Re: NBN - Veldan
Veldan, the flawed decision to sell 100% of the taxpayer-built copper to Telstra Ltd is the reason FTTN is uneconomic in Australia. John Howard recognised this in 2004 when he tried to circumvent Telstra's monopoly with his first national broadband extension proposal.
But it was the tax-funded nation-building work of laying copper to country towns, hamlets and farms in the 1960s and 1970s which first enabled basic communications for everyone. Much of that copper now needs replacing before it can deliver FTTN. Copper maintenance alone costs Telstra $1 billion per year and costs households and businesses a lot of downtime. Oncea decision is made to build national infrastructure, it inevitably means that government must run the project.
The past five years saw stagnant HFC numbers, Telstra bullying competitors by waiting for them to install a DSLAM before activating their own to reduce the profitability, and a third of Australians still unable to get ADSL at all, with the median spedd in June 2011 only 3 Mbps despite the price paid for 24.
You are not forking out anything for FTTP, which is built with project borrowings it will repay from wholesale revenue. Takeup of higher than expected speeds (only 16% are buying 12/1) proves the cost recovery will come even faster. It is Turnbull's FTTN which will cost you, firstly at least $11 billion, handed to telcos, to build massive cabinets and lay fibre to them, then at least $15 billion compo for the copper, much of which we will need to replace with new copper!
FTTP does not require FTTN. In fact, FTTN must be bypassed by new fibre starting at the exchange and running to the premises. The cabinets will remain as a stark reminder of the money wasted in building them only to be decommissioned before they even had time to rust.
The population density of the fibre footprint in Australia is quite similar to that in other countries with FTTP. Half the area of Greater Sydney comprises water and parkland which does not get fibre. Laying fibre right to the building in a suburban street here is no different from any town in Japan or South Korea, in fact the proportion of multiple dwellings is smaller here, reducing the work needed to get it to the individual premises. And our income per capita was double that of South Koreans when they built 100 Mbps FTTP last decade, though it has subsequently risen a bit. The USA doesn't bear comparison, as everyone there complains about the geographic turf wars of the big providers, who not only charge like a wounded bull, but have now moved to cap data as video now comprises 49% of internet traffic there.
In short, yes, we need the government to get adequate services beyond three cities; no, the track record of market delivery is poor in regional Australia; no, you are not forking out $40 billion, but you will fork out $25 billion for a white elephant under Turnbull's plan; and no, our population density in the FTTP urban footprint is perfectly comparable to our go-ahead Asian neighbours.
FTTP is the right answer, and the off budget funding model protects budget areas from losing funds, while guaranteeing no delays to the project in the event of changed budget priorities. The coalition must adopt it, or it will struggle to retain or win regional seats in 2013, as it did to most peoples' dismay in 2010.
Biting the hand that feeds IT
