NBN: Debunking Turnbull with Alan Jones - VI

Commenting on: Turnbull to Alan Jones, 15-Jul-2013

So we’re replacing almost all of the copper and the only reason you don’t replace that last couple of hundred metres is because that is about three-quarters of the cost.
And a huge amount of disruption.

Confusing/Conflating multiple items:

• the relative cost of a single part of the whole project reflects the TOTAL difference.
• The actual cost difference: Copper is only 10% cheaper to buy, 5 times more expensive to run, brings in just 40% of the revenue.

• Speaking as if Govt still owns the entire network & assets. Turnbull was a Minister in Govt that sold it all.

• Emphasise "huge disruption", Not just A Bad Thing, but The Worst Thing You Can Imagine.

1. If, and only if you, you already own all the assets, then you can compare the incremental costs of upgrading the existing asset to replacing it with a new asset. When you have to buy or build those
assets & holes in the ground/civil works, the economics are completely different.

Turnbull constantly holds up Overseas Telcos as the shining example to follow, but all of them own the copper and access they'll use, while NBN Co is starting from scratch. Turnbull likes to pretend that 200-250,000 kilometres of 10-pair distribution copper he needs are free. Only if he Compulsorily Acquires them: if he Nationalises Telstra's copper against their will.

2. The ACTUAL choice is "do we buy & rent assets from Telstra for a time and pay for Fibre NOW or LATER"?

• The Fibre makes many times more money, it's better to earn that more earlier than later.
• Why must the Government protect an asset it sold?
• And not just any Govt, but one Turnbull was in and a Minister of.
• What is profitable about paying Telstra rent on old, decrepit assets for an extended period, when you fully intend to replace them later?

3. One small part of the project, replacing 3km of distribution network with Fibre (if you already own that copper), is one-quarter the cost.
When you add-in everything, the price difference is ONLY 10%, then you're intending to throw it away (and waste half of what you spent) AND you're also forcing $500-$1000 (twice the money you saved) directly onto Customers, without warning them or offering them the option of an identical (NTD) service on the same terms.


4. "Disturbance" is a deception as well. Most of the Telstra lead-ins will be reused. NO DIGGING NEEDED.

These days, cables are installed in conduits which are placed with horizontal boring, NOT digging trenches - that's exactly what Telstra did in 1994 when it rolled out HFC Cable. It disturbed very little.


5. Turnbull was a minister in the Government that SOLD the Assets, knew that an NBN was required and the _only_ way there was via the Telstra assets they'd sold, knew that over the previous 10+ years the Telecomms market in Australia had failed multiple times (HFC Cable, ADSL1 pricing, ADSL2 rollout (so sharing), no mobile roaming between operators) AND he's on record as advising 'Telstra would be worth a lot more if it was structurally separated BEFORE being sold'.

To quote Turnbull in this same interview... "we wouldn't be starting from here".
This is his lawyer joke to illustrate:

"can you give me directions to Dublin?
  And the barman says well if I were you I wouldn’t be starting from here."
" So we wouldn’t be starting from here either.
 "So the first thing we’re going to do is assess in a hard headed objective way how much it is really going to cost in dollars and years to complete this project on the current specifications.""

• the point of the last sentence is "hard headed" and "objective way".
• Implies he really looked at the numbers & finances, while he hasn't published the financial forecasts he's done and quotes at us.

• where is the mention of taking a profitable business with 7% RoI and turning it into a guaranteed $10 billion loss that will destroy the entire $30 billion investment as well?