Posts by FrancisYoung

Yet another concession by Malcolm Turnbull that Labor got the project right under Senator Conroy, whose plan was always to fund the build from government bond issues, and repay with interest from the high wholesale revenues obtained from the 93% fibre to premises infrastructure.

The only element Mr Turnbull has failed to adopt is laying the optimal technology to attract higher revenue from about a third of all end users in every suburb, which is how it repays the loans. Inferior FTTN gets substantially less revenue, despite having higher operating and maintenance costs, and similar costs to deploy.

Build FTTP, Mr Turnbull, and stop lying about its cost.

Cost parity of FTTN and FTTP

The question to ask Mr Morrow, in order to assess whether FTTN or FTTP is "cheaper", is how much average revenue per user is being received from FTTN areas.

If it is less than the $43 ARPU coming in now from FTTP areas, then how quickly will FTTP be at cost-parity with FTTN, especially as data demand keeps growing?

Anecdotally, the break-even point occurs before the rollout is completed, and therefore urban areas should be done with FTTP wherever physically possible.

A divisive proposal

This is another exercise in divide-and-conquer by the anti-Communications Minister. Cross-subsidy must happen to achieve universal coverage. The question is simply how to do it, ie, internally or externally.

The 2010 McKinsey-KPMG NBN Implementation Report produced numbers which are still useful, and by uniform charging, it saw distributing the cost of fibre, wireless and satellite service provision across 100% of premises as the lowest cost approach.

This achieves the universal good of facilitating business, government and social service delivery to all Australian premises, by sharing the marginal cost of - initially - 7% of premises across the 93% in urban areas. As fibre is deployed subsequently to more outliers, this 7% will diminish over time. Note that some urban installations are also costly to provision. Sharing the total cost across the total customer base achieves the best outcome, and does so at the lowest administrative cost.

Critically, internal cross-subsidy averts the futile and pointless debates about city folks funding the lifestyle choice of farmers (as if this was not a symbiotic dependency!).

It has been quipped more than once that Australia's national sport is splitting the bill, but a universal calculation, universally shared by internal cross-subsidy, is the best way to contain the total cost and deliver all the objectives of the NBN.

The Department's official risk assessment of the NBN before it began identified two over-riding factors upon which success or failure depended, both linked to the wholesale revenue stream:

- take-up rates

- delay to signup

In other words, the entire project is only appropriate as a government sponsored, off-budget infrastructure build if it drives early take-up of services. This is why Telstra and Optus were signed up as partners to secure prompt migration of their customers off legacy infrastructure, and why third party competition for fixed infrastructure was so vehemently opposed. It is why "flying squads" of technicians were brought in to resolve "class-zero" obstacles to service provision.

The sooner a customer can be brought onto the NBN, the sooner the government begins to receive monthly wholesale revenue. Charging customers even $50 for equipment will deter many customers from changing to fibre, perhaps by 12 months, all over a cost which is recovered after 2-3 months.

It is a revenue-positive choice to supply the equipment for free and bring them on board sooner.

The end game must remain that every premises in urban Australia (towns and cities) has a reliable and fast fibre broadband service with full retail competition, absolutely wherever this is possible to do.

Broadband tool inflates median peak speeds

Malcolm's Magic Broadband Pudding Gauge seems to inflate current speeds.

MAIT 73 is a pocket of my suburb where I have surveyed many residents, none of whom ever achieve sync speeds of 3 Mbps, yet the "median peak speed" quoted for MAIT 73 is 3.79 Mbps, with the assertion that some residents would probably achieve double this speed.

Yeah, right. The best we ever see is 2.5 Mbps, but the copper is so appallling that unrecoverable errors see it drop quickly back, normally to 108 Kbps, before I pull the plug and force a cold resync.

I contend that the numbers of premises experiencing inadequate ADSL speeds are demonstrably far worse than this tool says.

The view from government

"See, the problem with the project as it’s – as Labor framed it – they massively underestimated the cost, the complexity, and the time it would take to complete."

Sounds like what Mr Turnbull did when he said every day from April to September that the gross cost of his 72% FTTN and 22% fibre would be $29 billion, and that he would complete it by 2016.

The fact is that Labor told NBNCo never to use copper inside buildings. For mine, this is the only constraint that should be relaxed. Fibre should be laid to all urban premises because it will generate higher wholesale revenue to repay sooner, yet cost about the same (money and time) as buying and remediating ten million copper pairs, building/electrifying/maintaining 60,000 nodes and taking responsibility for asbestos, which is currently Telstra's contracted responsibility.

Every urban building should get fibre, and only where internal fibre is genuinely frustrated should copper or Wi-Fi be used within the building to deliver the service to the occupant.

This will reduce the cost of FTTP, compared to forcing internal fibre to be delivered where impractical. but if fibre is not laid to the building, the wholesale revenue stream will be inadequate to self fund the project.

Is this is a trick?

The only reason anyone will want to use the existing HFC infrastructure in a few years is for watching TV. It is almost as useless as dialup for outgoing data, with 1 Mbps upload speeds the norm.

Is this submission designed to impede the fibre rollout? Provided the issue is not used as a way to confuse the public over the merits of fibre, there should be no reason not to examine it.

My chief concern is that if the ACCC requires Optus and Telstra to grant at-cost access to HFC to its competitors, they will demand more compensation from the government for decommissioning HFC when fibre arrives, and that would be a major reason not to open it up. I smell a rat.

No cabinet, no problem

Far better not to have the cabinet there to hit in the first place, surely? FTTP rules.

I beg to differ

Having handled my first iPad under a year ago, I have since deployed a hundred to field staff. Few ever use their laptops any more in the field, with some leaving them plugged in on their desks at home base.

I do agree that MS Office alternatives have been shocking on the touch screen. Until now.

An app called CloudOn has just appeared, and provides real Word 2010, Excel 2010 and PowerPoint 2010 on a server, with a quite useable touch screen functionality. Free for now, expect them to charge a usage based licence fee next year. But it ups the ante for Microsoft to deliver cloud based Office to the iPads, and not only to its own tablets, whenever they appear.