[LINK] NBN, pricing, separation, and $11b of copper

Tom Koltai tomk at unwired.com.au
Sun Nov 27 16:06:44 AEDT 2011

> -----Original Message-----
> From: link-bounces at mailman.anu.edu.au 
> [mailto:link-bounces at mailman.anu.edu.au] On Behalf Of 
> stephen at melbpc.org.au
> Sent: Saturday, 26 November 2011 6:54 PM
> To: link at anu.edu.au
> Subject: [LINK] NBN, pricing, separation, and $11b of copper
> "NBN boss defends pricing"
> Updated November 25, 2011 14:49:34 
> http://www.abc.net.au/news/2011-11-25/quigley-defends-nbn-pric
> ing/3693862
> National Broadband Network (NBN) boss Mike Quigley says the 
> pricing of 
> the broadband service offered does not disadvantage 
> low-income earners.

I'm afraid in my opinion, he is wrong. And... Because Australia's
population is rapidly aging... the outcome of getting this wrong will
severely hamper future education and subsequently the economy, I think
Government needs to intercede in this area.

Not every element of the NBN is economically justifiable today. If it
was, we would be giving a quarter of the NBN money to Telstra and asking
them to build a Wimax network. (err, no, I am not suggesting that we do

Assumption: A connected Australian is a positive indicator of future
economic growth. 

But let us examine the veracity of the statement that $35.00 is not too
By way of explanation, I will respond with only two basic fundamentals
to well being, housing and food. (My numbers are from 1997, mainly
because recent numbers are difficult to obtain.)

Whilst the majority of Australians have not yet been overly impacted by
the worldwide recession, the reality is that 23% live in Government
provided housing. (Hint: Housing commission is not quite on par with the
Hyatt or Garden Hilton.)

The government's official figures of Social welfare recipients are
shrouded in constantly altering baseline assumptions.
(They change the formula now and again making the stats a bowl of fruit
and difficult to compare.)

The Australian old age pension was introduced in 1909 and with the
exception of the addition of qualifying income and assets has remained
since that time as a support system for retirees. 

The aim of the pension is to provide an adequate safety net payment to
older people unable to support themselves financially in their
retirement. Its primary objective is thus the alleviation of poverty. As
at March 1997, the single rate of pension was $347.80 a fortnight and
the married rate of pension was $290.10 a fortnight for each member of a
The Australian age pension is and has always been a flat rate
non-contributory payment funded from general revenue. It is not linked
to previous labour force participation.
The pension is both income and assets tested; it is thus targeted at
those in financial need. Under the income test, the pension is reduced
by 50c for each dollar of income over a specified 'free area' of income.
As at April 1997, some pension was payable until income reached $804.40
a fortnight for single people and $1,343.20 a fortnight for couples
(combined). Under the assets test, the pension is reduced by $3 a
fortnight for every $1,000 of assets over specified limits, which vary
between single people and couples, and home-owners and non-home-owners.
For home-owners, the value of the family home is excluded from the
calculation of assets.

Of the 1.6 million people receiving the age pension in June 1996, 1
million were women; thus women outnumber men by almost 2 to 1 amongst
age pension recipients.

The ageing of the Australian population will impose pressure on program
outlays in the Social Security Portfolio in the future and doubtless if
we follow the US example, a tightening of the belt for pensioners
resulting in decreasing discretionary income choices. (NBN is
discretioanry unless it is categorised as a necessary service (water,
sewerage, electricity - and pricing regulated appropriately).

We next add to the pension scheme Unemployment Benefit [UB] and the
Single Parent Payment [SPP] scheme.

In 1997, these represented 769,859 (UB)(Male 69.5% Female 30.5%) &
358,893 (SPP) Male 6.7% Female 93.3%.
(I have no access to special (health and disability related) payments).
The total represented 2,728,752 Australians, or 15.75% of the then pop
of AU of 18.5 million.

The payments for a married couple (retirees) was (in 1996) $1160.4 per
month. Couples could also apply for additional rent assistance of up to
$95.00 per fortnight.

In 1997, the cost of a BigMac was $2.50. If retirees Bob and Alice ate
just two big Macs per day for 30.452 days per month then their cost
budget has been dented by $304.52 leaving $855.88 (p/mth) for rent and
other basic essentials.

In 1997 I was paying $550.00 per week in rent in Sussex Street and for
my Darwin house was receiving rent of $460.00 per week. Comparatively, a
three bedroom (Government provided rental assistance scheme) home in
Sutherland shire was charged out at $70.00 per week, or $280.00 per
month. Leaving Bob and Alice $575.88 per month for Tea, Coffee,
medicine, Milk arrowroot biscuits and some oranges. (No money left for
Sugar and Milk).  

As for Internet access, (in 1997) I guess, they would probably have used
the Koltai Easyplan, "Only one cent per minute"  all you can eat dial-up

There is no way known that Bob and Alice could have afforded $35 per
month or 25, or 20 or even $15 per month.  If Alice was a solo parent
with a couple of kids, then I dare say she would have gone without her
Tea bags to ensure that her kids were not the only ones in school that
didn't have home internet access. But again, it would have been the
dial-up kind.
Even today I know people that are unable to afford an unwired, 3G or DSL

11% of Australia fall into the category of dial-up only internet access.

I know a chap that has fallen on hard times and he spends three hours
every day at the local library so that he can read and write emails.

27% are not connected.
23% live in Housing commission.
I expect that at least 17% are on Social Welfare.

Our public transport is discounted at least 80% for pensioners.

Tablets and Smartphones are now under $(AUD)65.00 each. Therefore
hardware becomes less of an issue.

The Government needs to offer pensioners, social welfare recipients and
other financially and socially disadvantaged individuals access to the
net at a price that they can afford. [That would be Free.] Only by
entering this sort of arrangement can we eliminate the 30% who "see no
value" in being connected and propel our nation forward on a positive
economically beneficial growth path.

There is strong and overwhelming evidence that the Internet (knowledge
and social networking tools) is directly responsible for a drop in crime

The barrier to entry that the $35.00 per month represents most low
income households will maintain the (by now accepted) Telstra elitist
price gouging attitude and continue to hold back Australia as a nation.

Therefore, it is my contention that the NBN infrastructure should be
targeted firstly at the persons that can least afford it's services; the
unemployed, the infirm and the disadvantaged. 

Obviously any Government putting the most disadvantaged at the top of
it's priority list and thereby increasing the economic well-being of the
nation through increased education and decreased crime rate, is sure to
be given a second term by a grateful constituency.

Notwithstanding the increased B2C revenues, taxes and economic growth
resulting from adding 6 million online customers to EBay auctions and
Harvey Normans online catalogue and News.com.au subscription services.

Infrastructure for the people ? Sure, they're the ones paying for it. 

Few people at the top realise that it is the lifestyle value of the
people at the bottom that keep those on top, on top.
Of those that realise, even fewer do anything but pay lip service.

It's time Labor...


References: (I have removed the first "h" to avoid being marked for

ttp://www.aihw.gov.au/WorkArea/DownloadAsset.aspx?id=6442475254 (Stupid
Explorer link)

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