[LINK] What I don't like about Turnbull's NBN

Jim Birch planetjim at gmail.com
Wed Apr 24 13:31:52 AEST 2013


This is a temporary solution.  I can't imagine that in a couple of decades
fibre to the home won't be standard - it is a superior technology in almost
every way, bandwidth, maintenance cost, reliability but is expensive
upfront.

This means that the real questions are:
1. Is it affordable?
2. What is the costs and benefits of doing it now or now or later?
3. What are the costs and benefits of a private or public ownership model?

1.  This is almost moot now.  The original question of NBN or nothing is no
longer on the table.  We are just faced with a cheaper upfront or a better
long term option.

The cost per household is significant something of the order of a couple of
thousand dollars per household with the bulk of the cost being putting the
cable in the ground. $2k is not a trivial amount of money but we are
getting something that will be used relentlessly for like 50 years.
Compare this with a new car, a kitchen renovation or roof replacement and
it's a relatively small amount of money.  I guess this is is something like
what most households would spend on technology hardware over a couple years
but the NBN cabling will be running when the 2013 TV or computer would be a
museum piece.  Paying $2k off over 20 years at 5% would be about $13/month
$160/year which looks like an absolute bargain to me.  YMMV.

2.  Given the the Liberal NBN has something like half the upfront cost and
significantly higher and running costs there's a point about 20 years hence
when you were better off going with the expensive option from the start and
getting the benefits.  At this point, we will need to build a network like
the Labor NBN at something like the same real cost.  Mass produced hardware
gets cheaper over time It won't be getting wildly cheaper to dig up roads
and footpaths.  This seems like a no-brainer investment choice to me.  The
only reason for not going with it would be that you are too destitute to
get the loan, or that you believe that any government spending is wrong for
some religious reason that can only be understood by fellow sect members
(in which case you should also hate other government extravagances like the
electricity system, the road system, the sewerage system, scheme water,
etc.)

3.  If the purpose of the NBN is gouging the maximum possible money from
the punters then the public ownership model is really bad.  Nothing beats
the pricing potential being a single supplier of an essential resource.
Since the cost of entry, ie, laying down cable, is extremely high there
will be little chance of competition except in highly populated areas.  A
single ubiquitous standard infrastructure platform, available to everyone
and open to carrier competition is going to be a lot cheaper for
consumers.  It is also worth noting that buying the thing on the lower
interest rate offered to stable "AAA" governments also present a major
project cost saving, like a third of the interest cost on a 20 year loan.
The Liberal model appears to recognise these factors as they have adopted a
similar public model.

One thing that worries me is that Labor plan - I guess, the Liberal plan
too - includes selling the NBN when it is built.

- Jim



.






On 23 April 2013 21:09, David Boxall <david.boxall at hunterlink.net.au> wrote:

> On 23/04/2013 6:49 PM, Frank O'Connor wrote:
> > ...
> > Turnbull's NBN? Not even a quarter as attractive. ...
> As Paul Brooks said
> <http://mailman.anu.edu.au/pipermail/link/2013-April/099706.html>:
> > 75% of the cost to build 70% of the network in 80% of the timeframe to
> provide less
> > than 10% of the capacity ...
>
> In the 1960s, part of the road outside my school in Sydney's Surry Hills
> collapsed. When they dug it up, the foundation proved to be timber
> blocks. Looks like what the Coalition plans is a timber foundation for
> the NBN.
>
> --
> David Boxall                    |  Drink no longer water,
>                                 |  but use a little wine
> http://david.boxall.id.au       |  for thy stomach's sake ...
>                                 |            King James Bible
>                                 |              1 Timothy 5:23
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