“Simply wrong”: Hackett attacks NBN HFC critics

1. This explanation by Simon if anything, turns me more against the Liberal NBN plan. Not only are they going to spend money purchasing an obsolete and rotting network, they are going to pour additional funds into remediating and upgrading it? Pouring billions into a dead-end network is absolute madness.

   • “Pouring billions into a dead-end network is absolute madness.”

     +1

     This reminds me of people who spend hundreds of dollars on a fantastic new graphics card, not realising that their system doesn’t have the CPU power to keep up with it.

     • But Renai, don’t you know that the only thing a good gaming computer needs is a top of the line video card? Who needs fast disk access or a fast CPU? I mean that only makes the computer more usable in general and only gives a couple more FPS. What a complete waste!

       I don’t disagree with the points he makes in regards to HFC. As has been mentioned, it seems fairly strange to pour huge amounts of money into something that the company doesn’t own.Perhaps they’re planning on leasing it?

       • A possibly better analogy would be someone buying the latest Video Game card and rig…

         And running it on a 36bit XP or Windows 95.

         You can have all this memory and processing power but you can’t use it if what your using to run it is gimped =P

       • No there’s always the issue with CPU bottleneck in gaming though with the current generation of CPUs, it hasn’t really been a big issue.

         Back in the Core 2 Duo days, I had to overclock my E6400 to get my GPU fully used.

     • You guys mean the HFC or the PSTN copper network? :)

       • HFC, if you read the article

     • I’m actually with Simon on this one. FTTP would have been ideal. But the reality is it is not going to happen anytime soon. That is how the dice have rolled.

       If they have to pay (which they will) telstra a bunch of cash (pretty sure telstra are where ever optus are) but save money over all to get the HFC network, and then be able to use that to bump 3 odd million over to NBN, that can only be good for NBNCo in the long run. This thing needs to start picking up wins!

       Whether they can get it from telstra at a decent price is the only real problem.

     • This is a bit like putting a new engine into an old car. You can do it to replace a tired out old motor, but as any serious fleet owner knows, it’s a stupid idea. The maintenance costs and number of issues contine to escalate. It’s usually cheaper long term to buy new, and get years of pain free running.

     • A better analogy is buying a top of the line video card for $1000, and installing it in the computer that you borrowed/rented from your friend. When the friend puts the rent up, what do you do with the video card?

   • Exactly! Why spend a bucketload of money bringing HFC up to speed, and to open it up to more customers, for such marginal real-world benefits? And as we’ve all gone over a thousand times, how the hell do NBNCo get access to closed HFC networks? (even if they can – that will presumably be another giant access cost which hasn’t being factored into the rollout).

     I respect Hackett greatly, and I’m glad he’s on the board, but his response has done little to persuade me that everyone in an HFC area isn’t being shafted.

2. let’s avoid the gonksi backflip grammar nonsense, that should be plural

   “Pouring billions into three dead-end networks is absolute madness.”

3. How are they going to reduce the contention ratio of the HFC? Surely the contention ratio is a factor of how many people are using the same cable. Are they proposing digging up each HFC cable and replacing it with several HFC cables? Surely if they’re going to dig it all up it would make sense to put fibre down instead?

   • Nothing so stupid; they are planning to increase the number of users on it first.

   • Dave
     Posted 14/12/2013 at 10:43 pm | Permalink | Reply

     How are they going to reduce the contention ratio of the HFC?

     Adding more hfc nodes along the line and upgrade the systems um software for lack of a better word. Adding nodes along the lines essentially splits the users into less users per line easing congestion

     upgrading the system to 3.0 (i wouldn’t know but i did read 3.0 was already used) and eventually 3.1 will up the upload speeds and most likely help with congestion somewhat.

     Dont get me wrong, not defending the idea but of all the scenarios i like n#4 the best. Makes sense to utilize the hfc whilst its there.

     But 1 must ponder, if fttp is the end goal then why bother wasting funds upgrading dead technology, hmmm the mind boggles some sometimes.

   • I suspect that will require some form of regulatory or legislative change to gain access to T$ or O$ networks. The LNP have displayed a willingness to do both to get what they want which means a visit to the High and then, Supreme Courts – which add another 24 months to the deployment at the very least.

4. I thought Simon was going to help ensure Australia gets the internet infrastructure it needs not help sell LNP’s plan to waste money buying Telstra and Optus’s vastly inferior infrastructure.

   The only real plan that makes sense to me is a one stage build where we build across the nation FTTP and FTTB (for flats) with ease of upgrading to 1gb and further in future and open to all Isps to ensure competition on value.

   I also don’t understand why companies (KPMG, Ernst and young) that reviewed the review that was leaked from the blue book, speak out. With the Government saying they don’t/believe trust the figures in the documents theses companies reviewed, they are questioning these companies professional competency (these are two of Australia’s [and internationally) best firms).

   I also don’t understand how people can argue that the figures of the Turnbull review are more accurate than a report that has been reviewed by the treasury and two of Australia’s best firms.

   • I would assume that new flats could easily be connected to FttP if they’re built with fibre instead of copper.

     • i would assume so too, however i was speaking for flats already built.

   • The larger “ticket price” of Scenario 1 is based on a few, largely arbitrary, justifications:

     1) Larger contingency of 20% instead of 10% – this is entirely arbitrary. For some reason, there isn’t an even larger contingency for Scenario 6 (which includes FTTN and HFC, which are significantly less predictable) as you would expect.

     2) Much lower revenues, due to much reduced overall uptake, and much slower uptake (partially due to the 3 year rollout delay), and much reduced overall uptake of higher grade services (a lower average speed), and unaccounted for, umm, “special” services for lack of a better word (e.g. multicast). It also assumes that there will be little to no difference in the usage of a Scenario 1 all-Fibre network and a much lower level of service Scenario 6 mixed-technology network, which sounds absurd to me.

     3) Much larger Capex, based on the 3 year rollout delay (much of it because you have to pay contractors for 3 years longer).

     4) Significantly larger Opex, also based on the 3 year rollout delay (much of it because you have to pay staff for 3 years longer).

     5) The savings in rollout costs and time already alluded to by NBN Co management prior to the election are not included in Scenario 1. These savings are instead included in Scenario 2 (with the review effectively claiming credit).

     6) The cost of inevitable upgrades to the infrastructure (eventually to FTTP) is not included in the “ticket prices” of Scenarios 3 through 6.

     • “The larger “ticket price” of Scenario 1 is based on a few, largely arbitrary, justifications:
       1) Larger contingency of 20% instead of 10%”

       Hi Relim , Scenario 1 has a 10% contingency. With a 20% contingency, Scenario 1 would be $78bn. Infrastructure upgrades are included in the Scenario 6 upgrade paths.

       P.S. FTTP is dead, flogging a dead horse won’t bring it to life.

       • “FTTP is dead, flogging a dead horse won’t bring it to life.”

         Sadly, you’re right.

         I hate to be that guy, but, I guess we’ve gotta re-elect Labor again.

       • Ah, you’re right about the contingency. I must have misread it.

         You are wrong, however, about the upgrade cost being included in the comparison.

         The rest still holds.

         In any case, I believe that a more valid comparison is Scenario 2 (and perhaps Scenario 4) compared to Scenario 6. Even that is not quite accurate.

         The comparison that should be made is Scenario 2 (FTTP rolled out now) and Scenario 6 (MTM now, FTTP complete by 2040, assuming the last upgrades begin in 2033 and can be completed by then), at the year 2040. That would be comparing the same outcome at different price points – and that is the only thing that might justify not building FTTP out now.

5. It seems Simon has backed himself into a corner.

   I am normally very supportive of his opinions but he is essentially playing the “I’m right and you’re all wrong” card. I don’t agree with him on this one and I think you have hit the nail on the head Renai.

   It’s time to ditch all the crap, politics and ego’s and realise the right thing to do for the future is to “stop fucking around trying to upgrade the technology of yesterday and get started on deploying the technology of tomorrow.”

6. God, I’m so sick of this crap!

   1/- Cost of the Labour NBN version?

   2/- Cost of the current version?
   Include $? for purchase of HFC.
   Include $? for upgrading copper lines involved.(pffftt, 5% need fixing, bullshit!)

   3/- Cost of upgrading to FTTP later(at todays value will do)?

   Even an uneducated twit with a beer coaster would know that 2+3 > 1.

   I personally don’t ‘think’ that I’ll see any benefit from the NBN, but I wouldn’t bet on it.

   I wish these idiots would stop jerking around and build the bloody FTTP that my kids and their kids will need.

   • “1/- Cost of the Labour NBN version?” $73bn

     “2/- Cost of the current version?” $41bn
     “Include $? for purchase of HFC”.Say $2bn
     “Include $? for upgrading copper lines involved.(pffftt, 5% need fixing, bullshit!)”
     Included Pg 86, but let’s add another $2bn
     So cost of MTM = 41+2+2=$45bn

     “3/- Cost of upgrading to FTTP later(at todays value will do)?”
     $20.4bn @ $2400 per premise (overseas $1,100-1,300 per premise, NBN actual cost to date: $2400 per premise)

     “Even an uneducated twit with a beer coaster would know that 2+3 > 1.”
     2+3 = $45bn+$20.4bn = $65.4bn < $73bn

     Now add the time value of money of the $73bn-41bn = $32bn saved
     $32bn deposit @8% interest for 10 years = $71bn

     So, 2+3-time value of $32bn saved = $45bn+$20.4bn-$71bn = $5.6bn < $73bn

     i.e. the beer coaster shows that building MTM now and upgrading to FTTP after 10 years is $67.4bn cheaper than building Labour's NBN now.

     • Let’s use the back of the beer coaster to do the same exercise on Scenario 2 – Radically redesigned FTTP

       “1/- Cost of the Radically redesigned FTTP?” $64bn

       “2/- Cost of the current version?” $41bn
       “Include $? for purchase of HFC”.Say $2bn
       “Include $? for upgrading copper lines involved.(pffftt, 5% need fixing, bullshit!)”
       Included Pg 86, but let’s add another $2bn
       So cost of MTM = 41+2+2=$45bn

       “3/- Cost of upgrading to FTTP later(at todays value will do)?”
       $20.4bn @ $2400 per premise (overseas $1,100-1,300 per premise, NBN actual cost to date: $2400 per premise)

       “Even an uneducated twit with a beer coaster would know that 2+3 > 1.”
       2+3 = $45bn+$20.4bn = $65.4bn > $64bn

       Now add the time value of money of the $64bn-41bn = $23bn saved
       $23bn deposit @8% interest for 10 years = $51bn

       So, 2+3-time value of $23bn saved = $45bn+$20.4bn-$51bn = $14.4bn < $64bn
       i.e. the beer coaster shows that building MTM now and upgrading to FTTP after 10 years is $50bn cheaper than building Radically redesigned FTTP now.

   • Scenario 3 contains the much-hated FTTN.
     So let’s use another beer coaster to do the same exercise on the lesser-loved Scenario 4: HFC in HFC Footprint i.e. HFC in HFC Footprint now, upgrade to Radically redesigned FTTP later.

     1/- Cost of the Radically redesigned FTTP?” $64bn

     “2/- Cost of the HFC in HFC Footprint version?” $51bn
     “Include $? for purchase of HFC”.Say $2bn
     “Include $? for upgrading copper lines involved.(pffftt, 5% need fixing, bullshit!)”
     Included Pg 86, but let’s add another $2bn
     So cost of HFC in HFC Footprint = 41+2+2=$55bn

     “3/- Cost of upgrading to FTTP later(at todays value will do)?”
     $7.9bn @ $2400 per premise (overseas $1,100-1,300 per premise, NBN actual cost to date: $2400 per premise)

     “Even an uneducated twit with a beer coaster would know that 2+3 > 1.”
     2+3 = $55bn+$7.9bn = $62.9bn < $64bn

     Now add the time value of money of the $64bn-51bn = $13bn saved
     $13bn deposit @8% interest for 10 years = $28bn

     So, 2+3-time value of $13bn saved = $55bn+$7.9bn-$28bn = $34.9bn < $64bn

     i.e. the beer coaster shows that building HFC in HFC Footprint now and upgrading to Radically redesigned FTTP after 10 years is $29bn cheaper than building Radically redesigned FTTP now.

     • Steve, how come it will cost NBNMk2 74B to fo FTTP yet next to nothing for the Fraudband to make that jump from copper to fibre?? Dodgy numbers…if it’s going to cost 74billion for 1 to roll out fttp it will cost 74b for the other to roll out fttp…though the actual costed value of course works out much cheaper, just put in all the negative situations you can and voila 74billion…

       • “Steve, how come it will cost NBNMk2 74B to fo FTTP yet next to nothing for the Fraudband to make that jump from copper to fibre??”

         Because you’re not making a quantum leap from copper to fibre. With MTM fibre is rolled out to the last mile (the transit network, the backhaul, the exchanges, exchanges to nodes/buildings will all be fibre). And even 26% of the last mile will be fibre, the only copper will be last-mile to ~30% premises, the remaining 44% last-mile will be FTTB and HFC. So the upgrade primarily consists of rolling out last-mile fibre to overbuild the 30% copper, 30% HFC and ~14% FTTB. 8.2m times $2400 = $20.4bn, not next to nothing, half the 44bn in NBN Mk1. And the $2400 per premise is the actual NBNMk1 cost.

         “if it’s going to cost 74billion for 1 to roll out fttp it will cost 74b for the other to roll out fttp…”
         You mean the 26% last-mile fibre in MTM should be ripped out and redone, just for the heck of it? And so should the fibre transit network, the backhaul, the exchanges, the fibre from exchanges to buildings/nodes/distribution points?

         “though the actual costed value of course works out much cheaper, just put in all the negative situations you can and voila 74billion…”
         Well, if the actual costed value works out much cheaper, then so will the upgrade.

         • Mate, if you truly think that the cost per premises will remain at $2400 in the future, you’re completely insane. The highest cost in the rollout is the labour involved right? With inflation, that will increase the costs of the labour as their wages increase naturally. So, while it is currently that much it will not cost that in 17 years when they finally do the FTTP upgrade.

           What do those of us stuck on the copper or HFC do in the mean time when we are on even a possibly 50mbit when those on the fibre portion are on 1gbs or possibly higher? Creating an artificial digital divide on PURPOSE, that thing that we have been battling against for the past decade, is completely moronic.

           Before you start commenting about G.fast and any other possible mythical FTTN upgrade schemes, it has produced great speeds, in the lab. Where they can have very very short, very high quality copper. Much shorter than will be in our FTTN rollout, and of a much higher base quality (they usually use with Cat5E or Cat6 in these tests)

         • “Mate, if you truly think that the cost per premises will remain at $2400 in the future, you’re completely insane. The highest cost in the rollout is the labour involved right? With inflation, that will increase the costs of the labour as their wages increase naturally. So, while it is currently that much it will not cost that in 17 years when they finally do the FTTP upgrade.”

           Okay, 3% inflation+3% real wages (6% wages growth) makes $2,400 into $4,367 in 10 years or $5,890 in 15 years.

           The cost of the upgrade becomes $37m in 10 years and $48m in 15 years. So the Savings from building MTM now and upgrading to Radically Redesigned FTTP in 10 years vs. building Labor’s NBN now becomes $50.8bn in 10 years and $75bn in 15 years.

           “What do those of us stuck on the copper or HFC do in the mean time when we are on even a possibly 50mbit when those on the fibre portion are on 1gbs or possibly higher Creating an artificial digital divide on PURPOSE, that thing that we have been battling against for the past decade, is completely moronic.?”
           1. We could restrict fibre plans >100Mbps to businesses
           2. The great majority are currently on <4.8Mbps. There has been a massive digital divide for the past 10 years. FTTP will extend that digital divide for another 12 years.
           3. What do the majority stuck on <4.8Mbps do for the next 12 years while this 1Gbps utopia is built when all we need is 8-12Mbps?
           4. So here's an idea. To be fair, let's immediately restrict all current speeds to 4.8Mbps until 2024 so that the FTTP zealots can experience our pain while the FTTP is being built. Fair enough? That gets rid of the past decade's digital divide and when FTTP is ready everyone will have 1Gbps and we can all live happily.
           5. What is completely moronic is to to extend the digital divide of the past decade another 12 years when the needs of 99.99% of households for the next decade can be met in 3-5 years.

         • Lol, your creative accounting is so fricking funny.

           Did you go to the school of eleventy? :)

         • “Lol, your creative accounting is so fricking funny.”

           Lol, yes, certainly was a lot of creative accounting in the NBN Corporate Plans.

           “Section 2 NBN Co performance to date and a revised outlook” of the NBN Strategic Review is a Rofl read..

         • Yes, I’ve read the review. You might find it funny, and it is certainly full of dodgey figures, it’s about as funny as kicking puppies.

           Your calculations are so absurd, and since they are obviously so, and won’t cost us billions like Turnbull’s, they can be considered funny.

   • To summarise:

     1. The beer coaster shows that building MTM now and upgrading to Radically Redesigned FTTP after 10 years is $67.4bn cheaper than building Labour’s NBN now.

     2. The back of the beer coaster shows that building MTM now and upgrading to Radically Redesigned FTTP after 10 years is $50bn cheaper than building Radically redesigned FTTP now.

     3. The other beer coaster shows that building HFC in HFC Footprint now and upgrading to Radically redesigned FTTP after 10 years is $29bn cheaper than building Radically redesigned FTTP now.

     P.S.
     4. Another beer coaster shows that building MTM now and upgrading to Radically Redesigned FTTP after 15 years is $102.4bn cheaper than building Labour’s NBN now.

     5. The back of the beer coaster shows that building MTM now and upgrading to Radically Redesigned FTTP after 15 years is $75bn cheaper than building Radically redesigned FTTP now.

     6. Another beer coaster shows that building HFC in HFC Footprint now and upgrading to Radically redesigned FTTP after 10 years is $44bn cheaper than building Radically redesigned FTTP now.

     • Morning steve still desperately reminiscing and cherry-picking some figures and avoiding others to try to hide the current govt’s failed before it started plan and use the info to fit your preferred political outcome rather than viewing the info and then forming a position, I see? Nothing like dedication to the cause eh?

       So, the back of a coaster “figures/facts” you are trying to deflect from, which show your chosen preferential Comms Manager/Minister – Malcolm Turnbull to be either completely incompetent or a liar…

       Turnbull said his plan would cost 1/3 of the previous mobs plan. WRONG according to his hand-picked yes men/NBNCo 2.

       MT “over” quoted (surprise surprise) FttP as being $94 at best (at worst up to $120B iirc). WRONG according to NBNCo 1 and his hand-picked yes men/NBNCo 2.

       He “under” quoted (surprise surprise) FttN as being $29.5B. WRONG according to his hand-picked yes men, NBNCo 2

       MT was out by as much as $75.5B on FttP and $11.5B even on his own ‘fully costed’ policy FFS… So just miscalculation all round, of up to $87B.

       And he missed his promised review target date…!

       :/ Amazing

       • Hi Alex,

         You seem to have missed the point of Steves post.

         What figures do you propose to use in place of Steves which show that FTTP is cheaper than MTM?

         What is their source?

         Just slinging mud at MT doesn’t effect the numbers, perhaps you should try not being a douche?

         Regards,

         Your social betters ;)

         • Wow social better…ROFL…

           I’m guessing the hypocrisy of your own pointless comment in calling someone a douche and then claiming to be a social better has eluded ones obviously limited intelligence?

           Also, having seen steve in action doing nothing but mud sling at the previous govt and NBNCo is also hypocrisy, I bet has eluded you?

           I agree with Renai’s article here…
           http://delimiter.com.au/2013/12/12/please-accept-apologies-wrong-turnbull/

           And also his summation…

           “More than anything else, I am going to continue to push for better broadband in Australia. Like so many of you, I am tired of the substandard solutions out there and of Australia being a broadband backwater. We have the money, we have the technical skill and we have the need. As a country, this is a problem we should be able to solve.”

           If you and steve want to keep plucking bullshit figures to bag the previous roll out and ignore points such as I alluded to, in relation to our current comms ministers absloute fuck-up and then defend him religiously all to fullfil your prescribed outcome, then please continue… but don’t sob when people can see what you are all about and why…

           :/ Amazing

     • Good analysis, only thing is that it somewhat misses the point in that the two outcomes (MTM vs FTTP) are radically different.

       If you use the outcome ‘Megabit speed with easy upgrade to gigabit’ then FTTP or FTTN are the only choice as its the only one which provides that.

       If you use the outcome ‘Greater than 4.8Mbs for 90% of Australians’ then your analysis is relevant.

       Thanks, interesting numbers.

       • “Good analysis, only thing is that it somewhat misses the point in that the two outcomes (MTM vs FTTP) are radically different.”
         Thanks. Actually the outcomes of both are the same i.e. FTTP. The difference is between FTTP in 2024 or FTTP in 2030 for the 10-year upgrade. For the 15-year upgrade the difference is between FTTP in 2024 or FTTP in 2035.

         “If you use the outcome ‘Megabit speed with easy upgrade to gigabit’ then FTTP or FTTN are the only choice as its the only one which provides that.”
         The technologies in MTM are all capable of being upgraded to 250Mbps on current technology alone, let alone advances in the next decade. And let’s not forget wireless.
         In any case these are supply side outcomes. What about demand? Businesses will be covered by fibre in all scenarios, which leaves only household demand. Maximum demand in a median UK household is currently 8Mbps and is forecast to be 19Mbps in 2023. 2023 demand in the top 1% of households with 3 HD TVs and a 4K TV will be 40Mbps. So household demand for >50Mbps will be <1% in 2023. This is supported by the fact that take-up rates for high speed broadband is ~30% in countries where it is widely available and just 11% choose 50Mbps plans. 11% of 30% is 3.3% i.e. just 3.3% of the population choose >50Mbps plans.
         .
         So the outcomes on the demand side are also the same. Both MTM now and upgrade to FTTP whenever, or FTTP now has the same outcome on both the demand and supply sides.

         Which means the only differences are the cost and the risk. And that is huge.

7. “let’s stop fucking around trying to upgrade the technology of yesterday and get started on deploying the technology of tomorrow.”

   AMEN.

   • Amen!

   • +1

8. My personal response to Simon’s article is posted over at the whirlpool forums: http://whrl.pl/RdNQCm . I don’t want to double up or take up too much space, but I wanted to show my particular reasons for doubting this new coalition NBN plan as a current Telstra HFC subscriber.

   Basically, I’m concerned that costs for me on the new HFC network will not be the same or cheaper than they are now. I’m concerned that my currently enjoyed 100Mb/s speeds will drop due to congestion and that I haven’t seen any information about whether we will still need to pay line rental on copper to maintain a broadband connection and landline.

   Check it out if if you like and let me know if you feel there are any questions that need to be added.

9. :-)
   I wonder why Simon hasn’t allowed comments on his article?

   Too much ‘feedback’ from the pesky people?
   After all they are ONLY the bloody customers AND the ones that’ll be footing the bill, how dare they actually want a say!

   Hope Abbott does call a double dissolution over the carbon tax. I think Australia might show him and Turnbull about ‘mandates’.

   • Probably because iiNet’s interim CEO posted support for the Coalition’s review and got ripped a new one in the comments :)

10. (It’s time to ditch all the crap, politics and ego’s and realise the right thing to do for the future is to “stop fucking around trying to upgrade the technology of yesterday and get started on deploying the technology of tomorrow.”)

    +1 agree, good article Renai

11. Seamless migrations are 10x more complicated than building a parallel infrastructure and switching over/decommissioning.

    If NBNCo buys the copper and hfc networks it will have a heck of a time reconfiguring them from what they are, to what they need to be, without disrupting the existing users.

    The poor buggers will have to interact with Telstra & Optus I.T departments: I pity them.

    • I couldn’t comment on his blog (which I just read) but I would also like to thank Simon for (as always) publicly engaging on these issues.

      I was happy for his appointment because I knew he would drive issues near to the hearts of many (e.g. Upload speed), but I had expected the role to result in a gag on his public messaging, which to his credit it so far hasn’t.

      I really appreciate getting perspective and clarification from him on the inside rather than through the mouths of politicians, even if I still have concerns.

12. You sold out Simon, shame

13. If they can upgrade the HFC to something like 120/40 for a reasonable amount (ie half the time+money of FTTP) then go for it. MDUs can get copper based FTTN at the same speed or more. IMHO any FTTN using copper that can get wet (Telstra pit) is dumb.

    • One question I have on that is that Simon makes clear that 100% of premises in the hfc footprint (well, excluding mdu) will be given broadband ready leadins, but does that imply actually replacing a phone only pots service with voice over cable? I.e. Will the copper be decommissioned?

      Because that would involve a _far_ more costly house visit, and possibly a second one 5 years later if we get FTTP (who am I kidding), for someone who doesn’t care (hi nan!)

      But if not, they’ll be running/maintaining two networks?

14. The HFC is a non critical network. It was never designed as a critical network, Telstra priority for HFC is much lower than the CAN. Redundancy and power isn’t even of the same standard. Telstra doesn’t even offer enterprise or business connections, let alone would allow medical monitoring devices on the network. The HFC suffers so many problems in their joins it is not funny. The amount of gear Telstra has for it’s cable network versus the CAN is like 5% to 95%.

    Engineering wise, it’s against physics, against economics.

    A pipe dream not a reality

15. Does anyone else find it tragically hilarious that after all this time, after all this debate about FTTN versus FTTP, after all the shit we’ve been through over the past decade on this issue, that the apparent “answer” to 1/3 of Australians’ broadband issues is to “extend and fix the HFC”?

    It just beggars belief.

    We are about to go down as the only country in history that had a national FTTP plan, fully funded, with the network and construction contracts in place, one that was delivering (if very late).

    And then we abandoned it. For HFC.

    Think about that for a second. And then ask yourself how stupid the rest of the world thinks we are right now.

    So now we’re supposed to be debating whether HFC is the solution or not. Well, fuck that for a joke. Anyone who’s lived through the past 13 years of getting Telstra to wholesale ADSL can see how successful wholesaling HFC is going to be. And as for Optus … don’t even get me started.

    • IMO, It’s a very pertinent point Renai.

      I’ve mentioned it previously that reversing from FttP which is underway, to an inferior network (which at the time was primarily FttN) especially when the govt costs are almost the same (going by previous estimations also at the time)… is really dumb…!

      It’s no smarter now…!

    • Agreed Renai. There are really only two possible reasons for this:

      1) The people on the NBN Board are completely retarded.

      2) Turnbull/Abbott do, in fact, NOT want to go ahead with an NBN.

      Re #2 – If I wanted to kill it, I suppose coming up with a nice FTTN plan that was “cheaper and faster” to get me into govrnment – sounds like a plan.

      Then I’d, of course, do a review. If the review happened to come out saying that my plan wasn’t really feasible… well, I’d just blame the previous gov. and ensure the people were told that their plan was going to waaaay more expensive.

      Even with all of that, I probably couldn’t kill it directly… the people might have too much to say if I did that.. so what could I do?

      Hmm.. I know – the ‘new plan’ would be so convoluted, such a mess of options, that THE PEOPLE would beg me not to actually do it.

      Well, if I acquiese to their wishes… they can hardly blame ME then, can they?

      ..and if they are happy to go with the ‘new plan’… I guess you’d say that’s ‘win-win’.

      Yes, it appears that the coalition has – possibly by design, possibly by happy accident – given us a Morton’s Fork.

      Either we go with what they now say and end up with a horrible mix of technologies, with every other australian getting different speed, reliability and service… or we tell them to stop the whole thing and stay on our current mix of different speed, reliability and service.

    • And those upgrades (VDSL vectoring, DOCSIS 3.1) are GAMBLES. We don’t know how well, or even IF, they will work in the networks they need to.

      If we spend $44.1bn, plus costs of acquiring the HFC and PSTN networks, and those tech upgrades do NOT deliver the theoretical benefits in real world implementations?

      That would be a true squandering of time and money. We know FTTP works. It is much lower risk.

    • Why wouldn’t you get DOCSIS 3.0 (then 3.1) up and running (for people in the HFC areas that have no lead-in) now, whilst you work in parallel to get the fibre infrastructure into the regional areas that need it more? From there, it’s not a big leap to FTTP.

16. Looks like Simon has drank the koolaid.

    Let’s upgrade Australia to technology that was surpassed a decade or two ago. FFS. Do it once, do it properly. FTPP.

    In 50 years people will look back and there will be case studies about the gigantic stuff up and wasteful blunder that people like Simon Hackett were part of.

17. A paid for mouthpiece of NBNCo (that’s now been instructed to push the LNP barrow) you can hardly expect impartial thinking.

18. The other thing I find hilarious is that NBN Co and Turnbull are trying to claim that buying the HFC cable networks from Telstra and Optus, upgrading them and wholesaling them, can be called a portion of a “National Broadband Network”. This is not a NBN. It is a “HFC cable network upgrade”. NBN globally is understood to involve … fibre. Funny, that.

    I imagine, after all this time, that some of the wise heads at Telstra and Optus are also quite amused that anyone would want to buy the HFC cable networks … which have been going nowhere for quite some time now due to the rise of ADSL …

    But what am I saying — I shouldn’t try and apply rationality to the NBN debate. That would be pointless.

    • Well, Malcolm has been hinting at it for a while. I think we put it down to him just, you know, spitballing a bunch of different technologies he doesn’t really have any clue about that maybe might meet some download speed requirements, at least nominally. Who would have thought he’d actually do it? I’m somewhat surprised that 4G isn’t part of the new “NBN”.

      • “I’m somewhat surprised that 4G isn’t part of the new “NBN”.”

        I’m actually surprised they haven’t tried to buy Telstra’s 4G network and call it the “NBN” yet.

        God knows they’ve tried to buy everything else off Telstra. You know. The company they sold off just a few years back.

        *sigh*

    • What i find funny, is that according to this article: http://www.theaustralian.com.au/technology/telstra-completes-hfc-upgrade/story-e6frgakx-1225799820093

      Which is from November 2009, it cost Telstra just under $300m to upgrade the HFC in Melbourne, and only Melbourne.

      That suggests that upgrading the HFC is not a cheap thing, buying it likely isn’t going to be cheap, etc…

      They just keep pouring more salt on the wounds and shoving their heads deeper into the ground singing lalalalalala hoping it will all go away, hoping the scary monster will forget about them.

    • National Broadband Network. Think about that for a while.

      Crying that you don’t get fibre, when there are people out there with no or poor internet…

      • hey mate,

        at the moment I am suspecting more and more that you are a troll. Try to prove me wrong, will you?

        Cheers,

        Renai

19. Someone needs to see this ad from the 90s: http://www.youtube.com/watch?v=u1fCgca9ZNk
    Is this what we can expect, when everyone migrates to the NBN HFC network?

    • Hahaha, that’s great. Someone needs to tweet that at Simon.

    • lol those ads are hilarious. They pop up every now and then when politicians mention the word “HFC” :)

    • Actually the tragedy here is…

      That happens even on ADSL =P. My whole area was like that for about… 2-4 years about a few years back because Telstra’s solution to the congestion was… wait for it..

      “Cap the speeds during peak hours due to the exchange being full”

      Never mind it actually took them 2 weeks tops for a Top Hat upgrade and opening up ports when the NBN was anounced….

20. Sigh.

    Anyway, apparently Simon has given a guarantee that HFC will provide very, very similar levels of service as FTTP. ;)

    Good luck with that.

    On the same topic, I wanted to ask Simon:
    1. How much cheaper is purchasing/leasing HFC access*** and doing fill-ins, remedial work, upgrades, etc. than simply deploying FTTP?
    2. Is the price of HFC access included in the capex or opex?
    3. What year will we need to replace HFC with FTTP, and how much will it cost to deploy FTTP then?

    *** According to the revenue figures in the SR, I don’t think it will be about making HFC open access (i.e. Telstra/Optus are forced to open their network to retail competitors, and get revenues from customers through those competitors), unless I misunderstand the meaning of open access. Otherwise Scenario 6 in the SR would have significantly smaller revenues than Scenarios 1 and 2, as that’s 30% of customers not paying NBN Co.

    P.S. Renai working on the weekend?

    • According to the review
      they will be doing an upgrade at 2025 to g.fast and HFC 3.1 (cant remember what it is called)
      then at 2030 they will start up grading fttn and hfc to fttp

      but atleast we will know now we will be 17 years behind the rest of the world

21. How do they think telstra and Optus are going to give there stuff
    For nothing.

    Telstra has 1/3 of pop on copper to ransome and half a 1/3 on HFC and Optus on half a 1/3 on HFC

22. Time to top up those Telstra shares

    • +1 my thoughts too…

      They really seem to be in the box seat… again :(

    • Maybe, but the market has TLS shares trending downwards all week and a consistent trend for some time. So if the Market is a clearing house of perceptions, then they don’t see a lot in this for Telstra.

      NWS on the other hand has spiked against recent trends but consistent with longer term trends – can’t be sure that this is related to the NBN of course..

23. Godfather Abbott and Turnbull have a favour to re-pay Uncle Rupert for his support in getting LNP elected.

    What better way to do that that use TAXPAYER funds to buy or pay for upgrade to his Foxtell HFC.

    That is why FTTP is not on the table ..there would be no use for uncle Rupert’s assets and he would be suck with a useless HFC if people were given a chance to get FTTP.

    This is Treason and a betrayal of their oath of office…they are not acting in the Nation’s interest but they seek to advantage Uncle Rupert’s interests.

24. Well, I think I’d rather see HFC upgraded if it’s cheaper to buy it and upgrade it than run FTTN. I don’t like how Simon tries to brush off the contention by saying FTTH has contention too. It’s in an entirely different league, at absolute worst case, provided your problem isn’t ISP backhaul/CVC congestion you only slow to around 80Mb. HFC can be far worse, and that’s at a lower take up rate. I think the less money wasted before it becomes so blindingly obvious that no one can pretend demand will plateau at 50Mb the better, then the long term solution can be rolled out.

    There is one issue I’d like to hear about with MDUs, groups of 2-12 dwellings. Too small to justify FTTB, no where to put it. Many have individual phone lines and cannot get HFC.

    • “Well, I think I’d rather see HFC upgraded if it’s cheaper to buy it and upgrade it than run FTTN.”

      Try living in a suburb that has HFC and lousy ADSL (so bad I run it using G-dmt) and wanting a business connection (with a /29 subnet for servers) that has a decent uplink (I maintain BGP routers for a hosting service) and doesn’t go ratso when it rains.

      I wish HFC would go away. I will NEVER use Fuxtel anyway.

25. Simon suggests that the HFC network will be remediated and filled in. In other words an obsolete piece of infrastructure will be refurbished and extended at a cost of billions of dollars.

    It is not clear who will own the HFC network, but it is clear where the billions will come from, NBNCo.

    I think Simon is currently caught between a rock and a hard place. Trying to salvage something from the wreckage that Turnbull is creating. Once he realises that Turnbull has no use for his ideas, I believe he and NBNCo will part ways.

    This may be sooner rather than later.

26. C’mon Renai you honestly think XDSL or a fibre>hfc node is going to fix HFC..

    Looking the delivery mediums at present pending on wholesale provider is you either resell telstra at up too 100/2mb or resell optus at up too 100/8mb..

    can hfc do better may be I don’t know given the tech is based from base-10t it boggles the mind to see if HFC can produce 300 homes with adequate speed broadband…

    my opinion doesn’t matter how much they improve XDSL reality past 100 meters you pass the limit of Cat-x cable whether you use cat-5e, cat-6 or cat-6a as the service medium as you defeat the max range the cable specification can reach..

    when total line length is measured from the pit to 1st point the 1st 50-100 meters becomes of little consequence as total length can exceed 250-500+ METERS..

    soo the question is HFC and cat-x going to be suitable given upload constraints 2-5mb (XDSL) and 2-8MB (HFC)

    it would be nice to see XDSL and HFC with 40mb upload capacity though the unknown is the cost of deploying the same crap that the yanks and the brits have been deploying for over 20 years with fibre backhaul..

    Current estimation on serviced 300 premises D/A puts a basic minimum price tag of $2.1-$2.7 million AUD to deliver a Moca or VDSL solution whether it be shoved on the PIT or physically fixed to the premises…

    Given safety policies within some states of australia regarding arerial deployment over comms and electrical, given the UPS requirement for FTTdp based hardware and power requirements physically past your property boundary line tghese solutions may not be a plausible outcome.

27. sorry Renai

    Looks like you were wrong about Hackett as well

    When you did do a write up praising turnbull selecting Hackett on the n.b.n board

    I and a few others on here were warning hackett was only there for business profit , he was never there for customer focus or to make turnbull to change his mind about labors NBN

    • “Simon, you can get that 100Mbps service today, right now. Telstra has already deployed 100Mbps to its HFC cable networks nationally, including Adelaide. Just call up Telstra and ask to get it connected. There is no need to wait for the NBN to re-badge it as an NBN service.”

      Exposes exactly how hollow Simple Simon’s HFC blurb actually is.
      Why spend $B’s to get what is available now, those who have a HFC lead-in already have a service available if they want it.

      Has Simon now applied for his Telstra HFC cable internet ?

28. The NBN fibre fans can not get over the hump that installing fibre and only charging the cheap prices NBN co want to charge as well as subsidising the wireless and satellite, is simply not viable in Australia..

    Especially in a deregulated telecommunications industry..

    • :/ Amazing

      • +1

        And this pretty much explains why we have these issues even today.

        A lot of people seem to have forgotten the original issue why the NBN was required. 20 years+ of “free market” approach on an *isolated* market w/ an *incumbent monopoly* has *FAILED*

        So instead of fixing it we’re going to go “meh lets just shove another band-aid” and hope it sitcks for another 20 years hopefully that will be someone else’s mess to pay for. Never mind that that besides just a band-aid we’re now using an expired 20 yr old band-aid that probably can’t even stick to the surface anymore =P

      • What is amazing? That a lot of people are deluding themselves and not living in the real world?

        Who wants to pay double what they pay now for internet services, just so they can get fibre?

        Just like the prices we paid under Telecom for voice services.

        The labor NBN was not viable under current prices, no one wants to believe that though because they are told by conroy it was viable. They are holding onto a dream idea.

        Fibre will be viable in some high density areas, if people want it they should move to those areas.

        • Have you been paying any attention to what’s actually been happening “here in reality” over the last few days?

          Again :/ amazing

        • Don’t know if you were aware Frank, but before all this, NBN Co. we’re reporting higher revenue than predicted for the connected households they had. And the per premises cost was dropping.

          This review gives no explanation as to why per premises costs it says are nearly twice what was reported. Yet you’d happily believe that just cause they say?? As compared to NBNCo’s actual costs, also in the review??

          • I think it’s noble of you 7T to give these people the benefit of the doubt…

            But alas, me having been here and seen them in action, IMO, no benefit is warranted…

          • I wonder why costs were blowing out and the build was heading years behind if it was all roses at the NBN. How many apartment blocks did they connect up? You failed to mention all that, just concentrated on some very small statistics.

            Don’t worry I get it, whatever conroy released was all true, and the coalition are evil and everything they say is lies.

            Give it up, your dream was just a dream and is now over…

          • No…

            It was behind (we all know why) and as these problems were being address (as clearly explained by Mike Quigley) it was heading back on track… get your facts right even once.

            Yes the dream is over (oh, you got it right once, well done) and as such we are now in total fuck-up mode, as witnessed this week and spoken about at length by Renai here at Delimiter (and others in many other articles, even MSM).

            And you are happy about that?

            And throwing the political mud at me, the one person who has said all along, they are all politicians, as you puppets naively believed MT would save us all… please!

            :/ Amazing.

          • Not the ‘one person’, Alex ;-)

          • Indeed I stand corrected….

            I should have said one of the very people :)

          • So even though the Libs lied about pretty well everything else, you take the “review” as gospel? Some might call you naive Frank…

29. The NBN fibre fans can not get over the hump that installing fibre and only charging the cheap prices NBN co want to charge as well as subsidising the wireless and satellite, is simply not viable in Australia..

    Probably what is most telling is the way anyone that goes against fibre is attacked.. All we are missing is the pitchforks, we already have the angry mob..

30. First off, I propose that Simon be made the official spokesperson for anything NBN (and in particular, that Turnbull never say another word). Simon knows how to communicate effectively. I came away from his blog post feeling considerably more informed, whereas just about everything from Turnbull or anyone else involved with the NBN has left me feeling considerably *less* informed.

    There are a lot of assumptions in use of HFC to provide NBN-level services, the major ones that I see being:

    1. Wholesale access can be negotiated (or the HFC networks can be purchased from Telstra/Optus).
    2. Ability to successfully reduce congestion.
    3. Ability to provide suitable upload speeds.
    4. HFC will scale/upgrade to needs for the next 20 years (at least 1Gbps services available).

    #2 and #3 are technology issues that can be resolved if enough money is put in. #4 could be tricky – I expect that there will be a significant number of people wanting 1Gbps services in 2033, but again this would be a technology solution (maybe with more civil works needed to further reduce congestion). #1 is the biggest sticking point IMO – I’m not even going to venture an opinion on how difficult/costly it would be.

    However, *iff* the total cost and time frame for achieving all the above, (including all remediation and FTTB for MDUs required to provide 100% coverage) is significantly less than overbuilding with FTTP (or FTTP + FTTB for MDUs) then it seems like a sensible interim step to me to get a lot of people connected to the NBN quickly with a service that will be suitable for 10-20 years (and start pulling in revenues). But everything should be done with a view to eventually overbuilding with FTTP.

    • Bah – my edit time timed out.

      I was adding that assuming this could all be done at a reasonable price it would allow more resources to concentrate on areas which only have ADSL or worse options.

      FTTB is sensible for existing MDUs which can’t have their internal wiring upgraded (or where it would be prohibitively costly).

      FTTN – putting nodes in the streets – is a truly stupid idea technologically , economically and socially and should be discarded entirely.

      • So, if the NBN leases the HFC networks off T$ and O$, how does the upgrading work get done? Do the NBN commission O$ and T$ to do the upgrades or do NBN pay for the work as part of the lease – which adds value to the capital value of the leased product?

        How does that work commercially?

        Bruce

      • HFC IS FTTN :)
        DOCSIS 3.0 is capable of >100Mbps, just depends on how many channels each modem uses.
        DOCSIS 3.1 is looking at 10Gbps down, 1-2Gbps up. Same copper, different headend and modems.

        • You’ve just demonstrated that you’re either disingenuous attempting to mislead people or you have NFI what you’re talking about. The maximum peak performance of a standard is not how it will perform in the real world over real world infrastructure. In order to be accepted as a standard it must be demonstrated yo be physically possible in a ‘best case’ controlled lab environment, but even over a 2m run of in-ground 0.4mm phone copper that’s been there for 20 years you’re not going to hit those speeds. Theoretical maximum performance is irrelevant – let’s stick to facts of what people will actually be able to use, shall we?

    • People fell gullible to a article a month or so back in the article that gave the impression to some people that hackett could be the person to save the fftp

      Which was never going to be true

      Hackett as with internode has to continue to find ways for his company and the nbn profits , more then what is good for the customer

      • In case it wasn’t obvious, I’m extremely skeptical as to the viability of HFC being able to achieve the goals stated for a cost which makes it worthwhile compared to overbuilding with FTTP.

        I did want to acknowledge Simon’s ability to communicate (esp. compared to anyone else we’ve heard from at NBNCo), and that *iff* the immense hurdles can be jumped at an acceptable cost compared to overbuilding with FTTP then it would be reasonable to do so (with the understanding that this is an interim solution and the FTTP overbuild will still need to be undertaken at some stage). Fixing the HFC does not suffer from the idiocy of putting in FTTN (e.g. the eyesore of the nodes, the extra power requirements of the nodes, etc – although presumably the additional hardware required to reduce HFC congestion would require more power than is currently used).

        One thing I would hope is that any works to install new lead-ins required to connect people to HFC would also involve either laying fibre lead-ins (not terminated anywhere, but to avoid having to come back and lay them later) or provision to easily pull fibre lead-ins at a later date.

        I would rather that the NBN be scrapped in its current state, to be restarted later by a sensible government, than FTTN be implemented.

31. Simon has committed the same mistake Turnbull has, even if Simon is genuine. He’s put all these ‘wonderful’ ideas about buying, wholesaling, upgrading & using the HFC for the NBN on paper….with nary a thought as to the actual complexity involved. I don’t expect Simon has the time nor does he want to, answer all his twitter followers, but Sortius, myself & several others have asked how it’s possible all these lead-ins that aren’t done (the lead-ins by the way he describes in the previous paragraph as being the reason FTTP is so expensive to roll out…??), buying the networks & upgrading them could possibly still be cheaper than a large scale, efficient FTTP rollout. He hasn’t answered & I don’t expect he can. Because I expect the redacted cost is pie-in-the-sky that he knows is wishful thinking.

    It doesn’t make sense that Simon should have cable connected, be talking about how wonderful it would be to have 100Mbps….and yet not use it now. Sorry Simon, but actions speak a hell of alot louder than words.

    To paraphrase Carl from the Simpson’s ‘That was a real nice world class NBN we had once….’

    *Retreats to cry in a corner quietly*

    • Dear everybody,

      256QAM at 750+ MHz is not at all an easy thing to make happen, sorry people. It’s going to be very very difficult and even if you do that, you’re pretty much at a point you’ve run out of options.

      And, no, reshuffling and kicking off FOXTEL (wtf?) is not going to do it, at all.

      And, yes, you’re going to reach a point where each connection becomes linearly more expensive.

32. Renai, I was gonna say “No DONT Recommend upgrading to Telstra’s 100Mbps Cable, its a nightmare”

    Then I realised, Hey, maybe if the guys at the top experienced the gut wrenching pain that I went through to get this “simple upgrade” (which was only meant to be a seamless switch over with a new modem), then MAYBE they might have a smidge of compassion for all the Australians who are going through far worse with constant connection drop outs, Low speeds blah blah blah on badly degraded copper networks.

    Spent HOURS on the phone to all departments at Telstra and over 3 months just to get that working, I had to go to level 3 tech support and some higher level complaints department and had to name drop the TIO, and still it was quite an imperfect connection!

    Also every time we have heavy rain here (in Suburban sydney) the Internet inexplicably (Sigh) stops working for abour 24-48 hours, Cant tell you how many technicians have come out to check the thing…

    HFC is only a little better than ADSL 2+ and its still a nightmare at the best of times.

    Apologies if this is a slightly OT rant but its just a terrible Idea to do this, and I wouldnt want other Aussies to go through this! Do not upgrade, Its a Trap!

    Also arent the HFC areas the most lucrative parts of the network? Didnt they cherry pick the Higher Income Suburbs? So wouldnt NBN FTTP make a lot more money from these areas?

    • “Also arent the HFC areas the most lucrative parts of the network? Didnt they cherry pick the Higher Income Suburbs? So wouldnt NBN FTTP make a lot more money from these areas?”

      Precisely Greg. As if the economic justification for FTTN wasn’t bad enough, you take out the highest value customers that would have supported the upper ARPU products, but you don’t remove 30% of your rollout costs, no you take the money that would have been an investment in NBN Co infrastructure and instead you gift it to private companies as a subsidy for upgrading their privately owned networks… *shakes head* I guess if you use on-budget subsidies you don’t have to worry about cash flow positive ROI for that portion of the network, cause it’s no longer part of the network.

    • I’ve had HFC in 5 premises across two states in different suburbs each time. Never have I had the issues you experience. My last residence had 2Mbps ADSL2.. which I suffered with for 2 years whilst negotiating to get HFC lead-ins completed. 100Mbps now.

      Using the PSTN is a bad idea, using the HFC is a better idea, if you can build in the redundancies and capacity you need to.

33. Unfortunately, we knew that this was going to happen, there were a number of scenarios that Liberals COULD take, but never will, because it’s mainly due to being too closer to Labor’s NBN plan AND because it’s FTTP.

    That’s why anything but Scenario #1 (?) I think it was the only option for Coalition Party. Alot of people suggested that they could take Scenario #4 of the the Strategy Review, but no.

    The reason why they are going to FTTN+HFC is because people like Murdoch are associated with Coalition Party, and then you have vested interests behind those.

    The network that they have planned is not for US to use, it’s for vested interests to be used.

    I would rather we cancel this project, and focus on other polices that require more attention, Aged Care for example, which is now receiving massive cuts.

    I have nothing more to say on this topic, because I find that people like Renai, Hackett have all fallen for the Coalition Party trick.

    Final thing, be aware of massive cuts by the new year.

    Oh apparently Malcolm Turnbull is now all for SSM equity but not for Broadband apparently.

    “I think it is likely that we will (have a free vote), but as Tony Abbott has said, it is a decision for the party room, not for him,” he told Sky News on Sunday”

34. Its astounding that NBN Co want to rely on HFC. Inside the HFC footprint, only about 30% (from memory) of people actually use it. Those people on the whole complain about the speeds due to congestion in peak times. NBN Co are now saying, they will spend a heap of money upgrading HFC to fix that problem. Once they do that though, they are going to dump the remaining 70% in the footprint onto HFC as well, AND make it open access!! Can anyone else see the problem here? They are going to overload it again.

    Hackett says he will be happy to see an NBN Co tech come and connect his NBN (Telstra) HFC and provide 100mbps service in the next few years. NBN CO were set to start offering 1Gbps services this month, and Hackett thinks its great to get 100mbps in a few years? How is that progress? We are going backwards from where we are now. The obvious question then is, what happens when Hackett wants 1Gbps – how does he, and all the other people on HFC get to that point?? More taxpayer money!!

    It truly is a ridiculous situation. NBN Co needs to be focused on fixing the problem for the future, not doing band aids today, that will only last 5 years. Stop wasting taxpayer money and do it properly.

    • Atm according to there upgrade path which starting at 2030 will be upgrading to FTTP

      Atleast now we will have a timeline
      so instead of being 40th for internet speed
      we will be 17 years behind the rest of the world

    • HFC is already FTTN :) Upgrading that capacity would be relatively quick.

      The HFC copper is definitely in better condition than the PSTN copper. Sure, a few taps might need to be replaced – but this is pretty easy and can be done on service activation.

    • Hackett says he will be happy to see an NBN Co tech come and connect his NBN (Telstra) HFC and provide 100mbps service in the next few years. NBN CO were set to start offering 1Gbps services this month, and Hackett thinks its great to get 100mbps in a few years? How is that progress? We are going backwards from where we are now. The obvious question then is, what happens when Hackett wants 1Gbps – how does he, and all the other people on HFC get to that point?? More taxpayer money!!

      +1

35. What’re the odds that NBNCo and et al are hoping that the billions paid to Telstra/Optus to turn off their existing networks when a high enough % of fibre users are connected means that they can take those networks off the hands of Telstra and Optus before the switchover?

    BAM, suddenly NBNCo owns copper and HFC and can open it up or upgrade it as they wish.

36. There seem to be a lot of opinions where people are saying ‘if it costs more to upgrade HFC and do FTTN and then upgrade to FTTP later that is irresponsible waste and we should be going straight to FTTP’. Well, no shit. The problem is, according to this ‘strategic review’ FTTP will actually cost something like 80% more than stated with significant delays, making this FTTN HFC nonsense economically palatable. The obvious problem with this argument is that it directly contradicts all previous NBN Co economic modelling as well as all the research, expert design and external consultation that went into that. They can’t both be right. Either NBN Co was deliberately obscuring facts and perpetuating massive fraud on both Parliament and the Australian public, or a similar allegation can be brought to bear on the strategic review.

    This is not a point of merely historical significance, it is directly pertinent to the current and future direction of the project. If FTTP is actually achievable within the budget and time frame set out by the most recent NBN Co revised business plan (plus 12 to 18 months delay resulting from Turnbull’s strategic sabotage process) then all other discussion is moot – we have their budget and delivery time frame estimates for their Frankenetwork monstrosity, it isn’t even in the running.

    This is why Mr Turnbull has been attempting to systematically undermine Mike Quiggley’s reputation, because if we trust that he was competent at his job then it is improbable that NBN Co’s claims about total budget and time frame were drastically out. In fact, the detail included in the leaked business plan demonstrates just how sensitive the company was to changes, reporting both increases in some expenses but reductions in others where efficiency improvements were reducing costs. It beggars belief that NBN Co’s accounting could have been out to the tune of over $30bn.

    HFC is a sideshow. The accuracy and applicability of NBN Co’s previous costings and business plans vs those of the loaded strategic review are the real story – we know the review was stacked, so just how ‘soft’ are the figures they’ve come up with? If it’s $46bn FTTP vs the nonsense alternatives they’re planning, FTTP wins hands down.

37. Sorry to veer off topic somewhat… but as clearly prophesied… I’ve heard that Henry Ergas has now been added to Malcolm’s (transparent and unbiased) review panel…

    It just gets better eh?

    A fervent real NBN detractor, liberal party financial backer and the conservatives go to man when the “right” figures are needed (not to mention his own consultancy company went belly up) is now the brains behind what we need for our comms… F F S…

    All they need now is Kevin Morgan (as also prophesied) and the puzzle is complete… IMO

    If this wasn’t so serious it would be downright fucking laughable…

38. I’ve never had anything other than mobile wireless broadband.
    My disconnected (probably useless) phone line is pair-gain and Telstra won’t touch it unless I pay for a fixed Telstra POTS that I’ll never use.
    Telstra’s HFC cable passes my front gate, but there is a 1 metre concrete path around the house. I’ve had three different Telstra technicians visit during the last ten years and they all lacked the technical expertise to run a cable either over or under it.
    I’m like a lot of underprivileged Australians – stuck on slow, expensive wireless forever. Try doing a major Debian linux upgrade, or watching video with that!

    • Sorry. I should have added that my point is that, for some of us, almost anything more advanced than two cans joined by a length of string would be a vast improvement.
      Meanwhile, we’re all having an esoteric discussion about how people with connections that some of us can only dream of can upgrade to super-dooper!

39. When will ANY of these FTTN/HFC proponents ever admit that the vast majority of internal phone cabling in a premises (from the building POP) is totally unsuitable for these high-speed services?

    The Telstra External Plant “copper” cabling is true twisted pair and can actually handle high frequency services – just like CAT5/6 internal cabling – but most legacy internal building cabling currently used for telephony is crap 4-core Twisted Quad cable with NO TWISTED PAIRS and suffers horribly from crosstalk and external radiation and interference.

    I know, I – like every other Telecom/Telstra tech over the past few decades – used to install this stuff and know how bad it was even for voice band use, let alone ADSL services.

    Until I see an AUSTRALIAN pilot study showing that these technologies work with our infrastructure I just put all these overseas claims straight into the rubbish bin because they are just not valid for our situation.

    Any dumb-arsed tech “commentator” or so-called expert – without any practical experience – proposing reusing legacy phone cabling should just shut up on this issue until it is proven 100% that it will work with the current Australian cabling – otherwise millions of us will be let down again by vested interests and political dogma when we miss out on these promised data rates.

40. so let me get this straight, simons say we just have it simply wrong, it will cheaper and more effective to buy the hfc, upgrade it, upgrade it again, then install fttp, than it would be to just install fttp in the first place.

    ok, perhaps instead of being a patronising dick he could provide the actual financials to back up his claims? dont just whine that we are simply wrong, prove us wrong, show us what we are obviously missing. he has access to the raw data, we dont, so share it, show us how it was worked out that re-using infrastructure you dont currently even own, will be cheaper and more effective.

    • +1

41. I don’t know. I don’t think it would be particularly bad to build a good ftth backbone, plus fttb as standard (office buildings, residential buildings, hospitals and schools), with paid installs for others homes.

    At that point questions start. How do we handle dying copper, competition, transitions, black spots, and so forth?. I’d think a no-brainer start would be adding vdsl2 to existing copper – again which they’ve mentioned.

    But all of the above seems to be skimmed, unless I’m misunderstanding. The above is significant.

    The harder issues are hfc, wholesale rates, takeover of assets, and nbn vdsl nodes, which is were the conversation is.

    • That’s because they deliberately skimmed them, Coalition Party are in a full blown “Blame Labor” mode, and will be for another 6-12 months.

      • Yes but Renai doesn’t help the parties skim issues (and has the expertise the newspapers lack).

        If the coalition are really talking about building the full ftth backbone (from which they run fttb, fttn, paid ftth, and hfc) then it’s significant.

        • Sorry. 2 Greg’s here. I’m only these couple of comments.

42. I get that FTTP is the best scenario.. but for now, if we have to go with what LNP is dishing up then HFC is the next best scenario — provided the upstream rates are increased.

    Getting 100/40 into aged care facilities, doctors surgeries, small businesses etc all has its boosts to other industries.

    Too many people floating around on 2-10Mbps ADSL because of distance and PSTN copper quality. A lot of these people have HFC in their street, but multi-dwelling builders never bothered to pay just that little bit extra to put in the infrastructure.

    HFC was never really marketed, which explains why most people I have spoken to think that ADSL2+ is the best it gets. Less customers = less money getting pumped into maintenance.

    All in all, I think this is a good step. Sure, it’s not FTTP – but at least this is mostly reasonable.

43. These comments leave me in no doubt we are screwed. Me thinks Simon is very gullible thinking the money to fix the current network will be forthcoming.

    I also know I’m probbaly going to miss out on any solution living in a battle axe complex that no one will touch. Foxtel point blank refused to bring cable down our service conduits. So what will happen to us? Will we get FTTP, or FTTN or nothing at all and rot on ADSL2.

44. Too many people have been too heavily invested in the Cult of Hackett for too long. People fell in love with him because he fought Telstra and they gave him the crown of people’s champion.

    He wasn’t doing it for anyone else but himself. He fought Telstra because it was in his interests to do so. He did it well and made more millions than you could point a stick at. Happily his personal victories also often helped the general landscape.

    He isn’t a sage, he isn’t an internet messiah. He is a man with a deep knowledge of the workings of the Australian Telecommunications Industry and who uses this knowledge to further his own interests.

    This article here shows his feet of clay.

45. Renai,

    Simon makes it quite clear he is waiting until the contention ratio problem and upload speeds are resolved through the upcoming NBN Co rollout before he switches to HFC. So it definitely makes you naive to try and put words into his mouth on this front.

    And yes, you can easily have ADSL and HFC connected for extra bandwidth and redundancy – I have done this myself since 2000; it does not make you look any more intelligent by pointing that out.

    Cheers,
    Richard

    P.S. I am a Labor voter, however this issue is one of the very few times I have agreed with Liberal policy (the other being Howard’s anti-gun laws).

46. The most humorous part of all this how the Liberal party claimed in 2007 that $20 billion was too expensive and now when they see a $70 billion quote they are happy to pay $30 billion themselves for a ‘cost-effective’ option!

    Surely other people love how the psychology of ‘anchoring’ tricks people’s minds into justifying emotional decisions about value :-p

    • “The most humorous part of all this how the Liberal party claimed in 2007 that $20 billion was too expensive and now when they see a $70 billion quote they are happy to pay $30 billion themselves for a ‘cost-effective’ option!”

      Bourkie, around $15 billion of the $30 billion are costs locked-in by legislation and executed contracts in the last 3 years that would be more expensive to back-out of than to leave as-is.

      Even so, $30 billion is small beer compared to the costs of letting things continue as they were.
      Building MTM now and upgrading to Radically Redesigned FTTP after 10 years is $67.4bn cheaper than building Labour’s NBN now.
      Building MTM now and upgrading to Radically Redesigned FTTP after 15 years is $102.4bn cheaper than building Labour’s NBN now.

      Building MTM now and upgrading to Radically Redesigned FTTP after 10 years is $50bn cheaper than building Radically redesigned FTTP now.
      Building MTM now and upgrading to Radically Redesigned FTTP after 15 years is $75bn cheaper than building Radically redesigned FTTP now.

      A government study in the UK found that “the median UK household today requires a maximum download speed of 8Mbps. By 2023, even as new applications (such as over-the-top video and cloud computing) become more widespread, this is forecast to grow to 19Mbps. By then, even four-adult households with a 4K TV and three HD TVs (the top 1% of households by bandwidth demanded) would need less than 40 Mbps for all but the most intense four minutes of each month.”
      Video and gaming streams accounts for practically all of the above household bandwidth requirements.

      Since businesses are covered by the FTTP footprint in all scenarios, increasing the FTTP needs to be cost-justified by increased economic productivity from enabling households with more than four HD TVs and a couple of 4K TVs being able to use even more TVs concurrently.

      And just in case “Australia is falling behind in broadband” comes up, Australia is currently ranked 45th, universal 12Mbps would put Australia equal 2nd with Japan. 26% FTTP would put Australia equal first with Japan for FTTH penetration. Universal 25Mbps would put Australia at the No. 1 ranking by a wide margin.

      • “Since businesses are covered by the FTTP footprint in all scenarios”

        Steve there are many people now that have/want the option to work from home, even for 1 or 2 days per week. I don’t believe these “businesses” are covered in any scenatios apart from Labors ubiquitus FTTP. Vastly improved internet-highways like FTTP opens the door for telecommuting which in turn will alleviate traffic problems on our other highways. $’s spent on FTTP will have savings in other areas, not to mention TeleHealth. The non-tangible benefits of FTTP have not been taken into account.

        • HFC DOCSIS 3.1 can already support 1Gbps upstream and 10Gbps downstream – so I don’t see how anyone can claim that wont support video conferencing (the tech. required for tele-commuting and online health services). I already have my GP consultations over the internet here and it’s only a highly variable 200Mbps (San Francisco).

        • “Steve there are many people now that have/want the option to work from home, even for 1 or 2 days per week.”
          Hi Jon, do these people want the option to work from home now or after 12-15 years? Do they currently have 50/100Mbps? And do they need 1Gbps to work from home? The bandwidth intensive applications are video – SD video needs 2Mbps, HD needs 5Mbps, and compression efficiencies have been and are continuing to improve 9% compounded per year. A household with 4 adults, 3 HD TVs and a 4K TV needs just 40Mbps.

          “I don’t believe these “businesses” are covered in any scenatios apart from Labors ubiquitus FTTP.”
          They are covered by the NBN’s ubiquitous 50/100 Mbps and they are covered by fibre if they are in high revenue potential areas and in any case they are covered by co-pay fibre.

          “The non-tangible benefits of FTTP have not been taken into account.”
          The 2 benefits you noted are benefits of broadband generally. What about the non-tangiible costs of no broadband for another 12 years? And what are the benefits of 1Gbps to a household anyway?

        • “Vastly improved internet-highways like FTTP opens the door for telecommuting which in turn will alleviate traffic problems on our other highways.”
          Telecommuting takes place now using today’s technology, FTTP certainly isn’t a pre-requisite. FTTP doesn’t open the door, the door’s already wide open and has been for years. I work with telecommuters everyday in Asia, Europe, North America and regional Australia and none of them are on fibre or on the NBN.

          As for telehealth, the previous government abolished Medicare rebates for all telehealth consultations in metro, outer metropolitan areas and non-metro cities. i.e all of the areas in the previous NBN’s fibre footprint. So the telehealth revolution is stone dead in the starting gates.
          http://www.medicalobserver.com.au/news/rebates-slashed-rural-gps-forced-to-cut-telehealth

          • Yes and the “iron wires” were good enough too, remember?

            :/ amazing

47. All these second rate alternatives and dollar costings leave me unimpressed. Australia needs a Grand Scheme like the fibre NBN. Why is the dollar so important in the argument? We don’t take the cheap, poor quality option on hospitals and roads, so why do it with NBN? We are a large relatively sparsely populated country and we currently have a very poor communications infrastructure. I am only 100 kms from a State capital and only 7 kms from a major town, and yet the service I have is pathetic. Watching YouTube is not even a consideration and a conversation on Skype (voice only) would be nice if only it didn’t cut out every few minutes. Let’s raise our standards and get some guts. If the costs soar as they probably will, then we should just take a little longer to do it. But do it we must.

    • “We don’t take the cheap, poor quality option on hospitals and roads, so why do it with NBN?”

      We don’t take the Rolls Royce option on hospitals and roads either, so why do it with NBN?

      The “cheap, poor quality option” is used in every one of the 44 countries ahead of Australia in broadband rankings. Globally FTTP has 2.5% penetration, 6.5% in the OECD, 0.06% in the UK, 0.51% in Germany, 6% in the US, 1.24% in Canada. Only 3 countries in the G20 have FTTH >1% and only 15 countries globally – the top two countries for FTTH penetration, Japan and Korea have 26% and 17% FTTH, yet these two are the top two in broadband rankings. The options in the strategic review are for 26% FTTP.

      P.S. Labor’s 2007 promise of universal 12Mbps by 2012 would have let you watch YouTube (requirements 0.5Mbps SD, 1Mbps HD), Skype (requirements 0.1Mbps voice, 0.5Mbps video, 1.5Mbps HD video), Netflix (requirements 1.5 SD, 3Mbps HD). We don’t need 100+Mbps after 12 years, we need 12Mbps now!!!

      • Skype requirements 1.5Mbps HD video.

        Noone on an ADSL connection can do this or can reliable do these on HFC and I’ve experienced what skype HD look like with the required bandwidth in both direction and both sides and it isn’t that great I’ve also seen true HD video conferencing the type that need 10mb min both directions and it is a night and day comparison to to Skype HD video. There is demand for this sort of quality from business and not just in there main officers they want to be able to do in their remote and suburban branches that want to be able to talk to clients and suppliers both big and small. Last time I had one of these systems running I got asked when can I have this in my home my answer was when the NBN fiber rolls out to your area now we don’t even know that.

        I will get a suitable connection in my home but the people I want to talk to for both business and personal reason wont. Turnbull is partially right http://www.smh.com.au/federal-politics/political-news/turnbull-says-labor-wasted-20b-on-nbn-20131215-2zeyy.html we did waist billions but only because we are doing a half arse job and won’t be able to take full advantage of those areas where the full arse was used.

        • “Skype requirements 1.5Mbps HD video.
          Noone on an ADSL connection can do this or can reliable do these on HFC and I’ve experienced what skype HD look like with the required bandwidth in both direction and both sides and it isn’t that great I’ve also seen true HD video conferencing the type that need 10mb min both directions and it is a night and day comparison to to Skype HD video.”
          I have 2.5Mbps ADSL and Skype HD works okay. In any case you don’t need 1Gbps fibre for 10Mbps.

          “There is demand for this sort of quality from business and not just in there main officers they want to be able to do in their remote and suburban branches that want to be able to talk to clients and suppliers both big and small. ”
          Businesses are covered in the FTTP footprint that includes all business districts, industrial and commercial parks and precincts, schools, universities, hospitals, medical centres and high revenur potential areas. Fibre is also available on a co-pay basis. So this isn’t about businesses.

          “Last time I had one of these systems running I got asked when can I have this in my home my answer was when the NBN fiber rolls out to your area now we don’t even know that. I will get a suitable connection in my home but the people I want to talk to for both business and personal reason wont.”
          Mate, you don’t need 1Gbps fibre for Skype, really. you’ll have 50-100Mbos in 3-5 years. In any case I’d rather have something now than another 12-15 year promise. A bird in the hand and all that….

          • P.S. Diego is struggling to get SD youtube and voice skype. How can you support a plan that keeps him from these for another 12-15 years and costs an extra $50-100bn?

          • “business districts, industrial and commercial parks and precincts, schools, universities, hospitals, medical centres and high revenur potential areas” Yes because all business are located in those areas, and again it removes one of the advantages and that is the ability of business to locate where their customers or employees are as opposed to where the comms infrastructure is.

            “You don’t need 1Gbps fibre for Skype”, you’re right but like MT you fail to talk about the other half of the equation reliable bandwidth both UP and down.

          • “you fail to talk about the other half of the equation reliable bandwidth both UP and down.”

            Not at all. VDSL2 (ITU-T G.993.2) uses frequencies of up to 30 MHz to provide data rates up to 200 Mbit/s simultaneously in both the upstream and downstream directions.
            Upload speeds are set and configured by the RSP e.g. on a 2.5:1 or 4:1 ratio e.g. 50/20Mbps or 50/12Mbps but the RSP can choose to offer different plans, even full synchronous.

            Upload speeds for HFC in the SR scenarios are modelled on a 3:1 ratio e.g.120/40 Mbps but can be configured as required.

          • No mention of commitments in that regard in the report. there was some discussion of upload bandwidth ratios when talking about HFC, those speed are supposedly available now, just like they are supposedly available on 4g wireless, I’m already beginning to see cracks in the 4g system and the cracks in the HFC promised speeds well you could fly an A380 through those. There is also mention in future bandwidth requirements although their predictions take data from several different reports(that aren’t necessary looking at the some things) and at one using uses “maths” that forgets some principles of data theory. As an aside our current network doesn’t even deliver there requirements for now in one of those reports.

            The whole thing reads like it was written by a bunch of a bankers with only limited input from the people who have to build and maintain these things. We know how well decision by bankers work in the real world(but to buy some housing bonds anyone).

          • “our current network”
            So you’re an NBN employee? This is a report prepared by NBN Co. with expert input. It’s owned, prepared, and reviewed by NBN Co. and reviewed and approved by the NBN’s board of directors. If you don’t agree with the company’s direction you should take it up with your management chain – is your manager a banker?.

          • “our current network” is our as in the countries. I guess it isn’t ours anymore as we sold it.

            No I don’t work for NBNco, although NBNco has indirectly been one of my clients, I also don’t work for a merchant banker(although I do have to occasionally deal with the consequences of their decisions). I work in the area of the economy that gets hardest hit by these types of decisions small and medium business.

          • I’m getting kind of sick of this now steve.

            This report was done by the 3 consultancy firms, with NBNCo’s data. Specifically after Turnbull promised consultants wouldn’t be used. The board that “owned” this report is less than 2 months old. And full of Malcolm Turnbull appointments at that. The only people contacted for this report in NBNCo. would have been those that look after the raw financial and rollout data and those 60 people interviewed for the “Culture” section of the report.

            This review is not NBNCo’s. Suggesting it is shows a nativity that is quite astounding actually.

            There is no information about why the per premises cost of FTTP has suddenly doubled (not to mention the redaction of FTTN & HFC per premises costs for no CiC reasons feasible- there are no contracts signed so how could they be CiC??). There is no information about why it will suddenly take 3 years more. Just “the old board lied” essentially.

            I’m sorry, but you may take that as a reasonable “objective” review. When it involves Mike Quigley being called a bald-faced liar and completely incompetent, it is quite clearly barely worth the paper its’ written on. The man has one thing that none of the current crop involved have- integrity.

            I have no doubt there would be several extra months if not a year added to the completion date of the FTTP NBN and possibly another couple of billion dollars- pretty standard for government projects. But there is zero evidence, none whatsoever, that it would be double the price and take 35% again as long- NBNCo. passed 33 000 premises in October, 1/3 of the total they need to (100K) to be on track for the rollout, compared with just 18 000 in May. 3 consultancy firms telling me otherwise, who’ve been paid and instructed to follow a specific agenda, will never convince me otherwise. Especially not with ludicrous suggestions of costs that have no evidence other than “we think so.”

            In regards to you NPV calculations, median speed requirements of business and residential premises & talk of timeframes to each scenario:

            1- The FTTP NBN is supposedly to take an extra 3 years to 2024. I don’t know about your primary school maths, but 2024-2014 is not “12-15 years”

            2- NPV takes into account network costs. Only. No loss of opportunity costs. No possible extension on rollout costs (specifically mentioned in the report as a possible extra 18 months to 2 years for Scenario 6) No economic loss or gain in between times. No mobilisation and retooling costs for the industry.

            3- The current median in the UK is 8Mbps peak usage. That statistic is a misnomer. There is no such thing as median peak usage. Peak usage is determined by technology and server speed, not user requested speed. Average peak throughput would be a closer statistic, but still largely irrelevant.
            Ultimately, the only speed that counts is peak period average throughput. That takes the busiest time of the average connection and measures what both the network and average user require during that time.

            8Mbps median peak usage is ludicrous- median measures the difference between highest and lowest speeds….but there’s only 1 peak speed of a connection…. Why not use the Akami or OECD measure of average bandwidth? It’s good enough for every other BB provider and most reviews. There’s only one reason- because the Akami measures average speed at 8.4Mbps. Not Median. Not peak. Average. Average Peak speed is measured at almost 38Mbps in the UK (Akami 2013 State of the Internet). Having grown 52% in a year. Not 25% as the report suggests.

            Oh and by the way- not all businesses will be covered by fibre. 95% of all businesses are SME’s. Most of them aren’t in CBDs, business parks or industrial areas. They will get predominantly HFC and FTTN, like most residential areas.

            For these reasons alone it’s quite clear to me you’re uninterested in discussing what the state of facts are, rather than just quoting the review directly. You always whined when FTTP advocates quoted the CP as verbatim. Well, I’m afraid you are doing the same with the review. It suits you, because it is clearly derogatory of any previous work of NBNCo. In the real-world, the facts are likely to lie somewhere in the middle. And from the lack of evidence in the review, other than the aforementioned “because we said so” I’d say it’s actually much closer to the 2013-2016 CP. Produced by people who were actually building the network. Rather than consultancy firms and a board appointed to tear the previous plan down.

          • “NBNCo. passed 33 000 premises in October, 1/3 of the total they need to (100K) to be on track for the rollout, compared with just 18 000 in May.”
            That’s really strange. NBN Co’s weekly reports show that just 1,915 premise were passed in October. (September 30: 227,483 premises passed. October 27: 229,398 premises passed Difference: 1,915).
            http://www.nbnco.com.au/content/dam/nbnco/media-releases/2013/weekly-rollout-metrics.pdf

            “Specifically after Turnbull promised consultants wouldn’t be used.”
            This promise? MT: “They should get advice from experts, you know, inside the company, outside the company – sure.”

            “The only people contacted for this report in NBNCo. would have been those that look after the raw financial and rollout data and those 60 people interviewed for the “Culture” section of the report.”
            A company isn’t a democracy. And strategy is set by the board and senior executives, not by staff consensus. Management contacted staff it believed would add value. Perhaps they knew their staff were capable of claiming 33,000 premises were passed when just 1,915 had actually been passed.

            “This review is not NBNCo’s. Suggesting it is shows a nativity that is quite astounding actually.”
            The review is not NBN Co’s because some of its staff don’t approve? Naivety plus. Staff who disagree with a company’s strategic direction and believe the company’s leadership lack integrity are free to/should/must resign. Staff don’t get input into strategy.

            “There is no information about why the per premises cost of FTTP has suddenly doubled”
            There is extensive information about why the per premises cost has doubled in Section 2.5.3

            “(not to mention the redaction of FTTN & HFC per premises costs for no CiC reasons feasible- there are no contracts signed so how could they be CiC??).”
            How naive. There are negotiations ahead. and in any case companies never publish their cost breakdowns and ratios. Cost models are among the most closely guarded secrets of any business.

            “There is no information about why it will suddenly take 3 years more. Just “the old board lied” essentially?” Sections 2 and 3 has 70 pages of detailed information about why, but none that you can see.

            “When it involves Mike Quigley being called a bald-faced liar and completely incompetent, it is quite clearly barely worth the paper its’ written on.”
            Must have missed that Section. Which page is this on?

            “The man has one thing that none of the current crop involved have- integrity.”
            Evidence of lack of integrity is a criminal matter. Has this been reported to the police?

            “1- The FTTP NBN is supposedly to take an extra 3 years to 2024. I don’t know about your primary school maths, but 2024-2014 is not “12-15 years”” On current trends and past 3 years performance, it would take 15 years.
            “2- NPV takes into account network costs.” NPV is total value, not just network costs.
            “No loss of opportunity costs…” Feel free to quantify these, don’t forget to include all the lost opportunity and economic costs for the past 3 years of delays and for the next 10-12 years.

            3- “The current median in the UK is 8Mbps peak usage. That statistic is a misnomer.”
            The statistic is maximum download speed required by a median UK household. It is a demand metric, not a technical metric.Did you read the reference? I sent you the link.

            “Oh and by the way- not all businesses will be covered by fibre. 95% of all businesses are SME’s.Most of them aren’t in CBDs, business parks or industrial areas.” Not even in high revenue potential areas? Please link your evidence for this (along with the links for the half dozen reports you said you have on household requirements) And SMEs need 1Gbps, right?. And if they do, they can’t afford a co-payment. Right..

            “You always whined when FTTP advocates quoted the CP as verbatim.” Far from it. FTTP advocates whined when I extensively quoted the CP verbatim.

            “Rather than consultancy firms and a board appointed to tear the previous plan down.” The consultancy firms were selected by the board. The board was selected by the sole owner. The sole owner was elected by the Australian people. Things are as they should be. But keep tickling that dead horse. ….

          • :/ Amazing steve…

            Along with all the ground hog day waffle and forever political smeg, you now introduce sarcasm… nice!

            Some facts would be nice however… you ought to try them, even only once.

      • We don’t take the Rolls Royce option on hospitals and roads either, so why do it with NBN?

        The problem with your analogy, is it’s just plain wrong (unless you’re just going for a cheap political troll).

        Fibre isn’t a Rolls Royce, it’s more like a Mack, you don’t use a Rolls Royce to transport large quantities of anything (except maybe caviare for Malcolm).

48. My reading of current LNP NBN policy is that people in HFC areas will be the last to be upgraded to fibre. The first to get fibre being new housing estates followed by (non HFC) areas with failing copper. Just think for a minute about who lives in these areas. How will those nice people living in leafy blue rinse streets react when they begin to understand that they are at the end of the fibre upgrade queue after all those unwashed mortgage belt battlers in the outer suburbs. I really think that the old boys running the LNP simply don’t understand the implications of their NBN policy.

    • “My reading of current LNP NBN policy”
      LNP NBN policy was based on the NBN 2012 corporate plan. When NBN blew up their 2012 corporate plan, it also blew up the LNP NBN policy.

      What we have now is NBN’s Strategic Review and NBN’s recommendation, which will likely be adopted as the government’s NBN policy.

      In any case I’d prefer being last in queue for a 6 year roll-out than first in queue for a 10 year roll-out, especially when you realise that the real ramp-up in the FTTP scenario happens in the last 3 years, whereas the MTM roll-out starts at a high rate and slows down in latter years.

      • Now I’ve heard it all…

        “LNP NBN policy was based on the NBN 2012 corporate plan. When NBN blew up their 2012 corporate plan, it also blew up the LNP NBN policy”…

        Malcolm and you trusty messengers have told us the corporate plan was flawed from day 1 (remember white elephant/wastage) and estimations totally incorrect…!

        Yet now that their own policy is found to be a complete clusterfuck, you expect us to beleive that they actually used the same flawed, white elephant [sic] corporate plan doc they said was completely wrong, as the basis of their own policy…?

        WTF…

        :/ Amazing

      • “In any case I’d prefer being last in queue for a 6 year roll-out”

        lmao, 6 years? You still drinking Malcolm’s Kool-aid?

49. What is really like to know is the difference in price per user for

    1) putting in a new copper pair for my house (Telstra $299 install).
    2) putting in a new hfc connection to my house
    3) putting in a fibre to my house.

    (I get that vdsl would be cheap in existing cable – but what about new lines)

    The horror stories on fibre installs are getting from street to living room – but naturally that’s because it’s the unpredictable bit. But I’d hate to think they add HFC to houses (running new cables, working inside the home, with some nightmare installs) when a fibre could have been run instead (or as well)

    • “What is really like to know is the difference in price per user for
      1) putting in a new copper pair for my house (Telstra $299 install).
      2) putting in a new hfc connection to my house
      3) putting in a fibre to my house.”

      Internationally, the cost of rolling out a new FTTP network in countries most comparable to Australia ranges from $1,100 – 1,300 per premises, for FTTN it ranges from $350 – 700 per premises and for upgrading existing HFC networks to data over cable service interface specification (DOCSIS) 3.0 it is ~$100 per premises.

      The NBN 2012 Corporate Plan had costed $2,521 per FTTP premises but the actual cost being incurred per premises was found to be much higher (and the actuals to date included a greater proportion of greenfields than brownfields and a negligible no. of MDUs). The NBN Strategic Review revises the planned cost to $4,097 per FTTP premises in the revised outlook.

      • Back to work eh Steve? Tell me, how much do you make as a full time LNP shill? I would have thought the penalty rates would have been good over the weekend, surely you guys realised this would have been a particularly good weekend to work overtime? Shame, it would have made for a nice Christmas bonus…

        Hmm, maybe we should start a Not For Profit to employ full time anti-shill FUD eliminators – most of us are far to busy to spend even a fraction of the time you and your colleagues have available to spew your disingenuous misdirection on the world.

        BTW I love the way you’ve responded directly to a comment asking for the cost of new HFC lead ins and obfuscated with the cost of provisioning a new service over an existing connected cable.

        • Trevorx, thanks for the rationality, evidence and facts in the response. Shows a real passion for the sciences.

    • “Internationally, the cost of rolling out a new FTTP network in countries most comparable to Australia ranges from $1,100 – 1,300 per premises, for FTTN it ranges from $350 – 700 per premises and for upgrading existing HFC networks to data over cable service interface specification (DOCSIS) 3.0 it is ~$100 per premises.”

      They’re not costs of a new hfc connection or new copper pair though.

      If ftth is available for optional home installs and my copper ducting was damaged somehow ruining my phone, what’s the effort and materials difference between fibre, a NEW hfc, and a new copper.

50. Same shit, different day. C’mon boys, chop chop get on with it.

51. Am I the only one that thinks Hackett is planning on a political career under the LNP?

    Personally, I think the “if you knew as much as me, you would agree with me” attitude that Hackett has perfected over the years would be a disaster for the country.

    I wish he would just go back to playing with my Pilatus…

52. So, I read this itnews article[1] and nothing new there, except it has indicated that in a twitter status Hackett believes that NBN Co will own the (copper and) HFC networks[2]. In that status, Hackett links to this Business Spectator article[3] which states:

    There has been some discussion and debate* about whether the ‘new NBN Co’ should buy Telstra’s copper network outright or lease access to it, with a lot of focus on the cost of maintaining an ageing copper network. A similar discussion could be had about the HFC networks.

    It actually makes little difference whether NBN Co buys or leases the copper. The cost of maintaining it would be reflected either directly in NBN Co’s costs or indirectly via the level of the lease charges.

    Even if we accept the article’s proposition, this ignores the fact that whether the cost is direct (not included in the purchase price, NBN Co maintains the infrastructure) or indirect (included in the lease price, Telstra maintains the infrastructure) it is still higher.

    *Presumably, they are referring to, among others, the difficulty with purchasing the documented by ZDNet[4] where NBN Co advises the Government not to purchase or lease the Telstra networks, but to purchase a “managed service”. Nowhere in that Business Spectator article does it acknowledge these difficulties.

    The Strategic Review (3.2.7, page 83) does make some acknowledgment of the IT systems issues:

    For NBN Co to extend its current OSS/BSS to support FTTN, the additional one-off cost is estimated to be $110-180 million. For HFC, this one-off cost is estimated to be an additional $70-110 million. The effort existing operator(s) may incur in providing these systems and data to NBN Co has not been estimated. Furthermore, the cost of using a managed service for FTTN and HFC has also not been estimated.

    However, not all of these costs have been estimated. Additionally, the cost of using a managed service has not been estimated, so presumably that means a managed service is not expected to be used (despite NBN Co’s recommendation to the Government), confirming Hackett’s assessment that NBN Co will own the networks (and pay directly to bring them up to standard and to maintain them).

    Of course, the IT systems are only a small part of the complications of dealing with copper and . Other interesting reads about the complications with the copper/FTTN include (ZDNet):
    [5]”Unknown” quality Telstra copper 4-6x costlier than FTTP: NBN Co
    [6]In-home FttN wiring testing needed, costly: NBN Co

    Ultimately though, a lot of what has transpired was warned against. People said that the review would not be independent, and it isn’t[7]. People said that the CBA would not be independent, and it won’t be[8]. Shadow Minister Jason Clare warned of Gonski-like backflips[9] on the 25Mbps commitment, and he was right (see SR). Respected former NBN Co CEO Mike Quigley warned against letting politics distort the costs of the NBN[10], but they did it anyway (see SR).

    Speaking on the distorted (inflated) costs, a great proportion of the cost increase is attributed to an arbitrary increase in contingency funds, from 10% to 20% (see SR). I would agree that a large contingency would be required for a multi-technology mix with its very large share of known unknowns (state of the CAN, cost to remediate CAN and HFC, cost to maintain, purchase/lease price of HFC and CAN, guaranteed levels of service reflecting on usage and uptake, etc.); while some of these things are estimated, the larger inherent variation in many of these estimates (and therefore larger risk) in MTM versus all-FTTP has not been acknowledged. Even if they validly estimate that the contingency should be 20% for an all-fibre fixed-line footprint, the contingency for MTM should be much greater than that.

    P.S. I hope that so many external links are OK. In case there is any criticism of the ideas I’m expressing, I want to make sure the would-be critic knows where they come from.

    • A really excellent argument, Relim, thank you for taking the time to put that together, tremendous kudos to you :-)

    • Correction: The increase in contingency applies only to Scenario 2 (through 6), not Scenario 1. Otherwise, the rest holds. The better comparison is Scenario 2 with less contingency versus Scenario 6 (and other unaccounted for costs, including inevitable upgrades), or Scenario 2 versus Scenario 6 with more contingency (and other unaccounted for costs, including inevitable upgrades).

53. Yawn… I don’t know why any of you even bother commenting anymore, this includes you Renai.

    The coalition will do what it damn well pleases, screwing everyone and no amount of screaming, ranting, petitioning etc will change their minds.

    Sorry but I’ve given up on the whole debacle. I may surface again if they get dumped from office or Tony in some latter day miracle changes his mind, but until then, this is all just a complete waste of typing.

    • “Sorry but I’ve given up on the whole debacle” Aye me too, I just went them to stop bickering and start getting on with it! Anything! Get a shovel in the ground dig dig argh!

54. You don’t spruik using HFC, if copper is perfect and will certainly handle 100mbits down and 20-30 up.

    My guess (and it’s a guess) is that “anything is better than copper”. FTTN is too expensive; they know it, we know it. This is thus better than nothing; and it’s cheaper than the cost to own large chunks of the CAN and or it’s remediation.

    The question is, how much does it cost to fund Telstra and Optus to re-vitalise a network they’ve both all but abandoned?

55. We were conned.
    “Thousands of emails leaked to the ABC show Julia Gillard’s chief media adviser John McTernan used a “Twitter army” to attack Coalition figures, promoting the Labor-generated attacks to journalists as evidence of broader public opinion….
    “When the Coalition released its broadband policy in April earlier this year, Labor pointed to the hashtag #fraudband used by online critics to ridicule the watered down version of the National Broadband Network.
    Mr McTernan emailed his staff asking for regular samples of “Twitter coverage” of the Coalition’s policy, beginning with the left-leaning user @geeksrulz as it would be “good to point [the] gallery at?”.
    When Fairfax journalist Jonathan Swan published an article reporting the Coalition’s pledge to deliver “cheaper” broadband, Mr McTernan wrote to his press secretaries “Can someone: A. Speak to him B. Smash him C. Direct him to twitter mockery D. Smash him..”
    “Mr McTernan congratulated his staff on the outcome: “hat tip to Raw Hide. Our Twitter army comes through”.

    http://www.abc.net.au/news/2013-12-16/leaked-mcternan-emails-media-advisor-twitter-army-attack-coa/5158680

    • Interesting steve…

      Just what it has to do with the topic or coming from one as self-proclaimed, unbiased as your good self, is odd…?

      i agree though, politics swaying media or vice versa is sickening (on both sides) and just cements what I have been saying, they are all politicians, just their ideologies and pay masters differ… and anyone who believes one side is better than the other (let alone that one side is perfect and the other hopeless) s a gullible fool IMO…

      http://www.dailytelegraph.com.au/news/opinion/consign-rudd-to-the-bin-of-history/story-fni0cwl5-1226691046953

      Which is why I simply believe we shouldn’t pick political sides, they need to earn our votes and why we should choose what is best for us all… and in comms it’s FttP… not MT’s bandaid solution (even more so now than previously) being bandied about, with lame arguments to try to justify it coming endlessly from the aforementioned gullible…

      • As for picking political sides, I’m horrified to report that I know people here in Canberra who voted for Zed Sezelja because “he’s a nice bloke” while simultaneously hating the Liberal Party.

        These voters seriously thought that voting for Zed would magically change the nature of the Liberal Party.

        Right now I’m just praying for a double-dissolution. I honestly can’t see any other way out of the mess that the LNP is steering us into. The Titanic has nothing on Captain Punchy steering Australia on a collision course with reality.

    • I concur with Alex. This might be controversial, but imho, if Australians actually thought about what policies they voted for, the Greens would be in office.

56. Relim: “The comparison that should be made is Scenario 2 (FTTP rolled out now) and Scenario 6 (MTM now, FTTP complete by 2040, assuming the last upgrades begin in 2033 and can be completed by then), at the year 2040. That would be comparing the same outcome at different price points – and that is the only thing that might justify not building FTTP out now.”

    I’ve done the comparison between Scenario 2 (FTTP rolled out now) and Scenario 6 (MTM now, FTTP complete in 2035, assuming the upgrades begin and end in 2035 for simplicity. Here it is:

    1/- Cost of Scenario 2 Radically Redesigned FTTP? $64bn

    2/- Cost of Scenario 6 MTM? $41bn
    Include $? for purchase of HFC?.Say $2bn
    Include $? for upgrading copper lines involved? Already Included Pg 86, but let’s add another $2bn
    So cost of MTM = 41+2+2=$45bn

    3/- Cost to upgrade to Scenario 2 Radically Redesigned FTTP in 2035? $60bn
    FTTP per premises cost: $2,400
    Adjusting for 3% per year inflation + 3% per year real wages increase,
    FTTP per premises cost in 2035? $5,890
    Cost of upgrading to last-mile fibre for 8.5m premises = 8.5m X $5890 = $50bn
    Add say $10bn for other costs

    4/- Time value of savings? $76bn
    Savings from deploying MTM instead of FTTP now: $64-$41 = $23bn
    $23bn deposit @ 8% for 15 years = $76bn

    5/- MTM steady-state earnings to 2035? $42bn (asuuming no net earnings during rollout)
    EBITDA FY21-35 = $4bn X 14 years = $56bn
    Capex FY21-35 = $1bn X 14 years = $14bn
    Steady-state earnings FY21-35 = 56-14 = $42bn

    6/- Scenario 2 steady-state earnings to 2035? $27bn (asuuming no net earnings during rollout)
    EBITDA FY25-35 = $4.6bn X 10 years = $46bn
    Capex FY25-35 = $1.9bn X 10 years = $19bn
    Steady-state earnings FY25-35 = 46-19 = $27bn

    7/- FY2035 Cost of Build Radically Redesigned FTTP now: 1 – 6 = $64bn – $27bn = $37bn

    8/- FY2035 Cost of Build MTM now, upgrade to Radically Redesigned FTTP in 2035: (2 – 5) + (3 – 4)
    = ($41bn – $42bn) + ($60bn – $76bn) = (-$1bn) + (-$16bn) = -$17bn

    i.e. Building Radically Redesigned FTTP now is $54bn more expensive than Building MTM now and Upgrading to FTTP in 2035.

    NB: I’ve used 8% discount rate. Based on commercial telco rates of 10%+, the savings would be higher.

    • “Reality can be beaten with enough imagination.” ― Mark Twain

    • Come back a moment.

      “FTTP complete in 2035, assuming the upgrades begin and end in 2035 for simplicity”
      I don’t think you can do this. Extending the rollout timeframe necessarily increases the costs and reduces revenue (assuming we maintain speed-based charges (AVC) and usage-based charges (CVC)) – that is, after all, part of the justification for the blowout in costs of Scenarios 1 and 2. Of course, you may be operating under the assumption that people will not be taking up higher value services as they become available, in which case, the difference in revenue would be nil; however, that assumption is probably false. We can assume both scenarios are cashflow positive at this point though.

      “1/- Cost of Scenario 2 Radically Redesigned FTTP? $64bn”
      -> based on certain assumptions. Be fair.

      “2/- Cost of Scenario 6 MTM? $41bn”
      -> based on certain assumptions. Be fair.

      In brief: Contingency% should fairly be higher under MTM than FTTP due to the greater inherent difficulty of mixed technologies, where the needed investment in those technologies is known to be largely unknown. The extra 2 years in rollout (that reduces revenue and increases cumulative opex, capex and EBITDA) is rather creative. The initial uptake is better under MTM due to its faster rollout, there are caveats there but they play both ways so I won’t dispute that; the overall uptake and the mix of services is unfairly assumed to be largely the same under both Scenario 2 and Scenario 6 (I speak about that below); higher value “special” services (e.g. multicast) are unjustifiably not included.

      “Include $? for purchase of HFC?.Say $2bn”
      Based on the price of the existing Optus HFC-only deal ($800million), that sounds fair; knowing Optus has to maintain the infrastructure yet has fewer customers than Telstra, so they would ask for much less than Telstra for the HFC; Optus may not even ask for anything more, but I consider that unlikely. Telstra, of course, is a different beast.

      “Include $? for upgrading copper lines involved? Already Included Pg 86, but let’s add another $2bn”
      I will accept that.

      What’s the cost to purchase the copper? (We can assume it’s a purchase not a lease/managed service, because Simon Hackett said so in a tweet, and the review has not estimated the cost of a managed service.)

      3/- and 4/- I accept after adjustment with respect to the concerns raised with 1/- and 2/-

      5/- and 6/-, where are the revenues, where is the opex? And be fair with the numbers.

      a) A difference of just 4.0 – 4.8% in steady state revenues between the two scenarios is unbelievable – they are vastly different service offerings. Uptake of the FTTP NBN where it has been connected is high, and uptake of higher-value services is high (it may or may not be true that people can’t, today, tell the difference between 100Mbps and 50Mbps, but nevertheless there are many who are purchasing 100Mbps! The perceived added value is getting them over the line. I suspect it has to do with shared connections), but more to the point, NBN Co will be a monopoly provider (just about the only fixed-line infrastructure provider) after the HFC/CAN customers are migrated – using international examples of take-up is both irrelevant and disingenuous.

      b) We can expect maintenance costs (for FTTN; HFC I’m not sure of) to rise each year, increasing opex year-to-year.

      c) What is the steady-state capex being used for, and how is it higher under Scenario 2 than Scenario 6? I was under the impression that steady-state capex is used for replacement (IT systems, infrastructure)? There were suggestions that nodes (the electronics anyway) would need to be replaced every 7 years, and copper lines (assuming they are in good condition to begin with) would need to be replaced every 10-15 years. However, presumably, instead of replacing the node you’d just upgrade to the next technology, FTTdp. Nevertheless, there’s a cost there. The HFC, I don’t know about. I’m not sure about IT systems, but infrastructure replacement is certainly more likely to be significantly lower under Scenario 2 than Scenario 6.

      7/- and 8/- are based on the above numbers, and need to be reworked.

      Ultimately, though, you know, if the strategic review were more detailed and transparent like it should have been and was promised to be, we wouldn’t have to be doing these back-of-the-envelope calculations: the details would be there for us to see.

      Bottom line: I realise we can’t do anything about this anymore, and me convincing or not convincing you is not going to change the result. But nevertheless, we should hold the new NBN Co and the Coalition govt to account, so I think that this exercise that we are doing is valuable. And if necessary, kick the new mob out come 2016. The end goal needs to be FTTP (PON? Direct fibre?), and it needs to be ubiquitous and with equitable access, no matter how or when we get there. But I think it’s far more valuable for us to do that earlier (2021-2024) than to do it later (2030-2040). First, we are competing with and servicing Asian economies, more than Western economies. Second, that’s anywhere between 6 to 19 years that people in the future unlucky to be stuck on FTTN or HFC have to deal with congestion and a lower quality of service, versus the up to 8 to 11 years that some people stuck on ADSL/2 or 3/4G have to deal with their services (but balance that with the fact that they’re going to have to deal with it for up to 7 years under MTM anyway, so the difference is actually 1 to 4 years).

      • Since NBN Co. will be responsible for executing the scenarios, this analysis is based on the NBN strategic review.

        You may have a different opinion to NBN but NBN is the entity that is the responsible and authorised party. If you think the numbers and assumptions should be different, take your opinions and concerns to NBN Co. and get them to release a revised strategic review. Everyone has opinions but until your opinions are verified, tested and incorporated into the official document they mean nothing.

        Until then these are NBN’s only considered and official numbers and assumptions.

        • Steve

          I encourage you to read the Hansard of today’s NBN committee hearing.

          When you have & you have seen how ridiculous & assuming the predictions, numbers & assumptions in the review were, then maybe we can get back to talking about objective analysis of the NBN.

          • That is how rational people, who are simply wanting the best outcome for all Aussies would see it 7T…

            Sadly, then there are those who, out of sheer ideology, are given the outcome and then must at all costs try to desperately fill the blanks to justify such an outcome.

            Seen graphically over the last week here at Delimiter, when the current govt’s previous April 2013 policy was (pre-review) argued by some of the faithful here as being the ultimate, infallible doc.

            But now following the damning review showing the infallible docs complete fallibility and endless broken promises (and before anything at all has even been achieved..FFS) who did these people blame?

            Yes of course, the complete Turnbull fuck-up policy was blamed on the previous NBNCo/Corporate Plan (yes the same Corporate Plan these people told us pre-review failed and that MT’s plan was far superior to)…

            Yes they even had the audacity, after claiming the previous Corporate plan was a complete failure, to claim MT’s policy failed only because it’s basis was built upon the previous Corporate Plan…

            But nonetheless, the new reviewed plan is better than MT’s previous plan and of course now even more superior to the previous FttP/NBN plan, according to them.

            WTF…????

            :/ Amazing

        • What a disappointingly empty and pointless response.

          We know there is good reason to doubt the fairness of the strategic review. That comes from both within and without the review. It is healthy to have a good dose of scepticism. You accept those estimates at your peril. If you have a politically-motivated view, then there’s not really anything I can do to help you. I would have liked for you to consider what was actually being said though, rather than ignore it while making platitudes like “it’s NBN Co’s numbers” (it actually isn’t though, NBN Co just provided the data, they did not conduct the review) and refusing to actually engage with the very valid points raised in the discussion.

          You can, at the very least, give the benefit of the doubt, and build a new comparison. Or have you already done so, but you rejected it because it didn’t fit in with your pre-existing view?

          Please try again.

      • “Extending the rollout timeframe necessarily increases the costs and reduces revenue (assuming we maintain speed-based charges (AVC) and usage-based charges (CVC))”
        The analysis includes steady-state earnings only for both scenarios, which are not dependent on rollout timeframe.

        “Contingency% should fairly be higher under MTM than FTTP due to the greater inherent difficulty of mixed technologies, where the needed investment in those technologies is known to be largely unknown.”
        Any greater difficulty of mixed technologies is more than balanced by FTTP’s inherently much greater difficulty of having to install cables and equipment to and into every premise. This cannot happen without the permission and active cooperation of both the owner and the tenant and the co-ordination effort required, which is unknown for every premise. Every premise is different, the physical layouts are different, the distances and obstacles between the street and residence/business are unknown e.g. there are many residences in outer metro areas that are laid back 300-500m from the street, obstacles like concrete slabs, paths, landscaping, lawns and gardens need to be dug up and then relaid exactly as before, legal action by owners for damaged private property, etc. The MTM unknowns are with mixing 3 technologies, the FTTP difficulties are with 12 million unknowns. I think they more than balance out.
        However, for the removal of any doubt, let’s add 5% contingency to MTM

        “What’s the cost to purchase the copper?” Let’s add $1 billion, considering that the network has been declared, that Telstra is decommissioning it in 18 months anyway and government has the authority to break Telstra apart if it doesn’t cooperate.

        “5/- and 6/-, where are the revenues, where is the opex?” Sigh. EDITDA is revenue and opex
        “a) A difference of just 4.0 – 4.8% in steady state revenues between the two scenarios is unbelievable – they are vastly different service offerings.”
        In fact they are identical offerings for 26% of the footprint. And this 26% includes business districts, businesses,commercial & industrial precincts, government, institutions, greenfields and any high-revenue potential areas. In the remaining households the service is identical to 100Mbps. So “vastly different” is hyperbole.
        “uptake of higher-value services is high (it may or may not be true that people can’t, today, tell the difference between 100Mbps and 50Mbps, but nevertheless there are many who are purchasing 100Mbps!”
        100Mbps is maximum access rate, which is the same for MTM. Nevertheless for the removal of any doubt, let’s add another 10% to the FTTP revenue.

        “b) We can expect maintenance costs (for FTTN; HFC I’m not sure of) to rise each year, increasing opex year-to-year.”
        Opex is $200m p.a. higher in MTM. And the pro-active copper remediation program on Pg 86 is included plus an additional $2bn was added on top of this. However for the removal of doubt let’s add 100m a year to MTM opex.

        “c) What is the steady-state capex being used for, and how is it higher under Scenario 2 than Scenario 6? I was under the impression that steady-state capex is used for replacement (IT systems, infrastructure)?” The NBN corporate plans had $1.9-3bn in ongoing capex each year to 2040 for the connection of new premises and network upgrades.The connection of new premises is 4x for FTTP than MTM, which accounts for the difference.

        So summarising the changes, 5% increased contingency for MTM, add $1bn for copper purchase, add 10% ($700m) to FTTP steady-state revenue, add $100m to MTM opex.

        • Steve:

          The steady-state earnings of MTM scenario are completely unverified. They assume, what, a $2 billion difference over 15 years, compared to full FTTP, in revenue gathering, even though the highest priced products designed for business & high end users, those which drive the high revenue, are unavailable on in the MTM scenario. There is no business case for this revenue.

          On the matter of contingency, there is a serious risk that 12-18 months worth of extra work has to happen for the MTM scenario (self-confessed by the review). That wipes out almost $6 billion I believe (without looking at the report) worth of revenue if that happens, putting it well behind FTTP after upgrade by 2030. 20% contingency still does not cover this.

          On the question of risk per premises this:

          there are many residences in outer metro areas that are laid back 400-500m from the street, obstacles like concrete slabs, paths, landscaping, lawns and gardens need to be dug up and then relaid exactly as before

          Shows you do not understand FTTP rollouts, especially NBNCo’s, whatsoever. 1) Any residence that was 400m back from the road would be a non-standard install & would cost the owner. 2) Slabs, paths & other solid objects are easily overcome by side-drilling. It’s a 2 hour job, maximum, for 3 people. NBNCo. have been doing it for months and there have been dozens of anecdotal reports that it is efficient and neat. 3) Lawns and gardens are simple trench-digging equipment, even easier than slabs & footpaths. There have been very few complaints about this, just simply complaints about the long periods before the lawns are recovered and returned to normal state. A matter of process management.

          Next: “Let’s add $1 billion” for the copper….sure. And while we’re at it, let’s just assume FTTN’s average cost per premises will be $500, cheaper than 75% of worldwide deployments in medium density areas….oh wait, the report does that too. Assumptions like this is what you criticised in the NBNCo. CP. Now that it’s favourable to the MTM, apparently, that’s fine…

          And finally, would you stop this “all businesses will be covered by the 26% FTTP.” This is patently false. As I’ve said 3 times now, there are over 2 million businesses in Australia and 95% are SMEs. That would mean at least 50% would be in non-FTTP areas. Probably more like 65%. Trying to guess what proportion of these could get a productivity increase and saving in costs because of FTTP is futile without a CBA. You’ll say a small number, I’ll say a big number. But the facts are, the majority of Australian businesses will not be covered by FTTP. Please stop saying this.

57. 1/- Cost of Scenario 2 Radically Redesigned FTTP? $64bn

    2/- Cost of Scenario 6 MTM? $41bn
    Include $? for purchase of HFC?.Say $2bn
    Include $? for upgrading copper lines involved? Already Included Pg 86, but let’s add another $2bn
    Include $? for purchase of copper? 1bn
    Add 5% contingency? $1.7bn but say $2bn
    So cost of MTM = 41+2+2+1+2=$48bn

    3/- Cost to upgrade to Scenario 2 Radically Redesigned FTTP in 2035? $60bn
    FTTP per premises cost: $2,400
    Adjusting for 3% per year inflation + 3% per year real wages increase,
    FTTP per premises cost in 2035? $5,890
    Cost of upgrading to last-mile fibre for 8.5m premises = 8.5m X $5890 = $50bn
    Add say $10bn for other costs

    4/- Time value of savings? $76bn
    Savings from deploying MTM instead of FTTP now: $64-$41 = $23bn
    $23bn deposit @ 8% for 15 years = $76bn

    5/- MTM steady-state earnings to 2035? $41bn (asuuming no net earnings during rollout)
    Add $100m p.a. to opex
    EBITDA FY21-35 = $3.9bn X 14 years = $55bn
    Capex FY21-35 = $1bn X 14 years = $14bn
    Steady-state earnings FY21-35 = 56-14 = $41bn

    6/- Scenario 2 steady-state earnings to 2035? $34bn (asuuming no net earnings during rollout)
    Add 10% to revenue ($700m p.a.)
    EBITDA FY25-35 = $5.3bn X 10 years = $53bn
    Capex FY25-35 = $1.9bn X 10 years = $19bn
    Steady-state earnings FY25-35 = 53-19 = $34bn

    7/- FY2035 Cost of Build Radically Redesigned FTTP now: 1 – 6 = $64bn – $34bn = $30bn

    8/- FY2035 Cost of Build MTM now, upgrade to Radically Redesigned FTTP in 2035: (2 – 5) + (3 – 4)
    = ($48bn – $41bn) + ($60bn – $76bn) = ($7bn) + (-$16bn) = -$9bn

    i.e. Building Radically Redesigned FTTP now is $39bn more expensive than Building MTM now and Upgrading to FTTP in 2035.

    NB: I’ve used 8% discount rate. Based on commercial telco rates of 10%+, the savings would be higher.

    • How about you use an appropriate discount rate. The discount rate is used to reflect the interest paid and the income that could have been achieved if the money was used for something else.
      The NBN is funded by bonds, if the isn’t used for the NBN it will not be used on a profitable enterprise.
      Use the bond rate as the discount rate, stop playing with numbers like Turnbull was doing.

      • You beat me to it Lionel

        Turnbull played with the discount rate in the Coalition’s pre-election “Plan for faster Broadband”. He said NBNCo’s 8% discount rate was “massively understated” because telecommunications and other utilities regularly use 10-12%. That’s correct….PRIVATE utilities and telecommunications operators do. Monopoly government providers do not. Standard discount rates for government infrastructure is clearly labelled by treasury as between 5 and 9%, depending on likelihood of revenue return. 7% is a mid-range assumption, that includes some private debt.

        If you reduce the discount rate to 8% and make reasonable assumptions about revenue decrease in MTM because of much less network capacity and high end applications (high revenue earner plans) all savings go out the window for MTM scenario. It’s easy to massage numbers on a scale of billions and years with interest rates. Private companies do it all the time.

        • “Standard discount rates for government infrastructure is clearly labelled by treasury as between 5 and 9%, depending on likelihood of revenue return. 7% is a mid-range assumption, that includes some private debt.
          If you reduce the discount rate to 8% ….”

          The discount rate is 8%, would you like the 8% discount rate reduced to 8%?

          Reading and comprehension skills?

          • I would appreciate not being insulted continuously. I was referring to your incessant request the discount rate be a “more believable 10%”. I am well aware the Review uses 8% which is a reasonable and conservative rate for government infrastructure. It was your continuous suggestion it wasn’t that I was arguing against.

          • “It was your continuous suggestion it wasn’t that I was arguing against.”

            I was continuously suggesting it wasn’t? Where did I ever argue it wasn’t? I did the analysis at 8%, same as the SR, I’ve always thought 8% is reasonable.

            There were others e.g. Relim and Non Puto suggesting it should be higher to match the telco rate, thinking that would reduce savings. I explained that a higher discount rate would just make the savings higher.

          • By suggesting a higher discount rate was normal in telecommunications and would make savings higher, it appeared to me you were suggesting the discount rate of 10% was more likely & reasonable. If that was not your intent, I withdraw my objection.

            8% is a conservative and reasonable rate for a predominantly Government funded utility.

            Turnbull himself however tried on several occasions, including in the Coalition’s own “costings” to suggest 10% was “much more reasonable” because that’s what the private sector uses. Which is irrelevant as the private sector aren’t funding it with requirement of 15-20% profit within 7 years.

58. In dealing with Turnbull, Hackett has been setup to fail – Hackett knows his technology, but not how to play politics and wouldn’t even survive in the APS.

    Turnbull has effectively silenced a vocal industry critic by forcing him to resign from the iinet board, accepting a job offer that ostensibly is too good to refuse, and ensuring that Hackett will be forever tainted by his association with NBNCo and the coalition Government.

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