From: [email protected] [mailto:[email protected]] On Behalf Of David Connors Sent: Sunday, 14 April 2013 8:21 AM To: ozDotNet Subject: Re: Office365 ?
On Sat, Apr 13, 2013 at 9:13 PM, Ken Schaefer <[email protected]<mailto:[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. I’m unsure how this addresses the point above. The price isn’t something that the NBN just makes up, but something that needs to be agreed with the competition regulator. From what the ACCC has published, initial pricing should allow a “smooth transfer from existing telecommunications networks”, and the pricing increases will be CPI-1.5% 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: <lots of snippage> This is all implementation detail as far as I can tell. You don’t know for a certainty that this is how it’ll play out for 20 years, and you should know, from your own examples of what has happened over the past 20 years, that it’s very *unlikely* to be the end-state. 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. I studied economics at Uni – natural monopoly and the problems arising are well known: http://en.wikipedia.org/wiki/Natural_monopoly The issue is: “What to do about it?” and as I said, most natural monopolies are either run by the government, or regulated industries. Otherwise competition simply doesn’t arise, except in small pockets where secondary competitor can “cherry pick” profitable customers (leaving the vast mass of customers to the mercy of the monopolist) e.g. like being able to buy fibre in the Brisbane CBD that you mentioned in your post – certainly there isn’t any running anywhere near my house in inner city Sydney. Obviously you feel, based on implementation details, that we’re not getting a good deal. I have a different opinion, that natural monopolies like roads and transmission networks either need to be built by the government, or built in a regulated environment (e.g. public/private partnerships etc. that you see). And certain things, like local roads, fire stations etc. have a too uncertain pay off for private enterprise to build – it’s simply better for the local council to build those roads and fund it through general levies. Based on what I’ve seen happen to the economy through cheaper and ubiquitous internet access over the past 20 years, I’m willing to bet that providing universal, and upgradeable, fast internet access will make the next 20 years even more of an economic tectonic shift. You seem to be more concerned about what format your bill will arrive in. Cheers Ken
