Sunday, 21 July 2013

NBN: Kohler v Turnbull Debate - Unasked Questions.

Alan Kohler will debate Malcolm Turnbull on Thursday, 1st August 2013.

One of the difficulties with the NBN debate is that Turnbull has not been put up against tech savvy opponents. Journalists and most politicians have to learn as they go. Those embedded in the mechanics of the IT industry are the ones who know the ins and outs. For this reason there remain many questions that either haven't been asked, or have been allowed to be fobbed off by Turnbull with various statements - as if they are fact, but they are not.

Kohler's history is as a finance reporter, editor and presenter, so we can expect a lot of his angle will be from a pure business model point of view. Turnbull is a Barrister by trade, as well as an investment banker and chair of an early Australian Internet Provider OzEmail. He has no direct field experience in the tech side of Information and Communication Technologies (ICT).

There are two versions of the NBN - Labor's Fibre To The Home (FTTH, also known as FTTP) and the Coalition's proposed FTTN version which uses the old 'last mile' copper loops running from a large street cabinet.

The problem is that so far there has been no indepth discourse on the 2 opposing versions, which are actually very different in how they deliver. Solid technical questions need to be both asked and then pursued to their end. Not bluffed away and left unanswered.

It's for these reasons that I would like to pose some questions for the Kohler vs Turnbull debate.

If this were a business plan pitched to one of the ASX100 boards, they'd be asking some specific questions such as:
  • Does "more affordable" translate to "little or no profit?". There is no mention of ROI or "break-even" time in the Coalition Plan. You must have an idea of those, can you tell us what they are or why you didn't supply them?
  • That same board may look at your Plan and decide it's two phases - Phase 1 being Fibre to the Node (FTTN), then Phase 2 being Fibre to the Premise (FTTP). You've projected costs & revenues for Phase 1, but said nothing about Phase 2. A competent board would be asking you "Why don't we go directly to Phase 2? Just what do we really save by waiting? Especially when the system is flagged as obsolete in 2020."
  • If Turnbull is so worried about cost, why didn't he just add a $500 connection charge? That's $5-6 billion off the top right there. If equity is an issue, then pensioners could be subsided and pay $250 off over 2 years. If people want "priority" installs, they could pay more, increasing revenues for nothing.
  • What happens if a VDSL2 customer wants the same 4-port NTD as Fibre or Wireless Customers get? You've not mentioned in your Plan any Customer Premises Equipment (CPE) for VDSL. NBN Co supply the CPE equipment for Wireless and Fibre: they supply a Network Termination Device (NTD) with four Dataports, and for Fibre, 2 telephone ports. Will they be supplied on the same basis as all other NBN Co NTD's?


  1. Simon Hackett suggests 99% of customers won't need a 4 port NTD Wouldn't it make more sense to abandon the idea and save money?

    Rolling your own fibre to the cabinet is wasteful and makes no economic sense, but if it is to be the nation's fate is the $5,000 cost capped or just a figure fed to the chooks?

  2. See

    There is no costing given for the "optional" fibre upgrade. There is doubt there's upgrades will ever happen.

    The economics of "on-demand" rollout are terrible. I estimated 8-times more than a planned mass rollout. Plus result is worst possible: clogged ducts and bad design.


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