NBN Rollout Scrapped

[NBNMyths]

Thanks. Do you support NBN?

The original one. Not a fan of the hobbled FTTN version the coalition is running out now, as I believe it will be quickly obsolete and cost us more in the long term for upgrades.

 

[drsmith]

The following opinion piece on Stephen Conroy's legacy was in today's AFR,

Who would have thought? It turns out that a massive government-run telecommunications monopoly that was built from scratch and which aims to push other competitors out of the market is very expensive. As things stand, the grand monument dreamt up by the Rudd government's telecommunications minister Stephen Conroy will leave Australia with close to the highest broadband prices in the developed world.

As our Chanticleer column reported yesterday, telco retailer TPG has downgraded its profit outlook to reflect a sharp hike in its access fees to the national broadband network. NBN charges, including a controversial charge based on increased movie streaming, are driving this increase. Under its business plan, the NBN has to recoup the costs of capital over time. So the $54 billion it will eventually cost to build will be passed on to retailers, whose profit margins will be squeezed, and eventually consumers who will have nowhere else to go.

By now, competition would force a normal business to write off a chunk of this as a bad investment. In February a PricewaterhouseCoopers report suggested the NBN was worth less than half of its construction cost. Well here's the rub, the previous Labor government kept the NBN off the budget books by arguing it would generate a quasi-commercial return. That allowed it to keep the project's early shortfalls from adding to the budget deficit. But writing down a massive amount of the value would expose the fantasy of the entire exercise.

So now we live in a crazy world where both sides of politics pretend that the NBN will generate a quasi-commercial return on equity while also providing its services at competitive prices. The government doesn't want a bigger deficit on its balance sheet, and Labor thinks the NBN is a great idea no matter the cost. So the NBN has to be allowed to do what monopolies naturally do: charge monopoly prices.

The NBN was of course, the brainchild of Senator Stephen Conroy, who suddenly quit the Senate last week. One of the lowest-quality federal ministers in Australian history, Senator Conroy claimed he had "unfettered legal power" to order Australian telcos to "wear red underpants on their head" if he so desired. He claimed the NBN would cut prices for consumers and futureproof access to the internet. Well, in a sense he has futureproofed the NBN, because it is illegal for anyone from Telstra to TPG to advertise other internet technologies as alternatives to the NBN.

The Turnbull government vows to crack down on businesses whose activities have the effect of diminishing competition. Yet it has inherited a government monopoly at the heart of the information economy whose business model is based on doing just that. Under Labor, Telstra struck a terrific deal for handing over key parts of its broadband infrastructure to the NBN. That windfall for Telstra shareholders loaded more monopoly costs into the NBN business model, which it now seeks to pass on to its captive customers. Turns out we're all wearing red underpants on our head thanks to Senator Conroy.

http://www.afr.com/opinion/editoria...d-underpants-on-all-our-heads-20160921-grkz3h

 

[NBNMyths]

The following opinion piece on Stephen Conroy's legacy was in today's AFR,

http://www.afr.com/opinion/editoria...d-underpants-on-all-our-heads-20160921-grkz3h

All very nice to say, but what is a viable alternative?

Leaving it to the market clearly didn't work. Prices were no cheaper and the product was no better (for most people).

I would argue that telecommunication cables are a natural monopoly, like power cables, gas lines and water pipes. It makes no sense to overbuild multiple sets of cables, as Telstra and Optus discovered 20 years ago.

The NBN is about providing modern comms infrastructure for all Australians, based on a cross-subsidy model, just like every other utility.

By creating one regulated wholesale infrastructure monopoly, you gain economies of scale and equity of service/price for everyone.

Leaving it to the market would result in all but dense suburbs getting greatly inferior infrastructure at higher prices.

Allowing fixed-line competition blows away the business case, because competitors could cherry-pick small profitable areas and undercut the NBN in those areas, which would in turn reduce NBN revenue, driving up prices for everyone else. Imagine if power companies were permitted to overbuild powerlines, and one decided to only build within 2km of every substation. Their costs would be far lower than the big network operator, so they could charge less. That would take away the 'cheap' customers of the big operator who were cross-subsidising the rest of the network, either sending them into the red or forcing them to charge more to their remaining customers. What a shambles that would be, and we wouldn't allow it. So why should we allow it for communications?


Back to the original question, if not an infrastructure monopoly, what alternative would you propose and what impacts would it have?

 

[Tisme]

"As the first national, wholesale-only broadband service, the nbn provides wholesale access speeds to telephone and internet service providers who then deliver these services onto you.

Below are the speed tiers that are available to our service providers over NBN fibre. Of course, the actual speeds you experience depend on a number of factors outside our control, like your equipment quality, software, broadband plans and how your service provider designs its network.


Below are the speed tiers that are available to our service providers over NBN fibre. Of course, the actual speeds you experience depend on a number of factors outside our control, like your equipment quality, software, broadband plans and how your service provider designs its network.

Speed tiers
1-mbps
This speed tier provides your service provider with wholesale access speeds of 12Mbps download and 1 Mbps upload over NBN fibre.
5-mbps
This speed tier provides your service provider with wholesale access speeds of 25 Mbps download and 5 Mbps upload over NBN fibre.
10-mbps
This speed tier provides your service provider with wholesale access speeds of 25 Mbps download and 10 Mbps upload over NBN fibre.
20-mbps
This speed tier provides your service provider with wholesale access speeds of 50 Mbps download and 20 Mbps upload over NBN fibre.
40-mbps
This speed tier provides your service provider with wholesale access speeds of 100 Mbps download and 40 Mbps upload over NBN fibre"

Interesting how the term "access speeds" is used. I'm guessing that is a way to create the illusion that bandwidth is the same as goodput.

 

[NBNMyths]

Interesting how the term "access speeds" is used. I'm guessing that is a way to create the illusion that bandwidth is the same as goodput.

It's because actual and theoretical speeds will always be different. If you order 100/40, then you can theoretically get that speed, and if your ISP is good and you are downloading from a website with sufficient capacity, then you'll get very close to that speed.

But there is another major factor within the NBN (aside from all the ones outside it). The ISP also needs to buy enough total capacity at the point of interconnect to deliver to all their customers. So they balance/estimate how many of their customers will be using the service simultaneously and buy enough capacity for that estimate. Cheaper ISPs tend to under specify the back end, leading to congestion within their NBN network. e.g.: A 'good' ISP might have a ratio of 20:1. A 'bad' ISP might have a ratio of 30:1.

 

[Tisme]

It's because actual and theoretical speeds will always be different. If you order 100/40, then you can theoretically get that speed, and if your ISP is good and you are downloading from a website with sufficient capacity, then you'll get very close to that speed.

But there is another major factor within the NBN (aside from all the ones outside it). The ISP also needs to buy enough total capacity at the point of interconnect to deliver to all their customers. So they balance/estimate how many of their customers will be using the service simultaneously and buy enough capacity for that estimate. Cheaper ISPs tend to under specify the back end, leading to congestion within their NBN network. e.g.: A 'good' ISP might have a ratio of 20:1. A 'bad' ISP might have a ratio of 30:1.

I'm sure everyone who signs up to, say 100mps, with get that as a bandwidth guarantee, but I doubt that speed goodput would translate to the ISP in the first instance. Sure the ISP's downstream switches, multiplexing, etc will degrade the throughput...that's not an issue people are unused to.

 

[sptrawler]

The latest S.A blackout should give the NBN a real test, let's see the feedback from those on the copper vs those on the fibre.

Let's see how those on the NBN went, phoning a friend, good real world test for the battery back up.

 

[NBNMyths]

Remember those leaks last year about 'Operation ClusterF*#k' AKA the Optus HFC network?

The leaks that said the Optus HFC was not fit for purpose?

The leaks that NBN Co said were rubbish?

The Optus HFC that was fine and would bring down the cost of the NBN and speed the rollout?

The very same HFC that all the tech heads and real-NBN fans said was rubbish?


Guess what.....

'A lemon': NBN backflips, abandons plan to use Optus cables it purchased for $800 million

The National Broadband Network has dumped its plan to use Optus cables to deliver high-speed broadband less than a year after rubbishing reports the $800 million network was in a dire state and may be unusable....Acknowledging the Optus HFC network was not "NBN-ready", the company said FTTdp would provide a better customer experience and value for money than upgrading the old network.

http://www.theage.com.au/federal-po...urchased-for-800-million-20160928-grquam.html

 

[Tisme]

Remember those leaks last year about 'Operation ClusterF*#k' AKA the Optus HFC network?

The leaks that said the Optus HFC was not fit for purpose?

The leaks that NBN Co said were rubbish?

The Optus HFC that was fine and would bring down the cost of the NBN and speed the rollout?

The very same HFC that all the tech heads and real-NBN fans said was rubbish?


Guess what.....

'A lemon': NBN backflips, abandons plan to use Optus cables it purchased for $800 million

The National Broadband Network has dumped its plan to use Optus cables to deliver high-speed broadband less than a year after rubbishing reports the $800 million network was in a dire state and may be unusable....Acknowledging the Optus HFC network was not "NBN-ready", the company said FTTdp would provide a better customer experience and value for money than upgrading the old network.

http://www.theage.com.au/federal-po...urchased-for-800-million-20160928-grquam.html

What front page was that on? Did Malcolm get the deserved credit for a job well done?

 

[drsmith]

Back to the original question, if not an infrastructure monopoly, what alternative would you propose and what impacts would it have?

As the article points out, Labor and Stephen Conroy thought the NBN a great idea no matter the cost and spent accordingly under its monopoly model.

The $800m payment to Optus in relation to its HFC network is a case in point.

 

[NBNMyths]

As the article points out, Labor and Stephen Conroy thought the NBN a great idea no matter the cost and spent accordingly under its monopoly model.

The $800m payment to Optus in relation to its HFC network is a case in point.

And how much more time and money was wasted renegotiating the agreement, developing systems to integrate HFC into a back end that was never designed for it, repairing it, testing it only to find out that it was just as useless as all the experts had already told them it was?

 

[drsmith]

And how much more time and money was wasted renegotiating the agreement, developing systems to integrate HFC into a back end that was never designed for it, repairing it, testing it only to find out that it was just as useless as all the experts had already told them it was?

You're welcome to substantiate a figure if you like but don't forget that the upgrade of Telstra's HFC network is proceeding.

Also, the decision not to proceed with upgrading the Optus HFC network doesn't let Stephen Conroy off the hook. It only serves to illustrate what was done wrong under his tenure.

 

[NBNMyths]

You're welcome to substantiate a figure if you like but don't forget that the upgrade of Telstra's HFC network is proceeding.

Also, the decision not to proceed with upgrading the Optus HFC network doesn't let Stephen Conroy off the hook. It only serves to illustrate what was done wrong under his tenure.

Why was it wrong? The Optus deal existed to ensure the maximum possible uptake of the NBN, and therefore create a return for taxpayers and minimise costs for all NBN subscribers. You might have a philosophical opposition to that method/decision, but that doesn't make its 'wrong'. It makes it 'wrong in your opinion'.

 

[drsmith]

Why was it wrong? The Optus deal existed to ensure the maximum possible uptake of the NBN, and therefore create a return for taxpayers and minimise costs for all NBN subscribers. You might have a philosophical opposition to that method/decision, but that doesn't make its 'wrong'. It makes it 'wrong in your opinion'.

:nono:

Your attention span is better than that.

 

[NBNMyths]

:nono:

Your attention span is better than that.

Are you referring to the AFR editorial? In that case, it makes it 'wrong in their opinion' too.

I think it was right, you think it was wrong. It's possible to make arguments to support each case, but 'right' and 'wrong' are philosophical opinions on this particular strategy. They are not factual arguments.

 

[drsmith]

Along with the announcement last week of an increase in the FTTdp footprint, there was also a media release which included a breakdown between FTTN and FTTB so far since FTTN was launched in September last year,

27 September 2016

745,000 Fibre-to-the-Node premises are now Ready for Service (RFS) and 235,000 premises have been activated just 12 months after commercial launch of the product.

Nearly three quarters of a million Australian premises can sign up for an nbn Fibre-to-the-Node (FTTN) service just one year after the company commercially launched FTTN services. Further, nearly a quarter of a million premises are now activated on the nbn™ network via FTTN.

If you include the figures from our Fibre-to-the-Building (FTTB) deployment then we have a total of 854,000 premises Ready for Service (RFS) across FTTN and FTTB combined.

http://www.nbnco.com.au/corporate-i...-anniversary-of-Fibre-to-the-Node-launch.html

 

[drsmith]

NBN have today released their quarterly report to Sept 30 (Q3 2016),

http://www.nbnco.com.au/content/dam/nbnco2/documents/Q1 2017 Results Presentation.pdf

It outlines progress for the quarter but I couldn't see any reference against quarterly targets. Overall rollout progress however can be assessed from other publically available information.

In Q3 2016, the rollout passed an additional 338k premises. On the assumption of a linear passed profile from June 30 2016 actual of 2,893k to a June 30 2017 target of 5,442k, this is way behind schedule. Over the 4 quarters, the rollout needed to pass 637k per Q to reach the above June 30 2017 target.

From the June 30 2016 projection of 2632k outlined in the 2016 corporate plan, the rollout as at Sept 30 is 599k ahead of that. This though is also short of 703k quarterly target required between that June 30 2016 target and the June 30 2017 target. This is a more appropriate measure of progress relative to the annual targets outlined in the 2016 corporate plan but is still 104k behind based on linear extrapolation as at Sept 30.

This isn't necessarily cause for alarm as the rollout profile from quarter to quarter is not necessarily linear. It's highly unlikely for example that HFC passed is still going through a ramp up stage given that it's still the early stage of that component.

What is clear is that there is going to need to be a significant ramp up in numbers in the weekly rollout reports in the weeks and months ahead if the June 30 2017 target is to be achieved. Over the remaining 9 months of the year (39 weeks) the rollout needs to pass an average of ~57k premises per week to June 30 2017.

Other stats of interest is a breakdown between FTTN/B and HFC passed as at Sept 30 which is 926,624 and 27,506 respectively. A media article also outlines that portion of FTTN/B passed is FTTB,

The current count of total ready for service combined FTTN/B premises stands at 1.03 million, with 138,684 specifically on FTTB.

http://www.itnews.com.au/news/nbn-passes-1-million-fttn-b-premises-440904

That's later, possibly based additional commentary from the company around today's quarterly report. The most recent weekly rollout update published is to Oct 27.

 

[SirRumpole]

One man's NBN battle

NBN creating digital divide on New South Wales Central Coast

http://www.abc.net.au/news/2016-12-06/nbn-creating-digital-divide-on-nsw-central-coast/8096438

 

[SirRumpole]

Another demonstration of Turnbull's failure.

Global research opportunity stalled after connection failure

http://www.abc.net.au/news/2016-12-12/milroy-observatory-at-coonabarabran-nbn-internet/8113268

 

[drsmith]

Another demonstration of Turnbull's failure.

Global research opportunity stalled after connection failure

http://www.abc.net.au/news/2016-12-12/milroy-observatory-at-coonabarabran-nbn-internet/8113268

Sometimes it's a good idea to read more than the headline before being a critic. The observatory isn't on the fixed line network.

The owner David Baker said the NBN satellite did not provide a strong enough connection to allow global access to the telescope.

https://www.google.com.au/maps/plac...c7d3e5ca2b8ab55!8m2!3d-31.220588!4d149.190378