Unfortunately private enterprise will be shut down so you will have no clue
It won't be shut down, and more to the point it isn't right now. We have a very good idea of those costs, and calculating them in the future won't be a mystery either...
A free market is only one of several ways to determine a value, and it's a very good way. But costs are an accounting exercise...
Ok sweet dude, the ACCC can calculate fair NBN costs for the next 100 years based on competitive costs in 2012 right? Sounds like a method that will give great results, especially if it conflicts with the political pressure for a 7% ROI.
["This is one of the major problems with the NBN � A big new tax on some in true labor fashion, and conscription of how the receivers of the new welfare spend there cheque.
Cross subsidisation is tax by stealth."]
Cross subdisies are not new to the Telecommunications industry if fact the quite rampant, for at least the last 30 years it hasn't been a user pays system.
Sounds like a method that will give great results, especially if it conflicts with the political pressure for a 7% ROI.
Hate to see what a business profitability pressure of 30% will provide us with.
sought of defeats your earlier argument, about the failue of duplication since and Telstra's overcharging ,since their prices are also set by the ACCC
NBN Co has a very different mandate, T$ overcharge cause they are designed to make as bigger possible return for shareholders, NBN is designed to provide & maintain national infrastructure.
based on competitive costs in 2012 right?
Ummm...what are competitive costs? You mean competitive prices?
Bushie Bruce: A big new tax on some in true labor fashion, and conscription of how the receivers of the new welfare spend there cheque.
so you'd rather the government simply throw taxpayer revenue at companies to deliver regional services then?
Frankly that's just stupid!! The NBN funds itself and doesnt need any taxpayers money once it reaches scale!
Unfortunately private enterprise will be shut down so you will have no clue.
Competition between private enterprise has never realistically existed in this space. Remember Cable Wars? Optus does.
That wasn't competition, that was predatory defense of Telstra's last mile by the incumbent, which they were prepared to (and did) lose money on. Thanks all round to Labor (for creating the Telstra monolith), the Coalition (for selling it and implementing the failed regulatory scheme) and Telstra (for exploiting the bejesus out of it) for that one. No hands are clean.
Cross subsidisation is tax by stealth.
You should ask the Coalition if they will extend their philosophy? of � cancelling the cross subsidisation from their alternative NBN policy � out to say for Example:- Australia Post?
And for that matter � why not for � every other Government service that is extended to people to be priced determined � based on the distance and the cost of delivery from each originating point of Government service!
No one will want to visit an Australian Embassy overseas for fear of the bill they will incur no doubt!
Hey and what about seeing a Doctor in the Outback � Note to all patients � the basic cost of a visit will now be $326 � $36 is your standard metropolitan subsidy the rest is the new distant component cost of delivery that is not cross subsidised by the Commonwealth.
May help them with their 70 billion dollar and substantially growing black hole and I'm sure every Australian would want to see every Government service charge and price rise faster than the launch vehicles that will be used for the 3rd Generation Ka-Band Satellites that have been ordered.
Oh and what about the flow on effect to your Private Health Insurance costs? etc etc
There is a a quantum difference between supplying what is essentially a "public service" as provisioned under the Australian Constitution to every Australian a policy currently being implmented by the NBN and the failed model provided to us by the Coalition in the privatisation of Telstra and the price differential we saw between broadband services in Metro and Country areas!
But you do raise a good point � and that is just how much extra everyone will be required to pay in additional telecommunication costs between the Labor and the Coalition model taking into consideration
a) That NBN Co intend to provide a 7 percent return to Government
b) That Telstra have stated quite openly that they expect to get a 27 percent return on thier FTTN model as discussed previously
c) The fact that the Coalition's model is far more expensive to maintain
d) For 40 percent of Australians the Liberal alternative will consume up to 20 times the energy costs that Labors model will.
*Noting of course how much we are reminded daily of how much electricity prices have and will continue to rise.
e) That we will have far less competition and simply return to the failed monopoly environment that we had under the previous Coalition Government
f) Don't forget to add your basic Telstra phone line rental into the equation either
g) And the cost of local calls
h) And the cost of STD calls
i) And the cost of your dedicated ISDN lines
etc
etc!
Cheers
Competition between private enterprise has never realistically existed in this space. Remember Cable Wars? Optus does
But that isn't even what he's saying...
He said that pricing will be based on a cost + 7% basis.
No comparisons are needed to calculate costs, just look at the financials and you will see them. Add 7% and you're laughing. I don't think that this will actually happen, but as a basic framework it is sound and a very common practise for pricing monopoly products.
And then the NBN has the peverse incentive that the higher its costs are, the more profit it makes! perfect.
And then the NBN has the peverse incentive that the higher its costs are, the more profit it makes! perfect.
Hence the regulators...they don't HAVE to accept the costs as proper
But that is true for all monopolies...
No comparisons are needed to calculate costs, just look at the financials and you will see them. Add 7% and you're laughing.
Well, its not really that simple. The ACCC will actually oversee and control pricing. NBN Co will have to prove to the ACCC any case for price rises. The ACCC will compare the NBN Co pricing methodologies and cost structures against similar models from around the world, just as they do now with Telstra.
The whole "it will be a monopoly with nothing to compare it to" thing is a furphy.
And then the NBN has the peverse incentive that the higher its costs are, the more profit it makes! perfect.
Cost + fixed can avoid this.
Also, keeping a close eye on NBNCo and freezing pricing if they start doing anything evil isn't a bad idea.
The ACCC will actually oversee and control pricing. NBN Co will have to prove to the ACCC any case for price rises. The ACCC will compare the NBN Co pricing methodologies and cost structures against similar models from around the world, just as they do now with Telstra.
The whole "it will be a monopoly with nothing to compare it to" thing is a furphy
I do realise that...but as a basic conceptualization, the cost + 7% model is a good one.
Also, keeping a close eye on NBNCo and freezing pricing if they start doing anything evil isn't a bad idea.
Isn't "evil", the unions will push costs up, NBNCo will be "forced" to accept it, and everybody wins except the public which gets boned.
I do realise that...but as a basic conceptualization, the cost + 7% model is a good one
Any model that incentivises inefficiency is a poor one.
the unions will push costs up
I doubt it strongly...since the NBN is a regulated monopoly without a variable profit rate, I doubt that the Unions will be allowed to push the costs up. That certainly has been the case at other government monopolies around the world.
Edit: This does not include inflationary increases, but the impact there is negligible as the same is happening to the rest of the economy simultaneously.
Any model that incentivises inefficiency is a poor one.
Thank goodness this one doesn't...since all cost increases must be approved by the ACCC, then NBNCo will certainly not risk frivolous spending...
the unions will push costs up
Private companies have to deal with unions as well...
Any model that incentivises inefficiency is a poor one.
Any policy that promotes outdated technology that will need to be replaced soon anyway is a poor one.
Consider two scenarios:
A) 2025. NBNCo finished the network years ago, but they start increasing their costs to push up profits. The Government determines that pricing is becoming too high.
B) 2025. A bunch of local monopolies or oligopolies own FTTH to 25% and FTTN to another 50%. HFC networks are congested and delivering well below peak performance. Federal government is paying ongoing subsidies for rural wireless. Overall, 50% are on 40Mbps or less (with 25% below 10Mbps), but paying a wide range of pricing depending on area. The Government determines that 10-40Mbps is not enough.
Which scenario is more probable under each party's plans or "policies"?
Which scenario is easier to fix?
Lifesnotfair writes ... ... whrl.pl/RdbNfP
This is why I prefer a competitive NBN. Even if the NBN builds it, existing copper networks should be allowed in place to compete with it.
It is technically possible for copper and fibre to co-exist in an FTTN network, as described by Bevan Slattery and Simon Hackett with the switch at the node, but I'm not sure it's financially feasible. With the separation legislation in place and the current deal with Telstra done it's probably easier to cut the copper and go to FTTN only.
HFC and other fibre can still provide competition.
Mr.B writes ... ... whrl.pl/RdbNwB
Not really. There is no duplication of the CAN.
HFC duplicates the CAN within the HFC footprint.
As for HFC and wireless, they are not in direct competition to the actual CAN, but to services that can be provided over the CAN.
HFC and wireless are alternative CANs. HFC is not a direct competitor to copper because it's not open access. It is a CAN though.
bushiebruce writes ... ... whrl.pl/RdbNAz
Cross subsidisation is tax by stealth.
We, as a society, choose to spend some of our money on cross-subsidies to provide affordable services in regional/rural areas. There is no political disagreement on the cross-subsidy, just on the way it's being operated. I think Labor is wrong to fully embed the cross-subsidy in what will become a private monopoly. I still believe there should be a cross-subsidy though, whether it's operated as a communications levy like the USO or from general revenue.
so you'd rather the government simply throw taxpayer revenue at companies to deliver regional services then?
The choices as I see them are ...
- the government collects money and gives it to the NBNCo to offer the same prices everywhere
- the NBNCo collects money, by overcharging in some areas, and keeps it so they can offer the same prices everywhere
Either way, someone is paying for the subsidy and someone is being subsidised.
Frankly that's just stupid!!
Frankly, it's the same thing. It's a cross-subsidy.
Hence the regulators...they don't HAVE to accept the costs as proper
afaict this is Optus concern with the NBNCo's SAU. They want the ACCC to monitor the NBNCo's costs to make sure they're reasonable. I'm not sure the ACCC is set up to do this though. We'll see how they respond to Optus' submission.
Thank goodness this one doesn't...since all cost increases must be approved by the ACCC, ...
I didn't know the ACCC was approving the NBNCo's costs. Do you have a link to anything about this?
Cross subsidisation is tax by stealth.
Almost, but not really. Unlike tax, you can choose not to pay it by not using the service.
Coalition's (i.e. Mr Turnbull's) alternative to the NBN involves having private operators service the profitable areas and giving a direct subsidy (from the federal budget!) to the private industry in order to 'incentivise' it to deliver services where it otherwise doesn't want to for commercial reasons. Those subsidies will come out of your and my taxes, whether we like it or not.
So, under the Coalition model we'll be paying for the broadband infrastructure twice � once through service fees (for a pricing guide see what Telstra currently charges for HFC cable or Velocity fibre; much higher than NBN prices for inferior offering) and then the second time through taxes for perpetual subsidies.
How anyone can claim such a system as more efficient or better for Australia is beyond me.
I didn't know the ACCC was approving the NBNCo's costs. Do you have a link to anything about this?
Nope just more FUD/lies spread by the tech illiterate. As if when the unions come knocking to demand their pay rise it is up to the ACCC to approve it or turn it down.
Cross subsidisation is tax by stealth.
Any flat-fee or set-price product or service cross-subsidizes the harder jobs from the easier ones.
You can never eliminated completely � unless you introduce an imposssibly complex itemized charging system.
eg. if you by a newspaper from a shop, should you get charged extra if the shop is farther from the printer, has airconditioning. If the paper has more pages than yesterday? Contains less advertising? More stories from international sources? If the price of petrol was higher? Should it vary when the market prices of electricity/coal/gas goes up/down?
giving a direct subsidy (from the federal budget!) to the private industry
Are you sure the subsidy will come from the federal budget?
The current telecommunications subsidy for non-commercial areas (the USO) was entirely funded by an industry levy up until this year when the Government is going to start contributing money (from the federal budget!) as part of the Telstra/NBN Co/Gov deal.
How anyone can claim such a system as more efficient or better for Australia is beyond me.
Under the cross-subsidisation model someone in the wireless or satellite footprints that may have access to an ADSL2+ service that is equal to or superior to the NBN alternatives can only access the subsidy if they purchase the NBN service.
Similarly if someone in the wireless footprint values mobility over improved quotas and reliable speed they might have preferred a subsidised Next G connection to a subsidised NBN fixed wireless connection.
With a direct subsidy (funded by levy or direct contribution) the end user could get a choice of which service they prefer to have subsidised. Under a cross-subsidisation model the subsidy is limited to NBN provided services only.
I do realise that...
seems not everyone does though
Isn't "evil", the unions will push costs up, NBNCo will be "forced" to accept it, and everybody wins except the public which gets boned.
No they won't. NBN Co has already halted contracts once due to gouging. No reason that they won't do it again to make contractors pull their snouts out of the trough.
Any model that incentivises inefficiency is a poor one.
How is NBN Co doing that?
The choices as I see them are ...
the government collects money and gives it to the NBNCo to offer the same prices everywhere
the NBNCo collects money, by overcharging in some areas, and keeps it so they can offer the same prices everywhere
Either way, someone is paying for the subsidy and someone is being subsidised.
Does it really matter? That's one of the ups or downs of operating anything in a large sparsely populated island, where you have population clusters.
All Govts do it as a matter of course, it permeates society. So get over it.
I'm not specifically having a go at you CMOTD..
People in cities think that subsidizing the small number of country people is some huge chunk of change, but subsidizing occurs in the city as well.
Consider the person right next to the exchange. Supplying and maintaining his 10 meter fiber cable is practically zero, yet he pays the same as someone 20km away.
I don't see anyone screaming about how unfair that is.
Averaging prices is not new, or even a problem, unless you think it might help win an election...
Under the cross-subsidisation model someone in the wireless or satellite footprints that may have access to an ADSL2+ service that is equal to or superior to the NBN alternatives can only access the subsidy if they purchase the NBN service.
Fortunately for that unlikely someone, the ACCC has declared wholesale ADSL2+ with the same fixed price for zones 2 and 3. Many ISPs will cross subsidise to keep pricing the same across zones.
Similarly if someone in the wireless footprint values mobility over improved quotas and reliable speed they might have preferred a subsidised Next G connection to a subsidised NBN fixed wireless connection.
What if they mostly just use their subsidised Next G connection when in the city? My tax dollars would then pay for them getting cheaper access to the same network in the same location. I would be tempted to sign up for a Next G account using a relative's address (out in the sticks) to get the subsidy in the city.
Location-based subsidies do not make much sense for a mobile service.
If the subsidy only provided for the installation cost of a Yagi and 3G router, then there goes the mobility advantage, unless they swap the SIM card to a mobile device whenever they travel.
It would also be going from an internally managed cross subsidy for fixed wholesale pricing to a somewhat more bureaucratic retail subsidy.
Does it really matter?
I don't think it does. That's my point really. The important thing is that a subsidy exists to level retail prices as much as possible. How the subsidy operates is debatable.
I think the problem is that there are two separate policies ...
- building a national broadband network
- having (as far as possible) uniform retail prices
... that are being run together when they should be considered separately. The current plan for the NBNCo is one way of satisfying both policies. I'd agree on the first but not on the second.
- building a national broadband network
- having (as far as possible) uniform retail prices
The second policy is uniform open-access wholesale pricing.
The Coalition probably doesn't share this goal.
The Coalition probably doesn't share this goal.
And neither does CMOTDibbler eg
CMOTDibbler writes
I think the problem is that there are two separate policies ...
building a national broadband network
having (as far as possible) uniform retail prices\
... that are being run together when they should be considered separately. The current plan for the NBNCo is one way of satisfying both policies. I'd agree on the first but not on the second.
Easy to see where his and the Coalition's alternative policy meet!
People in cities think that subsidizing the small number of country people is some huge chunk of change, but subsidizing occurs in the city as well.
Here's the issue, under Labor's plan 3 percent will be provisioned with Satellite and 4 percent with Wireless.
Of that total I'd suggest the majority cannot get an ADSL Broadband connection and would have been part of the $400 million dollar conservative spend that was simply poured into the private sector to support "Broadband????? to the Bush under the previous Liberal Conservative Government, and I'd also suggest that
none of those existing telecommunications links I might add were/are able to support the next generation of Broadband services that the Government and Private Industry have/are developing, all of which I might add � "will substantially decrease" the cost of the delivery of those services across all sectors eg Health Education Industry etc which taxpayers currently fund to all of those who live in Regional and Remote Australia.
So essentially you have to move away from the isolated "specific" case which is very much the "Rhetoric" and daily rant that the Liberals put forth in attempting to justify their "alternative cheaper" proposal but when you start adding the numbers up across the other impacted sectors � their argument falls to pieces entirely.
Consider the person right next to the exchange. Supplying and maintaining his 10 meter fiber cable is practically zero, yet he pays the same as someone 20km away.
I don't see anyone screaming about how unfair that is.
And neither do Australian's complain about postage rates (another Government public service provided to all)
Therein lies the difference!
Some self centred selfish individuals and organisations view their right to make a profit from what is essentially a "public service" which is I might add � part of our National Constitution and are so pissed off at having their piece of the monopoly pie being ripped off them by Labor � that they will pretty much stoop to any fabricated argument, � put forward any set of lies and conditions, in an attempt to discredit and change the public's opinion with respect to the NBN!
Which in a nutshell is the Coalition's position on the NBN and will continue to be so!
Even in the face of reality that people actually want it and are upset not because Labor is rolling it out but rather that its not being rolled out fast enough!
Cheers
Even in the face of reality that people actually want it and are upset not because Labor is rolling it out but rather that its not being rolled out fast enough!
Well here lies the weakness and to your admission it is not being rolled out fast enough.
The Coalition is talking about faster and cheaper broadband. It's likely they will retain the NBN name but will fix it as Hockey said with faster and cheaper broadband.
The second policy is uniform open-access wholesale pricing.
I realise that's what the NBNCo has been asked to do. I don't think it's the policy goal though. I think the policy goal is uniform retail prices. That's what matters to the public and, I think, to the government. I think this is what the NBNCo was trying to achieve with the 14 POI proposal.
The Coalition probably doesn't share this goal.
It's hard to tell what goals they do have. Turnbull has mentioned a subsidy a few times though.
Well here lies the weakness and to your admission it is not being rolled out fast enough.
Do it once, do it right, do it with fibre!
Stop being a liberal apologist, FTTN 90's tech and not worth wasting the money on, it'll cost this country far more in the long run if the libs really do try to switch + it'll actually take longer Han to let the NBN co finish the FTTH rollout!
The Coalition is talking about faster and cheaper broadband. It's likely they will retain the NBN name but will fix it as Hockey said with faster and cheaper broadband.
That's not fixing it, that's FCUK'n it!
The Coalition is talking about faster and cheaper broadband.
The Coalition is talking rubbish and you keep repeating it!!!!!!
As Hockey has said in the press.
But never explains how much cheaper (and nasty the plain would be).
Does anyone actually take raoulrules seriously
Not me.
or are you all just bored?
Very much so with his NFI plain.
The Coalition are going to use fibre with FTTN but have said they will do it cheaper, do it faster!
So cheaper in the very short term because of the reduced quality, but far more expensive in the long term when we all have to pay to fix it.
Faster in the short term for the lowest end product, but much slower in the long run as fixing it will take MUCH longer.
That appears to be the Coalition answer here...slap a bandaid on it until we get elected, then hide it as long as possible so that our kids can get stuck with the check.
Ok. Serious question here. Does anyone actually take raoulrules seriously anymore, or are you all just bored?
Bored mostly. Intelligible criticism of the NBN is few and far between. Matthew does make some valid criticisms on NBN Co pricing model, imo that subject is subjective and each model has its benefits.
I am only bored because D3 is giving me 600ms 0.o
I am only bored because D3 is giving me 600ms 0.o
*takes page from raoel or whatever his name is*
That can only be fixed with the Coalition broadband plan, as NBNco are not designing the network with low latency in mind.
/facepalm
Jesus, I sound crazy.
So cheaper in the very short term because of the reduced quality, but far more expensive in the long term when we all have to pay to fix it.
Do you have a link to any evidence for this? It may well be true but unless we see something like the NBNCo corporate plan for FTTN + 'upgrade' to FTTP then we can't know.
Do you have a link to any evidence for this? It may well be true but unless we see something like the NBNCo corporate plan for FTTN + 'upgrade' to FTTP then we can't know.
Can't upgrade from FTTN > FTTH without an insane payout.
It'd likley cost 1.5 � 1.6x what we're paying now to fix the spectacle the libs want to give us
Can't upgrade from FTTN > FTTH without an insane payout.
I can see how the capex is higher. However (amongst other things) the funding cost may be lower and the revenue pattern is likely to be different. These may (or may not) make up for the increased capex.
I was talking about the total cost, including opex, over a (say) 30 year period. Something similar to the NBNCo corporate plan. I'd like to see Turnbull's CBA produce something like this so there can be a 'like for like' comparison of his plan (whatever it is) with the NBN. How else can we know which is more cost-effective? I'm not holding my breath though.
There have been several claims that the Coalition approach (FTTN -> FTTP) is more expensive. It may well be, but I haven't seen any evidence to back this up.
There have been several claims that the Coalition approach (FTTN -> FTTP) is more expensive. It may well be, but I haven't seen any evidence to back this up.
Mate I respect your critical viewpoint but there have been ample examples posted here of the extra costs, let me remind you how much FTTN alone would cost:
- citibank says 16billion for FTTN to 60%
- add 10 billion extra to buy the pstn from Telstra on top of 9 billion to lease ducts and fibre
Right there you have 35 billion before you have even considered an FTTH upgrade!
Then you need to consider that a from scratch GPON network design looks nothing like an FTTN network design and you have not an upgrade to consider but almost a whole new network to rollout (as discovered by the kiwis).
The Coalition are going to use fibre with FTTN but have said they will do it cheaper, do it faster! As Hockey has said in the press.
Straight from the Libs propaganda book. Trying to make FTTN sound the same as FTTH when reality is they are vastly different.
Heres a hint for you. The reason FTTN is cheaper is because it isnt as good. It will also need upgrading to FTTH within 10 years. Most of the money spent on FTTN is wasted. When is Turnbull and Hockey going to reveal the true cost of their plan to the Australain public? i.e. to get to FTTH, the same as Labour is providing, and the same as the rest of the world is moving towards?
Hockey cant even cost the policies they have, how is he going to handle this one that requires a bit of fore thought?
Do you have a link to any evidence for this?
The New Zealand model provides this exactly not only have they pissed their hard earned down the gurgler on providing the capital write downs on the implementation of FTTN but now find themselves having to refund the Telco's over there with even more taxpayer funds and even more capital write down's yet again for their new FTTH network and I might add the most expensive price per Mb downloaded anywhere on earth.
Paying for something twice is a universally and galactically stupid model of economics and one that the Liberal Coalition are attempting to make the Australian public swallow with liberal doses of lies about the real costs, their moronic alternative will cost the Australian taxpayer!
The result of which will see us simply end up with a noodle network the majority of which will be expensive to maintain, redundant, energy hungry technology that will be so congested that the only answer will be a Labor designed dose of fibre to run through it from top to bottom to unplug the congestion.
And that will cost a lot more to implement than the current cost of Labor's stunning example of the way forward that even makes the "Father of the Internet" Vince Serf envious of Labor's NBN Co FTTH Network.
Cheers
The result of which will see us simply end up with a noodle network of the majority of which will be expensive to maintain, redundant, energy hungry technology that will be so congested that the only answer will be a Labor designed dose of fibre to run through it from top to bottom to unplug the congestion.
The lack of vision from the libs here is truly spectacular! Mad dog tony is so pissed at loosing the election that he can't allow his party to support anything even remotely worthwhile for this country!
And before anyone mentions the NDIS, tony wants to follow the productivity commission timetable because that would allow him to take credit for it.
citibank says 16billion for FTTN to 60%
afaik that was for the whole Coalition policy (whatever that is) ...
This was broken down into $6.1 billion for FTTN, $3.3 billion for fixed wireless in regional areas, $4.7 billion for greenfields FTTH and $2.7 billion in overheads.
http://www.zdnet
It doesn't say what percentage of premises "urban" represents. I'm trying to find out.
I also found this on my search ...
The analysis by Citibank telecommunications analyst Justin Diddums was one of the first detailed looks at the opposition�s plan and forecast it would be cheaper and faster to roll out compared with the government�s $35.9 billion NBN.
http://afr.com/p/busin
Citibank think it will be cheaper and faster, eh?
add 10 billion extra to buy the pstn from Telstra on top of 9 billion to lease ducts and fibre
As I've written here several times, I don't think whovever builds the Coaltion's FTTN network will need to buy the CAN (not the PSTN). There will certainly need to be a renegotiation of the Telstra deal, but the differences I can see are ...
- less payments for decommissioning as only the copper from the exchange to the node is decommissioned.
- ducts from the node to the customer are not leased
- copper from the node to the customer is leased
- changes to the timing of payments
Then you need to consider that a from scratch GPON network design looks nothing like an FTTN network design ...
I've already been told that and I do accept it is not a 'simple upgrade'. That's why I think the Coalition needs to include the cost of the 'upgrade' in the cost of its plan (whatever that is).
Citibank think it will be cheaper and faster, eh?
Yes but they are assuming the same start time for both! NBN co are already well on their way with the FTTH rollout and to stop it for an FTTN rollout would add significant delays and most definitely not speed things up.
As I've written here several times, I don't think whovever builds the Coaltion's FTTN network will need to buy the CAN (not the PSTN). There will certainly need to be a renegotiation of the Telstra deal, but the differences I can see are ...
Frankly mate if the libs think Telstra won't demand the pstn be bought then their dreaming.
The only other option is to hand Telstra a shed load of cash and lock us into a vertical monopoly all over again!
Frankly mate if the libs think Telstra won't demand the pstn be bought then their dreaming.
Thodey must be dreaming as well then ...
Thodey indicated that Turnbull's FTTN approach would be of value to Telstra, because, as Turnbull stated, the payments for migration would become payments for access to the copper, and could be delivered quicker.
http://www.zdnet.c
Thodey said there would be some renegotiations, as the lease agreements for the ducts going to the house would no longer be required, and Telstra would need to maintain the copper to the premise. However, the majority of the deal would remain the same under the Coalition.
http://www.zdnet
The only other option is to hand Telstra a shed load of cash and lock us into a vertical monopoly all over again!
That is a frightening possibility but it's not the way Thodey seems to see it. The only way Thodey's comments make sense is if the NBNCo still builds the NBN but switches from (brownfield) FTTP to FTTN. However, as Thodey said ...
... without knowing the full details of the coalition policy, he couldn't commit to anything.
edit:
btw ... I've given up trying to work out how much FTTN coverage Citibank assumed in their costings. I can't find the report itself nor an article that gives that information. Also, I don't know who they assumed would build it.
Frankly mate if the libs think Telstra won't demand the pstn be bought then their dreaming.
They haven't demanded it be bought for the current NBN and their getting $500 per customer.
Then you need to consider that a from scratch GPON network design looks nothing like an FTTN network design and you have not an upgrade to consider but almost a whole new network to rollout (as discovered by the kiwis).
The difference only lies below the EAS/ECS, the remainder of the network can remain unchanged. So the FTTP nodes and associated fibre disappear and they are replaced by FTTN nodes and fibre to the EAS/ECS.
The Coalition could do well to read this http://www.advaoptical.com/~/
It was easier to link to the document from the European fibre council has a wealth of information
I see the election issues being on cost of living, trust, job insecurity, budget blowouts not on the NBN.
Then leave the NBN as it is and concentrate is what is of immediate importance. The significance of the the NBN will eventually dawn on the dimmest of souls � eventually.
They haven't demanded it be bought for the current NBN and their getting $500 per customer.
Because NBNCo don't want or need the copper part of the PTSN. They just wanted access to the pits to make construction cheaper and faster. However, the Noalition's FTTN network will require the copper PTSN. And you can bet that Telstra will expect a pretty penny from a then desperate Coalition government.
And you can bet that Telstra will expect a pretty penny from a then desperate Coalition government.
Exactly, Telstra recently said this:
http://m.zdnet.com.au/nbn-de
In a draft paper deliberating about what price Telstra can charge access seekers to use its copper network, the commission proposed shifting the valuation of Telstra's assets from current-dollar valuations to a nominal valuation. A substantial item in Telstra's assets is its existing copper access network, which the ACCC valued at $9 billion, based on the agreed terms of the deal the telco reached with NBN Co. This valuation would then ultimately be used to determine the price Telstra could charge access seekers.
Telstra said the new valuation was put forward "without any justification" and would result in an $18.6 billion devaluation of the telco's assets.
This puts the PSTN network value at 27 billion dollars and the libs think telstra will just give it to them for nothing, now that is dreaming!
The Coalition are going to use fibre with FTTN but have said they will do it cheaper,
And that just about sums up the Coalition's ethos (and mentality) "Cheap".
How in the hell Turnbull going to explain to people on one side the street get FTTN while people on the other side who got FTTH during the original roll out.
Ooooopps ;-)
Mad dog tony is so pissed at loosing the election that he can't allow his party to support anything even remotely worthwhile for this country!
I suggest you find a back copy of the Weekend Australian's magazine that had an article about Peta Credlin in it. Read that and you will see where Abbott's brains and intellect are. As they certainly don't reside between his ears.
It may have been Dec last year. Its behind their paywall, so here is another http://www.thepowerindex.com.
The Coalition are going to use fibre with FTTN but have said they will do it cheaper, do it faster
If your going to make comparisons you could say that the NBN is using fibre with FTTH to the splitters. You would work out the cost difference from the POI to the splitters and ignore the last mile.
If you don't ignore the last mile then you can't compare the two parties rollouts because they will be completely different.
This puts the PSTN network value at 27 billion dollars and the libs think telstra will just give it to them for nothing, now that is dreaming!
That reflects much of the coalition NBN position to date, sadly. Despite frequent interjections here and elsewhere from a couple of verbose little tro-, er, people, the coalition have failed to make good any part of their rhetoric about how they will tell us the means by which they will deliver 'very superfast broadband' for all, quicker and cheaper than the NBN project.
Earlier posts have said with impeccable accuracy that as the NBN rollout is now widely under way, it would be virtually impossible for the coalition to abort NBN and then design and deliver their FTTN plus all the other odds and sods in a shorter time.
That is a frightening possibility but it's not the way Thodey seems to see it. The only way Thodey's comments make sense is if the NBNCo still builds the NBN but switches from (brownfield) FTTP to FTTN. However, as Thodey said ...
Who gives a rats arse what Thordey thinks the only thing he is responsible for is his fiduciary duty to his shareholders not to the Australian taxpayer and that means maximising his investment return on which Telstra have stated previously that they expect a return of 27 percent on their investment
What's NBN Co looking at again � 7 percent.
So just who is going to make up the difference CMOTDibbler!
Scotch and his mate Mist the two people that the Liberal Party rely so heavily on with respect to the tripe they trott out as an alternative that has had more changes made to their 27th iteration of polic(lies) with respect to Broadband communications that its now viewed by the ICT industry as simply the biggest constantly moving joke on the world stage with respect to telecommunications debate!
Cheers
I've given up trying to work out how much FTTN coverage Citibank assumed in their costings.
Last time I looked it was $17 billion, then you've got a whole raft of other costs that haven't been included but in the end will cost far more than the 36 billion that is currently on the books.
maximising his investment return on which Telstra have stated previously that they expect a return of 27 percent on their investment.
Exactly. In the good ol' days of Telstra terrestrial monopoly (not so long ago), they were extracting around 50% ROI, which shows the mindset. This may be quoted approvingly by politicians as 'proof' of Telstra efficiency. It was nothing of the sort; just an example of a privatised monopoly doing what privatised monopolies always do.
If the coalition can the NBN and hand the residue over to a Big Service Provider in the stated pursuit of efficiency (and probable political donations), it will be the end of any chance of reversing the decline in relative access quality that we have had to wear for the last twenty years.
Do you have a link to any evidence for this?
This isn't a linked item as it's an engineering question...
It may well be true but unless we see something like the NBNCo corporate plan for FTTN + 'upgrade' to FTTP then we can't know.
Not sure what you mean...just from an engineering perspective (as many engineers here will tell you), it MUST be more expensive in the long run.
1. FTTN cannot use a drop-in fibre tail and become FTTP. This is a known engineering fact. See item 4...
2. FTTN is (by everyone's definition) a temporary solution at best, and absolutely must be replaced at some point by FTTP (the only debate would be when).
3. NZ is a very good example of the costly mistake of going FTTN first...
4. FTTP is broken up into FSAMs of about 1km X 1km...inside that area are 16 Hubs that are connected by a loop design to the FAN. From each of those hubs, there are fibers that come out and feed the localized NAPs (Network Access Points) which in turn have 12 drops each. Those drops have up to 8 ports each...
FTTN is a single hub for that same area that is connected to the existing copper (which in many cases will need repair).
If you wish to study the designs, look at
http://www.nbnco.com.au/asse
http:
And most other documents can be found at
http://www.nbnco.com.au/abou
the funding cost may be lower and the revenue pattern is likely to be different
Not sure what you mean...do you mean a reduced interest rate?
It is possible to increase revenue over the current system in the short term by cherry-picking areas. This is a very good example of why it's better that the system is being built by a Government owned institution as this would extend and compound all of the inequality that is currently taking place.
I was talking about the total cost, including opex, over a (say) 30 year period
MUCH higher if you are forced to start over again in a few years...that is just basic fiscal logic
cheaper � will end up costing Australia's more when it is upgraded to FTTH
This is why a CBA is needed to determine and quantify risks/costs.
Would like to see detailed risk analysis of FTTH and pathways of FTTN to FTTH.
Not sure what you mean...do you mean a reduced interest rate?
Nope. The funding requirement and timing is different.
It is possible to increase revenue over the current system in the short term by cherry-picking areas.
If FTTN is quicker to build then the NBNCo would get revenue earlier.
The different funding and revenue patterns might, or might not, offset the increased capex.
MUCH higher if you are forced to start over again in a few years...that is just basic fiscal logic
This may well be the case but I haven't seen any evidence. Is there anything that shows the total cost of FTTN -> FTTP over (say) 30 years that we can compare to the NBNCo's corporate plan? Without that we're just left with opinions.
Nope. The funding requirement and timing is different
Yes, but the requirement is higher overall...
If FTTN is quicker to build then the NBNCo would get revenue earlier
Partial revenue, yes...but only as a cherry picked area and thereby creating the same inequitable situation that we have today.
The different funding and revenue patterns might, or might not, offset the increased capex
I can't conceive of any financial model that doesn't involve cherry-picking areas where that is the case.
This may well be the case but I haven't seen any evidence
It's simple math...FTTN must be upgraded, so it's construction is added to the cost of FTTP. In addition, the largest cost (by far) of the construction of the NBN is the labour cost. Labour prices never ever reduce, they only increase.
By the way...30 years wouldn't be needed. The replacement of the FTTN network would almost certainly be required in 5 years.
It's simple math...FTTN must be upgraded, so it's construction is added to the cost of FTTP. In addition, the largest cost (by far) of the construction of the NBN is the labour cost. Labour prices never ever reduce, they only increase.
No no no it's not simple math. From past experience it will take at least two months to financial model cashflow at a professional level with a few variables and get it peer reviewed along with a sensitivity analysis. It's a very complex excercise.
I would give it a shot of FTTH vs FTTH if I had the inputs and assumptions. Quick back of the envelope that would stand out is time value of money of capital expenditure.
I would give it a shot of FTTH vs FTTH if I had the inputs and assumptions.
Let it go RR. I have just had a Carrier Pigeon from Tony and he categorically stated (whatever that means) that he will be funding TAFEs so the unemployed can learn Morse.
I asked how did he know and his response was:
"She was only a Telegraphist's daughter but she did it, did it, did it"
No no no it's not simple math
Considering that a few posts ago you didn't even know what Capex was (you were saying it was to be used for maintenance), I think that I will keep my own counsel on this...
/forum-replies.cfm?t=1881980&p=85
I would give it a shot of FTTH vs FTTH if I had the inputs and assumptions
Yeah? thanks but no thanks...
Considering that a few posts ago you didn't even know what Capex was (you were saying it was to be used for maintenance), I think that I will keep my own counsel on this...
I recommend you refer to the corporate plan exhibit 10.3/10.4 for capex. We can not make guesses on capex and it appears you are doubting the capex figures or the nbn corporate plan assumptions.
Considering you have tried to deviate from your point on the simple Math I would think if it' s simple math that it would be done in the matter of minutes. I suggest for you if it's simple then test the math on wp by posting up on wp.
It's not as simple as it appears and would take an enormous amount of detailed modelling.
Yes, but the requirement is higher overall...
This is your opinion but you haven't provided any evidence.
Partial revenue, yes...but only as a cherry picked area and thereby creating the same inequitable situation that we have today.
If FTTN can be rolled out quicker then the NBNCo can sell access services earlier in more places. They will get revenue earlier cherry picking or not.
I can't conceive of any financial model that doesn't involve cherry-picking areas where that is the case.
If you can build it quicker you can sell it earlier wherever it is built. This is quite straightforward.
It's simple math...FTTN must be upgraded, so it's construction is added to the cost of FTTP.
The capex might be simple maths but it is not so simple when you include opex over the (say) 30 year period.
In addition, the largest cost (by far) of the construction of the NBN is the labour cost.
So the biggest saving is not having to run fibre all the way to 93% of premises.
Labour prices never ever reduce, they only increase.
That would have to be factored into the 'upgrade' cost.
By the way...30 years wouldn't be needed.
It allows time to complete the FTTP 'upgrade'.
The replacement of the FTTN network would almost certainly be required in 5 years.
That is your opinion.
4. FTTP is broken up into FSAMs of about 1km X 1km...inside that area are 16 Hubs that are connected by a loop design to the FAN. From each of those hubs, there are fibers that come out and feed the localized NAPs (Network Access Points) which in turn have 12 drops each. Those drops have up to 8 ports each...
FTTN is a single hub for that same area that is connected to the existing copper (which in many cases will need repair).
Try again, from your reference indicates an urban FDA (HUB) is approx .2 sqkm. There are 16 FDA per FSAM ie 3.2sqkm per FSAM. There are 200 premises per FDA which makes 3200 premises per FSAM.
There is no way an FTTN node will serve 3200 premises, it will be more like 400 or less. So an FTTN node could cover approx 0.4sqkm. Or approx 600m from the node to the furtherest customer by road. Since copper distribution is loops about some that more like 800 to 1000m copper distance to the customer. An SQ of about 10db.
Let it go RR. I have just had a Carrier Pigeon from Tony and he categorically stated (whatever that means) that he will be funding TAFEs so the unemployed can learn Morse.
You must be closer to the hub of Tony's redundant FTTN model as many of us have had to rely on the British Navy's Code book of Signal repeater Stations (which were made redundant by carrier pigeons) and I might add that and I quote
The Noalition were going to instigate a new employment program to run alongside their "birdbrained" NBN alternative � which is now being focused on setting up a nation wide "CHEAPER" string of empty baked bean cans that have been retroliberal fitted with a gaping hole at the top end and a 500 metre string attached to its mouth.!
All running to a central collection point within a Murdoch media circle and they figure that their model will provide a far more efficient communications service to the Australian public in 2013 than was available back in the 18th century.
So true and I can't disagree with that at all however the question begs an answer as to who would want to use it!
Just another ENORMOUS flaw in the the Coalitions Expensive Redundant Last Centuries bit of technology they are trying to foister onto an unsuspecting Austalian public!
If FTTN is quicker to build then the NBNCo would get revenue earlier.
But if its "cheaper" they may not get as much revenue. Their customer base for FTTN will also be much less than it would be under the NBN. HFC will provide services for many consumers, and so there will be no revenue for those areas for NBN Co. There will also be competing third parties who will take customers. Getting less faster may not achieve anything profitability wise.
This may well be the case but I haven't seen any evidence. Is there anything that shows the total cost of FTTN -> FTTP over (say) 30 years that we can compare to the NBNCo's corporate plan? Without that we're just left with opinions. Opinions of experts in their fields, e.g
From Reg Coutts who formed part of the expert panel that rejected the previous FTTN proposal
�Essentially to go down the FTTN road would mean something in the order of, greater than 50 per cent of the capital being put into digital cabinets in the suburbs," he said. "They then become an obstacle to the final solution� fibre-to-the-premise. Fibre-to-the-node was not a stepping stone to fibre-to-the-premise. In fact, if anything it would put it backwards. The second reason, of course, is in no other market have people proceeded with fibre-to-the-node other than an incumbent. It is a solution that is the right solution for an incumbent that has a copper infrastructure.� http://www.computerworld.com.
or
Addressing the CommsDay Melbourne Congress earlier this week, CEO of Axia NetMedia � Art Price � said "FTTN is an unnecessary compromise that safeguards incumbents� revenues from copper infrastructure", further adding that it "is not future-proof" and "risks delaying the eventual move to FTTP".
According to the report by CommsDay journalist Petroc Wilton, Price argued that "FTTN is a compromise that is simply not necessary...It does not create competitive alternatives to the incumbent because the underlying economics of electronics at the node, for the size of the market at the node, are simply not viable... nobody is competing at the node anywhere in the world with the incumbent.� http://ozftth.blogspot.com.au
and from 2008 when FTTN was to be built.
Despite the first sod being far from turned, Budde called the government's proposal for the NBN already out of date, stating that few countries presently rolling out next-gen broadband infrastructure are talking about FttN anymore.
"They are talking about FttH, starting with the delivery of broadband speeds of 20Mbps-50Mbps for the period 2010-2015. We are still talking about 12Mbps over that same period. What looked like a good idea a few years ago now appears to be out of date. And, we haven't even got started." http://www.computerworld.com.
Budde talks about existing technologies being used for another 5 years � not 30. Still running FTTN in 30 years would mean had ended up a very long way behing the eight ball.
I will take their opinions over anonymous posters on Whirlpool any day
In addition, the largest cost (by far) of the construction of the NBN is the labour cost. Labour prices never ever reduce, they only increase.
Now you are just making up stuff. Sure there is a lot of labour in running fibre, but I think you underestimate the equipment costs for an NBN.
Now I also seen labour rates in the telco area go backwards, and I'm sure there are a lot of linemens that can attest to that. But I've also see hugh reductions in equipment costs over time. Or at least when we do install FTTP they might go straight to 10GPON and save an upgrade cost at that time.
If FTTN can be rolled out quicker then the NBNCo can sell access services earlier in more places. They will get revenue earlier cherry picking or not.
They will get some revenue, but there is no evidence it will the be same as what they stand to get under the NBN. Given Turnbulls calls for "cheaper" and the fact that there will be commercial returns required, the margins will have to be lower. They will also have a much smaller footprint to sell it in.
The capex might be simple maths but it is not so simple when you include opex over the (say) 30 year period. Why 30 years? Experts talk much smaller periods.
So the biggest saving is not having to run fibre all the way to 93% of premises.
Evebn Turnbull acknowledges that
The melancholy truth is that more than 75% of the cost of this network is civil works � the people with the back hoes, trench diggers, trucks and cherry pickers. Plainly if you can use some of the existing fixed line local access network, you can reduce those civil works considerably. http://www.malcolmturnbull.co
Where did he get his number from?
It allows time to complete the FTTP 'upgrade'. 30 years is not a valid timeframe. Budde was talking about 5 years 4 years ago. (as per the article I quoted above). Stephen Davies also says FTTH should be started now because we are being left behind. http://ozftth.blogspot.com.au
30 years would place us a very very long way behind.
That is your opinion. Well, its more than just his, as I have demonstrated.
This is your opinion but you haven't provided any evidence.
And where exactly is your evidence and business case that supports the moronic ideology of the Liberal Noaltion alternative that is designed to take Austalian Communications back to the 18th century.
Nothing but fluff and supposition as mentioned previously "Scotch Mist"!
If FTTN can be rolled out quicker then the NBNCo can sell access services earlier in more places. They will get revenue earlier cherry picking or not.
They did this in New Zealand at great expense to the New Zealand Taxpayer only to realise they completely stuffed it up and that FTTN simply couldn't deliver better than 10Mbps average throughput across the network and that they would having pissed their hard earned down the gurgler � bite the bullet and reinvest at great expense in a FTTH model.
If you can build it quicker you can sell it earlier wherever it is built. This is quite straightforward.
And the reality provides that rolling out a redundant expensive waste of time FTTN model will be no quicker than going FTTH.
So what's your point and I might add where's your evidence to support this nonfactual unsubstantiated un-costed. oh! and please don't ask to look at our business case! because we don't have one...- and I might add! nor have we done a CBA??? on the BS! we are asking you to swallow with a LIBERAL dose of salts.
The capex might be simple maths but it is not so simple when you include opex over the (say) 30 year period
Mate you haven't got a clue the Opex on FTTN is far higher than that of FTTH which cancels out entirely the higher intial CAPEX of the build and then you have to add the additional CAPEX to move to FTTH.
Therein LIES the COALITION's BS as to their assertions as to their BS mantra of being "Cheaper"
That is your opinion.
As evidenced with New Zealand's move to dump their brand new FTTN model which simply doesn't deliver and move to FTTH.
Frankly CMOTDibbler your opinion based on the reality of what's happening in the world has a serious disconnect with reality which is pretty much what the designers of the Liberal Alternative have eg a bloke who doesn't know what "Peak Speed" is and his Opposition Communications spokesperson another bloke who really has trouble spotting fake emails
Cheers!
This is why a CBA is needed to determine and quantify risks/costs.
Would like to see detailed risk analysis of FTTH and pathways of FTTN to FTTH.
Then why are you already aswell as the Coalition already espousing the benefits of FTTN? You seem reluctant to adhere to your own dogma.
They will get some revenue, but there is no evidence it will the be same as what they stand to get under the NBN.
Of course. There will be a more limited product set and only one RSP per premise. My point is we won't know which is more cost-effective unless someone does the costings similar to the NBNCo corporate plan. afaik no one's done that.
Why 30 years? Experts talk much smaller periods.
Pick a number. It has to be long enough to include the 'upgrade' to FTTP. Who knows when that would happen.
Budde was talking about 5 years 4 years ago. (as per the article I quoted above). Stephen Davies also says FTTH should be started now because we are being left behind.
Of course. They are proponents of FTTP. That's not what the Coalition is talking about though. This is not about what anyone thinks is right or wrong. It is about the Coalition approach, whether we agree with that approach or not.
The claim is that the Coalition approach is "far more expensive". I just asked if there was any evidence to support this. None has been offered other than opinion.
Well, its more than just his, as I have demonstrated.
Of course. Viditor is not the only one to have expressed that opinion. It is still only opinion, though, and I was replying to Viditor's post.
Mate you haven't got a clue the Opex on FTTN is far higher than that of FTTH which cancels out entirely the higher intial CAPEX of the build and then you have to add the additional CAPEX to move to FTTH.
I like to see your figures on that!
Here's my guess, about 50,000 FTTN cabinets fo 10,000,000 premises.
Power $2000 per year cabinet = $100,000,000
Battery $1000 every 5 years per cabinet = $10,000,000
CAN (about � of est. current costs) = $250,000,000 per year
Card replacements $1000 per cabinet per year = $50,000,000
Total = $410M per year
So yor saying approx $410M per year
cancels out entirely the higher intial CAPEX of the build
If FTTN can be rolled out quicker then the NBNCo can sell access services earlier in more places. They will get revenue earlier cherry picking or not.
Your still ignoring the extra 10billion or so Telstra will demand for NBN taking control of the copper pstn � see my earlier post where Telstra value the pstn at 27 billion dollars.
Your still ignoring the extra 10billion or so Telstra will demand for NBN taking control of the copper pstn � see my earlier post where Telstra value the pstn at 27 billion dollars.
You double counted. Assets are valued on NPV. The value of the asset will be valued on it's cashflow.
The rules of finance do not change and the value of the copper network will be valued on NPV.
Look at Telstra' s investment in PCCW and writedown. An asset gets valued on cashflow.
Here's my guess, about 50,000 FTTN cabinets fo 10,000,000 premises.
Power $2000 per year cabinet = $100,000,000
Battery $1000 every 5 years per cabinet = $10,000,000
CAN (about � of est. current costs) = $250,000,000 per year
Card replacements $1000 per cabinet per year = $50,000,000
Total = $410M per year
So yor saying approx $410M per year
Actually, you are saying that, as its your guesses/figures.
Where is the copper maintenance?
CMOTDibbler writes...
If FTTN can be rolled out quicker then the NBNCo
Your still ignoring the extra 10billion or so
Plus has anyone actually seen any planning at all on realistic FTTN rollout speed?
Would it actually be quicker? Remember to change to FTTN everything is going to have to be redesigned and they are going to have to source however many Nodes and cabinets as they need for the build (is anyone making these in quantity still?). Then they have to dig up the streets to put in the fibre in in such a way that these Nodes can be easily connected in to the existing copper. Power has to be fed to the cabinet and so design and placement of the fibre and nodes is going to be very restrictive because of the need to connect to existing infrastructure. Then existing exchanges will need upgrading to handle the FTTN rollout, all while trying not to disconnect whole streets or even suburbs from the existing phone and net.
Frankly the chance of serious area wide telephone and net outages goes right through the roof with FTTN given how it has to be hooked in to the old crappy copper at some point.
You double counted. Assets are valued on NPV. The value of the asset will be valued on it's cashflow.
I did no such thing, Telstra said this after the ACCC assumed the PSTN was only worth 10 billion due to the NBN co deal with Telstra:
Telstra said the new valuation was put forward "without any justification" and would result in an $18.6 billion devaluation of the telco's assets.
I did no such thing, Telstra said this after the ACCC assumed the PSTN was only worth 10 billion due to the NBN co deal with Telstra:
This is Mutually exclusive from the Coalition policy. The Copper network is worth $10 Billion according to your link right now.
As time progresses and assuming the NBN copper network is closed in ten years the valuation will be worth zip or whatever scrap value it wants (not material).
Telstra will value the network to the Coalition on NPV cashflow with whatever discount rate it applies. The value of network will be quite similar to the Coalition based on NPV.
This is Mutually exclusive from the Coalition policy. The Copper network is worth $10 Billion according to your link right now.
Bs, learn to read FFS!
Where is the copper maintenance?
As I said
CAN (about � of est. current costs) = $250,000,000 per year
THis figure based on the current well reported figure of $1,000M a year for the current copper network. Just doing figures for 040 copper loop, the existing local loop is can be upto 4.5km long so the average is about 3.1km per customer in a ESA. If you take a FTTN where say the furtherest customer is 800m from the node then the average loop is about 560m per customer. So the loop copper you have to maintain is about 1/6 of what exists today. I've used a � to allow for non linear fault rates in the copper loop.
An asset gets valued on cashflow.
Can you post a link on that one, next time the government asks me for an asset test, I can reply $0 since my assets don't have a cashflow.
Can you post a link on that one, next time the government asks me for an asset test, I can reply $0 since my assets don't have a cashflow.
Or whatever scrap value you can get.
http://pages.stern.nyu.edu/~
Your still ignoring the extra 10billion or so Telstra will demand for NBN taking control of the copper pstn
I'm not ignoring that at all. I've referred several times to what Thodey said recently. That didn't include any mention of an extra $10bn. If the Coalition have to pay Telstra $21bn NPV in order to roll out FTTN then their business case will almost certainly collapse.
see my earlier post where Telstra value the pstn at 27 billion dollars.
afaik no one is proposing to buy Telstra's CAN. From what Thodey said, the NBNCo will lease the copper instead of paying for it to be decommissioned and leasing the ducts. I don't know what that would do to the NPV of the deal.
I'm not pushing either side of this debate. I'm just saying the full cost of both options needs to be considered to know which is more cost-effective. A benefit comparison would also be handy. Any decision has to be based on evidence.
I like to see your figures on that!
Here's my guess, about 50,000 FTTN cabinets fo 10,000,000 premises.
Lets see now given that in Australia most of the population lives in the coastal area's on the East Coast with the majority distributed in other major capitals metro area's and the Regional centres �
The average number of individuals per square kilometre cut out at around 100 per square kilometre with obviously more in the inner city and less in the outer fringes.
Most FTTN cabinets can supply 500 residences and generally are laid out to a 1.5k zone which we know given the NZ experience provided a realistic average of 10Mbps
Now given that Malcolm Turnbull has stated his "Newest" position is that his FTTN system will deliver 60Mbps (which is pretty piss poor imo) then that means your going to have to put the nodes closer together which for arguments sake will mean a node at 400 metre's is my guess but lets be even more generous and repeat the tripe that Malcolm has stated eg 750 meters apart to service an average of 50 residences.
Let's see now 50 residences divided into 10 million is how many nodes we need?
Say around 200,000 or 4 times what you have estimated
You suggest a power cost of $410 million per year (you might want to add the carbon tax impact on that immediately taking it to $450 million and lets just round that out to a annual power bill of say 2 billion per year
Multiply that times say a 10 year build and we've got a $20 billion dollar price tag we've litterally pissed into the atmosphere for no discernable benefit.
Add the 20 billion dollar cost to the original estimate for the FTTN and its around $37 billion
Happy to chuck in so more costs if you like
What's Labor's FTTH system costing again mmmmm $36 billion
But hang on in 10 years time not only will we have spent what Labor's model would have originally cost us we are now up for the replacing the redundant expensive to maintain and run FTTN and go to FTTH.
Now why didn't we just do that in the first place?
Or whatever scrap value you can get.
The hypothetical value of the asset is technically irrelevant.
If Telstra decides it is worth $30b, then they will want $30b for it. If the Government goes We won't pay that! That's higher than the hypothetical value calculated from cash flow and scrap value! then Telstra goes cool story bro and the Coalition Government now cannot build their NBN.
If they spend another 2 years arguing over the cost, there goes faster. If they end up paying $20b for it, there goes cheaper.
Still, we don't know if the Coalition would buy the copper or rent it, because they haven't decided yet, because their "policy" is little more than a ruse to make people feel safe or safer voting for them.
If Telstra decides it is worth $30b, then they will want $30b for it. If the Government goes then Telstra goes cool story bro and the Coalition Government now cannot build their NBN.
Doubt it is worth $30 Billion or else Telstra is getting a raw deal on the NBN.
The value will depend on NPV. ACCC would know what that value is.
Still, we don't know if the Coalition would buy the copper or rent it, because they haven't decided yet, because their "policy" is little more than a ruse to make people feel safe or safer voting for them.
Well they are saying you will get faster and cheaper broadband. Considering the copper has zero value under the nbn once customers have been transferred would imagine the copper could be bought for nothing since a FTTN is more favourable in terms of expedited payments.
Plus has anyone actually seen any planning at all on realistic FTTN rollout speed?
The G9 reckoned three years for their metro FTTN roll out. I can't see anything in Telstra's NBN mkI RFP 'submision'.
Would it actually be quicker?
That's a very good question that Turnbull should answer. The roll out may be quicker but it may not be quicker overall when the project change over period from FTTP to FTTN is included.
Then existing exchanges will need upgrading to handle the FTTN rollout ...
I don't see any reason why the NBNCo would change from the current 121 POI model if they switched to FTTN.
... all while trying not to disconnect whole streets or even suburbs from the existing phone and net.
This is a disadvantage of FTTN as the copper has to be physically transferred from the pillar to the node. There would be a break in service and the obvious opportunity for error. Also, if there is a move to VDSL I believe the customer's modem would need to be replaced. The cut over to FTTN is more disruptive.
The NBN was originally going to overbuild and compete with the copper that Telstra has. If that was actually done then the copper would have close zero value at the end if the build. The deal with Telstra lets Telstra retain some value, and saves the NBN costs, and guarantees success with customers transferred over.
Considering the copper has zero value under the nbn once customers have been transferred would imagine the copper could be bought for nothing
You seem to be missing the point here.
One does not simply receive an asset by making an offer equal to the theoretical economic value.
If Telstra decides it is worth $30b, then they will want $30b for it. If the Government goes then Telstra goes cool story bro and the Coalition Government now cannot build their NBN.
The salient point is that under Commonwealth Law your entitled to fair compensation if your assets are effectively taken over by the Commonwealth which I might add has a right to do under the Constitution with respect to Section 51 article 5 from memory however here's the real rub
Under Labor their FTTH rollout makes their Coppernetwork completely redundant! hence the compensation relates to pretty much the value of the ducts pipes and exchanges which in this instance Labor has decided to lease.
Whilst under the Liberal FTTN model Telstra's coppernetwork forms the last mile of the delivery mechanism and hence is a 100 percent going concern.
By any logical estimation the amount of compensation that Telstra would be looking at for the copper would be what it would have earn't them as a going concern over the period that FTTN is scheduled for and they then get to again stick the hand out for a similar lease agreement for their pipes, ducts and exchanges with any future move to FTTH.
Cheers
You seem to be missing the point here.
No you cherrypicked my reply with a fragment of my full reply that misrepresents my point.
One does not simply receive an asset by making an offer equal to the theoretical economic value.
Agree with that. Since the FTTN has accelerated payments Telstra could favour this option and would expect them to hand over the copper assets to the new NBN under the Coalition.
The market value of the copper network is below on what NBN is paying to shut it off. It's getting a fair deal from the NBN and the argument on why NBN MK 1 was cancelled due to paying compensation is shot since the current Telstra deal is compensation to pretty much buy out the network. The notion of the Coalition paying $10-20 Billion more to Telstra is farfetched since the current deal is worth pretty much what Telstra wholesale is worth.
Let's see now 50 residences divided into 10 million is how many nodes we need?
Say around 200,000 or 4 times what you have estimated
You suggest a power cost of $410 million per year (you might want to add the carbon tax impact on that immediately taking it to $450 million and lets just round that out to a annual power bill of say 2 billion per year
Multiply that times say a 10 year build and we've got a $20 billion dollar price tag we've litterally pissed into the atmosphere for no discernable benefit
Well don't let the facts get in the way of a good story.
So you want to pick nodes of avg 50 premises. ie 200,000
1. I never suggested the power cost was $410M, it was opex costs are $410M pa.
a) Since the nodes are a quarter of the size of the example I used, guess what each node uses less power. I 'd guess about 2/3 less. So doing the math your looking at a power bill of $130M pa
b) Since each node uses less power then you don't need as many batteries. So each battery is only worth $300 every 5 years. $12M pa
c) WOW! You've reduced the size of the copper loop, by reducing the size to 50 (1/4 my initial estimate) the avg loop is now � the lenght of my estimate. CAN copper maintenance is reduced. $125M pa
d) Card replacements, well again the smaller node has less cards so the replacement cost pa on each node will be less. Say 50%, so now that $500 pa per node or $100M pa.
Miracle the OPEX for shorter loops is $367M pa. Not the grandious $2,000M pa you've suggested.
What you've actually done is blow CAPEX.
So back to the origonal argument, that OPEX on FTTN cancels out the origonal extra CAPEX for FTTP, is just not proven.
Well don't let the facts get in the way of a good story.
To tell you the truth I don't think I've ever seen so many instances of 'I'd guess', 'my estimate' and 'here's my guess' in my life. In fact the whole discussion is based on 'your guess' � which makes it sort of ironic to start claiming a factual basis.
Don't you think?
It also demonstrates just how far removed from any factual basis the discussion has, thus making it rather pointless.
It also means that .... the origonal argument, that OPEX on FTTN cancels out the origonal extra CAPEX for FTTP, is just not proven. is not disproven either.
The notion of the Coalition paying $10-20 Billion more to Telstra is farfetched since the current deal is worth pretty much what Telstra wholesale is worth.
It remains unclear how much (if any) additional compensation would need to be paid.
The "Telstra being difficult" risk is a major one, and if the Coalition was serious about their "policy", they would at least try and come up with figures for how long it would take to negotiate (iirc, Citigroup estimated two years) and how much it would cost.
If they were really serious they would also include the cost to upgrade to FTTH in their estimates and justify why they won't go full FTTH now.
By any logical estimation the amount of compensation that Telstra would be looking at for the copper would be what it would have earn't them as a going concern over the period that FTTN is scheduled for and they then get to again stick the hand out for a similar lease agreement for their pipes, ducts and exchanges with any future move to FTTH.
Madness!!!
In fact the whole discussion is based on 'your guess' � which makes it sort of ironic to start claiming a factual basis.
I'll accept that one.
The purpose of the origonal post was to trying and get some real numbers to the various components to the OPEX equation. I was hoping for someone with more experience in various components to suggest what they might be. The suggested "guesses" were not baseless but based on previous experience. But without the sufficient detail from the libs, all any of use can really do is guess.
Madness!!!
And then some!
Its just unbelievable the tripe that is trotted out by the Liberal Opposition and their supporters with respect to their blatent lies of being "cheaper" which is just complete and utter nonsense.
The payment to Telstra would have the Commonwealth buying their coppernetwork off them as a going concern to run FTTN.
And lets say for argument's sake the universally stupid bean counters in the Liberal Party paid Telstra their $30 billion or whatever for the redundant coppernetwork to enable other companies to compete effectively on FTTN.
What do you think Telstra will do with the $30 billion � They simply start rolling out their own FTTH network to compete against the Liberals redundant FTTN network cutting their prices and getting the taxpayer to fund even further their capital investment and write off's.
Net effect all the smaller Telco's on FTTN simply go bankrupt as they lose market share to Telstra and we still end up with a monopoly that will having dispensed with the competition simply jack their prices up accordingly to ensure they get their 27 percent return in the metropolitan area's.
Oh and as for the bush well I doubt entirely that Telstra would extend their fibre network even to the outer metrolitan area's but rather limit it to the same footprint that FTTN is after all its not like that the other 40 percent of Australian's that will be on wireless will have any choices provided to them will it.
As you said Madness!!! and then some!
PS The Coalition have also with their far more expensive to maintain and operate NBN Alternative � provided Labor with another $20 billion in forward estimates to play with!
And a great policy for that would be to fund each year a $2 billion investement in the construction of Solar/Wind Energy farms with the output of each being pumped back into their "National Electricity" Grid and the growing net sum total to be used to provide a "Rebate" to everyone's including business enterprises electricity bill, effectively nullifying the tripe the Liberals trott out with respect to Carbon Tax and I might add reducing expensive energy costs to business overall.
Cheers
It remains unclear how much (if any) additional compensation would need to be paid.
Yes it remains unclear but it will be valued close to the current deal. The carrot of accelerated payments is an incentive and Mr Thodey said FTTN has benefits which drew the ire of Conroy.
The "Telstra being difficult" risk is a major one, and if the Coalition was serious about their "policy", they would at least try and come up with figures for how long it would take to negotiate (iirc, Citigroup estimated two years) and how
much it would cost.
I do not expect the Coalition to fully fund FTTN whatever the cost and expect partnership with private industry.
I am quite surprised NBN did not want to take ownership of copper as a fallback option to FTTN should they find out FTTH is not viable.
If they were really serious they would also include the cost to upgrade to FTTH in their estimates and justify why they won't go full FTTH now.
The Coalition do not have the resources of the public service or govt. In reality it's impossible to cost these projects. FTTH/FTTN if completed could be 25-30% higher than projected. Govts often find it difficult to cost or budget.
The Coalition do not have the resources of the public service or govt.
The Coalition don't need the resources of the PS... they use their own accounting firms to do their costings... oh wait... that didn't work out too well did it?
In reality it's impossible to cost these projects. FTTH/FTTN if completed could be 25-30% higher than projected. Govts often find it difficult to cost or budget.
Wait... What? You've been banging on for the better part of the last 12 months about how your economic model showed that NBNCo had the costings all wrong. Posting link after pointless link from whatever source somehow backed up your claims that the NBN funding was all wrong...
But now... in order to justify the Coalitions complete lack of figures for whatever their broadband plan actually is, you now say its "impossible to cost these projects"... It also makes a mockery of your endless calls for the CBA.
The word "hypocrite" comes to mind.
Well they are saying ....
And "they" always say the War will be over by Christmas.
All political mobs when trying to sell a bad smell (or pup) always underestimate.
While this equally applies to Labor's NBN, they did have the smarts to set up a separate QANGO to run the show, so NBNCo is kept at arm's length.
Handing the job back to Telstra just reloads the old baggage and gives out all sorts of messages, nationally and internationally. None of them remotely complimentary.
You seem to be missing the point here.
One does not simply receive an asset by making an offer equal to the theoretical economic value.
I reckon the Mexicans destroyed any "Goodwill", so I don't know how they are going to arrive at a value that is traditionally associated with that. ;-)
Some things any valuation will have to consider, firstly we do not know almost anything about the Coalition policy. RaoulRoules seems inclined to believe they are gods gift to us earthlings and they can do no wrong.
What is the value of scrapping the copper. Scrap copper actually is quite valuable, in fact Telstra is even considering ripping some parts up for sale.
Furthermore if NBN Co. were to consider purchasing the copper there is no way to know whether Raoul is even close to the mark. In fact this seems to indicate the value of the Telstra copper network exceeds the value of the current deal in itself. This is before things like ducting are taken into account.
This is before we consider that to use FTTN copper lines will have to be moved to these new pillars which we have no idea how much is would cost.
This is before any remedial work is done to bring the copper is certain areas up to scratch.
This is before we consider lost productivity from the slower start dates and slower speeds, sure not all will use these faster speeds immediately, but those who can will not have the option.
For Raoul to be correct Telstra would have to think along the lines that since their network will be useless anyway they may as well flog it off for pretty much the cost of customer migration. I doubt this will be the case. If Telstra did what companies do they will attempt to get the best deals for shareholders. They can tell that they can get significantly more for handing over their copper than the current deal.
Basically Raoul make a great deal of unsubstantiated claim to support the liberal party. He may be right, but nothing so far seems to indicate that he is anywhere near the mark. In fact considering that the Coalition seems to have no vision here why should anyone have confidence in their ability? They started of with a miserable proposal that unlike the current government did not go through independent expert analysis. They are now moving on to a FTTN model that was rejected many years ago. Considering the amount already invested in the NBN I fail to see how a FTTN model can benefit this country more than a FTTP model.
Also remember that the NBN (FTTP) is not actually an expense, Joe Hockey's economic illiteracy aside. It is an investment that will refund itself with a modest profit. So basically what you have to compare here is times frame, do you want a project that will pay for itself quicker but deliver a substandard outcomes or vice versa?
Considering that NZ has decided on FTTP and the UK is only guaranteeing 2Mbps in rural areas (1/12th of maximum ADSL2+ speeds and �th of ADSL1 max speeds). Do we really wish to base our model on these two countries? Considering that South Korea/Japan and many other countries are investing in FTTP and are benefiting from it right now, do we really want to continue playing catch up?
1. I never suggested the power cost was $410M, it was opex costs are $410M pa.
a) Since the nodes are a quarter of the size of the example I used, guess what each node uses less power. I 'd guess about 2/3 less. So doing the math your looking at a power bill of $130M pa
2 points your going to have to buy and power an additional 150,000 nodes adding substantially to the original build cost which originally stood at $17 billion so the FTTN Capex is increased substantially which you point out eg
What you've actually done is blow CAPEX.
Well not me but rather Malcolm in suggesting an average of 60Mbps for his latest foray into his redundant and expensive to run alternative.
But hang on � there's another component in the Liberal alternative that also needs to be taken into account with respect to "Power" requirements isn't there!
Eg the Liberals "Wireless" Component which will be extended to 40 percent of Australians who live in "Outer Metropolitan" and Regional Australia!
Now whats the power requirements of Wireless compared to FTTH!
Try at least up 4 times that of FTTH if your going to deliver an average 10Mbps, of course that figure would go upwards accordingly eg 10 times that of FTTH if you were to cover say 25 Mbps and possibly 20 times to provision 50Mbps as you have to increase substantially the number of basestations within the broadcast footprint to obtain the speed increase using existing LTE tech. (not to mention the cost of provisioning the power to the backhaul, maintenance etc
That a quick couple of million tonnes of Co2 going up annually into the atmosphere for absolutely no benefit to anyone and of course the price of that has to be reflected in the delivery costs!
So back to the origonal argument, that OPEX on FTTN cancels out the origonal extra CAPEX for FTTP, is just not proven.
I'll give that -with respect to that "component" part comparison � however when both systems are compared eg
Labor's 93 plus percent FTTH, 4 percent wireless, 3 percent Satellite.
When compared to
Liberals 60 percent FTTN 37 Wireless 3 percent Satellite
The Opex on Labors FTTH build pretty much cancels out entirely its original higher Capex build when compared to the Liberals alternative FTTN to 60 percent Wireless to the rest!
And that's without adding the inevitable and additional CAPEX cost of moving to FTTH from FTTN as currently being registered on the accounting books in New Zealand!@
Cheers
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