NBN policy: Show us some detail, Conroy tells Turnbull

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news Communications Minister Stephen Conroy has demanded that the Coalition disclose some basic details of its rival broadband policy, noting that Shadow Communications Minister Malcolm Turnbull has not substantially outlined the policy further in public since a landmark speech on the issue in the middle of 2011.

The clearest indication currently available of the Coalition’s rival telecommunications policy is contained in a speech given by Turnbull in August last year, in which he proposed focusing on upgrading the HFC cable networks operated by Telstra and Optus, splitting Telstra into wholesale and retail arms, and using wireless and satellite solutions to serve remote regions.

Since that date, Turnbull has also appeared to focus heavily on the potential for fibre to the node technology to serve Australia’s future broadband needs, in comparison with Labor’s National Broadband Network policy, which focuses on more expensive and technically capable fibre to the home technology.

However, in a statement released late last week, Conroy criticised Turnbull for not releasing significant detail of the Coalition’s policy, demanding that the Shadow Minister “come clean” on the Coalition’s plans. “Six months ago today Malcolm Turnbull addressed the National Press Club on the National Broadband Network. For the rest of 2011 and already in 2012 he has been silent on any policy detail,” Conroy said.

“In one speech, three media releases and 15 tweets this year on the NBN he has continued his negative campaign and not provided an actual broadband policy. Meanwhile, his Coalition partners continue to call for fibre to the home in regional Australia, while his leader tells Australia this week we should invest in last century road and rail infrastructure not 21st century broadband.”
Last week, Conroy pointed out, Turnbull had linked to a Financial Times article on Twitter about a fibre to the node deployment by British telco BT.

“This is the same story he told us about in December,” Conroy added. “But he gives no detail on how it would be, or even if it can be, delivered in Australia. How many powered cabinets will be required to get within 400 metres of every premise? What is the actual speed that customers get rather than just ‘up to 80 Mbps’? How much will it cost? The Coalition needs to come clean – what is their actual policy, what technology do they propose to use and what will it cost.”

Conroy said Turnbull should answer the following questions about the Coalition’s broadband policy:

  • How will the coalition achieve the structural separation of Telstra?
  • How much will prices increase in regional Australia without a cross subsidy? How much will his “voucher” system for regional Australia cost?
  • How many households does Mr Turnbull plan to serve with HFC?
  • How many households does he plan to serve with FTTN? How many FTTN nodes does he plan to build?
  • How many households does he plan to serve with wireless?
  • What does he really think the requirements are for bandwidth in 2020?
  • When does he expect his network will need to be replaced by FTTH (he calls it a migration path)?
  • How much will his network cost?
  • Why does he consisently misrepresent the $35 billion capital cost of the NBN?

The Office of Malcolm Turnbull has been invited to respond to Conroy’s statements.

opinion/analysis
It must be snowing in hell today, because I find myself in complete agreement with Conroy about the lack of detail which Turnbull has so far released about the Coalition’s broadband policy. As I wrote in November last year:

“After my initial burst of enthusiasm for Turnbull’s plan, the Shadow Communications Minister’s behaviour over the succeeding months — in which he has done virtually nothing to address its criticism or expound its merits in public — has done much to sour me on it. Watching Turnbull in action in that period, I often find it hard to believe that he has the energy and determination to see his rival proposal through, should he be appointed Communications Minister in a Coalition Government.”

No doubt it feels nice for Turnbull to be featured by outlets such as the Global Mail on its launch day as Australia’s “Prime Minister in waiting”. And it’s also no doubt nice for Turnbull to make appearances on prime-time Sydney radio discussing the NBN with sympathetic hosts and taking the chance for a few below the belt potshots at Conroy and the NBN project in general.

But policy development isn’t about feeling nice. It’s about substantive outcomes. Right now it seems very likely that the next Federal Election (generally expected to be held in 2013) could see a change in government, with a Coalition team under Opposition Leader Tony Abbott considered likely to knock Labor off its perch. With Abbott having threatened several times to tear up the NBN project, I think it’s about time we get some certainty from the Coalition about just what it’s proposing to replace it with. This is not a joke. This is about Australia’s future.

Image credit: Kim Davies, Creative Commons

74 COMMENTS

  1. Turnbull’s policy is no policy….praying the public are stupid enough…..

  2. Conroy is asking all the question the media should be asking
    I never knew what a joke the mainstream media was in this country until the NBN project started.

    • +1 Simon.

      Totally agree with you. Why is the NBN getting so much flack, when the proposed alternative the Coalition has come up with is lacking so much detail?

      Why aren’t the media outlets focusing on Turnbull’s proposed policy so that the Australian voter can make an informed decision on which policy is the better?

      From what has been published thus far, it appears industry is tentatively backing the NBN, based on technology and overall cost. In order to upgrade the Coalition’s broadband network it is proposed to cost more in the long run than the total cost of deploying the NBN. Do it right and do it once is what I believe. We have the ability to rollout out one standard across Australia, rather then a patchwork of network types like today’s market.

      • In order to upgrade the Coalition’s broadband network it is proposed to cost more in the long run than the total cost of deploying the NBN.

        no, it’s not. there’s a simple concept called present value discounting. a dollar spent in the future is worth less than a dollar spent today. to be fair, i would not be surprised if Conroy was completely ignorant of the concept too.

        • That all depends on the life of FTTN, if it was built when first proposed (ie, Telstra didn’t play silly buggers and made a submission that was no more than a memo, and they didn’t want $25 a month for use of the copper tails) it would have been a good way to go. Now, I don’t think it has a long enough life. I am sure you will disagree, arguing there are no apps that need it (beside bluray quality video). But I also remember when a 20MB hard disk was huge and don’t discount the rapid rise in data volumes will continue to increase.

          • and they didn’t want $25 a month for use of the copper tails

            first of all, Telstra has to bid for the opportunity to upgrade the infrastructure they own 100% of?

            secondly, Optus & Co were offering $5-15/mth for the copper tails. given that Telstra’s wholesale revenue is at least twice the upper end of that range, you seriously think Telstra should just hand over an asset they outlaid tens of billions of dollars over to their competitors for a 50% firesale discount?

            Now, I don’t think it has a long enough life.

            well, for starters, our copper is in no worse condition than the copper overseas. tell me this, why are companies like Alcatel still pouring millions into researching and vendoring FTTN solutions that utilise copper as the last mile delivery?

            But I also remember when a 20MB hard disk was huge and don’t discount the rapid rise in data volumes will continue to increase.

            at an average of 12GB/mth monthly downloads, we’re far far far far away from exhausting the existing capacity of the copper tails. for the average user, the bandwidth bottleneck is not in the uncontended, last mile copper access network but in the fibre transit which is contended amongst many users.

            iiNet’s subscribers on ADSL2+ plans using ADSL2+ modems connect at average of 12Mbit. do you know what the monthly cost is of provisioning 12Mbit of international transit uncontended? at least four ZEROS’s, buddy.

          • Yes Telstra have to bid (if that’s how you want to put it) because PSTN ownership came with strict access laws, as reaffirmed in the High Court in March 08.

            http://www.accc.gov.au/content/index.phtml?itemId=812450

            So any upgrades which may hamper or strand those who have a legal right to access, cannot be allowed.

            High Court in relation to PSTN ownership rights. “These steps are necessary because they reveal that although it is right to say that Telstra bought and paid for the PSTN, and thus owns it, it has never had rights in respect of the assets of the PSTN of the nature or amplitude which its arguments assumed”.

            http://www.austlii.edu.au/au/cases/cth/HCA/2008/7.html

            As for Alcatel – Lucent (aren’t they the crooks like that Quigley, those opposing the NBN have told us about) are probably living off backward thinking conservative party’s worldwide ;-)

          • no, Telstra doesn’t have to bid. all the ACCC can declare are services which are viable based on the existing installed copper. the ACCC cannot “declare FTTN” if FTTN nodes have not been built.

          • this is what the High Court Case is about:

            under Trade Practices Act, ACCC can declare ULL and LSS.

            Telstra disagrees with some aspect of ULL and LSS declaration, most likely key parameters such as pricing.

            Telstra sues ACCC and tries to argue that “forced access” to copper via declared services on ACCC’s terms not mutually agreed to constitutes “compulsory acquisition” triggering compensation under constitution.

            High Court disagrees.

            nowhere in law does it say that Telstra has to upgrade their network to FTTN, or that the ACCC can declare services that the infrastructure in its existing state is incapable of, or that Telstra must co-operate with Government tender.

            the High Court ruled on a very narrow technical question that Telstra submitted (i.e. what constitutes “compulsory acquisition”). don’t read more into it than there is.

          • Seriously, I thought you may have been above such pedantics.

            The clause of reference which I copied/pasted clearly mentions the Judges telling Telstra they do NOT have cart blanche’ open slather to do as they wish with the PSTN, because their ownership is bound by access to others and isn’t as far reaching as Telstra think.

            Now if you can’t see (or refuse to see because it doesn’t fit the agenda) that this means Telstra simply are unable to do what they want, when they want, which would include FTTN stranding these companies who have legal access, well that’s sad.

          • under Telco legislation and Trade Practices Act, Telstra has to provide third-party access to the CAN. so, the ACCC can declare ULL and LSS services. Telstra has never denied any of this.

            the problem we have is that Telstra disagrees with the ACCC on what the real economic cost is or how these services should be priced.

            so, having lost the many battles against the ACCC in ACT, Federal Court, etc (i.e. debating abstract economic concepts before legal specialists which is an uphill battle for Telstra), Telstra tried to argue in the High Court that ULL/LSS access on terms not mutually agreed to btw Telstra and ACCC constitutes “compulsory acquisition” under the Constitution.

            the High Court disagreed. that’s all there is to that case. there is no law saying Telstra must upgrade the CAN or that it must participate in any Govt tender to upgrade the CAN. did Telstra break the law when it submitted a non-compliant bid? of course, not.

            end-of-story.

          • Unless one is willing to not only read the High Courts findings, but then understand the actual implications thereof in the real world, then trying to correspond rationally and genuinely with such a stubbornly partial person is a forlorn cause.

            But seriously you must be kidding when you say in regards to access “Telstra has never denied any of this”.

            Constant court battles trying to deny access (if not raise access prices) being fined $18m for wilfully denying access and constant attacks on their now defunct propagandist website nowwearetalking, referring to their wholesale customers as leeches and even attacking Optus ‘ Singaporean origins.

            Whilst I believe these wholesale customers/ISP’s are far from perfect, ‘Telstra have denied all of this’, have tried every trick in the book to avoid their legal obligations and anyone who says otherwise is delusional, in my opinion.

          • “secondly, Optus & Co were offering $5-15/mth for the copper tails. given that Telstra’s wholesale revenue is at least twice the upper end of that range, you seriously think Telstra should just hand over an asset they outlaid tens of billions of dollars over to their competitors for a 50% firesale discount?”

            That’s the problem. You are talking about infrastructure here. Something that we only need one of like every other utility connected to your house. We wouldn’t be building the NBN if Howard didn’t sell Telstra off as a whole company. Like all the roads, water and sewer mains around the country, those cables in the ground need to be treated a whole lot differently.

            The whole concept of trying to introduce market competition in infrastructure building astounds me; it’s not appropriate. But that’s more of an ideological debate.

        • Mark Pearson Deputy Chief Executive of the ACCC, mustn’t be aware of this either, Michael.

          http://www.broadbandexpert.com.au/broadband-news/broadband-news/accc-advise-that-it-may-be-more-expensive-to-roll-out-an-fttn-nbn_773846

          “The deployment of a fibre-to-the-node network would be a costly and pointless exercise if changes were made to broadband policy in the future according to Mark Pearson, the deputy chief executive of the Australian Competition and Consumer Commission (ACCC) when he spoke to a parliamentary hearing on the National Broadband Network (NBN)”.

          • everybody knows the ACCC is 100% biased towards FTTP because in their view FTTN is potentially more complicated to regulate if 100% of the copper is not cut over simultaneously and a wholesale FTTN model adopted universally. less work for them.

          • Ah yes, when common sense is exhausted or non existent, enter ‘the conspiracy’.

            The ACCC are against Telstra too, I’ve heard :/

            And, I suppose this list of authorities on communications, gathered to determine the viability of FTTN/FTTP relating to NBN mk1 are also part of that FTTN hate society too?

            Ms Patricia Scott, Mr John Wylie AM, Mr Tony Shaw PSM , Dr Ken Henry AC, Mr Tony Mitchell, Professor Reg Coutts, Professor Rod Tucker, when they concluded…

            The Proposals have also demonstrated that rolling out a single fibre-to-the-node (FTTN) network is:

            ␣ “unlikely to provide an efficient upgrade path to fibre-to-the-premises (FTTP), because of the high costs of equipment associated with rolling out a FTTN network that would not be required for a FTTP network (i.e. FTTN is not a pre-requisite for the provision of FTTP); and

            ␣ likely to require exclusive or near-exclusive access to Telstra’s existing copper sub-loop customer access network (CAN), the so called ‘last mile’, thereby confirming that strong equivalence of access arrangements would be essential. As well, providing such access to a party other than Telstra runs a risk of liability to pay compensation to Telstra. The Proposals have this risk remaining with the Commonwealth but they have not addressed the potential cost to the Commonwealth of any such compensation. In any event, the Panel considers that no Proponent could accept the cost risk and continue to have a viable business case”.

            You will note they also mention possible ‘compensation’ to Telstra, as one of their determining factors.

            But maybe this group aren’t part of that ACCC conspiracy and are just Labor shills… yes that must be it.

            It couldn’t be that such learned people in their field/ACCC can look past the politics and see FTTN for the bullshit it actually is and actually be “right”.

          • unlikely to provide an efficient upgrade path to fibre-to-the-premises (FTTP), because of the high costs of equipment associated with rolling out a FTTN network that would not be required for a FTTP network (i.e. FTTN is not a pre-requisite for the provision of FTTP)

            you have to balance the cost of the “stranded equipment” against the interest savings from deferring the replacement of the last mile. this latter cost component which is largely labour completely overwhelms the equipment costs. this is the fundamental economic logic behind the overseas roll-outs of FTTN which is more common and extensive than FTTP.

            likely to require exclusive or near-exclusive access to Telstra’s existing copper sub-loop customer access network (CAN), the so called ‘last mile’, thereby confirming that strong equivalence of access arrangements would be essential. As well, providing such access to a party other than Telstra runs a risk of liability to pay compensation to Telstra. The Proposals have this risk remaining with the Commonwealth but they have not addressed the potential cost to the Commonwealth of any such compensation.

            in plain English: the cheeky and insulting $5-15/mth for the copper tails that Optus suggested in the G9 SAU submitted to the ACCC was just a “play number” and was never accepted by Telstra as appropriate compensation. hence, in their formal proposals submitted to the Panel of Experts, they left the “cost of leasing copper tails” as ______ (BLANK), and effectively based their business case on free access to Telstra’s copper network with any potential compensation issue totally resting on the Federal Government’s head. how mighty selfless and generous of Optus & Co.

            no wonder even Michael Malone admitted in the 2010 testimony before Senate Select Committee on NBN that the G9 FTTN proposal was a complete charade and had zero intention of going through with it. and you expect Telstra to take KRudd’s tender process seriously?

          • So let’s get this straight, you tell us that you are right and the High Court Judges, ACCC and a group of learned experts are all wrong.

            Oookkk…!

          • firstly, the Evaluation Report you quote from was written by Labor’s “Panel of So-called Experts”, not the ACCC or High Court Judges

            secondly, the panel was dominated by Engineering Academics (and two life-long career bureaucrats), not Economics or Business Academics or experienced telco executives.

            thirdly, what was quoted is not wrong per se, but has to be read in context (that i provided above).

            fourth, why won’t the Federal Government release the full report, instead of two lousy pages?

          • +1 Michael.

            Your odd deviation regarding G9 and Telstra not, and/or not seriously inputting their well documented FTTN/NBN MK1 bids, has exemplified that both G9 and Telstra, like the government, ACCC and expert panel, even back 4 or 5 years ago, must have realised just how ridiculous and outmoded FTTN was/is after all.

            All the while the stubborn – no we aren’t listening – opposition and their trusty messengers keep banging that same old drum ;-)

  3. Yes, i agree.. the Mainstream Media are appalling.. I never that they would stoop so low to attack the NBN , like they have done. They must be scared of something?

  4. Unfortunately the Government know that the NBN is happening but they don’t know where, when or how much it is going to cost. Good policy.

    • What I find strange is, prior to NBN Co’s business/corporate plan, those opposing the NBN were saying.

      “There’s not even a plan to show us how much it will cost to build, access, or an ETA for completion”.

      Now that that very plan asked for is available and has been for quite sometime, the new cry is…

      “We don’t believe you”.

      • i don’t find this strange at all.
        i find it stupid and petty, but that’s how politician’s roll.

        in all honesty i would not be surprised to see labor doing the exact same thing were the situation reversed.

        • Of course they would.

          I was actually referring to people who comment here, who ‘aren’t’ politicians (as far as we know) who theoretically, have no reason to be this way.

          • oh right.

            well in that case, i find that even less strange.

            the only thing more petty than the politicians are the punters.

          • Good for you, I still find it strange.

            But then here we are having this conversation, so I suppose anything is possible.

      • Ask what year your suburb is getting NBN. They waffle on how it involves a hell of a lot of planning and therefore have no idea. Don’t expect it in the next 10 years.

        • Oooh its ok guys I’ve got this one.

          They cant!!!

          My god they are a pack of morons! They haven’t decided when my house is getting NBN therefore the whole NBN planning process is a mess!!

          How I would run an NBN is, I would first up get the 40 billion dollars deposited into my account. (I mean, I told them how much it’ll cost!!) then I would hire like 2000 logistics experts, and we would sit down and plan out our exact planning procedure.

          Then once we have planned how to plan the network, I would hire 1 fibre network designer (don’t want to waste money you see) and ask him how he would design the network. (its in the plan we do this).

          Then we would fire that guy, cause we know how to build networks. And my 2000 logistics experts would then plan the deployment of every house in the country (why start building if you can’t answer the question of: “When do I get fibre!!” from all your potential customers). Then, having the final exact rollout schedule written down. we can follow our plan which includes hiring and then we start building our network.

          That’s how a well run business works right.

  5. The coalition policy is to provide 75% of Australians affordable broadband prices

    which will save the tax payer 54.5% each year compared to labor’s policy

    • hahah you are funny

      yes Telstra have proven how much cheaper they can be at south Brisbane exchange

      What a joke the coalition policy will be affordable

      the coalition policy (what we know of it which is very little) is to set us back 20 years and has no vision for the future

      sorry but I don’t want a government and a leader running this great country who don’t have any vision for the future and wants us all to go back to 90s

    • Hi Malcolm,

      Can you please substantiate those figures in toto?

      Meaning, the Coalitions policy as it stands in comparison (as I believe this is)? Then factoring Telstra’s possible network compensation for FTTN? Then factoring later upgrades to FTTP, when needed in the future.

      And let’s not forget about the other 25% of Aussies who, apparently just miss out, or otherwise please factor those costs (subsidies) too?

      And where is the money to come from, the taxpayer or through the sale of bonds, debt/securities etc, who will own the network? What is to become of the current NBN already built?

      And what about the difference in productivity outputs?

      Thanks.

    • You seems to be the real Turnbull. So I guess you, as an economy expert, do not know that the tax money spent by your policy is gone forever, mainly drained to existing telcos, while Labour’s plan will use tax money as “loan”, and it will be repaid, just as all the tax payer’s money budged into the old Telecom has been repaid by Telstra.

      So who’s spending more tax payer’s money?

      Do you honestly do not know the difference between the two? If yes then you are either ignorant or thing we Australians are all ignorant.

    • if the Coalition plan does not pay back the ~16 bn? or so in cost to the government – because it has not yet been identified as an investment, or the method of recovery – then the amount of potential ‘saving’ is already at dispute. that in addition to Renais query regarding how much possible loss NBNco could really incur from the ‘Corrections:’ piece?

      i am also interested in the ‘provide 75% of Australians’ figure – which is the governmental portion and the private industry portion?
      getting private industry to play – how will that be achieved, and if involving subsidy to augment the FTTN plan by how much is it adding to the 40%(or whatever figure) FTTN share the government does? how much does it add to the all up $ figure?
      will their build be interoperable with the other portions?
      how exactly do you calculate “54.5% of the Governments plan”, given your figures could reasonably be construed as being scribbled down on a beer coaster in the middle of a flight, given the lack of detail?

      Incidentally if the majority of ISPs are offering prices on NBN that are functionally equivalent to todays ADSL prices are you not promising what has already been achieved by the alternative? (“affordable broadband prices”. in fact from my perspective if NBN were at my door today i would have 100 Mbit service – i didnt expect to afford 50! – that would be unavailable to me by any other policy. including FTTN, as described so far).

      a bald ‘savings generated’ statement is nice, but id like a bit more detail than that. so far im not sure it isn’t penny wise and pound foolish.

  6. Malcolm is doing exactly as instructed, praying on the general publics technical ignorance and using scare tactics in an attempt to discredit the NBN at every opportunity aided by an inept (corrupt?) media.

    Why on earth would the Coalition document their policy and provide the media and knowledgeable with the amunition to shoot them down in flames when it’s far more effective to scream – the cost, the cost?

    Coalition Policy

    We can do it cheaper
    We will do it faster
    Trust Us

    • that would be preying (predator, prey) tho im sure they are indeed on their knees praying the constituency will be easily baffled by bullshit – and that is true of all sides in Parliament today. given the importance of comms infrastructure and how ballsed up it has been over the past decade and some, baffling with bs is the last thing we need at this juncture.

      again wrt the coalition im am with Renai. cards on the table gentlemen, time to show what you got. “we can do it faster, we can do it cheaper, Trust Us’ is not an acceptable answer.

  7. I notice that in the latest Nielsen poll the Coalition is loosing ground. I wonder if that has anything to do with their announcements on the NBN in the past week or so?

  8. Why is the coalition so intent on destroying one of the genuinely good Labor policies?

    • They are intent on destroying the NBN first and foremost because it is a Labor initiative….

      The Noalition narrative does not allow for acceptance of good policy from Labor, especially when it clearly may end up being a real political winner for the Labor party in the medium to long term…

      Can’t have that now can we???

      No!!!

    • I suppose because distasteful policies, leave a bad taste in voters mouths, whereas good ones do not.

      Especially a policy on such a large scale, which could have this currently much deprecated government actually go down in the history books, as revolutionary.

      Can’t have that happen again, like the Snowy Mountains Scheme.

      • Definitely can’t have politicians actually do their job of representing the best interest of the people. Maybe they have some research to show that representing the best interest of the people is less likely to get you elected than bad mouthing the other side.

  9. ‘The coalition policy is to provide 75% of Australians affordable broadband prices
    which will save the tax payer 54.5% each year compared to labor’s policy’

    How:

    Can you guarantee such broadband savings.

    will the government fund such an ambitious project.

    How much will it cost the taxpayer?

    Citigroup costed the liberals FTTN project at $17billion. That is $17 billion that cannot be gotten back and much of that will be wasted on an eventual conversion to FTTH and the conversion does not use much of the same technology.

    does the coalition plan to allow for ubiquitous and fair access to broadband options. 93% FTTH coverage seems much fairer than 75% FTTN.

    • only $6bln of that $17bln relates to FTTN. the remainder is wireless and greenfields FTTH.

      • And what about the $20 billion compensation bill for cutting Telstra’s copper CAN ??

        • why do you assume compensation has to be paid? if Telstra can be convinced to spin-off the CAN into CAN Co, compensation = zero. if Telstra builds FTTN as vertically-integrated entity with strict functional separation like BT, compensation = zero.

          and who says it is $20bln? the current agreement which forces Telstra completely out of the fixed-line market is only $11bln in benefits. this is the only deal that has been realised and signed, and the only actual relevant benchmark for hypothetical compensation under FTTN. “$20bln” is pulled out of thin air.

          • FTTN jettisoned dodges Telstra compensation

            so, if the Federal Government acquires Telstra’s last mile copper and Telstra is reduced to the lowly status of FTTN reseller, they have to compensate Telstra.

            tell me buddy, how much compensation is the Federal Government currently paying Telstra to shutdown its copper network, transfer all their wholesale customers to NBNCo and reduce themselves to the lowly status of FTTP reseller?

            given that the economic loss suffered by Telstra is very similar (i.e. permanent abandonment of fixed-line wholesale business/margins), why should the level of compensation Telstra is prepared to accept be radically different? what’s the value or point of having uncut copper lying in the ground if you are contractually barred from using it to generate revenue from offering fixed-line services?

          • “given that the economic loss suffered by Telstra is very similar (i.e. permanent abandonment of fixed-line wholesale business/margins), why should the level of compensation Telstra is prepared to accept be radically different? what’s the value or point of having uncut copper lying in the ground if you are contractually barred from using it to generate revenue from offering fixed-line services?”

            Because they have agreements that only they supply copper connections. Also they will need to repair and maintain those copper tails. Who else is there to do that?

          • “what’s the value or point of having uncut copper lying in the ground if you are contractually barred from using it to generate revenue from offering fixed-line services?”

            Also, Telstra almost HAD to accept the NBN FTTH terms. If they rejected them they would eventually have copper sitting in the ground to maintain with and ever diminising customer base as people moved to fibre. After all, NBN Co was going to build it without Telstra ducting, it was just cheaper to pay Telstra to use theirs.

          • If they rejected them they would eventually have copper sitting in the ground to maintain with and ever diminising customer base as people moved to fibre. After all, NBN Co was going to build it without Telstra ducting, it was just cheaper to pay Telstra to use theirs.

            Labor’s NBN would have been dead in the water if Telstra had rejected the deal.

          • Not even Telstra wanted that to happen – thats billion dollar cheques walking away from them. it would have taken pretty big cojones explaining to shareholders why you walked away from not one but two government proposals varying values asides.

            again, the type of cutover required for FTTN and that required for FTTH were different and it so follows a different value was ascribed to both propositions. the FTTN proposal was a once off payment afaik, while the NBNco deal is a long term lease deal on the order of 30 years. also so far as i know Telstra retain full ownership of the copper and can make further dollars back flogging it off on the metals market. if they had lost the last 3-500 m of their copper to a node network recoverable value there for telstra would be commensurately less and therefore more compensation asked. (btw i dont know what the latest word from Telstra on possible copper recovery as NBN rolls out – last i read no decision was made but that option is there for them. in any case its not something i expect to be decided any time soon.)

            in any case thats just the things i can think of off the top of my head WRT Telstras network value. its also worth remembering the journalism of the time pre telstra deal constantly pegged the fair compensate value at anything from 10bn to 20bn, i dont recall anyone tipping 25. but its obvious theres a wide variety of affecting factors and without knowing all of the ones relevant to the deal thats the range people have been working with and both the deal that worked out and the possible FTTN deal are plausibly within that band. im not really seeing what there is to get knickers in a knot over

          • Not even Telstra wanted that to happen – thats billion dollar cheques walking away from them. it would have taken pretty big cojones explaining to shareholders why you walked away from not one but two government proposals varying values asides.

            uh, if you recall actual history, there was UPROAR amongst shareholders when Telstra announced the deal to exit the copper business.

            again, the type of cutover required for FTTN and that required for FTTH were different and it so follows a different value was ascribed to both propositions.

            what matters is the comparative loss in economic value, which i have shown is similar.

            the FTTN proposal was a once off payment afaik, while the NBNco deal is a long term lease deal on the order of 30 years.

            you can capitalise the value of the stream of lease payments and compare to lump sum.

            also so far as i know Telstra retain full ownership of the copper and can make further dollars back flogging it off on the metals market.

            the copper is not worth $20bln – $11bln = $9bln.

            its also worth remembering the journalism of the time pre telstra deal constantly pegged the fair compensate value at anything from 10bn to 20bn, i dont recall anyone tipping 25.

            exactly, the only firm deal that has eventuated is $11bln HoA which is within that $10-20bln range you claim, so $11bln is the only reliable benchmark for FTTN compensation.

          • Yes, an uproar against the 11 billion dollar deal that led to the deal being knocked back at the shareholder meeting…right?

          • Damn, trimmed my post:

            “STEPHEN CONROY: If we were to go ahead with the fibre to the node proposal, we would essentially have to, not to put too scientific a point on it, cut the copper. That would’ve meant effectively that we would’ve appropriated Telstra’s property rights, and under our constitution if you- you have to have fair compensation if you take someone’s property rights. And no expert in the field, nowhere in the legal field, commercial field, would give us a suggestion that the sort of bill you’d pay to Telstra was anything less than $15-20 billion.”

            There was more but it’s not like you’re actually interested.

          • The basic idea is that Telstra has exclusive rights to connect a copper phone system to people. FTTN uses that copper. FTTH does not and side steps that. Anyone can supply HFC, fibre, etc. but not copper.

          • So I take it you are saying that Telstra should be handed control of Australia’s communications network again, simply because they currently own the PSTN or if anyone else but Telstra builds and connects to Telstra’s last mile, Telstra won’t want compensation?

            Oookkk….!

          • Of course not, didn’t you listen to him?

            Can-Co (that we magically convince Telstra to spin off… that won’t cost anything) would get the compensation. Not Telstra. Stop lying and saying we would be paying Telstra compensation!

  10. I don’t think it’s about the Coalition having an alternative broadband policy. I think it’s about them having something that sounds enough like a policy to neutralise broadband as an issue at the next election. Good luck trying to get any details out of them.

    • Yet broadband was the reason they failed to win in 2010, and will again cost them critical regional seats if they don’t catch up. Here’s why they should adopt the NBN and its funding model.

      Since 2004 when John Howard first proposed universal broadband to circumvent the quagmire caused by monopoly corporate ownership of the copperto every house, three public studies have developed increasingly superior solutions – OPEL (wireless only), FTTN (found to cost double its $4.7 b headline budget to build, plus $20 b compo to Telstra), then universal FTTP wherever it was cheaper than wireless, supported by wireless and satellite.

      We know for a fact (McKinsey, May 2010) that fibre to premises is cheaper than uncontended 12 Mbps wireless all the way up to the 93rd percentile of premises, and of course that optical fibre is utterly futureproof and delivers blanket wireless coverage as well, so the best technology choice is not in question. It will cost $12 billion in 2010 money to build the fibre, compared to $11 billion to build FTTN to the 2007 plan before compensation to Telstra for the copper between footpath and home.

      So far then, the NBN is the best and chepeast solution for universal broadband.

      The NBN is not taking any funds from budget items, since it is targeted borrowing to be repaid from wholesale revenues.

      It is utterly brainless to allow Labor to have sole ownership of the cheapest and best broadband solution for Australia.

      The coalition should simply adopt it, and its funding model, leaving Labor with no popular policies to offer in 2013. But if the coalition does not climb down from the tower of cards Turnbull has built on this very soon, the electorate will doubt their sincerity, and might again hold their noses and vote the current mob back in.

      • FTTN (found to cost double its $4.7 b headline budget to build)

        $4.7bln was not the “headline budget” to build FTTN — it was the amount of the government co-investment to incentivise the private sector to extend the FTTN footprint beyond ~40%.

        then universal FTTP wherever it was cheaper than wireless, supported by wireless and satellite.
        We know for a fact (McKinsey, May 2010) that fibre to premises is cheaper than uncontended 12 Mbps wireless all the way up to the 93rd percentile of premises, so the best technology choice is not in question.

        no one doubts that FTTP is cheaper than wireless and satellite up to 90%. but the problem of the study is that it failed to consider FTTN as an alternative technology to FTTP. so the McKinsey study did not properly assess the most cost-effective technology choice as you assert. even Michael Malone has admitted that FTTN is the most cost-effective solution in a Business Spectator interview.

        It will cost $12 billion in 2010 money to build the fibre, compared to $11 billion to build FTTN to the 2007 plan before compensation to Telstra for the copper between footpath and home.

        seriously? now you’re asserting that the cost of FTTP is the SAME as FTTN?

        • And what would Telstra (or CanCo that we magically will into existence upon Telstra) do with the 4.7 billion dollars they would be paid to develop an FTTN network?

          Telstra have said they would build a FTTP network to cherry picked regions and overbuild the FTTN.

          Final outcome: 75% of australia get slightly better out of date FTTN
          Cherry picked neighborhoods (ie Cable areas is that 30%?) get FTTP and FTTN.

          Thats a great outcome! Only costs the government 5 billion dollars on the budget!

  11. Why on earth are people still asking GOVERNMENT for internet access?? Why not make mobile communication state run too? What’s the difference?

    • We only have one national fixed line network. HFC will be ignored entirely for this comparison. Not a national network so not a part of any valid comparison. That and the largest HFC network is owned by the same company as the CAN, so infrastructural competition it aint.

      In comparison we have three competing mobile networks in Telstra, Optus and VHA. Whilst nationalising the mobile comms would be a good idea, it is unnecessary when there is actually infrastructure based competition on a national level. I would, however, support government intervention if optus or VHA were to cease to exist. We really need a minimum of 3 mobile networks.

      We don’t have that for the copper. In my opinion, we don’t have the population for more than one national fixed line network. Said network will be a monopoly in the majority of australia. Add to this the way private enterprise operates when offered a monopoly and I can easily say that the fixed line network should NEVER be privately owned. Retail on the other hand, has no reason to be IN government hands. (I can haz ban on Australia Post retailing on the NBN?)

    • I do believe it was the Victorian Libs in their submission into one of the recent communications reveiws who suggested

      The government should come up with a plan for a Broadband Network

      Should fix mobile blackspots in regional areas.

      So at least someone thinks the Government should step into the Mobile market too. That champion of the free market the Victorian Liberal Party.

      Personally i say as the big 3 Mobile networks to do it.

    • “Why on earth are people still asking GOVERNMENT for internet access??”

      No one is asking the government for internet access. We are asking the government to provide upgraded communications infrastructure which can be used by ISPs to provide internet access.

      • It’s the same difference, without the government investing you would not have upgraded internet access…

        Btw, I’m not defending the coalitions lack of policy, but Conjob asking the coalition to be more forthcoming re: policies is an extreme case of the pot calling the kettle black ffs…

        Srsly, how many times have people tried to get info out of Conjob re: NBN Mk I and II (and filtering) and he’s been completely non responsive or delayed the release till long after it would have been useful? Shouldn’t we expect both parties to be transparent about their policies?

        • “It’s the same difference”

          Except it’s not. The government is not an ISP they build the infrastructure which ISPs use. This is really not that hard to understand.

        • Absolutely. but just because Conroy has been fobbing people off when asked the question doesnt mean that questions cant be asked of the Opposition as well. we certainly should expect a lot more transparency from both sides of parliament and for my part would be impressed if it was forthcoming from the Liberal party regarding this policy of theirs. i’ll be honest tho – im not holding my breath.

    • “Why on earth are people still asking GOVERNMENT for internet access?? Why not make mobile communication state run too? What’s the difference?”

      The difference is that mobile does not require infrastructure on the customer’s premises.

      Households also want only one water supply, electricity grid connection, gas line and street.

      These are natural monopolies, Eric. Like all of these, delivering fixed broadband beyond a certain footprint costs much more, so government must either do it or pay for it.

      The NBN is a brilliant project, delivering permanent all-purpose fibre to 93 percent of Australians, leaving only a million-odd relying on inferior service. In fifteen years, leaving it to corporations as Turnbull proposes has seen only 65% with a service, and an average bandwdith of under 3 Mbps and peanuts upstream. That’s 7 million with nothing, and almost all the remaining users with pitiful upstream bandwidth, all of which goes away for fifty years if you lay fibre once.

      The coalition needs to catch up or risk another hung result from an unloseable election like we saw in 2010.

      • In fifteen years, leaving it to corporations as Turnbull proposes has seen only 65% with a service, and an average bandwdith of under 3 Mbps and peanuts upstream. That’s 7 million with nothing

        as the ABS IT in Household Survey has shown, broadband penetration is ~65% as you state, but not because of the lack of availability of ADSL. instead, consumers cited “affordability” and “lack of interest” as the main reasons for not subscribing to broadband.

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