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  • Blog, Telecommunications - Written by on Friday, February 10, 2012 12:07 - 215 Comments

    NBN pricing revisited: The ARPU argument

    blog In well-regarded industry newsletter Communications Day this morning, publisher Grahame Lynch takes a potshot at Delimiter and our audience over recent articles attempting to correct inaccurate statements from the Coalition that broadband prices will rise under the National Broadband Network. He writes:

    “In recent weeks Malcolm Turnbull has been engaged in a somewhat unseemly online dispute with an Internet website and its band of pro-NBN followers who are targeting him over what they allege are his inaccurate claims that the NBN will cause broadband prices to rise. They point to the initial round of NBN retail offers, which suggest the opposite.”

    The full comments are available online here, buried deep in an otherwise innocuous commentary about Telstra’s half-yearly financial results yesterday. I encourage you to read them in full.

    Now, leaving aside the lack of courtesy in not even naming Delimiter (yo, Grahame, what up, my man?), what Lynch goes on to argue is that NBN Co is intentionally keeping its wholesale prices down at the moment to ensure that retail NBN prices aren’t higher than current ADSL or HFC cable broadband pricing. He then goes on to point out that NBN Co’s business plan states that it expects the average revenue per user (ARPU) to eventually rise — from, as Lynch states, $23 in 2013 to $32 in 2015 and $52 by 2020. He writes: “There’s no arguing around it: the only point of an NBN is to provide a faster-than-today service but once you start using it beyond DSL- style speed and download levels you will pay more.”

    Now, the first point is one which has been raised on Delimiter by other commenters previously, and you would think it would have some merit. But the difficulty is that NBN Co has committed to the ACCC that it will maintain wholesale prices to a reasonable level over the 30 year period governed by its Special Access Undertaking document. The document plainly states that NBN Co’s basic broadband pricing will remain the same until June 2017, and that after that point, price rises will be limited to half of consumer price index rises in any one year. They also can’t be accumulated over time.

    In short, NBN Co has guaranteed long-term, affordable, price stability on its wholesale prices, which will ensure similar stability in the retail market. Lynch has not addressed this issue.

    With respect to Lynch’s second comment about ARPU, I am unclear as to why he has included it. What NBN Co is essentially saying in its business case is that it expects consumers to use more and more broadband over the years, buying faster broadband services and consuming more data. This is, of course, true, and it will lead to NBN Co making more money from those consumers.

    However, this does not mean that broadband prices in of themselves will consequently rise. It may mean that consumers will sign up to higher value plans. But those plans won’t cost comparatively more than they used to.

    There is also evidence that in many cases, consumers won’t actually need to switch to higher value plans. For years, Australian broadband prices haven’t changed substantially. ISPs have not been cutting prices substantially. Instead, as iiNet CEO Michael Malone has pointed out, the focus has shifted to giving customers more value (quota, and extra services such as IP telephony) for the same cost. This has become possible due to factors such as the decreasing cost of international backhaul to Australia, among other factors.

    Now, it might be possible for the Coalition to start arguing that new benchmarks will be set under the NBN for what an affordable broadband service might be. In 2012, most people are happy with ADSL2+ speeds (usually up to 16Mbps or so), and a few hundred gigabytes of quota per month. The Coalition could argue that in 2015, a basic broadband service might be faster, say 25Mbps or 50Mbps, with quota of 500GB a month. And that because people are switching to higher value plans to get such services, in real terms, broadband would be more expensive under the NBN.

    However, this is not what the Coalition is currently arguing. And in any case, in an age where ISPs like iiNet are offering 100Mbps NBN plans with a terabyte of quota for $99.95 a month (the absolute top end option in a market which starts at a mere $34.95 a month) … I would strongly argue that even this argument wouldn’t hold water. In the NBN age, broadband is going to be highly affordable, as it is now.

    Grahame Lynch is a respected telecommunications commentator and a professional colleague of mine with whom I have shared many an ale. But, like other commentators on the issue of NBN pricing, he hasn’t provided enough evidence to make his case that broadband prices will rise under the NBN. And what evidence he has provided is more in the line of speculation about what NBN Co’s business plan might mean in the long-term. Meanwhile, in the real world, ISPs like Exetel are still cutting their NBN prices.

    That’s the reality of NBN pricing.

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    1. Adam
      Posted 10/02/2012 at 12:36 pm | Permalink |

      Whilst the SAU does limit price rises on access for products and services to 50% of CPI it also says NBN must recoup its ‘prudent’ costs. Just do the simple math… with the amount of money thats being expended and the current low cost of access there is no way that NBN can recover their costs with the currently low access fees. The 50% of CPI commitment only applies to access fees, it doesn’t apply to usage costs & it doesn’t apply to the additional services that are going to be delivered on this monopoly service… the costs of these must increase & the ACCC agreement provides the scope for them to do so.

      • skywake
        Posted 10/02/2012 at 1:47 pm | Permalink |

        Read the article. The ARPU is projected rise so according to NBN Co an “average user” will pay more over time. That doesn’t mean that the prices of services have to rise over time which is the point Renai is making here.

        A user could, for example, not increase the amount of quota they use at the price for quota drops but at the same time buy a faster service. A user could also cancel their satellite pay-TV service and move over to a similar service on the NBN. A user could also simply choose to pay more for a more premium service. All of these scenarios end with a higher ARPU but NONE of them require prices for service to rise. Which is why it’s wrong to quote rising ARPU in defence of statement saying “services on the NBN will cost more”.

        • cfm
          Posted 13/02/2012 at 8:57 pm | Permalink |

          Well, actually it’s not as simple as that at all.

          With evolving technology that is driven by the market place, there is a constant rise and fall with the speed and cost of the new technology implemented. Years ago we paid MORE than we do now for a 28.8k service.

          With the NBN, due to the business model being what it is (and needing to be profitable after blowing out costs and underestimating mobile data use), there is no chance that you will see an improvement in speed along with a reduction in cost. We are going to be locked in to expensive access, always going up, for a _very_ long time.

          Anyway, this is not even the main negative point of an NBN. It costs too damn much to implement a FTTH system in Australia, and this big bang kind of thinking/implementation has so many pitfalls and risks that it’s downright scary. People are such idiots for shiney things, no one seems to worry about what it costs anymore.

          • Alex
            Posted 13/02/2012 at 9:18 pm | Permalink |

            Or…

            It’s the kind of thinking which could finally drag us from our former reliance of, ‘off the sheep’s back’, which has now morphed into ‘dig that hole deeper in the ground’, to a nation of the educated.

            But no, it costs too much.

            • cfm
              Posted 13/02/2012 at 9:58 pm | Permalink |

              Yup. I can so see how the FTTH for the general public could turn us into a massive exporter of…. er… um… reality TV content.

              It’s just a shiny thing to buy votes. End of story.

              The benefit of switching to fiber does not outweigh the cost, which is massive. There just is not the same kind of advance that there is going from 56k to ADSL. And if you’re thinking of some weird and wonderful next generation kind of communication requirement, then think again, communications are getting simpler, not more extravagant, more mobile, not static.

              The best benefit of having fat pipes is the cloud, and the cloud makes it’s impact in the office and on mobile client. NOT at home anywhere near as much.

              IMO, for personal use, the ramp up of market driven technology aligns perfectly with the advances and requirements of modern living.

              • Alex
                Posted 13/02/2012 at 10:24 pm | Permalink |

                “It’s just a shiny thing to buy votes. End of story”.

                Seriously, you are entitled to your opinion, but…!

                • cfm
                  Posted 13/02/2012 at 10:51 pm | Permalink |

                  =)

                  Yeah, the end of story part is perhaps a little unnecessary, and a little bit of flame bait.

      • Posted 10/02/2012 at 3:22 pm | Permalink |

        Anybody should see the realisation that there will be some inflationary costs over the lifetime of the NBN, just as there was with Telstra. I dont understand why its a big deal to see these rise over time. Milk does, bread does, rent does… Is this a mystical new thing we’re all waking up to? Not likely.

        • Alex
          Posted 10/02/2012 at 3:34 pm | Permalink |

          It seems as usual Apollo, those NBN critics have decided ‘once again’ that there are ‘more new rules’, which simply apply to the NBN and nothing else.

      • Paul Krueger
        Posted 11/02/2012 at 4:52 pm | Permalink |

        Quote “Just do the simple math… with the amount of money thats being expended and the current low cost of access there is no way that NBN can recover their costs with the currently low access fees”

        I can do simple maths as well. Lets assume that there is indeed 10 million fixed line connections in 2021 (when the NBN is finished). The minimum connection is $24 per month or $24 X 12 = $288.

        Lets assume a ridiculously low 60% take up and that everyone only chooses the lowest possible priced plan, forever.

        Thats… (6,000,000 X 288) = $1.7 Billion just for the connection (or 4.2% return on 40 Billion Dollars)

        It is not much of a stretch to suggest that the extra 2.8% could come from people NON choosing the lowest possible speed, more then 60% take up.

        But wait, there’s more…
        The NBN also charges RSPs $20 per meg of committed bandwidth for transfer to their customers. It is not a stretch to expect this to become very significant, if data use rises, perhaps even exceeding the basic cost of connection.

        But wait, there is more…
        Pay TV delivered overt the NBN might prove popular. There is now no reason why overseas giant media companies could not offer their products at a better price without a local intermediary (such as foxtel). The NBN gets a slice here as well.

        It is hard to see how the NBN could not make a 7% ROI

        • Thrawn
          Posted 11/02/2012 at 5:23 pm | Permalink |

          You forgot

          1. Cost of running the network itself. A few thousand employees aren’t cheap.

          2. Various migration payments and also rent paid to Telstra for ducts, TEBA, etc.

          3. Cost of replacing equipment over time. Whilst the fibre cabling might last, the satellites, GPON, equipment, etc won’t

          4. Capitalized interest from the loss running period as the network is built

          • Posted 11/02/2012 at 11:13 pm | Permalink |

            Dude, he just factored it for 40 billion, the previous high estimate for what the network would cost. Wouldnt you think that would encompass those things?

    2. Noddy
      Posted 10/02/2012 at 12:43 pm | Permalink |

      Thanks for that Renai. I suspected he was talking about something like that but it’s always good to give a person the benefit of the doubt. Maybe there was an increase hidden away somewhere. I understand where he is coming from. It seems a little deceptive how he has worded it, like it’s a fact and not shown its roots.
      What is showing though in that over time people will want faster speed (wasn’t there also coalition argument they wouldn’t?) and more data volume (I have seen argued that the won’t).
      If the pro NBN people he seems to talk about with distain wanted to play similar numbers games they could compare the price of an equivalent 100/40 with 1TB now. Don’t try to fob them off with HFC, to get those speeds you currently have to live in a fibre estate or go comercial. And it’s a LOT more than $99

    3. paul
      Posted 10/02/2012 at 2:39 pm | Permalink |

      At the end of the day, Graham Lynch, although being well respected, is notoriously one sided in his commentary, and this has been obvious for a very long time.

      Sad to see someone who’s commentary I generally respect obviously approaching the issue in such an obviously one sided fashion.

      • Alex
        Posted 10/02/2012 at 2:56 pm | Permalink |

        +1

        Unless I am mistaken about your inference Paul, you seem to have echoed my sentiments, here ~

        http://delimiter.com.au/2012/02/07/why-nbn-prices-will-be-higher-by-malcolm-turnbull/#comment-323501

        • paul
          Posted 10/02/2012 at 3:20 pm | Permalink |

          Spot on. His commentary has all been like this for months upon months, Which is obviously why he has decided to have a crack at delimiter without linking to the site in question.

          It would make it too easy for his readers to get the other side of the argument, which might lead them to disagree with his, in my humble opinion, quite biased conclusions.

          Instead he just waves off the “Pro-NBN” crowd, says that all the arguments for the NBN are simplistic whilst not allowing anyone to see how he came to that conclusion, and goes on doing his thing.

      • Chas
        Posted 12/02/2012 at 2:46 pm | Permalink |

        “Graham Lynch, although being well respected, is notoriously one sided in his commentary”

        While he may be a nice guy to have a beer with, I can’t say he’s “well respected”…anyone that one-sided in thier viewpoint has lost all credibility. I have yet to see an article that does him credit…

    4. Hubert Cumberdale
      Posted 10/02/2012 at 3:02 pm | Permalink |

      Sounds like Mr Lynch has it all figured out. The beginning of the article he starts whinging about questions others have asked of Turnbull, which are not unreasonable considering he is a politician trying to convince us that his alternative patchwork solution is the right way to go (not doing a very good job so far I might add) the end devolves into a bizarre rant about Megaupload and torrents??? meh Hall of Shame this. NEXT!

      • Noddy
        Posted 10/02/2012 at 3:11 pm | Permalink |

        “bizarre rant about Megaupload and torrents”

        I thought he was starting to say that the bulk of internet traffic was bit torrent / piracy related (and probably is, it’s BT users who have need the TB and unlimited plans). That the shutdown of Megaupload dropped bandwidth usage by 4%. I was expecting to him to go on and say the continued crackdown would reduce that further, mitigating the need for more backhaul, etc, but it just went off into a ramble. Maybe he lost track of what he was saying.

        • nonny-moose
          Posted 11/02/2012 at 3:37 pm | Permalink |

          as an aside, the thing that annoys me is that GL clearly views (in what id loosely call old world journo sense) the entirety of content at MU as being ‘pirate’ ‘infringing’ content yet from the lawsuits i am seeing brewing over peoples recovery of legitimate uploaded material, that argument is not sustainable. it appears to have been a very popular data portage service for various levels of government and an assistant to collaborations in many areas otherwise.

          theres no dispute such services ALSO serve pirates, but so did the VCR, and thats probably one of the closest analogies i can think of to MU. technology that is agnostic to the user, whether that user is legitimate(bought a disney cassette, sharing created content on MU) or illegitimate (a vcr copy shop or someone uploading ANOTHER copy of Hurt Locker to MU).

          the big difference there is the behaviour of the company/people producing the tech (Sony/ DotCom), there are valid concerns there in terms of the latter. however the relevance of those concerns to the NBN argument was tenuous in the first instance, if not non sequitur. i certainly dont believe that portion of his argument is valid.

          • nonny-moose
            Posted 11/02/2012 at 3:49 pm | Permalink |

            addenda, i certainly appreciate the argument clarification below that consumables which are available now might not be here later – but my – incorrect it seems – initial reading that legitimacy of what is consumed has a bearing on it, was not the framing that GL intended.

            the way i do see it is whether legitimate or illegitimate; the overall trend is inflationary and such cutbacks in bandwidth – the 4% GL quotes – are transitionary and temporary and i do not see that as significant. something else will certainly inflate to take its place.

      • Noddy
        Posted 10/02/2012 at 4:41 pm | Permalink |

        I can see the data volume increasing in time. It is one of the worries I have with FTTN. Say they expect it to last to 2020, way shorter than the expected life of FTTH. Can you remember 18 years ago? 200MB was a large disk drive. I wouldn’t consider buying under 1TB now, that’s a 5000 fold increase. State of the art bandwidth requirement now is say 50-60Mb, bluray movie quality. What will be the requirement in 18 years? There are numerous extensions to current technology that could use a lot of bandwidth, not to mention the unknown. REAL 3D movies. Ones you can shift the camera around the scene and view how you like, continued increase in televisions or equivalants requiring more and higher bandwidth streams. 18 years ago you huge hard drive wouldn’t even hold a small youtube clip, what is the future? Something to be limited by shortsighted penny pinching (if it is even that, seems more like politics more than anything) or something that should be every opertunity to evolve unhindered.

        • Hubert Cumberdale
          Posted 10/02/2012 at 7:32 pm | Permalink |

          “State of the art bandwidth requirement now is say 50-60Mb, bluray movie quality. What will be the requirement in 18 years? ”

          Keep in mind the bitrate on BR discs is really overkill but it’s not just possible resolution increases (such as 4k and beyond) that contribute to higher data requirements, higher frame rates and bit depths are also a factor that the FTTN patchwork/Turnbull apologists like to ignore.

          • Noddy
            Posted 10/02/2012 at 7:37 pm | Permalink |

            The bit rate on bluray is high, but lowering it would reduce quality. It’s encoding is pretty efficient.
            As an example of waste, look at DTV. They could have gone mpeg4 but instead saved a few bucks on the units by going mpeg2, a saving that last all of a year or two. Now channels are having to drop HD and reduce quality to squeeze the extra channels into the bandwidth because of that short sightedness.

            • Hubert Cumberdale
              Posted 10/02/2012 at 8:04 pm | Permalink |

              “The bit rate on bluray is high, but lowering it would reduce quality.”

              The only reason why BR discs really use high bitrates is because they can. It was all do with accommodating some who still wanted to use MPEG-2 at the time rather than h.264 and VC-1… so who uses MPEG-2 on BR discs these days? No one.

              • Noddy
                Posted 10/02/2012 at 8:25 pm | Permalink |

                Yes, that and lossless audio. Though there are some movies (non mpeg2) that get into the 40s with say DD. http://forum.blu-ray.com/showthread.php?t=3338
                I am surprised how many are in the 30s

                • deteego
                  Posted 11/02/2012 at 12:40 pm | Permalink |

                  The market for lossless audio is pathetic compared to Mp3′s or AAC, mainly because most people can’t tell the difference between lossless and 256-328kb mp3/aac

                  • Hubert Cumberdale
                    Posted 11/02/2012 at 2:05 pm | Permalink |

                    Noddy is talking about what takes up bandwidth on BR disc. I know you are very eager to continue with your machine gun haphazard approach to commenting but could you please pay attention to what is said here.

                    • deteego
                      Posted 11/02/2012 at 2:08 pm | Permalink |

                      You didn’t read my statement carefully enough

                      The market for lossless audio is pathetic, hence the only audio that gets released in lossless tends to be the classics, i.e. the albums from 30′s, 40′s, and whatnot (also typically classical music, or the top albums such as Pink Floyd)

                      Hence the market for lossless is incredibly limited, you wont find any ordinary album as lossless on the internet (legally)

                      • antman
                        Posted 11/02/2012 at 2:18 pm | Permalink |

                        I agree the market for lossless is still relatively small, but is much more common than you imply. Bandcamp has all their albums available in FLAC, and iTunes offer some lossless also.

                      • Hubert Cumberdale
                        Posted 11/02/2012 at 3:26 pm | Permalink |

                        “You didn’t read my statement carefully enough

                        The market for lossless audio is pathetic”

                        No one is talking about a market for lossless audio albums. We are talking about BR discs. You are aware that BR discs can contain lossless audio right? That is what Noddy is referring to. Not lossless audio albums. Now the next response for you should be: “Sorry my mistake”

                  • Noddy
                    Posted 11/02/2012 at 2:43 pm | Permalink |

                    Yes, I think it’s more that they don’t know, there is no point of comparison. For my mp3 player I always record at the highest bitrate because I know what the music sounds like and notice things missing. Since I listen to a lot of instrumental stuff like Mike Oldfield or stuff with a lot of layers like Pink Floyd it’s more noticable. In fact on the lower bit rates instruments that were very quiet in the background, but very important to the piece can totally disappear. On headphones I find mp3 is fine at the highest bit rates. Play an mp3 on my home stereo though… flat lifeless, no sound stage, just really disappointing. My GF and here daughter were here and I put on put on some MP3s of the rise and fall of ziggy stardust. Being used to only radio or mp3s they thought it sounded fine. I put on the SACD version, they definitely heard the difference. I also had the CD version of that, and they could hear the difference between that and the SACD too.

    5. Brendan
      Posted 10/02/2012 at 5:40 pm | Permalink |

      I have a lot of respect for Lynch, certainly in the past, and still maintain that to some degree today. He has a keen sense of vision, on occasion.

      Unfortunately, it has become obvious to all that Lynch believes as Turnbull does, that the only people competent in network deployment and management are Telstra. The only difference is that Turnbull won’t actually admit it.

      Worse, Lynch tends to ignore the raft of not-Telstra deployments that have happened over the years, proving the fallacy for what it is. Lynch is as transparent as glass.

      Lastly, playing the man instead of the game, having just freshly and rather verbosely explained how bad that really is, virtually invalidates any further analysis.

      The clear bias has made reading his material difficult and often downright frustrating.

    6. Posted 10/02/2012 at 6:34 pm | Permalink |

      Hi everyone, the following comment is from CommsDay publisher Grahame Lynch. I don’t normally let editors of other sites post comments on Delimiter, as they are competitors, but in this case I’ve decided to make an exception. I will also allow Grahame one other right of reply post at a later date of his choosing.

      Cheers,

      Renai

      —————

      Renai has invited me to comment on the responses here. Let me just restate the debate from my perspective.

      Renai and commenters are clearly pointing to initial NBN retail plans and its undertakings to the ACCC as evidence that the NBN will not increase broadband costs to the community. But those of us who have read the corporate plan and other documents in some detail, see that there are two components to NBN pricing: access based and usage based. Renai and co are right on the access pricing, but are dismissive of the effects of usage charging. I believe they are wrong to dismiss the effect of usage charging on an overall’s RSP’s cost profile.

      If data consumption grows at historical norms, NBN Co will make significant revenues from usage charges that are additional to the fees it currently levies on RSPs. These charges will of course either be passed onto customers or avoided through higher contention rate/lower connectivity circuit requisitions which will reduce end QoS and user experiences. Either the way the original promise of “more bandwidth for less cost” made by the government seems difficult to achieve,

      The point seems to be missed that there is no cost or technical justification for NBN’s proposed modes of contention pricing: the committed information rate and connectivity virtual circuit charges. As we all know the capacity of fibre is virtually infinite and NBN Co incurs no cost of transit beyond the POI (ie no backhaul or international transit charges). Let me repeat: NBN Co incurs no meaningful extra marginal cost on its network when a user downloads extra Mb through their service and certainly nothing approaching $20 per Mb.

      The simple reason for usage charging is simple: to increase the revenues from users by stealth over time while maintaining the illusion of a stable access price. Now compare this to today’s broadband services based on unbundled copper – there is no such CIR or CVC charge, hence the ability of ISPs to offer ever increasing capabilities while keeping prices stable or increases to a minimum (such a ‘AVCC’ charge does exist on Telstra’s wholesale BB service, hence the bitter complaints about it from ISPs).

      When an ISP today lifts a quota the only marginal cost to them is the increased transit costs beyond the POI to the wider net. Under the NBN they face both those costs plus increased charges to the NBN itself in front of the POI. Now given that the data demands of users continue to substantially rise every year as per the ABS stats but broadband retail ARPUs remain relatively stable at around $50, doesn’t it strike anyone here as the least bit concerning that NBN Co plans to double its ARPUs over ten years (it’s all in the back of their corporate plan around the 90pp-100pp mark)? Oh no but that’s not a price rise hey? I call it a substantially greater call on the share of the average person’s wallet given that incomes are unlikely to double in the same period.

      I understand Renai’s semantic point regarding NBN Co’s freeze on access pricing but it is nothing more than that – semantic, given access pricing is only one half of the NBN pricing story going forward. You cannot engage in a serious discussion about NBN pricing without understanding the role CVC charging plays as soon as you move above a typical 2012 data consumption profile.

      I note that I am being accused of being one sided here but this is really a case of pot calling the kettle black. My argument is nuanced: NBN Co offers the illusion of price stability while imposing a fairly blatant and COST-UNJUSTIFIED variant of bracket creep on the charges it imposes on an ISP’s overall data cost profile should demand continue to grow at historical norms. And at the end of the day, the main reason for the NBN is to accomodate future growth in data usage is it not?

      Now on to the broader point of my article. In a funny sense I probably agree with the sentiment of the posters here that NBN Co won’t be able to successfully increase prices. I suspect that once the “braking” effects of the CVC on Internet usage become more widely apparent it won’t last. As much as I am loathe to break news here and not in CommsDay, I even hear mutterings that NBN Co sees that the long term effect of the CVC might prove counter to the government’s policy intentions and that it is rethinking its pricing strategies.

      There will be a mass defection from the NBN if it becomes too expensive against wireless competition that will be more meaningful than FTTH supporters allow. And my point re the closure of Megaupload and Bt Torrent is to show that the things that drive broadband demand in the here and now aren’t necessarily forever. What goes up can go down. Not all bits are equal. A 160 character SMS can have much greater economic value to the sender and recipient than a 1 gigabyte pirated movie. Size doesn’t always matter!

      In a sense I am more questioning the entire rationale behind a project that targets a particular mode of communications consumption (home-based, higher speed, larger data transfers) with a service that will cost more, directly via CVC/CIR fees and indirectly, via socialised losses, than a current copper network equivalent which evidence suggests is already finding disfavour with the masses. I am perfectly respectful of alternate views: it all depends on your personal ideological biases on what public policy should target or not target. I see a fixed market that is shrinking, a wireless market that is expanding beyond the most optimistic original expectations and a bunch of people who think that a new network that is twice the cost of today’s network can grandfather today’s prices without insolvency. Malcolm Turnbull is asking the right questions even if political constraints prevent him from offering the right answers.

      Finally, one correction I wish to make to “Paul”: I did link to this website from mine, so he is wrong. I chose not to name Delimiter as I didn’t really see a reason to cite a brand name in pursuit of a broader point I was making about misunderstandings about pricing in and the revenue potential (or lack thereof) in the fixed market. This clearly upset Renai but as we have discussed in private correspondence, Delimiter by no means has a unblemished record when it comes to citations either. Stones in glass houses :-)

      As to the claims I am biased: If NBN Co added nearly 1m customers in one half against two competitors in a market of 22m people I would be the first to congratulate them too.

      • delphi
        Posted 10/02/2012 at 7:21 pm | Permalink |

        Lynch has a long history as the NBN ‘critic’ – sadly, and the same goes for another ‘expert’ Kevin Morgan, he stopped gracing the Whirlpool with his ‘wisdom’ after he found the participants a little bit too well informed for his ‘expertise’ to gain much traction…

        As to the NBN prices, his FUD goes a long way – here:

        “First NBN costings: $215 national tariffs if 80% take-up service”
        CommsDay,April 21st, 2009, by Grahame Lynch
        ( http://www.commsday.com/commsday/?p=325 )

        • Noddy
          Posted 10/02/2012 at 7:32 pm | Permalink |

          LOL, using his “standard returns” argument, which is what Telstra would be after. Their current network is $17 mil plus the cost of whatever it is given to spend on FTTN we would be looking at plans costing over $120 or so from the Coalition.

          • Noddy
            Posted 10/02/2012 at 7:33 pm | Permalink |

            Sorry, make that $17 bil

        • deteego
          Posted 11/02/2012 at 11:46 am | Permalink |

          Please don’t quote people out of context, those prices reflect the original NBN MK2 which would have had to compete against Telstra’s copper network (and yes the prices would have been that high if NBN had to compete against Telstra’s network)

          • Noddy
            Posted 11/02/2012 at 12:02 pm | Permalink |

            He was talking $215 on an 80%, without Telstra as competition and therefore 100% NBN that still way off the mark.

            • deteego
              Posted 11/02/2012 at 12:13 pm | Permalink |

              Uh, you do realize he is referring to Henry Argus’s CBA of the NBN, which was done well before the announcement that NBN would essentially force Telstra to close down their network? In fact have you even read Henry Argus’s CBA on the NBN? It explicitly stated in the parameters that he was using the assumption the network was to compete against Telstra, which is exactly what the plan was at the time

              The announcement was made in like 2010, the CBA Henry Argus did was in like mid 2009

              Unless you are suggest that Lynch wen’t back in time to shoot himself in the foot…

              • Noddy
                Posted 11/02/2012 at 12:24 pm | Permalink |

                He refers him quite a bit, the calculation of the $215 dollars was his own.

              • Alex
                Posted 11/02/2012 at 12:26 pm | Permalink |

                The current NBN was announced 7 April 2009. Dr Ergas & Alex Robson’s report (CBA) was dated 17-18 August 2009. Over 4 months later.

                • deteego
                  Posted 11/02/2012 at 12:38 pm | Permalink |

                  omg, how many times do I have to state this

                  When the NBN was announced, it was going to compete against Telstra’s network.

                  The announcement, that NBNCo would pay for Telstra to actually decommission its copper network, happend in mid 2010

                  Under the parameters that NBN would have to compete against Telstra’s copper network, which was the case between 2009/2010, such plans would have been that expensive. That’s not the case currently, because NBN would get the entire fixed line market

                  That is no longer the case, and so that article by Lynch, and likewise the CBA by Henry Argus, is no longer valid, because the plans for NBNCo changed

                  • Alex
                    Posted 11/02/2012 at 12:51 pm | Permalink |

                    Thanks you for the “boldness” of your reply.

                    Sure it wasn’t agreed to officially until Telstra/NBN Co agreed and then it was ratified by Telstra shareholders, we all know this.

                    But no one of sound mind can seriously believe that an Australia wide FTTP network was announced in April 2009 and then as as an after thought (conveniently after Dr Ergas, yes Ergas’ report) someone in government had an epiphany and said “hey Stevie, maybe we can use Telstra’s pits, ducts and migrate their customers too”.

                    I’d bet (and neither of us know for sure, so don’t claim some new non existent victory please) that back in the RFP’s this formed part of many bids, which was part of Telstra’s worry about having their property seized.

                    • deteego
                      Posted 11/02/2012 at 1:01 pm | Permalink |

                      But no one of sound mind can seriously believe that an Australia wide FTTP network was announced in April 2009 and then as as an after thought (conveniently after Dr Ergas, yes Ergas’ report) someone in government had an epiphany and said “hey Stevie, maybe we can use Telstra’s pits, ducts and migrate their customers too”.

                      Stop trying to change history, that is exactly what happened

                      The announcement that NBNCo would pay Telstra to decommission their network happened mid 2010, around half a year after then NBN MK2 was announced (which was just before the election).

                      Im not sure what you are trying to do here, simply put your criticism of Lynch is this regard is wrong.

                      • Alex
                        Posted 11/02/2012 at 1:22 pm | Permalink |

                        My you are on an assignment aren’t you!

                        I’m not trying to change history at all, which part of my first sentence do you not understand… ?

                        That sentence being, “Sure it wasn’t agreed to officially until Telstra/NBN Co agreed and then it was ratified by Telstra shareholders, we all know this”.

                        Now let me ask you, do you seriously believe that in April 2009, a FTTP Australia wide network would have been announced without plans to ‘possibly’ use Telstra’s pit, ducts and migrate their customers?

                      • deteego
                        Posted 11/02/2012 at 1:28 pm | Permalink |

                        Considering that (after watching the Four Conrners report), the same government didn’t realize that they had to pay Telstra $15 billion dollars for compensation until after Telstra put in its tender (due to the way NBN MK1 was designed, it would have been government intruding on private property), then most definitely yes

                        Are you seriously expecting that Henry and/or Lynch were expecting to gaze into some crystal ball and now how the policy could have changed, or that they should base their journalist articles on made up future scenarios?

                        The government could have just as easily cancelled the FTTH NBN, or reduced its scope, or a massive number of other things to deal with that issue, they chose to pay Telstra to decommission their network

                        You are really scraping the barrel at this point

                      • Alex
                        Posted 11/02/2012 at 1:40 pm | Permalink |

                        No I was attempting, to no avail, to have intelligent two-way correspondence, where there’s a bit of give and take from each correspondent, common sense and mutual respect.

                        Correspondence where, one’s obvious political dogmatism and bigotry isn’t the single factor/goal.

                        I am obviously barking up the wrong tree here.

          • delphi
            Posted 11/02/2012 at 1:17 pm | Permalink |

            “Please don’t quote people out of context”

            There’re no quotation in my posts – only the reference to the article from almost 3 years ago which ‘predicts’ (and mirrored in Lynch’s posts on Whirlpool till the actual prices proved him wrong) super high broadband prices on the NBN and picked up by most of the press at the time. When confronted (on the Whirlpool) Lynch tried to explain that’s actually for a triple-play – of course, that was not mentioned in the article – classic FUD method…

            “and yes the prices would have been that high if NBN had to compete against Telstra’s network”

            Pure GOLD – so you admit that having the NBN as a (natural) whole-sale monopoly provides the consumers with the lowest possible prices. Good. And yet Turnbull, Lynch, Morgan, Ergas and other ‘critics’ tell us exactly the opposite – make up your mind…

            • deteego
              Posted 11/02/2012 at 1:52 pm | Permalink |

              Thats not FUD, thats forgetting to mention certain pieces of information, and it can also be implied if he is referring Argus CBA (which did mention triple pay)

              Pure GOLD – so you admit that having the NBN as a (natural) whole-sale monopoly provides the consumers with the lowest possible prices.
              I never said that, stop putting words in my mouth. If I was the editor I would ban you for twisting people’s statements

              I said that the decommission of the Telstra network lowered the prices at the NBN at the cost of forcing everyone to pay a higher price in general (due to it being a forced monopoly). How you get from that to “LOWER PRICES FOR EVERYONE” is beyond me

              Good. And yet Turnbull, Lynch, Morgan, Ergas and other ‘critics’ tell us exactly the opposite – make up your mind…
              Can you return back to whirlpool please? You belong there

              • Alex
                Posted 11/02/2012 at 1:59 pm | Permalink |

                Ah return to Whirpool, that horrible place… until one finds a single thread to suit ones bullshit and then claim it 100% factual

                :/

                • deteego
                  Posted 11/02/2012 at 2:05 pm | Permalink |

                  I do regard people that are head of ISP’s, Backhaul providers as more factual then most of the people commenting here

                  You are correct about that one. There is a reason why that specific thread is referred to as a gem, in that its rare, because its the one of the few threads where ISP’s actually comment (and not just the usual cruft of whirlpool people)

                  • Noddy
                    Posted 11/02/2012 at 2:47 pm | Permalink |

                    You have to be careful of their posts also. They have a vested interest. They are obliged to say things are too expensive. Can you ever imagine them posting a cost was too low and should be raised?

                    • deteego
                      Posted 11/02/2012 at 3:30 pm | Permalink |

                      A vested interest that knows what they are talking about is always much more informative than a vested interest that doesn’t know what they are talking about

                      If you think someone has a vest interest, then you read their arguments and you try and debunk their arguments. NBNCo had the opportunity to do that then, and they didn’t

                      • Alex
                        Posted 11/02/2012 at 7:05 pm | Permalink |

                        NBN Co are in the business of building an NBN not debunking bullshit.

                      • deteego
                        Posted 12/02/2012 at 12:12 am | Permalink |

                        They made that thread specifically for people to ask them questions regarding pricing

                        Did you even read it?

                  • Alex
                    Posted 11/02/2012 at 2:53 pm | Permalink |

                    Rare in your opinion.

                    And having now read many of your rapid-fire opinions here, forgive me for my frankness, but I tend to suggest that I have little faith in any of your opinions.

                    But, having seen the Editor’s recent tendency to curtail such non-sensical correspondences and posters who limit the scope of meaningful replies, before you suck me into being banned along with your good self, I bid you adieu.

        • Alex
          Posted 11/02/2012 at 12:20 pm | Permalink |

          Thank you for the URL delphi, which – without me being accused of stealing the NBN critics thunder by introducing fear, uncertainty, doubt and conspiracy theories – paints a graphic picture, *in my opinion*!

          Soon after the announcement of the NBN, “Commsday asked Concept Economics to run the numbers”.

          Interesting choice, Concept!

          Concept Economics and it’s Chairman – apparently a former Telstra advisor, who soon after, did his own not so glowing NBN CBA, interestingly entitled – The Social Losses From Inefficient Infrastructure Projects (seems you can judge a book by it’s cover) who writes columns featured in Commsday and … wait for it… “The Australian” and who are (were) alleged favourites of the opposition (with their Chairman also said to have worked pro-bono for them) and of course not so liked, putting it kindly, by the government.

          I said (were) above because interestingly, I believe Concept have since placed themselves into voluntary administration.

          So to demonstrate the differences in the government’s/opposition’s opinions of Concept and it’s Chairman, refer to the below URL, ironically from the Australian!

          Here’s just two comments – “Communications Minister Stephen Conroy joked that ** ***** had been “structurally separated from his business”…

          …”Finance Minister Lindsay Tanner used question time to declare “the opposition brains trust has gone broke” and suggested Malcolm Turnbull had not paid his bill”…

          http://www.theaustralian.com.au/business/breaking-news/economist-henry-ergas-feels-the-pinch-in-consultation/story-e6frg90f-1225774266638

          So, knowing all of this, should we accept these peoples opinions as impartial?

          *In my opinion*, I’d suggest everyone listen to their views of course, and take onboard valid points. But in general, remember where their allegiances allegedly lie and take a lot of what they say with a grain of salt.

      • PeterA
        Posted 10/02/2012 at 8:48 pm | Permalink |

        Hi Graeme,

        I’d love to debate you on this. But your article doesn’t stand up as well as your comment here.

        A few points that really tarnish the article:
        “Another 136,000 customers abandoned the PSTN last half. PSTN revenues fell 9%. Fixed broadband is flatlining.
        The market that is being chased by the NBN is evaporating before our eyes.”

        These aren’t broadband customers, these are telephone only customers. Obviously quoting a figure indicating fixed line internet access increased at all wouldn’t have been appropriate, so you picked a loaded figure.
        (I won’t even mention the disparity between bandwidth consumption of wireless and wired with respect to the future of internet access).

        But how much of this is of the economically useful variety that promotes social inclusion, generates jobs and improves productivity (as per the policy intentions of pervasive fibre)?.
        A difference of opinion I will give you here. It is my personal belief all communications that raise the profile of content producers is ultimately beneficial to content producers. Right now, they aren’t monetizing it to their benefit. But who is to say this style of consumption wont be the basis of future business models?
        It *cant* be the basis of current business models, because bandwidth is so unevenly spread. The NBN directly addresses the disparity of data access rates, across almost the entire population of Australia.

        “The trend is clear: much of the junk that dominates fixed network data usage is now being successfully targeted by lawmakers and the tools at their disposal, courtesy of things like the ACTA treaty, are only going to get more powerful.”
        Weird that you mention this. I fail to see how ACTA will solve anything. The same way that the DMCA solved everything right? The same way that SOPA and PIPA were meant to solve things? I suppose you are one of those people that thought that SOPA/PIPA and the people driving them were on the right track the whole time.

        “… telecom’s equivalent of a carbon tax)”
        Way to spread partisan FUD. You know its a lead in to an emissions trading scheme right? Of course you do, but you are a climate change denier too surely, or perhaps an economist like one bright spark I heard recently saying it was cheaper to let the world (maybe) go to hell THEN pay to fix it. – Of course the name for that is not economic policy, it is gambling. Personally, I would rather put the framework in to mitigate the disaster now (and dial it back if it is over zealous), than wait for millions to die tomorrow before we start trying.

        But hey, I am just one of Renai’s band of pro-NBN followers who are targeting poor old Malcom Turnbull over his flawless reasoning.
        Sorry if I don’t buy that rhetoric.

        PS. Your comment here was pretty good, and maybe if you read most of Renai’s (and his Band’s) comments – like ever – you might see that we aren’t all fans of the exact pricing model for the NBN either. We almost never said we were.
        What we are fans of though? Is progressive broadband policy. Hell, any kind of broadband policy at all would be a start.

        • PeterA
          Posted 10/02/2012 at 8:55 pm | Permalink |

          My apologies for the spelling of your name Grahame. (also I may have been a little personal attacky above, but I really dislike partisan catchlines when trying to debate things, and it may have triggered my innate xkcd 386 response.

      • Martine
        Posted 11/02/2012 at 3:17 pm | Permalink |

        Grahame is ignoring the fact that ULL wont exist when the Coalition gets Telstra to build FTTN.

        Telstra AGVC is $55 per month
        NBN CVC is $20 per month dropping to $8 per month ^.

        Telstra FTTN is nearly three times the price of NBN.

        ^ in about 15 years time assuming 30% data growth pa starting at 8GB/month (ABS data).

      • Tailgator
        Posted 11/02/2012 at 4:12 pm | Permalink |

        Afternoon Graem.
        A leopard doesn’t change it’s spots I see. I note that you begin your response with a thinly veiled snide attack on others “…. those of us who have read the corporate plan and other documents in some detail,….”. However you are fundamentally in error. Renai has obviously read the corporate plan and other documents in detail, as have many readers and commenters in this column. In fact Renai alludes to the fact here in the par, “With respect to Lynch’s second comment …. This is, of course, true, and it will lead to NBN Co making more money from those consumers.” Or did you selectively miss that?
        But as for your central point of contention, then Yes, the more someone uses the network the more they will pay.
        Wow. Astounding news!
        The fact that it already occurs in the BB/telco sector is apparently an irrelevance. Subscribers pay for higher d/l speeds, better upload speeds, commercial terms of service and support, etc , etc. You get what you pay for.
        ‘But.. but..’ I hear people say, ‘…. it doesn’t cost them anymore to provide the increased speed or increased data amounts, so why should they charge more?’
        Why? Because what NBNCo has recognized is two things;
        1. That as a wholesale provider it has to provide a backbone capable of meeting scalable demands. And in order to meet those demands, in particular the peak demands, it has to levy a charge to enable the upgrades to infrastructure.
        2. That the more consumers use a service the more they pay and this can be utilized to pay back the cost of providing the network.
        So what is so negative about this fact? I fail to be appropriately incensed by the prospect of paying more for greater usage. Why do you consider it to be noteworthy?
        And this is exactly the same scenario as applies to RSP’s . They charge additional fees for increased services and data d/l amounts etc. Because they recognize that there is a cost and it has to born. What NBNCo is not doing is playing the dumb infrastructure provider and just providing a service. Rather it is recognizing that the demands placed on its service incur costs and they must be recovered if they are to remain viable.

        Now, speaking of semantics and pots calling kettles black, your argument is not ‘nuanced’. In fact I suspect you are being somewhat egotistical in claiming a distinction. (No-one else’s arguments are ‘nuanced’? Sighs Oh well.) But NBNCo offer an illusion eh? And you need to open readers eyes, awaken them form their slumber? Sorry but this issue has been discussed ad infinitum in WP.
        But as for the ‘sentiments of posters that NBN Co won’t be able to successfully increase prices’ then I disagree with those posters. It will be seen as a natural progression, by both the consumers and the RSPs. The simple and incontrovertible premise of the more you use something the more it will cost, will prevail. In fact I challenge you provide to evidence to the contrary.

        Moving right along, you claim there will be mass defections from fixed line to mobile. Why exactly? Oh! If it becomes too expensive. And quite right too. However such a claim is pure idiocy considering the current and future demands being placed on the mobile spectrum and the charges for data. This argument really is a furphy. Meanwhile you take a scatter gun approach to the argument by citing Megaupload and BT Torrent and suggesting they are and will be the sole drivers of high speed, high data content uses of the Internet. Oh Dear.

        Now you can question the rationale of the NBN all you like, but until you can present coherent, cogent, and rational arguments to support your position then you are wasting your time.

        And finally as to your defense of being biased, then yourself proclaimed advocacy of the tenets of neo-liberalism provide more than ample evidence of any bias. Perhaps if you wish to engage in further discussion you might consider posting further on WP, an option you have studiously avoided for the last 3 months +.
        Look forward to further discussion Grayham.

        Cheers – Tailgator.

        (Oh and deteego – don’t bother with your garbage.)

      • WhatsNew
        Posted 12/02/2012 at 1:34 pm | Permalink |

        Thanks for the detailed response, Graham, but I really don’t see much cause for concern about future pricing on NBN based on those points.

        The CVC charge has been previously highlighted at great length by Simon Hackett, mostly over his concern about RSPs with smaller customer numbers trying to compete at a national level, but also about the constraints it will have on the expected use of future applications on the NBN.

        NBN Co responded on Whirlpool at the time that they fully expected the CVC charge to drop over time as data usage increased. That is, they were not out to make money out of it and would adjust their pricing down if it meant they were still achieving the government’s required 7% ROI. It also makes sense that they would have to keep an eye on wireless data charges in the future as well in any case.

        Your points about there being no cost or technical justification for the CVC/CIR charges seem to focus on markets where ULL or LLS usage by competitors is prevalent, only mentioning Telstra’s AVCC charge as something that those same competitors complain about. I find it strange how some commentators can support Telstra charging higher prices in areas where there is currently no competition by saying that these areas are not profitable and private enterprise won’t go near them, yet when NBN Co tries to apply a similar charge and is open about the fact that the govt policy is for metropolitan areas to cross subsidise broadband in the bush that suddenly we should ignore all that because NBN Co will not be as cheap for RSPs at a wholesale level as what they have now in their limited metropolitan offerings. NBN Co has to come up with prices that can be applied nationally. Even with that added responsibility though, I don’t forsee the gloom and doom that you are suggesting may eventually occur.

        I know it is a substantially different market to ours, but I see that the Canadians have now adopted a capacity based billing (not to be confused with usage based billing) approach for their wholesale offerings. Like it or not I think that sort of fee is likely here to stay.

      • Chas
        Posted 13/02/2012 at 7:22 am | Permalink |

        Dear Graham…

        “But those of us who have read the corporate plan and other documents in some detail”

        That line is arrogant, presumptive, and quite wrong. It assumes that Renai and those of us who have been commenting have not actually read those documents that you say you have. Obviously, this is a completely fatuous and error-ridden assumption.

        “If data consumption grows at historical norms, NBN Co will make significant revenues from usage charges that are additional to the fees it currently levies on RSPs. These charges will of course either be passed onto customers or avoided through higher contention rate/lower connectivity circuit requisitions which will reduce end QoS and user experiences”

        That is true and part of the plan…but I fail to see your point. Contention ratios on ADSL2 are already much higher than that, so the pain and woe you are predicting would actually be a massive improvement!

        “The point seems to be missed that there is no cost or technical justification for NBN’s proposed modes of contention pricing”

        That point has been made time and again, and it’s quite irrelevant. The justification is an economic one, and it seems to me as if it is the best solution for maintaining a network that is both fast and efficient while being able to continue sensibly well into the future.

        “There will be a mass defection from the NBN if it becomes too expensive against wireless competition that will be more meaningful than FTTH supporters allow”

        Sorry, but exactly how do you see that as possible? The data capacity for wireless is only a very tiny fraction of FTTH, and it would be very quickly overwhelmed if such a thing occured. In fact, the wireless pricing would most likely go through the roof if that happened as those companies would
        1. take advantage of the demand by increasing the price
        2. actually NEED to lower demand to maintain functionality

        “I see a fixed market that is shrinking, a wireless market that is expanding beyond the most optimistic original expectations”

        But that is true only in connection numbers…for data, the opposite is true. Wireless is a wonderful for connectivity, but it in no way can or does supplant fixed. The data useage numbers most assuredly bear that out. Your theory appears to assume that consumers will be using less and less data, but you have previously stated that they will be using more…which is it?

        “As to the claims I am biased: If NBN Co added nearly 1m customers in one half against two competitors in a market of 22m people I would be the first to congratulate them too”

        I’m not really sure what this means…discounting the trials, NBN has been online and available to be “chosen” in limited areas since October 2011. For any meaningful evaluation, we should probably wait until the 1-2 year contract period with other ISPs is up in those areas. Anything else would be just meaningless (and heavily biased) FUD.

      • Jean W
        Posted 13/02/2012 at 9:54 am | Permalink |

        >Either the way the original promise of “more bandwidth for less cost” made by the government seems difficult to achieve

        Stopped reading here.

        The promise was “affordable broadband for all Australians” and “100Mbps available to 90%, 12Mbps available everywhere”.

        Where did this “more bandwidth for less cost” idea from from?

    7. Russell Stuart
      Posted 10/02/2012 at 7:01 pm | Permalink |

      I was playing with some figures, after reading the comments on Malcolm Turnbull’s piece. Malcolm used a lots of words to put his case, and backed it up with bugger all figures. I rarely find such arguments unconvincing. At the time I did those back of the envelope figures I didn’t find them too convincing either. But I see they jell with the figures quoted here, so perhaps they aren’t too far out after all.

      So lets say the NBN costs $50B, they expect a 7% return, and they expect to convert the current 6 million broadband customers and get not more. A 7% return is $3.5B per year, or in round figures ARPU of $50/month. That was the original figure I got and it looked a little high to me particularly since it doesn’t include ongoing running costs. On its own it would give some weight to Malcolm’s words – but only if you assume there is no growth in the number of connected users.

      I vaguely recall the NBN were planning something around 10 million users by 2020. 3% population growth would give them 8 million, and 2.5 million currently in the 70+ age range (who aren’t big users) will have died off, so 10 million seems like a good a guess as any.

      10 million users would make ARPU $30/month just to earn the 7% return on the sunk costs. I don’t know what running expenses costs would be, but $10..$20 per month sounds reasonable which puts the required ARPU in the $40..$50/month range. And now this article says that is what they are expecting to hit in 2020.

      I am not sure what $50 translates to at retail, ie what the ISP plus other providers would charge you. It’s definitely higher than the small time users pay now for phone + line + adsl. But it’s also much lower than a household with cable tv + phone + line + 100Gb broadband would be paying now, and the NBN can expect to have most of that business in 2020. That puts the $50 in the right range at least.

      And since $50 is what they need to meet their projections, to me the NBN looks on target. But I suspect that despite all the noise being made about them the real challenge isn’t in those figures – the real challenge the building thing on budget and on time.

    8. Noddy
      Posted 10/02/2012 at 7:12 pm | Permalink |

      I think your calculations are off. The 7% ROI is not 7% of the build value of the NBN. The NBN is also an asset. The 7% is 7% profit each year. The profit is income from the NBN minus expenses, this includes depreciation as well as maintenance and other costs.

    9. Gav
      Posted 10/02/2012 at 9:04 pm | Permalink |

      So my $60 plan with 8 years of 3.5% inflation becomes a $79 plan. Lets say ISP revenue only grows at inflation because they increase their plan costs in this manner, and that all plans are $60. Currently, NBNCo is saying it expects revenue of $23 for every $60 my ISP earns. If the ARPU rises to $52 after 8 years, then NBNCo is taking $52 for every $79. This implies their take of revenue will rise from 38% to 66% over 8 years.

      Obviously there’s some huge assumptions here, but the ARPU rise is not necessarily a bad thing:
      1) Value-added services are ignored. It seems ISPs will need to make their profits from these as their revenue share from plain data decreases, if they keep prices in line with inflation. This probably isn’t unexpected in a world where the Internet is more of a utility business with low margins, but this would likely lead to lower investment due to lower rates of return, and thus less innovation. Those ISPs that don’t do value-add will thus be in trouble, but its clear that all the majors have been pushing this for years. How successful they are and how much end users get talked into paying for these services is not NBNCo’s problem.
      2) A single plan is extrapolated across all users and ISPs. In reality it will be more a case of ‘some people pay more’ and thus subsidise the rest. This exists today of course. The usage-based pricing is good in that it reinforces a user-pays system – ISPs will charge top users more. The real question is whether ISPs will be able to produce a bundle of plans that are economic at ‘no extra cost’ price points, and whether these price points can be maintained over time if data usage skyrockets.

      The usage-based pricing is no different from the the quota system… gigabytes per month is no different from megabits per second, but the issue of contention is more obvious when you look at it due to peak periods. ISPs today need to buy a certain amount of megabits per second on their other links, so why not this one? The quota is actually quite restrictive, I haven’t had time to go over non-NBN plans, but looking at iiNet’s NBN plans (just for somebody to pick on), they don’t allow users to use their full bandwidth more than 4.3% of the month, on average, due to the quotas imposed (I take bandwidth as maximum up plus down speeds). From the 12 plan combination, only two go over 5%, and six are under 1%. The issue, as in the price of electricity, is the peaks (a quarter of the price of the electricity grid is to cope with 40 hours per year).

      Averages, as always, are… problematic.

    10. Posted 10/02/2012 at 9:40 pm | Permalink |

      Anyone able to clarify as to what method telstra uses to charge for its service? I dont honestly know or where to look for specifics – if anyone knows?

      As far as I was aware, they charged with both methods used by the NBN, I know as an engineer for a “Network Carrier” we use direct usage based pricing. If we didnt, we’d have every leeching motherf^&%*$ in the country sitting on one plan chewing the network. Our Marketing Team has previously been reprimanded for allowing stupid plans with free things like unmetered youtube to hit the consumer space . -__________-.

      Usage in a Wireless sense is charged that way, purely because A: It generates the most income for the network for the bandwidth costs outlayed and B: It deincentivises things like leeching. All 3 carriers dont allow leeching of any description anymore, heavily regulating what traffic is flowing to a location. While I see his point, what I dont understand is why he trumpets this like its new. We shaft customers all the time with things like excessive data charges. Sure we make the news, but we get the desired effect. People become so paranoid that they dont use all the data in the first place. Not to mention large files become compressed by the network carrier and the handset’s 3G data methods, so large files arent an issue to the network. Optus is an excellent example, its BASE excess data charge is 0.20c /KB.

      My point here is that Grahame seems to indicate that this is a new thing, he also indicates that its a bad thing. It is not. Its designed for a specific purpose, which it does excellently.

      Gav hit this on the head, I’m more or less reiterating what hes said from a Network point of view. We use it, people go over their usage. They pay for it. Its no different to Bank fees when overdrawing your account and its no different to overborrowing on your loan. Its the same. Its usage based charging, its not going anywhere.

      • Noddy
        Posted 10/02/2012 at 10:09 pm | Permalink |

        I think it’s just the standard business model, change as much as you can get away with. If you are the only one in the exchange because it’s in the country, charge even more, they have no choice.

        “If we didnt, we’d have every leeching motherf^&%*$ in the country sitting on one plan chewing the network.” One reason I avoid ISPs who offer unlimited plans, especially for low prices. The leeches with 100 connections running may think the network is fine but the poor sucker who wants one connection gets 1% of the. probably congested, link that the leech gets.

    11. Duke
      Posted 10/02/2012 at 10:21 pm | Permalink |

      How can the newsletter be well regarded when it lets Kevin Morgan post there…

    12. Posted 10/02/2012 at 10:35 pm | Permalink |

      G’day Grahame!

      Big fan of your Commsday commentary. Your analysis is right on the money — replacing the old copper network with a brand new fiber network will naturally call for higher levels of revenue and higher user charges.

      But, seriously mate… I don’t even know why you bother. The regular crowd here is of the same high calibre as the esteemed Whirlpool intelligentsia. Based on past form and the deluge of responses to Malcolm’s article, the substance of your explanations will be completely ignored. Most of the active discussants on all online forums (including this one) are not really interested in having an objective discussion of the relevant issues. They just want the NBN.

      Coming back briefly to the topic of NBN pricing, the real speculation in NBN world are the detailed projections summarised within NBN Co’s business plan. The ultimate reality about the NBN is that the fiber network isn’t even 1 pct complete. The significance of these facts will be obvious to the impartial observer, but imperceptible to undying devotees of the Church of Fiberology.

      By the way, congrats on making it into Delimiter’s “Hall of Shame”. You’re in excellent company. Just about every honest, accurate and insightful gem on the NBN is in there. So, nothing to fret about!

      Keep up the good fight!

      • Posted 10/02/2012 at 10:58 pm | Permalink |

        Love the sarcasm man, keep it up eh?

      • Dread
        Posted 11/02/2012 at 10:31 am | Permalink |

        Slow day at Menzies House Kip?? You took a while to get there.

      • cfm
        Posted 16/02/2012 at 9:54 pm | Permalink |

        Church of Fiberology!

        If only I had of read your post first, I could of saved myself some frustration.

    13. Mathew
      Posted 10/02/2012 at 11:57 pm | Permalink |

      NBNCo have outlined the figures in a very easy to read chart on page 101 and 103 of the NBNCo Corporate Plan. Prices for actual services will (almost certainly) decline, but at a rate significantly less than the uptake of faster servers / downloading more.

      Plans for AVC pricing are outlined on page 101:
      * 1000/400Mbps falls from $150 to $90, while the average speed grows from 30Mbps to 230Mbps.
      * Price falls by 40% while average speed grows by 760%

      Plans for CVC pricing are outlined on page 103:
      * Starts at $20Mbps/Month when the average data usage is 30GB/Month and falls to $8Mbps/Month when the average data usage is 540GB/month.
      * Price falls by 2.5 times, while the average data usage grows by 18 times = growth in revenue from CVC of 720% when accounting for price falls.

      • Noddy
        Posted 11/02/2012 at 12:30 am | Permalink |

        You are mixing Mb/s second CVC speed and data usage in GB to get those percentages. Twice as much data usage does not require twice the speed of back haul.

        Look at page 105 for the expected retail prices of these fast 500G a month plans, $78-$85 dollars.

        Nice try.

      • Noddy
        Posted 11/02/2012 at 2:46 am | Permalink |

        Lets just assume, as you have that CVC rises linearly with data usage. How about putting dollar figures on this 720% rise that is so huge and is where the NBN are going to massively raise prices in future?

        “The CVC is priced initially at $20 per Mbps, adding approximately less than $1 per average end user
        for a 12/1 megabit per second service with current average data usage”

        So from current average usage to predicted usage of 540GB/month. The increase you say it a huge growth in revenue… $6.20

        Sorry, maybe I made a mistake in what you were arguing. Were you trying to show the NBN prices would have huge rises in future or that they wouldn’t?

        • deteego
          Posted 11/02/2012 at 11:53 am | Permalink |

          The CEO of PIPE (forgot his name), did some calculations on whirlpool, and basically the CVC charges end up becoming ridiculously high when you use actually use the fibre network, and by use, I mean downloading of data on speeds of like 50mb + with 1TB+ plans.

          A lot of those CVC charges are modelled on current ADSL2+ connections, and also on the complete lower tier of uses. The figure which NBN constantly puts forward, which I had a debate against Michael about (that he lost), is the for completely light 12/1 MBit user

          I am not saying that such people don’t exist (they clearly do), but they are not every single internet user. So if you use the assumption that everyone will be fine with that amount of contention, then sure, but what you are basically saying is that everyone will use 12/1 mbit plans on the NBN with like 10 gigs of quota, and only use the internet to check their emails every night (which is basically the scenario that NBN put forward)

          The most crucial thing is that NBN is putting an actual charge on data, no such thing exists on ULL/LLS, its also the reasons why companies like TPG with unlimited actually exist (and is possible). The last time every ISP was forced to use charges based on data, was in 2006 (and beforehand), when every ISP was forced to go through Telstra wholesale and pay their AGVC (which was Telstra’s equivalent of CVC).

          At that time, compared to the rest of the world (including the likes of Britain and Canada), our quotas were completely pathetic. Thats basically what happens when you put a charge on data usage

          • Noddy
            Posted 11/02/2012 at 12:20 pm | Permalink |

            “The CEO of PIPE (forgot his name), did some calculations on whirlpool, and basically the CVC charges end up becoming ridiculously high when you use actually use the fibre network, and by use, I mean downloading of data on speeds of like 50mb + with 1TB+ plans.”

            Wouldn’t know, your not offering any information there. Sources.

            “A lot of those CVC charges are modelled on current ADSL2+ connections, and also on the complete lower tier of uses. The figure which NBN constantly puts forward, which I had a debate against Michael about (that he lost), is the for completely light 12/1 MBit user”

            Again, wouldn’t know. Excuse me if I doubt the claim of victory too, I have never seen you claim otherwise.
            Doesn’t arguing increased usage once someone has a faster connection go against the anti-NBN argument that it isn’t needed and data usage wouldn’t increase with time?

            “I am not saying that such people don’t exist (they clearly do), but they are not every single internet user. So if you use the assumption that everyone will be fine with that amount of contention, then sure, but what you are basically saying is that everyone will use 12/1 mbit plans on the NBN with like 10 gigs of quota, and only use the internet to check their emails every night (which is basically the scenario that NBN put forward)”

            Of course they exist, that’s why they costed on an avergae of 30G per user, because as not all users are small, not all are big. And those that are can be rediculous. I really doubt we will see unlimited NBN plans, the ADSL2+ unlimited was only possible because of the limited speed. 30G a month is hardly checking email every night. It is about what I use and I use it a lot, hours of streaming TV a night too.

            “The most crucial thing is that NBN is putting an actual charge on data, no such thing exists on ULL/LLS, its also the reasons why companies like TPG with unlimited actually exist (and is possible). The last time every ISP was forced to use charges based on data, was in 2006 (and beforehand), when every ISP was forced to go through Telstra wholesale and pay their AGVC (which was Telstra’s equivalent of CVC).”

            The NBN is not charging by data usage, they are charging by backhaul capacity. Capacity isn’t free, they didn’t get PIPE for nothing. Upgrading capacity costs. The reason TPG has unlimited is not due to data usage being free, it’s because in a lot of areas they oversell their capacity and leave uses with ridiculously slow evening speeds. I am sure other ISPs want not part of their 24/7 leeching clientel.

            “At that time, compared to the rest of the world (including the likes of Britain and Canada), our quotas were completely pathetic. Thats basically what happens when you put a charge on data usage”

            And what the US is discovering was a mistake. For years they have been trying to get their initial unlimited usage under control. This theory that data is free because there is capacity there is a fallicy, capacity costs. With an individual link, yes, it’s 20Mb, same cost if you use it or not. But with the agregate of 1000s of users things are different.

            • deteego
              Posted 11/02/2012 at 12:31 pm | Permalink |

              “The CEO of PIPE (forgot his name), did some calculations on whirlpool, and basically the CVC charges end up becoming ridiculously high when you use actually use the fibre network, and by use, I mean downloading of data on speeds of like 50mb + with 1TB+ plans.”<i?
              Bevan scott is the guy, his nick on WP was bevan, here is the thread

              http://forums.whirlpool.net.au/archive/1675718

              Again, wouldn’t know. Excuse me if I doubt the claim of victory too, I have never seen you claim otherwise.
              Doesn’t arguing increased usage once someone has a faster connection go against the anti-NBN argument that it isn’t needed and data usage wouldn’t increase with time?

              If that was to happen then NBN would acquire such a massive shortfall of funding it wouldn’t be funny, furthermore the premise of the FTTH network would be completely redundant

              Of course they exist, that’s why they costed on an avergae of 30G per user, because as not all users are small, not all are big. And those that are can be rediculous. I really doubt we will see unlimited NBN plans, the ADSL2+ unlimited was only possible because of the limited speed. 30G a month is hardly checking email every night. It is about what I use and I use it a lot, hours of streaming TV a night too.
              I am saying that NBN equivlent for current ADSL2 plans doesn’t exist. We have TPG (and dodo, however they do heavy shaping of bittorrent networks, so they aren’t a really valid example), that offer ADSL2+ unlimited (actual unlimited) for $65 a month.

              If we assume that a similar NBN plan would be 12/1 unlimited for $65, such a plan does not exist.

              The NBN is not charging by data usage, they are charging by backhaul capacity. Capacity isn’t free, they didn’t get PIPE for nothing. Upgrading capacity costs. The reason TPG has unlimited is not due to data usage being free, it’s because in a lot of areas they oversell their capacity and leave uses with ridiculously slow evening speeds. I am sure other ISPs want not part of their 24/7 leeching clientel.
              No they are not, backhaul for ISP’s is provided by other parties (such as NextGen or PIPE). The CVC charge is a charge based on NBN’s internal network, and in reality that charge is non existant. It doesn’t cost that much money to send data on bits in the small area around the POI

              The reason backhaul data is expensive is that backhaul has to travel between every POI, and every capital city, and even overseas (into America and Japan and Guan for example). Thats not the case for NBNCo’s internal network. If you look at other FTTH networks around the world, they do not charge per mbit at all. In Asian countries such as Japan, Singapore and South Korea, the charge is completely flat

              And what the US is discovering was a mistake. For years they have been trying to get their initial unlimited usage under control. This theory that data is free because there is capacity there is a fallicy, capacity costs. With an individual link, yes, it’s 20Mb, same cost if you use it or not. But with the agregate of 1000s of users things are different.
              Its not just America, and its not just ‘unlimited’. Basically at that time, in terms of quota, we were on par with developing countries

              Also not to get offtopic, but the whole situation in America is more complicated than overprovisiong with unlimited. FCC did an analysis of this, and they found things such as ISP’s using outdated routers caused as many issues as unlimited being unsustainable

              • Noddy
                Posted 11/02/2012 at 12:50 pm | Permalink |

                “Bevan scott is the guy, his nick on WP was bevan, here is the thread

                http://forums.whirlpool.net.au/archive/1675718

                Though we would all love to have uncontended CVC for our personal use. I notice you ignore the rest where Simon points out the caulculations are wrong.

                “I am saying that NBN equivlent for current ADSL2 plans doesn’t exist. We have TPG (and dodo, however they do heavy shaping of bittorrent networks, so they aren’t a really valid example), that offer ADSL2+ unlimited (actual unlimited) for $65 a month.”

                Maybe they will offer them, but then they can just do what they do now, underprovision. CVC only costs if you provide it. They can just run with huge contention as they currently do.

                • deteego
                  Posted 11/02/2012 at 12:58 pm | Permalink |

                  Uh, Simon is agreeing with Beren Scott

                  http://whrl.pl/RcIe6J
                  http://whrl.pl/RcH79M
                  http://whrl.pl/RcIfln
                  http://whrl.pl/RcIfmN

                  Could you do a favor and read the entire thread

                  • Noddy
                    Posted 11/02/2012 at 1:13 pm | Permalink |

                    Sorry I have no time to read the whole thread today. I am going into hospital on Tuesday and have to get some stuff ready here as I will be pretty much house bound for a week or two and need a good supply of soup like food (cant chew for a while, getting a nasal spur removed and the septum broken to straighten it)

                    I read the “Bevan” one, will take a look at the “Beran” discussion.

                    • deteego
                      Posted 11/02/2012 at 1:16 pm | Permalink |

                      Hopefully you will be alright, and good luck

                      The thread is a very good read though, and its one that everyone should read before commenting on pricing

                      • Noddy
                        Posted 11/02/2012 at 2:53 pm | Permalink |

                        Thank you. Got held up a bit on the phone. Apparently the GF went to the doctors yesterday and got put on antibiotics for a nose infection. Lucky she mentioned it because she didn’t make the connection. I was going to go shopping with her today, and she was going to take me to and from the hospital on the day. Not with a nose infection she isn’t, the major thing I have to avoid is getting a nose infection.

                    • Alex
                      Posted 11/02/2012 at 2:57 pm | Permalink |

                      Coincidence Noddy…

                      I go into hospital on Wednesday for a hernia operation.

                      I have put that down to trying to work my way through all the weighty bullshit being sprouted daily from Turnbull and his army of bullshit disciples ;-)

                      All the best to you.

                • deteego
                  Posted 11/02/2012 at 1:07 pm | Permalink |

                  Also I would recommend, Renai, as a journalist, to read that thread so he gets a better understanding of how the pricing scheme for NBN works

                  Simon Hackket, Beren Scott and John Lindsay are all people that know what they are talking about

                  • Alex
                    Posted 11/02/2012 at 1:14 pm | Permalink |

                    I find it a bit off putting that a lot of NBN critics normally refer to the NBN Corporate plan and Whirlpool as biased information!

                    Until of course, they find information within which suits.

                    Disclaimer: I haven’t read the apparent carefully and selectively chosen threads, as yet.

                    • deteego
                      Posted 11/02/2012 at 1:23 pm | Permalink |

                      When NBN critics say that whirlpool is massively pro NBN, what they refer to is that there are a group of around 15 people (Tailgator, murdoch, Dudeika, UTC, Mr Cresote, Myne, rashman, aark-vadar, megalfar, captain-cynic,ungulate,Graeme Here,annie pink, kity-katz, etc etc) which make up for like 90% of the posts in the NBN section, and who are all heavily pro NBN

                      Reading the NBN section in whirlpool now is like reading some far left/right wing uni pamphlet, its so one sided its disguisting

                      That thread is one of the few gems, where people from the industry who actually know what they are talking about (not punters) comment on the situation, and its kinda sad that these people get personally attacked by some of the people mentioned above when they happen to say something which doesn’t fit their view

                      • Alex
                        Posted 11/02/2012 at 1:42 pm | Permalink |

                        So please let me reiterate…

                        “Until of course, they find information within which suits”.

                      • deteego
                        Posted 11/02/2012 at 2:28 pm | Permalink |

                        Actually that article has officials from NBNCo in there as well, so its not completely one sided. The issue is that they didn’t answer any of the questions that were being asked (which was also the point of that thread)

                      • Alex
                        Posted 11/02/2012 at 2:31 pm | Permalink |

                        And other threads on Whirlpool don’t?

            • deteego
              Posted 11/02/2012 at 12:48 pm | Permalink |

              Also sorry to clarify, but its Baren Scott thats CEO of pipe, Bevan is another guy who I forgot on the top of my head, but asks very good questions

              • Alex
                Posted 11/02/2012 at 1:00 pm | Permalink |

                Slattery perhaps?

              • Noddy
                Posted 11/02/2012 at 1:16 pm | Permalink |

                Yes, sorry I was commenting on his calculations, he doesn’t allow any contention.

                In the “Advanced” user NBN Co show a household with a total of 34Mpbs peak demand including SDTV x 2 (8Mbps), HDTV x 1 (9Mbps).

                If this were to be provided in an “uncontended” manner ie with dedicated CVC capacity would the wholesale cost to the RSP to deliver that to the customer be:

                Tail (50/20) $34
                CVC 34Mbps x $20 = $680
                Total $714

                • deteego
                  Posted 11/02/2012 at 1:30 pm | Permalink |

                  Yeah as I said, continue reading the thread

                  Because thats actually how much it would cost (per user), to get unicast TV through the NBN

                  Currently it costs 0 on ADSL2, Fetch TV for example made a press statement that under NBN their costs would double (from current ADSL2 services)

                  • Noddy
                    Posted 11/02/2012 at 2:58 pm | Permalink |

                    Yes, IF it was unicast, and every user used that amount of data all at the same time.

                    And it cost 0 on ADSL2 because it isn’t unicast, every user doesn’t use data at the same time and the backhaul has the capacity. IF they did as you suggest it would cost on ADSL2 because they would need to upgrade the exchange backhaul to cope with it.

                  • Noddy
                    Posted 11/02/2012 at 3:00 pm | Permalink |

                    Why are you defending this, it’s not a real world scenario.

                    • deteego
                      Posted 11/02/2012 at 3:22 pm | Permalink |

                      It is a real world scenario, how do you think watching TV through the NBN is going to work

                      The NBN is replacing every fixed line connection, that means that if you want to watch TV, its going to be hooked onto the NBN, and things like watching TV does have that much contention

                      People do this right now in fact, on our current ADSL2 networks, its just that since ULL/LLS has no cost on data, its not an issue for ISP’s to provide that service

                      Are you honestly saying that you want to envisage a world where you have some massive majority of people just using the NBN for email, and we have some very small minority that just torrent, watch TV etc etc all the time?

                      If thats the case, there isn’t any argument for a national FTTH

                      • Noddy
                        Posted 11/02/2012 at 4:38 pm | Permalink |

                        You are proposing that everyone with a connection will watch a HD and 2 SD channels, all at the same time. That DTV will have ceased to exists, Foxtel statilite TV will be gone. Also for your scenario, every service has to be stupid enough not to use multicast.

                        I repeast, it’s not a real world scenario.

                        “its just that since ULL/LLS has no cost on data, its not an issue for ISP’s to provide that service”
                        BS, they might not be charged but it has a cost. Those links don’t build and upgrade themselves. If you tried what you were suggesting on the current network no one would watch TV, all traffic from the exchange would reduce to a crawl.

                        Your assertions are rediculous. post away, claim your hollow victory when I don’t bother responding. Scenarios like you are suggestion are pure fantasy.

                      • deteego
                        Posted 11/02/2012 at 5:30 pm | Permalink |

                        Can you please read the thread, i never proposed such a scenario

                        If I did propose such a scenario, then everyone would have to pay $700 dollars for a fixed line service

                        Stop over exaggerating my arguments

                      • deteego
                        Posted 11/02/2012 at 5:36 pm | Permalink |

                        Also I don’t know what you are talking about, all last mile traffic from exchange to premise is direct copper link, thats how ADSL2+ works…..

                        The traffic between the exchanges is covered by backhaul, and under the NBN its the exact same model. A current Telstra exchange will be an NBN POI, none of that is changing

                        Do you even understand how the network topology works? NBNCo is not building backhaul, the only cables they are laying is from the premise to the POI, that is not backhaul, that is the last mile.

    14. deteego
      Posted 11/02/2012 at 11:43 am | Permalink |

      People cannot use current NBN prices whatsoever as an argument to how future prices will be

      There are only 4000 subscribers on the NBN, there is no god damn market. In fact, the only ISP that has directly correleated costs between NBN and non NBN services is the guy from NuSkope, and he said explicitly that the costs for the NBN is more expensive, and that he is still making less profit

      What is most likely the case, is that companies are still making a profit, but less of a profit on NBN services than on non NBN ULL/LLS services (for the NBN that happens to be in the roughly 60-70% of Aus that has DSLAMS and ULL/LLS).

      An ISP such as iiNet, who has lets say 600 customers on the NBN, is hardly going to complain if they are making 20 less dollars per customer, as that is just 20*600 = 12000 a month (absolutely miniscule). However do that same for lets say a million customers, and we get 20 million dollars a month, quite a bit of difference.

      Another thing to note, is that in many areas where the NBN was installed, the only other service was Telstra wholesale, and as everyone already knows, its more expensive for ISP’s to use TW than to use ULL/LLS (or even NBN). This is especially the case in Tasmania and other areas.

      If you put that, together with the fact that NBN will pay itself off is an assumption, calling someone factually incorrect is disingenuous. You can say that “its unlikely NBN will be as expensive”, but when you say someone is factually incorrect you are saying there are no assumptions, whatsoever, and that is clearly not the case

      • Noddy
        Posted 11/02/2012 at 11:58 am | Permalink |

        So, you go for the conspiracy theory. Was it just very improbable coincidence, or did all these ISPs, including Optus now, meet somewhere and decide to release plans that are below cost?
        Even the Coalition didn’t try that one, too easy for the ISPs to call BS on. They argued the prices would rise as Matthew above did, showing it all as huge percentages, that boiled down to a couple of bucks. A few bucks that covered hugely increased speed and quota.

        • deteego
          Posted 11/02/2012 at 12:07 pm | Permalink |

          ISP’s have already stated that with NBNCo’s pricing model, unlimited plans would basically be non existant, even on lower tiers

          Even as we speak now, there is still no unlimited NBN plan, from either the likes of Dodo or TPG or anyone else

          And its not really a conspiracy theory, in many of those areas, the only company that was offering internet was Telstra (due to ULL/LLS being non existant). Other ISP’s would have been glad to get extra customers through the NBN, because even if its less profit (compared to if it was ULL/LLS), its still profit for them, and more importantly when you get a customer on your side, the likelihood of them churning is very low

          My point is this, there are only 4000 people on the NBN. Despite what Conroy says, any expected economist would tell you that there simply is no market, and so you cannot accurately state that such prices will always remain the same. The point is further strengthened when you have such ISP’s as iiNet, which are able to absorb any such potential profit loss due to their sheer size

          • Noddy
            Posted 11/02/2012 at 12:31 pm | Permalink |

            “Even as we speak now, there is still no unlimited NBN plan, from either the likes of Dodo or TPG or anyone else”

            I am not surprised, the unlimited plans relied on being limit by the speed of ADSL2 and backhaul congestion.

            “And its not really a conspiracy theory”
            OK, so it was just a huge coincidence that all the companies decided to run there NBN plans at a loss. Or, here’s a thing, they expect to make a profit. Any ISPs want to comment? Profit or are you running them at a loss?

            “My point is this, there are only 4000 people on the NBN”
            It makes it poissible to run at a loss, but it is no argument that they are pricing plans to run at a loss.

            • deteego
              Posted 11/02/2012 at 12:34 pm | Permalink |

              I am not surprised, the unlimited plans relied on being limit by the speed of ADSL2 and backhaul congestion.
              Uh, thats not proving anything

              You can offer unlimited on 12/1 on NBN with our own backhaul, nothing is (technically) stopping any company from doing that

              OK, so it was just a huge coincidence that all the companies decided to run there NBN plans at a loss. Or, here’s a thing, they expect to make a profit. Any ISPs want to comment? Profit or are you running them at a loss?
              Don’t twist my words, I never said they were running at a loss, I said they were making less profit then if they were on ULL+LLS

              It makes it poissible to run at a loss, but it is no argument that they are pricing plans to run at a loss.
              Maybe, but its a pretty damn strong argument against people using current pricing as an indication that all future pricing in an all NBN country would be stable

              • Noddy
                Posted 11/02/2012 at 1:02 pm | Permalink |

                “You can offer unlimited on 12/1 on NBN with our own backhaul, nothing is (technically) stopping any company from doing that”

                Maybe they will, on 12/1 at first. I imagine some companies will eventually. I can’t imagine them offering it initially. Your first customers to jump on your NBN plans would be the leechers. You’d want a good base of average to balance those that will suck down data 24/7.

                “Don’t twist my words, I never said they were running at a loss, I said they were making less profit then if they were on ULL+LLS”
                Sorry, my mistake. I am so used to people on here claiming they are running at a loss.

                “Maybe, but its a pretty damn strong argument against people using current pricing as an indication that all future pricing in an all NBN country would be stable”
                Who knows. It is something happening though. Better than the stagnation we have had for so long. And better than maybe have everything stopped in 2013 and more years of analysis and nothing happening.

                • deteego
                  Posted 11/02/2012 at 1:13 pm | Permalink |

                  Maybe they will, on 12/1 at first. I imagine some companies will eventually. I can’t imagine them offering it initially. Your first customers to jump on your NBN plans would be the leechers. You’d want a good base of average to balance those that will suck down data 24/7.
                  Maybe they will, maybe they won’t, but until then my point is correct

                  Todays leechers becomes tomorrows mainstream, you are required to “leech” to do any of the benefits that fibre provides, you can see this in more detail in the whirlpool thread I linked above

                  • Noddy
                    Posted 11/02/2012 at 3:04 pm | Permalink |

                    “Maybe they will, maybe they won’t, but until then my point is correct”
                    Yet the same argument is unacceptable on NBN retail pricing? ;)

                    “Todays leechers becomes tomorrows mainstream, you are required to “leech” to do any of the benefits that fibre provides”
                    Yes, and todays leechers are tomorrows super leechers. You think everyone will suck down as they can 24/7 like todays leechers just because they move to fibre?

                    • deteego
                      Posted 11/02/2012 at 3:19 pm | Permalink |

                      If you want to do things like watch TV, then yes

                      I mean, thats kinda the point of fibre. The only thing it brings over our current network is speed

                      If you are arguing that people shouldn’t be using the FTTH’s advantages, then you aren’t really arguing for the NBN….

                      • Noddy
                        Posted 11/02/2012 at 4:40 pm | Permalink |

                        And here you are again, arguing points that are only applicable if TV is supplied in the stupidest possible way.

                      • deteego
                        Posted 11/02/2012 at 6:18 pm | Permalink |

                        If you have a better way on how to deliver on demand services, I would like to hear it

              • Noddy
                Posted 11/02/2012 at 1:06 pm | Permalink |

                Really, there could be arguments both ways forever. And it won’t change what will happen.

                In the end if it is too expensive people won’t use it. If they don’t use it they will lose money. They will have to (as happened with HFC) cost it to get people to use it to at least pay for some of it.

                The worst that could happen is that NBN Co will not recoup it’s cost. We end up still with a first rate nation network that will serve us for 50 years and probably longer.

                • deteego
                  Posted 11/02/2012 at 1:15 pm | Permalink |

                  In the end if it is too expensive people won’t use it. If they don’t use it they will lose money. They will have to (as happened with HFC) cost it to get people to use it to at least pay for some of it.

                  The problem is that this is meant to be a monopoly, everyone will be forced to pay more, you don’t have a choice, thats how monopolies work

                  The worst that could happen is that NBN Co will not recoup it’s cost. We end up still with a first rate nation network that will serve us for 50 years and probably longer.
                  If thats the case, then NBN would have to be on budget, since its no longer a financial investment, and due to the way that interest rates work, if NBN doesn’t pay itself off, it ends up being a huge financial burden for the government

                  • delphi
                    Posted 11/02/2012 at 1:38 pm | Permalink |

                    “The problem is that this is meant to be a monopoly, everyone will be forced to pay more”

                    And yet you earlier stated exactly the opposite:

                    “The problem is that this is meant to be a monopoly, everyone will be forced to pay more”

                    Again, make up your mind…

                    “you don’t have a choice, thats how monopolies work”

                    Hilarious. I don’t have (and I don’t want to ) more than one road (ie it’s monopoly) leading directly to my house and yet I have a choice of multitude of services using that road. That’s how basic infrastructure (natural) monopoly works – not only the most efficient way but, as you very preceptively noticed (;) providing the end consumers with the lowest possible prices.The NBN is no different…

                    • delphi
                      Posted 11/02/2012 at 1:42 pm | Permalink |

                      In the above post it should be:

                      ==================================================

                      And yet you earlier stated exactly the opposite:

                      “and yes the prices would have been that high if NBN had to compete against Telstra’s network

                      Again, make up your mind…

                      ==================================================

                      • deteego
                        Posted 11/02/2012 at 1:46 pm | Permalink |

                        Please dont compare my comments out of context, I know you are trying hard to disprove me, but at least dont resort to logical fallacies in order to do so

                      • Alex
                        Posted 11/02/2012 at 1:55 pm | Permalink |

                        @deteego.

                        No one is trying to disprove you, we are here for mutual, friendly correspondence and to learn from each others experience and knowledge.

                        You may indeed have good points, but unless you lighten up, stop the confrontationist at all costs approach (because people actually dare disagree with you) understand that you are not the exclusive holder of the book of all knowledge and that others may in fact have a valid opinion too, then corresponding with you is a forlorn cause.

                      • deteego
                        Posted 11/02/2012 at 1:58 pm | Permalink |

                        I have to admit, the thing I hate the most is when people put words into my mouth or twist what I say, and there is an obvious reason why, its as bad as lying or being deceitful

                      • Alex
                        Posted 11/02/2012 at 2:07 pm | Permalink |

                        @ deteego

                        In that case, may I humbly suggest, instead of firing off rapid fire replies, half-cocked, you instead settle/wait and respond clearly and without ambiguity.

                        For example, the fact that you continually refer to your star witness Dr. Henry Ergas, as Argus, doesn’t instil a lot of confidence.

                      • deteego
                        Posted 11/02/2012 at 2:10 pm | Permalink |

                        I made that pretty clear earlier, as for the spelling mistake, it happens sometimes ;)

                      • Alex
                        Posted 11/02/2012 at 2:20 pm | Permalink |

                        Yes mistakes do happen. So benefit of the doubt to you.

                        See this is what it’s all about give and take and mutual respect.

                        Your turn ;-)

                    • deteego
                      Posted 11/02/2012 at 1:43 pm | Permalink |

                      I did a diff on those statements, and they are exactly the same…..

                • deteego
                  Posted 11/02/2012 at 1:38 pm | Permalink |

                  Also you can’t really use the average figure like that, Simon Hackett explains why

                  Well, they’d only make it ‘free’ if the incremental cost to them was acceptable.

                  Right now, the point is that a 1 megabit average consumption over a month costs an extra $20 (+GST) to supply under the current NBNCo pricing model.

                  A 1 megabit average is good for around 200 Gigs per month (assuming its evenly drawn around the clock).

                  But that world of averages just isn’t the real world!

                  What actually matters is the need to provision enough capacity in the network to provide acceptable results to consumers during the busy hour. Its like a freeway – it doesn’t matter how many cars pass down it on average, it matters whether there are enough lanes on the thing in rush hour.

                  From here
                  http://whrl.pl/RcIe6J

                  • Noddy
                    Posted 11/02/2012 at 3:12 pm | Permalink |

                    Yes, but you don’t also just provision without contention. With a higher speed, with enough users (one of the reasons he and iiNet have combined) you only need the same backhaul no matter what the speed of the connection 12/1 or 100/40, the data volume is the same. The faster connections just get the same data in a small time frame. iiNet try to alleviate peak hour with their on/off peak. Since the common plan is 100/100 and many users don’t even use 100 this really only works to have the heavy users shift some of their downloads into offpeak, torrests, game downloads, etc.
                    Actually staggering working hours has yet another benefit, beside reducing road congestion it could solve some internet congestion too.

                    • deteego
                      Posted 11/02/2012 at 3:17 pm | Permalink |

                      That actually only really applies when everyone is kinda on the same speed tier, which is the current scenario (ADSL2)

                      However if you download something at 100mbits, you are causing much more contention than if you are downloading at 14mbits, or 12, or 10

                      In any case, the point is, that if you want to do things like watch TV through the NBN, it is going to be much more expensive than with current ADSL2 services. Some tasks have high contention, and there is no way of getting around that. Watching a TV shows requires constant bitstream, and in the thread I showed, that has been calculated as contention

                      • Noddy
                        Posted 11/02/2012 at 4:43 pm | Permalink |

                        “However if you download something at 100mbits, you are causing much more contention than if you are downloading at 14mbits, or 12, or 10″

                        That effect disappears with scale.

                        “In any case, the point is, that if you want to do things like watch TV through the NBN, it is going to be much more expensive than with current ADSL2 services. Some tasks have high contention, and there is no way of getting around that. Watching a TV shows requires constant bitstream, and in the thread I showed, that has been calculated as contention”

                        Once again, your argument that depends on TV services being delivered in the most inefficient manner. They don’t now, why would they on the NBN?

                      • deteego
                        Posted 11/02/2012 at 5:41 pm | Permalink |

                        How is that ineffecient, you have to deliver x bits to a premise in order to provide a television service.

                      • Noddy
                        Posted 11/02/2012 at 5:55 pm | Permalink |

                        You don’t send the stream to each customer as an individual stream using CVC for each, you multicast. My bet is there maybe, infuture, if not now, local storage at exchanges to further reduce bandwidth for on demand movie streaming.

                      • deteego
                        Posted 11/02/2012 at 6:17 pm | Permalink |

                        This is not about multicast, this is about on demand services, I was never talking about multicast, the thread was never talking about multicast

                        Hell, can you actually read the thread, so you can take into consideration the people that actually know what they are talking about

                        ISP’s know how much data people pull, they know how much CVC will cost them, they made their costings using NBNCo’s own figures

                        Simon Hackett even put a nice diagram of his own companies customers data usage habits, to show that on a national level, NBN would raise prices

                        Or are you going to continue to argue from the top of your head?

                      • Noddy
                        Posted 11/02/2012 at 6:56 pm | Permalink |

                        I am arguing against your assertion that all TV requires CVC for everyone viewing it individually.
                        The reason multicast came up is because you were ignoring as a viable alternative to sending all TV to everyone individually.

                        “Hell, can you actually read the thread… Or are you going to continue to argue from the top of your head?”

                        I have read the thread. No where do they take the view that you have that every person who watch TV will require their own individual stream on the back haul.
                        Anyway, I am done with you rediculous twisting and turning. I have ceased to respond to you on other topics here because of that. Good day sir.

                      • deteego
                        Posted 11/02/2012 at 7:05 pm | Permalink |

                        Ok, couple of points noddy

                        1. You have no evidence to back up what you are saying
                        2. You cannot deliver on demand services via multicast
                        3. There is a nice chart in that thread, which was provided by Simon Hacket, which completely disproves what you are saying about data consumption for users. Currently, with ADSL2+ networks, the data usage is high enough for CVC to be a concern, and thats without any fiber whatsoever
                        4. You have no maths, no calculations, nothing at all to prove your point, you are just talking off the top of the head
                        5. This is the classic case of “I have nothing to say in defense, so I come up with something that comes on the top of my head that sounds somewhat plausible as a rebuttal”
                        6. The on demand TV was an example, there are plenty of other examples of data usage on the internet (zomg). Like I dunno, that tele working over internet, well that requires even more usage
                        7. You argument is contradictory, if you claim that people are going to use hardly any bandwidth, than the premise of the NBN is pointless, as well as it no longer being a financial investment because of the massive shortfall of funding. If you say that people will use heaps of bandwidth, it will cost them an arm and a leg

                        Read the thread before coming back to reply

                      • Noddy
                        Posted 11/02/2012 at 7:38 pm | Permalink |

                        “1. You have no evidence to back up what you are saying”
                        So you are ignoring multicast because you believe it doesn’t exist?

                        “2. You cannot deliver on demand services via multicast”
                        Correct. You were talking TV in general however. I touched on the on demand mentioning that it could be store at the exchange to reduce CVC. that is something theoretic and a possible future way to deliver on demand without chewing up CVC.

                        “3. There is a nice chart in that thread, which was provided by Simon Hacket, which completely disproves what you are saying about data consumption for users. Currently, with ADSL2+ networks, the data usage is high enough for CVC to be a concern, and thats without any fiber whatsoever”
                        Which has nothing to do with your assertions that every TV stream to each person chews up CVC.

                        “4. You have no maths, no calculations, nothing at all to prove your point, you are just talking off the top of the head”
                        It doesn’t need maths to show your suggestion that each stream to each user needs to be sent individually. I’ts just plane stupid.

                        “5. This is the classic case of “I have nothing to say in defense, so I come up with something that comes on the top of my head that sounds somewhat plausible as a rebuttal”
                        No, I have rebuted your assertion that TV requires individual CVC but you keep avoiding that.

                        “6. The on demand TV was an example, there are plenty of other examples of data usage on the internet (zomg). Like I dunno, that tele working over internet, well that requires even more usage”
                        Yes, but the example we were talking about specifically was on general TV, not data uage. There you go on the TV again. General TV would be multicast. On demand movies are usually paid for, I think the usually $6 could cover some CVC cost. That is without being smart about it if you are going to provide an big on demand service cache it at the exchange.

                        “7. You argument is contradictory, if you claim that people are going to use hardly any bandwidth, than the premise of the NBN is pointless, as well as it no longer being a financial investment because of the massive shortfall of funding. If you say that people will use heaps of bandwidth, it will cost them an arm and a leg”
                        Weren’t you the one objecting to people twisting and attributing things to people they never said? I have made no claim that people hardly use any bandwidth. All along I have simply been agruing against your assertion that each and every TV steam requires CVC per person.

                        “Read the thread before coming back to reply”
                        Which I told you I did. Now stop trying to argue I am trying to make a point I am not.
                        Let’s hope if you keep up this behaviour you joined the banned.

                      • deteego
                        Posted 11/02/2012 at 7:51 pm | Permalink |

                        Can you please state when I said that every single user would stream TV constantly

                        Stop making strawmen

                        The entire premise of your post is hence nullified

                      • deteego
                        Posted 11/02/2012 at 7:53 pm | Permalink |

                        Also your statement about caching shows you don’t know what you are talking about

                        Caching will do nothing about CVC charges, the CVC charge is from the premise to the POI, thats what it stands for.

                        As long as data goes from the premise to the POI, you are paying CVC. Caching data at the premise doesn’t stop that, lol…..

                      • deteego
                        Posted 11/02/2012 at 7:53 pm | Permalink |

                        Caching data at the exchange*

                      • Noddy
                        Posted 11/02/2012 at 8:12 pm | Permalink |

                        “Can you please state when I said that every single user would stream TV constantly

                        Stop making strawmen

                        The entire premise of your post is hence nullified”

                        Pot kettle black? I didn’t not say you said they would stream constantly. I said you were arguing that each TV stream to each user would require seperate CVC.

                        We were talking about this:
                        “Tail (50/20) $34
                        CVC 34Mbps x $20 = $680
                        Total $714″

                        DT : “Because thats actually how much it would cost (per user), to get unicast TV through the NBN”

                        ND “Yes, IF it was unicast, and every user used that amount of data all at the same time…. Why are you defending this, it’s not a real world scenario.”

                        DT “It is a real world scenario, how do you think watching TV through the NBN is going to work”

                        etc

                        “Also your statement about caching shows you don’t know what you are talking about

                        Caching will do nothing about CVC charges, the CVC charge is from the premise to the POI, thats what it stands for.”
                        Did you completely ignore where I said it was theoretical and would be something that would need to be worked out in future? If the data came from a cache at the local exchange it would not use bandwidth to the POI. Yes, I know it doesn’t exist now. But it’s an option for providing on demand TV without flooding the backhaul. Obviously it would be similar to multicast where the data would be sent from the POI but once at the exchange could be played back with only local bandwidth consumed. Try thinking outside a narrow little box. You suggest the requirement for the NBN is to provide oodles of TV, the changes and usages it could be put to are not a static thing. I am sure that a deal could be made to implement such a scheme.

                      • deteego
                        Posted 11/02/2012 at 8:22 pm | Permalink |

                        can you please state to me, where its stated, in the thread or in this article, where every person would unicast?

                        Your are completely missing the point

                        Unicasting on NBN costs $700 per user as is shown + backhaul charges

                        It currently costs nothing + backhaul charges

                        The CVC is NOT a backhaul charge, its NBNCo’s internal charge for using their network. They are completely seperate

                        would need to be worked out in future? If the data came from a cache at the local exchange it would not use bandwidth to the POI.
                        Uh, a POI is an exchange. Its NBNCo’s word for exchange. Its where ISP’s connect to NBN, and its where the backhaul is connected to…… Why do you think NBNCo is purchasing exchange room, they are converting them to POI’s

                        The only reason its currently called exchange is because its copper for telephony and that was the name given to telephone hubs (exchanges)

                        Caching at the exchange (or POI) does not stop CVC charges, lol……

                      • Noddy
                        Posted 11/02/2012 at 8:35 pm | Permalink |

                        “can you please state to me, where its stated, in the thread or in this article, where every person would unicast?

                        Your are completely missing the point

                        Unicasting on NBN costs $700 per user as is shown + backhaul charges

                        It currently costs nothing + backhaul charges”

                        Do you like arguing in circles? I only costs that if you have to provide that bandwidth for each person. If one in twenty people are unicasting you only need to supply 1/20th of that bandwidth, because it’s bandwidth charge, not a data charge.
                        This is where you said that you would need to because everyone watches TV at the same time. Started to say multicast has nothing to do with it.

                        “would need to be worked out in future? If the data came from a cache at the local exchange it would not use bandwidth to the POI.
                        Uh, a POI is an exchange. Its NBNCo’s word for exchange”

                        Yes, but currently there are a hell of a lot more exchanges than 104. OK, rather than use the word exchange I will say “Powered node closest to the customers premises that you can put a server to cache the movies”.

                      • Noddy
                        Posted 11/02/2012 at 8:58 pm | Permalink |

                        OK, looking at the NBN, the first suitable area for caching seems to be the FAN, these are then aggregated into the POI. The FAN seems to be the local exchange equivalent.

                      • deteego
                        Posted 11/02/2012 at 9:10 pm | Permalink |

                        FAN is not an exchange, a POI is

                        The exchange is where the ISP’s and backhaul connect to the NBN, this happens at a POI

                        It is in their documents

                      • Noddy
                        Posted 11/02/2012 at 9:12 pm | Permalink |

                        Anyway, this whole idea on how to reduce the impact of on demand TV is just a what if. What if you want to deliver it in the most efficient manner.

                        The whole crux is that providing 35Mb or whatever the figure was for each person who watches on demand TV at times is not required. It’s the same as saying you need 100Mb of CVC for every customer who has a 100Mb connection. You need to provide the fraction to cater for those that could be doing it at the same time.

                      • Noddy
                        Posted 11/02/2012 at 9:16 pm | Permalink |

                        Oh FFS, are you just trying to be difficult? The POI is connected to multiple FANs, the FANs are in a building with power and could have a server to supply movies put there. I haven’t actually seen them refering to any of them as an exchange, but OK, if it makes you happy the POI is an exchange.

                      • deteego
                        Posted 11/02/2012 at 9:22 pm | Permalink |

                        All I am saying is that what you are saying makes no sense

                        If you are sending 1 and 0′s through NBN, you have to pay contention and hence CVC. The POI (which is called a point of interchange) is where the ISP’s (and hence backhaul providers) connect to in other to provide internet through NBN. That is the exact same as a current exchange, its where ISP’s connect to in order to use Telstra’s ULL/LLS. POI’s serve an area (just like exchanges do!!)

                        Its not a question of efficiency, the only way you can be more efficient is by using compression on the data, and that technique is already being done, and has been for decades

                        The ISP’s in that thread also provided a nice chart of current usage habits for contention, and that is for current ADSL2+ speeds, and with those figures the CVC charge is a problem

                        Also most current on demand set top boxes do constantly take in data, if you want to record something on your box which watching another film, that is unicast

                      • Noddy
                        Posted 11/02/2012 at 9:56 pm | Permalink |

                        “All I am saying is that what you are saying makes no sense”

                        Sorry if you have some difficulty, but really, I believe I have been very clear in what I am proposing. I don’t know if it is an inability to comprehend, think outside the box or what.

                        You do not have to be patronising about how data is sent over a network, I am well aware. I also familiar with compression algorithms and have written many. Unless you reencode the video into as video you won’t get much compression using generic data compression.

                        OK, I will draw a simple diagram and see if you can just read carefully and actually comprehend it without misunderstanding what I am saying or misinterpreting it, or whatever seems to make you incapable of getting off your idea of what you think I am saying.

                        Here we has the POI? All the ISPs connect to it

                        POI — FAN
                        |
                        — FAN
                        |
                        — FAN

                        The POI connects to his children, FAN FAN FAN, etc.
                        FAN is active and is housed in a building with power. He would be a perfect place to hold movies to distribute to the network which as passive from here on.
                        I know you can’t hold them there now. But it is only a suggestion and would reduce the amount of data sent from the POI to the FAN. I am sure some company like Net flicks or whoever could come to a deal to provide the bandwidth from the FAN to the ONT at a reduced rate.

                        “”The ISP’s in that thread also provided a nice chart of current usage habits for contention”
                        See, you used the word contention.
                        This formula is not taking that into account:
                        Tail (50/20) $34
                        CVC 34Mbps x $20 = $680
                        Total $714

                        That is what I am complaining about and each time I do you say that is the cost per user, with contention it isn’t.

                      • Noddy
                        Posted 11/02/2012 at 10:00 pm | Permalink |

                        Come to think of it, the FAN is the likely spot multicasting occurs. If it was earlier they would be using bandwidth needlessly.

                      • deteego
                        Posted 12/02/2012 at 12:05 am | Permalink |

                        FAN’s are really not relevant, its nothing that ISP’s have any control over.

                        NBN might do caching at FAN’s, but ISP’s will still charge the CVC

                        Im not sure why you are trying so hard to defend this. Its in their business document, its stated in black and white. ISP’s connect to POI’s, any data that is not multicast that travels through those POI’s get a CVC charge, the charge is $20 per mbit of contention

                        Multicast only applies to static TV content, most of which will be on FTA anyways

                      • Noddy
                        Posted 12/02/2012 at 12:31 am | Permalink |

                        Must everything be confrontational?

                        “FAN’s are really not relevant, its nothing that ISP’s have any control over.
                        NBN might do caching at FAN’s, but ISP’s will still charge the CVC”
                        Nothing is set in stone. It isn’t an argument to denie on demand video takes
                        CVC. It is merely an idea on how on demand video could be supplied that
                        would be economical. Not trying to prove any points, just an idea.

                        “Multicast only applies to static TV content, most of which will be on FTA anyways”
                        Yes, but does allow supply of broadcast that aren’t FTA, like Foxtel and the like. Though since they already have satilite transmission it would be a waste. Better something new.

                        The only part I am trying to defend is the bit you ignored, that full CVC of whatever bandwidth is needed for each on demand TV customer. Which is this.
                        Tail (50/20) $34
                        CVC 34Mbps x $20 = $680
                        Total $714
                        Due to contention the full 34Mbps and therefore $680 per customer is not needed.
                        The whole caching thing is just an idea on how it could be supplied with less CVC at some time in the future if parties agreed to it and it was implemented and a price put on the service.

                      • deteego
                        Posted 12/02/2012 at 12:00 pm | Permalink |

                        If it is on demand that is actually how much is needed, per customer. There isn’t any way around that. The concept of caching does not apply (unless you expect people to always watch reruns of old shows), and we are not talking about multicast

                        There is no difference between any other type of data transfer and on demand TV, to NBNCo it will all have the same consistent CVC charge

                        The question should be, how many people do you expect to be running on demand TV on the NBN, and more generally how much data usage do people expect in general

                      • Noddy
                        Posted 12/02/2012 at 12:09 pm | Permalink |

                        OK, tell me this. Why is contention not applicable to unicast?
                        Why is it necessary to allocate the bandwidth required to each and every customer?

                        Because by saying that
                        Tail (50/20) $34
                        CVC 34Mbps x $20 = $680
                        Total $714
                        is the cost for each customer you are saying that somehow on demand somehow makes running with contention is possible. The only way I can see that is if every customer that watches on demand tv does so at the same time.

                      • Noddy
                        Posted 12/02/2012 at 12:20 pm | Permalink |

                        BTW, caching isn’t just applicable to reruns. The first access to an on demand, movie show or whatever would be cached so that subsequent viewers would access it from the FAN cache.

                        Look, either to you see it, or you stop pretending you do not understand, but really enough is enough. I really am sick of going in circles. It is nice to come on and exchange ideas on a forum but when it because like slamming your head against a wall it is just an exercise in frustration.

                      • deteego
                        Posted 12/02/2012 at 2:41 pm | Permalink |

                        That IS the charge for contention. Thats what the thread is saying. That charge of $700 is what it costs to supply HD streaming for on demand television for X hours. Its what ISP’s have to pay to NBNCo in order to allow their users to stream HD. Even NBNCo didn’t argue against this

                        NBNCo’s main argument is that the number of people that would stream HD would be minimal, so in the above scenario you may only have one person streaming HD for every 30 that are light users (and don’t stream HD). So in such a case its like 700/30 which is like 23 dollars per person

                        But again, thats on the assumption that you have a very minimal amount of leechers and everyone else just browsers the internet.

                        BTW, caching isn’t just applicable to reruns. The first access to an on demand, movie show or whatever would be cached so that subsequent viewers would access it from the FAN cache.
                        You will still get charged for the CVC. Read NBNCo’s business case and documents

                      • Noddy
                        Posted 12/02/2012 at 3:21 pm | Permalink |

                        “That IS the charge for contention. Thats what the thread is saying.:”
                        So now NBN charge for contention? No idea what it is do you?

                        “That charge of $700 is what it costs to supply HD streaming for on demand television for X hours:
                        For one user with no contention allowance.

                        “So in such a case its like 700/30 which is like 23 dollars per person”
                        So now contention exists, but only between users who view no HD video on demand. All those that watch and somehow compelled to all watch it at the same time?

                        “You will still get charged for the CVC. Read NBNCo’s business case and documents”
                        And I said it is something that does not exist now but a possible future way to implement video on demand efficiently. Are you incapable of any creative thought?

                    • deteego
                      Posted 12/02/2012 at 2:48 pm | Permalink |

                      And the reason this head banging is going on is because you don’t understand how NBN’s CVC works, did you even read their business case? Everytime I point to some fact, you try and pull something from thin air

                      You are trying so vehemently to defend NBNCo in this scenario, and you previously didn’t even know the difference between an exchange and a POI (again stated in NBNCo’s documents). You didn’t even know the difference between backhaul and NBNCo’s internal last mile

                      Michael Wyres got himself into the exact same corner, he assumed that a 50 gigbit plan would just have a $6 dollar CVC charge, but that is with a contention of 1:250, again this is stated in the thread. The mathematics is also shown in that thread, regarding how much it would (for an ISP) if the user wants to run a server or something

                      • Noddy
                        Posted 12/02/2012 at 3:15 pm | Permalink |

                        “And the reason this head banging is going on is because you don’t understand how NBN’s CVC works, did you even read their business case?”
                        I do know have the CVC works and have read the business case. It is a charge of $20 per Mbps from the customers premises to the POI.

                        “Everytime I point to some fact, you try and pull something from thin air”
                        Every time I point to the fact that the CVC charges for video on demand does not include allowance for contention you ignore it.

                        “You are trying so vehemently to defend NBNCo in this scenario, and you previously didn’t even know the difference between an exchange and a POI (again stated in NBNCo’s documents).”
                        So now the exchange and the POI are different? You were only just saying they were the same thing. I didn’t argue as it is just semantics. The documents talk of FANs and POIs, when I refered to the exchanges I was refering to the Telstra exchanges where, since they are using the Telstra ducts is the logical place to locate the FAN.

                        “You didn’t even know the difference between backhaul and NBNCo’s internal last mile”
                        I am well aware of the difference.

                        “Michael Wyres got himself into the exact same corner, he assumed that a 50 gigbit plan would just have a $6 dollar CVC charge, but that is with a contention of 1:250, again this is stated in the thread. The mathematics is also shown in that thread, regarding how much it would (for an ISP) if the user wants to run a server or something”
                        I have seen your discussions with Michael, my guess is he just gave up as I am. I have mainly continued to answer your message to work out if you are a troll who just loves to wind people up or have have some disability, because if you really thing your reasoned debate actually fools many people you are wrong.

                        Tail (50/20) $34
                        CVC 34Mbps x $20 = $680
                        Total $714

                        Once again, where is the contention in this calculation?

                        At Micelles 250:1 it should be $2.72 of CVC
                        At 50:1 it would be $13.60

                        You obviously have no idea what contention is.

                      • Alex
                        Posted 12/02/2012 at 3:17 pm | Permalink |

                        Morosely, seeing a bombardment of dogmatic and bigoted comments here since yesterday, it is apparent that head banging is par for the course when corresponding with a few obstinate individuals.

                        And of course these individuals are ‘always right/never wrong’, rolls eyes.

                      • deteego
                        Posted 12/02/2012 at 3:30 pm | Permalink |

                        Try reading what I said noddy

                        “So in such a case its like 700/30 which is like 23 dollars per person”
                        So now contention exists, but only between users who view no HD video on demand. All those that watch and somehow compelled to all watch it at the same time?

                      • Noddy
                        Posted 12/02/2012 at 3:46 pm | Permalink |

                        Yep, just read it again just in case it had changed, it still says the same thing. Your point?

    15. Martine
      Posted 11/02/2012 at 1:26 pm | Permalink |

      The Coalition wants Telstra to build FTTN.
      Telstra wants to charge $55 per Mbps wholesale for AGVC – nearly three times the price of the NBN CVC.

      This is a WORSE outcome than the NBN.

      Malcolm Turnbull wants Australian broadband users to pay MORE for an INFERIOR service.

      • deteego
        Posted 11/02/2012 at 1:33 pm | Permalink |

        The Coalition wants Telstra to build FTTN.
        Telstra wants to charge $55 per Mbps wholesale for AGVC – nearly three times the price of the NBN CVC.
        This is a WORSE outcome than the NBN.
        Malcolm Turnbull wants Australian broadband users to pay MORE for an INFERIOR service.

        Could you please provide sources for this. I haven’t heard any statement of Telstra charging that much if they were to build their own NBN, or extend their own network. In fact I haven’t heard any statement, at all, regarding what Telstra would make the future pricing for any extension of the network

        Currently when Telstra started installing FTTN nodes (such as top hats), the price increase has been a whopping 0

        Currently Telstra charges $16 for ULL + $2 for LSS for their copper network (its higher then 16 if you are in the completely regional areas of Australia, like the outback)

        • Martine
          Posted 11/02/2012 at 2:07 pm | Permalink |

          http://www.accc.gov.au/content/item.phtml?itemId=1021445&nodeId=6c7d5fbc514ff8e9c922f15742b132d5&fn=Telstra%27s%20supporting%20submission%20for%20Revised%20SSU%20-%20submitted%209%20December%202011.pdf

          “Reference Prices for the Wholesale ADSL Layer 2 Service will be $30 in Zone 1, $37 in Zone 2 and $55 for the AGVC”

          There wont be any ULL anymore with Telstra FTTN, it will be Telstra Wholesale.

          • deteego
            Posted 11/02/2012 at 2:16 pm | Permalink |

            There wont be any ULL anymore with Telstra FTTN, it will be Telstra Wholesale.

            You source doesn’t say that, try harder

            • Martine
              Posted 11/02/2012 at 3:07 pm | Permalink |

              http://www.telstra.com.au/abouttelstra/download/document/tls650-nbnproposal.pdf

              No sub-loop unbundling.
              No structural separation.

              Telstra AGVC $55 per Mbps vs NBN CVC $20 Mbps.
              Telstra nearly three times more expensive then NBN.

              Malcolm Turnbull wants Australian broadband users to pay MORE for an INFERIOR service.

              • deteego
                Posted 11/02/2012 at 3:14 pm | Permalink |

                …..

                The document you are linking is about the SSU for the NBN, hell its even in the uri

                Its got nothing to do with the NBN

                The word FTTN isn’t even mentioned in there

                • Noddy
                  Posted 11/02/2012 at 3:21 pm | Permalink |

                  Are you reading the same document? If is riddled with references to FTTN. It is Telstra NBN proposal that was rejected.

                  • deteego
                    Posted 11/02/2012 at 3:27 pm | Permalink |

                    Can you please show me where?

                    The article is clearly talking about ADSL2+ wholesale, because thats the only thing that is comparable to NBN’s world where everyone is a wholesaler.

                    Currently, you can go below Telstra’s wholesale, which is ULL/LLS, which is not possible under NBN

                    He is quoting something completely out of context, of course the article doesn’t mention ULL/LLS, in an NBN world it doesn’t exist!

                    • Noddy
                      Posted 11/02/2012 at 5:39 pm | Permalink |

                      “The document you are linking is about the SSU for the NBN, hell its even in the uri

                      Its got nothing to do with the NBN

                      The word FTTN isn’t even mentioned in there”

                      You were clearly talking about the document.
                      Common English convention would mean the “Its” in the second sentence continued to refer to the document or else one would write “The article”

                      As for pulling FTTN from the document the whole thing is Testras FTTN proposal and their charges for AGVC and fits perfectly with the discussion. Showing that Telstras proposal for FTTN had higher charges than the NBNs.

                      • deteego
                        Posted 11/02/2012 at 5:43 pm | Permalink |

                        Because Telstra is providing the ULL service, jesus

                        The Telstra Wholesale is expensive because Telstra is a vertically integrated company, and they are trying to make money off it

                        The ULL is mandated by ACCC and Telstra is not allowed to set the price of ULL whatsoever.

                        The document is not applicable whatsoever, unless you are assuming that ACCC will not regulate Telstra at all (is that what you are saying?)

                      • Noddy
                        Posted 11/02/2012 at 5:50 pm | Permalink |

                        Sorry, your reply had nothing to do with what I posted.
                        End of discussion. I will not be drawn this sort of debate..

                • Martine
                  Posted 11/02/2012 at 3:29 pm | Permalink |

                  “Its got nothing to do with the NBN”

                  Its the price Telstra charges for wholesale DSL where there is no competitor ULL services.
                  This is exactly the same as FTTN – no ULL.
                  ULL will disappear as copper is cut from the exchange and re-connected to the nodes.
                  No sub-loop unbundling.

                  Telstra AGVC $55 per Mbps
                  NBN CVC $20 per Mbps

                  The NBN is much much cheaper.

                  The Coalition’s Telstra FTTN will cost MORE for an INFERIOR service.

                  • deteego
                    Posted 11/02/2012 at 3:35 pm | Permalink |

                    No that document shows the pricing of Telstra wholesale services when ULL exists. The reason why ULL exists is because Telstra has a monopoly on fixed line internet, and so the government forces them to provide such a service. If Telstra was to do a FTTN, the ACCC would have mandate Telstra to provide a service similar to ULL on their network

                    Again, your source does not show that will be Telstra’s pricing for FTTN in a world without NBN. Such a document does not exist, because Telstra has never made such a comment, and for obvious reasons

                    This is exactly the same as FTTN – no ULL.

                    This statement is incorrect (well it actually depends on how the FTTN is done)

                    • Martine
                      Posted 11/02/2012 at 4:49 pm | Permalink |

                      “If Telstra was to do a FTTN, the ACCC would have mandate Telstra to provide a service similar to ULL on their network”

                      There is no ULL in FTTN, because there is No sub-loop unbundling.
                      Telstra will cut the copper from the exchange and re-connect at the node.
                      Telstra will provide a wholesale DSL service to replace ULL.

                      Telstra AGVC wholesale is $55 per Mbps.
                      NBN CVC is $20 per Mbps.

                      Telstra FTTN has much higher AGVC costs than the NBN.

                      The Coalition’s Telstra FTTN will cost consumers MORE for an INFERIOR service.

                      • deteego
                        Posted 11/02/2012 at 5:38 pm | Permalink |

                        Actually, if you have a proper cabinet, you can do loop unbundling on the node…..

                        Hence your whole argument is broken, your source is taken completely out of context

                      • Noddy
                        Posted 11/02/2012 at 5:43 pm | Permalink |

                        You cannot do loop unbandling on the node. The current VDSL2 technology which they are using for their speed examples, the ones from the UK, etc, cannot tollerate unbundling. All wires in a bundle need to be connect the one VDSL2 unit as those speeds reply on crosstalk cancelling between the cables. This has been discussed here in the past. Unbundled the VDSL2 speed would drop to near a third.

                      • deteego
                        Posted 11/02/2012 at 5:44 pm | Permalink |

                        Telstra is not using VDSL2 at all for their examples, you can do FTTN without VDSL2

                        In fact Telstra have said nothing about FTTN since the tender process

                        So thats all we know regarding pricing, nothing

                      • Martine
                        Posted 11/02/2012 at 5:49 pm | Permalink |

                        “you can do loop unbundling on the node”

                        See the Telstra FTTN document: No sub-loop unbundling
                        as you said previously >> “Telstra to provide a service similar to ULL on their network”

                        This is why you have Telstra wholesale DSL replacing ULL.
                        Telstra cuts the copper from the exchange and re-connects at the node.

                        Telstra AGVC $55 per Mbps
                        NBN CVC $20 per Mbps

                        NBN CVC is much cheaper than Telstra AGVC.

                        This is why the Coalition’s proposal for Telstra FTTN will cost consumers MORE than the NBN.

                      • Martine
                        Posted 11/02/2012 at 5:53 pm | Permalink |

                        “Telstra is not using VDSL2 at all for their examples”

                        Yes they are.
                        Try re-reading the Telstra FTTN document.

                        http://www.telstra.com.au/abouttelstra/download/document/tls650-nbnproposal.pdf

                      • Noddy
                        Posted 11/02/2012 at 5:58 pm | Permalink |

                        All the discussion about FTTN has been about VDSL and VDSL2. The Coalition quoted speeds were on the latest VDSL2 technology. Sorry, this discussion is just getting stupid.

                      • Martine
                        Posted 11/02/2012 at 6:02 pm | Permalink |

                        Yes, I agree.

                        deteego is just ignoring the points now

                      • Noddy
                        Posted 11/02/2012 at 6:05 pm | Permalink |

                        Yes, I sort of got that with the last few posts. The earlier post seemed coherent. I can’t think of a polite way of describing what they are like now other than they bare no correlation to reality or the post they are supposed to be reply to.

                    • deteego
                      Posted 11/02/2012 at 6:15 pm | Permalink |

                      That document is 4 years old, and hence is completely irrelevant, especially if you are comparing NBNCo’s current pricing with one that was proposed years ago

                      “firstly the cost to build to 98% increases exponentially”

                      This was an FTTN to 98% of Australia, significantly more expensive then 93% to Australia

                      “Optic Fibre and computerized nodes are now 30% more expensive due to Euro and US”
                      Again, due to the global conditions at the time

                      Oh, and did I mention, that this is 4 years old?

    16. Serge
      Posted 11/02/2012 at 1:50 pm | Permalink |

      To Grahame

      “In recent weeks Malcolm Turnbull has been engaged in a somewhat unseemly online dispute with an Internet website and its band of pro-NBN followers”

      if you are going to label people in relation to their stance towards the NBN, wouldn’t it be more consistent to describe Malcom Turnbull as “Anti-NBN ” After all, isn’t his brief to “destroy the NBN? This will always make it challenging for him to remain objective or credible.

      “In a funny sense I probably agree with the sentiment of the posters here that NBN Co won’t be able to successfully increase prices. I suspect that once the “braking” effects of the CVC on Internet usage become more widely apparent it won’t last.”

      So, what you are suggesting here is that NBN Co is somewhat dishonest with regards to future costs but that ultimately it won’t get away with it. If this is the case, what is the point of your argument? Also, what did you say that in the original article?

      No matter what your expertise is, predictions about future increases rest solely on speculations about future usage. These, in turn, depend on the sum of individuals’ behaviour. As economists have proven, time and again, it is always difficult to predict.

      Perhaps, the time has come to accept that the NBN is happening and instead of worrying about what will happen in 20 or 40 years, it may be better to focus on how we can get it right today.

      • deteego
        Posted 11/02/2012 at 1:55 pm | Permalink |

        So, what you are suggesting here is that NBN Co is somewhat dishonest with regards to future costs but that ultimately it won’t get away with it. If this is the case, what is the point of your argument? Also, what did you say that in the original article?

        NBNCo has no choice, they are forced to do what the government tells them to do, the government told NBNCo that it needs to make a return (since its a financial investment), and this is how NBNCo needs to get its money. They are not being dishounest (or completely honest), they are stuck between a rock and a hard place. Quidley has already stated this many times, they are a GBE, they are forced to carry forward government policy, they have no choice in the matter.

        Perhaps, the time has come to accept that the NBN is happening and instead of worrying about what will happen in 20 or 40 years, it may be better to focus on how we can get it right today.
        Thats kinda the attitude that ends up screwing the industry, one way or another

        • Serge
          Posted 11/02/2012 at 2:12 pm | Permalink |

          “NBNCo has no choice, they are forced to do what the government tells them to do, the government told NBNCo that it needs to make a return (since its a financial investment), and this is how NBNCo needs to get its money. They are not being dishounest (or completely honest), they are stuck between a rock and a hard place. Quidley has already stated this many times, they are a GBE, they are forced to carry forward government policy, they have no choice in the matter.”

          You really missed the point I was trying to make. Whyt alarm people in the first place, only to admit later that it is unlikely to happen.

          “Thats kinda the attitude that ends up screwing the industry, one way or another”

          Would care to explain how getting things right today will screw the industry?
          Had you understood my comments, you would have realised that the reason I said this because any predictions made about the next 20 or 40 years can only be based on pure speculation.

          • deteego
            Posted 11/02/2012 at 2:18 pm | Permalink |

            You really missed the point I was trying to make. Whyt alarm people in the first place, only to admit later that it is unlikely to happen.

            Because it may not happen? It is after all a hypothetical scenario


            Had you understood my comments, you would have realised that the reason I said this because any predictions made about the next 20 or 40 years can only be based on pure speculation.

            Maybe because for NBNCo to do things right, they are completely relying on pure speculation. Have you read their business case?

            • Alex
              Posted 11/02/2012 at 2:24 pm | Permalink |

              What do you think a CBA is, if not pure speculation then?

              Yet those critics want one.

              • cfm
                Posted 15/02/2012 at 11:32 pm | Permalink |

                It’s odd that we know and have plenty of information about the types of business and new opportunities that could exist with fiber, because Korea has a system already (although it’s much cheaper to build one there, less labor, more technical resources, much more concentrated users).

                What exists? What new kinds of business do they have there? What makes Korea money? Electronics Companies.

                You have an existing install, yet the NBN people still didn’t come up with any reasons that could show the benefit outweighed the solution.

                Why?

                You can work that out.

                It’s just a foolish foolish game for votes, or a disastrous error in judgement.

            • Serge
              Posted 11/02/2012 at 2:40 pm | Permalink |

              “Because it may not happen? It is after all a hypothetical scenario”

              But it is an attempt by someone (Graeme) who is trying to defend of someone else’s statement (Malcom) who has the task of “destroying the NBN”

              Also, as I have asked, it is so why not make it clear in the original article.

              Furthermore, if we lived our life worrying about all hypothetical scenarii, we would never leave the house in the morning.

              As for my screwing the industry, you fail to elaborate on how this would happen.

              And you are right you did not twist what I said, but you did not APPARENTLY misunderstood what I said either. You DEFINITELY misunderstood. In fact, you did a bit better. You replied to some disconnected part of my statement which made your reply irrelevant

        • Alex
          Posted 11/02/2012 at 2:12 pm | Permalink |

          Please heed your own advice

          http://delimiter.com.au/2012/02/10/nbn-pricing-revisited-the-arpu-argument/#comment-324741

          • deteego
            Posted 11/02/2012 at 2:20 pm | Permalink |

            I didn’t twist anything he said, I apparently misunderstood him

            • Alex
              Posted 11/02/2012 at 2:30 pm | Permalink |

              Well if you didn’t twist you put words in his mouth.

              Sad the rules you wish for must apply to others only.

              • deteego
                Posted 11/02/2012 at 3:50 pm | Permalink |

                You do realize there is a difference between twisting/putting words into someones mouth and misunderstanding right?

                The former, you are actually stating that someone is saying something is not, in the latter you misunderstood what they have said.

                • Serge
                  Posted 11/02/2012 at 3:57 pm | Permalink |

                  And do you realise that by answering only part of a statement, you imply that the person said something they did not mean to say. This is even worth that the part you address is not the salient part of the statement.

    17. Jay Z
      Posted 11/02/2012 at 2:16 pm | Permalink |

      LYNCH and his anti-NBN publications on Commsday thus far have been such propaganda that I stopped reading Commsday around the time the NBN started.

      When a telecoms journalist starts frequently mentioning keywords in his telco articles like ‘carbon tax’ and other anti labor government spin on a regular basis you have to wonder what his ultimate motives are.

      I’m very happy to read criticisms of some of the aspects of the NBN (heck there are things I find difficult to understand as well). However it has been obvious for all too long now that Lynch’s stance is 95% liberal propaganda disguised as journalism.

    18. 2 tanners
      Posted 11/02/2012 at 10:19 pm | Permalink |

      I’m opening up my time machine, all aboard.

      First, we are going to establish a copper network entirely at public expense and no, you don’t get a say, that is the Post Master General’s privilege. Next, over several decades, we are going to extract ruinous prices in return for junk services and somewhere along the way Telecom, then Telstra will be borne. Next, we give all our copper to Telstra and also compensate for allowing competitors into the market. Finally, we will compensate Telstra AGAIN for the Government making the move they could have, but did not, in introducing FTTH.

      The Government should at least demand the return of all its copper to manipulate international commodity markets and reduce the cost of the NBN even further.

      More seriously, the negative comments around NBN pricing ignore the almost certain potential of technology enabled job growth and economy growth. A true CBA would take these into account.

      Deeteego’s arguments, applied three generations earlier, would have us sending business commincations by post only, or perhaps in line with Bell’s vision, when he foresaw the day that each town would have its own [single] telephone line and number.

    19. Chris Watts
      Posted 13/02/2012 at 7:33 am | Permalink |

      I do not understand all the claims of Grahame being a ‘respected industry commentator’. From as long as I can remember, the man has been a shameless Telstra stooge and NBN FUD conspirator.

    20. Jean W
      Posted 13/02/2012 at 10:31 am | Permalink |

      What is the overall point of the pricing debate?

      We have a 2.5 party system. So, we have two main policies to choose from, with smaller players keeping them in check.

      We know a whole lot about Labor’s policy – and it’s happening right now.

      We know very little about the Coalition’s policy – and if the Libs fail to achieve a majority in both houses, Labor and the Greens might block it anyway. Even if they don’t, it could take years before anything actually happens.

      So, without an alternate policy to argue about (and a massive delay even if it does happen), why bother having these arguments at all?

      What we need is to make Turnbull talk. He needs to stop with the blind attacks on Labor and start telling us WHAT he can do better and HOW. His comments about “fast broadband at a fraction of the cost” tell us *nothing*. (Technically, he didn’t rule out an improper fraction…)

      Arguing over (say) ARPU just makes it easier for him to delay expanding on his policy.

      • cfm
        Posted 15/02/2012 at 7:02 pm | Permalink |

        Didn’t you read the policy that they already have?

        It’s focused on fiber backbones, mobile/sat coverage, and I think it depends on what you mean by better as to answer your question.

        Is a Ferrari better for everyone than a Falcon, yeah sure, if everyone had to race it around a track, however they both get you to where you need to go. We have already reached the rates needed for all forms of communications. Except holographic. ;-)

        • Alex
          Posted 15/02/2012 at 9:01 pm | Permalink |

          Yes but Falcons have not been made obsolete by Ferrari’s. Whereas fibre has made copper obsolete.

          I have read the oppositions policy, which in my opinion, is based purely around, we dunno, just let Telstra do it.

          • cfm
            Posted 15/02/2012 at 11:15 pm | Permalink |

            Fiber is a pinnacle technology, no doubt, so is the inverted metamorphic triple-junction solar cell, but you wouldn’t go out and spend a a hundred thousand dollars on it to achieve the same end result that you can for a damn sight less with just regular photovoltaic cell.

            If the argument has no context, and is about what the best technology is, fiber always wins, but the _context_ for any real life decision is cost and benefit. Well, it should of been anyway.

            I wonder, in your own personal dealings, do you also buy black caviar for your dips, paperclips made of gold, and drink 1996 Dom Perignon Champagne Rose for a quick one after work at the pub?

            • Alex
              Posted 16/02/2012 at 10:35 am | Permalink |

              Invalid point.

              We are talking about copper which was designed for telephony (psTn) not internet, but was adapted for broadband use – opposed to fibre which is designed for such usages.

              In other words copper is redundant/obsolete and is unable to handle our needs.

              Look at Telstra in South Brisbane replacing damaged copper with fibre. Even the much conservative opposition plan to roll out fibre into Greenfields. But by your logic they should all be using copper. Even the opposition can see (although they won’t admit it generically) copper is obsolete, otherwise they would be planning to roll out copper in Greenfields wouldn’t they?

              So should we be rolling out new copper?

              And once again I see the ridiculous parting shot of going to the nth degree, caviar, gold paperclips, seriously. Your answer “no I do not” because a) that’s idiocy and b) I cannot afford to do so. Whereas, the NBN is anything but idiocy and Australia can afford the NBN, no matter how you look at it. Even if it was on budget and being paid for by taxpayers only (which it isn’t) it’s only just over 1% of revenue pa, for 10 years. But it’s being funded via the sale of bonds and will repay itself…!

              So if I could consume Dom and caviar regularly for just 1% of my annual salary, perhaps I would ;-)

              But to jump on your bandwagon, I wonder, in your own personal dealings, if you buy out of date, stale bread and settle for you daily shit sandwich?

              • SMEMatt
                Posted 16/02/2012 at 11:06 am | Permalink |

                What you are comparing is not a falcon and Ferrari.
                It is a XD with a dodgy service history and current model FG.

                Sure you could spend money doing up the XD replacing the engine and the like but in the end you still have an old ford.

                • cfm
                  Posted 16/02/2012 at 1:12 pm | Permalink |

                  Nope. Not at all.

                  We currently own the same thing or better than 95% of the world has.

                  So you consider that an old beat up XD that needs work, and that 5% of the world to having a current model FG.

                  Your tweaked analogy sucks.

                  • Alex
                    Posted 16/02/2012 at 2:01 pm | Permalink |

                    “We currently own the same thing or better than 95% of the world has”.

                    Can you please clarify this?

                    In the mean time…

                    http://en.wikipedia.org/wiki/Fiber_to_the_premises_by_country

                    http://gizmodo.com/5390014/internet-speeds-and-costs-around-the-world-shown-visually

                    The last URL is from 2009 and from the US. Who were ironically claiming how bad they were and guess what? We were (are) even lower… and there are many more such charts, although up to date comparisons are a little scarce, due to the compilation time factor, one would assume.

                    As for us Aussies, I have never seen any chart where we are in the top 5%. So I think your 95% claim to use your words, sucks.

                    BTW, SMEMatt’s analogy is right on the money, if you think about it impartially.

                    • cfm
                      Posted 16/02/2012 at 7:44 pm | Permalink |

                      lol.

                      I am, of course, talking about the world, the globe, everyone on the earth. So no, this doesn’t include the connections to the ISS, although I think they are fairly average.

                      Also, I never said we were in the top 5% of the word, I said the opposite, we are below… However we are on par or better than the rest. The problem you have looking at a breakdown by country, is just an issue with incorrectly framed statistics, because a country with 1 million people connected at 50Mbps gets the same comparison as a country with 1 billion people at 4Mbps.

                      That’s such a poor representation of the world unless you frame it relative population. Don’t you agree? It’s this kind of misguided statistics that governments like to use when attempting to prove a point, like when they report crime, and other stuff. It’s made to look one way, but when you take it the correct context it actually paints a completely different picture.

                      Those nations that have the 15Mbps or better internet connection, they make up only 5% of the worlds population. I know, a sobering though those that think we are just not fast enough.

                      Did you also know that Mobile internet traffic is expected to take over desktop internet traffic within the next 3 years?

                      Oh well. Anyway, here are some statistics collected by the speedtest.net website, I’d not put a real lot of faith in them as they are biased to the people wanting to do a speed test, and therefore so not include any particularly slow connections. But it will serve a point for my questioned analogy.

                      According to netindex (http://www.netindex.com/download/allcountries/).

                      The average worldwide download speed is 10.09 Mbps

                      Australia’s current average speed is 10.21 Mbps

                      The worlds most popular car today is the Toyota Corolla, an economical largish small car. It costs a bit over $20,000 to buy depending on options.

                      With the current financial situation, I can probably purchase a current model Falcon FG for the about the same price.

                      Analogy proven!

                      • Alex
                        Posted 16/02/2012 at 8:54 pm | Permalink |

                        Got it my stats wrong, your’s right… sigh

                        So you are now talking about speeds specifically. So let’s check your stats.

                        Wow, we are –

                        1. marginally above average – 10.21 and the average is 10.09
                        2. ranked 42
                        3. and sit behind the likes of – Kyrgyzstan, Faroe Islands, Malta, Macau, Latvia

                        What a compelling argument… I’m convinced, stop the NBN… lol indeed.

                        As for mobile…

                        http://www.accc.gov.au/content/index.phtml/itemId/1008844/fromItemId/142

                        “Fixed broadband remains the dominant technology for downloading data, accounting for 91 per cent of data volumes”.

                        Analogy proven, lol again? SMEMatts’s analogy is the better analogy, period – old network/old car vs new network/new car. But feel free to continue arguing and trying to convince yourself.

              • cfm
                Posted 16/02/2012 at 8:22 pm | Permalink |

                Heh.

                So funny.

                What needs exactly? Fine, you say needs, what are the countries needs for fiber exactly? Don’t leave me hanging man. Or are we talking about YOUR needs. *torrent* cough *games* cough *youtube* cough.

                Copper is obsolete for what? There is no fiber only internet technology? Huh?????
                I love it when people makes claims based on nothing, nothing at all. Sure, it can’t reach the bandwidth that fiber can, but that just goes back to my analogy doesn’t it. Where is your technology that only fiber can give, please, i’m sure that the world, and senator Conroy, would love to know. Fiber is great, just absolutely pointless for the general public, and foolish project for a country geographically and demographically like Australia.

                And what do you think government bonds are? The government is basically taking out a loan on itself, it still has to pay it all back. It’s just another way to skin a cat, sounds better to people that have no clue what a bond is, but it’s still It’s the same outcome (except they have to pay interest as well!).

                50bn PLUS mate, be a realist, it’s going to go over, they have already mismanaged the project and cannot get the work done for the prices they wanted. You read the news!

                Why am I even still writing?! I think _I_ need to be a realist, and realize that you will say anything at all to justify this incredibly stupid project.

                • Alex
                  Posted 16/02/2012 at 8:42 pm | Permalink |

                  I could be a smart arse too, but instead, let me ask you.

                  Is copper an obsolete/superseded medium for broadband in 2012?

                  Please note: I am not asking is it still used, I am asking if it is current technology.

                  • cfm
                    Posted 16/02/2012 at 9:16 pm | Permalink |

                    Last one, since you didn’t answer a single question about your claims. But i’m afraid this is just getting so frustrating.

                    Is copper an obsolete/superseded medium for broadband in 2012?

                    If obsolete means that (from websters)

                    a : no longer in use or no longer useful
                    NO – billions of people use it everyday, and there is service it cannot provide.

                    or

                    b : of a kind or style no longer current : old-fashioned
                    YES – obviously it’s old-fashioned, and we didn’t have any system already there in the ground, we would install fiber because it’s better.

                    Thing is, we DO have it already there, and although it’s not the pinnacle of communications technology, due to constant advances it now provides every service we require, bar none. (except holographic)

                    • Alex
                      Posted 16/02/2012 at 9:43 pm | Permalink |

                      Two can play these games…

                      Yes it is frustrating dealing with the irrational, who when unable to correspond logically and meaningfully, go for baseless conjecture/assumptions, as you continue to do…

                      So as you insist, please let me respond to your questions. I’ll do it by paragraph…

                      1. What needs? YOUR needs, torrent, gaming…! Baseless conjecture. Going by your Turnbullesque comments, I could surmise that you are a Liberal fanboi, but then I do not know this for sure. So please do not double guess me and I will not you.

                      2. Copper is obsolete for what? Err broadband. Here’s the bits you conveniently omitted. Obsolete also means “out of date”. And supersede means to “supplant or take place of”. It is pedantic desperation or outright stupidity, to suggest copper is not obsolete or has been superseded.

                      3. Well done. Yes government bonds and securities are debt issuances. And how will those funds which are channeled to the NBN be repaid…? Here’s a thought, how about through NBN sales!

                      4. $50B, dont I read. No I do not read the Australian or the Tele, enjoy!

                      5. Why are you still writing.. I’d suggest as a realist, because you will say anything to bag this project.

                      Last one, eh, lol?

    21. Jenita
      Posted 13/02/2012 at 5:04 pm | Permalink |

      ARPU has passed its sell by date as there’s no real link between it and the margins of a mobile operator’s business.

    22. Posted 15/02/2012 at 1:35 pm | Permalink |

      Here’s the funny thing, I don’t think Grahame Lynch is referring to delimiter at all, I think he’s referring to that very well known pro-NBN site with all of their very well educated followers, news.com.au.




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    • Super funds close to dumping $250m IT revamp facepalm2

      If you have even a skin deep awareness of the structure of Australia’s superannuation industry, you’ll be aware that much of the underlying infrastructure used by many of the nation’s major funds — AustralianSuper, CBus, HESTA and more — is provided by a centralised group, Superpartners. One of the group’s main projects in recent years has been to dramatically update and modernise its IT platform — its version of a core banking platform overhaul. Unfortunately, as was revealed in November, the $250 million project has not precisely been going well, and the Financial Review last week reported that Superpartners is actually close to turfing it altogether and going back to the drawing board.

    • Qld’s Grant joins analyst firm IBRS peter-grant

      This week it emerged that Peter Grant, the two-time former Queensland Whole of Government CIO (pictured), has joined well-regarded analyst firm Intelligent Business Research Services (IBRS). We’ve long had a high regard for IBRS, and so it’s fantastic to see such an experienced executive join its ranks.

    • Westpac dumps desk phones for Samsung Android mobiles samsung-galaxy-ace-3

      The era of troublesome desk phones tied to physical locations is gradually coming to an end in many workplaces, with mobile phones becoming increasingly popular as organisations’ main method of voice telecommunications. But some groups are more advanced than others when it comes to adoption of the trend. One of those is Westpac.

    • Ministers’ cloud approval lasted just a year reverse

      Remember how twelve months ago, the Federal Government released a new cloud computing security and privacy directive which required departments and agencies to explicitly acquire the approval of the Attorney-General and the relevant portfolio minister before government data containing private information could be stored in offshore facilities? Remember how the policy was strongly criticised by Microsoft, Government CIOs and Delimiter? Well, it looks like the policy is about to be reversed.

    • WA Govt can’t fund school IT upgrades oops key

      In news from The Department of Disturbing Facts, iTNews revealed late last week that Western Australia’s Department of Education has run out of money halfway through the deployment of new fundamental IT infrastructure to the state’s schools.

    • Turnbull outlines Govt ICT vision turnbull-5

      Communications Minister Malcolm Turnbull has published an extensive article arguing that the Federal Government needed to do a better job of connecting with Australians via digital channels and that public sector IT projects needn’t cost the huge amounts that some have in the past.

    • NZ Govt pushes hard into cloud zealand

      New Zealand’s national Government announced a whole of government contract this morning for what it terms ‘Office Productivity as a Service’ services. This includes email and calendaring services, as well as file-sharing, mobility, instant messaging and collaboration services. The contract complements two existing contracts — Desktop as a Service and Enterprise Content Management as a Service.

    • CommBank reveals Harte’s replacement whiteing

      The Commonwealth Bank of Australia has promoted an internal executive who joined the bank in September after a lengthy career at petroleum giant VP and IT services group Accenture to replace its outgoing chief information officer Michael Harte, who announced in early May that he would leave the bank.

    • Jeff Smith quits Suncorp for IBM jeffsmith4

      Second-tier Australian bank and financial services group Suncorp today announced that its long-serving top technology executive Jeff Smith would leave to take up a senior role with IBM in the United States, in an announcement which marks the end of an era for the nation’s banking IT sector.

    • Small business missing the mobile, social, cloud revolution iphone-stock

      Most companies that live and breathe the online revolution are not tech startups, but smart smaller firms that use online tools to run their core business better: to cut costs, reach customers and suppliers, innovate and get more control. Many others, however, are falling behind, according to a new Grattan Institute discussion paper.

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