John Linton .....too damned quiet.
It's Wednesday and I've accomplished practically nothing this week so far (actually "practically nothing" is a euphemism for absolutely nothing). Accomplishing nothing is an inevitability when you start the week without a sensible schedule of what you need to do and a rough idea of how you will go about doing it. There are no excuses for such inactivity and I will undoubtedly pay for my sloth in the near future with a deluge of overdue actions. Perhaps it's simply the ongoing depredations of old age or simply the need for a break that is now well overdue. I think it is more likely to be simply the ravages of time.
We will begin connecting the first NBNCo 'trial customers "on the main land" today. In terms of a 'trial' nothing much from our 'side' will be affected and the 'trial' is basically for NBNCo to determine just how their internal systems and processes work. You may have noticed this:
http://www.itwire.com/business-it-news/networking/49038-nbn-co-bows-to-industry-pressure-on-cvc-pricing
or some similar article. Despite the headline there was no "industry pressure" just an error, on behalf of NBNCo, on how to price the service for green fields locations (currently all of them) where it is simply impossible for a wholesale customer to ever make a profit based on the pricing model initially suggested. It was always going to be changed, a five year old could have pointed out the obvious arithmetic error, so no harm done. Exetel proceeded with the trials and whatever then comes about on the basis that the current 'correction' would be done before we received our first bill....and, of course, that's what happened.
When I said I had done absolutely nothing so far this week that wasn't strictly true. For some time we have been trying to determine just what these early days of NBNCo 'connections' will mean to Exetel in our very unimportant way in terms of the overall market but the intensely important ways to our particular company. This has included whether or not we continue to use APPT supplied residential ADSL services in the immediate future and whether we continue to use Telstra Wholesale residential services beyond the short term. We have no problem with continuing to use Optus ADSL services (unless something major changes) as they are currently the lowest priced of the three alternatives and, while restricted in coverage, allow us to 'honour' our reasons for being in business. So we did review exactly where we currently stand in terms of ending our ADSL relationship with AAPT and did decide not to do that, at least at this time.
The NBNCo alternative to Telstra's current pricing (at least its pricing to Exetel) is probably going to turn out to be a plus for us as a provider of residential services. However the 'roll out', at least as I understand it, is so slow that it will be a very long time before it makes any real impact on TW provided residential services.....but long before it is widely available it will make some very serious problems for our ability to provide residential services via Telstra Wholesale. Those problems could be as early as November of this year. The reason is that Telstra, alone among our suppliers, insists on prices being tied to volumes of business. This means that even a slight reduction in customers (inevitable under the NBNCo scenario) render the whole customer base non-viable if the total number drops below a certain threshold. This sort of pricing, widely practiced in a growing market, presented no problems. However in a falling market (transitions from copper to fibre) it makes no sense at all. Whatever today's volumes of ADSL business are thy will continue to get less as fibre becomes an option to an increasing number of people.....in other words NBNCo was forced to recognise the illogic of its cvc pricing model but Telstra has refused to change its now unworkable pricing model.....for whatever reasons.
NBNCo was forced to recognise the basic error of their cvc pricing model - hence the recent change before a bill was issued in anger. It is yet to be seen whether someone within Telstra Wholesale will see the idiocy of using a pricing model that simply doesn't work in a falling market. Then again perhaps it is their "final solution" to pricing all competitors to Telstra Retail out of the residential ADSL market as the coup de grace to their "win back campaigns"?
Maybe we will come up with a better solution today.
Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46
PS: I thought this was an interesting initiative:
http://content.usatoday.com/communities/technologylive/post/2011/08/comcast-rolls-out-internet-access-for-low-income-families/1?csp=obnetwork