back to article Turnbull storms Paris with NBN’s doom

In the midst of a blitzkrieg tour through Germany, Paris and the UK seeking tête-à-tête meetings with some of Europe’s leading telco brains trust including Ofcom, Australia’s shadow communications Minister Malcolm Turnbull delivered a typically caustic attack on Australia’s NBN project to a packed Broadband World Forum in Paris …

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NBN ending competition

Turnbull is promoting a fantasy here. He claims, repeatedly that the NBN is a monopoly guaranteed by law. It is complete bs. Even those supposed "anti-cherry picking" provisions were some journalists invention.

The new laws do insist the industry is split into segments - local loop and the rest (retail and back haul), but that's it. Any and every one is free to build a competitor to the NBN, and what's more do so only in the most profitable, densely populated areas (ie, cherry pick). The _only_ restriction is you must be a wholesaler who sells access to every retailer on the same terms. So, you think wireless is going to kill fibre - well then go for it. Maybe put fixed wireless into apartment blocks were you can get 100's of customers per antenna, and undercut the NBN. No one is stopping you.

So unlike the Telstra monopoly of old, competition is allowed. I expect in the back haul business there will be more competition, because unlike Telstra the NBN is banned from providing back haul. Telstra on the the other hand gave itself very preferential access to its own exchanges. If the NBN succeeds, it will be because it can wholesale the sort of local loop product people want cheaper than anyone else can. Most people would call that open slather competition.

It's almost a 180 difference from the picture Turnbull is trying to spin. Yet articles like this one just repeat his claims without question. Maybe your could actually try doing some journalism for a change, putting the claims of our pollies in context rather than just allowing yourself to be treated as a copy & paste megaphone.

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Silver badge

Errr, no. As part of the deal Telstra will be transferring my service over to the NBN - like it or not - and any of the ISPs with NBN deals (Telstra, Optus etc) have a contractual obligation not to slag off the NBN offering compared to any competing services (Wi-Fi, 4G etc) they offer. How quaint.

His point about creating an over-capitalised (i.e. fucking expensive) Government owned monopoly provider not being good for prices still stands. You will benefit in the short term - Telstra have been expanding their usage offerings and lowering prices over the last few years - but rest assured this is a future budget stocker. If you don't believe that then take a look at how the States have massively upped the transmission costs on their monopoly power networks to fill their budgets. Electricity in QLD has risen 50% in 4 years, mainly through this cost. Short term gain, long term fucked.

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Mushroom

Dear Mr.Turnbull, you fucktard,

I've just got an email from my internet provider about the new plans they will be able to offer me under the NBN.

Some of the highlights are:

10-20Mbps speed, compared with my current max of 1Mbps if I'm lucky.

About 4 times my current download capacity.

The same cost; which is still about half what I would pay for the same service on Telstrash.

So let's summarize: same cost (I pay the same as what I pay now), higher speed, higher capacity.

Problem?

The only problem is Mr. Turnbull - he and his lap-dog Liberal Party are a bunch of fucktards who clearly have some other agenda - perhaps massive investment in mobile / wifi company shares? Their superannuantion & investment portfolios didn't win the contracts in spite of all the traditional Australian back-room graft and corruption? Sore losers?

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Prat

That is all. The guy is a major prat. His record at OzEmail kind of shows his approach. The company then had a great user base and potential but when the whole service got shit, he took his money and ran.

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FAIL

Fibre to premises costs $12 billion, FTTN $26-30 billion

Mr Turnbull knows that a national FTTN rollout (ADSL extensions requiring 20,000 electrified street cabinets to extend the reach of the ageing copper) was costed at $11 billion in 2007, PLUS $15-20 billion compensation to Telstra for cutting their copper, which John Howard sold them against advice to keep the infrastructure and sell the retail business.

If FTTN (which is permanently capped at copper speeds) cost $26 billion in 2007, how can it be cheaper than building universal fibre to homes at a total cost of $12 billion in 2011?

To his FTTN folly, he must also add the cost of Ka-Band satellites for remote Australia, and 400,000 wireless services to the premises beyond fibre's urban footprint. Pretty soon he could be talking a lot of money for his inferior alternative.

Just as taxpayers built copper phone lines across regional Australia in the 1950s, a decade of market failure to upgrade it proves that only taxpayers will ever build fibre across Australia, a one-off cost for at least a fifty year life expectancy, compared to a five-year dead end of power-hungry FTTN cabinets in every suburban street and regional Australians again neglected.

Right-minded persons oppose borrowing to fund government expenditure, with the single exception of infrastructure which cannot but generate revenue sufficient to substantially repay the loans, and the NBN will do so in spades, while creating a level playing field for big and small providers to access any customer regardless of geography. The coalition should adopt the whole model and deprive Labor of its only remaining popular policy, or risk regional electorates again as they did in their 2010 broadband fiasco.

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Embarasing

It's embarrassing to have someone representing Australia who can spout this sort of nonsense to people who may have been considering investing in Australia.

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FAIL

Never let the truth get in the way of a politician

Its the Australian political way, regardless of whether or not the incumbent government has a good idea, tell the world that its a terrible idea and take the exact opposite stance as your policy.

What I've never managed to understand is how people from the political party that is *NOT* the government, spends so much time and money on meeting with foreign dignitaries, and spouting opposing political views at international conferences.

Let the government (right or wrong) govern, and if you oppose them, then present your alternative ideas to the people at the next election. If they like your ideas better, you get to be the government etc.

This international grandstanding is frankly embarrassing..

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WTF?

You guys are smoking crack

There is one company who owns the whole network. They have a business that will go public in order to pay back the Australian People.

One company owning all access, this means one company will set prices with no other companies to compete(I think the first guy is wrong). The wholesale rate is fixed to make money - not to provide great access.

Right now you have 3 different technologies to choose from depending on where you live - cable, adsl, wireless

This is being replaced with one technology - fibre. The Telcos can not advertise saying wireless is a substitute for fibre - and instead of several companies owning networks it will be one company.

Telstra is the incumbent, but their share has been dropping with pace since deregulation, as have prices. Optus had a network, there were other independent business networks in each capital city for data. That will all go.

One network, one wholesale price. This will not come down with volume - this requires huge volume to stay at this price.

In the UK for 12 pounds ~$20 you can get unlimited ADSL. Here the cheapest plan I could find was $59(naked). We are getting bent over. Nationalising the network and recreating a monopoly is madness.

FTTN - sure that is copper for the last stretch, but that could be upgraded to fibre to the house if a particular house wanted.

How many people in Australia need fibre to their house? Our population is aging - and lots of houses are not/do not need to be connected to the internet. I am in my early 30's and almost no one I know that is my age has a fixed line phone, mobile is more convenient getting faster for data.

This is appealing for geeks and some businesses - but the general population it is a waste.

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Happy

A lesson in universal natural monopolies

Scotty, if you are arguing that privatising the NBN fibre after it is built would create another fiasco just like selling Telstra the universal copper did, then I agree with you, but I suspect you have a different view.

Right now, depending on where you live, your options are not limited to cable, ADSL and wireless - seven million Australians cannot even get ADSL and most of these cannot get useable 3G indoors or at all! Meanwhile, nearly 20% of capital city premises have both Telstra and Optus cables in their streets!

The reason for this major fail for regional Australia is that we left it to the free market for fifteen years. Universal fixed comms infrastructure is a natural monopoly. Localities that are more costly to build to will never be serviced by a free market. This is why South Korea spent $46 billion laying fibre to premises last decade. Now for just $2 billion we watch them coax corporations to upgrade the switches to gigabit and in some areas 10 gigabit speeds.

As to your flawed price comparisons. There is no reason to buy a phone service on the NBN if you have a fibre data service, so the $24 wholesale charge (which includes GST) is incurred once only. All calls will be VoIP (not PSTN) from either port anyway. So, for a pensioner who wants the phone and web access an iiNet $49.95 20GB NBN fibre service is three dollars cheaper than the cheapest Telstra configuration of $22.95 Home Line Budget plus $29.95 5GB ADSL. But you then pay Telstra for the STD and local calls, or you pay $10 or less for all your calls on VoIP. The legislation also provides that a phone-only service will be made available for no more than at present to pensioner health card holders and the like, by means of subsidies, as it is now.

Rest assured there will be Dodos and Exetels offering leech-grade services, possibly as loss-leaders as they do now with ADSL products.

NBN fibre enables a completely free retail market, using a natural monopoly infrastructure, and cannot be delivered to all of Australia in any other way, nor any cheaper than is being done.

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FAIL

Free market? Never seen it

What free market? It costs at least $60,000 to get a carrier license for a start and more than that per year just in legal fees according to most people I know that deal with that sort of thing. The ACMA sold off half of the 900 MHz band that many parts of the world are using to get decent broadband speed to places that don't make economic sense other ways. There still isn't a free market of back haul into exchanges.

Do you have any idea what a PSTN interconnect costs? The last one issued was to Worldcom over a decade ago.

The $24 charge (which is exGST) needs markup and doesn't include back haul of any NBN data fails to cope with concept of "markup" so the millions of people who just have a land line are out of pocket a great deal for their budget or everyone else gets to subside them.

The NBN can't be delivered to hundreds of thousands of existing homes and offices that have high speed ADSL today because of changes in how connections can be made. Any property that has been subdivided may be stuck on who knows what if they pull the copper out but Telstra doesn't have to do that until its existing users are connected to something else.

If NT&T, AT&T and Verizon can't get 100% of existing customers converted from copper to glass, how can the NBN?

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FAIL

Unsolved problems

The numbers for the NBN seem to be lacking the +GST numbers. So far the average has to be $33 (or is that $36.3) for line service per month according to a presentation I saw last week. That is higher than the current line rental or even line rental on a Telstra only DSLAM. If you want your phone from one provider and IP from a second, both get to pay the $33. The bandwidth figures the NBN likes to push around (and used in their costings) fails to account for current use let alone future use. They seem to like using Telstra's business models as well when there are so many better choices. So far they have had a nice track record of being late for nearly everything. Their technology claims 100 megabits yet is only delivering about 72% of that according to some test and others see it as an upper limit. The NBN will cause a jump in many peoples access rates but it will be locked in for a very long time as the rest of the world passes us by again since their chosen technology is now only slightly slower than current HFC. Of course none of this makes Turnbull's approach anymore reasonable.

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Anonymous Coward

You do know that 100mb, as advertised, is only the STARTING point of what Fibre already does?? We already use 10Gbe in our corporate networks using the same fibre. We have TB connections under the ocean linking entire continents using the same Fibre. You did know that didn't you? Before spouting your utter bollocks above??

I really wish some of you numbskulls would get it through yoru thinck heads - there is nothing faster than Fibre. Now and on the horizon...and by horizon I'm talking the next few decades. No magic wireless, no sharks with frikken lazer beams, no Star Trek teleporters etc

And when you do upgrade yoru speed it won't need entire suburts dug up, nor your house re-wired or any other claptrap the Liberal Party or The Australian newspaper makes up fraudulenty for the clueless to swallow. You'dll jsut nip down to Hardly Normal and buy a new modem/router. Enter in yoru username/password and you're done. 1Gb speed for all. Any Wireless or HFC cable doing 1gb connections yet? Fibre is...and faster... already.

Turdball is an absolute disgrace. He's spouting off alleged 'experience' with IT based on the fact he was a 'Money Man', a banker, who invested in one of the oldest and biggest ISPs in Australia - after the explosion of the internet in the late 90's. He's no more 'IT' savvy than any other over 50 politician in the country. He moved money in, help rape and sell off one of the oldest ISPs in the country, and moved his money out - with a sizeable bonus and profits whilst making not a single technical decision related to IT and or Broadband.

The whole coalition FraudBand plan is to hand over BILLIONS to Telstra, a Private Company now, and pay them to upgrade THEIR backhaul and Exchanges, something we will never own orreceive money from, and we will still be reliant on the exact same copper cable thats been in the ground around our houses for 60 years and the exact same copper cable that is mostly responsible for those nice shiny new ADSL2 connections a lot of us have going from a theoretical top speed of 24mb to an actual reported speeds of anywhere from 16mb if you live next door to 1-2mb if you are around 4.5 clicks from the Exchange. Going on memory the avg ADSL2 speed is around 6-8mb - all because of the length and quality of the copper cable. Throw BILLIONS at Telstra like the coalition want to do and guess what - you are going to get the EXACT SAME speed you are getting right now. With no return on investment to the Australian people - ever.

FraudBand. Thats what the Liberals and Malcolm Turdball have to offer this country.

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FAIL

"We already use 10Gbe in our corporate networks using the same fibre."

Ummm no you don't.

Your 10G fiber doesn't have 1:32 prisms at both ends unless your network involves million dollar end points as found on trans-oceanic links. You might find your 10Gbe link has two bits of glass and the NBN is using only one and its running at 1/4 of that speed.

xPON is FTTN where the Node is an optical device and the NBN is just that. PON has increased speed 40x in the last 2 decades only in the lab. The point to point fiber you talk about has increased 20,000 times in the last 4 decades based on what I could buy in shops in town.

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Stop digging Malcolm, it's coming to your street too

Will Malcolm Turnbull, at the behest or the organ grinder Tony Abbot, risk his credibility even further by spouting this nonsense at an international forum? Would he advocate the duplication of the electricity network on the grounds of his beloved “competition”?

We know he spouts this type of nonsense in Australia, but why risk his reputation in international fora? Is he that desperate to have his overseas travel subsidised?

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Facepalm

Philistines

What do you expect from an opposition lead by a guy who talks to an invisible sky fairy?

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WTF?

@scottf007: I think the first guy is wrong

*shrug* What can I say? There will be no law banning competition on the local loop. They are all gone. Look it up yourself if you don't believe me. The proposed bill is online.

@scottf007: One company owning all access, this means one company will set prices with no other companies to compete(I think the first guy is wrong).

Firstly a gentle reminder: this is what we have now. One company, Telstra owns almost all the access. The one exception is the Optus HFC network which is dying a slow agonised death as we speak.

You talk about how wonderful competition is, but ignore the fact no country on the planet have managed to produce a competitive local loop delivery. The reason is plain as the nose on your face: no one in their right mind will roll out multiple cables to your house. It would be like running two water mains, or two selects of electricity poles. Just insane. That short period were we did take a short trip on the other side of sanity lead to the two HFC networks being rolled down the one street, and now the eventual death of one of them.

So local loop competition won't happen. You are demanding the impossible. Forget the fantasy, and just accept the idea that one company will own the sole land line connection to your house. If they are a private company they will charge you as much as they think you can bear. Of course no one can stomach that, so Telstra is regulated and charges whatever the government determines. The NBN will be a government owned company and so in that case the government sets the price. Can you spot the difference? Neither can I.

But there is one difference. Telstra used it local loop monopoly to keep a tight grasp all the rest of the communications infrastructure. Most of the back haul in the country is owned by Telstra. It is by far the biggest mobile operator. When you own the key piece of the puzzle, the local loop, that everyone must connect to it is easy to make it difficult and expensive for competitors. Thus we ended up with a one near monopoly operator who controls all of Australia telecommunications infrastructure.

The NBN will fix that. In return for being allowed to own the natural monopoly, it must stay out of all other areas. So in the long term we should see lots more competition in back haul and retail.

Did you get that - because I think you are missing the big picture. In fact you've got it 180 degrees arse about - just like Turnbull. Here you are saying the NBN will squash all competition, whereas in fact the new regulations separate the industry into multiple segments so there will be more competition.

In fact it is no different to what happened in Electricity. It used to be your local generator owned everything from the power station, to the transmission lines, to the suburban poles, to the meter box in your house, and you paid whatever they said. Then they broke it up. So now you have generators, who bid in a market to sell to retailers, who in turn sell to you. And so you have a choice. In fact everyone has choices and there is competition everywhere where they used to be none. But did you notice there is one area there is no competition? That would be the suburban poles and wires. They are still owned by a monopoly. The government usually. How odd - with the NBN we end up with the same situation in telecommunications.

@scottf007: We are getting bent over.

Maybe we are. But again you are making no sense. You are saying that with the current situation we being ripped off. Fair enough. But now the government proposes to change that situation in a way that might fix it, you are using that argument that we are being ripped off now to oppose it?!? Weird.

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Urh
Flame

Ugh

It really, really, REALLY pisses me off whenever Turnbull talks about trying to stimulate competition at the infrastructure level, as though it's never been done before. Except that it has, and it was a fucking joke (and not a particularly amusing one at that). Remember the HFC rollout? About a quarter of the country (i.e. the best parts of Sydney, Melbourne and Brisbane) got to choose from either the Telstra or Optus cables running down their streets, and the rest of the country got fuck all.

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