[LINK] PM?s national broadband plan really is no net gain

Tom Koltai tomk at unwired.com.au
Tue Aug 4 13:15:04 AEST 2009


> -----Original Message-----
> From: link-bounces at mailman1.anu.edu.au 
> [mailto:link-bounces at mailman1.anu.edu.au] On Behalf Of David Boxall
> Sent: Tuesday, 4 August 2009 10:21 AM
> To: Link
> Subject: [LINK] PM?s national broadband plan really is no net gain
> 
> 
> The NBN doesn't impress Chris Berg (of the the Institute of Public 
> Affairs <http://www.ipa.org.au/>). As with most things 
> political, I too 
> get less impressed as time exposes the details. Still more so 
> than Chris 
> (market fundamentalist bias notwithstanding), but less than I 
> was. 
> <http://www.smh.com.au/technology/pmx2019s-national-broadband-
> plan-really-is-no-net-gain-20090802-e5re.html?page=-1>
> >
<Snip>
> > The economist Henry Ergas has calculated it would have to cost
> > individual subscribers at least $215 a month for the network to pay 
> > off its investment, and only if almost every broadband customer in 
> > Australia - 80 per cent - signs up.

Boy is Mr. Ergas ever wrong.

Exactly the same rules apply to infrastructure as any other large
investment.

The original copper Cable installed by PTT in the twenties through the
fifties. 
The Various catchment dams for fresh water.
The Snowy River Mountain Hydro Electricity Project.

When the Snowy River Mountain project was envisaged - no-one considered
that the amount of electricity it was going to transmit to the Grid
would be a drop in the ocean in the future.
Yet every Australian happily paid their taxation and thought it was a
Grand project.
And in the thirties, no-one realised that the scheme would pay for
itself many times over in Carbon Credits - seventy years later.

No, I'm afraid that Mr. Henry Ergas has a different Agenda, as does
possibly the SMH.

FTTH is desired, required and can only be instituted by a Government.

The mess of Telephone Company regulations, has nothing to do with the
Governments infrastructure play.

As in - Build it and the companies will sort out their own mess.
I don't care if the idea was hatched on the back of a piece of toilet
paper at the back of the plane with the two ministers passing notes to
one another.

It's a plan that will benefit Australia.

Yes there will be financial pain. Like saving up for a new car, or
house. You do without the entertainment for a while. 
But the first time you drive past that horrible bus stop in your brand
new car, every movie missed, every drink not taken - suddenly seems
worth all the pain.

I agree with Mr. Ergas that on a dollar for dollar basis, the Fibre will
cost Australian over $200 per month in subscription fees and that figure
is based on 80% penetration.

What Mr. Ergas has not considered and possibly not even the Government
is that penetration has to be 100% and that should be mandated.

All Television signals should be transmitted through the fibre. 
All Telephone calls should be switched through the fibre.

With a Government mandated last mile loop now belonging to the people of
Australia, the money gained from the competition will pay off the NBN in
less than seven years.

Cost recovery has nothing to do with the infrastructure cost. It has to
do with the value to the economy - long term.
The value to education, the value to commerce and the value to the aging
and infirm.

Telstra ? They will become a service Company. Or go broke if unable to
make the transition.

What I do disagree with is the Governments insistence on pussyfooting
around the carriers and offering them a buy-in.

Who or what at Optus and Telstra has such political power that the
Government should even consider their involvement.

Mr. Rudd, Mr. Conroy - you just build that Fibre Loop. Connect every
house, every business. The Naysayers will be forced to jump on board -
straight after you enact legislation that stipulates that the Government
are the only last mile provider.
And don't sell the County's most valuable asset (the local loop) ever
again.

The Local Loop, the last mile is the economic heart to Australia - as we
decentralise into local communities.

It's (the local loop) stranglehold on the Australian economy has been
held by one participant for far too long.
The meagre taxation and revenue bounty (from a bottleneck local loop) is
a slap in the face to a country of pioneers and innovators.

And with the Government providing a conduit to each home and business,
the Members that introduce the benefits will reap the political rewards.


But not the Members keep worrying about what Telstra or Optus or anyone
else will think.

Ubiquitous roll-out time? Nine years. Benefits? Immeasurably large.

Oh yeah - Members - possibly a little bit of Spectrum needs to be added
to the deal - about 250 MHz in the 3.4 - 3.7 GHz range would do nicely -
just to ensure last mile fairplay at all levels.

As to the other comments in relation to being less impressed, I kinda
agree. But lets give them a chance. They have never built an Australia
wide FTTH before - actually, no-one has.
This is a scheme on the grandest scale possible. Unique throughout the
world. There are bound to be a couple of speed bumps along the path.

Tom














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