High-speed broadband can quickly be delivered at a reasonable cost

In The Australian today:
“That the release of the cost-benefit analysis of the National Broadband Network has generated as much heat as light is perhaps unsurprising. The debate about the NBN has always been drenched in politics. And the analysis itself is lengthy and complex, making its findings difficult to communicate and absorb.”

About Henry Ergas

Henry Ergas is a columnist for The Australian newspaper and the inaugural Professor of Infrastructure Economics at the SMART Infrastructure Facility at the University of Wollongong. The SMART Infrastructure Facility is a $61.8 million world-class research and training centre concerned with integrated infrastructure solutions for the future. Henry is also Senior Economic Adviser to Deloitte Australia. Prior to these concurrent roles Henry worked as a consultant economist at NECG, CRA International and Concept Economics. Henry's previous career was as an economist at the OECD in Paris, where amongst other roles he headed the Secretary-General’s Task Force on Structural Adjustment and was Counsellor for Structural Policy in the Economics Department.
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29 Responses to High-speed broadband can quickly be delivered at a reasonable cost

  1. Robbo

    “High-speed broadband can quickly be delivered at a reasonable cost.”

    Would you mind conveying that to Stephen Conroy?

  2. Giorgio

    The NBN was always about alp control of communications ,and union control of NBN ,forward into the 1920 s comrades. They had a lot of control of print media and broadcasting,with their abc ,sbs and the comrades infiltrayed into the non communist media ,control of communication would top it off with repressive ” law against truthfull criticism. Any opposition would be smothered and they could get on with communising Australia. Of course in their arrogant ,incompetent. i know everything way ,they forgot the elephant in the room Islamofascism! Who would help them destroy freedom then take over by eliminating the stupid leftists who made it all possible. Vote green/ alp for a caliphate in Australia!

  3. TerjeP

    At the beginning of the article Ergas indicates that the CBA treats locked in commitments as a sunk cost. Fair enough. But then on that basis is shows rural services fail the CBA. Which does not surprise. But then he says that rural services should go ahead because they are a sunk cost. Which is confusing give the CBA supposedly filtered for sunk costs. I suspect there is some fudge happening in regards to rural services.

  4. mark

    Useful idiots…always the first against the wall come the revolution…typed on my non nbn connected old technology wireless 4G phone…idiots! It was always about control of the internet in this country.

  5. I am in a rural situation and NBN, if it ever arrives where I am, will be some sort of wireless connection. In the meantime I have either 4G wireless at 25Gb max for $150 per month, which I have now, or build a house to get ADSL broadband, providing I am close enough to the nearest Telstra exchange. No phone link to the existing ‘shed’ possible.

  6. john constantine

    With two years until petrodollar bill and his green partners get to run the nbn and australias internet.

    How can there be a landmine left to deny shorten control of the internet area?.

    Maybe split satellite services/mobile/fixed and allow competition among the companies?.

    as we all know the whole fixed fibre monopoly was welfare for big unions/crony socialism.

    the answer is to only use fibre where vital, and to encourage competition.

    The nbn will be worth cents in the dollar of sunk capital, if ever sold, but socialist cronies will be locked into contracts dripping cash, and a whole pipeline of union officials will be empowered.

  7. stackja

    Liberty Quotes
    In regard to economic policy, socialism and communism are identical.
    — Ludwig von Mises

    Rudd Launches Broadband Policy; Abandons Opposition To Telstra Sale
    Mar 21, 2007
    The Opposition Leader, Kevin Rudd, has announced an election policy which commits the ALP to investing up to $4.7 billion in partnership with the private sector to build a broadband service which will cover 98 per cent of the population and deliver speeds forty times faster than currently available.

    This is the transcript of the press conference held by Kevin Rudd, Lindsay Tanner and Senator Stephen Conroy.

    linky

  8. Tel

    I am in a rural situation and NBN, if it ever arrives where I am, will be some sort of wireless connection. In the meantime I have either 4G wireless at 25Gb max for $150 per month, which I have now, or build a house to get ADSL broadband, providing I am close enough to the nearest Telstra exchange. No phone link to the existing ‘shed’ possible.

    Or you have satellite, or other wireless service (like BigAir) or you can pay for a fiber to go to wherever you want (your money, you tell them were to connect).

  9. Tel

    The Opposition Leader, Kevin Rudd, has announced an election policy which commits the ALP to investing up to $4.7 billion in partnership with the private sector to build a broadband service which will cover 98 per cent of the population and deliver speeds forty times faster than currently available.

    They tried. They put it out to tender and one after another the private operators told them, “That ain’t gonna happen!” so rather than admit they were stupid, the ALP multiplied the price tag by a factor of ten and created the NBN. The result, about 200k premises with NBN available at the end of 2012-2013 fiscal year (about 3% coverage of Australia) at a total cost in the billions, but I’m having difficulty tracking down how many billions exactly… any reference would be helpful.

  10. Tel

    the answer is to only use fibre where vital, and to encourage competition.

    The answer is to use all available technologies. Wireless will probably eventually win for household and individual usage. Fiber already got installed long ago for long distance and data centers. For short distance in-building use (like around the office) copper is a clear winner so that will remain (although some offices are going to local wireless but not many).

    There is certainly no economic justification for ripping up existing copper networks in suburban areas and running fiber out to people’s lounge room, nor probably will there ever be.

  11. Brian of Moorabbin

    Speaking of Broadband internet…

    3 months ago I was getting 5+Mbps ADSL speeds. Not too shabby considering the distance we are from the local exchange. It was enough for me to play my online games, while the missus spammed Facebook, and the little bloke did his Mathletics/LiteracyPlanet homework online, all at the same time.

    A month ago I was getting 2.5Mbps…. meh, not great but survivable.

    Last week I started getting 1Mbps and shitty (500+ms to local servers, instead of the usual 20-25ms) pings. Also getting static and crackling on the telephone line.

    Telstra sent out a technician (after an extended discussion with a non-technical CSR who insisted that it must be my equipment at fault because he could hear my quite clearly when I called him…. via cellphone *facepalm*) who confirmed that the local lines are “fuckin’ shit mate” (must be a technical term). He fixed the line, but also noted (both to me and in his official report) that the lines are still the original ones that were installed in the 1950s when the area was first ‘connected’ and mentioned to me that until they’re upgraded I should be prepared for things to potentially get worse.

    Today, they got worse.

    No dial tone on the phone, just a loud and irritating buzz/whine, and the best resuklt I can get from Speedtest.net (if I can actually get a test to complete) is a ping of 11253ms, and ADSL speed of 0.04Mbps (Seriously. The old 56k dialup would be faster..)

    So, since it’s the weekend and I have nothing better to do, I spent about an hour doing ‘isolation test’ (which I know the technician will ask about when he does come) – basically unplug EVERYTHING that connects through the phoneline (luckily just one telephone, and a single modem/router) and then plug each one in individually see if the service improves, or if the phone (or modem) is the problem.

    Nada. Still the same buzz/whine (no dial tone) on the phone. Still shitty speeds through the modem.

    Armed with this information, I ring the Telstra tech support line. Once again I get told it’s “obviously the equipment you have plugged into the line, despite what the technician thinks. Pardon? No I’m not a technician myself, but he MUST be wrong because I can hear you clearly on that line? What? Oh… the reason you’re so clear is because you’re calling from a cellphone because you can’t get a dial tone on the fixed line? B-but eveything here says the line is fine…”

    So eventually…

    They’re sending a technician out to look at the lines (again). Earliest appointment, you ask?

    Monday 8th September.

    10 days from now……

    So since it’s the weekend and, as mentioned previously, I have nothing better to do, I spent about two hours doing even more isolation tests… just to be sure I also had the wife video everything on the handy smartphone.

    Tried three different types of phone – still no dial tone, just the same loud buzz/whine, as per when I lodged the fault

    Tried two different modems and eventually got slightly better speedtest.net results…

    Even double-checked with the neighbours (who are also having problems with their phonelines…. with similar problems with Telstra ‘Technical Support’… quelle surprise…)

    So, in conclusion, I’m pretty sure its the “fuckin’ shit lines” in the area and not, as I’ve been advised by the (non-technician) CSR any of my equipment….

    … but I guess we’ll find out for sure when the (real) technician comes out…

    .. in 10 DAYS TIME!

    I’d love to be able to bypass this and use the NBN instead.

    Sadly though, according to NBN Co’s own website, this area isn’t scheduled to be rolled out until 2019…. (remind me again, when KRuddster announced this wonderful new internet service, what date the Liars Party claimed all Australia would be connected by?)

  12. stackja

    Brian of Moorabbin
    #1434096, posted on August 30, 2014 at 4:18 pm

    Most phone manholes I have seen still have PMG on the metal covers.
    Most wires I have seen are still inside lead covering.
    Thin copper wires keeping us connected/disconnected.
    We had a no dial tone problem turned out it was a PMG battery failure up the street.
    NBN will need a battery for when the solar energy fails, of course.

  13. Tel

    Brian, the basic problem is that to economically provide communications to remote areas in the bush actually costs more money than the cities and this is a fundamental fact that just will not go away. One choice is to find ways to make the city people pay for your communications, but when that happens you can be sure that every effort will be made to ensure the minimum service is provided, because people don’t hand over their money easily and lots of middle-men are involved in that process.

    The other choice is that people in the bush pay the market rate for what it actually costs to deliver, and then there will be an actual market, and you can get better service.

  14. Walter Plinge

    So, in conclusion, I’m pretty sure its the “fuckin’ shit lines” in the area and not, as I’ve been advised by the (non-technician) CSR any of my equipment….

    Recently went through exactly this in Oakleigh (about the same age). Sixty year old premises. Tested OK according to Telstra but I insisted a technician call no matter what. Did so next business day. You do get better service with a business account. Fixed the problem – it was the crappy copper into the building.

    A year earlier I abandoned ADSL at home – different suburb but same distance from CBD. 60 year old copper again. Signed up for Bigpond’s 100mpbs cable service and had never looked back.

  15. Brian of Moorabbin

    Tel, I wish I could blame the shitty service on living in the bush.

    Sadly though, I live in (blue-ribbon safe Liberal seat) part of bayside Melbourne, less than 15km (as the crow flies) from the CBD…

    Not that living in such prime Liberal territory would have made the socialist ALP decide ‘fuck you’ to the residents of the area, whilst simultaneously making sure their own premier red-ribbon safe Labor areas are first-cab-on-the-rank for all the swank new NBN lines etc.

    Nah, surely the Liars Party isn’t THAT shallow……………….

    (Do I really need to add the tags for that one?)

  16. Nanuestalker

    Brian -
    Can you get optus broadband in your area?

  17. Walter Plinge

    Brian -
    Can you get optus broadband in your area?

    Same copper wires.

  18. manalive

    Overall, the NBN CBA has been a massive exercise that has drawn on an advisory panel of international experts, groundbreaking modelling by the Centre for International Economics and painstakingly forensic analysis of costs and demands …

    Rubbish — nothing two great minds can’t work out on the back of an envelope during a VIP flight to Canberra.

  19. Brian of Moorabbin

    Brian -
    Can you get optus broadband in your area?

    Optus ADSL yes, but through the same Telstra copper wires (as per Walter above).

    Their plans are also more expensive than what I can get through my current ISP also.

    Ditto Telstra’s BigPond ADSL.

    I *could* get Bigpond Cable (through Foxtel), but the plan prices are even worse (more than double what I currently pay, not including the additional equipment/connection fees).

  20. Dave Wane

    High Speed Broadband “delivered” by Conroy, and all with taxpayer’s funds? And he still failed miserably. I doubt Conroy has ever delivered anything of substance to anybody or anything in his entire life. Obviously, other than taxpayer’s funds and union members dues to himself. Of course the crazy NBN was never required in first place. But was there anything implemented by the Rudd-Gillard-Rudd Labor government that was?

  21. JohnA

    So, in conclusion, I’m pretty sure its the “fuckin’ shit lines” in the area and not, as I’ve been advised by the (non-technician) CSR any of my equipment….

    Brian, you have succumbed to the Telstra marketing plan. Same problem out in Dandenong South industrial area.

    At home (Mt Waverley, south of the Mulgrave Parkway) we have had Optus cable since Optus first came into Australia. It has ALWAYS been more reliable, cheaper and faster than the more recent ADSL (our IINet fixed IP service).

  22. Chris

    Brian, you have succumbed to the Telstra marketing plan. Same problem out in Dandenong South industrial area.

    Yep – no incentive at all for Telstra to improve the copper lines as long as they will handle a normal voice call. Why would they make ADSL decent where they have to compete with other ADSL providers when they have a monopoly in many areas with cable and no longer have to care about customer service. It’s not that different from when they resisted introducing ADSL because ISDN was much more profitable for them even if hardly anyone could afford it to the home.

    I’m in a similar situation to Brian in being forced over to Telstra cable even though I was very happy with the my non Telstra ADSL provider. 5-6 mbits/sec is simply not fast enough for the work I do. So instead I have to put up with the awful Telstra customer service – who even have scheduled maintenance downtime during 9-5 working hours. They know that many of their customers simply have no choice.

    Unfortunately unless the ALP get back in its unlikely I’ll end up with an NBN service because cable will be seen as good enough even if there is no competiton and therefore poor service from Telstra.

  23. Matthew

    Unfortunately unless the ALP get back in its unlikely I’ll end up with an NBN service because cable will be seen as good enough even if there is no competiton and therefore poor service from Telstra.

    Labor won’t deliver no matter what their promises are in relation to Internet infrastructure.

  24. Tel

    Sadly though, I live in (blue-ribbon safe Liberal seat) part of bayside Melbourne, less than 15km (as the crow flies) from the CBD…

    In that case you certainly have other options… but not on your cheapest plan.

    Have a look at either TPG’s EFM service, they run multiple copper pairs into a single modem. Also check this map to find distance to the exchange:

    http://www.tpg.com.au/maps/

    Age is no problem for copper lines by the way, the insulation they used 50 years ago can easily last another 50 years and copper won’t corrode while sealed in plastic. The only thing that goes wrong with copper is poor joints, which usually means lack of maintenance. Probably some of the pits in your area fill with water and the junction in the pit has not been sealed properly. They used to have a bottle that covered it, but when they switched to contractors and paid the contractors by the number of visits they made in a day, what the contractors discovered was it was faster not to seal the bottle again. Thus, many pits have open joints exposed to the weather… and then you do have a problem.

    Admittedly, the old Telecom linesmen were pretty unenthusiastic about hard work, but they took their time and put the covers back on things. I’ve seen situations where the pillar in the street has just a plastic bag thrown over it to keep the rain off. Going over to fiber optic won’t fix poor maintenance either, bad joints are still bad joints and water can get into anything if you let it.

  25. Docket62

    Brian et al
    The problem isn’t the copper, it’s the routers at the exchange points. optus routers are better configured, and don’t run legacy software. The transmit speeds over the copper won’t change, because the copper isn’t ‘shit’ but what it plugs into is. Most telcos are using Cisco, but there’s a big difference in technologies around and some is redundant and degrading. Think of a PC (shudder) .. It’s performance degrades over (a very short) time, and the same thing happens with routers. Swap ISP’s. It will usually solve the issue…..I switched from Telstra to Optus because of constant disconnects. 8 years and ONE disconnect later…….

  26. Spider

    Tel spot on with regard to joints. I’ve got TPG ADLS2 and the telephone pit on the footpath fills with water. Stayed home one day to wait for a Telstra technician they had booked. They never turned up. Apparently Telstra had a big outage somewhere I was told later. Although when I was at Bunnings on the same day there was a technician in the car park in a Telstra van who looked like he was asleep. I felt like giving him a prod and telling him to go to my place.

    TPG said they would arrange with Telstra to book another time but frankly who’s got time to take a day off work to sit at home and wait for a technician to turn up so I just suffer the intermittent service in silence (almost).

    By the way I don’t have an issue with TPG. Their call centre staff impressed me enormously.

  27. Chris

    Spider – that’s the other big problem with Telstra running both the infrastructure and retail. Why would they care about TPG customers? If they give non Telstra retail customers “just good enough service” – enough to avoid getting sued too often then people eventually work out its better to move their service to Telstra.

    Docket62 – it’s a pretty big hint that it’s a copper problem when the service regularly degrades after heavy rain. Also it’s not just the pits but many people also have issues with leaky conduit.

    Tel – water however is more likely to cause issues with copper than fibre

  28. Brian of Moorabbin

    Docket62, switching ISPs will not solve the issue when it is definately the lines at fault.

    How do I know it’s the lines?

    Well, when all 6 units in the complex I live in, plus the 6 units in the complex next door (so 12 total, and several with multiple lines) who all connect through the one pit are all complaining about the same issue – frequent drop-outs, no dial-tone, static/cracking/buzzing on the lines, etc and all happening over the same period of time (last 1-2 weeks) – it is simply not possible for all of us to have faulty equipment…

    .. and it becomes even more unlikely when you consider that the majority of the problems happen between 9.30am and 6.30pm every day…

    Tel, switching to TPG is not an option here…. I used to use TPG (6 years ago) and consistently had slower speeds than what I had been enjoy via Internode, my current provider prior to the latest line problems.

  29. Brian of Moorabbin

    the majority of the problems happen between 9.30am and 6.30pm every day

    Further to my comment above.

    I ran frequent speedtest.net checks over the weekend.

    – Between 7pm Saturday night and 9am Sunday, I was getting my usual 20-25ms pings with speeds varying between 1.23 and 1.88 Mbps

    – Between 9am and 7pm Sunday the average results went back to 400-500ms pings and speeds of 0.24 and 0.71 Mbps (Worst result was 9862ms ping and a 0.09 Mbps speed, Best result was 213ms ping and 0.71 Mbps)

    – Between 7pm Sunday and 9am Monday morning, pings of 25-35ms and speeds of 1.21 and 1.91 Mbps.

    – In the (roughly 2 hours) since 9am this morning (Monday) pings are back up to 375+ms and sub 0.3 Mbps speeds

    I should also note that there are 2 IT specialists with my unit complex, and another one living in the complex next door, who I’ve discussed the issue with over the weekend. One uses TPG ADSL, another is on Optus ADSL, myself on Internode ADSL, and the last uses iiNet ADSL. None of the 3 recommended using BigPond cable, for various reasons. All of them are having the same problems with their ADSL, and all of them the above problems specifically for only the last 1-2 weeks. Prior to that, like me, they had been enjoying much faster speeds – particualrly 3 months ago (as per my initial post on this thread).

    They ‘pooh-poohed’ the idea that it was ‘our’ equipment at fault (one of the guys has access to a HUGE range of equipment, and has tried all kinds of different modems, routers, etc with no change) based on their experience in the field.

    I tend to blieve them (and the Telstra tech that first came out last week) than the non-technical CSR (probably working from an overseas call centre) who bases their “you’re service is fine” diagnosis on whether or not they can clearly hear and understand a customer when they ring on the support line….

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