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April 08, 2009
NBN ... Day Two
The responses to the $43 billion FttH/FttP national broadband network are predictably varied. Kevin Morgan opines in The Age that it's "just another sham" which will "damage the prospects for any large-scale deployment of this much-needed technology for the foreseeable future".
We're not sure why Kevin is so bleak, but he dismisses the strategy as being "concerned more with revising regulations that give competitors access to Telstra's existing copper network, not with a blueprint for reform that would lead to investment in fibre".
He dismisses the plan as cynical rhetoric, says that the real plan is to maintain arbitrage of the copper network, and predicts 21st century broadband in Australia will be delivered over "rotting copper wires".
Bleeding Edge felt like a cup of tea and a good lie-down after reading that. We've got an advanced degree in cynicism too, but we find it hard to believe that the Rudd Government is intent on being ignominiously kicked out of office as a bunch of lying, cheating carpet-baggers, which would be the inevitable result of such a monstrous betrayal of its promises.
In the absence of any real justification for his comments, we can only assume that Kevin remains convinced in his oft-expressed view that only Telstra has the capacity to "readily" build the network. We would have thought that Telstra had long ago shed the research and engineering know-how of network building (it's an expensive tool to store in the cupboard when you're trying to maximise profits), and the know-how would surely come from an operator like Alcatel-Lucent. Or does he think that Telstra is the only corporation with the capacity to stump up the cash? No doubt there will be further instalments in The Age.
We're going to have a preview, surely, of capacity to deliver when Aurora Energy kick-starts Tasmania's entry into the superfast broadband era. You'd expect them to know something, surely, about building networks. And surely mainland electrical distribution network providers must be more than a little interested in getting involved with this project, particularly if they can simultaneously hook up smart meters. We expect a lot of smart people will today be thinking outside the box that Telstra has stuffed so many of the nation's opportunities into for too many years.
Henry Ergas, "adviser to telcos including Telstra", says there are doubts about prices. Pretty serious doubts, as it happens. Henry tells us in a "What They Said" strip on page 9 of The Age (couldn't find it online), that "if the investment is to earn a commercial return, prices may need to be three or more times current levels".
Well, if Henry has been advising Telstra, his view of commercial returns are likely to be considerably higher than everybody else's. And we doubt he's taken into consideration the fact that the lion's share of the network's income will come from elsewhere. Consumer Internet will represent a substantial, but by no means majority revenue source. And if the result of all that investment is that consumers pay 300 per cent or more of their current bills (not that Henry gives us a figure on the current bill, so we don't know if he's talking about three times $40, or $60, or $180 per month), they'll be burning effigies of Conroy and Rudd on the steps of Parliament House.
AAPT's Paul Broad told Communications Day the figures didn't add up and that the $43 billion "seems to me to be an amazing waste of money". That could well be the case. The Government does seem to be plucking figures out of the air. We are, however, assuming that a lot of money is going to be swallowed up in building a fast, accurate, sophisticated billing system - you know, the sort of thing that Telstra has never got right, despite pouring buckets of money into the gaping maws of operators like Andersen Consulting et alia over decades. That's going to be absolutely vital if this new entity is going to be wholesaling services to all comers. The big advantage they have over Telstra is that they don't have a legacy of a spaghetti bowl of largely incompatible systems.
Paul Budde sees electronic health care alone accounting for as much as 25 per cent of the network's capacity, with education and energy and environment services taking up another 25 percent. They both seem a little high to Bleeding Edge, and the percentages apparently don't take into account the fact that a significant number of Telstra's PSTN connections - many millions of them - are likely to shift to the new network. But these new applications are in their infancy, if not totally off the radar screen, and nobody as yet has any idea of what's likely to be around the corner.
The only certainty is that a lot of people are likely to be talking a lot of rubbish over the next couple of years, but not, we hope, as much rubbish as is being generated by the contributors to Telstra's propaganda mill. How would you like to have these people living next door to you? We all might have to shift to Tasmania.
Posted by cw at April 8, 2009 10:58 AM
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Comments
You might have heard Brian of Croydon, retired Telstra engineer, talking to Jon Faine this morning. He says Telstra owns the ducts, not just those under the footpath outside your front door, but those used for the underground trunk routes between regions.
I know Brian and spoke to him after the broadcast. Fibre has to be underground, he says. Can't come down off a pole. So although the new scheme avoids a fight with Telstra about use of the copper wire from the nodes to the premises, if you want to lay fibre in a Telstra duct you will have to make it worth Telstra's while.
Maybe Telstra will buy itself a share of the network by contributing its ducts, as an in-kind contribution. If it won't play, that leaves the expensive option of new ducting for the fibre, because Brian thinks low earth orbit satellites are not yet able to do the job economically.
Or is enforced structural separation going to deliver the ducts to the NBN builder? The lawyers will love that one.
Posted by: David Horwood at April 8, 2009 03:56 PM
Fibre "can't come down off a pole" eh? Brian had better rush off and let Optus know, they have foolishly strung fibre all over Melbourne on poles.
Ducting for fibre? As distinct from just trenching it as is done all around Aus?
"Brian of Croyden" might have retired as an engineer, but I'd bet he knows a thing or two about astroturfing.
Posted by: Dale at April 8, 2009 10:45 PM
Oh please, no more cables down the street.
OOps I forgot, we cannot get cable. Our street is "heritage listed" Satellite only down here in (inner city) Richmond
Posted by: Bryan at April 10, 2009 01:29 AM
Fibre on poles? The electricity companies have been running fibre on poles and towers for years. They would be very interested to share their infrastructure, for a price.
Posted by: Robin at April 13, 2009 01:28 AM