It's Official: NBN's Multi-Technology Mix Is Broken

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The ABC reports that a Victorian IT consultant, whose home is less than 100 kilometres from the centre of the city has been given a quote by NBN Co for between $800,000 and $1.2M to upgrade his connection to the NBN from satellite to fibre.

The consultant, Alistair Stewart, called the ABC's John Faine on talkback radio to discuss this saying the quote was outrageous. Stewart's home was connected to the NBN over fixed wireless - a service NBN Co saying is "working within specifications". That's even though he's only getting 25-30 Mbps on his 50Mbps with 9-20Mbps more common. Latency and dropouts are also an issue and these are affecting Stewart's business.

He wants to upgrade to the NBN fibre as the wireless service has been slower and less reliable than his previous ADSL connection. NBN Co told Stewart his home is 7 kilometres away from the closest connection point and that it would cost between $800,000 and $1.2 million with NBN CO's spokesperson saying the installation is a "user pays system".

All of this highlights something many experts have been saying for a long time. The government's multi-technology mix, which has proven to be no cheaper or faster to deploy than the originally-promised fibre to almost every home, has created a country of haves and have-nots when it comes to access to fast and reliable internet connections.

There has always been some variation in what performance people received depending on the connection tech that was available. Until the NBN arrived, people had access to cable, ADSL and wireless connections. Those offered different performance and reliability. ADSL, in particular, was problematic because of the ageing infrastructure it depended on and how performance related to distance from an exchange. And wireless was often ver cellular connections that were spotty in many areas and very expensive.

It seems we haven't really moved that far forward.


Comments

    I'm 20 km from the CBD and I don't have access to the NBN yet. Stewart is 100 km away and he expects the taxpayer to pay for a fibre connection for his business?! 99.9% of IT companies are in the city or at least within 20-30 km of the CBD where cabling is available. I don't think its NBN.co or anyone else's problem that Stewart decided to live out in the middle of Wop-Wop to run his business. If he wants FTTP, he can pay for it.

      The government's multi-technology mix ... has created a country of haves and have-nots when it comes to access to fast and reliable internet connections.

      I for one am disgusted that my tax is nurturing nation-wide technological and wealth inequality in this day and age. You should be, too.

      Last edited 08/06/18 8:45 am

      Yeah, I kinda think the same. Whilst I don't think the rollout has been done well at all this doesn't seem to be a good example. I'm not from Melbourne but I have been there a few times and from coming in to land it appears that farmland is pretty close so I used Google Maps see just how far 100km can get you.

      NWish gets you closer to Ballarat than Melbourne so surely the guy would have used Ballarat as his reference point. N is the middle of nowhere and NE-E is mountains, or at least a lot of green space, I didn't use satellite view.

      That was super quick with no local knowledge. It sounds like this guy wants to live way out of town but still have the benefits of being in town.

      Last edited 08/06/18 9:01 am

      That's not the issue here. The issue is that his Fixed Wireless doesn't stack up to what was promised, and the only alternative is to pay exorbitant amounts for FTTP. The way things are, he can't even go back to ADSL or cable (the former of which gave him a better service than the NBN "upgrade").

      Wow.
      Congratulations, it's myopic ingrates like you who voted for this government in the first place, because HEAVEN FORBID that a government should pay for infrastructure to enable literally anyone to start a business and therefore kickstart the 21st century economy in this country.
      Because of your infantile "Wahhh he should pay for his connection and I shouldn't" attitude, that is EXACTLY WHY we are now a nation of 'haves' and 'have nots'.
      It's no wonder that this country is now over a DECADE behind other advanced nations (and even some not so advanced ones) if insular, selfish voters can't even grasp the simple concept of what the word 'infrastructure' is supposed to mean, and how spurring the creation of businesses is ANY INFRASTRUCTURE'S MAIN PURPOSE.
      If this conversation was about him having to pay that much for a water pipe, you - predictably - would think it's ridiculous, but because you and everyone else who keep voting for these double-dealing dinosaurs don't see broadband infrastructure as the critical 21st century utility that it is, we are doomed for the foreseeable future with a horrifically inadequate (and horribly expensive) network.

      By the way - this is also why YOU don't have a great connection. So well done shooting yourself in the foot by complaining about this guy's outrage. The LNP thank you for it.

        TLDR

        So you think we should pay for everyone to have FTTP?

        What if he lived 200km our? 300km out? Where do you draw the line? Australia is a mighty big place.

        Should we increase income taxes to 80% to pay for it?

          You didn't read what I wrote, and you expect to reply with an informed answer to my post?
          You're delusional.

          You've just perfectly illustrated how woefully little you understand about what an infrastructure is and how its funded.
          As it was originally envisioned, the NBN would have been a net money GENERATOR for the government - because like any well-designed infrastructure, it would spur the creation of businesses, which generate TAX revenue.

          "TL:DR" = the original NBN - proposed to be over 90% FTTP - WOULD HAVE PAYED FOR ITSELF OVER TIME. So yes, it's in the taxpayers best interests to pay for infrastructure because it benefits EVERY INDIVIDUAL over the long run.
          But since it didn't fit with this government's pro-Murdoch agenda, they intentionally sabotaged it, feeding uneducated fools the line "it's too expensive", and you swallowed it hook, line and sinker.
          Now, we instead have a network that is a net money SINK, which is already obsolete before its finished, and is explicitly designed NOT to spur the creation of businesses (this article being a prime example), and you're perfectly happy with the taxpayer paying for THIS network?

          Go and read an economics textbook sometime, and stop voting against your own interests.

          Last edited 08/06/18 9:50 am

            There's absolutely no arguing with you that all the new business creates tax revenue. But it doesn’t generate direct returns as a GBE which is the way that it was sold to the public and so that it could be classed as on off book asset and hence off budget. The thing is though, all the new business created by private sector broadband infrastructure development, presumably, also generate tax revenue. So, why dump $50bn into something that will lose money (and this is an important qualifier) as an investment rather than just as a nation building exercise? And it will lose money no matter how you build it because the CVC pricing is the means to recoup costs and it’s totally artificial - NBN Co as it stands now as an “investment” must charge CVC pricing to recoup that investment at rates that make it un-affordable for mass take-up in high-end tiers. So, that means that regardless of how you built it (FTTP or MTM) the supply/demand equilibrium was always working against it and continues to work against it. And it’s fantasy to think it would have been different as a FTTP centric network. As we’ve already seen, even where fibre is rolled, high demand for higher speed tiers isn’t happening, which reveals that these arguments that it would be more economical to use fibre on a cost recovery basis are folly. Sure the asset would be more valuable but it would still require a big write down and bigger than the one we're facing.

            This isn’t about being down on fibre or pro-MTM. The whole thing should have been built on-book no matter which approach you took or they should have done a Chorus. I.e. structurally separate Telstra and then let it use incoming revenue + some sort of subsidy so that an economical fibre build could happen. Win-win, yeah?

          There were two lines drawn. 1000 population (or was it 1000 properties?), and 93%, which led to roughly the same thing. These smaller townships got the rough end of the pineapple.

          It wouldn't matter if it was 100km, 200km, or 300km though. Those towers tap into a fibre trunk line somewhere nearby (the same ones the mobile towers tap into), which have been around for decades.

          Telstra's mobile coverage is claimed to be 99.4% for 3G or better, which would all have fibre lines back to exchanges. Point being, the infrastructure is there that greater distances doesn't change things.

        Do you think that using capital letters somehow makes your points more persuasive?

        Your analogy of a water pipe is interesting though - if someone decided to set up a business in an area which used tank or dam water, and complained that the available water supply wasn't sufficient for them, do you think they should have a mains pipe laid to them at taxpayer expense, no matter the cost?

          He was less than 100km from the CBD. That's still well within the metro area. Your question has a faulty premise.

          Expecting people to just move to where infrastructure is available completely defeats the argument of why the NBN is supposed to exist in the first place.

          Last edited 08/06/18 9:46 am

            So you are going to avoid answering the water pipe analogy (which you first raised) then?

            Do you know where Jam Jerrup is?

              I answered this question in another post. Do some reading because I'm not repeating myself for your benefit.

              Well, your water question isn't the right scenario. It's more like if this guy had access to reasonable drinking water through rain water tanks - the pressure is terrible, but it's drinkable at least. And then the government announced they would replace the entire water system in Australia so that everyone got piped drinkable water... except in rural areas because it's too hard to pipe in fresh water they were going to reuse treated flushed toilet water. So, this guys rain water tasted fine, but now the govt has bulldozed the tanks and replaced it with piped water that tastes a little bit like sewerage.... But hey, his fault for choosing that location before the National Water Network was even a thing, right?

          How many places qualifying for fixed wireless would fall into the tank/dam water situation? I'm sure there would be some, but I don't know how big an issue that would be. I'd expect most on tank water to more likely be satellite, which isn't what the article mentions.

          Could be wrong, but this feels like someone living on the outskirts of somewhere like Ballarat, Bendigo, Traralgon, etc. Wouldn't those areas expect towns water rather than tank or dam?

          Not questioning your point, its a good one. If someone on satellite was demanding this, the cost for a single property cant be argued that they should split it amongst other likely users, but if its fixed wireless, that's not the case. You can, and you can predict its going to be hundreds or properties eventually.

          There are enough places in the area to justify a tower and hence consider how many of those places will tap into a fixed line rollout. At some point they will also want to upgrade.

          $1m is ludicrous when you know hundreds of other properties would probably leverage off that infrastructure as well. So to a point, yes, its not unreasonable for the taxpayer to pay for it, knowing that it can be charged to others down the track to dilute that cost.

          Even 500 properties brings the cost down to $2000, and at that price this wouldn't be newsworthy.

        Growing up in the country and living purely off tanked water no I don't think that would be ridiculous at all.
        You honestly think everyone has piped water?

          Imagine having a rusty, poorly maintained water pipe running into your house and then being told that water pipe has to be disconnected and replaced with 'fixed tank' water, which is woefully below the capacity you need.

          That's a more fitting analogy.

            Well it would come down to who own the pipe, in a lot of regional places, land owners pay for the infrastructure themselves, such as power poles and utilities are after at the owners expense.
            Otherwise it would be council owned so it depends on council bylaws whether they can actually do that or not, if you pushed hard enough it may even go to a vote at the council.
            Like the NBN in a way, we had this vote, of course there were many topics people voted either way on, but as you said yourself...

            Congratulations, it's myopic ingrates like you who voted for this government in the first place, because HEAVEN FORBID that a government should pay for infrastructure to enable literally anyone to start a business and therefore kickstart the 21st century economy in this country.

            So I guess in this case, tough luck you get a tank.

            The connection he had before is not mentioned in this article, so assuming it was ADSL his speed are higher than they were before, they are replacing the leaky pipe with a bigger one, just not as big as he wants.

            The amount of regional businesses that have had to pay their own way, for electricity, water, even roads, is quite high. Why just because it is the internet he should get a free ride when others in similar circumstances have to pay their own way on other utilities.

            Should his connection be better? Yes it should. You cannot deny there are hundreds of issues with the NBN network.
            Should he be special above others? No he should not.

              Except no one is saying he should be special, ESPECIALLY if he was on a cabled connection beforehand, because it means that he would have automatically gotten FTTP under the superior original NBN model - just like everyone else who had a cabled connection.

                I'm on a cable connection now. NBN will be completed soon but I am not getting FTTP.

        "If this conversation was about him having to pay that much for a water pipe, you - predictably - would think it's ridiculous, but because you and everyone else who keep voting for these double-dealing"

        Some people do live in semi-remote places where there is no town water. They use water tanks. Do they buy these properties whinging that they should have millions in infrastructure built just so water passes them and the handful properties around them? Do they crying foul if it doesn't happen?

        The fact of the matter is that neither the MTM or the FTTP versions of the NBN were ever going to make money. Everybody in the telco industry knew it. That means that whatever is put out there will eventually come out of taxpayer’s pocket in the form of a write down or some other loss to the public purse.

        And where this article asserts that the cost and time of build wouldn’t have been more excessive than under the MTM model is just wrong. They were nowhere near their rollout targets and the loss of money comes not just from the use of more expensive civil works (which is ALWAYS going to be slower when you have to deal with anything premise by premise) but also from the lack of cost being recouped by connecting customers.

        Everyone whines about the MTM and fraud band and exclaims that the coalition are luddites and that somehow they are cheating everyone of a god given right to fibre. They were trying to make the best of a bad situation which was a loss-making network SOLD to Australians as an off-book profit centre.

        Think about that for a second as public policy issue. Even if Labor had been right and the network could have been built for $50bn …a BIG IF and not likely at all … it still would have lost money. BUT that’s not how it was sold. Nobody got a choice to test the idea of spending $50bn forgone for other public spending… you know, things like schools and hospitals and mental health programs and social welfare and essentials in other areas where the market utterly fails. And in the case of broadband the market wasn't failing completely. No other choice was ever tested at the polls.

        Now, if Labor had gone to the polls with the idea and said it would be on book as a nation building exercise AND they got a mandate for it then, yes, FTTP is much, much better. But that didn’t happen and the coalition is trying to rescue that but getting it rolled out quicker so it makes money quicker. It’s still going to be worthless but at least the damage to the public purse and the extent of the public policy wrong will be contained.

        We have to stop looking at this as purely a technology vs technology debate and see the NBN in the wider context that there are competing public spending needs. If at the next election Labor stops using the MTM as means to flail the coalition from the sidelines and commits to restoring the FTTP model on book and acknowledging the hit to the public purse AND WINS…. Then, awesome, fibre all-round. For now, just be mindful that the money this thing will lose money that has to be taken away from other areas of social well-being.

      I dont think its mine or anyone elses problem that you are sick and in the hospital. Your body decided to get sick. If you want hospital care you can pay for it

      I dont think it mine or anyone elses problem that you decided to drive a car. You decided to purchase one. If you want a road you can pay for it

      See how your logic works? We pay taxes to help our society. Helping small buisness grow benefits our society. People like you who only think in terms of "Me me me me its gotta be all about me" harm society.

        Hospitals like the NBN have minimum standards of service.
        I'll use an example which is a bit close to home.
        If you suffer breast cancer, you are covered for removal of the cancer, but not extras such as plastic surgery afterwards, the hospital just covered their mandated minimum. If you want plastic surgery afterwards that at your cost.
        This guys NBN is within the government mandated minimum so like a hospital anything extra should be at his cost.

        I made examples earlier of other utilities in rural areas when businesses have to pay for them selves, there are many, many, times to government has funded these changes, but they are based on economic impact. Say a large business that wants to expand and it will employ 200 people locally but it needs a new road, that's a sound economic investment because of the flow on effects of employment in the area.

        None of the reports given say anything about the economic impact his business has on the community, so it is hard to say whether the cost would be worth it.

        The "Me me me me its gotta be all about me" could be used about him, 1.2million just for him, when it could be spent upgrading hundreds of other peoples connections instead, including other business in the same circumstance.

        Look the NBN is stuffed, there's no doubt about it. At the same time you have to be fair, if you're making a special allowance for one person it has to be justified.

    We are supposed to be outraged because someone wants to run an IT business from Jam Jerrup and isn't happy with the NBN speeds they getting or the price they have been quoted for a 7km fibre run?

    Not sure how this relates to the MTM, wouldn't he have had a fixed wireless connection under the previous approach as well?

      He's still within the limits of a major city, so no, he would have likely had FTTP under the original NBN design. That's part of what made it - and every other world-leading broadband infrastructure in other countries - forward-thinking.

        Sorry to say, not the case. And again, I'm LOATHE to defend the MTM, but there are no cases where an area has downgraded from FTTP under Labor to Fixed Wireless or Satellite under Liberal. I say this as someone who works in the industry.

          Sorry but you're plain wrong many small towns and some outer urban areas have have been shifted, partly explaining the increased load and congestion on the FW network.

      Almost certainly he would have been in the fixed wireless footprint either way. It is a berry bad example to use to rage against the MTM.

    It’s his decision to live where there aren’t infrastructure.

    Satellites are known to be slow. NBN probably over promised, so that’s their fault.

      Satellites have high latency. He's on fixed wireless though.

    For anyone who's outraged that this guy 'expects the taxpayer to pay for his FTTP' - you're perfectly happy for the taxpayer to pay for an entire infrastructure that is already obsolete before its finished and is designed to NOT spur business growth and therefore be a net money SINK because it will generate almost zero tax revenue?

    Think about that for a second. All the billions of dollars already spent in your name for a woefully inadequate infrastructure, and the billions it will take to maintain something that already isn't fit for purpose. Let it sink in.

      The way I've read some stuff on it is that nbnco know they'll be ripping up some fttn/c/wireless and replacing it with fttp in the future. But the economics of getting value for taxpayer money is that they need to get some cashflow coming in. They can only do that by going for the low-hanging fruit first. Hence the shithouse that is fttn/c and wireless. Once they're running as a vaguely financially stable entity, then they can look at upgrades - active consumers subsidising it rather than taking from the taxpayer pot.
      I'm no economist, but that kinda made sense to me. But it still leaves Australia years behind where it could have been. And the wider social and economic impact of have/have-not internet access is hard to quantify I guess.

      Last edited 08/06/18 11:01 am

        'I'm no economist, but that kinda made sense to me'

        Wait, paying billions of taxpayer dollars for infrastructure that will be obsolete before its finished rolling out and delivers NO return in the form of revenue, only to spend billions more ripping it up (because it's not upgradable) and replacing it with what it should have been in the first place makes SENSE to you??

        Really?

        You don't have to be an economist to see the idiotic argument there.

        Last edited 08/06/18 12:39 pm

          Yes, yes it does. Because that's how businesses work. Finance is an ongoing process. It's hard to convince any bank to lend you money if your model is to blow enormous amounts of money and hope to repay it in a trickle over decades. However, asking a bank for cash to fund a venture that has a quicker ROI and a path to longer sustainability is probably a better bet. Whether or not the product/service produced has a limited shelf-life.
          You may need to calm down and take a wider view.

          Last edited 08/06/18 1:26 pm

            Aren't infrastructure projects different? Isn't the point of projects like major roads, watcher parchment, power generation and networking that they are enablers of other things. For example, when the Eastern Freeway was build in Melbourne, connecting Doncaster to the city, and then extended to join Ringwood to Doncaster, the road didn't generate any revenue. But it enabled faster transport and the growth of "mini CBDs" away from the city. The NBN is infrastructure. It will enable lots of stuff. The trouble is, we don't know what some of it is and that makes it easy for naysayers to shoot it down.

              Very much agree and yep, perhaps that's the problem - government wanting nbn to stand up on its own financially whereas it could/should have been approached differently.
              One thing I'm not sure of, and will probably go and have a read up on, is how the original copper telephone network was rolled out and how it was funded. Times/technologies obviously very different but I wonder if there's some knowledge/experience there to digest.

              But, Anthony, that's not how it was sold to the Australian public. It was sold as GBE asset or investment that kept it off the budget. That's what I've argued elsewhere here. That there was no chance for public reflection on the risk that building it would lose money (as it most certainly will no matter which tech you choose) and deprive other essential government cost centres of much needed funding. When you build a road it's a given that there's no direct return to gov't but a social and economic return overall and it's all pretty non-controversial as a public policy issue. When you go to voters promising something will make money when it won't and don't give anyone an opportunity to consider what makes for the best spending for society (especially when there's an option to let the private sector take care of it, imperfectly I suppose) then that's an egregious fraud. Again, if the other scenario, that you just put it on book as nation building and use fibre and it prevails with voters, then that's great. Best outcome! But the coalition would never have done it in the first place on ideological grounds so they're naturally doing what they do and trying to make it as profitable as possible and get it back into private hands. (*coughTelstracough*)

    I understand where nbnco are coming from - he's got a service that's in-spec, it's just not the service he believes he needs.
    But it is frustrating to see the train-wreck of a roll-out that is the nbn. I saw an ad the other day where they were super-pleased with themselves for getting 90% of connections correct the first time. That's a shockingly bad figure, not a good one.
    I subscribe to the idea that if a property had copper to it, it should've got fibre. Not some half-arsed wireless/node/curb connection. It's set Australia back decades.

    Well here in WA, we are pretty screwed we have a greater percentage of fttn and fixed wireless than any other state. I am 3km from Perth city centre and have fttn. Iam 400m from the node and got a quote to upgrade technology, quote came back at 15K. Now Hobart, adelaide and Melbourne have gigabit fiber at that distance to CBD

      Out of interest what speed are you getting? Im 750m from node and im getting 65Mbps down and 31Mbps up (on a 100/40 plan) hich im actually ecstatic about coming from a sub 6Mbps DSL service.

        Hi Archer I'm getting 70/27 on a 100/40 plan at 400 metres, my ADSL2+ was 18Mbps. Thats pretty good result for you, however for me at 400m a bit under par.

          Would have definitely thought you would get more than that!

          I got a significant boost (~20Mbps) by having my in-home wiring redone (all old telephone points disconnected and brand new point connected direct to where modem is). It cost me a few hundred $'s (has do be done by a licensed ACMA tech) but was well worth it i think. If you haven't already done so might be worth having a look at that

    As loathe as I am to defend the MTM, actually the whole Fibre vs Fixed Wireless vs Satellite mix of technologies was all part of the original Labor plan. Liberals brought in FTTN and HFC to supplement the FTTP part -- but Fixed Wireless and Satellite for remote & rural areas has been there since Day 1.

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