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  • News, Telecommunications - Written by on Tuesday, June 4, 2013 12:35 - 70 Comments

    Optus mulls user pays FTTH NBN plans

    fibre

    news The nation’s number two telco Optus has revealed that it is considering launching plans which would allow Australians to individually pay to have the Coalition’s fibre to the node NBN infrastructure extended all the way to the premises, in a move which will echo similar plans launched in the UK by British telco BT.

    The Coalition’s NBN policy unveiled in mid-April this year would see fibre to the node deployed to 71 percent of Australian premises, with a further 22 percent to be served by fibre all the way to the premises, and the rest of Australia served by satellite and wireless options. It differs in this choice of technologies from Labor’s policy, which would see fibre to the premises used for almost all premises, and a small percentage of premises served by satellite and wireless.

    However, Shadow Communications Minister Malcolm Turnbull has also left open the possibility that individual users could pay a fee to have fibre extended all the way to their premises. In June 2012, British telco BT, which is also deploying a FTTN network, revealed plans to modify its 80Mbps national fibre to the node rollout so that customers will be able to choose to have fibre fully extended to their premises, delivering a large speed upgrade to 330Mbps in the process.

    Under the FTTP extension trial announced last year, British retail ISPs will be able to order the extension process where there is interest and then assist network infrastructure owner Openreach with the cost of deployment. “It will then be up to the [ISP] to decide whether to absorb that likely one-off charge, recover it through higher monthly prices or pass it on in full to their customer,” BT wrote in its media release at the time. “The pilots will enable Openreach to gain an in-depth understanding of the costs of deploying FTTP on Demand. Any installation fee is highly likely to be distance dependent given the nature of the necessary work.”

    Since that time, Openreach has revealed the cost of its fibre extension. An article on its site published in March this year states: “When ordering FTTP on Demand, a distance-based construction charge applies, in addition to the fixed installation fee of £500.00. The distance-based construction charge is determined by the distance of the customer’s home or business from the local fibre network.”

    “Openreach estimates more than half of premises (55 per cent) will incur a distance based charge of between £200 and £1000. Virtually all other premises will face a charge of between £1,400 and £3,500. It will be up to communications providers to decide whether to pass on those charges to businesses and consumers. A small percentage of orders will also incur an [Excess Construction Charge] in addition to the other charges.”

    “There will be longer lead times for FTTP on Demand than for a standard connection due to the amount of planning and construction work that is required to extend fibre to a customer’s premises. The current estimate is typically 60 working days for the service to be installed.”

    In a FAQ article published on his site in late April, Turnbull wrote: “While we anticipate that for the vast majority of consumers in the areas serviced by FTTN the speeds offered will be more than adequate, there is the technical possibility to run fibre to one or more customers in an area served by a node … Fibre on demand is the most practical way of ensuring that a network like the NBN is rolled out as quickly as possible to all users, without imposing unnecessary costs on everyone using that network.”

    Up until this point, Australian ISPs have displayed little interest in the still-nebulous possibility of deploying user pays FTTP under the Coalition’s FTTN model. However, in a new interview over the weekend with the ABC’s Inside Business program, Optus Australia chief Kevin Russell revealed that Optus was actively considering the possibility.

    “… are you thinking about paying for it yourself and putting it on a plan like a mobile phone, so if somebody signs up a contract for two years or whatever, that you’ll pay for the fibre-to-the-home?” asked host Alan Kohler. “… there’s details we’re looking at, ideas we’re bouncing around. Nothing I can talk about,” responded Russell. When pressed on the issue and whether it was an option, Russell acknowledged “That’s one of them. But there are multiple options.”

    The news comes as users continue to demonstrate a strong appetite for higher-level NBN speeds, rather than the entry to medium-level speeds possible under the Coalition’s rival NBN policy. For example, in October last year, NBN Co revealed that 44 percent of NBN customers signed up to the network so far had opted for the company’s fasted 100Mbps speed tier, as evidence continues to accumulate that Australians will overwhelmingly pay for the fastest broadband speeds available if given the chance.

    opinion/analysis
    I want to do a more detailed article on this subject at some near point in the future, but let me say two things here. Firstly, I don’t take Russell’s comments that seriously. He was speaking off the cuff, and given the fact that there is very little FTTN infrastructure yet in Australia at all, and none with respect to the NBN, I suspect that any user pays FTTP model under the Coalition is at least 2-3 years away. Turnbull has only acknowledged it as a technical possibility at this point — and that’s very far away from confirmation that this will be a definite, affordable option.

    The second thing I want to note, however, is that this should indeed be an affordable option for telcos like Optus, Telstra, iiNet, TPG and so on to offer to customers. Consider the fact that many mobile phone monthly plans range up above $1,000 and even to $2,000 and higher now. Even if user pays FTTP costs up to $5,000 per customer, it’s still feasible that that cost could be delivered on monthly plans over three to four years quite affordably. It would especially be attractive to those who work from their own home that they own and also own their own businesses, which could absorb the costs as a tax write-off.

    Image credit: Clix, royalty free

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    1. quink
      Posted 04/06/2013 at 12:47 pm | Permalink |

      > Journalist: How would the Coalition Government deal with the asbestos issue with Telstra pits if it rolls out its own version of the NBN.

      > Pyne: Well we wouldn’t be doing what the Government has done. We wouldn’t be ripping up all the streets to lay cables for a national broadband network. Malcolm Turnbull’s made it very clear that we would use a variety of different technologies and wireless technology and satellite technology would be two of those. So, we wouldn’t be in this position. That’s why the blame for the fact that asbestos is now an issue in Western Sydney lies squarely at the feet of the Government that has foolishly proceeded with our National Broadband Network that we can’t afford and that requires the streets of Sydney to be torn up to lay it.

      > Journalist: But wouldn’t the plans still involve using those pits from Telstra? Wouldn’t it still involve having to deal with asbestos?

      > Pyne: Well we said that we’d use a variety of technologies and some of those would be wireless …

      > Journalist: But would they include the pits from Telstra as well?

      > Pyne: Some of those would be wireless, some of them would be satellite and where it’s safe to do so, cables would be laid but obviously, where there is asbestos, it is not safe to do so.

      What does that mean? It means, simply put, that the coalition will not touch any asbestos currently in the ground. Much of the asbestos is released when running new cabling through, copper or fibre. With 20% of the infrastructure containing asbestos, that means, simply put:

      * If 20% of infrastructure has asbestos because of network effects it means that the path to a higher percentage of premises has asbestos, maybe 30% or 40%.

      * There’s a very good change you won’t get fibre over the top.

      * If the copper goes bad, there’s a very good chance you won’t get fibre over the top.

      * If the copper goes bad, it won’t be replaced with more copper.

      * It means that, as copper goes bad and isn’t replaced, a fraction much greater than 7% will be on wireless/satellite.

      So, what Christopher Pyne has said, effectively, is to nix what Optus is planning here and to put about 30% or more of Australia on fixed wireless and satellite, even in urban areas.

      The madness continues.

      • midspace
        Posted 04/06/2013 at 1:53 pm | Permalink |

        It means, reading between the lines with orange coloured glasses:
        They’ll run the fibre through every other pipe except the ones with asbestos to get to where they need it. 6KM of fibre to reach a node 2KM away.
        When they can’t run fibre to that node location, it will be connected by wireless. You’ll have FWTTN.

        Considering any physical FTTN hardware deployments is years away, Optus have plenty of time to research options, and clear up any issues with the ACCC along the way.

      • jasmcd
        Posted 05/06/2013 at 7:32 am | Permalink |

        It means that they will beat up any issue that they can get hold of and make vague promises that they would do it better and that the current goverment has made yet another mistake.

        It also means that the LNP will say and do anything, even when nearly all commentators believe they are a shoe-in at the next election, to get into government. There is absolutley no integrity here, just a mouth glee fully taking any chance possible to stick a knife into the other side.

    2. Adam
      Posted 04/06/2013 at 12:56 pm | Permalink |

      So do we know where/who the lucky 22% of premises are that will get FTTP under the coalition plan?

      • GongGav
        Posted 04/06/2013 at 1:09 pm | Permalink |

        Yep. Its either greenfields sites, or a combo of greenfields sites and FttH already completed.

      • Richard L
        Posted 04/06/2013 at 1:10 pm | Permalink |

        Greenfields and those connected under the Labor plan.

      • spazmanaught
        Posted 05/06/2013 at 1:14 pm | Permalink |

        We are looking at our next house as the family has just become bigger and we are exclusively looking in NBN enabled areas. You are already seeing price differences in suburbs where it’s connected compared to those that aren’t and even streets that have it compared to those that don’t.

    3. midspace
      Posted 04/06/2013 at 1:43 pm | Permalink |

      “it’s still feasible that that cost could be delivered on monthly plans over three to four years quite affordably”
      Under an ironclad contract of at least 24 months, that the user has to pay in full if they wish to break said contract.

      “the fact that many mobile phone monthly plans”
      And fixed line, and broadband internet (fixed and mobile).
      All of which contracts for fixed terms are broadly used.
      I’ve mentioned the topic of this article before as the path we’ll end up taking for fibre extensions (under the coalition plan).

      Well, now the writing is on the wall for all RSP’s to read.
      There will be customers who want it. And if some RSPs don’t provide for it, customers will go elsewhere for it.

    4. GongGav
      Posted 04/06/2013 at 1:52 pm | Permalink |

      I dont think Optus is thinking widely enough. There was a story over on ZD net about The Turnbull thinking too country, or something like that. Example given was a small 340 premise township in the middle of Queensland. The place is so compact that if you plonk one single node in that town, you’re going to cover the entire town for FttN.

      Optus should be considering doing something with those towns, which are dotted right across Australia, and capture the 100-1000 population centres. You may not need any actual fibre deployed if the local exchange is in the right location, with every premise being less than an 800m copper loop from the exchange.

      And once you have FttN in place there, give a user pays FttH option for them as well.

      The rough calculation is that there are just under 1 million population tied up in towns with populations between 100 and 1000. Thats a decent amount of customers to tie up with 2 year contracts.

    5. Lionel
      Posted 04/06/2013 at 1:54 pm | Permalink |

      No, fibre on demand upgrades now. Abbott has said they won’t touch the last 500m to the home to avoid asbestos problems. They really need to get their stories together. If they want to politicise asbestos they could at least make it consistent with their plan.

    6. Mike
      Posted 04/06/2013 at 2:19 pm | Permalink |

      ” Robert Oakeshott MP ‏@OakeyMP 1h

      TAbbott just ruled out any option of voluntary fibre to the home as pits and pipes “will not be touched” over last 500m.He’s making it up!”

      Another brain implosion from the want to be PM

      Mike

    7. GENIII
      Posted 04/06/2013 at 2:24 pm | Permalink |

      I’ve already started saving for my FTTP connection :)

      Lets face it this government is going get it’s ass handed to it on Sept 14, and with fibre now not going to be started till 06/14 in my city (well my part of the city, the other 1/2 has been started already) i can pretty much kiss a free connection goodbye.

      GENIII

      • Djos
        Posted 04/06/2013 at 2:27 pm | Permalink |

        Yeah god luck with that, no FTTP on demand now according to Dr No!

        http://delimiter.com.au/2013/06/04/optus-mulls-user-pays-ftth-nbn-plans/#comment-611940

        • midspace
          Posted 04/06/2013 at 2:48 pm | Permalink |

          “No Mister Bond, I expect your fibre connection to die! There is nothing you can talk to me about that I won’t say no to!”

        • GENIII
          Posted 04/06/2013 at 3:53 pm | Permalink |

          Yeah saw that too, just i really dont put any weight on what anything he says about anything. Mal will be out tomorrow saying that they will do FTTP on request and not to worry etc etc

          • GENIII
            Posted 05/06/2013 at 12:14 pm | Permalink |

            Phone lines where i live are on poles anyway so i dont really care about the pits and pipes.

    8. clownface
      Posted 04/06/2013 at 2:37 pm | Permalink |

      A very very interesting plot is starting to thicken… the history of this country is being written and blog comments await fame! I’M IN!!

    9. Nat Vincent
      Posted 04/06/2013 at 3:23 pm | Permalink |

      That’s all well and good for those who own their own home… But where does that leave renters?

      This also entrenches the digital divide, with the “Haves” being able to afford the fibre extension, and the “Have-nots” being unable to afford it.

      • Fibroid
        Posted 04/06/2013 at 4:00 pm | Permalink |

        Which is a interesting comment to make because I have not seen any RSP’s cosing plans for Fibre on Demand, how much is it?

        • Posted 04/06/2013 at 7:11 pm | Permalink |

          Have you ever had a landlord Fibroid? No, you’re a big man who owns his own place and doesn’t have to answer to anyone when doing anything to his home? Well whoopie-[redacted]-doo.

          Because seriously, I cannot think how anyone can seriously think that tenants will not be screwed under a FTTPoD scheme even if they can afford the requisite installation fee.

          Alternatively, if you actually read the posts you’re replying too. Because, based upon your reply, and trying to get my head around you logic, the only conclusion I can draw is that somehow you think that the “entrenching the digital divide” somehow implies that the only factor is that low income families will be costed out of the market for FTTPoD.

          Which is hogwash, there are plenty of other reasons from landlords who will not cooperate to ye ‘old “We, NBNCo, have no interest in providing you this option.”

          • Fibroid
            Posted 05/06/2013 at 9:14 am | Permalink |

            Got all of that, which can be summarised as you don’t have any costings either.

            If and I say it’s a big if FoD ever gets beyond the white board of Coalition vague musings which underpins much Coalition Policy FoD won’t have much ‘demand’ anyway, and it’s not due to the high ‘roll the dice’ cost, it’s because the vast majority of residences that have a FoD option will be happy with FTTN.

            FTTH fans extrapolate their need for that product (only because Labor are perceived as delivering it ‘free’) onto every residence in Australia and that clouds their objectivity about alternative fixed line products.

            • Posted 05/06/2013 at 11:22 am | Permalink |

              Got all of that, which can be summarised as you don’t have any costings either.

              No, clearly you didn’t, because you failed to extract the point from the comment. I’m going to assume deliberately, because I was very explict.

              If and I say it’s a big if FoD ever gets beyond the white board of Coalition vague musings which underpins much Coalition Policy FoD won’t have much ‘demand’ anyway, and it’s not due to the high ‘roll the dice’ cost, it’s because the vast majority of residences that have a FoD option will be happy with FTTN.

              Do you have evidence for this? Apparently the majority of the population polled in Australia disagree with you, as has been well documented by Renai.

              FTTH fans extrapolate their need for that product (only because Labor are perceived as delivering it ‘free’) onto every residence in Australia and that clouds their objectivity about alternative fixed line products.

              They might, most people don’t. And most people come to the FTTH conclusion anyway.

              You see Fibroid, what most people do is engage in a processed called informed decision making. Maybe you’ve heard of it? It’s where you take readily established facts, for example, the cost of FTTHoD by BT, the economies of scale savings made by doing a FTTH rollout rather than FTTHoD, high speed broadband demand, etc, and use this to make a conclusion, for example FTTHoD is more expensive both in on macro and micro economic scales than FTTH, and is only feasible therefore in areas of low high speed (100Mbps+) demand that cannot be served by FTTN, of which Australia appears not to be.

              But apparently the colour of my shoes is going to be more important than that.

              • Fibroid
                Posted 05/06/2013 at 5:13 pm | Permalink |

                ‘No, clearly you didn’t, because you failed to extract the point from the comment. I’m going to assume deliberately, because I was very explict.’

                Except for the explicit bit about FoD costings here in Australia, it’s all very well broadcasting rhetoric about the ‘have and the have nots’ and renters, landlords etc etc in regard to FoD but until we have a approved fully costed FoD program that has passed the RSP, NBN Co and ACCC feasibility test, any artificial scenarios of how it will or not operate is just total conjecture.

                ‘Do you have evidence for this? Apparently the majority of the population polled in Australia disagree with you, as has been well documented by Renai.’

                I am not aware of any poll taken where those polled were asked if they had FTTN would they order FoD if it was available?

                ‘ And most people come to the FTTH conclusion anyway.’

                Most people come to a ‘FTTH conclusion’ because the Coalition plan has only just been released and there was nothing else to choose from , later polls after the Coalition policy release indicate the gap is getting smaller, I fully expect by polling day the difference (Labor policy vs Coalition policy) will be not be significant as it was in the days of Labor policy vs no Coalition policy.

                I fully expect that voters will make a rational judgement on which option is the most affordable for the nation taking into account the Budget deficit and the consequence of that which is Budget cutbacks across most areas of Government spending, they can read about the problems with the current rollout and make a decision on what will give them an ADSL or slower fixed line BB replacement faster.

                • Abel Adamski
                  Posted 06/06/2013 at 1:22 am | Permalink |

                  Fibroid
                  ” taking into account the Budget deficit and the consequence of that which is Budget cutbacks across most areas of Government spending”

                  Seeing you are commenting on the NBN I assume you are aware of the funding model?

      • quink
        Posted 04/06/2013 at 4:53 pm | Permalink |

        Fibre extensions are no more, Tony Abbott pronounced them dead just earlier today and Christopher Pyne about a day or two ago.

        • Quiet Observer
          Posted 04/06/2013 at 8:54 pm | Permalink |

          I guess Tony must’ve gotten a memo from Rupert regarding user-pays FTTH. “I thought we agreed that the plebs will get what I bloody well say and be ****ing grateful for it!”

        • Duke
          Posted 04/06/2013 at 9:28 pm | Permalink |

          Welcome back to the 50s, if Turnbull accepts this from the rat eared clown and his snivelling poodle he can take his remaining shred of credibility and stick it up his cushioned merchant banking rectum.

          Ah yes, the oppositions acceptable, well reasoned and presented alternative plan… for suckers and gullible newbies who wouldn’t know the coalitions real agenda if it hit them in the face with a wet fish…

    10. Observer
      Posted 04/06/2013 at 11:48 pm | Permalink |

      If the polls are right, we are in for very interesting times.

      As I said already, the debate on the NBN is becoming increasingly bizarre.

      • encryptor
        Posted 05/06/2013 at 12:08 am | Permalink |

        Bizarre is right… At Senate Estimates, NBN Co announces huge take up rates said to be “world record levels” by Corning in fibre areas, and the fact that they’re on budget and expect to meet their revised target (so they’re about three months behind, which is not that bad for a 10 year project still in the ramp up phase).

        But of course the media hasn’t reported on any of that because it goes against the “costs spiralling out of control and the project is years behind” story they want to tell.

        But then, a few cases of mishandling of a bit of asbestos by subcontractors to Telstra and there’s a huge overblown media furore…

        • Northern Blue
          Posted 05/06/2013 at 10:02 am | Permalink |

          “huge take up rates said to be “world record levels” “. Remember that. Then compare these figures to the figures released after September (regardless of the winner). I’ll bet the figures are different. This is a company with an executive group that will most likely be replaced on a change of government. Their comments are highly likely to be politically aligned for their own salvation more than anything else.

          • encryptor
            Posted 05/06/2013 at 3:34 pm | Permalink |

            That was an analysis by Corning (not NBN Co), based on real figures. In some areas they’ve literally got as many people signed up and connected to the NBN in six months as signed up for ADSL in six years.

            I hope you’re not suggesting that NBN Co are releasing falsified figures?

          • Abel Adamski
            Posted 06/06/2013 at 1:31 am | Permalink |

            “Their comments are highly likely to be politically aligned for their own salvation more than anything else”

            They are gone anyway so why bother, look at the take up in Coffs Harbour etc where the Nats have been really bagging the NBN and conning people into thinking it will cost an arm or leg.
            Read the comments on their articles. The locals are waking up to being conned and don’t like it, signing up very rapidly – word of mouth and country people communicate

    11. Harimau
      Posted 05/06/2013 at 1:57 am | Permalink |

      Labor’s FTTH NBN is already user pays… and a better form of it.

      • Non Puto
        Posted 05/06/2013 at 9:11 am | Permalink |

        + eleventy bajillion

      • Fibroid
        Posted 05/06/2013 at 9:33 am | Permalink |

        It sure is, it draws down on Government equity increasing the Budget deficit and adds to Government debt, and we have only reached the tip of the NBN debt burden because it won’t be fully negotiated until 2015.

        But Labor is smart, all of that financial mess is likely to be the Coalition’s problem to sort out, who gives a …

        • Alex
          Posted 05/06/2013 at 10:10 am | Permalink |

          @Fibroid.

          If the Coalition win the September election (which seems likely) and choose not to follow through with the entire NBN project as it currently stands (which also seems likely) … i.e. including the half you conveniently ignored – the repayment bit… well, so they should fix up their “own” mess.

          But of course, they can simply blame the others, so who gives a ….

        • Harimau
          Posted 05/06/2013 at 10:16 am | Permalink |

          Sorry, I must confess I’m not nearly as well-versed in Economics as you are. Could you explain to me the effect or significance of an increased “Budget deficit”, “Government debt”, and “debt burden” of this size?

          It seems to me to be a choice between a tight public debt “at cost” or a large private debt “at price”. And no doubt, rolling out fibre on demand, i.e. piecemeal, would have higher costs per premise (and therefore a much higher cost in the long term), not simply in terms of money, but time, labour and resources. Who wins in such a scenario?

          • Fibroid
            Posted 05/06/2013 at 11:56 am | Permalink |

            ” Could you explain to me the effect or significance of an increased “Budget deficit”, “Government debt”, and “debt burden” of this size?”

            The budget defect is at $19.4b, the effect is that costs have to be reined in as announced in the last Budget, the NBN Co’s own budget did not escape this, we have had $170 billion fall in tax receipts since the GFC and as Swan said at the Budget announcement “This year we face the second-largest revenue write down since the Great Depression”.

            Government debt needs to be paid back, this pay back in the NBN case is based on revenue the NBN Co makes from RSP’s, if the rollout is delayed for whatever reason/s the payback is delayed that requires further draw down on Government equity and increased debt to try and keep the NBN rollout chugging on as per the Business Plan 2012-2015.

            ‘i.e. piecemeal, would have higher costs per premise (and therefore a much higher cost in the long term), not simply in terms of money, but time, labour and resources. Who wins in such a scenario?’

            I am not sure what you mean by ‘higher cost in the long term’ because Fibre on demand is not a Government NBN Co cost at all, it is bankrolled by whoever takes up the service, either RSP’s, individuals etc.

            • Posted 05/06/2013 at 12:19 pm | Permalink |

              I am not sure what you mean by ‘higher cost in the long term’ because Fibre on demand is not a Government NBN Co cost at all, it is bankrolled by whoever takes up the service, either RSP’s, individuals etc.

              Need I remind you that under both implementations is ultimately the customer who pays. It’s Yes, it would mean the government would have put forward less capital, but that’s about it. All the costs have to be recovered from the users, be it in a lump sum, or in subscriptions.

            • Lachlan
              Posted 05/06/2013 at 2:23 pm | Permalink |

              Hey Fibroid.
              “Government debt needs to be paid back,”

              Government debt just needs to be funded, not neccisarily repaid. There is government debt on the books from before federation that’s still hasn’t been paid off, just having the interest paid over time.
              Source: http://aofm.gov.au/content/_download/Portfolio_12/Table_P8.3.pdf see the optional payment date.

              You seem to have fallen for a false annalogy that the governments finances are as limited as your households. Where as the government won’t get old and die, won’t lose it’s ability to get financial resources, and will always be able to pay it’s debts when due (even if just through printing cash to do so), which are the only reasons motal men have to pay their debts.

              You’ll probably refuse to attempt to understand this, but there is no need to allow a false understanding to deceive the other forum readers.

              • Fibroid
                Posted 05/06/2013 at 5:30 pm | Permalink |

                Hey Lachlan,

                Government debt is not some vague unaccountable figure that can be as high as you want and you can repay it back when you feel like it.

                The NBN Co debt is a predicted figure in the NBN Co business plan, it was increased from the original plan in 2010 in the 2012-2015 Business plan.

                The NBN Co also predicts in what year they will pay this debt off based on its predicted revenue figures and predicted 7.1% ROI, it is accountable for those predictions, debt is not categorised as “as much as we want” and under the payback timeline “when and if we feel like it”.

                • Lachlan
                  Posted 05/06/2013 at 7:24 pm | Permalink |

                  “Government debt is not some vague unaccountable figure that can be as high as you want and you can repay it back when you feel like it.”
                  True but based on historical figures, any “limit” is about 10 times the current level of debt in relation to the ecconomy and you only have to pay it back in accordance with it’s terms of issue. It can also be rolled over, like most business debts, government bonds, bank bills, commercial paper, etc. You don’t seem to really understand this debt thing properly. I’d reccomend an undegraduate introductory finance unit.

                  “The NBN Co also predicts in what year they will pay this debt off based on its predicted revenue figures and predicted 7.1% ROI, it is accountable for those predictions, debt is not categorised as “as much as we want” and under the payback timeline “when and if we feel like it”.”

                  The 7.1% is technically the IRR (which appears in the corporate plan), not an ROI (which doesn’t appear as it’s too vague a concept).
                  These are two technically distinct ways of quantifying a return, which it seems you don’t understand either.
                  See http://en.wikipedia.org/wiki/Internal_rate_of_return for some information.
                  You can see the difference based on the VAA report on the WACC (weighted average cost of capital) of the NBN from the SAU;
                  http://www.nbnco.com.au/assets/documents/vaa-report.pdf
                  This shows that the effective return on equity would be about 8% for the NBN, which would be a nice fully franked dividend yield for anyone’s super.
                  And the NBN (and it’s shareholders) still has to decide on it’s appropriate capital structure, and the next year’s rolling business plan will show the latest information for it. You should see it before the next election anyway, and I’m sure Renai will cover it comprehensively.

    12. kentlfc
      Posted 05/06/2013 at 10:02 am | Permalink |

      Optus may be onto something considering NBNCo can’t even get Wireless connected!

      http://www.afr.com/p/technology/more_delays_for_nbn_rollout_YdgYqS9SOzW4nM4RTIDqsK

    13. Harimau
      Posted 05/06/2013 at 10:34 am | Permalink |

      I’m curious who owns the last-mile fibre under this “user pays” scenario.

      I doubt the Coalition NBNco would own the fibre.

      It wouldn’t be strange that Optus would own the fibre
      - but then the user is cheated of the ownership of the asset they paid for (the mobile phone analogy clearly doesn’t hold up);
      - could other ISPs use the infrastructure at the same wholesale price?
      - would there be overbuilding if a user decides they don’t wish to use Optus?

      It would be most reasonable for the user to own the fibre as they are paying for the infrastructure;
      - they could add that cost to the price of selling their property in the future and use FTTH as a key selling point, assuming they sell
      - but is the user therefore responsible for the maintenance and quality of the fibre, should something go wrong?
      - would it be viable for a private individual’s assets to be in someone else’s pipes and ducts, how would the law deal with it?

      It makes more sense for a company (Optus) to pay for the fibre on their own and own the asset, but that still, once again, locks out competition, and will lead to cherry picking of denser urban areas – i.e. the same wasteful, unequal, anti-competitive environment the current telecoms industry has become, just with last-mile fibre instead of last-mile copper. Will the Coalition never learn?

      • Fibroid
        Posted 05/06/2013 at 11:16 am | Permalink |

        ‘ It makes more sense for a company (Optus) to pay for the fibre on their own and own the asset, but that still, once again, locks out competition, and will lead to cherry picking of denser urban areas – i.e. the same wasteful, unequal, anti-competitive environment the current telecoms industry has become, just with last-mile fibre instead of last-mile copper.’

        You need to read the Coalition Policy, yes I know you are a ardent pro Labor NBN supporter and you don’t take a objective view, but just read Page 10 under ‘Infrastructure competition’, it won’t hurt.

        It states any non NBN Co fibre rollout must be offered to ALL access seekers under the same terms as NBN Co wholesale products, with pricing overseen by the ACCC.

        ‘ Will the Coalition never learn?’

        They have.

        • Posted 05/06/2013 at 11:25 am | Permalink |

          Interesting, because the open acess provisions isn’t exclusive the the Coalition policy, the only difference is under the NBN they assume (correctly) that establishing a government monoploy will be more cost effective.

        • Observer
          Posted 05/06/2013 at 11:43 am | Permalink |

          “yes I know you are a ardent pro Labor NBN supporter and you don’t take a objective view”

          And, you are an ardent anti labor NBN supporter but, of course, you always take the objective view.

        • Posted 05/06/2013 at 11:47 am | Permalink |

          “I know you are a ardent pro Labor NBN supporter and you don’t take a objective view”

          OK, pipe down, please.

          • GongGav
            Posted 05/06/2013 at 12:59 pm | Permalink |

            Renai, he’s not adding anything to the debate, and making up ‘facts’ as he chooses. You’ve called out plenty of others for doing that, please be a bit more formal with this fool.

            All his stance does is frustrate people into saying something stupid and getting hit with the ban hammer.

          • Fibroid
            Posted 05/06/2013 at 1:08 pm | Permalink |

            Renai,

            I just get tired of repeating the same point over and over and over just because pro NBN supporters don’t want to read the Coalition Policy document.

            I stated that point here:

            http://delimiter.com.au/2013/05/20/turnbull-rejects-labors-nbn-subsidy-claims/#comment-610166

            then again here, within the same discussion piece:

            http://delimiter.com.au/2013/05/20/turnbull-rejects-labors-nbn-subsidy-claims/#comment-610168

            No doubt that sort of anti-Coalition policy comment based on zero reading of their policy will be repeated ad nauseam.

            • Posted 05/06/2013 at 2:42 pm | Permalink |

              I don’t know why you’re complaining to Renai about this. I read the threads in question, just to brush up, and I see no evidence that the points raised against yours were invalid, or in fact in any way indictiative that they have not read the Coalition Policy.

              Further, you may not realise, but the rules in question, althrough they may involve a slight modification, were in fact introduced by Labor.

              I quote from this Wikipedia page because it’s actually the most succient explaination of the rules I can find:

              To prevent other potential providers from undercutting NBN Co in metropolitan areas, new fibre networks are required to be open access and charge similar prices; these rules are known as the “anti-cherry picking” provisions, which were passed into law with other NBN legislation

            • GongGav
              Posted 05/06/2013 at 2:59 pm | Permalink |

              Our problem is that you get stuck on one point and dont listen to the commentary being repeated back to you. Lets look at this example on pricing.

              Under Labor’s NBN, the ACCC controls the wholesale price, while under the Liberal plan, the ACCC controls the retail price, It means the consumer pays $25 plus RSP margin under Labor, or (to pick a random number) no more than $60 for the Liberal equivalent.

              The Labor plan encourages the RSP to charge everyone the same, while the Liberal plan encourages them to offer incentives in metro areas to increase subscriber numbers where it matters. Its capped at $60 (again, a random number) but there’s no reason they cant charge less. And they are only going to charge less than the cap in high density areas.

              Thats for just the lowest plans though. Once you get to higher speeds, all bets are off, and if you have a setup that encourages dual pricing (hell, even if it just allows it) then you’re going back to a discriminatory basis of connection, which what the NBN is trying to get rid of.

              You fob comments like that off, and just go back to one stale point, using only half the argument. Its frustrating,

              The Liberal plan, no matter how you cut it, is weak. It has flaws and holes, and in the end will be outdated before its built. And now that Abbott has decided no FttH on demand, a $30b build thats a complete waste of money.

              The Liberals have whined about a white elephant for 6 years, and now, after they’ve finally given a policy, thats exactly what they’ve delivered.

              • GongGav
                Posted 05/06/2013 at 3:03 pm | Permalink |

                Actually, you know what? Forget what I wrote.

                Renai, delete my above post, I’m over it. I hope the Liberals get in and deliver exactly what you’re asking for Fibroid. You’ll deserve it.

                I’ll have my FttH and will be taking great delight in laughing at the Liberal voters. You deserve Abbott and the disasters he will deliver for you.

                • djos
                  Posted 05/06/2013 at 3:10 pm | Permalink |

                  I hear what you are saying Gav but if that lying a$$ clown gets in we’ll all be walking funny for the next 3 years at least – just look what Mr “climate change is crap” tried to do to our National Marine Parks last night … that’s right he and his band of goons tried to erase the lot … even the ones setup by John Howard!!!

                  Frankly it’s about time the Aus public woke the F Up and tell him to garn git stuffed on september 14th!!!

                  • GongGav
                    Posted 05/06/2013 at 4:08 pm | Permalink |

                    I dont want to look at his latest debacle. I’m just sick of people whining about Gillard, when all she’s been doing is trying to catch Australia up after more than a decade of no progress.

                    The Liberal party has zero policies, yet everywhere I turn people seem to be wanting them in. I ask – how will they fix things? All they’ve commited to so far is plans to lower the revenue dollars they have to work with. Remove the carbon tax = $2-$4b per annum. Remove the mining tax = $2-$4b per annum. Build FttN NBN = $3-$7b per annum. Theres $7b-$15b per annum lost. So how does that reverse a $19b deficit?

                    Yet all people do is whine about Gillard. They dont look at the alternative, and I’m sick of trying to give an even balance to the debate.

                    So people can get what they deserve, I’m over it.

                    Happily, I’m off overseas for a month or so next week, wont have to deal with it. Green cable should have been run past my place by the time I get back.

                    • Djos
                      Posted 05/06/2013 at 4:12 pm | Permalink |

                      +eleventy billion!

                  • kentlfc
                    Posted 05/06/2013 at 11:47 pm | Permalink |

                    Correctamundo! Known as Mr “climate change is crap” for a simple reason, it is! Every model has been shown to be wrong. There is no concensus of 97%! That’s the biggest lie in the whole AGW theory. My old man was in Canada last week, guess what? It was snowing. France is having its first ever June skiing season! Oh but that’s right, Australia had the “Angry Summer” (angry….such a scientific name!),where on Jan 7, we had our hottest ever day of 41C according to BOM. Curiously though, if you add up all the stations (removing the obvious wild high and low readings), the temp is only around 35C????? and Tim Flannery still hasn’t taken my offer to buy his two properties on the Hawksbury to save him from that pesky rising sea!!!!!
                    Hopefully the first thing Abbott gets rid of is any and all “climate change” policies.

                    • Abel Adamski
                      Posted 06/06/2013 at 1:43 am | Permalink |

                      Off Topic
                      But enjoy the future, it will be very interesting

                      • kentlfc
                        Posted 06/06/2013 at 8:36 am | Permalink |

                        I will, thanks. It’s not going to be that different.

                      • Posted 06/06/2013 at 8:43 am | Permalink |

                        Not going to be that different?

                        Okay, if I conceed your denial of climate change for a second (which I personally don’t agree with, but I’ll humour you)…

                        How much has your life changed in the past 10 years due to emerging technology? If you say “Not that much” you’re either lieing, or live in a very strong reality distrotion field.

                        What makes you think that this rapid technological development and social change is not going to propergate through the next decade?

                    • Abel Adamski
                      Posted 06/06/2013 at 2:03 am | Permalink |

                      kentflc
                      I was not going to but I will.

                      Very simple explanation for those weather extremes you mention

                      http://thinkprogress.org/climate/2013/02/14/1594211/death-spiral-bombshell-cryosat-2-confirms-arctic-sea-ice-volume-has-collapsed/?mobile=nc
                      http://www.guardian.co.uk/environment/earth-insight/2013/may/02/white-house-arctic-ice-death-spiral

                      Comparing the volume of melt water 1979 versus2012, in simplest terms is 4.5 billion gallons of melted ice comparing the change since 79. Of course, each seasonal melt contributes its own amount of fresh water to the North Atlantic.

                      Dr. Wally Broecker at Columbia’s Earth Institute warned us about thermohaline circulation slowdown disrupting the earth’s climates forever.

                      Measurements of warm tropic Atlantic waters flowing north have been observed to be slowing down. That dynamic will shut down Western Europe into a deep freeze in winter and longer.

                      The melt water and its impact on the thermohaline circulation deserves serious discussion.

                      Think what you will and believe who and what you will, the wheels are turning

                • clownface
                  Posted 05/06/2013 at 4:49 pm | Permalink |

                  Fibroid doesn’t care about his next door neighbour: people vote for the Liberal Party because they are bean counters and thus have no country. If you read the book, THE LITTLE PRINCE, you will find that some of those amongst us are from PLANET ACCOUNTANT! YES, AUSTRALIA IS A NATION OF TRYHARDS: IT STOPPED BEING THE CLEVER COUNTRY IN THE 80S AND DECIDED TO WORSHIP THE YUPPIE CULT THUS THIS COUNTRY BORE THE METROSEXUAL AKA THE CASHED UP LOSER FROM JULIE BISHOPS ELECTORATE.

            • Alex
              Posted 05/06/2013 at 4:43 pm | Permalink |

              @ Fibroid.

              “I just get tired of repeating the same point over and over and over just because pro NBN supporters don’t want to read the Coalition Policy document.”

              To cut a long story short… this is known as role reversal. As such, welcome to our world (well half of our world, as we at least reply to your questions)…. and say hello to karma.

              :)

        • Harimau
          Posted 05/06/2013 at 8:30 pm | Permalink |

          Okay. So the Coalition will uphold a law introduced by Labor to avoid cherry-picking. Thank you for that clarification.

          What about the first three quarters of my comment? I understand you are a big personality, but hijacking this thread is poor form.

          It makes most sense for [Optus] to pay for the asset out of its pocket, and own the asset, and charge the wholesale price over the asset; in effect, [Optus] replaces NBNco as the owner-operator of the infrastructure. It would be unfair for [Optus] to (as Renai suggests) charge the $5000 price tag over three or four years, while retaining ownership of the infrastructure (in effect, the ability to seek rent).

          So realistically, all we have done is taken future revenue on the asset (after the asset is eventually paid off) out of the public purse (NBNco) and put it into private hands ([Optus]). I’m sure that under some mad interpretation, this is a good thing. “A government big enough to give you all you want…” blah blah blah.

          Now that we’ve established that; of course, the cost of deploying FTTP has economies of scale, so I don’t see fibre-on-demand on an individual scale as being very viable (assuming [Optus] owns the asset and generates revenue from it); it would be more appropriate for [Optus] to go in unilaterally, or for “geo-collectives” (e.g. local councils, or coalitions of local residents in an area) to bring a company such as [Optus] in to do work on a larger scale. In any case, whether [Optus] are called in, or go in pre-emptively, to deploy FTTP, this will occur where it is most cost-effective, i.e. where there are economies of scale and where there is the highest likelihood of the asset being repaid, i.e. dense urban areas. So we have the situation, again, where those further out have inferior internet connections to those in central urban areas. If you don’t wish to call it the result of cherry-picking, what should we call this situation?

          One final thing: to be fair, I’m not pro-Labor, but I am anti-Liberal (as they are now). But to be perfectly accurate though, I’m anti-political party in general: I think that political parties are anti-democratic, and should be abolished. A discussion for another time and place though.

    14. kentlfc
      Posted 07/06/2013 at 9:43 am | Permalink |

      Not tech I was referring to but the fact that the climate is not going to be that different in the forseeable future. We have cold period and we have warm periods. That’s how it has always been, that how it will always be. Climate changes ALL the time. It’s just not warming as the flawed models say it is.

      http://www.drroyspencer.com/

      • Posted 07/06/2013 at 9:50 am | Permalink |

        I really, strongly, suggest you stop talking about climate change in a technology forum.

        We are willing to humour you for a little bit, but your posts are off topic, and unless you bring them on topic, you will be banned by the all-seeing, all-reading Editor.

    15. kentlfc
      Posted 07/06/2013 at 1:36 pm | Permalink |

      Sure. Didn’t bring up the subject though.

      • Posted 07/06/2013 at 1:49 pm | Permalink |

        Please learn to use the “Reply”, you seemed perfectly capable of using it when you replied to djos starting the debate.

        Althrough djos was bringing up “climate change” it was in passing and had little to do with his point, (he was also off topic, but like I said, we’re a tolerant bunch) which was Tony Abbott trying to close the marine park. A displicable act even for people who don’t believe in climate change*.

        *Except maybe those people who care only about profits.

    16. kentlfc
      Posted 07/06/2013 at 4:47 pm | Permalink |

      Actually I did use the reply feature but for some reason it didn’t do it as a reply? The same for a reply I had for Adam, that after I posted it “successfully”, it didn’t show? I only have a problem when posting my replies via phone? And djos was using it as a centrepiece as a putdown of Abbott. It wasn’t needed in his arguement, so I replied to that.

      “Except maybe those people who care only about profit”

      You mean like all the merchant banks who are investing in carbon credits that will do nothing to improve the environment!!!




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