Politics trashes the NBN

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I’ve been arguing for a year or so now that I’d be voting for the Libs were it not for three policies. Abolition of the mining tax is crazy given it is a profits based tax and will eliminate itself if margins fall below a reasonable level. For the same reason it doesn’t deter investment. In the short and medium term it isn’t making any money but in the long term it will and the demographic challenge facing the nation means that the lost tax will have to come from somewhere else.

The second policy is the scrapping of the carbon price. This should be Liberal heartland policy, using markets to effect change, so it makes no sense to me that it be scrapped given the likelihood that mitigation policy will be required of the nation.

The third policy is the changing of horses midway through the NBN rollout. I can understand why traditional conservatives balk at this policy. It is a big bill and will no doubt get bigger. I’d be very happy to see a conservative government put a new broom through the thing and demand greater transparency on costs. The Australian today has news of good policy from the Libs on this front:

THE federal Coalition has threatened a crackdown against union-friendly workplace deals on government-funded, nation-building infrastructure projects, vowing to enforce a strengthened national construction code to police conditions that apply to workers.

Opposition workplace relations spokesman Eric Abetz said yesterday the militant construction union had a history of holding key infrastructure projects to ransom, and nominated the $8 billion east-west road tunnel project in Melbourne as one undertaking a newly elected Abbott government would “take steps” to ensure was delivered on time and on budget.

The Australian has confirmed that the Coalition, which has a workplace policy to undermine the institutional power of unions, intends to take the same approach with all government-funded infrastructure projects.

“The community can be assured the Coalition will have a strong and effective building code that cracks down on illegality and thuggery in the building and construction sector, within the first three months of a Coalition government, which will apply to all government infrastructure projects,” Senator Abetz said.

Excellent. I’m all for it. The Libs must as well prevent the kind of contractor gouging we’ve seen in the last few weeks with Leighton subsidiaries crying poor mouth and being gifted fat new contracts. I wonder too how it will address its reinstatement of Telstra’s vertical monopoly.

But, the NBN is still in principle well-directed public investment. The network is simply too big and faces too much tyranny of distance to ever be built by the private sector. As well, the fibre-optic roll out is very well-timed for our post mining boom adjustment, helping to sustain investment expenditure as we head off the mining investment cliff. Even better, it is off balance sheet and does not impact the budget bottom line materially. In fact, in theory it should boost the budget by growing productivity in all sectors but especially the large services component which struggles to gain efficiency by its nature.

That’s the point that’s at large in the media today with a new study by Deloitte Access Economics. From the AFR:

The average household would be $3800 a year better off by the end of this decade due to lifestyle changes enabled by the National Broadband Network, including more people working and shopping from home, a new study has found.

…The study finds the $3800, which is in today’s dollars, would come about largely because people would stay at home more rather than go out to work, shop or even see a doctor.

The saving comprises $2000 per household in cheaper prices and higher wages due to a productivity boost to the economy worth $16 billion by 2020.

Another $634 would be saved per household through the increased use of teleconferencing and telework, meaning reduced travel for workers.

…It finds significant benefits for those outside the cities. “Those in regional areas . . . will be less likely to have to move for education and employment,” it says.

“Broadband, particularly in regional areas, will open up opportunities to allow regional residents to better participate in the digital economy.”

The report concludes that the estimates of what could be achieved are conservative.

“The range of broadband impact is extensive and finds substantial benefits to many different households,” it says.

“Further developments in technology and applications are certain, and are likely to mean that realised benefits in 2020 will be greater still.”

Deloitte acknowledges that this is not a cost benefit analysis. But if we’re talking about a $25-$30 billion uplift in household standard’s of living per annum, even at a significantly higher cost of building that would be worthwhile and it would be difficult to match in any other spend of the same amount of money. There is no comparable assessment of the Coalition’s more limted plan.

Such figures are always pie-in-the-sky so I’d throw a grain of salt over them. But it does illustrate the point of this post. Labor has doomed this policy by failing to cost it for the public. It should have been done with the full scope of the economic benefits. That it wasn’t can only be for three reasons. Either the numbers are questionable, the numbers are so big that they’re easily undermined politically, or Labor does not want to be held to account to any benchmarks. There is no kind interpretation for their silence.

But on the other side, why is the project being cut to ribbons before the numbers are even exposed? That can only be political bastardry as well. And given the pre-commitment to gutting the policy, how can we expect an honest appraisal now of the possible benefits of the project? These questions are pressing enough before we add the very blurry role of Rupert Murdoch, his media support for the Libs, and alleged hostility to the NBN.

Those committed to the tribal following of either political party should ask themselves hard questions about why Rudd and Abbott combined have corrupted this policy before we can even test it’s very promising upside.

Comments

  1. It’s not just the NBN. Can anyone supply a list of worthwhile projects that either party have as a platform for our future.
    At a time when it makes sense to spend and build – we have nothing. Worse we are faced with projects being cut rather than extended.
    We get what we vote for, but it would be nice to be offered substantial policy with meat rather than a lettuce leaf.

    • Yes, PF that is a huge concern.

      There has been zip discussion by the parties on what shovel ready projects could be considered in the event that a slowdown occurs.

      Much of the criticism of the ALP in 2008 concerned their choice of project but to some extent they were limited to what could be started quickly.

      There is no excuse for the absence of any discussion of possible projects so that priorities can be debated and plans developed – especially how they will be delivered and project managed.

      When the slow down arrives as the mining boom continues to slow and the RBAs house price inflation strategy fails to stimulate significant new construction, there will be another mad scramble and more half baked spending ideas and projects.

    • That’s right. Right now we have a very short-sighted, hollow political class. Populism rules. Given the timidity and shallowness of both major political parties, I’m pessimistic about the probability of Australia making any of the necessary hard economic decisions until it’s too late to make any difference anyway.

  2. Frankie says Relax !

    Assuming the LNP win on Saturday what we will get in terms of broadband is what we would get anyway.

    Leaving to one side of course the fantasy concept of laying a blue fibre cable to every existing house including every existing home unit.

    Big Malcolm is laying blue fibre to EVERY new house – which may of course stimulate demand for new housing if the futurist fantasy descriptions of life with fibre are even slightly true.

    He is also laying a blue fibre network to every street so there will be a superb backbone in place for local wifi spots – mobile cell towers and distribution points (nodes) for the legacy copper.

    Because he is only laying the backbone it can happen a lot faster which means many more people who have no or crap connection now will get much better connection asap.

    If the futurists are right and in 20 years there is demand for granny to be sending home made HD videos of body parts to the GP the cable guys can come back and lay fibre cable to every house as the backbone will be in place.

    Keep in mind that at the moment the cable guys are unable to even keep up with new housing construction (those friends I know are still not connected in their new house in a new estate in Sydney – 5 months after moving in)

    Relax – with Malcolm faster Broadband is going to come!

    • Big Malcolm is laying blue fibre to EVERY new house

      I don’t think that’s true, the Liberals plan is still very murky and no one really knows how it’s going to work under the LNP.

      Especially since it will require significantly more involvement from Telstra, who Big Mal thinks will just gift NBNCo its copper for free. Telstra values its copper network at around $30 billion.

      If LNP win the election I think it’ll be time to expand my Telstra holdings.

      • Jason,

        I know what will happen. It will be completed to a design. It will be cheaper than the ALP monstrosity. It will deliver the service that is specified. The LNP will cost the project to a level of at least comprehension and budget standard. Beyond that the project in parts is a basket case and they will have to do the best they can.

        Word on the street is that the project is unravelling from the rorts and contractual discrepancies (intentional, so variations can be gouged!).

      • GSM, you are very much an optimist I think.

        I think after the 3 reviews which the LNP have said they will carry out in the first 60 days; they will drastically pare down the goals of the project (number of houses passed and/or quality of service rendered) or just flat out refuse to continue to issue bonds for it (citing it as ‘too expensive’) and leave the project on its arse.

        Word on the street is that the project is unravelling from the rorts and contractual discrepancies (intentional, so variations can be gouged!).

        I spoke with a guy from a major supplier of fibre optic cable and tools, and he was telling me the biggest problems with subcontractors going out of business was that they drastically underquoted their jobs and as a result could not deliver on the quality standards required by NBNCo.

        Apparently they were expecting NBNCo to keep lowering its standards for signal-to-noise and whatnot. Unfortunately this is the kind of stuff that happens when you embark on any big spending projects – poorly trained subcontractors will inevitably pour out of the woodwork to try and take advantage of the big spend. To be honest, NBNCo would have been better off building their own workforce, training them to standard and managing it themselves rather than farming it off to project management companies who then hired unscrupulous contractors to do the work.

        It’s very common for big engineering & construction projects these days to have a lot of contractual issues, as it has become a part of the game to see just how much you can get away with before people start bringing in the lawyers. Just ask the big resources companies. Look at Chevron’s project in Gladstone.

      • 100% agree

        ” To be honest, NBNCo would have been better off building their own workforce, training them to standard and managing it themselves”

      • 100% agree

        ” To be honest, NBNCo would have been better off building their own workforce, training them to standard and managing it themselves”
        But that would necessitate them being Government employees !

        We all know how well paid and inefficient Government employees are – nothing would ever get done !

      • Australia Post does alright drsmithy, the mail gets delivered.

        NBNCo is supposed to be an independent company from Government, not a Government department. It’s like Medibank Private.

      • I like that one but I reckon when it comes to conservative parties their motto would be

        Deliverying: What’s wrong with the way things have always been?

        For the ALP ( in its current form)

        Deliverying: Sorry, everyone makes mistakes, we need to move on.

    • The problem is the network effect – the benefits swing in when there’s a critical mass on the higher speeds, not just new housing.

  3. The NBN is needed for many reasons, to upgrade a network, etc etc but all the studies on productivity from anywhere are all flawed by model scenarios or data limitations which may them unreliable. Deloitte’s own papers tend to the ‘unknowable’ scale as the network will not be finished for another decade. Experience from other countries doe snot reveal even marginal improvements to growth.

    • All good points.

      I will add that release of a report like this that has been commissioned by the government itself in the final days of an election campaign necessitates the ‘pie in the sky’ claims be immediately discounted, if not thoroughly discredited.

      The AFR have dropped the ball on this one. So have others.

  4. In addition all technology projects produce idyllic views of how technology will make everyone’s lives better. I recall how email and websites were meant to yield a better working environment but people don’t answer email, content on sites are not updated. Govt site are amongst the worst.

    No one should believe these silly reports commissioned to prove a case by the key sponsor.

  5. For those not technically inclined, be clear that Fibre to the Node is NOT a stepping stone or a ‘backbone’ that will enable Fibre to the Home for the whole neighbourhood in the future.

    About half the cost of FTN is the cabinets which terminate the fibre and connect it to Telstra’s copper with ADSL 2+ hardware, there just isn’t enough fibre laid from the exchange to the cabinets to support future Fibre to the Home for all the premises connected to the cabinet.

    • “..there just isn’t enough fibre laid from the exchange to the cabinets to support future Fibre to the Home for all the premises connected to the cabinet….”

      What?

      What happened to the amazing ability of optical fibre to handle vastly larger data volumes as need requires.

      Are you sure those 100M fibres to each house can be upgraded to 1G?

      Whatever fibre(2,3 4 strands or more) is needed to a cabinet to allow for eventual fibre to each house – should it ever be required – can be easily accommodated. Mal – take a note please, have the cable guys lay some dark fibres to the boxes to be on the safe side.

      Funny how optical fibre has limitations when it is not being used by the ALP.

      • What happened to the amazing ability of optical fibre to handle vastly larger data volumes as need requires.
        Nothing.

        Are you sure those 100M fibres to each house can be upgraded to 1G?
        Yep.

        Whatever fibre(2,3 4 strands or more) is needed to a cabinet to allow for eventual fibre to each house – should it ever be required – can be easily accommodated.

        Mal – take a note please, have the cable guys lay some dark fibres to the boxes to be on the safe side.
        And there’s the rub. FTTN as a “stepping stone” requires enough be run for an eventual implementation of FTTH. Do you seriously think that’s going to happen ?

        Funny how optical fibre has limitations when it is not being used by the ALP.
        No, it has limitations when it’s used in a way that’s limited.

      • To me this is not ALP vs Coalition, if the coalition supported FTH and ALP supported FTN I’d be arguing for the Coalition’s position.

        Sure the capacity of the fibre to the cabinet can be upgraded in the future. However firstly that won’t improve the speed to any copper users who are constricted by an ADSL2+ DSLAM. Secondly while you may now match what the old 100M FTH could have provided to most premises, you are now missing out on what a similarly upgraded FTH could be providing. FTN keeps you one step behind.

        I imagine I will be a fixed wireless/ satellite user, so this isn’t something I think will personally benefit me but I think it is important for the country to have the best infrastructure possible to overcome its natural impediments.

      • This is technically true, but then you are still needing your cabinets (of which about 600,000 will be required) even after you go FTTH. It’ll still require active switching units to go FTTN->FTTH this way, so you’ll need power to the units still and they will be vulnerable to inundation, etc. This means higher operating costs.

        Whereas GPON is a passive optical network using optical gear to split different wavelengths of light to different houses. You only have to lay cable once, and there is now 10GPON possible (which is 10gbit) with existing fibre but new end point equipment.

        Then of course there’s the cost point of view. It will cost more to go FTTH later, and what happens to all that old VDSL gear that will have to be trashed? It will cost a lot more to go FTTN and then>FTTH later than to just go FTTH now.. so why not go FTTH now? Why waste time and money going with what is clearly obsolete technology?

        The idea that the FTTN plan will be cheaper is total conjecture too.. the LNP has not factored in the cost of using Telstra’s existing copper, which will not be cheap.

      • Jason,

        The good thing about Malcolm Is that if those concerns you raise prove correct and the node roll out quickly indicates that going to each house with fibre is a sensible idea, he is likely to change course.

        Under his plan he recognises that FTTH is good for new houses and ultimately may be needed for existing houses and units.

        No skin off his nose to change course and he will have plenty of evidence and costings to explain why.

        Having said that, I will be surprised if the cost of a node cabinet is not a lot cheaper than trying to rewire every house and apartment block.

      • The good thing about Malcolm Is that if those concerns you raise prove correct and the node roll out quickly indicates that going to each house with fibre is a sensible idea, he is likely to change course.

        That’s purely conjecture, I am not sure I would believe that. I am more inclined to think that if Malcolm doesn’t get the answer he wants then he’ll just shitcan the project altogether. The Coalition have not made a commitment ANYWHERE to finish the NBN in any form, they can cut funding whenever they like and leave the project half-finished if they wanted to.

        Having said that, I will be surprised if the cost of a node cabinet is not a lot cheaper than trying to rewire every house and apartment block.

        It all hinges on what Telstra will charge to sell their copper to NBNCo – something that Turnbull has totally ignored (and in fact recently he said he expected Telstra to just give it to NBNCo, what a joke!).

        A responsible person would also consider longer-term maintenance costs of copper compared with fibre optic. But I guess it is a bit much to expect a long-term focus from politicians these days.

      • What makes you think the LNP do not believe that improved broadband is a vote winner.

        It clearly is and they accept that, which is why they changed policies.

        The LNP policy is simply what anyone would do who did not start with a thought bubble on a back of a coaster. ” rewire every house with fibre without the workforce with the skills to do it”

        It is certainly what the ALP policy will end up looking like if they were to win and decide that taking a decade or more to improve connection speeds for much of the population is simply too long.

    • Another key consideration not to be ignored with the FTN approach is how do you supply a very reliable source of power to all these Node Cabinets that are going to be popping up on street corners through out the suburbs?

      It will be a very costly addition to the FTN approach that is not required under the Fibre to the Building/Home approach.

      • And what happens to FTTN when vandals realise that each one of these cabinets is going to have a nice fat bank of expensive batteries in it?

      • Jason,

        I suggest the main consideration with the batteries will be more of a maintenance issue. They will need to be checked every 6 to 12 months and replaced every 5 to 7 years. And this is for the “maintenance free” type batteries, yes even these batteries require checks if you want them to be reliable. This will be a significant ongoing expenditure.

        On the hand the LNP could just use the cross your fingers and hope for the best approach. This would probably appeal to them in the lower socio economic neighbourhoods.

        Vandalism will no doubt be a problem for the FTTN approach but I suspect no more than the problems faced by the transformer cabinets that are now located in the suburbs with underground power. And again mainly a problem in the lower socio economic neighbourhoods. So not really a problem I expect Malcolm to spend much time on.

        http://www.news.com.au/breaking-news/national/abbott-stands-by-liberal-perth-candidate/story-e6frfku9-1226710535508

  6. ” Labor has doomed this policy by failing to cost it for the public”

    You cannot understate the importance or the cost of this. The whole project, no matter whether one is for or against the principle of it, was not costed. Gross and willful negilgence, ineptitude, corruption and waste from this horrid Govt has been committed with this project.

    By not costing the NBN, better, faster, cheaper , more effective options across a whole range of technology, suppliers, schedule sequencing, and material were never put to rigorous scrutiny and competition tests. Who knows therefore what redundancies, failures and shortcomings have already been “built in” to this network?

    Incompetence on the biggest scale we have seen in Australia, with the exception perhaps of the subs.

    • I agree. I like the idea of the NBN but don’t like the extravagant, seemingly endless cost blowouts. That’s what you get when you design something on the back of an envelope and then start building the thing with only that mudmap to go by. It just looks so wasteful and haphazard.

      On the other hand, I was at a grand old pub on the weekend. It was three storeys and built in the 1800s with ornate finishings. I looked around and marvelled at the detail and it occurred to me that things like that will never be built again. In those days, people built what they needed and found the money to do it. Even if it took many years and they had to stop for a while until they raised some more funds. These days, such a project would never get up because both the cost and the quality of finishing would be considered excessive. Something cheaper and less visually appealing would be built instead. The same thing applies to railways. Many of the suburban railway lines in our capital cities would probably never be built today because governments would wring their hands and the time, effort and cost. Back then, they just did it. I know times change, but just sayin’.

      • I like the idea of the NBN but don’t like the extravagant, seemingly endless cost blowouts

        TBH this sounds like a repeated slogan than actual fact. I understand that NBNCo is behind schedule and a lot of this is to do with the Telstra negotiations taking a lot longer than forecast. But on a project like this, behind schedule doesn’t necessarily mean ‘extravagant cost blowouts’.

      • Jason,

        Please, get real. This project has become a horrendously costly shambles. The LNP has to somehow complete it. I’m sure they will and there will no doubt be many changes to it in order to accomplish it’s completion. Many won’t like those changes and they can thank this hopeless Govt for that.

        At the end or close to it, there should an Enquiry into the whole NBN saga, if only to detail and expose the fraud , waste and incompetence so that it should not be repeated. There MUST be more respect for and scrutiny of Govt expenditures embedded in our legislation. A major reason why this project was never on the Budget books was to avoid the accountability. That has to stop.

      • “There MUST be more respect for and scrutiny of Govt expenditures embedded in our legislation. A major reason why this project was never on the Budget books was to avoid the accountability. That has to stop.”

        GSM, I hope you’ll be just as hard on Abbott as he’s already lying about a public business case being available for the Melbourne East-West link that he’s keen to fund for $1.5 billion.

        The Victorian Premier has said that there will never be a business case released to the public so I would expect Abbott to refuse funding based on his commitment that no infrastructure projects worth more than $100 million would be funded without an “published cost-benefit analysis”.

        http://www.theage.com.au/federal-politics/federal-election-2013/tollfree-eastwest-link-preferable-tony-abbott-20130902-2t0ff.html

    • GSM, to be fair, I believe the Coalition is proposing to keep the NBN off balance sheet as well. Nobody wants it on the books.

      • Ralph,

        It must be costed the best of accountancy standards, given the complexity of it’s status now.

        AB,

        Of course the same standards must apply to Abbott. Let’s see how they finally fund it. The Libs will severely test their support if they don’t get wasteful spending under control.

      • “The Libs will severely test their support if they don’t get wasteful spending under control.”

        Agreed. And they may even grudgingly get my support if they do.

  7. I share many of the sentiments displayed by HnH here. To me, reversibility is the key for an expensive project with a large element of uncertainty (such as the NBN).

    Microsoft just made it “certain” that Windows phones will hit the market. The rise of smart phones (and hence the uncertainty about the future demand of the NBN) was clearly visible even when the ALP first announced the NBN extravaganza. Plus, our imagination is limited; we have absolutely no idea as to how the world will look like in 3 years, 5 years, 10 years.

    Given all these, does not it make sense to structure the NBN projects in steps with an option of pulling out at little or no cost after the end of each milestone, in case the situation “unexpectedly” changes? The ALP was showering public monies with little care at that time (at least that is how it looked to me). If they had cared, they would have done the homework before announcing a big splash.

    • Dumpling, demand for bandwidth is growing exponentially and wireless technologies cannot keep up.

      Wireless is limited for physical reasons – it is transmitted over a medium which is saturated with other signals (TV, radio, satellite, military, etc.) as well as physical obstructions (walls, buildings, trees) and weather interference.

      Then you have to factor in that there is no control over congestion – have you ever tried making a mobile phone call from an area where there is a big music festival taking place?

      Fibre is a totally isolated medium – you have the entire spectrum of light in that cable dedicated to data transfer. There is no interference from other transmitters, and the number of people transmitting over one cable is limited to the number of houses terminated on each GPON strand.

      Theoretically you can achieve the same throughput (say gigabit) as optical fibre, but it would require very high power (which can cause ionising radiation and interfere with other services using spectrum) and larger frequency bands than are currently available. Alternately, you could achieve higher speeds over shorter distances (for example wifi access points can put out 300mbit if you are close to them, 5-10m), but then you need fibre to feed those access points anyway so why not just allow people to use the fibre instead?

      To put it simply though – optic fibre will always be far superior for bandwidth provision than wireless solutions. And that should be the key consideration when deciding on technologies for a data network – current bandwidth demand and the growth rate.

      Look at the statistics – while 49% of services in Australia are 3G/mobile they only account for 2% of the total bandwidth used. That is a truly damning statistic.

      • Thank you for this. Very informative. I love it when I learn something new so that I know better today than I did yesterday!

      • +1 Jason.

        I’d love for this discussion (both on MB and in the media at large) to revolve around the objective merits and costs of a fibre network, lead by people who understand the detail.

        Instead we tend to hear the partisan carping of people unencumbered by the facts.

      • Jason, good explanation, but its misses the most crucial point, which is that wireless data is the FASTEST growing internet sector. New laptops /tablets dont even have a place to plug in a 10baseT (ethernet) all data connection is through WiFi or 3G/4G. Additionally if I subtract peer-to-peer download/upload data volume (mostly video) I get a real measure for the fixed line data requirements of the household.

        Understanding that the typical users connection path is
        Server (somewhere in world)
        Electronic router
        Optical fiber
        Undersea fiber ( over 60% of data…from memory)
        Australian router
        Optical distribution (NBN or other)
        Electrical last mile (or FFTH)
        WIRELESS to device

        The future ubiquity of the last step (wireless) is the most important step to understand, average Joe is not going to give up un-tethered access so the wireless bandwidth problems that you allude to are with us regardless of weather we implement FFTN or FFTH.

        In the case of FFTN the local RF spaces can be professionally managed with appropriate settings to ensure maximum utilization of the precious resource. I’m not going to go into these methods because it is outside the scope of this post.

        Compare this with FFTH and WiFi. When I lived in China it was in a highrise building and everyone had their own WiFi. so we all interfered with each others access. This caused some people to buy extra high power WiFi transmitters (intended for outside use) so that their system worked better. Of course everyone elses system worked worse so they eventually discovered the high power Tx units. this is the reality of a shared local resource (wireless BW) for the last 100m.

        This last 100m wireless problem is the crucial problem to be solved regardless of the FTTH/FFTN outcome.

      • Jason, good explanation, but its misses the most crucial point, which is that wireless data is the FASTEST growing internet sector.
        That’s because it’s starting from the smallest proportion.

        New laptops /tablets dont even have a place to plug in a 10baseT (ethernet) all data connection is through WiFi or 3G/4G.
        Both wrong and irrelevant. The NBN delivers data to your local WAP, which then distributes it within your household at dozens to hundreds of MB/s.

        Additionally if I subtract peer-to-peer download/upload data volume (mostly video) I get a real measure for the fixed line data requirements of the household.
        How do you figure that ?

        The future ubiquity of the last step (wireless) is the most important step to understand, average Joe is not going to give up un-tethered access so the wireless bandwidth problems that you allude to are with us regardless of weather we implement FFTN or FFTH.
        No-one is suggesting the end user give up wireless connectivity.

        The point is wifi of a range meaningful for distribution to more than a single building, is never going to deliver the performance or reliability of a hardline to a WAP in the next room.

      • @DRsmithy
        “The point is wifi of a range meaningful for distribution to more than a single building, is never going to deliver the performance or reliability of a hardline to a WAP in the next room”

        This is not a theoretical point its a practical issue. WiFi IS the endpoint for most (if not all) household Internet systems. So locally managing the available Wireless bandwidth IS the most critical issue if we all want better faster data access.

        A managed fully Meshed MiMo (or maybe DiDo) system for the last 200m is a way for us to all simultaneously get over 100Mbps to our handheld devices, this will NEVER happen with self provisioned WiFi (the system we have at the moment)

      • This is not a theoretical point its a practical issue. WiFi IS the endpoint for most (if not all) household Internet systems. So locally managing the available Wireless bandwidth IS the most critical issue if we all want better faster data access.
        The speed of local wifi only becomes a concern when it can be overwhelmed by the speed of whatever is feeding it. Local wifi (inside a house) can deliver dozens to 100s of Mbs already.

        A managed fully Meshed MiMo (or maybe DiDo) system for the last 200m is a way for us to all simultaneously get over 100Mbps to our handheld devices, this will NEVER happen with self provisioned WiFi (the system we have at the moment)
        Rubbish. You can deliver 100Mbs connections to multiple wifi devices inside a house _today_.

      • “Rubbish. You can deliver 100Mbs connections to multiple wifi devices inside a house _today_.”

        You cant have it both ways.

        Either local wireless data is a bottle neck OR its is not.

        If local wireless BW and interference is not a bottle neck and we can all have 10’s or even 100’s of 100Mbps WIFI’ links running than logically we can also have a wireless distribution from FTTN cabinets, exactly the same spectrum and exactly the same throughput limitations. Exactly this point was my original point.

      • If local wireless BW and interference is not a bottle neck and we can all have 10′s or even 100′s of 100Mbps WIFI’ links running than logically we can also have a wireless distribution from FTTN cabinets, exactly the same spectrum and exactly the same throughput limitations.
        Are you saying there’s no difference between wifi distribution when most clients will be within 20m and separated from the WAP by one or two walls, and wifi distribution when most clients will be outside of 100m and separated from the WAP by numerous whole buildings ?

      • Look drsmithy, all I’m saying is that in the final analysis local wireless data distribution IS the real problem regardless of the FTTH or FFTN configuration. So we might as well solve this problem first rather than implementing FTTH and figuring out that everyone’s home WiFi is interfering with everyone elses home WiFi.

        If you reduce the cell size (100m down to 20m) than you get to reuse the spectrum at some distance. Ultimately Spectrum reuse gets real complex when you shrink the cell size to the point that simple sheetrock walls (in intended path) present more attenuation than air in all unintended paths. This is precisely why Distributed Tx Distributed Rx systems are potentially such a game changer, DiDo enables an independent optimization of the link budget for each Receiver position, that’s Huge especially if you combine this with dynamic subcarrier loading for each of the OFDM carriers. The carrier maps for each of the DiDo end points will thereby automatically correct for path loss changes.

        Anyway this is the wrong forum for this topic so I’ll leave it at that.

      • Bob, your point about WiFi in high density apartments is valid (I did a stint living in China too and experienced similar issues – setting my router to auto channel hopping did quite a lot to help fix this).

        However, this is not such an issue in Australia because a) less people live in apartments than those that live in houses / detached dwellings and b) average apartment size is significantly larger than in China, thus space between access points is larger. No doubt technology will get better to allow more wireless devices to co-exist without interfering with each other – that will be driven by market demand.

        My point is that for the provision of bandwidth to keep up with demand, wireless protocols will never be better than fibre optic. Those are the pure physics of the situation. Most people can get between 100-300Mbps wifi in their homes (although it will very in speed over distance and through obstacles), but you still need the pipe to go to that WiFi access point.

        Look at the proliferation of clients that WiFi has brought us – WiFi TVs, WiFi fridges, WiFi phones, tablets, laptops, DVRs, Gym Equipment, etc. The number of clients is increasing as well as the bandwidth consumption of individual appliances. It isn’t just about peer-to-peer file sharing – everything is moving to ‘Smart’ stuff. Look at trends in the electrical sector – ‘smart’ power points and lighting. Everything is getting ‘smarter’ and to do this requires collecting data and trying to predict your wants and needs.

        Tele-presence is another potential industry just getting off the ground, being able to control robots representing you across the world (see https://www.suitabletech.com/).

      • Look drsmithy, all I’m saying is that in the final analysis local wireless data distribution IS the real problem regardless of the FTTH or FFTN configuration. So we might as well solve this problem first rather than implementing FTTH and figuring out that everyone’s home WiFi is interfering with everyone elses home WiFi.
        You are trying to disingenuously equate wifi distribution at the neighbourhood level, with wifi distribution at the household level. Yes, there are some caveats in particular types of high-density housing for home wifi, but that is not a reason to throw it away for everyone, especially since they are in the minority.

        Wifi data distribution at the household level is, by and large, already a solved problem. Trying to argue it’s some sort of roadblock or negative for FTTH, and by extension a reason to prefer FTTN, is absurd.

        I’ll take a bet anytime that we have reliable 100s to 1000s of Mbs networking on a household scale long before we have reliable 10s to 100s of Mbs networking on a neighbourhood scale.

  8. The biggest mistake lies in making the NBN free to households. This removed any incentive for cost control.

    The Coalition’s version of NBN have one stumbling block : Telstra. They can stop the network from being built for the next decade by using court challenges. For ‘Fibre to the Node’, the ‘node’ only have enough space for set of equipment, so the worse outcome is for every other ISP turning into a Telstra reseller. It’ll be a rent seeker’s paradise. Before the ACCC made the copper wire into a ‘declared service’, Australia have the most expensive and restrictive broadband in the world. ($150 for 3 Gig at 1.5mbit). It may happen again.

      • Interesting take, if a little depressing. I didn’t realise that FTTN was just a suggestion and not a commitment.

      • The Coalition has been very cagey about technologies, funding and staging of their rollout. At some points they have talked about specific splits (eg. FTTN 75%, FTTP 18%, Wireless X%, Satellite X%), and then other times said that it would be up to “NBN to choose the appropriate technology or strategy to meet the budget”.

      • “I didn’t realise that FTTN was just a suggestion and not a commitment.”

        Yes, I’m a little nervous about that as well.

        Although I far prefer Labor’s plan, I do give Turnbull a lot of credit for convincing the Coalition to adopt an NBN plan. I hope that he’s able to convince them to actually stick with FTTN rather than dumping the idea (which I fear is more likely than many people suspect).

        I’ll be paying for fibre to my house, assuming the costs aren’t completely outrageous as I have a 100m driveway and am at the end of a 1km road surrounded by water on three sides (still within Melbourne though). Upload speed is more important to me than download.

        Given I work from home and will easily make use of the additional bandwidth, I wouldn’t have a problem paying between $2-3,000 if required. Any more than that and I’d probably hesitate depending on what the alternative solution was.

  9. I already get 100mb download in inner city Brisbane(via cable), it looks good on the speed test, but not much else.

    • Because it’s only you and a few others on that. If the country was on it, you could chat away in full HD quality to your colleague sitting in Perth without the feed stuttering, for example. Or in the evening when 3 people in your neighbourhood on cable start streaming movies from iTunes, your speed won’t go down from the shared pipe.

  10. The part I find fascinating is how an organisation as totally corrupted as Deloittes has come out swinging, just before the election, with a whole lot of ‘pie in the sky’ BS and is being quoted far and wide as some sort of authoritative source…especially by the ABC.
    Doesn’t anyone smell a pile of stinking festering dead rats here?

    • “Doesn’t anyone smell a pile of stinking festering dead rats here?”

      Well yeah, but it’s not uncommon for organisations to come up with a load of crap leading up to elections.

      What’s a bit strange here is that Deloittes has chosen to support (or lend support to) the side that’s almost certainly going to lose the election.

  11. My business in Western Brisbane has very good speeds on a relatively cheap hook-up. I guess NBN will come past here soon. At home on the Sunshine Coast internet is basically unusable. I’m not scheduled to get any upgrade with NBN in the next five years.

    Again we have the situation where we are making up a fairy story about something in order to get the outcome we want. According to Deloittes ‘It’s all good!” Increased living standards, consumers can consume more ever more easily !!!!
    Am I the ONLY one who can perceive any risks in that strategy?

    THEN….This damned thing does NOT replace the mining boom. According to Deloittes the great justification for this thing is that consumers can consume more online and download porn faster. We’re spending how much foreign exchange we don’t have?
    What mines and farms are we selling off to finance this thing? Are we damned sure that the sell-off of those farms and mines don’t have a NEGATIVE impact on our economic well-being?

    • I think that it’s a mistake for household or small business users to look at their needs and say I’m OK with cable or ADSL2 so everyone should be. the reality is that our universities could be streaming live to anywhere in Australia, our medical facilities could be greatly expanded to perform remote consultations, operations and research, science could take a leap forward, and large corporate users could enhance their software and user speeds considerably.
      We need to stop saying it’s all OK and start seeing the possibilities, and allow for possibilities that we still haven’t even dreamt of yet.

      What does Japan have – not ADSL2.

      • Re medical GP’s in the regional towns already have what they regard as very adequate access to medical advice with the current facilities.

        I’m not disputing that are NO benefits anywhere. However MOST of the cost of this thing is delivering to HOUSEHOLDS which has nothing to do with any nof the things you’ve quoted Peter.
        Deloittes is trying to justify it based on the benefit to households.
        Can we have some clarity as to exactly where and to whom the benefits arise? We don’t even have a clear view of that.
        I AM asking, given the state of our economy, can we afford this damned thing in the form in which it is now being constructed. It’s very possible that the over-all effect on our economy could well be negative if we end up selling large blocks of natural resource assets to fund what appears to be a fundamentally consumer item.

      • That is a good point Flawse,

        At the present time most household usage of faster broadband connections will be to consume intellectual property owned and sold by Americans.

        No wonder the yanks reckon the NBN for a Australia is a swell idea.

        We are build a distribution system for their exports.

        Plenty of good reasons to improve connectivity including broadband but the idea that it is all good and a cost is no object very high speed fibre to every house proposal is the most sensible approach is highly debatable.

      • I’m not particularly interested in Deloittes or households. The problem with the ALP version is that to satisfy the independants they had to deliver the NBN to some remote areas and then households before the major corporations, universities, research institutes etc etc – something that I will never forgive them for.

        Households don’t need “the last Mile” but some vital users do, and they are the users who can potentially drive growth in the future.

        I sympathise with farmers and rural users, they need a decent broadband facility as well, but they don’t need fibre that can potentially run thousands of times faster than speeds that suburban homes now have.

        The problem with the LNP version is that they won’t say exactly what the major users will end up with. What we have now just doesn’t compare with other nations who lead us in research and development. To compete we need equal or better speeds.

        http://gigaom.com/2013/04/22/as-internet-gets-faster-hong-kong-south-korea-lead-the-broadband-speed-derby/

        BTW Rupert is concerned that his cable empire will be trashed by Netflix etc when households can livestream for a fraction of the price of Foxtel. Hence his assault on the ALP.

        This issue is a gamechanger for future technology and industry redundancy.

      • Indeed Peter, the history of IT is littered with people saying “I think X will be enough”. Even a smart guy like Bill Gates was saying that 640 kilobytes is all of the memory your computer will ever need (new PCs these days come with 2gig, about 3,200x what Bill was suggesting that).

        When it comes to information, I don’t think anyone can accurately predict how much we ‘need’ and how accessible we ‘need’ it. At it’s base level, this is what the internet is. However that information could be anything – it could be a wikipedia article, or a university lecture, or control signals for a remotely operated surgery robot. The possibilities are literally endless.

      • Exactly Jason – it’s the possibilities and what can be, not what is.

        people lack vision – if we are going to have an NBN then give it the best bones possible.

      • I agree with the sentiments that we should implement the best and most robust NBN solution to future proof it as much as possible. Cost is a very important consideration but not the central issue, considering what ever we install will in all likelihood be around for at least the next 50 years.

        We should also factor in that at some point in the next two decades we will need to replace the copper network.

  12. HnH you’re a Green voter. With all that implies. Libs have never stood a chance in your eyes.

    It would be interesting to see your analysis (and costing) of Green policies. Given you admire them so greatly. 😉

    • Low blow? In defence of HnH, he’s made it clear he’s doing so out of protest. And many others will too, simply because they can’t bring themselves to vote for either of the two major parties.

      • Any protest vote to the Greens is a dangerous thing. I get it when it’s undergrad’s thinking they are making a difference (and they are, but not in a way they understand) but do not get it when it comes from the politically engaged intelligent mature voter particularly when combined with genuine interest in the national economic future.

        HnH would not have taken this as a low blow as it was not intended that way – he knows how to roll with the punches in any case 😉

      • Balderdash 3d1k,

        The greens only have influence when one or the major parties put political interest before national interest.

        If they are acting in the national interest the greens will always be out voted.

        A vote for the greens (ie more senators or reps or just preference flows) puts more pressure on the major parties to act like reasonable, moderate centrists rather than ideologues.

      • Pish posh. 3d1k feigning objective concern on this issue is as crazy as buying boats back from indonesian fishing villages, as hypocritical as chiding our entitlement mentality while handing out $75,000 cheques to North Shore senior associates.

        Vote Green/Katter/Palmer/Independents – whatever it takes. The Liberal party’s complete domination of our political organs from Saturday ownwards may be a welcome thing to those who fantasise about Julie Bishop beating their hog tied arse with a rolled up copy of Real Solutions, but intelligent, balanced, reasonable thinkers will recognise it as a far worse danger.

      • Saturday ownwards may be a welcome thing to those who fantasise about Julie Bishop beating their hog tied arse with a rolled up copy of Real Solutions

        Man I really did not need that image in my head. You’ve pretty much summed it up though spleen.

      • Jason, Spleen has indeed spent many a lonely hour fantasising about Ms Bishop (the younger…and probably the older if he is honest). Here is Spleen in full stride:

        ‘It’s not hard to imagine the kind of baroquely perverse sexual life of the would be Foreign Minister. One imagines the candle lit dungeons, the smell of stale piss, ammonia and unwooded chardonnay, the thick stone walls draped in blue velvet and immense blown up images of muscular negro bodies, the ornate hand carved tables encrusted with candle wax, on which Bishop has fastened the hands, feet and necks of her shadow cabinet colleagues in tight leather straps and studded dog collars.’

        Spleen, a tissue to wipe your…lips?

      • I totally dig the dominatrix thing Bishop’s got going with her conservative sex pervert colleagues. I just don’t want ’em dominating the country, as much as you may be widening your own mouth in anticipation.

    • If someone decides to vote Greens once, does that makes him a “Greens voter”?

      I guess through the eyes of an ideologue, everyone else must look like one too.

      • Que? You vote Greens you have descended to being a Green voter. There’s no way around it.

        But you have a point – it is indeed unpalatable to the sensible.

      • Give it up 3d1k. You know as well as I do that MB will always insist on holding the LNP to much higher standards that the Greens or Labor. You also know that 99% of MB commenters want the NBN at ANY cost. Cost does not matter in this case because so many are wrapped in this I.T., infrastructure at any cost warped groupthink where the public purse is a bottomless pit of (other peoples) money to be blown on stuff. So just give it up.

      • You also know that 99% of MB commenters want the NBN at ANY cost. Cost does not matter in this case because so many are wrapped in this I.T., infrastructure at any cost warped groupthink where the public purse is a bottomless pit of (other peoples) money to be blown on stuff

        Jeez mate at least take a breath while you stuff words in my mouth and attribute things to me which I have never said.

        But if you want to talk about cost, the LNP want to spend 2/3 of what Labor is spending for a network based on obsolete technology that AT BEST will only be able to provide 10% of the capacity (based on current publish max rates of 100mbit vs. 1000mbit). The LNP want to pay for a network that is little better than existing ADSL2+ technology.

        If you want to talk cost/benefit, if the LNP have some sort of ideological opposition to FTTP then they are far better spending less money (say a couple of billion) on improving people’s access to existing ADSL2+ than spending tens of billions on a new network comprised mostly of obsolete technology that is near the end of its usefulness (copper).

      • Jason,

        MB has a long history of supporting the sacrosactity of the NBN. So catch up on some threads and find one, just one negative article among the dozens that is not supportive – no costs matter.

        I happen to think the NBN is a monumental waste of taxpayer money, at any cost. That’s just me. You sound like the other I.T. wonks here who love the thought of faster internet at taxpayer cost. Don’t bother, I have heard all the so called wonderful future unknown benefits of faster BB and the NBN. Like almost everything else about this Govt and Rudd in particular , it’s all BS.

      • dumb_non_economist

        Jason,

        You need to understand GSM’s makeup. He doesn’t know anything about NBN just as he doesn’t know anything about climate change science, but he’ll take a position on it based on his ignorance just the same, using whatever crap info he can lay his hands on. It won’t matter what the opposing opinions range or depth of expertise is, it will be rejected. Once he’s formed a view it’s unchangeable regardless of available evidence.

      • GSM I am not in IT, I am an electrical engineer with experience rolling out fibre for clients. I know how projects work, especially ones based on the client-primary contractor-subcontractor model that NBNCo is using, so I understand a lot of the delays around the project. So far there is little evidence that NBNCo is being ‘rorted’ or taken for a ride. Most of the delays are to do with the extended negotiations with Telstra (was supposed to be 6 months, ended up being close to 18) and unqualified subcontractors not doing what they said they were going to do. That’s just a fact of life on these kind of projects – and it usually ends badly for the subbie by the way which is why a few of them are starting to cry poor.

        But I wouldn’t expect to change your mind based on reason or evidence, it seems like you made up your mind first and decided on which facts fit into it afterwards.

  13. i think the approach should be
    a) Libs node approach – this WILL make a big difference more quickly
    b) if anyone wants fibre from the node to the home (as opposed to copper) then pay for it themselves. Dont see why i should pay for my neighbours over consumption of data via too many movie downloads and addiction to social media.

    Its a luxury not a right.

    • Will the node approach make a differance?

      http://nbnmyths.files.wordpress.com/2011/06/fttn-speed-graph.gif

      At 600 meters from the node VDSL2 and ADSL2 are the same, ADSL2 is even better due to its ability to handel less qaulity copper.

      At 800 meters from the node VDL and ADSL2 are the same, once again ADSL2 is better on poor quality lines.

      Upstream wise VDSL2 only beats ADSL2 at Sub 500 meters and then drops below adsl2 at around 550-600m

      People who currently have bad copper will still have bad copper and will get a worse service on a VDSL solution. I have left out vectoring as the idea of doing 25/30Mhz on our copper is a joke, all speeds are listed at 17.6Mhz

      So we spend 20 Billion on a NBN that will have little improvment or 40 Billion on a NBN that will have a massive improvment.

      I say its the Labor NBN or no NBN as the LNP one is just a waste of money.

      • Not sure I understand:
        If you dont extend the system BW for VDSL (i.e 30Mhz or even 100Mhz) than the only change in VDSL over ADSL is support for adaptive higher order QAM’s and better FEC. With VDSL technically you get about half your throughput increase (over ADSL) from the lower near side (downstream) adjacent pair interference( reduced signal cross-coupling).

      • VDSL support 7(or 8) different bandwidths and all of them are alot higher then ADSL2/+ and even at lowest 8mhz it will still have 4 times the symbol rate of adsl2+ and this is before you modulate.

    • Dont see why i should pay for my neighbours over consumption of data via too many movie downloads and addiction to social media.
      Do you also get upset about the size of your neighbours’ mains water pipe because he washes his car and all you do is drink 3 glasses of water a day ?

  14. The LNP scream for more detailed cost/benefit analysis on a telco project running 20/30yrs into the future….and yet with 3 days to go they have not provided costings of their own policies for analysis.

    Where are your costings Joe?

    • Yes. But I think the word hypocrisy is lost on many people in this argument.

      No doubt when the LNP finally get around to detailing exactly what they are going to do with the NBN they won’t be producing any cost benefit analysis of any substance either.

      A bit like the East West Link in Melbourne.

  15. ALP’s mistake was trying to build something for the future in the worlds largest retirement village.

    “One of the UK’s foremost telecommunications experts, a former chief technology officer of British telco BT, has publicly stated that fibre to the node-style broadband is “one of the biggest mistakes humanity has made”, imposing huge bandwidth and unreliability problems on those who implement it, as the Coalition may do in Australia.”

    http://delimiter.com.au/2012/04/30/fttn-a-huge-mistake-says-ex-bt-cto/

    • Another quote from that article

      “Cochrane is the UK telecommunications equivalent of a hippy. In his segment in the UK parliamentary committee into broadband, he rants and raves about how great fibre to the home is, and highlights many examples where communities have independently rolled out fibre to their neighbourhoods without the assistance of major telcos like BT.

      Cochrane is an out and out evangelist for fibre broadband, and it shows in his one-sided approach to the matter.”

      The bizarre thing about that article is its claim that

      “The volume of the NBN critics in Australia is just so much louder, that they get heard a lot more. In comparison, the volume of those for the NBN in Australia — even though they represent the majority of the country — is much softer.”

      Who is he kidding?

      The ALP NBN plan gets a free pass across most of the media and certainly from the majority of the population who loves governments that give them stuff.

      The only reason I question a plan, that suits my private interests perfectly, is that I have some regard for how we deploy our most definitely finite resources and I know that wasting resources has a significant impact for those on lower incomes – even if it is not easily identified.

      • The ALP NBN plan gets a free pass across most of the media and certainly from the majority of the population who loves governments that give them stuff.
        So I’ll confess I don’t read or watch a whole lot of MSM, but I’m pretty sure whenever I do hear anything about the NBN on it, it always seems to be about how it’s way over budget, or behind schedule, or poorly planned because of Telstra’s asbestos-laden pits, or completely unnecessary because nearly anyone can get a few megabits of ADSL connectivity and that’s all they need, etc, etc.

        Dunno if “free ride” is the way I’d describe it.

      • “The ALP NBN plan gets a free pass across most of the media”

        What? Do you read the Murdoch press? you know…. that 70% of the capital city newspapers that have been trashing it for the last 3 yrs?

        PFH, what media are you talking about?

      • The ABC ! It is as close as I get to mass media these days. I suppose I should widen my menu but from what I hear it may not be worth the effort.

        Oh and fairfax and business spectator which for a News limited publication seems to run a fairly positive futurist line.

        But with 1 day to go – we can soon join forces to give Big Mal grief on the performance of his baby!