news The nation’s largest telco Telstra last week carried out the first copper to fibre customer migrations in its South Brisbane exchange area — including those of customers belonging to other ISPs — as it continues its project to replace its copper network in the region.
Telstra has chosen to replace the copper connections to about 20,000 premises in the region as its South Brisbane telephone exchange — where the copper cables terminate — is being closed in order to make way for the new Queensland Children’s Hospital in the area. The region is one of the first in Australia to receive fibre services to the home — but is not part of the Federal Governent’s flagship National Broadband Network project, although the long-term plan is for the infrastructure to become part of the NBN.
The telco said in a statement that last week three customers who had been using traditional fixed-line telephone services through its Wholesale Line Rental product (which other telcos use) had been migrated from copper services to the fibre. One of these customers was actually previously using Telstra as its retail provider, but migrated to another provider.
In addition, one customer using broadband through the telco’s Spectrum Sharing Service had been migrated to its Fibre Access Broadband product, which represented the first customer to use the FAB service — and the first mixed service, as they were using Telstra as their retail fixed line telephony provider, and another provider for broadband.
Overall there are about 20,000 customers in the region, with about a third of those (some 7,000) being customers of other providers which Telstra serves through its wholesale division. About 4,500 are accessing broadband through Telstra Wholesale’s unbundled local loop service (ULLS).
In a separate interview, the telco’s general manager of wholesale products, Graham Bate, said it had originally planned to start migrations in March, but after feedback from telco customers, decided to defer the shift until August this year. Customers in the area using the copper network will be progressively migrated to the fibre throughout the rest of this year.
At some points, as the network has been rolled out, Telstra has faced a few bumps in the road with respect to the fibre deployment, with ISP customers such as iiNet criticising the company for not providing exactly the same services on the new fibre as it had through its previous copper network — such as naked DSL and multi-cast IPTV broadcasting.
Over the past decade, the product suite which Telstra Wholesale offers and the processes by which other telcos connect to its network have become increasingly refined, due to both sides working together on the matter, as well as dispute resolution processes through regulator the Australian Competition and Consumer Commission.
However, it’s only over the past several years that fibre rollouts have been hitting Australian residences, primarily in greenfield development zones and early NBN rollout areas.
Bate said the rollout was “the perfect opportunity for the industry and Telstra to derive some learnings about fibre”. And with respect to the complete suite of services available over copper: “The challenge is for us to replicate in our fibre product, something which customers have implemented in their own network — something which we haven’t implemented in our own network previously,” he said.
opinion/analysis
Ah, the love/hate relationship between Telstra and the clutch of ISPs which it both services (through its wholesale division) and competes with (through its retail arm). Enough ink to float a yacht on has been wasted on the ins and outs of this complex dance over the past decade — and I’m sure that much and more will be used up in pixels on computer screens over the next.
To be honest, I think Telstra has done quite a good job with its South Brisbane fibre migration. Sure, there has been the odd complaint from ISPs, and I’d personally still like to see a service similar to naked DSL implemented (where you don’t have to pay for a telephone line on the side), but it’s also true that such things only evolved on the copper network after years of work on both sides anyway, and that even NBN Co itself is requiring customers sign up to buy a telephone line as well as a broadband service. While Telstra’s fibre offering isn’t perfect, it’s hard to argue that it’s not standard.
The South Brisbane fibre upgrade was always a bit of a bastard child — born halfway between Telstra’s copper past and the nationwide NBN fibre rollout which is designed to replace it. However, I don’t think going through the process has been a bad one, for either Telstra or its ISP customers. The feedback I have gotten from network engineers is that there is quite a lot involved in rolling out fibre — especially in such a mass rollout — and both Telstra and the industry would have, as Bate points out, learned a lot through this one.
Image credit: Clix, royalty free
Did you mean “multi-case” or “multicast”? :o)
Also, it’s not correct that NBN Co force people to buy a voice service. The 150kbps/150kbps channel reserved for voice in the AVC does not need to be used. It’s just “there”.
Typo fixed.
And while the channel does not need to be used, customers still need to pay for it. I’ve had confirmation from ISPs that if they don’t include the voice channel as an offering to customers, they still pay the same price.
As in, cost to ISPs to buy NBN wholesale customer line with voice line: $A
Cost to ISPs to buy wholesale customer line without voice line: $A
In short, there is no discount to going without it, which is why ISPs like Internode are bundling it as a compulsory add-on to their NBN services. You want NBN? You want Internode? Well … you’re going to get a voice line as well, whether you want it or not.
Sure – but it doesn’t mean they are going to charge end customers “line rental” to use it. It’s a freebie – whether they use it or not is up to them.
Well it’s not free, it is incorporated in the charge, you cannot ask for a lesser charge on the basis you use VoIP and will never use the two UNI-V sockets on the NBN ONT.
There is no such product as Naked FTTH.
Precisely.
On Copper network there is:
*Chargers associated with the copper (be it ULL/LSS etc)
* Line rental ripoff -$20-$30.
* VOIP charge at ~10 per month depending which ISP you go with.
There is still a wholesale charge to access the ULL for a naked service, it’s just not called “line rental” because it’s not capable of voice.
A voice channel is simply not connected to the ULL.
Similarly, if you don’t have a voice service over your fibre, it is because a voice channel is not connected to the 150kbps/150kbps reservation.
Sounds the same to me.
Now, turn it around the other way – if the fibre connection was just voice only, it will cost NBN Co the same to provision it as if it was just data or data and voice combined.
The fact it is “there” or “not there” doesn’t change the cost to NBN to light up a link from your NTU to the POI.
So the 150kbps/150kbps is a freebie.
I don’t agree with you, the voice channel overhead as low as it is within the greater data speed offered for BB use is incorporated into the wholesale charge to the ISP, it in itself requires extra routing and linking on the NBN Co’s part as well to link it into the Telstra PSTN system until the great Australian PSTN switched off happens at some unknown point in a decade or so from now.
The voice calls of course will be additional if you take a NBN voice call package from the ISP, when the NBN Co get around to offering it that is!.
What I am waiting to see is what the voice only charge is on the 150kbps channel from the NBN Co is, the equivalent of Telstra Homeline Budget at $22/mth, which is the minimum charge customers pay today for a voice service.
If that line service hung of the UNI-V ports is offered for free from the NBN Co and you only pay for the calls I will agree with you that it is actually a ‘freebie’.
*facepalm*
Show me a single RSP who has indicated they will charge “line rental” for the voice channel.
Point me to the NBN plan page from the ISP’s that are offering the NBN that gives me a zero charge voice service, I don’t want BB.
A question with a question? Isn’t that your usual complaint?
NBN Co does not and will not provide voice services.
They provide the option of a QoS’d circuit of 150kbps/150kbps, a data connection which the RSPs will run SIP-based voice services.
The crap that I’ve heard from many people that NBN haven’t “found a way to deliver voice yet” is bunkum. They won’t be delivering voice, ever. They will provide a high priority circuit over which the RSPs will provide voice.
It’s just data. Stop thinking in an analogue world.
At this time they have released a product that includes data – (at various different rates) – and *optionally* a dedicated QoS’d channel for voice.
Just because you’re argumentative and lack vision doesn’t mean such a “voice only” product won’t be released.
alain I think Michael and I would gladly subsidise you not having broadband.
So that’s a no then there is no ‘freebie voice only service’ from the NBN Co, good glad we have that sorted.
Now all I have to do is wait for the free voice service from RSP’s running a SIP based service off the UNI-V ports on the ONT box, where all I have to do is pay the RSP for the voice calls.
Any idea when this product will be available?
No – that’s you making crap up again.
All I *tried* to beat into your concrete-hard head is that it’s an optional freebie within the currently available product set (10, 25, 50 or 100Mbps).
As for when a separate service will be available – I suggest you give Jim Hassell at NBN Co a call. He’ll be happy to tell you the same thing “officially” that I will tell you now (and save you a phone call):
“Whenever they are good and ready to.”
(See that? I saved you money!)
Perhaps you can go shake your Magic-8-Ball and let us all
know ahead of time?
Since you are the fountain of all knowledge, you should be telling us.
Now – relating this to how this will likely play out in the real world, instead of some imaginary fantasy world.
– RSP gets an order from a customer for 100Mbps service.
– Customer doesn’t want voice.
– Either way – (since having the voice circuit is no difference in charge) – the RSP will have NBN Co provision it with the voice option.
– Why? Well, further down the line when the customer changes their mind and wants voice, they won’t have to get the voice channel provisioned, because it’s already there at – (wait for it) – the exact same cost.
I see the point you’re trying to make, Michael. I think we’re coming at it from different angles — but I think we agree on the fundamentals of how it works etc. I guess my complaint is that there is an assumption at some level that a customer wants a fixed voice connection — but I am not sure about the validity of that.
Agreed. That’s why it’s optional. :o)
But many/most RSPs will stick it in there for convenience later on.
“is that it’s an optional freebie within the currently available product set (10, 25, 50 or 100Mbps).”
Of course what you are frantically tap dancing around is that as a end user I don’t want any of those 10, 25, 50 or 100Mbps BB options, I just want a FTTH voice service from Day one after Telstra says I cannot use Homeline PSTN anymore, because Conroy has given them a bucket load of $$ to shut the copper based exchange down.
As I said I look forward to the ‘free voice channel’ after all you have stated it is free, and only having to pay for the calls.
That’s great.
Come on, now you’re just trolling.
Maybe this will help:
http://www.nbn.gov.au/frequently-asked-questions/voice-services-over-the-nbn/why-should-i-connect-to-the-national-broadband-network-if-i-dont-use-the-internet-i-only-want-a-landline-phone/
Happy now?
Alian, your trolling and FUDding knows no bounds, does it?
I said it’s a “freebie” option within a broadband plan. Never did I say it would be free “by itself”.
Go play in the shallow end of the sandpit.
Phew! we got there, so it’s not free, good we have that sorted.
This sums up the whole sorry mess
http://forums.whirlpool.net.au/forum-replies.cfm?t=1763568#r7
I’m a resident in this area and am being forced onto this abortion of a network. Why do I describe it this way? Well lets ignore the technical inferiority of this fibre network and focus on the cost:value proposition.
I’m currently on no contract and using TPG unlimited at $60pm + line rental (couldn’t get ULL at the time), getting a reliable 12 megabits/sec. I frequently use >300gb per month, and have exceeded 500gb at times. What are my new options when copper is ripped from my hands? Well Telstra’s plans top out at a measly 500GB for a spasm-inducing $159/per month on a 24 month contract. To add insult to injury, they want a $35 upfront payment. TPG has no plans and Internode’s pricing makes my eyes bleed.
What do I do? Well so far the advice has been to a) move house, or b) use wireless. I can’t honestly believe I’m being put in this situation. My service is being cut on the 31st of October. If no other options appear by then, I might just let that happen.
So in short, you’re having fibre rolled out to your house, and you’re complaining bitterly about it. Surely there is some other option apart from a $159/month package?
I wasn’t going to say anything, but now the Renai has commented on it I also want to add:
TPG undervalue their services, and you were lucky enough to get a cheap ride on their network downloading over 300GB a month, and now you’re complaining because your this over?
I cannot get TPG in my area, I can’t even get ADSL2+ because I’m on a CMUX with no free ports. I have to pay for Telstra’s Cable service. I would love to be able to get Broadband for $60 a month, but I have pay close to $100 simply because of where I live.
I can see both sides to this.
As NightKhaos said TPG have a cheap, no frills service.
$159 per month with 500GB of quota on Fibre is very competitive.
The other side is, Booksacool1 will have his current service terminated through no fault of his own and there will be bugger all competition because Telstra aren’t required to offer reasonable wholesale rates because Fibre is not regulated like the copper network.
However, South Brisbane will eventually become part of the NBN … which will be heavily regulated.
That doesn’t help booksacool1 between 31st of October 2011 and whenever the NBN rolls out. Telstra are just proving why we need the NBN and/or better regulation.
This IS the NBN, the $35 cost is the line rental, how ever that doesn’t give you a connection to the net you have to pay for that on top.
People seem to forget this, and I take it Telstra are the only provider in this area you have to go with them or wait until another one decides to come along.
@OP
Also what is the deal with the home phone is that cut as well?
This IS the NBN, the $35 cost is the line rental, how ever that doesn’t give you a connection to the net you have to pay for that on top.
No, the fibre going up in South Brisbane is not the NBN. It is Telstra’s own Fibre network, often marketed as Telstra Velocity. On the NBN does not charge line rental as they do not run a voice service, they simply provide a 150kbps/150kbps conduit for the RSP to use as they see fit. In fact RSPs can purchase only the 150kbps/150kbps conduit for voice customers if required on the NBN. On Velocity is much different, it is treated like the Telstra CAN except that it can offer faster data services. Which makes sense as Telstra are building it under their USO obligations.
People seem to forget this, and I take it Telstra are the only provider in this area you have to go with them or wait until another one decides to come along.
No, there are a few providers who resell on Telstra Velocity. iiNet do, however their prices are more expensive than Telstra’s, and do not provide quotas good enough to meet the OP’s needs.
Exetel also provide services on this network however in order to utilise 300GB per month you are looking at over $150 a month plus between $35 and $70 dollars depending on your bandwidth tier.
So for the OP, it isn’t so much that Telstra are the only provider, but Telstra are the only provider who will be able to meet his requirements at a reasonable price point, as they can offer a 200GB plan for $89-$99, it seems the OP has found a way to increase that to 500GB for $159 dollars, although I could not source this.
Also what is the deal with the home phone is that cut as well?
The home phone service is now provided over Telstra Velocity’s infrastructure at, presumably, the same price points. All the prices quoted above I am to understand require a home phone service. Further if the OP has a mobile phone service with Telstra he may be eligible for a $10 discount to his Velocity Plan.
Awesome blog post! I like it because it shows deep research and analysis on keywords the writer on First South Brisbane fibre customers go live.I read almost 10 articles on this topic but didn’t find an interesting article like this. I also want to share another good sporting goods online store with you for great information.
hello spambot :)
L2Report?
*I’d personally still like to see a service similar to naked DSL implemented*
the McKinsey Implementation Report actually recommended active layer competition via Layer 1 unbundling.
however, NBNco argued against fibre unbundling:
ref. pg 2:
http://www.nbnco.com.au/assets/documents/foi-no-1011-06-nbn-co-response-to-mckinsey-implementation-study-released-29-jul-11.pdf
NBNco provides many reasons for not adopting a home-run topology and facilitating active layer competition via fibre unbundling.
however, they fail to mention one *crucial* reason why they are dead-set against fibre unbundling — doing so would strip them of the ability to extract variable rents from end-users via the tiered AVC charges and the per Mbit CVC charge.
this is important because all the broadband price reductions that we have enjoyed over the past decade have resulted from ISPs being able to bypass Telstra Wholesale’s AGVC charges via copper unbundling (and pay a flat monthly ULL fee).
somehow, what’s good for the goose is not good for the gander.
furthermore, NBNco’s SAU has revealed that they are positioning themselves to jack up AVC/CVC charges over time (as high as double the RBA’s inflation target) if the revenue they require to pay off the massive (and still, uncertain) cost of building an extravagant fibre network fails to materialise.
My god that’s a good troll. I’m impressed Tosh. But as usual you’re hanging on a couple of misrepresentations.
First, I quote directly from the letter linked :
Based upon our discussions with the ACCC, they may not view a “home run” deployment as constituting efficient network build which could raise significant issues around our ability to achieve full cost recovery.
So it seems they didn’t neglect to mention the impact to cost recovery direct fibre would have, you must have missed it because they didn’t say “We can’t charge enough to recover our debt!” in big pink friendly letters across the title page.
Further, I ask you this, if the incumbent were allowed to continue with its Telstra Velocity deployment, how precisely are providers going to avoid Telstra’s AGVC charges? Oh wait, they can’t, they have to resell Telstra products only, just like in remote areas. Meaning it seems the direct fibre model, unless heavily subsidised by the government, is not a sustainable private investment, even when limited to small areas. This is why this model is used almost exclusively by businesses that can afford the expensive costs associated with it.
So just remember that NBNCo has to reduce CVC costs over time, and have pricing regulated by the ACCC. You know, the entity which continues to drop LLS and ULL prices enabling that competition that allowed prices to fall?
Further, it’s interesting that you think that the ability to raise prices over time as insurance actually means they will. You know a company that’s whole long term existence depends on removing debt which means high usage which means keeping the product affordable?
Also you like highlighting that uncertainty. Tell me, where are large long term infrastructure projects ever “certain”? Oh wait none, they all have risk associated with them.
First of all that post is not a troll just because you say it is, history of your use of the term indicates you don’t have a clue what one is anyway, which leads me to suspect you are a rampant Whirlpool herring ‘troll’ button pusher for posts you don’t like.
“Also you like highlighting that uncertainty. Tell me, where are large long term infrastructure projects ever “certain”? Oh wait none, they all have risk associated with them.”
Yes you are right behind the ‘uncertainty’ when it suits you now that it is black and white in the NBN SAU, the best the pro-NBN glee club can come up with is a “oh we know all about that” so therefore all is ok again.
The problem is as you are well aware the NBN Business case rests solely on a great deal of certainty, the Parliament of which Labor holds the slimmest of margins approved the build on that certainty, you don’t publish figures of 70% uptake and 7% return on investment which supposedly justifies the $43 billion cost to the taxpayer then say when those figures are not met oh well it was a risky venture, we did say it was so therefore it’s all ok.
A troll is an inflammatory posting designed to bring about an emotional response. Tosh’s comments were misrepresenting the truth.
And yes I know about the assumptions of the business case, that doesn’t change Tosh’s misrepresentations.
*pro-NBN glee club*
is Diana Agron in that glee club? if so, i’d gladly switch camps ;)
oh, and it seems like the acronym “FUD” has gone out of fashion — the latest term in vogue is “misrepresentation”.
it’s evident that a very vocal minority, or to get in the spirit of correspondence here, the *anti-nbn subterfuge club*, have exhausted their fud quota many times over, leaving simply basic misrepresentations as their now only remaining arsenal.
the size of the “regulated asset base” and the mechanism for capital recovery on that pre-determined RAB are two distinct issues.
“bitstream access” and “unbundled access” are totally different means of network access which have huge implications for the economics of cost recovery and network pricing.
instead of prematurely jumping at other people’s throats and engaging in ad hominems such as “troll”, “as usual”, “misrepresentations”, sit down and have a quiet think about the issues that other posters raise.
THAT is the defence you come up with?
I need to think about what you said… Oh so all the analysis including reading the letter and finding a clear, and unambiguous citatation, that they will have trouble with removing the debt if they provide a Level 1 network, thus justifying what you call “rent seeking” as a method of distributing the costs.
Hypothetically, if they only provided unbundled access how much would it cost RSPs to rent a fibre spur? Something like $100 a month, minimum. So with that in mind there will be absolutely no way low income families could afford to get a service.
You seem to be forgetting that the biggest cost associated with fixed networks is the rollout. Once that is done the incremental upgrade cost comes down. This means that, just like with copper, prices can come down. In 30 years time the ACCC may ask NBNCo to drop the CVC charge all together, since obviously the mechanism of ULL does not work with GPON networks.
But hey, it’s all just a conspiracy right, they’re trying to screw us over for money, and add to that they’re going to raise prices at double the inflation rate…
*THAT is the defence you come up with?*
defence against what? i haven’t seen any meaningful “attacks” on the very specific and pertinent issue i was discussing regarding “fibre unbundling”.
you’re turning into a hysterical drama queen.
i’m very reluctant to get drawn into ridiculously long debates with you where you engage in meaningless lawyerism only to end up getting owned because it is all too time-consuming and unproductive to correct every single error you make… but here goes….
††crosses himself like a good Catholic††
*finding a clear, and unambiguous citatation, that they will have trouble with removing the debt if they provide a Level 1 network*
firstly, i specifically said in my post that there are MANY REASONS why NBNco rejected fibre unbundling including the one you’re hanging onto like a 6-mth old, stained, unwashed smelly security blanket.
secondly, uncertainty over “efficient network design” was just another convenient excuse for NBNco to throw up — the ACCC “may or they may not” accept certain things — big fucking deal, that shit happens over a whole range of pricing/cost issues*.
whether you’re building FTTN, FTTP(GPON) or FTTP(PtP), every implemented technology has its own “efficient network design” in terms of where you place the nodes or exchanges.
when you’re choosing between GPON and PtP, you’re no longer simply optimising “topology layout” in terms of determining where you place the nodes or splitters for a given technology, you’re choosing between two very different technologies which offer different possibilities.
so, this concern over “efficient network design” in this latter context occurs at a much higher architectural level. if the ACCC is indeed so concerned with such issues (and i’m not saying they aren’t at some level), i would suggest this:
since 50% of users will be be stuck on 12Mbit under 93% FTTP according to NBNco’s projections, shouldn’t the ACCC be setting the regulatory asset base of the NBN to reflect the much lower cost of FTTN (over at least the first decade) as FTTP no longer represents an “efficient network design” to deliver 12Mbit?
^.-
stop believing NBNco’s unintelligent rubbish. (i can’t believe my taxpayer dollars are going to pay the salaries of these incompetent clowns.)
*Hypothetically, if they only provided unbundled access how much would it cost RSPs to rent a fibre spur? Something like $100 a month, minimum. So with that in mind there will be absolutely no way low income families could afford to get a service.*
in terms of that “$100 level” that you throw up — well, what does that tell you? it’s crazy to mandate fibre for residential users. NBNco is just disguising its negative net worth by capitalising their operating losses on their balance sheets and future-dating the recovery period. (any future auditor that signs off on NBNco’s future annual accounts prepared on this basis has zero professional integrity and should go to jail.)
assuming that the market as a whole can actually sustain $100 average per connection, “the low income family” problem is not a real issue. basically, you’d internally subsidise the lower ARPU market segment.
the current problem is residential premises outnumber business premises 10 to 1 within the NBN fibre footprint. there’s no way in hell businesses can subsidise all those under-utilised, money-losing residential fibre installations. similarly, a big proportion of business premises themselves will have zero need for fibre connections and will need to be subsidised too (think laundromats, bakery, hairdresser, nail salon, grocery, etc).
unbundling and flat tariff charging is not an issue if the overall cost base underlying the infrastructure makes sense in the first place.
*You seem to be forgetting that the biggest cost associated with fixed networks is the rollout. Once that is done the incremental upgrade cost comes down.*
that old tired irrelevant chestnut. if NBNco can’t even recover the massive capital cost associated with the initial roll-out, you can kiss goodbye to any fucking “incremental upgrades”… (oh, i forgot, taxpayers’ hip pockets are a bottomless pit to finance internet geeks’ luxuries.)
*This means that, just like with copper, prices can come down. In 30 years time the ACCC may ask NBNCo to drop the CVC charge all together, since obviously the mechanism of ULL does not work with GPON networks.*
NBNco’s SAU tells us explicitly they are currently under-pricing (below cost) access to the NBN. the motive is unspoken but obvious — to ease the short-term migration from copper to fibre and minimise political backlash from consumers. the only direction prices will move from here is UP. the SAU paves the way for them to jack up premium service pricing by up to 5% a year in real terms. they will have “some” success in doing this because:
i/ all alternative fixed-line platforms are being shutdown;
ii/ some portion of subscribers to the faster ports belong to the “inelastic” segment of the market.
however, they won’t succeed entirely (e.g. competition from BigAir fixed wireless, etc) — bankruptcy is inevitable.
God, i’m sick and tired of having to explain everything to you in minute detail — who’s trolling who? before you reply to my future posts with silly accusations, i suggest you go read the Book of Commonsense.
*But hey, it’s all just a conspiracy right, they’re trying to screw us over for money, and add to that they’re going to raise prices at double the inflation rate…*
actually, i made a mistake here (if i said that) — since they can raise prices by up to 5% above CPI and the mid-point of the RBA’s inflation target is 2.5, that’s more like raising prices at TRIPLE the long-term inflation rate.
^.-
* that’s how these silly, model-fondling, marker pen-waving, whiteboard-staring technocrats justify their jobs.
defence against what? i haven’t seen any meaningful “attacks” on the very specific and pertinent issue i was discussing regarding “fibre unbundling”.
How about the questions I asked you regarding Telstra Velocity upgrades, the point of this article, and how that plateform is subject to the very same problems (i.e. difficult to offer ULL pricing models) that NBNCo’s network? You just completely ignored that.
Or how about where I said the ACCC will force NBNCo to drop prices over time, because if they don’t the pricing will mean NBNCo will not be able to repay their debts because they will lose customers and they will not be fulfilling their purpose, which is to allow for competition? You know, considering this is the ACCC’s job, to manage competition, you’d think they’d get mighty unhappy with NBNCo if they raise wholesale prices. You just completely ignored that as well.
Or how about point that without a large customer base NBNCo doesn’t have a chance in hell to recover their debt so they are encouraged by the market to lower prices if, and when, they can. Another point you just seemed to have ignored.
So maybe the definition of meaningful for you is “something I can retort”. Is that it?
you’re turning into a hysterical drama queen.
I really don’t appreciate the insult. Especially coming from someone who, clearly from the post, is only begrudgingly replying to me because you seem to think I’m some kind of simple minded fool.
Tosh, I respect some of the points you make, but a lot of them seem to come out of blind political bias. “Rent seeking” is a classic example of this.
i’m very reluctant to get drawn into ridiculously long debates with you where you engage in meaningless lawyerism only to end up getting owned because it is all too time-consuming and unproductive to correct every single error you make… but here goes….
And yet, you’re doing it. I don’t bother correcting you at every single turn, and no, that’s not because you’re an infallible god. I only decided to comment on this point because you decided it was important to highlight once again the “problem” as you see it with CVC charges. And then accused NBNCo of being deceitful, when the document you used to source it clearly indicates that a ULL pricing model is not sustainable. Thus they picked another one. Do you have a third option Tosh? No, didn’t think so.
firstly, i specifically said in my post that there are MANY REASONS why NBNco rejected fibre unbundling including the one you’re hanging onto like a 6-mth old, stained, unwashed smelly security blanket.
Yes you did, but you also said that the “main reason” is to “rent seek”, which implies that NBNCo has a choice, that they can recover the debt another way through, by example ULL, because obviously they’re just greedy bastards right?
secondly, uncertainty over “efficient network design” was just another convenient excuse for NBNco to throw up — the ACCC “may or they may not” accept certain things — big fucking deal, that shit happens over a whole range of pricing/cost issues*.
So NBNCo made a calculated risk and decided to go for the less optimal (in terms of pricing flexibility) option. That shit happens all the time. Big fucking deal.
when you’re choosing between GPON and PtP, you’re no longer simply optimising “topology layout” in terms of determining where you place the nodes or splitters for a given technology, you’re choosing between two very different technologies which offer different possibilities.
You may have noticed I pointed out that ULL pricing model is very hard to deliver on GPON. This is obvious because it’s a shared model. PtP fibre allows more flexibility, but at the cost of added complexity (you need every strand to the POI to be unique, you cannot multiplex them, and it marks it harder to add redundancy into the network).
since 50% of users will be be stuck on 12Mbit under 93% FTTP according to NBNco’s projections, shouldn’t the ACCC be setting the regulatory asset base of the NBN to reflect the much lower cost of FTTN (over at least the first decade) as FTTP no longer represents an “efficient network design” to deliver 12Mbit?
That’s an interesting idea, oh wait, that’s the Coalition’s plan isn’t it. Hmm. Wait, there was something about that plan that irked me. Oh, that’s right:
Geographic distribution of maximum potential speeds on FTTN is not representative of market demand, especially when you consider the housing market is being to stagnate, and fall in a lot of areas of the country (i.e. the old “move to an area with FTTH or move closer to your node” line doesn’t work because no one can afford to move any-more).
But hey, if the NBN get’s thrown out, then I, and everyone else in the country, will just have to deal with it won’t we? I’m okay with that, but the NBN hasn’t been thrown out yet. And accusing them of deceit on a news website like Delimiter isn’t going to change that any-time soon Tosh.
stop believing NBNco’s unintelligent rubbish. (i can’t believe my taxpayer dollars are going to pay the salaries of these incompetent clowns.)
I don’t. And I’m almost offended that you would think that. You obviously haven’t been paying much attention to what I’ve been saying.
Let’s go through the areas I’ve thrashed out with you over NBNCo and some others I’ve been sitting on:
– NBNCo’s lower end market is under threat from wireless, but the wireless market is not eroding the demand for fixed line. (Remember those fun times with Alain thrashing through the ABS stats).
– NBNCo’s CVC pricing has to come down because pricing is too high, but unfortunately the size of the project means you are limited in the ways you can do this, so you probably want to directly sink capital from the government. (Remember those fun times arguing about the pricing model and the recent changes NBN Co have made because of Simon Hackett’s concerns).
– NBNCo’s 93% mandate is expensive, and in order to get more government support they might consider reducing the size of the footprint of GPON based networks.
– NBNCo’s setting the “minimum access point” at 12Mbps is foolish and not really taking advantage of the plateform. They should consider increasing this to 25Mbps or 50Mbps within the footprint, effectively “squashing” the price plans and removing the 12Mbps tier. (Haven’t discussed this often, because I think the market will push towards this anyway).
Do these points seem keeping with someone who blindly believes the NBN press releases?
in terms of that “$100 level” that you throw up — well, what does that tell you? it’s crazy to mandate fibre for residential users. NBNco is just disguising its negative net worth by capitalising their operating losses on their balance sheets and future-dating the recovery period. (any future auditor that signs off on NBNco’s future annual accounts prepared on this basis has zero professional integrity and should go to jail.)
No, it tells me that unfortunately, fibre is expensive to deploy, and that for once in our lives the well off people have to man the fuck up and take a hit, paying more for luxuries, in order to subside the poorer people who can’t afford to pay all that much for the service. You know, that line everyone uses, that the NBN is for all Australians.
Are you unwilling to sacrifice some of your income to subsidise those less privileged than you? I’m willing to pay up to $200 a month for a fibre connection. That means that, if the ULL pricing were in effect, I’d be able help some less well of family by paying a third of their internet bill every month.
assuming that the market as a whole can actually sustain $100 average per connection, “the low income family” problem is not a real issue. basically, you’d internally subsidise the lower ARPU market segment.
Okay, and how does CVC charges and speed tiers not do this? Oh wait they do.
the current problem is residential premises outnumber business premises 10 to 1 within the NBN fibre footprint. there’s no way in hell businesses can subsidise all those under-utilised, money-losing residential fibre installations. similarly, a big proportion of business premises themselves will have zero need for fibre connections and will need to be subsidised too (think laundromats, bakery, hairdresser, nail salon, grocery, etc).
Businesses are not the only entity capable of subsiding, have you not noticed that every RSP provider so far have said “the take up of 100Mbps connections have been surprising”. I’ve seen excuses that this is because “the geeks” sign up first, but you’d think intelligent business executives who’ve been the Telecommunications Game as long as Simon Hackett and John Linton would have taken that into account wouldn’t you.
Further, as I have suggested many times, if the government phased back the FTTH footprint slightly, and then put the bloody thing to the productivity commission with a couple of revisions, the government could even directly subsidise the project.
A combination of all the above measures could work, but you seem fixated on the idea that FTTH is a waste. I even saw in another post you saying that fixed line is more expensive than wireless.
Well, over the life of this copper network, how much has the average (in real terms) phone call and broadband connection costed? I can assure you it is no where near the current prices being offered. This is because the initial investment is high, and initial costs (to consumers) are high to recover debt, however once these debts have been repaid they fall, rather dramatically in the right conditions as well.
Now do the same thing to mobile connections. You’ll find they’ll be higher, because although the initial investment is lower, the incremental upgrades are more expensive, keeping the price high as companies invest in improvements. If the life of a FTTH network and wireless network were the same, then yes, you could state FTTH is more expensive, but they aren’t. Over the life of a FTTH (50 years let’s assume) network you will have to completely replace all the equipment on the towers for the wireless network about 10 times. Each time with equipment that has even more complicated signal processing requirements, requirements I’ll argue that get more complicated faster than Moore’s law.
that old tired irrelevant chestnut. if NBNco can’t even recover the massive capital cost associated with the initial roll-out, you can kiss goodbye to any fucking “incremental upgrades”… (oh, i forgot, taxpayers’ hip pockets are a bottomless pit to finance internet geeks’ luxuries.)
If NBNCo can’t begin recovering the massive capital cost within the next 5 years it’ll get thrown out anyway, remember, so this is irrelevant. We can shrug our collective shoulders are move on at this point and move on with our lives. The whole project isn’t set in stone remember. Wasn’t it you that said the pricing policy of NBNCo couldn’t be adjusted, and they they came along and adjusted it to address Simon Hackett’s concerns?
NBNco’s SAU tells us explicitly they are currently under-pricing (below cost) access to the NBN. the motive is unspoken but obvious — to ease the short-term migration from copper to fibre and minimise political backlash from consumers. the only direction prices will move from here is UP. the SAU paves the way for them to jack up premium service pricing by up to 5% a year in real terms. they will have “some” success in doing this because:
Okay, so, they want to ease the migration, but did you consider the fact that during the migration period their revenue will also be growing considerably? The fact they can raise the prices 5% doesn’t mean they will. I’ve said this on many occasions.
The cost of flour has gone up, and I’m a baker, the only one for thousands of kilometres, I could raise prices, or I could keep the low because my product is popular and rely on my increasing customer base to meet the rising flour prices. The same principle applies here.
however, they won’t succeed entirely (e.g. competition from BigAir fixed wireless, etc) — bankruptcy is inevitable.
No, it’s not, what is inevitable is they won’t be able to rise prices consistently. You’re making a huge logical leap here. It all hinges on the fact the NBNCo will raise their prices, something you can’t prove.
The reasons you have might work if NBNCo were an established platform, yes, but it’s not. It has to balance the repaying enough debt to stay afloat and encouraging as many people as possible to migrate. It has to further do this under the very watchful eyes of the ACCC and the government.
If it fails to do this, and remember this is kind of important: it will get thrown out. There is never a point of no return with these things, especially if they start costing taxpayers money we can ill afford to spend.
God, i’m sick and tired of having to explain everything to you in minute detail — who’s trolling who? before you reply to my future posts with silly accusations, i suggest you go read the Book of Commonsense.
There’s a book of Common Sense? Give me. I’ll start handing them out of the street!
*How about the questions I asked you regarding Telstra Velocity upgrades*
the Delimiter Ubermind was suggesting that he would like to see something similar to “naked DSL”, viz. “fibre unbundling”, on the NBN. all i did was merely point out the strategic superiority, from NBNco’s perspective, of confining access-seekers to bitstream access platforms in terms of the convenience of price-setting, market segmentation and capital recovery.
and then you got all frickin’ antsy and menstrual on me screaming “troll” like some WP whingenut.
*Or how about where I said the ACCC will force*
forget about the frickin’ ACCC… they are a highly political organisation and are ultimately under the thumb of the Government.
it’s easy to sanction and encourage pack-rape of the privatised Telstra’s infrastructure by its competitors, but a statutory monopoly like NBNco, whose massive billion dollar debts are guaranteed by the Commonwealth, is a whole different kettle of fish.
*NBNCo to drop prices over time, because if they don’t the pricing will mean NBNCo will not be able to repay their debts because they will lose customers*
FFS…. i already explained to you that 1/ there are segments of the market that are inelastic consumers of fixed-line services and 2/ all alternative fixed-line platforms are being shutdown.
*when the document you used to source it clearly indicates that a ULL pricing model is not sustainable.*
that’s only because the NBN is over-capitalised in the first place! don’t blame the pricing model which works overseas.
*So NBNCo made a calculated risk…*
what calculated risk? the bureaucratic goons at NBNco are just executing an uncosted political mandate.
*move closer to your node” line doesn’t work because no one can afford to move any-more.*
that doesn’t even make any frickin’ sense — as house prices fall, you can afford to move into areas that were previously off-limits because your other financial assets (as well as ongoing earnings stream) would have a greater “property purchasing power”.
*And accusing them of deceit on a news website like Delimiter isn’t going to change that any-time soon*
NBNco is the biggest FUD spreader (e.g. imminent local access network “bandwidth shortage crisis” BS) in the world. what we really need to do is prioritise fixing the broadband blackspots.
*but the wireless market is not eroding the demand for fixed line*
the average consumer has a fixed budget to spend on telco services. if wireless products are chewing up more and more of the total (fixed and wireless) ARPU pool, how many extra dollars do you think consumers can expend on fixed-line services?
and NBNco’s SAU has already explicitly spelled out that NBN’s viability depends on both #SIOs and fixed-line ARPU.
for the love of Jesus, Mary, Joseph and the Holy Ghost….
*They should consider increasing this to 25Mbps or 50Mbps within the footprint, effectively “squashing” the price plans and removing the 12Mbps tier.*
that won’t work as i have previously explained they have to generate premiums for the higher speed ports to reach their revenue targets and the baseline port is under strict price control (loss leader). that would be financial suicide.
*(Haven’t discussed this often, because I think the market will push towards this anyway).*
what market?!!??!! since the competition-killing NBN legislation was passed, NBNco will be THE MARKET (cornered). there’s no competitive pressure on them to do what you suggest.
*for once in our lives the well off people have to man the fuck up and take a hit, paying more for luxuries, in order to subside the poorer people who can’t afford to pay all that much for the service.*
the NBN is not about social welfare in the sense of rich subsidising poor. rather, it’s middle class welfare with the greater mass of city-dwellers who share congested, efficiently-utilised infrastructure subsidising sparse rural folk who share less-congested and inefficiently-utilised infrastructure (e.g. 50,000 city-dwellers sharing $1bln infrastructure subsidising 1,000 bush-dwellers “sharing” the same $1bln infrastructure).
it’s a geographical (spatial density) subsidy, not an income-inequality subsidy. a lot of farmers are multi-millionaire property-owners.
*Okay, and how does CVC charges and speed tiers not do this? Oh wait they do.*
if the underlying cost structure of 93% FTTP was sustainable, then “bitstream” and “unbundled” access models would both be workable. because NBNco is overcapitalised, they are forced to adopt a “bitstream” platform to maximise the NBN’s financial prospects. (it still won’t work, bankruptcy is inevitable.)
*have you not noticed that every RSP provider so far have said “the take up of 100Mbps connections have been surprising”.*
FFS…. and how large is the sample? 40 customers nationally (or whatever it is)? not to mention, trial pricing which doesn’t factor in actual NBN wholesale charges.
*Further, as I have suggested many times, if the government phased back the FTTH footprint slightly, and then put the bloody thing to the productivity commission with a couple of revisions, the government could even directly subsidise the project.*
you are dreaming.
*You’ll find they’ll be higher, because although the initial investment is lower, the incremental upgrades are more expensive, keeping the price high as companies invest in improvements.*
Telstra’s national roll-out of 3G to 98% of population apparently only cost $1bln.
let’s make a very generous assumption that the NBN capital works only costs $36bln:
7% ROI x $36bln = $2.52bln in annual interest payments (alone).
doesn’t even take into account principal repayments, OPEX, NBNco X’mas party, etc.
conservatively, the annual interest payments on the NBN would more than pay for the cost of building a national 3G network twice over every year.
what was it you were saying?
*Wasn’t it you that said the pricing policy of NBNCo couldn’t be adjusted, and they they came along and adjusted it to address Simon Hackett’s concerns?*
i’ve in the past gone to great lengths to differentiate between:
i/ the “slow walk in the valley of death” problem (during the build phase when everyone is a “small ISP”); and
ii/ the long-term challenges facing ISPs which remain “small” after the roll-out is completed.
note that Internode requested a permanent CVC subsidy or rebate (free 200Mbit CVC) to deal with both situations (i and ii), and NBNco only gave them a temporary 150Mbit CVC subsidy (which only addresses problem i).
*I could raise prices, or I could keep the low because my product is popular and rely on my increasing customer base to meet the rising flour prices.*
you don’t get it — if consumers don’t voluntarily spend more per fixed-line connection, NBNco will be forced to raise prices, esp. the premium ports, to preserve their revenue targets.
*There is never a point of no return with these things, especially if they start costing taxpayers money we can ill afford to spend.*
you just outlined Malcolm’s position and all this (“get thrown out”) will happen in 2013 (insha’llah).
hallelujah! praise the Lord!
False. According to NBNco’s projections 36% will be on 12mbps, the other 64% (the majority) will be on 25mbps or higher. The 50% number is for FY2012. http://i.imgur.com/609eZ.png
in the specific context of this discussion you just gate-crashed (which is fine as long as you pay careful attention to context), i was referring to the hypothetical “efficient network design” that carries users from now until the completion of the roll-out in 2020, where the proportion of users on 12Mbit is still closer to 50% over this relevant period.
this is why i said:
“the ACCC be setting the regulatory asset base of the NBN to reflect the much lower cost of FTTN (OVER AT LEAST THE FIRST DECADE)”
until 2020-ish, not 2028.
Oh I’m sorry, I didn’t realise this was a private conversation on a private forum… I’ll remember this next time someone replies to me when I find the comment inconvenient lol…
There is no “specific context” it’s the same thing you’ve been repeating for the last 6 months. In fact I do recall you specifically saying:
NBNco’s own corporate plan tells us ~50% of consumers will be stuck on 12Mbit (below what Mr Menon is currently getting on ADSL) until 2028 because anything faster will be too expensive
So explain somethign tosh is this 50% number in the NBNco docs actually referring to 2028 or is it your own prediction? You want to change it to 2020 now?
your comment is not inconvenient, it is simply wrong because i haven’t asserted that 50% of users will be on 12Mbit in 2028 in this thread.
the specific context of this discussion is relevant, because i will say it again, if we are to be pedantic about “efficient network design” at the highest architectural level, then clearly, for the purposes of RAB calculations, (in playing devil’s advocate) i could argue that the ACCC should be framing the regulatory asset base in terms of NBNco implementing FTTN for the next decade or so, since as your linked chart shows, close to 50% of users will still be on 12Mbit by 2020 when the fibre roll-out is slated to be completed.
nonetheless, the chart very clearly shows that NBNco is forecasting that 36% of users will be on 12Mbit in 2028. in the minor instances where Mathew and i mistakenly or carelessly referred to 50% users being on 12Mbit in 2028, then quite clearly, we were wrong. but, that one data point really doesn’t change the substance of my arguments in previous threads. (i’ll let Mathew speak for himself for his posts.)
but, thanks for gate-crashing this thread to tell me i made some trivial error in another thread months ago which is totally unrelated to this particular thread discussion (because i’m not talking about 2028 in this instance).
i repeat, 36% of users will be 12Mbit by 2028 according to NBNco. (so what?)
are we a happy little camper now?
*roll eyes*
It’s not a trivial error when you repeat it endlessly and then continue to do so after someone has pointed out the error. In the end all it shows is that you and others in your camp like to conveniently distort facts to suit your own arguments and/or agenda. You may have not specified 2028 in this thread however considering your history with this line I think my question was reasonable. As for “gate-crashing” please get over it, this is a public forum if you still find my awesome comments inconvenient simply ignore them.
*It’s not a trivial error when you repeat it endlessly*
yes, i may have mistakenly quoted that data point on more than one occasion. endlessly? evidence, please.
*and then continue to do so after someone has pointed out the error.*
evidence? (have fun trawling through all my posts, you must have them bookmarked because they are absolute gems ;))
*In the end all it shows is that you and others in your camp like to conveniently distort facts to suit your own arguments and/or agenda.*
drive-by blanket smears. that was the whole point of this exercise wasn’t it? can’t attack the substance of my arguments one iota, so resort to “credibility” attacks.
*You may have not specified 2028 in this thread*
end. of. story.
*As for “gate-crashing” please get over it, this is a public forum if you still find my awesome comments inconvenient simply ignore them.*
pardon me, it’s not “gate-crashing”. it’s more accurately described as “thread-hijacking” in WP parlance. your comment isn’t “inconvenient”, it’s just “disruptive” because it has zero relevance whatsoever to my arguments in this thread (as you have conceded above).
if i compiled a list of *your* errors, it would probably stretch from Cairns to Adelaide. but i have far better things to do with my time. furthermore, your pro-NBN posts are easily demolished just by examining the “substance” of your arguments, as opposed to nit-picking over relatively minor data points.
oh, let’s say it together one more time — 36% of users will be on 12Mbit in 2028.
(so what?)
“oh, let’s say it together one more time — 36% of users will be on 12Mbit in 2028.”
That’s not the figure the NBN Co is worried about, the figure they are worried about is if 70% of residences passed by the NBN as required to justify the ROI in their business plan will actually use it, and if Australia follows the upward trend in the USA and UK where about 26% of residences are today wireless only then the concern is a very real one.
Comments are closed.