tag:blogger.com,1999:blog-17771779175402268392024-03-14T06:25:34.355+11:00SteveJ on Broadband: pre-election NBN postsNBN Issues, Commentary & Opinion. 30 yrs in I.T. and Telecommssteve jenkinhttp://www.blogger.com/profile/16064724730975745470noreply@blogger.comBlogger301125tag:blogger.com,1999:blog-1777177917540226839.post-59624363912392568172013-09-27T17:24:00.000+10:002014-04-25T17:27:26.938+10:00Copper cheaper than Fibre? Only if you "cook the books" radically!<b>Summary:</b><br />
Comparing costs is only half the picture, <i>profits</i> are what drives business. <i>Turnbull has omitted anything to do with revenue, charges or profits from </i>everything<i> he's released.</i><br />
<br />
Using the <i>correct</i> Discount rate of 4.6%, nearly all sets of FTTP/FTTN costs put Fibre ahead, or at the same cost as Copper, even with the highly unrealistic costs chosen by Turnbull: Fibre costs 100% higher than actual and leaving out all Telstra payments for Copper.<br />
<br />
If you include payments to Telstra, <i>Copper is always more expensive than Fibre.</i><br />
<br />
If you use the <i>actual</i> Fibre costs of NBN Co, then at worst the difference is negligible ($17/year) or<i> the Copper FTTN is from 50%-60% more expensive than Fibre over 15 years.</i><br />
<a href="https://www.blogger.com/blogger.g?blogID=1777177917540226839" name="more"></a><br />
<b>Comparing the Costs of Fibre (FTTP) and Copper (FTTN) networks</b><br />
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Turnbull hasn't just viciously and aggressively attacked anyone and everyone, he was very publicly <a href="http://stevej-on-bband.blogspot.com.au/2013/09/turnbull-still-doing.html">accused of lying</a>, <i>a claim he's not refuted in nearly six months.</i> When does that become an admission?<br />
<i><br /></i>It's a given that any politician will distort, select and manipulate figures to support their cause. Turnbull has done this in spades with his NBN Node Plan. This piece will focus on just one point where we <i>can</i> pin him down.<br />
<br />
Previous blog posts here have included <a href="http://stevej-on-bband.blogspot.com/2013/08/nbn-what-can-fibre-do-that-copper-can.html">why Fibre makes a Profit whilst Copper <i>cannot</i></a>, <a href="http://stevej-on-bband.blogspot.com/2013/09/the-real-deal-on-coalition-nbn-same.html">a discussion of real costs to taxpayers </a>and <a href="http://stevej-on-bband.blogspot.com/2013/06/nbnpolicy-questions-for-coalition.html">critical policy points, like charges, are <i>still</i> unaddressed by the Coalition</a>.<br />
<br />
The first outrageous cheat by Turnbull was <i>to not pay Telstra anything for their copper!</i> Turnbull estimated this at $1500/line, considerably more than the $900/port he allows for FTTN.<br />
<br />
The next cheat was using fabricated FTTP install costs of $3600/service when <i>very</i> reliable costs of ~$2350/service had been released by NBN Co in good time for him to add to his documents.<br />
<br />
The last is more subtle, Turnbull used a usurious rate-of-return, or "Discount Rate", such as Telstra or Optus might use. The "Discount Rate" is what you might <i>otherwise</i> earn from your money. For Government, it's <i>zero</i>, <i>they don't invest or earn profits</i>. NBN Co has a <i>very</i> modest target of ~7% placed on it by its shareholder, as it's prime concern is not lining the pockets of investors, but providing affordable services to taxpayers.<br />
<br />
Another wrinkle is that Turnbull omitted the effects of inflation.The "Discount Rate" needs to be further reduced by the inflation rate for these figures to be meaningful.<br />
<br />
Lastly, the most blatant and colossal distortion of reality is <i>to never, ever speak of revenues, charges or profits!</i> Any business person knows that <i>there are two sides to the ledger, </i>and focusing on just one side, either revenues or expenses, leads inevitably to ruin. Businesses survive solely <i>by making a profit</i>. A more subtle point that has killed many a small businesses, and one that Turnbull trades on, is <i>a positive cashflow (cash surplus) which is <u>not</u> a profit.</i> Business have to cover non-operating expenses, like Depreciation, <i>and</i> payback their loans, something you can't do with positive cashflow and no profit, as Turnbull has as <i>his</i> target for the NBN.<br />
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In this "example", as elsewhere, Turnbull focuses <i>solely</i> on costs, where he can <i>manufacture</i> an advantage, pretending that is <i>all</i> that matters to a business. He then proceeds to choose outrageous, unrealistic and unjustified assumptions to create the outcomes he wants. Very easy to do if you don't submit your <i>full</i> figures to independent scrutiny and verification.<br />
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Even the manufactured <i>cost</i> advantage of Copper over Fibre fails if you use real, Australian data, not fictions dreamt up in the backrooms of Turnbull's offices.<br />
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<b>Source</b>: <a href="http://www.malcolmturnbull.com.au/assets/Coalition_NBN_policy_-_Background_Paper.pdf">Background Papers, The Coalition’s Plan for Fast Broadband and an Affordable NBN</a>.<br />
<br />
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="http://4.bp.blogspot.com/-ulWjR7wzWnw/UhRcDFRH85I/AAAAAAAAAho/0QOkm3d8feQ/s1600/NBN_Libs_NPV-costs_p14.png" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" src="http://4.bp.blogspot.com/-ulWjR7wzWnw/UhRcDFRH85I/AAAAAAAAAho/0QOkm3d8feQ/s640/NBN_Libs_NPV-costs_p14.png" height="230" width="640" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Coalition Net Present Value example of FTTN/FTTP <i>expenses,</i> page 14<i>.</i></td></tr>
</tbody></table>
<b><br /></b>
These figures are also available as <a href="https://docs.google.com/spreadsheet/ccc?key=0AlGLdfqdwpNQdEtIUzJtcmxZZWdISmV4WGttVGJGbXc&usp=sharing">a downloadable spreadsheet.</a><br />
<br />
The first line, <span class="Apple-style-span" style="background-color: #cfe2f3;">in blue</span>, is the Coalition example. Values <span class="Apple-style-span" style="background-color: #f4cccc;">marked in red</span> are where Fibre is cheaper than Copper. You'll notice for the majority of cases, Fibre is cheaper than Copper, even when unrealistic costs are used.<br />
<br />
<i>Notes on reading table:</i><br />
The first seven columns are the parameters input to the two NPV values calculated in the Coalition example to compare which approach is cheaper over the period.<br />
<br />
The two NPV calculations are the cost of building FTTP versus building FTTN initially, then upgrading later to FTTP, with half of the FTTN cost wasted, as per the Coalition "50% CapEx Reuse".<br />
<br />
<table cellpadding="0" cellspacing="0" dir="ltr" style="font-family: arial,sans,sans-serif; font-size: 13px; table-layout: fixed;"><colgroup><col width="60"></col> <!-- Discount --><col width="65"></col> <!-- Year upgrade --><col width="65"></col> <!-- Years NPV --><col width="45"></col> <!-- FTTN CapEx --><col width="45"></col> <!-- FTTN OpEx --><col width="5"></col> <!-- spc 1 --><col width="45"></col> <!-- FTTP CapEx --><col width="45"></col> <!-- FTTP OpEx --><col width="5"></col> <!-- spc 2--><col width="50"></col> <!-- FTTP NPV --><col width="50"></col> <!-- FTTN+FTTP NPV --><col width="50"></col> <!-- Diff --></colgroup><tbody>
<tr style="height: 33px;"><!-- header 1 --><td colspan="1" rowspan="2" style="border-bottom: 1px solid #000000; border-left: 1px solid #000000; border-right: 1px solid #000000; border-top: 1px solid #000000; color: black; direction: ltr; font-weight: bold; padding: 0 3px; text-align: left; vertical-align: top;"><div style="max-height: 33px;">
Disc- ount Rate </div>
</td><td colspan="1" rowspan="2" style="border-bottom: 1px solid #000000; border-right: 1px solid #000000; border-top: 1px solid #000000; color: black; direction: ltr; font-weight: bold; padding: 0 3px; text-align: center; vertical-align: top;"><div style="max-height: 33px;">
Year of FTTP upgrade </div>
</td><td colspan="1" rowspan="2" style="border-bottom: 1px solid #000000; border-right: 1px solid #000000; border-top: 1px solid #000000; color: black; direction: ltr; font-weight: bold; padding: 0 3px; text-align: center; vertical-align: bottom;"><div style="max-height: 33px;">
Years of NPV </div>
</td><td colspan="2" rowspan="1" style="border-bottom: 1px solid #000000; border-right: 1px solid #000000; border-top: 1px solid #000000; color: black; direction: ltr; font-weight: bold; padding: 0 3px; text-align: center; vertical-align: bottom;">FTTN</td><td rowspan="2" style="border-bottom: 1px solid #000000; border-right: 1px solid #000000; border-top: 1px solid #000000; font-weight: bold; padding: 0 3px; text-align: center; vertical-align: bottom;"></td><!-- spc 1 --><td colspan="2" rowspan="1" style="border-bottom: 1px solid #000000; border-right: 1px solid #000000; border-top: 1px solid #000000; color: black; direction: ltr; font-weight: bold; padding: 0 3px; text-align: center; vertical-align: bottom;">FTTP</td><td rowspan="2" style="background-color: white; border-bottom: 1px solid #000000; border-right: 1px solid #000000; border-top: 1px solid #000000; font-family: arial,sans,sans-serif; font-size: 100.0%; font-style: normal; font-weight: bold; overflow: hidden; padding: 0 3px; text-align: center; text-decoration: none; vertical-align: bottom; vertical-align: bottom; white-space: normal;"></td><!-- spc 1 --><td colspan="3" rowspan="1" style="border-bottom: 1px solid #000000; border-right: 1px solid #000000; border-top: 1px solid #000000; color: black; direction: ltr; font-weight: bold; padding: 0 3px; text-align: center; vertical-align: bottom;"><div style="max-height: 33px;">
NPV</div>
</td></tr>
<tr style="height: 16px;"><!-- hdr 2--><td style="border-bottom: 1px solid #000000; border-right: 1px solid #000000; color: black; direction: ltr; font-weight: bold; padding: 0 3px; text-align: left; vertical-align: bottom;">CapEx</td><td style="border-bottom: 1px solid #000000; border-right: 1px solid #000000; color: black; direction: ltr; font-weight: bold; padding: 0 3px; text-align: left; vertical-align: bottom;">OpEx/yr</td><td style="border-bottom: 1px solid #000000; border-right: 1px solid #000000; color: black; direction: ltr; font-weight: bold; padding: 0 3px; text-align: left; vertical-align: bottom;">CapEx</td><td style="border-bottom: 1px solid #000000; border-right: 1px solid #000000; color: black; direction: ltr; font-weight: bold; padding: 0 3px; text-align: left; vertical-align: bottom;">OpEx/yr</td><td style="border-bottom: 1px solid #000000; border-right: 1px solid #000000; color: black; direction: ltr; font-weight: bold; padding: 0 3px; text-align: left; vertical-align: bottom;">FTTP</td><td style="border-bottom: 1px solid #000000; border-right: 1px solid #000000; color: black; direction: ltr; font-weight: bold; padding: 0 3px; text-align: left; vertical-align: bottom;">FTTN+FTTP</td><td style="border-bottom: 1px solid #000000; border-right: 1px solid #000000; color: black; direction: ltr; font-weight: bold; padding: 0 3px; text-align: left; vertical-align: bottom;">Diff</td></tr>
<tr style="height: 16px;"><!-- 01 --><td style="background-color: #cfe2f3; border-bottom: 1px solid #ccc; border-left: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">8% </td><td style="background-color: #cfe2f3; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;">3 </td><td style="background-color: #cfe2f3; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">3 </td><td style="background-color: #cfe2f3; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$900 </td><td style="background-color: #cfe2f3; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$90 </td><td style="background-color: #cfe2f3; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="background-color: #cfe2f3; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$3600 </td><td style="background-color: #cfe2f3; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$60 </td><td style="background-color: #cfe2f3; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="background-color: #cfe2f3; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">-$3755 </td><td style="background-color: #cfe2f3; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">-$3633 </td><td style="background-color: #cfe2f3; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$122</td></tr>
<tr style="height: 16px;"><!-- 02 --><td style="border-bottom: 1px solid #ccc; border-left: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">8%</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;">10</td><td style="background-color: white; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; font-family: arial,sans,sans-serif; font-size: 100.0%; font-style: normal; font-weight: normal; overflow: hidden; padding: 0 3px; text-align: right; text-decoration: none; vertical-align: bottom; vertical-align: bottom; white-space: normal;">15</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$900</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$90</td><td style="background-color: white; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; font-family: arial,sans,sans-serif; font-size: 100.0%; font-style: normal; font-weight: normal; overflow: hidden; padding: 0 3px; text-decoration: none; vertical-align: bottom; vertical-align: bottom; white-space: normal;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$3600</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$60</td><td style="background-color: white; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; font-family: arial,sans,sans-serif; font-size: 100.0%; font-style: normal; font-weight: normal; overflow: hidden; padding: 0 3px; text-decoration: none; vertical-align: bottom; vertical-align: bottom; white-space: normal;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">-$4114</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">-$3074</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$1040</td></tr>
<tr style="height: 16px;"><!-- 03 --><td style="border-bottom: 1px solid #ccc; border-left: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">8%</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;">10</td><td style="background-color: white; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; font-family: arial,sans,sans-serif; font-size: 100.0%; font-style: normal; font-weight: normal; overflow: hidden; padding: 0 3px; text-align: right; text-decoration: none; vertical-align: bottom; vertical-align: bottom; white-space: normal;">15</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$900</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$90</td><td style="background-color: white; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; font-family: arial,sans,sans-serif; font-size: 100.0%; font-style: normal; font-weight: normal; overflow: hidden; padding: 0 3px; text-decoration: none; vertical-align: bottom; vertical-align: bottom; white-space: normal;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$2350</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$60</td><td style="background-color: white; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; font-family: arial,sans,sans-serif; font-size: 100.0%; font-style: normal; font-weight: normal; overflow: hidden; padding: 0 3px; text-decoration: none; vertical-align: bottom; vertical-align: bottom; white-space: normal;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">-$2864</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;">-$2495</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">$369</td></tr>
<tr style="height: 16px;"><!-- 04 --><td style="border-bottom: 1px solid #ccc; border-left: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">8%</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;">10</td><td style="background-color: white; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; font-family: arial,sans,sans-serif; font-size: 100.0%; font-style: normal; font-weight: normal; overflow: hidden; padding: 0 3px; text-align: right; text-decoration: none; vertical-align: bottom; vertical-align: bottom; white-space: normal;">15</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$900</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$90</td><td style="background-color: white; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; font-family: arial,sans,sans-serif; font-size: 100.0%; font-style: normal; font-weight: normal; overflow: hidden; padding: 0 3px; text-decoration: none; vertical-align: bottom; vertical-align: bottom; white-space: normal;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$2350</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$30</td><td style="background-color: white; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; font-family: arial,sans,sans-serif; font-size: 100.0%; font-style: normal; font-weight: normal; overflow: hidden; padding: 0 3px; text-decoration: none; vertical-align: bottom; vertical-align: bottom; white-space: normal;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">-$2607</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;">-$2439</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">$167</td></tr>
<tr style="height: 16px;"><!-- 05 --><td style="border-bottom: 1px solid #ccc; border-left: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td></tr>
<tr style="height: 16px;"><!-- 06 --><td style="border-bottom: 1px solid #ccc; border-left: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">4.6%</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;">3</td><td style="background-color: white; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; font-family: arial,sans,sans-serif; font-size: 100.0%; font-style: normal; font-weight: normal; overflow: hidden; padding: 0 3px; text-align: right; text-decoration: none; vertical-align: bottom; vertical-align: bottom; white-space: normal;">3</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$900</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$90</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$3600</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$60</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">-$3765</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">-$3899</td><td style="background-color: #f4cccc; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">-$135</td></tr>
<tr style="height: 16px;"><!-- 07 --><td style="border-bottom: 1px solid #ccc; border-left: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">4.6%</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;">10</td><td style="background-color: white; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; font-family: arial,sans,sans-serif; font-size: 100.0%; font-style: normal; font-weight: normal; overflow: hidden; padding: 0 3px; text-align: right; text-decoration: none; vertical-align: bottom; vertical-align: bottom; white-space: normal;">15</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$900</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$90</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$3600</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$60</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">-$4240</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">-$3785</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">$455</td></tr>
<tr style="height: 16px;"><!-- 08 --><td style="border-bottom: 1px solid #ccc; border-left: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">4.6%</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;">10</td><td style="background-color: white; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; font-family: arial,sans,sans-serif; font-size: 100.0%; font-style: normal; font-weight: normal; overflow: hidden; padding: 0 3px; text-align: right; text-decoration: none; vertical-align: bottom; vertical-align: bottom; white-space: normal;">15</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$900</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$90</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$2350</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$60</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">-$2990</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">-$2988</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">$2</td></tr>
<tr style="height: 16px;"><!-- 09 --><td style="border-bottom: 1px solid #ccc; border-left: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">4.6%</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;">10</td><td style="background-color: white; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; font-family: arial,sans,sans-serif; font-size: 100.0%; font-style: normal; font-weight: normal; overflow: hidden; padding: 0 3px; text-align: right; text-decoration: none; vertical-align: bottom; vertical-align: bottom; white-space: normal;">15</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$900</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$90</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$2350</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$30</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">-$2670</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">-$2904</td><td style="background-color: #f4cccc; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">-$234</td></tr>
<tr style="height: 16px;"><!-- 10 --><td style="border-bottom: 1px solid #ccc; border-left: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td></tr>
<tr style="height: 16px;"><!-- 11 --><td style="border-bottom: 1px solid #ccc; border-left: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">8%</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;">3</td><td style="background-color: white; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; font-family: arial,sans,sans-serif; font-size: 100.0%; font-style: normal; font-weight: normal; overflow: hidden; padding: 0 3px; text-align: right; text-decoration: none; vertical-align: bottom; vertical-align: bottom; white-space: normal;">3</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$2400</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$90</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$3600</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$60</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">-$3755</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">-$5133</td><td style="background-color: #f4cccc; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">-$1378</td></tr>
<tr style="height: 16px;"><!-- 12 --><td style="border-bottom: 1px solid #ccc; border-left: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">8%</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;">10</td><td style="background-color: white; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; font-family: arial,sans,sans-serif; font-size: 100.0%; font-style: normal; font-weight: normal; overflow: hidden; padding: 0 3px; text-align: right; text-decoration: none; vertical-align: bottom; vertical-align: bottom; white-space: normal;">15</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$2400</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$90</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$3600</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$60</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">-$4114</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">-$4574</td><td style="background-color: #f4cccc; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">-$460</td></tr>
<tr style="height: 16px;"><!-- 13 --><td style="border-bottom: 1px solid #ccc; border-left: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">8%</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;">10</td><td style="background-color: white; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; font-family: arial,sans,sans-serif; font-size: 100.0%; font-style: normal; font-weight: normal; overflow: hidden; padding: 0 3px; text-align: right; text-decoration: none; vertical-align: bottom; vertical-align: bottom; white-space: normal;">15</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$2400</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$90</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$2350</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$60</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">-$2864</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">-$3995</td><td style="background-color: #f4cccc; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">-$1131</td></tr>
<tr style="height: 16px;"><!-- 14 --><td style="border-bottom: 1px solid #ccc; border-left: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">8%</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;">10</td><td style="background-color: white; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; font-family: arial,sans,sans-serif; font-size: 100.0%; font-style: normal; font-weight: normal; overflow: hidden; padding: 0 3px; text-align: right; text-decoration: none; vertical-align: bottom; vertical-align: bottom; white-space: normal;">15</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$2400</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$90</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$2350</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$30</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">-$2607</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">-$3939</td><td style="background-color: #f4cccc; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">-$1333</td></tr>
<tr style="height: 16px;"><!-- 15 --><td style="border-bottom: 1px solid #ccc; border-left: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td></tr>
<tr style="height: 16px;"><!-- 16 --><td style="border-bottom: 1px solid #ccc; border-left: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">4.6%</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;">3</td><td style="background-color: white; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; font-family: arial,sans,sans-serif; font-size: 100.0%; font-style: normal; font-weight: normal; overflow: hidden; padding: 0 3px; text-align: right; text-decoration: none; vertical-align: bottom; vertical-align: bottom; white-space: normal;">3</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$2400</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$90</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$3600</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$60</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">-$3765</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;">-$5399</td><td style="background-color: #f4cccc; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">-$1635</td></tr>
<tr style="height: 16px;"><!-- 17 --><td style="border-bottom: 1px solid #ccc; border-left: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">4.6%</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;">10</td><td style="background-color: white; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; font-family: arial,sans,sans-serif; font-size: 100.0%; font-style: normal; font-weight: normal; overflow: hidden; padding: 0 3px; text-align: right; text-decoration: none; vertical-align: bottom; vertical-align: bottom; white-space: normal;">15</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$2400</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$90</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$3600</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$60</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">-$4114</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">-$4574</td><td style="background-color: #f4cccc; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">-$460</td></tr>
<tr style="height: 16px;"><!-- 18 --><td style="border-bottom: 1px solid #ccc; border-left: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">4.6%</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;">10</td><td style="background-color: white; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; font-family: arial,sans,sans-serif; font-size: 100.0%; font-style: normal; font-weight: normal; overflow: hidden; padding: 0 3px; text-align: right; text-decoration: none; vertical-align: bottom; vertical-align: bottom; white-space: normal;">15</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$2400</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$90</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$2350</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$60</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">-$2990</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">-$4488</td><td style="background-color: #f4cccc; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">-$1498</td></tr>
<tr style="height: 16px;"><!-- 19 --><td style="border-bottom: 1px solid #ccc; border-left: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">4.6%</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;">10</td><td style="background-color: white; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; font-family: arial,sans,sans-serif; font-size: 100.0%; font-style: normal; font-weight: normal; overflow: hidden; padding: 0 3px; text-align: right; text-decoration: none; vertical-align: bottom; vertical-align: bottom; white-space: normal;">15</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$2400</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$90</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$2350</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">$30</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; padding: 0 3px; text-align: right; vertical-align: bottom;"></td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; padding: 0 3px; text-align: right; vertical-align: bottom;">-$2670</td><td style="border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">-$4404</td><td style="background-color: #f4cccc; border-bottom: 1px solid #ccc; border-right: 1px solid #ccc; color: black; direction: null; padding: 0 3px; text-align: right; vertical-align: bottom;">-$1734</td></tr>
</tbody></table>
<br />
<br />
<b>FTTN to FTTP upgrade cost</b><br />
<br />
The Coalition Background Papers use a FTTP CapEx cost of $3600 and $60/year OpEx, with FTTN costs of CapEx: $900 and OpEx $90.<br />
<br />
The real-life difference is actually much worse for FTTN than is detailed here:<br />
<ul>
<li>For FTTP, payments are only made to Telstra when <i>active</i> services are transferred to NBN Co.</li>
<li>While for FTTN, we can assume <i>every</i> copper pair cut, active or not, will require payment to Telstra.</li>
<ul>
<li>For FTTN, Turnbull estimates a markedly lower take-up of 75%, increasing the Telstra payments per active copper service by 10%-25%.</li>
<li>In the Telstra customer access network, there are many unused copper pairs . This increases Telstra payments by another 10%-25%.</li>
</ul>
</ul>
Assumptions in the Coalition "Net Present Cost" model presented are:<br />
<ul>
<li>There will be an upgrade from FTTN to FTTP at some future date.</li>
<li>The example given uses an unrealistic replacement time of 3 years. This is well before the $900 investment can be recovered, somewhere between 10 and 20 years.</li>
<li><i>Half</i> the FTTN investment is wasted, $450 is deliberately wasted in the Coalition Plan.</li>
<li>An unrealistic 8% discount rate is used. This is a figure that Telstra and Optus may obtain as they expect far higher returns for their shareholders. NBN Co, because it is not driven by profit-hungry shareholders, seeks a <i>very</i> modest shareholder return of 7.1% in comparison.</li>
</ul>
<ol>
<li>-($3,600 - $450) - $90 = -$3,240 [Coalition model figures]</li>
<li>-($2,350 - $450) - $90 = -$1,990 [Actual costs for NBN Co]</li>
</ol>
<b>Notes</b>:<br />
<br />
<i>1. Telstra "PSAA" Payments estimated at $1500 by Coalition and used in their modelling.</i><br />
a. FTTN $900 <i>excludes</i> lead-in cost<br />
b. FTTP $3600 <i>includes</i> lead-in cost<br />
<br />
Comparing FTTN & FTTP CapEx costs on <i>same-same basis:</i><br />
c. $900 v $2100 <i>without</i> lead-in<br />
d. $2400 v $3600 <i>with</i> lead-in<br />
<br />
<i>2. Real FTTP CapEx Costs</i><br />
From <a href="http://nbnco.com.au/assets/media-releases/2013/report-to-parliamentary-joint-committee.pdf">NBN Co report, 19-Apr-2013</a>.<br />
a. $1100 lead-in<br />
b. $1100-$1400 Fibre ($1250)<br />
<br />
<i>3. FTTP CapEx (Capital Expenditure)</i><br />
a. $3600 = $2500 + $1100 leadin<br />
b. $2350 = $1250 + $1100 leadin<br />
<br />
<i>4. FTTP OpEx to CapEx ratio. Lead-in costs excluded.</i><br />
a. $60 claimed by Coalition for $3600 FTTP<br />
b. For current FTTP cost of $2350, same ratio is $30. ($60 * ($1250÷$2500)<br />
<br />
<i>5. Discount Rate (the earnings/interest rate the money could <u>otherwise</u> make in the business)</i><br />
a. 8% ignores inflation, long-term rate of 2.5%<br />
b. 4.6% is NBN Co IRR (Internal Rate of Return), adjusted for inflation<br />
4.6% = (7.1% - 2.5%)steve jenkinhttp://www.blogger.com/profile/16064724730975745470noreply@blogger.com2tag:blogger.com,1999:blog-1777177917540226839.post-87163897624439185152013-09-26T16:20:00.000+10:002014-04-11T13:58:30.762+10:00Correcting wrong-headed Journalistic Myths & MemesI found myself again this morning with my blood boiling over statements that are not just flat-out wrong, but deceptive and misleading.<br /><br />Turnbull has "taken the helm", so there's no reason to keep obfuscating these key points.<br /><br />I've been frustrated getting the attention of Mainstream Media journalists - they ignore anyone outside their "bubble".<br /><br />I'm not talking about false progress measures, like "premises passed" or "years late" etc, when NBN Co have <i>just</i> entered the mass-rollout phase and only 3-months behind schedule, something Kohler has finally noticed!. Nor the absolute fallacy and fantasy of comparing the economics of incumbent Telcos Overseas to NBN Co... These are/were topics the ALP/Conroy should've defended and didn't.<br /><br />The whole "review" process will be highly political and biased, we know that.<br />Without informed media scrutiny, Australia is going to be right-royally screwed, not just 'screwed' for the next 75 years.<br /><br />Turnbull playing the "human flamethrower" is vicious, vindictive and wholly untruthful & misleading - everything you expect in a barrister, but antithetical to an informed public debate.<br /><br /><b>My pet peeves:</b><br /><br /><b>1. "We need a Cost Benefit Analysis for the NBN".</b><br />Eg. <a href="http://www.abc.net.au/pm/content/2013/s3855486.htm">AIG calling for a Cost Benefit Analysis</a> and "<a href="http://www.abc.net.au/worldtoday/content/2013/s3855951.htm">public debt funding for roads</a>":<br /><br /><b>2. "The <i>Cost</i> of the NBN is $37.4/$44.1 billion versus the Coalition's $20.5/$29.5 billion".</b><br /><br /><b>3. "Cheaper" and "Cost-Effective" are the sole Figure-of-Merit or assessment criteria, not Rate of Return</b>.<br /><a name='more'></a><br /><hr /><br /><b>1. "We need a Cost Benefit Analysis for the NBN".</b><br /><br />NO!!! It's the <b>wrong</b> measure for an <i>investment</i>! It doesn't <i>cost</i> the taxpayer a cent over its full lifetime.<br /><br />CBA's only makes sense for fully <i>public</i> projects where Govt don't 'invest' but <i>spend</i> with NO return to them. By definition, ALL returns & benefits are to the public, direct or indirect, and none to the Govt.<br /><br />That's why they are <i>tricky</i>, costs are easy to identify (look in the Budget) while benefits are diffuse, time-delayed and<br /><br />You'll also note that the Coalition, and folks like AIG, are NOT querying Abbott/Turnbull on the CBA's for their road infrastructure spending.<br />This is <i>precisely</i> where they should be done, yet they aren't.<br />Are the Coalition hypocrites, deluded or in denial? I don't know and don't care - it a reasonable question for journalists to ask & pursue in the public interest, but aren't currently asking.<br /><br /><b>The full cost to the Goverment, to 2033, for the NBN is <i>zero</i>.</b><br /><br />Dividing by zero has <i>one</i> answer: <i>infinity</i>.<br /><br />Any investment that makes a return, by definition, has an <i>infinitely</i> high Cost:Benefit ratio...<br />It's simple Maths, not even high-school Maths. What's difficult with the concept?<br /><br />The "razor" question is:<i> What does BHP do?</i><br /><br />Do large mining companies run "Cost Benefit Analyses" or something else?<br />They run extensive modelling, discounted cash-flows, NPV's and finally compare options on "Internal Rate of Return" (IRR).<br /><br />NBN <i>Co</i> is a company, admittedly wholly Govt owned, but a private-sector enterprise with an ABN, tax-file number, a Board and a duty to pay taxes and return value to its shareholder(s).<br /><br />It is NOT an on-budget Government <i>expenditure</i> program, nor a Government Department/Agency.<br /><br />Is this <i>off-budget</i> investment so hard to grasp??<br /><br />There doesn't NEED to be a CBA because it's <i>wrong</i>.<br />There <i>does</i> need to be an assessment of the full-term options.<br /><br />Turnbull needs to be up-front, saying he'll compare the full-term project costs on a sound commercial basis: Internal Rate of Return, IRR.<br /><br />He ran a comprehensive spreadsheet model of his 4-way network proposal, but didn't release it, or the full-term Rate of Return and payback period.<br /><br />Why has <i>that</i> not been reported and picked apart?<br />Are journalists too ignorant, stupid or just too blinkered to understand business basics?<br />I can't see a valid reason for it not being reported or the questions not asked.<br /><br /><hr /><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><br /></div><b>2. "The <i>Cost</i> of the NBN is $37.4/$44.1 billion versus the Coalition's $20.5/$29.5 billion"</b><br /><br />Now with the "$1.6 billion" extra peak funding- all paid out of direct borrowing and still returning 7+% Rate of Return.<br /><br />Every-time this nonsense is repeated I bristle. The NBN Co <i>budget</i> has <i>nothing</i> to do with the Federal Budget, in the same way that what's owing on your house isn't important for your personal budget, only meeting the month repayments.<br /><br />There's a <i>world</i> of difference between direct, on-budget expenses and independent, off-budget investments. It's not even Accounting 101, so why don't journalists understand and report this???<br /><br />The <i>real</i> cost to the taxpayer is the on-budget costs, the interest on the loans used to provide the $30.5 Billion equity for NBN Co. While the yearly Equity owed hasn't been released, we know that it peaks in 2018 at $30.5B and doesn't start to be paid down until 2025, with full pay-back by 2033. From 2033 to 2040, it provides the "return on investment" of around $50 billion in total (7.1%/year equivalent).<br /><br />My calculation of interest on equity, for the whole on-budget cost to 2033, is <i>$12.5 billion at 2.5%</i>.<br /><br />Turnbull has never once mentioned the difference between on-budget costs directly out of the taxpayer pocket, nor how his spreadsheet model paid down the equity. There's only one statement on needed returns, and that's imprecisely worded. It could be "cashflow positive", which means it pays back interest and operational costs, but doesn't pay off the equity <i>or</i> cover depreciation.<br /><br />This <i>is</i> Accounting 101: Expenses used to calculate <i>profit</i> must include non-cash charges, like depreciation.<br /><br /><i>Profit</i> = ( Revenue - Expenses)<br /><br />Cashflow is <i>not</i> profit, as many a small business has discovered too late to prevent ruin,<br /><br />Why aren't journalists asking for the full on-budget cost to taxpayers over the <i>full</i> life of the project?<br /><br />Turnbull calculated all this in his spreadsheet model, just refused to give any details of <i>half</i> the equation (Revenues and Charges), and only released a fraction of his full model for the period 2014-2019.<br /><br />It's time that journos demanded his full spreadsheet <i>model</i> for the full life of the project. This has to include the second-phase that he's modelled, <i>the replacement of the FTTN.</i><br /><br />This is needed as a baseline for comparisons with the full FTTP Corporate Plan and the new 4-networks Corporate Plan.<br /><br />We already know he's scammed the cost of FTTP ($3600/premise, not $2350) and FTTN line ($900, excludes the Telstra lead-in etc payments).<br /><br /><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"></div><hr /><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><br /></div><b>3. "Cheaper" and "Cost-Effective" are the sole Figure-of-Merit or assessment criteria, not Rate of Return.</b><br /><br />Would you rather buy as an investment "The best house in the worst street" or "the worst house in the best street"?<br /><br />Investors know that <i>cheap</i> is not always most profitable, in fact, almost never.<br /><br />This is why Taxis are bigger, more expensive cars, not the smallest, cheapest, nastiest little cars on the market. There are so many taxis on the road, that if buying a Hyundai, Getz or other cheap piece of crap, <i>could</i> be profitable, we'd see them out there. The fact we don't is proof of: "cheap is <i>not</i> always best".<br /><br />Same for long-distance trucks. The majority of prime-movers are $250,000 or more, where alternatives that look the same on paper are available for one-third that. Truck fleet owners look well past the initial<br />purchase price to full lifetime ownership costs: running, repairs and reliability. Just <i>one</i> unscheduled breakdown may cost more in penalties than a decade's profits.<br /><br />According the Turnbull rhetoric, there is only ONE method of assessment for investments: initial purchase price (CapEx).<br /><br />Its truly idiotic and ludicrous to compare real investments without examining <i>both</i> sides of the Ledger: Revenue <b>and</b> Expenses.<br /><br /><i>All</i> the profit of the NBN is generated by the top 25% of high-demand users. The rest of us get a free-ride, either at cost or subsidised.<br /><br />The high-demand users have already shown they are very willing to pay a lot more for guaranteed faster access: they place a value on their time and lower their total costs by reducing unnecessary wait times.<br /><br />Turnbull had to have very detailed revenue forecasts to create his spreadsheet model, and those figures rested on his charging model and pricing.<br /><br />Why has the mainstream press ignored the most important part of the business equation, <i>profits</i>, focussing only on expenses while entirely ignoring the other <i>half</i> the ledger, <i>revenue</i>?steve jenkinhttp://www.blogger.com/profile/16064724730975745470noreply@blogger.com2tag:blogger.com,1999:blog-1777177917540226839.post-16505924387708002122013-09-26T15:47:00.000+10:002014-04-11T13:58:30.794+10:00For the every-person: Why you want Fibre to _your_ Premises<b>Summary<span class="Apple-style-span" style="font-weight: normal;">:</span></b><b></b><br /><br />The full Fibre NBN is the <i>biggest</i> free kick we'll be offered in our lives: <i>Grab it now or lose it forever.</i><br /><br />Businesses end up paying for the network. They will provide the cash for our cheap, reliable Internet and really fast access, because "Time is Money" - it's far, far cheaper for them to buy a high-speed service than pay the wages for time lost waiting for downloads and especially uploads.<br /><br />When you understand the technical, economic and social realities of the full Fibre NBN, you appreciate the Tony Windsor's quote: <i>Do it once, do it right, do it with Fibre</i>. It's cheaper, faster and pays for itself to boot.<br /><a name='more'></a><br /><b>Reliability</b>: Copper problems are never permanently fixed. Fibre still works when the pits are full of water.<br /><br /><b>Durability:</b> Fibre doesn't corrode and suffer electrical problems like copper. The first Australian long-distance fibre laid in 1986 is still running, carrying hundreds or thousands of times more traffic after multiple upgrades. The fibre laid in 2020 will still be running after 50 years and capable of vastly more, simply by swapping the electronics on the ends. Copper-based networks degrade faster and require many times the maintenance and more frequent replacement. They are a 1925 solution for a 2020 network.<br /><br /><b>Availability:</b> Fibre is automatically remotely tested, end-to-end, from a central location providing <i>ideal</i> monitoring and fault resolution. The NBN Techs know before you there's a problem and will initiate repair before you are aware of it.<br /><br /><b>Ubiquity:</b> More commercial services will be offered if fibre is <i>universally</i> available. That's cheaper goods and services to customer, faster service and more turnover for business. This is what the Internet is designed for: <i>doing business and creating new businesses.</i><br /><br /><b>Guaranteed and Upgradable services</b>: Fibre speeds aren't "best efforts" and variable, you get <i>exactly</i> what you pay for. The fibre doesn't provide the speed, the silicon electronics at each end do. These are cheap and already units are <i>in production</i> at not just 100Gbps, but 96 times that by sharing the one fibre. Off the shelf <i>now</i>, fibre provides anywhere from 0.1Gbps to 9,600Gbps.<i> If you want it, you can have it, without costing the earth.</i> That's a great deal for any business, researcher or hobbyist who can use high speeds.<br /><br /><b>Affordability and Utility</b>: Fibre is <i>profitable</i>, with top 25% high-demand users generating all profits and the rest of us getting a free-ride, either at cost or heavily subsidised. Speed tiers allow customers to decide how much money they want to trade for saved time, the "utility" of the service. Single data charges mean nobody is disadvantaged by where they live or how they access. Already, 30% of NBN subscribers have chosen the fastest access rate they can, years ahead of forecasts. On the copper Fibre-to-the-Node we will, presumably, be charged the same way as for current ADSL: "a random speed and one price fits all".<br /><br /><b>Uploads and Backups</b>: Your data is precious and irreplaceable, both for your business or home records, videos and pictures. The <i>guaranteed</i> fast upload speeds allow everyone to be able, and afford, to back up locally and to the cloud. Your data is available in any location, should your home or business suffer a catastrophe or be robbed.<br /><br /><b>Support services</b>: Computers can be fixed quickly by remote sharing the PC desktop with your ISP support staff. This is <i>only</i> possible with fast, guaranteed upload speeds.<br /><br /><b>Telephony and VoIP</b>: Every member of the family can have their own number and have conference calls. Decent upload speeds are needed if a couple of people are on the 'phone whilst someone else is downloading. Fibre "NTD"'s, the device installed gratis by NBN Co, come with <i>high-priority</i> network connections for your telephone, making sure you always have crystal clear calls, <i>especially</i> when the network is busy. This <i>cannot</i> happen with the Copper Fibre-to-the-Node where you plug in your own modem and take pot-luck.<br /><br /><b>New Services for Telework, TeleHealth, Aged Care:</b> Hi-Def video conference saves a lot of time and money, especially for the old and infirm, not just Teleworkers. It allows Aged Care to be delivered in-home, giving the aged cheap, easy and safe access to family, friends and community support groups. <i>The most cost-effective investment in roads is the NBN</i> by allowing effective teleworking and reducing peak-hour traffic. The Health Dept will find it considerably cheaper to provide cameras, PC's and NBN connections and <i>avoid</i> hospital or nursing home stays - but only with Fibre and their NTD's.<br /><br /><b>Safe & Reliable</b>: Fibre is safe in electrical storms and does not have a lot of sensitive, expensive electrical equipment as is needed in the Fibre to the Node network. These Nodes sit exposed to weather, fire, vandals, vehicle accidents and worse. Fibre is not going to blow up in a storm, breakdown in the middle of summer or burnout in a few years when ants, termites or mice nest inside. When the power goes out, as it will, Fibre has big batteries and backup-generators, while every Node have their own small batteries which fail within 24 hours, as Canberra residents discovered after the 2003 fires. Checking 250,000 batteries every year and replacing them every 3-4 years is a big, costly waste of time. <i>The Copper solution is barely cheaper but just won't last,</i> in fact, <i>it's designed to be thrown away.</i><br /><br /><b>Real Choice:</b> You, the subscriber, choose the speed and the plan YOU want and you receive <i>exactly</i> what you pay for. YOU, not the capricious copper wire network, decide what speed you get. YOU are in charge and choose the "model" that works for you, just like you choose the model car you want, not have it forced on you by Big Brother.<br /><br /><b>Wise Investment:</b> <i>Invest</i>, not spend, the money <i>once</i> while the interest rates are the lowest in 54 years. This is <i>literally</i> a "once in a lifetime opportunity" and should not be squandered. <i>The whole point of the NBN is that it doesn't cost the taxpayer anything!</i> Rather the reverse, by 2040 it will have <i>made</i> $50 billion in profits that the Government gets to spend, not have to raise new taxes for. We don't know if the Copper Fibre to the Node network will even break-even, let alone make a profit. If it is "more affordable", it cannot be "more profitable" as well. Unless it's all given to Telstra, who'll make sure we all pay through the nose, as they've done since deregulation in 1992.<br /><br /><b>Equity</b>: A Universal commonly-priced Fibre NBN is equitable for all, especially rural, regional and remote subscribers. Subsidising, via network charges, those in the country who will benefit most from faster, more reliable networks is more economically efficient and "Cost-effective" than "direct Government subsidies". It's more efficient to charge a few percent more for those in urban areas and 30%-50% less in country areas than taxing urban dweller at higher rates, collecting that tax and then paying it to those "in need". There will also be inevitable inequity, some people getting subsidies they shouldn't and others needing them, not getting subsidies. <i>Do it once, do it right, do it with Fibre, and the same price for everyone!</i><br /><br /><b>It "Just Works", not "works, just"</b>: "Shared media" networks, like wireless 3G and Cable HFC, have huge problems with contention ratio and performance. Everyone tries to talk at once on the same thin wire. You might have 100Mbps, but it could be shared with 50 or 100 other people. When the school buses get home, kiss goodbye to your internet. With "shared media", throughput and latency <i>cannot</i> be guaranteed.<br /><br /><b>A personal view from South Australia:</b><br /><blockquote class="tr_bq">I heard about a couple who drove to his mother's place in a country town to make a video call for an overseas job interview because they didn't have a reliable internet connection at their home. [He got the job because of it.] </blockquote><blockquote class="tr_bq">In Adelaide we have suburbs flooded every year in heavy weather and the 'phones don't work, sometimes for a couple of weeks. </blockquote><blockquote class="tr_bq">Beach side suburbs have their Telstra pits filled with salt water. This happens in Port Pirie too with its levies that keep seawater <i>out</i> and flood water <i>in</i>.</blockquote>steve jenkinhttp://www.blogger.com/profile/16064724730975745470noreply@blogger.com0tag:blogger.com,1999:blog-1777177917540226839.post-44102072144216611482013-09-26T14:14:00.000+10:002014-04-11T13:58:30.850+10:00Ziggy Switkowsky: No Rocket Scientist<a href="http://www.abc.net.au/worldtoday/content/2013/s3845194.htm">In the assessment yesterday of ABC business reporter, Peter Ryan</a>:<br /><blockquote>In the world of telecommunications, it's hard to find a more experienced local operator than Ziggy Switkowski. </blockquote><blockquote>The one time nuclear physicist is a former chief executive of Telstra and before that he ran Optus and the Australian operations of Kodak.</blockquote><blockquote>On paper, it's a formidable CV. <i>But more importantly, his Liberal Party connections run deep. [emphasis added]</i></blockquote>Malcolm Turnbull was quoted as saying:<br /><blockquote class="tr_bq">He's obviously highly qualified and I think most people would think it would be, would regard him as an eminently suitable person. But no decision has been taken by a Coalition government because as, not least because we haven't even been sworn in yet. </blockquote><b>Is any of this true?</b><i> I don't think the facts support the proposition that Switkowski is either competent or experienced enough to successfully lead NBN Co. He's failed <u>twice</u> in local Telcos.</i><br /><a name='more'></a><br /><br /><a href="http://en.wikipedia.org/wiki/Ziggy_Switkowsk">Ziggy's Wikipedia</a> page tells us he studied and researched Nuclear Physics until age 30, when he joined Kodak (Australia), working there for 18 years, rising to Managing Director and Chairman for 4 years, with a $3.5 million severance. The same Kodak that received a massive government bail-out and is now defunct.<br /><br />Ziggy's time at Optus, replacing the foundation CEO, Bob Mansfield was brief, <a href="http://www.cwu.org.au/telecom/ctel110.htm">May 1996 to 13-Jun-1997</a>. Hardly a CV enhancer and never cited by him, such as <a href="http://www.suncorpgroup.com.au/our-leadership-team/zygmunt-e-switkowski">Suncorp</a> or <a href="http://investing.businessweek.com/research/stocks/people/person.asp?personId=222174&previousCapId=881761">Bloomberg Businessweek</a>.<br /><br />Ziggy joined<a href="http://www.theage.com.au/articles/2004/04/14/1081838792100.html?from=storyrhs"> Bob Mansfield</a> at Telstra in Sept 1997 as "Group Managing Director, Business & International until replacing Frank Blount as CEO in Mar 1999, contracted until Dec-2007. Mansfield was Telstra Chairman from 2000-2004.<br /><br /><a href="http://www.theage.com.au/articles/2004/04/14/1081838792100.html?from=storyrhs">Mansfield's qualifications</a> for CEO of <a href="http://www.hoovers.com/company/SingTel_Optus_Pty_Limited/jrryti-1-1njhxk.html">Optus</a>, and presiding over the <a href="http://en.wikipedia.org/wiki/Optus#The_Hybrid_Fibre-Coax_Rollout">multi-billion debacle of the Cable TV/HFC rollout</a>, started as CEO of MacDonalds and MD of Tyco investments After Optus, he went on to be CEO of Fairfax for a year. In 1997, he was given a senior political appointment by Prime Minister John Howard: 'major projects facilitator'.<br /><br />The 1995-1997 HFC rollout passed an estimated 2.5M premises, 80% duplicated and cost an estimated $6-$7 billion between Optus and Telstra. <a href="http://stevej-on-bband.blogspot.com/2013/08/nbn-need-broadband-now-in-coffs.html">By 2000, over $4 billion was written off</a>.<br /><br /><a href="http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aXd_QyArwHFY">However, Ziggy stepped down <i>three years early</i> after very poor performance:</a><br /><br /><blockquote class="tr_bq">Dec. 1 2004 (Bloomberg) -- Ziggy Switkowski quit as chief executive of Telstra Corp., Australia's largest phone company, ending a five-year tenure where he presided over a 42 percent slide in the share price and more than A$2 billion ($1.5 billion) of losses from a failed expansion in Asia. </blockquote><blockquote class="tr_bq">The resignation of 56-year-old Switkowski comes seven months after Bob Mansfield quit as chairman, following the board's rejection of a plan by the pair to bid A$3.5 billion for John Fairfax Holdings Ltd., the nation's second-biggest newspaper publisher. Switkowski will leave by July 1, Telstra said in a statement.</blockquote><br /><blockquote>Switkowski, who spent more than $5 billion on acquisitions as chief executive, according to data compiled by Bloomberg, abandoned the expansion strategy in June in favor of returning A$4.5 billion to shareholders through buybacks and increased dividends during the next three years. </blockquote><blockquote>Switkowski led Telstra's expansion into Asia, which was marred by more than A$2 billion in losses. The company last year wrote off its investment in Reach Ltd., an undersea cable venture with Hong Kong-based PCCW Ltd., which was once valued at A$965 million. </blockquote><blockquote>He had staked his job on achieving at least 4 percent growth in domestic sales, the industry average, by 2006. Domestic sales rose just 1.7 percent to A$19.3 billion in the fiscal year ended June 30. </blockquote><blockquote>The former government monopoly's share of the telecommunications market fell to 60 percent from 75 percent under Switkowski, according to independent industry researcher Paul Budde Communication Pty Ltd.</blockquote> Ziggy successor at Telstra, Sol Trujillo, in 2005, just 6 weeks after assuming control, <a href="http://stevej-on-bband.blogspot.com/2013/04/nbn-deconstructing-2005-trujillo-howard.html">gave a very frank presentation on the parlous state of the business and it's bleak commercial outlook</a>. Without direct criticism of the previous management, Trujillo made it very plain they had performed <i>very</i> badly: 13 of the first 15 slides detailed the problems, describing it as a "meltdown" and adding there had been at least $2 billion of under-investment in the network, both Capital and Operational expenditure. [<a href="https://docs.google.com/file/d/0B1GLdfqdwpNQNF9ERHF0RktVeGs/view">slides 8 & 14</a>].<br /><br />Trujillo's pitch at the time, <i>guaranteed</i> to address the business's problems, was a $4.7 billion injection of government money into a National Broadband Network, with Telstra fully in control. The Howard government had the chance to change history, fix the Telecommunications market and structurally separate Telstra and forcefully rejected it.<br /><br />Trujillo was forced into an ambitious and extensive modernisation programme of all aspects of Telstra's business. Not unsurprisingly, Trujillo and his team failed to meet all their goals and <a href="http://stevej-on-bband.blogspot.com/2012/10/tls-sol-trujillo-telstra-legacy.html">created a lot of criticism, including mine</a>. Perhaps Trujillo did very well as an import 'parachuted' into a highly dysfunctional and internally riven organisation. He certainly set the business up for David Thodey and the doubling of the share price since the NBN agreements were signed.<br /><br />The <a href="http://www.cwu.org.au/telecom/ctel110.htm">Communications Workers Union</a> has a unique take on the business and people of the time, including some comments on the internal factions within Telstra management and their view of the Howard agenda.<br /><br />One time Liberal Communications Minister, Richard Alston, <a href="http://www.theaustralian.com.au/opinion/one-telco-behemoth-replaces-another/story-e6frg6zo-1225704138264">weighed into the NBN debate in early 2009,</a> but interestingly describes the massive failure in the Telecommunications market on his watch:<br /><blockquote class="tr_bq">So when in 1994, in partnership with leading US cable operator Continental Cablevision, Optus unveiled a brand new<i> $4 billion hybrid fibre coaxial cable network</i> to take on the slumbering giant, there was cause for serious optimism. </blockquote><blockquote class="tr_bq">But Telstra quickly adopted a classic defensive strategy and built a parallel network, which almost bankrupted the new entrant. This experience undoubtedly had a searing demonstration effect, sufficient to deter other international challengers and since the tech wreck of April 2000 there has been a dearth of any serious direct facilities-based competition, despite a fundamentally new regulatory regime introduced in 1997 with the support of both main parties.</blockquote><b>Summary</b><br /><br />Switkowsky didn't just get turfed out of <i>one</i> Telco for over-promising and under-delivering, but <i>two</i>, Optus and Telstra.<br /><br />He was unqualified to run Telstra and inexperienced in Telecommunications in 1999. Nothing has changed since 2004. It took a <a href="http://stevej-on-bband.blogspot.com/2013/06/nbn-hawke-v-malby-turjillo-v-howard.html">real Telco exec, Sol Trujillo (cf Maltby & Quigley)</a>, to understand the problems and solutions and start to execute on them - starting with standing up to the bully boys in the Howard Government.<br /><br />Bob Mansfield, his mentor and ally, also has demonstrated poor commercial judgement running <i>two</i> Telcos, but his career path under the Liberals shows that who you know and what you believe are far more important than<br /><br />And what of Ziggy's judgement in his own field, Nuclear Science?<a href="http://www.abc.net.au/7.30/content/2011/s3163783.htm"> In 2011</a> he was telling us that<a href="http://nuclearhistory.wordpress.com/2012/08/31/threat-from-meltdown-only-minor-ziggy-switkowski-fmr-head-ansto/"> the threat of meltdown at Fukushima was only minor and more nuclear reactors should be built.</a><br /><br />The Japanese government<a href="http://www.economist.com/news/asia/21586570-shadow-fukushima-worlds-worst-nuclear-disaster-after-chernobyl-hangs-over-japans-energy"> has just shutdown the last nuclear reactor in Japan</a>, despite their reliance on them, domestically and industrially, for electricity. <a href="http://www.abc.net.au/news/2013-09-19/fukushima-operator-tepco-ignored-advice-two-years-ago-to-contro/4968614">Groundwater contamination and pollution of the sea</a> are still unresolved problems for Tepco, the owner/operator of the triple meltdown at Fukushima.<br /><br />Switkowsky's unbridled enthusiasm and naive optimism on Nuclear power in the face of overwhelming contrary evidence seems to me to provide more evidence of poor judgement and a lack of critical analytical abilities.steve jenkinhttp://www.blogger.com/profile/16064724730975745470noreply@blogger.com0tag:blogger.com,1999:blog-1777177917540226839.post-48848578967621703252013-09-23T12:28:00.000+10:002014-04-11T13:58:30.862+10:00The death of NBN Co: OZ Telecoms permanently screwed.<a href="http://www.businessspectator.com.au/article/2013/9/23/information-technology/nbn-board-has-run-away-why">Alan Kohler today gives Ziggy advice </a>on accepting the "hospital pass" which is the NBN Co CEO/Chair role. He's forgetting that Ziggy presided for 5 years over the meltdown of Telstra's PSTN business and ran a strong under-investment strategy for the Howard Government. We <i>know</i> this because Sol Trujilo penned these words just 6 weeks after assuming control in 2005.<br /><br />An aside on Kohler: I'm starting to think he's "a fool or knave, or both".<br /><br />He has never asked the most important, and obvious business questions of Turnbull, perhaps because he now works for News/Murdoch, perhaps because he's a dyed-in-the-wool Conservative:<br /><ul><li>What's the on-budget cost, the interest on loans, over the <i>full</i> life of your Plan?</li></ul><ul><li>What's the pay-back period and Rate of Return (IRR) of the Turnbull NBN Plan?</li><ul><li>Which should've led to "where's your <i>full</i> spreadsheet/model to 2040, not just 2014-2019?"</li></ul></ul>That Kohler let himself be distracted and misdirected by Turnbull's technical B/S means he was in-league with Turnbull and the Conservatives or simply doesn't understand business. Given he made many millions from selling out to Rupert, he just might be a competent businessman.<br /><a name='more'></a><br />Ziggy does what he's told and is happy to do so, I've written about the differences between him and real Oz Telco CEO's with backbone: George Maltby, Sol Trujilo and Mike Quigley.<br /><br />Somehow under the Turnbull Plan, all the cheap/easy work will be done privately (and NBN won't 'overbuild' because that's not 'cost-effective' when an area is already 'fully serviced') while NBN Co becomes "supplier of last resort" and gets ALL the most expensive and least profitable installs.<br /><br />It is NOT possible for NBN Co to make a profit under these conditions, but Ziggy has already presided over the foreseeable and preventable <i>meltdown</i> of one Oz Telco, Telstra, and we know both what's coming and why he's been chosen.<br /><br />My prediction for the "free competition" and "cost-effective" policies of Turnbull:<br /><ul><li>Telstra will move quickly and offer a residential FTTN network in the cheap and profitable areas, with other players taking the MDU market (30% of services at just 4% of street addresses. Neatly clustered.)</li></ul><ul><li>TPG, OpenNetworks and a very few other "well-connected" businesses will dominate the large apartment complex market, with a few smaller players taking a share of the mid-sized apartment market.</li><ul><li>This is because "management agents" used by Body Corporates are the gatekeepers to almost all apartment blocks.</li><li>Telcos need only sign <i>one</i> management agent to control huge portions of the MDU market.</li><li>In return for a sweet commission, the Telco's will get exclusive long-term access to the <i>private</i> wiring inside the building.</li><li>The trouble for other Telcos is that access within the complex is <i>privately</i> owned. It is ONLY equal access to the network interconnection point.</li></ul></ul><ul><li>NBN Co will be left with the most expensive, least profitable crumbs, making it impossible for them to provide a single, low wholesale price or cross-subsidise the expensive services and service their debt.</li></ul>To me the resignation of the NBN Board says they won't be the fall guys for <i>when</i> NBN Co goes broke, as it <i>must</i> and as Turnbull has always known that it must, under his Plan.<br /><br />Think about the 3 networks NBN Co is building and why they're building them - if the Operational rules are changed, NBN Co won't make a profit, no profit = can't pay bills = liquidation = "Told you so, <i>worst Govt ever</i>".<br /><br />Which is really cynical, vindictive and an appallingly deliberate waste of taxpayer money, not to mention destroying the future productivity and competitiveness of the nation. What do they care, so long as their masters' agenda is met?<br /><br />Costs of the 3 networks:<br /><ul><li>93% FTTP. - upper-limit set by cost of next technology, $300 - $2,400/premises (+$1,100 leadin)</li><li>3% Fixed Wireless - roughly constant price per premises ~$3,500/premises</li><li>4% Satellite. constant price for system + cost for dish, ground station and install. >$3,500</li></ul>The single price is only possible because of cross-subsidies.<br />Allowing "competition" kills the economics of the 93%, which kills the cross-subsidies.<br /><br />This is why LNP will push for different pricing "in the bush" and has promised to give out explicit (taxpayer funded) subsidies to them.<br /><br />It's a really, really bad model:<br /><ul><li>there's nothing to protect rural/remote subscribers from lowering/withdrawal of the subsidy.</li></ul><ul><li>it's economically inefficient to give savings to one group, collect taxes from them, then redistribute the taxes to a small group.</li></ul>The cross-subsidy is efficient and effective because it happens at source within the cashflows of one commercial entity, but doesn't put money in the hands of Mal's Mates, so <i>cannot</i> be allowed.<br /><br />History might show this <i>one</i> decision to be the worst economically, socially and politically that has <i>ever</i> been made in Australia. There is NO coming back from an eviscerated NBN Co. Once they are prevented from executing a universal roll-out of Fibre, it <i>can</i> never happen again. Like Banks and Insurance companies, the majority of customers never change Telcos, especially for fixed-line, it's just too hard for customers.<br /><br />A rational, national wholesale network <i>can</i> never happen after the market is fragmented into a zillion pieces. Nobody will ever again be able to get sufficient coverage and market share to rollout a single network. Not even Telstra.<br /><br />The Balkanisation of Telco access to premises, with areas controlled by just one provider, will create the worst possible commercial outcome with the highest possible prices for retail customers. Turnbull's "Competition" model is the exact opposite, it's a set of <i>permanent</i> monopolies handed to the favoured few.<br /><br />The Liberals are the "party of business", but have an almost complete disregard for small, even medium business. They are the political wing of the <a href="http://www.ipa.org.au/">IPA</a> and the Sydney & Melbourne clubs: Abbott and Co are executing the wishes of their corporate masters, not providing the best outcomes for the populace.steve jenkinhttp://www.blogger.com/profile/16064724730975745470noreply@blogger.com8tag:blogger.com,1999:blog-1777177917540226839.post-81159509454760458182013-09-17T13:22:00.000+10:002014-04-11T13:58:30.918+10:00The ALP "arms-length" direction of NBN Co. and the NBN tenderThese comments, republished with permission, are from a<a href="https://plus.google.com/117364153071764012642/posts/5AiwL9Xbo7R">n I.T. consultant and small business owner</a>. They are exactly the sort of person that <i>should</i> be in the Liberal heartland and a vigorous supporter of the Coalition NBN. Minor edits and added emphasis.<br /><blockquote class="tr_bq">... while the ALP did <i>frame</i> the parameters, <b>they only did so as a result of expert advice</b>; the politicians and bureaucrats had zero input on actual cost estimates or technical targets, <i>all they did was choose to take the expert advice they had paid for</i>.</blockquote><blockquote class="tr_bq">Plenty of governments have been criticised by the opposition for performing an enquiry and then ignoring the recommendations, so why does the LNP have such a huge problem with the advice of experts qualified in the area?</blockquote><blockquote class="tr_bq">In fact, the LNP have heavily leaned on their FTTN choice when that decision does appear to have been chosen by politicians and their advisors in absence of actual professional advice. </blockquote><blockquote class="tr_bq">Otherwise, they would be waving around their own enquiry/professional investigations where actual experts (not partisan "know it alls" who barely understand the debate) have done a thorough analysis of the engineering, costs, time line and finance involved and recommended FTTN as the best, most economically sensible solution for Australia's telecommunications needs. </blockquote><blockquote class="tr_bq">Show me the engineers and infrastructure designers who would sign off on that and I'll show you someone who has just ruined their future career prospects...<br /><a name='more'></a></blockquote><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">I'd add that the "Kevin '07" campaign promised $4.7 billion, the 2005 figure requested by Telstra, would be <i>given</i> to the preferred tenderer, a direct cost to the taxpayer with NO returns. The non-political evaluation committee rejected the Telstra bid as it was "non-compliant", then rejected all others as "commercially unviable". Without Telstra involved, any FTTN project was doomed to failure, a situation that hasn't changed, only worsened.</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><br /></div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">The <i>expert</i> committee, including Economic and Business experts, advised the Government a) an FTTN without Telstra was doomed to failure as having to <i>rent</i> the Copper from Telstra would make it unviable commercially and b) investing in a stop-gap solution and improving an asset they didn't own was a gross waste of taxpayer money.</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><br /></div>Contrary to the LNP assertion that the FTTP plan was worked out on a coaster or napkin on a plane trip, it resulted from detailed analysis and advice from a team of relevant, cross-disciplinary experts. It certainly came as a surprise to the LNP and electorate.steve jenkinhttp://www.blogger.com/profile/16064724730975745470noreply@blogger.com4tag:blogger.com,1999:blog-1777177917540226839.post-54387931106938180002013-09-16T11:14:00.000+10:002014-04-11T13:58:30.938+10:00Turnbull still doing "rant-o-matic"The election is over, Turnbull's team won and now there's nobody to tear down and oppose. He's now "The Man".<br /><br />Does Turnbull engage his civil, rational, considered side, looking for support & consensus? No, he continues his mindless ranting, <a href="http://www.malcolmturnbull.com.au/media/the-importance-of-telling-the-truth-especially-if-you-are-a-lecturer-in-com#.UjWAeCie2J5">this time attacking <i>yet another</i> private citizen</a>. This puts on display his very poor judgement and lack of control, raising the question: <i>Is Turnbull a fit and proper person to be a Minister of the Crown?</i><br /><br />Less than a week after the election, Turnbull has already forcefully rejected the normal democratic process, <a href="http://www.malcolmturnbull.com.au/media/our-nbn-policy">pillorying the largest ever on-line petition.</a> Apparently, a group so large that it would've changed the election outcome, is irrelevant in his mind. The fantasy of "we have a mandate" prevails.<br /><br />I haven't read the full <i>rant</i>. The wonderful irony is Turnbull, the master of misdirection and deception, is yet again calling on someone uninvolved and with nothing to gain, to "tell the truth".<br /><br /><a href="http://delimiter.com.au/2013/04/12/turnbull-openly-lying-about-nbn-says-conroy/">On 12-Apr-2013, Turnbull was written up on a high profile Technology site as <i>openly lying</i></a>, something he has never addressed, never asked to be retracted, never asked for an apology over and, given his legal background and contacts, has never pursued a defamation action on. In law, "silence is assent", meaning this non-action is an admission of the allegation by Turnbull.<br /><a name='more'></a><br /><br />Given Turnbull's aggressive, combative nature, if he had the <i>least</i> grounds or chance of winning a suit, he'd have pursued it.<br /><br />This is what Renai LeMay of Delimiter wrote:<br /><blockquote class="tr_bq">This is very much the definition of lying: <i>There is intelligent awareness of an intent to deceive.</i><br />In my professional opinion as a journalist, Conroy is right: <i>Turnbull is lying about the cost of Labor’s NBN. [emphasis added]</i></blockquote>So, the man who admits to lying about the NBN, is extorting <i>others</i> to tell the truth. Sheer hypocrisy and complete arrogance.<br /><br />This is how Turnbull finishes his rant:<br /><blockquote class="tr_bq">The strategic review will consider all those matters - <b>openly and honestly. No spin. No politics. Just hard facts.</b> And that will make the debate much better informed. [emphasis added]</blockquote>Turnbull has demonstrated he's a liar and hypocrite, that his words and judgement are not to be trusted, and that all he knows is attack, attack, attack.<br /><br />Will his "open and honest" review be any more revealing than his NBN Policy? Will his responses to questions on "hard facts" be yet another tirade of abuse and invective? Not on current evidence.steve jenkinhttp://www.blogger.com/profile/16064724730975745470noreply@blogger.com3tag:blogger.com,1999:blog-1777177917540226839.post-57225556802454900062013-09-15T14:48:00.000+10:002014-04-11T13:58:30.995+10:00Turnbull's Fantasy: The Copper Fairy will come in the night and fix everything.One of the consolations of losing the All-Fibre NBN (for the 93%) will be watching Turnbull's political career unwind.<br /><br />Will his leaving politics be gracious and dignified like Julia Gillard or the mother of all dummy-spits? With his sharp tongue and unlimited belief in his ability and infallibility, I'm looking forward to the dummy-spit.<br /><br />Turnbull delivered for the Libs in the election campaign with a "blocking" move: the NBN was removed as an election issue, regardless of what the <i>real</i> Coalition plan is. There is probably <i>nobody</i> else that could have done this, which for me, raises deep questions about Turnbull's integrity and character. He was very happy to destroy the current NBN for a political end, can anything he says now be trusted?<br /><br /><a href="https://twitter.com/rwerkh/status/379039175153950720">This tweet by RickW</a> (on the Tooth Fairy theme) reminded me of one of the "drop dead" project risks of a (<i>Telstra</i>) Copper Node Plan: <i>First, stocktake the assets and audit the records/database to see if the plan is still even <u>possible</u>.</i><br /><a name='more'></a><br /><i><br /></i>I've <i>never</i> seen an estimate for this <i>additional</i> cost of the Turnbull Node Plan, either in time or money.<br /><br />It's somehow magically assumed by the all-encompassing $900/port and "will take no time at all". Just ask Turnbull, as if he's ever going to provide any actual numbers (put your fireproof suit on, if you do ask).<br /><br />Turnbull would like us to think the opposite of what's true, the "counterfactual" spell:<br /><br /><ul><li>he's experienced in dealing with Telstra, not just as a <i>customer</i>, but as a regulator or peer acquiring their assets <i>when he doesn't</i>, and</li><ul><li>[Telstra play "hard-ball", ask Senator Conroy]</li></ul></ul><ul><li>he has Big Project, even Telecommunications, experience, <i>when the most he's done is push paper and sign cheques for an antiquated email provider, small by current standards. </i></li><ul><li>[Ask BHP about the surprises in Big Projects. They are <i>hard</i> and sometimes even the best and brightest have to walk away. <i>Size Matters</i>, Experience is necessary.]</li></ul></ul><br />We already know there are two large significant and uncosted parts of the Turnbull Node Plan: <i>remediation</i> and <i>reconfiguring</i> the <i>Telstra</i> copper Customer Access Network (CAN), the last 800m that he desperately needs to work.<br /><br />In <a href="http://www.telstra.com.au/abouttelstra/download/document/tls385-technologybriefing.pdf">2005</a> and <a href="http://www.telstra.com.au/abouttelstra/download/document/tls652-NBNtechnologybriefing.pdf">2008</a> Telstra went on record with real plans for a Fibre to the Node network where their first priority was <i>remediating</i> the <i>Telstra</i> Copper network, including removing all pair-gain systems (8500 RIM/CMUX's out there) and "bridge-taps". In 2007 we learned <a href="http://transition.accc.gov.au/content/item.phtml?itemId=797540&nodeId=ee686233c64f9ebf7d2febc1ae811939&fn=Telstra%20submission%20in%20response%20to%20ACCC%20discussion%20paper%20on%20FANOC%20SAU%20(27%20Aug%2007).pdf">in a Telstra response to the G9/FANOC proposa</a>l, they needed to <i>reconfigure</i> the (Telstra) copper to make <i>nodes</i>, not exchanges, the centre of each "distribution area", reducing the number of nodes by 30%-40%.<br /><br />In 2005, 12Mbps at 1500m to Metro-only customers was an appropriate solution. It seems Turnbull and the Liberal Party didn't get the memo<i> that it is now 2013</i> and both demand and technology have moved on many-fold. The "window of opportunity", where an FTTN could be economic and technically feasible, has long shut.<br /><br />Before <i>anyone</i> can move building an FTTN, an audit of the <i>whole</i> line records database is required (20-50 million records) to reach <i>acceptable</i>, not perfect, "data quality", a "ground-truth" survey to get the database in sync with Reality and an assessment of the condition of <i>every single metre</i> of the 100-200 million pair-kilometres of the <i>Telstra</i> copper network.<br /><br />To "fix the worst first", you first need to <i>identify the worst</i> and then define a test to "fix, replace or go Fibre?". There are at least 200-250,000 cable-km in those 800m passing 75% of fixed-lines Turnbull wants to thrown down the FTTN well? Compare this to the 208,000 cable-km in the <i>whole</i> FTTP rollout of NBN Co.<br /><br />To survey the last 800m in one year, Turnbull needs to <i>examine and test</i> 1,000 cable-km <i>every day</i>. How big a team does he need? <i>Thousands?</i> How good will the results be? <i>Variable</i>. (If you rush, the results will be incomplete and/or inaccurate. If your intent is complete, correct records then rushing makes that impossible.). Where will he find that number of spare, skilled and competent contractors? <i>Not in Australia.</i><br /><br />What's that 100,000 "man"-years going to cost Turnbull? <i>$10 billion a time, because it has to be repeated</i>. Remembering that he's not included either the cost or delay in his (public) plans...<br /><br />The problem for Turnbull is, that unlike Fibre, the <i>Telstra</i> Copper Access Network is in a constant state of flux. <i>As soon as an audit and "reality-check" are done, they are out of date. Guaranteed.</i><br /><i><br /></i>Turnbull has to pay <i>twice</i> for a <i>complete</i> database audit, ground-truth survey and line test:<br /><br /><ul><li>Once before planning can get underway, and</li><li>immediately prior to cutting the <i>Telstra</i> copper in <i>every</i> Distribution Area.</li><ul><li>The second audit and survey/test is hidden in the cost of works.</li><li>Starting from better quality data, the cost is 25%-50% of the first audit.</li></ul></ul><br />There's also the small matter of doing all this again in 10 or 20 years when the <i>Telstra</i> Copper is finally retired and replaced with Fibre. That's written in the Coalition NBN Plan, they choose to not emphasise it. That additional $10 billion audit and survey of all premises has to be added, along with the deliberate wastage or "CapEx Reuse", to the budget of the Coalition NBN Plan. What's another $10 billion for the taxpayers to cop?<br /><br />I know that it took 6 months for a major bank to have it's 120,000 network devices audited/checked when new network contractors were hired. Their records were 60%-70% accurate and these had been used for <i>billing</i>. The number of sites was a tiny fraction of the 9 million premises Turnbull wants to cover.<br /><br />One of the first delays for NBN Co was "simply" creating an accurate premises database. The street address of every service in Australia:<i> this wasn't available before NBN Co created it</i>. <i>Wouldn't you expect the Telstra records to already have that?</i> This is <i>proof positive</i> that as recently as 2011, the line record database was inaccurate and inadequate for <i>any</i> major project, especially for an FTTN.<br /><br /><b>But there's more...</b><br /><br />As RickW points out, what Telstra is giving NBN Co to run Fibre for the current $11 billion is <i>prepared ducts</i>.<br /><br /><i>This is necessary for the Turnbull Node Plan rollout as well.</i><br /><br />After the audit, survey and test, before the remediation and reconfiguration of the <i>Telstra</i> Copper Access Network, the pits, pipes and ducts must first be "prepared", but that's code for <i>repaired and remediated</i>. The Copper Access Network is two separate parts: <i>the cables and the access-ways</i>. If you can't run the new Fibre to the Node or fix <i>and</i> reconfigure the (Telstra) Copper distribution pairs, then you can't build your FTTN.<br /><br />Turnbull might be happy he's duped the public with his uncosted "NBN Lite", but he's also completely ignorant about the real size, costs and schedule of <i>any</i> project touching connections to <i>every</i> premise in Australia.<br /><br /><i>Size Matters.</i> "Getting to scale" is difficult and requires great skill, ability and experience.<br /><br />This is why Google, Amazon and Apple have survived while <i>hundreds</i> of "wannbe" competitors have fallen by the way in the last 15 years: <i>Execution at 'scale' is hard</i>. Something Telstra <a href="http://www.telstra.com.au/abouttelstra/download/document/tls652-NBNtechnologybriefing.pdf">knows and has warned of [slide 12&18]</a> many times.<br /><br />Turnbull and his advisers simply don't have the experience or ability to complete or control an FTTN project, let alone get it done on-time and on-budget. But worse, <i>they don't even know they don't know.</i><br /><br />It's the taxpayer that is going to pick-up the tab for Turnbull's <i>inevitable</i> failure and <i>we</i> will have to wear the decade or two wait for better Broadband. Australian Business Productivity, and hence Competitiveness, will suffer and we will get even further behind the rest of the world. <i>The all-Fibre NBN is simply a catch-up, not an overtake.</i><br /><br />If Turnbull's magical "Cost Benefit Analysis" doesn't uncover these <i>drop-dead</i> project risks and predictable schedule challenges, then we'll know it was just a predictable sham and smoke-screen.<br /><br />The Turnbull Node Plan is based on the Copper Fairy coming in the night and magically transforming <i>decades</i> of neglect and decay into a bright, shining new network. Telstra knows this and will lead Turnbull a long and merry chase, extracting tens of billions <i>in taxpayer dollars</i> in the process.<br /><br />Remember back to late 2001 when the World Trade Centre came down and Ansett Airlines were stopped from flying. QANTAS kept "negotiating" with them to wet-lease their fleet (planes, fuel, crew, facilities) until the clock was run out and Ansett lease payments were due, forcing the company into liquidation.<i> Who saw that coming?</i> [A: Everybody but the Ansett management, seemingly.]<br /><br />Just as Ansett were blind-sided by QANTAS, Telstra will 'take' the Coalition government for everything they can, forcing Turnbull to be sacked and rightly pilloried for his failure. The recriminations and fireworks within the Liberal Party will be quite something to watch. Not useful or helpful to Australian voter and taxpayer, but at least some sort of recompense for destroying our future.<br /><br />The two guaranteed outcomes of the Turnbull Node Plan: <i>Telstra will do well out of it! And the taxpayers will pay billions of ongoing dollars more than the full fibre scheme would have cost.</i>steve jenkinhttp://www.blogger.com/profile/16064724730975745470noreply@blogger.com2tag:blogger.com,1999:blog-1777177917540226839.post-71658128238413066152013-09-14T10:58:00.000+10:002014-04-11T13:58:31.009+10:00The Real Deal on the Coalition NBN: same price, worse outcomes.The reason the ALP Government, not private industry, <i>had</i> to build an NBN is because the Coalition deliberately screwed-up both Broadband and Telecommunications. In the early 1990's, Telstra had plans, within it's normal budget, to rollout Fibre to all homes by 2010. In 2005, Telstra wanted to build a node-based NBN by 2010. What happened is <i>solely</i> the failure of the Liberal & National parties to make proper decisions.<br /><br />Over the decade 1997-2007 when action was needed and the private sector could have delivered, they didn't just sit on their hands, they did <i>exactly</i> the wrong things: ignoring Broadband, privatising Telstra unseparated and not implementing legislation to create strong competition in Telecommunications.<br /><br />For the Coalition to now want Broadband "sooner" is hypocritical and disingenuous.<br /><a name='more'></a><br /><br />The ALP created a new type of Public-Private Partnership where they leveraged the historically low interest rates, "patient" capital for long-term support and the Government's ability to accept low returns.<br /><br />The NBN is built exactly like a Tollway/Motorway: someone else builds it, runs it and charges the public, <i>then the asset is handed back to the Government</i>. The sole difference is that the Government has contributed most, not all, the Equity - and it gets paid back in full with handsome dividends.<br /><br />The <i>real</i> cost to taxpayers is the interest on the Equity funds: $12.5 billion until 2033 when its paid back. Then we get <i>another</i> $40-$45 billion in dividends by 2040.<br /><br />The Budget to build the NBN doesn't concern the Government, it's NOT on their books. Whether it costs $30 billion, $40 billion of $50 billion to build the NBN<i> does not matter to the taxpayer</i>. What matters is what comes out of their taxes every year and that NBN Co doesn't just break-even, but pays back the Equity.<br /><br />The Turnbull Node Plan is a tissue of lies. Here's how:<br /><ul><li>The real cost to taxpayers of the current plan is only $12.5 billion, yet the Coalition has never released their estimate of this cost, or even if their NBN Public-Private Partnership will payback the Equity. Over 20 years to 2033, this is $40 billion in interest and $30 billion in loans,<b> putting the taxpayer at risk of a $70 billion loss from the Fibre to the Node Plan.</b></li></ul><ul><li>The Coalition NBN <i>Budget</i> is unbelievable:</li><ul><li>If their claim to only change one thing, 75% of fixed-lines are Copper/VDSL2, then that's <i>only $12 billion</i> of the Budget. <i>Yet Turnbull claims savings of $17 billion after spending $8 billion on building the FTTN</i>. It's a complete fantasy.</li><li>On top of this, the Coalition plans to throw-away the FTTN, destroying <i>half</i> of its investment. That deliberate and planned waste of $4 billion is never included.</li><li><b>At the best, a Copper FTTN costs the same as the current full fibre, and will only be complete a year earlier.</b> This is not the <i>deal</i> of a lifetime, but the <i>con</i> of a lifetime.</li></ul></ul><ul><li><i>All the NBN profits are generated by the top 25% of users</i>, the rest of us get services <i>at, or below, cost</i>.</li><ul><li>This happens because usage is exponential. The top 1% of users download 50% more data than the entire lower 50% (10% vs 6.42%).</li><li>Higher speeds allow those, like businesses, who place a dollar value on their time, to reduce total costs. Wages are far, far higher than Broadband rental.</li><li>The NBN take-up and income is already 18-24 months ahead of Budget. It is <i>spectacularly</i> successful financially.</li></ul></ul><ul><li>The Coalition hasn't released the charges they used in their model, nor contradicted they'll use "One speed, one Price" charging, rather than the tiered pricing model.</li><ul><li>Because businesses make up 48%-49% of ISP connections, they <i>need</i> to be able to get guaranteed speeds anywhere, not just "designated areas". Wages lost waiting for downloads and uploads is many, many times the monthly broadband rental.</li><li>NBN Co currently charges wholesale prices of $24 - $38 for the same line, soon this increases to $150. <i>"Tiered pricing" reduces the entry-level costs at least two-fold,</i> increases profits and allows customers, who want, to pay more for something they value: <i>time savings.</i></li><li>Contrary to Turnbull's assertion of "nobody <i>needs</i> more than 25Mbps", the <i>real</i> income figures of NBN Co released on 19-April, show that 31% of consumers are already paying for 100Mbps. That's way more than the 18% included in the forecasts, increasing Average Revenue Per User considerable. Something that a "one speed, one price" regime <i>cannot</i> do.</li></ul></ul><br />Since the April launch of the Coalition NBN policy, Turnbull has actively stifled debate, introduced distractions and misdirections and refused to answer basic questions about the finances, profits and charging of his Node Plan.<br /><br />At a minimum, the taxpayer needs to know the planned pay-back period and Rate of Return of the Coalition <i>model</i> used in their Policy.<br /><br /><i>It's $70 billion of real taxpayer money the Coalition is risking, we have a right to know the figures.</i>steve jenkinhttp://www.blogger.com/profile/16064724730975745470noreply@blogger.com0tag:blogger.com,1999:blog-1777177917540226839.post-37970089746827999572013-09-12T13:46:00.000+10:002014-04-11T13:58:31.066+10:00Voter backlash over "NBN Lite" as they realise they've been 'had'?On the weekend, 300-400,000 voters went with the Coalition over the ALP, based on many factors, one of which was Turnbull's "NBN Lite" was <i>good enough</i>. Just how enraged will they be to know they have been duped.<br /><br />We know from <a href="http://www.change.org/en-AU/petitions/the-liberal-party-of-australia-reconsider-your-plan-for-a-fttn-nbn-in-favour-of-a-superior-ftth-nbn">Nick Paine's petition to the Liberal Party</a> [<a href="http://iwantthenbn.com/">real-time count</a>] that getting a <i>good</i> NBN is still a hot-button issue for many voters<i>, even post election.</i><br /><br />Australian voters don't like candidates whom they feel have let them down or taken them for granted: witness push-back against Liberals James Diaz and Sophie Mirabella and the collapse of Bob Katter's personal vote.<br /><br />Long term, Australian voters <i>remember</i>. The demise of the Australian Democrats was started with the defection of Cheryl Kernot, who lost her seat, and finalised by Meg Lees "flipping" on the GST.<br /><br />Here's what Turnbull didn't tell, in fact hid from the electorate, what's NOT been said in "Cheaper, Sooner, more Affordable" - the reality is a very far cry from his claims and slogan:<br /><ul><li><i>Cheaper</i>, by 10% or $4 billion, but<i> </i>not if you take everything into account. In fact the opposite: fully costed, an FTTN then FTTP is more expensive.</li></ul><ul><li><i>Sooner</i>, by one year, after <i>creating</i> the problem by doing nothing for more than a decade.</li></ul><ul><li><i>more</i> <i>Affordable</i>, isn't possible when <i>the Government</i> don't set the retail prices. Even if they knock 33% off the wholesale price ($16 vs $24), why would <i>any</i> ISP pass-on the whole saving, not just follow the banks' example and pocket it?</li></ul>What Turnbull<i> didn't </i>say:<br /><ul><li>What will the NBN <i>cost the taxpayer</i>? <i>It isn't any number you've been told.</i></li><ul><li><b>$12.5 billion </b>in interest payments to 2033, mainly from 2018, until the loan is paid off.</li><li>Then, over the next 7 years to 2040, the NBN <i>returns</i> $40-$45 billion. The taxpayer is better off by $30 billion at least.</li><li>NBN Co is already 12-18 months ahead of financial forecasts. Keep up these early wins and it's like a house mortgage, small payments early on result in massive gains later. Because paying off the loans are NBN Co's highest cost, just like a house.</li></ul></ul><ul><li>How much PROFIT will "NBN Lite" generate? NONE<b>,</b> <i>it makes a $10 billion loss over 20 years.</i></li><ul><li>Turnbull acknowledges it costs more to operate and maintain the Copper/VDSL network, but artfully hides just how <i>this destroys the business.</i></li><li>If NBN Lite charges $16 wholesale per line, they can <i>just</i> cover interest and maintenance and be "cashflow positive",<i> but they can't pay-off the loans or cover depreciation.</i></li><li>In 20 years "NBN Lite" will not only cost the taxpayer $40 billion in interest, they will still have to payback the $30 billion in loans.</li><li><b>Turnbull's "NBN Lite" plan will cost the taxpayer $70 billion by 2040,</b> not leave them $30 billion better off. There <i>is</i> a $100 billion difference, but not the way Turnbull calls it.<a name='more'></a></li></ul></ul><b>Who's figures do you Trust?</b><br /><br />One of the central criticisms of the current NBN by Turnbull is the "cost". It's NOT the cost to taxpayers he discusses, but the Budget of NBN Co, they're very different to begin with. Taxpayers don't have to meet ANY of the NBN expenses, only pay the interest on the loans to fund the business.<br /><br />It's the difference between paying for a house in cash or taking out a mortgage and paying off the loan over 25 years. That's a <i>massive</i> difference, as every home-owner can tell you, but reality doesn't fit with the Coalition confabulated narrative.<br /><br /><i>The ALP did not create the NBN Co Corporate Plan.</i> NBN Co is a business staffed with subject-area experts. They will be held accountable to their management and ultimately the NBN Co Board, for meeting their forecasts. These are industry professionals, experts in their field, doing their best work. They don't just make up numbers or parrot what their ALP overlords dictate to them. The Labor government set their maximum equity contribution, gave the design rules<i> and stood back</i>.<br /><br />Turnbull would like people to think <i>he</i> knows more than the highly-experienced, expert professionals in every field of NBN Co, and that magically and mysteriously, they've overlooked risk factors that will blow out their project costs by a shattering 2-3 times.<br /><br /><i>That just doesn't happen with professionally run big civil projects.</i> If unforeseen events occur, the project halts and is rebudgeted, redesigned or, if necessary, scaled-back or cancelled. No <i>Professional</i> is stupid enough to overspend a well run Engineering projects by 200%, it's a "strawman" argument at very best.<br /><br />NBN Co has anticipated <i>real</i> risks to the project. They are well documented and included in the current Corporate Plan. They even have a 10% contingency set aside, as is good industry practice.<br /><br /><b>Who are you going to trust for accurate figures</b>: a small bunch of faceless, self-serving, politically motivated non-experts surrounding Turnbull, or the multitude of highly experienced, professional experts within NBN Co?<br /><br />Despite his claims of being unchallenged, Turnbull's wildly exaggerated "Stress tests" (my term) have been questioned and refuted in the media many times over and were never taken seriously by any Telecommunications Engineers, Accountants, Financiers or Economists. They don't make sense and never have made sense.<br /><br /><br /><b>Cheaper</b><br /><br />The on-budget, direct cost to the taxpayer is <i>solely</i> the interest on the loans taken by the Government to contribute equity to NBN Co.<br /><br />The NBN Co <i>Budget</i> is something entirely different and includes loans it arranges for itself. Both the Coalition and Labor have never separated the two. The NBN Co Budget, be it $20.5 billion, $44.1 billion or something else is NOT what comes out of the taxpayer's pocket.<br /><br />"NBN Lite" is <i>identical</i> to the current plan except for ONE change: 75% of Fibre services, 8.968M lines, will be replaced by FTTN (Fibre to the Node) using VDSL2.<br /><br />That part of the NBN Budget <i>is just $12 billion</i> and Turnbull estimates $8.1 billion to build his FTTN at $900/line.<i> </i><b>This can be at most a $4 billion saving</b>, 10% of the whole budget. A far cry from the oft-repeated claim "VDSL only costs one quarter of Fibre". (It does, if you ignore the majority of costs!)<br /><br />Somehow, <i>Turnbull saves $17 billion out of a $12 billion budget</i>. That is a trick he has never explained.<br /><br />But there are two BIG ticket items that Turnbull has craftily hidden away in his "NBN Lite" plan:<br /><ul><li>For FTTN, he isn't going to provide the CPE (Customer Premises Equipment) which NBN call an NTD (Network Termination Device). For the <i>other</i> three networks, Fibre, Wireless and Satellite, NTD's are <i>included</i>. It's like making the inside of a car "optional".</li><ul><li>In Dec 2008, Telstra at their NBN Demonstration said "VDSL is much harder than you think" and <a href="https://docs.google.com/file/d/0B1GLdfqdwpNQM3NSTE1tNl9yVGc/view">specifically included a VDSL NTD with an integrated Central Splitter in their design</a>, warning that without it, services would NOT be of an acceptable standard. [<a href="http://www.telstra.com.au/abouttelstra/download/document/tls652-NBNtechnologybriefing.pdf">Full Telstra doc</a>]</li><li>No NTD option is offered for FTTN/VDSL in "NBN Lite".</li><li>"NBN Lite" transfers all CPE capital and maintenance costs onto the subscribers. Over 20 years, this is upwards of $1,000 per customer, or <b>$5-10 billion extra that's just ignored.</b></li></ul></ul><ul><li>"NBN Lite" makes allowance for wastage, not all the money spent on FTTN will be useful for a final Fibre to the Premises network.</li><ul><li>This deliberate wastage was the reason why the Expert Panel rejected all FTTN proposals in 2008 and recommended jumping straight to full Fibre.</li><li>Turnbull puts this figure at half the cost of his FTTN build ("50% CapEx Reuse"), but doesn't include this charge against his project:</li><ul><li><b>"NBN Lite" costs an additional $4 billion in wasted investment on FTTN.</b></li></ul></ul></ul>The "NBN Lite" plan is touted by Turnbull and the Coalition as saving $17 billion, off the Budget, not from taxpayer funds, yet it cannot.<br /><br />Instead, at most it can save $4 billion, while adding $5+ billion in costs only borne by VDSL customers AND ignoring $4 billion in deliberate wastage.<br /><b><br /></b><b>"NBN Lite" costs the same, or 10% more, than the current plan.</b> Why would <i>anyone</i> think an inferior service, that is designed to be thrown away, <i>for the same price</i> would be a good idea?<br /><br /><br /><b>Sooner</b><br /><br />In 2002, Telstra was under financial pressure as it's main source of revenue, the PSTN (telephone network) was in 2005 described by Sol Trujillo as being "in meltdown".<br /><br />Leading up to then, the explosive growth in both Internet use and mobile phones was well known inside Telstra and broadly within the Industry. From 1997 onwards, it was a matter of <i>when</i>, not if, Telstra would get into serious financial trouble and a new digital-from-scratch broadband network was necessary.<br /><br />Yet the Howard Government did <i>nothing</i> about creating a strong, viable 21st Century network for Australia<i> for a decade.</i> There were many studies, recommendations and even the odd billion dollars dropped on the problem, but by 2007, we were still in a digital backwater.<br /><br />In 2005, the new Telstra CEO created a table-thumping presentation about the need to reform the business and build Broadband. The Liberals ignored it then and in 2007, contributing to their electoral loss. They backed up to the 2010 election with an inadequate NBN plan and again, failed to carry the day.<br /><br />From 1997 onwards when the Coalition was in control, Telstra could have been structurally separated easily AND a good broadband network could have have been built with<i> no Government funding, if they'd been allowed.</i><br /><br />For more than a decade the Liberal/Nationals <i>did not act when they needed to</i> <i>and could have</i>, and then they continued this policy for another 5 years! This antipathy to Broadband runs deep.<br /><br />So finally in 2013, after deliberately and consciously creating the current situation,<i> they now want to claim that speed is of the essence</i>.<br /><br />Why the urgency for "NBN Lite"? <b>Turnbull has never offered a good explanation.</b><br /><br />The actual "NBN Lite" end date is 2020, or 2019. A one year improvement over the current 2021 end-date. <i>So why is a one year speed-up so important after 15 years of inaction and resistance?</i><br /><br /><br /><b>More Affordable</b><br /><br />As said above, NBN Co can set wholesale prices, but the ISP's can set any retail price they like.<br />But the real story is "if you charge one third less <i>and</i> it costs you four times as much to deliver the service, how can you still make a profit?".<br /><br />The Government does NOT and cannot control retail NBN pricing. Why would the ISP's, especially Telstra, pass on, even in part, any savings?<br /><br />It's not sophistry, there's a serious marketing point here. Customers are very tired of battling with incredibly complex and difficult "rate cards" from Telcos, especially with mobiles and smartphones.<br /><br />ISP's, especially Telstra, are likely to offer simple NBN pricing, with a <i>single</i> price for each service speed. The entry level, 12/1Mbps services are likely to be the same just like now, with NO difference depending on Network: Fibre, Wireless or Satellite.<br /><br />If the ISP's supply and maintain the missing VDSL NTD and Central Splitter for FTTN customers, they will be justified in charging both <i>a service connection fee</i> and not passing on any savings.<br /><br /><b>Customers on VDSL will not see any savings compared to Fibre</b>, rather they will face higher "out of pocket" and connection charges and on-going maintenance, over and above what other NBN customers pay for in home connections.<br /><br /><br /><b>Media Coverage, Costings and the PBO (Parliamentary Budget Office)</b><br /><br />The greatest coup of the Turnbull disinformation campaign was having Alan Kohler, doyen of the Business Media, come out the day after the Policy launch (10 April) and declare "NBN Lite" was good enough.<br /><br />Without costings, without financial forecasts, without charges or costs, without on going debt & equity figures, without a payback period or Rate of Return, in fact without ANY financial data necessary for a $30 thousand, let alone $30 billion investment.<br /><br />Rather than attempt to analyse the Coalition Policy, question them and dig out the numbers, the Media quietly walked away from it, choosing to quote, <i>as fact</i>, the unverified project cost figures given by the Coalition<br /><br />The PBO did not review the Coalition NBN Policy costings, nor was anything offered them.<br /><br />They don't seem to understand the basic rules of accounting either: if it's not under your control, then it's NOT on your balance sheet and it does not affect you.<br /><br />The PBO would've taken less than an hour to check both the ALP and Liberal Party on-budget costs, interest payments, if they'd been given the forecast Equity figures.<i> It's that simple.</i><br /><br />So why haven't any of the media reported on this or asked the Coalition for that information?<br />Especially after the election, <i>does the public have a right to know what it is now committed to paying from its taxes?</i><br /><br /><br /><b>Other Myths</b><br /><br />The proponents of slower, inferior Broadband ask "Who needs higher speeds?"<br /><br />That's easy: <i>anyone who puts a monetary value on their time.</i><br /><br />48%-49% of ISP connections are current "Business/Government", according to the ABS.<br />They value their time, currently around $120/hr to keep an average employee, and can work out what it's worth to save download time.<br /><br />This is why NBN Co has sold 31% of services at 100/40 Mbps, the highest current speed, not the 18% forecast. This increases their AVC (access charges) by an easy 10% over the forecast.<br /><br />Later this year, they're scheduled to turn on 3 higher speeds (250, 500 and 1000), and increase their income from access charges by another 10%-20%. <i>This extra service speed doesn't cost NBN Co anything</i>.<br /><br />What's going on here? It's why NBN Co is going to be <i>immensely</i> profitable and what Turnbull has tried desperately to hide from the electorate: NBN Co can sell exactly the same physical Fibre connection for anything from $24 to $150, AND have all customers very happy with what they pay.<br /><br />In Economics, it's called "removing consumer surplus". Current ISP ADSL pricing plans, <i>which Turnbull hasn't said he will or won't continue with</i>, are "One size, one price Fits All". This makes most customers unhappy, either because they get charged more or they can't get a fast enough service.<br /><br />We know <a href="http://www.aph.gov.au/Parliamentary_Business/Committees/Senate_Committees?url=broadband_ctte/submissions_from_april_2009/sub99.pdf">from a report in 2009 that includes a detailed economic model of the NBN</a> done by the current NBN Chief of Pricing, that a "one price fits all" regime would charge the majority entry-level plans <i>more than 3 times the current $50/mth of iiNet,</i> or 2.5 to 8 times if uniform charging is also abandoned.<br /><blockquote class="tr_bq">... for the most likely estimate of $170 per month, unit costs in metropolitan areas are of $133 per month, while those in non-metropolitan areas are just under $380.</blockquote>For "NBN Lite" to not include their charges or clarify their pricing model can only mean bad news for consumers. Politicians <i>always</i> proclaim good news from the highest points.<br /><br />The reality of a "one speed, one price" VDSL model for "NBN Lite" is entry-level charges need to increase by 50%-100%, while high-end charges reduce, those users would rather pay more to swap their money for time <i>and make massive savings in wage costs.</i> It's incredibly strange that the party that's "open again for business" doesn't understand how businesses look to reduce their <i>total</i> expenditures.<br /><br />The world isn't well ordered, all the people wanting fast access rates aren't clustered together, around what will be decided as a "Node". Nor are all businesses located in business parks etc. The whole point of running out the ONE system, everywhere, is that <i>anybody</i> who needs faster access can do so without delay, cost or impediment. This is lost with FTTN/VDSL.<br /><br />This leads to the next point:<b> Who pays for the NBN? </b>The low-volume users or speed hogs?<br /><br /><i>The entire profits of the Fibre NBN come from the top 25% of users, the rest of us either get NBN services at cost or below.</i><br /><i><br /></i>This is because the use of the internet is very uneven, it's an exponential, in fact.<br /><br /><i>The top 1% of users consume half-as-much data again as the low 50% of users</i>: the top 1% account for 10% of downloads and the bottom half 6.24%.<br /><br />The Fibre NBN is the best deal any of us are ever likely to be offered in our lifetimes.<i> If we want speed, we can have it, if we don't then others pay for us.</i><br /><i><br /></i>If you remember the claim of "tripling of charges" by the Coalition,<i> it's another upside-down argument</i>. Yes, NBN Co are forecasting an Average Revenue Per User (ARPU) of $110 in 2040, but that's because customers who value the service will want to pay for it AND download large volumes,<i> mostly for their businesses</i>.<br /><br />Neither has the media reported that NBN Co revenues are 12-18 months in advance of forecasts on all fronts. This is really important, it <i>proves</i> the Corporate Plan is <i>conservative</i> and that the reality will be far, far better than people expect. It's not unreasonable for a Fibre NBN Co to cost under $30 billion and return over 15%, simply because there is such large "pent-up demand" from a decade of inaction by the Coalition.<br /><br />The NBN is about Business, Productivity Growth, Efficiency and reducing drags on our Economy. That it will be used, <i>in very small part</i>, for Entertainment, even Adult content, is an irrelevance. It's like banning ALL glossy magazines because there's a very small number with X-rated content. Adult content is a fact of life, it's still commerce and it's largely an irrelevance.<br /><br /><b>The Internet grew up in the 15 years the Coalition weren't watching, </b><i>it's now about Business and the Economy.</i><br /><b><br /></b><b><br /></b><b>Summary</b><br /><b><br /></b>"NBN Lite" is the OPPOSITE of how it's been portrayed in the media:<i> giving us better Broadband but for less.</i><br /><ul><li>It's an inferior service that will cost <i>the same,</i> or more, to build and operate.</li></ul><ul><li>It will <i>cost</i> taxpayers $70 billion or more by 2040, NOT make them $30 billion or more by then.</li></ul><ul><li>Fibre NBN doesn't just make money, it matches need and service, making everyone happy.</li></ul><ul><li>Tiered pricing reduces costs to the majority, while <i>allowing</i> those who put a high monetary value on their time,<i> to swap money for time.</i> That's <i>real</i> consumer choice.</li></ul><ul><li>The Fibre NBN profits <i>all</i> come from the top 25% of users, the rest of us get a free-ride.</li></ul>steve jenkinhttp://www.blogger.com/profile/16064724730975745470noreply@blogger.com14tag:blogger.com,1999:blog-1777177917540226839.post-90734981248923578652013-09-06T10:21:00.000+10:002014-04-11T13:58:31.135+10:00Liberals: Liars, Fools or both?<a href="https://twitter.com/nanso44/status/375766966264287232"></a><a href="http://www.smh.com.au/digital-life/computers/blogs/gadgets-on-the-go/coalition-filtering-swindle-abbott-and-turnbull-play-us-for-fools-20130905-2t8fx.html">Adam Turner of SMH wrote a definitive piece</a> on the Turnbull/Fletcher/Abbott Policy Fiasco. He raises most questions that need to be answered.<a href="http://www.lifehacker.com.au/2013/09/the-coalitions-internet-filter-plan-seems-like-a-technical-mess/"> Angus Kidman writes in Lifehacker</a> as well.<br /><br />What the non-technical commentators aren't saying is the implications of having, on every single device, a remotely controlled and non-user-accessible piece of software <i>in the system</i>, not an application:<br /><ul><li>These have a name, they're "backdoors". They are a very, very bad idea. The most awful security hole.</li><li>This is completely opaque to users. The software can be made do <i>anything</i>, and users will not know, cannot know.</li><ul><li>Who's going to be controlling what you see? What you send? And monitoring what you do?</li><li><i>You won't know and cannot know. This isn't simply invasion of Privacy, </i>it has the potential to be complete on-line surveillance of the Australian population.</li><li>An extreme view? Not after Snowden and PRISM. What's <i>possible</i> become Reality, very quickly indeed.</li></ul><li>Forcing all Internet connections in Australia to go under Abbott Rule is a Really Bad Idea.</li><ul><li>All Software has bugs, even from the NSA.</li></ul></ul>This isn't just <i>bad</i> policy, it is completely insane and bizarre, its a <i>guaranteed</i> technical & security disaster. We know from the exploit of the Google NSA/PRISM backdoors for Gmail, that if the Government can get in,<i> so can others</i>.<br /><br />Here's a roundup of tweets I found interesting, insightful or amusing. There are many deep questions raised. Questions that need clear, straight answers <i>before</i> the Election.<br /><a name='more'></a><br /><b>Recent</b>:<br /><br /><a href="https://twitter.com/savenbn/status/375766702643871746">@Th2shay</a>: Abbott wouldn't have a clue but @TurnbullMalcolm has no excuse<br /><a href="https://twitter.com/nanso44/status/375766966264287232">@Nanso44 </a>Absolutely not poor wording!This was a slip showing that we have no reason to trust what they say<br /><br /><br /><b>Tweets from Ric Werkhoven.</b><br /><br /><a href="https://twitter.com/rwerkh/status/375749891328192512">https://twitter.com/rwerkh/status/375749891328192512</a> for first.<br /><br /><ul><li> it clearly was not poor wording. Someone should get that admission from Abbott. He lied.</li><li> how can someone insert comms policy into LNP policy like that? And it gets support till confirmed wrong?</li><li>who has power to get policy through? What else could get in?</li><li>That fits my theories about why the NBN policy is what it is.</li><li>Not that could meant the opposite. This is weirder than spin I think???</li><li>Yes @turnbullmalcolm exactly how many LNP policies do you think are BS?</li></ul><div>This is particularly worrying. This really is Big Brother wanting Total Control of the Internet.</div><div>Once you have a filter/firewall installed on ALL your appliances & computers, one that YOU don't control, how will you ever know what it's doing ("Trust us, we're the Government", if its turned on and what "extra" functionality it's been given.</div><div><br /></div><div>This is a very dangerous, very slippery slope, especially in light of how it was attempted to be snuck through.</div><br /><br /><ul><li><b>it's more than that. It's for mobile networks as well.</b></li></ul><br /><b>Other tweets</b><br /><br /><ul><li>Coalition filtering swindle? Abbott and Turnbull play us for fools [Link to SMH article above]</li><li>Hmm, Ill thought out policy on the run that's hastily reversed a few hours later? Sounds like business as usual</li></ul>No, not at all. It's about process and cover-ups, spin and denial in "Never our policy", no room for manoeuvre for Turnbull.<br /><br /><ul><li>The LNP are now running paid ads on Twitter trying to shift focus from their epic filter backflip to Labor's stuff-ups.</li></ul><ul><li>Tbull on-air defending "not our policy, never has been" And yet opposing it at the same time.</li><ul><li>Turnbull, "Please Explain" the contradiction and inconsistency.</li></ul></ul><ul><li>"Nothing to see here"</li></ul><ul><li>you know not to let a bad policy get in the way of a good story.</li></ul><br /><b>Last night</b><br /><br /><ul><li>Client side filters are a dime a dozen and don't need legislation. As usual, doesn't pass the stink test</li><li>then why would it be a policy? Plenty of client-side filters already available. Market not working?</li></ul><ul><li>he's all over social media now disavowing the filter We'll see but doesn't make sense to roll this out now</li><li>It's a Comms policy, which is Turnbull's area. "switched on as default" was mistakenly written twice?</li></ul>Process? Abbott read & authorised 'last night'. where was Turnbull in all this? He's provably NOT in charge of Internet and Communications policy. That he so easily and willingly complies with any policy put in front of him speaks to the character of the man and also that he whatever he thinks, he is very unimportant in the hierarchy of the Liberals.<br /><ul><li>I'm not sure what bothers me more: that they may be crazy or are actually incompetent. Hopefully they're not both. :(</li></ul><ul><li>Coalition #NBN is a sham and all misinformation. </li></ul><ul><li>What the Libs haven't told us is the real worry. We'll find out after their 'reviews/audits'.</li></ul><ul><li>Yes it has to make you wonder what else do they have planned for us. They intend silencing any critic.</li></ul><ul><li>honesty and trust. Except don’t be honest or truthful. How horrendous.</li></ul><ul><li>I’m stunned. I’ve never seen any party sneak something like that in</li></ul><br /><b>early tweets</b><br /><ul><li>You could from Conroy's too. At least his was done in the backend rather than at the consumers</li><li>What's worse is that we already know a 12 yr old can beat client-side filtering. LNP #internetfilter worse than useless</li><li> at least you can opt out of this one!</li><ul><li><i>Comment</i>: really? That is <i>always</i> very hard to do technically.</li></ul><li>Lucky for me I have a Windows Phone 7. No-one writes apps for that so I should be safe :)</li><li>Wow. I never thought it would be possible to prefer Conroy's Internet filter over something, but there you go</li></ul><br /><b>Other worthy comments and questions</b><br /><ul><li>Malcolm a man of mirrors and a smoky hazes.</li><li>That famous Liberal Party unity. I mean they backflip, retract and obfuscate as one! </li><li>Turnbull defended an Internet filter on radio today (bit.ly/mallies) then lied to Australia about it </li><li>So the LNP internet filter was non core policy? Why isn't there like a list, a doc of all of their core, non core policies??</li><li> One has to ask - what other policies will the LNP & @TurnbullMalcolm change 4 hrs after publication? </li><li>LNP Internet Filter Policy wins the 2013 Federal Election Mal Meninga Award. </li><li>You've had 3 years to get your shit together LNP you pack of f'ing amateurs</li><li>Mr Abbott only read the first page and approved it.</li><ul><li><i>Comment</i>: speculation?</li></ul><li>"No opposition has ever gone to an election with a more carefully, comprehensively and thoroughly prepared set of policies." Filter?</li><li>The first cockup of a Coalition government was such a cockup that they couldn't even get into government before cocking it up</li><li>The only error with the Internet Filter Policy was some dope released it BEFORE the election. What about their IR Policy?</li><li>Mr Abbott read the internet filter policy as Stop the Boats not Stop the Bytes.</li><li>Liar @TurnbullMalcolm has tried throwing LNP filtering policy down the memory hole. But the Internet doesn't forget! </li><li>LNP want to buy back all the modems out there in an attempt to control foreign bytes coming to our shores.</li><li>I wonder if the policy of buying up the Indonesian fishing fleet was also "poorly worded."</li><li>But LNP invented the internet so why wouldn't they control it with a filter? </li><li> Look, if only they'd put a 3-star general in charge of the internet this stuff-up would not have happened.</li><li>You don't make a fool of @TurnbullMalcolm it's more a case of self saucing pudding</li><li>Mr Abbott's Internet Filter is designed to 'Stop the Sex Appeal' </li></ul><br /><div><br /></div><div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><b>Collected <a href="https://twitter.com/geeksrulz/">Retweets from Geeksrulz</a>.</b></div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><br /></div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><a href="https://twitter.com/geeksrulz/status/375600242390872064">https://twitter.com/geeksrulz/status/375600242390872064</a></div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Abbott's 5 pillar economy:</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">1. Stop BOTES</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">2. Stop GAYZ</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">3. Stop INTERNETZ</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">4. Stop PRON</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">5. Stop DREAMING OF A BETTER FUTURE</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><br /></div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"></div><ul><li>.@TurnbullMalcolm - not your policy? You released it - you own it. You can't be trusted and nor can Abbott</li><li>Tony Abbott: "Look, trust me, I read that policy document and thought it said something completely different". he admits it. </li><li>So Abbott saw the policy before it went online. Interesting! </li><li>Tony "I'm not tech-head" Abbott: "I thought it was a PC-based software." In other words, #GetAMac</li><li>The best internet filters are the ones people don't know about. LNP nearly got away with it</li><li>Today the Libs announced an internet filter. No consultation. Hoping no one notices. A vote for Abbott is a vote for filter & #fraudband</li><li>Is this the competence we've been waiting for?</li><li>So who authored this policy if it wasn't the Communications Spokesman @TurnbullMalcolm? </li><li>Liberal Party in last minute dash to take the "Dumb party organisation award" from the Wikileaks Party</li><li>With sinuous ease, @TurnbullMalcolm is now backing an internet filter, an idea he furiously opposed just last year.</li><li>Malcolm Turnbull on Labor's internet filter, 2012: "This was always a bad idea. It was bad for freedom, it was bad for freedom of speech,"</li><li>.@TurnbullMalcolm this is just insulting to voters, releasing policies just days before an election that you haven't even read properly.</li><li> Coalition announces internet filter ... and immediately backs down</li><li>This mob was supposedly ready to govern in 2010, 2011, 2012 and can't even agree on a simple policy position on internet filters?? </li><li>One policy. One elevated degree of scrutiny. One furious backflip.</li><li>There. Wasn't that hard, was it?</li><li>"This is very much about protecting children against inappropriate content" - Liberal MP Paul Fletcher defends the, er, "policy"?</li><li>Mr Turnbull and Mr Fletcher have been sent to their rooms by Mr Abbott. Baddies vs Baddies. Adult Alternative Govt</li><li>Shortest lived policy ever? What 3 PM to 6PM? The LNP Mal Meninga Internet Filter.</li><li>Thank f**k mr flip flop changes his mind as soon as his ideas are unpopular </li><ul><li>Comment: Abbott won't be doing this, not when he's in power</li></ul></ul><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><br /></div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><a href="https://twitter.com/geeksrulz/status/375578896185323520">https://twitter.com/geeksrulz/status/375578896185323520</a></div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Today we have:</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">1 Sweaty Joe</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">2 Perplex Andrew</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">3 Confuse Malcolm</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">4 Long Lost Paul</div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"></div><ul><li>Rumour is that Paul Fletcher will replace Turnbull after Abbott gets absolute power.</li><li>.@TurnbullMalcolm who's actually running this net protection policy - you or @paulwfletcher?</li><li>So on the same day Turnbull defends a filter which didn't exist and it appears in a costings doc. Nothing to see here peoples. Badly worded.</li><li>This is a complete debacle. @paulwfletcher explains in detail an opt-out filter policy which the Coailtion apparently strongly opposes!</li><li>If the Libs put in an internet filter and don't tell anyone, does it really exist?</li><li>Why would Mr Turnbull know so much about an internet filter & defend it when it never existed?</li><li>So the internet filter is enabled by default which means a majority of non techo people will be censored.</li><li>A Rhodes Scholar cannot tell a LNP Policy is #NotBadlyWorded until a non Rhodes Scholar points it out.</li><li>Hear that? That’s Malcolm Turnbull running 100 miles an hour away from Liberal Party policy...</li><li>@TurnbullMalcolm Why would you need to make sense of a policy that you have developed?</li><li>It was released by mistake. RT @AlboMP: Labor's release on Coalition last minute hidden Internet filter plan </li><li>Three years in the making RT @latikambourke: OL Tony Abbott - badly worded sentence or two in the policy document that went out.</li><li>The internet filer policy was embargoed until after the election. Who leaked it?? </li><li> @LiberalAus don't even know what their own policies are. </li><li>The Coalition have removed a policy already. It was a mistake. An ENFORCED filter in phones & handhelds WHAT.? </li><li>Mr Turnbull is Shadow for Censorhip, Internet Filter and Mind Control.</li><li>So why did lib backbenchers confirm it to two journos.</li><li> A filter policy, replete with all the media trimmings, suddenly becomes a poorly worded error? Pinocchiosis</li><li>It appears that @TurnbullMalcolm is not in control of the comms portfolio. Ready for the reshuffle & cancelling of the #NBN?</li></ul></div>steve jenkinhttp://www.blogger.com/profile/16064724730975745470noreply@blogger.com0tag:blogger.com,1999:blog-1777177917540226839.post-65192559632839842762013-09-06T06:51:00.000+10:002014-04-11T13:58:31.146+10:00The Liberal Party's Latham Moment: letting the Real Team Abbott out.Last night saw an incredible piece of Political Theatre unwind.<a href="http://www.abc.net.au/lateline/content/2013/s3842341.htm"> The ABC's Jake Sturmer wrapped it up for Lateline</a>: first a policy is announced, then there's a monumental backflip. We're told "nothing to see here".<br /><br />A relatively unknown MP, Paul Fletcher, went on-record <a href="http://www.zdnet.com/au/coalition-confirms-internet-filtering-by-default-7000020272/">to Josh Taylor of ZDnet</a> about the latest LNP Policy slipped under the wire on the last day - a Back to The Future Internet Filter "for kids safety", <i>Mandatory and Opt-out</i>. Just the policy <a href="http://www.zdnet.com/au/australian-christian-lobby-renews-call-for-internet-filter-7000007076/">that in 2012 the Australian Christian Lobby was calling for</a> after the ALP/Conroy Internet Filter was put to death.<br /><br />Joe Hockey, the putative Treasurer didn't know of it. Malcolm Turnbull, the minister-in-waiting who's portfolio covers it, was on-air explaining how it wasn't filtering (though the <a href="http://lpaweb-static.s3.amazonaws.com/Coalition%202013%20Election%20Policy%20/U2013%20Enhance%20Online%20Safety%20-%20final.pdf">Policy</a> (or <a href="http://www.scribd.com/doc/165687822/Coalition-2013-Election-Policy-%E2%80%93-Enhance-Online-Safety-final">Scribd</a>) does <i>say</i> "filter") at all and the Prime Ministerial candidate, Tony Abbott said quite clearly that he had read and authorised this Policy the evening before.<br /><br />Then the back-pedalling began. Turnbull tweeted maniacally (13 tweets), including a statement "<a href="https://twitter.com/turnbullmalcolm/status/375554766153068544">That is not our policy and has never been</a>", which formed the narrative <a href="http://www.malcolmturnbull.com.au/media/the-coalition-is-opposed-to-mandatory-internet-filters#.UijoM-Ce2J5">of a statement on his website</a>, when it came back on-line, <a href="http://www.liberal.org.au/latest-news/2013/09/05/coalitions-policy-enhance-online-safety-children">and the Liberal Party</a>.<br /><br />There are a number of massive FAILS by the Liberal Party. Like the Latham handshake in 2004, they cannot deny any of these.<br /><ul><li>This was an <i>official</i> Liberal Party Policy that followed their process, was formally approved, and released.</li><ul><li>There was NO ACCIDENT.</li><li>This last-minute under-the-wire release jibes with Abbott's promise:</li><ul><li>NO Surprises, NO excuses.</li><li>It goes directly to a "referendum on Trust". Do we now <i>trust</i> anything Abbott says?</li></ul></ul></ul><ul><li>How could the responsible Shadow Minister, Malcolm Turnbull, not be aware of a <i>critical</i> Policy in his Portfolio.</li></ul><ul><li>How could Turnbull NOT understand this was political dynamite?</li></ul><ul><li>What does it say of Turnbull and his position within the Liberal structure that he could not veto the release of this policy <i>within</i> his portfolio, that he had to go out and promote the party line with all his usual passion, aggression and certainty?</li></ul><ul><li>Why did it take Turnbull more than an hour to <i>remind</i> the Liberal Party, "<i>That is not our policy and has never been</i>"?</li></ul><ul><li>Turnbull is now saying, "<i>This was released by Campaign Headquarters</i>" and <i>he</i> had to correct it. What?!?! The central puppet-masters don't know their own policy<i> inside and out</i>?</li><ul><li>Is that really something you want to broadcast?</li></ul></ul>Clearly, it was an early insight into <i>exactly</i> how an Abbott government will work.<br /><br />Turnbull is persona non grata to the Inner Circle. He is tolerated to some extent, and is <i>told</i> what to do and happily complies. <i>Others make the Policy in his area, Turnbull has to sell it.</i><br />That does NOT bode well for all his promises and assurances about an NBN.<br /><i><br /></i><i>Nothing</i> has happened by accident in the Liberal campaign. We just caught a glimpse of the inner workings: Paul Fletcher issued a Policy, read and approved by Abbot, without informing or consulting with the responsible proto-Minister. <i>Just who's in charge?</i><br /><br />This is Kevin '07, but more extreme. One man, Tony Abbott, is micro-managing ALL Liberal actions and policies. This megalomania can only end badly.<br /><br />Further, Abbott has just been shown to have very, very poor judgement. Either he & his inner circle <i>meant</i> the Policy to be out there OR it was slipped past Abbott, when he failed to recognise it was "Not the party policy and never had been".<br /><br />Either way, this is a damning insight into the Abbott "team": Policy on the run, inconsistent and contradictory and without regard for prior public commitments.<br /><br />Whither the Abbott commitment:<i> NO Surprises, NO Excuses?</i><br />That's blown completely.<br /><br />If this Election is a "referendum on Trust", then what did we just learn about the nature of an Abbott government?<i> It says one thing and does another.</i><br /><i><br /></i>This Policy was NO accident, no mere mistake. This was NOT a policy ripped off in an afternoon. This policy was carefully compiled, written, checked, authorised and released.<br /><br />No matter how Turnbull spins it, in such a controlled, buttoned-down campaign, <i>nothing</i> happens by chance, <i>there are no mistakes</i>. We just looked into the future. <i>This</i> is how an Abbott government will work, <i>You ain't seen nothing yet.</i>steve jenkinhttp://www.blogger.com/profile/16064724730975745470noreply@blogger.com4tag:blogger.com,1999:blog-1777177917540226839.post-29319420801000346342013-09-05T18:48:00.000+10:002014-04-11T13:58:31.202+10:00Australian Tech Media: Second to ALL.Phil Dobie is a great Tech Journalist, just ask him. It doesn't seem a lack of technical or economic knowledge hampers his efforts in the least.<br /><br /><a href="http://phildobbie.com/main/podcasts/crosstalk/item/1177-how-much-bandwidth-do-we-need">His latest podcast furthers the inane & self-serving Coalition proposition</a>: "Applications NEED bandwidth"<br /><br />Dobie bravely asks "How Much Bandwidth Do We Need?".<br /><br /><i>Answer</i>: If the two <a href="http://voyager.jpl.nasa.gov/spacecraft/">Voyager spacecraft </a>can map/image the Solar system at 160bps - 1400bps (no kilobits, megabits or gigabits there), then NO application NEEDs more bandwidth.<br /><br />People WANT bandwidth and given the chance, are prepared to pay for it. From <a href="http://nbnco.com.au/assets/media-releases/2013/report-to-parliamentary-joint-committee.pdf">the NBN April results</a>, we know there is pent-up demand and 31% of customers are happy to pay for 100/40Mbps services. Rather more than the average 4.2Mbps in today's ADSL Copper ghetto.<br /><br />It's a very simple trade-off of time and money, based on how much do you value your time.<br />For some people, all that matters is getting the cheapest price. They'll always be entry-level users.<br /><br />This seems far too difficult for Phil The Great to grasp. Or maybe he just likes recycling Coalition memes.<br /><br />For my previous pieces on the topic:<br /><br /><br /><a href="http://stevej-on-bband.blogspot.com/2013/08/nbn-need-for-speed-3.html">http://stevej-on-nbn.blogspot.com/2013/08/nbn-need-for-speed-3.html</a><br /><a href="http://stevej-on-bband.blogspot.com/2013/08/nbn-need-for-speed-ii-nobody-needs-more.html">http://stevej-on-nbn.blogspot.com/2013/08/nbn-need-for-speed-ii-nobody-needs-more.html</a><br /><a href="http://stevej-on-bband.blogspot.com/2013/08/nbn-need-for-speed-i-path-to-1-gigabit.html">http://stevej-on-nbn.blogspot.com/2013/08/nbn-need-for-speed-i-path-to-1-gigabit.html</a><br /><div><br /></div>steve jenkinhttp://www.blogger.com/profile/16064724730975745470noreply@blogger.com0tag:blogger.com,1999:blog-1777177917540226839.post-31929953321200398442013-09-05T14:33:00.000+10:002014-04-11T13:58:31.225+10:00Australian Media: Worst. Reporters. EVER. Example - the NBN election coverage.<br />I think it's not just possible, but easy to make a case for a "Fail" by Australian Media in reporting the election issues through the lens of the topic I know best, the NBN.<br /><br />My opinion of the Australian media, at least on this issue (NBN), is that they are "soft" (vs hard) questioners, credulous and lazy. I hope what I write substantiates that for you. If one crucial issue is badly reported, then why would others be different?<br /><a name='more'></a><br /><b>Introduction</b><br /><br />The NBN is an <i>investment</i>, not an expenditure, by the Federal Govt.<br />NBN Co is a company, running a business and being given $30.5 billion in equity to run a project for 30 years. It is expected to payback the entire equity and return a profit (7%pa) in the 30 years.<br /><br />Both parties are funding the investment the same way: off-budget loans of around $30 billion raising 100% of equity, with on-budget interest payments. NBN Co has to raise any additional capital required by direct debt - raising loans itself above the $30 billion equity.<br /><br />Both parties are making a pitch to the taxpayers/voters to fund around $30 billion via loans BUT the Downside Risk is that the taxpayer-as-investor has to underwrite ALL losses, besides funding the interest.<br /><br /><i>These losses are an uncapped amount.</i><br /><br />There are two things that come out of this:<br /><ul><li>there is a very significant BUSINESS story comparing the pitches, the Rate of Return, structure of income & profitability and likelihood & magnitude of losses.</li></ul><ul><li>The "costing" of the both policies is trivial:</li><ul><li>what is the on-budget interest payable up until break-even? (equity repaid in full)</li><li>Over the project period (2040 for the ALP), what is the equivalent yearly Rate of Return (IRR)?<br />How much <i>extra</i> is returned after the equity is repaid?</li></ul></ul>From the 2012 NBN Co Corporate Plan, we know for the current project:<br /><ul><li>The $30.5 billion equity is reached in 2018.</li><li> Equity repayments start in 2023 and is fully repaid in 2033.</li><li>NBN Co from 2014 to 2021 expects to raise direct debt of ~$2 billion/year.</li><li>At 2.5%, on-budget interest is $12.5 billion until 2033.</li><li>By 2040, equivalent yearly return is 7% pa.</li><li>Downside risk is low, with current financial results running well ahead of Plan and costs on-budget.</li></ul>The Turnbull Node Plan sets an equity limit of $29.5 billion and tells us NOTHING else.<br /><br />As investors, the Australian Taxpayer doesn't know about the Turnbull Node Plan:<br /><ul><li>the timing of equity drawdown</li><li>repayment schedule and break-even period</li><li>the on-budget interest</li><li>the Rate of Return</li><li>maximum risk exposure</li></ul><br />Turnbull supplies "summary financials", but these cover just a 5 year period (2014-2019) and NOTHING is revealed for the next 25 years.<br /><br />NOTHING is supplied about the charges, traffic volumes or demand & growth used in the project forecasts/model.<br /><br />As a <i>business</i> plan, the Coalition documents are woefully incomplete and do not pass basic sanity checks.<br /><br />What we've seen is:<br /><ul><li>NO mainstream media (MSM) has reported on the lack of basic business data and missing Financial Forecasts nor taken Turnbull to task over this.</li></ul><ul><li>NO MSM has had BUSINESS reporters critically examine the Turnbull Node Plan.</li></ul><br /><b>Comments</b><br /><br />Turnbull has specialised in "smoke and mirrors" illusions and distractions.<br />The outrageous estimate of "$100 billion cost" for the full Fibre NBN is one of these. I've published a rebuttal of this, it's been ignored.<br /><br />There have been many technical furphy's from Turnbull, like "G.fast", that would need 1.25 million nodes. These are solely distractions, not serious argument, meant to mislead and keep attention off the real business issues.<br /><br /><br /><b>Point 1. "Cost" not "Returns"</b><br /><br />According to the MSM (there are many side-by-side NBN Policy comparisons), what's the <i>cost</i> of each sides NBN?<br /><br />Coalition: $20.5 billion and $29.5 billion are quoted.<br />But they are almost never preceded by "claimed".<br />These claims, as above, have NEVER been checked or questioned by the MSM.<br />In late April I published a simple "sanity" check that says the Turnbull Node Plan can <i>only</i> save $4 billion, while it deliberately wastes the same amount AND transfers $2-$4 billion of extra costs onto VDSL subscribers while denying them multi-port access and multicast TV.<br /><br />This has never been refuted by Turnbull's team, even though I did converse directly with them. I got abuse and disdain in buckets instead.<br /><br />But the <i>real</i> story is COST.<br /><br />We know the COST to taxpayers for the current NBN, it's $12.5 billion in interest until 2033.<br /><br />Whatever NBN Co is given in equity or borrows itself is <i>irrelevant</i> to the taxpayer. As investors, taxpayers need to know:<br /><ul><li>what they will pay each year out of taxes</li><li>how long they'll be expected to pay that</li><li>their maximum exposure.</li></ul>It's Accounting 101 that a business ONLY accounts for the assets it owns and controls. That's <i>why</i> NBN Co is "off-budget".<br /><br />It's an investment and a separate entity with separate assets, revenues, expenditure, debts and profit/loss. The ONLY connection it has to the Federal Government Budget & Accounts in the <i>investment</i>.<br /> - the equity put in and repayments due later.<br /><br />The on-budget cost that's identifiable and linked to NBN Co is the interest payable on the loans taken to provide the equity.<br /><br />This is so simple & basic, WHY hasn't any business reporter in the MSM asked questions?<br /><br />The only reasons I can think of:<br /><ul><li>a complete lack of critical thinking</li><li>a herd mentality (play "follow the leader")</li><li>an incomprehensible laziness, they report media releases, nothing else.</li><li>an unwillingness to listen to anyone outside "the bubble".</li></ul><br />Alan Kohler, the doyen of Australian Business media, interviewed (or debated) Turnbull and in his own words "lost convincingly".<br /><br />But he asked NONE of the basic questions and continued the false view that the NBN Co accounts and budget were on-budget Federal Government "costs".<br />Consequently, he didn't ask Turnbull any of the most salient business questions.<br />Kohler followed everyone else in asking only about NBN <i>expenses</i> and never asking about Profit or Revenue. That's not just "soft" journalism, it's amazing thought capture or worse.<br /><br />My modelling suggests that the Turnbull Node Plan makes a $10 billion LOSS over 20 years, at best getting to be cashflow positive, but never paying back the equity it's given.<br /><br />I arrived at this by modelling Revenue AND Expenses. First I had to come up with a figure for VDSL/Node wholesale <b>charges</b> that weren't included in the Turnbull documents. A figure the same as the current ULLS charges, $16/mth, seemed in-line with the 2014 ARPU of $21.50.<br /><br />When I queried a Turnbull staffer on this (and other) figures, I wasn't just stonewalled, but abused, reviled and sworn at.<br /><br />The MSM <i>did</i> pick up this story when one of their own reported it.<br />But NOT as a Business story, but as "bad behaviour" by a staffer.<br /><br />My modelling of the Turnbull Node Plan suggests:<br /><ul><li>a $10 billion loss by 2034, leading to liquidation</li><li>Interest on $29.5 billion from 2014 to 2034 of $20 billion, and</li><li>a crystallised debt of $30 billion on the loans.</li></ul><br /><b>That's at <i>least</i> a $50 billion on-budget cost to the taxpayer.</b><br />This massive downside has <i>not</i> been reported in the MSM, nor discussed by any of them.<br /><br />I put these points to Lateline Business amongst others, suggesting that he could get a series of experts to comments on the suitability & completeness of the Turnbull documents as a <i>pitch</i> for an investment of $30 billion, which is all it is. Nothing came of this.<br /><br />A simple question to ASIC would be:<br /><blockquote class="tr_bq">"Would these documents constitute an acceptable Company Prospectus to raise $30 billion?"</blockquote>This question has never been put.<br /><br /><b>Point 2. "Cost Benefit Analysis"</b><br /><br />I've put to Prof Henry Ergas of UoW the proposition that "Cost Benefit" Analyses are irrelevant if there is NO COST. Prof Ergas has advocated & been an activist for CBA's for public expenditure for over a decade.<br /><br />Whilst being helpful, Prof Ergas was too busy to answer the question. Prof Ergas was also a co-author of a commissioned report that found in 2009 that NBN Co would have to charge $215-$380 retail for this services. A far cry from the $50 entry-level plans now available.<br /><br />The whole basis of a CBA, especially of public programs, is that there is a NON-commercial expenditure with an unlinked benefit.<br /><br />Businesses link expenditure and revenue. They are based around identifiable transactions where goods/services are traded for money or cash-equivalents.<br /><br />Government accounts & budgets are fundamentally different: they raise money by "fiat" (demand it) through taxation. This isn't "revenue" but income, unrelated to ANY activity or transaction. Taxpayers give money to the Government because they have to, not in direct exchange for anything.<br /><br />Government expenditures are gifts, untied to any revenue. There is NO backing transaction.<br /><br />For Government, identifying the national/community <i>benefits</i> that accrue from their expenditure programs is important. It allows them to quantifiably assess the economic desirability and performance of different means of giving away money in their budget.<br /><br />Government have <i>costs</i>, but there are rarely identifiable, linked benefits. For on-budget Government expenditure, "Cost Benefit" Analyses are very important to maximise the social and economic impact of the limited resources/money available.<br /><br />But Investments ARE NOT A COST.<br />Investments, by definition, make a return on equity.<br />The COST is ZERO.<br />Any cost:benefit ratio is therefore <i>infinite</i> (divide by zero = infinity).<br />There is NO need for the Coalition to run a Cost Benefit Analysis on NBN Co: we already know the answer,<i> and it cannot be better.</i><br /><br />There is a GOOD, well-known method for businesses to compare different investments, the ratio of <i>returns</i>, not <i>costs</i>, to equity invested.<br />This is the "Rate of Return" or IRR. It presumes Net Present Value discounts on the value of money.<br /><br />Turnbull and the whole Coalition KNOW that CBA's are irrelevant for NBN Co, it's an investment.<br />What matters is the Rate of Return, payback period and Maximum Downside Risk. There are financial methods to assess risk. These are built into loans as "premium" above base rates. In market trading, volatility and "risk" are nominally measured by "beta".<br /><br />What everyone learned from the sub-prime Mortgage collapse that led to the GFC, is that NOBODY in business has an infallible method to estimate Risk OR to insure against Risk. But you have to take your best shot and allow the investors to decide <i>if they'll </i>accept the risk, it's estimated likelihood and maximum, or not.<br /><br /><b>The Coalition KNOW that a CBA for NBN Co is irrelevant and misleading.</b> The correct way to compare investment proposals is IRR, yet Turnbull has not provided one.<br /><br />Why has NO MSM reporter, especially BUSINESS & Economics reporters picked up on any of this?<br /><br />It's <i>basic</i> accounting, economics and Maths.<br /><br /><b>Point 3. Acquiring Telstra <i>Copper</i></b><br /><br />Turnbull was in the Howard Ministry that sold Telstra, with no attempt at Structural Separation.<br /><br />He KNOWS that the Government does NOT control, own or have any claim to the 215-250,000 km of distribution copper that he wants from Telstra, for <i>nothing</i> for his plan to work.<br /><br />Even at a massive discount of $5,000/km, there's over $1 billion, more likely Telstra would value the last 800m of its network at $15-$20 billion, based on $45/year line rental, pro-rata from the $16.22/mth ULLS fee.<br /><br />Yet, when asked about this "drop dead" project risk, and one that is only mentioned in passing in the Turnbull documents, Turnbull has remained tight-lipped on the question, only ever asserting "<i>They will</i>" in response to questions on the topic.<br /><br />This is THE most important question he has to answer, yet NOBODY pushed him on an answer.<br />This is not "hard journalism", but passive, soft and weak.<br /><br /><b>Conclusion</b><br /><br />I contend that the treatment of the NBN by the MSM since 09-Apr-2013 when the Coalition released the Turnbull documents, shows they are credulous, lazy and "soft" reporters.<br /><br /><b>Credulous</b> because NOBODY challenged Turnbull on his costs or claims of "$94 billion" for the current NBN, they took these numbers at face value. The word "claimed" does NOT appear in any of the side-by-side comparisons of the NBN plans. The lack of critical thinking shows up by NOBODY noticing a) <i>only</i> on-budget costs are important, b) 25 years of financial forecasts were deliberately left out and c) there's a potential $50 billion downside that's never been mentioned, let alone discussed.<br /><br /><b>Lazy</b> because NOBODY asked Turnbull about the critical Business of his NBN proposal, nor how he would raise a cent. There's been no sanity checks of the Turnbull proposals, nor any serious questioning and challenging of the outrageous and ever-inflating "$100 billion" estimate for full Fibre.<br /><br /><b>Soft</b> because even when the best business reporter, Alan Kohler, went up against Turnbull, NOTHING about the business plan, financing, risks and downside was asked.<br /><br />Where is the hard questioning over the drop-dead issue of acquiring Telstra's distribution copper? Do they plan to <i>nationalise</i> the asset with a compulsory acquisition? That's a pretty hot news topic right there.<br /><br />Where is ANY questioning about charges, revenue, profitability, rate of return, payback period or maximum downside?<br /><br />When my questions to Turnbull's staff were reported by the MSM, the real issues (charges, revenue, profitability) were ignored, they focussed on the "person within the bubble" and that they'd behaved badly.<br /><br />BTW, there were widespread reports of Turnbull "apologising". I was never offered any apology or even contacted. Although I've raised this with multiple journalists, this has never been reported in the MSM.<br /><br />Where is the basic fact gathering and fact checking in the Australian Media?? It seems completely absent.steve jenkinhttp://www.blogger.com/profile/16064724730975745470noreply@blogger.com0tag:blogger.com,1999:blog-1777177917540226839.post-54626860073529835262013-09-03T19:01:00.000+10:002014-04-11T13:58:31.289+10:00NBN: Cost Benefit Analyses and NBN 'Reviews'There's an issue on the costs of the NBN that's simple, profound and has been <i>completely</i> ignored.<br />The current on-Budget cost of the NBN, pre-2033,<i> is only $12.5 billion in interest charges</i>.<br /><br /><a href="http://www.businessspectator.com.au/article/2013/9/3/politics/dont-chuck-nbn-fibre-out-labor">Rob Burgess wrote a piece today</a>, mentioning Conroy didn't allow a Cost Benefit Analysis, and finishing with:<br /><blockquote class="tr_bq">The all-fibre NBN is a precious baby that looks likely to be thrown out with the Labor bathwater. That’s not just a pity. It’s an historic opportunity – to be truly ahead of the world for once – lost forever. </blockquote>Paul Budde <a href="http://www.buddeblog.com.au/frompaulsdesk/the-post-election-nbn-review/http://www.buddeblog.com.au/frompaulsdesk/the-post-election-nbn-review/">wrote on avoiding preconceived or biased outcomes</a> of any 'reviews' of the NBN. Paul doesn't offer opinion or reporting 'news', his organisation is "The largest telecommunications research site on the internet". He & his company are globally significant Telecomms researchers and analysts.<br /><br />Not surprising, his 10 points on setting review guidelines is wide-ranging, focusing on Business, Economics and Costs & Benefits, not the technology:<br /><blockquote class="tr_bq">While costs are important the overall economic and social issues are far more so.<br /><a name='more'></a></blockquote> The <a href="http://www.aph.gov.au/Parliamentary_Business/Committees/Senate_Committees?url=broadband_ctte/submissions_from_april_2009/sub99.pdf">2009 Ergas/Robson report to the Productivity Commission Roundtable, </a>also submitted to the Senate Enquiry, "The social losses from inefficient infrastructure projects: Recent Australian experience", focussed on CBA's for the NBN and rail investment. Their bottom-up modelling estimated retail pricing 3-4 times higher than the $50 entry-level plans currently being offered:<br /><blockquote class="tr_bq">"(range of) $125 per month and $225 per month... most likely estimate of $170 per month, unit costs in metropolitan areas are of $133 per month, while those in non-metropolitan areas are just under $380".</blockquote>But there was another egregious error in this analysis that I approached Prof Ergas about, and while he was very helpful, did not have time to address.<br /><br />The only <b>cost</b> that is significant with the current NBN investment funding is the <i>on-budget</i> expenditures. These are <i>only</i> interest payments, with the Government currently able to borrow at 2.5%, a record low, the projected total, $30.4 billion, reached in 2018 and being paid down between 2023 and 2033.<br /><br />Summed over time, without discounting for inflation, total interest payments are $12.5 billion by 2033.<br />BUT, <i>the project has an annualised Rate of Return of 7% by 2040</i>.<b> It's not a cost, but a revenue item.</b><br /><b><br /></b>For anyone to claim that the cost of the NBN to government is other than the interest is absurd, foolish and ignorant in the extreme. The $30.5 billion government equity, $37.4 billion CapEx and $44.1 billion maximum funding are <i>nothing</i> to do with the Federal Budget.<br /><b><br /></b>This leads to two problems:<br /><ul><li><i>Turnbull has failed to disclose the break-even period or IRR of his FTTN proposal</i>, presumably because it's only bad news. My modelling is that the Turnbull FTTN makes a $10 billion loss, and after 20 years, lands the taxpayer with a $15 billion interest bill <i>and</i> a $30 billion on-budget charge to pay-off the loans.</li></ul><ul><li>Calling for a Cost Benefit Analysis of the NBN as a revenue-making proposition defies logic: <i>an investment is, by definition, not a cost.</i></li><ul><li>The 'cost' to the Government is ZERO, hence any CBA <i>must</i> find an infinite Cost to Benefit ratio. <i>That's as good as it gets</i>.</li></ul></ul>Prof Ergas, Turnbull and Rob Burgess have all made the same simple, fundamental error, it's like they never did 1st year Accounting: <i>they've confused the separate accounts of NBN Co with the Federal Government.</i><br /><i><br /></i>If you've ever owned a rental property or financed an income-producing asset, say a truck or shares, you <i>know</i> the Maths. You raise money for a <i>deposit (equity)</i>, then find a lender to finance the remainder of the asset, being careful that your repayments are covered by the income (revenues - expenses) generated by the asset. If like the <i>vast</i> <i>majority</i> of businesses, it follows the plan and survives and thrives, then when the loan is due, it's repaid and the owners walk-away with a tidy profit and/or ownership of the asset.<br /><br />The Funding, Capital Expenditure and Cashflow of the business are <i>all</i> separate from the principals. If you borrowed for the equity, then <i>your</i> books only show those costs.<br /><br />This is done thousands of times a month in Australia. <i>It's not a secret sauce or unknown to any of the players.</i><br /><i><br /></i>At <i>worst</i> for the NBN, a Cost Benefit analysis can be done on the total interest paid by the Government until 2033, the planned break-even. As mentioned, this is $12.5 billion at 2.5%, not discounted for inflation.<br /><br />There are already identifiable, <i>linked</i> (as in provable causal relationship) Benefits from the NBN: the increased value to Telstra shareholders.<br /><br />TLS shares bottomed pre-SSU (Structural Separation Undertaking) at $2.55 and reached $5.15 recently before the shares went ex-dividend. That's a provable $2.60 gain of 12.4 billion Telstra shares: or a $32.3 billion benefit <i>already</i>. The TLS price was in long-term decline since 2007 with over 100% of profits being distributed as dividends, an unsustainable and desperate measure by the Board.<br /><br />The NBN investment, can already show a 258% benefit just as the mass-rollout phase starts. It's not complete and rather than being a lemon, has already becoming the exemplar of Government projects.<br /><br />Which raises the question: <b>just <i>what</i> are the Coalition hiding by not disclosing 25 years of their financial forecasts for their FTTN NBN?</b>steve jenkinhttp://www.blogger.com/profile/16064724730975745470noreply@blogger.com0tag:blogger.com,1999:blog-1777177917540226839.post-3900686216752499182013-09-02T13:08:00.000+10:002014-04-11T13:58:31.300+10:00NBN: Fibre-on-Demand, at best $7,500/premises, more like $45,000/premises<a href="https://twitter.com/1petermartin">Peter Martin</a> tweeted that the ALP's claim of $5,000 to connect Fibre-on-Demand was "Mostly False".<br /><br />I disagree and <a href="https://twitter.com/SteveJ_CBR/status/373997262830964736">tweeted a short calculation</a>. I find it surprising that the ALP has never made this argument:<br /><blockquote>$5000 is way low<br />NBN Co charge ~$110,000/km for "extensions".<br />800m = $88,000<br />At 26 prem/km, 20 per leg.<br />10 >400m<br />= $9000 ea<br /><a name='more'></a></blockquote><br />Here's how I came up with those figures.<br /><br /><b>Key Assumptions</b><br /><br />The expectation is that the <i>same</i> rules as "Fibre Extensions" will be applied by NBN Co to "Fibre on Demand". Either a group of subscribers split the up-front cost between them, or one lead customer pays for the extension <i>in full</i> and then is given a rebate by NBN Co for every additional subscriber that connects using that cable. It's unclear to me just how costs are calculated for 2nd and subsequent customers, and if any rebates apply.<br /><br /><br /><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">It's unclear whether for Fibre on Demand NBN Co would follow the Fibre Extension policy of full cost recovery from the first customer/group. This has <i>major</i> cost implications for NBN Co, and as a commercially viable business, they can't enter this to make a loss. They could assume a minimum connection percentage for all nodes and charge standard connection fees, or run a strict "cost-recovery" model.</div><br /><br /><b>Background</b><br /><br />ZDnet, May 2013, reported <a href="http://www.zdnet.com/au/first-nbn-fibre-extension-completed-7000015637/">the first "Fibre Extension" had been completed</a>:<br /><blockquote class="tr_bq">NBN Co CEO Mike Quigley said at the time that it would be "very expensive" to deliver; one estimate that a business owner in South Australia received quoted that 1.3 kilometres of fibre would cost him AU$150,000.</blockquote>$150,000 for 1.3 km is $115,384. There is too much uncertainty in both denominator and divisor to use this figure. A more reasonable figure is the rounded down: $110,000/km.<br /><br />There's another figure needed, the number of premises per kilometre in Australia. <a href="http://www.bbcmag.com/Primers/ftthprimerAUS_Aug13_webFINAL.pdf">Broadband Communities</a> [Pg 22, "Advantage Fiber"] cite, per km of paved road 26/km versus 24/km in the USA.<br /><br />The <a href="http://www.nbnco.com.au/assets/documents/nbn-co-corporate-plan-6-aug-2012.pdf">2012 NBN Co Corporate Plan</a> says there are 148,000 route kilometres and 208,000 km of Fibre passing 12.2M premises, with 8.5M active. This gives raw numbers of 58 & 82 premises/km.<br /><br />How to calculate the number of households that a single run of Fibre from a node, by NBN Co, <i>could</i> share? The figure lies between 26 and 58 premises/km, but probably 26-29 premises/km.<br /><br />Reconciling the two numbers shows the routing and access density differences between wire and road networks. Roads need to observe geographical barriers and to provide lots of redundant interconnects in a 'mesh': you <i>don't</i> want to be forced into driving to/from a hub on every trip. There are also strong traffic management issues to avoid congestion at central hubs: road vehicles are different to Telecomms networks.<br /><br />Copper distribution networks <i>do</i> follow road networks, at least in urban areas which serve the majority of subscribers. There are two problems:<br /><br /><ul><li>For underground copper cables, separate runs are needed down each side of the street to minimise cross-street trenches and the chance of conduit collapsing under traffic.</li><ul><li>Aerial cable, under power-lines, can easily cross the road with road-side poles, or</li><li>with backyard poles, as in Canberra, houses on two sides are easily served.</li></ul><li>Distribution Areas are a hub-and-spoke layout/topology. "All roads lead to Rome", or all wires lead back to a central pillar.</li><ul><li>Sets of 10-pair cables are run from the pillar at the centre of each DA. Multiple cables travel the same route, allowing for damage and additional demand.</li></ul></ul><br />For an access network, the wire-distance from premises to an exchange is always longer than direct "crows-fly" distances because of the many shared trunks, 'splits' and hub-and-spoke Distribution Areas. The total covered distance by the conduits is far less than the mesh road network, but the total distance covered<i> by all pairs</i> is far greater.<br /><br />It's reasonable for one-off, on-demand installs to be run down each side of the street, reducing the 58 premises/km by half, to 29 prem/km. This is "within the ballpark" of the BC-mag figure of 26hh/km.<br /><br />Turnbull has indicated somewhere, but not in any formal document, that his VDSL2/FTTN network will initially have an 800m cable-run limit. No statement has been made about how the 400m maximum effective range of VDSL2 Vectoring will be dealt with: either four times as many nodes are needed or the 75% of customers outside 400m won't have Vectoring.<br /><br />I posit that NO customers closer than 400m will consider Fibre-on-Demand. Those who win the "VDSL2 Node Jackpot" won't be motivated to pay a considerable sum, both upfront and we can presume in additional rental charges as per BT Openreach, for a marginal increase in access rate and NO increase in Busy Hour sustained throughput.<br /><br />VDSL2, without Vectoring, will provide reasonable accesses rates up to 400m. With the limits of the Node electronics and uplinks, it's very unlikely that much more than 100Mbps will be offered with Fibre-on-Demand. Offering 1Gbps, when the uplink is that speed, is an invitation to Retailers and NBN Co to be savaged, rightly, by the ACCC for "false or deceptive advertising". Subscribers expect sustained throughput to be near the advertised access rate. 1Gbps Fibre-from-the-Node will fail miserably to give reasonable sustained throughput at peak hours due to Contention & Congestion within the Node and it's uplink.<br /><br />We know from <a href="http://nbnco.com.au/assets/media-releases/2013/report-to-parliamentary-joint-committee.pdf">the 19-Apr NBN Co data</a> that the trial Fibre installs cost $4,000 on top of the $1,100 for the lead-in. This is consistent with the $110,000/km figure, giving 27 premises/km.<br /><br />We also know from <a href="http://nbnco.com.au/assets/media-releases/2013/report-to-parliamentary-joint-committee.pdf">the 19-Apr NBN Co data</a> that 31% of consumers select 100Mbps services when it is offered at a higher rate.<br /><br /><b>Calculation</b><br /><ul><li>NBN Co will charge roughly pro-rata for distance for each 800m run, plus a connection/upgrade fee for the Node.</li></ul><ul><li>Prudent Financial management says NBN Co will only install short fibre runs after a firm order is placed. A minimum number of premises, no fewer than 4, might be set, otherwise "full cost to first connection".</li></ul><ul><li>Good engineering practice dictates running a single cable along the entire run of copper from the Node to the end of the leg. This minimises later costs, pipe & pit overfilling and follows the Statement of Expectations on "upgrading to FTTP".</li></ul><ul><li>Cables will conform to the NBN Co standard: bundles of 12 ribbons of 12-fibres (min 144 fibres in a bundle).</li></ul><div>The cost of 800m leg: $110,000 * 0.8 = $88,000</div><div>Add node connection/upgrade costs = $95,000/leg + per-premises lead-in of $1100.</div><div><br /></div><div>Per 800m leg, the <i>maximum</i> number of subscribers is 21 at 27 premises/km.</div><div>Only those outside the "magic circle" of 400m will ever seek a "Fibre on Demand" upgrade: 10 subscribers <i>maximum</i> per leg.</div><div><br /></div><br />The current NBN Co "take-up rate" expected for Fibre is 70% of premises passed will become active subscribers.<br /><br />The <i>maximum</i> take-up, on this basis, of Fibre-on-Demand would be <i>7.5 subscribers per leg</i>.<br /><br />A <i>minimum</i> shared connection cost, for all 7 signing up is:<br /><blockquote class="tr_bq">= $95,000 ÷ 7<br />= $13,571 + $1,100 lead<br />= <b>~$14,500/subscriber</b></blockquote>The very best, and rare, scenario will be a two-sides of the street being served.<br />Still $6,500 + $1,100 =<b> $7,600, <i>minimum</i>.</b><br /><br />What is more likely is that <i>only</i> 25%-30% of <i>active</i> subscribers, as shown by the real-world data on take-up of 100Mbps services, will take-up Fibre-on-Demand.<br /><br /><b>That's at <i>best</i> 2 (1.9-2.25) subscribers per 800m leg, or $45,000/subscriber, </b>1100 hours of take-home average wages <i>plus</i> $3,600/year in interest at 8%.<br /><br />For a service that <b>cannot</b> guarantee 1Gbps, why would <i>any</i> subscriber be that desperate for 100-250Mbps?steve jenkinhttp://www.blogger.com/profile/16064724730975745470noreply@blogger.com2tag:blogger.com,1999:blog-1777177917540226839.post-39901580543899419102013-09-01T10:50:00.000+10:002014-04-11T13:58:31.357+10:00"NBN Lite" won't happen, but has served its purpose: took the NBN off the Election agenda<i>Update</i>: <a href="http://www.sortius-is-a-geek.com/nbn-post-election/#.UiPRrOCe2J4">Sortius did a better piece</a>, and b<a href="http://nofibs.com.au/2013/09/01/preparing-abbotts-nbn-twitter-handles/">oth pieces on <i>NoFibs</i></a>.<br /><br /><br /><br />To win the NBN Debate, Turnbull, the Earl of Wentworth, only needed to convince the media that he had an NBN Plan that was acceptable to the great unwashed and was roughly the same as the Real NBN.<br /><br />To support this, he had to cast serious doubt on the NBN Co budget and ability to execute, and to confuse/conflate the critical questions so media never asked them:<br /><ul><li>Lifetime on-budget spending of both Proposals.</li><li>Lifetime Rate of Return from Equity</li><li>Pay-back Period of Government Equity</li><li>Downside Risks</li></ul>Turnbull succeeded on 10-April when Alan Kohler announced "<a href="http://www.abc.net.au/news/2013-04-10/kohler-how-malcolm-turnbull-saved-the-nbn/4619868">How Turnbull Saved the NBN</a>" summed up as: <br /><blockquote class="tr_bq">Malcolm Turnbull, with the help of the polls, has turned the Liberals into an NBN party. His plan isn't perfect, but it's better than dismantling the whole thing, ...</blockquote>After that, the mainstream media assumed that line and all "analyses" uncritically accepted the unverified, unchecked Coalition figures as truth.<br /><br />The ALP failed to counter this strategy, even under Conroy. Noticeably, they failed to ask Turnbull the central questions above and have the media, and so the electorate, question the fate of an NBN under the Coalition. It's now too late for them to put the fate of the NBN back on the election agenda.<br /><br />The <i>only</i> thing we can believe in everything that Turnbull has said and written is that they will commission three "reviews", to report within 60 days.<br /><br />These will be headed by hand-picked high-profile Liberals, exactly as Peter Costello was brought in for Campbell Newman of Queensland's "Commission of Audit" (CoA).<br /><br />Just like Newman's CoA,<a href="http://stevej-on-bband.blogspot.com/2013/08/nbn-despite-news-ltd-turnbull-will-kill.html"> the three NBN "reviews" will produce NO surprises</a>. They are designed to:<br /><ul><li>Underscore and 'prove' the "Worst Government <i>Ever</i>" rhetoric.</li><ul><li>All intentional economic destruction resulting from Liberal actions will be blamed on Labor, and</li><li>as things get worse, even dire, the Liberals will trumpet "Labor put you in this hole, aren't you glad we're saving you! We came along in the nick of time!"</li></ul><li>"Demonstrate" a complete failure of Governance under Labor.</li><li>Assign blame and considerable opprobrium to the <i>individual</i> Labor actors.</li><ul><li>Following Slipper and Pauline Hansen, expect to see legal action against <i>individuals</i>.</li></ul><li>Reinforce the "Great Big Useless White Elephant" view.</li><li>Make "official" the unsubstantiated claims "Will cost over $100 billion to finish", and</li><li>Concoct an 'official' "Cost Benefit Analysis" that 'proves'</li><ul><li>a Fibre NBN is not "Cost Effective"</li><li>that the <i>only</i> NBN build that can provide an economic benefit is based on existing HFC & phone-line copper assets, with small amounts of "remediation", and</li><li>that as these assets are in <i>private</i> hands, that the NBN can only be built "Cost Effectively" by the private sector.</li></ul></ul>Turnbull can then be the Ultimate Wise Business Investor and "save us from a $100 billion disaster", by liquidating NBN Co and <i>giving</i> away it's assets to the private sector. He might run supply and construction contracts to completion, or invoke "force majeur" clauses, or just wind-up the company, leaving the creditors to duke it out [Telstra wins]<br /><br />Telstra and Optus, as the major creditors, would trade their future contract payments "at a substantial discount", for the NBN Co assets. Optus may take a one-time payment from Telstra.<br /><br />Telstra will abide by its Structural Separation Undertaking and keep NBN Co as a separate, but controlled, entity.<br /><br />The ACCC won't have much to say because the legislation & regulations controlling it and the Telecommunications sector in particular, will be changed "to support consumer choice and diversity of suppliers, creating <i>real</i> competition".<br /><br />Meaning, Telstra will once again control both the wholesale and retail markets and<br /><br />Welcome to the Brave New World, brought to you by the Earl of Wentworth.<br /><br />Does Turnbull, or anyone in the Liberal Party, regret this <i>deliberate</i> destruction of National assets.<br />Will they have any pangs or twinges of conscience over <i>deliberately</i> destroying Australian National Productivity and making Australian business internationally uncompetitive for the next 50 years.<br /><br /><i>No!</i> He's a gun for hire and has "won the argument" as he was asked to do. The consequences are for others to suffer.steve jenkinhttp://www.blogger.com/profile/16064724730975745470noreply@blogger.com6tag:blogger.com,1999:blog-1777177917540226839.post-21940831361268604802013-08-31T09:55:00.000+10:002014-04-11T13:58:31.366+10:00Fibre to the Premises - with an 's'. I stand correctedOne of the joys for me in blogging my opinions & analyses is the feedback I get.<br /><i>Including the corrections.</i><br /><br />So, thanks to this correspondent in educating me on "Fibre to the Premise<span class="Apple-style-span" style="font-size: large; font-weight: bold;">s</span><span class="Apple-style-span">". Much appreciated.</span><br /><br /><blockquote class="tr_bq">Hi Steve </blockquote><blockquote class="tr_bq">I have stumbled across your NBN blog and found it quite interesting. However one issue I have is the misuse of the word "premise", as in fibre to the premise. In my years working in telco I have noticed that this error has spread far and wide, and even Mike Quigley says fibre to the premise. </blockquote><blockquote class="tr_bq">The correct term is "premises". A single dwelling is a premises. Multiple are also premises. The singular is pronounced pre-ma-sis whereas the plural is pronounced pre-ma-sez. Look it up. </blockquote><blockquote class="tr_bq">Your blog is quite insightful, however part of your appeal will be based on how factual you are and if you can't get this word right then it could destabilise your arguments - ie "if this is wrong, what else is wrong?" </blockquote><blockquote class="tr_bq">Keep up the good work!<br />Alex</blockquote><br />permission:<br /><blockquote class="tr_bq">Yes you can post the blog, including the last line, as long as you send me a link to where it appears</blockquote><br />From the New Oxford American Dictionary in OS/X:<br /><br /><blockquote class="tr_bq">premises |ˈpreməsəz|<br />plural noun<br />a house or building, together with its land and outbuildings, occupied by a business or considered in an official context : business <b>premises</b> | supplying alcoholic liquor for consumption <b>on the premises.</b> </blockquote>steve jenkinhttp://www.blogger.com/profile/16064724730975745470noreply@blogger.com0tag:blogger.com,1999:blog-1777177917540226839.post-6664272436240176812013-08-30T21:01:00.000+10:002014-04-11T13:58:31.423+10:00NBN: Real Cost Benefit Analysis.<a href="http://smart.uow.edu.au/staff/UOW091803.html">Dr Henry Ergas, Professor of Infrastructure Economics</a>, has called for over a decade that Cost Benefit Analyses be performed before infrastructure investments are made. His first target was the Coalition Government under John Howard, more recently he's questioned the NBN investment.<br /><br />Infrastructure CBA's take one <i>known variable</i>, the Government Budget expenditure, and attempt to quantify the economic benefits that accrue to the community/country.<br /><br />Government accounts, and hence CBA's, are fundamentally different to Corporate Accounts.<br /><br />At the heart of Corporate Accounts are <i>sales</i> transactions: there is an exchange between the company and customers. The company provides goods or services in exchange for payment, or promise of payment, from the customer.<br /><br /><i>Government accounts are very different.</i> There is no sales transactions. There is revenue, given up by taxpayers in exchange for nothing, there is expenditure where services mostly are given to recipients without payment.<br /><br />For Government Cost Benefit Analyses, t<i>here is NO sales transaction, no exchange of payment and service/goods</i>. There is an only an expenditure, a Cost, without income. The Benefits that accrue in the community are hard to identify and quantify.<br /><a name='more'></a><br /><br />Here's my contribution: <i>it's very simple to create an accurate & quantifiable CBA for NBN Co.</i><br /><br />The Cost is solely the <i>interest</i> on the Government Equity, raised as loans. This is an on-Budget expenditure. At 2.5% interest on $30.4 billion, the maximum current planned equity, this is just under $1 billion a year. This high-water mark is reached in 2018 and is maintained until 2023, being fully discharged by 2033. A total on-budget expenditure of around $12.5 billion.<br /><br />There is an easy to measure economic benefit: the increase in the 12.44 billion Telstra shares.<br />These have gone from a pre-NBN agreement low of $2.55 to a recent high of $5.15, more than doubling, at least $30 billion of identifiable, linked gains.<br /><br />In just one sector is a provable 2:1 Benefit. That qualifies as proven, useful CBA.<br /><br />There is also the treatment of <i>additional</i> Tax Revenue created: as a <i>business</i>, NBN Co pays direct and indirect taxes. Company Tax and GST, plus Personal Income Tax, Payroll Tax and Fringe Benefit Tax.<br /><br />In total, these are 30% of Profits plus over 20+% of Revenues.<br /><br />But all this is moot:<br /><blockquote class="tr_bq">We <i>know</i> the Cost-Benefit ratio of <i>all</i> profitable investments before we start: <i>it's infinite, because the cost is ZERO. </i>NBN Co at 2040 won't just have cost the government <i>nothing</i>, but will have paid back the equity invested, with a 7% ROI.</blockquote><br /><hr /><br />Included below are the current NBN Co Funding forecasts.<br /><br /><div class="separator" style="clear: both; text-align: center;"><a href="http://2.bp.blogspot.com/-KsNqp1p4sdo/UiBtkHak4aI/AAAAAAAAAiY/KlIP3eF9U9o/s1600/NBN-Co_plan-2012_Ex9.10.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="480" src="http://2.bp.blogspot.com/-KsNqp1p4sdo/UiBtkHak4aI/AAAAAAAAAiY/KlIP3eF9U9o/s640/NBN-Co_plan-2012_Ex9.10.png" width="640" /></a></div><br />steve jenkinhttp://www.blogger.com/profile/16064724730975745470noreply@blogger.com0tag:blogger.com,1999:blog-1777177917540226839.post-71099149957792253702013-08-30T20:10:00.000+10:002014-04-11T13:58:31.436+10:00NBN: Turnbull, it's time to "put up or shut up" with your numbers.Turnbull and the Coalition brag about their NBN plans being the most detailed ever presented by an Opposition. It's an unverifiable statement.<br /><br />What's true is that they are consciously and deliberately withholding critical financial details of the business, critically affecting the public funding from the budget.<br /><br />If "NBN Lite" is really a "Core Promise" and they intend to complete it fully, make it commercially viable and return a profit, then Turnbull and the Coalition should have no trouble or hesitation in making their <i>modelling</i> fully public. There can be NO "commercial-in-confidence" data there.<br /><br />Especially in light of Abbott's <a href="http://www.smh.com.au/federal-politics/federal-election-2013/tony-abbotts-campaign-launch-speech-full-transcript-20130825-2sjhc.html">very public commitment</a> to "No surprises, no excuses" and "a referendum on trust".<br /><br />Turnbull and team had to create a full financial model from 2012-2040, presumably in a spreadsheet, to create their documents. They had to recreate everything in the NBN Co Corporate Plan, especially Chapter 9 on Financing.<br /><br />While there are assumptions and other data they should not be held to account for, there is NO valid reason why they haven't presented exactly the same data, in close to the same format, as is in the NBN Co's Corporate Plan.<br /><br />So, Mr Turnbull,<b> where's your financial and funding forecasts?</b> Or are you hiding them for good cause?<br /><a name='more'></a><br /><br />These are the minimum charts and tables Turnbull should've prepared from his full financial forecast spreadsheet(s). Taken from <a href="http://www.nbnco.com.au/assets/documents/nbn-co-corporate-plan-6-aug-2012.pdf">NBN Co 2012 Corporate Plan</a>, Chapter 9.<br /><br />Funding, especially Government Equity required, is essential to calculate on-Budget payments of interest. It also implies pay-back period. ROI is listed in one of the tables.<br /><br /><br /><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody><tr><td style="text-align: center;"><a href="http://4.bp.blogspot.com/-KsNqp1p4sdo/UiBtkHak4aI/AAAAAAAAAiQ/Wy3Vc0RhXGs/s1600/NBN-Co_plan-2012_Ex9.10.png" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="480" src="http://4.bp.blogspot.com/-KsNqp1p4sdo/UiBtkHak4aI/AAAAAAAAAiQ/Wy3Vc0RhXGs/s640/NBN-Co_plan-2012_Ex9.10.png" width="640" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Ex 9.10 Forecast Funding profile</td></tr></tbody></table><br /><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody><tr><td style="text-align: center;"><a href="http://1.bp.blogspot.com/-NH6ZlRrk9Zo/UiBtkPGdMoI/AAAAAAAAAik/WIB9EP7f7iM/s1600/NBN-Co_plan-2012_Ex9.2.png" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="298" src="http://1.bp.blogspot.com/-NH6ZlRrk9Zo/UiBtkPGdMoI/AAAAAAAAAik/WIB9EP7f7iM/s640/NBN-Co_plan-2012_Ex9.2.png" width="640" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Ex 9.2 Summary Financials, including 2040</td></tr></tbody></table><br /><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody><tr><td style="text-align: center;"><a href="http://3.bp.blogspot.com/-jDGpUiqux4k/UiBtkDjFRyI/AAAAAAAAAiU/eyr7DDffP-A/s1600/NBN-Co_plan-2012_Ex9.4.png" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="350" src="http://3.bp.blogspot.com/-jDGpUiqux4k/UiBtkDjFRyI/AAAAAAAAAiU/eyr7DDffP-A/s640/NBN-Co_plan-2012_Ex9.4.png" width="640" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Ex 9.4 Key Financial Indicators</td></tr></tbody></table><br /><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody><tr><td style="text-align: center;"><a href="http://3.bp.blogspot.com/-fUKSOcn--fI/UiBtk6UvWrI/AAAAAAAAAig/aEz3CslENnw/s1600/NBN-Co_plan-2012_Ex9.6.png" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="140" src="http://3.bp.blogspot.com/-fUKSOcn--fI/UiBtk6UvWrI/AAAAAAAAAig/aEz3CslENnw/s640/NBN-Co_plan-2012_Ex9.6.png" width="640" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Ex 9.6 Premises Passed, by type, 2021</td></tr></tbody></table><br /><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody><tr><td style="text-align: center;"><a href="http://3.bp.blogspot.com/-94MpdlXEbRE/UiBtldHnPBI/AAAAAAAAAio/liFmECZXRq0/s1600/NBN-Co_plan-2012_Ex9.7.png" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="186" src="http://3.bp.blogspot.com/-94MpdlXEbRE/UiBtldHnPBI/AAAAAAAAAio/liFmECZXRq0/s640/NBN-Co_plan-2012_Ex9.7.png" width="640" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Ex 9.7 CapEx to 2040</td></tr></tbody></table><br />steve jenkinhttp://www.blogger.com/profile/16064724730975745470noreply@blogger.com0tag:blogger.com,1999:blog-1777177917540226839.post-2989775820515723892013-08-30T15:06:00.000+10:002014-04-11T13:58:31.496+10:00NBN: Despite News Ltd, Turnbull WILL kill NBN, if he wants.News Ltd ran a cock-and-bull story today "<a href="http://www.theaustralian.com.au/business/opinion/nbn-here-to-stay-no-matter-who-wins/story-e6frg9io-1226706969425">NBN here to stay, no matter who wins</a>" that is provably false, claiming:<br /><blockquote class="tr_bq">This means that whoever wins the election, there will be an NBN and structural separation of Telstra, and the only differences will be in style, not substance.</blockquote>Turnbull, <a href="http://www.sortius-is-a-geek.com/a-letter-from-the-big-mal/">on-record to an unnamed MHR</a>, has unequivocally stated [Point 9]:<br /><blockquote class="tr_bq"><i>The Coalition has not 'settled' on FTTN. </i></blockquote>This does NOT commit the Coalition to <i>any</i> version of an NBN. Turnbull is not on record <i>anywhere</i> as giving a firm commitment to completing an NBN. You <i>might</i> think he's said that, but he and the Coalition have crafted their words very carefully. In the letter to the MHR, Turnbull <i>fails</i> to make this simple statement, one which would've taken <i>no</i> effort and an issue he would've been acutely aware of when crafting his long-delayed response. Failing to saying anything leaves the door open to "I didn't say that" refutations later, a favourite ploy of Turnbull.<br /><br />To say that <i>any</i> options about the NBN under the Coalition are firm is a deliberate misstatement. News Ltd, in my opinion, is making a deliberately incorrect claim in this piece.<br /><a name='more'></a><br />The Coalition clearly states it will undertake 3 'reviews' of NBN/NBN Co within its first 60 days. To pre-empt the results of these reviews is incorrect and deliberately misleading.<br /><br /><i>Until</i> the three scheduled reviews are complete, and remember a Coalition government is <i>not</i> bound to act on the recommendations of <i>any</i> external report/review, nobody, not even Rupert Murdoch, can say "the NBN is here to stay". Even then, they still have a full term to cancel the project. They're in control of the Federal Budget and get to decide where <i>every</i> cent goes, or doesn't go.<br /><br />There are many, many ways for Turnbull to fulfil his mission to "Destroy the NBN", not limited to cancelling it outright.<br /><br />If the Coalition intends to a) finish the NBN, b) to substantially the current coverage and timetable and c) keep ownership of NBN Co well past its first term, <i>it needs to go on record saying so unequivocally</i>.<br /><br />Otherwise, we can infer from the evasive, obfuscated, complex, incomplete and ill-detailed plan with tortuous language around these topics, that the completing the NBN is <b>not</b> "<i>a Core Promise"</i> and they will <i>actively</i> seek ways to "Destroy the NBN", or prevent the rollout of a competitive & desirable broadband network, <i>as has been their position since 2005 when Sol Trujillo first floated it.</i><br /><br />There's a simple test:<br /><blockquote class="tr_bq"><i>Has Turnbull or anyone in the Coalition ever offered a reason for <b>why</b> they now committed to rolling out an NBN sooner than the full FTTP build?</i></blockquote>We all understand "cheaper" in the context of "Good Economic Managers", <i>but why is "sooner" a priority at all after 10+ years of inaction and implacable opposition?</i><br /><br />What changed their minds?<i> They've never said</i>, so why would anyone think they have?<br /><br />Many commentators would have us believe Turnbull worked some powerful magic within the LNP to reverse a decade long position. Where's the evidence for that? I've seen none given. What I <i>do</i> see is a Plan that <i>cannot</i> be brought to successful commercial & profitable operation, is full of errors of fact. logic and substance and is littered with convenient "out's".<br /><br />If Turnbull was really committed to building an NBN, why has he crafted a "plan" that is so complex and so riddled with omissions that the Parliamentary Budget Office <i>cannot</i> cost it?<br /><br />If Turnbull, as a master and experienced <i>investor</i>, wanted to present a plan that the PBO <i>could</i> cost, he would've released his <i>full</i> 2012-2040 spreadsheets and matching critical full-period charts for funding etc derived from his forecasting model that NBN Co released in their 2012 Corporate Plan. Turnbull is either incompetent, which I don't believe, or working <i>very</i> hard to hide some very unpalatable facts.<br /><br /><hr /><br />From pg 12/13 of <a href="http://lpa.webcontent.s3.amazonaws.com/NBN/The%20Coalition/U2019s%20Plan%20for%20Fast%20Broadband%20and%20an%20Affordable%20NBN.pdf">the Coalition NBN Policy</a>:<br /><br /><blockquote><b>Review of NBN strategy/policy process and NBN governance/industry matters</b><b><br /></b>The australian people deserve the facts about labor’s NBN and its lessons for the public policy process should be studied to help avert similar episodes in the future. NBN Co must also be scrutinised, both to ensure it can be repurposed as a vehicle for a more rational policy and to learn from any past missteps. if elected the Coalition will initiate three reviews, each with a specific focus and reporting horizon. </blockquote><blockquote><i>NBN Co strategic review</i><br />This review will be a rapid but rigorous business review of NBN Co’s rollout progress and costs, structure, internal capabilities, commercial prospects and strategic options. </blockquote><blockquote><i>Independent audit into broadband policy and NBN Co’s governance</i><br />This review will be a separate independent audit to examine the public policy process which led to the NBN and NBN Co’s governance. it will have the objective of ensuring policy process or governance lessons arising from recent broadband policy are captured and made public. </blockquote><blockquote><i>Independent cost-benefit analysis and review of regulation</i><br />This review will analyse the economic and social costs and benefits (including both direct and indirect effects) arising from the availability of broadband of differing properties via various technologies, and to make recommendations on the role of government support and a number of other longer-term industry matters. The study (which will be conducted at arms-length from any previous NBN activities)</blockquote>steve jenkinhttp://www.blogger.com/profile/16064724730975745470noreply@blogger.com0tag:blogger.com,1999:blog-1777177917540226839.post-20245608820506043212013-08-27T18:27:00.000+10:002014-04-11T13:58:31.511+10:00NBN: A Need for Speed 3<a href="http://www.afr.com/p/technology/both_sides_miss_the_point_focus_0WjUAa65E8iJYMbNXdkfoL">Tamara Plakalo in the AFR notes</a> that, for her, Turnbull has best phrased why we need fibre:<br /><blockquote class="tr_bq">“speed is only of value to you in so far as you have applications that need it”.</blockquote><i> Only that's not nearly the whole truth,</i> in fact it shows classic Turnbull "upside-down thinking":<br /><blockquote class="tr_bq">Applications don't <i>require</i> speed, <i>people do</i>. When people are <i>allowed</i> to place a dollar value on their time by selecting higher access rates, the vote with their wallet.</blockquote><a href="http://nbnco.com.au/assets/media-releases/2013/report-to-parliamentary-joint-committee.pdf">The real data is in</a> from a statistically valid (50,000 of 12M) fibre connected households. Take-up rates are running well ahead of forecasts and 31%, not the 18% forecast, have signed up for the current maximum rate.<br /><br />Part of this must be nearly half ISP connections are "Business or Government" according to the ABS (Dec 2012), up from 28% in Dec 2009.<br /><br />When people <i>can</i> put a value on their time, they trade more expensive higher speeds against wages.<br />Even at $2/minute, Fibre's higher access rates provides <i>exceptional</i> returns.<br /><br />"Who needs Gigabit?" <i>Anyone who values their time at more than nothing!</i><br /><br />I've created <a href="https://docs.google.com/spreadsheet/ccc?key=0AlGLdfqdwpNQdDY3b2dFMUNaaGxjSDZ3Q19Cb2FkMkE&usp=sharing">a spreadsheet showing the break-even points for higher speeds</a> (250, 500, 1000 Mbps) compared to 100/40. In 2040, if you only do uploads, then at current average wages + on-costs ($120/hr) 16G/month is the break-even. 41GB for all downloads. At that time, this will be in the lowest quartile of data consumption.<br /><br /><b>Previous pieces:</b><br /><b><br /></b>The Path to 1 Gigabit<br /><br /><a href="http://stevej-on-bband.blogspot.com/2013/08/nbn-need-for-speed-i-path-to-1-gigabit.html">http://stevej-on-nbn.blogspot.com/2013/08/nbn-need-for-speed-i-path-to-1-gigabit.html</a><br /><br />Nobody Needs more than 1Mbps!<br /><a href="http://stevej-on-bband.blogspot.com/2013/08/nbn-need-for-speed-ii-nobody-needs-more.html">http://stevej-on-nbn.blogspot.com/2013/08/nbn-need-for-speed-ii-nobody-needs-more.html</a><br /><div><br /></div><br /><br />steve jenkinhttp://www.blogger.com/profile/16064724730975745470noreply@blogger.com0tag:blogger.com,1999:blog-1777177917540226839.post-22547389688125173472013-08-27T16:03:00.000+10:002014-04-11T13:58:31.576+10:00NBN: Turnbull spin "on-demand fibre"<a href="http://www.theaustralian.com.au/australian-it/it-business/coalitions-nbn-on-demand-offer-could-see-users-hit-for-4000/story-e6frganx-1226704552716">Chris Griffith & Stuart Kennedy wrote a strong, factual piece in the Australian</a> today, providing a good analysis of a Turnbull distraction, "Fibre on-demand" or "Fibre <i>from</i> the Node".<br /><i>Rating for their article:</i> 10/10<br /><br /><a href="http://www.malcolmturnbull.com.au/media/clarification-on-fibre-on-demand-costs#.Uhw08uCe2J7">Turnbull has jumped on it</a>, and naturally, refuted all claims and introduced more confabulation and misdirection. He doesn't mention the difference between "access rate", which he's selling and "sustained throughput", that customers want to buy.<br /><br /><i>Rating for Turnbull response:</i> 1/10 [spelled his own name correctly]<br /><a name='more'></a><br /><br />Why is Turnbull <i>so</i> sensitive about people trying to cost his proposals?<br />Because for the last 5 months he's been very carefully hiding <i>every</i> financial detail.<br />He's never published any relevant detail, only blistering attacks when people try to decipher his waffle or second-guess his intents. Turnbull <i>deliberately</i> created this whole situation, why now rant and attack those who are doing their job and trying to clarify things for voters?<br /><br />Why should Griffith and Kennedy even <i>write</i> this article if Turnbull has done his job well, and actually communicated his plan clearly and effectively? Why would they not just contact his office for a clarification and more detail? Because they know that, like me, they'll get an abusive, hostile reception.<br /><br />So WHAT is Turnbull trying so desperately to hide?<br /><blockquote class="tr_bq"><i>If</i> NBN Co offer "Fibre on-demand" to Nodes, <i>the Plan clearly says they are not obliged to</i>, then it just won't perform. <b>The Turnbull Nodes are small and underpowered with dismal uplinks:</b> that is why we have NO technical details about them. Cheap means low switching capacity.</blockquote><blockquote class="tr_bq">Only businesses or high-demand users <i>outside</i> Turnbull's "magic zone" of 400m-500m will even consider a Fibre upgrade. However, if they <i>think</i> they'll get more than 50-100Mbps sustained throughput, <i>they are dreaming</i>. Node congestion will be <i>extreme</i> and <i>throughput, latency </i>and<i> jitter</i> terms the public will come to know and dread.</blockquote>The problem with providing a 1Gbps Fibre interface to a Node with a single 1Gbps uplink is that an ISP cannot guarantee the advertised rate, leading to ACCC charges.<br /><br />With 160 ports in a Node, and even 25% of them getting 50-100Mbps over VDSL2, the 1Gbps uplink starts with <i>40-fold</i> contention. Add the other 120 users at 25Mbps as claimed by Turnbull, and you've got at least a 75:1 contention ratio on a rather thin 1Gbps uplink.<br /><br />What happens when everyone comes home and want to watch TV at night? Especially if there's some large special event? <i>Everyone</i>, including the fool that stumped up for a 1Gbps "fibre from the node", get the same, paltry 12-13Mbps.<br /><br />This is the reality that Turnbull is trying to hide, his Copper/Node Plan will perform <i>so</i> badly due to congestion at the Node that people won't be happy. They'll be less happy when they try to upgrade, only to find <i>Throughput won't change</i>.<br /><br /><b>Unpicking Turnbull's Spin</b><br /><br />NBN Co has not <i>paid</i> billions yet, it has contracted to make payments to Telstra. Some will buy the access path ("lead-in"), others are to rent access. The details are not public, not even Turnbull the Omniscient knows the detail. <i>How can The Master of the Business Universe confuse payments made and commitments?</i> He's either incompetent or bull-shitting...<br /><br />Labor made NO claim on <a href="http://nbnco.com.au/assets/media-releases/2013/report-to-parliamentary-joint-committee.pdf">19-April. NBN Co</a>, a separate company of independent, expert and highly professional people published real figures on their costs.<br /><br />Why would Turnbull claim it's "wrongheaded" to assume that the current standard of Telco business is adhered to?<i> Customers are billed for their specific work, that's the accepted norm.</i><br />It's a simple enough business concept: each user pays for their services.<br /><br />Turnbull has not said previously, nor does he say here, what conditions actually will apply to "Fibre on Demand". As Turnbull is so fond of saying "nobody can foresee the future" - which is why any Telco will charge a single customer the full cost of running a service<i> if nobody else has ordered one</i>.<br /><br />Unless of course Telcos are charities that just give away everything, like he expects Telsra to <i>donate</i> him 215-250,000 kilometres of Distribution cable.<br /><br />Why should the journalists have called BT Openreach when all their pricing and conditions are in full public view on the website? Do they have some special "mates rates" for Turnbull and his colleagues?<br /><br />The only contradiction in either piece is Turnbulls. Griffith and Kennedy DO NOT contradict themselves on costings. They are quite clear and conservative in how they arrive at their figure.<br /><br />Why won't NBN Co incur these costs in the mass roll-out of Fibre? Because they won't be doing "one-off specials", they won't be paying retail prices and they won't be making good a flawed concept.<br /><br />The real answer is that NOBOBY will pay a $50,000 connection fee for "Fibre from the Node". They will, <i>wisely</i>, invest that money into an alternative service, such as point-to-point carriers that will spring up to full the void.<br /><br />And Turnbull's final paragraph is plain bat-shit crazy...<br />How to avoid a $50,000 fee that nobody will ever pay for a substandard and inequitable service?<br />Simple,<i> Do it Right, Do it Once, Do it with Fibre.</i>steve jenkinhttp://www.blogger.com/profile/16064724730975745470noreply@blogger.com3tag:blogger.com,1999:blog-1777177917540226839.post-32664066962780999942013-08-26T15:17:00.000+10:002014-04-11T13:58:31.632+10:00NBN: How Alan Jones was "played" by TurnbullRadio "shock jocks" are great communicators for the simplest of reasons: <i>they</i> <i>listen</i>.<br /><br />To get a large, loyal audience, you not only have to speak their language, know & even share their concerns, talk to them as equals, but pass the "have a cuppa (or beer!) with me" test.<br /><br />It's isn't just about being liked, but being somebody people want to sit down with, someone they have a <i>relationship</i> with. You forge relationships over time by <i>relating</i>, by speaking <i>and</i> listening. People have to feel you know them and their circumstances, that you have empathy with, even <i>care</i> for, them.<br /><br />That's why Alan Jones has built and kept a massive audience. Why Prime Ministers have lined up to talk to him. <a href="http://stevej-on-nbn-er.blogspot.com/2013/08/nbn-debunking-turnbull-interview-with.html">And why Turnbull sat down with Alan Jones and pulled the wool over his eyes and Jones' audience.</a><br /><a name='more'></a><br /><br />Every successful, long-running commercial radio presenter must become good at promotion, branding, politics and <i>business</i>. While they may start as an "everyman", unless they learn how to handle money and investments, they'll implode in just a few years.<br /><br />Alan Jones seems to have a genuine concern for "Battlers", putting his own time and energy to helping them.<br /><br />So <i>why</i> did Alan Jones so eagerly get on-air with Turnbull to destroy <i>the</i> most important social and economic support since 1945 for his "Battlers"? Because of what Turnbull<i> hasn't </i>said.<br /><br />The headline is that the Turnbull Copper/Node Plan is not just <a href="http://stevej-on-bband.blogspot.com/2013/08/nbn-turnbull-node-plan-financial_6.html">going to lose money, $10 billion at least</a>, but because <i><a href="http://stevej-on-bband.blogspot.com/2013/08/nbn-what-can-fibre-do-that-copper-cant.html">it's designed to fail</a></i>, the whole of the $30 billion investment will be written off, with the current loans all suddenly becoming part of the Budget and being picked up by the taxpayer.<br /><br />If you doubt that Turnbull is hiding something big, not only have his staff stonewalled me since April on the simplest of questions ("what wholesale charge did you model with?")<a href="http://stevej-on-bband.blogspot.com/2013/08/nbn-turnbull-staffers-not-just.html"> I got abused and sworn at, on-record, for asking.</a> That's the smoking gun...<br /><br /><i>The NBN is designed to benefit Alan Jones' battlers most, but only if Fibre is used:</i><br /><br /><ul><li>The top 25% high-demand users generate <i>all</i> NBN Co's profits.<i> The rest of us, the other 75%, get a free-ride</i>, either the NBN services at cost, or heavily subsidised. Fibre access rates are scheduled to reduce by 19%-26% by 2021 (and 51%-89% by 2040). Copper/Node charges will only fall by 10% by 2024. <i>Fibre</i>, not copper, is the cheapest broadband service.</li><ul><li>This comes directly from two things:</li><ul><li>Broadband demand is exponential: the top 1% consume 10% of all data, while the bottom half of users consume just 6.4% (six point four). There's a 500-fold difference at least across all users: the notion of an "average" user doesn't apply.</li><li>We know from the 31% take-up of 100/40, versus the 18% forecast, that subscribers are <i>very</i> happy to pay for higher rates for higher speeds, versus the "one model, one price fits all" of copper broadband lottery.</li><li>Already, <i>Fibre is making 85% more in access charges than copper</i> ($29.62 vs $16, wholesale), which I expect to be <i>145% more</i> when the next 3 access rates are released soon.</li></ul></ul></ul><ul><li>Telehealth services, over Fibre, will become the next major Public Health system since universal clean water and sanitation. This matters more to "battlers" because health outcomes worsen for low-income earners. They also tend to not have broadband services, only mobiles, and then only entry-level plans.</li><ul><li>Australia spends ~$120 billion, 9+% of GDP on Healthcare,</li><ul><li>70% of this on the chronically ill.</li><li>We urgently need to get this under control before the waves of older people arrive, needing far more, very expensive, medical care.</li></ul><li>The USA spends 18% of GDP and we're heading there, <i>as costs continue to rise faster than inflation</i>.</li><li>It will cost $500-$750/yr to provide free home monitoring and HD video, over fibre, for those that need it. Timely monitoring and easy, quick video access prevents simple problems becoming a $100,000 life-threatening "event" leaving permanent damage.</li><ul><li>Prevention pays for itself 10-times and more. People also live longer and healthier lives.</li><li>Fibre, with its 4-port connection, allows Community Nurses, unskilled in I.T., to reliably install and setup monitor, TV and camera and tablet/laptop.</li><ul><li>It's secure and easy to fully support and upgrade remotely, just as every large business has done for the last 15 years.</li></ul><li>VDSL services get in the way with a single service.</li><ul><li>The person has to pay the ISP and provide and maintain all the equipment.</li><li>The service and ISP plan has to accommodate upload speed and data volumes needed, <i>at the customers expense</i>.</li><li>Attaching and configuring the "VPN" needed to access a secure Health Dept network is not simple nor easy: it requires an expensive I.T. technician to visit.</li></ul></ul></ul></ul>Here's <i>some</i> of the critical things Turnbull has left unsaid. Questions that require good, independent assessment, something that the PBO has been convinced not to give.<br /><ul><li>The Copper/Node Plan can only be 10%, $4 billion, cheaper to construct, based on Turnbull's own figures of $900/line. Telstra contract payments are another $1500/line, according to Turnbull.</li><ul><li>Yet somehow, Turnbull claims $17 billion in savings: <i>that's impossible.</i></li><ul><li>Even if they pay Telstra nothing, they have to be paid to build the Nodes to achieve the savings.</li><li>There's $4 billion, by Turnbull's own estimate, <i>deliberately</i> wasted in building a Copper/Node network that will be thrown away, as <i>planned</i> by the Coalition.</li><li>80%-90% of Fibre network costs are for things that don't drop in price, like civil works or cable. Waiting saves nothing and only creates a higher risk of a low Australian Dollar forcing <i>up</i> the cost of electronics.</li><li>We currently have the lowest interest rates in 60 years, making waiting <i>guaranteed</i> to be more expensive. The <a href="http://www.smh.com.au/business/we-have-a-debt-problem-says-nab-chief-20130801-2r29e.html">NAB CEO, Cameron Clyde</a>, and <a href="http://www.abc.net.au/radionational/programs/drive/kennett27s-advice-3a-borrow-to-build-while-interest-rates-low/4881654">Jeff Kennett, Liberal ex-Premier</a>, are both advocating increased infrastructure spending now.</li></ul><li>The Copper/Node plan, when you do the Maths, costs the <i>same</i> as full Fibre, but adds delays and increases risks.</li><ul><li>In 2002 when Telstra's phone business was in obvious decline due to mobiles and broadband, the Coalition did nothing about fixing Broadband.</li><li>IN 2005, the Coalition was told that it <i>urgently</i> needed to build an NBN, but did nothing.</li><li>In 2007, it had no Broadband policy to speak of.</li><li>In 2010, it's lack of a credible Broadband policy contributed to its failure to win.</li><li>Now, in 2013, the Coalition have <i>suddenly</i> decided we have a broadband crisis and that it must act post-haste. Why? What just changed?</li></ul><li>Telstra's share price has <i>doubled</i> since the NBN contracts have been signed.</li><ul><li>The market assigns a very high value/importance to the NBN.</li><li>Why aren' the Coalition listening to Business and the market?</li></ul></ul></ul><ul><li>Turnbull is pitching the Australian taxpayer for $30 billion to invest in <i>his</i> new scheme, <i>but hasn't provided an adequate Business Plan</i>. Why?</li><ul><li>Only 5 years of the 30 years of financial forecasts that Turnbull prepared are published.</li><ul><li>If politicians deliberately hide figures, it's only because they're bad news.</li><li>Why did Turnbull leave out the majority of his financial forecasts.</li></ul><li>There is NO break-even period.</li><ul><li>If the Copper/Node network made a profit and paid off the loans, Turnbull would've screamed it from the rooftops.</li></ul><li>There is NO Return on Investment.</li><ul><li>Similarly, if there was <i>any</i> ROI, it would be talked about, a lot.</li></ul><li>What's the maximum Downside Risk of the Turnbull Copper/Node Plan?</li><ul><li>Without tiered pricing, the "one size, one price fits all" model <i>destroys</i> revenue.</li><li>Which coupled with higher maintenance and higher depreciation charges, makes it impossible to make a profit.</li><li>The only earnings hurdle Turnbull has set for his investment seems to be "cashflow positive", which he knows very well can never pay off the loans.</li></ul></ul></ul>steve jenkinhttp://www.blogger.com/profile/16064724730975745470noreply@blogger.com0tag:blogger.com,1999:blog-1777177917540226839.post-11777369775563926352013-08-26T11:14:00.000+10:002014-04-11T13:58:31.643+10:00Stump questions by voters for TurnbullIf you're out an about and happen to bump into Malcolm Turnbull campaigning, here's some simple to remember questions you can ask him on his Copper/Node Plan:<br /><br /><ul><li>What <i>wholesale</i> price will you charge for VDSL2 connections?</li></ul><ul><li>When will your Plan make a profit, not just be cash-flow positive?</li></ul><ul><li>Over the product's life, what's the ROI you're giving us on $30 billion?</li></ul><div>And if you want, a coup de grace, try this:</div><div><ul><li>Why did you deliberately withhold 25 years out of 30 of Financial Forecasts?</li></ul>or is it:<br /><ul><li>Why haven't you had anyone independently verify your Business Plan and costings?</li></ul></div>steve jenkinhttp://www.blogger.com/profile/16064724730975745470noreply@blogger.com0