CHOICE membership

Should the NBN be Sold? And if the NBN is sold what Next for the consumer?


#1

It may appear to be getting ahead of current NBN Progress. Completion keeps being pushed back 2020 last time I looked. Both major parties in Federal Parliament have said very little about the prospects or NBN sale.

One Telco Expert’s advice on Selling the NBN - FUTURE GOVERNMENTS URGED to DELAY SELLING NBN Co

It’s difficult to know what questions to ask and even more difficult to discover many of the answers.
There is a consumer choice to go into the next federal election accepting that the NBN will be sold. To trust in the ghost of Robert Menzies or memories of consensus politics. Or to ask that as consumers to be properly informed of the issues and positions of each major contender before we vote.

I’m suggesting this topic as a place to collect separately from all the other NBN related topics:

  1. What consumer protections should come with the future NBN ownership?
  2. Should the NBN sale be split up, if so how and what are the likely consumer consequences?
  3. In the future NBN world (for each premise connection most notably) how will maintenance and upgrades be prioritised and costed?
  4. What will the future Customer Service Guarantee provide if at all it remains?
    5, Should the NBN or part of the NBN even be sold into private ownership, as per the mandate of the current government?

Are there concerns that the outcomes will not be equitable, that there will be government legislated outcomes granted with the conditions of sale that limit consumer protections, and that consumers will be separated into different classes of service limiting access to competition as well as opportunity?


Privatisation or government ownership - what's best for the people?
Privatisation or government ownership - what's best for the people?
NBN fibre to the premises - what are the real costs and benefits?
#2

Perhaps Mark you may garner more interest if instead you asked ‘whether the NBN should be sold, and if so …’
rather than just assuming everyone agrees that is should be sold?


#3

Someone had to say it – i chose to bite my tongue, but am so glad you didn’t.

Neoliberal politics is a modern evil. Essential state & national infrastructure should be owned by the public via govt, not flogged to corporations to milk it & screw us. Only people who’ve never worked in big corps fall for the delusion that they care about actual service delivery & system maintenance. They instead care about nought but maximising share price to gain their bonus at the next AGM.

NBN has had a truly crap genesis, care of liebs & nuts politics, & privatisation would only confirm that the public never will receive a high quality service at a decent price, over most of Oz.


#4

Thanks Meltam6554. Some edits made.

Note that the NBN will not be available to connect at either of the two places I have an interest before the next Federal election. For many of us it will be impossible to have a reliable informed view on the NBN outcomes or the sanity of keeping or selling it. Many of my near neighbours have a more benign outlook. Some consider the NBN or NBN Co to be a little fairy at the bottom of the garden. When it shows up they will talk with it. Until then don’t worry.

The IT expert in the original referenced article suggests it should neither be split or sold, advice which appears to be very contrary to others.

Notably one recent position of the ACCC (tongue in cheek), champion of all things consumer!

ACCC concerns over the sale of the NBN

The ACCC appears to be supportive of the sale and supportive of the NBN being split up.

Another view even suggests splitting the FTTN customers out in the sale. One stated outcome is that it can then compete with Fixed Wireless NBN. How nonsensical?


#5

Should NBN be sold? NO!!

Privatising the telecommunications infrastructure was a betrayal. One for which John Howard should be brought to account. Paul Keating started privatising Telstra, but it was Howard who took it to a ruinous extreme and threw the infrastructure into the pot.

What should we do?
Return infrastructure to public ownership.

Separate Telstra into retail and wholesale/infrastructure arms. The best mechanism I’ve been able to come up with takes the form of a de-merger. Telstra is split into two companies, with shareholders given shares in each proportional to their current Telstra shareholding. Government then acquires all shares in the wholesale/infrastructure company, at value.

Return radio frequency spectrum to public control. The easiest way would probably be to not renew spectrum licences as they expire. Associated assets of providers other than Telstra could be acquired at value, where economically and operationally rational.

Establish a statutory Commission to provide telecommunications infrastructure and wholesale services. Vest in the Commission all infrastructure and wholesale assets formerly held by Telstra and nbn™.
http://david.boxall.id.au/201604/


The "Never Never Broadband Network" - NBN complaints
#6

plus ça change, plus c’est la même chose …

what could go wrong …


#7

Let me look into my crystal ball…

I have another that says all plans will go up by $20pm once the deal is done. (7% ROI on $27B sale price over 8M NBN services)


#8

Telstra will probably be bought by Huawei … then we’ll be proper screwed …


The "Never Never Broadband Network" - NBN complaints
Huawei cyber vulnerabilities
#9

Should the government build assets with taxpayer dollars and then sell them to the highest bidder? This has been the dominant ideology for the last thirty years, and look what happens to those assets.

  1. The Commonwealth Bank of Australia. Sold for pennies, biggest bank in Australia, dudding all of its customers and locking children into Dollarmite accounts. A dollar might go further if you put it elsewhere!
  2. Telstra. The initial sale was at bargain basement prices. Then the Howard government decided to make decent money off the rest, and said ‘it’s for Mum and Dad investors’. How many ‘Mums and Dads’ still hold Telstra shares, when they’re struggling to keep up with the ever-growing cost of living? In the meantime, the network has decayed - to nobody’s surprise except the Liberals when the NBN decided to pay premium prices to buy it back! What kind of idiots are we?
  3. Airports. There are all sorts of natural monopolies, and airports are an obvious one. The prices they charge to airlines, renters (shops) and consumers have gone through the roof! Worse, if second Sydney airport is ever built the owners of Kingsford-Smith have first right of refusal!!!

Then of course there’s public housing. Demand has increased, while stock has decreased. I heard this morning that Victoria has 60k+ public housing tenants, and 83k+ on the waiting list! Worse, it’s going to sell prime central Melbourne real estate to developers, on the proviso that a certain proportion of the resulting apartments will be set aside for public housing. WUT?

If governments are unable to pay their bills, they need to either cut their expenses or increase taxes! Not cut taxes (for a few) and sell off taxpayer assets for short-term gain. Choice @BrendanMays @ScottOKeefe needs to make some noise about the idea of building a second-rate NBN only to flog it off to the only likely bidder at mates’ rates! It should be run as a major issue at the next election.


#10

OT for this thread but since you mentioned it, to bring you up to date from May 2017, Badgerys Creek is under way by the Feds since Sydney Airport declined their option to develop it.


#11

An alternate assessment on the value in the sale of the NBN, and why Telstra may be in the box seat?

One of the hard economic assessments is that after investing $32B in the NBN, plus then NBN’s own financing debts of $19B the NBN may need to be sold off for as little as $10B to make it a viable investment?

There are many permutations on the selling conditions and sale price, so nothing is assured. Per the SMH report:

Given that NBN Co has only been able to drive increased penetration of higher-speed products by discounting them, there is a big question mark over its ability to achieve its financial forecasts.

Moreover, wireless is already substituting for fixed line broadband in an increasing number of households and the imminent rollout of 5G networks can only amplify that trend.

NBN retailers aren’t making money and there is, with the current NBN settings, an enormous incentive for the wireless networks to position themselves as an alternative to the NBN.

Wireless isn’t a perfect substitute for fibre-based broadband but the wireless networks could divert enough customers from NBN Co to make a mess of its projections, which are already sub-economic.

Edit: All has been very quiet in the public arena on this topic since. Having had time recently to read through both the NBN Co 2018 Report and latest NBN Business Plan for 2019 too 2022 - there are a few clues as to the future.

One may be the forecast financial position and income streams 2021 forward. This appears to paint a successful financial enterprise from 2021 moving forward.

A second observation is the heightened and primary focus on improving customer satisfaction and improving measures of positive service outcomes.


#12

There are two comments in the report that may interest others.

Firstly Ziggy Switkowsksi is talking up the potential sale price of the NBN to the $50B mark. This depends on how and when the sale is conducted. It was also suggested there are various options for splitting up the asset. These have not been determined.

Secondly Mitch Fifield (Fed Minister for Communications) has suggested that discussion of the sale of the NBN is premature.

The valuation of NBN Co is not a government decision,” Fifield added.

Spoken like a seasoned pollie!
He may have said instead?

What might have an impact on the valuation are:
the timing of the sale,
how the sale is conducted,
any separation or breakout of the assets,
changes to government regulation of services,
and indeed the policy decisions driving the NBN deliverables.

Nothing to do with government! Really? :roll_eyes:

It’s worth considering the current government if re-elected has always stated the NBN will be sold off. There is no need for a new LNP “mandate” to be negotiated at the next federal election. Equally the opposition ALP has not withdrawn from it’s original position of also selling off the NBN. It is yet to take a position other than in the fence perhaps?

What is not being discussed by either power in Canberra is retention of public ownership of the NBN.

And neither are suggesting there will be a public float of any of the NBN if it is sold off!
.

P.S. there are enough hints though the Satellite and Fixed Wireless services remain candidates for separation.

Such a move would likely:

Enable dropping the commitment to provide a minimum 25Mbps service to all FW customers per the original LNP NBN commitment. Note that this commitment in various forms did not include the word “peak”?

Enable the service operator to increase charges for these services independently of the other 90% of Australians with the NBN.

Increase the value of the other 90% of the NBN through removing the need to cross subsidise the FW and satellite services. Yes, the current government has said this will not happen. It was the government that said this though!

Isolate to the 10% of Australians, the ongoing high costs of continually upgrading the expensive technology used by FW and satellite as needs driven demand increases. The performance of both the satellite and FW internet services have many signs of being at capacity. They are also far from fully subscribed, making future upgrade needs even more pressing?


#13

This is the one that interests me:

All were keen to deflect Telstra’s bid - which has it wanting to combine its new InfraCo business and NBN Co

How about we (the people, represented by our government) offer to take InfraCo off Telstra’s hands, so we can combine it with NBN Co and begin building the coordinated national network that the country needs? Sadly, current planning has InfraCo controlling only fixed-line assets. Coordinated public infrastructure should control wireless, as well.


#14

The SMH continues it’s speculation around the future ownership of the NBN. This article attempts to link the options to a future Labour led Federal Govt. It might support a Telstra based take over as financially less pain than sale in an open market. Future NBN ownership in this option would depend on how Telstra was restructured.

Telstra’s time line for it’s current proposed restructure and the NBN Co’s time line to be all done and profitable are noted as coinciding in 2022.

Uninformed thinking follows?
Of course whether in reality Telstra gets a look at obtaining any part of the NBN is uncertain. Speculation either way for Telstra will at some time likely impact it’s share price for better or worse.

P.S. There are a variety of sources that are also talking about the economics of future NBN fibre upgrades based on consumer demand and NBN profitability. One take is that these will only be provided where there is a high density of demanding consumers (EG FTTN areas).

The non Fixed Line customers may not be so lucky. These services are subsidised through the RBS levy (read secret NBN tax). It’s charged per NBN connected customer account per month. Effectively Fixed Line customers are helping to pay for the rural Satellite and FW.

It’s existence potentially complicates a split sale of the NBN. The levy as stated in the article also does not account for the additional $800M of new funding approved for the NBN Co for Fixed Wireless.

It’s worth asking for a future NBN world, will upgrades will be prioritised where the return on the added investment is greatest? Or to where the need is greatest?

Will privatisation of the NBN assure a two speed future for consumers? Fast and Cheap for many. Slow and Expensive for the 1.1M premises in the Satellite (Sky Muster) and Fixed Wireless service areas.

If the NBN is not sold off, the same concerns remain. Out of pocket cost, time and technology?
How much more are customers willing to pay for the NBN as a whole?
And how deep are the governments pockets outside election time?


#15

“The committee is of the view that the most useful policy function the RBS levy can serve is to establish a price signal that deters the inefficient duplication of fixed-line infrastructure, deters cherry-picking of profitable parts of the NBN footprint, and establishes a more level playing field for nbn.”

In other words, the levy compensates for market failures and attempts to mitigate private sector inadequacies. I think that implies an answer to the question that forms the first part of the title to this thread.


#16

Please, no! Having a quick read about Telstra’s ‘restructure’, it appears they’re betting on their future being in the NBN and in mobile. I wouldn’t be at all surprised if Infraco happened to be shed and left to go belly up in a few years.

So we end up with the same situation we got when Telstra and Optus rolled out cable TV.

If the NBN is ever sold, it would pretty much have to be as an entire network, in order to get a decent price (which of course would then be gouged out of every Australian household). That means a monopoly. In the interests of taxpayers, of course.


#17

I’ll be surprised if that isn’t the plan, but it is an opening that can be exploited.

That’s the way “market forces” reliably fail.

I don’t see how a monopoly can be avoided. We can only choose the nature of that monopoly.


#18

The focus of this article is wholesale costs, but the issues bear on the ultimate sale of the NBN as well.

While the losses will reduce once the NBN is essentially completed in 2019-20, it probably won’t be generating meaningful profits and generating equity until closer to the middle of the next decade, by which point it might have less than $10 billion of equity.

It is self-evident that you can’t write $20 billion off a $10 billion (or less) equity base.

And a bit of the politics that got us to where we are:


I do believe that a Royal Commission into all aspects of the NBN would be worthwhile.


#19

Tantalising! :smiley:.
But would it be necessary or productive?

If there is a change of government in May? It’s one way to defer any decisions as well as reset the legacy issues, IE around the necks of the prior government. Some may choose to limit the terms of reference to only look as far back as 2014.

The risk, if any such RC were to come about, is it might make recommendations that are not acceptable to the government.:money_mouth_face:

Although anything that delays or stops the sale of the NBN assets would be a better outcome than a rushed fire sale.

The prospects of a sale of the NBN under a future
LNP government are less than appealing.


#20

Necessary, yes. Productive?

We really need an inquiry into telecommunications infrastructure, not just the NBN.

We should probably look back to the Howard government.

Or give the government an excuse to change tack. Labor is no longer so keen on privatisation.