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hectorbustnuts

Coalition unveils $6b broadband plan

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sounds like another private sector monopoly to me. aka telslut.

This.

 

 

why dont they just build the fricken infrastructure and lease out the lines to a whole range of companies at wholesale cost, you will make the money back eventually.

That's what the Labor Party is planning to do with the NBN.

 

 

 

 

 

 

Oh well, at least the Coalition now has a broadband network plan of sorts. Better than nothing, I suppose.

 

 

 

 

 

EDIT: just skimmed through the 'detail'. It's vaporware. It will end up being "Telstra maintains its infrastructure monopoly". Disappointing. I was hoping for some kind of genuine national infrastructure investment.

Edited by Virtuoso

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So its either fast with a filter, or slow without one.

 

Great!

 

 

'

With a Greens balance of power in the upper house, the filter will get nowhere.

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6Billion Dollars spent on getting everyone up to 12Mb/s. Holy fuck, better break out the champagne. We're already well behind other nations and we're going to spend 6 Billion on not getting any better?

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No substance.

 

I'm still voting coalition because $43 billion is a gigantic waste of money spent on service duplication for the 0.05% of Australians who need faster porn.

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So its either fast with a filter, or slow without one.

 

Great!

 

 

'

You mean slow either way, right?

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The plan will give broadband to those who don't currently have it. This is an infrastructure investment that I think the government should be making.

 

The plan is also to somehow encourage competition, not to create another Telslut monopoly. I don't know exactly how this will be done so I can't comment on how effective the means is likely to be.

 

The choice appears to be $6 billion for a marginal upgrade and the provision of broadband to those who can't currently get it or $43 billion for an inefficient public sector behemoth the majority of which will be unnecessary.

 

This announcement hasn't changed my vote. :P

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With all respect to our rural brethren, from an economic perspective, it's actually more important to get high speed and high bandwidth to the cities - so that businesses can leverage it - rather than infill those remote parts of the country which don't have it.

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The plan is also to somehow encourage competition, not to create another Telslut monopoly. I don't know exactly how this will be done so I can't comment on how effective the means is likely to be.

As far as I know, the ALP plan won't create another Teltra either. They're not going to retail the service, just own the infrastructure and wholesale it.

 

I'm not sure how this plan is supposed to 'stimulate competition' more than we currently have. There's already a bunch of telcos around 'competing' with each other, but they're all still charging big bucks for crappy service.

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No substance.

 

I'm still voting coalition because $43 billion is a gigantic waste of money spent on service duplication for the 0.05% of Australians who need faster porn.

You must live in major metro city.

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I'm not sure how this plan is supposed to 'stimulate competition' more than we currently have. There's already a bunch of telcos around 'competing' with each other, but they're all still charging big bucks for crappy service.

A nationally owned network infrastructure will definitely stimulate competition.

 

At the moment, Telstra's wholesale pricing is still driven up artificially high by the fact they need to load in their bloated management, multi-business arms and retailing costs.

 

Plus, Telstra still use every trick in the book to stymie competition, even to the point of flat out lying about node availability in order to deny competitors access - contrary to the legislation. Whenever they get caught, they pay a fine which is a pittance compared to the business they've been able to protect by behaving illegally.

 

A nationally-owned broadband network would create a lower cost* platform which all competitors can then onsell from a level playing field. We'd see much greater variation and pricing against speed, download quota, reliability, value-added services, and the like.

 

* Being government owned and run, it wouldn't be a "least cost" platform. But I am certain it would be a damn sight less than Telstra's network, and would cost less than a new commercial entity would charge us for the sake of using any new network they built.

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No substance.

 

I'm still voting coalition because $43 billion is a gigantic waste of money spent on service duplication for the 0.05% of Australians who need faster porn.

You must live in major metro city.

 

You must live in a rural area. Maybe I should complain to you about how expensive my mortgage is.

 

And that way we can both tell each other to stop being crying nancies and realise that the choices we all make affect the services and costs of living available to us.

Edited by Leonid

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No substance.

 

I'm still voting coalition because $43 billion is a gigantic waste of money spent on service duplication for the 0.05% of Australians who need faster porn.

You must live in major metro city.

 

I'm all for broadband for everyone. What I don't want is waste.

 

Remember when Optus was stringing cable along the power lines duplicating what Telstra had underground? Who paid for that in the end, yep, the consumer. Providing broadband to me when I already get 32Mb/sec will get me, ummm, more tax.

 

Give it to people who need it I say...

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Remember when Optus was stringing cable along the power lines duplicating what Telstra had underground? Who paid for that in the end, yep, the consumer.

To be fair...

 

You only paid for it if you chose Optus. It created competition between Optus@Home and Bigpond Advance, something that didn't exist yet. Remember, at that time there was no ADSL, and Telstra didn't have to wholesale HFC. Maybe if they did, things would be different.

 

If they had finished rolling that out, there would be an effective alternative to distance-limited DSL. If more people were on it, the funding would have been there for node upgrades.

 

I believe local councils were blocking it because people didn't want another fat cable on their power poles. There were probably other reasons...

 

But alas, here we are. I'll take Labor's solution because it suits me just fine. Well... now more so than before because I feel that the coalition's solution could be more harmful in the long run.

Edited by SquallStrife

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I'm with SquallStrife on this one. I'd rather $43b be spent on infrastructure we need (it's easy for you city people to say that rural communities don't matter much) than $6b on something that won't even be a band aid solution by the looks of things.

 

Infrastructure costs money and the potential profit is often a long term prospect. That's a reality people have to deal with. Thinking only about the bottom line will screw this country over.

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I see a national high speed broadband network as being the modern day equivalent of the Snowy River Scheme.

 

It will be an accelerator on Australia's overall international competitiveness, and a stimulus to the local economy (while being built, and thereafter).

 

For a country so far from the rest of the world, and with such distances between major population centres, phat pipez are a must-have efficiency multiplier.

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Remember when Optus was stringing cable along the power lines duplicating what Telstra had underground? Who paid for that in the end, yep, the consumer.

To be fair...

 

You only paid for it if you chose Optus. It created competition between Optus@Home and Bigpond Advance, something that didn't exist yet. Remember, at that time there was no ADSL, and Telstra didn't have to wholesale HFC. Maybe if they did, things would be different.

 

If they had finished rolling that out, there would be an effective alternative to distance-limited DSL. If more people were on it, the funding would have been there for node upgrades.

 

I believe local councils were blocking it because people didn't want another fat cable on their power poles. There were probably other reasons...

 

But alas, here we are. I'll take Labor's solution because it suits me just fine. Well... now more so than before because I feel that the coalition's solution could be more harmful in the long run.

 

You only paid if you chose Optus, while other houses received nothing.

 

Duplication and waste, just like providing fibre to people like me who don't need it. According to the ABS there are LOTS of people in the major cities who currently have access to high speed broadband.

 

We have been around this before so I won't repeat all the arguments. You're happy for $43 billion dollars to be spent, with a major chunk of that going to people who don't need it.

 

There is currently a need for other infrastructure projects in terms of power, water, medical, transport which I would prefer to see get the investment.

 

The Coalition's policy is a band aid at best, but a cheaper one...

Edited by Mac Dude

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The federal government got huge licencing fees.

 

Local Councils and utilities got paid fees to have the cables strung from their poles.

 

Australian businesses and employees got a couple of billion dollars of investment from the US and British companies who funded the Optus startup.

 

Optus customers got cheaper phone calls than had previously been offered by the Telstra monopoly.

 

Telstra customers got cheaper phone calls than had previously been offered before Optus launched.

 

I can't think of anyone who actually paid more because of the duplicate cable infrastructure.

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So the US and British companies donated money they didn't want to make back to pay for the duplicate cable, to pay for the federal government fees, to pay for the local council and utilities?

 

Companies make an investment to make a profit, profit from Australian consumers, the consumers who paid for the duplication.

Edited by Mac Dude

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Optus didn't make an operating profit until its 5th year. By that time, its shareholder had invested $3 billion in network infrastructure alone, plus all the additional operating expenses of a 2000 employee company.

 

If Optus didn't exist, then Telstra would have continued to gouge high prices out of its monopoly for years to come (as evidenced by Australia's telecommunications pricing compared to the rest of the world, for the decade prior to the introduction of competition).

 

So, this is one of those rare instances where all telecommunications consumers actually saved money, and a company got to make a profit as well.

 

In anyone can be said to have lost money due to the duplication, it was the people who owned Telstra shares. Those shares were in effect devalued by the existence of a competitor.

 

But consumers did not pay for the duplication. In fact, they made money from it, both as consumers and recipients of government services.

 

Further, thanks to the competitive pressure between Optus and Telstra, consumers got two cable networks (and the services they provide) much much faster than if Telstra had been permitted to amble along, trying to wring profit out of its aging copper monopoly access to the home.

 

Incidentally, the initial owners of Optus made their lion's share of their money out of selling the network/company they had built to SingTel in 2001, not from operating profits in the period they owned it.

Edited by Virtuoso

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Having OS companies pay for duplicate cable down the same street will indeed add to competition, however the cost of the rollout and the profits to paid back to those OS companies have to be paid by the consumer.

 

This duplication, as dictated by the government of the day, also meant that the cable was only rolled out where it was profitable for Optus, leaving us in our current broadband state.

 

As for the claim that the Optus cable rollout lead to dramatic cost reduction for both Optus and Telstra phone line customers, I'd like to see some analysis and facts linking the two. If we look at pay TV, the reason for the rollout in the first place, the competition lead to consumers being gouged by both companies, not one.

 

Regarding the Telstra shareholders being the only ones who lost because of the duplication, who were the major Telstra shareholders at the time?

 

EEK : Sorry hector for the hijack, back on topic :

 

What a waste of money.

;)

Edited by Mac Dude

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Having OS companies pay for duplicate cable down the same street will indeed add to competition, however the cost of the rollout and the profits to paid back to those OS companies have to be paid by the consumer.

I explained, to the best of my ability, how this was not the case, because of the special market conditions around the dissembly of the former Telstra monopoly (ie licencing fees, historical price-gouging by Telstra, etc). If you continue to believe that consumers paid for the duplicate cable rollout, please explain how that was the case, in your view.

 

 

As for the claim that the Optus cable rollout lead to dramatic cost reduction for both Optus and Telstra phone line customers, I'd like to see some analysis and facts linking the two.

There is ample data available showing how competition brought phone call prices down. In 2001 an ACCC report found that the average price of telecommunications purchased by Australian consumers fell in real terms by 17.5 per cent between 1996-97 and 1999-2000. The Australian Communications Authority estimated that the benefits to consumers of telecommunications services from competition in 2000/1 were between $5.5 billion and $12 billion.

 

 

If we look at pay TV, the reason for the rollout in the first place, the competition lead to consumers being gouged by both companies, not one.

Optus' network was developed to handle both local calls and pay TV services. Telstra's cable network was designed to handle pay TV. Pricing for the pay TV offerings was determined to a large extent by the OS content providers, who played Telstra and Optus off each other to maximise the content costs on both networks. The government's bungled auction of pay TV licenses, which led to 2-bit shell companies buying the licences and then on-selling them at high prices to the telcos and TV networks, also led to higher than planned operating costs for both telcos.

 

I agree that initial pay TV pricing was duopolous in nature, though this was to some extent a consequence of the high input costs. The pay TV profits were actually nowhere near what either telco had originally included in their business cases.

 

 

Regarding the Telstra shareholders being the only ones who lost because of the duplication, who were the major Telstra shareholders at the time?

T1, T2 and T3 were in 1997, 1999 and 2006. Optus commenced resale of the Telstra network in 1992. Its own cable network was not in place until (from memory) late 1994. How much value was lost from Telstra, and the extent to which that is counterbalanced by the licence fees paid by Optus and the capital investment made in Australia by Optus, would be very hard to calculate. (And besides, the eventual inevitable deregulation of the telecommunications market was priced by analysts into Telstra's value estimates well before the government announced its actual deregulation and privatization plan.) Edited by Virtuoso

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