Wednesday, 12 September 2012

NBN: Depoliticising the debate

Does anyone not think that:
  • The Internet is a game-changer across the whole economy and its full impact is yet to be realised.
  • That affordable, universal "fast" broadband availability is in our best national interest.
  • That for all but a very few fixed connections, Optical Fibre is by far the best technically and economically.
  • That what we want in the long term as Telecomms infrastructure is Full Fibre connectivity.
Does anyone think that:
  • Ideologically driven Political solutions can ever deliver good, let alone the best solutions for complex infrastructure like Telecomms?
  • That the current Political system can only deliver an expensive NBN full of compromise?.
  • That the current Political debate will deliver the most efficient, effective and least costly version of the NBN?
I think the only thing that can be guaranteed with the NBN staying as a Political issue is that we, as electors and customers, will not get either good value-for-money nor what we want, individually or collectively.

We have two Political Parties trying to sell us competing versions of a product not yet built and which we'll consume and pay to use for a very long time. Since the Structural Separation Undertaking in April, for which there is never likely to be an alternative.

Every sale has two sides: the Vendor and the Buyer.
Both parties have an input into the sale and product specifications. As Buyers, we must have a say in what we get.

I'd like to suggest that the only way to get a decent National Broadband Network is for us, the consumers and electors, to take this debate away from the Politicians.

We can start a debate ourselves and say what we want and, most importantly, are prepared to pay for.

You get what you pay for and we are paying for the NBN and will continue paying for it for decades.
Currently, I don't know of anyone who is really happy with any of the solutions on offer.

The NBN is not being paid for by "The Government" nor by any Political Party. It's us, the Australian Public, who are footing the bill.

The NBN is not a Free Good or Gift, we are paying for it, we should have a direct say in how much we pay and just what we get.

I believe the way to get there, to depoliticise this debate, is to remove the core issue: Money.

Something that's never come up in the Political debate is NBN Funding.
Each Political Party has always assumed the Traditional Telco and Infrastructure model of "full central funding".

One of the reasons that the Internet became so popular, so quickly (growth rates of 100% every 3-6 months for years on end), was that it wasn't built or funded by the Telcos.
The ISP's drove the investment and deployment individually - and subscribers provided their own equipment and connection (modems and phone lines). Rethinking the NBN funding model might be the way to defuse the NBN as a political issue.

There's a very simple and straightforward solution that would give definitive information about just what the Australian Public, those paying for this, our largest single infrastructure investment so far, truly desire:

Allow individuals to:
  • Directly purchase bonds or non-voting shares in NBN Co.
    • Shares entail maximum risk for owners, but allow maximum returns. Individuals can invest any sum they like, or nothing at all. Being "non-voting", like News Ltd, shareholders can't change the Board, CEO nor directly affect policy and plans.
    • Mostly Bonds are sold at a single interest rate. I'm suggesting a variation, multiple series of bonds at different interest rates, with the total bonds available in a series decreasing with the interest rate. Possibly offer 5 and 10 year terms on the bonds as well. Oversubscribing series would be distributed either by ballot or proportionally.
      • 3.25% - $20B [start under the current RBA cash rate]
      • 3.75% - $10B
      • 4.25% - $5B
      • 5.00% - $2.5B
    • Investors who are comfortable with the long-term prospects of the NBN might first think of taking a lower interest rate.
    • All these rates are lower than the 7.1% rate-of-return NBN is currently required to pay the Government. Moving the funding to Bonds means we, as subscribers/customers, pay less for our services because NBN Co can reduce profits, and we, as electors, lessen the debt the Government enters into for us.
  • Allow NBN Subscribers to indicate their commitment now by entering into a binding agreement to take the service when available. These agreements must be rescindable or be varied every 12 months or in the event of force majure. They wouldn't bind NBN Co to install dates.
    • Commit to attaching the service at low- (12 or 25Mbps) or high-speed (50 or 100Mbps), but prepay nothing.
    • Commit to service, pay a fee as a 'refundable deposit' (with 3.25%pa interest till connection) or to purchase a discount plan, only available prior to connection.
      • $500
      • $1000
      • $2000
      • $5000
    • Having customers pre-pay deposits gives NBN Co access to cheap working capital.
      • A nice variation would be to apply the prepayment or deposit to the wholesale connection, buying some period of prepaid service. ISP's can still make their margin, but pay NBN Co nothing for that line for the prepaid period.
      • When the prepayment has been consumed, it wouldn't be offered again.
    • NBN Co can prioritise deployment based on committed connections, not guesswork or Political agendas.
    • Individuals or groups with a strong desire for Fibre connections might be able to raise enough money to pay for early connection in their area.
These ideas, Bonds and pre-commitment are very close to what Bendigo Bank currently does with its highly successful Community Bank model.
Those Community Banks might be a good jumping off point for Community Networking.
  • Another addition would be "sweat-equity" for small communities, currently not in the NBN plans as they'd be unprofitable, or for communities that might wish to speed up connection.
  • The model is already popular in US schools: "Networking Parties".
    • There's no reason a small town or community of 50-300 dwellings can't dig trenches and lay conduit if the installation is inspected by an NBN Co certified inspector.
    • NBN Co could run, and charge for, these certification courses.
    • Local communities might be able to find local approved contractors to pull fibre through their conduit.
      • Not sure who'd pay for the fibre itself. It's the cheapest part of the installation and becomes a tangible asset of NBN Co.
      • NBN Co must supply the NTD (Network Termination Device) and they must be connected by a properly trained and approved person, not necessarily NBN contractors.
      • The ethernet switch and GPON equipment must be supplied and installed by NBN Co, though an approved enclosure might be supplied by the Community.
    • The digital backhaul from these Community Networks to the nearest NBN fibre might have to be digital microwave, not long-distance fibre.
      • A reasonable starting point is the rural electricity supply model: transformers and poles/wires are, like these backhaul links, are paid for by the customer, then ownership and maintenance/replacement responsibility transferred to the Operating company.
The best thing about this proposal is the "What if we thew a party and nobody came" outcome.

If all three of my proposals were implemented and public response was completely underwhelming, it rather makes the Coalition point that the NBN would be A Great Big Expensive Project That We Don't Need and would give them moral authority in the political debate.

If the Labor Party truly believes that a Full Fibre NBN is "what the people want", it can't object to testing that question.

If, however, we discover that Australians desperately want a Full Fibre NBN and are willing to put their wallets where their thoughts are, then it's a win-win for the Political Parties.

Both sides of politics can walk away from the issue without political fallout because they've both got won their argument and we, the customers and electors, get what we want into the bargain:
  • Mr Conroy can say "we told you so" and "it's now going full-speed ahead, delivering what you want",
  • Mr Turnbull can say "without us doing our job as an effective opposition and forcing the Government to reconsider its plans you wouldn't now have exactly what you want."
What do you think?

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