NBN Rollout Scrapped

[drsmith]

Turnbull explains it so simply in today's paper so that even galahs have no excuse for their ignorance.

http://www.theaustralian.com.au/opi...realistic-choice/story-e6frg6zo-1226619379754

The point I've been focusing on is its impact of affordability and thus the ability of households to financially access the higher end plans,

We also modelled NBN revenues. NBN Co assumes it can increase broadband access revenues by 9.2 per cent a year in real terms, and in doing so increase the share of household income devoted to fixed-line telecoms by 60-70 per cent. Our more realistic assumption (shared by independent telecoms analysts) is that its share of the wallet will stay constant.

The NBN's corporate plan admits Labor intends to triple wholesale charges across the next decade. That means the retail price for broadband will increase to at least $90 a month on average by 2021 for someone hooking up to the NBN.

The Coalition's assumption is that revenue per user is constant as a share of GDP (equivalent to annual growth of 3.5% in inflation‐adjusted terms), as opposed to Labor's 9.2%.

 

[drsmith]

As has been expressed here by pro Coalition supporters it is a political statement based on lack of or straight facts or miss information which is fine as long as you understand its the political argument not the technical facts argument.

It's a political statement yes, but is that a generic criticism of have you actually checked the information that supports it ?

Note I am not praising Labor's political position either.

A classic was the statement in the video DR posted earlier that the Coalitions project was 5 times faster and Labors 10 times faster than present....... go figure.

He made others too that were no doubt exaggerations, in particular regarding the speed of the rollout, but as you note above, this happens on both sides of the political fence.

Kevin Rudd for example,

http://delimiter.com.au/2013/04/13/...feed&utm_campaign=Feed:+Delimiter+(Delimiter)

 

[sydboy007]

The point I've been focusing on is its impact of affordability and thus the ability of households to financially access the higher end plans,

The Coalition's assumption is that revenue per user is constant as a share of GDP (equivalent to annual growth of 3.5% in inflation‐adjusted terms), as opposed to Labor's 9.2%.

I don't see a problem with the assumption that households will choose to spend more on home communication costs.

Once the NBN reaches a reasonable level of cover services like IP TV will become a decent sized market, companies like Netflix will be able to offer HD movie downloads, RSPs can start offering hosted services like backup or even virtual computers you can access of a lower powered device.

As for affordability, the current cost of 100Mbs plans is amazingly cheap. While it's not quite apples to apples, just do a search for a metro ethernet service and see how ridiculously expensive they are. RSPs are offering 100Mbs plans from around the $80 mark, going up to around $130 with 1TB of data.

 

[drsmith]

I don't see a problem with the assumption that households will choose to spend more on home communication costs.

Once the NBN reaches a reasonable level of cover services like IP TV will become a decent sized market, companies like Netflix will be able to offer HD movie downloads, RSPs can start offering hosted services like backup or even virtual computers you can access of a lower powered device.

As for affordability, the current cost of 100Mbs plans is amazingly cheap. While it's not quite apples to apples, just do a search for a metro ethernet service and see how ridiculously expensive they are. RSPs are offering 100Mbs plans from around the $80 mark, going up to around $130 with 1TB of data.

The problem will be not as to whether households chose to spend more, but the extent to which they can afford to spend more against other priorities. The greater the extent to which the government needs to recover capital costs through increased prices for higher end plans, the more households there are that are faced with this consideration.

What is amazingly cheap to some can be unaffordable to others with limited discretionary funds. What also seems amazingly cheap now may not in the future, depending on advances in technology.

Further to this point is a response I made to one of NBNMyths's posts a few days ago. His point is in black, my response in blue.

Think back a decade to 128k ADSL and ask yourself whether you could have imagined that a typical broadband connection of 12Mbps (100x faster!) would be struggling to cope with demand today. Do we really think that demand will suddenly plateau now? I think not.

Take myself back a decade and I was paying the same for that 128k ADSL with a download limit of a few gig to where am now paying a similar amount in nominal terms for a service approximately 50x better in both speed and download limits, driven by technological advancement. The problem here with Labor's plan is that the rollout cost of the technology (fibre) is such that for the capital cost to be recovered and a ROI, many households may be priced out of the higher end plans which you claim to be so essential. This too in a constantly evolving technological environment.

 

[Julia]

I don't see a problem with the assumption that households will choose to spend more on home communication costs.

You seem to be looking at this just from your own point of view. There are hundreds of thousands of people struggling to pay, eg, electricity bills, who do not want or need high speed internet, quite happy with what they have, and absolutely do not want to be forced to pay more.

 

[sydboy007]

You seem to be looking at this just from your own point of view. There are hundreds of thousands of people struggling to pay, eg, electricity bills, who do not want or need high speed internet, quite happy with what they have, and absolutely do not want to be forced to pay more.

The NBN doesn't make them. It's a choice.

As I have said a number of times my Dad is saving over $40 a month after moving to the NBN as he no longer needs a land line and the VOIP calls he gets are cheap - 10C untimed landline calls is hard to beat.

A lot of people DO choose to spend a reasonable share of their income on entertainment and communication services.

 

[Calliope]

Still there is no avoiding its a bit like connecting modern car front end to a 1956 FJ rear end with the hope you can screw 10 times the horse power out of the back end using future technology.

On Insiders this morning ( the usual stacked deck) was the similar sneering attitude of David Marr to Turnbull's NBN as is displayed on this forum.

For my part the attraction of the Coalition's proposal is that I would get it in my lifetime, and at 25 to 50 megs it would be at a speed much faster than 90% of the population needs. And the option is there for an update from copper to fibre up your driveway in the future. Leaving this an option will mean a savings of $60 billion on Conroy's never-never plan.

 

[Smurf1976]

Now the unions are getting upset about safety on the job (specifically relating to asbestos).

http://www.themercury.com.au/article/2013/04/14/376933_tasmania-news.html

For the record, I've seen what these contractors do and it's not something that I would accept personally. It's legal on paper, but shortcuts are taken in practice to save time and money at the expense of safety. Been there, seen this game before.

That said, Kevin Harkins is playing another game of his own too......

 

[drsmith]

Regarding the rollout, the most interesting sentence in the following article is the last,

http://www.theaustralian.com.au/new...-short-of-target/story-e6frg6n6-1226619523095

An NBN Co spokesman said there was confidence the 190,000 to 200,000 target would be met. "That's the target that we and our construction partners are working towards," he said.

If correct, it's at the lower end of the recently downward revised 190,000 to 220,000 target.

 

[bellenuit]

The absurdity of overspending on this one infrastructure project at the expense of other items has been highlighted by the announced cuts to Universities. Education was touted as the big beneficiary of ultra high speed broadband, but what's the point if students are deterred from going to Uni by the increased costs that will be imposed upon them. Education would not have lost out under the coalition proposals, as education facilities, along with greenfield sites, have been identified as those who would get FTTP.

 

[drsmith]

More on the rollout from the AFR,

http://www.afr.com/p/technology/nbn_co_to_pay_for_training_to_speed_5OioDwUuTcFYdasesrJQMP

 

[Julia]

The absurdity of overspending on this one infrastructure project at the expense of other items has been highlighted by the announced cuts to Universities. Education was touted as the big beneficiary of ultra high speed broadband, but what's the point if students are deterred from going to Uni by the increased costs that will be imposed upon them. Education would not have lost out under the coalition proposals, as education facilities, along with greenfield sites, have been identified as those who would get FTTP.

Agree. Ditto medicine. The much touted E-Health program is full of problems, with many of the doctors who have attempted to engage in it having their computers crash, and others - liking the idea - have set up appropriately at their end but are unable to connect.
How surprising: a Labor initiative that has been stuffed up!

 

[IFocus]

The absurdity of overspending on this one infrastructure project at the expense of other items has been highlighted by the announced cuts to Universities.

How? The funding is from entirely different sources.

 

[bellenuit]

How? The funding is from entirely different sources.

The interest on the bonds is part of the current account (unless they are capitalising that too). The face value of the bonds will eventually have to be paid back. Should, as will likely be the case, the NBN get sold for a lot less than its cost to build, the face value of the bonds owing will be less than the revenue from its sale, so the difference will have to be funded from general revenue.

At the end of the day it all falls back on the taxpayer.

 

[Calliope]

How? The funding is from entirely different sources.

There is only one source...the taxpayer. Are you so out of Focus that you can't see that the taxpayer will be footing the bill for the Gillard/Conroy NBN, even though Gillard says it's FREE. No way in the world can they recoup the run-out cost of $94 billion from revenue despite what Myths says.

 

[noco]

I listened to a report by Professor Michael Porter on the Bolt Report this morning and he does make a lot of sense.

I think the Labor Party have been a little lose with the truth in what can or cannot be achieved with the NBN roll out.

The Coalitions proposal appears to be far more economical and almost as effiecient and as the Professor explains, it is possible to install a node or box in a street and you can then have the choice of connecting through copper and receive 50 MGS or pay the extra to go all the way with fibre to receieve up to 100 MBS.





http://blogs.news.com.au/heraldsun/andrewbolt/index.php/heraldsun/comments/the_bolt_report_today31/

 

[NBNMyths]

I listened to a report by Professor Michael Porter on the Bolt Report this morning

Oh, so you're the guy who watches it.

 

[Smurf1976]

Should, as will likely be the case, the NBN get sold for a lot less than its cost to build, the face value of the bonds owing will be less than the revenue from its sale, so the difference will have to be funded from general revenue.

If any future government is dumb enough to privatise the NBN then they and those who elected them deserve everything they get.

The cost of building the NBN in the first place is, to a significant extent, just the cost of having privatised Telstra and allowed them to profit mine the infrastructure. Only a fool would do it again.....

 

[Calliope]

If any future government is dumb enough to privatise the NBN then they and those who elected them deserve everything they get.

The cost of building the NBN in the first place is, to a significant extent, just the cost of having privatised Telstra and allowed them to profit mine the infrastructure. Only a fool would do it again.....

"profit mine the infrastructure." ???:screwy:

 

[bellenuit]

If any future government is dumb enough to privatise the NBN then they and those who elected them deserve everything they get.

Isn't that the policy of both Labor and the coalition?

Anyway they don't have to sell it to take the loss (if there is one) to the current account. It will be valued using standard financial techniques (NPV of revenue stream etc) and if that value is less than the accumulated costs, the difference will be taken to the current account.