IT’S BEGUN: Split up the NBN and sell it off, says Infrastructure Australia


news Australia’s independent authority on infrastructure has recommended the Federal Government split the NBN company into pieces based on technology or geographical lines and sell it off to the private sector, but without publishing any justification at all for such a move.

Today Infrastructure Australia released what it billed as a 15-year Infrastructure Plan and associated priority list, marking what the agency said was 18 months of work (presumably since the 2013 Federal Election). The agency said the “first of its kind” plan delivered a roadmap to “more affordable, innovative and competitive infrastructure”.

Page 110 of the plan (available in PDF format online) deals with Infrastructure Australia’s vision for the future of the National Broadband Network project.

In its document, Infrastructure Australia states baldly that over the medium-term period, the Federal Government should “transfer NBN Co to private ownership”.

The agency does not include any justification — at all — which may outline its reasoning why such a move would benefit Australia. It appears that the agency has either merely assumed that such a move would benefit Australia, or that the agency has chosen to completely withhold any reasoning for such a move from its document.

The document merely states that it is Infrastructure Australia’s view that the privatisation of the NBN company should go ahead.

In the document, Infrastructure Australia lists a number of previous reports commissioned by the Abbott/Turnbull Coalition Government as backing the idea that the NBN company should be privatised, including the National Commission of Audit’s report and the NBN Panel of Experts report, led by Michael Vertigan.

However, these reports are commonly viewed as being strongly influenced by the Coalition Government’s agenda and are not viewed as being politically independent.

The only reference Infrastructure Australia makes to an independent authority supporting the sale of the NBN company is comments made by Rod Sims, the chair of the Australian Competition and Consumer Commission, who has repeatedly called for the NBN company to be broken up and sold off.

In its report, Infrastructure Australia said the NBN company could be split along “technology lines” into separate companies selling its various technologies — HFC cable, Fibre to the Node, Fibre to the Premise, Satellite and Fixed Wireless.

Alternatively, the company could be “split along geographical lines: for example, by major city”.

Infrastructure Australia said to prepare for a future sale, it was important that the NBN company did not “enmesh” different technologies in a way that cannot be separated later.

“Accordingly, NBN Co could establish separate internal business units in anticipation of creating a more competitive network,” the agency wrote. It advised the federal Government to undertake a “scoping study” to consider the objectives of any sale, before privatising the NBN company.

Infrastructure Australia particularly took aim at the cross-subsidy which the previous Labor Government set up to ensure that retail pricing on NBN broadband services would be the same Australia-wide.

“Currently, NBN Co is providing equivalent broadband services at the same wholesale price, regardless of geographic location or the technology platform used to deliver them,” Infrastructure Australia wrote. “This allows for consistent retail pricing for equivalent services – a requirement set by the Australian Government – but it constrains the recoverable revenue through wholesale pricing.”

“It means densely populated cities and urban centres are cross-subsidising our regional and more remote areas. A hidden cross-subsidy does not support transparency for service delivery in regional areas. This arrangement could also inhibit the transition to greater competition. Where possible, the Australian Government should make clear the aim of this [community service obligation], its present cost and funding source, and establish a competitive process for delivering the CSO.”

“Exposing the CSO to the market should improve the quality of services and lower the cost to taxpayers.”

The Infrastructure Australia plan also made reference to the need to change the way that the Government’s Universal Service Obligation plan. Currently the Government and industry fund a model which sees money delivered to Telstra to act as the telecommunications company of last resort, especially in regional areas.

However, mobile telco Vodafone has argued that the money should be diverted towards mobile services in regional areas instead, and the IA plan agreed.

“The Australian Government should consider phasing out its existing USO and diverting it to improved mobile coverage,” the report stated. “Diverting funding to provide better mobile coverage in the regions will support greater use of new technologies that rely on smartphones. This could involve introducing a technology-neutral USO to support mobile services, in conjunction with existing programs.”

The report also recommended making NBN backhaul and Fixed Wireless towers more available for use by mobile telcos in regional areas, as well as taking steps to encourage mobile telcos to co-locate their mobile infrastructure.

Opinion/analysis to follow.


  1. ABT.
    I’d suggest offloading HFC would be tackled at the 2016 federal election, just like buying a third Ka-band satellite (proposed service seems to be 25/ 5 Mbps with a 150 GB quota, whereas on Telstra Mobile free data day one Redditor alone scored nearly 500 GB).
    Maybe offloading fixed terrestrial wireless (Ericsson)? Stationary LTE was designed for Gbps, so far nbn does 50/ 5 to 20 Mbps.
    Refocus nbn between now and 2020 on the copper/ fibre transition. Privatise it in 2020 to 2025.
    Ensure no party can have more than wireless, plus either fibre/ copper or HFC.
    Salon socialisms didn’t work, and neither will extreme capitalism.
    Nbn-induced sovereign risk must be removed!
    OECD policy advise has talke of regulatory reform, competition for infrastructure and services, besides technology neutrality for a while now.

    • Hey John Nobel. Perhaps you could answer the question I’ve been asking for years now without a satisfactory response. (In fact with almost no response)
      How will competition in basic infrastructure such as fixed line telecommunications lead to lower prices for consumers?
      Please. I really would appreciate an explanation. Because if you have a rational response then I suggest you contact all the water and the electricity supply companies. Looking forward to multiple water pipes, electricity feeds etc being available at my door.

      • It depends how far you take the comparison. One could say the same about electricity and gas, sometimes owned by the same companies, sometimes by competitors. Both provide energy and customers can choose (to some extent) which one they use more, less or none at all. For better or worse, there are more options and technology choices available these days to transmit and receive IP packets than H20 and electrons.

        There have been examples before where private fibre has been laid TransACT for example, or wireless providers with fixed-line equivalent services have moved to certain geographic areas. These premises often had existing DSL or services but in some cases the alternative technology might be more appropriate for them. Whether it forces the price of other services down I don’t have information for, but I would be surprised if it made them any more expensive! The alternative offerings are in many cases cheaper or provide value in other areas (speed, data capacity etc).

        Rather than thinking of telecommunications infrastructure being a fixed line, if one thinks of the service being ‘connectivity’ then different infrastructure whether Fibre, HFC or Copper provide different mechanism (each with pro’s and cons) to provide a data service a customer. There is some choice which creates a market and might cause some competitive tension. It might be the case that there is just a happy oligopoloy of providers but even then, multiple providers would surely have to be better for consumers than a monopoly provider?

        I’m not advocating privatisation of last mile communications infrastructure but I think where there are competing infrastructure options available, it would likely have a downward impact on service price rather than higher. That is, unless both were owned by the same company who were merely forced to pay maintenance on multiple sets of infrastructure!

        • Joel Webb,
          Please stop pretending you know it all about how “IP Packets” being delivered to your house. There are only a few options:
          – xDSL (i.e. ADSL, ADSL2+, vDSL)
          – Fibre (some area ???)
          – HFC (Cable) only 2 biggest players owning a large share of the infrastructure, Telstra and Optus. If NBN is sold to one of these 2, then the choice is still very limited isn’t it? You mentioned other player, but are they willing to compete head-on with Telstra or Optus, knowing that they may get priced out ?
          – Satellite (I wouldn’t dream about it, low speed, high cost)
          – 3G/4G : are you paying less for your data over these network as compared to xDSL/Cable ?

          So you’re limited to 1 or 2 options for given cost that you’re willing to pay, and with only a couple of players, you know who set the price. Remember a few years back what Telstra did to the wholesale price ??

          So if you could please enlighten me with your statement “there are more options and technology choices available these days to transmit and receive IP packets than H20 and electrons”.
          It all comes down with cost vs speed !!! Technologies cannot be compared like apple-to-apple

          Another thing is you totally missed out the whole point of having NBN in the first place, let’s look at the BIG picture rather than individual area. Australia desperately needs the infrastructure to be able to compete on the global market. Have you ever wondered why we don’t have giant corporation like Yahoo, Google, Facebook like the US ? Simply because we either don’t have the infrastructure to deliver it, or it is too expensive !!

          So if NBN is privatised, you bet that the Telcos will make sure the future of internet commerce in Australia is set back to at least 10 years; isn’t it that they had been sitting on their hands between 1990 – 2010 ???

          Japan already had 100Mbps internet early in the last decade; Korea already had 1000Mbps (1Gbps) internet a few years ago. It is a disgrace that we are still struggling with basic plan of 12Mbps.

          So it is not like we can just fetch “IP packets” out of the air and everyone would have equal chance !!! It comes with a cost and Telcos will only invest in the area they makes money, other will get missed out !!!

  2. It makes perfect sense. It is really the only way to muddy the water enough to hide what the LNP ideology has done to the project, delays, cost blow outs, political interference, questionable governance.

    Hard to do the math once it is split up and sold off.

    Oh and true to form, the LNP will buy it back and do it all over again.

  3. How about the government do what they are supposed to do, own and manage infrastructure and let others sell services over that infrastructure. Having infrastructure in private hands is a major sovereign risk.

    • Umm, I don’t know that a government is “supposed” to build and manage infrastructure necessarily. The initial impetus for the government to build the NBN was that no private company would ever build such a network, because it would never earn *commercial* rates of return.

      Melbourne’s CityLink and EastLink are privately owned – Citylink has been a thing for nearly 20 years, and there seems to be no issues there. Having infrastructure in private hands can be a risk, but there are plenty of examples all over the world that ably demonstrate that this is not necessarily the case.

      That said, I do agree that the NBN should remain in public hands. If it is broken up and sold to competing interests, you face the possibility of arguments/disagreements between those competing interests, and we could be faced with one part of the network being held to ransom with another part of the network.

      (ie: Company A calls Company B an asshole, and refuses to move traffic from Company B across Company A’s network)

      It defeats the entire ideology of what a national broadband network should be.

      • CityLink and EastLink are examples of WHY you don’t want them private. As a Geelong boy, I can see why you don’t understand.

        Citylink and to a degree Eastlink after being built, had roads around them closed or lanes reduced to drive traffic onto the toll road. This was to fluff up the business plan to make these private companies build it.

        If you have to use these roads daily, you’ll soon see that they are a money maker! $5-8.57 each way, means a good $80/wk to drive on them.

        There is a reason Citylink is asking for a 10yr extension to its contract, the road is a cash cow.

        We don’t want the NBN to turn into this!

        • Firstly: “…as a Geelong boy, I can see why you don’t understand…”

          Beg pardon? I have lived in many places in Australia, including Melbourne. Just because I currently live in Geelong, doesn’t meant I don’t get out, or that I don’t have a brain. Frankly, yours is an offensive and moronic comment. Grow up.

          Secondly – after that effort, I don’t know why I even bothered reading the rest of your comment, but anyhow…has CityLink or EastLink gone broke, or discontinued service, or done terrible things? No, and frankly it shows that the model does work. Clearly we have a different opinion on the matter, but they wouldn’t have been built with 100% public money.

          It is fine for you to have some kind of philosophical objection, but nobody is forcing you to drive on their toll roads…you have control of your steering wheel…

          • The Geelong boy comment, had nothing to do with not getting out or not having a brain. It was simply that you don’t have to use a toll road EVERY DAY to get to work and back, so might not understand the impact.

            That $16/day (per toll road BTW) really hits your pocket hard.

            As to not being forced to use them, the same comment applies. As someone who doesn’t live/work in Melbourne currently, you might not realise as I said before that other roads around them have had lanes reduced or changed that FORCE you to use the toll road as they are pretty much choked.

            See, nothing at all about being a Brain dead Geelong boy at all, as you put it.

          • …but I have used a toll road everyday – did you miss the part where I said I’ve lived in Melbourne, before and after toll roads? Frankly, you’d save money – (time, fuel, wear and tear on your car) – using the toll road instead of jumping up and down about having to use a toll road you DON’T have to use…

            “…as someone who doesn’t live/work in Melbourne currently, you might not realise as I said before that other roads around them have had lanes reduced or changed that FORCE you to use the toll road as they are pretty much choked…”

            That was happening when CityLink opened, this is nothing new. It is not a new phenomenon.


          • Off topic…

            I did for years to get to work until City Rail decided to “improve” the timetable *cough*North Sydneysiders are worth more than Western Sydney*cough* and added an extra hour to my normal 15-20 minute train ride back home..

            Bugger that I’d rather spend the same time in traffic!

        • It’s $5 per toll in Brisbane, so you’re getting off fairly light.
          $20 return trip the CBD from the northside. Go team.

      • I’d argue that there is always a consideration to keep monopolistic infrastructure in the hands of Government.

        In no way has selling Telecom and the various Electricity commissions off to private interests been positive for the consumer that paid for them to be built with their taxes.

        • How could it? It is a logical failure – a government owned monopoly can provide non discriminatory access to all with no vested interests, it can run at break even because there’s no necessity to return ever increasing dividends to shareholders, keeping access prices as low as necessary to cover operational costs and maintenance. A commercial owner will be tempted to leverage their monopoly power in some advantageous way, they have a vested interest in minimising expenditure such as maintenance costs and customer service while maximising profit by charging ‘what the market will bear’. In a mature market with lots of competitors obviously the competition will come along and undercut you if you’re charging too much for your product, but in a natural monopoly where the costs and barriers to entry are excessive you will never have price deflating competition.

          If you look globally at privatisation initiatives focused on divestment of government controlled infrastructure monopolies the result has overwhelmingly been the creation of miniscule numbers of extremely wealthy people. The world bank has insisted on such privatisations as a requirement for funding to assist developing nations, with not a single success story where the nation and it’s people have directly benefitted.

          • National infrastructure can be funded by credit generated by a true National Bank as the Commonwealth Bank did under the Chifley Labour Government. There is no need to privatise national infrastructure.

      • What proportion of the Australian road network is under private control i.e. Chitylink? Perhaps the amount of NBNco network that should be outsourced to private hands, says satellite or something.

    • Yep exactly, the Aussie Govt seem to have no qualms selling anything and everything to China, even at the cost of their own people.
      Not just normal houses either, giant farming properties to boot. Incredible.

  4. Infrastructure Australia is simply returning to the bi-partisan competition policy of the Hawke/Keating years. Free market economists would agree. However such a policy has been made difficult (read expensive) due to the NBN disaster (all parties).

    Last mile infrastructure competition was possible utilising HFC and CAN. Both of these now acquired by NBNCo for the fixed line network. The most expensive portions of the CAN (LTE & Sat) retained by Conroy (paid with giving Telstra a 20 yr USO extension). NBN, with taxpayer equity, overbuilding anyone proposing / delivering last mile alternatives (except cellular; the elephant in the room).

    NBNCo’s revenue model, by design (pointed out at the time), depends on zero competition. Whilst I believe NBNCO won’t meet it’s revenue predictions (all models), without the cross subsidy the GBE requirement of “commercial terms” would be shattered and most of the expenditure brought into the budget. No political party (well maybe the greens) would accept such a proposal given their overspending, deficits and mounting debts. They’d prefer to hide the debt from voters (their children expected to pay).

    The HFC upgrade will now see the CAN in those areas abandoned after 18 months. Depending on component sale timing & price it’s possible for the two to compete but only for the 4.5m premises within the proposed HFC footprint. Significant challenges remain with FTTB in those areas.

    Worth pointing out ALP’s original policy was to privatise NBNCo. Their mistake believing it would be profitable and valued more than the equity injected. Clearly it wont be without monopoly gouging guarantees.

    NBN disaster, long pointed out, continues its realisation. Enjoy;-)

    • Worth pointing out that ALP’s original policy was privatisation AFTER IT WAS FULLY PAID DOWN. Dont leave that part out, its kinda important to the point of the article.

      At a wholesale level, yes it was always intended to be a monopoly. Why is that a bad thing? When are wholesale monopolies bad for the consumer? When they are controlled by private interests, concerned about profits rather than service.

      Telstra is the classic example. When it was Government owned, its monopoly meant consistency of service to the consumer. When they wanted competition, and sold it off so Optus could compete, how did that work out? What could have been done to make it work better?

      • @gg except it wasn’t. ALP policy (as legislated) was after construction.

        Monopolies have acknowledged characteristics that makes their operation less than ideal (universally bad for consumers). ACCC warned Conroy. Sometimes the nature of the market to be served requires them, but as discussed above not the case for the majority of fixed line internet users in Oz.

        Old Telecom was a disaster (a few of us remember); it’s service, options and pricing terrible for consumers. Optus entrance into the then monopoly was a massive win, long distance and international calls rates plummeted. Later local loop unbundling a boon for data consumers here.

        Unfortunately you can’t turn back the clock, however I’d have restricted Telstra overbuilding Optus HFC. This would injected a last mile competitor and continued network expansion), also forced Telstra to be more creative with their product offerings utilising their CAN (FTTN triple play a decade ago). Two large well financed competitors would have been great. If market dynamics not working then add a carrier license condition to require wholesale access. Regional areas require subsidy (open, in budget and tendered) for both last mile and backhaul (see BT). Total plan (posted several years ago) would have cost several billions and delivered a vasty superior outcome: speed matching demand, completed today.

        • Its amazing how selective memories can be. Again, how has Telstra being privatised made things better?

          Simplest example is line rental. There is no way you can convince me that supplying a fixed line costs $300 a year before you make a phone call. And please, dont use long range calls as an example, how often do people call interstate or internationally versus locally? For businesses, different story, but I’m talking about individuals.

          I also found an old electricity bill for $75 versus my most recent one for nearly $400 a couple of years back, and there wasnt a massive time difference considering the 500% change in price.

          In both circumstances, prices went up after privatisation, when the companies started caring about shareholders. Companies in situations where there was no serious competition.

          You’re right, you cant turn back the clock. If you could, I wonder whether most of those decisions would remain the same.

          The only time I remember seeing competition be positive on pricing in a monopoly scenario is currently with Foxtel. Streaming services have forced Foxtel to lower the cost of their basic package, but is that competition, or is that progress passing them by?

          • @gg your power bill is very illuminating. The privatise components prices have increase little, less than public. Govt extorting for environmental and gold plating spending the reason your bills have increased so much.

          • In the case of East Coast electricity, it’s a direct result of the $45bn that was spent upgrading power grids to cope with increasing demand, when the actual evidence demonstrated that demand had plateaued and was falling by the time those upgrades were approved. The falling demand was a direct result of private solar installation, the power companies used the funds as a tremendous cash injection into their businesses, I wonder how much was siphoned off in bonuses?

            There was a really illuminating in-depth analysis done on this several years ago, I believe it was an ABC article. Highly recommended to understand the way public funds can be misappropriated, how little control we have over the process and how utterly impotent we are to hold those responsible accountable.

          • @ug right, the biggest spenders mandated by govt. Worthy of an investigation (desal plants as well). Plenty of the ungrades required for renewable fantasies and their unreliability, total demand projected to fall.

            Biggest electricity demand drop as a direct response to rapid price increase and large power user relocating their emission overseas (without global reduction).

          • @pd guess the financial studies no match for the village voice and the NY equivalent of a Nigerian email scam. Seriously people.

        • “Old Telecom was a disaster (a few of us remember); it’s service, options and pricing terrible for consumers.”
          Interesting revisionist history. Let’s consider that PMG/Telecom existed for over 50 years, then after 15 short years of Telstras reign it became necessary* to rip them to shreds and start again with NBN Co.

          *Actually it was necessary after 5-10 but Liberal stagnation rules

    • How much infrastructure competition has been going on in the past 20 years Richard?

      I, technically, agree with nbn™ being privatised in the future, as long as it is privatised and legislation put in place to stop them from retailing on their own network. We do not need a repeat of Telstra being able to wholesale and retail anti-competitively.

      • @r0 billions!

        NBNCo’s wholesale prices makes this monopoly component the most expensive of the network. Why monopolies are attractive to any supplier (govt or private).

        • Please show me where these billions in infrastructure competition is happening?

          You can ignore Telstra rolling out Velocity in greenfields (because they have no competition), you can ignore Telstra rolling out copper in smaller greenfields (because they have no competition).

          The last time any real major infrastructure competition occurred in Australia before the NBN was the HFC wars in the 90’s.

          • The only real money being invested in comms infrastructure over the last ten years (nbn aside) has been in mobile/4G, so as usual he’s technically correct in his cherry picked way.

        • True r0, it’s been DSLAMs here and a few FTTN or HFC suburbs there. It’s only been around the edges, because no other company has had the courage to take on Telstra in the marketplace with a fixed-line network similar in reach and capacity to Telstra’s copper. Too much capital risk. They saw what happened between the Telstra and Optus HFC in the 90s. It’s been Clayton’s Infrastructure competition.

          • I think some consider a company (other than Telstra) placing a DSLAM into Telstra’s exchange and accessing Telstra’s network, as being the wonderment known as free market infrastructure competition?


            Which part of Telstra’s and Telstra’s do they not quite grasp?

            And then they have the gullibility to argue how great infrastructure competition was pre Conroy’s NBN (their words)… all in the face of incessant legal battles/ACCC interventions etc…

            Some just love reminiscing about the good old days (apart from commie Telecom of course)…


      • @ph monopoly costs are well understood in economics; theoretical and practical.

        The flip side to your question is why doesn’t govt or a single supplier produce everything?

        Competition and multiple producers may appear inefficient, but given the complexity of free markets and imperfect knowledge they continue to out perform all alternatives by a devastating margin.

        Pre Rudd/Gilard/Rudd such a position had bipartisan support, sadly the ALP has lost the realworld experience of the Hawke/Keating days. All union hacks and lawyers (problem in other parties as well). Competition a lesson that needs to be relearnt by every generation (poor leftoid education system) despite the global experience. It won’t change.

        • Sorry Richard, that’s just simply false. Competition is great where barriers to entry are low, but the higher those barriers the greater the risk of incumbent abuse of their power. The most extreme barriers exist in ‘natural monopolies’, where infrastructure investment is onerous and completely entrenches the incumbent in the market, making the barriers essentially insurmountable to potential competitors because they will never recover their investment based on the miniscule profits they would derive from the tiny fraction of market share available to them.

          Incumbents in such powerful positions have a critical stranglehold on society and the economy. Water, electricity, telecommunications, rail, roads and ports. Allowing private control of such critical infrastructure is a recipe for abuse – it is too tempting and too easy to take advantage of the monopoly and overcharge customers, because they’re not going anywhere and no one can stop you. Capitalists rail against ‘red tape’ laws designed to protect and control such companies, but without such control and oversight there’s nothing to stop them increasing their own profits and wealth to the detriment of the people (and even the local economy).

          Government exists to allow the people to govern themselves, to provide a framework for the development of laws to protect people and society. Certain administrative tasks fall to governments because facilitating their supply is beneficial to the society, such as basic infrastructure upon which people can build their lives. Such as water, land management, transportation, electricity etc. Upon this foundation people can develop and sell all kinds of products and services, adding value and variety to society.

          The problem is that Capitalists realised there was a great deal of profit to be made in private ownership of monopolies, and a capitalist hates to see profit squandered. The problem with this thinking is, privatisation of monopoly infrastructure adds nothing of value to society, while it leeches money away from the people like a parasite, carving out profit for private interests from a system where it was wholly unnecessary. The only way to get that profit is to decrease costs (ie cut maintenance and servicing, reducing quality) and/or increase access prices, so it gets more expensive for customers yet they derive less value.

          Please, tell me how that improves things? Tell me how society is better off for privatisation of critical infrastructure? I’ve studied a fair bit of economics and political history, and there has not been a single valid reason for privatisation – it benefits the powerful, the rich, the banks, the international investors and the corrupt politicians, while essentially stealing assets from the people and then stealing their money to keep paying for infrastructure they can’t do without – it makes the people poorer. That’s not a valid reason, it’s criminal.

          • @ug actually as I posted; monopology costs well understood. My first post post grad in this area.

            Unfortunately the abuse of monopolies is not restricted to private companies. Examples of govt abuses are common and no less likely (eg power generators). By comparison privatisation countinue to generate significant benefits including power generation in vic.

            Old telecom was massively overstaffed.

            Your post ignores the govt ability to regulate prices in all markets, particularly non-competitive ones. The biggest parasite in our society today is govt and their ever growing entourage of pigs at the trough.

            NBNCo a perfect example; $16b spent already with so little return, indefinite taxpayers subsidies required. 7th year expected to lose over $2b, simply unimaginable.

          • Richard, there’s a number of reasons Telecom was over staffed by today’s standards:

            * Dramatically Less automation across the network
            * Active maintenance of the physical networks
            * Telecom actually did research and development

            I could go on but there were mostly legitimate reasons for telecoms high staffing levels.

          • @do I don’t want to make this personal. It’s common for monopoly suppliers to be inefficient; costs carried by consumers.

            However telecom was overstaffed, evidenced by the large staff reductions post commercialisation (then privatisation). Competition in telecoms in Australia a great success. Bewildering they’d want to reintroduce a poorly performing govt monopoly supplier. NBNCo failureunprecedented internationally.

            AusPost, Qantas, Commonwealth Bank, Medibank we could go on.

          • “Competition in telecoms in Australia a great success.”

            Yeah, I love the multiple copper networks that stretch across the nation from the infrastructure competition.

            Or the Australia wide multiple HFC networks that aren’t just in the highest density, cherry picked regions.

            Or the multiple operators rolling out multiple FTTP networks across the country running down the same streets/building in the same areas as each other!

            Oh… Right… None of that happened. Infrastructure competition is a myth, it isn’t happening.

          • Uninvited Guest has nailed it.

            Speaking from the Free Market Paradise of TrumpLand, I cannot emphasize more how these arguments are identical to what we’re dealing with in the USA, only we’re a great example of what the end result of privatized infrastructure looks like.

            A back alley in Bucharest has better broadband than we do. But we pay some of the highest prices in the world. I hear from readers now paying over $100US a month to Comcast for 25Mbps broadband after buying their “insurance plan” to avoid Comcast’s usage rationing plan. Broadband prices are dramatically inceasing in the U.S. just because they realize they can charge more and still add usage caps to monetize usage. It is literally affecting the local economies of communities that get substandard broadband from a duopoly. Chattanooga, Tennessee is raking in new jobs and hundreds of millions in new investments because the publicly-owned power company delivers gigabit Internet in a state dominated by AT&T slow as hell DSL or Comcast’s usage capped broadband.

            In this unregulated paradise, most Americans have no chance of new competitors because new entrants cannot convince investors or banks to finance expensive fiber projects only to win 15% market share. Why is that? Because incumbents cross-subsidize pricing in competitive areas. When you call to cancel, they sell you a retention plan at a ridiculously low price, financed by rate hikes on customers where competition is absent.

            The NBN resolves all this brilliantly and Australians can either pay for a fiber network or go back to what you had before and hand over your money to investors and executives who see every incentive to spend less so they can get paid more.

            Selling the NBN sounds like something Donald Trump would suggest. If you want him, you can have him. It’s will be our payback for Rupert.

          • Philip, I’d ask why you stay, but I’m guessing it’s because you don’t want to become a victim of U.S. Foreign policy.

            (Apologies to Barry Crimmins)

          • @pd the U.S. is no free market paradise (and no longer free). Govt control and expenditure is everywhere; over regulation, massive debts & deficits. It the economy model I’m trying to avoid.

            Travel regularly, U.S. is well below most developing countries experience (airports, planes, hotels,… ). Wasn’t always the case, how quickly they fall.

            As a safe currency money continues to pour in to support massive deficits and unproductive spending (eg nasa engine test facilities built for an engine design cancelled before test facility construction commenced, after opening cermony construction teams paid to mothball it).

            I don’t know much about Trump apart from staying in a few of his hotels, but from quotes published here he appears to be telling a few truths (surprisingly directly). It might pay to listen to someone not trying to deceive you.

            @do US remains a rich and beautiful country. The great irony after seeing off communism will be govt will bring down this great nation too.

          • Richard, I’m not planning to make this personal either but the facts are technology is what made most of the “excess staff” redundant, not management.

            And let’s not forget that Telstra had a very large number of call centre staff here that have now been off shored too.

          • @ Dick,

            “the U.S. is no free market paradise (and no longer free). Govt control and expenditure is everywhere; over regulation, massive debts & deficits. It the economy model I’m trying to avoid.”

            Oh so you support a “free market paradise” and governments out…?

            Just like the greed driven companies did pre-GFC. You know, when they demanded – “hey government keep your nose out of our affairs (in other words fuck off).”

            Then when their greed caught up with them and the same companies (some huge multi $B companies) were about to go to the wall during the GFC, what did they say and do then?

            They went down on their knees and begged the very same government they told to FO to please, please…. bail them out.

            But of course that the side of your biased argument you always fail to address and pretend doesn’t and never existed…whilst residing in that wonderful safety bubble of market perfection.

            Time to open both eyes Dick.

          • Sorry (again) Richard, financial market deregulation is the epitome of what you’re espousing for economies generally, and deregulation is precisely what led to the GFC, the effects of which are still being felt and are about to cause global destabilisation due to the vast reallocation of wealth that has occurred over the past eight years. If it wasn’t for deregulation, the financial markets wouldn’t have been allowed to create and bundle high risk products with no discernable differentiation from blue chip loans, the poisoning of the global financial system wouldn’t have caused the reactionary market retraction that caused the GFC while the global boom was still in full swing, that wouldn’t have caused governments to run up trillions in debt to bail out a financial system that was clearly broken but they couldn’t do without (as the world came within a whisker of global hyperinflation), that debt essentially ate up global equity reserves (that tiny fraction of boom time income that had actually been set aside instead of squandered by the incompetent capitalist optimists who always predict never ending booms when history tells us cycles are inevitable), so now as retractions in China have ripple effects throughout global economies, as the world realises that governments can’t shore up economies through confidence boosting money trains indefinitely and investors and shareholders start getting cold feet, we know the music is about to stop and most people are going to be left without a chair to sit on, with governments and big financiers holding up their hands and saying ‘we can’t protect you this time – we’re in too much debt and have no equity left to be bailing anyone out’. So what happens this time?

            And the thing to remember is, all that money that was being pumped into the system, it wasn’t being pumped into the ether. Where do you think it was going? It went to major investors, as essentially bribes to keep them from ripping their money out of the system. When that cash has dried up, they will want to protect that money, whether they’re a hedge fund or an insurance company or a billionaire. To reduce risk they will move their money out of unstable markets predicted to tank into safe assets like gold (which is only going to climb in value exponentially in the coming years as there is literally not even slightly enough to go around). Government bonds look iffy at this point as governments themselves are far to leveraged into market stability. Real estate remains far too overvalued for savvy investors, even in the USA where several market corrections have kept prices at reasonable levels, but in a country like Australia half the value of real estate could be wiped out overnight. The point is there is too much consolidation of wealth in too few hands, and they can’t shift that much money into ‘safe’ products because there simply aren’t enough of such products for the sheer volume of money these people control. So the end result is they literally *can’t* pull all their cash out of the system, because there’s nowhere for them to move it *to* – they continue to prop up the system because they can’t leave it by choice, which is the one thing that has protected global financial markets. But they are doing what they can, and money is still gushing out of the system as rapidly as they dare allow it to flow without deliberately causing a market run (which would hurt them as much if not more than everyone else, because they can’t pull all their money out at once, thank *&#@).

            This hellish situation is the result of both privatisation and deregulation. It is the concentration and consolidation of wealth, where just a few people can make decisions that make the global financial system heave one way or another. Without deregulation this *could not have happened*. Without privatisation people and cities and countries would not be so at risk of critical infrastructure exposure to market volatility.

            Look, I understand you are a free market capitalist and a believer in Freedman’s Boston school of economics modelling, but the fact is the system is fundamentally flawed, as so much analysis has demonstrated. It works from the perspective of entrenched wealthy, but from those at the bottom they are exploiting it is ostensibly unworkable. There are numerous examples of how countries and Markets have resisted the imposition of such capitalist systems and the private theft of public wealth and the only way to impose it was through military intervention and state sponsored terrorism of their own citizens. That’s not ‘free market’ ideology, so tell me why that has been the solution? Killing and disappearing people in their tens of thousands, criminalising uninion membership and any form of legislation protecting the rights of workers. From Africa to the middle east, Eastern Europe to South America and Greece. Financial system deregulation is just the ‘low hanging fruit’ example of what happens when oversight, regulation and control are completely removed in favour of ‘self regulating’ (read: free to do whatever they like without fear of being held to account) free market capitalist systems. They can’t work because they are designed to fail, because you can’t keep shifting wealth from the bottom to the top indefinitely, because when you remove oversight and repercussions people will inevitably push the boundaries until they find a new ceiling, resulting in flagrant abuse of the system (and thus everyone not a multibillionaire). Your argument fails because it is wrong, because we know from logic it must fail, because modelling shows it must fail, and because real world results like the GFC demonstrate that they *do* fail.

          • @gc financial markets (in particular US home loans) one of the most regulated around the world.

            The GFC was due to the failure to properly price risk. They should have been allowed to fail, not the bad debt nationalised (more govt intervention).

            More of an Austrian economist myself.

            Freer markets have created all the wealth around you, and has lifted billions of people out of poverty in the last couple of decades alone. Including those that lived under the terror of communism. Centralise decision making has comprehensively failed, again a lesson that surprisingly needs to be continually relearnt.

            Then most here don’t recognise NBNCo failures (all models). $16b to date, few hundred thousand services.

          • Sorry Richard, with that comment you demonstrate an almost perverse lack of knowledge for someone who seems proud of how knowledgeable you are on the topic. There is so much you can read on the topic, but to make it simple and save you time I will only recommend one book – Naiomi Klein’s the Shock Doctrine. You could read it in an afternoon.

          • @ug I could have replaced my two postgrad degrees with an afternoon reading. We see what passes for knowledge in some forums;-)

          • The biggest parasite in our society today is govt and their ever growing entourage of pigs at the trough.

            Ah, ok, now I get it, you’re one of “them”…

          • Your first (according to you) post grad was (iirc – not that I actually GAF) was ironically…

            “Market Failures”… Dick.

            Wow reading your ideological market this, market that rubbish, seems you must have been pissed, whacked or asleep during…?

          • Richard, your appeal to authority through the holding of certain unverifiable qualifications is a logical fallacy and thus meaningless. I, too, have degrees, and have been involved in the development of undergrad, post grad programs, and university administration, I have been an employer and workmate of highly skilled and qualified people, and that experience has led me to the conclusion that the only thing you can know from a piece of paper is that that person was enrolled at a university and when they stopped being enrolled they were handed a certificate. A degree does not tell you how much work they did, it does not tell you how competent they are, it doesn’t even tell you whether they made it to class for three years or skived off and were passed anyway because someone they know is influential (or they were an international student, 99% of which are guaranteed a pass irrespective of their knowledge or ability). The commercialisation of tertiary education has reduced its value to nothing. There are plenty of mediocre and even incompetent lecturers even at the most prestigious universities on the planet, so it’s hardly surprising that someone could acquire a degree while being taught utter nonsense.

            So don’t try to claim your argument is somehow more powerful or relevant just because you have a piece of paper – your arguments must stand or fall on their own merit, and sadly I’m yet to read a convincing argument from you on any topic.

            Which goes to the somewhat more important aspect of your comment – your dismissal of information that doesn’t overwhelmingly agree with your preexisting ideological worldview. Those who dismiss information out of hand demonstrate that they are incapable of holding a sound, scientific and valid viewpoint – how can you? The only way to come to a sound conclusion on any topic is to collect and analyse the body of evidence objectively. You can’t do that if you simply dismiss anything that doesn’t agree with your existing position.

            So not only do you invalidate your argument here, you have comprehensively undermined your credibility and the value of your opinion on any topic at any point – you have no moral compunction to promote evidence that you believe supports your specific position or view, while ignoring, disparaging or avoiding evidence that might disagree or promote an alternative possibility.

            You, sir, fail at logic. Your opinion and your comments and your arguments are utterly, comprehensively worthless and should be ignored by all because they are devoid of facts or value.

    • Considering the rate that electricity has sky rocketed after privatisation, I think you may be wrong on that one.

      • @r actually no. Compare prices in the privatise components with their non-private supports in other states. Surprising this is still repeated, comprehensively covered during the qld & nsw privatisation debates.

        • @do yet the numbers support my position:

          “It found that since privatisation, electricity bills have increased less in the privatised states of Victoria (99 per cent) and South Australia (80 per cent) than over the same period in the non-privatised states of NSW (158 per cent) and Queensland (152 per cent).”

          If you’re wondering about rising costs of living look first to govt as the cause not the solution.

          • NSW and QLD are different cases, SA and Vic power costs are directly attributable (170% in Vic according to the article I posted) to privatisation.

          • @do not what I get out of the age article (down on Kennet;-)

            “His figures show that in the past three years, electricity bills in Victoria have increased by up to 66 per cent, or $680 on an annual bill. Yet he questions how much of this is actually about electricity price increases; apart from the carbon tax, consider add-on costs such as smart meters and renewable energy requirements. These were policies imposed by governments.”

            Take out the govt extortion (eg wholesale generation charges) and we’d all be much richer.

          • Sorry I was looking at this section:

            “In a report this year, the Australia Institute used official figures to calculate that the cost of electricity increased by 170 per cent from 1995 to 2012 – four times higher than the rise in the consumer price index.

          • @do we’ve all experienced it. Cost of living and doing business in Australia is ridiculous; govt the primary cause (as discussed in the very article).

          • With QLD , you can blame the incompetent Lying LNP (1 Term) with the 152 % increase , to keep the “Cost of Living Down ” ?


          Since 2009, the electricity networks that own and manage our “poles and wires” have quietly spent $45 billion on the most expensive project this country has ever seen.

          Let’s be clear: this is the single biggest reason power prices have skyrocketed. According to the federal treasury, 51% of your electricity bill goes towards “network charges”.

          Privatisation sure worked out well for the end consumer – right Richard?

          We now pay 50-60% of our bill to fund gold plating of the electrical network.

          The 90’s cable wars taught us Australia cannot have infrastructure competition – it doesn’t work here and never will.

          Your philosophy is the reason we are now in this mess – private companies will cherry pick and not invest in networks/run them down.

          The government has to build a real nbn – no other company will.

    • If NBN had have been successfully built as envisaged (if not planned) then it undoubtedly would have been a very saleable assets once completed and the backbone of Australian communications infrastructure. You really think it couldn’t have been worth A LOT? But remember the Telecom/Testra sell off was decades after project began. Think you’re getting ahead of the curve there.

      • @a it would have been worth a lot, just a lot less than they spent on it. Same with today (management competent).

          • Think about it, MtM is a temporary, high maintenance network – if it was FTTP to 93% it’d be worth a lot more simply because it’s comparatively cheap to run and maintain and upgrades are easy. Plus you would have the bonus of being able to supply biz grade, high bandwidth, high margin services via RSP’s.

            Even better, the gov would have absorbed all the financial risk in the construction phase vs MtM nbn where the FTTP roll-out financial risks would still need to be born by the new owner in 5 to 7 years.

          • @do except unlike anyone here I’ve done the numbers, destruction of “detailed analysis story”. The numbers don’t play out the imagined fanboy reality.

            How does govt “absorb” the financial risk other than the way PWC (and myself) have identified?

            Put some number up or move on. The spouting of the same unsupported opinion across this forum is tiresome.

          • I dont agree with your numbers, imo the dont pass the “sniff test”.

            As i’m not financial analyst I’ll just have to leave it at that – I was once a Business Analyst and have written more than a few business cases to spend millions of CapEx dollars (most was about 4 Mil) so i’m relying on my experience and instincts.

            I personally think that like many corporate finance people you ignore the intangibles and long term benefits of “doing things properly the first time”.

          • @do a “sniff test” means nothing.

            My numbers are published for anyone to analyse (and I’ve repeatedly asked for it). Renai’s published articles covering “detailed analysis” destroyed with 15 minutes research (confirmed by author). Post after post of bile attacking my obvious corrections.

            CPP, ARPU and direct opex all that’s relevant. Simple once you have the background info (links supplied by a few), like FTTN details. Most here run around in circles publishing uninformed opinion and “facts” that have been corrected several times.

            Intangible too are quantifiable. Time to put up some numbers.

          • Your numbers are tainted with selectivity (cherry picking) and Ergas-esque conservative, yes man BS…IMO, Dick…

            So the big question is –

            Who should we believe…

            Richard the guy who desperately comes to Delimiter everyday to tell us all how good Richard is…

            Or Mike Quigley a universally recognised professional with years of experience in the field.

            Gee’s that’s a hard choice – NOT.

          • Cannot let go, it’s still August 2013 always for you and many others, if the Coalition win again through to 2019 it will still be 2013 and Quigley is still running the NBN Co.

  5. Haha – I can see the timeline now:

    – We pay Telstra $11b as compensation for losing their copper network.
    – We decide to keep the copper network, but pay Telstra to fix it because it is in such a bad state.
    – We sell it all back to Telstra again.


    • “– We sell it all back to Telstra again.”

      For less than we spend on the entire network and hand Telstra back an upgraded fixed line network for them to continue their current anti-competitive business practices.

      • you would hope a retail provider would not be allowed operate both retail and wholesale out of the same company ‘again’!!

        If anything else I’m guessing there’s whole chunks even Telstra don’t want back!

    • And let’s not forget that Telstra has veto on who buys their ex-copper networks. They are not going to roll over and let a competitor buy it and treat them the way they have treated the rest of the industry for the last 15 years!

      • Derek O,

        And let’s not forget that Telstra has veto on who buys their ex-copper networks.

        How does Telstra have a veto over a copper network they don’t own anymore?

        • Seriously, showing your ignorance as usual Alain!!

          Telstra has also secured asset disposal restrictions should NBN Co sell the HFC or copper network after ownership is transferred.

          The restrictions would in certain circumstances require an acquirer – such as another large retail service provider – to enter into a direct agreement with Telstra to purchase the assets.

          • That doesn’t read right, in the light of this statement:

            Under new continuity deeds in the agreement, Telstra will remain able to use the copper and HFC networks to serve its retail and wholesale customers while the assets are progressively transferred to NBN Co.

            So at some point all the assets will be transferred to the NBN Co, so what copper/HFC assets does Telstra still have left that a retail service provider needs to enter into a direct agreement with them to purchase them?

            Unless they are referring to a scenario where a offer is made to purchase the copper or HFC before the asset transfer is completed to the NBN Co.

          • so what copper/HFC assets does Telstra still have left

            All of them until the exchanges get repainted in nbn™ trademarks I expect.

    • Michael Wyres,

      We pay Telstra $11b as compensation for losing their copper network.

      Unlike Labor who was going to pay them the same amount to shut it down and the Telstra HFC as well so the most expensive CPP FTTP could be overbuilt onto both.

      We decide to keep the copper network, but pay Telstra to fix it because it is in such a bad state.

      I wasn’t aware Telstra were the sole contractor for FTTN remediation where required.

      We sell it all back to Telstra again.

      Assuming Telstra is interested, somehow I doubt it.

    • Why would the LNP initiate a Royal Commission into their own doings?

      As far as I am aware, a Royal Commission happens when a Government requests one from the Head of State (through the GG), thus we would have to wait until a future Labor/Other party(lol?) Government are in power.

    • Do the ‘Nationals’ even really exist anymore in anything but name? Other than some grumbling for electorate benefit I doubt they’ll do much other than support MT et al.

  6. who the heck is going to buy the HFC network, much less at a price that will give the taxpayers a return on what we spent buying it? Its a got a min of 10 year mandatory support and maintenance for foxtel along with it (which you don’t get paid for so its a pure expense). Especially since you have the chance then of someone overbuilding it with fibre (because I assume once you sell you cannot prevent area’s being cherry picked to further extend the fibre footprint).

    Also who’s going to buy the satellites and fixed wireless. They subsidised atm by the fact that metro users offset the higher costs so everyone ends up paying the same. you privatise that prices will skyrocket to match their real costs!

    FttN/B maybe sure but I don’t see an entity buying up a technology that is essentially obsolete. It’d be better spending that capital elsewhere on something with longevity. currently its projected to have a 2-3% return which flat out sucks even for wholesale comm’s. Better of just buying Govt bonds lol.

    FttP no issues there as its good for another 50 years and is making better returns than projected atm.

    • @sm paid zero for the HFC networks, renegotiated Conroy’s obscenely generous non-compete deal.

      JK’s senate estimates link had Foxtel support expiring 2023-25 according to Conroy. Importantly revenue picked up when infrastructure passes to NBNCo (contract price agreed, CPI adjusted).

      Sat and LTE have a price, but well below taxpayer equity spent. Indefinite subsidies possibly required in addition. Sad isn’t it.

      FTTN/B is no where near obsolete. Returns in other markets outstanding.

      NBNCo ARPU marginly above predictions (as shown 4%) however costs blown out by far greater. Policy a dud.

      • The LNP’s policy has a roi of 2-3% – WHAT A DUD!

        It’s only worth 27 billion – WHAT A DUD!

        No minimum speed – WHAT A DAD!

        CVC issues – WHAT A DUD!

        Why are you defending it – it’s a dud from all levels.


            The national broadband network will only be worth $27 billion when it is complete – less than half what it will cost to build, according to auditing firm PwC.

            Under the Coalition, the NBN’s internal rate of return has fallen to between 2.7 and 3.5 per cent.

            Since you are all for financial analysis – when it suits your situation.

            What a dud of a policy!

          • @meck01

            Interesting article, thanks for the link.

            It also highlights why corporations wont invest on this type of infrastructure here, it’s just too big an outlay to get the ball rolling for them. If the PMG had been a private company, I doubt we’d even have a copper network that covered almost everywhere…

          • @m article I’ve already linked to, outcome I’ve predicted for years.

            What’s missing from your post is the original policy’s IRR is today negative (CPP higher, revenue same but slower).

            Again all models a disaster. Taxpayers up for tens of billions (and climbing).

          • You forgot to mention that FTTP has an roi of 7% (at least), would be worth $45 billion and would pay itself off.

            FTTN does not do this.

          • @m the CPs with the following predictions v actuals:

            Premises passed (FY13, FY14, FY15)
            Forecast CP12-15p61 661k, 1681k, 3664k.
            Actual AR14-15p22 227k (-66%), 553k (-68%), 1153k (-66%).

            Premises activated (FY13, FY14, FY15)
            Forecast CP12-15p61 92k, 551k, 1615k.
            Actual AR14-15p22 70k (-24%), 211k (-62%), 486k (-70%).

            Revenue (FY13, FY14, FY15)
            Forecast CP12-15p61 $18m, $120m, $529m
            Actual AR14-15p27 $17m (-6%), $61m (-49%), $164m (-69%).

            CPP of $2200-2400 when actual over $3700.

            Performance that makes a 7% IRR disappear very quickly don’t you think?

          • @Richard

            Lots of numbers, blah, blah, blah, things are still shit.

            Life isn’t about numbers, greed is about numbers. If both your post grads were about numbers, you may be rich, but you’ve wasted your life Richard.

          • Lots of numbers, blah, blah, blah, things are still shit.

            That’s what is always outstanding about pro FTTP and MtM bashing argument, the in depth detailed number crunching analysis in a response.

          • @Reality

            Lol, we all know numbers give you a woody Reality, I guess that’s why you like Richard so much ;o)

  7. Follow the money/influence and you’ll figure out why Infrastructure Australia wants to put the NBN on eBay.

    This recommendation is hilariously short-sighted, but no worries, the United States government is also being pressured by the private telecom companies to ban or sell off municipal broadband networks and AT&T is lobbying hard to pull the plug on rural fixed lines and hand everyone expensive wireless service instead.

    Politics and the “free market” theorists are what is really behind all this. They are counting on the current government to see the NBN as a money pit and suggest the free market can somehow do better, despite the fact the same companies likely to bid for these networks are the same ones that delivered the “better for our shareholders” lousy broadband that drove the case for the NBN in the first place.

    If they can get the taxpayers to front some of the infrastructure costs and with a motivated seller, these companies know they can low ball bids and pick up a nice assortment of fiber and hybrid fiber/copper networks at fire sale prices. Then the same Return On Investment formulas that left you with awful broadband and low caps will return and you will have subsidized the very networks future telecoms will charge you extortionist prices to access.

    Meanwhile, in the United States we still have public utilities building fiber-to-the-home networks delivering gigabit speeds (and more) to consumers for as little as $65US a month with no caps. They are not going out of business, taxpayers are not fronting the costs, and long term bonds are covering the expenses. They put the dominant “free market” players to shame and expose the massive overcharging and Internet rationing private companies have gotten away with for years.

    Yes, it will take a few decades to pay off infrastructure like this — no different than paying off the electrical and telephone networks through artificially higher rates of decades past. But Australia will also get top-of-the-line infrastructure that will pay dividends for a long, long time. The alternative is more DSL. We have private telcos in the U.S. still selling 3Mbps DSL as plenty fast enough for consumers in big cities. Their investors celebrate every penny they don’t spend improving infrastructure, and with a working duopoly for most Americans, it’s tough luck.

    It would be nice to see Australia not make the same mistake. As for those rural wireless lines and shifting subsidies to wireless carriers, a word to the wise – don’t do it. We’ve had disastrous experience with that in the United States as well. The result was a small percentage of rural customers losing ALL telephone service and a much larger percentage extremely disappointed by the substandard network that results from “one-bar” signals, phones that don’t ring, cell tower failures and congestion, no reliable access to emergency services in power failures, degraded or failed performance of fax machines, older home security systems, telemedicine data, and permanently substandard broadband access. Service also turned out more expensive in many cases as well. That was good for the telecom companies, bad for you.

      • Yes it is I. I actually took time out from the U.S.broadband swamp to see how the NBN is coming along and saw this and my hair caught on fire. I thought American politics was bad and infested with money munchers and then I see this. I didn’t realize the mindlessness of unregulated monopolies and duopolies would be acceptable to a country I admire very much. It is a damn shame and you guys have lived with rationed broadband and overpriced service for far too long already.

        I hope I can enlighten people about the end result because that is what we have here and it isn’t pretty.

        • PM Abbott dumped minister Turnbull with the job of taking a pickaxe to the NBN vision. Some might speculate as a thanks very much to Uncle Rupert Murdoch for favourable coverage prior to and during the Federal election (with extreme prejudice) Minister Turnbull obliged and told lie upon lie to justify his policy direction. Now he’s at the top he can’t admit error. Will take a new PM and by then it could be all too big a mess for anyone to pull together, least of all (Private Interest) Infrastructure Australia.

          • Don’t worry. The pro-privatization crowd that demagogues the NBN and then slows network development to a crawl while discussing cost and privatization will later blame the predictable delays that result on “government inefficiency.”

            I knew this was headed in the wrong direction as soon as they ditched a true FTTH plan for cheaper and lousy fiber to the neighborhood. Let me clue people in on that. AT&T also went the cheap route and just a decade later they are now forced to reinvest billions because that technology has proved completely inadequate. You will hear all about vectoring and bonded DSL making copper wire “relevant” again but it works better in a lab than in practice (assuming Testra’s infrastructure is as decrepit at AT&T’s deteriorating copper) and still doesn’t meet the speed demands consumers are increasingly seeking. The gold standard is now gigabit and AT&T was stuck with a network that on a good day managed a maximum of around 25Mbps. They have managed to get closer to 100Mbps in some areas using bonding and VDSL, but then they realized even this was inadequate and today are again talking about scrapping the copper and going full fiber to the home (like they should have from the start).

            Short term thinking and obsession with short term results isn’t efficient or practical, but the free market lives by it here. They don’t admit their mistakes either.

          • Phillip, talking about gigabit.. Naughty naughty. You’ll have the right-wing LibTrolls here any second telling you/demanding you prove that a household needs more than 25Mbit.

            If you dare suggest more than one user utilising the connection at any given time, it will be ignored.

          • Phillip Dampier,

            I knew this was headed in the wrong direction as soon as they ditched a true FTTH plan for cheaper and lousy fiber to the neighborhood.

            It’s not that simple, the history of the previous Governments FTTP rollout was plagued with massively downgraded targets, so at the end it was half yes half of the original estimates, so at the end the Communications Minister in charge of the whole scheme for six years admitted (waiting until after their massive election loss of 2013) the FTTP construction model was overly ambitious.

            There was also the added complexity of the massive payout to the two biggest teleco’s in Australia Telstra and Singtel/Optus by the same Labor Government of $11B and $800M, part of which was to shut down their copper and HFC infrastructure so it could be overbuilt with NBN Co FTTP.

            To ensure all residents especially in the lucrative HFC high density population areas saw the ‘way to goodness’ with NBN FTTP it was necessary to remove choice.

            The current government renegotiated those contracts and obtained the copper and HFC infrastructure for the same amount Labor were going to pay them for not getting it, which was the catalyst for the much cheaper and faster to deploy MtM mix.

            The FTTN rollout is just gaining momentum here after a September last year release, FTTP now is mainly restricted to greenfield estates where you need to build fixed line infrastructure from scratch.

            So the big picture is not the same as the AT&T picture in the USA, where as you have outlined telco’s cherry pick areas they will upgrade for their own customers.

            You will hear all about vectoring and bonded DSL making copper wire “relevant” again but it works better in a lab than in practice

            Except in those countries where it works in practice you mean?

            Short term thinking and obsession with short term results isn’t efficient or practical, but the free market lives by it here. They don’t admit their mistakes either.

            FTTP is always waved about as the ultimate solution, as long as someone else pays for it of course, current funding estimates here for a NBN FTTP is $74-$84 Billion with a finish date of 2026-2028.

          • So much typing Reality, and so little of it correct…

            I couldn’t be bothered addressing it (again), it’s like beating your head against a brick wall…

          • It would easier not to actually say anything or just repeat “Lots of numbers, blah, blah, blah, things are still shit.”

    • “Politics and the “free market” theorists are what is really behind all this. They are counting on the current government to see the NBN as a money pit and suggest the free market can somehow do better”

      Oh the same “Free Market” that’s been fluid and dynamic and kept up with the times by keeping everyone on ADSL1 or 2+ (if your lucky) or plain old Dial up? The same “Free Market” that as someone on Whirlpool said was content on keeping us on a “supply driven” market instead of a “demand one” because by throttling/controlling supply it was much more cheaper to run and gave a much more constant if lower returns as opposed to the big risk/rewards of upgrading the infrastructure?

      Yup that “Free Market” did us wonders all right….

      People seem to have insanely small attention spans if they’ve already forgotten about Telstra’s stagnation

  8. Wow, just fucking wow, the fucking thing hasn’t even been built yet and they want to fucking sell it, so depressing.

  9. You know what. If local Municipal governments can get involved and build their own networks, I probably wouldn’t mind. Our local mob are actually pretty good around here, and having fttp would be a big win for small business.

    *Shakes head* anyway back to reality.

    The US is a prime example of why this sort of infrastructure competition simply does not work.
    The above article has details on how in the US, 10 mb down 60% of the population have choice of 2 or more providers. At 25 mb 50% have a choice of 1 provider.

    The only way it would work is if the infrastructure providers are forced to share at a reasonable wholesale price. Which worked really well with Telstra.

    • You can forget about infrastructure competition. It rarely happens. These companies take the path of least resistance. Here is the USA the cable company had the superior technology and have taken the speed advantage. Telcos in most parts of this country (there are some exceptions) decided it wasn’t worth investing in their networks to keep up by scrapping copper for fiber, so they became the “value leader” instead – selling slower broadband for less money. AT&T and Verizon shifted most of their investment into their cash cow wireless operations and their DSL customers are dwindling fast (and they honestly don’t care).

      You have Google and a small number of entrepreneurial fiber overbuilders in some cities, but almost all of them have to make a case before their bankers to wire neighborhoods individually, based on proven pre-registration demand. Some have been doing this for five years and have only a few thousand customers to show for it – less than 1% of many cities are wired for these networks, which often favor multiple dwelling units.

      Wall Street considers duplicative networks wasteful and punishes any provider threatening to spend money on them. Instead, they pressure providers to excel in a specific niche they can have to themselves and avoid inefficient and costly price wars. Where that competition does exist, they apply pressure for cost-saving consolidation and “synergies.” That way everyone is on the same page emptying your wallet together.

      • Indeed, that was my point. For the majority of the US there is no infrastructure competition. The system seems to punish non monopolies.

        When I said it worked really well with Telstra I was being Sarcastic .. LOL.

        Part of the reason I support the NBN is that I believe this sort of infrastructure for the masses, should be owned by a government entity. Because the overall benefit that the infrastructure provides to the nation, is greater than any loss in the actual value of the asset as a monopoly device.
        The idea of Infrastructure standardised and controlled, but with the RSP side being competitive. The POI not withstanding (another stupid mistake).

  10. If the free market is so good at supplying top rate Internet then why don’t we have it already??
    Telstra was privatized to enable market forces and what happened after 10 years of a free market? Sweet FA. People in metro areas still wait for DSl ports, so the demand is there just not the supply. Why? Cause the good areas are already cherry picked. NBN exists due to a need that the private sector will never meet because there is no money in it for them. If we want to be innovative how about re writing the play book and use profit from NBN to fund innovation.

  11. It’s costing double, is not delivering on it’s goals, is only receiving a 2-3% roi and will only be worth 1/2 of what we are spending.

    Are people really defending this policy – it’s a shambles!

    The cable wars taught us that we would never have infrastructure competition as Telstra was sold off with the network!

  12. I suggest the government should stop running the NBN as a dictatorship and let us the shareholders (ie taxpayers) decide whether or not it is sold on. Lets have an AGM and put a vote to the people.


    But it’s a long stretch for nbnTM to describe Cable Labs’ gigabit symmetric technology as something that’s “now right up there”, unless the company means “right up there in the blue sky until all the aforementioned standards and products are sorted out.”

    And, by the way, if we’re talking about a new modulation scheme, that means that every single HFC node – the ones that aren’t yet NBN-ready – will have to be upgraded to support Gigabit speeds. ®

    Why do we need these speeds anyway – 25mbps is more than enough – Richard/Malcolm told me so /sarcasm

  14. No justification = no credibility. There must be analysis of the practical implications. Thankfully Renai can do it, if the agencies set up to do it won’t.

  15. Sadly late to the party with this comment – got too distracted by Free Market Capitalist No 1 :-/

    So, privatisation, eh? That wasn’t at all predicable… Oh wait, yes it was But such ‘speculation’ was very much ‘on the fringe’ of rational thinking on the subject, wasn’t it Renai? So much ‘on the fringe’ that people were *actively censored* for writing such things on your site, because according to you they lacked rationality and a factual basis and so we’re ‘in breach’ of the comments policy. One of the few forums were people could have intelligent discussions in public about not only critical infrastructure but the party responsible for tens of billions in redistributed public funds, and you *actively censored* those with the knowledge and foresight to predict what was happening and coming. Based on what? You’ve admitted on numerous occasions you’re not an expert in ICT, networks, wireless, economics etc, you’re a journalist with an arts degree. Not that I’m disparaging you or your journalism – you perform a valuable role. But your arrogance at picking a winner on this, at actively censoring views that disagreed with yours, deleting comments because you said they lacked facts and rationality when they were absolutely spot on was a gross disservice to the industry and the country you espouse to represent.

    I am *not* attacking you as a journalist. I’m pointing out that if facts mean anything to you, then you need to let people who actually know what they’re talking about have rational discussion without you dismissing them, deleting their comments and banning them. Yes, you made a mistake believing Malcolm’s claptrap, but not allowing people to have those discussions without you shutting them (and even the whole conversation) down was worse, something you’ve never accepted.

    So do you accept that these predictions were accurate, do you accept that you’ve been a bit trigger happy with the delete key and let this comment stand, or do you shut me down again? This situation isn’t going away, it is only going to get worse – if you care about the fate of this country’s future, you need to let these discussions happen. You need to allow people to communicate, so they can discuss it with others, so the government can be held to account, so the current board of NBN Co can be stopped in their tracks before they relegate us to a third world economy with third world infrastructure. No, Delimiter is not going to be where an election is won or lost, but it might be the straw that led to the avalanche. Don’t stand in its way, because, quite frankly, you’re not qualified to pick a winner.

  16. The agency does not include any justification — at all — which may outline its reasoning why such a move would benefit Australia. It appears that the agency has either merely assumed that such a move would benefit Australia, or that the agency has chosen to completely withhold any reasoning for such a move from its document.

    There is a third option Renai, the agency was just told to say it…

    The LPA never learns, do they, and much like their name (Liberal Party of Australia) they keep putting Australia’s best interest last.

  17. All of a bit of a storm in a teacup, the Coalition have not stated they will implement any of Infrastructure Australia’s recommendations, in a election year with privatisation of public assets well and truly on the nose I doubt they will, nor will Labor if we ever get to see their NBN policy MK2.

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