NBN Issues: Considerations for Voters

Whilst there are Technical and Governance/Reporting issues around the NBN Co project, the overwhelming issue is Political.

The 2013 election will be the 3rd in a row where Broadband is a major issue. Unless the Coalition change their position, funding the NBN Co project to completion will be an running election issue until it becomes self-funding, 2016-2018 if I've understood the Project Plan. Then the electoral question will switch to ownership and whether to keep or sell NBN Co: if it follows Telco history, it will pour rivers of gold into government coffers, hard to give up.

Will voters support continuing the NBN Co project to completion, or cut it short and embrace an apparently cheaper solution pushed by the Coalition?

• Is the NBN Co project important enough to sway voters?
• What information do they need to decide?
• What factors will influence their decision?
• What are the issues?

This is an attempt to list and briefly describe the issues undecided voters, those who aren't already ideologically bound to a position, will need to weigh in making their decision:

• Seize the Day!
• The Opportunity to beat many of the G8 economies into 'Fibre to the Home': USA, UK, Germany, Italy, is one we'll never have again.
• Fibre Projects are already deployed/underway in Canada, France, Japan, Russia, though mostly local or small regions. [Not]
• Australia has a history of balkanised infrastructure, e.g. Railroads, creating a drag on the economy and undermining Productivity growth. As well, a history of long delayed technologies: FM radio and Colour TV were decades late here and Cable TV never arrived because of limited rollouts.
• Australians are Early Adopters of Technology: Do we want, for once, to steal a march on the USA and UK?
• Bill Shock.
• Will monthly bills for basic services rise like NSW Electricity prices recently have?
• Not from NBN Co: they are bound to drop their prices in real terms.
• Will average consumers increase their spending, as they've done with mobile phones?
• It's a really good bet that consumers will gladly pay more for more "goodies".
• Uniform Pricing.
• The ALP has mandated "uniform pricing", with opaque cross-subsidies.
• The Coalition wants explicit subsidies (read 'coupons') and different pricing 'bands': if you're in the Country, you'll see what it really costs.
• Is this a return to the old STD phonecall pricing: In the Bush, you'll pay a lot more for a lot less?
• Fibre is not about Speed.
• There are currently very, very few consumers that want, let alone need, more than the basic access rate of 12Mbps.
• So why does everyone talk about Fibre as offering 100Mbps if nobody wants it?
• Wireless, WiFi or Mobile Phone, goes just as fast and is everywhere: Isn't Fibre already an Obsolete Technology?
• Optical Fibre is not "gold plating" nor "a rolls royce" solution: it's a boring family car or people-mover that just does what it does competently, reliably and without nasty surprises.
• That can't be right: ADSL has only been around 10 years old and the Copper network will support an FTTN. What gives?
• Fibre is current, Copper is old technology. Each excel differently.
• The NBN is not about Fast Broadband to the Home.
• An NBN is about improving Economic Productivity across the whole economy.
• The prime beneficiaries of an NBN are business not home users:
• Businesses will have much more affordable high-speed access allowing them to do more over the Internet and adopt new, much cheaper technologies, like "Cloud Computing" and remote data storage and backup.
• Unless high-speed business access is cheap and commoditised, we can't improve Productivity. The only way there is "everybody gets Fibre".
• Removing the consumer speed bottleneck allows businesses to embrace newer, more immersive Internet technologies, offering better Customer experience and increased sales opportunities.
• Project Cost and Economics.
• Why aren't we maximising the residual value in existing networks?
• For the same reason we all don't buy everything second-hand: it isn't economic.
• Our FTTH network is much more expensive per house than Overseas projects. Why?
• Our "Wide Brown Land" with low population densities has always made Telecommunications more difficult and expensive, with a smaller customer base.
• Can the project deliver on Budget?
• Probably. If large, experienced Resources Companies and Large Builders don't always meet schedule and budget, then NBN Co, using private contractors, may not as well.
• Why don't we run Fibre everywhere in the Bush? Don't they deserve it too?
• In time, maybe we can include fibre in the electricity wires.
• Why not wait until we obviously need higher speeds?
• It takes 10 years to build new infrastructure, when you know you need it, it's too late to start. Forward Planning is necessary 
• Project Schedule and Priorities.
• Why's it taken so long to get nothing accomplished?
• Like a major mine or skyscraper: planning, preparing and foundations take time.
• Why can't NBN Co pay more and be done in 5 or 3 years from now?
• There aren't enough spare qualified people.
• Why aren't isn't NBN Co working first on clearing "blackspots"?
• First they have to build the foundations: the pieces we now need that Telstra and Optus never built.
• NBN Co can either build the new network efficiently, at least cost, or run around the country-side in no good order satisfying "demand", at a much higher price.
• NBN Co is rolling out two big projects besides Fibre: Fixed Wireless and Satellite. These access methods are specifically for rural and remote users and those in "blackspots".
• Ownership and Funding of the "NBN".
• Can a Government owned business ever be efficient and well priced?
• Isn't Competition the magic sauce that delivers the best prices and best goods to consumers? (I.e. All Government Enterprises lack Competition, are prices always high?)
• Why does or doesn't this fundamental of Economic Theory apply here?
• Governments these days don't generally start new Business Enterprises: so why did the ALP do this extraordinary thing?
• Because the Free Market was given over a decade and it did nothing.
• The Coalition would like "The Free Market" to provide all Telco services: 
• Is that a good idea?
• What are the upsides and downsides of that policy?
• Cost Benefit Analyses.
• Why weren't they done by the ALP?
• Costs won't be known accurately until afterwards, and
• Benefits for new applications and uses are unknowable.
• Are they relevant for this project?
• For the same reason didn't Apple, Google, Facebook, Amazon do CBA's: everything (costs, revenues) is unknown.
• What commercial analyses should we be seeing?
• The same range-estimate projections used in Venture Capital Business Plans.
• Tracking and monitoring progress is more important than anything.
• Because the driver for an NBN, from both Parties, is improving Productivity, baselining it now and providing a yearly Realised-Benefit Analysis is probably the most important part of both NBN Policies.
• Should the Coalition, having demanded them from the ALP, be offering Cost Benefit Analyses for its own Policy?
• What's good for the goose is good for the gander.
• Historical Factors: Why are we here?
• The 2009 surprise decision by Rudd/Conroy to not use FTTN.
• Unlike Howard in 2001, they took the advice of their Experts.
• As a Nation, we stumbled into this position through many twists and turns.
• Telstra was privatised as a vertically-integrated entity by the Coalition, but created by the ALP.
• How pivotal decisions led to a radical solution.
• Telstra consistently used it market position to block new entrants and technologies.
• The only economic FTTN solution can be by Telstra.
• Rudd/Conroy "cut the Gordian Knot" by initiating Structural Separation of Telstra and creating a new entity for the "last mile", the only Telco Natural Monopoly.
• What are we getting?
• You won't pay an NBN Co bill: what is it delivering?
• The "last mile" only: the Customer Access Network (C.A.N.)
• Service Providers connect to the C.A.N. at Points of Interconnect (PoI's).
• The many layers of the Telecommunications Onion and why you want to know.
• Customers deal with Retail Service Providers.
• They need to interconnect to other Service Providers, buy National and International links and backhaul from the PoI's.
• The C.A.N. is under half the total cost.
• How the NBN is the best news for Telstra in a decade.
• Telstra has the largest backhaul network, the best National and International connectivity and largest Residential and Business customer list to spread costs.
• If they choose, Telstra can be extremely price-competitive.
• Misdirects, Noise and Smokescreens.
• Both sides of Politics have introduced a lot of 'spin' into the debate that 
• All Monopolies are Bad, Kill the NBN!
• Anyone can build and sell a C.A.N., provided they play by the ACCC, the Regulator, Rules: the NBN isn't and never was a Monopoly.
• The NBN will stifle Competition.
• Only for the Customer Access Network, which is already controlled by a single and rather recalcitrant entity, Telstra, the 'monster' (according to Paul Fletcher) created by the Howard Government.
• Forcing everyone to use the NBN Co C.A.N. is Removing Choice!
• No, for the first time we'll have the possibility of real competition amongst Telcos, because Telstra can't block and undermine everyone else.
• You might have to choose been Fibre or using a Mobile Phone Operator
• It's a Risky Plan.
• A lot less risky than what's been Policy for the last 10 years: Do Nothing!
• Duplicating Existing Private Assets is a Waste.
• Private is the keyword: Some businesses are going to lose, that's why the ALP provided compensation to Telstra and Optus.
• At some point we have to jump, some assets are always going to be orphaned.
• Waiting until everything is old, decrepit and completely depreciated is the worst possible strategy.
• The NBN will increase the cost of the internet.
• At most, only marginally for basic services, and the 'basic' 12Mbps is double the current average access speed: quite a benefit.
• NBN Co is regulated to reduce costs in real terms.
• Retail Service Providers will set the prices to users. NBN Co, as only a fraction of that cost, cannot control what the user pays.
• Like Mobile Phones and Smartphones, Average Revenue Per User (ARPU) is expected to rise as consumers start to value and use the additional bandwidth. That's voluntary, not forced, behaviour.
• The NBN is a Colossal Waste of Money!
• ~$40B barely rates as a major resource project. Compare to over $250B committed funds.
• In the scheme of things, the $6-8B/year Federal funding needed for only a few years is only slightly above the "noise level".
• A major cost of the NBN has been paying Telstra for access to its pits-and-pipes.
• An FTTN network, built to throw-away in as little as 10 years, may be 25%-30% cheaper when rolled out to everyone: that's not a bargain.
• The NBN is unlikely to deliver value for money.
• This is based on low rates of take-up, but no mention is made of ARPU's increasing with higher proportions of fast plans.
• Since the price of ADSL was dropped around 2002/3, take-up has skyrocketed: take-up is more related to price than availability of service.
• New technologies take time to be adopted. Even if the initial take-up rate is 25%, the long-term equilibrium rate will be the same or higher than today's ADSL rate.
• It was not until 1986 that Australia achieved 90% domestic telephone take-up!
• Nobody argues that fixed-line telephones were a failure or not "value for money" as a business.
• Singapore has an ISP provided 1Gbps cheaply. They do great business, proving that Fibre service can and will be profitable.
• Nobody else is doing this!
• Yep, exactly. There are many local and regional Fibre rollouts most doing well. Australia is the first country to take the leap.
• A Government can a) afford lower rates of return b) be patient with investments c) can be first and d) can borrow money more cheaply than corporations.
• Saying that private companies aren't doing this yet means a) they can still squeeze their customers on old assets and b) they can't get 50-90% margins yet.
• Fixed Fibre doesn't provide What Customers Want now: Mobility!
• While Mobile Phone/Wireless is growing rapidly, it suffers congestion, interference, reception blackspots and will always be more expensive per GB.
• While we still go home to the same place every night, Fixed Networks will be the cheapest, most reliable and fastest option available.
• Guess how Mobile Phone Towers connect phone: Fibre. The NBN should benefit Mobile Phone Operators as well, improving coverage and reducing costs.
• The NBN Demonstrations were cheats: Nobody will get the speed they expect!
• The User Experience will be many times better than FTTN and ADSL: see the Gungahlin Experiment for details.
• NBN Co can't guarantee speeds to home users, there are some network factors that mean effective speeds will sometimes be marginally lower than the notional line speed. This is nowhere near the line-speed & error-rate problems of ADSL and an FTTN.
• The years of preparatory work done by NBN Co have been providing good backhaul for Retail Service Providers.
• NBN Co is currently building the next level, the Points of Interconnect.
• The switches and routers in the PoI's are Telco-grade: they are designed to handle everything running flat-out.
• The NBN GPON Fibre technology is, unlike FTTN exemplified in the Gungahlin Experiment, designed to be congestion-free at the C.A.N.
• Network Congestion can and will happen, but this will be within the Retail Service Providers: they oversubscribe all links, backhaul and National Interconnect. This is normal commercial practice and how they offer cheaper services. ISP's often run 20:1-50:1 oversubscription rates now - the total customer bandwidth sold versus the size of the pipes back to the ISP and from then to 'the Internet'.