NBN Rollout Scrapped

[NBNMyths]

You could try holding your breath till the next election.

The future of NBN may become clearer then....

Indeed. Although, the coalition's NBN position has moved considerably over the last few years.

In 2007, they said that Labor's (then) 12Mbps FTTN plan was a waste of money.

In 2009 they said that the new FTTP NBN was a huge waste of money.

In 2010 they didn't have any detailed policy, just a vague outline.

In early 2011 they said they would scrap the NBN and replace it with 12Mbps FTTN (Yes, that's the same system they said was a waste of money in 2007) built by the private sector.

By late 2011, Turnbull was hinting at 40-80Mbps FTTN, mostly by the private sector.


Now, we've got them saying they will continue the fibre NBN rollout until all existing contracts are complete. They will also continue the regional wireless and rural satellite portions of the NBN. Once the existing fibre rollout contracts are complete they'll still use FTTP in new estates but scale back existing areas to FTTN, but continue to have it govt-built by NBN co.

With over 60 countries now doing FTTP, I suspect that by 2016 when the existing NBN contracts are complete, it will be patently obvious (even to Turnbull) that FTTN is well past obsolescence, and if fibre doesn't continue then it will soon be apparent that FTTN is not up to the job.

 

[moXJO]

Indeed. Although, the coalition's NBN position has moved considerably over the last few years.

In 2007, they said that Labor's (then) 12Mbps FTTN plan was a waste of money.

In 2009 they said that the new FTTP NBN was a huge waste of money.

In 2010 they didn't have any detailed policy, just a vague outline.

In early 2011 they said they would scrap the NBN and replace it with 12Mbps FTTN (Yes, that's the same system they said was a waste of money in 2007) built by the private sector.

By late 2011, Turnbull was hinting at 40-80Mbps FTTN, mostly by the private sector.


Now, we've got them saying they will continue the fibre NBN rollout until all existing contracts are complete. They will also continue the regional wireless and rural satellite portions of the NBN. Once the existing fibre rollout contracts are complete they'll still use FTTP in new estates but scale back existing areas to FTTN, but continue to have it govt-built by NBN co.

With over 60 countries now doing FTTP, I suspect that by 2016 when the existing NBN contracts are complete, it will be patently obvious (even to Turnbull) that FTTN is well past obsolescence, and if fibre doesn't continue then it will soon be apparent that FTTN is not up to the job.

Even though I think the contracts were a rip off, Libs should be supporting this imo. I just don't have much faith in labor managing this very well.

 

[NBNMyths]

Even though I think the contracts were a rip off, .....

On what do you base that assessment?

 

[moXJO]

On what do you base that assessment?

Some of the conditions relating to the union labor. I'd have to dig up where I saw it in the contract again.

 

[drsmith]

More trouble at the top ?

http://www.theaustralian.com.au/bus...nstruction-chief/story-e6frgaif-1226554691246

 

[sydboy007]

More trouble at the top ?

http://www.theaustralian.com.au/bus...nstruction-chief/story-e6frgaif-1226554691246

I'd say the external politics has been the killer.

Considering how little occurred with the free market over the Howard years the NBN is a breath of fresh air in terms of infrastructure in Australia.

I don't understand the angst towards it.

If you were offered a brand new car, for no increase in the costs of your currnt car, would you say no?

Basicaly that's what's happening witht he NBN. You're getting a MASSIVE upgrade to your internet connection, and I'd say with a reasonable level of confidence that you will find you NBN internet connection will be faster and CHEAPER than what you currently get.

Any SME against the NBN have been conned by the LNP. I work for an ISP and am amazed at what we charge for services. I would say as NBN is rolled out what we charge will drop by up to 75% depending on the location - the further from the capital city center the bigger the price drop and the far larger increase in bandwidth we'll be able to provide. Oh the joy of not having to deal with a Telstra that drives me to drink some days!

Now if bloody Howard hadn't sold a vertically integrated tel$ra then we'd probably not be having this conversation! Then again the ALP started the whole sorry mess by merging Telecom and OTC. Would have been far smarter to have set up OTC as a direct competitor along with cable and wireless supported optus. The the whole HCF debacle mightn't have occurred too. So much for Bullturn's free market.

 

[matty77]

If you were offered a brand new car, for no increase in the costs of your currnt car, would you say no?

Really its free is it? Wow..

In fact it is costing more, the real scenario would be:

You pay tax to the car company and they use that money to design a new car with something that you don't need but is new, then charge you the same amount as you were paying for your previous car (which was fine by the way)

So yeah its costing us money, you just dont see it as its being paid out of our tax (or national debt) or whatever.

The NBN is a big white elephant, its a pity the average labor supporter is too stupid to see it, and now our kids will be paying for it for years to come..

Oh 4G? its pretty fast..

 

[sydboy007]

Really its free is it? Wow..

In fact it is costing more, the real scenario would be:

You pay tax to the car company and they use that money to design a new car with something that you don't need but is new, then charge you the same amount as you were paying for your previous car (which was fine by the way)

So yeah its costing us money, you just dont see it as its being paid out of our tax (or national debt) or whatever.

The NBN is a big white elephant, its a pity the average labor supporter is too stupid to see it, and now our kids will be paying for it for years to come..

Oh 4G? its pretty fast..

When did I say free?

As for paying tax, with the rollout ramping up as planned it wont be more than a few years before the NBN is generating the kind of revenue that starts paying of the debt used to start it.

My family down in Kiama are saving over 50% on what they used to pay for far inferior ADSL.

As for business, I can say 100% that waht the NBN will offer is going to save so much money, and improve the competitiveness of any SME who adopt and adapt to the internet age, it will truly be a revolution.

We are currently leasing a very old worn out car. The copper in some areas is 50+ years old. We are being offered a brand new car for the same lease payments. You'd have to be crazy to say no.

 

[NBNMyths]

Really its free is it? Wow..

In fact it is costing more, the real scenario would be:

You pay tax to the car company and they use that money to design a new car with something that you don't need but is new, then charge you the same amount as you were paying for your previous car (which was fine by the way)

So yeah its costing us money, you just dont see it as its being paid out of our tax (or national debt) or whatever.

The NBN is a big white elephant, its a pity the average labor supporter is too stupid to see it, and now our kids will be paying for it for years to come..

What a load of rubbish. White elephant, huh? Were you around in 1909? http://trove.nla.gov.au/ndp/del/article/19571372

The NBN is not being funded from tax revenue, it's being funded from debt (the issue of bonds, to be precise), which will subsequently be repaid from user revenue (not taxation revenue). That's what the usage fees of the NBN are for.

This is exactly the same funding model that was used for the current copper network, and pretty much every other user-pays infrastructure project, be it public or private.

Oh 4G? its pretty fast..

Surely you're not serious. Why would anyone in their right mind choose a 4G mobile connection in lieu of an NBN connection? Maybe you're unaware of the cost differences:

50GB on the NBN: $35 per month (including a phone service and 10c calls, via Exetel)

50GB on Telstra 4G: $360 per month (no phone service included)

50GB on Optus 4G: $675 per month (no phone service included)

Note that an average Australian ADSL/cable connection consumes 19GB per month (as at June 2012), increasing at ~50% every 6 months. The average usage should hit 50GB in about 12 months time.


Also note that far from becoming cheaper, both Telstra and Optus recently increased their mobile broadband pricing by 10%. Vodafone announced the end of free social network browsing, and started charging by the MB instead of the kB. (meaning loading the Google search page, for example, will cost the user 1MB from their data allowance instead of ~30kB).


Mobile broadband is complementary to fixed broadband, not alternative. That's why there isn't a single country or telco in the World replacing their urban fixed networks with wireless. Conversely, there are 60 countries where FTTP is being rolled out to one degree or another.

 

[drsmith]

The NBN is not being funded from tax revenue, it's being funded from debt (the issue of bonds, to be precise), which will subsequently be repaid from user revenue (not taxation revenue). That's what the usage fees of the NBN are for.

Government debt is a liability owed by the taxpayer, so whether it's funded directly by the taxpayer or borrowings, it ultimately makes no difference.

The main issue here is that this back of the envelope plan B was never subject to a cost-benefit analysis. It was never weighed up against other demands for government dollars. With this project, we are reliant purely on the judgement of politicians to spend taxpayer dollars wisely without any critical analysis. This is never good, but recent history inspires even less confidence.

 

[So_Cynical]

Government debt is a liability owed by the taxpayer, so whether it's funded directly by the taxpayer or borrowings, it ultimately makes no difference.

What a nonsense.

The main issue here is that this back of the envelope plan B was never subject to a cost-benefit analysis. It was never weighed up against other demands for government dollars. With this project, we are reliant purely on the judgement of politicians to spend taxpayer dollars wisely without any critical analysis. This is never good, but recent history inspires even less confidence.

A 10 year back of the envelope plan i love how you guys just completely ignore reality, completely ignore history and treat these decisions as somehow instant, i suppose you have to do that in order to shift the blame/throw mud in the direction you want to.

• Broadband Advisory Group 2003 (Howard)
• Telstra Copper Upgrade Plans 2005 (Howard)
• Broadband Connect Policy & OPEL Networks 2006/07 (Howard)
• G9 Consortium 2006/7 (Howard)
• Creation of NBN Co April 2009 (Rudd)

 

[sptrawler]

What a nonsense.



A 10 year back of the envelope plan i love how you guys just completely ignore reality, completely ignore history and treat these decisions as somehow instant, i suppose you have to do that in order to shift the blame/throw mud in the direction you want to.

• Broadband Advisory Group 2003 (Howard)
• Telstra Copper Upgrade Plans 2005 (Howard)
• Broadband Connect Policy & OPEL Networks 2006/07 (Howard)
• G9 Consortium 2006/7 (Howard)
• Creation of NBN Co April 2009 (Rudd)

So Cynical, there numerous examples of this government going of half cocked on a hair brained plan.
As DrSmith is suggesting, this could still be added to the list of failures.
Highlighting that the Howard government was thorough with its analysis does not mean Labor took any notice.
The asylum seeker issue has proven they chose to make policy on the run, rather than adopt and adapt working policy.
Most of the policy they have introduced has lacked vision and is in no way Nation building.IMO
I understand you may see it differently and the NBN may put us at the forefront of something, I'm yet to have someone tell me what it will be.
Meanwhile we slide down the industrialised scale toward the bulk mining pit, joining South America and South Africa.

 

[sydboy007]

So Cynical, there numerous examples of this government going of half cocked on a hair brained plan.
As DrSmith is suggesting, this could still be added to the list of failures.
Highlighting that the Howard government was thorough with its analysis does not mean Labor took any notice.
The asylum seeker issue has proven they chose to make policy on the run, rather than adopt and adapt working policy.
Most of the policy they have introduced has lacked vision and is in no way Nation building.IMO
I understand you may see it differently and the NBN may put us at the forefront of something, I'm yet to have someone tell me what it will be.
Meanwhile we slide down the industrialised scale toward the bulk mining pit, joining South America and South Africa.

I'd say probably Germany is the only rich country where manufacturing would be a high level of GDP. Pretty much the rich world moved on to post industrial societies over the last 20 years.

The good companies have adapted, the ones that could only survive behind tarrif walls have died off in Australia.

I'll use Codan as a great example of what Aussie ingenuity can achieve with the right management and staff.

A boom in amateur prospecting has made Africa one of Codan’s fastest growing markets and McGurk (CEO) hadn't authorised any discounting for his highly demanded product.

When they investigated the discounting claims, they discovered a product that was identical in every way, right down to the logo. A Chinese manufacturer had reverse engineered Codan’s metal detectors and had started exporting to Africa.

Here is where the story gets interesting. The company has taken a number of steps to protect its IP but rather than tie itself up in legal wrangling, Codan has hit these counterfeiters where it hurts most. The manufacturing process that McGurk has introduced is so efficient that they've undercut their competitors on price. So much so that their Chinese rivals threw in the towel and asked to make a deal. Codan does use contract manufacturing in Malaysia, but it is the techniques developed at its plant in Adelaide that has allowed it to outfox its Chinese competitors.

As for our LNG exports, James Fazzino (CEO of Incitec Pivot) makes a critical observation: by exporting our gas supplies as LNG we are increasing its value three to four times. If we exported that natural gas as advanced chemicals, we could grow that value to 20 times.

Generally I'll take the higher end IP that produces high returns over low end manufacturing that is a race to the cheapest.

I was listening to a pod cast a few months back over how the NBN had changed business in Willunga - http://tinyurl.com/bcd8soj. Have a listen as it's not a cheer leading for the NBN, but it does give a few real world examples of how businesses have benefited from being able to access CHEAP FAST broadband.

I'm starting to think that IF the NBN is completed that property prices in the Capital cities may stagnate or fall and property n the larger regional cities and towns will increase as people can live where they like, not just purely for work.

 

[sydboy007]

Government debt is a liability owed by the taxpayer, so whether it's funded directly by the taxpayer or borrowings, it ultimately makes no difference.

The main issue here is that this back of the envelope plan B was never subject to a cost-benefit analysis. It was never weighed up against other demands for government dollars. With this project, we are reliant purely on the judgement of politicians to spend taxpayer dollars wisely without any critical analysis. This is never good, but recent history inspires even less confidence.

* Turbull says he can build the LNP FTTN cheaper - No CBA done, fully costed policy claim withdrawn within days of claim being made.

* Turnbull says the LNP FTTN can be built faster, whilst saying the Govt should have done a CBA and he will as well. How long does a CBA take to complete? Hasn't Turnbull prejudged what the CBA will show as the most cost effective network to build?

* Turnbull talks about speed of 80Mbs with VDSL yet then goes on to talk about node to house cable distances of 1Km or more - either he's incompetent as at around 600M you will find it difficult to provide 80Mbs, or he's being rather dishonest.

So I ask, how do you have a plan that is cheaper and faster when you can't define ANY of the major costs components, when you give Telstra the biggest whip hand there could be. How do you go into negotiations with Telstra and they know YOU have to make a deal as they already have a fully legally binding contract. Every day of delay for Bullturn is going to see him look worse and worse in the media. Telstra shareholders rejoice, taxpayers weep.

I would say Mike Quigley has already shown a very keen eye to maximising the tax payer $$$ by cancelling the original contract bids when he saw the contracting firms all putting in over the top bids - way to go private enterprise! Current contracts seem to be providing good value for the tax payer. Do you have any examples of the way the NBN rollout is occurring to support your worries?

NBN is I pay for XXX speed and that is what I get. FTTN is an increase of the UP TO we currently have.

Oh and Mr Turnbull, how much of the copper network will need to be replaced as you roll out the FTTN? From my expeirence, I'd hazzard around the 30% mark. How will you upgrade the HCF network to cope with 3-5 times the current number of users as well as provide access to MDUs that both Telstra and Optus have chosen to never connect via HCF?

Another HUGE issue with the FTTN is that Telstra has good records of your cable pair details from the exchange to the pillar. Their records of the pair from the pillar to your house are very very poor as each time there's a line fault and a tech has moved your line to a new pair, the records haven't been updated. So the whole process of cutting your line off at the pillar and connecting it to the node is going to be a hugely labour intensive and time consuming process to match up each exchange main pair to each pillar to house pair.

Faster and cheaper. Yes Mr Kerrigan, he's definitely DREAMING!

 

[NBNMyths]

Government debt is a liability owed by the taxpayer, so whether it's funded directly by the taxpayer or borrowings, it ultimately makes no difference.

Of course it makes a difference. The NBN will pay back its own debt, unlike typical government spending.

The only scenario where "it makes no difference" would be if the NBN was cancelled prior to completion (and would therefore not generate sufficient revenue to repay debt) or;

The assumed figures on cost and takeup were completely inaccurate. This is so far proving to be unlikely, and even if there were to be a massive blowout in costs (say 100%), then the revenue earned from the NBN would still mean the liability to taxpayers would be a fraction of the cost to build it, making it "different" to other Govt expenditure.

The main issue here is that this back of the envelope plan B was never subject to a cost-benefit analysis. It was never weighed up against other demands for government dollars. With this project, we are reliant purely on the judgement of politicians to spend taxpayer dollars wisely without any critical analysis. This is never good, but recent history inspires even less confidence.

I love the oft-repeated "back of the envelope" BS, which has no basis in reality. I guess if you say it often enough it becomes the truth.

The NBN is most certainly not based "purely on the judgement of politicians", and was in fact the recommendation of many telecommunication experts and the panel set up to assess the NBN Mk1. FTTP is the future of telecommunications, which is a fact apparently known to companies like Google, MS, Intel and hundreds of telecom companies around the World. But alas, not yet to conservative luddites.


As for CBA, let me repeat (once more) the argument why it's utterly worthless:

The NBN is an enabling technology. It is impossible to value the benefits of building it, because we don't know what most of the benefits will be. One could only guess about developments for the next 5 or 10 years, let alone the next 50 years. Any CBA would therefore be completely inaccurate.


To illustrate my point, I suggest you do a CBA for the copper telephone network rollout, valuing only the uses/benefits that were known in (say) 1910.

Let me know if the per-capita cost (which is about the same as the NBN, adjusted) would be worth it, considering the only use would be basic person-person voice communications.


If you don't think that's a valid argument/analogy, please explain why not.

 

[FlyingFox]

.....
As for CBA, let me repeat (once more) the argument why it's utterly worthless:

The NBN is an enabling technology. It is impossible to value the benefits of building it, because we don't know what most of the benefits will be. One could only guess about developments for the next 5 or 10 years, let alone the next 50 years. Any CBA would therefore be completely inaccurate.

....

I wouldn't say completely inaccurate but I agree that they would be very inaccurate. Some of the things that the NBN will enable have appeared while its was still on the drawing board. Look at cloud computing. A NBN type network can fundamentally change the way we view and use computing resources. I believe this gives Australia a strong competitive advantage and productivity gains.

While some of it maybe be possible with a ADSL connection, others require too much bandwidth.

 

[drsmith]

Of course it makes a difference. The NBN will pay back its own debt, unlike typical government spending.

The only scenario where "it makes no difference" would be if the NBN was cancelled prior to completion (and would therefore not generate sufficient revenue to repay debt) or;

The assumed figures on cost and takeup were completely inaccurate. This is so far proving to be unlikely, and even if there were to be a massive blowout in costs (say 100%), then the revenue earned from the NBN would still mean the liability to taxpayers would be a fraction of the cost to build it, making it "different" to other Govt expenditure.

Until it pays it back, if it pays it back, it is still a liability to the taxpayer. This is fundamentally no different to a home loan being a liability to the home owner until it is paid out.

There is still the question of whether the money would have been better spent on other projects ot put another way, a comparison of relative return of investment on other projects.

I love the oft-repeated "back of the envelope" BS, which has no basis in reality. I guess if you say it often enough it becomes the truth.

It certianly wasn't the vision the Labor government started with. It was born out of the failure of their original FTTP model.

The NBN is most certainly not based "purely on the judgement of politicians", and was in fact the recommendation of many telecommunication experts and the panel set up to assess the NBN Mk1. FTTP is the future of telecommunications, which is a fact apparently known to companies like Google, MS, Intel and hundreds of telecom companies around the World. But alas, not yet to conservative luddites.

As for CBA, let me repeat (once more) the argument why it's utterly worthless:

The NBN is an enabling technology. It is impossible to value the benefits of building it, because we don't know what most of the benefits will be. One could only guess about developments for the next 5 or 10 years, let alone the next 50 years. Any CBA would therefore be completely inaccurate.

To illustrate my point, I suggest you do a CBA for the copper telephone network rollout, valuing only the uses/benefits that were known in (say) 1910.

Let me know if the per-capita cost (which is about the same as the NBN, adjusted) would be worth it, considering the only use would be basic person-person voice communications.

If you don't think that's a valid argument/analogy, please explain why not.

With regard to comparisons between the copper network and the NBN, the copper network to communication was like the development of motorised vehicles to transport whereas the NBN is an upgrade.

The upgrade is generally supreceeded with another upgrade in a far shorter timeframe than the original innovation. Who knows how the communications landscape will look in 50 years.

One cannot rely on the hope of what miay or may not happen in the longer term to avoid comparisons against other government expenditures. To do so is a recepie for poor expenditure outcomes.

 

[sydboy007]

Until it pays it back, if it pays it back, it is still a liability to the taxpayer. This is fundamentally no different to a home loan being a liability to the home owner until it is paid out.

There is still the question of whether the money would have been better spent on other projects ot put another way, a comparison of relative return of investment on other projects.


It certianly wasn't the vision the Labor government started with. It was born out of the failure of their original FTTP model.


With regard to comparisons between the copper network and the NBN, the copper network to communication was like the development of motorised vehicles to transport whereas the NBN is an upgrade.

The upgrade is generally supreceeded with another upgrade in a far shorter timeframe than the original innovation. Who knows how the communications landscape will look in 50 years.

One cannot rely on the hope of what miay or may not happen in the longer term to avoid comparisons against other government expenditures. To do so is a recepie for poor expenditure outcomes.

* unless we stop using the internet the NBN will pay itself off. Could it take longer than planned, maybe, but the fees will pay the debt off.

* Telstra's intransigence meant the ALP had to go all out for a FTTP network otherwise Telstra would have caused massive delays and the cost would have been prohibitive.

* While the NBN is an upgrade, the beauty of Fiber is there is no known limit to the bandwidth a single fiber strand can handle. We've moved from 1 to 10 to 100 GBS per wavelength. Dense Wave Division Multiplexing means at 10GBS you can fit 80 wavelengths down 1 fiber. The Southern Cross cable system is currently upgrading some fibers to 40GBs gear, and in the middle of the year will start using some 100GBs gear as well. Increasing total bandwidth with minimal cost. No other technology even at the very earliest stages of development can compete with fiber. Wireless certainly can't.

* I would argue that because the borrowings for the NBN wll be funded by the income of the network, that the construction in no way inhibits the Govt from funding other infrastructure. Also there would be little overlap on a lot of the staff for the NBN rollout compared to say building a hospital or road.

 

[orr]

With regard to comparisons between the copper network and the NBN, the copper network to communication was like the development of motorised vehicles to transport whereas the NBN is an upgrade.

God where do your even start with this drivel. One point might be; the fly ridden pestilent reminisce of a pre industrialised agrarian culture that had managed to crawl with glacial speed over a couple of millennia to the point, of, considering a peddle powered mechanical sewing device in the homes of a tiny fraction of the worlds population was the zenith of modern achievement... And then the introduction of motorised transport and in a few short decades mass production of said transport and then the hundred years till now.... OH ooops now I've seen my error, It's been basically the same progression as of the last couple of thousand of years.

I've watched with delicious interest the unfolding of this thread and have admired the surgical and incredibly patient demolition of those who for ideological reasons have no interest in progressing positive development in this country. All power to your arm boys. The tiller steering of that first Benz? Only history will tell us where we are in the comparative time lines drawn by our 'oh so wise' doctors pronunciation. Or Maybe he'd care, oracle like, to enlighten us all?

 

[drsmith]

God where do your even start with this drivel. One point might be; the fly ridden pestilent reminisce of a pre industrialised agrarian culture that had managed to crawl with glacial speed over a couple of millennia to the point, of, considering a peddle powered mechanical sewing device in the homes of a tiny fraction of the worlds population was the zenith of modern achievement... And then the introduction of motorised transport and in a few short decades mass production of said transport and then the hundred years till now.... OH ooops now I've seen my error, It's been basically the same progression as of the last couple of thousand of years.

I've watched with delicious interest the unfolding of this thread and have admired the surgical and incredibly patient demolition of those who for ideological reasons have no interest in progressing positive development in this country. All power to your arm boys. The tiller steering of that first Benz? Only history will tell us where we are in the comparative time lines drawn by our 'oh so wise' doctors pronunciation. Or Maybe he'd care, oracle like, to enlighten us all?

None of the above addresses any sort of financial comparison against other uses for government monies.