[LINK] Telstra vs NBN, Comcast Triple Play 105 Mb, Telstra Wins again.

[Tom Koltai]

Another prophetic nail in the NBN coffin arrived in my email this
morning with the following Comcast announcement...

Article Headline: "Comcast Rolls Out 105 Mbps 'Extreme' Broadband
Service"

By comparison to the proposed NBN pricing, Comcast are charging a dollar
per month (retail) for every megabit of throughput... however as a
triple play that includes cable as well.
That provides an interesting conundrum. If Foxtel have over one point
five million homes connected, and many of those already have BigPond
broadband, how can Foxtel not get burnt on the delivery fees (75 million
per month payable to Telstra) of their future triple play ?

I think Telstra have taken some clever insurance, see comments at end of
following article:

------------------------------------------------------------------------
---------------------
Quote/ [From: http://www.pcmag.com/article2/0,2817,2383592,00.asp]

Comcast on Thursday started rolling out it Extreme 105 Xfinity Internet
service, which promises downloads speeds up to 105 Mbps and upload
speeds up to 10 Mbps.

The service is available in major cities like San Francisco, Seattle,
Portland, Denver, Salt Lake City, Chicago, Indianapolis, Miami,
Washington, D.C., Baltimore, Philadelphia and most of Boston, among
others, Comcast said. Other markets will be added on a rolling basis.

Comcast said that Extreme 105 will allow users to download a 4GB
high-definition movie in five minutes, compared to an hour and 30
minutes on a 6 Mbps network. A standard-definition movie will download
in two minutes, a standard-def TV show will finish in 20 seconds, and a
10-song album will download in about three seconds, Comcast said.

The service will be available for $105 per month as part of Comcast's
Triple Play bundle. The company said the Extreme 105 service will also
be available as a standalone offering, but did not elaborate on pricing.

Extreme 105 is part of Comcast's DOCSIS 3.0 technology, which Comcast
first introduced at the 2008 Consumer Electronics Show and starting
rolling out that following April.

"When you think about how uses of the Internet have expanded and how
much time families are spending online, the need for even more speed
remains clear - and the faster the speed we deliver, the better the
experience for the whole family, no matter what they want to use the
Internet for," Cathy Avgiris, general manager of communications and data
services at Comcast, wrote in a blog post. "As we roll out Extreme 105,
we're entering a whole new era of innovation for the Internet. I'm
excited to see what new consumer applications will be invented in the
next decade that will take advantage of all this speed."
/Quote
-------------------------------------------------------------------

As we know, the Telstra Cable TV network is exempted from the NBN.

>From an article in June 2010
Quote/  [From:
http://www.theaustralian.com.au/business/pay-tv-a-winner-as-foxtel-spare
d/story-e6frg8zx-1225882024295]

TELSTRA yesterday emerged as a pay-TV winner on two fronts.
Its 50 per cent stake in Foxtel is safe, while the Telco also retains
Foxtel as a customer of its cable network until this infrastructure is
eventually switched off.
Foxtel's 1.6 million householder customers were a notable exclusion from
Canberra's deal, which sees Telstra's copper and broadband customers
migrate to the national broadband network.

As with its copper network, Telstra's hybrid fibre coaxial cable network
eventually will be switched off. But in the meantime, according to the
Telco, "Telstra will continue to use its cable network to meet its
pay-TV contract with Foxtel....".
/Quote.

Once again Telstra have managed to negotiate themselves into a most
advantageous position. (Switched off - yeah right!!!)
The last instance was the local loop when Optus said that they weren't
interested in the copper local loop. 
Stewart Fist, Robin Whittle and I tried to tell Optus that they _WERE_
interested in the copper, but no-one was home.

With the enhanced (extreme 105) technology (based on common old Docsis
3) available to Telstra possibly as far back as 2008 it is obvious that
their negotiations in June last year (Sol Trujillo inspired) may have
been based partly on bad faith.
Then again,  the ASX rules, the ASIC rules and Telstra's shareholders
actually force the Telstra Board to be the Nemesis of the NBN.
Eleven Billion without simultaneous Telstra Wholesale and Retail
separation leaves current Telstra shareholders holding a future class
action suite.

How could this ever have turned out any other way ?

I don't think Malcolm will need to do much at all, the NBN appears to be
headed straight for a cliff.[1]
It may be time for Government to look at the options before it one more
time.

The Cable TV Coax to one quarter of Australian Homes with Docsis three
Extreme 105 would wipe 25% off the cost of the NBN and would mean
customers and revenues NOW.

The value of that Network is the revenue that Telstra shareholders
receive today. That revenue is only 75 million per annum (for the cable
TV delivery to Foxtel customers)  and a possibly similar amount for
BigPond Broadband customers. (Two separate profit centres.)

Let's estimate the value as being 150 million x 3 plus 100 mill
goodwill. 
I guess the Government should be able to buy that network on commercial
terms for about 600 million to a billion.

That leaves 9 billion in the kitty for QLD reconstruction, School
Janitorial contracts extensions and other sundry expenditures that
Governments have from time to time.
But what this would do, is balance the books. That would be a good thing
for the public perception of the state of the economy.

Secondly, the lines can be redrawn, and resources focused in the country
areas.
We could rejig the rollout to be Fibre to the Node, with householders
given the option of community fibre rollout participation or of course,
60-90 GHz delivery options.

There are many options for a successful high speed rollout. There would
seem to be little reason for not exploring these, even on a temporary
basis (one or two decades) to decrease the costs.

Telecommunications these days is no longer "one size fits all", it has
become a rapidly evolving swiss army knife.
The ISP era converted the Carrier "old boys club" into a new commercial
world where success is based on the level of disruption one can
introduce into existing carrier delivery business plans.

The NBN doesn't currently offer any disruption to anyones business
model, and until it does, my guess is that economically, it is doomed to
failure.
In it's current incantation, it will no doubt bring the current
government down with it - which is a shame, because although I've heard
a lot of sniping from the other side, I have yet to see an alternative
business plan that would ensure that all Australians receive affordable
high speed broadband to their homes.

As I have quoted before:

Quote/
"I think historically where we [venture capitalists] fail is when we
back technology. Where we succeed is when we back new business models." 
Bob Higgins, founder and managing general partner of Highland Capital
Partners (Harvard Business Review )/Quote

The NBN in it's current configuration is not yet a new "disruptive"
business model. 

/body