How Conroy lost his NBN Seoul

I agree, Ross (See 'Market for physics', Conversation contribution, June 16). I live 1.5km from my exchange and can only manage less than 5 Mb/s from a theoretical 24Mb/s. The article talks about theoretical versus actual speeds then goes on to talk about high def video streamed on less than 10MB/s (See How Conroy lost his NBN Seoul, June 16). I think you'll find that the actual speeds are significantly less than 10MB/s and therefore quite hard to stream. At least fibre doesn't have the same reduction in speed with simultaneous users that copper experiences.

Mr Turnbull, when I read things like "the NBN's most enthusiastic supporters quickly lose patience with those, such as the Coalition, who suggest a better approach...", it makes me wonder just how much longer you think we should wait for the Coalition to get their act together (See How Conroy lost his NBN Seoul, June 16). How many more years will it take to articulate this so-called 'better approach'? Because all I've seen from the Coalition so far is a lot of trash talking detractors trying to kibosh the NBN.

The basic assumption revealed towards the end of the article appears to be that all technology improvements are free market driven and no speed or cost improvements existed before privatisation of what is now a dog's breakfast of a telecommunications system with a massive inbuilt waste of resources used on both the retail and consumer sides for marketing, unnecessary system duplication etc (See How Conroy lost his NBN Seoul, June 16).
Have you compared the rate of performance and cost improvements in Australia's telecommunications infrastructure before 'privatisation' vs after? If you did, you may be surprised.
By the way – I am not a strong supporter of the NBN as there are better ways of achieving a cost effective communications infrastructure system using fibre trunks and wireless where it is most effective. However, blind, absolute faith in the efficient markets hypothesis never really makes a good basis for a credible article.

Here's a quote from today's Korea Times ( http://www.koreatimes.co.kr/www/news/biz/2011/06/123_88952.html ):
"Halfway into 2011, it's becoming ever clearer that this will be a dismal year for the Korean economy. The grim combination of surging inflation and sluggish growth threatens to derail a fragile recovery, while historically high levels of household debt, which nearly matches an entire year's worth of gross domestic product, is seen as a ticking time bomb waiting to fracture financial stability."
Even just as a snapshot of how things stand in Seoul, might this not be a factor in explaining the dip in household expenditures on high speed broadband? Not to mention the fact that seasonal dips and fluctuations are a poor way to assess the long-term success or otherwise of a major infrastructure.
Mr Turnbull keeps making the same elementary mistake – treating infrastructure investment in the same way that he would treat business investment. Markets and market-driven innovation, to which he makes frequent reference, are very good at providing solutions and products that are flexible to meet changing demands. But they are no solution for the long-term building of infrastructure.
Roads, rail, water, sewerage, copper-based telephony, electricity – all are available to all or nearly all taxpayers through the direct intervention and control of government. Private sector innovation would never have provided these; and if they had, it would have been with very great disparity between affluent city dwellers and those in the regions.

As always in politically-based articles such as this, it is hard to parse the pollie bash from the real sense of issue being put (See How Conroy lost his NBN Seoul, June 16).
Up front, I am a supporter of the NBN and like any start-up recognise that the organisation has its issues – in a similar way to the whole proposition of something as bold as a national broadband network. Imagine the political debate about a national rail or highway system back when they were being envisioned and built. Given his background, I'm sure Malcolm understands this. He just can't express that given his position in holding a party line.
So, good try Malcolm – but your argument around best technology doesn't stack up in the context of building a long-term capability for our grandkids. And Malcolm knows that too. The thing I do agree with Malcolm about is that the NBN is taking a 'build it and they will come' attitude. Supply doesn't equal demand and if the NBN and its 'business plan' are to fulfil their potential, there had better be some quick thinking about services that the average Aussie needs and is willing to pay for.
Given that this is not part of the NBN Co mandate, that will have to come from somewhere else – and their is little active industry strategy or government policy to stimulate that thinking or growth. Add to this the lack of desire for our firms and institutions to hack their offline offering to forge a BB service, and Australia's very poor record and entrepreneurial ecosystem for worthy online start-ups, and you have a real demand issue.
I suspect that, as usual, most content/service supply may come from OS which will in turn be a negative for the NBN. To me it makes sense that the all the NBN is, is a supply strategy... and without a demand strategy that kick-starts new homegrown industry and jobs, as taxpayers and citizens we will not get our full quids worth from such a great initiative. What about that line, Malcolm?

Malcolm, I will reserve judgement on the figures provided in the article until I can see the references, given the rather checkered accuracy of the information you have provided in the past (See How Conroy lost his NBN Seoul, June 16).
I would like to grab one of your statements though, as a perfect example of what is wrong with the Coalition vision. You wrote: "...the market has continually responded to demand for bandwidth up to now with more advanced techniques for getting more out of our existing infrastructure."
While I don't dispute that faster technologies have been invented, I certainly dispute that the "market" has delivered them in Australia. Yes, the rest of the world is enjoying fibre, HFC cable, fast VDSL etc. But where are they in Australia? There is basically no FTTP. HFC cable rollouts stopped a decade ago. There's no VDSL. Of the 5,000-odd telephone exchanges in Australia, only 400 have had competing ADSL2+ DSLAMs installed. Surely, this isn't your idea of the market "responding"?
Hence, your statement is disingenuous. The market has failed to deliver any of these faster technologies to Australian homes and businesses. If they had, then the NBN wouldn't be required.

Malcolm, I appreciate your desire to expose the underlying fallacies in the government's fanciful thinking – but to do so while engaging in fanciful thinking yourself is poor form. Doing so doesn't serve to strengthen your position or increase your credibility. This debate is complex and requires thought, to see it cheapened for the purpose of political point scoring is somewhat discouraging.
To say we can get 700Mb/s from copper is true but to ignore the technical limitations and imply this might somehow become ubiquitious is fantasy in its purest form. Not in your lifespan or mine will 700Mb/s be delivered to the average Australian home over existing Telstra copper.
You also mention HFC cable and it's ability to deliver 100Mb/s to up to 1/3 of Australian homes. No mention is made though that this bandwidth is shared with every home on the same length of cable. 100Mb isn't as impressive when its peak time and there's 30 active users on your street leaving each person with a little over 3Mb/s each. Even with DOCSIS 3.0 that only barely gets you above ADSL1's maximum speeds. These networks also wouldn't be expanded with or without the NBN.
Every technology has its limitations. These limitations stem from the physical constraints of the various elements of the system used and our ability to exploit them. With copper it's attenuation and cross talk, with wireless it's interference and LoS. Every system has them without exception.
Of all the systems in use today it's common knowledge the one with the most 'headroom' is fibre.
What you are proposing though is that we stick with what we've got and maybe patch it up a little for some people, the lucky few. You are saying that future bandwidth needs won't vary by much and if they do we'll fix it then.
It takes a decade to refit a whole country. If it becomes obvious we do need 100Mb/s each we'll just need to wait 10 years.

ADSL speed is perfect for our family – we are not game players or tv/movie downloaders. We will be wireless users rather than subscribe to NBN when the time comes – the government can't stop that, can it? (See How Conroy lost his NBN Seoul, June 16)

Isn't the biggest firphy Conroy spouts that the Aussie bush will be the engine of spectacular invention?
Bring on the NBN fibre by all means, tell us that new inventions will be the new horizons. But don't tell us that the Aussie bush will be the heart of this new horizon, which will make this NBN all worth while.
That and that alone is why the ALP concept of the NBN must be stopped as an unaffordable item for everyone (See How Conroy lost his NBN Seoul, June 16).

Hmmm, a deal between Telstra and NBN Co must be looming for Malcolm to give it one last shot at telling people what they need (See How Conroy lost his NBN Seoul, June 16).
I disagree strongly with his view and with his complete lack of vision and also with his glossed over examples of other technologies. What Malcolm should highlighting is what assumptions and predictions he will have the Productivity Commission include in their cost benefit analysis if the Coalition wins government. Because, as he has stated in the past, a favourable CBA will persuade the Coalition to back the NBN.
This is Malcolm's political game, as he knows the NBN will be very difficult to wind back by the next election. If the Coalition win government, they will conduct a CBA, the results will be favourable (considering how much will be completed by then anyway) and the Coalition will complete the NBN as planned. So to all of you who think there is another option on how this will play out, it's time to get over it and let's start thinking of ways this infrastructure can benefit us.

Interesting points here on price, competition, and service (See How Conroy lost his NBN Seoul, June 16). But, Malcolm, you might have added these:
1) The irresponsibility of the government to exclude the costs of the NBN from the federal budget – as if the money is not spent and not collected from tax payers.
2) The scope of it all. New Zealand has a fibre plan for something like 75 per cent of households. Under the Australian plan, those last few percent of houses will cost mega bucks to get to. No debate on the percentage covered: 93 per cent, 90 per cent, 85 per cent.
3) The political angling of it all to the bush first – the most costly part of it and also the portion with the lowest return. The government wants to keep it separate in its books because it thinks it will make a return, but then makes decisions about the network very much on a political basis and not on a commercial basis.
4) The stifling of debate and review of the NBN including a fluffy business case and not addressing issues above. Plus not highlighting the deleterious impact of creating a new monopoly (NBN Co) and crushing competition to help make it look good.

Malcolm, why do you keep insisting Koreans do not have FTTH? They do; H = house - if it terminates in the basement of a building people live in, then it's FTTH. The only reason Korea has taken this method is because their housing is mostly high-rise.
I reject any claims that this would somehow be cheaper in Australia. Take a look at your street - how many high-rise buildings exist? In mine, zero. I would even go as far and say in my entire suburb, zero. In the more urban areas of Korea the suburban houses do have direct FTTH. (See How Conroy lost his NBN Seoul, June 16).
I then note you compare $31 in Korea to $56 in Australia. The average wage in Australia is circa $65,000 - in Korea it is $11,524.
No wonde4r they are having issues geting people to pay $31. $31 in Korea would be seen as around $173 in Australia.
Please, Malcolm -- there are without doubt arguments against the NBN, but nothing but truth twisting has come out of your mouth so far.

Ten-year-old estate, 20 kms from Brisbane CBD, lucky to get ADSL1 to some homes off RIMS. Now even that is congested at night; wireless networks are already congested. No real competition but plenty of telco excuses, but no action. Who is responsible? The private sector who cut costs but didn't pass on those savings, or build for the future? Now with a captive market, who can't go anywhere else, the desire to improve services is nil. So tell me, Malcolm, how does your model fix that? (See How Conroy lost his NBN Seoul, June 16). There is no incentive to change it.
I know one thing, the NBN will bring a better service to my suburb, as the current Telstra ADSL RIM monopoly in my suburb will not. Oh, and reselling overpriced Testra ADSL1 is not competition either. In some places wireless via a FTTN solution is a better option where there is less population spread out over a larger area, but a mix of technologies is generally required.
Strange how none of those plugging the alternates go to the broadband dead zones in capital cities. With 25 years working in IT, spare me the rhetoric and technical double speak. It is just politics.

I was told today by a Telstra Tech that his friends in Poland are currently testing a wireless broadband system which runs at 50 megabits per second or just half of Australia's terrestial FTTN 100 megabit per second speed at a mere fraction of the cost of a terestial system such as the NBN.
It makes so much sense. So why not us here in Australia where take up of Mobile Broadband is very high and in many instances is replacing wired / fixed broadband in many peoples lives particularly the up and coming early twenty something year olds who can't be bothered with waiting to be home or in an office for the information they so readily devour at plenty fast for them speeds right now. (See How Conroy lost his NBN Seoul, June 16)

At last someone has recognised that it has always been the applications that have dragged more bandwidth from the network providers, not the other way around (See How Conroy lost his NBN Seoul, June 16). On top of this fact, history shows telcos are typically overly conservative in meeting that demand when it is building.
But when they decide it's time to do so, they tend to go overboard and create an oversupply. Right now there are some good examples around the world of telcos rolling back their ambitious FTTH broadband plans because of this situation. Verizon in the US is a good one, they suddenly realised a couple of years back that the slow demand for and reluctance to pay more for the higher bandwidth FTTH they were rolling out was actually caused by a lack of applications. They also realised that it's going to take more than a few years for those new resource hungry applications to hit the market and to gain wide acceptance and use. This included all the applications software and systems that Labor will need to meet all those promises they spruiked up at the last election; you know the ones, 'improved health, education, electricity distribution and transportation'.
But the debate about the NBN shouldn't be about its unsupportable business forecasts or its costly unjustifiable big bang technology roll out strategy, these are symptoms of the larger problem. Which is the NBN is the result of Labor's failure to recognise there are simpler ways of transforming the telecommunications industry than nationalisation.

The NBN may be a good idea.The problem most people have is how much it is going to cost and whether it is worth it. It is an extreme amount of money per household. Maybe it would be smarter to run first to all major centres, and look at the economics after that of fibre to the house versus wireless (See How Conroy lost his NBN Seoul, June 16).

Since you haven't provided a reference for the data from South Korea, it makes it difficult to analyse exactly what the situation is there in context (See How Conroy lost his NBN Seoul, June 16). However, we do have a reference for a study of Fibre To The Home in the USA, which shows that the takeup of 100Mbps services increased 144 per cent between 2010 to 2011, following an increase of 868 per cent between 2009 and 2010.
http://www.ftthcouncil.org/en/newsroom/2011/06/15/survey-indicates-ftth-leads-other-broadband-services-in-bandwidth-value-consumer

Ah Malcolm, as a staunch ex-pat Aussie, and just as staunch Liberal voter, you have my respect (See How Conroy lost his NBN Seoul, June 16). But as I watch this debate from over the ditch, I can't but be bemused by how something as crucial to our national future as our digital interconnect strategy, has become such a political football.
You claim that supply won't create demand. Hogwash. To believe that would be to believe that faster smaller microprocessors wouldn't drive the proliferation of laptops, smartphones, tablet devices or any host of other devices we find so valuable today. For surely Intel is wasting its time in continually refining the microchip – I mean what on earth could we possibly want with more processing power?! Men like you and I may not dream that far, but I suspect it is only because we aren't genius enough.
You need only have a look at the massive bandwidth demands already in the pipeline to know that bigger pipes mean more creative ways to use them. Even Apple is getting into the act – their new operating system will be available (almost exclusively it seems) by download to your desktop. All 4Gb of it. Their iOS updates are already up to 700Mb, and they seem to release one of those (one each for your 3-4 iDevices at home) once every month or two. And our schools, offices and even hospitals are chewing through more data every day, as we increasingly explore the value of global connectedness. Just ask any head of network infrastructure at any telco around the world – they'll grumpily tell you that data usage is doubling or even tripling yearly, and accelerating all the while.
And as for those boffins pointing to wireless as the saviour, please remember that it all still connects up under ground. Without fibre backhaul, there ain't no wireless data.
Our digital future is too important to leave purely in the hands of corporations. Partnerships across industry, public and private, are the only way to secure it. Even if it costs a fair penny.

Whatever technical social issues may or may not have been missed, avoided or glossed over, Malcolm's alignment of the Korean experience with Australia's future response to the NBN may hold true (See How Conroy lost his NBN Seoul, June 16). The over-riding basic fact is that the Australian taxpayer cannot afford this pie-in-the-sky dream when so many other essential services are suffering.

The real question so many need to ask themselves is – would they personally be prepared to stump up their $5,000 share of this NBN to greatly improve speed over what they have or haven't got now? (See How Conroy lost his NBN Seoul, June 16.) I could easily afford that to increase my current 7Mb/sec copper speed but wouldn't and funnily enough the telcos implicitly understand that if actions are any guide. Then I look about me at so many that couldn't possibly afford their share, just like that 87 per cent rural Tasmania refusal figure. So I ponder what exactly will they have to forgo in order for me to enjoy the promised speed luxury so many are clamouring communally for? We won't have to wonder long now by the look of the public purse red ink everywhere.

Recently I met with some satellite communications providers from London in Sydney and they were dumbfounded by the NBN plan (See How Conroy lost his NBN Seoul, June 16). It uses technology that is expensive, and possibly outdated, when there are viable alternatives. Central to their issues was that most people use the internet to download (70 per cent) and there are few users with heavy upload demands worldwide (the usage has speed implications.)
What I didn't realise is that satellites cope well with that sort of usage, so laying fibre around a country larger than Europe, with the population size of Romania, is very, very expensive and very, very unnecessary. Korea, Malcolm didn't point out, is roughly 50 per cent bigger than Tasmania. Its population is double Australia's (50 million). It is a very neat country, with 100,000 square kilometres housing 50 million people. We are over 7 million square kilometres housing 25 million people. So the cost per kilometre per user is vastly less than ours (about 1 per cent of ours.) So if our rate is $6,000 per household to lay cable to the door, theirs is about $60. That's a big difference. So why is this NBN so good? Who knows.

Korea Telecom is the incumbent telco in Korea but it trails its two major competitors LG U+, and SK Broadband in the relevant market of high speed fixed broadband. Figures for subscriber numbers for both those providers show that they have collectively added 920,000 100Mbps subscribers since January 2010.
So far from demand for high speed fixed braodband services declining in South Korea it has in fact been growing at quite a rate. All KTs numbers show is that they are losing market share to their competitors.
LG U+ subscriber data can be found here: http://www.lguplus.com/download?policyName=board_files&realName=20110531110945028.xls&fileName=LG_Uplus_Fact_Sheet_(Apr_2011)_upload1.xls
and SK Braodband subscriber data can be found here: http://data.skbroadband.com/app/www_hanaro_com/eng/ir/quarter_eng/download.asp?file=SKB_1Q11%20earnings%20results_eng.pdf&seq=49
Malcolm's assertion in this article, that South Koreans are turning away from highspeed broadband, is utterly false (See How Conroy lost his NBN Seoul, June 16). Almost dishonestly so.
I think he has conflated changes in a single providers subscriber numbers with changes in the market overall.
(For a more complete analysis of Malcolm's article see: http://www.theregister.co.uk/2011/06/16/turnbull_nbn_calculations/)