John Linton
....what happens when 'government' involves themselves in doing what 'private enterprise' does.....or does anyone really believe that 'government' actually does anything half decently, cost/effectively and to the benefit of anyone but a group of dim witted politicians who haven't got the slightest idea of what is involved (except it might get them re-elected?).....and this is the case despite the fact that (if they live in NSW) they have had the opportunity of seeing what a Labor government can provide in the way of 'government' run "infrastructure" such as education, health, rail, roads, ports, policing and......(add any 'government' operated service you can think of) such as.....well, Telecom Australia before it was "privatised".
If you have forgotten that 'government' is incapable of building any infrastructure at a cost anyone can afford to pay for in a time frame in which anyone wants to use it then consider these two articles from the recent media:
http://www.theaustralian.news.com.au/story/0,25197,25938987-5006788,00.html
and:
http://www.southerncrosscables.com/public/News/newsdetail.cfm?StoryID=172
They provide a stark contrast of some speculation on the cost of a 'government' provided 'NBN2' and the ongoing reductions in cost of a private enterprise major undersea cable service.
The article from the Australian is mere speculation and the numbers are very, very unlikely to be even vaguely correct (how could they be - no-one including the 'gubment' has actually done any studies to get to a base point let alone a set of realistic estimates). However they do proceed from a close estimate of the funding committed to the project and then do provide a basis for establishing a take up percentage. It doesn't matter whether their estimates are correct or not - even if you take the best case scenario you can see that the project will never become financially viable and depending on the ongoing stream of Federal Labor funding has the ability to bankrupt the Tasmanian State budget within a very short space of time.
As the Labor Federal 'gubment' (as Julia Guillard insists on calling it) has no analysis nor any sort of financial plan for the Tasmanian 'NBN2' it's impossible for anyone to actually work out what the cost of providing a fibre connection to a residence or business in Tasmania is going to be - either as a heavily subsidised "start up" service or as a financially viable on going service. The figures in the Australian can't be used as they are as 'woolly' as Krudd's non-existent figures and have no more credibility. The only thing that is known (though I don't really think "known" is the right word to use) is that Telstra postulated some figures a long time ago to the Howard Government that indicated a cost of (Metropolitan build only) at around $A7,000 per end point and I can't remember now whether that was FTTH or FTTN - but I think it was the latter as Telstra's proposal involved no 'network sharing' of course.
So, everyone will have to wait for some real costings but you can be very, VERY sure that they won't be at all pretty and you certainly wouldn't let "your grandmother" invest in Krudd's fiscal criminality. It's very doubtful that any of the real numbers will see the light of day before the next Federal Election so there's little point in considering any aspects of the 'NBN2' for quite a while.
The other, very positive, news item I cited shows what a whiff of competition (something an 'NBN2' will never have) can do to prices of internet delivery components in Australia. Does anyone expect the cost of Krudd's megalomaniacal madness to fall 86% in a six year time frame? I guess there must be some people who believe it will based on today's opinion polls where Krudd retains a Fidel Castro/"Dear Leader" type popularity rating. As SX provides all of our bandwidth to the USA West Coast this latest reduction in cost is a welcome bonus and, looking in to the future, provides small companies like Exetel with greater flexibility in lowering future service costs (something it seems impossible for an 'NBN2' to ever achieve). We were recently enabled Exetel to reduce some of our ADSL plan prices by as much as $5.00 per month and/or raise the included downloads due, mainly, to the last Southern Cross price reduction and the latest reduction would allow a further reduction in base plan costs some time mid next year. There were of course 'two prongs' driving the latest price reduction. One, despite SX claims to the contrary, because of possible new competition. The main driver though is the fact that as the base technology continues to develop the costs of providing a megabyte of trans Pacific data continues to fall with a capital investment that also continues to fall as the technology advances. What would the current mobile networks look like if they had been built by a government monopoly in 1990 and no other network would be allowed to enter the market?
I wonder whether Krudd's 'NBN2' which would be built at a cost that would almost certainly be so high it would never allow a commercial return would ever allow even more money to be invested to upgrade it as technology develops at its usual rate of doubling in capability and halving in cost every three years? I'll give 100 to 1 that you'll never see an SX type price reduction for any 'NBN2' that may get built - assuming that anyone is ever insane enough to try and do that.