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  • Blog, Telecommunications - Written by on Tuesday, November 20, 2012 16:36 - 54 Comments

    NBN + climate change deniers: A rebuttal

    blog Remember those controversial comments several weeks ago by telecommunications analyst Paul Budde, comparing critics of Labor’s National Broadband Network project to “climate change deniers”? Sure you do. It generated a highly contentious debate on Delimiter and other sites about the NBN, fibre broadband rollouts and … well, the science of climate change, as off-topic as that may have been. But what you may not have known is that Robert Kenny of UK communications consultancy Communications Chambers penned a rebuttal. Some sample pars:

    “Paul Budde, the Australian telecoms analyst and FTTH enthusiast, has a feisty blog post up. In it he draws parallels between fibre-sceptics and climate change deniers, saying they’re both mud-slingers who get far more attention than they deserve. Paul complains: “So far we have not come across any NBN sceptics who have dared to move into the area of what the extent of the NBN’s potential – the digital economy, intelligent infrastructure, big data, clouds computing, e-health, e-government, smart grids and so on”.

    This is a surprising allegation, since there are plenty of people out there expressing doubts about these beneficial externalities, and I know Paul has read at least one such paper – the one I wrote (together with my brother). Given that the Australian government is spending so much more than other governments, surely it’s not unreasonable to focus on costs, and to ask if the benefits will really outweigh them? Oh, and for the record, I am a believer in climate change!”

    Overall I find it hard to disagree with Robert on some of his discrete points; I personally feel that some of Budde’s enthusiasm for the NBN and fibre technology in general can be a bit exaggerated at times, and Kenny does tend to punctuate his argument with pithy tidbits of evidence, which we’re always a fan of. However, I suspect much of the debate is merely a matter of timing. Will the delivery of the NBN result in a panacea of improved add-on services in the realms Budde mentions? Probably not immediately. But they will come in the long term — and they would have a hard time arriving without the underlying infrastructure boost that the NBN will bring, to my thinking. In any case, I comment Kenny’s post to you, as somewhat of a right of reply to Budde (who has himself rebutted Kenny in the comments).

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    1. Posted 20/11/2012 at 4:43 pm | Permalink |

      Remember Kenny is Turnbull’s chief FTTN cheerleader. Has a distinct leaning in that direction, and is wingman for Turnbull whenever he needs another voice. If Budde has any bias, so does Kenny.

      • DylanX
        Posted 20/11/2012 at 5:52 pm | Permalink |

        +1

      • Gwyntaglaw
        Posted 20/11/2012 at 8:18 pm | Permalink |

        Exactly so. There’s no such thing as a truly dispassionate, impartial observer – but who is also well-informed and in command of all relevant facts. And that’s because any such person will inevitably have a stake in something, even if it’s just their reputation for being dispassionate, impartial, well-informed… you get the picture.

    2. Dan
      Posted 20/11/2012 at 5:39 pm | Permalink |

      The simple truth is that a full analysis of the benefits is not required in order to outweigh the costs. Put simply just the savings from power, maintenance and – by far the biggest – corporate reduction in bandwidth spending will easily cover the entire cost of the NBN.

      Power: about 50m per annum less
      Maintenance: about 700m per annum less
      Corporate and government broadband spending: about 2-3bn less per annum

      “Bullshit!” You cry? Go look at ABS and see how many connections there are in the >adsl2 eg 100mbps range and then go ask a few telcos what they charge for The equivalent service. Take off the cost of a 100mbps ‘corporate’ NBN plan and then multiply that by the number you got from the ABS. It’s a big number, a really big one in fact.

    3. NBNAlex
      Posted 20/11/2012 at 5:52 pm | Permalink |

      Seems to me after reading Mr Kenny’s article, that his argument is basically, “prove that fast broadband is more beneficial than current broadband”… in other words, what we all have is pretty well good enough…

      I shake my head that someone who claims to be an expert hasn’t already seen the advantages from going from dial up to ADSL to ADSL2 or HFC and so forth.

      What’s the bet Mr Kenny isn’t on dial-up? In fact what’s the bet Mr Kenny uses fast broadband?

      Sorry Renai, no evidence, just surmising. It just reminded me of our old friend Mark A who used to come here telling us all FttN is good enough for us all. Then later telling us that he himself has paid extra foe and has been enjoying FttH for quite sometime :/

      To me of all the arguments against the NBN (it’s just based on estimations, no guarantee of ROI etc) the incremental need for improved speeds is the least argumentative and is in fact a given reflected by historic trends, not estimations.

      Seems Mr Kenny is simply the flip-side to Mr Budde, but from reading both gentlemen’s ideas and weighing “all of the evidence” I’d go with Mr. Budde.

    4. quink
      Posted 20/11/2012 at 5:55 pm | Permalink |

      You know, the biggest single misconception Robert Kenny has is that the NBN is being rolled out simply because it’s faster than the alternatives. It’s not. Nor is there ever an acknowledgement that Australia is the only country with a telco which, when privatised, owned the biggest HFC network, owned all the phone exchanges and had no structural separation to speak of. You combine those two facts and you’ll see this blog post for what it is. A strawman here and a misinterpreted statistic there.

      You see something like this here:

      > The UK has the largest internet contribution to GDP of any G-20 country, but is only just above the middle of the G20 pack in terms of average connection speed (among the countries tracked by Akamai).

      But this is a statistic from 2010, South Korea and Japan are #2 and #4, and this report contains also, for example, a statistic about China which is laughable. Namely that the online retail market in China, in 2010, was all of $10 billion. Just to compare that statistic with another one to dispute its validity, nine days ago a single website, TaoBao, had $3 billion in sales. I don’t believe you, Boston Consulting Group. You want a statistic from 2010? On TaoBao alone, shoe sales alone for the first half of 2010 alone were 9 billion RMB, more than $1 billion. Also, how is this statistic “internet contribution” measured in the first instance? It seems to just be coming from a wide variety of sources – EIU, OECD, statistical agencies and BCG analysis. Are they comparable? “Who cares, we can get the BBC to report on it if we say that the UK is #1″ – and that’s what happened.

      Paul Budde made a very good point when he said that the business case of the NBN isn’t clear. NBN Co has failed at stating how it will do good for the economy. But that doesn’t mean that you can go with this:

      > Let’s have a look at the $2bn energy cost saving. Again, Paul hasn’t provided a source for it, but it is a number he’s been using since 2010, when he said it stemmed from “savings from a duplicated comms network and double installation”. Even then he didn’t provide a source, so we can’t directly review its basis.

      Alright, we continue on the journey of bad statistics to arrive at a claim that in Italy smart meters had a “unit install cost of €13″. I’m looking at the presentation and I see 31 million for 2.1 billion euros, or €64 – which they flesh out as a total cost of €68. 20% of that is labour, fair enough, but the rest of this is not going to remain the same either – there’s are presumptions being made here that have not much reality. Or, for example, not considering that maybe Ethernet or Wi-Fi will be cheaper than GPRS in the long run. Or not actually taking Australian statistics into this equation and going hunting off convenient stats from Italy when Energy Australia has estimated that the minimum cost for a smart meter is $150, quite a way away from the €68 previously mentioned.

      Tell you what? I’ll substantiate Paul Budde’s claim, right now. Let’s assume that $2.3 billion for Victoria is about right, according to this:

      http://www.abc.net.au/news/2011-12-14/smart-meter-roll-out-continues-despite-cost-blow-out/3730522

      Victoria has about a quarter of the population, and with Australia’s higher labour costs it’s easy to assume that labour might be about 30%. So, we’re up to about $2.8 billion for labour for smart meters across Australia. If we combine this with an NBN install, we can surely save some fairly large fraction of that, let’s say it’ll be a total of $1.5 billion. Is this a correct statistic? No. Do I have just as much reason to believe that my process here was just as straightforward as that applied by Robert Kenny to arrive at his quite possibly equally unreal figure – yes. Does, however, Paul Budde need to substantiate his claim and explain how he got to that number?

      That said stuff like this:

      > To say the $30bn eHealth benefit depends on NBN is simply wrong.

      Is neither “simply wrong” nor “absolutely right”. It will surely depend in great part, for people in rural areas, on new connections that the NBN can roll out. The Four Corners program on the NBN made a very good demonstration of the challenge here. Having doctors stuck in the mindset of faxing everything because email is too unreliable and getting patients to carry X-rays everywhere is something that the upload speeds and reliability of the NBN are going to solve – even if it’s just in part going to be a mindshift. NBN Co needs to do a better job in describing what exactly FTTH will do for medicine or it should just fall back to the claim that it’s copper++.

      > People say of FTTH ‘Build it and they will come’. We already have built it in many markets, but no-one (or no key applications) have shown up.

      Maybe FTTH isn’t about the faster speeds or new applications at all. Maybe, just maybe, it’s about replacing a decaying copper network as well, and those key applications might only show up when we’ve reached 20% or 25% of saturation? In the past, two IMPs were enough to create a new application – the ARPANET, but it took millions of users with massive bandwidth to make YouTube a viable thing. Facebook isn’t popular because it had 0% saturation where it started, it started at colleges where it had near enough 80%+ penetration – it wouldn’t have been a massive success without those users or without that critical mass when it was released to the public. Maybe it should be conceivable that FTTH is basically just copper++ until we get to 50% or 60% saturation.

      Should we rely on this hypothetical possibility to build FTTH, should we take that “build it and they will come approach”? No. And that’s why the NBN isn’t being built on that premise. It’s being built on the premise of being needed, now. It’s being built on the premise of recognising that competition in this country in the telecommunications sector isn’t real, that Telstra is a problem and that we need to take the next step and would otherwise be at an impasse.

      As Robert Kenny has previously said:

      > Worrying about where you rank in the league tables [of broadband] only matters if it is a good thing to be at the top.

      Yes, but it is far more worrying to be at the bottom, and that’s where Australia is heading, quickly. It’s already more than halfway there. I’m not saying that, the upload speed stats from Ookla’s netindex.com are.

      If we’re rolling out the NBN, not so much for its benefits, but to replace what we have with something a bit more reliable and equitable and to create a viable competitive atmosphere with partial private sector funding, private sector support and at as cheap a wholesale price as possible, isn’t that enough? Isn’t at least trying to get off the bottom half of the list of average upload speeds across the world, and moving to a spot higher than at least about #40 as FTTN suggests we might at best end up at, a good enough reason to do this and do it right? Isn’t it sensible to build this because it’s neither much more expensive, much slower and an inevitable end-goal for at least a fair fraction of Australians anyway?

      Sorry about the long post, people. It’s hard to shut up about something quite this important for the future.

      • PeterA
        Posted 21/11/2012 at 7:38 am | Permalink |

        Long, but a good read.
        Thanks quink.

    5. Zok
      Posted 20/11/2012 at 6:01 pm | Permalink |

      I just attempted to re-read the Kenny’s “Analysis”, and remembered why it made me laugh the last time I tried…

      All else equal, faster is better – surely. But faster technologies don’t always triumph; think of passenger hovercraft, maglev trains, and suspersonic [sic] airliners.

      Hilarious! :)

      They also list what they did not include in the “analysis”:

      We do not consider: the trade-offs in business districts (a largely separate investment decision, though one often elided [sic!] with investment in fiber to the home by FTTH advocates); nor the extension of the network to areas that currently have no broadband at all; nor wireless data opportunities; nor demand-side measures to encourage those currently unconnected to get online. We believe these may pay high societal returns in some cases, but they are not part of our scope.

      Some of the other gems:

      we [cannot] move all TV online – the backbone capacity isn’t there

      the bandwidth of the human eye is only 9 Mbps

      while fiber may contribute to teleworking, it is neither necessary nor sufficient

      On-demand HD is often cited as a key advantage of fiber, but cable is capable of this too, and cable coverage is high in many countries: 96% of households in the US and 97% in Canada for instance

      The medical benefits discussed by FTTH advocates [are] primarily about linking medical practitioners at different sites, not about reaching the patient at home, and thus they are not relevant to the case for FTTH

      Ironically, the intellectual lightness of Kenny’s scribble is very reminiscent of typical climate change deniers’ argumentation. Turnbull would do well to distance himself from such “friends”.

      • Posted 21/11/2012 at 8:06 am | Permalink |

        @Zok

        we [cannot] move all TV online – the backbone capacity isn’t there

        Well….that’s just ridiculous as an argument AGAINST the NBN….

        the bandwidth of the human eye is only 9 Mbps

        What a load of bollocks. I can tell you right now, I can tell the difference between a 10Mbps “HD” video and a 40Mbps Blu-Ray….

        while fiber may contribute to teleworking, it is neither necessary nor sufficient

        ….lolwhut? This guy seems to be a little fruity….

        On-demand HD is often cited as a key advantage of fiber, but cable is capable of this too, and cable
        coverage is high in many countries: 96% of households in the US and 97% in Canada for instance

        9…96%?????? Last number I looked at it wasn’t above 60% penetration! Coverage may be higher, but I’d bet my car it isn’t above 90%.

        The medical benefits discussed by FTTH advocates [are] primarily about linking medical practitioners at different sites, not about reaching the patient at home, and thus they are not relevant to the case for FTTH

        Except when your GP works out of a Practice that isn’t in a medical centre…..like 3/4 of Regional GPs and many Urban GP’s as well…..and there’s no reason GPs can’t use it for people at home. They just CAN’T now because those at home don’t have THE BANDWIDTH.

        Kenny seems to be a little be odd….

        • Zok
          Posted 21/11/2012 at 11:46 am | Permalink |

          Actually, the cable coverage is USA (as in “homes passed by cable”) is well over 90%… But that is irrelevant, because:

          1. This is Australia, not USA; only about one third of all households have potential access to cable;

          2. This whole business model where media providers ‘pump’ pre-determined programming through a distribution medium (air, cable) and audiences sit down to watch whatever is being ‘served’ to them at the moment, is on its way out. People want to choose what they watch and when they watch it; streaming of on-demand media is the future. Cable is inherently unsuited to this model.

          3. HDTV is not the “be all and end all” of TV technology. 3D TV and 4K TV are already here, and 8K TV is on the horizon. All of these technologies require bandwidths higher than what FTTN would enable.

          Fibre to the home is, in essence, a disruptive technology. It will help create new markets and new value systems, but it will also disrupt existing markets (like the above-mentioned TV programming model). And that can at least in part, explain the level of resistance to NBN from currently dominant players in mainstream media, free-to-air and cable TV.

          • Posted 21/11/2012 at 12:04 pm | Permalink |

            @Zok

            Interesting that it’s over 90% coverage and yet only ever got as high as 60% penetration and falling….

            Cheers for the correction though- don’t like to spread the FUD.

        • TechinBris
          Posted 22/11/2012 at 10:27 am | Permalink |

          Hey seven_tech, I remember some time ago watching a documentary on vision and it advised that the human eyes do some neat tricks to give us such clarity in vision without overloading the brain with detail. It was a fair while ago so I am not sure if the information has been superseded. But in the doco, they advised the point of focus where we concentrate on the details of what we see is a very dense area of the retina for details, but around it is a lot less dense and actually is blurry. But we just don’t notice it. So the 9Mbps might be correct, but I am in no place to say it is correct or not, I’d have to, on that one, confer with the Scientist to give me their learned opinion with the best that our sciences can provide as to the “Bandwidth” of the optical nerve. Anyone Medical here?
          As to a lot of the other hypothesis given by Kenny, meh, scratch the surface of anything and one can guarantee you will find something underneath. There is a lot of scratching going on and this rebuttal of Kenny’s proves it.

          • Posted 22/11/2012 at 10:35 am | Permalink |

            @Techinbris

            I understand what you’re trying to say. I remember several lessons in science and some basic lectures about it in Uni (I didn’t do biology, but we did have some lectures on the human body) that about 20% of the retina has the most information and the rest sort of “blurs” out as you say.

            But that is not the point I was making. The equivalent DATA throughput of the human eye may very well BE 9Mbps….but that is utterly irrelevant because our brain is the best compression analyser on the planet and can turn that 9Mbps into more like 90Mbps. And it is irrelevant to VIDEO, as VIDEO at 9Mbps is VERY lossy and you can easily see the artefacts- so the point is utterly moot.

            You cannot tell me you can’t see the difference between a 10Mbps HD broadcast and a Blu-Ray at 40Mbps?

            • TechinBris
              Posted 22/11/2012 at 1:25 pm | Permalink |

              I know what you were saying and was not refuting that. But knowing what the NBN Naysayers are like, they will pick apart at anything to support a case that is lost, but won’t accept defeat.
              Of course you and I can tell the difference visually between HD and Blu-Ray and where Kenny misses the point is we might require larger bandwidth than the eye as it is a whole screen that has to be drawn and not just the section we are looking at. Also you have to consider many people may be looking at different parts of the screen and it needs all the detail to be satisfactory over an entire screen. As such, you and I have shown Kenny’s failure in that point. :{D

      • Quiet Observer
        Posted 21/11/2012 at 1:48 pm | Permalink |

        “while fiber may contribute to teleworking, it is neither necessary nor sufficient”

        Wait, what? What the hell is he trying to say? That we don’t need fibre for teleworking, and that fibre isn’t even up to the task of teleworking? Or is it teleworking the he deems unnecessary? True, teleworking isn’t necessary in the strictest definition of the word, it cannot be disputed that it delivers tangible benefits (i.e. reducing road traffic, fuel savings, etc.).

        “the bandwidth of the human eye is only 9 Mbps”

        I’m glad I wasn’t ingesting a beverage when I read this line, otherwise I’d be replacing my keyboard at this very moment. How can any intelligent person take Mr Kenny seriously when he is spouting such utter bollocks as this?

        I’m starting to think that all the whining about bias and fanboyism in NBN reporting reeks of false balance. With the NBN, we are mostly dealing in the realm of verifiable fact, and as such not all opinions are of equal merit. I’m going to repeat that in allcaps, as I think it’s an important point that is frequently forgotten when discussing bias:

        NOT ALL OPINIONS ARE OF EQUAL MERIT.

        Last month on Mediawatch, Jonathan Holmes said the following in summary of a story on the issue of vaccination:

        “To put it bluntly, there’s evidence, and there’s bulldust. It’s a journalist’s job to distinguish between them, not to sit on the fence and bleat ‘balance’. Especially when people’s health is at risk.”

        • Zok
          Posted 21/11/2012 at 4:49 pm | Permalink |

          Yep, had the same reaction regarding the “human eye bandwidth”. :)

          +1 for “NOT ALL OPINIONS ARE OF EQUAL MERIT.” Unfortunately, in modern media business, the quantity of content is paramount. Capturing viewers/readers/listeners, getting clicks, etc. beats having a balance of informed opinion. The article we are commenting on being no exception.

        • Tom
          Posted 21/11/2012 at 9:54 pm | Permalink |

          “while fiber may contribute to teleworking, it is neither necessary nor sufficient”

          “Wait, what? What the hell is he trying to say? That we don’t need fibre for teleworking, and that fibre isn’t even up to the task of teleworking? Or is it teleworking the he deems unnecessary? True, teleworking isn’t necessary in the strictest definition of the word, it cannot be disputed that it delivers tangible benefits (i.e. reducing road traffic, fuel savings, etc.).”

          The statement means that fiber isn’t needed for teleworking, ie it is not necessary for teleworking. Fiber not being sufficient for teleworking is a comment that just having fiber won’t magically make teleworking possible. There is much more infrastructure needed to get it working.

          • PeterA
            Posted 22/11/2012 at 11:40 am | Permalink |

            Then it is an intentionally misleading statement.

            It would be like me saying: “4G wireless networks aren’t truly wireless”

            And meaning 4G networks rely on Towers, they don’t magically beam the data to your destination wirelessly.

            One statement requires clarification – or it looks like I am saying something about 4G, when in truth I am not, I am stating a fact of life.

    6. Posted 20/11/2012 at 6:59 pm | Permalink |

      He sounds like he believes in the LNP line that the NBN should be on budget, since many other countries are spending far more than the government will be ‘spending’ in the interest payments till NBNCo can make its first positive returns.

      We are not spending far more than anyone else.
      One comparison is South Korea who are planning over $25Billion USD in funding driven from government sources for the Internet Infrastructure in their country.

      So… were looking at “spending” (yes, air quotes) only 200% their budget. To reach somewhere between 750% and 1000% as much land area. (thats probably an underestimate of the land area percentage)

      To be totally honest, Korea pushed fiber a long time ago, and if they are spending so much more per square km, it honestly makes me wonder just how anyone can think we are spending more than we should be.

      • Harimau
        Posted 20/11/2012 at 9:33 pm | Permalink |

        A very sensible point. Unfortunately not everyone (i.e. Coalition peons) is sensible. So I predict that they’re going to hang on to the total cost comparison for whatever justification, and reject the cost per land area comparison, even though the latter makes more sense from an infrastructure perspective.

        Honestly, I just want the NBN without the politics and the media circus. It could cost twice as much and I think it would be worth the price. I need the internet the same way I need roads. FTTP is simply the best long-term solution. Using the road analogy, FTTP vs FTTN is kinda like paved vs dirt roads for all the streets except major roads. Dirt roads might do the job, but it’s going to be messy, and there’s no way it’s more than a short-term solution.

        • Harimau
          Posted 20/11/2012 at 9:46 pm | Permalink |

          And now reading the comment by Paul Budde, he apparently made the same analogy. Huh. What’s the saying? Sane minds think alike?

    7. Lachlan
      Posted 21/11/2012 at 2:20 am | Permalink |

      Relating to the energy usage of the NBN disputed by Mr Kenny

      This is estimate based on a presentation from Prof. Rod Tucker at the the Center for Energy Efficient Telecommunications, (http://www.ceet.unimelb.edu.au/) shown on http://www.nbn.gov.au/2011/07/25/rod-tucker-on-fibre-to-the-home-energy-savings/

      The source for the energy used slide there is an academic paper called “Energy Consumption in Wired and Wireless Access Networks”
      http://people.eng.unimelb.edu.au/rtucker/publications/files/energy-wired-wireless.pdf
      which compares energy consumption of various network technologies, with GPON (as per NBN) using 6.3W per customer vs FTTN using 13.2W per customer.
      Using the roughly 7W of difference, at an electricity price of 20c/KWhr over 10 million users, constantly for a twenty years FTTN useful life, gives about $2.4528 billion as the extra cost of electricity used, exceeding the claimed costs by Mr Buddie.

      In reality the methodology used in this paper doesn’t include climate control of the FTTN nodes, as required in the Australian summer. This difference would increase the energy cost of the FTTN option compared to the FTTH.

      So raw electricity savings of $2 billion can result from skipping the FTTN step and upgrading straight to FTTP.

    8. GongGav
      Posted 21/11/2012 at 9:26 am | Permalink |

      We’re in the middle of Click Frenzy, an attempt to generate online sales in the leadin to Christmas. The US have had this for a decade or so, and it generates something like $1.4b in sales there for that one day.

      Here, people looked forwards to it, and it was so successful it was effectively DDOS’d for the first 5 hours.

      Doesnt that suggest that we WANT an online presence, and WANT to shop online?

      How would the NBN help the situation? Would it be better, as people were able to get out of the way faster, or a hinderance as people were able to get there faster?

      Or would the NBN provide more bandwidth for the website, allowing more traffic and thus negating the DDOS style impact of so many people wanting to check it out?

      They want an example of people wanting more uses, well here’s one. Driven by the publics willingness to sign up and have a look.

    9. Brendan
      Posted 21/11/2012 at 10:09 am | Permalink |

      It’s expensive, so it’s bad. Doesn’t matter what “it” is, just that “it” is expensive, and thus bad.

      This pretty much sums up the “flat earth” type movement that is obsessed with the notion that demand and adoption of online technologies from a social, and commercial perspective is over-hyped.

      Perhaps that’s true, to a point.

      But by the same token, we don’t all still use Acoustic Couplers to access BBS; or FIDO for mailing people stuff. In much the same way as most people don’t take a public horse-drawn trolley to work.

      We have phones (that really are more like those silly pad things from star-trek, than anything else) that have more horsepower than PCs from just a few years ago. We play large-scale online games, that would have been considered impossible, again just a few years ago.

      We form communities, socialise and spend vast sums of money online.

      All of this drives change, inovation and growth. All of this hinges on having a sufficient fast (and capacious) backbone to carry it all.

      And none, non of this is considered by (frankly) luddites that would have us all back to knocking two bricks together in morse-code, rather than spend money on any form of internet infrastructure.

      Because we’re always told we don’t need the NBN. And then people lament why the US and UK have so many cool online services.

      The ridiculous “click frenzy” outcome, perfectly illustrates this notion that there’s “no demand” or “no need”.

      Yeah, there is. There always will be. The people responsible for click-fail clearly had absolutely no clue as to how large the online slaes market is.

      I watched in great amusement, as did a few folks, as they tried to scurry between ever larger CDNs and content networks looking for something that had enough capacity to deliver to the demand.

      It’s a truly great example of why FTTN is just like click-frenzy. It’s what happens when you under-invest. It doesn’t cope. And so, instead of planning, you run around at a later date desperately trying to put the genie back in the bottle.

      What we have in the Liberal solution, is click-frenzy, without the fallback option of running to CDNs to fix the problem of serving demand. It won’t scale, wouldn’t meet demand even now and has no hope of carrying us into the future.

      • GongGav
        Posted 21/11/2012 at 11:26 am | Permalink |

        +1

        I’m not being too critical of click frenzy, because at least they tried. They knew there would be a truckload (or 50) of people flooding the site, and actually made allowances for it. And it still wasnt enough.

        Like many first day launches of online products (specifically games, but other products have suffered too) the demand was simply too great for expectations.

        And to me, that just shows that as a culture we need more capacity, not less.

        • Tinman_au
          Posted 21/11/2012 at 12:03 pm | Permalink |

          Personally, I don’t need “Click Frenzy” to get me to buy Aussie goods online (I already do, off places like Kogan, UMart and others). What the big Aussie retailers need to learn is that they are just too damned expensive, there are plenty of Australian shops already online that flog them on price/service.

          The only time I buy anything from OS is when it’s something that isn’t offered here (like custom exhaust for my bike, or juice for my e-cig).

        • Brendan
          Posted 21/11/2012 at 12:36 pm | Permalink |

          Yes and no. Many online vendors manage to cope with (large) spikes in demand.

          The reality is, click-frenzy started out as a small chunk of hosting. It was built small, to an obviously small budget, despite what was apparently being charged to retailers, for the opportunity to be listed.

          It’s no different to a popular band renting someone’s bathroom to have a concert in, knowing full well 10,000+ people are going to rock up. Even if it turns out to be closer 100,000+, you know</em full well there are going to be a bunch of people, regardless.

          My point was, the people running the show massively underestimated demand. They misunderstood the nature of the market they were trying to hook into. And paid the price.

          It was always going to be a difficult thing to get right, but it does illustrate my point pretty clearly. If you underestimate the value or scale of a thing, you're not going to have a great day. There are so many examples of working models out there, right now, that click frenzy could have used as a comparative decider.

          FTTN is the very same thing. It's the result of underestimating the market and forces at play (and those forces are pushing for a network that will require quite some investment).

          • Brendan
            Posted 21/11/2012 at 12:37 pm | Permalink |

            Ahh crap – renai can you close my errant tag? Sorry :(

            • Tinman_au
              Posted 21/11/2012 at 2:08 pm | Permalink |

              Not sure that’ll work, but was interested to try :o)

              • Tinman_au
                Posted 21/11/2012 at 2:09 pm | Permalink |

                Guess you can’t just post a close tag later in the list :o)

                Maybe a open/close together?

                • quink
                  Posted 21/11/2012 at 3:20 pm | Permalink |

                  Hmmmm…

    10. Zok
      Posted 21/11/2012 at 11:03 am | Permalink |

      The conservative naysayers and their negative “predictions” always remind me of these quotes:

      “This ‘telephone’ has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.” – Western Union internal memo, 1876

      “The phonograph…is not of any commercial value.” – Thomas Edison remarking on his own invention to his assistant Sam Insull, 1880

      “Flight by machines heavier than air is unpractical and insignificant, if not utterly impossible.” – Simon Newcomb, an astronomer of some note, 1902

      “It is an idle dream to imagine that… automobiles will take the place of railways in the long distance movement of… passengers.” – American Road Congress, 1913

      “The wireless music box has no imaginable commercial value. Who would pay for a message sent to nobody in particular?” – David Sarnoff’s associates in response to his urgings for investment in the radio in the 1920s

      “Who the hell wants to hear actors talk?” – Harry Warner, Warner Brothers Pictures, 1927

      “I think there is a world market for about five computers.” – Thomas Watson, chairman of IBM, 1943

      “There is no reason anyone would want a computer in their home.” – Ken Olsen, president of Digital Equipment Corporation, 1977

      :)

      • GongGav
        Posted 21/11/2012 at 11:31 am | Permalink |

        To be fair, pretty much all of those comments were correct for the era they were made. The one thing they have in common though is failing to see any future change that would facilitate the relevant products being worthwhile.

        Look at the comments. They are all “is” or “has” comments, not “will” or “could”.

        The exception is the American Road Congress statement, and they dont rule it out, just say that its a dream. Which it was at the time.

        Good collection of quotes though, it shows pretty well how hindsight works.

        • Zok
          Posted 21/11/2012 at 12:38 pm | Permalink |

          Most of those comments came as a reaction to ideas that were proposed at time; some of them show a lack of vision (e.g. David Sarnoff about the radio; Harry Warner on sound in movies; DEC about personal computers at home) but these two are from people/institutions who had a vested interest in keeping the status quo and fighting a change that already started happening: Western Union slamming the telephone (they were a telegraph operator); railroad lobby arguing against investment in American interstate highways.

          Both of those angles are a constant in the human history; progress always requires a battle with those who lack vision and those who fight it for their own selfish reasons.

          • NBNAlex
            Posted 21/11/2012 at 1:44 pm | Permalink |

            Indeed Zok…

            Just like the NBN :(

          • GongGav
            Posted 21/11/2012 at 2:05 pm | Permalink |

            Oh, I agree fully 100% with you. I’m just pointing out that whether they had a vested interest in the status quo or not, their statements WERE correct when they were made.

            Ken Olsen, Pres of DEC, 1977 was right.

            There WAS no reason for anyone to have a PC at home. It was purely a status symbol, and only vaguely useful for entertainment at the time. My Godfather had an Apple 2, and I loved using it.

            But I could see that he only had one because he could.

            Times changed, and reasons to own them were created, but at that point, there was little benefit to owning a toy that cost several thousand dollars.

            • Zok
              Posted 21/11/2012 at 2:41 pm | Permalink |

              I beg to differ re: personal computers at home in 1977. :)

              We are not talking 50s or 60s here, but late 70s… 1977 was the year that saw home computers starting to sell like crazy (Apple II, Commodore PET, TRS80…) People used them for all kinds of stuff; sure, mostly for playing games, but programs for word processing and databases were also selling well. You can’t say that there was “no need” for home computers when history show that there clearly was a huge market for it. (Even if you dislike the large “gaming/entertainment” portion of that market, that’s still a legitimate use of computers. Those who saw it made lots of money satisfying that market; those who didn’t, made a mistake.)

              • GongGav
                Posted 21/11/2012 at 3:29 pm | Permalink |

                This is where we’re going to differ :)

                FYI, no, I dont disagree with gaming, its what I mostly use my PC for at home.

                But in 1977 they didnt move millions of units, they moved thousands. Roughly 15000 Apple 2′s up until about September 1978. History shows 50,000 units moved in total up until Oct 1979, with 35,000 in the fiscal year ending Sep 1979. So about 15,000 (or from launch to Sep 78) before that which is hardly a huge market.

                Was there a market? Sure. My Godfather had one for his business records, thanks to VisiCalc – the first “killer app” to hit the market. But history has forgotten that there really werent many models moved of any PC until the 80′s.

                And before 1978 or 1979, there wasnt any real need to have one in the home. Not even for gaming. If you look about, you’ll see that business needs drove those first PC’s, with entertainment following.

                And that was the intent behind the line – there was no need for a HOME to have one. As a business tool, different story, but where business and home combined, the purchase was justified for business needs, not entertainment needs. That came later.

                You make a fair point about the TRS-80 though – that was as much a gaming toy as a business tool from the start. But still not a huge market, even with 10,000 a month being sold, and the bulk of the programs were business related for a good 6 months after launch.

                I’d still be saying home computers didnt become anything more than a business tool until at best late 1978 when the Atari 400 and 800 models were announced. Before that, the primary use was for business, with a few entertainment uses, rather than the other way around where they were fully intended as PC’s with gaming the prime use.

                Were there exceptions? For sure. There always are, and to be fair the ZX-80 was an exception. But by the very nature of being an exception, it means the normal situation is something considerably different.

                • Zok
                  Posted 21/11/2012 at 4:22 pm | Permalink |

                  I understand what you are trying to say, GongGav, but we are disagreeing here on the basic premise: To me, when someone says “There is no reason anyone would want X in their home” and then thousands of people purchase X for their homes that same year (and keep purchasing more and more in following years, with almost exponential growth), that person was, and is, wrong.

                  Yes, I agree with you about the size of the market for home computers in those early days; it was “small” compared to what it is today. But there was a market because there was a ‘want’. The fact that this market has grown strongly year upon year, from thousands in 1977 to hundreds of millions today only makes the original statement more wrong, not less. :)

      • NBNAccuracy
        Posted 21/11/2012 at 11:58 am | Permalink |

        “There is no reason anyone would want a computer in their home.” – Ken Olsen, president of Digital Equipment Corporation, 1977

        I love this one. How short sighedd can you be. He said it the very year home computers started to boom with the Apple II etc

    11. Tinman_au
      Posted 21/11/2012 at 11:56 am | Permalink |

      I think Rob brings up a fair point with his following comment:

      “We don’t invest much these days in building faster airliners or cars. We build six-lane highways but rarely twelve-lane highways and so on. The key question is when does the incremental cost of bandwidth outweigh the benefits? ”

      But where he goes wrong is thinking of the NBN as a Ferrari. Fibre is used as a backbone technology meant for shuttling large amounts of data, and is pretty well future-proof unless they develop something workable with quantum technology (and folks are actually working on that, but who knows when they’ll have anything workable?).

      Using his airline analogy, he thinks of it as a Concorde (Super fast, supersonic, but limited passengers), when in actual fact it’s more akin to an Airbus (Fast, but subsonic and built to carry more passengers). ADSL/HFC/etc are great for developing countries, but countries that can afford it (like us) should be building infrastructure like the NBN if we want any hope of staying ahead of the rest of the pack in the future.

      • Tinman_au
        Posted 21/11/2012 at 12:39 pm | Permalink |

        And before anyone jumps in to say fibre _is_ like a Ferrari because it’s fast, it isn’t that much “faster” than the other technologies, it has basically the same latency (speed) as ADSL/HFC, it’s just much better at transferring data (bandwidth).

      • NBNAccuracy
        Posted 21/11/2012 at 12:40 pm | Permalink |

        That is a good point. The NBN isn’t “faster”. A single bit of data gets there at the about the same time as on other technologies. It is the volume of data, or carrying capacity that is really the increase.

      • PeterA
        Posted 21/11/2012 at 12:57 pm | Permalink |

        Here’s the thing with flawed analogies like this.
        we are building better transport. We are spending.billions on better planes. Where did the A380 come from if not.the billions spent recently.
        What does he think Boeing’s r and d budget is being.spent on?
        on the topic of roads, how short sighted is he? How many roads in Melbourne have been expanded? How many major highway intersections are being rebuilt for billions of.dollars to.accommodate more cars at higher speeds more safely?

        Not to mention how much money gets spent by the car industry developing more efficient and safer cars to run on those roads. Cars are to roads as the web is to the NBN.

        You don’t build a Holden Volt for dirt roads, it is designed for high quality roads and consistent speeds.

        ugh. I didn’t read his article (or the original from budde), they both seemed to be off-base. But given the quality of the climate debate and the apparent quality of this and buddes comments, there ARE genuine parallels.

    12. TechinBris
      Posted 21/11/2012 at 2:03 pm | Permalink |

      Has anyone else noticed the missing “friends” from this discussion?
      I think I am losing it, as I have come so much to expect with every intelligent utterance, will come an insane or uninspiring one to “balance” it.

      • Tinman_au
        Posted 21/11/2012 at 2:24 pm | Permalink |

        You mean folks like Michael?

        The quality of the responses so far are very good, not that I see Michaels comments as not being quality comments, he just has a different ideology to me when it comes to infrastructure ownership I think.

        He seems to lean towards Malcolms “private enterprise/free market is the answer to everything”, when “free market” doesn’t exist when it is infrastructure, and if they do overbuild to keep it “free market”, then it’s also a waste of resources, as they just built 2,3,4, *however many* of the same thing to have “competition” (even then, mobile networks are a great example of how that (doesn’t) work, no one that travels/lives out west of the east coast bothers with anything but Telstra, as the others couldn’t be bothered building the coverage that Telstra has there now). Telstra basically owns 3G outside of metro/urban areas, and they’ll do the same with 4G. That’s not “competition”…

        • TechinBris
          Posted 21/11/2012 at 4:22 pm | Permalink |

          Nope. I don’t mind Michael. He may be a “Free Market” advocate without understanding there isn’t much free about that market he is upholding (if he does, he is hiding it), but at least he is intelligent in his musings and does understand some things that simply escape some of our other “friends”. Difference of opinion is a good thing, but it should be intelligent and not the product of a mind that is ignorant by choice.
          BTW, thank you Quink. Another most excellent post. Loved it.

        • TechinBris
          Posted 21/11/2012 at 6:13 pm | Permalink |

          Oh, I know it is hard to see in my posts Tinman. But I am for Private Enterprise being strong with a good strong Market with strong Justice Systems that keep it all honest. But the more the Market is dishonest, and the Justice Systems are compromised, our Politician’s duplicitous, I swing more for Public Government Enterprises to counteract the skew. I’m a small “l” Liberal (Center) but move more to the left the Market moves more to the right. Why? Because wealth only exists to serve and assist us, not to be our ruler and dominate us. Would you like to be controlled by what you created? Well you currently are. Mankind has fallen into that trap and we cannot extricate ourselves from it, it seems. We’re nothing but Junkies to wealth. Need another injection of Cash? Really paints a vivid picture, does it not?
          Without responsibility, there should be no wealth afforded to you. Hence only a person should be able to hold property as their life and wealth is forfeit if they fail to follow a Blind Law, which cannot and will not see differences of a person’s financial, social or political standing. Currently, this is not the case in most Western Democracies. We have fallen asleep at our post. Elizabeth the First saw that danger and refused corporate ownership of Property. The USA failed to see it. Lots followed it blindly in the pursuit of profit, even the UK.
          So to balance the power and greed of the Market, I am all for the NBN to remain in the Government’s hands for the people of Australia, to look after the Nation’s People’s best interests and not faceless Apparatchik’s of the Stock Market elsewhere around the globe with no responsibility to Just Laws, that should exist to protect our Societies. When the Law is Just for the people of our Society, I will concur to let the Market have the NBN as the Law will make sure they will not do the wrong thing. This was the real thing Menzies created the Liberal’s for, but it and his name was corrupted when he was no longer there to keep it to the path. Oh, I know he wasn’t perfect. Who is?
          BTW, the Trans Pacific Partnership secret negotiations will make us afraid to use the Internet if it takes happens as Australian’s will have no rights against the rulings decided by Multinational Corporations. So the NBN will then be the people’s money spent for something the Multinationals will be the only one’s not afraid to use it. Most Technology will fall into the breadth and scope of that corrupt crooked agreement. That is the threat that hangs over the NBN and the Australia’s Parliament is aiding and abetting in it. I wouldn’t trust either Labor or Coalition with a chook raffle right now. Only those two monoliths are what will make the NBN and our Democracy a White Elephant. Watch them, for if the TPP becomes law, it will then be too late for nearly everything. Our Law will no longer be ours.

          • Tinman_au
            Posted 22/11/2012 at 10:21 am | Permalink |

            it seems we aren’t that much different TB, we both have very similar outlooks (even on the TPP). One of the reasons I like the way the NBN was set up is the infrastructure part is owned by the Australian public (avoiding private monopoly), but “free enterprise” will have the opportunity to “do it’s thing” on the retail side. Seems to me like a perfect blend of check and balance, opportunity and stability…

            • TechinBris
              Posted 22/11/2012 at 1:36 pm | Permalink |

              I agree wholeheartedly with your statement. In the current environment we find ourselves in, it is the best of the outcomes for our Society, created by the very Market that is whining about it. Topping it off, the Market is so lacking in intelligence, it cannot even see it is the creator of it’s own demise. If it was not so painful for us, it’d be actually funny to watch it die.

        • TechinBris
          Posted 21/11/2012 at 6:16 pm | Permalink |

          Oh, I know it is hard to see in my posts Tinman. But I am for Private Enterprise being strong with a good strong Market with strong Justice Systems that keep it all honest. But the more the Market is dishonest, and the Justice Systems are compromised, our Politician’s duplicitous, I swing more for Public Government Enterprises to counteract the skew. I’m a small “l” Liberal (Center) but move more to the left the Market moves more to the right. Why? Because wealth only exists to serve and assist us, not to be our ruler and dominate us. Would you like to be controlled by what you created? Well you currently are. Mankind has fallen into that trap and we cannot extricate ourselves from it, it seems. We’re nothing but Junkies to wealth. Need another injection of Cash? Really paints a vivid picture, does it not?
          Without responsibility, there should be no wealth afforded to you. Hence only a person should be able to hold property as their life and wealth is forfeit if they fail to follow a Blind Law, which cannot and will not see differences of a person’s financial, social or political standing. Currently, this is not the case in most Western Democracies. We have fallen asleep at our post. Elizabeth the First saw that danger and refused corporate ownership of Property. The USA failed to see it. Lots followed it blindly in the pursuit of profit, even the UK.
          So to balance the power and greed of the Market, I am all for the NBN to remain in the Government’s hands for the people of Australia, to look after the Nation’s People’s best interests and not faceless Apparatchik’s of the Stock Market elsewhere around the globe with no responsibility to Just Laws, that should exist to protect our Societies. When the Law is Just for the people of our Society, I will concur to let the Market have the NBN as the Law will make sure they will not do the wrong thing. This was the real thing Menzies created the Liberal’s for, but it and his name was corrupted when he was no longer there to keep it to the path. Oh, I know he wasn’t perfect. Who is?
          BTW, the Trans Pacific Partnership secret negotiations will make us afraid to use the Internet if it takes happens as Australian’s will have no rights against the rulings decided by Multinational Corporations. So the NBN will then be the people’s money spent for something the Multinationals will be the only one’s not afraid to use it. Most Technology will fall into the breadth and scope of that corrupt crooked agreement. That is the threat that hangs over the NBN and the Australia’s Parliament is aiding and abetting in it. I wouldn’t trust either Labor or Coalition with a chook raffle right now. Only those two monoliths are what will make the NBN and our Democracy a White Elephant. Watch them, for if the TPP becomes law, it will then be too late for nearly everything. Our Law will no longer be ours and ther is nothing we can do for anything including Climate Change.

        • TechinBris
          Posted 21/11/2012 at 6:22 pm | Permalink |

          Oh, I know it is hard to see in my posts Tinman. But I am for Private Enterprise being strong with a good strong Market with strong Justice Systems that keep it all honest. But the more the Market is dishonest, and the Justice Systems are compromised, our Politician’s duplicitous, I swing more for Public Government Enterprises to counteract the skew. I’m a small “l” Liberal (Center) but move more to the left the Market moves more to the right. Why? Because wealth only exists to serve and assist us, not to be our ruler and dominate us. Would you like to be controlled by what you created? Well you currently are. Mankind has fallen into that trap and we cannot extricate ourselves from it, it seems. We’re nothing but Junkies to wealth. Need another injection of Cash? Really paints a vivid picture, does it not?
          Without responsibility, there should be no wealth afforded to you. Hence only a person should be able to hold property as their life and wealth is forfeit if they fail to follow a Blind Law, which cannot and will not see differences of a person’s financial, social or political standing. Currently, this is not the case in most Western Democracies. We have fallen asleep at our post. Elizabeth the First saw that danger and refused corporate ownership of Property. The USA failed to see it. Lots followed it blindly in the pursuit of profit, even the UK.
          So to balance the power and greed of the Market, I am all for the NBN to remain in the Government’s hands for the people of Australia, to look after the Nation’s People’s best interests and not faceless Apparatchik’s of the Stock Market elsewhere around the globe with no responsibility to Just Laws, that should exist to protect our Societies. When the Law is Just for the people of our Society, I will concur to let the Market have the NBN as the Law will make sure they will not do the wrong thing. This was the real thing Menzies created the Liberal’s for, but it and his name was corrupted when he was no longer there to keep it to the path. Oh, I know he wasn’t perfect. Who is?
          BTW, the Trans Pacific Partnership secret negotiations will make us afraid to use the Internet if it takes happens as Australian’s will have no rights against the rulings decided by Multinational Corporations. So the NBN will then be the people’s money spent for something the Multinationals will be the only one’s not afraid to use it. Most Technology will fall into the breadth and scope of that corrupt crooked agreement. That is the threat that hangs over the NBN and the Australia’s Parliament is aiding and abetting in it. I wouldn’t trust either Labor or Coalition with a chook raffle right now. Only those two monoliths are what will make the NBN and our Democracy a White Elephant. Watch them, for if the TPP becomes law, it will then be too late for nearly everything. Our Law will no longer be ours and there is nothing we can do for anything including Climate Change.

        • TechinBris
          Posted 21/11/2012 at 6:58 pm | Permalink |

          Sorry guys. My pc wen’t strange and multiple posts came up. Renai, can you delete them please?




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