NBN to survive but not intact: Budde

Aug 30, 2010 5:39 PM
Filed under Telco/ISP

Analyst urges Coalition to re-state its broadband policy.

The National Broadband Network appeared likely to survive a fierce debate over its immediate future but would not escape unscathed, said telecommunications analyst Paul Budde.

In a research note, Budde wrote he was "fairly confident that Australia would get its NBN, albeit with some alterations".

He based that confidence on "noises" from the Coalition about its willingness to change its $6 billion broadband policy.

Budde wrote that alterations to the network might include a "longer rollout period" for fibre-to-the-home and unspecified "rearrangements" of the draft heads of agreement between network architect NBN Co and Telstra.

Changes might also include some concessions to the Coalition strategy, such as use of the hybrid-fibre coaxial and DSL networks "a while longer" and more use of wireless "as an interim solution" until the home-fibred aspect of the network was ready.

Budde urged the Coalition to "make a statement that broadband is an important national infrastructure ... not just a Labor issue".

And he the Coalition should make a positive statement that "long-term, the future of broadband infrastructure is [fibre to the home]".

He wrote these were important steps to convince private sector investors to inject funds into the network.

"Private investors will not be persuaded by more of the same telecoms policies that the Coalition used between 1996 and 2007," Budde wrote.

"Who would want to invest in traditional telecoms, where the revenues are dropping?

"The Coalition will have to come up with a more attractive set of policies to tempt private investors."

9 comments in this discussion

"@Umbria - "wiser of Rudd-Gillard to produce a cost-benefit study showing a whole lot of social benefits and likely cost savings to other portfolios like health and education." I could rip your ..."

By RDEFCON1

Tags

nbn, national, broadband, network, budde, coalition, policy

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Comments: 9

legless Aug 31, 2010 3:42 PM	Thanks to the debacle that was called an election, everyone suffers. Abbott's people have no clue about what the needs are in an NBN so his plan is a mish-mash of ideas to save money. Now to rub salt into the wounds, the idea is instead of doing it all once and properly, to do it in stages using old and new technologies. Ultimately it's going to end up costing more to do it twice and in the meantime the crappy services for many will continue.
Rossyduck Aug 31, 2010 4:51 PM	The Obama administration came out with the broadband stimulus plan. This plan called for public private partnerships, low interest loans etc and did not involve the defacto nationalisation of succesful greenfields industry and other gross government interference, rather facilitation. Lets hope we can go in that direction.
singo79 Aug 31, 2010 6:53 PM	@Rossyduck - Also you will note that the US NBN was estimated to cost around US$300 Billion, that makes our total network cost of A$43 Billion seem like a drop in the ocean. By the way I will note that the $43 Billion for our network consists of $23 Billion from the Federal Government and the rest coming from private investment and the handover of assests from the industry in order for a share of ownership in the NBN. Lets do it once and do it right, the ALP model is by far the best, the most future proof and the most equitable to the vast majority of Australians.
doobinator Aug 31, 2010 8:29 PM	Its a pitty you guys aren't holding seats in the federal government, I don't understand why the coalition is so hell bent on throwing more nad more Telstra's way. Obviously no one in the coalition has ever had to get something fixed by Telstra. If they had they would understand the need for the NBN. I can't agree more with singo, do it once, do it right.
RDEFCON1 Sep 5, 2010 6:52 PM	Do it once, do it right - it's a nice philosophy. However governments have an appalling record of NOT doing things right. Recently, see: home insulation, school halls, Myki, mining super profits tax, ETS... Let's hope that if Labour does get in... that they actually can do this one right. If not, we'll be $43bn or more in the hole. Vic Labour's myki program has blown out by more than 100% over original estimates... and still doesn't work.
umbria Sep 6, 2010 10:38 AM	@rdefcon1, NBNCo has displayed fiscal prudence throughout, perhaps because it was isolated from the cash splash approach of the outgoing government. Quigley could have charged ahead to deliver all the pilot sites during this vacuum, committing money not yet allocated, but he has instead put everything on hold despite the risk of the plug being pulled. No-one disagrees with the technology plan of the NBN, only with the money. It would of course have been wiser of Rudd-Gillard to produce a cost-benefit study showing a whole lot of social benefits and likely cost savings to other portfolios like health and education, rather than being too scared to do one that didn't have dollars on both sides of the ledger. Likewise their profligate spending in other areas didn't reassure anyone that they would deliver the NBN on budget, either. But as time went on, we have seen the numbers become clearer. With Telstra now on board, taxpayers will fund up to $27 billion over eight years and will see it all come back in direct wholesale revenue. In the meantime 93% of premises will get broadband capable of any speed at all in the future, limited to 1 Gbps today, and rock-solid, CD-quality VoIP telephony to get rid of their entire phone bill and line rental. For allegedly good economic managers, I can't understand why the coalition wants to pour money into electrifying 20,000 street pillars for ADSL and 60,000 mobile towers for wireless, when we will inevitably lay the fibre in a few years anyway. And remember that Telstra now obviously WANTS to be split, if you look at its business model. No more maintaining old copper, just using its marketing expertise to retail media services.
wallabyted Sep 6, 2010 6:45 PM	I thought when the Coallition sold off Telstra to private enterprise that this was supposed to fix all our telecommunications infrastructure problems ? Private industry almost never drives innovation since it is risk averse and milks every dollar it can out of current (read old) technology. The NBN infrastructure should be public owned as our communications network is probably MORE important than our roads these days, and we wouldn't privatise all those (or maybe some would). I also haven't seen any mention of IP over Power lines in the NBN debate - something that I think could work well to supplement Australias IP infrastructure to some areas - even just as a less expensive link between fibre and WAPs in less populated areas). I think someone should at least approach a few power companies to garner their view. Maybe governments need to start thinking more long term and actually plan things properly, not just take quick and dirty politically expedient action.
advocate Sep 7, 2010 10:54 AM	umbria wrote: NBNCo has displayed fiscal prudence throughout, Really? - I don't know about you, but a limited rollout in Australia's least populated state into 3 small areas of that state where it is used by some of the residents is not my idea of any indicator of 'fiscal prudence' whatever. No-one disagrees with the technology plan of the NBN, Well they do but you just don't like reading it, but that doesn't make it no-one though. Likewise their profligate spending in other areas didn't reassure anyone that they would deliver the NBN on budget, either. Understatement of the year that may have lost Labor the election, there is no indication at all whether the NBN rollout will be on budget, especially when the budget is a moving target. But as time went on, we have seen the numbers become clearer. They have? - can I borrow your special glasse the numbers still look muddy to me. With Telstra now on board, The final agreement with Telstra has yet to be signed, revisit that statement when it has, interesting that Telstra has decided to put in their own FTTH network for the Sth Brisbane exchange, that's coming 'on board' is it? taxpayers will fund up to $27 billion over eight years and will see it all come back in direct wholesale revenue. Let's also visit that one in 2018, when we know what percentage of the residences that have NBN in the street actually take it. In the meantime 93% of premises will get broadband capable of any speed at all in the future, limited to 1 Gbps today, and rock-solid, CD-quality VoIP telephony to get rid of their entire phone bill and line rental. Wow impressive stuff - you have advanced knowledge of how ISP's/Telco's are going to market their plans, I am sure they are amused that you think all phone calls are going to be free and line rental is zero, and they are going to provide CD quality VoIP with it. And remember that Telstra now obviously WANTS to be split, It does? - I think you had better let Telstra know, it has no idea it wants to be split. if you look at its business model. What business model that not even Telstra knows it has indicates it wants to be split? Edited by advocate: 7/9/2010 11:02:26 AM
RDEFCON1 Sep 7, 2010 5:12 PM	@Umbria - "wiser of Rudd-Gillard to produce a cost-benefit study showing a whole lot of social benefits and likely cost savings to other portfolios like health and education." I could rip your views apart on every comment like advocate, but instead I'm just going to focus on this one comment. Are you daft? NBN is just an ENABLER of telemedicine and remote education. In order to actually deliver these services, you need to speed additional billions of dollars on equipment, software, online curricula, you name it. Then you need to maintain and update these technologies over time. And you think that's going to REDUCE the healthcare and education budgets? Dream on!