NBN Rollout Scrapped

[NBNMyths]

Well smurph, that's why the first tender fell on its @#$e, the government wanted fixed price, got stupid quotes, rejected them all and re tendered.
Second time around went with the tried and proven tendering process of cost +.
That would be the cost plus whatever you can scam us for. LOL
NBN can't build it themselves, they are just a government dept shopfront, designed to stuff Telstra, the outcome will be very interesting.
IMO they would have been better off buying Telstra back(at half the price they sold it for)then seperated it and re floated it.
Instead they have taken the high risk ,high cost option and are left holding the can.

The 2nd round of tenders is not cost+ at all.

The primary differences between the two are:

Each tenderer got a large chunk of the country for a minimum 2 year period, with option for another 2. This reduced their risk in investments on tech and human resources.

Another was that they shifted the risk of duct remediation from the contractor to Telstra. The original tender went out before Telstra negotiations started, so cost risk of upgrading pit and pipe was on the contractor. By the time the second round came along, remediation was part of the Telstra deal, so that cost risk was removed.

If they'd just bought Telstra back, how would that have improved any infrastructure? They'd just be left owning the same obsolete network that the NBN is tasked with replacing.

 

[NBNMyths]

How does the cost of these contracts compared to that of NBN Co simply building the network itself?

I'd just like to know how much of my taxes will be building the actual NBN versus how much will be consumed in unnecessary overheads etc which are inherent in the outsourced system.

For a project of this size, I would have thought that a substantial in-house work crew supplemented by contractors would have been a cheaper option than using contractors for the majority of the work. It would also save a fortune through avoiding the inadequate compaction and poorly executed drill shots which always seem to happen when total control is given to contractors rolling out a power / gas / comms network.

I have no idea. But given the vocal complaints about the level of Govt involvement in the NBN now, I can only imagine the howling that would result from excluding the allmighty private sector from the rollout completely!

As for taxes.....Assuming all goes reasonably to plan, none of your taxes will be used on the NBN at all. The net is funded by debt through issue of bonds. The bonds (inc interest) are repaid from network revenue, not from consolidated revenue/tax dollars.

 

[sptrawler]

If they'd just bought Telstra back, how would that have improved any infrastructure? They'd just be left owning the same obsolete network that the NBN is tasked with replacing.

If they had bought Telstra back(nationalised it) at say $3.50-$3.80/share, which would have been 30% above market price at the time. There would have been an instant ongoing income stream which would have funded the upgrade.
When the upgrade was complete the government could re float any or all of it. Also if it went the same as last time they would double their money again $7.40/share.

 

[sptrawler]

As for taxes.....Assuming all goes reasonably to plan, none of your taxes will be used on the NBN at all. The net is funded by debt through issue of bonds. The bonds (inc interest) are repaid from network revenue, not from consolidated revenue/tax dollars.

Well lets be honest, that's the theory. Time will be the judge of the accuracy of that plan.
Like your first statement said" Assuming all goes reasonably to plan" any chance of providing an example of anything this government has done that has gone to plan.

 

[Smurf1976]

Each tenderer got a large chunk of the country for a minimum 2 year period, with option for another 2. This reduced their risk in investments on tech and human resources.

Another was that they shifted the risk of duct remediation from the contractor to Telstra. The original tender went out before Telstra negotiations started, so cost risk of upgrading pit and pipe was on the contractor. By the time the second round came along, remediation was part of the Telstra deal, so that cost risk was removed.

My main point is that if you let contractors loose with conduit work then it has a habit of being poorly done. Not enough glue on the joins (where rigid lengths are used), not buried to depth, inadequate compaction (and consequent quite legitimate local govt demands for rectification in a "quick as possible, cost is not a consideration" manner) and so on.

Telstra's network is absolutely full of asbestos by the way. During the NBN roll-out would be the quickest and cheapest time to deal with it. Cost I really don't know, but I'm thinking (based on practical experience with comparable work and a very rough guess of how much they have to deal with) that for the pits at least $2 billion should be allowed for actual costs if done as cheaply as possible without profit. Make that $5 billion if they simply hand the job over to someone to take care of (auditing this would be virtually impossible).

They also have a lot of asbestos in the conduit itself. I really don't know how much they have but I know that they do have it. Pulling in new cable will certainly result in some fibre disturbance - I'm guessing that they'll just conveniently ignore this but from a safety perspective it's not a smart move to end up with new cable contaminated with dust plus a pile of loose fibres at the bottom of every pit.

If cost were the objective then they should have been removing it during other (eg council) civil works over the past 10+ years. You can take a pit out and replace it for a few $ hundred all inclusive if someone else has nearby works. Double it and put a zero on the end if you have to come back later and rip up (and replace) new concrete etc. Telstra has left a lot of old asbestos pits surrounded by nice new concrete, pavers and faux brick that councils have installed - this isn't going to be cheap. They chould have removed them cheaply when the councils were doing work etc at those locations but chose to leave them.

 

[NBNMyths]

Well lets be honest, that's the theory. Time will be the judge of the accuracy of that plan.
Like your first statement said" Assuming all goes reasonably to plan" any chance of providing an example of anything this government has done that has gone to plan.

Yes, you're right. Until it's totally completed, we can't be sure. But then, you could say that about anything. Your current plan is probably to pay off your mortgage and retire one day. Until you turn ~60, you'll never know if that will actually happen. Of course, you have indications. You can see what your income is, and how much your repayments are. You can see how much super you have. Based on this info, you can make a reasonable estimate as to your future. And so it is with the NBN.

I'd suggest that the BER went largely to plan. As did the move to a national school curriculum. The stimulus package kept us out of recession, so I imagine that went to plan too, unless the plan was for us to go into recession of course

Plain packaging of ciggies went to plan. The elimination of workchoices went to plan. Subject to negs with the indies, I'd say the MRRT went pretty-much to plan too.

On the flipside, the insulation scheme was run with incredible naivety, the NSW and VIC state Labor govts stuffed up their share of the BER by overspending and the boat people situation is a fiasco (not that I can see any easy/workable solution from anyone on that topic).

But, overall I'd have to say I'm quite happy. Things are getting done, and not through the sale of "the geese that lay the golden eggs", which was principally how the last Govt remained in the black. I wonder what Governments will do when there's nothing left to sell? Find themselves in Barry O'Farrell's position, perhaps?

 

[NBNMyths]

Telstra's network is absolutely full of asbestos by the way. During the NBN roll-out would be the quickest and cheapest time to deal with it. Cost I really don't know, but I'm thinking (based on practical experience with comparable work and a very rough guess of how much they have to deal with) that for the pits at least $2 billion should be allowed for actual costs if done as cheaply as possible without profit. Make that $5 billion if they simply hand the job over to someone to take care of (auditing this would be virtually impossible).

They also have a lot of asbestos in the conduit itself. I really don't know how much they have but I know that they do have it. Pulling in new cable will certainly result in some fibre disturbance - I'm guessing that they'll just conveniently ignore this but from a safety perspective it's not a smart move to end up with new cable contaminated with dust plus a pile of loose fibres at the bottom of every pit.

If cost were the objective then they should have been removing it during other (eg council) civil works over the past 10+ years. You can take a pit out and replace it for a few $ hundred all inclusive if someone else has nearby works. Double it and put a zero on the end if you have to come back later and rip up (and replace) new concrete etc. Telstra has left a lot of old asbestos pits surrounded by nice new concrete, pavers and faux brick that councils have installed - this isn't going to be cheap. They chould have removed them cheaply when the councils were doing work etc at those locations but chose to leave them.

Funny you should say that, because that's exactly what is happening. Part of the Telstra deal is that they must deal with the remediation/repair/improvement of their duct systems so it can be used by the NBN (ie, it is deemed by NBN as being "fit for purpose". I believe (no link on me) that Telstra told their shareholders the cost would indeed be about $2bn.

 

[Garpal Gumnut]

NBNMyths mate,

The NBN is a dog.

A political dog.

It defies sense, has a poor uptake and will be overcome by superior technology within 12-18 months.

Spruik as you will.

A dog is a dog.

gg

 

[NBNMyths]

NBNMyths mate,

The NBN is a dog.

A political dog.

It defies sense, has a poor uptake and will be overcome by superior technology within 12-18 months.

Spruik as you will.

A dog is a dog.

gg

Never quite sure when you're being serious, and when you're just sprouting rubbish to get a bite. Either way, I always enjoy a nice bite.

It defies sense: It was recommended by the people that assessed the original (failed) FTTN plan, as the best option to go forward, and has very strong support from everyone who's anyone in the telco and IT industries. If that defies sense, then you must have a strange definition.

It has a poor uptake: Actually, the uptake is well above expectations. That beatup in the News Ltd press from a few weeks back lamented the "11% uptake as at mid October". Let's put that into perspective. The mainland NBN was only available for 2 weeks at the time those stats were current. 2 weeks. Optus and Telstra (the two largest ISPs) weren't even offering connections at that stage. That means that 60% of potential customers couldn't connect by then without paying contract-break fees for their ADSL. Telstra customers (50% of the market) are still in that position.

will be overcome by superior technology within 12-18 months: That, beyond a shadow of a doubt, illustrates your absolute lack of knowledge on the subject. There is nothing known to man (even in experimental physics labs) that can make optical fibre obsolete. To the contrary, fibre gets faster every day, and those advances in optical fibre tech can be implemented over the NBN when such speeds are required in the future. So to claim that something will be invented, tested and commercialised within 12-18 months is an epic-fail on the level of the Alan Jones laserbeam network. The NBN will offer 1Gbps speeds from next year, with an upgrade to 10Gbps pencilled for 2016, and 100Gbps on the roadmap for 2025. All using the same NBN cables that are being laid today.

The GPON fibre system being rolled out for the NBN is world-best standard for networking, and is the same tech as being rolled out in Singapore, Japan, South Korea, the US, UK, NZ and a hundred other countries.

The bottom line is that no-one in Telco agrees with your statement. Sorry.

 

[Garpal Gumnut]

Never quite sure when you're being serious, and when you're just sprouting rubbish to get a bite. Either way, I always enjoy a nice bite.

It defies sense: It was recommended by the people that assessed the original (failed) FTTN plan, as the best option to go forward, and has very strong support from everyone whose anyone in the telco and IT industries. If that defies sense, then you must have a strange definition.

It has a poor uptake: Actually, the uptake is well above expectations. That beatup in the News Ltd press from a few weeks back lamented the "11% uptake as at mid October". Let's put that into perspective. The mainland NBN was only available for 2 weeks at the time those stats were current. 2 weeks. Optus and Telstra (the two largest ISPs) weren't even offering connections at that stage. That means that 60% of potential customers couldn't connect by then without paying contract-break fees for their ADSL. Telstra customers (50% of the market) are still in that position.

will be overcome by superior technology within 12-18 months: That, beyond a shadow of a doubt, illustrates your absolute lack of knowledge on the subject. There is nothing known to man (even in experimental physics labs) that can make optical fibre obsolete. To the contrary, fibre gets faster every day, and those advances in optical fibre tech can be implemented over the NBN when such speeds are required in the future. So to claim that something will be invented, tested and commercialised within 12-18 months is an epic-fail on the level of the Alan Jones laserbeam network. The NBN will offer 1Gbps speeds from next year, with an upgrade to 10Gbps pencilled for 2016, and 100Gbps on the roadmap for 2025. All using the same NBN cables that are being laid today.

The GPON fibre system being rolled out for the NBN is world-best standard for networking, and is the same tech as being rolled out in Singapore, Japan, South Korea, the US, UK, NZ and a hundred other countries.

The bottom line is that no-one in Telco agrees with your statement. Sorry.

That is not what I am hearing or reading.

It is a dog, and a sick one at that.

gg

 

[So_Cynical]

NBNMyths mate,

The NBN is a dog.

A political dog.

It defies sense, has a poor uptake and will be overcome by superior technology within 12-18 months.

Spruik as you will.

A dog is a dog.

gg

lol coming from the man whp boldly said the below.

(5th-February-2011) I have it on good opinion from one of my Queensland ALP contacts , that the NBN is to be "modified".

This will free up money for the Flood and Cyclone Reconstruction.

The word "scrapped" will not be used.

"Modified" is the buzzword.

One can imagine a Dalek saying it...."Modified, modified, modified"

gg

Sounding like a bit of a Dalek yourself GG...with about as much credibility.

 

[bellenuit]

That won't bother the NBN, because the alternative "Telstra can't mislead consumers" is what they really needed from the deal anyway.

No, what they needed from the deal was to stifle competition. It is already illegal for companies to mislead customers. Witness Harvey Norman's recent $1.5m fine for doing just that.

 

[todster]

Give GG a break he has been in the Ross Island Hotel for ever.

 

[NBNMyths]

That is not what I am hearing or reading.

It is a dog, and a sick one at that.

gg

Just to ad to what So Cynical has posted, I think your cred on the issue leaves something to be desired, given the plethora of incorrect predictions you've been giving since this thread began. Have you actually got any of them right?

And now, you apparently have the inside running on some magic technology that will make optical fibre obsolete in 12 months, which that no-one in the telco sector has ever heard of. You'd better quickly tell them about it, lest they keep investing in their own fibre infrastructure and waste their shareholders money

Tell you what. I'll bookmark this post, and in "12-18 months" we'll see if you were right. I wouldn't bet your house on it.

 

[Struzball]

67x the data and 10x the speed for the same price. Clearly it would be impossible for Telstra to claim the two are comparable without being misleading.

Not technically the same price, one is a viable business product, the other is a 42 billion dollar black hole.

 

[So_Cynical]

Give GG a break he has been in the Ross Island Hotel for ever.

Perhaps he's peeved that they don't have wi-fi. :dunno:

 

[sptrawler]

Well Turnbull may be getting traction.

http://www.theage.com.au/national/nbn-co-review-agitates-conroy-20111213-1ot7r.html

Loved this quote

'Tragically they don't seem to have noticed what's actually been happening for the last 15 years in the telecommunications sector … 90 per cent of profits in this sector went to one company. Ninety per cent. Does that suggest that maybe perfect competition isn't working?''

Funny he didn't mention they owned 98% of the infrastructure and 100% of keeping it running.
Why didn't he say the competition 'cherry picked' for 15 years and installed minimal competing infrastructure despite being large multinational companies.
The government is quick to tax multinational minning companies that spend huge amounts on infrastructure.
Yet pander to multinational telecommunication companies, that want to piggy back on mum and dad supported Australian companies.
Jeez have they lost the plot, poor old Vodaphone, massive overseas company can't afford to supply reliable service even in capital cities. Shame on you Telstra.
Singtel Optus, on sell the limited infrastructure available, so speeds are crap. Shame on you Telstra.
Why can't these mum and dad investors, who payed $7.40 a share put their hands in their pockets to help out the Singapore Government and Europes leading telecommunication company.
Not to worry Conroy to the rescue. LOL
Best of luck.
NBNmyths don't tell me, that is why the NBN is happening, were paying for that too.LOL

 

[NBNMyths]

Well Turnbull may be getting traction.

http://www.theage.com.au/national/nbn-co-review-agitates-conroy-20111213-1ot7r.html

Loved this quote

'Tragically they don't seem to have noticed what's actually been happening for the last 15 years in the telecommunications sector … 90 per cent of profits in this sector went to one company. Ninety per cent. Does that suggest that maybe perfect competition isn't working?''

Funny he didn't mention they owned 98% of the infrastructure and 100% of keeping it running.
Why didn't he say the competition 'cherry picked' for 15 years and installed minimal competing infrastructure despite being large multinational companies.
The government is quick to tax multinational minning companies that spend huge amounts on infrastructure.
Yet pander to multinational telecommunication companies, that want to piggy back on mum and dad supported Australian companies.
Jeez have they lost the plot, poor old Vodaphone, massive overseas company can't afford to supply reliable service even in capital cities. Shame on you Telstra.
Singtel Optus, on sell the limited infrastructure available, so speeds are crap. Shame on you Telstra.
Why can't these mum and dad investors, who payed $7.40 a share put their hands in their pockets to help out the Singapore Government and Europes leading telecommunication company.
Not to worry Conroy to the rescue. LOL
Best of luck.
NBNmyths don't tell me, that is why the NBN is happening, were paying for that too.LOL

Don't know how you interpret that as Turnbull gaining traction, I'd have said that it's the first time Conry has done a decent job of articulating why the NBN is so much better than Turnbull's "alternative".

Anyway, you're right in that the problems quoted are one of the reasons the NBN is being built.

And it all stems from the way in which Telstra was privatised. Telstra should never have been sold as a vertical monopoly. At the very least, it should have been split into infrastructure and retail companies before being sold, but I think it would have been far better for the Govt to have retained the fixed infrastructure, turning it into a wholesale-only open access utility, and only sold off the mobile and retail side of the business.

That would have achieved far better outcomes in the way of infrastructure improvements and retail competition. The big problem of course, is that it wouldn't have realised anywhere near as much money in the sale.

 

[Smurf1976]

Did any of the infrastructure privatisations and de-regulations really work? I mean really?

Looked at your power bill lately? Or noted the government bailouts of rail and the problems there? Or that you're still paying a fortune in rego and petrol tax despite the toll roads?

Noted that we're actually less competitive than we were before all of this (at least that's the case with electricity)?

I'm not socialist, but this privatisation of infrastructure nonsense has been nothing other than one big con thus far.

 

[NBNMyths]

Did any of the infrastructure privatisations and de-regulations really work? I mean really?

Looked at your power bill lately? Or noted the government bailouts of rail and the problems there? Or that you're still paying a fortune in rego and petrol tax despite the toll roads?

Noted that we're actually less competitive than we were before all of this (at least that's the case with electricity)?

I'm not socialist, but this privatisation of infrastructure nonsense has been nothing other than one big con thus far.

Yep, it's just a way to make treasurers look good because they can say "Look I've delivered surpluses".

Not too much thought seems to go into what happens when there's nothing left to sell.