Heya Tony,
I'm going to deconstruct a few things interspersed with your points:
Tony Wright wrote:
Actually perhaps the word "natural" is confusing people. Technically the existing telephone network is a natural monopoly because it is prohibitively expensive for companies to compete with Telstra. The monopoly was created by the government when Telstra was government owned, because everyone had a home phone and Telstra owned all the infrastructure.
There was nothing "natural" about Telstra's monopoly. It was created as
a monopoly by a monopoly using the resources of taxpayers.
Next they brought in Optus to compete, but they can't just go into an existing market and dig a whole lot of trenches next to Telstra and bury more cable.
Why not?
Regardless, the government then sold off the common/public land which
contained the trenches. The government handed over millions of km of
public trench space as to a single monopoly organisation. Once again,
this isn't anything "natural".
It can't happen. Optus had to be given opportunities to enter the market in a profitable and large scale way, which is why they targeted business first.
If something is profitable, than why can't you just open and start a
business? Optus had to be "given" opportunity because of all of the
government regulation, and the impossible monopoly that government had
already created.
When Optus came in, people were so patriotic about Telstra that they even managed to successfully stop the rollout of Optus cable via overhead power lines, and Telstra owned all the existing trenches and wouldn't hire them out.
Once again, nothing to do with a natural monopoly, but government
regulation and collusion which allowed this to happen.
The ACCC had to step in and Telstra was ordered to sell its services to other carriers as they were still too powerful. They still are, as evidenced by their ongoing attempts to prevent competition from hooking into their exchanges, citing "no space in the exchange".
There is simply not enough money in it for companies to just install in new estates. These end up fringe players, not real competitors. The real competitors have to pay Telstra a tax to reuse the copper wires into buildings: Naked connections.
100% disagree. Internode *WERE* installing their own cable into new
estates. If I could hook up a suburb with my own fibre, I'd certainly
consider it as well. Unfortunately the most expensive part is the
government regulation, and the most impossible part is the actual
permission to lay cable on Telstra's monopoly on the trenches.
Next, to put things in perspective, I researched the capacity of Fibre. The current world record for data transmission over fibre optic cable is 1.05 Petabits/s over a distance of 54 kms via 12 core fibre optic cable. 1 petabit is 1024 Terabits. 1 Terabit is 1024 Gigabits.
The record for bandwidth on a single core was 101 Tbit/sec (370 channels at 273
Gbit/sec each) in 2011.
So freaking massive amounts of data can be transferred over fibre optic cables
provided you have the right technological endpoints. The endpoints wear out but
can be upgraded as very high speed technology becomes cost effective to
replace, and it's essentially replacing circuit boards at each end of the wire.
There was also this comment in the research: "Since 2000, the prices for fiber-optic
communications have dropped considerably. The price for rolling out fiber to the home has
currently become more cost-effective than that of rolling out a copper based
network." - probably because copper is a commodity that has become prohibitively
expensive, so much so that organised crime gangs have been known to steal sections of
large scale networks such as copper power lines and copper train lines.
I agree with the above, but it seems to contradict what you said before
about companies rolling their own fibre in new estates.
But you need to have the end points in place.
So forget any reference to copper or coaxial cable, they just aren't going to
cut it in future. If the world goes Terabit internet all of a sudden, we won't
have the capacity to move, but other countries that already have this
infrastructure will: Singapore, United States, Japan, South Korea, China all
have it now. If we're not going to be a manufacturing economy, we need to be an
Information economy, and the only way we can do that and keep up is with an
exceptional internet.
This "information" economy rhetoric is empty political speak, and I'd
ask anyone to actually define that it means.
It's also false to imply that the only way we can have "exceptional
internet" is via government intervention. You might not be saying this
here, but plenty of people do.
As for the cost, I simply don't agree. Wholesale and retail infrastructure has
to be cost effective or people will bypass it.
Except that fixed-line competition is effectively banned, and the copper
network will be shut off.
That's where the market comes in. If the costs were prohibitively expensive,
we'd all end up dropping our connections and overloading the secondary
infrastructure that does exist.
Wireless/4G/etc will be all that is left.
NBN and government certainly don't want that and have to be market aware. If they aren't as market aware as they need to be, they will learn that soon enough.
They aren't market aware at all, and I'd argue that to some extent the
entire idea of having a top-down approach to a market "problem" using
tax payer funds and while banning competition would be towards the
opposite of anything "market".
And as for Australia being able to afford it, don't believe the hype - the is
the 21st year of economic growth in Australia (last 6 years with Labor,
actually), and Australia now has a AAA credit rating from 3 ratings agencies.
We can afford it, and if we have to replace the infrastructure anyway, we may
as well do it properly and take advantage of all the opportunities that arise.
This is flawed reasoning on many levels.
I can afford a Ferrari, should I buy one? At what cost to other
opportunity do I miss by making that decision? Just because I can afford
it, does it mean I am paying a fair price, or too much?
"Economic Growth" figures are mostly bullshit (GDP/etc), and once again,
just because you got a payrise doesn't mean you should take on many more
years of debt.
On ratings, these are also mostly garbage, and one of the biggest
factors is that Australia can never default on its debt because its
denominated in AUD, and we can print as much as we want. Let's also
remember that junk real estate was ranked AAA.
On "having to replace the infrastructure", there is no reason that we
"have to". The market is already brining faster internet (or at least
was, as the government forbid any fixed-line competition since they
announced the NBN), and if fast internet is a necessity (which I believe
it is becoming more of), the utility value will certainly be there for
the market to act: Government just needs to make it possible for
organisations to act.
So rather than the Coalition blowing $20 Billion of tax payers money, how about
do it right instead - they're already spending 2/3 of the Labor budget already
on 1/4 the speed, so how about spend the other 1/3 and do it properly.
Or maybe leave internet to the internet companies? It's a false choice
to play the liberal vs. labor game.
Finally, the research also said:
" The main benefits of fiber are its exceptionally low loss (allowing long
distances between amplifiers/repeaters), its absence of ground currents and other
parasite signal and power issues common to long parallel electric conductor runs
(due to its reliance on light rather than electricity for transmission, and the
dielectric nature of fiber optic), and its inherently high data-carrying capacity.
Thousands of electrical links would be required to replace a single high bandwidth
fiber cable. Another benefit of fibers is that even when run alongside each other
for long distances, fiber cables experience effectively no crosstalk, in contrast to
some types of electrical transmission lines. Fiber can be installed in areas with
high electromagnetic interference (EMI), such as alongside utility lines, power
lines, and railroad tracks. Nonmetallic all-dielectric cables are also ideal for
areas of high lightning-strike incidence.
We all know fibre is great. What does research say on the pricing,
timing, and overall management of government projects, and government
mandated bureaucratic monopolies over a sector which is constantly
changing?
You have also used the reasoning above talking about Telstra as a
monopoly, how can we be so sure this won't just end up as another
private monopoly as well?
TL;DR: Telstra were not a natural monopoly, fibre > copper, but this
doesn't mean government > private business in proving faster
connections, it's not liberal vs. labor.
Cheers,
--
Les Hughes
