blog Great article from the ABC here chronicling the ongoing broadband problems of those moving into new housing estates. It looks like there will be a variety of answers to the question of how they will get connected — ranging from a quick Telstra copper fix to an early on-ramp to the NBN. But what really interested us was the comments about one Alec Downs, a Berwick (Melbourne) resident:
“Telstra told him it was not laying any more copper, but to meet its universal service obligation, it gave him an interim wireless phone that cannot deliver internet. Instead he has had to buy a wireless ‘dongle’ with very patchy reception, with no hope of a landline internet connection in the near future.”
Even more interesting were Telstra’s own comments, with the big T noting that while it might give residents a wireless solution to their telecommunications needs, its preference was always to deploy fixed infrastructure.
It’s these kind of experiences which should help put paid to the argument that Australia doesn’t need a fixed fibre National Broadband Network because wireless (usually 3G mobile broadband) services will do. They simply won’t. Your broadband experience will suffer if you move, as Alex Downs did, from an ADSL or HFC broadband connection to a wireless connection. Did I say ‘suffer’? Well, by that I meant that in many areas, you’ll actually be in broadband hell, waving a wireless antenna around the room every day in a pathetic attempt to get a signal.
Let’s say it again kids: Fixed and wireless broadband are complementary; one is not a replacement for the other.
Image credit: Telstra
What happened to Cable? Are Telstra not going to offer these people cable? Why isn’t that mentioned in any of these stories?
If you’re referring to HFC, both Telstra and Optus gave up on that way back in the 90’s and haven’t expanded their networks at all since then. Given what a dismal failure it was for both companies I don’t expect either of them to consider HFC an option for new premises, unless it happens to be a subdivided block in an area which already has HFC available (relatively rare scenario).
The NBN naysayers really ought to keep this in mind when they talk about infrastructure competition in this country. But of course, they won’t.
@Jeremy
“The NBN naysayers really ought to keep this in mind when they talk about infrastructure competition in this country. But of course, they won’t.”
Of course what you fail to mention is that most residences when faced with a HFC cable plan (it doesn’t matter which company) said no.
The NBN when it has to compete with viable high speed BB options as in Brunswick Victoria struggles to make an impression.
The NBN will not gain customers on its technical merits, it will gain the vast bulk of its customers when Telstra and Optus have been given billions to shut down their fixed line networks and hand over their customers.
Fortunately Telstra and Optus get to keep the ever increasing wireless BB customer base which have the highest ARPU’s.
That’s how a legislated taxpayer fed fixed line monopoly works, hopefully it will only get as far as 2013, that’s assuming the restarted national NBN build tender is finalised by then.
@ alain. People didn’t want HFC because the cost was inhibitive… mystery solved…!
I also see once again, you have returned to screaming NBN monopoly (circa Nov 2010) rather than blindly saying the NBN will fail. How many times have you jumped back and forth now, 3, 4?
The latest – “The NBN will not gain customers on its technical merits, it will gain the vast bulk of its customers when Telstra and Optus have been given billions to shut down their fixed line networks and hand over their customers…. Fortunately Telstra and Optus get to keep the ever increasing wireless BB customer base which have the highest ARPU’s….That’s how a legislated taxpayer fed fixed line monopoly works… (cont)
So I’m reading between the lines here, that you are AGAIN suggesting the NBN will “you betcha – succeed” when Telstra (and perhaps Optus) migrate their customers… and not fail, after all??????
Like Reality Check, you talk monopoly.. BUT then say, Telstra (and Optus – who still haven’t agreed to any NBN deal as far as I know, so again purely speculation) “can keep their Wireless networks” – AND AS SUCH COMPETE WITH THE NBN…LOL!
Regardless of the technology (and although I see them as complimentary technologies) they will still be (as even your mate RC claimed earlier today) competing with the NBN for certain comms customers…!
“Of course what you fail to mention is that most residences when faced with a HFC cable plan (it doesn’t matter which company) said no.”
Why would I mention that when it has nothing to do with the question asked?
At least try to make sense.
@Jeremy
“Why would I mention that when it has nothing to do with the question asked?”
Because you said this.
“The NBN naysayers really ought to keep this in mind when they talk about infrastructure competition in this country. But of course, they won’t.”
The failure of HFC (infrastructure competition) is because there were two suppliers chasing too few customers.
The problem is even if there was ONE supplier the same mount of customers would have said no thanks, the comparison to the NBN is stark, except Conroy is smart, he knows the NBN and HFC and ADSL cannot co-exist, in fact if they did chances are the NBN would be the loser – ‘I’m ok I’m satisfied with the BB I have’ attitude.
I am sure the HFC would be a ‘rip roaring success’ if the Telstra copper was shutdown in the HFC areas by giving Telstra taxpayer funds to do so.
Many crap on about NBN FTTH being a technical marvel and the way of the ‘digital future’, yeah sure it is, that’s why ALL alternative fixed line infrastructure will have to be shut down ‘voluntarily’ by their respective owners, well if you call handing over a big fat cheque with taxpayer funded billions on it ‘voluntarily’. LOL
Umm either that or it’s being shut down because it is DEGRADED, SUPERSEDED and will NOT be able to handle our future requirements.
Why keep dirt roads or even old pot holed bitumen roads open, when you have gleaming new multi-laned highways…!
Although Telstra are now a private company, the government still feel indebted (because of previous governments actions or INactions) to not hang a lot of self funded retirees, who trusted the Telstra sell at the time… and depend on their Telstra investment… out to dry!
Whether this is right or wrong?
*Umm either that or it’s being shut down because it is DEGRADED, SUPERSEDED… Why keep dirt roads or even old pot holed bitumen roads open, when you have gleaming new multi-laned highways…!*
which is why BILLIONS of people around the world are still using COPPER networks.
For now…
And many still use dirts roads, your point…?
Please don’t pick a fight if at the last second, you refuse to go through with it, because you just don’t have what it takes…!
sincere apologies for tearing a fresh new gaping hole in your dearly beloved NBN on a daily basis.
sincere apologies for tearing a fresh new gaping hole in your dearly beloved NBN on a daily basis.
my commiserations.
3rd time lucky maybe tiger… ? Try again.
No worries, we are used to ToshP300 and holes. After all your Lib inspired argument has more holes than swiss cheese…
Keep trying tiger…!
Billions of people live in third world countries who do not have health care, welfare, democracy etc.
– your argument is invalid.
It is – how?
The NBN will not gain customers on its technical merits, it will gain the vast bulk of its customers when Telstra and Optus have been given billions to shut down their fixed line networks and hand over their customers.
If 50% of users are still on copper and the copper gets shut down underneath them, then whatever government happens to be in power when that happens can kiss goodbye to seats where customers are left stranded. The voters will lash out like a rat in a corner.
This is why the opt in and opt out is just a joke.
The system should be opt out, with residents being told that the copper network is being disconnected, the upgrade is to fibre. Your copper will be cut off in the near future, do you want continued access to fixed line communications?
What if they don’t want ANY fixed line communications? – as in they stopped using it years ago and disconnected from the Telstra line because they were paying line rental on a unused service.
I see exactly where you are going with this.
Someone will reply by saying (rightly) that the connection is free, they will only be charged if they want a service.
You will attempt to point out however that there is diminishing demand for fixed line Broadband services using some dodgy logic (which is brought into question by the ABS stats for the 2010 FY) and thus the NBN cannot possible compete with wireless.
That about sum up your argument Alain?
Then they say no thank you.
If they change their mind later they pay for connection at that point in time.
I bet they don’t, the installation cost will be ‘absorbed’ by the ISP within the plan contract term like they do today, with favorable post rollout installation arrangements in place with their wholesaler the NBN Co.
There is no penalty on installation cost if you take Telstra or Optus HFC today as distinct from when it was first rolled out in your street all those years ago, the NBN Co and ISP’s flogging retail plans want residences to take up NBN FTTH, it won’t put impediments like high post rollout installation costs in the way.
Yep, same as the free modem you get with current plans. Of course the contract term may need to be 48+ months to cover both the modem they will need and the connection they chose to forego.
No. Actually, doesn’t work that way. Optus and Telstra cable you can only get if it already installed in the development/street that you reside in, i.e. they mux off an existing cable. This mux connection is very small, at most a hundred metres in extreme cases, the cost to Telstra to physically install the cable is minimal, even more so when you consider that the majority of households within the cable servicing footprint already have a connection muxed.
With the NBN, a three fibre spurs will have to be run from the local cabinet to the PCP, which given the nature of the technology, means a run of a several hundred metres in the best case, over several kilometres in the worst. The cost to NBN will vary wildly depending on the property, in much the same way the cost to Telstra to install brand new copper cabling for PSTN varies wildly.
Fortunately, under the current regime, most people already have a PSTN connection in place, meaning that if you want fixed-line telephone or some other service (ADSL) delivered over your PSTN connection you pay between $59 and $229 to get it installed.
If the NBN is opt-out, the majority of households will have a connection to their PCP made at rollout, meaning we can keep the cost of new connections low like with Telstra PSTN, since it is very rare that NBN Co will need run a new spur or collection of spurs, i.e. only when there is subdivisions or new developments.
However, if the NBN is opt-in, then there will be a significant percentage of people who decide they don’t need a connection only to have one of the following occur:
1) They later discover that they do in fact want an NBN connection for some reason.
2) They sub-let their property to have the tenant want an NBN connection for some reason.
3) They sell the house and the new owners want an NBN connection for some reason.
In all of the above cases, someone, in likelihood the current occupant, will need to pay a connection fee, and that connection fee cannot be reduced by the fact that in most cases the cable is already in the ground like with Telstra PSTN. Meaning that it will cost them far more than $229. The estimate thrown about was around $400, but I strongly suspect the more states that play this like political poly of “opt-in” the more this will cost. Such an action is clearly not in the States interests as it means that all this extra cost associated with connections comes directly out of the state economy, which leads me to believe that every single case of “opt-in” is merely being done to stick it to Federal Labor.
Now given one of the primary goals of the NBN is a little thing called social inclusion this is a completely unacceptable outcome. You may disagree with the NBN in principle, which you do, you have demonstrated this on my occasions, but why the NBN is the policy on the table, supporting a policy like “opt-in” is just lunacy.
Yes I got all of that, thanks for the technical insight of what’s involved, irrespective of all of that you want to make a bet the post rollout installation cost, that is those residences that said no but then decide yes later to a FTTH ISP Plan will have the installation cost absorbed, either by the NBN Co and or the ISP within the contract term.
The NBN Co and ISP’s will be desperate for punters to sign up, not give them excuses not to, the ISP competition for FTTH customers will be fierce and many ISP’s will fall in the battle the ‘free’ installation will be a marketing winner for those ISP’s that implement it.
…irrespective of all of that you want to make a bet the post rollout installation cost, that is those residences that said no but then decide yes later to a FTTH ISP Plan will have the installation cost absorbed, either by the NBN Co and or the ISP within the contract term.
I’m making a bet that the costs, considering how high they are, will not be completely absorbed by the ISP and/or NBN Co. Which is the same thing we have now with Telstra. They charge a nominal amount which in most cases covers the cost of installation ($229).
The NBN Co and ISP’s will be desperate for punters to sign up, not give them excuses not to, the ISP competition for FTTH customers will be fierce and many ISP’s will fall in the battle the ‘free’ installation will be a marketing winner for those ISP’s that implement it.
NBN Co may be desperate for extra revenue sources if they are not getting a satisfactory return on investment with which to repay the debt. ISPs will not be desperate for customers unless they are in a financially unstable position (i.e. there distribution of customers is such that they cannot compete and maintain profitability, a likely situation under the current CVC charging structure according to Simon Hackett).
With this in mind, in the situation where desperation is involved, yes they may go on a price blizt in order to attract more punters, but that assumes that everything goes terribly terribly wrong, and if things are that bad, it would be in the best interests of the government to bail out some of the debt and/or the ACCC to step in to restructure the CVC charges.
That is something I think the government should be considering now as I think it is a fouls errand to try and pay the entire $43 billion via ROI, some of the investment can be returned via other areas in the economy, there is absolutely no reason for the NBN to be considered a commercially independent entity that succeeds or fails under it’s own merits at such an early stage.
What is most likely to happen is that NBN Co and ISPs will trade off the possible extra customers in exchange for paying the immediate liberality created by installing a new fibre spur for a customer. This trade off will result in a nominal amount being charged for new connections. If Telstra considered attracting customers important, why then do they charge between $60 and $229 for new connections? They too have made the trade off I speak of.
err, they don’t get cable TV?
You’ll find if it’s a new estate the 3G coverage may not be as good as other areas, then when loaded up with all telco services it would just get worse.
This sounds more like a protest from Telstra that they aren’t allowed to lay copper anymore. I have to agree with them though, Telstra (or any telco) should be allowed to lay copper so a fixed line service can be provided now than NBN Co can convert it to fibre when they are ready, or NBN Co could just install all their gear now.
I can’t believe new estates are being built that *don’t* have fibre. Why are Telstra still even laying copper wire? Why isn’t the NBN installing into new estates right now, as they’re being built? Shouldn’t the USO be brought up to 21st century standard and include something like “a minimum Internet connection of 10mbit” as well as a voice line?
You make some very good points, why isn’t the NBN being rolled out into areas that have not got proper fixed line BB facilities first
., instead of inner urban areas like Brunswick in Melbourne that already are well serviced with fixed line facilities the outcome of which is a lukewarm uptake for the NBN.
Your point about the USO is also pertinent, as the USO is all about providing a basic voice service not BB, hence Telstra handing out mobiles which meets that obligation.
Because it would mean Telstra would also need to install gear capable of delivering the last mile services via fibre, and then have all that replaced by NBN Co. in the near future. If they lay copper it would likely just be able to connect to an existing exchange, so much cheaper and quicker to install.
Really NBN Co. should be coming to the party when new estates are built and installing all the last mile.
I think this is more or less the aim, but there are a few estates falling through the cracks, especially the smaller ones :(
But Telstra is not the only supplier of FTTH to Greenfield estates, it is totally up to the developers discretion if they want to make a commercial arrangement with a FTTH Telco on wiring the estate for BB.
The story above highlights the need to do your research before going into a new housing development if BB is a high priority, if the developer has not made a arrangement for FTTH on the estate Telstra’s ONLY obligation is to provide a voice service, it’s pot luck after that what BB facility you will get, but it’s not Telstra’s fault if you don’t get a high speed fixed line service, Australia’s second biggest Telco SingTel could do it but they ain’t interested, but that’s ok.
It’s also ok that the NBN Co is not interested either it seems.
For starters the 2nd biggest telco is Singtel Optus, not Singtel.
But regardless, Telstra is obligated to provide voice services to all Australians, this was part of the agreement when the company was privatised, as you said this is what they are doing by providing the mobile voice services. There is no obligation for them or any other telco to provide services beyond this, though no doubt all mobile carriers are looking at where developments are being built and planning network expansions to cover these and future developments.
Ultimately this all comes back to NBN Co, no telco whether it be Telstra, Singtel Optus, VHA, Transact, etc, should be required to install any sort of physical last mile service when NBN Co will be replacing it in the foreseeable future. NBN Co. should be doing their install on the fly now.
“The story above highlights the need to do your research before going into a new housing development if BB is a high priority”
I agree 100% with this. There has been so much press released on the issues with new housing estates and lack of BB. Yet people continue to move into these areas expecting complete broadband solutions. As someone who is internet savvy I would not even consider moving into a new house without a definite BB solution.
People need to be a lot more aware and smart when choosing their options.
People need to be a lot more aware and smart when choosing their options.
If everyone did this then the developers would suddenly take an interest in workable commercial solutions with existing telcos. However, most Australians have learned that calling for the government to help them is easier than helping themselves, and if they happen to be in a marginal electorate they get what they ask for.
Thing is, the typical family buying into new housing estate will be strapped to the eyeballs on mortgage payments and you can’t squeeze any money out of them for internet services, that’s why none of the telcos give a rat’s backside about such places — there’s no profit to be made there.
Greenfield fiber operators can’t install fiber into the development areas, and they are lodging a complaint against the government for this reason.
So you can blame the lovely labor government (and NBNCo) for doing this, its a result of forcing a monopoly and fixing prices
http://www.theaustralian.com.au/national-affairs/pleas-for-level-playing-field-trigger-inquiry/story-fn59niix-1226042456376
Blame your state goverment they should be ensuring the developers include a plan for broadband connection before allowing them to develop these estates.
Housing is unaffordable enough as it is thank you.
1. A protest from Telstra “that they aren’t allowed to lay copper anymore”? (@Tezz) Nothing could be further from the truth! Telstra is most certainly allowed to – they just don’t want to. Unless political pressure is brought on them.
2. New estates of 100+ residences do have NBNCo as the provider of last resort. But smaller ones (many are very small – ie subdivisions of just a few) are not covered – it simply isn’t practical to have NBN Co at this stage racing around the country after every granny flat that gets added in any town or suburb. They don’t have the personnel or resources yet in place to handle that. Telstra does, however.
3. Ultimately, it is the responsibility of the developer to provide basic services – unfortunately, we are too easily letting the “take the money and run” developers get away with it. Imagine if developers told you that connection to sewage was something you had to arrange. Or windows. Or a front door. Would you scream at the government for not providing you with doors and windows? Developers could pay Telstra (or someone else) to connect copper wires. But why would they, when nobody will call them on it?
But why should Telstra be expected to install copper when their only obligation is provide a voice service?
Installing copper means installing infrastucture, conduits, pits, etc, and then at a later date NBN Co. will come along and say “we’ll have that”. It’s simply not worth the cost to them.
How this has turned into a Telstra (or Optus for that matter, how they got pulled in I have no idea as no telco bar Telstra has a legal obligation to provide any type of service) bashing session is beyond me. This pure and simply falls back to NBN Co.
@Gwyntaglaw
” Telstra is most certainly allowed to – they just don’t want to. Unless political pressure is brought on them.”
Telstra is not the only Telco in Australia, perhaps political pressure on all of them would be appropriate, I like the assumption Telstra should provide a BB service, the fact they might lose on the deal if they have to outlay CAPEX on infrastructure in the area is overlooked.
“They don’t have the personnel or resources yet in place to handle that. Telstra does, however.”
ok sub contract Telstra to do it on their behalf, like they did with the NBN rollout in Brunswick.
“Ultimately, it is the responsibility of the developer to provide basic services”
The developer doesn’t have to provide anything in the way of communications to a estate and many do not, if they do it’s a nice cosy commercial arrangement with a fibre Telco.
Isnt half the problem at the moment that people moving into new devolpments already can not get adequate access to internet due lack of Dslam connections?
This problem isn’t limited to new developments, but essentially yes, this problem that made this a political issue is:
– Lack of “modern” (ADSL2+) DSLAM ports meaning in areas of high demand those who want fixed line Broadband cannot get it it. (Liberals intend to force Telstra to remove their legacy (ADSL) ports and ensure their is adequate provision by upgrading cabinets with more DSLAMS and/or providing more cabinets/DSLAMs, Labor want to remove the problem entirely by replacing it with a system designed to provide Broadband from the ground up)
– Lack of affordable Broadband services for remote areas (both Liberals and Labor intend to, one via subsidies, the other by building their own towers, increase fixed wireless and satellite Broadband coverage to these areas).
– Unacceptable Broadband speeds (Liberals intend to implement a FTTN solution that will provide a minimum of about 12Mbps per household by forcing Telstra to upgrade their infrastructure and providing subsides, Labor intend to remove the problem entirely by replacing it with a system designed to provide Broadband of speeds of a maximum (at release, room to upgrade upon completion or mid-rollout, hardware costs permitting) of 1Gbps/400Mbps with a contention ratio (at hardware, CVC costs will likely mean customers see a higher contention) of around 15:1)
– Lack of provision for higher speed tiers for high consumption households and small business (Liberals consider this of minor importance, believing that giving basic access first is more important, and hence will provide subsides for upgraded services of significant capital (i.e. FTTH) but will not directly intervene in the market, Labor consider this paramount, and thus allow all services connected to the wireline part of their service to get up to 1Gbps/400Mbps)
Differences in plan mean that Labor’s plan will cost more in terms of government expenditure, has more risk which directly falls onto taxpayers, and will take longer to complete the initial rollout, and if the Green’s get their way in preventing later privatisation, requires government/ACCC intervention in order to upgrade from original brief. Same basic goals however.
Why the flying eyebrow would Telstra install copper when its going to get ripped out in a few years time due to the NBN?
What do you think, that Telstra has money lying around that its going to waste?
This is the governments (not NBNCo’s) fault for not properly planning what is happening and doing that massive debacle that prevents current greenfield operators from installing fiber in such areas. Either the government compensates Telstra for the fact that their investment will go down the drain, or they install a fixed line service there asap
Telstra’s PSTN profits keep ticking over and until such time as the HoA agreement is rubber stamped by Telstra shareholders and the PSTN agreed to be decommissioned, Telstra should supply a vaild internet connection, under the USO, “imo”…!
that’s bullshit.
the $13bln HoA only covers the existing CAN. any further expansion of the CAN would require additional compensation over and above the $13bln.
since there’s no provision for additional compensation, there’s no incentive or obligation for Telstra to lay new copper lines.
this greenfields issue is a total Labor fcuk-up.
@ ToshP300. My… I see my previous lesson has you all excited and frothing at the mouth in anticipation for some sort of revenge (at all costs), eh tiger…?
You admitted, wireless and the NBN are COMPETING for clientele. Which makes the NBN… NOT a monopoly… you just said (as did you clone RC earlier) and I agree with you…
Gee even when you say something and I agree, you still want to argue and be antagonistic, FFS…LOL!
Last time I said (and I got in trouble) that I wondered if you can talk while Abbot is drinking a glass of water… so I won’t say that again, eh Renai.
However, seems you can’t, as everyone of your tainted comments mentions Labor this and Labor that. Please stick to the topic…NBN and leave your obvious membership biases at Liberal HQ…!
let me get this right…
we can’t blame NBN Co. ‘coz… “the guvmint made us do it!”
and we can’t blame Labor either… (even though NBN legislation has Conroy’s fingerprints all over it)
err… little green men?
Dont be a fool Renai,
Or should that read don’t be an NBNco propaganda puppet.
Tell the total TRUTH.
The Absolute performance of Fibre is better than the absolute performance of Wireless, but thats not how the market makes its choice. You NBN / Govt puppet.
Perhaps at this guy’s specific LOCATION wireless may or may not be adequate today,
but without question whatsoever, the performance offered by wireless NextG today in the capitals let alone by Dec 2011 when its upgraded to 4G, the performance of wireless for the majority of people in the capital cities will in fact be much greater than all residential fixed copper internet today.
Absolutely Wireless will be a competitor to Fixed wire broadband.
And it needs much less than half the broadband market to render the NBN UNVIABLE.
P.S I notice your very quiet about how the NBN just RAISED THE PRICE OF COMMUNICATIONS TO THE MAJORITY OF AUSTRALIANS. (BY OVER 100% IN THE WHOLESALE ULL. FROM $6 p.m TO $16 p.m)
YOU ARE EXPOSED AND SHOULD BE ASHAMED OF YOURSELF YOU NBN PUPPET
I’ll agree with you that 3G coverage may be lacking in the area (I mentioned that in a previous reply) and that is probably an issue with Renai’s comparison, but that’s it.
Have you read any any of Renai’s articles/blogs before? I would hardly call him a puppet to any telco company or supplier.
*cough* I’m hurt, Reality Check. I thought we had a deeper relationship than that. I think I’ll go and cry on Mike Quigley’s shoulder. He’s always been so supportive.
I know your not hurt, I expected you would’t be.
But I was hoping you would, I was hoping you would wake up to yourself.
But in any case others who are neutral or genuinely pro NBN who have rational thinking will now see more evidence, THE WHOLE TRUTH and will call for change.
Could you tell me if you got a good deal on your tin foil hat please?
Renai, have you considered implementing a comment voting system for delimiter ?
Example would be youtube, where people can give a thumbs up or thumbs down for comments, then perhaps sort comments by rating.
Happy to look at one if there is a WordPress plugin for it ;)
Don’t bother, it’s abused on ZDNet to the point where any worth has relegated it to a predictable farce.
@alain. Spoken like someone who for every thumbs up has 10 thumbs down… as is the exact scenario with you eh advocate…?
I rest my case.
Yes the truth of non-acceptance of your anti-NBN rhetoric as clearly shown by the thumbs down at ZD, is a b^st^rd, eh? But, it is the truth, so…!
Oh that’s right it’s not everyone else voting is it, it’s just me…LOL. Remember rather than accepting it, you claim that I spend 24/7 logging on and off, voting thumbs down for you…LOL!!!!!!!!!!!!). OMFG…!
And when you say, you rest your case, do you mean, like when you said you’ll “never correspond with me ever again”…but as above, you clearly do so… So complete BS too?
Just asking!
@ Reality Check – “Absolutely Wireless will be a competitor to Fixed wire broadband”.
Well, just remember those words the next time you and/or your mates contradictorily try to tell us the NBN is a big bad monopolist that will kill of all network based competition…!
RS,
YES the NBN is a foolish FIXED WIRE Monopoly.
Nothing changes there, the label fits.
And once more its built on buying off and then destroying 3 existing networks.
1 x Copper PSTN
2 x HFC Off which 100 Mb/s is made available to 2.8 million premises TODAY !!!!!
Yes it’s a monopoly that will have competition… you said… LOL!!!!!!!!!
Thanks for coming back to Happy Valley with you now…!
YES the NBN is a foolish FIXED WIRE Monopoly.
Wrong, the NBN would like to be a fixed wire monopoly. It has yet to actually get any agreements in place, nor does it have any significant infrastructure yet, and I don’t believe it has any paying customers either. Oh, and their business plan does not cover the full $40 billion budget, and anyhow they don’t know how they are going to roll out fiber even within that budget.
Go down the list of marginal electorates from the last federal election… those are the ones that will get NBN fiber. By that stage it will be reasonably obvious that the project is in deep financial trouble and an election will pop up at the same time.
Incorrect…Tel
LOL the very first area I looked at… Kiama is in the federal seat of Gilmore, which is a blue ribbon Liberal seat… held by Joanna Gash!
http://results.aec.gov.au/15508/Website/HouseDivisionFirstPrefs-15508-120.htm
Note that 2pp for “Last Election” is actually in favour of Labor (that’s based on a redistributed boundary).
Redistribution is gradually pushing Gilmore toward the ALP and the electorate is known for big swings. Nominally, if there had not been a swing toward the Libs in 2010, the ALP would have won the seat. For what it’s worth, Wikipedia regards it as a marginal seat (admittedly wikipedia is not the absolute authority).
http://en.wikipedia.org/wiki/Division_of_Gilmore
This highlights the current sad state of internet service provision in this country. The government really needs to expedite the rollout of the NBN within the next couple of years. Another 4-8 years is simply unacceptable with a good chance the Gillard government won’t survive the next election and put the whole NBN project in jeopardy.
“with a good chance the Gillard government won’t survive the next election and put the whole NBN project in jeopardy”
…. yes and what’s the bad news?
@ alain… your complete Telstra and political bias is shining through more and more with each comment and explains your fervent anti-NBN rhetoric. But that aside…
Recently you’ve been suggesting that the NBN will be a failure (like HFC before it). But you now expect NBNCo to wave their magic wand and solve all new estates comms woes, immediately? But in the next breath champion the end of the NBN as good news? My friend [sic] your odd contradictions are incessant, aren’t they?
As for some also suggesting NBNCo rolling out a fibre last mile… now I’m not too sure about the legalities but…In a society with social justice, yes the NBN should! But in a society dictated by legals and dollars (as the opposition requires) why should they…? The HoA deal with Telstra has not been approved by Telstra shareholders as yet and although unlikely, maybe never will be.
As such it is “surely” still Telstra’s responsibility to fulfil the USO, not NBNCo’s, until the HoA deal is rubber stamped by Telstra shareholders? Sure Telstra only need to supply the minimum, but…!
One minute we are told by the naysayers about the NBN’s so called wasted taxpayer dollars…and next the same naysayers expect NBNCo to pay “even more”, to foot the bill for Telstra’s current obligations, and run willy-nilly to, exactly as Gwyntaglaw rightly alluded to, every granny flat, now?
Funny too, these naysayers who want NBNCo to supply, will be the first to whinge when NBNCo say… because we have had to supply in new estates which weren’t part of the initial funding agreement, the NBN will now cost an extra $1B-$2B. I can just see it, “told ya so” and again they’ll scream waste…OMG!
But if Telstra want to simply be “minimal”, handing over mobiles and refusing these people ready access to the internet, all that is doing is getting potential future customers (who will go to another RSP, for sure, when the NBN is available) off side. Thus undermining Telstra’s so called push for “better and friendlier customer service”!
Conversely, looking at it from Telstra’s point of view, they of course want to minimise costs in the interim, which is why they simply choose the mobile route. But is it gaining them any friends? Is it undermining their “new customer orientated initiatives”? Sometimes you have to just spend the money, for the sake of good PR!
Off the cuff suggestions (without looking at any real ramifications, competition issues etc) perhaps Telstra could run fibre (open access) with a clause that the NBN will buy it back from them, once the NBN is in that region (NBN will have to pay at sometime). In the interim Telstra will have internet and wholesale clientele and the people in the estates will have decent internet access. Or, if copper will cost Telstra $x to install, then NBNCo could “top up that amount” for Telstra to run fibre and it will belong to NBNCo…!
As for Optus can… Optus don’t have a USO, because Optus didn’t receive a monopoly PSTN network.. it is actually quite simple to understand. So why would they? Even Telstra who “have” a USO, only provide dead basics, so! But if Optus did have the USO do you think Telstra would say to Optus, “no…my shout…”? Seriously!
Suggestion: if there’s not already??? There should be a register for new estates with NBNCo, so that they can (once the Telstra deal is done and it is then NBNCo’s sole responsibility) program these new estates for systematic fibre hook up, imo!
These estates aren’t being hooked up to internet in the first place due to greenfield fiber group being unable to install fiber there because of monopolistic legislation that was passed due to the NBN
http://www.theaustralian.com.au/national-affairs/pleas-for-level-playing-field-trigger-inquiry/story-fn59niix-1226042456376
Depending upon the Australian for your FUD now Matt…LOL…
interestingly they have found another little group of self interest whingers who want open slather…
From your URL: – “The group claims that mandating technical standards will saddle fibre operators with new costs, making it difficult for them to compete for new business”…
So what you want is to let them supply fibre “without” technical standards”, so that when the inevitable problems occur, you can again scream “insulation”…?
Dear oh dear…
I would have thought that you would be intelligent enough to differentiate between technical and safety standards RS
But that would clearly be asking for too much
(Also its not just the standards, but the fact that the FTTH developers have a forced pricing structure upon them, and have to charge everyone the same price for the network as they do themselves, which means they lose money)
Interesting deteego that all these Greenfield estates have been hooked up for years with FTTH without any such ‘standards’ in place, and it’s all working, it only came AFTER the NBN started being rolled out by the very same contractors in the main that built the FTTH infrastructure in the Greenfield estates the first place!
But of course when your political motive is purely to enforce a monopoly that would struggle for customers on its own merit without a hell of a lot of legislative help it doesn’t really matter how irrational it is.
@alain. I thought you rested your case?
You do know what “resting the case means”? FYI – (Lit.) “I have completed the presentation of my argument”.
But just 10mins later… dear oh dear!
Strange to blame wireless in this instance.
The guy has moved into a new estate with no fixed lines and complains about the level of wireless broadband service! Surely it takes time to rollout wireless to new areas, just as it does fixed line. Without that wireless he would have no connection. He should be blaming the developers if anyone.
Telstra will continue to do what is best for Telstra and I believe that will be at the detriment to the NBN rollout.
“The guy has moved into a new estate with no fixed lines and complains about the level of wireless broadband service!”
I think the guy was actually complaining about a lack of fixed lines, and only mentioned wireless because it is a poor substitute. No doubt he assumed (as most of us would) that any new home would have actual phone lines connected. I’d be pretty angry too.
Incidentally it’s nearly impossible to determine what broadband options are available to you when you purchase a house in a new estate. I fell into this trap a couple of years ago – I called Telstra to determine if ADSL2+ was available in the area I was looking at, they assured me multiple times that it was, but it was only after I purchased and moved into the house that I discovered my line is too long to support any form of ADSL. Too bad, so sad – by that point you have no recourse except to use an expensive and unreliable wireless service.
As far as I can tell there is no way to determine in advance if your phone line will support ADSL, unless it’s an existing house which has already had ADSL activated. I’m sure lots of people buying in new estates get stung this way.
Of course the NBN will solve this problem once and for all. There are no ifs, buts or maybes about a fibre connection – if it’s there, it works!
Wireless a poor substitute for no fixed line?
I disagree, he should be saying thank goodness I am able to get on the internet without a land line being connected. You can hardly condemn wireless if it is the only way to get onto the internet, especially in a new area.
I agree with the difficulty of moving to a new estate because I have done the samething twice and havent been able to access broadband despite the area having ADSL and/or HFC. Twice I have had to turn to wireless for my internet needs and now I am sticking with vividwireless which provides ADSL equivalent services.
I detest Telstra for what they have subjected people to in their efforts to maintain their monopolisitic market share.
I also despair of this NBN rollout and the amount of issues it has due to poor planning.
On the contrary, other than PR issues the NBN has been planned exceedingly well. What more could you ask of them? Most of their projects so far are in or under budget. They were forced to start with the outer lying regional areas because of politics. What else do you want them to do?
I would agree, I think the actual NBN rollout has been done quite well so far, considering the company formed as a startup from the ground up.
Well that’s if you ignore the pitifully small uptake in the first activated NBN areas in Tasmania, and you also ignore the poor uptake in Brunswick Victoria, and you also ignore the ‘start again’ we just wasted 12 months of the timeline build tender appraisal process and also ignore the fact that the biggest ISP and existing infrastructure owner Telstra has still not agreed to any proposal put to them by the Government let alone scheduled a date to put any recommendation to shareholders.
Other than that it’s going fine.
Also please spare me the guff about the ‘new start up company’ doing well, FTTH has been around in Australia for years, the NBN Co just sub contract the work to overseas firms and companies that have been doing it in Australia for years and pay them from the virtual bottomless pit that is called taxpayer funding.
What is this blog about then?
It highlights one of the gaps in the NBN planning where the legislation was to slow to get through and now results in some estates dont have broadband (or copper) of any type.
Policy of opt in/out should have been discussed with State governments prior to work starting on the NBN, not brought up as an after thought. If they got in early enough the ground work could have been laid with the then Labor Victoria and NSW Governments. This should have been one of the priorities at the top of the planning process.
The tender failure and the subsequent resigning of two senior people in the bid highlights that there are some fundamental issues with the whole tender process. Hopefully they are working on the Plan B, which should already have been written.
You would hope that the initial Tasmanian roll out was under budget and on time given the poor subscriber turnout.
From Techworld 08 April 2011
http://www.techworld.com.au/article/382676/we_need_do_more_nbn_communication_conroy/
“Despite launching more than seven months ago in three Tasmania towns at a cost of approximately $30 million, the NBN has yet to attract more than 600 of the 4000 eligible premises for the network.”
all of that just reflects Labor’s “crash through” approach to policy.
compare this to how Telstra is handling the NBN HoA, i.e. they’re doing due diligence, forming contingency plans, appointing independent expert to review, etc, before submitting to shareholders for vote.
the contrast between government incompetence and corporate accountability couldn’t be any sharper.
@Merlin
“Most of their projects so far are in or under budget”
How do you know, because they said they were?
“They were forced to start with the outer lying regional areas because of politics.”
What politics? – and how would that differ if they had started in a high density inner city area of Melbourne like Brunswick for instance? – that’s right no change.
word on the street is that the Tasmanian contract was a loss-maker.
Would you like to provide verification, either of you (Merlin and Tosh) on the if Tassie sites made a profit or loss, and also if they were on or off budget (remember these two things are not mutually exclusive, one can be on budget and still make a loss)?
Perhaps you can show us what the Tasmanian budget in $$ was BEFORE the rollout what the expenditure in $$ was AFTER the rollout so we can see how much UNDER budget it was for ourselves.
Forget about the revenue from the Tasmanian areas, it wouldn’t even pay for the photo copying paper budget at NBN HQ.
I also like the spin that the low Tasmanian uptake was ‘as per expectations’, not that we knew what the expectations were before they started, these amazinng ‘hindsight’ predictions are always stated after the event.
rumours (“word on the street”) are that the contracters made a loss. profit calculus for NBN Co. is irrelevant as they aren’t even charging actual wholesale costs to trial ISPs.
Tosh, Alain and Merlin:
I didn’t specify any opinion nor assert any position either way as to the state of the finances of the NBN. I just merely asked for some facts. An article showing that the NBN made unheard profits or unbelievable losses. Because I wanted to prevent this thread from spiralling out of control for some misunderstanding, hence why I pointed out you can make a loss and still be on budget.
Some ramblings about how the Tassie uptake numbers and how profit in that area won’t even pay for photocopying (alain) or quoting the word on the street (Tosh) is kinda irrelevant to actually answering my question, even if they might be true, because you are just two guys from the Internet, trying to refute the point made by a third, and getting annoyed when a fourth asks you for some verification of your stated facts.
However if it is that you don’t want to keep some kind of semblance of reliable information in this thread, and would rather just keep debating, please, go right ahead.
The facts are NK Conroy stated that the Tasmanian rollout came in 10% under budget, which is great PR but he refuses to publish any figures that I am aware of to support that support that claim.
What $$ budget, what did it actually cost and what 10% under dollar figure was left after it was finished?
Exactly. With no reliable information discussion of the success or failure (in terms of budget and profit) of the NBN trail sites is like watching paint dry. It’s tedious and not helpful. Which is my point, provide some refutable facts, or lay the “issue” to rest. Because we can debate it all day, and won’t actually get anywhere.
But I’m starting to think that is what you want.
I can’t believe you guys (M Wyres must be on holidays) are still spending your days on the delimiter comments forum arguing about the NBN! The only person that is good for is Renai’s hit count for selling advertising space ;)
Faith (or otherwise) in the NBN is verging on religion, and some seem even more fanatical, bordering on football.
And just like football, you’ll never convince someone that your team is better than theirs :)
Peace out.
*Let’s say it again kids: Fixed and wireless broadband are complementary; one is not a replacement for the other.*
http://en.wikipedia.org/wiki/Complementary_good
“A complementary good, in contrast to a substitute good, is a good with a negative cross elasticity of demand.[1] This means a good’s demand is increased when the price of another good is decreased.”
examples include:
Hotdogs and hotdog buns
Peanut butter and jelly
Printers and ink cartridges
DVD players and DVDs
Computer hardware and computer software
http://en.wikipedia.org/wiki/Substitute_good
“Substitute goods are goods which, as a result of changed conditions, may replace each other in use (or consumption)[1]. A substitute good, in contrast to a complementary good, is a good with a positive cross elasticity of demand. This means a good’s demand is increased when the price of another good is increased.”
“wireless” internet and “fixed” internet both essentially offer the same service: internet access. hence, they’re unambiguously substitutes – and definitely not complementary.
@toshP300
“wireless” internet and “fixed” internet both essentially offer the same service: internet access. hence, they’re unambiguously substitutes – and definitely not complementary.”
Spot on tosh, it makes me laugh when I see the that buzzword ‘complementary’, people will make choices of wireless over a NBN Plan for the same reasons they choose wireless INSTEAD of HFC and ADSL.
You see all this crap about wireless being the choice for those that cannot get fixed line, err no , wireless is the choice for many instead of fixed line, and as wireless increases its technical capability and spread, even more so.
So AGAIN I ask alain (it’s not a trick question or being insulting)… and I also ask ToshP300, too…
Do you use completely FIXED or more to the point, completely WIRELESS means, for all of YOUR comms requirements?
Or do you have a mixture of the two (which “complement” each other) to suit your needs…LOL…?
It makes me laugh when people post about wireless taking over, but hypocritically do so, from their fixed line connection…!
@RS
i’ll put it in simple child’s language for you:
if i were to disconnect my LAN cable and hook-up a USB wireless broadband dongle, i’m SUBSTITUTING wireless internet access for fixed internet access.
the fixed-line connection becomes inactive – hence, NOT complementary.
to further illustrate, an example of complementary product usage for *you* would be “keyboard” and “kleenex”.
So you’re arguing that all mobile wireless subscribers are using their mobile wireless as a substitute for fixed-line services? Because the ABS stats don’t support this theory. Mobile subscriptions are going up and fixed subscriptions are going… up. Hmm.
Trying to pretend mobile and fixed broadband connections are exactly equivalent smacks of desperation. There are some pretty obvious differences between the two, such as one is expensive and *mobile* while the other is cheap but not mobile. This would explain why most of the people I know have both types of connection – they serve different purposes, hence they are complimentary. I’ve yet to hear of anyone abandoning their ADSL/cable connection to rely exclusively on a mobile connection instead.
Well you have now.
I use Vividwireless exclusively for my home connection, roughly 8-15GB a month.
Granted its not for everyone but it is a reasonable comprimise since I would save the $300 connection fee and didnt want to pay for a phone line I dont want; only telstra infrastrucutre in my area.
I dont P2P and only browse youtube occassionly so there is no issue for me. It is suitable for gaming (not overseas FPS) and skype video and gives better performance than ADSL 1.5M
The bonus is that I can take the router with me (in Perth), and if i wanted to, run other wireless devices off the same account. It it miles ahead of 3G devices. You can even get “unlimited” for $75 per month but I imagine that is priortised to shape P2P.
http://www.vividwireless.com.au/home
*So you’re arguing that all mobile wireless subscribers are using their mobile wireless as a substitute for fixed-line services?*
did i say that? of course, not. a lot of people have both, and some are wireless only. future trends will depend on how both technologies evolve and pricing/cost considerations.
i was merely pointing out that the term “substitutes” and “complementary” have strict economic definitions. nothing to do with me – it’s thus defined in millions of economic textbooks. if you don’t trust wikipedia, go check it out in your public library.
*Trying to pretend mobile and fixed broadband connections are exactly equivalent smacks of desperation.*
did i say that? of course, they’re not equivalent. mobile is “mobile” and fixed has “cheaper data”.
*This would explain why most of the people I know have both types of connection – they serve different purposes, hence they are complimentary.*
they’re “complementary” in the following sense:
merriam-webster: mutually supplying each other’s lack
but, if you’re talking about “substitutes” and “complementary” in the specific “economics” sense, the meaning is entirely different. depending on how technology evolves, level of investment, pricing/cost factors, wireless *may* increasingly become a viable substitute for fixed-line connections (as it already is for a small minority of users).
the important points are:
(i) not everyone’s requirements are the same – i.e. what is “seriously lacking” for some might only pose a “minor inconvenience” to others;
(ii) different users respond differently to pricing/cost factors – i.e. the value gained from addressing “something lacking” may not justify the cost for a particular individual;
(iii) these pricing/cost parameters that users respond to will evolve over time.
it’s in this more complex sense that “wireless” and “fixed” are product substitutes.
this goes straight to the heart of the NBN folly – imposing ONE fixed-line solution for all instead of allowing a more complex and differentiated market to develop. (wealthy and successful Western economies are all about complexity and diversity as opposed to socialist “monotone drabness”.)
*I’ve yet to hear of anyone abandoning their ADSL/cable connection to rely exclusively on a mobile connection instead.*
me too – but apparently, they do exist.
I’m sorry, but ignoring alain’s drivel, do you even notice the difference between your examples of competitive substitues and the NBN? The NBN is an infrastructure product. It is impossible- or at least incredibly wasteful and inefficient- to achieve infrastructure competition. Infrastructure tends toward a “natural monopoly”. This is honestly economics 101. It’s brazenly obvious you never actually took an economics course, the way you’re quoting wikipedia with such childish glee over something completely unrelated to the NBN.
*I’m sorry, but ignoring alain’s drivel, do you even notice the difference between your examples of competitive substitues and the NBN?*
i was merely pointing out that “substitute goods” and “complementary goods” have very strict definitions in “economic lingo”.
many people have both wireless and fixed connections – but they’re clearly “substitutes”. you substitute one for the other depending on the mode of usage and cost considerations.
nothing to do with the NBN.
*The NBN is an infrastructure product. It is impossible- or at least incredibly wasteful and inefficient- to achieve infrastructure competition. Infrastructure tends toward a “natural monopoly”. This is honestly economics 101.*
no-one’s arguing we should build TWO fibre networks.
rather, it’s silly to shutdown the copper network entirely and move EVERYONE onto the fibre platform when it’s clearly not the most cost-effective method of upgrading our broadband infrastructure.
that’s precisely the “infrastructure duplication” that you seemingly abhor. by sinking $36bln into a new fibre network and paying the $13bln bribe to shutdown the copper network, consumers are paying for TWO networks.
if the copper network is so “inferior”, “degraded”, “worthless”, “rotting”, etc that you claim, then why bother offering a single cent to Telstra to shut it down? surely, the gleaming, new fibre network would win over a massive subscriber base just by engaging in “open competition”?
*It’s brazenly obvious you never actually took an economics course*
i’m hardly an elitist – a $2 public library lending card is the most valuable investment you could ever make ;)
*the way you’re quoting wikipedia with such childish glee*
i’m amazed myself how often “Wikipedia” is quoted even in “serious publications”. i must’ve caught the bug. ;)
>>>many people have both wireless and fixed connections – but they’re clearly “substitutes”. you substitute one for the other depending on the mode of usage and cost considerations.
nothing to do with the NBN.
You CAN’T substitute wireless for wired, because they are so dissimilar and have completely different pricing and capacity constraints. The markets are also completely different. It’s impossible for almost every private corporation to set up a national wired network, but it’s far easier for a large corporation to set up a wireless network.
A substitute good is something like a Dell instead of an HP. They’re extremely similar and provide exactly the same function to the customer.
Most importantly, competition requires a minimum of 5 or 6 options. You can go HP, Dell, Asus, Acer, Apple, Lenovo, and many many more. That’s IMPOSSIBLE in wireline internet infrastructure.
>>>no-one’s arguing we should build TWO fibre networks.
rather, it’s silly to shutdown the copper network entirely and move EVERYONE onto the fibre platform when it’s clearly not the most cost-effective method of upgrading our broadband infrastructure.
that’s precisely the “infrastructure duplication” that you seemingly abhor. by sinking $36bln into a new fibre network and paying the $13bln bribe to shutdown the copper network, consumers are paying for TWO networks.
>>>if the copper network is so “inferior”, “degraded”, “worthless”, “rotting”, etc that you claim, then why bother offering a single cent to Telstra to shut it down? surely, the gleaming, new fibre network would win over a massive subscriber base just by engaging in “open competition”?’
It wouldn’t be an “open competition”. It’s not even fair competition. Telstra would be able to cherry pick the most profitable urban areas while NBNCo is required to provide 93% of the population with FTTH. Subscribers would end up paying for the upkeep and expansion of two separate networks. It’s a complete waste of money. By having one network the fiber you’ll double NBNCo’s penetration rate and pay off the network TWICE as fast.
>>>i’m hardly an elitist – a $2 public library lending card is the most valuable investment you could ever make ;)
You obviously haven’t spent enough time learning basic economics. I highly recommend you take actual university courses instead of cherry picking whatever economic books satisfy your viewpoints.
>>>i’m amazed myself how often “Wikipedia” is quoted even in “serious publications”. i must’ve caught the bug. ;)
You didn’t even fully read your own wiki passages. Your knowledge is incomplete. Wiki passages need to be understood with context. If I looked up a part of US history on wiki without understanding how it all went, I would most likely draw incorrect conclusions, as you did with “substitute and complementary goods”.
*You CAN’T substitute wireless for wired, because they are so dissimilar and have completely different pricing and capacity constraints.*
obviously, you can’t have an “all-wireless” or “all-fixed” national network. no-one’s suggesting that.
however, at the level of an individual consumer, depending on personal requirements, preferences, budget and cost factors, “wireless” and “fixed” can be substitutes. you have to stop viewing broadband consumers as homogenous units with homogenous preferences facing homogenous constraints.
*A substitute good is something like a Dell instead of an HP. They’re extremely similar and provide exactly the same function to the customer.*
a USB wireless broadband dongle and a LAN cable both provide the same service: “internet access”. of course, the quality, cost and convenience of the service is not identical. but, still, they’re are “substitutes”. nobody sits down with a laptop and uses TWO internet connections simultaneously.
*It wouldn’t be an “open competition”. It’s not even fair competition. Telstra would be able to cherry pick the most profitable urban areas while NBNCo is required to provide 93% of the population with FTTH.*
you’re right. if NBN Co. was to proceed with pushing fibre to 93% of households – absent of any regulatory constraints and the $13bln deal, Telstra would shrink the operational footprint of its copper network and drive NBN Co. into bankruptcy. after all, current NBN pricing anticipates offering ~ADSL speeds with 10GB/20GB/30GB caps to half the population. hardly competitive.
*Subscribers would end up paying for the upkeep and expansion of two separate networks. It’s a complete waste of money.*
i wasn’t trying to argue that the government or the market should build TWO fibre networks. of course, not. but even assuming that we have two networks in operation, consumers will only subscribe to ONE network (that’s if they choose to subscribe at all). not a single dollar of Telstra HFC revenue is diverted to defray Optus HFC costs, or vice versa.
*By having one network the fiber you’ll double NBNCo’s penetration rate and pay off the network TWICE as fast.*
that is logically true, undisputed and irrelevant. the problem with the NBN is the proposed investment configuration and the unnecessary cost burden it imposes on broadband consumers and the broader economy.
imagine if you were running a laundromat. if you bought out the competing business next door for $X and the government passed laws preventing the licensing of any new laundromats – you will have cornered all the customers and can then charge them higher prices to pay off the $X. but, the economic outcome is unambiguously bad for consumers.
*cherry picking whatever economic books satisfy your viewpoints… ”.
i challenge you to find a single economic textbook that defines “substitutes” or “complementary” in a way that contradicts the textbooks referenced in that Wikipedia entry.
>>>a USB wireless broadband dongle and a LAN cable both provide the same service: “internet access”. of course, the quality, cost and convenience of the service is not identical. but, still, they’re are “substitutes”. nobody sits down with a laptop and uses TWO internet connections simultaneously.
They’re not substitutes. In order to achieve cross elasticity of demand you need the capacity and price constraints to be similar.
Look, in countries like Sweden where super-fast FTTH has been available for years, wireless still hasn’t “replaced” wired. It’s impossible. The costs are orders of magnitude different. Even with modern 4G technology, at best bandwidth costs ISPs $1/gigabyte. On wired that’s below 3 CENTS/gigabyte, and constantly dropping. Wireless tech is also reaching its theoretical limits. Since you like wikipedia so much, wiki “Shannon’s Law” in order to understand how close we are to the limits of wireless bandwidth.
>>>you’re right. if NBN Co. was to proceed with pushing fibre to 93% of households – absent of any regulatory constraints and the $13bln deal, Telstra would shrink the operational footprint of its copper network and drive NBN Co. into bankruptcy. after all, current NBN pricing anticipates offering ~ADSL speeds with 10GB/20GB/30GB caps to half the population. hardly competitive.
Why yes, a company with an explicit mission to serve the best interests of ALL Australians without gouging people with inflated prices will in fact lose in competition to a for-profit, amoral corporation whose sole goal is to line the pockets of its executives and foreign shareholders.
If NBNCo *lost* money the taxpayers would be on the hook, so it makes sense to have only one network without allowing a private corporation to cherry pick and thus screw over every Australian for its personal profits.
>>>i wasn’t trying to argue that the government or the market should build TWO fibre networks. of course, not. but even assuming that we have two networks in operation, consumers will only subscribe to ONE network (that’s if they choose to subscribe at all). not a single dollar of Telstra HFC revenue is diverted to defray Optus HFC costs, or vice versa.
No you don’t understand. In order to maintain upkeep of two networks while dividing subscriber penetration rates in HALF for each network, the cost of accessing both networks has to be significantly higher. If the copper were still government owned, it would make sense to force Optus to decommission their network because it would allow the government to lower their prices while still achieving their annual target ROI.
The same principles apply to fiber and copper.
>>>that is logically true, undisputed and irrelevant. the problem with the NBN is the proposed investment configuration and the unnecessary cost burden it imposes on broadband consumers and the broader economy.
imagine if you were running a laundromat. if you bought out the competing business next door for $X and the government passed laws preventing the licensing of any new laundromats – you will have cornered all the customers and can then charge them higher prices to pay off the $X. but, the economic outcome is unambiguously bad for consumers.
This is COMPLETELY irrelevant. The laundromat has significant competition in the form of SUBSTITUTE GOODS. It’s also a completely private organization, and in a monopolistic situation will gouge its customers by pricing at what the market will bear to maximize its profit margins. That means profit returns of 40% or more. NBNCo has an explicit mandate to maintain 7% ROI. So if penetration rate is double what they expected, they will HAVE to lower prices to maintain that 7%. How hard is this to understand?
If you have two networks, the cost and burden on subscribers DOUBLES, because upkeep must be done on both networks. This is freaking simple.
>>>i challenge you to find a single economic textbook that defines “substitutes” or “complementary” in a way that contradicts the textbooks referenced in that Wikipedia entry.
What I meant to say is that wired and wireless are complementary goods- NOT substitutes. I was too quick to reply to see through my blinding frustration. My mistake.
*They’re not substitutes. In order to achieve cross elasticity of demand you need the capacity and price constraints to be similar.*
definitions:
P’ = price of good 1
Q’ = quantity demanded of good 1
P” = price of good 2
Q” = quantity demanded of good 2
U = total consumer utility
substitutes: goods with positive cross-elasticity of demand.
∂ Q'(P’,…) / ∂ P” > 0
perfect substitutes: goods with constant marginal rate of substitution:
∂ U(Q’,Q”)/∂ Q’ = ∂ U(Q’,Q”)/∂ Q”
{∂ U(Q’,Q”)/∂ Q’} / {∂ U(Q’,Q”)/∂ Q”} = 1
complementary: goods with negative cross-elasticity of demand.
∂ Q'(P’,…) / ∂ P” < 0
to put in simple English:
(i) "wireless" and "fixed" broadband are SUBSTITUTES because they exhibit POSITIVE cross-elasticity of demand.
(ii) however, depending on individual requirements, they're not "perfect substitutes" in most cases.
*No you don’t understand. In order to maintain upkeep of two networks while dividing subscriber penetration rates in HALF for each network, the cost of accessing both networks has to be significantly higher.*
broadly speaking, in the case of fixed infrastructure, the overwhelming portion of the costs relate to "capital consumption" (or depreciation) and the associated interest costs of servicing the huge (sunk) capital base. ongoing maintenance costs are relatively trivial in comparison.
now, in the case of the competitive roll-out of HFC by Telstra and Optus:
(i) both companies have not tried to recover the FULL building costs from access charges;
(ii) instead, when they realised that the revenue potential of HFC was less than initially projected, they wrote-off portions of the book value (capital base) of their respective networks;
(iii) current access charges reflect this lower asset base;
(iv) if Telstra and Optus can charge willy-nilly to recover the FULL building costs, there would be no need for the large, billion-dollar write-offs.
in other words, the (ex-ante) asset base of competitive, private infrastructure was adjusted downwards to reflect the (ex-post) actual revenue generating potential of the networks, resulting in lower access charges.
this is in sharp contrast to the NBN, where the Government is:
(i) arbitrarily foisting an unsustainably-high capital base on the "market";
(ii) eliminating all competition so that NBN Co. can try to forcibly recover the entire capitalised building costs (via punitively-high data charges);
(iii) thereby:
(a) destroying general broadband affordability;
(b) compromising the current viability of fibre as an "affordable" platform for high-bandwidth applications (by unnecessarily and indiscriminately shunting 10mln, free-riding, subsidy-hungry households onto fibre);
(c) creating all kinds of pricing and economic distortions, which will ultimately undermine NBN Co.'s revenue model and lead to serial taxpayer bail-outs.
(d) the claim benefits of "7% ROI" are a total furphy – to undo the huge damage done to affordability caused by overbuilding and overinvestment, the Government will have to write-off a substantial portion of the NBN.
@Merlin
“The NBN is an infrastructure product. It is impossible- or at least incredibly wasteful and inefficient- to achieve infrastructure competition.”
So all the different wireless infrastructure and all the fibre loop infrastructure mainly in the metro areas providing corporate communications and 3rd party non Telstra exchange backhaul capability from multiple suppliers is what exactly?
Mobile networks are different. I’ll give you an example.
Let’s compare a wireless tower to a fibre spur in a small town of say 20 people.
In Wirelessville a tower can have 10 different customers connected at one time, but all 20 people can access it. In Fixedville you have run fibre all 20 different households. A competitor comes along in both towns who can do exactly the same thing as you.
In Wirelessville, a customer decides to move to your competitor. That’s okay, that slot you lost can be filled with another customer. The town will settle, assuming everyone wants service, on 10 customers per provider. This is not wasteful.
In Fixedville, a customer decides to move to your competitor. This isn’t okay, as that slot you lost can’t be recovered with another customer. The town will settle, assuming everyone wants service, on 10 customer per provider, hence there will be 20, a whole entire network worth, slots that are unused by the town. This is wasteful.
Wireless competition would literally be impossible without enforced government tower sharing and roaming regulations. It’s an analogue to the line-sharing forced upon Telstra.
@Merlin
So taking that point of view you could have fixed line infrastructure competition then if the Government legislated to force Telstra and Optus to wholesale their HFC product under ACCC pricing regulation?
Although practical it’s not likely because the Government wants the NBN FTTH to look good, the only way it can do that is to get rid of the HFC network and buy the Telstra and Optus customers, not make HFC more appealing.
Well yes, that would work, and has been discussed as an alternative by people like myself.
However it’s just that, an alternative, HFC cable for Broadband is a direct substitute for FTTH, just like ADSL2+.
It means the majority will chose only to have one. I did discuss before how this is a wasteful practice, and then explained how this problem does not apply to wireless didn’t I?
It’s not making the NBN “look successful”, it’s just a way to make Telstra and Optus to go calmly and quitely. They could compete with NBN if they wanted to, and suffer a very long a painful death. If the government wanted to, it could write off some or all of the debt associated with the NBN, and suddenly wham, HFC cable can’t compete. But the government (foolishly) wants to recover every cent they borrow, so they are attempting to find a way to do just that.
Everything you said is exactly right, but it’s not foolish to demand an ROI- at least in the long run. There’s no reason why NBNCo can’t be profitable when it will have a monopoly on subscribers. Why is their corporate plan basing price ranges on 20% penetration rates?
Logically speaking, penetration rates will be the aggregate wired penetration rate of ALL current ISPs. If you add up Telstra, Optus, iiNet, internode, etc. what is the overall Australian penetration rate? *That’s* the minimum that NBNCo will achieve, and in fact likely even more as they will reach so many Australians who can’t access quality broadband.
The only problem with NBNCo is its absurd CVC charge scheme. Not only is it unnecessary and completely at odds with every other wholesale network in the entire world, but it’s insanely inflated. International traffic costs Australian ISPs $40/mbit, dropping another 50% every 12 months. But CVC will start at $20/mbit and ostensibly drop to $10/mbit by 2020? WTH???
“There’s no reason why NBNCo can’t be profitable when it will have a monopoly on subscribers. Why is their corporate plan basing price ranges on 20% penetration rates?”
Because it isn’t, it is based on 70% penetration rates, I don’t know where you dreamed up 20% from.
Also it’s only a monopoly on fixed line subscribers after the copper and HFC networks are completely shut down, which does not equate to being profitable after your subtract the massive rollout cost and on going maintenance expenditure.
I think if/when the NBN is in full swing that wireless can be sold as a complementary service to fixed line broad band. It is easy to see how Telstra and Optus could leverage off their wireless networks to provide a broadband package for home and roaming needs.
Imagine the one account being able to be used for content delivery / small business need at home, whilst your mobile devices can access the account whilst roaming around the city on your [insert tablet/phone here].
there’ll be three types of subscribers:
(i) mobile only
(ii) fixed only
(iii) mobile and fixed
and you’re 100% right – category (iii) subscribers will find product bundles by the same carrier highly attractive. in fact, high CVC charges on the fibre network encourages product bundling as it allows carriers to economise on total (mobile and fixed) capacity provisioned per subscriber.
Peanut butter and Jelly – Tosh (Billy Bob) P300?
Anyway… after that circus… you admit too, that the NBN is not a monopoly, as wireless networks are competition…thank you!
the biggest problem with the NBN is not so much that it’s a FIXED monopoly – it’s the ridiculous cost structure that results from indiscriminately forcing 10 million households onto the fibre platform.
furthermore, by shutting down the copper network, it means we’ll have no cost-effective, alternative FIXED-line option to resort to.
Labor’s NBN policy sets a new benchmark for STUPIDITY.
Do you understand how much more expensive it would be to maintain 2 separate wired networks? Do you realize a private corporation’s maintenance funds comes solely from its subscribers?
Are you having trouble how exceedingly inefficient it would be to have 2 competing wireline networks, one vastly inferior to the other?
Do you actually believe Telstra *wanted* to continue spending such huge amounts of money every year maintaining a clearly inferior network that is rotting away? They would undoubtedly go bankrupt if they had to, costing both shareholders and taxpayers money.
*Do you understand how much more expensive it would be to maintain 2 separate wired networks?*
basically, if you overbuild, you run the risk of having fewer subscribers than you require to operate a profitable network. so, you may end up having to write-down the value of your sunk assets.
*Do you realize a private corporation’s maintenance funds comes solely from its subscribers?*
yes – but each household only subscribes to *one* network. so, if there’s a shortfall of subscribers for a particular network, it’ll run into financial difficulties – the loss is borne entirely by private equity holders in the failing network.
*Are you having trouble how exceedingly inefficient it would be to have 2 competing wireline networks, one vastly inferior to the other?*
NBN Co.’s fibre network will be technically superior to Telstra’s copper network in terms of installed bandwidth capacity.
however, the copper network has a far superior cost structure because the infrastructure is highly-depreciated. the ACCC’s latest pricing determination values the CAN at significantly less than $10bln. this compares with the mooted $36bln cost of building the NBN.
the real economic inefficiency is indiscriminately forcing 10 million households onto the fibre platform, thereby destroying it’s current viability. right now, fibre subscribers pay the full cost of their connections – there’s no USO.
*Do you actually believe Telstra *wanted* to continue spending such huge amounts of money every year maintaining a clearly inferior network that is rotting away? They would undoubtedly go bankrupt if they had to, costing both shareholders and taxpayers money.*
the fundamental problem with the copper network is that the ACCC has depressed band 2 ULL prices so low that Telstra’s not earning enough to justify further incremental investments (beyond the current minimum) in the network – otherwise, they’d go bankrupt.
if overall returns on the copper network were allowed to rise, Telstra would have the necessary economic incentives to selectively invest in FTTP/FTTN, build new exchanges, upgrade copper backhauls, etc. all the complaints you see now would be immediately alleviated.
companies always invest with cashflow – if you deny them the cashflow, they don’t invest.
Your assertion is utterly ridiculous and completely opposed by all research done on this topic. You’ve used the EXACT same argument the incumbent telcos in the US and Republicans have used for YEARS to delay competition and maximize telco profits.
The FCC, the approximate equivalent of your ACCC, has gutted competition in the name of ensuring profits for the DSL and Cable Cos, upon promises of future buildouts due to incentives. They never did a thing. We gave them $200 billion in tax breaks and incentives to build a national FTTH network with the ’96 Telecom Act, and they still did nothing with it but build wireless towers and form an oligopoly.
In fact the FCC commissioned a study by Havard’s Berkman Center to determine the best way to maximize buildouts. They found Europe’s policies of line-sharing to be the greatest at lowering prices and encouraging buildouts. Extreme competition and low profit margins forced competitors to differentiate themselves by building out speedier, fiber alternatives.
You’re also ignoring that Telstra WANTS to get rid of their copper network. You’re saying the ACCC values the copper at $10 billion, but you’re ignoring the massive maintenance and upgrade costs that have been sunk into the network. Fiber is infinitely cheaper to maintain and upgrade, and has far, far more potential. It makes literally no sense whatsoever to maintain a copper network when you’re building FTTH.
When Verizon lays out their fiber through their FIOS networks, they take down the copper. Basically you don’t understand what you’re saying. You could technically have two profitable networks, copper and FTTH, but subscribers will have to pay for maintenance of both of them. Instead with one network eventually the FTTH network initial capital will be paid off and prices can be sizeably reduced once it’s fully paid off.
You’re saying the ACCC values the copper at $10 billion, but you’re ignoring the massive maintenance and upgrade costs that have been sunk into the network. Fiber is infinitely cheaper to maintain and upgrade, and has far, far more potential.
Do you have any real evidence to back this up?
Fiber requires more expertise to splice and terminate, and is more sensitive to kinks in the cable (pulling past a corner, etc) and the tools and parts are more expensive. Typical configuration for a building that does have fiber, is to terminate the fiber the moment it gets into the building and then switch to copper for everything else. People do that because copper is easier to work with on a day-to-day basis.
Here’s a typical warning on fiber equipment:
Fiber optic connectors and cables can be damaged from airborne particles, humidity and
moisture, oils from the human body, and debris from the connectors they plug into.
In addition, all spare ports need to be sealed against dust when not in use, every time a connection is changed it must be properly cleaned. Compare this with the current generation of Telstra linesmen — they rarely even note new connections in the MDF book, and half the time they don’t bother sealing the bottles in the pits to keep water out. I have trouble even imagining those guys doing proper maintenance on optical connections.
What’s more, when faultfinding on copper you can just push a tone down the line and follow it through — you can’t do that with fiber. If a bundle of fiber goes down a duct, you just have to know which one comes out where because there ain’t no way to puzzle it out after the fact.
Then there’s battery maintenance on the NTU… we have barely scratched the surface of what fiber costs to maintain.
*We gave them $200 billion in tax breaks and incentives to build a national FTTH network with the ’96 Telecom Act, and they still did nothing with it but build wireless towers and form an oligopoly.*
what does that tell you? national FTTH networks are not economically viable for countries with dispersed geographies like the US and Australia. instead, they invested in wireless… and look at the current boom in wireless devices… who got things right?
*In fact the FCC commissioned a study by Havard’s Berkman Center to determine the best way to maximize buildouts.*
that study is widely discredited: http://www.precursorblog.com/content/any-fcc-reliance-harvard-study-would-damage-national-broadband-plans-credibility
*You’re also ignoring that Telstra WANTS to get rid of their copper network.*
that statement contradicts reality, i.e. Telstra’s $10bln (shareholders’ equity) FTTN plan of a few years ago, and current contingency plans which involves a least-cost, blended mix of FTTP, FTTN and good ol’ exchange DSL.
*You’re saying the ACCC values the copper at $10 billion, but you’re ignoring the massive maintenance and upgrade costs that have been sunk into the network.*
in crude terms, the implied valuation of the copper network is essentially a DCF analysis assuming current ULL pricing.
*Fiber is infinitely cheaper to maintain and upgrade, and has far, far more potential.*
any maintenance cost differential in favour of fibre is totally swamped by “capital base” effects, e.g. you could offer me a 3% mortgage, but i’ll never be able to service the principal on a $10mln waterfront mansion.
*It makes literally no sense whatsoever to maintain a copper network when you’re building FTTH.*
it makes “literally no sense whatsoever” to force EVERYONE off the copper network and onto a super-expensive fibre platform when consumers have differentiated needs, requirements, preferences, budget contraints.
the approach adopted by Telstra in its current contingency plans, viz. least-cost, blended mix of FTTP, FTTN, exchange DSL, is the rational approach given our highly-differentiated market and cost parameters.
*You could technically have two profitable networks, copper and FTTH, but subscribers will have to pay for maintenance of both of them.*
no, nobody subscribes to TWO networks. Telstra HFC revenue isn’t diverted to defray Optus HFC costs, or vice versa.
*Do you actually believe Telstra *wanted* to continue spending such huge amounts of money every year maintaining a clearly inferior network that is rotting away?*
err, i should add:
(i) a few years ago, Telstra took out full page ads in national newspapers declaring it was prepared to roll-out FTTN within weeks if it had the necessary regulatory certainty over pricing (or returns on its $10bln investment programme).
(ii) Telstra’s current contingency plans, in the likely case NBN 2.0 falls over, involves investing in a least-cost, blended mix of FTTP, FTTN and “plain copper”.
the only “FUD” in this whole NBN debate is that the copper network is “seconds away from vaporising into ether”.
You don’t seem to understand that giving a private corporation billions of dollars to build out a private network and continuing an obviously failed monopoly is the height of nonsense.
Furthermore unless the government legislated Telstra’s required buildout, they would have no obligation to fulfill their promises.
Finally, there is absolutely no reason to build FTTN in this era. Building FTTN to 93% of Australians would cost over $20 billion. AT&T in America opted to go FTTN (“U-verse”) instead of FTTP for the sake of saving money in the short term, but they’ve been forced to halt the buildout because it’s not economically viable versus FTTH. Now if they go FTTH in next 10 or 20 years, they have to rebuild the *entire network*.
*You don’t seem to understand that giving a private corporation billions of dollars to build out a private network and continuing an obviously failed monopoly is the height of nonsense.*
Telstra’s $10bln FTTN plan of a few years ago was all shareholders’ capital.
“obviously falied monopoly” = failed regulation = ACCC arguing that there’s “no underinvestment in fixed networks”.
*Furthermore unless the government legislated Telstra’s required buildout, they would have no obligation to fulfill their promises.*
Telstra took out full-page ads in national newspapers declaring they were ready to roll-out FTTN WITHIN WEEKS if they had the necessary regulatory certainty over network pricing. they WANTED to do it, but were obstructed by the government/ACCC.
*Finally, there is absolutely no reason to build FTTN in this era.*
Telstra, G9/Terria, Labor Plan A (as opposed to current, second-best Plan B) all involved building FTTN. the latest Telstra contingency plan also involves selectively building FTTN.
*AT&T in America opted to go FTTN (“U-verse”) instead of FTTP for the sake of saving money in the short term, but they’ve been forced to halt the buildout because it’s not economically viable versus FTTH. Now if they go FTTH in next 10 or 20 years, they have to rebuild the *entire network*.*
in terms of a “national solution”, FTTN will always be more economically-viable than FTTH when serving markets characterised by dispersed geographies such as US and Australia.
you clearly have zero understanding of how business and markets work, let alone theoretical economics.
*Labor’s NBN policy sets a new benchmark for STUPIDITY*… until we compare it to the Coalitions…!
Wow…looks like you don’t need me around to create an NBN comment storm…;) I should work in the field more often…
Let’s say it again kids: Fixed and wireless broadband are complementary; one is not a replacement for the other.
Say it as many times as you like, doesn’t change anything, nor does repetition constitute an argument.
There are only so many dollars out there that customers are willing to spend on communications, every dollar spent on wireless is a dollar not spent anywhere else. If you have spent $40 billion on infrastructure at 7% interest then you MUST return $2800 million per year in profit.
The better wireless gets, the more it eats away the willingness of customers to put their money into NBN, which in turn makes it more difficult for NBN to break even. Wireless does not have to be better, or even equivalent, it just has to be good enough.
Tel your final sentence is certainly a more common sense approach and analysis to the others who oppose the NBN… kudos.
Strangely though, one of those others was arguing only a few days ago, that no one opposing the NBN demands/demanded a ROI,! Yet you say ROI of $2.8B pa is paramount…!
Sadly those who are against the NBN (on the whole) don’t seem to have an actual united reason why they are so against it, they just are…?
Which simply leaves the obvious conclusions…political and financial!
Sure oppose for the right reason (if they actually exist) not for the wrong and/or selfish reasons!
The 7% ROI is not my idea, I’m just quoting ALP policy. All I’m saying is that if NBN Co can’t achieve their 7% ROI then they will have failed to meet the standard that was set for them by the original design. As a corporate entity chartered to fulfill a specific task, NBN Co are not in a position to change the rules they are working under.
I fully expect that 7% ROI is not possible in this situation. I strongly suspect that Malcolm Turnbull will become the next Post Master General and the baby will be dropped in his lap around about the same time the whole thing is self-evidently unworkable. The liberal cabinet will be set like iron against any budget blowouts (and note that NBN money has been tucked “off-budget” by ALP accounting trickery on the basis that it is money invested not money spent) and the public will be saying, “you thought you were so smart, now you fix it.” Malcolm will not be able to fix it, so he will start sawing it into pieces…
http://www.theaustralian.com.au/business/opinion/nbn-sell-off-remains-an-option/story-e6frg9if-1226043497439
Quoting Paul Kerin:
But we’d be better off having many small local monopolies rather than one mammoth one.
It’s easy to mistakenly think that if CAN is a natural monopoly, it should be one big national monopoly, but CAN’s natural monopoly is at the local level. There are few economies in one player owning CAN in multiple areas.
Take Cincinnati Bell, which began building CAN within 40km of Cincinnati in 1878. It owns only 674,000 fixed access lines — less than one-tenth of Telstra’s. Yet it is a successful listed company, despite competing against giants.
Small, geographically focused firms can and do use fibre. Cincinnati Bell began replacing copper with FTTP in 2009. So far, it has converted about 10 per cent of lines. TransACT began building fibre to the node in Canberra a decade ago and FTTP in 2007.
Most sensible article on the NBN that I’ve seen in ages.
I’m having trouble understanding why you think the NBN won’t be able to achieve a measley 7% ROI. Verizon here in the US deployed fiber in competition with cable and they’ve managed profitability with 30+% penetration rates. Doesn’t the NBNCo’s corporate plan anticipate 20% penetration rates? That’s ridiculously, even laughably conservative. That doesn’t even take into account the massive revenue potential of leasing backhaul to wireless providers.
Your cherry picking of Cincinnati Bell is amusing. Are you even aware Cincinnati is a public effort started by a utility in response to massive outrage over the failure of private corporations to expand their broadband footprint and offer higher speeds?
You’re also referring to an entrenched entity that started to build out its lines over a century ago. “Upgrading” is a completely different issue than starting from scratch, which is what would be required of any overbuilder.
Because Verizon only rolled out FTTH where there is demand, and they actually stopped their FTTH rollout due to financial reasons.
To date, the Verizon FTTH rollout only covers around 5% of America. If NBN only rolled out FTTH where there was demand, then yes it would be much more financially viable
Verizon has FIOS covering over 50% of its entire footprint. They don’t cover the entire US. The reasons for them stopping the buildout is extremely complicated and reeks of internal politics. The man behind the project was Ivan Seidenberg, an old timer from the Ma Bell era who’s on his way out. He believed in long-term growth over the short-term obsessions of modern day shareholders. What Verizon will do with FIOS buildouts in the long run is anyone’s guess.
Here is the history of Cincinnati Bell:
http://www.cincinnatibell.com/aboutus/history/
The broadband footprint probably was quite poor in 1873 when they first incorporated, but I find it difficult to believe that anyone was outraged by that. There’s also a history of Zoomtown here:
http://help.zoomtown.com/history.shtml
In October 1999, Cincinnati Bell was one of the first telecommunications companies to launch ADSL service in the United States.
Sounds like they were a company that decided to innovate and deliver a better product, which is pretty normal for companies. None of which changes Paul Kerin’s original point in as much as a local “last mile” monopoly can be stable, profitable and provide good service without ever needing to be a nation-wide provider.
You’re also referring to an entrenched entity that started to build out its lines over a century ago. “Upgrading” is a completely different issue than starting from scratch, which is what would be required of any overbuilder.
Did you read Paul Kerin’s article at all? Paul does not even discuss overbuilding, nor does he advocate it. Personally, I’ve been an advocate of incremental upgrades from day one, which is why FTTN makes so much more sense than FTTP.
I think you fail to understand what I’m saying here. Cincinnati Bell is a public utility. None of the anti-NBN crowd is protesting NBNCo because it’s federal, as opposed to local or state (or whatever denominations you use in Australia). They believe it should be privately funded, and should experience infrastructure competition, without understanding how utterly stupid using a private corporation to manage infrastructure and having multiple buildouts of infrastructure is.
NBN Co is simply acting as a national utility. An affordable and speedy internet connection has become a necessity for all Australians. And there’s no reason they can’t be profitable given their corporate plan relies on hilariously low-ball estimates of penetration (20%? Verizon gets over 30% despite inflated prices and cable competition). I have little doubt NBNCo will eventually get over 50% penetration, their profitabilty will soar, their pay off date move dramatically upwards, and demand for faster buildout will increase until they are forced to finish it in half the intended time (causing costs to balloon- but everyone will be the happier for it).
Cincinnati Bell is a public utility.
Maybe you can explain why they are listed on the New York Stock Exchange and any private citizen can buy and sell shares in the company?
Or maybe you should just read this:
http://www.fundinguniverse.com/company-histories/CINCINNATI-BELL-INC-Company-History.html
The company that would become Cincinnati Bell was founded in 1873, when the City and Suburban Telegraph Association was incorporated in the State of Ohio. This company, established to provide telegraph links between the workplaces and private homes of businessmen, got its start when Cincinnati transportation executive Charles H. Kilgour hired a clerk to run errands between Kilgour’s home and office, after his mobility was curtailed by an injury. When the clerk tired of his daily round, he suggested that a telegraph line be strung between Kilgour’s residence and his place of business to allow easier communication. This was done, and soon other businessmen became intrigued by the idea. Together with Kilgour, they founded a company for the purpose of installing home telegraph lines. By 1874 the fledgling company had issued stock to raise funds, held its first shareholders’ meeting, and selected a president. In its early years the company operated at a deficit, but by mid-1877, it had installed nearly 50 private telegraph lines between homes and offices. Customers who signed up for the service were also equipped with simple telegraph instruments and code books for sending and deciphering messages in Morse code.
For bonus points go ahead and explain how the above company startup differs from the NBN.
Don’t you think a bit of research would help you with that problem you have, of being wrong all the time?
None of the anti-NBN crowd is protesting NBNCo because it’s federal, as opposed to local or state (or whatever denominations you use in Australia). They believe it should be privately funded, and should experience infrastructure competition, without understanding how utterly stupid using a private corporation to manage infrastructure and having multiple buildouts of infrastructure is.
I repeat, did you read Paul Kerin’s article at all? He is exactly protesting the fact that NBN is a nationwide monopoly rather than a local monopoly. That’s the bit I quoted above.
toshP300 already pointed out that your “20% penetration” does not match the NBN business plan.
*Doesn’t the NBNCo’s corporate plan anticipate 20% penetration rates?*
70%.
*That’s ridiculously, even laughably conservative.*
yes, the NBN, as a concept, would be hilarious – if it weren’t so sad.
I agree Tel,
Back in the days when mobile calls were expensive and fixed line were cheap, I would barely use my mobile but it would still cost me about $80 a month while the fixed line would cost about $50 and again $50 for internet access. Total spend $180.
Today it has flipped. For $60 dollars I can make all the calls I want on my mobile and even use some 3G data and I essentially have telstra “naked dsl” for only $60. Total spend $120.
The cost at the end of the day is what might kill the NBN, which is unfortunate as from what I can discern from this and other threads and articles is that the only reason my bill is 120 today is because fixed line prices are being kept artificially low by the ACCC and from what others have stated, this is hindering development of fixed line services. What I am used to paying today is $120, I personally would go back to $160 if it meant high speeds and downloads, but I acknowledge that I am not in the majority…. at least not at this point in time anyway.
I would believe that the many customers with fixed lines have shifted from voice only to primarily data usage. At the same time Telstra’s competitors are cherry picking infrastructure installations in the locations in which they can be most competitive and of course the competitiors have no obligations to offer similar services or prices to less attractive suburbs. With a host of other regulations and decisions being made, an environment has been set up where the market could not deliver a adequate outcome. It is many of the decisions in the past, which have led us to this screwed up telecommunications place where we are today.
We essentially have had a broken stagnant system. If the true cost of the fixed line network was to be passed on to the consumer I believe this would make a much stronger case for the NBN.
Fibre is the proven technology to fix the problem… I do not know if the solution proposed by Labour is the best for the country…. I dont know if any solution could fill those shoes. I honestly believe that wireless is the future, I just feel that that future is a long way off and we will need greater speeds and bandwidth than what we have today.
I honestly believe that wireless is the future, I just feel that that future is a long way off and we will need greater speeds and bandwidth than what we have today.
While in principle I agree with you, the problem is the current way wireless is delivered I don’t agree with. The idea we should be aiming for is an “always connected network”.
I believe that in some point in the future, just like what is happening with film and music, the idea of charging someone for access to the Internet on their mobile will be considered at the very least an attempt to maintain a broken revenue model, and at most squeezing every last dime out of the customer as possible.
The current model for access on wireless networks is broken in that every device must have its own independent connection. Already we are seeing solutions coming about to aggregate these services, and also people are also choosing to have WiFi at home since they do most of their access there.
It is also broken in that it struggles to deliver higher bandwidth and lower latency to those who need it, but the solutions that do are broken in that they are actually very expensive to build (i.e. putting the fibre in the ground in the first place).
The model I see working is densely populated nodes, much denser than we have with current wireless networks, but more flexible than open WiFi networks everywhere, with it being relatively cheap and affordable (more so than it is now) to get a dedicated (wireline) link should you need it. The problem we have now is dedicated wireline links are starting to become expensive, and wireless connections are not reliable enough and cannot scale very well due, in most part, to the large size of cells.
It’s almost as if we are swinging between two extremes and it will take the market several decades to reach some kind of equilibrium between the two services. In the meantime one service is being neglected (wireline) by the fact that more profit can be driven from the other.
That was in reply to RS btw
LOL.. dat ego! Keep trying tiger…!
i’ll let you tag out now and see if your replacement has actually got anything…!
Sorry Renai, yes, I’m pushing it… I promise I’ll leave the FUD bros alone for a while…! But they are such fun, eh?
FYI RS has been placed in the sin-bin for now.
Thanks, any discussion he participated in automatically degenerated into nothing
delimiter is the best moderated forum i’ve come across. keep up the good work.
Indeed, the quality of the discussion just went up 100%.
I’m not known as a patient man, normally :)
Just to exercise my right of reply… (albeit somewhat belatedly)
I find the “only 3 people” who took personal comfort from my recent “Delimiter unavailability”, very comforting…!
*facepalm* Seriously guys? Another hundred posts on the NBN?
That number pales into insignificance compared to this:
http://forums.whirlpool.net.au/forum/142
:)
@alain
http://forums.whirlpool.net.au/forum-replies.cfm?t=1679260:
“This thread is for real consumer information only, not for pundits exploring pro’s, con’s and hypotheticals.”
definitions:
“real consumer info”:
(i) info that can be directly sourced to the following domain: http://www.nbnco.com.au
(ii) caveat – info that satisfies condition (i) will not constitute “real consumer info” if:
(a) it can be interpreted in a way that casts a negative light on the NBN, and
(b) the probable course of events, which the info points to, have yet to occur
(iii) any adverse analysis (“liberal propaganda”) appearing in the media does not constitute “real consumer info”
“hypotheticals”:
(i) the antonym of “real consumer info” as defined above
(ii) discussion of any policy, scenario or outcomes not espoused by the government
(iii) any logical inferences from facts that cast a negative light on the NBN
(iv) any other lines of reasoning not explicitly endorsed by NBN Co.
Right I’m going to call completely and utterly off topic with that.
1) How does that relate to the original rhetorical question to which Alain was replying, nay Alain’s post at all?
2) How does the behaviour of the moderators of Whirlpool relate to the rhetorical question to which Alain was replying, since I can only infer is your inference here?
3) What possible useful information can we gleam from this comment that either directly or indirectly relates to the subject matter of this article? Remembering of course that the original statement that Alain was replying to was very loosely related in the first place and at the very least can only be described as meta discussion.
Anyone who thinks wireless is an enterprise solution, has never used or managed an instalation bigger than a home network.
The technology is great for people who can’t get anything else.
Sorry regional Australia, but it is true…
I think you put it quite correctly, wireless is a compliment to fixed line it is not a replacement. If I had to live with the 3G that my phone gives me then I would be very disappointed all of the time and would need to stay back at work to get anything done on the net.
Telstra are not laying any more copper? this is interesting. how do they then ensure they are compliant under their obligations under the Customer Service Guarantee.
Customer Service Guarantee (CSG) ensures that no Australian can go without a fixed line service for more than 6 months without the phone provider incurring penalties.
the legislation state: A carriage service provider must not, without the agreement of a customer, supply the customer with an interim service for a period exceeding 6 months from the time of the customer’s request for the connection of a standard telephone service
not that i am defending Telstra, i would never do that, but they do add an agreement to get customers a fixed line service within 20 working days.
CSG however only covers for a voice quality service. this means that Telstra may put you on pair gains to get you a voice line which therefore means you cannot get ADSL. A friend of mine lives in an estate where she is on pair gains and the estate is about 14 years old. she is forced onto wireless Splitting copper pairs was commonplace for about 20 years.
Smart wired estates are the other major issue. Telstra will wait the full 6 months from the first solid request for a phone service before laying cable to a smart wired estate.
the best way to ensure you can get ADSL when you move is find yourself a nice 35 year old home that hasn’t been renovated hugely and live there. You can request a DSL capable service and do not organise connection until you find a Telstra staff member who agrees to it. Then take down their name and the time that you called so that if the service is any less than DSL quality, you can say ‘Not fit for purpose’ and not pay a penny until they correct it. You just have to know and abuse all the consumer protection legislation that you can find
What a stupid article. Patchy wireless reception is an infrastructure problem not a technology problem. Put up suitable capacity of mobile towers in the area and the reported problem is fixed. Numb nuts.
I’m very glad you’re not in charge of provisioning wireless infrastructure, let alone broadband infrastructure in general. If you seriously think the answer is ‘more towers’ you clearly have no idea how the technology works.
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