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SATELLITE DEAL – MORE WASTEFUL NBN SPENDING

Published on: February 08, 2012

The Coalition and Labor both agree on the need for wireless and satellite services capable of providing high quality broadband to Australians in regional and remote areas.

The Howard Government’s OPEL plan offered exactly such services – and people in remote areas of the nation would already have better broadband if Labor hadn’t cancelled OPEL in 2008.

But every announcement by NBN Co so far has involved it spending excessively, and today’s satellite announcement is no different.

There is enough capacity on private satellites already in orbit or scheduled for launch for the NBN to deliver broadband to the 200,000 or so premises in remote Australia without building its own.

When these two NBN satellites are launched, there will be huge spare capacity on them.  Once again, the NBN is investing more than is needed to achieve its mission.  Once again, the incentive will be for this giant new Government monopoly to intrude into other markets, and undermine existing private sector providers.

At the expected cost of $1 billion to build, launch and operate two satellites built from scratch, NBN Co is spending over $10,000 for each of the 106,000 households its Corporate Plan says will be using satellite broadband in 2021.  That does not even account for the other costs required for the satellite portion of the NBN, such as installing receivers at remote premises.

Today’s decision is not only wasteful, it is late.  According to the NBN Co Corporate Plan, it should have chosen its satellite strategy by July 2011 – eight months ago.

Labor’s rhetoric on broadband is strident, but its record in office is shameful.

The real question Senator Conroy and Mr Quigley should have answered today is why the NBN’s fibre network was not extended to a single new home or business across Australia in the entire second half of 2011.

And why, after four years of Labor government, only 4000 Australian households are connected to the NBN Kevin Rudd promised in 2007.

17 Responses to “SATELLITE DEAL – MORE WASTEFUL NBN SPENDING”

Brad says:

Malcolm ,

Give you a tip , Buys some shares in Newsat!!
I think they will fill these satellites up and rename them..in 2017 & 2018 under coalition government.

Brad

Geoff says:

Hi Malcolm – PLEASE be are aware that EVERYTIME I have problems with a SLOW INTERNET CONNECTION – and its often unfortunately – I think well – I wont be voting for Malcom Turbull! And I bet there are allot like me! :-)

Brad says:

Well Geoff maybe u can thank Labour for that. Remember they have done nothing in recent times via the NBN except spend a stupid amount of funds… Which we really no longer have.. You will pay for it one way or another.. Thank Labour for shafting TLS instead of working with them, And thank that independent from Tamworth who didnt even know the fibre was 100feet from his electoral office… The fibre only used 3% of its capacity.. There is an easier way here, explore it , try and see what our friends in the USA are doing.. & I have pair gain technology… so.. consider!

Peter says:

“Once again, the incentive will be for this giant new Government monopoly to intrude into other markets, and undermine existing private sector providers.”

Unfortunately that means utilising the private sector taxes to directly compete with those same Companies for commercial contracts.

Shareholders in Companies such as NewSat who are striving to become the first Australian Company to launch and own its own satellite fleet have every reason to feel betrayed and disillusioned. It hardly affords them a level playing field.

Steve says:

The NBN has no experience in building an NBN and it shows. Satellite operators like Newsat know what they are doing they have provided satellite services to remote locations (Kimberleys etc.) for years. NBN say why do it low cost when we’ve got billions of tax payers money to waste. Newsat are launching anyway so running a few thousand NBN clients would be a walk in the park. NBN get this: JUST PAY FOR WHAT YOU NEED. And keep business with AUSTRALIAN companies.

NBN = No Bloody Need.

Steve says:

PS

“..According to the NBN Co corporate plan, the satellite service is expected to provide broadband services to 106,000 premises by 2021, equating to a cost of about $18,000 a premises…”

TRY ABOUT $40,000 per house as they have not accounted for launch, slots or teleports!!

THIS IS CRIMINAL.

Carsten Helmsley says:

oh, please do us a favour… and stop linking to that garbage, left-wing, one-sided troll website.

Delimiter has been consistently and unfairly attacking Malcolm for the past year at every opportunity. When Malcolm graciously responds with reasoned arguments, they just completely ignore the correct analysis of the facts, dismiss it as “rhetoric” (economic commonsense is “rhetoric” to the loony, left-wing types), make ridiculous suggestions that “Malcolm doesn’t really believe what he’s saying” and continue trolling.

I guess that’s what that troll blog does best (that, and acting as the de facto propaganda mouthpiece for NBNco and Conroy).

here is enough capacity on private satellites already in orbit or scheduled for launch for the NBN to deliver broadband to the 200,000 or so premises in remote Australia without building its own.

At what quality of service?

Considering that NBN Co has leased almost all of the currently available capacity to serve just 50000 customers at 6Mbps peak, can you explain how existing satellites could deliver 12Mbps to >100,000 customers? Magic?

Clearly Malcolm, you have absolutely no desire to deliver decent broadband to those Australians living beyond the reach of terrestrial networks. What a shame you are so happy to dismiss the needs of those people.

I suggest this article in Delimiter is well worth a read:
http://delimiter.com.au/2012/02/11/the-truth-about-nbn-cos-satellite-needs/

Carsten Helmsley says:

oh, please do us a favour… and stop linking to that garbage, left-wing, one-sided troll website.

Delimiter has been consistently and unfairly attacking Malcolm for the past year at every opportunity. When Malcolm graciously responds with reasoned arguments, they just completely ignore the correct analysis of the facts, dismiss it as “rhetoric” (economic commonsense is “rhetoric” to the loony, left-wing types), make ridiculous suggestions that “Malcolm doesn’t really believe what he’s saying” and continue trolling.

I guess that’s what that troll blog does best (that, and acting as the de facto propaganda mouthpiece for NBNco and Conroy).

P.S. when the most ardent defender of NBNco is a crazy Marxist ideological website, you know there’s something NQR about the NBN.

HaHaHa. Marxist ideological website???

You’ll find that delimiter has actually been quite critical of the NBN on occasion, and praised some of Turnbull’s statements.

However, they have also quite rightly attacked him when he makes demonstrably false statements (such as the claims that NBN pricing will be more expensive than current ADSL, which we all know it isn’t).

They have also been quite critical about Turnbull’s lack of detail on his alternate policy. Over the last year, malcolm has done much criticising, much hinting, but provided no detail about the real coalition alternative.

They have also allowed Malcolm to write complete delimiter articles, giving him a right of reply.

If you care to examine the Delimiter posts tagged with Malcolm Turnbull, you’ll see there is plenty of balance there:
http://delimiter.com.au/tag/malcolm-turnbull/

Kav Vartan says:

HI Malcolm, Newsat has the solution for the NBN, lock stck n barrel. Most importantly with investors’ cash, not Govt coffers. So the satellite / broadband fiasco, is covered, can be rolled out from the expertise in Newsat. Why not spend $1bn on the norm of Education, Health, Roads, infructstrure….The solution for Satellite demand/requirements is all there….Wake up australia, others have risked their cash to do this, the government does not have to implement the way they going. The Govt also does not have to risk anything..Kav

Kav Vartan says:

The answer to NBN http://www.newsat.com

Gary says:

Malcolm,
I wer’e going to spend $1bn, then I would prefer my tax money to at least have a chance of staying within Australia, and generating growth within our fledgling satellite industry. As a Newsat shareholder I would have liked to see at least an opportunity to tender. It just demonstrates shortsighted thinking by this government. Nevermind the fact that the public sector should not be launching satellites in the first place, with the inevitable future mismanagement and financial blackhole that it will become….

[...] Although Prime Minister Julia Gillard and Communications Minister Stephen Conroy used a nationally broadcast press conference to emphasise that the deal was necessary, and that NBN Co had gone through an exhaustive two-year satellite investigation and procurement process, it was immediately attacked by Shadow Communications Minister Malcolm Turnbull, who sees the deal as being too expensive. Turnbull’s core claim is that NBN Co could rent satellite capacity, instead of building its own. “There is enough capacity on private satellites already in orbit or scheduled for launch for the NBN to deliver broadband to the 200,000 or so premises in remote Australia without building its own,” Turnbull said in a statement. [...]

Seems Optus – one of the providers of the NBN’s interim satellite solution- agree with NBN Co’s launch of their own satellites

Optus’ CEO states that there is not sufficient capacity from existing satellites to deliver the NBN’s stated goal of 12Mbps service to 200,000 premises.
http://www.theage.com.au/it-pro/government-it/nbn-satellite-stoush-malcolm-turnbull-wrong-says-optus-20120213-1t1hg.html

And, for those touting Newsat as being capable of delivering the NBN’s stated goals, I doubt it.

Newsat’s upcoming Ka band satellite has -according to NewSat- already allocated 50% of the Jabiru-1 satellite’s capacity.

Can anyone explain to be how (at most) 50% of the capacity of one satellite can deliver the same performance as 100% of two equivalent satellites? Magic?

While you’re at it, perhaps you could explain what happens if Jabiru-1 was to fail. What sort of redundancy service could be expected for the few years until a replacement satellite could be launched?

Let’s face it, Newsat are just cranky because they missed out, and at a wild guess, I’d have to say that the vast majority of commenters on this blog post have a vested interest in NewSat.

Jim Webb says:

Jamie,

nobody doubts the technical capacity of NBNco’s satellite spend.

however, spending $2 BILLION dollars to serve 100K customers is nothing short of insane. for example, take a look at Newsat: look at how many customers over how many different continents Newsat is currently serving with a fraction of NBNco’s Rolls Royce capacity. I can guarantee you NBNco’s 100K customers will never generate even a small fraction of Newsat’s total revenue.

good policy is not about spending for spending’s sakes. it’s about generating value proportionate to what you’re spending.

[...] Although Prime Minister Julia Gillard and Communications Minister Stephen Conroy used a nationally broadcast press conference to emphasise that the deal was necessary, and that NBN Co had gone through an exhaustive two-year satellite investigation and procurement process, it was immediately attacked by Shadow Communications Minister Malcolm Turnbull, who sees the deal as being too expensive. Turnbull’s core claim is that NBN Co could rent satellite capacity, instead of building its own. “There is enough capacity on private satellites already in orbit or scheduled for launch for the NBN to deliver broadband to the 200,000 or so premises in remote Australia without building its own,” Turnbull said in a statement. [...]