Jamie Sunderland Jamie.Sunderland at aarnet.edu.au
Fri Feb 25 11:15:38 AEDT 2011


the POI numbers and locations are critical to competitive advantage for large incumbents (and therefore competition stifling). Likewise is the cost ratio of the AVC "access virtual circuit" (= from street corner to house) versus the CVC "connectivity virtual circuit" (= the backhaul from the street to the POI) versus "POI-Backhaul" from the POI to the ISPs PoP.

Smaller ISPs have to pay for the AVC, the CVC and POI backhaul - whereas the large incumbents will have loads of cheap capacity for POI backhaul. The big guys can then afford to spend more on the CVC capacity, and keep their over-subscription ratios much lower and their networks will appear to the average user to perform much better.

The CVC:POI backhaul cost ratio will also vary depending on the location of the POI.  This will encourage smaller ISPs to stay in areas where the POI-backhaul is cheap. This is counter-productive for the goal of uniform national competition and services - particularly in regional areas.  (Surprised the pegional pollies such as Tony Windsor didn't get this: Small ISPs won't want to tout for business in Armidale when the market is not big enough to justify leasing commercial backhaul from the Tamworth POI).

If (as NBNco suggest) the CVC price drops over time as take-up increases, but the POI backhaul pricing stays static - then the competitive advantage increases for those who own their own POI backhaul. 

If there were fewer POIs, it is likely that the CVC:POI-Backhaul cost ratio would be much higher and future reduction of CVC prices would mean better networking for all (not just those who own their own POI-Backhaul).


Jamie Sunderland
t.+61 2 9779 6971   m.0419 100 573  w. www.aarnet.edu.au

-----Original Message-----
From: link-bounces at mailman.anu.edu.au [mailto:link-bounces at mailman.anu.edu.au] On Behalf Of Roger Clarke
Sent: Friday, 25 February 2011 10:24 AM
To: link at anu.edu.au
Subject: Re: [LINK] TELSTRA 1 - LABOR 0

At 10:06 +1100 25/2/11, Tom Koltai wrote:
>We have another Telstra, it's called, Telstra NBN POI Backhaul Monopoly.
>Commentary from Simon Hacket explains: [My sardonic commentary follows
>at the end] ...

Okay, that explains the PON debate much more clearly than anything 
I'd seen previously, thanks.  I should obviously follow Simon 
Hackett's posting more closely.

Is there any chance of deflecting Malcolm Turnbull away from the 
'destroy the NBN' agenda / poison-pill that Abbott gave him, towards 
the 'many PONs anti-competitive / few PONs good' argument?

It ought to appeal to the Lib Party (less government, more business), 
but also to a person who made a lot of his money in 

Roger Clarke                                 http://www.rogerclarke.com/

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Visiting Professor in the Cyberspace Law & Policy Centre      Uni of NSW
Visiting Professor in Computer Science    Australian National University
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