The NBN: The debate.

[Chris]

There have been lots of claims on both sides of politics regarding the National Broadband Network about its benefits and costs.. so what's going on? How much *will* it cost us on a personal level? I have no idea but here are some 'facts' I've extracted from various places on the web.

As I understand the situation, over the next 5 - 10 years, the government is intending to spend up to AU$50 billion building a fibre network cable of delivering speeds of 100 Megabits per second to up to 93% of the Australian population (the remainder will be served by wireless and satellite).

In operation it will function as a 'wholesaler' and access will be sold the ISP's who in turn onsell to the public.

Half the capital required to build the network will be raised by the sale of 'bonds' but the government will hold 51% of the shares for a period of ten years after which the network could be sold if circumstances are suitable.

Whilst it is being built it will create up to 50,000 jobs on a rolling basis but a minimum of 25,000 jobs whilst being constructed.

So, we have a projected maximum government spend of up to AU$50 billion, but a possible clawback through bond sales of up to $25 billion.

Those are the basics... but of course there is more... far more.

There are questions surrounding the creation of this massive piece of infrastructure that we can reasonably ask.

What sort of improvements if any can we expect to 'business' if this is built? What effect will it have on the lives of us ordinary folk? And perhaps the most pressing of all... how much will it really cost *us*?

On the last point I'd suggest we ignore the highs and lows and ask what effect it would have on the take-home pay of someone who earns, say $100,000. What will it do to the paypacket?

[Chris]

What sort of improvements if any can we expect to 'business' if this is built? What effect will it have on the lives of us ordinary folk? And perhaps the most pressing of all... how much will it really cost *us*?

One interesting side-effect that would accrue if we build the network is to allow 'business' to spread further afield out of the cities. Currently the fastest internet speeds are only available within the metropolitan area so anyone who works in one of these industries has to drive into the city to work.

If these businesses are able to achieve the same or greater speeds outside the cities they are likely to move. The returns for them would primarily be lower costs, e.g. cheaper premises etc. but for the rest of us we'd have that many less cars fighting their way into the city, possibly less pollution and less need for people to move towards the cities to find work!!

[Crimson]

Not one private business has expressed any intention or willingness to invest one single dollar into the NBN, in-fact the main Telco investors are preparing to compete with the NBN.

The government will be saddled with 100% of the cost.

That may equate to AU$100,000,000,000 of your money being spent on an entity that will never ever recoupe the capital investment.

To recoupe the capital investment it would require every many man, women and child in this country becoming customers and even that would require life-long consuming. At an estimated AU$25,000 per connection price the reality is it will take generations of users for the NBN to become profitable, the exact same reason why Telstra and others refused to do it themselves and why private investors have not been found an nor will they.

Regards,

Crimson

[Chris]

Not one private business has expressed any intention or willingness to invest one single dollar into the NBN, in-fact the main Telco investors are preparing to compete with the NBN.

Says who?? Please point to the article from which you derived that information.

The government will be saddled with 100% of the cost.

I think we need to see some verification that you aren't making this up before we can accept that... bearing in mind the value of this infrastructure!

That may equate to AU$100,000,000,000 of your money being spent on an entity that will never ever recoup the capital investment.

To recoup the capital investment it would require every many man, women and child in this country becoming customers and even that would require life-long consuming. At an estimated AU$25,000 per connection price the reality is it will take generations of users for the NBN to become profitable, the exact same reason why Telstra and others refused to do it themselves and why private investors have not been found an nor will they.

Utter rubbish.

A few posts ago you claimed it would cost $500,000 to connect each household... now it's $25,000. It's time you went looking for some real information instead of making wild baseless claims.

Perhaps it's time for you to you publish some of the sources for the information you set such store by.

By the way, you *are* aware the NBN isn't intended to connect directly to *any* households aren't you??

[Crimson]

I quoted thus-far it has cost AU$500,000 for each connection, that will come back down to AU$22-25,000 per connection as the connections take place in major cities, the fact remains however, that AU$25,000 per connection is the reality.

And no private enterprise or private investature is gonig to take place if indeed it is going to cost that sort of money per connection. (which is why Telstra didn't do it, after-all they actually need to make a profit)

The only private investature in the NBN will be the issuing of government bonds in order to pay for it, nothing more and nothing less. That is, the Government is going to have to borrow in-part if not the great majority of the initial AU$45,000,000,000 or upto AU$100,000,000,000 which is an expected possibility.

No private enterprise is going to invest anywhere near that sort of money in an infrastructure project that could take generations to become profit viable, and the Minister responsible has allready stated that such an eventuality is the likely out-come.

Business allready has access to better than the initial NBN data-speed. fact is, by and large they either don't need it or are unwilling to pay for it and that isn't likely to change just because the NBN is going to exist. They can allready video-conference, in-fact you can make video calls from any current generation mobile phone, you can allready stream HD TV and Movies through current generation broadband and th3e main data transfers are between large organisations and they allready have dedicated data services avaialable that make house-hold broadband look like first genertion dial-up.

And when Tesltra offfers a cheaper wirliess service of comparible speed the NBN will go belly up and we'll be left with another white-elefant for future generations to pay for.

Regards,

Crimson

[Chris]

I quoted thus-far it has cost AU$500,000 for each connection, that will come back down to AU$22-25,000 per connection as the connections take place in major cities, the fact remains however, that AU$25,000 per connection is the reality.

Balderdash... please produce *any* evidence that might even come close to supporting it!!

And I repeat there will be *no* connections directly to the NBN because it is a *wholesale* system which will sell to ISP's!!!

[Crimson]

I quoted thus-far it has cost AU$500,000 for each connection, that will come back down to AU$22-25,000 per connection as the connections take place in major cities, the fact remains however, that AU$25,000 per connection is the reality.

Balderdash... please produce *any* evidence that might even come close to supporting it!!

And I repeat there will be *no* connections directly to the NBN because it is a *wholesale* system which will sell to ISP's!!!

There are allready 70 Tasmanian homes connected to the NBN at a cost so far of AU$35,000,000, please try and read a newspaper occasionaly, heck, even read some Andrew Bolt once in while, he at the least provides some of the basics.

By the way, no ISP has even remotely expressed interest in providing the NBN, the largest ISP in Australi (Telstra plans to compete with it)

Regards,

Crimson

[Chris]

I quoted thus-far it has cost AU$500,000 for each connection, that will come back down to AU$22-25,000 per connection as the connections take place in major cities, the fact remains however, that AU$25,000 per connection is the reality.

Balderdash... please produce *any* evidence that might even come close to supporting it!!

And I repeat there will be *no* connections directly to the NBN because it is a *wholesale* system which will sell to ISP's!!!

There are allready 70 Tasmanian homes connected to the NBN at a cost so far of AU$35,000,000, please try and read a newspaper occasionally, heck, even read some Andrew Bolt once in while, he at the least provides some of the basics.

By the way, no ISP has even remotely expressed interest in providing the NBN, the largest ISP in Australia (Telstra plans to compete with it)

Wow... even after your other bizarre posts, yet again I find the breadth of your ignorance amazing!!

No ISP's interested eh?? Had you bothered to make even the *briefest* of investigations you *might* have stumbled across some of the plans already published by the ISP's regarding the plans they are offering regarding connection to the NBN.

Here are a few to get you going:

Internode
http://bc.whirlpool.net.au/bc/isp-9-16/internode-nbn-stage-1.htm

iPrimus
http://bc.whirlpool.net.au/bc/isp-10-10/iprimus-nbn-ftth.htm

iiNet
http://www.iinet.net.au/nbn/

Exetel
http://www.exetel.com.au/residential-fibre-pricing-tasmania.php

Geez... I even wrote just this morning I'd asked iinet when they were going to be linking me to the NBN!! Why would I ask them if they didn't have plans in place?

I'd write more but yet again what point is there?? You keep on writing  unresearched drivel and refuse to quote verifiable sources!!

Can you try to keep up please?

[Kady]

I think most on this forum agree Malcolm Turnbull knows what he's talking about. So might be worthwhile reading the following.
..........

AUSTRALIANS understand high-quality, affordable broadband is a critical part of the infrastructure we need to prosper.

As one of the founders of OzEmail, Australia's first big internet company, I believe passionately in broadband and the power of the internet. But as a businessman and member of parliament I also believe passionately in not wasting taxpayers' dollars on white elephants.

So what's the broadband debate about? On the one hand Labor is spending at least $43 billion (and maybe much more) on the most expensive network in the world.

On the other, the $6bn Coalition plan will fix those parts of Australia's broadband infrastructure where intervention is justified: increasing competition in the main networks that link towns and cities and subsidising faster connections in poorly served suburban, regional and rural areas.

The Coalition's spend is less but all Australians will have access to privately provided broadband services, most of which are virtually indistinguishable from Labor's, just at a much lower cost.

Scrutiny of the Rudd-Gillard National Broadband Network reveals no fewer than seven separate reasons why it is going to fail Australians.

First, the NBN will cost far too much to build. It will be the largest investment of taxpayer funds in the country's history. While Labor claims it will find private partners, the NBN is so risky and its likely returns so low that it will probably be entirely funded by taxes. And even the chief executive of NBN Co admits the final cost is highly uncertain.

Several countries have subsidised high-speed broadband, but not on the scale Labor proposes. The taxpayer contribution in Singapore was $200 a person and in New Zealand $330 a person. Labor's extravaganza will cost Australian taxpayers more than $2000 a person.

Cont'd

[bambu]

Another $43 BILLION.

More borrowed money on which interest will have to be paid...and the borrowed sum also repaid in full by taxpayers.

It's a stupid idea, wireless internet is the future, then whatever new thing will be invented in the next few years.

This NBN nonsense will likely be another costly and giant Labor white elephant.


And this other Gillard tripe, online doctors diagnosing illnesses and rashes etc, is just that, tripe.

Shazza emailed the radio station and asked if she'll be able to drop her knickers, put her beehind up to the camera and have a doctor treat her hemorrhoids, and also do a pap smear.

[Kady]

This vast expense is why the Rudd-Gillard government has refused to submit its plan to Treasury for cost-benefit analysis. It would show the cost of the NBN far outweighs the benefits.

Second, the NBN will increase internet costs for users. Once the government has built a white elephant utterly incapable of earning a reasonable return on capital invested but assured of a monopoly over carriage of internet services, what do you think is going to happen to user charges?

One possibility is that the monopoly provider jacks up prices. The implementation study estimates that for the NBN to earn merely the bond rate, real prices will need to increase 1 per cent each year, rather than decrease rapidly as they have in recent years. And if it doesn't, then its value won't equal the cost of investment. If the government instead decides to charge reasonable wholesale fees, the cashflows earned by NBN will not justify a value remotely near $43bn. Even if most households sign up, the NBN may be worth less than a quarter of that investment.

The trouble with the NBN is that it has been decreed by politicians, not driven by market demands.The fastest networks of today run over optical fibre and there are already many thousands of kilometres of fibre in our networks. The question is whether the huge extra cost of mandating every home in Australia be connected to fibre-optic cable is justified. Millions of Australians can already achieve fast broadband speeds over networks currently in place, and we know today's speeds will increase rapidly in coming years.

Source

[Chris]

Millions of Australians can already achieve fast broadband speeds over networks currently in place, and we know today's speeds will increase rapidly in coming years.

That last part it the telling point. Speeds *will* increase... but only if a network is built that can sustain the speeds required.

Left to 'the market' there will be huge areas of Australia which will never generate sufficient income to make a decent connection economically viable. Should they be abandoned because of that??

If so... should we stop subsidising *telephone* services as well??

Left to market forces the old 'survival of the fittest' always kicks in. If there is no profit... the market pulls back. This government subsidised network will provide massively fast broadband to the vast majority of the population and give to *all* Australians what people in the City and suburbs take for granted already.

My ADSL2+ speeds are sufficient for my needs currently... and my ISP plan allows be 25O Gb a month in downloads. Why shouldn't Jane Doe out in Woop Woop have access to the what I have now... or faster??

And once it's built and we begin to reap the rewards of such huge speeds you'll begin to appreciate what's been built and how much value it will be adding to the quality of life for all of us!!

[Chris]

Millions of Australians can already achieve fast broadband speeds over networks currently in place, and we know today's speeds will increase rapidly in coming years.

Here's an independent view of the Liberal suggested broadband plan:

Tony the Tower: Abbott's 'technical ignorance on a national scale' on wireless and broadband

Broadly the same opinion is being pushed by anyone who has some notions of the problems with trying to move to 'wireless' as a solution.

[skypilot]

Why wouldn't Gillard answer questions on the NBN when asked??

[bambu]

Because she's all populist platitudes, spin, no numbers, no detail and no idea?

Seems to know nothing about the NBN and what it would cost, the take-up rate, etc.

Same as Rudd!...all hot air and hogwash.

"Kevin Rudd in a dress".