"Businesses will lie to customers and regulators as much as they're allowed to get away with because it's good for profits."
Either the customer or regulator needs to hold companies to account. In an industry that is a natural monopoly like last-mile internet delivery, then regulators need to step in and work hard to structure the market such that it actually functions properly, with as much competition as possible.
In Australia this had the government own the wires, which rented the capacity to companies, that sold internet service to consumers. An actual functioning market with competition, instead of one company owning all the wires for a town/city/state, refusing to rent them to anyone else, and charging sky high rates.
Theres a natural Pit and Pipe monopoly, but ISPs are hardly bound to it. The Pit and Pipe asset is a gift from the federal government to Telstra, who sold it to NBN for a steal. There are multiple fibre companies in a lot of our pits. PIPE, Vocus, Optus. They are prevented by legislation from diverting any of that asset towards residential users. The only exception where theres any kind of competition at all, was TPG taking NBN to court over apartment buildings, otherwise its illegal to overbuild NBN. The penalty is quite hefty too.
In fact NBN is being directed to overbuild other fibre providers. NBN says, we arent coming to this community. Community organises their own fibre. NBN says hey we actually do want to be in this market now. Now its a legal grey area as to whether the existing provider can continue their rollout.
Thats before we get into fixed wireless. I spent 99% of the NBN "debate" with a 300M residential fixed wireless service. Shady operators give it a bad name, but a well engineered wireless link is a godsend.
We had a functional market in this country. It was ULL. Legislation forced Telstra (through gritted teeth) to sell ULL copper instead of reselling their services. It lead to the largest sharpest increase in internet speeds in this country. The ULL model allows providers to provide their own hardware and upgrade it as demand requires. It removes a middle man from their logical networks. Why we trashed this model for an NBN cost recovery makes no sense. Singapore rents glass, it was a big undertaking and it has been extremely successful. Companies competing to be the first to roll out 5/10/100 gig services.
Any discussion in this area needs to acknowledge it is illegal for me to rent pit and run a fibre cable into a residential dwelling thats already serviced by the NBN. There's nothing natural about it.
The other thing the government (specifically, Graeme Samuel, Rod Sims and the Australian Competition and Consumer Commission) did was structure the NBN so that small operators couldn't join without buying connectivity from one of the large incumbent players.
The original model for the NBN was that there would be 14 points of interconnection nationally, which means if you were a smallish ISP you only need a physical presence in 14 locations to be able to offer service on the NBN nationally. That was the clear preference of NBNco itself, and the smaller (often regional) ISPs who now had a real shot at becoming national operators and challenging large incumbents like Telstra, Optus and TPG.
The ACCC decided that it does not, in fact, want to foster or support competition and that it wanted to continue the status quo, where a handful of large telcos control the market. NBN instead ended up with 121 POIs, which only the best capitalised carriers could service. That lead to massive consolidation in the market; many small to mid sized players either closed up shop or sold out to operations like TPG, and the small operators who survived now buy wholesale connectivity from the incumbents.
Yup - in NZ the infrastrucutre and the provider were separated as part of the nation-wide fibre-to-the-door rollout.
I switched provider the other week, after the old one discontinued a discount. All I had to do was sign up with the new provider and provide the connection number. They organised everything else and my old provider _refunded_ me for part of an unused pro-rata month.
Yeah, the Australian Government was never going to structurally separate Telstra because it would have trashed the share price, which would have made them look bad because they were the ones that sold it off to create the Future Fund (public sector pension fund, sort-of).
Telstra's behaviour post-privatisation somewhat precipitated the creation of NBNco.
"structurally separate Telstra because it would have trashed the share price,"
I've whinged for years about the fact that Australia is the world's expert in fucking up communications services and it has done so for nearly a century, and it's cost the Australian public many billions of dollars (for some reason Oz people are like sheep, unfortunately they let governments and Big Business walk all over them and don't complain).
I even challenged HN readers to come up with a country that made a worse mess of its communications and I've had no takers!
It's not only the sale of Telstra that governments of both persuasions have fucked up, one only needs to see a litany of disasters with the NBN, and just wait until it's divided up among unscrupulous money-grubbing telcos, the Telstra sale will begin to look benign in comparison.
What are my reasons you may well ask. I've said them all previously on HN and elsewhere, the latest only a week or so ago, it's here if you're interested:
And how much did the Liberals and Murdoch media hate that?
I got my FTTH connection a full ten years later than I would have if they hadn't fucked with the original plan. I can't forgive them for that. It's not even personal, it was holding back the progress of the entire country.
The behaviour of Optus and Telstra at the time dictated that the only way to do it properly was to have it done by the government. And they were right, because it was 'for Australia', not for private companies' shareholders.
100% agree. Abbott should be held to account for this forever. The plan wasn't perfect, but the way they messed it up for purely political point-scoring (and keeping Murdoch happy) was criminal.
The original plan was killed by the ACCC. You are thinking of the Rod Sims ACCC "engineered" plan written by the big 4 telcos (expanding the network to 121 POIs, preventing NBN from competing against fibre backhaul providers, generally making it hell for small players to compete), that would deliver FTTH but not the capacity or competition to make it viable. And we would still be undertaking the physical roll out.
The LNP made the last mile worse by some metrics, but they vastly improved the economics. Its a testament to how bad their PR is that they have failed to capitalise on it politically.
Strongly disagree that they improved the economics at all.
I will say that, if they did improve the economics, then I agree that 'something' failed in getting that point across. They did crow about how bad the original economics was, but really just using scare tactics by quoting the large number that out's of the range of reasonable comparison by the average citizen. Most information I read was that they wasted additional money including paying for a lot, like a lot lot, of copper for last mile connections, including paying Telstra for some of their existing copper infrastructure - the dilapidated state of which was part of the reason that FTTH was the proposed solution for 9x% of the Australian population.
In fact, it's almost impossible that improved economics making changes and causing the (decade+ in some cases) delay of the rollout of FTTH.
I'm happy to be told I'm wrong, along with explanations, or if there are mitigating factors to anything I've written above.
Edited to add: My rant may be on a different interpretation of 'economics' than which you're referring to. Mine's purely based on the cost of the project - not how it's been charged to ISPs or Customers.
Edited to add post-reply below: Thanks for the detailed reply, that's very interesting information that I had read peripheral information around, but was less intimate with. Thanks for taking the time, two thumbs up.
When I refer to the economics, I refer to the market that the NBN act creates. This is largely divorced from political spending, like purchasing the Optus HFC network to which you refer.
The original labor approved cost for accessing the network made it unreasonable to purchase enough CVC to provide services for customers.
Bevan Slattery used to discuss this alot, but NBN had the capability, and in one case threatened to use that capability, to cut off any wholesalers they like. So Bevan was the only one in a place to really publicly criticise them. A gentleman I know wrote a whitepaper about how bad the NBN Fixed Wireless service was and his employer forced him to scour it from the internet after threats from NBN Co.
So as to publicly allowed criticism of NBN Co you dont get much other than that.
I will see if I can dredge up the numbers.
Under labors watch, they assigned engineers and specialists to design a fibre network. It was over engineered (should have been ULL with no active hardware) but we didnt get that. It was to consist of 21 points of interconnect and effectively would have provided an alternative to buying backhaul from Telstra/AAPT etc.
The ACCC, after prompting from the big 4, changed the plan to include 121 points of interconnect. NBN co also mandated that Wholesalers be able to reach a very large number of them before they could connect to the system (with a plan for all 121).
What they didnt do was change the pricing structure. So now to play ball, you now need 100 more points of presence on your network (very expensive) and you are paying a quite hefty fee for an extremely small amount of CVC. NBN Expected that more CVC would be purchased by providers, but as it worked out, this did not occur. Some providers purchased more CVC just to get started, and then phased it out. Others didnt bother. Ultimately, CVC proved to be lossmaking for ISPs, who at best had a dollar after the customers monthly sub with which to find Support/Hardware/all their other costs. This lead to a significant number of user complaints, regardless of last mile tech.
LNP pops in, and they are looking for any way they can "fix labors mistake". ISP lobbying finally makes an impact and NBN starts bundling in CVC. The LNP also mostly stop talking about the NBN becoming a return on investment in x years, which takes pressure off of NBNCo to needle ISPs. This is where people with fibre connections started going from just having less dropouts, to having very significant speed increases versus other technology types. ISPs gained a very small amount of breathing room (still heaps of room for improvement) and the economics were somewhat improved.
The thing is, the LNP didnt market this success. They went and fiddled around with the rest of the project, bought the optus network etc and campaigned on that nonsense instead. Really if they wanted to they should have done more to highlight and correct the actual failures of the NBN rather than the issues their donors had but w/e.
"A gentleman I know wrote a whitepaper about how bad the NBN Fixed Wireless service was and his employer forced him to scour it from the internet after threats from NBN Co."
I know, this bullying and like threats are just part of a much bigger problem. As I've said in my post to this story, that's just part of a much bigger problem with Australian communications and communications policy. When it comes to Australian governments and communications what we end up with is inevitably some sort of major fuck-up, and often it's monumental.
If I were an alien I'd draw the conclusion that Australian people have a congenital abnormality that makes them lose all sense and reason when they hear strings that contain words like 'communications'. What else could it be, the fuck-ups are continuous and span over a century?
Methinks, some grad student could likely get a PhD sorting this out and pinning the blame. Oh, but what a horrible job!
I think the Australian disease is an addiction to the great big national solution.
If 1 state is falling behind, they strip all the states of the responsibility and push ONE MASSIVE SOLUTION to everything.
NDIS? We had years of disabled people complaining that their state benefits were better, or lost completely after the NDIS rollout before they got their nonsense together. Now its always new and interesting ways the scheme is failing.
NBN? You could hand pit and pipe to local councils to rent out, but nah we need another failed monopoly.
Housing? Make sure states are meeting their land release obligations? Nope needs a massive funding splash from the federal government.
Education? We used to use the US as an example of poor education policy. Standardised tests? Nope those force teachers to teach the test rather than teach the child. Suddenly, national curriculum and standardised tests. Genius.
Either the customer or regulator needs to hold companies to account. In an industry that is a natural monopoly like last-mile internet delivery, then regulators need to step in and work hard to structure the market such that it actually functions properly, with as much competition as possible.
In Australia this had the government own the wires, which rented the capacity to companies, that sold internet service to consumers. An actual functioning market with competition, instead of one company owning all the wires for a town/city/state, refusing to rent them to anyone else, and charging sky high rates.