@Shadow Minister: So Telstra gets $9bn directly, and $2bn is paid on behalf of Telstra. Still makes up $11bn cost to the government, or is every newspaper wrong

Your argument was this wasn't included in the $35 billion price of the NBN. I believe you called it a gift from the government to the NBN. It looks to me this assertion of yours was flat out wrong, meaning it _is_ included in the $35 billion. Since you didn't supply a link ended up reading quite a few newspaper articles to see if you were spouting crap. Nothing I read implied the $9 billion wasn't being paid for by NBN Co, so unless every newspaper you read was different to the ones I saw then no, they weren't wrong either.

@Shadow Minister: The 75% fixed line use comes from the business case partially presented to the senate. http://media.gizmodo.com.au/wp//2010/12/NBN-Business-plan.pdf

That's 70% Shadow, not 75%. But fair enough, at least you have a source. The 70% looks to be the 63.6% 2020 figure, adjusted to an allow for unoccupied homes. The 2015 figure of 56% equates to 65%, allowing for unoccupied.

Those figures look OK to me. Take this survey:

http://www.emarketer.com/Article.aspx?R=1006414

It says there are 6 million broadband connections now. The NBN is saying they will get 56% or 10.1 million, or 5.6 million, by 2015. Despite your claims, I very much doubt people who have existing broadband connections are going to switch to wireless. If there was some wholesale switch away from broadband going on, we would expect to see that 6 million dropping. Instead it appears to be growing by about 200,000 each year.

@Yuyutsu: I was not aware that other fixed line networks were available in Australia

My guess is it is the cable network. You can get a phone service over cable. It uses IP as it transport. I'd also guess that by 2020, the cable network will disappear.

Rstuart,

The link you wanted is here:

http://www.zdnet.com.au/dont-add-telstra-deal-to-nbn-cost-quigley-339307580.htm

"It is unreasonable to add the $13.8 billion payment to Telstra, which National Broadband Network Company (NBN Co) counts as an operating cost, to the $35.7 billion capital expenditure cost of the whole network, NBN Co chief Mike Quigley has said."

It looks as though all my arguments are solidly based, whereas you are "spouting crap".

As the new legislation being proposed would essentially make the provision of alternate networks illegal, the 5% existing was included.

However, the nub of the argument was that the business case assumed that 13% of houses had wireless only internet. As I have shown above, with the existing connection rates, this is extremely optimistic. I read recently that the figure already in the US is 25% and set to rise.

The second link you so conveniently supplied, showed that the requirements of 98% of broadband connections probably don't need more than 1/2 Mb/s and for whom the 3Mb/s mobile connection is more than adequate.

As I said the NBN is yesterdays technology tomorrow whether you want it or not.

@Shadow Minister: It looks as though all my arguments are solidly based

No Shadow it doesn't. It is just Malcolm Turnbull spinning it as hard as he can to create some negative publicity. Seriously: don't swallow the kool aid. Read it and understand what is being said.

The question boils does to this: does this $9 billion cost go on the NBN Co's books, or does it come from general revenue? Answer, which doesn't appear to be contradicted by that article is: it goes onto NBN Co's books. What the article is discussing is some arcane accounting principle on whether that $9 billion should be treated as capital expenditure or operating costs. I am inclined to agree calling that $9 billion an operating cost seems sus, but it is beside the point.

The only statement that actually matters is in the last paragraph:

"The government is expected to contribute $27.1 billion to NBN Co over several years, with the difference between that figure and the network's peak funding requirement to be sourced from debt."

If you can show the government is funding the NBN more than $27.1 billion by pushing gifts under the table, you have a point. Otherwise you don't.

The $27.1 billion dollar question for me is what happens at the end. It would appear the government will end up up owning 100% of a company with $35 billion in assets, generating about $3.5 billion in income each year. That is healthy for a government owned asset. The cost will be whatever interest they don't earn on the $27.1 billion while the NBN is building the network. Assuming their assumptions are correct that should not be more than a few billion.

The translates to the NBN proposal costing tax payers less than proposal the Libs took to the last election. As I said this because the NBN captures an income stream which the less radical proposal from the Liberals didn't. Thus the Liberals proposal ended up costing more even though they spent less.

@Shadow Minister: As I have shown above, with the existing connection rates, this is extremely optimistic. I read recently that the figure already in the US is 25% and set to rise.

Maybe, but this is Australia, not the US. And in Australia we already have more than the required number of people using broadband to fulfil the NBN assumptions, and that number is currently growing both numerically and percentage wise.

Maybe the explanation for the difference with the US is their huge income gap between rich and poor. The US 14% below the poverty line in 2009 (and rising) and some 40% falling below the poverty line in any 10 year period. http://en.wikipedia.org/wiki/Poverty_in_the_United_States That 14% simply can't afford broadband.

@Shadow Minister: broadband connections probably don't need more than 1/2 Mb/s and for whom the 3Mb/s mobile connection is more than adequate.

That would be an issue is we were designing a network for today. I hope out pollies would not be that dumb. If it is like our copper network, it will be around for 60 years.

@Shadow Minister: NBN is yesterdays technology

Seriously Shadow. Have you run out of sensible things to say?

Dear Rstuart,

"Your phones will be exposed to the internet no less or more than they are now. Your current phone line carries IP packets, which stop at the ADSL splitter"

Do you mean that currently, a hacker from the internet, say they successfully compromize some main CISCO routers and DNS servers, can send their voice to my phone and/or listen to my phone conversations? Can a terrorist attack for example, or an alien state, jam and bring down our phone system, either now with copper or in the future with the NBN?

"Nope. Your phone is an analogue device. It does not understand IP packets. The voice signals your phone understands will be turned into IP packets by your telco - Telstra, Optus or whoever, on their premises (or maybe in the NBN box, but that seems unlikely to me)"

Now that's scary: telcos are not immune to hacking, so if there is any point of contact between the phone network and the internet, then hackers who break into the telco's computers could divert and manipulate our phone calls.

"I've heard on the grapevine the fibre is PON (Passive Optical Network) system, which is TDM (Time Division Multiplexing) based."

That would be very welcome news: if that's the case, then I presume that the phone will have its separate time-slots and the internet will have different time-slots: that will allow for perfect hardware-level isolation.

@Yuyutsu: Do you mean that currently, a hacker from the internet, say they successfully compromize some main CISCO routers

Maybe. As I said, I don't know whether the Australia telco's route their main voice channels through the public internet. Certainly other telco's do. Whether there are many systems left that are truely isolated from the internet (such as the cisco routers that handle the teco's phone calls now) is an interesting question.

Your phone is definitely not isolated from the internet. An internet phone can ring your land line now. Many of the firms offering cheap overseas phone calls do by routing those calls over the internet using high compression codecs.

@Yuyutsu: hackers who break into the telco's computers could divert and manipulate our phone calls.

This has happened already, on a grand scale. It didn't require access over IP:

http://spectrum.ieee.org/telecom/security/the-athens-affair

The recent Israeli attack on Iran's uranium refineries using the Stuxnet virus also didn't happen using IP:

http://www.nytimes.com/2011/01/16/world/middleeast/16stuxnet.html?_r=2&pagewanted=all

The internet does add another way into computer systems. But there always have been lots of ways in, and believe it or not most companies are well aware of the risk the internet poses and take appropriate precautions.