Sunday, February 6. 2011
I have had a chance to read the various attendee notes and other documentation provided at the seminar last week as it was too hot in Sydney yesterday to contemplate very much else. I think, unlike the multitude of ignorant peole from Ms Faustus on down who make their pig ignorant and biased comments about the 'wonderfulness' and amazing future that another government owned utility will provide that the previous government owned utility (which had 90 years to prove otherwise) did not provide - I have a sensible background knowledge of not only what has happened in the Australian communications industry generally but for the past twenty years have been actively involved in delivering voice and data services to a wide variety of users from the largest government departments to the smallest residential user. That, by no means, makes me an 'expert' but it does make me someone who is as knowledgeable as anyone else and, as an additional 'benefit' also has the additional perspective of someone who has risked every cent accumulated over a life time of work in trying to deliver cost effective communication services to Australian corporate and residential users.
I have read quite a considerable amount of material on first the 'NBN' and now the 'NBN2' (basically from the first day in 2007 when Krudd invented the concept of "I will provide $A4.9 billion so that no Australian living anywhere in Australia will live in broadband poverty by December 2009" subsequently followed seven months later by his even crazier and totally lying cover up of "make that $A49 billion by 2012". Throughout the period from September 2007 to today the only 'truth' is that 506 people have been connected to government fibre and that is via a billion dollar pork barrel in a federal 'swinging' electorate in that tiny State. OK, all major projects take time to get going but the Tasmanian pork barreling has clearly put into perspective that the 'NBN2' is driven purely by Labor's political requirements. Never forget that....however that is not really the practical issue as Australians get the governments they deserve by making their stupid self interest apparent to the con men in political party head quarters (of any persuasion) whose job it is to gull the stupid.
Three or four (depending how you look at it) things become apparent from the little, apparent, fact published so far.
Firstly the basic premise of the 'NBN2' being built by taxpayers money and then sold off to 'private industry' belongs in Lewis Carrol's first book....it simply can't be true even if the Red Queen insists that it is. In theory you can certainly spend billions of tax payers dollars and then give the results away to a private company who would never have invested that sort of money as there would be no commercial return but they would get a commercial return out of a zero investment. But what sort of government could give away billions of dollars of tax payers money without being lynched (figuratively if not unfortunately in reality). Apart from that gross silliness where is there an example, anywhere in the world, of a monopoly not exercising the abilities inherent monopoly brings to commerce? So that pathetic concept simply says that a bunch of self aggrandising wankers (the ALP in its desperation to keep its nose in the trough) will spend billions of tax payer dollars building a new monopoly to the one that was privatised over the past 10+ years on the basis that monopolies weren't good for the end user.
Secondly the concept of a single per month port price, irrespective of the number of ports rented per month is something that appears to be overwhelmingly beneficial - even if the price is very high - when/if it actually hits an executable contract. But the 'announced' port price is so high that it provides a major disincentive for the majority of today's wire line and wireless broadband users in capital and other major cities to actually select an 'NBN2' connection over an ADSL or wireless connection and - the major problem - it gives absolutely no reason why the current major carriers of either technology should put efforts in to promoting an 'NBN2' service rather than their current and future enhanced fully owned services which provide them with the abilities to compete with the high priced 'NBN2' ports. Why would Telstra put themselves in the position of buying ports at the same price as the 'NBN2' will sell them to Exetel or companies even smaller than Exetel? Of course - it's a case of "damned if you do and damned if you don't" because if there is a 'volume discount' then all that you have succeeded in doing is handing back to Telstra the monopoly you spent the billions to break (again) in the first place - minus the USO.
Thirdly - the USO and the concept of the 'NBN2' providing "cheap and fast broadband to all Australians". Does anyone really believe that impossibly absurd contradiction can actually occur? Despite the bare faced lying Krudd's statements and the morally and ethically bereft Ms Faustus' parroting of those statements subsequently, the fact remains that, as has always been the case, it costs a whole lot more money to provide telephone and data services to the Northern Territory than it does to the Sydney CBD. As part of the 'NBN2' deal is to relieve Telstra of the obligations to provide such services to regional and remote Australia who is going to do it? The 'NBN2'? I suppose that must be the answer - trouble with that answer is that if port costs anywhere in Australia are going to be priced the same how can that be possible? Only one answer to that of course which means the 'price gap' between an 'NBN2' port cost in the Sydney CBD and similar locations is going to have to be higher than it should have been and that means other technologies will become even more competitive than they should have been in the high population density areas.
So I am not sure I am any the wiser having 'invested' the time in reading what has been provided. Until Telstra shareholders actually approve the sale terms it is all a bit moot anyway. Of course the real wild gamble in the 'NBN2' is the assumption that 70% of current users will choose to use it - at least that's fractionally more realistic than the union goon's original statement that 90% of user will use it because we will ensure they have no choice. However, from what is reported it seems that 7o% of CURRENT users don't use the PSTN so I'm not sure where that leaves the basis on which the 'NBN2' is being toted as financially viable.
Democracy - what a ridiculous claim for Australia's methods of governance.
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One of the major problems you've highlighted is the lack of education that all too many people suffer with regard to the provision of communication services.
People simply don't understand that the expense of providing data services is governed by the level of competition in a given area and (sadly) the distance the handoff point is from the Sydney CBD.
All we've seen thus far regarding backhaul fees for NBN access is that the fee will be "$20 / Mbps". Where on earth does one start with such a statement??
Such statements completely fail to provide any sort of level playing field for any RSP. I do not have hard information, but I would think that RSPs would be expected to connect at a regional PoI to provide any NBN services to that region. If this thinking is correct, then your example of the Northern Territory is particularly appropriate, with very few choices for intercapital links and just as sparse a set of choices for co-location for interconnection.
There are plenty of issues that are not at all being addressed by Senator Conroy and his staff:
- All international connectivity except one minor cable (SeaMeWea-3 - JASURAUS doesn't count) lands in Sydney, thus a huge amount of intercapital improvement is surely needed to realise the network structure NBN promises.
- We are officially out of IPv4 addresses, yet there is no requirement for IPv6 support to become a RSP. The problem here is not ISPs like Exetel, but AAPT Optus, Telstra and Verizon in failing to offer IPv6 transit domestically as Steve Waddington has pointed out.
- No content or hosting strategy is being looked into by Conroy and company to feed this network. How much international capacity can be economically purchased, and is enough actually available to satisfy requirements? Ignoring either question, latency will not be improved by any amount if Australian customers still need to interact with services on the other side of the planet.
- The playing field will continue to be skewed whilst AAPT, Optus, Telstra and Verizon continue to benefit from a previous governement's braindead decision to create the Gang of Four peering cartel. If Exetel were to host a content distribution cluster for a customer, why should Exetel foot the bill to service Optus and Telstra customers, yet also foot the bill for their own customers for content fetched from those networks?
The short-sightedness of those attempting to effectively redefine the rules of your industry (and have a worrying impact on mine) continues to disgust me. I have written to Mr Conroy's department several times on all these issues and have yet to receive acknowledgement, let alone a reply.
I thought I'd pick up on the USO parts of your comments.
I'm not a fan of "under the radar" schemes and both the past USO and the system of the NBN are "under the radar". If you asked people in the east cost capitals whether they knew they were subsidising regional phone and internet, I suspect a majority would not. These systems are a hidden tax and subsidy systems. We don't have the debate about whether this system is beneficial or one which the community wants to bear.
As you point out, it may skew the economics in favour of other technologies - like wireless. It also skews the economics of people's choice of where to live. There is less incentive to avoid living in places that cost the community money.
If we're serious about a USO, it ought to be funded from general government funds - with changes in tax law if necessary.
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