Tuesday, 30 July 2013

NBN: Kohler v Turnbull Questions - Top Ten.

Alan Kohler will be debating Malcolm Turnbull on the future of Australian Telecommunications. These are questions I'd like asked. Getting straight answers would be another matter.

1. There's a very specific figure for FTTN (Copper) Fixed Line rollout of 8.968M premises.
  • How did you arrive at that figure?
  • Is that all the Metropolitan areas?
2. There's a lot in your Policy about reusing existing assets, mostly owned by Telstra and Optus, and changing the rules to allow Cherry Picking, while the current rules allow any wholesaler to provide Layer 2 services at Points of Interconnect.
  • Do you expect Telstra to take advantage of your new arrangements and roll-out new broadband services across all Metropolitan areas?
  • Would the Coalition consider contributing to such a rollout, either directly or through NBN Co?
  • If Telstra took on the FTTN, maybe with HFC Cable too, would you direct NBN Co to not compete with Fibre in those areas?
3. Your Broadband Plan is really only half a Plan, it says nothing about it's most important second part: the replacement of FTTN/Copper network with a full FTTP network, mentioned a number of times.
  • Who's going to do that second phase?
  • Who's going to pay for the eventual rollout of FTTP?
  • If your eventual aim is an FTTP, do you save enough with Telstra's Copper to make this cheaper?
4. Your Plan includes "Total Funding", while your modelling must have also given you the other 3 standard numbers: Project Lifetime, Return on Investment, Time to Break-even.
  • Can you tell us what those numbers from your model are?
  • Was there a reason you didn't include them in your Plan?
5. Your Plan, and stress-tests of the current NBN Co Plan, specifically limits NBN Co to real revenue increases of 3.5%.
  • Will that be a direction to NBN Co?
  • Is there some policy reason for this?
  • If NBN Co does reduce its charges accordingly, then what does your modelling suggest happens to their ROI and profitability?
  • Isn't this a gift to the private sector Retailers who have no obligation to pass on any of those savings?
6. In early April, NBN Co released updated, detailed figures on their costs and rollout. You didn't update the figures published in your Plan from your modelling.
  • Do you accept the NBN Co figures as credible? If not, why would you doubt a competent, independent, professional organisation?
  • Did you rerun your modelling with the latest NBN Co data, especially your estimate of $3600 per service for Fibre?
  • If the results were different, is there a reason you didn't update the figures in your Plan?
7. You've been critical of the Labor government's ability to "execute" for the NBN and many other projects. Given that you will have to use exactly the same prime contractors and sub-contractors, and that you've said that current problems stem from NBN Co forcing the prime contractor to bid too low, then:
  • Will you be paying those prime contractors more?
  • If so, how will you bring in your project on-time, on-budget and to spec?
  • What will you do differently than the current Government, given that NBN Co is actually running the project and signing contracts?
8. We all know that the outcomes in any Business Plan depend on the assumptions you make and the data you use in your model. In your model:
  • What Copper Fixed Line Access Charges (AVC) did you model?
  • What traffic growth model did you use to arrive at a "reasonable" 3.5% real growth in revenue?
  • What traffic distribution model did you use to explore the impact of substitution by 4G wireless competitors?
  • Did you model the effects of price undercutting by Copper services, an area identified as High Risk in the NBN Co 2010 plan?
9. Those lucky enough to get Fibre have an NTD provided with 4 data-ports and 2 voice-ports, while your "No Disruption" promise for your FTTN/Copper solution provides the user nothing, the same as current ADSL services.
  • If a customer requests a VSDL2 NTD, will you provide them one? Will that cost them anything?
  • Are there extra customer costs for a typical FTTN/Copper service over and above a standard Fibre service? Such as a central splitter and VDSL2 modem?
  • For your FTTN/Copper service, will you be charging different amounts for ADSL2, VDSL2 and VDSL2 with vectoring?
10. Your Plan relies a lot on terms like "Cost Effective", "commercially viable", "commercially feasible" and "commercial factors (or reasons)". Customers need certainty, Retailers need clarity to form marketing plans and discuss them with clients, and NBN Co planners and designers need precise, detailed definitions of what is above or below the cut-off.
  • Do you intend to publish a full or partial contents of your "Commercial viability" rules?
  • How will you know if NBN Co is following your rules, if the final FTTN design comes out somewhat different to your modelling, which as we all know, has to make assumptions and estimates?

1 comment:

  1. Steve, as usual you have exceeded all expectations with your detailed and exceptional set of questions. Sadly, I think we all know that Kohler won't ask them, and even if he did, Turnbull won't - or more likely, can't - answer them. All we will get is more spin, bluff and bluster. That's not to blame Alan Kohler, who I respect and believe has a good handle on the issues. However, he is clearly out of his depth with Turnbull. It would be like trying to catch a slime-ball in a boxing ring! Turnbull will obfuscate; he will bully and when or if he senses that anything difficult is being posed, he will attack - Kohler; the questioner; the audience or maybe all three! It is a sad and sorry reflection on the state of Australian politics that we have to suffer this parody about something that will affect every Australian for the next 60 to 80 years. But thank you, again for trying. It's the least we can do.


Note: only a member of this blog may post a comment.