Why can't Labor sell the NBN's benefits?

"Sweden's FTTH is completely done by the private sector"
Bzzzt! wrong.

The government funds it $ for $ with the private sector, effectively subsidizing every connection by 50%. Piller says the rest.

Correction October 28th, 2010

http://www.broadbandtvnews.com/2010/06/08/ftth-passes-18-million-european-homes-2/

I can't really see any evidence that Sweden government has provided any amount of subsidies that is not negligible (proportional to GDP/Surplous of Country)

As stated in that article, Europe in general has really strong laws in regards to government subsidies, since they cannot cause any distortion in the market (which means any subsidies are strictly for rural areas)

deteego October 28th, 2010

@Correction, the Swedish government have costed the rollout to rural areas at 4 billion EUR. I dont think anyone would be here debating if the cost in Australia was so low.

mwil19 October 27th, 2010

That's about the same as we are looking at for the NBN is it not?
4Bn EUR = A$5.7Bn
9m people vs 22m people, so multiply by say 2.5
450,000 sqkm vs 7,500,000 sqkm, so multiply again by another 2 for argument sake. Remember it's $28Bn, not $43Bn as a cost to the public purse.

Correction October 28th, 2010

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By that logic, the cost for the project should be around $28B, so why is the total figure $43B?

Which private companies have signed on to make up the funding shortfall?

mwil19 October 28th, 2010

The total figure is not $43 billion any more. That was indeed the origina estimate, but that was reduced when the NBN Co deal was struck with Telstra. However opponents of the NBN keep using that figuree becayse it sounds scarier.

Also, that figure, or even the new lower one, were the total build cost of the NBN's network over the eight-year project lifetime. However the NBN Co gradually starts generating revenue from its wholesale customers as the network is built, and that's the key missing bit.

stilgherrian October 28th, 2010

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We don't even have any evidence that figure is smaller due to the deal (which we still have yet to see if it passes), just as there is no evidence that it will only cost $27 billion instead of $43 billion since there haven't been any private companies that have signed up to the bonds (which if they don't NBNCo will have to pay for using taxpayers money)

The future of the NBN is a massive cloud, and nothing is really certain. What we do know is that if the NBN fails, everyone will pay, and this is not the case if it was done by the private sector. There might be a lot of added costs as well

deteego October 28th, 2010

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Looks like the Govt expects the NBN to deliver cheap water to rural areas too....

Ms Gillard? Perhaps you and a few other retards need to go to school...?

undrkvabrtha December 1st, 2010

Yeah Canada have really put their bandwidth to productive use :)
http://www.gizmodo.com.au/2010/10/netflix-completely-dominates-the-internet-in-canada/

IGLER October 26th, 2010

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"Yeah Canada have really put their bandwidth to productive use"

Are you 7 and back in Primary School? Fact checking is something most people lack in the internet age and take the headline as good-as-truth. Read the third comment to htat story you posted and all of a sudden, the story is completely different.

"The ZDNet guy has got it wrong here. The graph he is referring to shows the amount of Netflix data through the day as a percentage of the volume of Netflix at the peak period, which is 9:30pm. It is no surprise that at 9:30pm the graph is up near 100%.."

Correction October 27th, 2010

Tax payers shouldnt have to pay for broadband.
Internet users should buy whatever plan they want.
If the Government has a few billion to throw around, fix hospitals and schools.

Jack from Carina October 25th, 2010

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Jack, you don't seem to realise taxpayers and broadband users are the SAME people. Most other government projects are only intended for s subset of the community. Given the NBN is going to provide telephony too - it affects everyone.

As to "fixing hospitals" in one sense they can never be fixed because, like roads, demand just keeps increasing. And John Menadue, the architect of Medibank, says we have more that the average number of beds for OECD countries already. Malcolm speaks glibly of building more hospitals in country areas but where do the doctors come from?

Richard Ure October 27th, 2010

Turnbull has a good idea, and he's about the only person in the upper house that has had a business that dealt with proving access to users.

A CBA is a very good idea, in ANY business, and when you’re going to spend 11Bn on a network that may not produce a ROI, or even an 80% ROI within a reasonable amount of time, why do it?

I ask you as a Joe average;
You get heaps of your friend’s pressure you into purchasing a Play Station 3, it costs you $500. All your friends want to use it, but one has all the cables for the TV, and they want you to pay $250 for them. Ok, you say, so now I got a PS3, and the TV cables, and are $750 in debt. You now rent out the console to your friends at a much reduced rate, because a friend called the ACCC says you’re the incumbent, and can’t make a large profit from renting it out (Look at Telstra). It takes you a LONG time to reap back the costs of the PS3, and you only get to use it a few hours a week.

Now if your performed a CBA, you would go STFU to your friends, no?

amckern October 25th, 2010

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"he's about the only person in the upper house"
Malcom Turnbull sits in the House of Reps; the Lower House

"when you’re going to spend 11Bn on a network that may not produce a ROI, or even an 80% ROI within a reasonable amount of time, why do it?"
IIRC, the $25m McKinsey Report has suggested that NBNCo is spending $27Bn of public money over 6 years (4.8Bn/yr), as well as suggesting that the ROI is around the 12-15 year mark. That's pretty quick for infrastructure.

Correction October 27th, 2010

Thats also all based on assumptions (McKinsey report that is). Its even stated in the report that these are assumptions

The only thing to be taken literally from the McKinsey report is the costings and the technical details of the NBN

deteego October 28th, 2010

Yes that's why we need a CBA [sic]...

Because comparing nation building infrastructure, which will benefit Australians in their homes/business and replacing the old dying copper infrastucture (that will be need replacing one day soon, like it or not) to an obviously equally PS3 scenario, is most apt!

Seriously...you jest!

RS October 25th, 2010

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If we think about what we could do with the additional bandwidth, there are only a few applications that I can think are useful/worth the price. These are:
> parallel gaming, so lots and lots of people can go online and play within a HD environment
> telemedicine, so we can get remote location connected with HD TV and have patients being examined remotely be doctors
> video, either streaming or downloaded, so one can watch HD TV.

The thing with the HD TV is that even if we had the bandwidth now, the problem is that no one in Oz seems to be interested because the content distribution channel is tied up legally. We can't watch US content because we are banned from doing so and the content distributors in Oz (Channels, 2, 3, 7, 9, 10, etc, etc) don't want people in Oz watching overseas content without them being involved. They would loose money because they can't sell ads. Unless these problems are solved, I'd argue providing 100 mBits to everyone over fibre is like building 4 lane expressways across the country but banning automobiles and forcing everyone to use horses. What's the point??? Let's change the laws first so that I can use Boxee/Hulu legally and then the telecoms providers would happily provide the 100 mBits to people's houses because the demand would be there and people would be willing to pay. The public wouldn't have to fork out anything to build the network.

pmerrill October 25th, 2010

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That's right, there is no 'killer app' at the moment and not much (anything?) on the horizon.... 720p HD requires a little more than 1M and Full HD requires around 4M, so unless you are intending to run 20 or so video sessions why bother with 100M, Conroy's offer of 1G to the home just prior the election was pure farce.

A recent study in the US found that 8-10M was enough for the standard family.... and HD on my WDTV Live works real nioce with my 'crappy' DSL which is so 2000's.

PhillIT October 25th, 2010

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A recent study in the US found that 8-10M was enough for the standard family....

So in 5 years time wil 8-10Mbs be enough & then in another 5 years after that when the new report states another minimum will it be enough & then 5 years later (15 years down the track). What will be the cost to keep upgrading the network continously for 15 years to try & keep up. Money wasted when it could have been fixed right the 1st time. Unfortunately for some, the countries policies are only planned 2-3 years in advance untill the next election.

Piller October 27th, 2010

If* you apply Moore's Law to those figures in 6 years time the average family will need 120Mbps

* Does Moore's Law apply here????

EnsignR October 29th, 2010

Whether you import media personally or a media ditributer does on a commercial scale, the money for the programming goes overseas to the provider. The only thing preventing you personally importing it is a contract between the media provider and the local media distributer. Contracts don't last forever.

Correction October 27th, 2010

The tax payer will end up paying the full $43b+ because Conroy won't be able to come up with any private investors to cough up the additional $17b because the necessary documentation giving proof of a worthy investment hasn't been done.

maindot October 25th, 2010

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All these comments about wireless seem to forget a key point.. Even wireless towers have to plug into a fibre backbone.. So Malcolm's vague comments about backing wireless is really not useful, we need an NBN anyway.. Simply, the deprecated copper network which was a post-war government investment which later became telecom and now telstra, is flaky at best, so what private investment will replace this entire network, making sure to include all the regional (and capitals, like Hobart and surrounds in Tasmania) areas that currently don't even have thorough mobile network coverage, let alone decent internet..

Duro October 25th, 2010

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I don't think anyone here disagrees on FTTN being invested in, but the expense in FTTN is pretty hard to justify. We should start work on the backbone now, and see what the CBA recommends for the rest.

mwil19 October 26th, 2010

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Uh, Wireless is used for last mile, not the backbone. FTTN would have virtually no difference for wireless compared to FTTH

Most (if not all??) of our backhaul is already on fibre, and wireless towers would just connect the towers up to the nodes

deteego October 28th, 2010

@Duro - there's a very clear difference between fibre to towers and fibre to every single residence in Australia. So no, we dont' need the NBN to have fibre backbones to major sites (schools, hospitals, towers etc) - we don't need to dig up every single street and garden in Australia.

Bobolob October 25th, 2010

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I do have to agree with pmerrill. It's excellent to see such a revamp of the Plain Old Telephone System (POTS), but there is hardly any content out there that it really willing to merit it.

Television, for example. It is not impossible for live, free-to-air TV to be streamed over the Internet (most commercial and AM-band radio stations currently do this). It surely would not be too difficult to simultaneously broadcast across the airwaves and to the Internet (it would probably be just a matter of setting up a second feed from whatever broadcasting systems they currently use, patching it to their internal network backbone and going from there).

Education could probably benefit from this as well. The concept of the virtual classroom is not all that far-fetched, I feel. That is not to say that the traditional classroom can be done away with, but actually enhanced by using the available technology. So that during school hours, students participate in group activities laid out by curriculum requirements and standards, and at home they can utilise that time to review their days' or weeks' work or provide assistance to their friends if they are struggling.

In that sort of set up, security would need to be monitored carefully. For example, students could be enrolled into a virtual classroom by the nominated school's IT department, but then reviewed against the school's enrolment registers and approved by the principal. Teachers, as well, could be put in roles like a forum moderator, but where they only have read access to student chat rooms unless specifically requested by the student for assistance.

Other ideas are out there, but these are just ones I can think of. But it is going to need a big shift from thought to reality before the NBN is actually of any benefit.

techkid October 25th, 2010

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I can remember my IT guy telling me when he put a 1gig hard drive in my computer that I would never fill it up and should go for a cheaper option. He lacked future vision.
In the year 1900 the overseer of the US patent office tendered his resignation because in his opinion there were no major things that could be invented and technology had peaked. He lacked future vision.
To all those worried about if NBN is of any use today consider how long it will take to build and then look five years past that.
The old 1 gig hard drive was only 12 years ago now I have one 2000 times that size. Where will the internet be in 12 years?

staggerleeau October 25th, 2010

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Unfortunately , no matter how tempting, and that it certainly is, the NBN is a Trojan Horse.
It will provide the government of the day with a single network, to the home, with the nodes available to allow total monitoring of all internet traffic. The potential for abuse of this power is mindblowing. Never has a population allowed itself to be so exposed to such intense scrutiny as will be provided by this, one, State controlled monopoly.
There will be no effective alternative network left with any chance of competing with the monster.
If you want some faceless official collecting your every thought, go right ahead and support this hardware trojan. Just remember Conroy has not thrown out his censonship aspirations, they will be hidden in the belly of the beast.

porageater October 25th, 2010

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If this is possible technically, why is it not possible (and happening) now? If anything, blogs and such make it easier for folk to really let rip on the government more than ever before. Something the Chinese and the Iranians are still learning.

Richard Ure October 27th, 2010

(1)In our harsh enviroment optical fibre will last less than 12-15 years before breaking down, S Korea is already experiencing problems (fact)
(2) not even .01% of the population would use even 10MB/S with current or near future Apps
(3) if even 1% of our populantion did use 100MB/S to its full capacity it would far exceed NBN limmitaitions of national bandwith and all would be speed limited.
(4) the vast majority of our population does have speeds they are satisfied with according to many surveys compiled over the last 12 months
(5) Only 4 years ago copper wire had a max carry speed of 1.5MB/s, current tecnology takes copper to over 20MB/s, already new tecnology is to increase that speed to over 50MB/s very soon, (a saving of around $43B )
(5) when put to a current survey asking if the average aussie would spend $43B on the NBN or on aging and failing medical infrastucture 96% voted for medical.
(6) we have been used as a testing ground by other countries for too many possible future tecnologies already without our own GOV using us as guinea pigs too.
(7) it is far better to watch a smaller country (in area) to test this tecnology as they dont have to run 1000s of KLMs of fibre at enornmous cost.
(8)In a mobile age when more than ever our young population want mobile internet how does optical fibre help?
I could keep going on with more than 50 points as above, but finding it a little hard to find many points on the positive for the NBN, can anyone help?

petersid October 25th, 2010

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But,,,,4 years ago the 1.5 was an artificial limit imposed by telstra because they didn't want residential plans to butcher the prices of the more expensive enterprise class links . Another reason that private enterprise should not be in control of such vital services.

Unabletoconnect October 25th, 2010

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Above 1500 internet is not a 'vital' service.

advocate October 27th, 2010

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1) Forewarned is forearmed ... there are things you can do with cable sheathing, slack and monitoring to prevent that happening. You kind of shot yourself in the foot re (7) with that argument since as you say other countries have already installed ftth and we can learn from that.
2) Well I'm pretty sure you pulled that statistic out of your &#@$. Assuming a population of 22 million according to you only 2200 people would use 10 MB/s. Let's discount business for the sake of argument we still have plenty of households with multiple computer users who all might want to download/stream tv/movies on demand. That's one application. Another might be telemedicine i.e. video conferencing, which might even take some of the strain off the "failing medical infrastructure" you emote about in (5).
(3) You're making the flawed assumption that everyone would be using it simultaneously. That's not how it works. Look up contention ratio.
(4) I disagree that the speeds over copper will continue to increase as you say, there's only so much speed you can squeeze out of the limited low loss bandwidth of copper with clever modulation techniques and don't forget that it's a shared medium. But ignoring all that you're forgetting that ADSL isn't symmetric, you're upload speed is tiny. That's not acceptable for applications like video conferencing.
(5) What a loaded question for probably a boguy survey. The health budget is huge as it is and what the health sector really needs is reform to address waste and profiteering. Eg. my father recently had a simple angiogram at a hospital, he was there for all of 3 or 4 hours and the hospital charged $2000 for the visit .. that didn't include the fees of the actual surgeon or anaesthetist etc. His subsequent bypass surgery cost in excess of $20k ... and the surgeon performed at least three that day alone.
(6) Specifics please. So you're worried that the technology isn't going to work? Isn't going to be better than the falling apart copper network? It's fairly mature technology, Peter.
(7) As you pointed out earlier there are already countries that have rolled out fibre to the home or node a decade ago. Not that I think that it's wrong for Australia to pioneer something. I kind of think it's messed up that you do.
(8) Optical fibre is the backbone of the mobile network. The mobile network has to use the atmosphere as it's channel, which is challenging since its properties are rapidly time-varying depending on environmental conditions and you can't do anything about it on the channel side. Mobile networks also have limited bandwidth and are shared. As the demand for bandwidth goes up the number of towers required for increasingly small cell areas would become prohibitively high. Wireless is a great complementary technology and has its place but keeping in mind that most high bandwidth broadband use would take place at the home or office fixed line is the most appropriate and reliable implementation.

redrover October 26th, 2010

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Are you aware how long copper lasts and how much repair it requires?

Wireless is definitely not the way to go. You're looking at 1-2 years maintenance, repairs compared to 10-15 in fibre. Hmmm

watever October 27th, 2010

"can anyone help?"
Well you can start by getting yourself educated about the NBN, and stop reading The Australian. Redrover picks apart your entire post off the top of his head, as I would have if he hadn't. And by the way current fibre is good for 50 years. Don't state anything as 'fact' without a source or verification. As for point 7, choose from one of either Japan, S. Korea, Singapore or Hong Kong. Brunei is just starting their FTTH as well. Before the "small country large density" debate starts up, you people can go and choose Sweden as your example.

Correction October 27th, 2010

Wow, another arm chair expert. For all the fact visit http://nbnexplained.org

Piller October 27th, 2010

Yes, that is a good start.
I'm pointing people at that site but I didn't know if there was a no-linking policy here.

Correction October 28th, 2010

That "fibre lasts only 10 to 15 years" is wrong, actually. The figure was bandied about in a piece of anonymous propaganda just before the election. We covered the reality on a previous edition of "Patch Monday". http://www.zdnet.com.au/opening-up-the-cloud-339306234.htm

stilgherrian October 28th, 2010

Well... let's all go back pre-NBN when Telstra ruled and we plebs weren't allowed to have ADSL2, were charged exorbitant amounts for exceeding our piddly downloads and we (and probably you especially) were all whinging about it, etc, etc, etc...

Fast forward a few years where everything has improved, is on the improve even more and everything has changed for the better!

Oh apart from you still whinging , so please continue...!

RS October 25th, 2010

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we are still at pre-NBN and prices are far cheaper due to advancments in tecnology in wireless and copper as well as competition, nothing to do with fibre optics or a NBN

petersid October 25th, 2010

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Some very familiar (and incorrect) comments being repeated over and over, both here and elsewhere.

When are some people going to learn that NBN is being built today to meet our needs for the next 50 years, and not for what the nay-sayers were doing ten years ago, interesting as that may be (to them)?

gnome October 26th, 2010

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Why does everything have to be about making a profit? Why can't we enjoy the new infrastructure?

I don't know why we keep talking about money when you know it will be paid off. I rather have quality infrastracture and be in debt than have a surplus and have a shity infrastructure.

stfu October 27th, 2010

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Because unfortunately in the world we live, money (or profitable assets) is actually what governments need to help the people of the country

If a service/infrastructure/policy is expected to generate a loss, then it would have to be one that is absolutely essential (such as a stimulus package)

That is even completely disregarding the fact that both Kevin and Conroy said that the NBN is going to be financially feasible and will be able to pay itself off, and it has to be if its going to be sold to a private company, because its incredibly difficult to get a private company to buy something that is generating a massive loss

If NBN isn't financially feasible, we pay for it. Either our internet prices will go up extortionately (and we actually can't do anything to stop that because Conroy is putting up a legislation that is preventing wholesale competition in the Fibre department) or the government sinks more funds into it then it should (which means we lose in other areas, either higher taxes or worse services)

Whether you like it or not, NBN DOES need to be financially viable, thats just the world we live in

deteego October 27th, 2010

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I tell you what stfu, if corporations/ISP's want to sell me IPTV and a facility to download movies for example, let them build the infrastructure to support it, then I can decide if I want to connect to that infrastructure to buy their product.

advocate October 27th, 2010

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Also @ Stilgherrian

The figure for 43 billion is just as accurate as the figure for 26 billion. The $17 billion discrepancy is in private bonds, and as far as I am aware of there hasn't been any private company/s that have signed up to those bonds

So the figure of $43 billion is just as realistically $27 billion dollar figure, if there isn't any private investment for the NBN then it will cost $43 billion of our tax money

Also Turnbull did state the speed, he used the figure from the FCC from America which was 4mbit (as a bare minimum) and the coalitions target is 12mbit. And thats the entire point, even by Nielson's law the current speed range we should be aiming for is 4-20mbits.

You can easily use current copper technologies to provide 100mbit using VDSL/HFC/LTE to the premises with current technology and gradually upgrade to FTTH (and provide FTTH to the areas which can't provide 100mbit with current technology). Thats the whole argument behind Malcolm argument is, gradually upgrade the technology (with fibre) as the market demands ;)

deteego October 27th, 2010

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Replace realistically with "realistic as"

deteego October 27th, 2010