back to article Turnbull moves on NBN subsidy arrangements

Australia's government has slapped the defibrillator on the Vertigan review of the National Broadband Network (NBN), and is asking for submissions about how subsidies for unprofitable services in remote areas should operate. Have your say on funding options for #nbn non-commercial services visit # …

  1. mathew42

    The government should simply disband NBNCo and call for tenders to provide services in the existing 121 PoIs. The concessions would last for 5-10 years and would include pricing caps on wholesale pricing and KPIs that result in bonuses / penalties. In some localities, the concession holder would pay the government and in other localities (e.g. rural) the holder would receive payments to make up for higher costs.

    A single company would be prevented from more than 33% of the market to preserve competition.

    1. Jasonk

      have you forgotten that if the private sector done there job NBNco wouldn't have been made.

      eg. while the rest of the world started to rollout FTTN we had Telstra still rolling out ADSL1 and charging ADSL2+ upto speeds for it.

      1. aberglas

        Telstra was never asked

        Actually, Telstra did a fine job of satisfying its universal service obligation for telephones. Telephones are widely available even in quite remote and thus unprofitable areas.

        There simply was/is no universal service obligation for broadband. If it were to be created, with the same sort of subsidy/penalty arrangement, then Telstra would presumably also do a fine job.

        That said, I prefer to have multiple different companies bidding for different areas. Competition breeds efficiency.

        1. Jasonk

          Re: Telstra was never asked

          That said, I prefer to have multiple different companies bidding for different areas. Competition breeds efficiency.

          Not really have you seen the mini monopolies of HFC in the US no competition what so ever.

          1. Abel Adamski

            Re: Telstra was never asked

            Very true

            Those who promote the mini monopoly concept really want to be in on a monopoly rivers of gold scenario. Realistically that is what it would be with no competition and bunfights to avoid being forced to wholesale. Any expectations of future upgrades and improvements would be the stuff of fantasy, with no competition why should they spend the money to do so

            Then consider the screams when levies are applied against them to fund the non profitable areas

  2. FrancisYoung

    A divisive proposal

    This is another exercise in divide-and-conquer by the anti-Communications Minister. Cross-subsidy must happen to achieve universal coverage. The question is simply how to do it, ie, internally or externally.

    The 2010 McKinsey-KPMG NBN Implementation Report produced numbers which are still useful, and by uniform charging, it saw distributing the cost of fibre, wireless and satellite service provision across 100% of premises as the lowest cost approach.

    This achieves the universal good of facilitating business, government and social service delivery to all Australian premises, by sharing the marginal cost of - initially - 7% of premises across the 93% in urban areas. As fibre is deployed subsequently to more outliers, this 7% will diminish over time. Note that some urban installations are also costly to provision. Sharing the total cost across the total customer base achieves the best outcome, and does so at the lowest administrative cost.

    Critically, internal cross-subsidy averts the futile and pointless debates about city folks funding the lifestyle choice of farmers (as if this was not a symbiotic dependency!).

    It has been quipped more than once that Australia's national sport is splitting the bill, but a universal calculation, universally shared by internal cross-subsidy, is the best way to contain the total cost and deliver all the objectives of the NBN.

  3. Abel Adamski

    Absolutely brilliant idea, of course it is the oft stated wet dream of that economic genius in his own fantasies (Strangely also on that panel) who can now ensure that $200/month (+GST) minimum cost for the basic broadband service that he promised.

    After all why stop at Satellite and wireless, those advantaged customers on the node or FTTP need to pay extra to cover the install, operational and maintenance costs of that poor bugger 600 Metres down the road on crap copper on FTTN, after all AT&T is going for FTTP with 100Mb up to 1Gb, so any company can run the infrastructure to provide the service and claim subsidy to cover their costs, that farmer 2K off the road and 5K out of upper Quambatook North can now get FTTP, paid for by a surcharge on those greedy buggers sponging off us all in their apartments fed by cheap easy to run FTTB.

    fraudband will hardly have to install anything, the gold rush is on.

    Just think Tony will get his 1 Million new jobs, as the total costs of every customer will have to be calculated and verified and adjustments calculated and applied, a bureaucratic Nirvana all paid for by that surcharge (+GST) at no cost to the taxpayer or the budget.

    That Privately owned Pay TV portion of the HFC must also be included with appropriate levies applied, the corporate and backhaul and transit links must also be factored and equalisation costs applied as well as Carriers privately owned fibres including within the HFC Fibre cables. The work incolved in calculating and applying all these values will require a major bureaucratic industry

    I million new jobs will be a conservative estimate, all praise to our fearless and brilliant leader.

    After all the principle must be equitably applied to all communications sectors, including the to be sold Government network.

    What an exiting time for beancounters

    Sheer genius

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