[lubos]

Could you please explain how NBN will pay for itself?

Not to mention, NBN Corp. will not be any different monopoly from Telstra Wholesale.

And regarding speeds, how is NBN going to solve that? Australia doesn't even have enough international throughput in the current network. NBN will make speeds even worst as the demand will only increase. The bottleneck here is not copper, it is international capacity. What's the point of replacing copper if the weakest link of the network remains.

[stephen_g]

I haven't looked into the specifics, but in the corporate plan they expect to pay off the government contribution in 20 to 30 years. And it's been audited by more than two audit firms now, so I expect it must be somewhat realistic.

Yes, it is still a monopoly, but what would you rather have - a fast network that reaches the whole population with open access to providers, or the Coalition granting Telstra and Optus some more money to upgrade parts of the network that they don't want to let other carriers access because they are competing with them in the retail space?

I think we do need to put in more overseas cables, but that's no reason to delay upgrading our local network. Anyone who can't see that bandwidth requirements are rapidly increasing to the point where we'll inevitably need a fibre network is delusional (or doesn't know much about technology). It just seems such a waste to spend billions to put in another system that is not sufficient in the long term, and nowhere near as upgradable as fibre, that will have to be ripped up...

[jacques_chester]

> And it's been audited by more than two audit firms now, so I expect it must be somewhat realistic.

Nitpick: we can't see the actual financials because they are "Commercial-in-Confidence".

When you bring in an outside firm to audit something, if it's not a report regulated by law (eg the annual report of a public company) you can instruct them to use any assumptions or constraints that you wish.

An audit will only point out if your formulae are incorrectly formed (invalid), not whether they are at all realistic.

For example, NBN's internal funding plan might say something like:

"We assume 100% takeup in 2 years".

And the auditor's job isn't to say "2 years to 100%? That seems unlikely".

It's actually to say, "given 100% in 2 years, our calculation is X, and your calculation is also X, therefore the audit passes".

[beamso]

> Could you please explain how NBN will pay for itself?

NBNCo gets a cut of the customer's payment to the ISPs for their Voice & Data Service.

> Not to mention, NBN Corp. will not be any different monopoly from Telstra Wholesale.

I believe NBNCo aren't allowed to sell services directly to the consumer.

> And regarding speeds, how is NBN going to solve that? Australia doesn't even have enough international throughput in the current network. NBN will make speeds even worst as the demand will only increase. The bottleneck here is not copper, it is international capacity. What's the point of replacing copper if the weakest link of the network remains.

There is plenty of competition in this area (http://en.wikipedia.org/wiki/Telecommunications_in_Australia...). Capacity has increased, reducing international traffic costs for local ISPs (and hence, the consumer).

[coopdog]

NBN Corp would become a monopoly like Telstra wholesale (and I hope they don't sell it, just outsource the operation), but at least it would split Telstra wholesale and retail. There was some seriously strange things going on there, like when the retail price goes below the wholesale price and the fine is nothing compared to the dollars lost by competitors.

The copper situation is ok in inner city areas (except some buildings where the wiring is corroded, or the two wires split to different lines which increases noise/slows the connection), but ADSL speeds also depend on distance. Many areas can't even get into an exchange because they're full, and when you do if you're too far away from it your speeds will be quite horrible.

Not to mention upload speeds, NBN would make it possible to send virtual images, giant movie files, HD video and other big chunks of data person to person, rather than this many to one subscriber download model we kind of have at the moment.

[lubos]

So we have established that NBN Corp will be the same as Telstra Wholesale. The only difference will be that NBN Corp will be owned by government rather than being a public listed company (the question is for how long)

Exchanges in some areas are full because nobody wants to invest into building new capacity since government has volunteered $50bn to make it all redundant. The problem has been created by government by announcing NBN in the first place.

I'm still not convinced. How is ability of users being able to send each other high-resolution images, HD video etc. going to be worth $50bn+ to economy?

The reason why upstream is so slow is because there is hardly any demand for it. Some ISPs will double your upstream on ADSL2 by reducing your downstream speeds. Hardly anyone is interested.

[Volpe]

I think you are building a narrative to suit your own argument. Industry (telstra, optus, iinet, etc) NEVER planned a nationwide network of fiber (even before NBN was announced) let alone a Fiber-to-the-Home solution.

Australia has 20 million people spread across one of the largest countries in the world, there is not enough market (i.e critical mass) for private firms to build this kind of infrastructure, it is called market failure, it is EXACTLY when government should intervene.

>I'm still not convinced. How is ability of users being able to send each other high-resolution images, HD video etc. going to be worth $50bn+ to economy?

Why was electricity so important just to spread nighttime lighting!? Why'd we even bother!? You don't know that all we will use data for is HD video/image.

Also I think you underestimate how much caching occurs, speeding up local network with speed up "the internet" as ISPs cache a lot.

[alwaysinshade]

> How is ability of users being able to send each other high-resolution images, HD video etc. going to be worth $50bn+ to economy?

The real technological bottleneck of our time isn't CPU's, GPU's or anything that can be purchased by the end user. Internet speed/latency limitations are what's stifling emerging markets and technologies. Let's have a look at some ideas around the corner, some of them already waiting for fibre to the home...

- OnLive-like game streaming with minimal latency or frame compression - would only require cheap hardware to play super detailed games rendered in the cloud

- OS in the browser/cloud - instant bootup, less hardware dependent, software/file system accessible anywhere

- Streaming 4k high definition video on demand

- Downloading 12Gb+ games on a whim as opposed to walking/driving down to your local JB Hifi or EB Games and paying for the game plus physical materials

These aren't pie in the sky ideas. They'd be here already if we had fibre to the home. Australia will be open to markets that aren't practical elsewhere because of the NBN.

[jeza]

You can put controls on public monopolies that you can't with private ones, such as making them accountable to the voting public. Even the free market is regulated by the government in an attempt to create a level playing field. When it comes to telecommunications though, it's a natural monopoly since it's not really economical to connect each house to multiple underground fibre networks (though the redundancy would be nice :D).

[taligent]

> What's the point of replacing copper if the weakest link of the network remains.

Typical selfish attitude.

What clearly you don't understand is that for a large percentage of the population the weakest link IS the copper network. They don't connect at 24Mbps. I personally know people who connect as low as 1Mbps. So what good is a faster international link to them ?

And there are huge benefits internally if everyone has a super fast connection especially for anything that involves face to face communication e.g. those in remote, rural areas.