Saturday, 10 August 2013

NBN: "Need Broadband Now" in Coffs.

The Coffs Harbour local paper has a piece on their problems with the NBN rollout. As they should.
The paper is part of the APN media group.

Below is the history behind the good people in Coffs now being forced to wait for Broadband. I encourage you to read this small selection.

The facts are:
  • In the early days of Telstra, 1992/3, there was a plan started, for the copper Customer Access Network to be replaced entirely with Fibre by 2010. This would've been funded out of normal operations. This was abandoned sometime under the Howard Government.
  • There was a crisis within Telstra in 2001 that was known and discussed by the Howard Government - the Telephone business, the PSTN, was in "meltdown".
    • In 2005, the incoming CEO, Sol Trujillo made a very strong case to address exactly this problem and form a FTTN National Broadband Network.
    • Despite Telstra being a distressed asset, the full sale went ahead in late 2006, without Telstra being structurally separated.
    • Although the Howard Government from 2000 onwards ran many enquiries into Broadband or Internet in the Country, nothing effective and long-lasting was put in place.
  • The 1996/7 HFC Cable TV rollout disaster with Optus and Telstra wasting around $5 billion "overbuilding" & producing an non-viable commercial product showed everyone that the Australian Telecomms market had already failed and that Telstra could not be privatised as a single vertically-integrated entity.
    • The Howard government deliberately created "a monster" in the words of Liberal MP, Paul Fletcher.
  • Malcolm Turnbull himself, around the time of the T2 sale, advocated that Telstra be structurally separated and as was later shown, this would considerably boost the share-price.
    • Turnbull was part of the Howard Ministry that allowed the full sale of Telstra as a single entity.
    • The share-price predictably crashed, and ordinary, first-time investors lost billions as a result.
    • Telstra has only recovered financially because of the NBN, and agreements on "Structural Separation" with the ACCC and NBN Co.
      • Turnbull now says, "we wouldn't have started from there".
      • Only he was directly involved with creating the mess that first had to be unwound.
  • If any of the multiple warnings since 1997 and especially since 2001 and 2005 had been heeded, the people of Coffs would've had good Broadband a very long time ago.
Turnbull not only has a very selective memory, he played a role in the series of disastrous decisions with Telstra and Australian Broadband made by the Howard Government. The Coffs Harbour paper does not raise that inconvenient truth.

A very selective History of Telecommunications in Australia.
  • 1901. PMG formed to cover entire Commonwealth
  • 1946. Overseas Telecommunications Commission (OTC(A)) formed.
  • 1975. PMG split into Australia Post and Telecom Australia.
  • 1981. Aussat formed as 3rd Australian Telco.
  • 1982. Davidson Enquiry recommends Deregulation of Telecommunications.
  • 1989. Telecom Australia briefly reformed into another entity.
  • 1992. OTC merged into Telecom Australia.
  • 1993. Telecom Australia renamed Telstra.
    • Frank Blount, CEO, forms a plan to replace the entire copper Customer Access Network with Fibre by 2010.
    • Telstra deploys the first RIM's, Fibre-to-the-Curb (now called FTTN), were deployed handling telephones. The Gungahlin Experiment starts.
  • 1994. Aussat, with debts of $400M, sold to Optus consortium.
    • Optus granted duopoly protection in return.
  • 1995 - 1997. Optus and Telstra roll out HFC Cable TV networks.
    • 80% "overbuild" by both Telcos
    • 2.5M premises passed
    • $6 billion estimated spent together
    • Over $4 billion written off by 2000.
  • Feb 1996. John Howard elected. Paul Keating defeated.
  • Jul 1997. Australian Telecomms market fully deregulated
  • Nov 1997. 33.3% of Telstra sold in T1 for $3.30/share.
  • Sep 1999. 16.6% of Telstra sold in T2 for $7.40/share.
  • pre-2000. Turnbull advices Howard government to structurally separate Telstra.
    • Both entities, wholesale and retail operations, would be valued higher. Seen as having growth prospects.
  • Jul 2001. Telstra telephone (PSTN) services & profits have peaked and go into decline.
    • Challenge to PSTN is twofold
      • Mobile phones
      • Internet services:
        • VoIP, Skype, email, instant messaging, social media, ...
  • Aug 2005. After 6 weeks in job, new CEO Sol Trujillo meets with senior Howard ministry.
    • Advises record profit is not sustainable,
      • PSTN has been in "meltdown" since 2001 peak.
    • Proposes National Broadband Network, NBN.
      • ADSL2, 1500m, 20,000 nodes to 4M of 5.2M premises in "5 major metro areas"
      • Asked for $4.7 billion contribution. (3 amounts given for different options)
  • Nov 2006. Final 50.1% of Telstra sold, or transferred to "Future Fund" in T3 for $3.60/share.
  • Sep 2007. Kevin Rudd elected. John Howard defeated.
    • During the Howard government, multiple enquires into and schemes to provide "Broadband to the Country" were funded. These barely addressed needs at the time and were not found adequate for later demand.
    • The last project, OPEL, was launched in late 2007, was cancelled by the Rudd government.
  • Aug 2008. GFC hits with failure of Lehman Brothers and US "sub prime" mortgage market.
    • Rudd government responds with three tiered approach, avoiding technical recession and mass unemployment  as in USA, UK and most of Europe.
      • tier 1: direct cash handouts. very short term
      • tier 2: mid-term projects. 'Schools' program. Home Insulation.
      • tier 3: long-term infrastructure projects. Including NBN.
    • Rudd government draws on reserves provided by the utterly stupid sale of Telstra by the incompetent Howard government.
      • Borrowing only possible due to strong balance sheet left by Howard government.
  • Nov 2008. Tenders returned for Fibre-to-the-Node (FTTN) NBN with up to $4.7 billion Govt investment
    • Telstra bid disqualified as "non-compliant", did not address mandatory section for Australian content.
  • Jan 2009. FTTN-NBN Expert Committee reports:
    • no bids were viable.
    • Spending money upgrading other peoples' assets was a waste of money.
    • The "National Broadband Network" announced, no FTTN, entirely Government funded and owned.
      • 93% of premises to get Fibre.
      • 7% to get Satellite or Fixed Wireless (point to point 4G mobile phone technology)
  • Jul 2009. Sol Trujillo leaves Telstra at end of 4 year contract. ADIOS, Rudd.
  • Mar 2011.Telstra share price reaches record low, $2.60, pre-NBN agreements
  • Apr 2012. Telstra signs "Structural Separation Agreement" (SSU) and agrees to rent or sell assets to NBN Co.
    • Telstra shareprice took off, as predicted by Turnbull in 1999.
    • Currently about $5.10 with $0.28 dividend.

1 comment:

  1. Coffs Harbour is in the electorate of Cowper.

    Electorate details here ........


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