NBN which Option is a Better Bet

There are two distinct plans being put up by the parties for the NBN. There are massive differences in the cost and what the outcome will be.

If you keep doing what you've always done in the midst of rapid change, you’ll lose your competitive advantage. You either change with the times or you get left behind. Which option makes the most sense for Australia?

I watched the debate last night on ABC Lateline and I have to say I felt so sorry for Malcolm Turnball. He was trying desperately to put up a valid argument. I have to say that if I am ever in need of a good mouth piece when I know that I am in the wrong then he will be my choice.

The simple fact of the matter is that the LNP option will cost the Australian Public more than the Labor Party NBN in the long run and makes absolutely no economic sense. Please see my blog a few weeks ago regarding the NBN on the cost differences.

Today I want to talk about capacity differences.

When we look at the NBN  we have to look at our three change accelerators—processing power, storage, and bandwidth. The exponential advances that have been taking place in all three areas have reached unprecedented levels. You’ve likely heard the story about what happens when you double a cent every day. Tomorrow you’d have two cents; the next day, four, the next eight, and so on. By the end of the week, you would have a whopping sixty-four cents. By the end of week two, your cache of cash would have grown to $81.92. Not too exciting. But by day twenty-eight, just two weeks later, your pile of pennies would exceed $1 million; on day thirty it would be over $5 million. If this happened to be a thirty-one-day month, you would end the month with more than $10 million.

There is a distinct and very clear move to Cloud based solutions. We will no longer be storing information on localised servers as it is just not cost effective. When we consider the amount of data that is being collected and stored we are starting to realise that we are getting to the point where we will need to be able to access this data in a accelerated manner. We will not want to wait for the information.

Consider this: what was considered the world’s fastest super computer two years ago was recently disassembled because it was obsolete. And of course, as the power of those three change accelerators continue to increase dramatically and exponentially, their price continues to drop. So we can do much, much more with much, much less.

So what does that look like when we consider the rate of growth of broadband speed.

If we look at average speed in red - yes the coalition will cover average speed up until 2024 (10 years) but will be at full peak speed capacity by 2016 only (3 years) where as the maximum capacity of the Labor NBN will not be reached till around 2032 plus.

We also need to consider the following facts about where we are positioned in the world as far as internet speeds.

A study, which looked at more than 8.8 million Australian internet connections, found just 4.1% of Aussie internet users were downloading content at speeds greater than 10 megabits per second - the speed required to stream 720p high-definition movies.

Only 38% of Australians were connected at speeds higher than 4Mbps.

By comparison, 86% of net-connected South Koreans enjoyed speeds of over 4Mbps and more than half were connected at speeds higher than 10Mbps.

Australia's average peak internet connection speed of 22.8Mbps won the country 34th place, putting it sixth in the Asia Pacific region but well below the 54.1Mbps of world leader Hong Kong where users could download high-definition feature films in minutes rather than hours.

Find out more on this study here (Yes it is a News site believe it or not)
http://www.news.com.au/technology/state-of-the-internet-australia-web-speeds-ranking-dwindles-to-40th-place-globally/story-e6frfro0-1226560992748#ixzz2XwNUzAzm

This therefore negates the ridiculous argument from Turnball that a 1G internet connection would cost a household $20,000 per month when it becomes available. The fact is that by the time it is available there will be a range of infrastructure that is able support the connection and the appropriate levels of competition to drive the price down.

His other assertion that the NBN will just be a price gouger is another rediculous argument. Yes we will be paying additional cost but it will be for a superior service. Let's take the example of the Next G network with Telstra when it first came along. The pricing was in the order of $79 per month for very limited data at very low speeds we now have a 4G service for the same price.

Yes there will be people saying well there you go we don't need fiber we can do it with wireless. Please have a look at these following graphics taken from a NBN comparison site.  http://howfastisthenbn.com.au/

So let's take the following example.

 As you can see it still takes awhile under the Government's current speeds. But in the future we will have the job done in minutes while we are still waiting for the job to get down by the coalitions NBN.

In fairness there has been some flak from Malcolm Turnball on the fairness of the comparison site. http://www.gizmodo.com.au/2013/05/that-nbn-speed-comparison-site-now-looks-more-realistic/

Wreck the People Smugglers Business Model- Easy take away their customers

Both the ALP and the LNP say they want to wreck the people smugglers business model but in fact they are not going to achieve this by locking up the people who are seeking asylum. The basic fact is that these people are looking for a place where they can be safe and can be allowed to exist in a manner that gives them the dignity to be able to work and raise a family with.out the fear of persecution.

Trying to get to Australia and then receiving the protection of the Australian government is what they seek initially. They then seek to get settled either in Australia or another country. Locking people up does not stop them from coming. All it does is ensure that they get the protection and a standard of care that means they will be able to survive until they get to a country that will give them asylum.

In order to be able to achieve this goal they need to get to a country that will provide that protection under international law and will also allow them to achieve the goal of living a life with dignity. That country in the region is Australia as none of the other country's in the region are able to offer the protection that they seek.

What is not fully understood by the electorate and in turn by the major political parties is that in order to be able to stop the people smugglers' business model and stop the deaths at sea,. we need to remove the clients from their insidious grasp.

Currently in the region people are able to seek protection in transit countries like Indonesia and Malaysia. But even though they are protected they are not able to achieve the goal of living a dignified life as they are unable to work or conduct business etc. There are huge economic and social reasons as to why the region is unable to support these people. Anyone who has lived or worked in the region will attest to the extreme levels of poverty that exist across the region.

I do agree with both parties that there needs to be a regional approach but these discussions are ongoing. And as with all discussions and agreements on the international stage if it does not involve a trade agreement it appears to take an exorbitantly long time. The Bali process commenced in 2002, 11 year ago and all we have to show for it is an agreement to agree at some point in the future.

People who are Fathers, Wives, Sons, Daughters, Sisters, Brothers, Uncles, Aunts, or Grandparents are dying NOW trying to seek asylum. Just to spell it out a bit further for the MP's in this world "Humans".

The amazing fact is that in offshore processing we have actually had a reduction of numbers from approximately 13,061 in 2003-04 to only 8500  in 2010-11. The actual number of people processed, in total, has remained steady at approximately 13,700 so we have seen a steady increase in the number processed onshore.

Another interesting fact is that the period of the greatest intake was actually during 2005 -06 when the Howard government allowed 14,144  people to migrate to Australia.

Working with the region  and UNHCR we should develop a methodology for the fast track processing of refugees, not only to Australia but to all countries that take refugees. We should be allowing peole the right to arrive in this country under protection and to live and work in our communities while they endeavour to seek a better life in what ever country they eventually settle in.

The interesting part of the debate is that there is in fact a short term solution available. It would be cheaper than the current solution and put an end to the deaths at sea.

 We should immediately increase the refugee intake to 30,000. These people should be encouraged and provided incentives to ensure that they live in regional locations and areas where they are able to gain work. So rather than being a burden on the tax system they become tax payers.

The current cost of maintaining  people on Nauru will be approximately $253,000 per person or 1.9 Billion dollars.

There is an interesting article on the economic cost of asylum seekers here Economic Cost of Asylum Seekers

We currently have a system where we are punishing people for taking the trip by boat and then putting them into environments where we are causing damage.

It is my contention that a better solution is to allow these people into the country. If it costs us $9,000  a year in Newstart and they get rent assistance of say $9000 per year we are still a long way from $253K

We can in fact help 12 people for everyone that we lock up.

If people are paying the Smugglers to come to Australia, those that meet the refugee criteria and pay a fee get here first.

This will wreck the People Smugglers Business Model. We compete with a safe method of getting to Australia and the ability to provide a decent and protective environment  where you are able to live in dignity.

Australia is a country that has been multicultural since the arrival of the first settlers by boat. And as an indigenous leader once said we have had a boat problem ever since. We are not people who don't give people a fair chance. Our lives have been enriched by the influence of a range of cultures. Surely we have the maturity and the compassion to open our borders to people and grant them a place of refuge.

Below is a link to a very interesting article from Anne Mc Nevin a Lecturer in Politics and International Relations at Monash University on which I have based some of my points.

http://inside.org.au/why-we-would-gain-from-a-regional-approach-to-refugee-protection/

Here is a link to another article which discusses the futility of  border protection.

http://theconversation.com/the-myth-of-the-people-smugglers-business-model-16426

Here is the link to the Bali Process

http://www.baliprocess.net/

Here is the link to the Numbers I quoted on intakes. It makes for a very interesting and enlightening read especially when we look back at our history and see what we have contributed in the past.

http://www.refugeecouncil.org.au/r/isub/2012-13-IntakeSub-stat.pdf

So the economy will be the issue well lets look at the NBN

We have a situation where if Abbott gets in he will reward his mates at News Limited. He will do this by ensuring that the NBN is watered down so as to ensure that Foxtel doesn't lose any market share or can truly get an advantage over any potential entrants into the market by slowing down the speeds and distribution.

The NBN will in either form help the economy but let's consider the economy on two other factors first and then take that into consideration with the NBN

Abbott says he will honor all deals with the states on Gonski. That should have been a no-brainer from the start. We would not have the drastic skills shortage if the Howard government had started increasing money for education and training back when it first got into government 19 years ago. We would have a range of graduates in a lot of areas that would have jobs rather than having a youth unemployment rate of 25%.

What I find interesting is the LNP saying they will increase jobs by 1 million. What I want to know is how? And the retort will be by reducing regulation and the burdens of taxation on business. This is not the reason why people are not employed. The reason is that the people who are in the market don't have the right skills or there is no incentive for them to become engaged in being in the work place. We import a huge number of workers under 457 visas. Why haven't we trained our people in these skills?

The coalitions policy in Healthcare is one of privatisation and fragmentation to give the people on the ground more say on what occurs in the delivery of services. Sounds great in practise but expensive in delivery and who pays? "The Patient"?

This election is going to be about the economy. It is my belief that the ALP needs to be selling a message that includes the combination of the following as they relate to the economy:

NBN is a big infrastructure project that will be a game changer for Australia in the new economy. We have led the world in the provision of service-based businesses and if we don't continue in this area we will be left behind by our trading partners. We have an opportunity to truly export great internet businesses across the world from anywhere in the country. The NBN will also change the way we live and where we live enabling us to reduce the impact on cities and allowing us to decentralise over time.

There will be the creation of new jobs in a greener and more connected economy. This means we can have people working in a manner that suits their life style as well as provide employers with a flexibility that suits their needs. This is through the NBN.

Healthcare needs to focus on the benefits that can be achieved by having a single e-health system, and by getting the states to recognise the savings that can be achieved through a centralized and well managed single management system. A system that is able to provide services where they are needed regardless of where the service provider is located (A Radiologist in Melbourne providing consultation to a Doctor in Marble Bar in remote WA). Nearly all major enterprises in the world are moving to single ERP (Enterprise Resource Program) systems that enable them to have a transparency to increase efficiency and reduce wastage. Surely this has to make sense in what is one huge enterprise that is health care.

The LNP, even though they profess to be the productivity experts, have in each of the states in their control cancelled or suspended work on eHealth. Hate to be cynical and start to sound like a conspiracy theorist but could this be because they have outsourced a majority of the services to the private sector on a per service basis and any efficiency gain would reduce the private sectors income stream? Below is an article regarding the cancellation of HealthSMART which yes had its issues but with appropriate leadership and drive could have delivered outstanding benefits.

http://delimiter.com.au/2012/05/21/victoria-dumps-healthsmart-e-health-project/

Education being able to be provided regardless of where you are and in a manner that is engaging and able to take into account your special needs. This will then enable people to undertake studies of their choice in areas of interest that suit them rather than the current model of providing study at local institutions that is only relating to the local economy eg in Barossa they offer wine making courses but not much in the way of mine supervision or being a Nurse.

The LNP solution for the NBN is to provide us with an inferior and what will become an unreliable system. This is from the people who call themselves good economic managers.

So let's look at the difference in cost for benefit

LNP

So lets look at the numbers 29.5 Billion gives us FTTN. We, the home owner, have to pay if we want the last mile as they call it in fiber at a cost of lets say $2000 (Estimates say $6000) so lets say we have 5 million homes who chose to get connected to fiber (that is only 13% of the total connections under the ALP) that is an additional 10 Billion in cost. so we have a total cost of 39.5 Billion we will then have cost of maintenance of two systems. Fiber network at say 1 Billion and the copper at $700 million so total cost of ownership over ten years is 56.5 Billion that is connected to 5 million premises at high speed and another 32 million to be connected in the future so an additional 64 Billion impost on the economy or we have a two tiered system with all the disparity and issues that we get with that. Total cost to get equal network to the economy 110 Billion odd dollars


ALP

37.3 Billion this is the cost estimates by NBN so lets say they are out by 25% it is 46.8 Billion gives us FTTH with all the copper replaced we have all 37,632,000 premises connected we are only up for the maintenance on the fiber network of 1.2 billion give us a total cost of ownership over 10 years of 56.5 billion.  So we have 36 million more premises connected at a higher speed and with the ability to be able to achieve higher speeds sooner.

Here is the article about BIS Shrapnels assessment of the maintenance cost
http://www.zdnet.com/au/nbn-to-save-up-to-au700m-in-copper-maintenance-costs-7000002846/ 

As I said before the LNP are trying to say they are the economic managers

So what is our return on investment then? Well we first of all save 700 Million per annum on not having to maintain the copper network.

We spend 121.4 Billion on Health, 76 Billion on education so lets say we get a 2% productivity gain in each of these sectors. That is a saving of 3.94 Billion a year but lets not be that generous.

If we look at the total GDP and say we have a productivity increase of .05% we are looking at 6.5 Billion per annum so taking just the economy as a whole with a .05% improvement the Return on investment is just over 8 years on a piece of infrastructure that if it lasts as long as the copper will be here for 100 years.

We want to give the economy over to these dolts. I did this based on simple maths garnered from government published numbers so even on the back of a postage stamp the numbers are pretty easy to see.