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The Forum > Article Comments > Broadband ... the only game in town > Comments

Broadband ... the only game in town : Comments

By Selwyn Johnston, published 24/5/2007

Mr Rudd’s donation of $4.5 billion to any telco consortium is at worst a long shot non-achieving punt, or at best a hollow election stunt: here's why ...

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A good article Selwyn. I hope you get Leichhardt.
Posted by healthwatcher, Thursday, 24 May 2007 9:56:46 AM
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Very good article Selwyn,

You quoted:
"However, to overcome all these problems it would appear that a consortium of some 11 telecommunication carriers has floated the idea that they could, and would, build a parallel service to Telstra’s"

You summarised a political stunt beautifully in the comment above:
Any semi-technologist in Australia will tell you that only Telstra can and should build and operate the FTTN with potentially wholesaling or white-labelling to other service providers.

Having a consortium of 11 is a political stunt as all what it will do is:
- Mutilate the network by having hybrid connections.
- Cause multiple points of failure rather than one and hence will eventually become a lot less reliable for international business.
- Will become a great 'finger pointing excercise' since the connection from the exchange to the last mile (home, office over copper) is going to have 3-4 companies responsible for maintenance.
- Telstra still have to maintain the exchanges (ie at the end we are back to square 1).

I have been consulting in the ICT field in Australia for a decade now and the FTTN comes up in discussions. I rarely met a business or technologist who sees the consortium of 11 anything else but a recipe for disaster.

Its worrying that Costello and Rudd have jumped on the political topic without resorting to global best practices.

Whats in Australian consumer and business best interest is for Telstra to step in and execute it.
Posted by Fellow_Human, Thursday, 24 May 2007 10:27:47 AM
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Just shows that the communications infrastructure of Australia should never have been sold in the first place.

If we had this infrastructure still in public ownership this mess would just not exist.

Well done Howard and Costello.
Posted by ruawake, Thursday, 24 May 2007 11:58:55 AM
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Mr Johnson,

Thank you for your article, however you may wish to check a few things:

ADSL stands for Asynchronous Digital Subscriber Line (not Linkage)

Also, I'm not sure where you get 11 companies putting forward the alternative proposal, last time I checked it was being proposed by 9 companies known as the G9 group - AAPT, iiNet, Internode, Macquarie Telecom, Optus, PowerTel, Primus, Soul and TransAct.

As for Fellow_Human's comments about who would be responsible for the last mile, there is an article on Whirlpool with a link to a G9 press release which deals with some of these issues:

http://whirlpool.net.au/article.cfm/1726

Finally Mr Johnson, anyone can criticise Labor's broadband proposal that involves just throwing money at the industry and hoping that they will magically come up with a proposal that works, and conversely, anyone can say that the government is not coming up with an alternative.

However, as a candidate in the upcoming federal election, what voters expect is that you will have some actual ideas about how to resolve these issues.

From your article, I cannot see any ideas, just criticism. Anyone can be critical.

Best of luck to you anyway,

d
Posted by Deryck, Thursday, 24 May 2007 12:12:16 PM
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Apologies, my comment above should be addressed to Mr Johnston (not Johnson).

Regards,

d
Posted by Deryck, Thursday, 24 May 2007 12:15:42 PM
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Questions about the original article and the first posted comment:

1. Given the rate of expansion of use of networks world-wide, has generally accelerated at a rate approaching their capacity to handle the traffic, why the assumption that a network would be "stranded"? Why would we not have a reduction in price along the lines of the free enterprise competition model? Pricing based on capital costs -- rental -- instead of the milch cow of charge-per-call would be more sensible. When you rent me your house, you don't ask me to pay for the number of times I enter the front or back door. And STD call charges are a joke: the call you make from Bankstown to Milperra may well be redirected way to another city 100kms away if the network is busy at some point.
A second network at least gives a chance of a more rational approach compared with the one adopted by Telstra.

2. Why does Fellow_Human carry on about "hybrid connections" being a "mutilation" of networks ? What does he/she think we already have ? Is an existing network that consists of: plain copper, pair-gain copper, microwave, satellite, wireless, and fibre optic not already one of "hybrid connections"? If not, what the hell is it ?

3. And why would a second network connected to the Internet suddenly develop "multiple points of failure" that are any more complex than the networks set up in other larger countries, and internationally? Would it not inherit the defining characteristic of the Internet: its designed-in redundancy (particularly if it has "hybrid connection" support)? In a sensibly co-operative world, could one not simply argue that the existence of the second network allows for a fall-back situation which we all might be happy to have available, instead of worrying about increased points of failure?
(After all, a new point of failure applies every time you install a router or similar equipment in a network. Is this a worry ?) Sorry, I find this a weird argument.
Posted by PeterGM, Thursday, 24 May 2007 12:54:14 PM
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Hi Peter GM,

Network efficiency is measured/ rated globally on:

- Physical performance and speed.
Debatable given than each interconnection-hub slows down the network by a number of milliseconds especially for VOIP (voice over internet). I can’t begin to think of the optimisation process to get to a commercially acceptable performance.

- Service levels (down-time, fail over, redundancy, etc..)
What type of service level guarantee can you have with 9 or 11 providers? Who will own it and how will you deliver it? Maximum sustainable SLAs involve 2-3 parties.
- Supportability: same as the above. How do you streamline support when 11 entities (instead of one) have access to the exchange? What type of processes involved after each alteration and what are the costs associated and who will pay for them.

Hybrid providers as proposed means that the customer will have the following:
- Different entities to deal with (including it will eventually create an onsite conflict resolution when it occurs) which in turns add cost and time to the end consumer.
- My personal experience in the ICT to get a single telco to formulate a strategy, agree on deliverables, rollout out plans and roadmap is a nightmare. Can you imagine having to liaise and execute a common framework across 9 or 11 companies?

One correction: You quoted: Why would a second network connected to the Internet suddenly develop "multiple points of failure"

Its not a second network, its living on the Telstra infrastructure and exchanges, just mutilating the last mile so Telstra funds the ditches and trenches costly work from the Taxpayers money while the G9 get the cream.

All what the G9 (or 11) will do is:
- Risk Australia chances of having a global high-speed network (at best will be a sub standard)
- Add risk to getting to the FTTN on time (given the multiple strategies above).
- Increase the snowball effect on jobs and business services offshoring (each of the G9 members have an offshore BPO operation).

Here is a good question: why AT&T or BT is not on the G9?
Posted by Fellow_Human, Thursday, 24 May 2007 1:39:10 PM
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Fellow_Human:

Did you read this bit?

"The arrangements will establish the separation of the ownership and operation of the FTTN Network...... Both access seekers and institutional investors would have an opportunity to invest in FANOC, but importantly no single carrier will be allowed to control it."
"As the network owner, FANOC would not provide retail telecommunications services. Its objective would be to deliver high quality and cost effective wholesale services to access seekers who will then compete in downstream markets."
<snip>
"No individual carrier will control SpeedReach and all access seekers will be entitled to membership of SpeedReach, including Telstra."

"SpeedReach will have both access seeker appointed and independent directors and managers tasked with optimising the use of the FTTN Network."

You cannot expect anything other than trouble with SLAs etc when the main network is provided by a company which is also a major (the major?) offerer of retail services on that network in competition with purchasers of the bandwidth.

If the G9 proposal does nothing else, it highlights the stupidity of the original decision to leave Telstra with both a network and a retail business on that network in competition with others trying to share the same network... something that would never be allowed in the country of origin of some of the key Telstra executives who want "free enterprise" operation free from regulation. (Ma Bell ?)
Posted by PeterGM, Thursday, 24 May 2007 2:21:53 PM
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"Broadband" as we now know it is apparently already considered to be out of date. Why would Rudd or Telstra or anyone else want to invest in it? Perhaps the first thing our boffins need to do is their homework?
Posted by Communicat, Thursday, 24 May 2007 4:02:41 PM
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Telstra only interest is to hold a monopoly. That is to charge other providers a fee whereby they could not compete with Telstra in the market place that counts, Families. Currently Telstra is perphaps one of the most expensive providers of Broadband to Families. Currently Telstra can't even provide a decent service to those who live in the bush. Down worry Telstra you are not totally to blame for this mess, the Government had a very big part to play they sold the infrastructure to you. By the way we all know that telephony (landline) is on the way out. Sowly but surely to be replaced by Mobile Phones and by Internet Phone Servives.

Telstra if you were prepared to work with the G9 Group to develop an FTTN system combine with VDSL (Up to 52Mbps/16Mbps) everyone would be a winner.

Forget about the ACCC, the Australian people do not want an American type system where by the Providers made great big profits at the expense of the Australian Family.
Posted by southerner, Thursday, 24 May 2007 4:18:27 PM
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As I used to work in the telecommunications industry, I know that international data and telephone charges make opium dealing look honest. The fact that it costs me more to ring from Sydney to Windsor, NSW than Edinburgh, Scotland simply makes it look ridiculous.

FTTN is obsolescent. Any solution, which would take some years to implement, should use FTTH (fibre to the home), so that when it is built it is reasonably up to date.

Another thing that needs to be fixed is to eliminate the extortionate rate Telstra and Telecom New Zealand charge for carrying data to Australia. At the moment this must be one of the most profitable duopolies in the world. The way to fix it is to have an independent consortium lay an optic fibre cable to Guam, which is a natural cable crossroads from East Asia to the US, and compete with Telstra using the very cheap rates from Guam to the US.

Anybody who comes up with the tosh that as a large sparsely populated country Australia should expect to pay a lot more for communications should look at Canada, which is larger, sparser, and has reasonably priced comms, mainly because no-one has a monopoly.

Spending billions of tax dollars to obtain a short-term fix is no solution. Simply copying what has been done for years overseas just condemns us to remain second-rate.
Posted by plerdsus, Thursday, 24 May 2007 9:38:22 PM
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Peter GM,

Your quotes below are 'statements':

‘"SpeedReach will have both access seeker appointed and independent directors and managers tasked with optimising the use of the FTTN Network."
"The arrangements will establish the separation of the ownership and operation of the FTTN Network”
"Both access seekers and institutional investors would have an opportunity to invest in FANOC, but importantly no single carrier will be allowed to control it."

My comment is: the devil is in the detail. My practical work experience with fluffy PowerPoint and promises like ‘optimising the FTTN’, reliable SLA sent me on wild goose chasing for months if not years. Time will tell.

The key issue we should not ignore is that the ACCC is dictating the 3 elements of 'fake free market:

a) Get Telstra to open up the last mile to competitors.
b) Get Telstra to fix the access costs (or subsidise) the competitors.
c) Ban Telstra from benefiting from the same wholesale costs it provides to its competitors. This in turn will guarantee that Telstra services will always be too expensive and hence will have to lose business to its competitors. Creating a fake free market where the tax dollar will always fund the savvy investor.
Posted by Fellow_Human, Friday, 25 May 2007 11:35:46 AM
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i wonder if one glassfibre connection is enough. if it is, there's a physical 'monopoly' which calls for commercial monopoly, or the madness described above.

the government is getting out of the roadbuilding business, so this is the wrong time to suggest that the government should build the 'superhighway' infrastructure and rent it out- but that seems to be the logical response to reality.

an independent candidate can say "let's go back to some government ownership", and i wish they would.
Posted by DEMOS, Friday, 25 May 2007 1:12:29 PM
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Who is this guy? I live in his electorate and have never heard of him. Netherless the arguments (complaints) he provides are simplistic. The points bought forward by him were heard 18 months ago and we have moved on from there. What is the price that Telstra wants for their unbundled loop.? What is the G9 SAU going to reveal. What is Telstra's SAU (special access undertaking) going to consist of?
How much, who will benefit, who will the Government subsidise and what next for the winning and losing consortiums?
None of this was addressed by this nobody, why was this article posted.?
Go to www. whirlpool.net.au if you want more info on this and other broadband issues.
Posted by seaweed, Friday, 25 May 2007 10:17:01 PM
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Why the Government should not allow any one telco to control a FTTH/FTTN is quite simply.

Those people who lived in a non-profitable area would simply be left in the dark ages.

There are two choices.
1. The Telcos work together for the betterment of the nation.
or
2. An independent company in partnership with the Government would own and operate FTTH/FTTN. The company would not be permitted to provide telephony or internet services to Business and Residential Customers. The Government would simply be an investor and would protect our rights through the ACCC.

The $64 question. Who would provide a landline service at a reasonable cost to those who are less fortunate. Now I telling you with Moblie Phones and Internet Phone Services, that landline telephony has reached it used by date.
Posted by southerner, Saturday, 26 May 2007 9:55:11 AM
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Southerner, you wrote: "Now I telling you with Moblie Phones and Internet Phone Services, that landline telephony has reached it used by date."

I am not quite sure what you mean - aren't Internet Phone services made over landline telephony? I use them a lot, but they ultimately pass through the copper wires from my home to the exchange. I would never use mobile phones because these are unethical - sending harmful electromagnetic radiation through innocent people.
Posted by Yuyutsu, Sunday, 27 May 2007 12:13:12 PM
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Yuyutsu,

If you have an internet service which you receive by wireless, cable or satellite why would you as a person need to pay for landline telephony. While I may stand corrected, this would also apply to FTTN/FTTH as I understand it. Add mobile phones to the mix, than landlline telephony is certainly dying. Have a close look at landline telephony cost. The telcos will offer you a landline telephony line rental for as little as $19.00 a month, even capped plans which include the line rental.

If you have ADSL coming over a landline for example. Here are some basic cost to you. Landline Telephony $19.00/mth Broadband 9GB $49.00/mth Internet Phone Service $9.95/mth. In my household that would mean a seving of $125.00 per month. Without the Landline Telephony cost that means a savings of $144.00, these savings means you could afford to have paid television.

Right now for example with a mobile phone you can have a phone service, the internet and paid TV. Why would you need Landline Telephony. As far as mobile phones are concerned I find that they intrude on my life.

For these reason I believe in time Landline Telephony will not be required.
Posted by southerner, Sunday, 27 May 2007 6:01:11 PM
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When you use a mobile phone, it goes to the nearest tower, then where?

Are you saying that mobile calls do not use the copper network?

Do you realise that the mess we have is because our Govt. could not see the difference between Telstra the retailer and wholesaler of telecommunications and Telstra the owner of telecommunications infrastructure.

The two should have been split, and Costello is to blame.
Posted by ruawake, Sunday, 27 May 2007 6:21:56 PM
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Southerner,

I have a landline service simply because I want to have a phone - is this too much to ask? I also enjoy ADSL over that line, which also allows me to make very cheap calls using Skype.

It is not a matter of cost: mobile phone is not an option for me, because it is unethical. Using it sends harmful electromagnetic waves through innocent people and supports those towers that radiate everyone in their neighbourhood. It also increases the chances of brain cancer.
Posted by Yuyutsu, Sunday, 27 May 2007 6:22:11 PM
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ADSL uses copper infrastructure, or as you erroneously call them landlines.

So your skype calls use the same infrastructure as the normal PSTN network.

When will we wake up and see Costello has shafted us, he could not get his greedy paws off infrastructure we have owned for decades, he sold it to pay for public servants super.
Posted by ruawake, Sunday, 27 May 2007 6:27:04 PM
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People have every right to use a landline telephony, a mobile phone or an internet phone service.

Telstra will not invest in FTTH/FTTN unless it is on their terms. Optus has made it quite clear that it will not provide a service to those customers who are not on their network. So if you are an Optus customer but not on their network, you will be asked to find another service provider for landline telephony and the internet.

At present the Telcos are bending over backwards to retain their landline customers. But as more and more people swicth to mobile phones, programs like Skype etc. than Telcos will have no options but to raise the cost of Landline Telephony.

Mobile Phones
If you have a ABN/ACN number why would you not choose a Telco's Business Plan, 62cent untimed calls.
For the average person, $49 capped plan with $230 worth of calls per month, why would you not consider using a mobile phone.

Internet Phone Service
$9.95 a month.
10c Local and National Calls
International Calls you can ring the Philipinnes for example as low as 19c a min. Landline Telephony 77c a min. Mobile Phone 52.8c a min. Choose the right IPS Provider and you can dial 000.

If with FTTN/FTTH means you don't need a telephony landline. Do you really believe that Telstra will maintain a landline telephony service. From a business point of view it does not make any sense at all. Telstra and the G9 group will provide an internet phone service as soon as FTTN/FTTH is up and running and dump the Landline Telephony service. The present indication are that this will occur in the next 5years or so.

Who do we blame, the federal politicans
Posted by southerner, Monday, 28 May 2007 8:01:38 AM
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May 28, 2007

PLANS to be submitted this week by the Optus-led G9 consortium for Australia's new $5 billion high-speed fibre-optic broadband network will be subjected to rigorous public scrutiny, says the competition chief.

Australian Competition and Consumer Commission chairman Graeme Samuel said the process would inject some much needed transparency into a debate that has so far been clouded by rumour, innuendo and "spin doctoring" from both Telstra and G9.

FULL ARTICLE: End telco rumours: ACCC (http://www.theage.com.au/articles/2007/05/27/1180205075431.html)

Given the above, obviously... the game is on!

Selwyn Johnston - Leichhardt Independent 2007
Posted by Selwyn Johnston, Monday, 28 May 2007 12:13:37 PM
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I did not quite understand: are you suggesting, Southerner, that in 5 years or so, due to this and that intrigues between telcos and politicians and in the name of "progress", when I lift the handle of my phone I will hear silence on the other end (and no ADSL/internet either)? if so, I better hurry to pack and move to a more "backward" country...
Posted by Yuyutsu, Monday, 28 May 2007 1:09:33 PM
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Landline Telephony

To clarify a point, while Landline Telephony may remain for some time in this country, as a form of telecommunictions it will in time die a natural death. There are number of reasons why this will occur:
1. Mobile Phones. The average person only wants to make calls, send text message and be able to use their phone when travelling overseas. These people will buy one with Quad Band out right and use a Prepaid with capped cost. Paid lets say $49 with $230 worth of calls.
2. Internet Phone Services deliver telecommunications at a reasonable cost.
3. Those who choose to have FTTP connected direct, combine with a mobile phone and a internet phone services will not need to have a landline telephony service.
4. The further use of satellites as the carrier of telecommunications.

Under the sale of the Telstras whereby the Infrastructure was part of it, I have no doubts the company was handed a lemon. Telstra has to realise that FTTP can be deliverd in a number of ways. At best Telstra may have a case for compensation.

Instead of one FTTP system covering the nation there will be at least two, Telstra and the G9 Group. The Government and the ACCC cannot force the G9 Group to include Telstra at no cost or to charge themselves the same fee as Telstra or any other provider. Its call competition in the market place.

It is time that the Goverment and the Telcos told us the truth about FTTP. Right now I am getting a load of bull dust pushed up my nose.

The government calls this responsible economic mangaement of our telecommunications. Whatdo you call it?
Posted by southerner, Tuesday, 29 May 2007 10:29:00 AM
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Sorry for the ignorance, Southerner:

By "FTTP" I think you mean fibre-optic lines: I don't really care whether the line from the exchange to my home is made of copper or fibre-optic, as long as there is a line. I am also not concerned with the costs and who will provide it: will there still be, in your view, such a line at all in 20-30 years?
Posted by Yuyutsu, Tuesday, 29 May 2007 11:38:24 AM
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Yuyutsu,

I had to find the truth by searching the internet as to how FTTH/FTTN actually worked.

Currently ADSL +2 like ADSL is program to run from your local exchange.

As to whether Landline Telephony will be around in twenty or thirty yeears time will depend on whether Telstra maintains the service. If they are not prepare to upgrade the exchanges to carry VDSL when it arrives and add to the fact, if Labor's plan for broadbabd is to offer incentitives for providers to extent the service to cover 98% of Australian people that will spell the end of Landline Telephony.

To be quite honest with you, all telcos will offer a Internet Phone Service either in their own right or in a partnership with an Internet Phone Service Provider. Why, they can provide it at a reasonable cost without the current over heads, such as buildings. maintainence cost and with reduce staffing levels.
Posted by southerner, Tuesday, 29 May 2007 6:08:14 PM
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Well, basic phone services are such an essential need that they should have remained as a government responsibility in the first place. Mobile phones are immoral - I guess I'll need to start raising pigeons.
Posted by Yuyutsu, Wednesday, 30 May 2007 9:11:55 AM
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Learn more about FTTH go http://www.conniq.com/InternetAccess_FTTH.htm

If Telstra, G9 Group and others do not follow the Scandinavian Fibre Operators where they use ‘Open Access’ than FTTH will be beyond the reach of Residential Customers.

Open Access means all providers have access to one system. The Scandinavian Fibre Operators have found that they can compete with those who only provide ADSL+2.

My message to Telstra, the G9 Group and other providers share the cost of building and maintaing one system for all to use. If not, be prepared to wait 50years or more before you even look like making a profit, why because you won’t have the customer base. Having examined the real cost, Alone Wolf will end up in the Bankruptcy Court.

Whether we have a Liberal/NP or a Labor Government they must promote Open Access when it comes to FTTH or leave Australia behind the rest of World.

Mr Howard and Mr Rudd right now we are faced with having two or more FTTP formats. Do you realise that Telstra could be one to face bankruptcy because you refused to retain the infrastructure side of the business
Posted by southerner, Wednesday, 30 May 2007 10:54:41 AM
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I don't think any government that is put into power really considers the bigger picture past the term they are elected.

I do question the FTTN being a consideration as this is now out-of-date technology.

AT&T have U-verse for streaming HDTV with recording technology built-in.
Down Streaming up to 6Mbps and Up Streaming up to 1Mbps.

Why would not the telco and the Australian Government be looking at a long term solution to take us into the next 10 - 15 years.

As for throwing $4.5 billion (Taxpayer dollars) on a project such as the future of communication network that will need to be up-dated within 4 - 5 years, because it can't handle the growing demand for services. Please Mr Howard or Mr Rudd, depending on the future of the pending election, this communication issue is an election issue please get it right for all Australians' not just the ones that live on the Eastern Seaboard.

Collector_AUS
Posted by Collector_Australia, Thursday, 31 May 2007 3:16:47 AM
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Before putting U-verse as the solution, I would suggest that you go to http://electronics.howstuffworks.com/vdsl.htm Than tell me which one is best.
Posted by southerner, Thursday, 31 May 2007 7:28:20 AM
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The point I was trying to make is the following.

If public money is to be thrown at the communication proplems facing Australia right now, let be sure that we do not just waste money.

Ask all the experts in the field, what is going to last for the next 50 years and what will give ALL Australians access to First World Countries Internet.

I have been testing the program Second Life and it is the e-commerse of the future. 3D repsentation of the real world, it has virtual people in 3D, virtual markets and virtual businesses. Also a program that streams TV 24/7 from TV stations from around the World where like minded people with the same interest in the program they are watching can Chat about it with others.

The future is all about linking smart people together to come up with real world solutions a design environment to take on the BIG Stuff.

Lets get it right in Australia having one of the best Digital Networks in the world. Don't want to be left behind...

Collector_Australia
Posted by Collector_Australia, Thursday, 31 May 2007 9:26:20 PM
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