they stand to lose money. What happens if a company loses money for a protracted period of time and cannot recover from it? They’ll go bankrupt.

              • toshP300
                Posted 27/10/2011 at 5:16 pm | Permalink |

                @NK

                *Where does Telstra undercutting ULL come into that statement at all?*

                you don’t get it. nevermind. maybe alain or deteego will explain it to you.

                *The bands were a stupid idea, but that still doesn’t justify the behaviour of Telstra I am referring to does it.*

                you don’t get it. nevermind. maybe alain or deteego will explain it to you.

                *you’re not a shareholder? You should be, they’ve been quite profitable and likely will continue to be even post NBN*

                you’re doleing out investment advice now? are you an ASIC-registered investment adviser? careful, you might run into legal issues ;)

                *I’m not going to let the fact I am a Telstra customer affect my decisions here, and nor should you.*

                who said i am? i’m just engaging in objective analysis.

                *since you need me to lay it out explicitly: you can limit your exposure to risk by only upgrading select areas of demand.*

                sorry, but that doesn’t address the more general issues surrounding mechanisms of capital recovery, value capture and cross-subsidies which make bitstream wholesaling the ideal access regime, which is why NBNco has adopted it. it has nothing to do with selective upgradeability of FTTN vs FTTH. heck, you could selectively upgrade GPONs to home-run topology too!

                *Once again, you seem to be confusing a specific circumstance to a general principle.*

                no, i haven’t. i’m just responding to your statements at literal, face value.

                *In this case the specific circumstance is that only a select few will actually benefit from the upgrade and the rest can happily be left on legacy hardware.*

                so, the incumbent will implement selective upgrades to those who will actually benefit. what’s the problem?

                *However Cherry Picking provisions mean that Optus has to ensure they build to everyone fairly*

                no, they don’t. what rubbish.

                *or build to select areas as a wholesale only provider as “part” of the NBN. That is what I am referring to here.*

                no, they don’t. they just have to submit to open access and NBN-equivalent SAU to ACCC.

                *So you understand……… there is a town with 10,000 people, and then there is a settlement of 500 people…*

                zZZZzzzz…. the question is does your cock-and-bull story even make sense to you?

                *What happens if a company loses money for a protracted period of time and cannot recover from it? They’ll go bankrupt.*

                they don’t lose money… they make less money… crucial distinction.

              • Anonymous
                Posted 27/10/2011 at 6:31 pm | Permalink |

                you don’t get it. nevermind. maybe alain or deteego will explain it to you.

                Why don’t you try and explain it to me then instead of hiding behind your allies because you’re losing the argument?

                Here is my understanding of how the regional price squeeze works:

                We have ULL/LSS pricing, which is the price ISPs pay to get access to the local loop fibre. We then have bitstream pricing on TW DSLAMs. Providers can either chose to purchase ULL/LSS service and run their own backhaul to the exchange, or they can run backhaul to a Telstra POI and use TW’s bitstream services.

                Providers provide two prices, ULL/LSS (or Metro as it is often referred to) and TW (or Regional as it is often referred to). Because they can afford to, due to owning their own backhaul and DSLAMs (Agile, PIPE, etc), competitors can provide cheaper services to customers in Metro areas, however in Regional Areas their prices are determined solely by how much they have to pay in Bitstream prices.

                Telstra wants to compete with services in these Metro areas, so it reduces the price to come in line with Metro services. All fine and dandy, except it reduces these prices at the retail side only, not the wholesale.

                The result, in order to meet the BigPond pricing in regional areas ISPs have to either reduce the amount of bandwidth they have provisioned, or their margin, or even make a loss.

                Now, as Telstra are technically, from an accounting perspective, a bit-stream customer from Telstra Wholesale this often means they are making a very small margin, or a loss, at the retail arm when they do this.

                The solution: Telstra should drop their bitstream prices, otherwise they are artificially preventing competition. This might be due to ACCC regulations, however, as a competition watchdog, the ACCC needs to address this quickly, which they don’t.

                How many times have we seen this debate come about in the past few years Tosh?

                Well, I’ll dig up an article for you: here ya go.

                Now the regional bands make this situation slightly worse in that it disincentives other ISPs from actually rolling out infrastructure to regional exchanges, however, the behaviour here by Telstra is still questionable.

                So I ask you again, what do your reply have to do with scenario? Telstra Retail are not undercutting ULL pricing, they are undercutting their own bit-stream pricing. Why should pricing parity have anything to do with this, as it is about Telstra undercutting their own bit-stream pricing? Can I make it any clearer for you?

                sorry, but that doesn’t address the more general issues surrounding mechanisms of capital recovery, value capture and cross-subsidies which make bitstream wholesaling the ideal access regime, which is why NBNco has adopted it. it has nothing to do with selective upgradeability of FTTN vs FTTH. heck, you could selectively upgrade GPONs to home-run topology too

                I don’t think you quite get it, you minimise the capital the incumbent has to spend, both in subsidies and the minimised nature of the build by allowing competitors to install their own infrastructure, then the issues of capital recovery is reduced because their is less capital to recover. This, added to the fact that it reduces the risk to the incumbent by making other ISPs subject directly to risk from provisioning DSLAMs and backhaul.

                The bitstream model is good if you want to maximise return, yes, that is why the NBN has adopted it. However, considering the incumbent in FTTN is exposed to very little risk, then there is no need to maximise capital recovery. Especially since to do so will have undesirable repercussions on the market.

                no, i haven’t. i’m just responding to your statements at literal, face value

                And I said specifically a hypothetical technology called VDSL3, an improved variant of DSL. The reason it would provide marginal benefit of VDSL2 is implied by me specifying that technology. So, no, you didn’t respond to my comments at face value, you cherry picked a particular phrase out of context.

                so, the incumbent will implement selective upgrades to those who will actually benefit. what’s the problem?

                Now, let’s bring this back to original point, did the politicians think to include this particular situation in the legislation that mandates they keep the DSLAM cards up to date? I’m trying to show you that the model you have set yourself up for is anything but “light regulation” remember?

                zZZZzzzz…. the question is does your cock-and-bull story even make sense to you?

                Alright Tosh, completely ignore my hypothetical situation designed to outline the problem of how high granularity of nodes can have an adverse affect on demand when a entity on cherry picks areas of high demand. This is especially relevant with technologies like GPON where considerable capital investment must be made and you cannot do a fraction (i.e. with VDSL2 (I realise I used that as the example technology to demonstrate the point, apologises) you can install a limited number of DSLAMs if demand in that area is low).

                they don’t lose money… they make less money… crucial distinction.

                Oh so with the ULL prices set as they currently are they’re just making a small margin when you take into account maintenance and upgrades? Great, so why were you complaining?

              • toshP300
                Posted 27/10/2011 at 10:23 pm | Permalink |

                @NK

                *……because you’re losing the argument?*

                LOL

                *Providers provide two prices, ULL/LSS (or Metro as it is often referred to) and TW (or Regional as it is often referred to).*

                ULL/LSS is set entirely by ACCC. it’s completely out of Telstra’s hands. imagine if i pimped you out at $X/hr, you have no say, you’re someone’s involuntary bitch at the rates i dictate. if you don’t like it, too bad, you just gotta suck it up.

                and, oh btw, ULL access is not confined to “Metro”, it’s also available in “Regional”.

                *however in Regional Areas their prices are determined solely by how much they have to pay in Bitstream prices.*

                (continuing from above) and as i’ve said, it’s not Telstra’s fault that ACCC has adopted geographically-deaveraged ULL pricing with a steep pricing curve in “Regional” (which Telstra has argued AGAINST many times to no avail).

                given this regulatory setup which is unilaterally determined by ACCC, why the f–k should Telstra i/ abandon its long-standing pricing principle of “retail pricing parity” (which BENEFITS regional consumers); and ii/ undercut regional ULL pricing as determined by the ACCC? they’d be barking mad to lower their wholesale DSL rates below ULL.

                so greedy, opportunistic, zero-USO cross-subsidy burden, cherry-picking “competitors” choose not to access ULL in “Regional” areas… why the f–k is that Telstra’s problem? Telstra doesn’t set ULL pricing. Telstra argued AGAINST a steep ULL pricing curve which would have obviated against this “regional margin squeeze problem”.

                *Telstra wants to compete with services in these Metro areas, so it reduces the price to come in line with Metro services. All fine and dandy, except it reduces these prices at the retail side only, not the wholesale.*

                bullshit. TW DSL rates in metro areas historically track the downward trend in metro ULL rates (with a lag). Telstra has to lower TW resale prices in metro to protect the market share of TW DSLAMs, otherwise customers like Dodo which have no DSLAMs (?) and rely entirely (or mostly) on TW would get wiped out by competitors such as TPG which have a massive trove of DSLAMs.

                *The result, in order to meet the BigPond pricing in regional areas ISPs have to either reduce the amount of bandwidth they have provisioned, or their margin, or even make a loss.*

                so? if Telstra TW doesn’t undercut ULL in metro, why should it be any different in regional?

                *Now, as Telstra are technically, from an accounting perspective, a bit-stream customer from Telstra Wholesale this often means they are making a very small margin, or a loss, at the retail arm when they do this.*

                if Telstra was able to operate under a flat ULL pricing curve with no cherry-picking of cheap band2, then their returns on the CAN wouldn’t be biased downwards below their average costs. given that they’re already under-recovering average costs because of “retail pricing parity” tied to band2 ULL pricing, wtf should they add salt to their own wounds and hand over even more retail market share (margin) to their competitors?

                the rules of the game, in terms of access costs (positively sloped ULL curve), is determined by the ACCC. if you want to just cherry-pick “metro”, fine… either way, Telstra is screwed because of the constraints imposed upon them as the “USO provider of last resort”. if you want to play in the “regional” markets, then pay the f–king “regional” ULL rates as determined by the ACCC. those are the rules of the game, set by the ACCC, not Telstra.

                *The solution: Telstra should drop their bitstream prices, otherwise they are artificially preventing competition.*

                the actual cost benchmark is the ULL pricing curve. in both “metro” and “regional” areas, the bitstream prices shadow or track the ULL curve. Telstra IS losing money in the “regional” markets because they are subsidising “cheap” access for regional consumers by charging metro-like prices. so, if you want to play in the regional markets, adopt the same business model that has been forced onto the incumbent.

                what do you prefer? that Telstra abandon “retail pricing parity” and charge regional consumers substantially more just so that greedy ISPs can have their “market share” and earn their “gross margins” in the regional areas without having to cross-subsidise? who’s interests comes first? regional consumers or greedy ISPs’ bottomlines?

                unlike the NBN, the ACCC’s copper pricing policies forces cross-subsidisation at the retail level because there is no cross-subsidisation at the wholesale level.# you don’t like it? too bad, so sad, suck it in and DEAL WITH IT, instead of threatening Telstra with legal action like an arrogant, self-entitled —-.

                *This might be due to ACCC regulations, however, as a competition watchdog, the ACCC needs to address this quickly, which they don’t.*

                well, go bitch and moan at the ACCC instead of engaging in misleading, mindless Telstra bashing/demonising. if the ACCC had adopted Telstra’s numerous suggestions of a flat ULL curve, we wouldn’t have this regional squeeze problem. Telstra hasn’t done ANYTHING wrong. they don’t set the rules of the game, they play by the rules. if you want to play in the “regional” markets, pay the f–king regional ULL rate.

                Telstra may OWN the monopoly infrastructure, but they lost control of the access pricing regime and pricing principles many moons ago. in terms of pricing, they are no longer a monopolist price-setter, but a ULL price-taker (from the ACCC technocrats).

                *The bitstream model is good if you want to maximise return, yes, that is why the NBN has adopted it.*

                there will always be a bitstream product regardless of the availability of unbundled because not every ISP can afford to slot their own cards into the street cabinets.

                in simple terms, if the cost of accessing bitstream and unbundled are equivalent after factoring in equipment costs, etc, then the unbundled is practically redundant. if the unbundled has a cost advantage, that means the pricing structure is not sustainable and you’re setting up an unstable market.

                *apologises*

                apology accepted.

                *Oh so with the ULL prices set as they currently are they’re just making a small margin when you take into account maintenance and upgrades?*

                why expand the capital base if the ACCC doesn’t reward you for it?

                # read this aloud 10 times for your own sake.

                • Posted 29/10/2011 at 3:16 pm | Permalink |

                  Since I’ve had a few days to think about this response I hope it comes of better than a point by point rebuke.

                  First off, Tosh, let’s begin by telling you once again to stop taking statements out of context. For example.

                  *……because you’re losing the argument?*

                  LOL

                  If you can’t be bothered sticking to the argument then and just tell me to “wait for someone to explain it” you aren’t doing a very good job of arguing, and allowing me to win by default. No matter, I got the desired response from this, which is you trying to explain it. (More on that later)

                  Also:

                  *apologises*

                  apology accepted.

                  That was only an apology for using the wrong technology as an example to demonstrate my point, you do realise my point still stands right? You can’t just take that one word and take it to mean I conceed to your points, which I don’t.

                  and, oh btw, ULL access is not confined to “Metro”, it’s also available in “Regional”.

                  Did you miss the part where I said “often referred to as”? Just go look at the DoDo website for but one example, I am quite aware that ULL is also available in regional areas, I am quite aware that TW is also available in Metro areas. It is just a convenient naming convention, nothing more.

                  Alright, cool, statements out of context covered, let’s look at what you actually said, and in order:

                  ULL/LSS is set entirely by ACCC. it’s completely out of Telstra’s hands. imagine if i pimped you out at $X/hr, you have no say, you’re someone’s involuntary bitch at the rates i dictate. if you don’t like it, too bad, you just gotta suck it up.

                  Right okay, ULL/LSS is set by the ACCC, excellent. I knew this. But why is that important? Since ULL/LSS represents the bare minimum someone needs to pay to get access to the copper pair leading into the home of a customer, all prices should be higher than this, and indeed are. Which is curious, considering you constantly refer to Telstra needing to “undercut” ULL in regional areas (by this we obviously mean Band 3 areas) in order to address the “regional” price squeeze.

                  In fact all the ULL price needs to do is represent the bare minimum, with a reasonable margin, that Telstra should earn in order to maintain and upgrade the network. If the price is below this threshold then either the government needs to provide a subsidy, or raise the ULL prices.

                  Banding here is kinda irrelevant in this respect, as all you are doing is more the cross-subsidisation from the wholesale to the retail level since maintaining regional infrastructure costs more. Either way, there will need to occur a cross-subsidy. Moving it to the wholesale side is more intelligent, and obviously would have benefits, but it has very little to do with the problem I am talking about here with TW pricing.

                  This is indeed a curious interpretation, as even under the banded model of ULL Telstra should never need to do this to address the problem, which is TW bit-stream prices being too high when compared to Telstra Retail prices.

                  Anyway, let’s continue.

                  and as i’ve said, it’s not Telstra’s fault that ACCC has adopted geographically-deaveraged ULL pricing with a steep pricing curve in “Regional” (which Telstra has argued AGAINST many times to no avail).

                  Why are you referring to ULL when I was specifically referring to the bitstream rates that Telstra charge? This does not address my point at all.

                  given this regulatory setup which is unilaterally determined by ACCC, why the f–k should Telstra i/ abandon its long-standing pricing principle of “retail pricing parity” (which BENEFITS regional consumers); and ii/ undercut regional ULL pricing as determined by the ACCC? they’d be barking mad to lower their wholesale DSL rates below ULL.

                  Okay, before I address this, let me point you to another paragraph further down:

                  the actual cost benchmark is the ULL pricing curve. in both “metro” and “regional” areas, the bitstream prices shadow or track the ULL curve. Telstra IS losing money in the “regional” markets because they are subsidising “cheap” access for regional consumers by charging metro-like prices. so, if you want to play in the regional markets, adopt the same business model that has been forced onto the incumbent.

                  So let me get this straight, Telstra shouldn’t drop it’s wholesale prices in regional areas because they would lose money, however they lose money on their retail products because of cross-subsidisation?

                  What makes you think that dropping their bit-stream prices will undercut ULL? You do realise just how much they charge for Bandwidth with bit-stream pricing right? You do realise that their bit-stream prices are always going to be more expensive than “rolling your own”, which is why ULL works. No one is asking them to undercut ULL pricing, what is being asked is when they change their retail prices they change their TW prices to reflect this change, as per the article I linked.

                  Right I’m going to skip a few paragraphs here because they are leading on from your already established points and not adding anything of value to the debate. That leads us to:

                  Telstra may OWN the monopoly infrastructure, but they lost control of the access pricing regime and pricing principles many moons ago. in terms of pricing, they are no longer a monopolist price-setter, but a price-taker (from the ACCC technocrats).

                  Okay, where does the ACCC specify Telstra’s bit-stream pricing? They don’t, they just intervene whenever Telstra are found to be charging uncompetitive rates. Which is what we are referring to. We are referring to the instances where Telstra has dropped their retail prices, and failed to drop their wholesale bit-stream prices as well.

                  Okay, so at this point we move away from this topic. The problem is you have adequately closed it, as you haven’t addressed (or more accruately acknowledged) the issues we are referring to. In fact you even touched upon it and actually admitted it is happening:

                  bullshit. TW DSL rates in metro areas historically track the downward trend in metro ULL rates (with a lag)

                  It is that lag, dear Tosh, that is the problem we are referring to. It is that lag which is unacceptable. It is is that lag that has prompted people like Simon Hackett to call Telstra out on it multiple times.

                  So tell me, what justifies Telstra lagging the lowering of their wholesale bit-stream prices? Because that is what I have been asking you this whole time. I haven’t tried to say that Telstra should abondon it’s policy of pricing parity, I haven’t being saying that Telstra should have dropped it’s bitstream prices in regional areas so that they are the the ones that cop the cross-subsidisation and not the retailer.

                  Which is why, dear Tosh, I originally said when you made these points:

                  Non-sequitor much?

                  So let us continue with your reply, since there are a few other points you have made:

                  in simple terms, if the cost of accessing bitstream and unbundled are equivalent after factoring in equipment costs, etc, then the unbundled is effectively redundant. if the unbundled has a cost advantage, that means the pricing structure is not sustainable and you’re setting up an unstable market.

                  Actually no, you’re not. ULL relies on the ISP investing capital in their own infrastructure, whereas the bit-stream model you are “renting” someone else’s infrastructure. It is why Alain always refers to the NBN pricing model as “rent-seeking”.

                  To give you an example, is the housing market unsustainable because over the long term (40 years) it will likely work out cheaper to purchase your own house than to rent one? As I said: the ULL price is supposed to be set at a point where it adequately covers the cost of maintenance and upgrades of the network with a reasonable margin. If it fails to do this the government needs to subsidise or up the ULL pricing.

                  Ideally the ULL price should therefore be market driven, however given the fact that the incumbent owns a monopoly on this infrastructure, it has to be regulated. And because there is only one factor to regulate, it becomes much simplier to regulate than say a bit-stream pricing model (like the NBN).

                  The reason being that under a ULL market, despite the fact the incumbent can also provide bit-stream services, you will get provides, known as aggregators, who compete directly with the incumbent’s bitstream prices, in other words, the only factor that requires regulation is ULL pricing because all other pricing will be market driven.

                  This is the advantage of ULL, it simplifies the regulation. It is unfortunate such a model is not easily achieved under the NBN.

                  why expand the capital base if the ACCC doesn’t reward you for it?

                  For the last and final time, the ULL price is supposed to be set at a point where it adequately covers the cost of maintenance and upgrades of the network with a reasonable margin. If it fails to do this the government needs to subsidise or up the ULL pricing.

                  • toshP300
                    Posted 29/10/2011 at 7:43 pm | Permalink |

                    *Since I’ve had a few days to think about this response….*

                    and it will take me 5 mins to …… ;)

                    Telstra can’t cherry-pick where they offer services like Internode. in very simplified terms, given their cost base, they need to earn an average of $X per connection to make their target return on capital.

                    (on top of this, there’s the more complicated issue of how that $X is earned, i.e. in the form of “wholesale margin” or “wholesale + retail margin”. obviously, for those 60% of retail access lines that 3rd-party access-seekers have grabbed from Telstra, the only revenue they derive is purely “wholesale margin”.)

                    for a fixed retail market share, if you had uniform ULL pricing, then it wouldn’t matter where these access-seekers plugged into Telstra’s copper network.. however, the ACCC has forced a positively-sloped ULL curve on the market. imagine if ULL access-seekers like iiNet had DSLAMs uniformly distributed across the entire ULL curve from band 1 to band 4 ESAs. in such a case, iiNet’s retail pricing would reflect an average wholesale cost that takes into account both extremes of the ULL curve from band 1 to band 4. iiNet would be internally cross-subsidising the regional cost differentials at the retail level. Telstra would also do the same. as a result, Bigpond and iiNet’s retail broadband offerings would be very similar.

                    however, the way businesses operate is that they always seek an advantage over their competitors. go look at the ACCC stats on the national distribution of DSLAMs. the overwhelming majority (~90%+) of ULL take-up is in bands 1 to 2 ESAs. by only cherry-picking the dirt cheap ULLs, “competitors” like iiNet and Internode are able to lower their average wholesale cost and therefore, undercut Telstra retail pricing. Telstra, in turn, is forced to lower their retail prices otherwise they’d be haemorrghing market share in the key, lucrative band 2 ESA. of course, they can’t lower pricing to the extent of their opportunistic “competitors”, otherwise they’d be losing even more money.

                    and this is why Telstra’s competitors have been able to grab 60% of the market. it’s not because they have a natural competitive advantage in terms of being able to offer a service with superior technology, etc. it’s 100% the result of ULL cherry-picking. they’ve basically been gifted the 60% market share by the ACCC on a silver platter to artificially create so-called “retail competition”.

                    as a result, Bigpond retail pricing no longer reflects the average national wholesale cost as encapsulated by the ULL pricing curve, i.e. they are unable to fully cross-subsidise the regional cost differential. now, for the Telstra entity as a whole, it’s totally irrelevant where the loss is absorbed, i.e. whether in wholesale margins or retail margins. bottomline, Telstra’s capital return has been eroded by the downward pressure exerted on retail pricing due to competitor ULL cherry-picking.

                    the hypocrisy of the likes of Internode should now be transparently clear. if access-seekers such as them had not just cherry-picked band 2, but rolled-out DSLAMs uniformly across the ULL curve, then their average wholesale cost would be reflective with Telstra’s average cost and retail pricing would also be similar. there would also be no “regional margin squeeze” problem. by cherry-picking band 2 ULL and forcing Telstra to also push down their retail pricing to be on par with the greedy, opportunistic ISPs, they created this “regional margin squeeze” problem.

                    basically, by creating a separate, parallel means of access to Telstra infrastructure, in addition to TW resale of DSLAMs, the ACCC has a created a “fracture” in the market. to cut a long story short, if you want to be a player in the market, you have two choices:

                    you can be

                    i/ an ACCC ULL pricing curve skirt-hugger: in this instance, if you want to cherry-pick Telstra to death in band 2 ESA, go for your life. if you want to serve the regional markets as well, pay the ULL band 3 and band 4 prices and roll-out your own DSLAMs in the regional areas the same way you do in band 2;

                    or

                    ii/ a genuine “Telstra Wholesale reseller”: in this instance, you’re piggy-backing off Telstra’s retail pricing structure across all regions and you resell Telstra products nationally in ALL bands (not just in regional areas). this is what ISPs which do not have DSLAMs like Dodo (?) do. ISPs which are genuine TW resellers do receive “bitstream pricing” which is effectively “Bigpond minus retail margin”. (this is why not all ISPs are complaining of a so-called “margin squeeze” but certain greedy, vocal ULL cherry-pickers.)

                    what you can’t do, and what is COMPLETELY UNFAIR to Telstra is to CHERRY PICK ALL OVER THE F–KING SHOP, i.e. you can’t rape Telstra by jamming your cheap, bloody DSLAMs all over Telstra’s exchanges in band 2 ESA, and turn around and expect to get “genuine TW reseller” bitstream pricing quotes for the regional areas because you don’t like the ACCC’s ULL rates in those higher cost areas. that’s just BULLSHIT. that’s just PURE UNBRIDDLED GREED and selfish, arrogant, unreasoned self-entitlement.

                    you can’t hug the ACCC’s ULL pricing curve in band 2 as an unbundled access-seeker and then conveniently switch over to masquerading as a “genuine TW reseller” and hug the Telstra retail pricing curve in band 3 + 4. that’s just COMPLETE NONSENSE.

                    by denying these opportunistic market scum parasites “genuine TW reseller” bitstream pricing, Telstra is effectively protecting other players in the market who do not have the capital to roll-out their own DSLAMs and are genuine TW resellers. imagine if you’re an ISP that’s purely reselling TW DSLAMs nationally. if Telstra was to offer the same generous, band 3+4 bitstream pricing to ISPs which have a treasure trove shitload of DSLAMs in band 2 ESA, these other ISPs that are purely reselling TW DSLAMs would get wiped out of the market.

                    the reason is obvious: ISPs like TPG which have a shitload of proprietary DSLAMs at $16 ULL already have a massive cost advantage, not just over TW resellers but also Telstra itself! that’s how they grabbed the 60% market share! not by ingenuity, better technology or superior anything… just ACCC-facilitated band 2 ULL cherry-picking. if these ULL market parasites can steal 60% of market share from the incumbent with their superior, cherry-picked wholesale cost base, imagine what they’d do to other smaller ISPs that are purely TW resellers if Telstra offered ISPs like Internode and iiNet the same deals in the regional areas!

                    bottomline, if you’re making a killing in band 2 ESAs raping Telstra at $16 ULL, you can afford to cross-subsidise your retail price structure in the regional areas. what is COMPLETELY INSANE is raping the market in band 2 via unbundled access and then expecting a “cross-subsidy free-ride” by piggy-backing on Telstra’s retail pricing curve as a TW reseller in the regional areas.

                    Internode is full of shit – stop believing their rubbish propaganda.

                    *The reason being that under a ULL market, despite the fact the incumbent can also provide bit-stream services, you will get provides, known as aggregators, who compete directly with the incumbent’s bitstream prices, in other words, the only factor that requires regulation is ULL pricing because all other pricing will be market driven.*

                    think about what NBNco’s two-part tariff pricing structure allows it to achieve. it facilitates “mix and matching” and allows ISPs to provide cheap, low-frill products (basic internet access with minimal CVC provision) as well as expensive, value-add products (triple-play). if you had a flat rate, unbundled access charge per premise, it forces the ISPs themselves to internally cross-subsidise their own customer base with users of varying degrees of broadband requirements and capacity to pay.

                    on the one hand, it encourages scale due to diversification benefits of different users which facilitates flexible pricing strategies, i.e. internal replication of wholesale bitstream pricing model. on the other hand, it also encourages cherry-picking and vigorous competition for high-value subscribers. as a result, pricing for high-spending subscribers will tend to be lower than otherwise because of a lesser need to cross-subsidise low-value subscribers. there will also be a lower capacity to cross-subsidise low-value subscribers due to the “capture” of high-value subscribers by cherry-pickers and the prices they pay will tend to be higher than otherwise.

                    in other words, unbundled access once more encourages cherry-picking and potentially creates a fracture in the market and lowers the capacity to implement more flexible, cross-subsidisation pricing models.

                    • Posted 29/10/2011 at 9:05 pm | Permalink |

                      Again Tosh, you’re still not getting it. You’re arguing against something I’m not saying.

                      Maybe you should have taken more than 5 minutes rather than going on an unfounded rant basically repeating exactly the same comments you made previously, and you still haven’t acknowledged the issue. You can make all the excuses for Telstra you want, but they still acted in an anticompetitive manner.

                      Also stop calling the likes of Internode and iiNet greedy, they are companies, who’s sole purpose in life is to market a profit. The same as Telstra. That is how capitalist markets work. You can’t tell of one company for being greedy and taking advantage of flawed legislation and use that as a justification for another company going against other legislation, that is just plan hypocritical.

                      If the legislation is flawed, lobby better to have it changed. There is no excuse in today’s political environment for a company as big as Telstra to just sit there and blame an organisation like the ACCC.

                      And do you really think that even if the bands were eradicated this would fix the problem? Hell no, providers like TPG will still only pick the most profitable exchanges where it costs the least amount to roll out backhaul. The nature of the Australian market is always going to be like this, because it is very hard to effectively deliver broadband services to regional customers.

                      And when that happens, what will be your excuse then? Will providers who have a cost advantage because they don’t need to cross-subsidise still be greedy bastards or will something else need to change to allow Telstra to get a “fair go” in the market? Give me a break Tosh, it’s a market, not a playground, no body has to play fair.

                      • toshP300
                        Posted 29/10/2011 at 11:52 pm | Permalink |

                        okay, despite my best efforts and genuine intention at positive engagement, since you choose to go down this road….

                        *Again Tosh, you’re still not getting it. *

                        not getting what?

                        *you still haven’t acknowledged the issue.*

                        what issue?

                        *You’re arguing against something I’m not saying.*

                        i’m not arguing “against” anything. definitely not what “you’re saying”, because what you’re saying is rubbish — because you have very little clue how the real world works.

                        *an unfounded rant*

                        so, my explanations went straight over the top of your head, eh?

                        *You can make all the excuses for Telstra you want*

                        what excuse?

                        *but they still acted in an anticompetitive manner.*

                        how so? stop blindly parroting Internode propaganda. you’re in way over your head in shit you don’t understand.

                        *Also stop calling the likes of Internode and iiNet greedy*

                        why? they are f–king greedy. go find some other “heroes” to worship. idolising corporate entities is just “sad”.

                        *they are companies, who’s sole purpose in life is to market a profit.*

                        which is fine, as long as you don’t publicly slander and defame other companies and make false allegations.

                        (btw, Internode with its typical galling arrogance called for immediate declaration of WDSL and issuance of competition notices threatening financial penalties to Telstra. ACCC pretty much told them to f–k off. of course, this doesn’t stop them from ongoing public whinging and manipulation of the media.)

                        *That is how capitalist markets work.*

                        from reading your posts, you wouldn’t know the first thing about how markets work.

                        *You can’t tell of one company for being greedy and taking advantage of flawed legislation and use that as a justification for another company going against other legislation*

                        what flawed legislation? since when are the minutae of ULL pricing principles enshrined in “legislation”? how is Telstra contravening “other legislation”? if they are, why did the ACCC dismiss Internode’s complaints and reject all their demands?

                        *And do you really think that even if the bands were eradicated this would fix the problem?*

                        well, if the ULL pricing curve was flat, there’d no longer be a dirt cheap band 2 ULL to cherry-pick, would there?

                        *And when that happens, what will be your excuse then?*

                        what excuse? i don’t make any excuses. what’s your excuse for engaging in mindless Telstra bashing?

                        *Will providers who have a cost advantage because they don’t need to cross-subsidise still be greedy bastards…*

                        you’re a greedy bastard if you cherry-pick band 2 ULL and then expect Telstra to subsidise your participation in the regional markets because you want to avoid paying the band 3/4 ULLs. (the ACCC appears to agree, hence, their refusal to declare WDSL.)

                        *Give me a break Tosh, it’s a market, not a playground, no body has to play fair.*

                        nobody has to “play fair”? what the f–k does that mean? so “anti-competitive” behaviour is okay? or you mean “nobody except Telstra”?

                        you’re are so full of s–t. stop wasting my time and go back to humping your Nodepony.

                        (even better, stop reading and replying to my posts with your patent nonsense.)

                      • Posted 30/10/2011 at 12:26 am | Permalink |

                        okay, despite my best efforts and genuine intention at positive engagement, since you choose to go down this road….

                        What road? Every arguement with you seems to lead to nowhere. Are you actually here for intelligent debate

                        not getting what?

                        what issue?

                        i’m not arguing “against” anything. definitely not what “you’re saying”, because what you’re saying is rubbish — because you have very little clue how the real world works.

                        Says the guy who doesn’t support the ULL model because he doesn’t seem to understand how competition works as an effective means of price regulation.

                        so, my explanations went straight over the top of your head, eh?

                        No, but repeating them again and again is not actually going to make them sink in. And as that goes both ways I won’t bother explaining what Telstra has done wrong again and why it has absolutely shit all to do with the ULL pricing.

                        how so? stop blindly parroting Internode propaganda. you’re in way over your head in shit you don’t understand.

                        Right, so it’s Internode propaganda. Then obviously iiNet must be in on it to?

                        why? they are f–king greedy. go find some other “heroes” to worship. idolising corporate entities is just “sad”.

                        So is Telstra. So is every single company out there. They’re all greedy bastards and they will do everything in their power to stay on top. Get used to it Tosh.

                        what flawed legislation?

                        So the ULL bands aren’t flawed?

                        since when are the minutae of ULL pricing principles enshrined in “legislation”?

                        So the ULL bands aren’t legally binding and Telstra can choose to ignore them?

                        how is Telstra contravening “other legislation”? if they are, why did the ACCC dismiss Internode’s complaints and reject all their demands?

                        Did you know that in general when dealing with a regulator you give them your most outrageous demands first, and let them push back until you find a compromise or the issue is dealt with in another way. If you were paying attention, in response to Hacketts request to the ACCC, the TW prices went down and Internode and other providers were able to bring their prices down to more reasonable levels.

                        well, if the ULL pricing curve was flat, there’d no longer be a dirt cheap band 2 ULL to cherry-pick, would there?

                        It isn’t just the band 2 ULL they are cherry-picking Tosh, as I attempted to explain, but you seemed to have plaintively ignored.

                        what excuse? i don’t make any excuses. what’s your excuse for engaging in mindless Telstra bashing?

                        Oh so… it’s okay for you to call the likes of TPG, iiNet, Internode, etc, greedy bastards and bash them for their “cherry picking” of cheap ULL but I’m not allowed to tell of Telstra for anti-competive practices? Hypocritical much?

                        you’re a greedy bastard if you cherry-pick band 2 ULL and then expect Telstra to subsidise your participation in the regional markets because you want to avoid paying the band 3/4 ULLs.

                        Oh so the fact it’ll cost them tens of millions of dollars to roll out the back-haul to bands 3 and 4, with very little expected return, the fact that there are areas of Band 2 that Internode especially still hasn’t installed DSLAMs in, is irrelevant? The fact that Telstra refused to act as a bitstream provider for competitor DSLAMs meaning if they can’t afford the back-haul they have to use Telstra’s DSLAMs is also irrelevant? So the only reason they aren’t rolling out to regional areas is because they are cherry-picking? You couldn’t have less business sense if you tried Tosh.

                        nobody has to “play fair”? what the f–k does that mean? so “anti-competitive” behaviour is okay? or you mean “nobody except Telstra”?

                        No, I mean that provided a company acts within the confines of the law it is free to do whatever it wants to to get ahead.

                        you’re are so full of s–t. stop wasting my time and go back to humping your Nodepony.

                        And now, at the end of all that, you resort to a blatant insult. Thanks. I really love talking to you Tosh.

                      • toshP300
                        Posted 30/10/2011 at 9:57 am | Permalink |

                        @NK

                        *Every arguement with you seems to lead to nowhere.*

                        LMAO

                        the problem with you is that you’re just a NBN white elephant / NBNco / Telstra-basher apologist.

                        (if i had to guess, i’d say you’re just another one of those internet geeks who religiously troll the “NBN”, “filesharing” and “hard drive peripherals” threads on WP. that’s about the extent of your real interest or concern in broadband policy issues.)

                        *Are you actually here for intelligent debate*

                        this coming from the guy who claimed that Telstra hasn’t undergone accounting or operational separation….

                        (when there are reams of documents pertaining to Telstra’s accounting and operational separation on the ACCC’s website)

                        LMAO

                        please stop trolling.

                        *Says the guy who doesn’t support the ULL model because he doesn’t seem to understand how competition works as an effective means of price regulation.*

                        if ULL works, why do we have this cherry-picking problem? why we do have this problem of greedy ISPs falsely claiming anti-competitive behaviour when the truth is they are refusing to internally cross-subsidise their regional operations and expect a Telstra-shareholder sponsored free ride into the ACCC’s higher ULL bands?

                        *No, but repeating them again and again is not actually going to make them sink in.*

                        so, my explanations haven’t gone over your head, but yet they still haven’t sunk in…..

                        (another contradiction)

                        *And as that goes both ways I won’t bother explaining what Telstra has done wrong again….*

                        because Telstra hasn’t done anything wrong and you’re finally giving up on trying to make shit up about shit you barely have any understanding of.

                        good move. mindlessly slandering and defaming a corporate entity that funds the retirement of millions of hard-working Aussies to further enrich the tightly-held entities that rape band 2 ULL isn’t a good look on you.

                        *Right, so it’s Internode propaganda. Then obviously iiNet must be in on it to?*

                        QUOTE: “We’ve actually grown about 51,000 during the year in on-net customers, which is suburbia, whereas off-net, we’ve actually decreased by about 43,000,” he said.

                        so, they have 51,000 new dirt cheap LSS/ULL in the metro areas which dramatically lowers their wholesale cost base. they can use the expanded margins in these metro areas to cross-subsidise their regional operations (if they want to play there, and they don’t even have to because they don’t have a burdensome USO). instead, they prefer to lose all those 43,000 regional customers rather than sacrificing a single dollar of their increased margins in the metro areas.

                        if Telstra allowed ULL cherry-pickers to piggyback off the Telstra retail pricing curve in the regional areas at bitstream pricing equivalent to “Telstra retail minus”, other ISPs which have little to no DSLAMs and don’t enjoy the same cherry-picking cost advantage in band 2 ULL would get steamrolled by the likes TPG and iiNet. are you in support of i/ regional consumers enjoying metro-like prices and ii/ the survival of small competitor ISPs who are mainly TW resellers, or are you really just an unashamed Nodepony humper?

                        Telstra has to cross-subsidise regional broadband, TW resellers who piggyback off Telstra retail pricing are also implicitly cross-subsidising regional broadband…. why the f–k should greedy ULL cherrypickers like Internode and iiNet get a free ride?

                        *So the ULL bands aren’t legally binding and Telstra can choose to ignore them?*

                        oh okay… so if the ACCC decides to replace the existing ULL bands with 10 new bands instead, the Federal Government has to pass new legislation? so every time the ACCC chairman farts, the bureaucrats at DBCDE have to furiously scribble new emergency legislation for Conroy to introduce…. most interesting….

                        *Did you know that in general when dealing with a regulator you give them your most outrageous demands first, and let them push back until you find a compromise….*

                        you idiot — the ACCC rejected ALL of Internode’s demands (because they were all outlandish, trumped-up nonsense).

                        *If you were paying attention, in response to Hacketts request to the ACCC, the TW prices went down and Internode and other providers were able to bring their prices down to more reasonable levels.*

                        wow… so, now you’re privy to highly-sensitive, commercial-in-confidence wholesale pricing negotiations between Telstra and other ISPs? where do you get your information from? hacking into corporate servers or did you just pull it out of your (_!_)?

                        go look at Internode’s current pricing — they haven’t budged an inch:

                        http://www.internode.on.net/residential/adsl_broadband/easy_reach/

                        stop making shit up.

                        *but I’m not allowed to tell of Telstra for anti-competive practices? Hypocritical much?*

                        in the context of this specific and putative “regional margin squeeze” issue, what “anti-competitive practices”? i’ll remind you for the zillionth time: the ACCC rejected all of Internode’s demands!

                        stop being a dickhead — just spitting out three words (“Telstra”, “anti-competitive” and “practices”) together does not a case make. it’s not “anti-competitive” to refuse to be cherry-picked and raped all over the shop.

                        *Oh so the fact it’ll cost them tens of millions of dollars to roll out the back-haul to bands 3 and 4, with very little expected return*

                        oh, so now you can predict TW pricing in the hypothetical scenario of a flat ULL pricing curve? give me a f–king break…

                        *The fact that Telstra refused to act as a bitstream provider for competitor DSLAMs meaning if they can’t afford the back-haul they have to use Telstra’s DSLAMs is also irrelevant? *

                        how do you know TW won’t provide backhaul to competitor DSLAMs at the right price if there’s sufficient capacity available (assuming that greedy cherry-pickers actually bother rolling out DSLAMs in these higher ULL bands)? have you wiretapped all calls and conversations at Telstra HQ?

                        *So the only reason they aren’t rolling out to regional areas is because they are cherry-picking? You couldn’t have less business sense if you tried Tosh.*

                        yes — you idiot. they are cherry-picking areas with cheap ULL and cheap backhaul.

                        *No, I mean that provided a company acts within the confines of the law it is free to do whatever it wants to to get ahead.*

                        yes, and Telstra is free to avoid being raped in both the metro AND regional bands. (the ACCC apparently agrees.)

                        *I really love talking to you Tosh.*

                        no, what you really enjoy is trolling my posts with ignorant nonsense. please stop.

                      • Posted 30/10/2011 at 11:57 am | Permalink |

                        the problem with you is that you’re just a NBN white elephant / NBNco / Telstra-basher apologist

                        Ad hominem.

                        (if i had to guess, i’d say you’re just another one of those internet geeks who religiously troll the “NBN”, “filesharing” and “hard drive peripherals” threads on WP. that’s about the extent of your real interest or concern in broadband policy issues.)

                        Wrong.

                        this coming from the guy who claimed that Telstra hasn’t undergone accounting or operational separation….

                        A point I conceeded.

                        if ULL works, why do we have this cherry-picking problem? why we do have this problem of greedy ISPs falsely claiming anti-competitive behaviour when the truth is they are refusing to internally cross-subsidise their regional operations and expect a Telstra-shareholder sponsored free ride into the ACCC’s higher ULL bands?

                        Strawman. Specifically, ULL as a model works not ULL in Australia in it’s current form. Obviously if the current form of ULL worked we wouldn’t need any Telecom Legistation from either party on the table at all.

                        Further the idea of “cherry picking” isn’t actually a problem. As stated, even the NBN is “cherry picking” the best 93%. The reason being rolling out to regional providers is expensive.

                        You can’t have it both ways Tosh. Either you have providers that “cherry picking” in some form or another, or you have rediciously expensive Broadband. Imagine if the NBN’s mandate was 100%, not 93%. How much would it cost them to push fibre out to every farm and estate on this continent?

                        so, my explanations haven’t gone over your head, but yet they still haven’t sunk in…..

                        No, it means you’re trying to make an Arguement from repetition.

                        because Telstra hasn’t done anything wrong and you’re finally giving up on trying to make shit up about shit you barely have any understanding of.

                        Ad hominem and Argument from silence.

                        good move. mindlessly slandering and defaming a corporate entity that funds the retirement of millions of hard-working Aussies to further enrich the tightly-held entities that rape band 2 ULL isn’t a good look on you.

                        Appeal to emotion.

                        QUOTE: “We’ve actually grown about 51,000 during the year in on-net customers, which is suburbia, whereas off-net, we’ve actually decreased by about 43,000,” he said.

                        so, they have 51,000 new dirt cheap LSS/ULL in the metro areas which dramatically lowers their wholesale cost base. they can use the expanded margins in these metro areas to cross-subsidise their regional operations (if they want to play there, and they don’t even have to because they don’t have a burdensome USO). instead, they prefer to lose all those 43,000 regional customers rather than sacrificing a single dollar of their increased margins in the metro areas.

                        Strawmen. The specific information in there that I was pointing to was iiNet was also accussing Telstra of charging more for it’s regional wholesale pricing than it’s retail pricing.

                        if Telstra allowed ULL cherry-pickers to piggyback off the Telstra retail pricing curve in the regional areas at bitstream pricing equivalent to “Telstra retail minus”, other ISPs which have little to no DSLAMs and don’t enjoy the same cherry-picking cost advantage in band 2 ULL would get steamrolled by the likes TPG and iiNet. are you in support of i/ regional consumers enjoying metro-like prices and ii/ the survival of small competitor ISPs who are mainly TW resellers, or are you really just an unashamed Nodepony humper?

                        False dilemma.

                        Telstra has to cross-subsidise regional broadband, TW resellers who piggyback off Telstra retail pricing are also implicitly cross-subsidising regional broadband…. why the f–k should greedy ULL cherrypickers like Internode and iiNet get a free ride?

                        They’re not actually asking for a free ride. Your assumption here is that Telstra is making a loss on regional Broadband at retail. If they are then they are perfectly justified at leaving the wholesale Broadband prices as they are, but being a company, and under no obligation to over-invest in regional areas, I doubt this is the case. Chances are then, since they stand to get more reveneue, as Internode and iiNet assert, from wholesale than retail, they can afford to drop their wholesale prices and still make a meaningful profit.

                        oh okay… so if the ACCC decides to replace the existing ULL bands with 10 new bands instead, the Federal Government has to pass new legislation? so every time the ACCC chairman farts, the bureaucrats at DBCDE have to furiously scribble new emergency legislation for Conroy to introduce…. most interesting….

                        Strawman.

                        you idiot — the ACCC rejected ALL of Internode’s demands (because they were all outlandish, trumped-up nonsense).

                        An insult, followed by an arguement from repeatition, never actually addressing my counter point.

                        wow… so, now you’re privy to highly-sensitive, commercial-in-confidence wholesale pricing negotiations between Telstra and other ISPs? where do you get your information from? hacking into corporate servers or did you just pull it out of your (_!_)?

                        Actually this conclusion is based upon the fact that after the initial price drop by Telstra with a lag of a few months after the submission was placed into the ACCC, Internode dropped the price of their “Reach” based plans.

                        Prior to the price change Internode’s pricing for the 100GB plan on TW was $129.95. Now it has dropped to $69.95.

                        in the context of this specific and putative “regional margin squeeze” issue, what “anti-competitive practices”? i’ll remind you for the zillionth time: the ACCC rejected all of Internode’s demands!

                        Fallacy by division.

                        stop being a dickhead — just spitting out three words (“Telstra”, “anti-competitive” and “practices”) together does not a case make. it’s not “anti-competitive” to refuse to be cherry-picked and raped all over the shop.

                        As explained above, if we hold iiNet and Internode’s assertation to be true, you’re assuming that Telstra makes a loss on it’s retail offerings and is thus unable to drop the wholesale prices to even parity with the retail.

                        oh, so now you can predict TW pricing in the hypothetical scenario of a flat ULL pricing curve? give me a f–king break…

                        Non-sequitor.

                        how do you know TW won’t provide backhaul to competitor DSLAMs at the right price if there’s sufficient capacity available (assuming that greedy cherry-pickers actually bother rolling out DSLAMs in these higher ULL bands)? have you wiretapped all calls and conversations at Telstra HQ?

                        No, however I do no that Telstra quite specifically charges exhoribantent amount for backhaul making their TW products look far more attractive and was called on it around 2008 by the ACCC. Despite the supposed changes I still don’t see any competitor DSLAMs out in regional areas.

                        I also note that my original statement should have read:

                        The fact that Telstra refused to act as a reasonable bitstream provider for competitor DSLAMs…

                        Which is important as it changes the whole meaning, my original statement seems to imply Telstra don’t provide backhaul bitstream options at all.

                        yes — you idiot. they are cherry-picking areas with cheap ULL and cheap backhaul.

                        Specifically I said only. In other words, is this the only reason they are doing this, is their specific reasons as to why they are doing this?

                        yes, and Telstra is free to avoid being raped in both the metro AND regional bands. (the ACCC apparently agrees.)

                        Not if that “rape” happens to be within in the confines of the law. Further, let’s not forget the other times the ACCC has intervened on regional broadband issues and look at this one time in isolation? Good plan.

                        no, what you really enjoy is trolling my posts with ignorant nonsense. please stop.

                        And you really like to apply the proof by verbosity and then insult anyone the argues you repetitively. You called me an idiot 2 times in your previous reply alone.

                      • toshP300
                        Posted 30/10/2011 at 1:05 pm | Permalink |

                        *Your assumption here is that Telstra is making a loss on regional Broadband at retail.*

                        yes, for the umpteenth time, retail pricing parity in combination with an upward-sloping ULL curve implies cross-subsidisation of regional markets.

                        *Chances are then, since they stand to get more reveneue, as Internode and iiNet assert, from wholesale than retail, they can afford to drop their wholesale prices and still make a meaningful profit.*

                        you idiot — if they are getting cherry-picked in metro, bitstream pricing offers that shadow ULL rates in the higher bands merely offset the metro margin losses.

                        *An insult, followed by an arguement from repeatition, never actually addressing my counter point.*

                        you have NO “counterpoints” — in fact, you have no “points” at all because you have amply displayed in this thread that you have zero understanding of simple financial concepts.

                        *Actually this conclusion is based upon the fact that after the initial price drop by Telstra with a lag of a few months after the submission was placed into the ACCC, Internode dropped the price of their “Reach” based plans.
                        Prior to the price change Internode’s pricing for the 100GB plan on TW was $129.95. Now it has dropped to $69.95.*

                        my, oh my….. there are no lows you won’t sink to… even to the extent of completely fabricating datapoints.

                        FACT:

                        i/ on the 12th of July, 2011, Internode replaced the 200GB Easy Reach plan with two new plans: Easy Reach 100GB and Easy Reach 250GB;

                        ii/ the 100GB Easy Reach plan didn’t even exist back in April, 2011 (when the ACCC concluded its inquiries into Internode’s demands for declaration of WDSL);

                        iii/ the 100GB Easy Reach plan was introduced in July at the price point of $69.96 bundled or $89.95 unbundled — these prices have not budged a penny since then.

                        you clearly value your forum credibility to the same extent a pimp values his whore.

                        *No, however I do no that Telstra quite specifically charges exhoribantent amount for backhaul making their TW products look far more attractive…*

                        you don’t know shit — since when are you a bandwidth broker? (after the rubbish you made up about the pricing of 100GB Easy Reach plans, you have ZERO credibility left to whore.)

                        *Despite the supposed changes I still don’t see any competitor DSLAMs out in regional areas.*

                        because greedy, cherry-pickers will always cherry-pick.

                        *Specifically I said only. In other words, is this the only reason they are doing this, is their specific reasons as to why they are doing this?*

                        is the only reason why cherry-pickers are cherry-picking the cherries because the cherries are there to be picked?

                        STOP TROLLING.

                        *Not if that “rape” happens to be within in the confines of the law.*

                        and Telstra is “free” to deny greedy, band 2 ULL cherry-pickers the ability to free-ride on Telstra’s retail pricing cross-subsidy.

                        *And you really like to apply the proof by verbosity*

                        all my detailed explanations to you only appear “verbose”, because the content of my arguments just fly (*whooosshhh*) straight over the top of your head and, consequently, the words are nothing to you but just a bluuuuurrrrrrr……

                        *and then insult anyone the argues you repetitively.*

                        you don’t “argue”, you troll. worse — you resort to fabricating data points.

                        now, shooo!! go back to humping your Nodepony.

                      • Posted 30/10/2011 at 2:14 pm | Permalink |

                        yes, for the umpteenth time, retail pricing parity in combination with an upward-sloping ULL curve implies cross-subsidisation of regional markets.

                        Cross-subsidisation does not imply that the area being subsidised would actually make a loss, it merely implies that you are drawing more of your revenue out of higher revenue regions and using that revenue to justify the expenses associated with an area of less revenue. This could mean you break even, or make a marginal profit, in that area.

                        The expenses associated with rolling out higher capacity back-haul and upgrading DSLAMs to sparse regional customers, rather than just providing customers with the bare minimum outlined by the ABG, which in the majority of cases can actually be achieved by a NextG connection, implies that the profit sustained by the operation is such unlikely that the company would be loss leading in Band 3 and 4.

                        I cannot see a company like Telstra justifying such a huge expense as you are implying for regional customers to their shareholders. Pricing parity or not, they still are a company with the purpose of making profit.

                        you idiot — if they are getting cherry-picked in metro, bitstream pricing offers that shadow ULL rates in the higher bands merely offset the metro margin losses.

                        So what? You seem to forget a wholesale customer still translates into profit. Undercutting their regional wholesale prices with retail may get them more customers on their books directly, but a customer of Internode on a TW DSLAM is still on their books. There is no reason, a part from attempting to scape market share share by pricing out the competitors, why the incumbent should need to ever charge more wholesale than retail.

                        you have NO “counterpoints” — in fact, you have no “points” at all because you have amply displayed in this thread that you have zero understanding of simple financial concepts.

                        What? Okay…. I’ll let you stick to your delusions, what ever makes you “happy”.

                        my, oh my….. there are no lows you won’t sink to… even to the extent of completely fabricating datapoints.

                        FACT:

                        i/ on the 12th of July, 2011, Internode replaced the 200GB Easy Reach plan with two new plans: Easy Reach 100GB and Easy Reach 250GB;

                        ii/ the 100GB Easy Reach plan didn’t even exist back in April, 2011 (when the ACCC concluded its inquiries into Internode’s demands for declaration of WDSL);

                        iii/ the 100GB Easy Reach plan was introduced in July at the price point of $69.96 bundled or $89.95 unbundled — these prices have not budged a penny since then.

                        you clearly value your forum credibility to the same extent a pimp values his whore.

                        Right, so the fact the TW plans were not called “Easy Reach” back in 2010 means that I have “fabricated a data point”. The fact remains to get a 100GB plan on Internode via a “Reach” (TW) DSLAM cost you $129.95 plus line rental back in early 2010. I should know since that is when I was signed up on TW DSLAM as an Internode Customer (I have since moved to Telstra Cable).

                        *No, however I do no that Telstra quite specifically charges exhoribantent amount for backhaul making their TW products look far more attractive…*

                        you don’t know shit — since when are you a bandwidth broker? (after the rubbish you made up about the pricing of 100GB Easy Reach plans, you have ZERO credibility left to whore.)

                        Ignoring the fact that this is another ad hominem, have a look at this, from 2008. Also don’t you remember that the ACCC has considered putting in benchmarks for backhaul pricing?

                        because greedy, cherry-pickers will always cherry-pick.

                        Capital expense of DSLAMs + backhaul should work out cheaper in terms of operational expenses than pure bitstreaming.

                        is the only reason why cherry-pickers are cherry-picking the cherries because the cherries are there to be picked?

                        Tautology.

                        and Telstra is “free” to deny greedy, band 2 ULL cherry-pickers the ability to free-ride on Telstra’s retail pricing cross-subsidy.

                        Right, so repeat it again, and hope this time I will concede the point.

                        all my detailed explanations to you only appear “verbose”, because the content of my arguments just fly (*whooosshhh*) straight over the top of your head and, consequently, the words are nothing to you but just a bluuuuurrrrrrr……

                        There is a reason why arguments are meant to be kept clear, and concise. Some general principles you seem to have broken: don’t repeat the same point twice and clearly outline your objectives and conclusions (don’t just provide data and expect the opposition to “join the dots”).

                        you don’t “argue”, you troll. worse — you resort to fabricating data points.

                        If anyone is trolling here it is you. And as I showed above, I didn’t fabricate anything. If only someone kept a record of historical pricing oh wait. Now, unfortunately that particular article doesn’t show the $129.95 plan from Internode, however one can assume it’s more than the 50GB ($99) plan, right?

                      • toshP300
                        Posted 30/10/2011 at 3:54 pm | Permalink |

                        *Cross-subsidisation does not imply that the area being subsidised would actually make a loss*

                        you idiot — yes it does. otherwise, the ACCC’s ULL pricing curve is completely meaningless.

                        *it merely implies that you are drawing more of your revenue out of higher revenue regions*

                        you idiot — how the hell is Telstra drawing more revenue per subscriber out of one region over another when they are implementing “retail pricing parity”?

                        *The expenses associated with rolling out higher capacity back-haul and upgrading DSLAMs to sparse regional customers, rather than just providing customers with the bare minimum outlined by the ABG, which in the majority of cases can actually be achieved by a NextG connection, implies that the profit sustained by the operation is such unlikely that the company would be loss leading in Band 3 and 4.*

                        you idiot — ABG has nothing to do with Telstra’s USO. ABG does not in anyway dictate what regional DSL services they have, should or wish to provide.

                        do you even know what a “loss leader” is?

                        “A loss leader or leader is a product sold at a low price (at cost or below cost) to stimulate other profitable sales.” (wikipedia)

                        how the f–k does selling below cost in the upper bands stimulate revenue in the lower bands?

                        stop using terminology you don’t even understand.

                        *I cannot see a company like Telstra justifying such a huge expense as you are implying for regional customers to their shareholders.*

                        you twit — the difference between Telstra and the cherry-pickers is that the incumbent has a f–king USO. furthermore, Telstra goes over and beyond what the USO stipulates in providing regional DSL and wears the loss when the ACCC allows greedy, cherry-picking ISPs to rape the lower bands.

                        if you find that too hard to believe, it’s only because you’ve been too busy humping your Nodepony and swallowed too much rubbish propaganda.

                        *Pricing parity or not, they still are a company with the purpose of making profit.*

                        yes… which is why they are refusing to allow ISPs like Internode, TPG and iiNet rape them in the regional markets too?

                        *You seem to forget a wholesale customer still translates into profit.*

                        and if i pimp you out at 50c/hr vs $20/hr, it’s still a “50c profit”. what hours would you like to work?

                        *Undercutting their regional wholesale prices with retail may get them more customers on their books directly, but a customer of Internode on a TW DSLAM is still on their books.*

                        they are not undercutting anyone — they’re just cross-subsidising their regional operations so regional consumers can enjoy the same prices as metro consumers. greedy ISPs like Internode and iiNet can do the same but choose not to, because they don’t want to give up their cherry-picked profit margins in the metro areas.

                        and who says a regional subscriber who is not a ULL cherry-picker customer is automatically a Bigpond customer? they could also be a customer of other ISPs which resell TW DSLAMs. take off those f–king blinkers and stop being so one-eyed in your observations.

                        in case you haven’t noticed, not every ISP has complained about “regional margin squeeze”. only the ULL cherry-pickers hoping for a cross-subsidy free ride in the regional markets have complained. genuine TW resellers, which also implicitly cross-subsidise by riding the Telstra retail pricing curve, certainly haven’t complained.

                        *Right, so the fact the TW plans were not called “Easy Reach” back in 2010 means that I have “fabricated a data point”. The fact remains to get a 100GB plan on Internode via a “Reach” (TW) DSLAM cost you $129.95 plus line rental back in early 2010.*

                        i’m not going to let you weasel your way out of this. let’s get the facts right:

                        i/ you were arguing that ACCC pestering by Internode starting in Oct 2010 resulted in subsequent wholesale pricing improvements which resulted in better Easy Reach pricing;

                        ii/ what actually happened was that when the ACCC rejected Internode’s demands and closed the inquiry into WDSL declaration in Apr 2011, Internode subsequently completely revamped their pricing plans in Jul 2011 and worsened the value proposition of their Easy Reach offerings.

                        STOP BULLSHITTING. who are you trying to fool, foo’ ?

                        *Ignoring the fact that this is another ad hominem, have a look at this, from 2008. Also don’t you remember that the ACCC has considered putting in benchmarks for backhaul pricing?*

                        and what the f–k do those random links prove? stop grabbing at straws and relying on the “Telstra bogeyman” to fill the gaping holes in your arguments.

                        *Capital expense of DSLAMs + backhaul should work out cheaper in terms of operational expenses than pure bitstreaming.*

                        stop your mental masturbation….

                        *Right, so repeat it again, and hope this time I will concede the point.*

                        no, repeat it again in the vain hope that you will finally UNDERSTAND the point.

                        *And as I showed above, I didn’t fabricate anything.*

                        STOP TROLLING.

                      • Posted 30/10/2011 at 4:47 pm | Permalink |

                        you idiot — yes it does. otherwise, the ACCC’s ULL pricing curve is completely meaningless.

                        No, it wouldn’t. The ACCC’s ULL pricing curve indicates that is more expensive to provide in regional areas than it does in metro areas. That is consistent with my argument.

                        you idiot — how the hell is Telstra drawing more revenue per subscriber out of one region over another when they are implementing “retail pricing parity”?

                        I apologise I mean profit. Not revenue. My argument still stands.

                        *The expenses associated with rolling out higher capacity back-haul and upgrading DSLAMs to sparse regional customers, rather than just providing customers with the bare minimum outlined by the ABG, which in the majority of cases can actually be achieved by a NextG connection, implies that the profit sustained by the operation is such unlikely that the company would be loss leading in Band 3 and 4.*

                        you idiot — ABG has nothing to do with Telstra’s USO. ABG does not in anyway dictate what regional DSL services they have, should or wish to provide.

                        And Telstra’s USO has nothing to do with their requirement to provide Broadband. The ABG is the only thing that requires them to offer any Broadband services to regional players.

                        do you even know what a “loss leader” is?

                        “A loss leader or leader is a product sold at a low price (at cost or below cost) to stimulate other profitable sales.” (wikipedia)

                        how the f–k does selling below cost in the upper bands stimulate revenue in the lower bands?

                        Increased market share, word of mouth, and the assumption that at least the highest quota tier is profitable in even regional markets. Further, even if they aren’t loss leaders, why would a company like Telstra invest in regional Broadband at a loss when they have no legislation requiring them to.

                        you twit — the difference between Telstra and the cherry-pickers is that the incumbent has a f–king USO. furthermore, Telstra goes over and beyond what the USO stipulates in providing regional DSL and wears the loss when the ACCC allows greedy, cherry-picking ISPs to rape the lower bands.

                        USO is only for voice services, voice services can be provided at much smaller expense because of their lower bandwidth requirements than Broadband. I think you have to much faith in Telstra if you think they are only providing regional Broadband out of “goodwill”.

                        if you find that too hard to believe, it’s only because you’ve been too busy humping your Nodepony and swallowed too much rubbish propaganda.

                        Another insult. Seriously Tosh, will you give it a rest. How about you treat me with some fucking respect?

                        yes… which is why they are refusing to allow ISPs like Internode, TPG and iiNet rape them in the regional markets too?

                        Wait, they get money if they sell Wholesale Products, they get money if they sell retail products, how precisely is Telstra going to get “raped” by ISPs RESELLING THEIR OWN INFRASTRUCTURE? The only thing Telstra stands to lose here is of any significance is MARKET SHARE.

                        they are not undercutting anyone — they’re just cross-subsidising their regional operations so regional consumers can enjoy the same prices as metro consumers. greedy ISPs like Internode and iiNet can do the same but choose not to, because they don’t want to give up their cherry-picked profit margins in the metro areas.

                        Once again Tosh: the only thing Telstra stands to lose by bringing down their Wholesale prices in like with their retail ones is MARKET SHARE. What the other ISPs do on top of them is irrelevant frankly.

                        and who says a regional subscriber who is not a ULL cherry-picker customer is automatically a Bigpond customer? they could also be a customer of other ISPs which resell TW DSLAMs. take off those f–king blinkers and stop being so one-eyed in your observations.

                        Oh right, so somehow another TW customer doesn’t translate into revunue for Telstra.

                        in case you haven’t noticed, not every ISP has complained about “regional margin squeeze”. only the ULL cherry-pickers hoping for a cross-subsidy free ride in the regional markets have complained. genuine TW resellers, which also implicitly cross-subsidise by riding the Telstra retail pricing curve, certainly haven’t complained.

                        As I already stated many posts ago, the ISPs in question, like DoDo, are budget ISPs, and get away with this by significantly under-providing in back-haul and service. The two complainers in question are premium ISPs, on par with Telstra.

                        i’m not going to let you weasel your way out of this. let’s get the facts right:

                        i/ you were arguing that ACCC pestering by Internode starting in Oct 2010 resulted in subsequent wholesale pricing improvements which resulted in better Easy Reach pricing;

                        ii/ what actually happened was that when the ACCC rejected Internode’s demands and closed the inquiry into WDSL declaration in Apr 2011, Internode subsequently completely revamped their pricing plans in Jul 2011 and worsened the value proposition of their Easy Reach offerings.

                        STOP BULLSHITTING. who are you trying to fool, foo’ ?

                        Okay, that’s not how it happened. There were several two drops, in late 2009, mid 2010. All these drops were not accompanied by a drop in TW prices.

                        Up until the final drop, that brought retail pricing below the threshold of wholesale pricing, Internode continually revamped pricing. Prior to all of these drops the prices of Internode was, as stated, $129.95 for 100GB plan. During this period there was allegedly a TW price drop, which allowed Internode to respond with the new “Reach” plans in November 2010.

                        QUOTE: After negotiating improved terms with Telstra Wholesale, Internode has overhauled its entry-level broadband services to offer faster speeds, lower prices and improved data quotas.

                        However this was only in response to the late 2009 price drop. Internode was thus able to bring it’s pricing down from the original $129.95 to what you see today, however there has not being a TW price drop in response to the mid 2010 retail price which had prompted the filing to ACCC in the first place. During the period of the between November and when the ACCC rejected the claim, Simon claims that they were incurring making unsustainable expenses, and hoped that the ACCC filing would resolve it, this did not happen, and thus they raised their prices.

                        So let me get away with what? Actually knowing my facts about the situation?

                        and what the f–k do those random links prove? stop grabbing at straws and relying on the “Telstra bogeyman” to fill the gaping holes in your arguments.

                        The first one proves that Telstra has historically charged large amounts for back-haul, the second proves that the back-haul in general in Australia is still being charged to much especially in regional areas. Since in regional areas the only back-haul provider is Telstra, QED.

                        stop your mental masturbation….

                        Another insult, I almost feel like keeping a telly. So, why isn’t that the case Tosh? If you have no ongoing “rent” to pay, and you have paid of the capital on an assert, how can it still be cheaper to rent?

                        no, repeat it again in the vain hope that you will finally UNDERSTAND the point.

                        I understand the point. However, your point is meaningless. If Telstra were in fact engaging in anticompetitive practices, something we cannot prove (either of us) since it involves commercial in confidence information, they cannot use the fact that other players are able to undercut them by investing in their own DSLAMs and backhaul and taking advantage of cheap ULL as justification. Which if you recall, was my original point, here:

                        You can’t tell of one company for being greedy and taking advantage of flawed legislation and use that as a justification for another company going against other legislation, that is just plan hypocritical.

                      • toshP300
                        Posted 30/10/2011 at 6:24 pm | Permalink |

                        *That is consistent with my argument.*

                        you have no argument, you’re just trolling.

                        *I apologise I mean profit. Not revenue. My argument still stands.*

                        you did not mean anything and you have no argument therefore nothing stands. you are just deliberately making shit up as you go along because you have nothing better to do on a Sunday than troll.

                        *The ABG is the only thing that requires them to offer any Broadband services to regional players.*

                        the ABG does not impose any obligations on Telstra. it’s an entirely separate infrastructure subsidy scheme run by the DBCDE that incentivises other private players to deliver broadband to the regional areas.

                        stop talking about stuff you don’t have the faintest knowledge of.

                        *Further, even if they aren’t loss leaders*

                        you clearly demonstrated you have no idea what a “loss leader” is. stop digging an even bigger hole for yourself.

                        *why would a company like Telstra invest in regional Broadband at a loss when they have no legislation requiring them to.*

                        because it wouldn’t be a loss if the ACCC had accepted Telstra’s repeated requests for a flat ULL pricing curve to prevent cherry-picking. moron.

                        *How about you treat me with some fucking respect?*

                        trolls who make shit up and invent “arguments” out of bullshit and rubbish don’t deserve any respect. stop trolling my posts.

                        *Wait, they get money if they sell Wholesale Products, they get money if they sell retail products, how precisely is Telstra going to get “raped” by ISPs RESELLING THEIR OWN INFRASTRUCTURE? The only thing Telstra stands to lose here is of any significance is MARKET SHARE.*

                        are you just plain dumb or slightly retarded? (how times do i have to explain?)

                        allowing band 2 ULL cherry-pickers to get a “cross-subsidy free ride” by reselling Telstra’s retail pricing curve in the regional areas instead of paying band 3/4 ULL-equivalent bitstream rates allows these greedy parasites to further push down band 2 retail pricing. it’s a vicious circle that deprives the incumbent infrastructure owner of much needed cashflow to perform maintenance and upgrades. it’s the reason why the copper network is in such a poor state and why we don’t already have FTTN. it will also allow these ULL cherry-pickers to drive out other ISPs who don’t have any (or few) DSLAMs at all but merely (or mostly) resell TW DSLAMs.

                        *As I already stated many posts ago, the ISPs in question, like DoDo, are budget ISPs, and get away with this by significantly under-providing in back-haul and service. The two complainers in question are premium ISPs, on par with Telstra.*

                        you have NO IDEA what you’re talking about. you are so completely lost… so far behind…. go read Dr Seuss…. i don’t know why you’re even wasting my time and continuing to troll my posts.

                        but, just to humour you, the crucial distinction between the TPGs of the world and the Dodos of the world is that band 2 ULL cherry-pickers have shitloads of DSLAMs and enjoy a superior wholesale cost structure over other ISPs which merely resell TW DSLAMs. i’m not even going to bother elaborating from here, because i’ll just be repeating myself over and over, when you still can’t even grasp simple concepts such as “cost structure”. heck, do you even understand the simple concept of “cost”? go read “the Cat in a Hat” instead and hump your Nodepony when you get bored.

                        *There were several two drops, in late 2009, mid 2010. All these drops were not accompanied by a drop in TW prices.*

                        stop making shit up. you have already been caught too many times.

                        *The first one proves that Telstra has historically charged large amounts for back-haul*

                        and what is the significance of “large amounts”? so, cherry-pickers won’t build regional backhaul because it’s highly costly. said backhaul is highly costly, so Telstra naturally charges “large amounts” to recover the cost. see the logic? what economic crime is the “Telstra bogeyman” guilty of?

                        *the second proves that the back-haul in general in Australia is still being charged to much especially in regional areas. Since in regional areas the only back-haul provider is Telstra, QED.*

                        no, it doesn’t. stop making shit up. the second article is just about the ACCC inventing new bullshit pricing models to justify greedy cherry-pickers raping more Telstra infrastructure at below cost because they couldn’t be assed spending their own capital building their own infrastructure and prefer to use the incumbent’s infrastructure for next to nothing.

                        *Another insult, I almost feel like keeping a telly.*

                        you could keep a “telly”… but you might find it more convenient to keep a “tally”, instead.

                        *I understand the point. However, your point is meaningless.*

                        you just proved you don’t understand my point. you don’t understand anything. we’ve already established that 10 page scrolls back. stop highlighting the obvious. you’re just trolling.

                        *If Telstra were in fact engaging in anticompetitive practices*

                        but they are not, which is why the ACCC rejected ALL of Internode’s demands in April after 6 months of deliberation.

                        please stop trolling.

                      • Posted 30/10/2011 at 6:56 pm | Permalink |

                        trolls who make shit up and invent “arguments” out of bullshit and rubbish don’t deserve any respect. stop trolling my posts.

                        I have not many anything up here. I have even provided references for the majority of points I have made. You have absolutely no justification for calling me a troll. You are actually the one provoking me here, with insults and inflammatory posting. Since my original post I have been merely responding to your points.

                        We have already moved well away from my original retort to your post on your direction. Which you have yet to actually provide the evidence for in that I requested of you. In the process you have called me an idiot, engaged in many attempts to undermine my creditability by attacking my motives, repeated the same arguments multiple times while insulting my intelligence by asserting that I didn’t understand them. You have engaged in several straw-men arguments, and now you’re getting angry at me and calling me a troll because I won’t budge.

                        So I give up. Maybe someone else can find this post in a month or so and pick it up where I left off.

                      • toshP300
                        Posted 04/11/2011 at 5:17 pm | Permalink |

                        no-one wants to jump into the big hole you just dug ;)

                      • toshP300
                        Posted 04/11/2011 at 7:20 pm | Permalink |

                        shuusssh!!…. i’m trying to steal NK’s treasured “last word” without him noticing….. ;)

                        *tip-toes away*

          • Brendan
            Posted 26/10/2011 at 1:23 pm | Permalink |

            “if you’re talking about existing ADSL services, these “access seekers” on Telstra’s copper network have already grabbed SIXTY PERCENT of the retail market share. (all of this without bearing a single dollar of the capital risk of carrying the last-mile infrastructure on their balance sheets.)”

            Sorry? Access seekers are not able to build last mile because they have no rights to the last mile. It’s owned by Telstra.

            Let’s also ignore all the ISPs (and third party suppliers) that have deployed fibre to (hundreds) Exchanges, and installed DSLAM equipment.

            Lets also ignore the access seekers pay rent monies. This single sentence encapsulates why the rest of your wall of text diatribe misses the mark entirely.

            Telstra is free to work within the same regulations as every other ISP and carrier. Every. Single. One.

            “so, they are all hypocrites.”

            This completely invalidates (again) your entire argument.

            “i dunno what specific outcomes you’re referring to but most markets with these vertically-integrated structures have upgraded to FTTN/FTTC/FTTH as well as experiencing trend decline in retail product pricing.”

            Because they, amazingly, often do not exist in a [/void/]. The same ISPs and carriers you’ve spent a good five minutes insulting, help introduce something called [/competition/].

            Something that is a part of the TPA and Regulation. The ACCC, is a Competition watch dog; none of this is relevant, apparently.

            If those pesky, dirty ISPs you seem to have such hatred for, didn’t exist (be that local or international) then prices would be higher.

            It’s a basic economics precept.

          • Dbremner
            Posted 26/10/2011 at 1:46 pm | Permalink |

            The only reason Telstra has 40% market share is people weren’t willing to pay their ridiculously high proces for ADSL. Now they are priced competitively they are winning back customers. If it wasn’t for competition would they have lowered the prices? They are the blame for Telstra only having 40%? None of it falls onto their previously rediculous pricing?

            • alain
              Posted 27/10/2011 at 1:21 pm | Permalink |

              I doubt Telstra is to cut up with that share precentage, especially as you say they are ‘winning back customers’, the next nearest is Optus with 11%.

          • Dbremner
            Posted 26/10/2011 at 2:00 pm | Permalink |

            He said a wholesale-only network group owned by a bunch of Telecomunications companies would be near on impossible to manage given the inwoven use of parts of each companies existing infrastructure.

            Don’t try to misrepresent what he was saying to refer the NBN.

          • Dbremner
            Posted 26/10/2011 at 2:05 pm | Permalink |

            In fact, reading it a second time, he is describing something more akin to the Liberal NBN “plan”

    8. PeterA
      Posted 27/10/2011 at 7:59 am | Permalink |

      Did anyone else notice toshes comment about how pro nbn’ers never concede there are problems with the NBN?

      Gave me a hell of a chuckle. (Also mighty confused about what those articles complaining about the POI pricing, and the 5% ontop of CPI articles were, cause I sure as he’ll wasn’t and am not sold on either right now, but am pro NBN). Always an exception eh tosh?

      On topic: good points raised by Optus. (what more is there to say?)

      • toshP300
        Posted 27/10/2011 at 10:43 am | Permalink |

        did i ever say “fibre-obsessed geeks are happy with everything about Labor’s NBN”?

        NO.

        i was referring to the furious arguments btw NBN delusionists and NBN realists where even if evidence and facts are presented to refute specific arguments or points made by NBN delusionists, fibre geeks still refuse to concede the particular point under debate.

        nice try, Mr Straw Man Expert. god, fibre geeks even suck at ad hominems ;)

        • Brendan
          Posted 27/10/2011 at 3:57 pm | Permalink |

          “i was referring to the furious arguments btw NBN delusionists and NBN realists where even if evidence and facts are presented to refute specific arguments or points made by NBN delusionists, fibre geeks still refuse to concede the particular point under debate.”

          .. and so the desperate need for FTTN to be “right”, regardless of how wrong it might be, is what, exactly? I know – stupid question. Of course FTTN is the only option. Right?

      • alain
        Posted 27/10/2011 at 11:51 am | Permalink |

        “On topic: good points raised by Optus. (what more is there to say?)”

        SingTel Optus is Telstra’s main competitor and wants Telstra diminished any way it can so it can become No 1.

        What more is there to say?

        • Brendan
          Posted 27/10/2011 at 3:55 pm | Permalink |

          “SingTel Optus is Telstra’s main competitor and wants Telstra diminished any way it can so it can become No 1.”

          I’m not sure whether you have grasped this yet, or not, but there is actually competition legislation in existence; amazingly it applies to competition. I know, crazy.. work with me here.

          So that means were the infedel Optus (or heaven forfend anyone not-Telstra) to become the majority, monopoloy player they would be under the exact same regulatory framework as Telstra.

          Telstra could be called “Bob’s Internets” and the same competition regulations would apply. Amazingly, competition regulations will apply to the NBN, too.

          Again, your true colours of “there can be only one – telstra” come to the fore.




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