NBN Discussion

[jb747]

Well yes and no. NBN is for the most part capable of first class service (excluding FTTN) but it is the RSP's that are promising the cut price.

But doesn't FTTN now represent the "most part".

And whilst the ISPs can be blamed for failing to deliver, the NBN system of CVC pricing is a major driver of the ISP issues.

 

[Quickstatus]

True but in the end you get what you pay for which is several degrees less than what you would expect.

I see the NBN CVC pricing as closer to the reasonable cost but most people do not want to pay at a price point that would cover the CVC pricing model, notwithstanding the flaws in the model

 

[Jeffrey O'Neill]

Well yes and no. NBN is for the most part capable of first class service (excluding FTTN) but it is the RSP's that are promising the cut price.

Just remember NBN get a $24-38 cut for the AVC charge, then another $15.75 per 1 Mbs of CVC capacity.

So do the math on a cut price $65 plan, needing to also pay for backhaul from the NBN POI, then some internet transit, staff wages, rent, equipment costs.... There's also the rackspace rental at the NBN POI. ADSL was cheap because a lot of the infrastructure has already been depreciated.

CVC is not scarce. NBN have tens of millions of dollars in equipment being underutilised. Increasing utilisation would barely increase NBNs cost structure. Cutting the price of CVC much more rapidly would just delay the revenue, no eliminate it, as competition would force RSPs to buy more CVC, which means people use more and you get a faster version of utilisation growth than we already have.

Definitely RSPs need to stop highlighting the up to speed. Possibly the ACCC could force RSPs to provide average peak time speeds for each POI so consumers can shop based on price and performance much easier than they currently do.

 

[Quickstatus]

I would rather RSPs be required to provide a minimum speed.

Electricity is 240v. For the most part even in high demand times the voltage is relatively stable. It certainly does not drop by half.

 

[ajw373]

Just remember NBN get a $24-38 cut for the AVC charge, then another $15.75 per 1 Mbs of CVC capacity.

So do the math on a cut price $65 plan, needing to also pay for backhaul from the NBN POI, then some internet transit, staff wages, rent, equipment costs.... There's also the rackspace rental at the NBN POI. ADSL was cheap because a lot of the infrastructure has already been depreciated.

CVC is not scarce. NBN have tens of millions of dollars in equipment being underutilised. Increasing utilisation would barely increase NBNs cost structure. Cutting the price of CVC much more rapidly would just delay the revenue, no eliminate it, as competition would force RSPs to buy more CVC, which means people use more and you get a faster version of utilisation growth than we already have.

Definitely RSPs need to stop highlighting the up to speed. Possibly the ACCC could force RSPs to provide average peak time speeds for each POI so consumers can shop based on price and performance much easier than they currently do.

I understand the issues fully your are not going to get an argument out of me.

Your last para is prob the most sensible thing I've seen that speeds should be sold as average peak speeds not some arbitrary maximum that is simply not fiscally possible to deliver to everyone 24x7.

 

[Jeffrey O'Neill]

I would rather RSPs be required to provide a minimum speed.

Electricity is 240v. For the most part even in high demand times the voltage is relatively stable. It certainly does not drop by half.

In the good old days when ATM ruled the roost in the telco world you had the concept of CIR and PIR

committed information rate was pretty much the minnimum speed you'd get

peak information rate was what you might be allowed to burst up to if the carrier had some spare capacity.

Possibly the RSPs need to come together and work out an advertising policy that pushed back on NBN with a CIR and PIR kind of system that directly links the guaranteed speed against the CVC cost (it would be higher due to the backhaul and other costs) and then allowing customers to tailor their own internet plans based on the minimum speed they are willing to pay for. Want a minimum 4Mbs in the night time peak? Well that's going to be say $80 + port speed fee. Consumers ask why does it cost so much, and the RSPs can provide the NBN cost break down, and then the nbn can wear some of the backlash from consumers.

 

[jb747]

Well, why not a model where you actually pay for what you get. None of this up to rubbish. If I get half of what I'm paying for, then I pay half the cost.

Probably two things would happen then. The ISPs most likely couldn't afford that model, and the NBN would be forced to abandon the entire concept, as it would basically collapse.

My understanding is that this model is only used in one or two other places in the world, and the pricing there is in the cents per meg/sec, not multiple dollars.

 

[ajw373]

Well, why not a model where you actually pay for what you get. None of this up to rubbish. If I get half of what I'm paying for, then I pay half the cost.

Probably two things would happen then. The ISPs most likely couldn't afford that model, and the NBN would be forced to abandon the entire concept, as it would basically collapse.

My understanding is that this model is only used in one or two other places in the world, and the pricing there is in the cents per meg/sec, not multiple dollars.

I don't know of anywhere in the world where with broadband that they could offer any guarantee of paying for what you get. The simple fact is your maximum speed is set by in some instances physical limits and in others commercial limits.

And your access to bandwidth or lets call it your throughput is limited by what a service provider is willing to buy. Which is based on a complex formulation of average and peak usage and what the market is prepared and willing to pay.

Instead I would rather if I brought a ticket on a particular flight having a guarantee I would be on the flight that I paid for! Save for unforeseen engineering rather than operational issues. In fact overselling in the airline industry is a reasonable analogy to what happens in broadband where a provider oversells on the basis that on avaerage not everyone will use (or in the case of airlines turn up) the service at the same time.

 

[PLANT]

Look Australia is a second class country...... Why can't we have like America and Europe in the city ..... 24/7 gig fast speed on unlimited plans for a cheap price! I mean even Hawaii has their internet better than us...... Rant over

 

[mannej]

Look Australia is a second class country...... Why can't we have like America and Europe in the city ..... 24/7 gig fast speed on unlimited plans for a cheap price! I mean even Hawaii has their internet better than us...... Rant over

I'm sure there is the little thing of economies of scale as to why the prices aren't to your liking.

 

[moa999]

But even with this expensive pricing the NBN is making a return of about low single digits in IRR terms (if not negative).
It's not commerical and if the govt ever sought to sell the sale price would be well under construction costs.

Our vast distances, low density (even in CBD areas), and high wages and strong OH&S practices (not that the latter two are a bad thing) mean constructing the network is a very expensive exercise.

And both sides of politics decided it should be off-budget, ie. Usage fees need to fund it.

 

[jb747]

The problem is that it's a self defeating pricing model. By charging such a high CVC, the ISPs won't buy enough. So, the entire thing gets a reputation as being slow, and not up to whatever pricing people have ordered, so nobody orders the higher speeds. How about just charging $2 per actual DELIVERED meg/sec. I would happily pay for 100 meg/sec if I could actually get it. But, paying for it and being given less does not make for happy customers.

Of course, at this instant in time, getting anything from NBN is simply a dream.

 

[RB]

Not sure if NBN is being unfairly blamed. There is a lot of NBN activity around here at the moment with availability supposed to be May/June. Seems to be more than coincidence that there are many disruptions to home phone services.

 

[ajw373]

Not sure if NBN is being unfairly blamed. There is a lot of NBN activity around here at the moment with availability supposed to be May/June. Seems to be more than coincidence that there are many disruptions to home phone services.

There is a reported and consistent increase in faults and adsl speed drops when NBN starts FTTN work in a suburb. So wouldn't say unfairly blamed.

 

[Quickstatus]

And for the record, the project cost was originally $43b, which has since been revised down to $35.9b with the Australian government contributing $27.5b of that.

What govt project designed on a back of beer coaster by politicians ever has a price that never needs to be revised up

 

[ajw373]

Beer coaster design for NBN is a massive Liberal/News LImited miss truth.

Virgin Blue on the other hand.

 

[Quickstatus]

Figuratively or literally between Rudd and Conroy while on domestic flight to CBR. Basically no robust coatings when announcement made.,so the 12 then 40 then 60 bil might as well have been picked out of the sky

 

[ajw373]

So says the report commissioned by the LNP to justify their solution. And what a winner that has turned out hey?

 

[JessicaTam]

What govt project designed on a back of beer coaster by politicians ever has a price that never needs to be revised up

Beer coaster design for NBN is a massive Liberal/News LImited miss truth.

Virgin Blue on the other hand.

Figuratively or literally between Rudd and Conroy while on domestic flight to CBR. Basically no robust coatings when announcement made.,so the 12 then 40 then 60 bil might as well have been picked out of the sky

So says the report commissioned by the LNP to justify their solution. And what a winner that has turned out hey?

The discussion about the costings/genesis has been pretty well covered in this thread and elsewhere.

I think our time is better served discussing the current situation than revisiting the past.

 

[TheRealTMA]

Motherhood statements. Surely the arguments for base political motives are now moot. In reality the actual expenditure cost for a government is irrelevant for a national infrastructure project that will benefit the country for many years to come. Surely the argument should be to build the best possible network and provide high speed services that will see the country in good stead for the next 20-30-50'years. But some (many, most) politicians think only of their superannuation and for two years rather than to build proper national infrastructure.

It makes no sense to build an inferior network then cruel it further by nor using the available bandwidth for high speeds just for some mythical future profit argument. Underutilising the network makes no sense, technically or economically.