On Sat, Apr 13, 2013 at 9:13 PM, Ken Schaefer <[email protected]> wrote:
> Currently the NBN charges are regulated by the ACCC, and they’ve already > signed a consent agreement around charges rising by less than the inflation > rate (i.e. requiring internal efficiencies). > The problem as you no doubt are aware is that NBN Co isn't *currently* charging RSPs what it intends to. Specifically, there are no CVC charges being levied. You are aware of that right? You do know that NBN Co is going to charge CVC pricing that is within pissing distance of what I can buy *domestic and international IP transit for* right? They're waiving it during network build but you and the rest of Australia are in for a lot of sticker shock. > If you’re so opposed to these types of monopolies, perhaps you should be > agitated for privately provided sewerage pipes and water mains? There’s > good economic reasons that certain industries (typically that require > physical distribution channels) are called “natural monopolies” – the > potential market can’t grow bigger, but adding more suppliers just divides > the existing market between them in ever smaller amounts. Most economists > would agree (if not all economists) that natural monopolies should be run > by the government, or regulated by the government. They aren’t free markets. > Let me do your homework for you Ken, then you can tell me about the benefits you'll be enjoying after NBN Co adopts its commercial pricing structure: - ISPX needs to connect to NBN Co. - ISPX needs to buy an office, hire support staff, network engineers, build extremely high speed backhaul to 121 points of interconnect with NBN Co. - ISPX needs to buy all of the normal stuff to run their network including LNS, routers, peering links, links with transit providers, a CDN for selling Fetch TV, a VOIP system with call termination, blah blah blah. I don't know what that costs, but at the end of the day, it will be $x per subscriber. I'm doing to call this $15 per subscriber as a completely out of my butt figure. If you disagree with that, then you can happily change it to a 3D hologram-frog-like figure of minus $15 per subscriber as it won't make a knob of nanny goats shit difference to what I will type next. Then they have to enter into agreements with NBN Co for a number of things. I am going to buy the 100/40 plan for this. Irrespective of every other cost of operating a business, NBN Co will charge the RSP: - A bunch of POI interconnect fees. I'll generously throw them in the $15 figure above. - AVC (access virtual circuit - your own 'vlan') - *$38 per month per subscriber.* - CVC (connectivity virtual circuit) - *$20 per megabit per month per service area* (internal NBN aggregation point of about 78K premises). As I said, CVC is waived while they haven't passed 30K subscribers in each service area - and of course having only done 15K subscribers across the whole country, this is currently waived nationally. This is just to get off the NBN (a layer 2 service with no services on it) and onto the intarwebs. Oh, I forgot, the poor old ISP still has to pay 30-60 bucks per megabit per month for international IP transit. Now let's run the numbers on your brave new world with greater efficiency. *Scenario A* A home with a single on demand movie @ 4K resolution. That's about 9mbps. The provider has to ensure that there is 10mbps available out of the service area all the way back to their CDN. That will cost them $180 per month per subscriber in CVC charges alone. If you add in the other figures above, then we're talking $233 a month. It doesn't matter how much *you *watch TV, they have to have enough CVC for the peak of all subscribers in a service area. Unless you want to give customers an "NBN is too busy for TV right now" message, then you'll need to ensure peak across everyone in that area. Of course, this is just to watch a movie. *Scenario B* Ken telecommutes from home with OLED bendy displays. Let's say he runs BitTorrent, has Bloomberg on in the background 12 hours a day, is transferring VMs all over the world while video conferencing in high def with colleagues remotely to save the planet. Let's say you are doing 30mbps. Well, guess what Ken, you just cost iiNet or Telstra $600 a month in CVC charges Their total cost of business in providing you with the Internets is now $653. *Scenario C* And just for shits and giggles, let's imagine someone invents some reason for every business in Australia to run 250mbps over 1gbps links during business hours. That would be north of $5000 PER MONTH PER SUBSCRIBER. What's the upshot of all of this? Fast links with tiny quotas into the indefinite future with no way off that bus. - If you are an ISP with your own dark into DSLAMs at the moment, you will be ripping that out and throwing it in the bin with the NBN. Your cost of doing business for CVC (a grand or two a month for dark on an inner city DSLAM that you can run red hot using your own gear) is going up astronomically. - I don't know how you do 'quota free' movies on demand in an NBN world. Previously, your CVC was a function of bulk fibre you owned, now you're paying the man per mbps per month. - Everyone will end up with small quotas as per today. - Maybe they'll uncap the links and just let it be contended to all buggery. But isn't that the alleged reason why T's perfectly good HFC network is being removed? And a few places where the NBN is taking us back to the dark ages: - I can buy dark around the CBD and run short haul optics at 1gbps today. Piece of piss. Costs less than 2K in the BNE CBD. What about if I need to connect two sites and run a link red hot at 1gbps? The CVC charges table in the NBN price guide stops at 500mbps and that is $10000 per month JUST FOR THE CVC. So what's that mean? - I can use a variety of on-net services for free today and run my 20 mbps DSL hot as I want. I can download all day from Internet file mirrors. Customer son BigPond can watch Foxtel on demand irrespective of their quota all day. Goodbye. Since the telecommunications act of 1997 was past and low impact works were allowed *by law* to ensure competition. Companies like Pipe sprang out of that legislation and it is why you see Vocus etc running dark all over the place. Our office has gone from 128K/128K ISDN for $699 a month to 42/4 for $199 a month. 30% the cost for 336x the performance and other examples abound. I don't know how turning my 45 meg copper link in the office with a 150gb quota to a 100 meg fibre link with a 150gb quota solves any of the worlds problems. iiNet's NBN plan is $70 a month cheaper so I guess that is a win for the 5-10K of hard won tax payer pesos that it will cost to install. Everyone likes to talk about Australia being a broadband backwater etc but anyone who has paid attention to the evolution of telecommunications in the country for the last decade sees a different picture. Whichever form we get the NBN in post the election, one thing is for sure, it is going to be expensive - more so than today. Lastly, there are definitely issues for users in the bush and users on RIMs and pair gain. Telstra has been tophatting RIMs. Also there are competition black spots that need to be addressed. David. PS Your pitch is 1/3 good. Most NBN "arguments from analogy" I've been given involve roads and the F/35 + Colin's Class sub, not water and sewerage.
