NBN Rollout Scrapped

[Tisme]

You're not talking about me I hope ?

Do you Donkey vote LNP?

 

[Smurf1976]

So one of Turnbulls biggest gripes of the Labor NBN was the lack of infrastructure competition.

We've been down that road before. It failed then and it will fail now for the same reasons.

100 years ago we had electricity in major cities. But it was chaotic, inefficient and disorganised with numerous infrastructure owners each competing for business and running at a scale far too small to be efficient. And so we built the grid as it is today, most places did it in earnest after WW2 with Victoria and Tasmania starting well before that (Tas made the decision in 1914, Vic in 1918, others took another 30 years to follow).

The same could be said for roads. There were cars a century ago. Not too many, and they were primative by today's standards, but we had self-powered road vehicles as such. In due course it became readily apparent that existing roads weren't up to the task of accommodating such vehicles in large numbers and that we needed to do something drastic if it was to work. And so we set up entire government departments with the purpose of building highways and doing other road traffic-related things.

Can anyone seriously tell me that competing private owners would have built Yallourn (Vic) or Waddamana (Tas) power stations and a statewide electricity grid to distribute the power? No, they wouldn't because by its' very nature the grid is a single network and that doesn't lend itself well to having multiple competing owners.

South Australia tried doing electricity privately. They struggled for decades trying to make it work but AESCO (Adelaide Electric Supply Co) was just too worried about minimising commercial risk and making a profit. It wasn't working, SA was hamstrung by constant rationing and blackouts amidst the refusal to build a proper grid and power stations whilst industry was booming in Victoria and Tasmania on the back of cheap and abundant power. And so AESCO was nationalised, ETSA was created and promptly went about building new generation and the grid. Most of the manufacturing industries around Adelaide started up shortly afterward.

Can anyone seriously tell me that we'd have developed the road network as it is today if we insisted that everything made a profit from day one and that there had to be competition in infrastructure? Five competing roads running straight past your door and a dozen competing highways between Sydney and Melbourne? No, that's not going to work because it destroys the scale of economy.

But we built the grid and we built roads. Directly and indirectly, they became the most dominant feature of the 20th Century economy and lifestyle built upon them. If you were to contrast life and the economy in the late 20th Century with that of a century earlier then private vehicles and the ubiquitous use of electricity are standout features of the change.

Today it's about communications infrastructure but the same principles still apply. We're never going to build an economical, efficient network if we only build the bits that are individually profitable. And you can be pretty sure that competing private owners won't be building anything that doesn't make a big enough profit. Hence the need for government to be involved if we're going to build it.

Naysayers said that electricity wouldn't work. The Tas government was warned pretty bluntly by the Commonwealth a century ago about that with arguments very similar to those being used against the NBN today. A century later and it's still working pretty nicely, having employed tens of thousands of people over that time and lead to overseas exports with many $ billions via industry.

The question with the NBN isn't whether we're going to build it. At some point we will. It's about whether we do what Vic and Tas did a century earlier with electricity and do it now, or whether we do what SA did and wait until we're crippled by ongoing crises with the present infrastructure and finally bite the bullet sometime down the track. But we'll build it eventually, no doubt about that (well, assuming we're to remain a first world, developed country then we'll build it).

The question, of course, is how to pay for it. That's the big problem. But we had a very workable answer to that one a century ago. Borrow money and repay the loans via sale of the product.

 

[drsmith]

Turnbull seems to have done a good job, of calming down the hysteria.

There seems to be a fair bit of connection activity, around my area.

The NBN non longer seems to be in the news on a regular basis with something else having gone wrong.

There's not too many of his critics here at least commenting on Simon Hackett's September presentation.

 

[SirRumpole]

The question, of course, is how to pay for it. That's the big problem. But we had a very workable answer to that one a century ago. Borrow money and repay the loans via sale of the product.

Another excellent post Smurf, you just keep rolling out the facts and maybe one day the Conservatives on this board will get the message.

Australia just doesn't have the population and therefore the market size to attract competing commercial interests for large scale infrastructure. It always has to be government supplying the $$$ subcontracted out to private firms to do the actual building. No commercial enterprises want to take the private risk of large scale investment for a small market.

The Snowy Mountains scheme was partly funded by a loan from the world bank, and was sold to its staff (SMEC) in the 1990's as a going concern, and now sells its skills to countries around the world. That seems to be the best model we could have for this type of infrastructure, government funding, acquire skills and knowledge and then apply these to projects in other countries to recoup the investment.

 

[SirRumpole]

Another excellent post Smurf, you just keep rolling out the facts and maybe one day the Conservatives on this board will get the message.

Australia just doesn't have the population and therefore the market size to attract competing commercial interests for large scale infrastructure. It always has to be government supplying the $$$ subcontracted out to private firms to do the actual building. No commercial enterprises want to take the private risk of large scale investment for a small market.

The Snowy Mountains scheme was partly funded by a loan from the world bank, and was sold to its staff (SMEC) in the 1990's as a going concern, and now sells its skills to countries around the world. That seems to be the best model we could have for this type of infrastructure, government funding, acquire skills and knowledge and then apply these to projects in other countries to recoup the investment.

This makes the following story particularly sad:

http://www.abc.net.au/pm/content/2014/s4147887.htm

and this:

http://www.abc.net.au/news/2015-01-12/ret-clean-energy-sector-uninvestable-analyst-says/6013090

 

[sydboy007]

We've been down that road before. It failed then and it will fail now for the same reasons.

100 years ago we had electricity in major cities. But it was chaotic, inefficient and disorganised with numerous infrastructure owners each competing for business and running at a scale far too small to be efficient. And so we built the grid as it is today, most places did it in earnest after WW2 with Victoria and Tasmania starting well before that (Tas made the decision in 1914, Vic in 1918, others took another 30 years to follow).

I full agree. It's just the sheer hypocrisy to oppose the Labor NBN based on the lack of infrastructure competition, to only then bring in last minute regultory changes to enforce pretty much the same thing.

I mean, how can you say with a straight face that introducing major changes a couple of weeks before Christmas is enough time to allow companies to reorganise themselves. Telstra's had years to do it, and they weren't required to go nearly as far as having separate boards for the retail and wholesale side.

 

[Tisme]

Australia just doesn't have the population and therefore the market size to attract competing commercial interests for large scale infrastructure. .

Even when there is competition it turns into an oligopoly, collusion and higher prices. There was a time when Ansett and TAA were viable only because of this.


The NBN is a classic example of one govt trying to build a valuable (saleable) future asset and another letting its contempt or jealousy get in the way of fulfilling that aim. Instead we see a monopoly handed to an organisation that has a history of price gouging and slow uptake of world trend technology.

The days of men with grand visions and an enthusiastic population have been shoehorned out by our maturation from pioneers to arm chair critics it seems.

 

[sydboy007]

The NBN non longer seems to be in the news on a regular basis with something else having gone wrong.

There's not too many of his critics here at least commenting on Simon Hackett's September presentation.

Close to halfway through the current term and the promise of 25Mbs for all broken within what 3 months, with no retail HFC services till maybe 2016, no retail FTTN services till maybe 2 years after the election.

The quiet is because too many people don't believe they're going to get any kind of upgrade before 2019. The only growth in NBN connections is via the Labor NBN rollout.

I'm sure next year the Govt will trumpet the million plus HFC customers as now connected onto the NBN, though no mention as to when any network upgrades will occur to actually provide them with decent speeds. Systems designed to wholesale HFC may not even be available till after the next election, so using the HFC may not even help to speed up the rollout much for a few more years.

To top it all off, we've got Telstra back as the dominant party in telecommunications. They'll have a high level of control for the rolout with the competitive advantage that provides them for signing up customers. Extra rivers of Govt funds flowing to them, while off loading the costs of upgrading the copper network that they chose to underinvest in for the last decade.

Only a Liberal Govt could think selling off a reasonable quality asset , the CAN, and buying it back in a seriously degraded state is somehow a good deal for tax payers.

I'll also note that the Govt has stopped calling Labor's satellite plans the rolled gold route. Interesting how quiet the Nationals are over this, but their rural constituents are getting a superior service compared to anything the Coalition would have been willing to offer.

 

[sydboy007]

this is the kind of competitive bonus the Govt is willing to Give Telstra

http://www.zdnet.com/article/competitors-fear-telstra-hfc-nbn-coup/#ftag=RSSbaffb68

The revised migration plan explicitly prohibits Telstra from accepting an order to supply HFC services if it is outside of the network footprint, and any new customer it adds on the HFC network in the interim period must be on a flexible plan with the ability to switch providers once migrated to the NBN.

So basically Telstra will be the only company able to provide a new HFC service untill it is taken over by NBN - so far no details on how that process will work.

Law of inertia says that a large chunk of those customers migrated to HFC will stay with Telstra, or at least get an offer for a locked in contract long before competitors are able to offer their own services.

So tax payers will fund Telstra to connect new customers to the HFC, provide Telstra with a monopoly signup period, while watching potential competitors wither away because of their being practically shut out of the NBN.

I'm expecting Telstra will still want the set of steak knives thrown in for free though.

 

[Tisme]

this is the kind of competitive bonus the Govt is willing to Give Telstra

http://www.zdnet.com/article/competitors-fear-telstra-hfc-nbn-coup/#ftag=RSSbaffb68



So basically Telstra will be the only company able to provide a new HFC service untill it is taken over by NBN - so far no details on how that process will work.

Law of inertia says that a large chunk of those customers migrated to HFC will stay with Telstra, or at least get an offer for a locked in contract long before competitors are able to offer their own services.

So tax payers will fund Telstra to connect new customers to the HFC, provide Telstra with a monopoly signup period, while watching potential competitors wither away because of their being practically shut out of the NBN.

I'm expecting Telstra will still want the set of steak knives thrown in for free though.

I had a need for a new service recently. It was in a transitional type village (I think many are on the lamb) where people don't earn much, but I am migrating there for a year or two to enjoy the riparian pleasures. Consequently asking the various providers (Dodo, etc) for ADSL2+ resulted in zip success, with only ADSL1 available and on a RIM. When I rang Telstra and explained I wanted a ADSL2+ business quality line, one was available no probs. My choice was easy.

 

[sydboy007]

I had a need for a new service recently. It was in a transitional type village (I think many are on the lamb) where people don't earn much, but I am migrating there for a year or two to enjoy the riparian pleasures. Consequently asking the various providers (Dodo, etc) for ADSL2+ resulted in zip success, with only ADSL1 available and on a RIM. When I rang Telstra and explained I wanted a ADSL2+ business quality line, one was available no probs. My choice was easy.

Sounds very much like the isues we have where Telstra is unable to get a reliable ULL for a customer on our DSLAM, but when we migrate them to a Telstra wholesale service magically the line become stable.

It happens far to often to be pure chance

 

[So_Cynical]

The NBN is a classic example of one govt trying to build a valuable (saleable) future asset and another letting its contempt or jealousy get in the way of fulfilling that aim.

Absolutely, the Noalition turned infrastructure into a political issue...a disgrace.

-----------------------

(18th-June-2014) A bit of NBN work has been going on in my street over the last couple of months, started with Telstra pit rehabilitation and has now moved on to actual cable replacement, pulling out the 40 year old copper and replacing it with brand new copper concrete saws to cut through the foot path, digging trenches, laying new conduit, a big job.

Update: 7 months on and still no NBN but the digging has continued in bursts of activity over the last 7 months....and turns out im getting Fibre, old school Labor NBN Fibre, that's what i get for asking a lollipop man what was going on.

 

[Smurf1976]

The days of men with grand visions and an enthusiastic population have been shoehorned out by our maturation from pioneers to arm chair critics it seems.

Just about every "great" thing that's been done or built in this country came about due to the determined efforts of someone with a vision. It doesn't just happen, someone made it happen.

We seem to have completely lost that spirit these days unfortunately. It's not that we can't do the 21st Century equivalent of the power grid, highways, copper phone network or the Snowy scheme, it's that we're too frightened to actually get on and do it.

Ask the government's road department in 1960 to build a new highway. They'd set about designing and building it.

Ask the same question in 2015 and they'll pay a fortune to a consultant to produce a report saying how to get someone else to design and build a highway. The idea of actually knowing how to do it, and then actually doing it, seems to have been completely lost.

A big part of the problem with the NBN is that government simply doesn't know how to build it. There's very few people left in government, at any level, who really know how to do physical things these days. As such, government is completely at the mercy of consultants and contractors to get things done.

In theory that can work, but think "pink batts" if you want to understand the problem. It's like any situation in life, if you have no idea what you really want and what needs to be done to provide it, then you are at the mercy of those selling it. And that's a pretty sure fire way to end up being ripped off, especially given the "easy money" that's generally associated with government work on account of the political aspects.

A private developer (of anything) will be heavily focused on cost. But government also has the political aspect of time. They need it done, and it needs to be done so as to suit political time frames. Government tends not to end up in court with those doing the work when costs start to rise, they just can't afford the political risk of (1) being seen as incompetent managers and (2) time blowing out. And so they pay.

I am not a communications expert, I have qualifications in the electrical field not comms, but I know how to physically build the NBN apart from actually splicing fibre and making connections. Pits and conduits - I've installed plenty of those in my time, dealing with asbestos included, and I know what happens.

Now, I've had a look at the work being done. I know that the taxpayer isn't getting good value. Cables installed poorly which will lead to early failures. Pits being replaced that don't actually need replacing since they never contained asbestos to start with. And so on. And of course the horror stories, unfortunately true, about asbestos being dumped in the suburbs and so on.

But government doesn't know what to do in a physical sense, they only know how to write contracts and pay the bills. There's the problem.

I'm not suggesting that government ought to employ a huge workforce and build the whole lot themselves (though that is one possible option) but they ought to have a decent sized works crew, from engineers through to skilled labourers, in order to keep the contractors in check. By failing to do so, well they may just as well write a blank cheque to be honest.

So where's the money going? Well I'm fairly sure that it's not going into the worker's pockets. They're being paid yes, but the info I have suggests that they're not getting rich doing NBN work. Where its' going is into things that were completely unnecessary to start with, or which are done in a truly ridiculous manner that nobody in their right mind would contemplate, or which are poorly done and won't last.

There's a similar problem in Adelaide at the moment. A few years ago they extended the tram line from Victoria Square (right in the centre of the Adelaide CBD) through to the Entertanment Centre (a few km away). It works, trams do indeed run on that line, but a recent report finds that the underground work (that's pits, conduits and cables) isn't up to scratch. It wasn't done properly, it won't last as long as it should. It's not an easy fix given that it involves digging up large sections of a recently built project, on major roads in the CBD and close by, in order to fix it.

The same problems will happen with the NBN for sure with the approach being taken. Government just isn't sufficiently informed about what needs to be happening, and that's not a way to get good value.

Overall, I'm very much in favour of the NBN as a concept and nationally important project. But I'm not keen on the private profit maximising manner in which this "public" project (and others) is being built. I'm sure we could do it cheaper and better than what's actually being build in practice.

 

[Tisme]

Just about every "great" thing that's been done or built in this country came about due to the determined efforts of someone with a vision. It doesn't just happen, someone made it happen.

We seem to have completely lost that spirit these days unfortunately. It's not that we can't do the 21st Century equivalent of the power grid, highways, copper phone network or the Snowy scheme, it's that we're too frightened to actually get on and do it.

.............

Your post makes some valid points, some I agree with others not so sure. For example back in the 80's I was one of the few who could handle some rather high tech gear, so much so the govt would use my specification to scope the works. The govt engineers were simply not up to the task because of the lag between the engineering schools' training and the explosion of new tech. I did not gouge, but I made money, the client made enormous savings over outdated tech and we were all happy pushing new ideas and expanding horizons; responsible contracting and non combative clients goes a long way, especially if egotistical consultants are excluded from the equation.

But as you suggest, you don't need to be a rocket scientist to install light pipes and pits. To this end I don't really understand why multiple layers of organisations, all sucking from the public purse are required. The Chinese crowd who are installing most of the rest of the world's fibre could do our install in a heartbeat and if security is problem let Cisco do the hardware and software direct.

It's not like Telstra have a recent history of maintaining stuff, proved by the poor state of the copper and the past used by date of the street tophats and their corroded solder connections, so I don't really know what they offer except as a wholesaler/retailer which plenty of people could do with a laptop and a phone.... what is NBNco doing?

Apparently we don't need enterprise any more because we are moving back to the future and devolving into a British Empire mercantile economy, however we sell finished ideas rather than finished goods. For example it seems there is such a high demand overseas for our knowledge in building mining camps and conveyors we can relax about the fall in commodity income.

 

[drsmith]

Syd,

Remember this,

http://www.smh.com.au/it-pro/govern...tbenefit-analysis-report-20140907-10dqu0.html

Simon Hackett's latest piece is in response to it.

http://simonhackett.com/2015/01/14/is-15-megabits-enough/#more-1691

 

[sydboy007]

Syd,

Remember this,



Simon Hackett's latest piece is in response to it.

http://simonhackett.com/2015/01/14/is-15-megabits-enough/#more-1691

I seem to remember Ziggy stated at Senate hearings last year that there was no longer a guarantee minimum speed of 25Mbs, so unless that's changed what Simon is saying doesn't really count for much.

Considering the Liberal believed the Labor satellite rollout was over the top, can you see them doing much in the way of CAPEX to bring the HFC networks up to grade?

Are you willing to comment on the way Telstra has been handed first dibs on all future HFC customers? They can sit there watching what each premise downloads, gauging the likely ages of members and what their usage habits are like. Once NBN takes over Telstra will have the best chance of locking in the customers via targeted promotional offers. Liberal competition policy for you.

 

[drsmith]

I seem to remember Ziggy stated at Senate hearings last year that there was no longer a guarantee minimum speed of 25Mbs, so unless that's changed what Simon is saying doesn't really count for much.

I see.

You've joined Myths in condemning him to the dark side.

 

[Smurf1976]

But as you suggest, you don't need to be a rocket scientist to install light pipes and pits. To this end I don't really understand why multiple layers of organisations, all sucking from the public purse are required.

The crux of my point could be summarised this way.

They replaced the pits in my street as a prelude to NBN fibre installation.

Just one problem. The pits in my street were already suitable for such application and didn't need replacing. Indeed they skipped the hard ones and just did the easy (profitable) work.

As there's nobody left in government who knows about such things, they have no idea that they're paying for work that doesn't need doing in the first place. Sure, the contractors may well be giving them a cheap price per pit "on paper" but in practice we've given them a license to print money simply because there's few if any sitting around the table in a meeting who have ever hauled an actual cable through a conduit. Contractor says it needs to be done, so they pay them to do it. Easy money.

There's a sensible role for both private contractors and in-house staff in building the NBN. But I'll say from experience that the fully outsourced model has a lot of problems where the work is unable to be seen upon completion and there's no employee of the asset owner around when it's being done. Out of sight, can't be checked = almost as bad as signing a blank cheque. Been there, done this and learned the pitfalls.

 

[SirRumpole]

As there's nobody left in government who knows about such things,

Maybe there is a case for Expanding Infrastructure Australia to include those skills as a permanent repository of knowledge ?

 

[sydboy007]

I see.

You've joined Myths in condemning him to the dark side.

No.

Just pointing out that the current rollout is not being designed to meet any minimum performance target - well at least the technologies being used can't be guaranteed to meet any verbal promise provided, and we know how reliable they are from the Abbott Govt.

For someone working in the profession I find that bizarre to say the least. generally you have an end goal in mind and select the most cost effective technology. You don't have a goal then select technologies you know may or may not be able to provide the performance required.

I see you have yet again avoided commenting on the Coalition allowing Telstra monopoly access to HFC customers as the rollout occurs. Roughly 1.5M premises that will get their first taste of upgraded service via Telstra for how many months?

It will be interesting to see if Telstra is allowed to offer current Telstra retail ADSL customers lock in contracts once they have a new lead in cable for the HFC network connected.

Seems the Govt has traded a slight lessening of Telstra's dominance of the ADSL access network and for giving Telstra a massive leg up in areas of the current HFC footprint.