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NBN

Reg Coutts's picture

As one of the two engineers on the original expert group that contributed to the NBN vision, we envisaged the broad technology platform of fibre, advanced wireless and satellite to meet 100% of premises but I believed and still do NBN should have and can still be a bipartisan telecommunications policy. We should all do our bit to influence our political leaders to listen more and say less. 

TelSoc's Position on NBN

Andrew Hamilton's picture

I attended Mark Gregory's lunchtime lecture today. His view, putting it politely, is that the NBN is a mess. I'm not sure that it was ever going to end up any other way.

Someone asked whether this is our (telecommunications engineers') fault for not seeking to influence the NBN's design and roll-out. My view is that it is and that ceding telecommunications policy to lawyers with arts degrees just ends in tears.

With a federal election coming up next year, I think that TelSoc should publish a position paper that examines a number of scenarios for the NBN (e.g. no change, FTTdp instead of FTTN for new connections, RFoG instead of HFC). Given the current partisan nature of telecommunications policy, I don't think that TelSoc can favour one option, but I believe that a balanced view of several scenarios backed by (available) facts would be of value.

It would also generate publicity for the Society.

Does anyone agree with this view? If not, how might TelSoc best influence the direction of the NBN in the future?

Options for NBN rollout

Gary McLaren's picture

An interesting hierarchy of options for the NBN post rollout in this paper. But not clear to me what criteria were being used to make the judgment of Option A above all else.

The specific question I would like to ask is as follows :

The paper points out Option B would require a large write-off (~$30 billion) of the taxpayer's investment would be needed before the private sector would be interested.  

Option A asserts that government ownership of NBN Co (with an ARPU) of $52 per month would be "advantageous" and able to fund investment to a future-proof FTTP (at $10-12 billion) over a 10 year period to be potentially then sold off for presumably no loss of taxpayer's investment (ie. at least for $60 billion assuming after FTTP investment assuming zero cost of capital).

How does government ownership become so commercially attractive that it can avoid a write-off and fund an extra $10-12 billion investment? In 10 years the value to the private sector has tripled from $20 billion to $60 billion. Or to put it another way, to support a $60 billion price-tag, NBN Co's EBITDA would need to be $10 billion per annum assuming the 6 times multiple discussed in Option B. This is more than twice the $4.5 billion EBITDA projected in FY25 by Government's Panel of Experts which was questioned by the author.

It would be interesting to hear more on how a government owned NBN Co can improve its financial performance more than a private sector option. 

We can only hope that post rollout, whichever flavour of government is in charge, we get an honest appraisal of the costs and funding arrangements for the necessary upgrade of the network with deeper fibre. If they are footing the bill, taxpayers need to be told that further fibre investment will most likely come as a cost on the budget and that cannot be fudged any more. 

Options for NBN post rollout

Gary McLaren's picture

An interesting hierarchy of options for the NBN post rollout in this paper. But not clear to me what criteria were being used to make the judgment of Option A above all else.

The specific question I would like to ask is as follows :

The paper points out Option B would require a large write-off (~$30 billion) of the taxpayer's investment would be needed before the private sector would be interested.  

Option A asserts that government ownership of NBN Co (with an ARPU) of $52 per month would be "advantageous" and able to fund investment to a future-proof FTTP (at $10-12 billion) over a 10 year period to be potentially then sold off for presumably no loss of taxpayer's investment (ie. at least for $60 billion assuming after FTTP investment assuming zero cost of capital).

How does government ownership become so commercially attractive that it can avoid a write-off and fund an extra $10-12 billion investment? In 10 years the value to the private sector has tripled from $20 billion to $60 billion. Or to put it another way, to support a $60 billion price-tag, NBN Co's EBITDA would need to be $10 billion per annum assuming the 6 times multiple discussed in Option B. This is more than twice the $4.5 billion EBITDA projected in FY25 by Government's Panel of Experts which was questioned by the author.

It would be interesting to hear more on how a government owned NBN Co can improve its financial performance more than a private sector option. 

We can only hope that post rollout, whichever flavour of government is in charge, we get an honest appraisal of the costs and funding arrangements for the necessary upgrade of the network with deeper fibre. If they are footing the bill, taxpayers need to be told that further fibre investment will most likely come as a cost on the budget and that cannot be fudged any more. 

True Broadband costs - who really knows?

Denis Mullane's picture

True cost of any service is an amalgam of actual capital costs and actual operational costs, and is dependant on -

(1) a sufficiently realistic widespread sampling/database of actual services rolled out nationally (updated regularly as further deployment is achieved in varying geographies, densities and take-up rates)

(2) Data measured over a sufficient period of time to generate the real overall costs as cost factors change with time

(3) Accurate data, reliable cost models, peer review agreement on these

In short, be very careful about taking claims on costs at face value without being very knowledgeable and confident around all facets of this complex field of work, made much more so with the introduction of the NBN into the overall cost equation.

Denis Mullane

0419256894

The True Cost of FTTN

johnson's picture

Thank you for your article Rod. As Telstra's largest Business Customer in Tasmania (home of the NBN) I can say at a practical level that FTTN is exceptionally expensive because of the number of visits required by NBN and the retailer.
In my experience there are on average less visits for a FTTP installation.
With FTTP I can have a service active on my NTD within a few hours (within an hour if I ask my ISP nicely) and that service can range from 25/5 to 1000/400.
With FTTN the lead time to active a new service is always weeks. There is always confusion about where the current copper cabling is and how poor a state it is in. Most ISP's struggle to tag the service at the MDF meaning you need to get a cabler in. Internet performance is nearly always poor and seems to fluctuate quite a bit. FTTN VSDL is considerably less stable the ADSL and in general the performance is so bad we have to look at separate fibre connections.
The long term cost of FTTN as services churn is going to very high and I don't think many people realise this.

auDA membership grows as reform process takes shape

Tim Herring's picture

.au Domain Administration Limited, commonly known as auDA, has announced a significant growth in membership, with a record 955 new members being admitted at a board meeting earlier today.

auDA is charged with overseeing domain names allocation in Australia. If you have a website you’ll have dealt with one of the numerous companies that sell domain names to the public. They all operate under the authority and supervision of auDA.

The organisation was recently the subject of a report from the Department of Communications and the Arts that called for major governance reform. As I’ve previously written, auDA has been mired in controversy in recent years. For some time it had been seen as a tightly held fiefdom under the control of a board of directors elected from within the industry, but subject to “capture” by vested interests.

Recommendation 11 of the government review, released in April 2018, requires auDA to “diversify its membership base in the short-term with a focus on extending membership to stakeholders that are underrepresented”.

According to auDA CEO, Cameron Boardman, membership has quadrupled in the last month.

“This is a very positive move for the .au domain space and will further strengthen the operations of auDA by broadening the membership base”, Boardman said.

In a statement to members auDA said it had accepted all of the review recommendations, and is working on modernising its operations “for the benefit of all stakeholders and ultimately the consumers who rely on Australia’s safe and stable top-level domain”.

Recently, a group of former directors and members demanded a Special General Meeting – scheduled for 27 July 2018 – and called for the removal of three independent auDA board members: chairman Chris Leptos and directors Sandra Hook and Suzanne Ewart.

The campaign is led by industry veteran Josh Rowe, who was on the auDA board for 14 years, along with member Jim Stewart and former staffer Paul Szyndler. Known as the Grumpies, it is not thought they have the numbers to succeed in ousting the three directors.

While the new auDA members will not be eligible to vote at the July meeting they will be entitled to vote at the auDA annual general meeting later in the year, arguably making any decisions made next month potentially redundant.

Given three months by the Government to develop new processes to redress the historical weaknesses identified in the DCA report, auDA has created a broad-based consultative group to guide the process.

The 16-member Consultation Model Working Group has met four times in recent weeks and according to Boardman is working on ways to better involve members and stakeholders in the management of Australia’s domain names space.

auDA exists under a delegation from the federal government. Similar organisations run the domain names system in many countries. Apart from monitoring the sale of domain names, auDA is responsible for ensuring the overall integrity of the process. So it plays an essential role in how the Internet functions in this country.

The physical operation of the registry is carried out by a third party – with Afilias, a global firm specialising in domain name management, about to take over on 1 July this year. Afilias is well advanced in its preparations for the changeover. (ref:

(Laurie Patton is a member of auDA. He is currently advising Afilias Australia. However, the views expressed here are his own and have not been endorsed by Afilias.)

ukpaperhelp

Shone ted's picture

That there will be a key audit of the NBN inside 60 days, which will plot the approach the NBN will take from that point on, yet don't expect any huge changes from the Liberal party's arrangement. With that declaration as the most recent development of Australian broadband, I figured it is intriguing to perceive how we touched base now, to give some setting to the issue. ukpaperhelp

An interesting analysis which

Tim Herring's picture

An interesting analysis which puts numbers to what we could all have guessed and for that it is valuable. This provides data and analysis to an area badly lacking facts, but rife in opinions.

One of the interesting issues is that I see from the References that no information is referenced from NBN Co since 2013! This underlines one of the major issues with the NBN and that is the lack of information that is publicly available since the MTM was introduced.

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JASMINE LEE's picture

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On "Further lack of regulation"

Frank den Hartog's picture

AT&T's comment may be sensible. There is a middle way between regulation and no regulation, which is self-regulation. In its comment, AT&T hints at this solution, basically saying: "If Congress doesn't regulate us, we are happy to make firm promises regarding how we deliver Internet connectivity." In cases where regulatory freedom does not work, self-regulation could be a good alternative. It is cheaper, more flexible, better informed, and better supported by stakeholders than anything that comes from government.

It is therefore that the EU government (i.e. the European Commission, or EC) increasingly tries to facilitate self-regulation instead of top-down regulation. A good example is their mechanism of Codes of Conduct (CoCs), which are voluntary policy instruments largely written (and signed) by the stakeholders themselves. There is a series of Codes on Conduct on ICT energy efficiency (see https://ec.europa.eu/jrc/en/energy-efficiency/products/coc), and many of them are successful. Of course it helps that the EC threatens with "real regulation" if the stakeholders do NOT agree on or comply with satisfactory CoCs.

But, admittedly, the success of self-regulation is heavily depending on corporate culture within the sector and the market. Yes, there must be an independent watch dog which has some level of policing and enforcement authority, but this will only go that far. In the end, self-regulation relies on the existence of some level of mutual trust between the stakeholders. Which is why the EC has not been successful in having net neutrality self-regulated. Also, the level of trust that the stakeholders have in AT&T may still be too low for making self-regulation successful.

This is the first of the

Tim Herring's picture

This is the first of the CommsWire Afternoon editions.

Further lack of regulation

Leith Campbell's picture

AT&T's Annual Report for 2017 contains the following, blatantly political comment on the 'open' internet.  Clearly, AT&T wants no regulation, like 'Silicon Valley'.  Is this sensible?

AT&T and its strategic positioning must be assessed first through the lens of what transpired in the general U.S. business environment in 2017. It?s been a long time since we have seen a shift in public policy that was more positive for growth in investment, jobs and wages.

It began with a broad, sweeping rationalization of the regulatory burden on U.S. businesses, particularly in our industry. The most notable example came last December when the FCC reversed its 2015 decision to impose a set of archaic, 1930s-era regulations ? rules created for the rotary-dial telephone ? on how the internet works.

The new FCC order returns internet service to the light-touch regulation that had been in place until 2015. We now have the same regulatory approach that enabled the U.S. technology sector in Silicon Valley to lead the world in innovation as the internet flourished, thanks to massive investments in mobile and fiber-based broadband infrastructure. Indeed, AT&T invested more than $200 billion in capital in our U.S. networks over the past 10 years. Returning the industry to that same light-touch regulation will help ensure continued investment in new, significantly higher-speed network technologies ? such as 5G ? that will help the United States to remain the global leader in advanced connectivity and digital innovation.

The internet has become a very important element within our society, changing the way we all live, work and conduct commerce. Therefore, another change in the rules is understandably confusing and concerning. This is why we believe it?s time for Congress to end the debate once and for all by writing new laws that govern the internet and protect consumers.

Until that is accomplished, I want to make clear what you can expect from AT&T.  We are committed to an open internet. We don?t block websites. We don?t censor online content. And we don?t throttle, discriminate, or degrade network performance based on the content. Period.

We have publicly committed to these principles for more than 10 years, and we will continue to abide by them. But the commitment of one company is not enough. We need Congressional action to establish an ?Internet Bill of Rights? that applies to all internet companies and guarantees neutrality, transparency, openness, nondiscrimination and privacy protection for all internet users.

We intend to work with Congress, other internet companies and consumer groups to push for this legislation that will permanently protect the open internet for all users and encourage continued investment for the next generation of internet innovation.

Vision needs to remove NBN Co monopoly

Gary McLaren's picture

Frank makes up some great points.
But unfortunately there is common ground across the ideological and partisan NBN debate about the fundamental disconnect in Australia's telco policies - everyone seems to consider the NBN Co monopoly as sacrosanct. This is starting point for everyone's disparate "visions".
Australia seems to be the only country that starts from this position. This is the core of Australia's problem. Monopolies do not invest unless someone provides extra funds, usually taxpayers or customers who have no choice! As a result investment either doesn't happen or is too late.
Any vision for the future of Australia's telecom policy must first consider the fundamental issue of telecom monopolies.
Why is Australia the only market that considers this a no go zone?

The Utility of Broadband

Tim Herring's picture

Transferred to the main blog under "Broadband"

How should the FTTx investments be recouped?

Frank den Hartog's picture

I agree with Prof. Tucker's conclusion that the NBN will not bring Australia higher up the international ladder of fixed broadband connectivity speeds. But "being high up the ladder" should not be a goal in itself. The real tragedy is that we (industry, public, government) do not seem to have a shared (!) vision on our society's needs for broadband now and in the future, how these needs would translate into a measurable improvement of the society's well-being, and how this improvement subsequently would translate into everybody recouping a fair share of the investment costs and taking a fair share of the investment risks. Said otherwise, a viable business model and business case seems missing, plus a vision on how to implement such a business model given the existing organisation of Australia's telecommunications market.

As an illustration: the article discusses the costs of FTTN and FTTP deployment internationally, but costs may differ greatly per country, especially the OPEX part of it. Besides, who cares about the costs if there is a clear vision on how to earn them back? And what role could mobile networks (5G) play in this discussion? But lacking that vision, the only thing we can do is minimising the investment costs, and then comparisons like presented become relevant indeed. And, to be honest, even $2500 then sounds like a lot of money to me: with a fee of $50/month per household it would take ~10 years to earn this back, depending on which part of the fee should cover the infrastructure investments (here estimated on ~50%). Which company, nowadays, or even government (with its <3 year cycle), is prepared to take such a long term risk for an unclear outcome?

I firmly believe that Australia should be much better connected than it is now in order to maintain our standard of living, or even improve it. I believe that FTTN will help too little too late. But as long as we discuss broadband policies on the basis of just believes instead of facts and evidence, we will loose a lot of time, energy, and money in discussing and fighting. Resources we should better put into updating the network. I support Prof. Tucker's conclusion that NBN needs a vision for the future beyond 2021. But that's easier said than done. The lack of this vision is the real tragedy.

Good observations, Bob.

Graham Shepherd's picture

Good observations, Bob.

In the latest Journal http://telsoc.org/ajtde/2014-12-v2-n4, I try and take an overall view of the latest policy and Gary McLaren compares the utility model you describe with the competitive model proposed by Vertigan. The government seems to be hovering between a utility approach and a comptitive approach. In the Business Spectator last week (http://www.businessspectator.com.au/article/2014/12/12/technology/year-nbn-stood-still) Mark Gregory noted that if the government delays selling off the HFC until NBN Co upgrades it then a well-cashed-up player like Telstra could walk right back in to a dominant position in broadband access.

I wish that rational argument would prevail but despite the mantra of rational economics I doubt that it raises even a lazy eyebrow. Daniel Kahneman in "Thinking fast and slow" demonstrated that markets and consumers are not rational (unless they really concentrate). I suspect that governments and politicians are the least rational of all and wide open to powerful forces, including half-cocked ideologies, political expediencies and modern, more sophisticated versions of the good old brown paper bag (Askins, I think they were called).

I remember Richard Alston laughing his head of at naive young me when I suggested that he simply had to explain to the Australlian people the "good reasons" for privatising Telecom Australia and he would get his legisltation through. Of course, it was the mountainous tax-payerfunded political pay-offs to Senator Harradine that actually ensured the result he wanted.

There will be a wide readership of the Journal articles. You might like to add your comments there.

Graham Shepherd

Gigabit connections: MyRepublic says NBN chief is wrong

Nigel Swinney's picture

Given the rediculous cost to get 100Mbits currently I doubt we could justify 10x that for gigabit but it would be good to have if they priced it right

(No subject)

Ian Campbell's picture

(No subject)

Rob Nicholls's picture

PDF file reissued

administrator's picture

Thanks, Bruce. I hope that you received the reissued version of the pdf file on the same day.

Graham Shepherd

Ericsson "fair co-existence ... in unlicensed band"

Ken Sayers's picture

I recall when I worked for Neighbourhood Cable in the mid 2000's we had a Wi-Fi network in Mildura which was running perfectly until this mob from Tasmania called One Wire (according to Whirlpool they went belly up in Feb. 2008). This mob was sucking money out of the Broadband guarantee program then being run by the Howard Government. They put up a WiFi network which created massive interference to our network. When I spoke to the ACMA I was told "unlicensed spectrum is like the swings in the playground. All the people who want to use the swings have to agree on how they will be shared. There is no police who can come in and set up a regulated system, so unless they are interfering with licensed spectrum, too bad". We ended up having to send our technical guys out to fix their kit so as to reduce interference. So while it might sound like a great idea to use unlicensed spectrum for LTE, that use comes with risks. 5GHz in less risky as it's a pretty broad band, but then it is also pretty short range, so it might be good in a closed space like say a Race Track, as long as the users of that spectrum is limited by e.g. the club that owns the race track.

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