John Linton
....view of the Krudd cover up known as the NBN2.
I was sent this summary of one persons view of yesterday's 'NBNCo Industry Consultation". While I broadly agree with the views expressed (with the exception that I don't think it will ever be built in any meaningful way), they are actually the views of someone unknown to me. (I apologise about the formatting but transferring documents and getting rid of the, literally, pages and pages of formatting has always defeated me):
"Spent the afternoon at the NBNCo Industry consultation.
NBNCo panel consisted of:
Mike Quigley CEO: highly intelligent, quite aggressive but with a deep engineering knowledge;
Christy Boyce, NBNCo No 2 employee, Head of Industry Liaison, ex McKinsey Partner: very poor presenter
and completely out of depth in anything to do with telecoms;
Matthew Lobb, NBNCo GM Wholesale Products - reporting to Christy - quiet, good presenter.
Jamie Chard NBNCo Architect, poor presenter - technically incredibly weak.
The highlights in my opinion were:
NBNCo model will enable any Retail Service Provider RSP – with or without backhaul – to connect to an NBN POI. No POI can have only Telstra backhaul.
NBN provides transit backhaul to aggregate traffic from POIs that have contested backhaul. Telstra will not be allowed to use its unique backhaul assets for direct connection but must use and pay for NBN’s transit. Huh huh.
In the best case NBN may agree to rent/purchase backhaul from Telstra but certainly NBN largely eliminates or at least greatly reduces Telstra’s advantage in backhaul; Premise Optical Terminating Unit OTN will have multiple ports allowing a premise to have multiple retail service providers.
This will be for RSPs an absolute race to the bottom. If the wholesale cost per FTTP is $100/month/connection then RSPs won’t be able to charge more than a few tens of dollars per premise / month and with multiple RSPs per premise would mean that no margin whatsoever is left for RSPs. This is really a race/dive to the bottom;
Each premise OTN will have a single ATA to covert analogue phone calls to SIP and it may be that the
Government will have to allow a customer just to pay for the ATA to meet USO?
NBNCo has no path to Multi Dwelling Unit MDUs and FOXTEL has told NBNCo not to touch any of their equipment and basically bugger off from apartment buildings as far as possible;
The story about the remaining 10% via satellite is very murky. Quigley became quite agitated when somebody in the audience asked whether Telstra’s NextG already covering 99% of the population at up to 42 Mbit/s could be considered to meet the 12 Mbit/s for
the remaining 10%? At the end Quigley said that no decision was as of yet made on satellites and that the solution might end up being wireless for the remaining 10%
Quigley became very agitated - really rattled - about any wireless broadband competition capabilities. Quigley’s answers knocking down wireless were very unconvincing and IMO downright rubbish;
I asked and Quigley thanked me for good questions {but without giving any answers I have to say} on: “NBN’s view of having to compete with the CAN as well as HFC. Would Telstra and/or Optus be allowed to shut down their networks if it made commercial sense and what about the stranded equipment in exchanges?
Also, what would NBNCo’s position be if a carrier were to cherry pick the most profitable 20-30% of densest population by building their own FTTP at a fractional cost {Quigley’s response was that he’d raise that with the Government and would offer the Government options how to deal with cherry picking}
OK what does this all mean to Telstra, the other carriers and the consumer:
Telstra’s share price will no doubt plummet if there will be no deal with NBNCo;
NBNCo cannot offer full commercial pricing for Telstra’s assets and traffic unless backed by legislation allowing Telstra to turn-off the CAN segment by segment. This would be objected by ACCC unless legislated;
Running NBN in competition with CAN and HFC would be commercial suicide in particular with the
additional wireless competition;
ISPs will be completely wiped out by NBN. Tier-2 AAPT, Primus, TPG and iinet
will be wiped out, too. Optus will revert to a pure mobile + satellite carrier;
Telstra will lose over the next ten years all of its fixed line retail margin. A loss of $1b pa in profit at the end of the ten years. This could be partially offset by reduced OPEX, no further CAPEX in the CAN, business-to-business point-to-point fibre networks by Telstra Wholesale – this being beyond the scope of the simple NBNCo
GPON mass market premise model. Also, Telstra fixed line losses will be offset by further massive staff redundancies and extra wireless revenue. It could bethat after ten years Telstra’s revenue base will be reduced by a third but profit by very little.
All the competing carriers will be screwed by NBNCo and everybody will long for the good old days when they as the so called “competition” could have a free lunch at Telstra’s expense with generous assistance spoon fed by ACCC;
We the consumers will becompletely screwed because we will be paying two-to-three times more for fixed broadband especially if the take-up will be less than 60% as Paul Broad of AAPT so wisely warned.
These are just my thoughts. "
I would provide the acknowledgment to the person who wrote the above comments but they were sent to be by a third party so I can't do that for the moment.
Perhaps the technical media will provide their various views on this briefing later today? The only one I've seen so far said absolutely nothing:
http://www.theaustralian.com.au/business/national-broadband-roadshow-outlines-products/story-e6frg8zx-1225821803318