Labor and its inconsistent broadband plan

This isn’t a post to tear Labor apart, but rather, just to highlight some of what is spat by Senator Stephen Conroy.

He recently wrote an article for The Australian (so it is biased), stating that in mid-2009, Coonan’s plan of spending $1 billion bucks on giving Regional Australia competition could prove to be a waste of dollars.

The first thought that runs to my head is, no, you are wrong you incompetent moron, spending $1 billion to generate competition is going to be $1 billion well spent on ensuring Regional Australia gets three things. Competitive access to basic telecommunications services at good value prices, and two, innovation between carriers to set products apart, and three, competitors will have better choice of products to wholesale, and more methods of innovating themselves.

So, we have what can step into a multilayer ideal where the consumer is the goal of all parties.

eg. Telstra has a copper network and has customers paying excessive rates for ADSL1. OPEL plan to put ADSL2+ speeds in exchanges to give consumers both faster speeds, and a better price. Telstra will be keen to maintain market share, so will likely want to match the OPEL product by offering faster speeds than OPEL, or cheaper prices on ADSL1.

The win there is a combination of price and innovation, and all it will cost for it to start its fury is $1 billion!

Another example of a win for consumers is.

eg. Telstra has a outdated, inferior NextG network, which offers speeds at pathetic, excessive prices. OPEL plan to come along and add a new, innovative, and top of the line WiMAX network to the lineup, which will offer speeds faster than NextG, and at prices a lot more sane than Telstra. Telstra won’t want to waste those dollars spent on NextG and will drop prices to maintain market share. Competitors come along and use the WiMAX network as a form of backhaul for their own different style of service, which is also cheaper than Telstra and OPEL. Consumers discover they have many, many choices.

The win there is a price based win for consumers, a future proofing win for consumers, a competition win for consumers, an innovation win for consumers, and all it costs .. a small $1 billion bucks.

That’s a big win, when you consider that without it, consumers will be stuck, paying the same rate, day in, day out for a slow, overpriced, artificially limited Telstra or Telstra Wholesale service.

Then you consider the other side of Conroy’s argument, the side that would cost a lot of money, for perhaps a long-term future proof gain, however, in the wrong hands, could see consumers paying through the roof for access to services that are able to be produced for just $1 billion.

Labor’s plan is to create a national FTTN network in a public, private partnership. It’s unclear who Labor prefers to be rolling that network out, however the one clear item is that they are happy to blow $4 billion of taxpayer funds doing it.

It’s a mass spend for a gain. It’s future proof though, FTTN is an upgrade path to FTTH, and will avoid the costs later down the track of upgrading regional australia.

However, is running Fibre around regional areas a move that is best right now? When many regional areas don’t have total demand for a full fibre optic network.

Part of me says: Yes, because if its not done now, we will be waiting many, many years for another upgrade when WiMAX’s lifetime ends.

Part of me says: No, because we got years, years, years out of the copper wire in the streets now, and it’s not finishing there, if wanted, they could install VDSL2, or UDSL (200Mbps) and provide services to customers, they also have the option of bonding lines to produce higher speeds as well. So, copper isn’t at the end of its life yet, and it still has some 5 – 10 years left on it before our technology demands will reach those of a typical ADSL2+ connection.

Based on the copper network argument and the lifetime from it, we can be relatively certain that no matter what technology that goes out, it will have some lifetime on it to perform to expectations before consumer demand increases and an upgrade will be necessary (or when the OECD says our networks suck again).

WiMAX being a young developmental technology still, is prone to be enhanced and advanced in many, many ways, and the speeds are just one area they will enhance on (much like Intel, they went from P3 to several stages of P4 in just 4 years), actually, I should also mention here Intel are a strong investor in WiMAX.

WiMAX is certainly in my opinion not a lemon technology, and one where compression, pipe widening, spectrum manipulation, and various other technology innovations might occur to release faster speeds and greater distances.

And again, it will likely only cost just a few hundred million to swap WiMAX with another technology should it ever prove a wrong path many years down the track.

So, I sit with Coonan’s plan is ideal for regional areas, because it’s cheaper on the taxpayer, and offers much the same as what we’d get from FTTN.

I ask: Do you expect WiMAX to be innovated, just like ADSL1 was, beyond it’s initial 6Mbps, to speeds where ADSL2+, or VDSL2 is at today, of 24 – 50Mbps?

It’s fairly obvious to me that it shouldn’t be too hard or impossible for them to pull 24Mbps out of this new technology.

And again, Coonan’s plan aides competition in investing. A FTTN network does not do this, as it simply is an upgrade of Telstra’s network.

In related news also, we can expect to see FTTN guidelines released in the coming day or so, and there is a 30 day timeframe for users to disagree with those, so I will certainly be taking a look at those as soon as I can! I’m interested to see their thoughts on how a proposal should enhance competition in the current environment, and whether they’ve actually looked into some of the problems that exist in the environment, and whether any future problems have been factored in, for example, what if an FTTN supplier decides to use anti competitive tactics just like Telstra has done previously and still do to force competitors out of the market…!


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