Friday, 18 May 2012

NBN: restructure to answer marketplace questions

I think there are 3 actions the Gillard Government can undertake to improve the prospects of the NBN.

1. Reform NBN Co into a Co-operative owned by Telcos and ISP's.

Takes away the problem of the wholesaler being a monopoly and setting prices too high.
It's necessary to get the voting/Governance right so Optus/Telstra don't automatically control it, but still have some influence.

Funding? I don't know enough about the topic to know how the Govt can raise bonds for a Co-OP.
Perhaps they can be allowed to raise Govt Guaranteed Bonds like the old Telecomm/Telstra Bonds.

2. Let the market speak!!

Allow subs to prepay for service to bring forward their installation. This allows retail customers to put their money where mouth is, and is an additional source of cheap funds. There'd need to be several levels of pre-payment from ~$250 to $10,000, each with a different incentive/discount schedule. If whole street or communities pre-paid to $2,500/household, that should become a "Priority 1" install zone.

The central weakness that Turnbull exploits is "where's the demand?" [c.f. "where's the beef?"]

If you have a bunch of folk who've put varying amounts of money, not promises to pay, on the table, you've got an incontrovertible measure of "value to customer".

3. Go Big, Go Early and answer the underlying assumption "faster isn't just more of the same".

Are the 500 days left before a mandatory election enough to get a major deployment done?
A city of 500,000-1,000,000, in addition to moving on the "low hanging fruit" in the major markets (Capitals etc), would be a definitive economic testbed to show that the NBN is either "just a better ADSL" or something different and synergistic.

We then have an undeniable benchmark to answer the question:
Does the NBN provide extra social and/or economic value?

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