[LINK] Why the NBN business model is deeply flawed

[TKoltai]

> -----Original Message-----
> From: link-bounces at mailman.anu.edu.au 
> [mailto:link-bounces at mailman.anu.edu.au] On Behalf Of Kim Holburn
> Sent: Thursday, 16 February 2012 8:40 AM
> To: Link list
> Subject: Re: [LINK] Why the NBN business model is deeply flawed
> 
> 
> 
> On 2012/Feb/16, at 8:05 AM, Tom Worthington wrote:
> 
> > Paul Fletcher MP, will speak on "Why the NBN business model 
> is deeply
> > flawed ...?" at the Australian Computer Society meeting in 
> Canberra, 12 
> > Noon 28 February 2012: 
> > 
> https://www.acs.org.au/act/index.cfm?action=event&area=9002&te
> mID=eventdetails&eveID=30224664535724
> > 
> > ---
> > ACS TSA Communication SIG
> > Why the NBN business model is deeply flawed ...?
> > Why it matters from a public policy perspective
> > 
> > Paul will present the case that, as a standalone business 
> model, the 
> > NBN
> > is fundamentally flawed. It is far too costly - reflecting 
> political 
> > decisions.
> 
> Or engineering and geographic constraints.
> 

In the '80's a number of persons built fortunes by stripping the assets
of Corporations that had healthy balance sheets for personal wealth. 

Thousands of jobs were lost as a result.

As a community we look on the corporate sharks of the 80's with disdain.
Yet the same negative sound byte activity in our politicians is seen as
newsworthy.

Pre-KA-Band Satellite announcement, I would have agreed that the
tethered take-up estimates were a little bit too enthusiastic and that
the NBN would fail to meet many of it's financial KPI's.

I also believe that with newly emerging technologies, removal of the
copper was wrong and that hybrid digital/copper delivery systems, as in
the past decade would continue to serve us well moving forwards. 

Unfortunately for Paul, his "talk" was probably based on the terrestrial
only based economic arguments without consideration given the recently
emerged technical enhancements to the NBN business case.

Recent trials - Satellite to Mobile have exceeded 40 Mbps suggesting
that adding more satellites and less fibre may be a better long term
vision, especially for outlying areas.
 
In fact due to the fact that satellites have a limited shelf life, some
of the 40 billion should have been used in creating a space agency in
Australia that launched new satellites on Australian rockets every three
years. I think the plans for Christmas Island and Gunn Point NT are
still floating around somewhere.

Therefore, a much better scenario for any Politician is not to attempt
to dismantle the economic benefit argument of the NBN but to add to the
vision.

We no longer live in a world where a Politician's every sound byte is
surrounded by the supporting media editors of yesteryear. 	

Politicians now have to hold up their own end.

I would suggest that was better achieved with positive "build a better
NBN" announcements than by constantly harping on wastage.

For example, Richard Alston could have given the green light to HAAPS
devices two decades ago. He elected to hunt telecommunications
entrepreneurs instead and halt all forward momentum in Australian
competitive telecommunications by allowing Telstra to rip out the copper
between exchanges in an attempt to stop inter-exchange pairgain transit
(DSL).

Malcolm at least has an excellent understanding of communications
technology, but if the topic of this talk is anything to go by, it's
last years technology and not tomorrows.

Tomorrow's successful Political leaders, if wanting to be genuinely
heard by the Australian "informed" public, should probably not rely on
speeches written by one of the popular online "Essay's for Sale" sites.

How any Business can be demonstrated to be flawed as a stand alone
business model.... 

Paul Fletcher MP, might be surprised to learn that the extraction of
iron ore from the ground is doomed as stand alone business.

To be successful it requires, 

the road and rail transport industry, 
along with the shipping and export industry,
The demountable industry (ATCO's on site)
Komatsu, Caterpillar and others to make great big huge HaulPaks 
Transfield to create crushing plants,
Shram to cook for the miners 
South Korea to manufacture ore carrying ships
And, most importantly, it requires:
More than one customer, to continue building empty apartments buildings
that won't be sold to anyone.

If any aspiring politician in Australia (with a formal education in
economics) is truly desirous of making their mark, they would do well to
analyse what Australia has in place for the iron ore industry IF China
ever stops building unwanted apartments and South Korea ever stops
building ore carrying ships.

Because the cost of the failure of that business model is just a tad
more than the NBN outlay.


TomK



References:

Apart from Gold, all metals and non-ferrous down.
http://www.indexmundi.com/commodities/

Declining prices due to declining demand.
http://www.riotinto.com/documents/investors_databook/Chartbook.pdf