opinion In rubber-stamping the uncompetitive $800 million deal which Optus has signed with NBN Co, the national competition regulator has signalled a disturbing loss of independence and an obsequious willingness to make the Federal Government’s National Broadband Network project succeed at all costs.
It used to be that when the chairman of the Australian Competition and Consumer Commission issued a press release or gave a major speech regarding the telecommunications sector, that the various players in the industry would tremble in their boots.
Take this fiery speech which then-ACCC chairman Graeme Samuel delivered to the annual conference of the Australian Telecommunications Users Group in March 2007. At the time, Telstra was demanding more regulatory certainty in the ADSL broadband market before it would offer ADSL2+ services in exchanges where its rivals didn’t. Samuel said all Telstra had to do to get that regulatory certainty was to write to the ACCC asking for it. “You can’t get much more certainty than that,” he said.
Or what about the time the regulator slugged Telstra with a competition notice after the company controversially implemented a wholesale line rental price increase — without cutting its own retail prices. Or what about the time Samuel described the National Broadband Network proposal first raised by then-Telstra CEO Sol Trujillo in 2006 as “an illusion”? The list goes on. I can think of a dozen occasions or more when Samuel or other senior ACCC executives such as telco czar Ed Willett have sharply laid down the rules in a very public manner with respect to Australia’s telecommunications industry.
These moves made for great headlines, but perhaps more importantly, they made for great policy. It has been partially due to the ACCC’s harsh restraint of the activities which the nation’s powerful telcos (usually Telstra, but occasionally Optus) have been able to conduct in the Australian marketplace which has gradually delivered better telecommunications services to Australia over the past decade or so.
If not for the ACCC regulating Telstra’s wholesale telephone service, after all, we would still be paying STD rates up to $30 an hour, as I remember our household paying when I was a teenager. If it was not for the ACCC regulating access to Telstra’s copper network, after all, we would not enjoy the ADSL2+ speeds which we do today. And if it was not for the ACCC taking action on mobile network call termination, it may be a much more expensive and painful proposition to place calls between Australian mobile phone networks.
All of this is why it continues to surprise me that the ACCC takes such an obscenely soft touch when it comes to the Federal Government’s National Broadband Network project and the relationship of Telstra and Optus to it. Astute observers of the debate may remember the ACCC’s surprising and unpopular decision to set up 120 points of interconnect to the NBN, another arrangement which positively benefited Australia’s major telcos, to the extent that the issue was one factor behind the acquisition of Internode by iiNet, and the consequential gradual depreciation of competition between the two.
This morning’s draft determination by the ACCC regarding the $800 million deal which Optus has signed to shut down its HFC cable network and migrate its customers onto the NBN is a perfect example of this kind of ridiculous sweetheart behaviour. In a statement, the ACCC’s new chairman Rod Sims noted that the two main public benefits of the deal were that the cost of operating the Optus HFC cable network would be saved, and that it would cost less to migrate the telco’s HFC customers onto the NBN.
Now, these do sound like good benefits, it’s true. But the only problem is that neither has anything to do with Australian consumers, being chiefly benefits to Optus.
Who the hell cares whether it continues to cost Optus a large amount of money to operate its HFC cable network? The network was built more than a decade ago, in a completely different regulatory era, when there was very little competition in Australia’s telecommunications environment. Since that stage, Optus has had the best part of 15 years to recoup its investment in the network.
The truth is that Optus has done very little with its HFC cable network over the past decade. It hasn’t extended the network, it has barely upgraded it, it won’t allow most people in apartments (“multi-dwelling units”) to connect to it, and it doesn’t even publicise the infrastructure on its web site any more, preferring to direct customers to use ADSL broadband instead.
If the Federal Government had decided to roll out the NBN a decade ago, when Optus was trying its best to recoup the investment in its HFC cable network, then I could understand why the Government should compensate Optus for overbuilding its infrastructure. But with a meagre 400,000 customers on the infrastructure, right now Optus is looking for reasons to offload its HFC cable investment — and its deal with the NBN is a perfect way for it to do so. But this is not something that NBN Co should be concerned about. It was Optus which built the damn thing, after all, a decade ago, and it is Optus that should continue to pay to maintain it. It is not the responsibility of the Australian taxpayer to fund Optus’ ageing network infrastructure.
In addition, the ACCC’s statement that the Optus deal will deliver a lower cost HFC subscriber migration to the NBN is also puzzling. The regulator itself admits in the same statement that Optus is likely to migrate its HFC customers to the NBN organically anyway. This is something which was obvious when Optus first signed its deal with NBN Co in mid-2011. At the time, I wrote:
“Why the hell, after all, should NBN Co pay Optus $800 million to migrate its customers off its HFC cable network and onto the NBN fibre infrastructure? I can guarantee you that as the NBN rolls out fibre throughout Australia over the next decade, almost all of Optus’ HFC cable customers would eventually terminate their HFC connection and switch to the NBN organically. Why? Because the technology is incredibly superior, to start with, but also because they will have dozens of rival companies offering them great deals to do so.
In short, why is NBN Co paying Optus almost a billion dollars for something it would eventually get for free anyway?”
Other aspects of the ACCC’s statement are also puzzling. The regulator notes that Optus is unlikely to upgrade its HFC network to allow faster speeds. The only problem with this statement is patently untrue. It was only in August 2010, for example, that Optus announced it had upgraded the cable network to the DOCSIS 3.0 standard, following Telstra and allowing dramatically boosting speeds to NBN-like levels of 75Mbps.
The ACCC’s statement that Optus’ cable footprint is unlikely to be extended is technically true; but misleading. One of the main reasons why Optus only has 400,000 HFC cable customers is that if you live in an apartment block or business office block, it’s hard to get HFC cable connected to your premise unless the entire block is connected. If legislation was introduced to get around this ongoing ‘multi-dwelling unit’ legal issue, I suggest that many more Australians would connect to Optus’ HFC cable network — or that of Telstra.
But perhaps the biggest stunner in the ACCC’s statement is the one it saved for last, where it states that the sort of infrastructure-based competition that Optus’ HFC cable network could provide to the NBN would not actually drive competitive outcomes at all.
“The ACCC also considers that some of the usually expected gains from competition in the performance of the NBN are, on closer examination, reduced,” Sims says in the statement. “For example, the regulatory approach which will ultimately apply to the NBN is intended to provide strong incentives for NBN Co to promote utilisation of the NBN and to be responsive to customer needs concerning speeds and other aspects of service quality.”
Setting aside the fact that other fibred-up nations such as Korea decided to keep their HFC cable, essentially, what the ACCC is saying is there is no need for NBN Co to face competition in its wholesale broadband market, because the regulatory environment is sufficient to keep it in line?
Yeah, right. Let me remind Mr Sims and his colleagues at the ACCC of the past decade they have spent dealing with another Australian telecommunications monopolist: Telstra. Regulation never quite succeeded in keeping that 800 pound gorilla in line, and while NBN Co is a different beast entirely, for the competition regulator to suggest that a little market-based competition wouldn’t help is simply ironic.
As many readers will know, pending a decent effort by the Coalition (whose policy right now has potential but not detail), I am personally currently a supporter of the NBN; I believe it will deliver real broadband outcomes to Australia and that the policy is a strong one. It’s the best and most comprehensive telecommunications policy Australia has ever had. You can also see why the ACCC’s supporting the project; like everyone else in Australia’s telecommunications sector, it wants to avoid spending another decade negotiating with a vertically integrated Telstra. The NBN represents its best chance of exiting that scenario.
But let’s not pretend it’s perfect. The winding back of infrastructure-based competition and the huge billion-dollar subsidies being paid to Telstra and Optus as part of the NBN project are extremely concerning to anyone such as myself who believes that markets are the best way of efficiently delivering services to consumers. The ACCC’s absurdly contradictory statement this morning on Optus’ $800 million NBN deal is an indication that the regulator may have overlooked that fact.
As pro-NBN, I can see your point Renai and arguably, it could be said that the ACCC are perhaps treading lighter with the NBN?
However were the NBN to steam roll over the top of Telstra and Optus and in the process poached their customers “without compensation”, surely there would be legal recourse for doing so and then the opposite could be argued.. why weren’t they compensated for previous investments being made redundant?
But let’s not kid ourselves that infrastructure based competition is the be all and end all as many years of price gouging, lack of investment, technological restrictions and endless lega/lregulatory wrangles, proved it otherwise.
“However were the NBN to steam roll over the top of Telstra and Optus and in the process poached their customers “without compensation”, surely there would be legal recourse for doing so and then the opposite could be argued.. why weren’t they compensated for previous investments being made redundant?”
True; but then why do we have a situation now where it’s halfway? TPG, iiNet and so on are not being compensated for the money they’ve spent on ADSL infrastructure. You could argue there is a case for them suing the Government over those millions of dollars of sunk costs. To me it seems as if Optus is getting a special deal here – with NBN Co buying customers who would have likely migrated anyway.
That they are loosing what “they’ve spent on ADSL infrastructure” is not necessarily the case. Existing DSLAMs deployed in areas that are to receive fibre, can – (and likely will) – be redeployed in areas that keep their copper – those being the wireless and satellite areas.
People often forget that people outside the 93% are not forced onto the NBN. DSL will still be available in those areas, and in many cases, areas that didn’t previously have DSL.
*losing
‘People often forget that people outside the 93% are not forced onto the NBN. DSL will still be available in those areas, and in many cases, areas that didn’t previously have DSL.’
These areas do not have DSL just because new DSLAM’s are too expensive and ISP’s servicing these areas can suddenly make it viable because they have access to ‘used’ DSLAM’s post NBN.
I am sure there are heaps of cheap ‘used’ DSLAM’s both here and worldwide already, the main inhibitor to ADSL being made available in remote exchange areas is lack of backhaul or not a viable business case based on customer numbers.
Many ‘unviable’ exchanges were enabled by Telstra courtesy of the Broadband Connect program started by Howard and Minster Coonan with Government funding, this will still be the case if these exchanges are to be ever ADSL enabled at all, it has nothing to do with the NBN.
All that is true alain, and NBNCo. will be providing a better service than they can get now off copper, with wireless or satellite.
Is it perfect? No, certainly not. Is it better? Yes, in the vast majority of cases. Also, the fibre will not just STOP at 93%. Many communities have already expressed interest in purchasing access to the fibre NBN themselves and I hope they can come to some cross subsidy arrangements to allow this.
NBNCo. has also said they will continue to roll out fibre on a analysed need basis. Their continued goal will be to roll out fibre everywhere. But for many areas, this will take extra time as there’s HUGE amounts of fibre to be rolled out to service just a few dozen people.
It will happen, just not as quickly. These people won’t be forever stuck on these wireless services. If anything MORE needs to be spent getting fibre to them.
Didn’t say that it was related to the NBN – that’s just you leading the response, as is normal modus operandi.
It’s a side effect of the NBN that many thousands of DSLAMs – (both new and old) – will no longer be required in their current locations.
It’s common sense. Try it some time.
But it’s drawing a very long bow indeed to say these thousands of DSLAM’s will be deployed into exchanges that don’t have DSLAM’s already, because as you well know DSLAM availability has nothing whatever to do with these exchanges not currently being ADSL enabled.
So, you wouldn’t like to see an exchange with an old ADSL1 DSLAM upgraded with an ADSL2+ DSLAM, redeployed from somewhere else.
Glad we got that straight.
The NBNCo’s backhaul could make exchanges that are not currently viable for non-Telstra ADSL2+ viable. The NBNCo has to have the backhaul for wireless.
Maybe it will, but as I emphasised that has nothing whatever to do with ‘used DSLAM’s’ being made available, if you read ISP’s like Internode reasons for not enabling a exchange it is always viable backhaul at No 1 followed by enough existing customers in the area already to make a business case at No 2.
Well not really. Their equipment is housed in Telstra exchanges. Telstra has ‘sold’ their network. So would it not be Telstra’s problem that the ISP’s have no where to operate their DSLAMs?
That’s not quite true Isaac. NBN has leased access to Telstra exchanges, conduit and holes. Telstra hasn’t “sold off” any of its’ network, it has simply agreed to migrate people from it and not compete wholesale. (not that they really could much anyway in a few years)
Telstra still OWN their copper network, they just can’t use it inside the 93% fibre footprint unless people specifically DON’T connect to the NBN. This is similar to the Optus deal, but the Optus deal seems more frivolous because of the small number of people it covers relative to Telstra.
Yes, hence the inverted comma’s around ‘sold’. Essentially Telstra have entered into an agreement… by direct agreement from Telstra the DSLAMs are made redundant…. thus my point still stands…
I never have and never will agree that placing a DSLAM or two into a Telstra exchange and utilising Telstra’s network is infrastructure investment and that’s coming from someone who has no leanings to Telstra.
As I have argued before, because you put a Saas steering wheel on your Ford Falcon it doesn’t make it a Saas Falcon.
It’s pseudo competition.
When you sign up to an ISP does it matter to you who owns the network? No what matters is the retail offer – i.e. the service provided and price.
This is the folly of arguing about the so called lost infrastructure competition casued by the NBN, because there really isn’t much actual infrastructure competition, apart from maybe Optus/Telstra HFC (only because it was all duplicated for business reasons, otherwise…).
In the NBN world, there will be more actual retail competition Australia wide, which is what the average punter needs.
IMO
‘In the NBN world, there will be more actual retail competition Australia wide, which is what the average punter needs.’
Is that why ISP’s like AAPT, Westnet, Netspace, TranACT and Internode are all now owned by iiNet, that’s increasing retail competition in the NBN world is it?
I think it’s called “raising the barriers to entry” and it’s diametrically opposed to increasing competition.
Surely the ACCC would be on the side of reducing barriers to entry — wouldn’t they? (no, sadly not)
@alain: Ermm… feel free to inform me on the actual connection between NBN “world” having a link w/ your example of older retail ISP’s being taken over by Iinet.
Because i’m not seeing it.
ok RocK_M tell me all about all the NEW ISP’s that have come onto the market since the NBN has been commercially available as retail plans for all ISP’s in NBN footprint areas
Because I’m not seeing it, until that happens this statement – ‘In the NBN world, there will be more actual retail competition Australia wide, which is what the average punter needs.’ – is just wishful thinking not backed up what is actually happening in the market.
“ok RocK_M tell me all about all the NEW ISP’s that have come onto the market since the NBN has been commercially available as retail plans for all ISP’s in NBN footprint areas”
Ok then:
1) NBN hasn’t actually technically begun commercial operations of its’ fibre network; these are due to begin officially July 2012 as per the Corporate Plan
2) http://www.computerworld.com.au/article/422478/new_isp_launches_nbn-only_plans/
Here’s one already, and, as you so like to remind us, the NBN only has 17000 people using its’ services. If we scale that rate up, by your narrow logic (not mine, it is not likely to happen) that’s 1 new ISP per 17000 new services- that would make (if NBN achieves its’ 70% goal) roughly 1000 new ISP’s by the time the NBN is complete.
Now, that’s absolute rubbish of course, but this is simply using your logic which follows that “I haven’t seen any, oh, wow, 1 ISP, for all of 17000 people” I’d say more likely 10 or 20 new players, many niche, for say multicasting services and some cloud services, allowing higher upload ratings.
So, just because you don’t see it, oddly enough, doesn’t mean it doesn’t exist. Try reading around outside your comfort zone for a bit.
@alain: I would respond but it seems seven_tech has done my answers for me. Also I will ask again… whats the actual causal market link to your references?
Your talking about a previous market w/ an existing leading private monopoly on the wholesale level attached to the provider level as opposed to a new system of a wholesale separate from the provider level. Two different market conditions at work there.
Will if you think quoting ONE new ISP that is starting a three month trial from August is more than enough proof of increased competition under the NBN then go for it.
There’s no competition…?
Shh better not ALL of tell these people that…
http://www.nbnco.com.au/getting-connected/certified-service-providers.html
Sorry, “tell all”… for the pedantic who will make an issue
What has that list got to do with a reduction of independent ISP’s?
I don’t think it’s fair to blame the NBN Co for raising the barrier to compete. I think that bone lays at the feet of the ACCC at changing the POIs to 121 from 14. I mean, I understand why they increased it, but that’s nearly 9 times the size. But even then competition will happen. Just because you raise the bar doesn’t mean it won’t happen. You just might see larger players enter the market.
I think the problem we have with that Josh is that the ACCC are supposed to be looking out for the consumer. And pushing little, often budget, players out of the market by increasing the number of POI’s substantially seems counterintuitive to this.
You may be right that larger players will come in….but they have to be small first.
Yes competition…
I know it’s foreign to many as Australia only has ONE ‘national’ player at the moment.
But even the NBN critics have said (to try to detract from the NBN…sigh) there will only be 4 or 5 national RSP’s..
So we have 1 now and will have at least 4 nationwide.
Plus iirc, there are already new players who have not been in the fixed comms business previously, now onboard.
Pretty self explanatory why ISPs are not getting Compensation, they don’t own the Last Mile – which has been the argument all this time.
To me this article demonstrates the lack of what HFC did to the telecommunication/ISP industry, and why it still continues to not innovate in such the way where the HFC networks are owned by the BIG 2.
HFC stifled the upgrades needed for the Copper network, further more, the HFC networks got upgrades eventually, but the ADSL Network did not (I’m Talking to FTTN/FTTC/FTTP).
“True; but then why do we have a situation now where it’s halfway? TPG, iiNet and so on are not being compensated for the money they’ve spent on ADSL infrastructure. You could argue there is a case for them suing the Government over those millions of dollars of sunk costs. To me it seems as if Optus is getting a special deal here – with NBN Co buying customers who would have likely migrated anyway.”
Not really a fair comparison Renai, an 800 port DSLAM install costs about $100k per exchange, the ISP doesnt need to build their own CAN or backhaul (Telstra CAN, PiPE or Amcom or Nextgen etc Backhaul) so the ONLY infrastructure they actuall need to pay for upfront is the DSLAMs.
NBN co is actually doing the ISP’s a favour, Instead of a Minimum $100k spend per exchange, they now only have to spend $5k on a decent switch for each POI – so that is $605k in switches for 100% National coverage vs $1,00,000,000 (that’s right 1 billion dollars) for only 1,000 exchanges (Telstra has lit up 2176 exchanges for DSL so far).
As for Optus getting paid to move it’s HFC customer to the NBN, far cop imo at least they actually built a CAN and frankly imo they deserve to be compensated for past gov’s screwing them over by allowing Telstra to overbuild their HFC network (my area actually has all the Optus unused guide-wires still hanging from the poles!)!
I agree with most of what Renai has said here, I mean at the end of the day infrastructure competition is pointless but in this Optus HFC case it is just too insignificant to worry about and the price paid for this is too much imo. If it were up to me I would have handled things a lot differently with these Telstra and Optus deals. Of course you would then have people whinging about this non-diplomatic solution, even though they claim to want this sort of competition as soon as that very same competition destroys their investment naturally they don’t like it one little bit and that’s when they scream for the government to compensate them for their loss.
Infrastructure competition is pointless until you mention wireless infrastructure then all of a sudden everyone loves it.
Wireless providers love it as well as ARPU’s on data revenues are the mainstay of their existence, if they had to survive on fixed line infrastructure only they would struggle.
Apparently the NBN Co won’t struggle with it though because umm – they just won’t.
“Infrastructure competition is pointless until you mention wireless infrastructure”
The NBN is not a monopoly after all. Thanks for confirming that.
umm what? – that doesn’t make sense.
Are wireless networks competing with fixed line networks? True or False. Simple question but which way will you flop today?
alain, you’re confusing MOBILE wireless with FIXED wireless. NBNCo. aren’t and won’t compete in mobile wireless. They state this in their plan and go so far as to say this will produce competition in areas where fixed wireless is available.
ARPU’s are high on mobile wireless because of the areas wireless can cover compared with fixed line for the same cost. The service is much worse, but consumers are happy to pay for slower access to mostly email, Facebook and youTube occasionally.
NBN’s FIXED wireless solution covers about 4% of Australians….that’s hardly competing with even Vodafone’s ridiculous excuse for a network which cover 90% of Australians. Or Telstra’s which covers 99%. But it WILL give better service than currently available on those networks AND on fixed line networks to those 4% of Australians not being covered by fibre rollout.
NBN won’t struggle on fixed line ARPU’s because it is CROSS-SUBSIDISING with MASSIVE ARPU’s from the dense areas of Australia. THIS is why ARPU’s for fixed line in regional and remote areas makes Telstra/Optus “struggle” cause it won’t make them any money; they’re a business, that’s all they exist for! NBN is INFRASTRUCTURE- they’re here to provide the best infrastructure to ALL Australians. If that means losing money in some places balancing against other places making money, so be it. This. Is. The. Point.
The NBN is infrastructure that will cross-subsidise to allow the largest proportion of Australians possible to receive a better broadband service- it is NOT an enterprise that exists solely to provide money to its’ shareholder, the government; this is a secondary consideration. If you haven’t yet understood what the NBN is, you truly aren’t qualified to comment on how it will effect telecommunications in Australia.
‘alain, you’re confusing MOBILE wireless with FIXED wireless.’
No I’m not.
‘ NBNCo. aren’t and won’t compete in mobile wireless.”
Never said they would.
‘ARPU’s are high on mobile wireless because of the areas wireless can cover compared with fixed line for the same cost. The service is much worse, but consumers are happy to pay for slower access to mostly email, Facebook and youTube occasionally.’
No ARPU’s are higher on wireless because as a data unit wireless data it is more expensive than fixed line to the end user, the margins on fixed line data are poor relative to wireless data.
Telstra is not pumping millions into wireless LTE and increasing the coverage as fast as possible because they don’t think they will get their money back many times over, also do you think Telstra is cut up that it doesn’t have to upgrade its fixed line infrastructure and let competitors have it under ACCC set wholesale pricing and access conditions?
‘NBN won’t struggle on fixed line ARPU’s because it is CROSS-SUBSIDISING with MASSIVE ARPU’s from the dense areas of Australia. ‘
That’s assuming 70% of residences of the 93% target use the NBN for BB with a plan with a ISP, Australia is already at 12-13% wireless only residences and rising, overseas like the USA and UK are higher at around 25% and rising, every percentage increase in wireless only residences eats away at at that 70% the NBN Co doesn’t get them.
‘ If you haven’t yet understood what the NBN is, you truly aren’t qualified to comment on how it will effect telecommunications in Australia.’
I know exactly how it will effect telecommunications in Australia, 70% uptake and 7% ROI – tell them they’re dreaming.
BTW not being a zealot pro-NBN spin doctor doesn’t automatically mean therefore ‘you truly aren’t qualified to comment’.
“No ARPU’s are higher on wireless because as a data unit wireless data it is more expensive than fixed line to the end user, the margins on fixed line data are poor relative to wireless data.”
Who said anything about data? I get 2Gb of data on my mobile plan, which I pay considerably less for than my broadband and use maybe half. I don’t see how data massivelt affects ARPU’s on mobile wireless seeing as the vast majority of mobile wireless users use it from their phone plan which is bundled. They can make huge money on it because the system can cover such a wide area and covers so many people in that area, for a single outlay of 1 tower. Obviously in busy areas, more towers are required. But, for example, there may be 75 towers (I don’t know how many there are) in the Sydney CBD. And yet those 75 towers cover probably 1 million people daily. Compared to the km’s of copper and dozens of exchanges in the same area, mobile is comparatively cheap. DATA is not what gives mobile wireless operators high ARPU, its’ number of subscribers and keeping data low.
“Telstra is not pumping millions into wireless LTE and increasing the coverage as fast as possible because they don’t think they will get their money back many times over, also do you think Telstra is cut up that it doesn’t have to upgrade its fixed line infrastructure and let competitors have it under ACCC set wholesale pricing and access conditions?”
I don’t disagree with any of that. But mobile wireless operators are realising their networks CAN’T handle the data, so they HAVE to upgrade. Yes, they expect to make money off it. Just as if they were to upgrade fixed line they would expect to make money off that….which is why they don’t do fixed line upgrades in lower density areas….and why those same areas can STILL be profitable in mobile wireless because of the COVERAGE it provides, hence the high ARPU relative to fixed line. Thanks, you just proved my point.
“That’s assuming 70% of residences of the 93% target use the NBN for BB with a plan with a ISP, Australia is already at 12-13% wireless only residences and rising, overseas like the USA and UK are higher at around 25% and rising, every percentage increase in wireless only residences eats away at at that 70% the NBN Co doesn’t get them.”
No, you need to look closer at those numbers. That 12-13% “only wireless” INCLUDES those on naked broadband, a growing market. (and I would hazard a guess it does in the US and UK as well, though I don’t know where your sources are so I can’t say) The ACTUAL number on “wireless only” is about 6-7%. So….not such a threat now, is it? Oh and that 70%? That’s working off today’s numbers, there’s no telling whether it won’t grow by 2021. It may dip, but it could grow too….nice solid facts there.
“I know exactly how it will effect telecommunications in Australia, 70% uptake and 7% ROI – tell them they’re dreaming.
BTW not being a zealot pro-NBN spin doctor doesn’t automatically mean therefore ‘you truly aren’t qualified to comment’.”
You tell them they’re dreaming. What gives you ANY more righ tto say those experts are wrong because your “expert” opinion says otherwise? Until it is proven to be unattainable, I’m willing to give the top experts in telecommunications a bit of leeway over ideas that I only understand the basics of. What makes you more important?
I’d also broadly agree Renai. This agreement seems like a tacit waste of money overall. As you’ve said, why why should NBN pay for customers it’s likely to get anyway JUST because Optus wants to make its’ money back on what was largely an unprofitable enterprise?
However, I’d go so far as to say the ACCC are softening up on the NBN because the ONLY way to make the NBN attractive enough to business prospects and thereby shoring it up as a viable fix to our telecommunications woes, is to ensure its’ ROI. One way to do this is ensure the maximum number of people are on it ASAP. Now, certainly, these 400 000, or most of them anyway, would eventually go to the NBN just for sheer cost, let alone decent service, but how long would that take? 5 years? 10? NBN can’t afford that delay if it is to continue appearing attractive, to the government, to the Australian people AND to business.
Now, I know it is not the ACCC’s job to ensure the NBN has good business prospects- it’s job is to protect the Australian consumer. But if the NBN goes down in popularity because it is unlikely to see a return thanks to slow customer uptake, it is much less likely (even than now with a Coalition victory looking increasingly likely) to continue it its’ current form- and you’ve said yourself, the ACCC KNOWS dealing with Telstra for another 10 or 15 years is the WORST possible outcome for Australians.
The ACCC WANTS the NBN to succeed as they are desperate to remove the monoplistic Telstra and, with the Coalition plan still very vague, this is currently the only viable way to do it. It is very unfortunate that they believe, however, that $800 million extra is required to see that through. I don’t think it was necessary to pay that amount to Optus, but I think it likely that wouldn’t accept less. In an ideal world with bi-partisan support, NBN would’ve said “here’s 100 mil to make it quicker, if you don’t like it, rack off” but with the constant pressure to make itself viable both NBNCo. and the ACCC are under, it’s no wonder this sort of waste is going to happen, the same as with the Telstra deal.
It’s not right or fair that the NBNCo. should have to pay this sort of money to private enterprise to ensure its’ viability, but unfortunately I believe, in this political climate ANY advantage helps and the cost becomes a less primary concern,
Mind you, I’D pay $11 Billion if I had it to get away from Telstra’s monopoly…..
This comment pretty much sums up the situation.
I see the reasoning for it all and understand the ACCC’s actions. But what I don’t like is absurd doublespeak media releases where it attempts to justify those actions by pulling the wool over our eyes. Shutting down competitive infrastructure does, by the nature of such an action, decrease competition. It’s as simple as that – and I’d like to see the ACCC be more honest about that.
+1 bring on the honesty
Does this not apply exactly the same to the copper network? If some budget operator out there wants to buy up old copper lines and provide a cheap basic data service then is that really a disaster for the nation?
Except there’s a big but there Tel- No one would. Telstra are happy to decommission it, because it’s costing them almost $1 Biliion just to maintain. And they get $11 Billion out of the deal and exit with the giant market share they have…..so no, not really the same thing.
I disagree, The Howard Goverment was going to give Optus/Elders almost $1 billion dollars to rollout a network – where THEY WILL REAP THE REWARDS.
WHERE AS, BUYING HFC and MIGRATE, WE WILL REAP THE REWARDS.
This is big deal here.
Renai, @ a cost of $2k per customer this seems pretty reasonable to me, many companies spend these sort of amounts up front to grow their customer base and gain the longer term revenues.
Exactly. Let’s say after 18 months only one in four have migrated to the NBN and assuming $30/user/month.
300,000*30*18 = $162,000,000
A very rough estimate, but the ballpark is there and you’ve already lost out on 162 million in revenue. Chances are you may also not end up gaining some of those customers ever, as they will move to wireless (or nothing at all?). Add to that you’ve probably ended up with a lawsuit from Optus courtesy of being anti-competetitive.
I don’t think 800 million for buying the good graces of the Number Two telco is such a bad thing.
I don’t know why you are making a fuss about this now. This is just the final stage of the Federal Government’s policy. The ACCC can only work within the government’s legislative and regulatory frame work. The ACCC doesn’t make the rules.
The question of the NBN Co operating in a competitive (ie infrastructure market) has long gone. There is no doubt that Optus and Telstra would have been able to under cut the pricing that NBN Co offers via their HFC networks and match the performance at least for the next five to ten years.
This competition would have ensured the NBN Co wouldn’t be profitable for a long time, if ever.
“The ACCC doesn’t make the rules.”
Yes, it does make many of the rules. The ACCC is independent and by no means has to do what the Government says with respect to the NBN. In fact, on many, many matters, such as their deal with Optus, the Government and NBN Co need to seek ACCC approval.
Renai, you really don’t understand the ACCC role. The ACCC doesn’t make legislation the Government does. The ACCC has to work within the legislative frame work. The “rules” ACCC makes are not final and can be challenged in the Federal Court and often are.
I think that the NBN was created to deliver competition to markets that were suffering from a lack of competition – and thus suffered from high pricing and/or low speeds/old technology. It should adhere more strongly to this philosophy: If there’s suitable alternative, don’t plan a rollout!
NBNCo has already brought competition to the backhaul market for poorly served cities, without replacing the incumbent infrastructure.
For the last mile:
– Dialup / nothing? Get them NBN now! (I have no problem with the ~90% fibre, 7% LTE, 3% satellite arrangement.)
– ADSL is slow / old. If it’s the fastest an area has, the NBN should roll out there soon. Sooner still if it’s a suffering from a RIM infestation.
– HFC is old but definitely not slow, particularly if the Telcos keep contention ratios low (by adding extra nodes, etc.) One day, HFC will not be in the same ballpark as FTTH for speed and price – but it is right now. Same goes for VDSL2, for the few people that have it.
Optus (and Telstra) HFC customers shouldn’t be bought by NBNCo. Optus not wanting to cable an apartment? TransACT prices too high? Threaten to roll out NBN there and see if they change their mind. Once 1) all the broadband blackspots are covered and 2) FTTH pulls way ahead of the alternatives speed-wise, then roll-out FTTH and watch the customers sign up.
The NBNCo doesn’t have to buy customers. Existing providers can recoup investments. Hell, let them put in new kit if they will offer competitive services to NBNCo-based offerings.
I’d agree to a certain extent Richard, but 2 things to my mind:
1) It isn’t always possible to rollout the NBN to those without access to ADSL at all- the MUST provide the infrastructure to GET there first and to do that to all areas where this is happening would cover most of Australia and skip all the larger towns in between. The NBN rollout is best prepared to rollout to these towns ASAP WHILE connecting the majority of Australians at the same time for speed of changeover to the NBN.
2) It’s true Optus and Telstra could’ve simply been let lie in terms of their HFC network, but, this would’ve created competitive pressure against the NBN and Labor KNOWS the only way to get the NBN out is keep its’ business case solid. If that means buying up customers, they say, so be it.
I truly wish this weren’t the case. It’s a waste of present money (NBNCo. will recoup it eventually, but even so). THIS is where the Coalition could make a good case against the NBN in this form. They could say “We agree with the NBN on the whole, but think that it should allowed to gain customers, rather than paying for them”. The problem with this of course is it will cost more money up front than it is now (because you’d be doubling infrastructure being used and initially not gaining a return, rather than migrating from one to another and getting revenue), pushing back the projected ROI further. For a popular government, this wouldn’t be an issue.
But Labor is FAR from a popular government. And the Coalition doesn’t seem interested in coming to the ballpark of the NBN. They seem obsessed with “allowing the market to provide sufficient competition to drive growth and innovation”…..yeah, cause that’s happened alot over the past 20 years….
‘And the Coalition doesn’t seem interested in coming to the ballpark of the NBN. They seem obsessed with “allowing the market to provide sufficient competition to drive growth and innovation”…..yeah, cause that’s happened alot over the past 20 years….’
So what comment have you to make on wireless infrastructure competition which has been left to the market to ‘drive growth and innovation’, it would be have been much better if the Government owned the lot?
Err,
Fixed had an incumbent who initially owned everything and had every customer. So there was no way anyone could ever compete on a level playing field. Remember the HFC debacle?
This was not the case in wireless, which is why companies were able to compete fairly.
That incumbent initially owned the only mobile network in Australia as well and had the ‘monopoly’.
And you still can’t see the difference?
*sigh*
Repetitive use of *sigh* doesn’t get you out.
“Repetitive use of *sigh* doesn’t get you out.”
Neither does repetitive use of “customers will have LESS choice under the NBN” when in fact they’ll have more.
They will have one choice of terrestrial non-wireless provider. Many choices of who puts their name on the bills. Most people are able to see beyond such a pseudo-choice.
Pseudo-choice…..really? And what exactly do we have now? 85% of the copper lines are owned by Telstra and sold on to iinet, internode etc…..just a name on a bill really…
Except with the NBN, we don’t have the company that owns the infrastructure in the hands of the private sector, who’s only care is profit….
As they/ WE do now…
Invalid argument.
‘Except with the NBN, we don’t have the company that owns the infrastructure in the hands of the private sector, who’s only care is profit….’
Of course you fail to mention that Telstra Wholesale pricing and access on the monopoly last mile is set by the ACCC, just in the same way NBN Co pricing and access conditions will be set by the ACCC because it will be the new fixed line monopoly replacing Telstra.
“Of course you fail to mention that Telstra Wholesale pricing and access on the monopoly last mile is set by the ACCC, just in the same way NBN Co pricing and access conditions will be set by the ACCC because it will be the new fixed line monopoly replacing Telstra.”
Ahhhh, alain, you might want to retract that. The Telstra LACK of separation is the exact reason the ACCC has little control. The TOTAL wholesale situation of NBNCo. is the reason they WILL have control.
You’ve just regressed to an argument that has not only had the majority of the telecommunications industry been fighting to separate Telstra but is, in fact, the REASON the NBN is required.
This is the most ridiculous thing you’ve come up with. Telstra’s current PRIVATE nature AND their monopoly on Wholesale is the reason we’re arguing about the NBN…..
‘The Telstra LACK of separation is the exact reason the ACCC has little control. The TOTAL wholesale situation of NBNCo. is the reason they WILL have control.’
That glib analysis doesn’t hold up beyond a throwaway one-liner, explain how ACCC legislated control over Telstra Wholesale monopoly last mile will differ from ACCC legislated control over the NBN Co monopoly last mile.
Also explain how the Structural separation of Telstra as distinct from the Operational separation of Telstra which is what we have had since 2006 will be different in terms of ACCC control and outcomes for residences?
“That glib analysis doesn’t hold up beyond a throwaway one-liner, explain how ACCC legislated control over Telstra Wholesale monopoly last mile will differ from ACCC legislated control over the NBN Co monopoly last mile.”
Is “glib” the word of the day is it?
Explain? Ok, seeing as you seem to need it done several times to understand:
The ACCC can legislate, condemn and wrist slap Telstra, currently, as much as they want, but, ultimately, they are a PRIVATE company, that owns PUBLIC infrastructure. That infrastructure should be available for all, equally and, as the ACCC has pointed out on dozens of occasions, Telstra simply doesn’t make that happen. They make excuses. The whinge it isn’t profitable. They complain other competitors don’t have to deal with this regulation….which is the point seeing as none of the other Telco’s built their infrastructure with PUBLIC money. It is ours, Telstra are simply using it to greatest affect. I don’t care that the shareholder’s “bought” Telstra, the infrastructure is the country’s. But at the end of the day, Telstra is PRIVATE and the ACCC cannot directly interfere with private companies, only fine them.
NBNCo.? This will be a wholly PUBLIC company, which, will also be overseen by the ACCC for its’ wholesale prices. If it moves them out of line? The ACCC is a government agency, ruling over a government owned company, so it can FORCE it to change its’ prices. The ACCC CAN’T do this to Telstra, it can only fine or wrist slap, as with the other Telco’s because of its’ PRIVATE nature, even if it does own the vast majority of our infrastructure.
“Also explain how the Structural separation of Telstra as distinct from the Operational separation of Telstra which is what we have had since 2006 will be different in terms of ACCC control and outcomes for residences?”
Structural separation of Telstra will mean that the CAN moves entirely to NDC control, the wholesale part of Telstra which will be government regulated, like NBNCo. How though, you might say, can the ACCC regulate a still private NDC? Because of this clause:
In circumstances where:
(i) a failure to meet the requirements of this clause 10 is material and is not an
isolated incident; and
(ii) that failure forms part of a demonstrable pattern of repeated non-compliance
by Telstra,
that failure will constitute a breach of this Undertaking which is capable of being
directly enforced by the ACCC.
Note the last line. The ACCC can intervene directly, and that’s AFTER things like wholesale customers don’t pay until they provide the service.
The SSU FORCES the NDC to obey in line with regulations, or risk non-payment AND actual intervention from the ACCC. In other words, all those excuses count for nothing, when NDC doesn’t get paid if they’re not fixed. Unlike now, where they can just fob it off down the line if it’s less important, with little recourse for RSP’s to complain.
This means for the consumer:
– Increased level of service, through the ability of RSP’s to have rectifications dealt with quickly
– Increased reliability for the same reason
– No more ridiculous waiting around for up to 10 days for disconnect/reconnect when moving, seeing as new clauses will require the NDC wholesaler to make these a priority
– Cheaper prices, thanks to the fact that Telstra has to hire off NDC, like everyone else, for the same rates
– Equal access to Exchanges for all RSP’s, meaning fast connection and changing of services and higher likelihood of DSLAM’s being installed, because of open access.
This is all, of course, a moot point if the NBN goes in, because none of this will matter to the majority of people who will be on fibre, but you asked what the SSU would mean. I’ve just told you.
I can see why the word childish is bandied about when some are here…
Do I actually need to explain the difference between a fixed network belonging to one company over many decades, giving them an insurmountable head start, by having “all customers and all infrastructure in the entire nation” to themselves vs. the new tech on the block in a few limited areas and a few years head start, FFS?
Still can’t (oh, don’t want to) see it.
***SIGH***
The head start was nothing like “insurmountable”. There were about a half a dozen Greenfield fibre companies who were flourishing under the competitive arrangements until Labor’s NBN came along and put them out of business. So instead Telstra is installing fresh new copper in greenfields right now, so they can sell those customers over to NBN rather than allow them to fall into the hands of independent operators.
The competition was happening very nicely, and the NBN was put in place to stop all that, which it has.
“The head start was nothing like “insurmountable”. There were about a half a dozen Greenfield fibre companies who were flourishing under the competitive arrangements until Labor’s NBN came along and put them out of business. So instead Telstra is installing fresh new copper in greenfields right now, so they can sell those customers over to NBN rather than allow them to fall into the hands of independent operators.”
Note: GREENFIELDS. That’s about 150 000 homes a year….compared to the 13 MILLION premises already here. And if you’re silly enough to think these fibre companies would be able to branch out into mainstream Brownfields?…Hmm, how did that go for Telstra in South Brisbane? Oh that’s right, badly, because it’s horrendously expensive on Telstra fibre, compared to NBN fibre, which will be the same price, if not less than, HFC or copper for EVERYONE.
Also note: these Greenfields will get fibre. NBN has committed to that. Because Telstra took SO long deciding on the Financial Heads Agreement, they HAD to provide copper, where NBN couldn’t yet provide fibre, because of USO. Get your facts straight before trying to lecture.
“The competition was happening very nicely” — remind me again when HFC was going to be rolled out in Wollongong.
Tel, theres a monopoly either way. For fixed line connections, the monopoly is the fibre. For wireless, its the tower. Each service is forced to go through the respective technology to get the job done. The difference between the two is that for wireless the towers are owned by the retailers. Thats all. And thats where the debate needs to be – at the retail level.
I dont sign a contract with NBNCo, I sign a contract with the ISP. Whether there is 5 or 50 to choose from, THATS where I sign. I sign a contract with the RETAILER, not the WHOLESALER. At that level there is no difference between fixed line and wireless.
You’re splitting hairs if you disagree.
Whether there actually is more competition with the NBN or not at the retail level is debatable. At the moment, I have an effective choice of 3 or 4 ISP’s. If the choices go up because everyone is on the same network, there is more competition.
Pretty simple really.
“So what comment have you to make on wireless infrastructure competition which has been left to the market to ‘drive growth and innovation’, it would be have been much better if the Government owned the lot?”
Alex pretty much just covered it alain, you’re trying to defend your position using an entirely separate industry for your argument. Mobile wireless was NEVER government owned. It was enterprise ONLY from the beginning (alright if you want to go RIGHT back, Telecom Australia offered mobile wireless, but it was to all of about 3% of the population).
Actually, Telstra had a MAJOR advantage in this respect anyway, because they used revenue from their incumbent status in fixed line, thanks to the Government, to produce, what is arguably, the best mobile wireless network. And yet Optus and, to some lesser extent (well, up until 2009 anyway) Vodafone are able to properly compete with Telstra in the mobile wireless sphere, because wireless is such a different business from fixed line. So in this case enterprise has done well. But there was never any point where government ownership of a mobile network could be compared in this industry. I don’t know of any government owned wireless networks around the world, because wireless is so new (relatively speaking compared to fixed line) and deregulation has taken place in the telecommunications sphere.
But that doesn’t preclude there being advantages from HAVING a regulated market in fixed line. In our case MASSIVE advantages because deregulation has caused the poor service and high prices we have in fixed line, primarily due to large CAPEX required for fixed line rollout as compared to mobile wireless.
So in answer to your question, my statement would be, there is no call for government owned mobile wireless providers because of its’ business model. The mobile wireless business model allows for such large coverage for greatly reduced price over fixed line alternatives. They can’t give the speeds and data quantities that fixed line can, but mobile wireless is still very much a voice and text based system for it’s primary purpose, and the high ARPU comes from data. In fixed line, it’s the line rental and voice costs which give high ARPU, both of which are not very profitable anyway nowadays. Data (speeds and quantity), fixed lines primary purpose now, is what contributes to a low ARPU because you can’t get the same speeds 2km away as you can, 500m away, so distance VASTLY effects serviceability. In mobile wireless distance is much less of an issue especially as super high speeds are seen as unnecessary on the go (who watches TV on their mobile?)
Government owned fixed line allows greater serviceability for the majority of users, because it can cross-subsidise. Mobile wireless doesn’t need anywhere near as much cross-subsidy but can’t provide the speeds or guaranteed service. They are different business models and you can’t compare them directly.
Renai, “obscenely soft touch”? “ridiculous sweetheart behaviour”?
A couple of things. First and foremost, customers couldn’t give a rats what technology delivers the broadband they need, to wherever they need it, provided it happens and they can afford to buy it. If Optus sells them a service on their own coax or copper, fine, if they resell it on publicly-owned fibre, also fine.
Secondly, wholesale competition in national infrastructure is not an end in itself, but a means to ensuring affordable services to the end user, and that all users get a service at all. And we have suffered the folly of leaving this to the Telstra vs Everyone Else market for fifteen years. In the 1990s, Telstra chased Optus down the same streets duplicating HFC. In the 2000s, Telstra ignored regional exchanges until a competitor installed an ADSL DSLAM, and only then activated a Telstra DSLAM, undermining the business case for competitors to open new markets.
Thirdly, Optus WANTS to decommission its 20-year-old HFC and invest in its mobile data network where the public NBN is not a player.
After the ACCC’s idiotic insistence on anti-competitive regional POIs – excluding small operators from equal access to NBN customers – it has on this occasion given clear business reasons for Optus wanting to offer its HFC users the best product going forward, and that is fibre, of course. To maintain an unwanted HFC network which was the ants’ pants in the 1990s but is now nearing end-of-life, would have been an unwarranted interference by the ACCC in Optus’ commercial interests, and would stifle development of the competitive mobile phone network.
<<<And we have suffered the folly of leaving this to the Telstra vs Everyone Else market for fifteen years.
The market hasn't "failed" just because telcos aren't dumb enough to build super-expensive infrastructure designed for dense urban populations in small, one-horse towns such as yours. Want big city infrastructure? Move to a big city. The only folly on display is that of Conroy and Quigley continuing to con the public that Labor's NBN is affordable.
<<<In the 2000s, Telstra ignored regional exchanges until a competitor installed an ADSL DSLAM, and only then activated a Telstra DSLAM, undermining the business case for competitors to open new markets.
Bullshit. Telstra has hundreds of thousands more DSLAMS in regional exchanges than any other telco. There has been plenty of opportunity for Telstra's competitors to roll-out DSLAMs in regional exchanges but they haven't bothered. Even after Conroy wasted $250bn of taxpayers money duplicating Telstra's regional backhaul, these parasitic cherry-picking ISPs still haven't bothered to roll-out new DSLAMs beyond 14 or so regional exchanges out of hundreds served with new taxpayer funded backhaul.
<<<Thirdly, Optus WANTS to decommission its 20-year-old HFC and invest in its mobile data network where the public NBN is not a player.
What's stopping them? Absolutely nothing. Optus would have been more than happy to retain its HFC network. It was Telstra that insisted that NBNco also buyout Optus' network because it would have otherwise conceded a competitive advantage to Optus.
“Want big city infrastructure? Move to a big city”
It is people like you that ensure the majority of us pay through the nose for services you quite happily brush off as not bothering to make them cheaper because they’re cheap enough already.
More than 40% of Australians live outside cities. How about we come knock on your door and ask if we can live with you and share your vastly superior services. Don’t want us? Ok, well, to get these vastly superior services, we have to:
– Clog up your roads even more
– Bring the transport systems to their knees because of high capacity issues
– Produce rolling blackouts because electrical infrastructure can’t handle the load
– Remove all parks, wetlands etc. to ensure adequate room for houses, cause I ain’t living in an apartment, that’s half the REASON people move from the city
– Oh, and that “big city infrastructure” you’re so proud of? Watch it crumble as SO many people try to use youTube at the same time because contention of the copper and even your shiny new HFC becomes rife and slows EVERYBODY’S speed down, yes, yours too
– Oh, and those superior mobile wireless networks? They can’t even handle what’s CURRENTLY in the city, what do you think will happen if another 10 MILLION Australians move in? Then how good will your fixed line be in comparison? Oh wait, without the NBN, your fixed line WON’T be any good, because of CONTENTION on copper and HFC
I’m sorry, I’m normally pretty rational and reasonable in these discussions, even with people who disagree, but that comment sickens me. You are utterly selfish and do not deserve anymore RIGHT to those services than those fighting for them outside cities. I sincerely hope the NBN doesn’t pass you until later, that way, if the Coalition get in and cancel it, YOU’LL be the one on crappy infrastructure watching your other city mates with high speed broadband on their NBN services.
Why would government be providing INCENTIVE for people to more to regional hubs if they wanted us to move closer together?? The cities are over crowded, overly expensive, alot of it dirty and run down and many have services just as poor as the regional areas, because people like yourself who live in better areas keep complaining “their more than 20 MINUTES away, why should THEY get better services?? WE have more people?!”
Please, DON’T share your opinions if you’re going to bleet on about “wasting money on subsidising regional Australia” You’re precious city wouldn’t exist without regional Australia to feed it, clothe it and provide coal for your electricity.
Oh and in case you’re wondering, I live in a regional area, but I work RIGHT in the middle of Sydney and pay ALOT to just get there. The NBN will make NO DIFFERENCE to my work, I will almost certainly have to keep going into the city to earn a decent wage- but I’m 1 person in 1 industry and not selfish enough to believe this won’t VASTLY change the economic outlook for many regional areas.
Stop being so DAMN selfish!
3rd last paragraph, you’re is meant to be your, before anyone corrects my grammar. I’m a grammar Nazi too!
“More than 40% of Australians live outside cities. How about we come knock on your door and ask if we can live with you and share your vastly superior services.”
How about you just pay rent or a mortgage like everyone else has to?
“… cause I ain’t living in an apartment, that’s half the REASON people move from the city …”
Great, you made a choice, so man up and deal with the idea that people take some responsibility for the choices they make.
Once again invalid argument.
I’ve heard that South Korea has great, perhaps all our rural friends should move there?
You know the strangest part of all of this, “you need to move” stupidity. It seems the Liberal party supporters are the first to want to deny their Coalitions partners, supporters, of decent infrastructure.
has great “broadband”
< << the huge billion-dollar subsidies being paid to Telstra and Optus
There's that trusty Delimiter reality filter busy at work again.
Go read the McKinsey Report — there is zero obligation (legal or otherwise) for the Federal Government to pay compensation to Telstra or Optus for overbuilding existing networks. As a matter of fact, the McKinsey Report envisages head-on competition with Telstra.
It was Mike Quigley (or Tim Smeilie) when appointed to run NBNco who immediately realised that the business case is much weaker than portrayed in the case of head-on competition.
The fact is HFC is one of the leading technologies used to deploy NGN services in major markets overseas. NBNco would never be able to survive head-on competition with Telstra’s HFC network. Telstra’s HFC footprint services the most economical and lucrative markets, while NBNco has a grossly inflated cost base because they’re stupidly pushing fibre everywhere into small regional towns (which has to be cross-subsidised).
In a head-on competition scenario, Telstra would just write-off the capital cost of the HFC network and price to recover OPEX. NBNco wouldn’t have a chance in hell of competing against that and would go bankrupt in a jiffy.
Those aren’t “subsidies” — they’re BRlBES to abstain from competition.
The Labor Government is spending billions of taxpayer dollars “buying” competing infrastructure just to shut them down.
“Those aren’t “subsidies” — they’re BRlBES to abstain from competition.
The Labor Government is spending billions of taxpayer dollars “buying” competing infrastructure just to shut them down.”
Reality Check, this is the POINT of the NBN. It’s great for you (if you do) or anyone else who might live where these HFC networks are, that you’ve got access to these speeds. These people make up around 35% of Australian households, the other 65% don’t and probably won’t. Why? The CAPEX required to lay HFC will not decrease significantly since it has been over 20 years since Telstra/Optus put them in and they haven’t rolled them out elsewhere. This means the business case for rolling them out elsewhere is obviously not going to improve substantially, as they’re not currently planning any significant expansions (before the NBN).
Basically, you might see a modest increase to say 40 or maybe even 45% of Australians covered by these networks without the NBN, which still leaves the majority of Australians in the dark for decent broadband. The NBN pushes this whole argument over by redoing the infrastructure with CAPEX not being relevant. Now all Telstra and Optus have to do is log on and connect a customer via the NBN, getting their revenue without any CAPEX input. The NBN is POPULAR with ISP’s.
Now, we COULD go with the Coalition’s plan- FTTN. Who would build it? The ISP’s. Mainly Telstra. It would be there’s and they could charge what they like for it. And it wouldn’t significantly increase speeds to the majority of Australians. They’ve also said they’ll subsidise Telstra and Optus to a faster rollout of more HFC and fibre EXACTLY what part of both these plans involve subsidies doesn’t makes sense?
Yes, the NBN costs more to subsidise, they’re rolling out to more Australians!! I really wish people would get it out of their head that the NBN is a waste of money because it moves fibre into unprofitable areas- THAT’s IRRELEVANT. These Australians deserve fast, reliable broadband JUST as much as people for whom it is “financially beneficial” to give it to. Stop being so selfish.
Renai, at the risk of stating the bleeding obvious, the HFC footprint was commercially driven. The streets which have HFC were self-selecting because Optus and Telstra estimated that these streets were prepared to spend the most money on broadband-delivered services, compared to streets which were not connected.
What does this mean for the NBN? That these same premises will be valuable, and that incentivising their existing providers to efficiently switch them onto NBN fibre will expedite the wholesale revenues to NBNCo.
Given that 34% of existing, mostly regional, NBN fibre customers have already chosen high-value 100/40 Mbps services (compared to NBNCo’s budget forecast that only 8% would do so), then migrating a well-heeled customer within a month of fibre being available, instead of waiting up to 24 months for their HFC contract to end, is going to generate hefty revenues and quickly overtake the spotter’s fee.
Of course there is a political angle, but that is the coalition’s fault. The fact is that the economics and public good of facilitating early customer transfers clearly justify the $2 billion for getting 30-35% of customers off Telstra and Optus without faffing around.
<<<then migrating a well-heeled customer within a month of fibre being available, instead of waiting up to 24 months for their HFC contract to end, is going to generate hefty revenues and quickly overtake the spotter’s fee.
Bullshit. "Hefty revenues"? Right now, HFC and ADSL are priced close to parity. The same goes for NBN fibre. Not only does NBNco have to recover the cost of brand new fibre installations to each Optus HFC premise, they also have to recover the $800 mln on top of that. And the so-called "spotter's fee" is close to the replacement cost of the HFC network itself! — that's one hell of a "spotter's fee".
@ Reality Check,
Call it what you will, but it’s firstly (in relation to Telstra) $’s to use their pits and ducts and in relation to both Telstra and Optus, compensation for migration of customers, which will inevitably mean their “superseded networks” will be replaced by bigger, better, faster etc and Australia’s comms (well 93%) made uniformed.
It’s technological advancement/progression. Is it really that hard to understand?
So of course you will oppose all subsidies, gifts, BRIBES (to use your speak) especially in relation to Telstra’s copper for FTTN, if/when the opposition form government and pay Telco’s in their plan too, right?
Renai,
The Hansard for the Senate Estimates hearing last week is now online. Looking at page 108 of the 135 page PDF, where they talk about the Optus deal… Senator Conroy appears to be stating that NBNCo was previously not going to connect houses that were on the Optus HFC network. NBNCo had been planning for 96% of the fixed line market, but will now have 100%.
In regards to the $800 million, NBNCo will clearly get revenue benefits from the Optus customers. Mr Quigley and Senator Conroy note this in Estimates, and it is obvious from the fact the HFC network was only built on profitable streets. This means NBNCo will partly be paying for the benefit of additional revenue. Since Optus will be removing their cables, I gather they are also being compensated for the cost of decomissioning, which is surely going to cost tens of millions of dollars.
It would be nice if we could see the details of the deal, but I suspect that Optus wants to keep it secret far more than NBNCo does.
Interesting, I will check that out.
iirc the Optus deal is a condition of the Telstra deal. I’m not sure what would happen if the ACCC disallowed it.
It will be interesting to see the impact on the NBNCo’s corporate plan. Mike Quigley has already flagged increased capex as the Optus HFC customers have to be connected. $1600 per customer is a fair sized hit to opex too.
Don’t expect any complaints from ISPs about the Optus deal. Every voice service on the NBN has to have a bitstream data service. Every multi-cast ipTV service on the NBN has to have a bitstream data service. The NBN is being built for ISPs.
The difference between Optus HFC and iinet, TPG et all is that HFC is last mile infrastructure. As far as I know, Optus are the only other telco to at least have a stab at the last mile in a major way..
The other guys are using someone else’s copper.
Again, why the hell are you trying to promote competition in what is CLEARLY a natural monopoly? There SHOULD NOT be competition infrastructure.
If the market wanted to build it, they would have done so already. The fact they haven’t goes to show you that you have flaws in your argument. Why aren’t Optus and Telstra still competing in the HFC market? Because it is stupid for there to exist two competing networks!.
+1
+ 2
<<<If the market wanted to build it, they would have done so already.
Yes, they did. Two HFC networks covering 1 in 3 premises; Neighbourhood Cable in Geelong and Ballarat; Transact FTTP estates; multiple competing GPON fibre providers.
<<<<Why aren’t Optus and Telstra still competing in the HFC market?
They still are — both upgrading HFC to 100mbit in competitive response to each other.
<<<Because it is stupid for there to exist two competing networks!
Really? Tell that to AT&T, Verizon, BT, Virgin Media, Korea Telecom, Powercom, etc.
Long Live Infrastructure Competition!
1 in 3…
So 2 in 3 miss out.
But it’s typical (as the NBN critics have a contradictory view on every aspect of the NBN) on the one hand some claim HFC is great and is still being upgraded. Then on the other hand some claim no one wants HFC and ergo equate that to no one wanting the NBN…
So which is it?
@Alex
‘But it’s typical (as the NBN critics have a contradictory view on every aspect of the NBN)’
No they don’t, you hope they do but it is not the case at all.
‘ on the one hand some claim HFC is great and is still being upgraded.’
He didn’t say it was ‘great’, he just stated a fact that the two HFC competitors were still competing with each other in 2012 by upgrading their speeds and will continue to do so until both are switched off, keep in mind it is being switched off because the Government is giving Telstra and Optus billions to do so, the Government is fully aware that the total elimination of high speed fixed line choices is a key factor in forcing residences onto the NBN.
‘ Then on the other hand some claim no one wants HFC and ergo equate that to no one wanting the NBN…’
The constant cry from the NBN supporters is that Australia desperately needs the high speeds that only FTTH can provide, when it is pointed out that Australia already has high speed HFC which the majority of residences in its footprint do not sign up for this is dismissed as being of no consequence as a historical fact.
The key point is of course when faced with a CHOICE most residences under the HFC footprint are saying they don’t need high speed BB, and are happy with wireless, ADSL, and ASDSL2+ or a combination.
Many residences would also be happy with ADSL2+ and HFC under the NBN as well, but the risk is too high for the Government if it allowed choices that residences would not move to the NBN at all.
The NBN FTTH cannot survive on its technical merits of just being the fastest, its only glimmer of hope of a reasonable ROI is to make sure residences have NO choice when it comes to fixed line BB.
“The constant cry from the NBN supporters is that Australia desperately needs the high speeds that only FTTH can provide, when it is pointed out that Australia already has high speed HFC which the majority of residences in its footprint do not sign up for this is dismissed as being of no consequence as a historical fact.”
No, we WILL need the speeds, we don’t yet. I don’t think anybody pro-NBN would say we’re desperate for 100Mbps speeds right this minute (some people are, but not the majority) but give it 5 years and the majority will, give it 10 years and it’ll be standard. HFC CAN’T do this. DOCSIS 3.0 is the last upgrade to HFC and it can’t even give 100Mbps in real world use….
The majority of residences don’t sign up for it because the speed boost is not significant over ADSL2+, because of contention, because, as I’ve just stated the speeds aren’t needed YET and because it is MORE expensive than ADSL or ADSL2+. NBN plans are LESS than HFC for better speeds AND are usually as expensive or less than ADSL2+…..try again….
“The key point is of course when faced with a CHOICE most residences under the HFC footprint are saying they don’t need high speed BB, and are happy with wireless, ADSL, and ASDSL2+ or a combination. ”
Choice…..2 options is not a choice, it is a duopoly….look at Woolworths and Coles. And don’t start with “the NBN will not give ANY choice” customers don’t SEE wholesale, they see RETAIL and there will be plenty of choice there.
“Many residences would also be happy with ADSL2+ and HFC under the NBN as well, but the risk is too high for the Government if it allowed choices that residences would not move to the NBN at all.”
No, the Government HAS to migrate people to the NBN because they need the business case to be reasonable because people like you INSIST the NBN be profitable, as apparently its’ vastly increased speed, capacity, reliability and coverage make no difference, and the only way it can do that is ensure the most people are on the NBN. Meanwhile the Coalition’s policy: apparently speed isn’t important, now OR in the future. Neither is capacity (because last-mile copper still exists), reliability (copper again) or coverage (copper can’t handle the speeds everywhere, but fibre can)….oh AND it’s at a COST to us the taxpayer, AND allows the current monopolistic setup to use government funds to increase their own revenue.
Yes, this is much better…
“The NBN FTTH cannot survive on its technical merits of just being the fastest, its only glimmer of hope of a reasonable ROI is to make sure residences have NO choice when it comes to fixed line BB.”
Technical merits?? What “technical merits” does HFC or, for that matter, FTTN have over FTTH??? HFC is not being continued by either Telstra OR Optus because it is at the end of its’ useful life in terms of capacity and speed upgrades. FTTN WON’T increase speeds because it uses last-mile copper. TECHNICALLY these are both WORSE than FTTH, AND they can’t provide the speeds that are “least important”.
And once again with your “choice” argument- consumers see RETAIL, not WHOLESALE choice when it comes to prices and features. They don’t care where the increased speeds, capacity and reliability comes from (ie the NBN) as long as they can choose between ISP’s who GIVE them that reliability, speed and capacity increase; this can only BE provided by the NBN because it is not profitable and therefore won’t happen in many areas for infrastructure for most ISP’s. Why do you think Optus and Telstra are the only 2 to rollout ANY form of infrastructure?? It’s FAR too expensive for normal enterprise to give increased speed and capacity via their own infrastructure to the vast majority of Australians- HENCE THE NBN!
@seven_tech
‘No, we WILL need the speeds, we don’t yet.’
Oh I see, ‘we don’t need them yet’ , interesting, I assume also we don’t need HFC yet, perhaps HFC is also ahead of its time and we should leave it up until it is ‘needed’ !! :)
‘ give it 10 years and it’ll be standard.’
So 10 years ago we didn’t need HFC even though it was available, but magically 10 years from now we will need 100Mbps FTTH (but not 100Mbps HFC), of course the definition of need hinges around competing infrastructure being shut down, what you might call a compulsory need.
Everyone is on the NBN so therefore it proves we need it. LOL
‘The majority of residences don’t sign up for it because the speed boost is not significant over ADSL2+,’
The majority of residences on ADSL2+ averaged out are on 8-9 Mbps, that’s not significant compared to either up to 30 Mbps or 100 Mbps – really?
Doesn’t really explain why a residence that has HFC running past its door is happy with wireless BB either.
‘Choice…..2 options is not a choice, it is a duopoly…’
No sorry it’s still a choice, you are confusing it with the NBN where there will be NO choice when competing infrastructures are shut-down by gifting taxpayer funds to the infrastructure owners.
‘No, the Government HAS to migrate people to the NBN because they need the business case to be reasonable because people like you INSIST the NBN be profitable’,
It has nothing to do with me, Parliament requires it to be profitable because it is a promise by the NBN Co of 70% uptake and 7% ROI before it was approved , to achieve that fantasy 70% figure especially you have to ensure that the choice alternatives are eliminated.
‘Technical merits?? What “technical merits” does HFC or, for that matter, FTTN have over FTTH???’
I didn’t say that FTTN and HFC have technical merits over FTTH, FTTH is promoted by all as being technically superior to both those technologies, if it is let it stand on its merits then, leave Telstra and others to roll out FTTN, leave the HFC up and see what happens to the NBN’s justification for existence ie 70% uptake and 7% ROI.
‘ HFC is not being continued by either Telstra OR Optus because it is at the end of its’ useful life in terms of capacity and speed upgrades.’
So why isn’t Telstra and Optus shutting HFC down voluntarily without any $$$ to do so from the Labor Government if it is as you assert ‘at the end of useful life’?
Once again, we go over the same ground, but you seem to enjoy that.
“Oh I see, ‘we don’t need them yet’ , interesting, I assume also we don’t need HFC yet, perhaps HFC is also ahead of its time and we should leave it up until it is ‘needed’ !! :) So 10 years ago we didn’t need HFC even though it was available, but magically 10 years from now we will need 100Mbps FTTH (but not 100Mbps HFC), of course the definition of need hinges around competing infrastructure being shut down, what you might call a compulsory need.”
HFC is a stop gap measure between copper and fibre. It’s very NAME Hybrid FIBRE-COAXIAL means it is greater than one but less than another- therefore it is greater than copper but less than fibre. If we had HFC throughout Australia, we might be in a different situation. But we don’t. 33% of Australians have access to it, all in the cities. I could DREAM to have HFC here, but it is even MORE expensive to lay than fibre; its’ physical SIZE limits where it can be laid easily. A bundle of HFC is 100mm, fibre? 15mm. Regional Australia NEEDS HFC, but we won’t get it and it would be like giving someone a new hard drive when they ran out of storage, when you know, the next time they go for a program they won’t have enough memory, or a powerful enough graphics card OR a fast enough CPU, so they may as well have saved the money and bought a new computer!. It is a STOP GAP MEASURE only. We WILL need speeds GREATER than HFC in LESS than 15 years. WHY WHY WHY??? would we roll it out now, when we could rollout fibre cheaper and easier and it has infinitely more capacity?!!?
You can dodge around what “need” we will have all you like. Simply look at the global projections from a half dozen companies and independent organisations that show data speeds growing. In 2025, we will need more capacity than HFC can EVER provide.
“The majority of residences on ADSL2+ averaged out are on 8-9 Mbps, that’s not significant compared to either up to 30 Mbps or 100 Mbps – really?
Doesn’t really explain why a residence that has HFC running past its door is happy with wireless BB either.”
Um, have you looked at the what the “averaged out” speeds of HFC are??? They’re not even CLOSE to 30 Mbps, let alone 100?!
(http://www.dynamicbusiness.com.au/news/optus-broadband-faster-than-telstra-bigpond-2130.html)
This is an earlier dated test, but it shows 10Mbps AVERAGE for cable customers. And the latest broadband report worldwide shows only 19% (19!!!!) have access to ABOVE 5Mbps!
http://www.comparebroadband.com.au/article_1423_Australian-internet-speeds—not-as-slow-as-you-think-still-not-great.htm)
Where are you getting the idea that these HFC cables ACTUALLY GIVE 100Mbps in real life?? There are thousands of comments on Whirlpool and other sites about shoddy quality of service and how it can range from as high as 90 to as low as 1.5!. The only way to alleviate this is to MASSIVELY node split the HFC and with ONLY 33% of the population available to sell to, how likely do you think that is??
“No sorry it’s still a choice, you are confusing it with the NBN where there will be NO choice when competing infrastructures are shut-down by gifting taxpayer funds to the infrastructure owners.”
Once again the consumer DOESN’T CARE ABOUT WHO HAS THE INFRASTRUCTURE. They only care what service THEY get and for how much and that there is competition that allows them to choose THEIR price. Wholesale competition in Australia wouldn’t greatly affect this because the cost of rolling out competing infrastructure to 93% of Australia is so high that there would be massive increase in price to the average consumer. THIS is what the NBN prevents.
“It has nothing to do with me, Parliament requires it to be profitable because it is a promise by the NBN Co of 70% uptake and 7% ROI before it was approved , to achieve that fantasy 70% figure especially you have to ensure that the choice alternatives are eliminated.”
Parliament requires it to be profitable for 1 reason. One. To (pointlessly obviously) try and persuade people like you who will vote Coalition anyway because the Coalition policy WON’T make money. If this were bi-partisan, as it should be, profitability would not be an issue. It IS an issue, because of politics, NOT network viability. Oh, by the way, that “fantasy” figure of 70% Is it fantasy, or real, now that NBN HAS come to these agreements to migrate consumers?? You can’t have it both ways. It’s either fantasy, even though NBN are migrating consumers to ensure it ISN’T or it ISN’T fantasy and you don’t like what NBN are doing. That’s 2 different arguments and you’re putting a bet each way.
“I didn’t say that FTTN and HFC have technical merits over FTTH, FTTH is promoted by all as being technically superior to both those technologies, if it is let it stand on its merits then, leave Telstra and others to roll out FTTN, leave the HFC up and see what happens to the NBN’s justification for existence ie 70% uptake and 7% ROI.”
alain, as usual you’ve completely missed the point about this whole debate. There is no QUESTION the fibre from other companies could compete with NBN or even, in the short term HFC. THAT is why the agreements were put in place. The REASON NBN can’t compete is that in order to make it a truly NATIONAL Broadband Network, it HAS to cross-subsidise with profitable areas- ie the areas most likely to be “cherry=picked” by Telstra and Optus. They don’t give a DAMN about regional Australia in fixed-line. It doesn’t make them any money so why should they, they’re a business, not a government….and that is the POINT! The government are building this so ALL Australians have access to this service (93% in 10 years, 100% in 20 or so years further). This whole point around “allowing” competition with NBN is totally opposite to the IDEA of the NBN. It’s not a matter of not allowing competition being bad for consumers, its’ a matter of the competition would be BAD for consumers, in wholesale, because while the 55% of people in cities get decent prices, the NBN, being competed against, can’t afford to rollout to regional Australia and therefore the WHOLE POINT of the NBN becomes moot!
WHY do anti-NBNers have this obsession with “allowing enterprise to grow the market for the sake of the consumer”?? WHAT part of the last 20 years in Australian telecommunications has been GOOD for the sake of the consumer??!?!
“So why isn’t Telstra and Optus shutting HFC down voluntarily without any $$$ to do so from the Labor Government if it is as you assert ‘at the end of useful life’?”
What a stupid question, and that’s saying something. Optus have 400 000 people on it, even if they grow no more, that’s tens of MILLIONS of dollars a year from those people, even if they do nothing but keep it working with no competition except Telstra. Why WOULDN’T they keep it operational. And why WOULDN’T they expect compensation for lost revenue when it is decommissioned?! End of life doesn’t mean people stop paying for a service on it. Look at copper!? My parents 2001 Magna is at the end of its’ life, but they can’t afford to replace it. So they repair it and keep its “service” going. Exactly the case with Telstra and Optus. Telstra had already stated they won’t rollout anymore HFC BEFORE the NBN. They had the opportunity in South Brisbane and what did they choose? Fibre!
For the love of all that is holy, would you LOOK past your preferences for your own little world and look at what OTHER people around Australia want?! We can’t HAVE HFC and NOBODY is going to rollout fibre here commercially- HENCE THE NBN!
l wholeheartedly agree — Telstra’s HFC network upgraded with node-splitting would have served the Australian market adequately for another two decades at least.
Labor’s NBN is a totally unnecessary and draconian political vision being forced onto a well functioning telco market that has satisfied the needs of most broadband consumers for the past decade without the need for heavy-handed government intervention.
Malcolm’s subsidy program for broadband optimisation would fix the problems of the minority stuck in blackspots. Let’s all stop pretending that NBNco will turn a profit pushing fibre to small country towns.
Agree with who? He was saying node splitting to the degree needed was stupid. I get it, you don’t want money spent on things you don’t want. Well I guess you have had trillions spent on what you want, what’s a few billion on someone else? Selfish prick.
$1bn infrastructure shared among 100,000 people is $10,000 per capita. The some $1bn infrastructure shared among 1,000 people is $1,000,000 per head.
Who is the selfish prick? (Ans.: Those demanding $1,000,000 per head infrastructure in unviable areas.)
This is why you’d have a better chance of turning a profit from building a third HFC network to service the densest metro populations than pushing fibre to one-horse towns.
They aren’t running fibre to unviable areas. They are using wireless and satilite.
They are not spending $1bn for 1,000 people.
BS won’t justify that your a selfish prick who doesn’t want any money spent on people that could add a fraction of 1% more money spent on alternatives like roads, or the perenial Liberal favourite, reduced tax rates for companies and the rich.
I repeat Auditor, do you have any factual information to add?
“$1bn infrastructure shared among 100,000 people is $10,000 per capita. The some $1bn infrastructure shared among 1,000 people is $1,000,000 per head.
Who is the selfish prick? (Ans.: Those demanding $1,000,000 per head infrastructure in unviable areas.)”
It is not 100 000 people, it is, in fact, well over 7 Million who have no access now (30%). And, considering it will provide faster speed for ALL, for the next 40-50 years, it’s actually more like 32 Million. But let’s use 5 Million anyway.
$28 Billion (total government spending) on 7 Million people? $4000 each. That’s less an old baby bonus, before Labor scrapped it….and I’m sure there were many millions of those given out each year. Not that I have anything against those with kids, I don’t. I just think $5000 from the government for a kid was a bit rich, and I LIKED Howard.
But even THAT isn’t fair, because it’s NOT 7 Million people it will effect, it is, in fact, 23 Million, plus growth over 50 years. Every single person, one way or another, will benefit from the NBN. Please, try and disabuse me of this position. I want a laugh.
And $28 Billion over 23 Million people? Well that’s about $1200 each. Or about the cost of your average phone bill over a year. So for 1 years EXTRA phone bills, per person, we have a brand new network, that covers 93% with 100Mbps, and up to 10Gbps in the coming years, 4% with 12Mbps, with 25Mbps in the coming years and 3% with 12Mbps. FOR THE NEXT 50 YEARS. Plus of course they don’t actually just stop rolling fibre, it’ll continue at a slow pace.
But no, you’d much rather see the other 10 Million people that live outside anything that couldn’t be considered a city wallow away with useless infrastructure, because, how does that affect you?
Yes, selfish prick indeed.
Auditor, as Noddy has pointed out, good to see you didn’t ACTUALLY read my post.
Node splitting would have to be done to the extent that, in some areas, there would be a node on each street corner for HFC….now where have I heard that before? Oh, that’s right, the Coalition’s FTTN project. Because that’s the only way it could ACTUALLY improve speeds to the majority of Australian’s who are on copper- nodes on every corner. And even THEN they STILL can’t get any speed higher than 25Mbps unless we begin to implement currently experimental ideas for copper, which would allow us to push it to possibly 100Mbps at less than 1km from the node….or we could just upgrade to FTTH and not waste the money and the years to install on all those nodes that would eventually get ripped up anyway….
HFC is an upgrade from ADSL2+, in as much as it is a technology that can actually handle more than 25Mbps total. But it CANNOT give speeds anywhere near 100Mbps for the majority of users- it suffers from the same contention as copper, worse, in some areas. And that’s if you have it. More than 65% of the population doesn’t. Including those, in places such as Dubbo, Wagga Wagga, Armidale, Cairns and many other major regional hubs. Not to mention areas such as mine in the Southern Highlands, that aren’t considered hubs being so close to Sydney, but we STILL have nearly 70 000 people.
Auditor, you mention Telstra many times in your posts and usually fanatically positively. I can only assume you’re either:
a) Employed by them as a cable (HFC or copper) technician and fear for your job under the NBN
b) Have some form of controlling say in Telstra or
c) Have a large number of shares in Telstra
“Labor’s NBN is a totally unnecessary and draconian political vision being forced onto a well functioning telco market that has satisfied the needs of most broadband consumers for the past decade without the need for heavy-handed government intervention.
Malcolm’s subsidy program for broadband optimisation would fix the problems of the minority stuck in blackspots. Let’s all stop pretending that NBNco will turn a profit pushing fibre to small country towns.”
Wow, talk about political nonsense. Does anyone know if Tony Abbott or Warren Truss post on these forums?…
Draconian political vision- Maybe, don’t really care. It’s a fresh, viable, speedy plan to give Australians access to fast broadband now and continuing in the future (note that, continuing in the future. It is NOT all about the NOW believe it or not). I don’t care what it is as a political policy. It’s irrelevant. It’s good for Australia and good for business. The NBN is a good IDEA, politically or not is irrelevant, except to people such as yourself who seem to breath politics rather than oxygen. And those that don’t read, only watch tv.
Well functioning telco market…..WELL FUNCTIONING??? You’ve GOT to be in Telstra. That’s not baseless by the way. Every ISP in Australia knows this environment is not well functioning. And they’ve said as much, regularly. Otherwise, why would we have more complaints every year to the telecom ombudsman?
“Malcolm’s subsidy program for broadband optimisation would fix the problems of the minority stuck in blackspots. Let’s all stop pretending that NBNco will turn a profit pushing fibre to small country towns.”
Malcolm’s….what? “Tony” came along with that idea, you can guarantee it, because “Malcolm” wouldn’t be that ridiculous. Fix the problem of a minority of blackspots….I don’t even know where to begin on that. How many millions have no broadband whatsoever to speak of? 30% they reckon. And how many who CAN get it, get less than 5Mbps? 81% they reckon (they being international studies by the way, look them up) A minority?….yes, definitely….
NBNCo. will not turn a profit pushing fibre to small country towns. More clear evidence you are based in Telstra- NBNCo.’s job is not to turn a profit, although they have to thanks to political extremists such as yourself, who believe everything the Australian government provides its’ people MUST NOT cost us money. Their job is to provide fast, reliable, fair priced broadband to all of Australia. Does that mean there will be some unprofitable areas (in a strictly commercial sense) yes. Does it mean NBNCo. as a whole won’t be profitable? No. These agreements with Telstra and Optus, whether you agree with them or not are there JUST to make sure of that (and to ensure faster rollout in the case of leasing ducts from Telstra).
If you have some factually based argument against the NBN, by all means, pile in. Or if you have any questions about the NBN or the alternatives, feel free to ask. But seeing as you appear to know as much as you want about the NBN; ie that it is devil spawn from Labor and politically wrong, regardless of its’ benefits/disadvantages as a project, 3 words.
Bugger off. Please.
Sorry Renai, probably skirting close to borderline there. I’m frustrated.
LOL, love it. I wish I could dig up your post where you were going to keep it all very nice and level headed. I believe I posted good luck with the repeated BS not getting to you. Congrats, you are human :) It’s not that these issues are raise that gets you in the end. It’s that they are raised over and over, usually by the same people who insist on any ridiculous argument to defend them. Try as you might to show them 1+1=2 they will still argue that in some fashion it is 3, because three is the result they want for whatever reason.
lol Noddy. It’s even affecting my blogging on the NBN and THAT needs to be level headed. People don’t read rants when they’re looking for answers.
If only there was no politics. Just people who were elected by the people, to job only FOR the people….
oh wait, that was Democracy….
You eventually get sick of repeating the same stuff over and over. And you know what? It’s a total waste of time replying to them. You could have the worlds most coherent argument. You could provide and iron clad mathematical proof to them. And the end result? Nothing. It’s not about what is true or right, it’s self interest in things other than Australia’s communications or even the flow on economic benefits. It’s about Labor vs Liberal. It’s politics, not what the truth is but what you can get the people to believe so you can have power. Or what you can get people to believe to you can benefit yourself.
I’m SURE this is sarcasm. It MUST be. Nobody can write those things and be serious, right?
Specifically who are you referring to Karl? It’s not clear sorry.
seven_tech: referring to the auditor
“So 10 years ago we didn’t need HFC even though it was available, but magically 10 years from now we will need 100Mbps FTTH (but not 100Mbps HFC), of course the definition of need hinges around competing infrastructure being shut down, what you might call a compulsory need”
HFC cannot handle a large number of users. Put everyone in an area that is on ADSL2 onto HFC and you wouldn’t get 10Mb/s at best. I have friends on HFC in high takeup areas that drop below that of an evening.
“The majority of residences on ADSL2+ averaged out are on 8-9 Mbps, that’s not significant compared to either up to 30 Mbps or 100 Mbps – really?”
I would love to have HFC at 100Mb. I and my gf in 3 locations have tried to get it. They wouldn’t do it, they wanted to put us on ADSL2 with a dish for Foxtel. Seems they aren’t that keen to connect premises to HFC unless they are already cabled.
“Doesn’t really explain why a residence that has HFC running past its door is happy with wireless BB either.”
That would be because they are very low data volume users and it’s cheaper to just use their mobile quota. Another reason some people use it is because no other connection is available due to full exchanges or RIMs and they aren’t happy.
“I didn’t say that FTTN and HFC have technical merits over FTTH, FTTH is promoted by all as being technically superior to both those technologies, if it is let it stand on its merits then, leave Telstra and others to roll out FTTN, leave the HFC up and see what happens to the NBN’s justification for existence ie 70% uptake and 7% ROI.”
Telstra would not roll out FTTN without being paid to do it. They aren’t stupid enough to roll out a competing infrastructure to make a profit. The only reason they rolled out HFC was try and send Optus broke.
“So why isn’t Telstra and Optus shutting HFC down voluntarily without any $$$ to do so from the Labor Government if it is as you assert ‘at the end of useful life’?”
Because if they didn’t they would take the government to court. It would be nice to leave them with their HFC. It could compete for say 10 years as long as too many people didn’t want to use it. Stand alone it would be swamped and no one would get any speed. If it tried to supply everyone in an area with broadband it is dead already, it can’t. I don’t know why you’d want to use HFC when there is cheaper and better FTTH. Maybe Telstra will run it at a loss. I doubt it though, not like you can send the government broke like they tried with Optus.
alain, as you seem to, I may also be pushing the comments policy here? But… Delimiter (an evidence based forum by Editor’s choice) seems to have taken an abrupt IQ plummet since your arrival :-(
I am all for fervent debate, but “sorry dude”, imo your frivolous argument approach is quite immature and most unproductive.
I note with interest too many of your correspondences end abruptly because after you ask questions and receive logical evidence based answers (which is part of this process) once you are asked even one question, you shut up shop and just move on :/
Anyway, your first two dozen unsubstantiated furphies above have been refuted with basis time and time again, so if you don’t want to ‘even consider the evidence supplied’ by now, stop asking. Because it’s pointless trying to rationally discuss them with you.
Being so I’ll skip the fluff and jump straight to your last question…
“So why isn’t Telstra and Optus shutting HFC down voluntarily without any $$$ to do so from the Labor Government if it is as you assert ‘at the end of useful life’?”
Because there are faithful sycophants out there who will argue until they are blue in the face, against all evidence, that the shit Telstra and Optus have for years been dishing up and still gouging us for, is good enough for not only now but for, forever more. And while ever such foolish people not only do so, whilst willingly handing over their cash, but also endlessly criticise (for no rational reason) the current NBN, which will help all Aussies for many years… why the fuck would they shut anything down voluntarily?
@Alex
Yes I thought you wouldn’t like posters like me and others coming in and hammering your argument, that’s because they have more holes in them than a Swiss cheese, you always know they must be hitting home and things are getting bit awkward to respond to in a rational factual manner because all that is left for you is resorting to personal attack as a response.
Hammering our argument…you must be kidding or living in an alternate reality to the rest of us?
More like smothering our facts in complete childish bullshit, whilst hammering “the cause” and then screaming personal attack when some one suggests “pull your head in”?
You haven’t presented even one fact nor one basis to argue from, to remotely disprove the NBN what-so-ever Tony, sorry alain, got you two mixed up there, as you are so alike.
Forced
Monopoly
No competition
To expensive
Don’t need
Waste
White elephant
The world as we know it will end
And not one shred of evidence to support you.
Well, my argument may be nice juicy Swiss cheese full of holes (I never claimed to know everything, as you obviously do). But imo, your argument is all fucking hole and no cheese at all.
Where is you alternate plan to the NBN, since you say the NBN is no good, let’s hear it!
That’s your cue to move on and pretend you didn’t see my question.
Thank you for coming in exactly when required.
Reality Check claims that HFC is being upgraded by Telstra and Optus and competing against each other. Sorry for taking the liberty of assuming he meant that positively, but I’m pretty sure that was his intention.
That was your intention wasn’t it Reality Check? Or are you saying HFC is NOT great?
Then we have, you alain who says HFC has gained little interest from customers and therefore you equate… the NBN will be the same.
So who is lying Reality Check or you?
***
No choice…you mean forced – like I have been forced against my will onto copper all these years *rolls eyes*
33% (Reality Check’s figures) have the choice of 2 companies for HFC (the closest to NBN specs)
vs.
93% having the choice of many/multiple RSP’s for FTTP
100% having the choice of multiple RSP’s via the NBN, as opposed to the choice of ONE ONLY “fully nationwide provider”, currently.
Which is better for all Aussie consumers?
Also refer here –
http://delimiter.com.au/2012/05/28/the-accc-is-falling-too-far-in-love-with-the-nbn/#comment-427235
in relation to further answers (imo) relating to the ridiculous notion that we ever had this wonderful, magical infrastructure competition you tell us about and that we do not need it anyway…
And here –
http://delimiter.com.au/2012/05/28/the-accc-is-falling-too-far-in-love-with-the-nbn/#comment-427745
“Yes, they did. Two HFC networks covering 1 in 3 premises; Neighbourhood Cable in Geelong and Ballarat; Transact FTTP estates; multiple competing GPON fibre providers.”
1 in 3….great and the 2 in 3 of us without it?? Farout your selfishness is mind boggling. Australian Government is here for ALL Australians, not just hose with money who live in the right spot!
“They still are — both upgrading HFC to 100mbit in competitive response to each other.”
Brilliant, so 1 in 3 get better speeds….while the rest of us get jipped again.
“Really? Tell that to AT&T, Verizon, BT, Virgin Media, Korea Telecom, Powercom, etc.
Long Live Infrastructure Competition!”
Hmm, AT&T, widely believed to have the WORST mobile network in the US, along with Verizon and the rest (go to the US and try keeping 5 calls going 1 after another, guarantee you’ll get at LEAST one drop out)
BT- GOVERNMENT OWNED until 1982, when it was sold off and LEGISLATION WAS PUT IN PLACE TO STOP MONOPOLISING….unlike Telstra. Virgin Media- Setup by Branson who is probably the only decent business person in the world today who actually cares about those with crappy services.
Korea Telecom, Powercom- Asian. Not comparable. Asian countries have the highest population per SqKM in the world. Australia, one of the lowest.
Get some decent arguments not based around business that either can’t be compared to the Australian sphere or that don’t make massive amounts of money without providing decent service, like ALL US mobile companies. And stop being a selfish city dweller. 33% of Australians doe not constitute Australia as a country. Get off your high horse.
SELECT COMMITTEE ON THE NATIONAL BROADBAND
NETWORK
Reference: Implications of the proposed National Broadband Network
THURSDAY, 6 NOVEMBER 2008
Senator BIRMINGHAM—Mr Malone, you indicated that, in a horses for courses type
approach of mixed technology solutions, fibre to the node could or probably is the best or most
likely solution for metropolitan and built-up areas. Is that achievable in a competitive
environment or does that have to be a natural monopoly that therefore requires regulation?
Mr Malone—From a physical point of view, it is not actually required to be a monopoly.
There are certain components of it that need to be, but again I will use Perth as an example. It is
technically and commercially possible for there to be two fibre-to-the-node networks in Perth,
simply because there are two parties here that have sufficient market share to be able to do it.
END QUOTE
Infrastructure competition works in the US and elsewhere. There’s no reason why it won’t work here. Because of less restrictive land development policies in the US, Australian cities are actually much denser in population than many US cities which enjoy infrastructure competition.
Been here before with 1% poster…
That was Mr Malone in 2008…
BUT, here’s Mr Malones thoughts in 2012
http://www.canberratimes.com.au/act-news/aust-can-afford-nbn-risks-industry-expert-says-20120224-1ttnj.html
SELECT COMMITTEE ON THE NATIONAL BROADBAND
NETWORK
Reference: Implications of the proposed National Broadband Network
THURSDAY, 6 NOVEMBER 2008″
You make this argument based on the comments of 1 CEO of an ISP that has ALOT to gain if a decent competitive market was opened up (most likely requiring the separation of Telstra) that he stated almost 4 years ago, before NBNCo. or the Corporate Plan or the Telstra agreement was made.
I’m sorry, how is this relevant to what we are discussing? This was at a stage where the FTTH network had not yet had the implementation study done, the closest to a CBA we have. This recommended the FTTH project be EXTENDED to 93%, instead of 90%. Would a CBA have changed this? Maybe, but after recent articles, it looks like it wouldn’t have (http://www.abc.net.au/technology/articles/2012/05/01/3493131.htm).
Would it have changed the Senate Committee’s mind? Undoubtedly not. Senate committees largely base their hearings and recommendations off industry. Telstra IS the Australian telecommunications industry in fixed line (they own over 80% of the infrastructure) and they don’t WANT the NBN as it removes their monopoly. Senate committees are established as part of the law. Whether or not they produce any viable recommendations, or that any government has to follow them, is not necessarily relevant to the project. I’m certain a senate committee hearing into the Harbour Bridge would’ve found it to be far too big and unnecessary an expense for, what was then, a small city.
This isn’t grounds for an argument against the NBN. This is grounds for nothing. This is old information.
+3
My friend has HFC and, apparently unlike RC, his connection is subject to enormous variations in speed and quality dependent on peak usage times. So why all the love for HFC, compared to 100% 24/7 ftth NBN?
I’m quite disappointed in this article Renai. I’m not really understand what the problem is here, you implied yourself that this isn’t a pro-NBN decision, it is a pro-Optus decision, so why are you using this as an example of thr ACCC being soft on NBN?
Or, if your problem is with this decision specifically, what have previous tough decisions by the ACCC got to do with it? You seem to be trying to sensationalize the issue to me.
Anyway, on this specific issue, I honestly don’t see what your concern is. Optus shouldn’t be forced to compete with the NBN, because it is in the best interests of -absolutely nobody-. The difference in infrastructure is just too great for Optus to ever be able to give the NBN any kind of run for their money, it is better for consumers if those on Optus HFC are just migrated to NBN and Optus are allowed to compete at the retail level, and that is also obviously better for Optus. The advantage to the NBN is less clear, but I would guess for various reasons it’s just better for them to hook people up sooner rather than gradually over time.
You may believe in infrastructure-level competition, but this decision is not a sign that the ACCC is going soft, it is simply yet another sign that infrastructure-level competition is simply not practical.
<<<<Optus shouldn’t be forced to compete with the NBN, because it is in the best interests of -absolutely nobody-.
"Forcing Optus to compete with the NBN"?
LMAO.
Another punter with a reality filter. A “subsidy” is a payment to a business to keep operational money-losing infrastructure that would otherwise be shutdown without government intervention.
NBNco is PAYING Optus (and Telstra) to shutdown infrastructure that is profitably serving its customer base.
<<<it is simply yet another sign that infrastructure-level competition is simply not practical.
No, it’s a sign that NBNco would go bankrupt if it had to compete head-on with the nation’s two HFC networks.
If these HFC infrastructure were indeed uncompetitive with NBNco, they wouldn’t have to PAY Telstra and Optus to shut them down. Do you see Apple paying Blackberry RIM not to compete against them in the smartphone market????
“No, it’s a sign that NBNco would go bankrupt if it had to compete head-on with the nation’s two HFC networks.
If these HFC infrastructure were indeed uncompetitive with NBNco, they wouldn’t have to PAY Telstra and Optus to shut them down. Do you see Apple paying Blackberry RIM not to compete against them in the smartphone market????”
You’re own reality filter seems on the fritz, ironically. NBNCo. would in fact wipe the floor with both Telstra AND Optus’ HFC networks. It would simply take longer than NBNCo. has allowed in its’ business plan.
Reality Check, you seem to be under the misapprehension NBNCo. is acting as a business because it needs to provide a viable return to produce ANY benefit as a business. Whether NBNCo. produces a return or not, which undoubtedly it will seeing as these agreements, as you’ve pointed out numerous times, ensure it will, is SECONDARY to its’ job as an INFRASTRUCTURE provider.
It needs to turn a profit, so in the short term political extremists such as yourself can be overridden by the fact that it WILL make money. In the long term, it provides Australia with telecommunications infrastructure that is out of the hands of the retail sector (ie Telstra) and therefore can be dolled out equally, whether you live in a city of 3 Million, or a town of 3000, as it should be.
It is paying Telstra and Optus because it needs the people sooner, rather than later, because of the BUSINESS proposition. Not because they can adequately compete in the long term with fibre infrastructure across the nation. Are you trying to tell me that Optus and Telstra could compete over many years, on HFC, with ALL the contention issues they ALREADY have, when there’s fibre running next to it and all you have to do is ring up to be connected?? Someone needs their Reality Check, checked….
Saying NBNCo. will go bankrupt trying to compete with Telstra and Optus is like saying Australia Post will go bankrupt with DHL, Toll, IPEC, FedEx and any other courier company running against it for parcel delivery- nice in theory, but have a look at eBay; the majority of the time, people are more than happy with Aus Post. It’s fast, reliable, cheap and provides a better service half the time than the competitors. It also runs at a healthy profit to the government- JUST LIKE NBNCO. WILL.
Welcome to fibre. Please stop arguing against the inevitable. Your “business economics” work great….in business. This is government infrastructure. You’re playing with the big boys now- they own the bank.
That last bit is added as you seem to enjoy hyberbolic sentences, so I thought you’d appreciate it.
So those political extremists believe business should operate in a competitive marketplace, and that accounting and profits are ways to determine which businesses are successful. The NBN will prove itself to such extremists, by getting rid of its competitors and ensuring that its accounts are opaque. Yeah, that will be convincing!
“So those political extremists believe business should operate in a competitive marketplace, and that accounting and profits are ways to determine which businesses are successful. The NBN will prove itself to such extremists, by getting rid of its competitors and ensuring that its accounts are opaque. Yeah, that will be convincing!”
Hmmm, what did I say in that post before….oh that’s right:
…”you seem to be under the misapprehension NBNCo. is acting as a business because it needs to provide a viable return to produce ANY benefit as a business”
NBNCo. is NOT an enterprise business specifically in business to make money. It is a GOVERNMENT business there to provide infrastructure and management OF that infrastructure at a ROI that is HIGHER than government bond interest. Those are its’ only goals.
It is irrelevant whether YOU think it is a good business opportunity in an enterprise situation. There will be and are people who disagree, and they’re the only people who NBN need to provide the extra funding it needs. 7% ROI is still higher than alot of Super accounts, so I can see super management companies being interested, also transport operators, it’s a better rate of return than most of those toll roads in Sydney….
You could cut each NBN critics comments, do the old switcheroo and paste each ones comments anywhere and no one would know the difference, eh seven_tech?.
They’ve all gone enmasse from white elephant/waste to forced no competition/business accounting.
It’s like they are each handed a script and take turns to bombard us with repetitive idiocy.
I often wonder if they have their own site where they get together before hand Alex…
I think it’s called tonyabbott.gov.au…
No, but seriously, I’m happy to debate pros and cons of the NBN with people. But we keep getting the same rubbish about the business and politics side. They’re not relevant arguments. The NBN isn’t ABOUT politics or business, it’s about infrastructure!
Why can’t people be a bit open-minded and forward thinking for once. It’s not JUST about us, it’s about everyone AND all the people who will benefit in the many years it’ll service the nation too!
Because it simply doesn’t suit their business and/or political agenda’s…!
“A “subsidy” is a payment to a business to keep operational money-losing infrastructure that would otherwise be shutdown without government intervention.
NBNco is PAYING Optus (and Telstra) to shutdown infrastructure that is profitably serving its customer base.”
Just because the HFC networks are profitable now, doesn’t mean they will be once the NBN rolls out in HFC areas and people start switching. And people will start switching, because the people on HFC are clearly the people who want more speed, and NBN will do more speed and better reliability at a lower price. And what do you think is going to happen at the point where enough people have switched to make HFC money-losing infrastructure? That’s right, it will be closed down.
“No, it’s a sign that NBNco would go bankrupt if it had to compete head-on with the nation’s two HFC networks.
If these HFC infrastructure were indeed uncompetitive with NBNco, they wouldn’t have to PAY Telstra and Optus to shut them down.”
That’s an extremely simplistic view of things. Do you honestly believe the only 2 possible outcomes for businesses are success and bankruptcy? The fact is they can’t be competitive, because NBN just offers a better service on all fronts. The fact that HFC will retain some customers for a while is not because the service is competitive, it will be because people simply haven’t switched YET. Oh, and I’m sure some of the Liberal party fanatics will stick with it as well to prove their point that “I don’t need faster speeds therefore the country doesn’t either.”
“Do you see Apple paying Blackberry RIM not to compete against them in the smartphone market?”
No, because they can’t. Do you think Apple would pass up that opportunity if it came along? Of course they wouldn’t. But they can’t pay RIM because RIM would never accept it, because RIM is competitive. Drawing a real parellel with NBN/Optus, if Blackberry lost it’s ability to compete because Apple suddenly had a huge jump forward in technology, it is entirely possible that Apple would pay RIM for their customers, because it gets them onto Apple products sooner rather than later, and RIM would certainly accept the offer if the offer was more than the projected earnings for the end of the product’s lifetime.
ps. writing in bold doesn’t make your statements and less wrong.
I just noticed something too Reality Check:
“A “subsidy” is a payment to a business to keep operational money-losing infrastructure that would otherwise be shutdown without government intervention.”
Yes- you’re absolutely right. The government is paying Optus and Telstra to migrate to the NBN because their infrastructure is still working, but will lose money when the NBN is put through….
You mad Bro?…..
It’s just the most basic rule of business that you don’t have to pay people to do something they would want to do anyhow.
“It’s just the most basic rule of business that you don’t have to pay people to do something they would want to do anyhow.”
Once again Tel, this is not normal business. This is business for the sake of government infrastructure. There are MANY different aspects from normal enterprise.
I would definitely agree with you if this was an ordinary Telco. It would be an absolute waste of expenditure to buy something that you’ll get eventually anyway (assuming your product is better and people will migrate to it) and it’s unlikely the ACCC would allow it anyway BECAUSE it is the retail market. But it is not that simple in this case, because it’s WHOLESALE and because of politics and government being involved.
Exactly.
And these people claim to be business savvy.
Well business pay to acquire other businesses and/or their assets, don’t they?
““More than 40% of Australians live outside cities. How about we come knock on your door and ask if we can live with you and share your vastly superior services.”
How about you just pay rent or a mortgage like everyone else has to?”
Wow, way to be immature….my point about overcrowding not withstanding however….
“… cause I ain’t living in an apartment, that’s half the REASON people move from the city …”
“Great, you made a choice, so man up and deal with the idea that people take some responsibility for the choices they make.”
FYI Iv’e NEVER lived IN a city, I was born in this district. If you’re happy to live in an apartment, great. Plenty of people are. But they still make up the VAST minority. OVER 80% of people in Sydney live in detached houses (ie. not apartments). It is one of the most spread out cities on the planet. One of the reason HFC is NOT rolled out everywhere in cities, same as in regional areas….
…so yeah, it’s definitely just me….
Tel, I’ve not actually seen you seriously rebut one of my arguments yet. You’ve just thrown the same argument back in the opposite direction, with no serious contending one.
$800million for 400k in customers to switch to the NBN, for a HFC network that barely even exists, this is utterly dissapointing and a waste of tax payers money.
I am all for the NBN but whoever arranged this deal should be fired!
Unfortunately Jason, I agree. It is a waste of money. But it’s made necessary by the political climate that NEEDS NBNCo. to have the largest number of customers to make its’ money back fastest.
If only the NBN was bi-partisan, most of us would probably have it by now….
Personally I’d just do a Telstra and overbuild them. Trouble is if they did that without compensation there would be huge news headlines and bitching to the ACCC. We have seen similar sort of problems because of the POI. Companies whinging they would lose money so they increased them to not make their infrastructure redundant. Just leaving the areas with HFC alone completely isn’t an option. If 70% of the people in those areas went HFC it would be slower than ADSL1
In an ideal world, that’d be great. Let Optus and Telstra flounder around while NBNCo/ pulls the customers because of better service and cheaper plans. But of course, as you’ve state, they’d be up in arms about NBN pulling customers away and “unfair” competition.
The POI’s thing REALLY annoys me. The ACCC had the chance to ensure that ALL ISP’s could be on a dead level playing field with the big 3, instead, because of whinging from Telstra, Optus et al, we get 121 instead of 4, meaning areas such as my own, where instead of 700 000 on a POI, you get 70 000. That means a less competitive atmosphere for the small players. And THAT one WAS the ACCC. NBNCo. wanted 4!
It just shows how much we need the NBN, even if it is to JUST break the stranglehold Telstra has; they’re STILL holding us to ransom via the ACCC even though they’ll no longer own the infrastructure!
There are some other issues it raises beside nearly locking out small ISPs. We now have the old blame game situation. With the NBN doing the backhaul, if you had speed/congestion issues there were only two options. Your ISP or the NBN. It would not be a hard proposition to identify and in most cases would be the ISP even if the congestion was on the NBN due to lake of CVC. Now there is Telstra in the middle. Congestion can be passed off with the old excuse “It’s Telstra, there is nothing we can do about it”
How so? NBNCo. is buying use of dark fibre in Telstra’s backhaul, but the POI’s are all NBN run. And that is where the backhaul for NBNCo. will terminate, as far as I understand.
Or have I missed something?
Backhaul from the POI to the ISP. With 4 POI it’s pretty much one connection, probably worth doing themselves. With 121 they are more likely to pay for backhaul from POI to themselves, especially in the country areas, and the big provider is Telstra.
Ah yes, I see what you mean. Mmm, that adds more problems as you say.
Dammit, why does the ACCC have to be neutered half the time we need them to be kick ass??
What will/is happening instead is smaller ISPs buying service from wholesale aggregation providers, companies who set up all the back-haul and NBNco contracts sell access similar to how ISP now just buy access from Telstra for ADSL example here http://www.computerworld.com.au/article/422478/new_isp_launches_nbn-only_plans/
There will be competition at the wholesale end of town the only difference is the person selling access to the last mile (from the exchange to client) wont be competing with wholesale Aggregation providers or retailers.
I personally would have much preferred a lower number of interconnects but I can see still see the point of what the ACCC did there. While they like of Telstra and Optus do benefit from it remember there are also other providers in this space and a significant amount of competitive back-haul is/has been laid as part of the black spot project.
There is also one advantage for local PoI for remote areas and that is local routing of data. In Darwin our Telstra wholesale PoI is in Adelaide which meant date going to our office across town was going down to Adelaide and back again, or even worst when there was an error on the line it was going via the east coast and back again via the east coast giving a connection latency to the next suburb similar to what I currently enjoy to US.
So what you are saying is after 15 years Optus has recouped their infrastructure building cost. However its going to be priced at a way people will naturally switch to NBN which needs to charge at a price that covers infrastructure cost.
You cant have it both ways. Either Optus can set their HFC cost much cheaper to under cut the NBN, or they can’t because they are still paying off their infrastructure cost, either way they need compensated or they wont relinquish their customers.
Thats $2000 each of the customers need to foot for being forcefully transferred. If the NBN is going to be recouped the transfer cost. Over 30 years. That would cost $6 a month.. ($10 with interest) just for being transferred.
Do remember all ASDL, and ASDL2+, and cable customers. Are also worth about $2000 each. And guess who foots the bill YOU.
So i have to agree with Renai don’t pay a single cent for force transfering customers its an ugly thing to do. And let people naturally transfer to NBN who want to pay for it.. And let the NBN charge people who want to use it the appropriate cost of the service.
That’s true to a certain extent not same. It’s certainly not worth it in monetary terms buying Optus’ customers.
But unfortunately, as we’ve said, with the current political climate practically FORCING NBNCo. to continually provide proof and reason for its’ continued existence and goal, its’ primary goal becomes getting as many customers as it can, as quick as it can, otherwise it’ll be seen as not a valid plan, even if it is.
This shouldn’t be. It SHOULD be infrastructure policy with bi-partisan support. But slimy and childish politics is so entrenched in Australia now you can’t even pay public servants these days without a senate enquiry.
It occurs to me that the anti-NBN folks here thoroughly deserve a Liberal leader like Tony “the mad monk” Abbott, they are all equally incapable of coherency logical thought and completely bereft of any forward vision!
Quite sad really!
“In short, why is NBN Co paying Optus almost a billion dollars for something it would eventually get for free anyway?”
In short, in order to avoid a costly and destructive battle who;s outcome, by your own admission, is a foregone conclusion.
Far better to allow a mutually agreed, mutually beneficial agreement that benefits everyone, including the customer who, lets face it, eventually pays the price for any marketplace battle when the eventual winner recoups it’s short term losses because it can charge what it likes minus the competition.
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