PIPE v NBN Co continues

This is not like a normal telco project - it's more like the original roll out of telephone or power systems. Sure, the overlying technologies may change, and have changed, but the underlying fibre optic cables will be a constant. Roll on NBN...

Even in homes with FTTH there is still a wireless connection to provide the last of the "last mile" connection to the laptop.

As digital tools & media devices increasingly become mobile, the need for fixed ethernet connection points and/or coax becomes irrelevant.

Sat TV - wireless data - leverage the most out of copper where its at -- sure fibre is needed at nodes and POPs.

Absolutely valid argument by Slattery that technology will evolve. Why put "glass copper" to every home if it will take 15 to 25 years to make $ Faster pipe, same access limitations. Conroy and Rudd have absolutely screwed the nation on this.. in 2 years the government have switched the goalposts on 'preferred technology' for NBN 1.0 & 1.5...now they think they have it right for the next 20 years? lol

Meca while what your saying is correct at a certain level, ie yours, it just isnt that simple.
Wireless was and still is a stop gap or for use with mobile tech, but its still not fit for purpose for many other functions, and is very prone to reliabilty issues, this is way I and many other techs screamed at Telstra and still hold them in contempt for their wireless will fix everything view they once held.

The cable will provide a chance for someone to get whatever they want internet wise, rather than what we have at the moment or with wireless, which is, you can something, or nothing, you will be paying for X, but recieving a Y and told thats all your getting
.
As for the last mile wireless option, sounds good on paper, but I hold up mobile phone service as an example of patchwork quailty, now apply that to a factor of 10.

The cable has a projected 20 to 30 year life, that is a world wide projected norm for the fibre optic industry, it is incredibly future proof, stuff they layed down 20 years ago in the UK is still being tweaked for more bandwidth, and still has room for more expansion, this is due in part to increase in technology to transmit rather than the fibre optic itself.

So investment wise fibre optic is god, as you have a fixed product 20 to 30 year life, fully upgradeable, so you can plan costings over that.

Read up on optic fibre thick bundled under ground cable you you quickly see why its better, and then read up on the projected tower needs and forecasts on functionality and you see its a dead end, short term view, that is both ugly, questionable service and performance record, patchy service, not a constant umbrella, more of a moth eaten tarp, strung between 2 trees.

+1 David.

I understand fibre is king but is it a requirement. DSL is currently being proven in the lab (yes I know this is not real work which is why I said lab) @ 100mb over 1km so it is possible to get 100mbps over DSL not taking 3d tv into account which is crap our current 20mbps can handle enough for a few TV channels and internet browsing. You must remember we are now in an era which our connections are NO LONGER the bottleneck we need to work out what to do outside of the customer connection as well as inside. I beleive Fibre should be rolled out first to all exchanges to give competition in all exchanges then to businesses. Homes should be the last place Fibre comes to! Our business has to buy multiple DSL lines as we need the additional bandwidth for VoIP and alike I don't see this same need in homes. Telstra next G can solve the problem in the short term. I have had no problem using this and other wireless network (virgin excluded) an problems have been more to do with contention which Fibre to the towers would solve.

Dave, the biggest problem with wireless is not quality or reliability from the tower to you, it is back-haul. It's a bit 90's of you to use that position.

why invest $$ in fixed line to the "home" -- the home concept of anchored desktops, 200 pound TV's that never get moved, and the cordless phone mounted to the wall is also a bit 1990.

Your ecstasy for fibre being king, dog, is well-placed for nodes, POPs, aforementioned back-haul, and businesses who require >Gb. For the home, it's a ridiculous waste of money, Satellite competition for TV.....FMC via wifi VOIP at home and transition to 3G when you step outside....t-mobile's been doing it for years now.... the jolly good point is that your concept of what things are today will change increddibly in 20 years time, fibre to the home is a waste of money if it takes 20 years to start making money. The only reason this stuff was popularized is by the real estate market trying to provide a diffferentiator for green field developments yawn...

@ harquebus

Are you suggesting the Govt should give the money back to the shareholders and have its ownership returned to the govt?

As it is no longer sufficient to have the ACCC control the prices for access to Telstra's copper.

Or are you advocating the Conroy /Rudd plan which is to wipe over $20 Billion from Telstra's value, in an attempt not to buy Telstra back, but to blackmail it into a partnership in a venture (NBNco) that gives equity to other telco's in Telstra assets,
and Telstra's customer revenue stream.

A venture that is also committed to spending Billions on a conclusively proven unviable and unneccesary purpose.

@David

NBN - Fibre to 90% of Population is Proven Unviable.

A/ Henry Ergas report.

B/ Bevan Slattery - Pipe networks Fibre wholesaler.

C/ Paul Broad - AAPT CEO

D/ Telstra - NBN 1.0, the only bid with money on the table.

E/ ADSL 2+ is taken up by 5%, yes JUST 5% of the premises that have access to it.

F/ More than 35% of the population is still on dial up !

G/ ALL melb Telstra HFC footprint 100 Mb/s capable. Asof Nov09

H/ ADSL 2+ is far from the currently available end of progress for copper. (Re. SHDSL, VDSL, etc etc.)

I/ Wireless broadband growing at exponential rate.
(up 40% in 6mths)

J/ Wireless to exceed 100mb/s in HSDPA let alone LTE.

K/ LTE trials commencing in May in Aust. LTE commercially avail overseas now.

L/ Govt. NO BUSINESS PLAN

M/ Govt NO Market Analysis

N/ McKinsey Implementation plan arrives a year after implementation begins!
6 mths into negotiations to buy Telstra assets and customer revenue stream!

O/ Conroy states implementation report is not concerned if NBNco buys Telstra assets either way !!! A $10 B+ expenditure !

P/ Personal experience dealing in cost and demand for corporate requirements

Q/ R/ S/ ETC. ETC. ETC.

Tis' amusing to again see more comments from people claiming the NBN isn't needed by claiming the THEORETICAL SHARED medium speeds of various wireless standards and the HFC networks.
The fact is that HFC is still a shared medium with horribly limited upstream speeds that will be critical in future internet applications. Oh, and let's not forget that HFC providers in this country are still deliberately crippling the applications of their network by not offering static IP addresses.
The speed claims of wireless standards are always misunderstood by the general public and subsequently over-hyped by journalists and marketing departments. Wireless will always be at least 100 times slower than fibre due to a critical shortage of usable RF spectrum.
Copper based DSL development is essentially reaching close to the physical limits of the twisted pair cable for those subscribers not fortunate enough to live less than a few hundred metres from the exchange. And the recent speed claims of new DSL research are yet again leaving out the critical fact that upstream speeds are pathetic.
And for those people who ignorantly think that homes don't deserve high speed internet links, don't you realise that a huge growing number of people now work from home? Before the industrial age almost everyone worked from home and now with manufacturing dying in this country we are now moving back to the more sustainable and sensible option of once again working from home without all the wasted resources involved in commuting. Sadly, that's what all the naysayers are missing in the whole NBN opportunity. There will be huge savings made in travel that are not factored into their simple economic charts.
Fibre is the future with ongoing potential returns for up to a century or more just like the copper network has provided for the last century,

National infrastructure like roads, schools, hospitals aren't economically viable either, so should we stop building them or better still, close them down.

The NBN is also national infrastructure and anyone who wants it stopped because of the finances involved are simply worried about their own finances, i.e. Telstra shareholders, petty pollies and would be pollies.

What is it with every man and his dog claiming that wireless will save us all? Even with LTE we might get a peek speed of 100 Mbps. But that's a lab based speed. It occurs when you have 1 moblie device on one cell of the tower. If you happen to have 2 people on that cell they can both get 50 Mbps. But in a capital city you normally have some 2000+ people on one cell. So that's some 50kbps. Gee your greatest life saving broadband aint so fast anymore. And even if you do overcome this problem by somehow packing a few thousand cells into one tower (which you can't because there isn't enough RF spectrum in existance, let alone avaliable), you will need a mighty fast connection to the tower.

And don't even get me started on how city people think they deserve every of life's luxuries but don't need to do anything to take care of more regional and rural areas. I guess all those people should just fork out and pay for themselves.

davmel
Sat 24/04/2010 - 21:16
@Democracy Damaged "Let all forget all rational conventional financial and market assessment. Lets just hypothesise that demand will one day exist."

You do realise that data usage in this country is doubling every 12-18 months and that has no reason to change in the future.
The demand already exists and will continue to grow in the future at a significant rate which no other technology other than fibre can accomodate.
Using any other medium in the future will only only cripple our economy and lifestyle.

+1 handclap....

I hate the 4 year cycle polictical longest view alot of people have, this project is about a 20 year long view of growing demand, not a patchwork quilt of 4 yearly promises and forced exculsion...
The biggest factor in Australia today about demand, is so many people have not got a chance or been exposed to the full possibilties of what can be supplied to them, due to lacklustre product and pricing.

You look at currant oversea usage of fast stable cable networks and see what occurs, the new busissness that have been created, how people have adopted and changed with this tool at their disposal, and thats just residential use and knock on effect.
Wireless is not the option period, full stop, not even for the last mile connection, Like putting a Hyundi Excel gearbox into a Porsche, yeah you could do it, its cheaper, but why the flamin heck would you, unless you have no long term vision, and just want to get from A to B in an expensive shell.

Hear hear David.

Seems our Telstra friend democracy damaged, and his piddly shares, say we don't need an NBN.

Well that's his opinion based on his own obviously limited view of the future, his current telecommuinications needs seemingly being fulfilled (so **** the rest) and as it appears most apparent, his own foolish investment in Telstra.

As for me claiming non viability, I don't know if it's viable or not and neither do you dd, although you make many rash and unfounded claims, using as David rightly says, reports already laughed at.

My opinion is, that the NBN is "of national importance infrastructure" and should, like hospitals, not be baulked at because of return fears. Or because of Telstra FUD.

But, obviously my claims of cost, viability and national interest went way over your head, going by your response, dd.

Possibly due to your haste in responding to me as quickly as possible, as you do with each and every other comment here, which opposed to yours, aren't weighed down by complete bias, based around nothing more than one's own foolish Telstra investment.

DD, when the telephone lines were first rolled out by the PMG, they were a luxury, not a necessity.

When the sealed roads were first laid, they were a luxury, not a necessity.

To borrow a well put phrase "if you build it, they will come".

At present, there are a very large number of restrictions on home access to broadband. Using current usage patterns and growth as your forecasting tool for whether the NBN can turn profitt, especially factoring in current wireless usage growth to the future projections is just silly.

The wireless broadband growth rate is at an artificially inflated high. This is produced by over-subscription of under-performing towers, high cost of hard wire access and a distinct lack of any REAL competition in the Australian market.

Right now, tens to hundreds of thousands of households (eg. around 50 - 55 thousand in the Adelaide metro area alone) are without any form of broadband, or use wireless "broadband" because PSTN based access and cable are unavailable to them due to the sparse distribution of exchanges and the over-subscription of RIMs. A large portion of those people are waiting for some way to get online now which is not available to them.
In desperation many subscribe to 3G services, only to discover that more often than not, the tower segment they are connected to is so congested that there is little difference between 3G and dialup, with the former often actually being worse due to its inherent packet loss once badly congested.

Cost wise; the price per megabyte, coupled with accessible speed across all providers is so prohibitive at present that most people "make do" and don't even think about things like streaming SD TV, let alone HD or 3D.

Consider that internet based television systems (pay or otherwise) can reasonably be a competitor to standard satellite, cable or terestrial wireless pay TV.

Basically, all current indications as to a lack of profitability in the NBN is based on the misconception that the growth rate in comms now is "normal". It's not. Wireless is being over-subscribed, while landlines are being under-subscribed and "real" broadband is virtually non-existant.
Once a real alternative exists at a reasonable price, FAR more people will take it up.

If you want it in commercial sense; right now the companies have no choice but to subscribe X people at price 10Y, because the infrastructure isn't there to do otherwise.
With NBN you could easily subscribe nX people at price 10*(n/2)*Y.

Basically, by proportionally decreasing the cost of the product (which is possible with the sort of economy of scale produced by the NBN), you can subscribe an exponentially increasing number of customers to it who were previously priced out of the market, thus netting lower profit per customer, but still more profit overall, while accessing a new customer base previously not even considered in the workings of the "experts" speaking out against NBN.

For the record and for the benefit of those who have not read it or read of it, the Ergas report calculated an anticipated averaged monthly cost of $215 for access to a service on the NBN. This calculation was on the basis of an 80% uptake across current broadband subscribers.

The single biggest flaw being that monumental error in not actually factoring growth of uptake of broadband, let alone the inevitable acceleration of that growth.

Growth of broadband uptake in Australia should be treated as exponential, not linear and definitely not static.
7 million current subscribers, estimated 80% uptake, $215 per month gives the 20 to 30 year profit span ($28.2 Billion to $42.3 Billion cost over life).

"F/ More than 35% of the population is still on dial up !"
Absolute rubbish?
"# The phasing out of dial-up internet connections continued with nearly 90% of internet connections now being non dial-up."
From: http://www.abs.gov.au/ausstats/abs@.nsf/mf/8153.0/

Also from the same statistics, from December 2008 to December 2009, access to the internet via any means other than dialup grew from 7 925 000 households to 9 112 000, effectively a 15% anual increase in uptake of broadband, already placing the figures used in the Ergas report dangerously out of date, especially seeing as they fail to factor in growth!!!!!

Let us make the following assumptions:
1. The NBN will cost $45 billion over 20 years
2. We want to turn a profit before the company turns 21
3.There are currently 9,112,000 active broadband connections
4. There is a continuous (very conservative) growth rate of only 8%.
5. The NBN will secure only 70% of current retail broadband subscribers, with uptake being linear over the first 3 years (existing contracts and such)
6. A further 15% of existing broadband services will provide a 20% cost-wise input to the NBN through their backhaul arms, which WILL be rented by the ISPs, whether they use the last mile FTTH or not.
7. Those being used to calculate 6 will be paying on average $40 per month.

We end up with a nice conservative average monthly spend of $116 per month.
Very importantly, this does not factor in the premium many businesses are already paying and are willing to continue to keep paying to access business grade services, nor does it truly represent how fast growth is actually going.

If we throw in real growth and real current usage estimates based upon it, using Ergas's own estimate of 80% uptake, we get a number more like $33 per month.
Given that, it proves unreliable my estimate of $40 per month for those not taking NBN based services, or the level of uptake.

Let's convert to a worst case scenario.
1. Uptake is only 60%
2. The cost blows out to $55 Billion
3. Growth rate slows to only 7%

We are STILL only looking at $197 per month, averaged across all subscribers, not the $215 hyposited by Ergas.