Whirlpool

Continues from /forum-replies.cfm?t=965007&p=62

Can I ask regular posters and all joining in to please try and manage the uncertainty that surrounds this process.

Please refrain from isolating posters that disagree with your thinking and concentrate on maintaining a fruitful debate.

This has been a free flowing and useful discussion so far, and we'd prefer to keep it that way.

Marxx,

For a little while now, all I have seen you do is ask other Whirlpool members of any evidence, but you yourself haven't given us any evidence .

Singapore shock: SingTel to take just 30% of bidding consortium for FTTH network

In a major industry surprise with implications for Australia’s NBN plans, Singapore Telecom is to take just 30% of a four-way consortium to bid for the rights to build a national passive fibre to the home network in Singapore.

....

The OpenNet consortium will be made up of Axia (30%), SingTel (30%), Singapore Press Holdings (25%) and Singapore Power Telecommunications (15%). Axia is regarded as a “model” open access provider, while SPH is the country’s major newspaper and magazine
publisher and SP Telecommunications is a subsidiary of Singapore’s major power utility and not related to the similarly named Australian firm.

....

The decision of SingTel to take minority status in its bid for the passive network build is a major surprise as the company currently wholly owns the major access network in the country. Meanwhile, Singapore telecommunications rivals Starhub and MobileOne have teamed up with Hong Kong’s City Telecom to form the Infinity Consortium, which lodged a competing bid yesterday.

Grahame Lynch

EDIT: At the request of the copyright owner, a link to the Communications Day PDF has been removed.

Broadband policy on the right track

Third, there is regulatory failure because the current access pricing regime allows too mcuh of the private benefits available to the NBN builder to be taken by other service providers using the NBN.

Which private business case should the government support? The obvious candidate is Telstra. Many wonder if there will be a second serious bid. This should be no surprise. When the opportunity to compete with Telstra was issued in 1991, many bids were expected. Despite the most favourable access regime ever created and access prices mandated to provide bid certainty, only Optus made an offer. That may have been surprising, but to get a credible alternative offer to build the NBN would be a miracle.

John de Ridder and Robert James are independent telecommunications consultants. Both own shares in Telstra.

www.misaustralia.com/vie...y+on+right+track

From the previous thread:
The weak operational separation we have now ensures equal processing of retail and wholesale orders and fault reports by the network division. Adding accounting separation would provide transparency of service pricing. Is that enough? What more is required?

What more is required?
That is simple. The mandate that Openreach has, and its structure ensures that it is in the business of increasing wholesale sales. It is not beholden to the whims of its former master in how it conducts its business, to whom it sells and under what condidtions.

What's the due date for bid submission? Also, when will the winning bid be advertised? Will the details be released? Or will we have to wait till our phone lines are cut off and a $100 a month Telstra bill is in the mail?

MD351 writes...

Marxx,

For a little while now, all I have seen you do is ask other Whirlpool members of any evidence, but you yourself haven't given us any evidence .

Indeed. It simply turned into a exercise in Optus bashing. Despite people asking for proof of Telstras claims that structural seperation has failed in "other countries", in the thread where this all started /forum-replies.cfm?t=970534, none came. How about examples of these failures? Where are they? There have been examples provided of countries moving to seperated models, functionally and structurally. If it such a bad thing, why is it being pursued in various countries around the world?
Proof was provided that seperation works. Most people use structural seperation as the generic term for most types of seperation, and that is what people here want. Simply playing pedantics for the sake of an Optus bash achieves nothing.
Seperation of Telstras activities to provide the transparency, accountability and fairness that will be required if Telstra is allowed to regain its monopoly.
I would like examples of where it hasnt worked, as claimed by Telstra, why it didnt work, and more importantly why people are arguing that Telstra shouldnt be seperated.(Especially given its anti-competitive history)

scarytas writes...

The weak operational separation we have now ensures equal processing of retail and wholesale orders and fault reports by the network division. The operational seperation we have now is useless.

Adding accounting separation would provide transparency of service pricing. Is that enough? What more is required? No. I dont believe so. Where are issues like equal access terms addressed? What is to stop Telstra crippling speeds to competitors or something like that? Who deals with the inevitable Telstra small print? Surely we arent heading into a litigious future to replace the current litigious regime. Whilst ever Telstra can tie up competitors in the courts or in the ACCC where the wheels turn very slowly, Telstra are the only winners. We need to address the issues that are causing these problems so we dont repeat history.

The people who are against Telstra seperation, are they customers or shareholders? Because I don't see why a customer of Telstra would want seperation to not occur. Seperation will only make the end-product better. However that will ultimately lower the share price.

Can we have some share price information for companies that have seperated?

L. Ron Hoover writes...

The people who are against Telstra seperation, are they customers or shareholders? Because I don't see why a customer of Telstra would want seperation to not occu

I am sure that a lot of people (Both customer's and shareholders) would be indifferent since no one really has provided a thread of competent claims regarding the impact of separation on shareholder value.

Customers would be indifferent unless they are like us (more savvy to the whole fiasco and how this all came to pass) and wouldnt even understand why so much fuss is being made over it.

Many shareholders (institutional ones) havent really weighed into the discussion in the public forum and only those on the board who have managed to destroy shareholder value without separation are vocal on this subject

L. Ron Hoover writes...

However that will ultimately lower the share price.

Not necessarily. Some analysists say it could increase shareholder value. Morgan Stanley has said that a three-way split of Telstra could increase its market value by 20 per cent. www.theage.com.au/news/b...91695740234.html

Can we have some share price information for companies that have seperated? How about you do your own research because that will take some time to put together. Look at BT, Eircom, for starters

MD351 writes...

For a little while now, all I have seen you do is ask other Whirlpool members of any evidence, but you yourself haven't given us any evidence .

Wrong.

First of all, I'm not the one trying to prove a statement. I want to know everyone thinks SS is so good. They must be overflowing with reasons because whenever it's brought up many posters act as though it's the most obvious thing in the world.

Secondly, I have given evidence, specifically to you as well on a number of occasions. You asked me for proof that BT owned OpenReach. I provided that evidence. Many users on this forum called me a liar and said I was manipulating evidence when I claimed that Optus was still going to bid even if there wasn't a deadline extension. I provided evidence for that.

So please, don't hide your ignorance and inability to argue constructively by continually demanding evidence when it's been given to you, and you fail to do so yourself.

ernal writes...

It simply turned into a exercise in Optus bashing. Despite people asking for proof of Telstras claims that structural seperation has failed in "other countries",

The thing you can't seem to understand is that I'm not arguing that it has failed. I can't even find an adequate example that is similar to what is being demanding by industry (not a few posters who changed their minds because they realise they wrong). So therefore I want to know why you still think it's inherently good when there isn't any evidence.

Proof was provided that seperation works.

Care to link to the specific post?

Simply playing pedantics for the sake of an Optus bash

Accusing those who won't roll over and accept your flawed, illogical and ignorant arguments of "Optus-bashing" isn't getting us anywhere. I'm neither pro-Telstra nor pro-Optus and I'm not anti either of them. If you spend time to read my posts carefully and see where I'm coming from you'd understand that. Unfortunately you get so upset when someone disagrees with you that instead of calmly and rationally looking at the facts you become hysterical and accuse them of ridiculous things.

I'll start by apologising to anyone I may have offended over the course of this conversation.

My goal is arguing the point of the people. I have in the past said that I am happy with structural separation (the concept in one form or another overseas, BT, Sweden, the US), I am happy with regulatory control (as long as there is fair an equitable open access to all comers).

I am happy to go on record to say that I don't honestly care if I'm 3 years down the list to get FTTN if it means that people who currently don't have ANY option for broadband beyond NextG, but are in the applicable coverage area, get first bite. I'm not stupid enough to believe that will happen, the prime cash locations will be the first cab off the rank, as usual.

If Telstra will be unhappy that anyone can resell their product and erode their market share, maybe the monopoly isn't for them. However, Telstra are a known quantity. They are obvious and while I dislike them for their principles, they are just doing what any other business could and probably would in their place.

The real mongrel here is Conroy and by extension the current gov. Considering Labor has always been a left wing, semi-socialist organisation, being unwilling to make sure the end user is protected before implementation seems very uncharacteristic of them. Call me cynical, but I think letting the bull out of the gate then trying to control it once it's loose is wrongheaded and ultimately going to be more trouble than it's worth.

I'd also like to go on record as a Liberal voter, and I'm currently deeply disappointed at the present and past Governments over their continual fumbling of this particular issue. I would like to be optimistic but I just don't believe we will end up with a good outcome turning the clock back 8 years and starting from scratch. I would honestly love to be proved wrong.

I'd lastly like to say that companies should occasionally think about where the profit comes from. The customers. Call it Marxist, communist or w/e, there would be no profit without the customer.

Marxx writes...

Wrong.

No I'm not.

I'm not the one trying to prove a statement

But your willing to Discredit it, before you give it a chance.

Thats so typical of people these days...

You asked me for proof that BT owned OpenReach. I provided that evidence

It's still on a different scale to what we have here in Australia.

So please, don't hide your ignorance and inability to argue constructively by continually demanding evidence when it's been given to you, and you fail to do so yourself.

Excuse me? your the ignorant one, I gave you far more evidence than you have, when I gave you evidence, you attacked Optus. I gave you reasons why Structural Separation would be good, but you continue to deny it.

If Structural Separation is done properly before the FTTx project, we should see some benefits for both Retailers and it's customers.

MD351 writes...

No I'm not.

Good argument!

But your willing to Discredit it, before you give it a chance.

When have I discredited? This is ridiculous. You haven't provided one shred of evidence! Either do it, or shut up and don't bother posting. Instead of singling me out and attempting to discredit me, which you're failing at, post something sensible that's relevant to the discussion or don't bother posting at all.

If Structural Separation is done properly before the FTTx project, we should see some benefits for both Retailers and it's customers

What benefits and why?

. I gave you reasons why Structural Separation would be good,

Sure you did. Link me the post.

Marxx writes...

Good argument!

Thanks!

When have I discredited? This is ridiculous. You haven't provided one shred of evidence! Either do it, or shut up and don't bother posting. Instead of singling me out and attempting to discredit me, which you're failing at, post something sensible that's relevant to the discussion or don't bother posting at all.

Oh please, continue to ignore why don't you......

Sure you did. Link me the post.

/forum-replies.cfm?t=970534&p=2#r34

/forum-replies.cfm?t=970534&p=2#r36

Org'asmo writes...

The real mongrel here is Conroy

I'd also like to go on record as a Liberal voter

As a Liberal voter, who is currently very upset (And perhaps justifiably so) with the way Conroy is handling the issue and specifically the deadline/extension issue, how do you respond to the fact that Conroy introduced legislation to the parliament to force Telstra to give up network access thus making everyone happy but it was shunted to committee by those who control the Upper House, the Liberal's?

make sure the end user is protected

Open access is going to be ensured, regardless of any possible future separation.

that people who currently don't have ANY option for broadband beyond NextG

I'm not sure if this 100% relevant but I found out today that Unwired is rolling out a WiMax network for regional Australia. Isn't that proof that there are those interested in building competitive networks without Government funding? This tender isn't the be all and end all of broadband. It's to build one particular network. Others will still be built. Will they have to? No, because the Government and the RFP has ensured open access. But there's nothing stopping ANYONE building their own network be it wired or wireless.

MD351 writes...

/forum-replies.cfm?t=970534&p=2#r34

Oh btw, it is believed that Structural separation will get better prices and services to customers.

...

Have you been drinking? I'm asking WHY it will give better prices and services. Saying that it will isn't proof, rofl.

/forum-replies.cfm?t=970534&p=2#r36

1. allow all communications providers to gain real equality of access to critical BT infrastructure on fair and equal terms, encouraging investment in infrastructure and enabling innovations through multiple services and the increasing deployment of next-generation technology;

2. lead to lower prices and greater choice of products and services for consumers and businesses; and

3. help to underpin the UK’s industrial and economic competitiveness in the future.

As I showed you in a reply to that post:

"They were goals set. They aren't achievements. And they certainly aren't proof it was a success, considering they were made before the re-structuring took effect."

This post: www.ofcomwatch.co.uk/200...h-one-year-later

And this one: /forum-replies.cfm?t=970534&p=3#r41

Are much more relevant.

MD351 writes...

Oh please, continue to ignore why don't you......

Do you understand what "evidence" means?

"Evidence in its broadest sense, refers to anything that is used to determine or demonstrate the truth of an assertion."

"your basis for belief or disbelief; knowledge on which to base belief; "

www.google.com/search?so...nG=Google+Search

Your statement "It is believed it will lead to lower prices" is not evidence, it is an *assertion*. I can assert it will lead to the end of the world, but I'm not going to since I can't provide any evidence.

So instead of asserting, use evidence to "determine or demonstrate the truth of your assertion".

scarytas writes...

The mandate that Openreach has, and its structure ensures that it is in the business of increasing wholesale sales.

Setting up Telstra's Network (Operations) division as a profit centre with the same incentives as the other profit centres would achieve the same. Why is accounting separation not enough?

It is not beholden to the whims of its former master in how it conducts its business, to whom it sells and under what condidtions.

Openreach is governed by the BT board and regulated by Ofcom. The Telstra Network division is governed by the Telstra board and regulated by the ACCC. How will functional separation of Telstra change anything?

I like the idea of the undertakings negotiated between BT and Ofcom and the Equality of Access Board that monitors performance against these undertakings. I think bringing the ACCC and Telstra together to negotiate a similar set of undertakings is more important than separation.

To answer my own question...what more is required?

We need transparency that all access seekers are paying the same price for the same service (accounting separation) and being treated equally (operational separation). We need to turn the adversarial relationship between the ACCC and Telstra into one of cooperation, with a streamlined dispute resolution process.

Functional separation will not change the laws of physics, ie. full exchanges will still be full, or of economics, ie. regional/rural backhaul will still cost more than metro backhaul. Equality of access can be achieved without functional separation.

Marxx writes...

Do you understand what "evidence" means?

hehe, don't try and tell me if I understand what "evidence" means.

You still haven't said anything yourself, other than to discredit Structural Separation by continuing to telling me that I haven't provided any evidence...

If Structural Separation by any method is bad move or not a positive move, then surely problems would have risen to those companies that have or are doing it, yet it is not (either during the process or after it).

Due to moderation, some may have missed this pivotal article by Grahame Lynch that I posted very early this morning:

/forum-replies.cfm?t=970989#r3

(Whim me if you want the full article - copyright claims prevent a public posting).

On the other hand, the Financial Review argues that broadband policy is fine:

/forum-replies.cfm?t=970989#r4

MD351 writes...

hehe, don't try and tell me if I understand what "evidence" means.

You obviously don't, since you haven't provided any and continue to say that you have... lol.

You still haven't said anything yourself, other than to discredit Structural Separation by continuing to telling me that I haven't provided any evidence...

I haven't discredited SS in the slightest. I've discredited your shallow attempts to take part in a discussion.

If Structural Separation by any method is bad move or not a positive move, then surely problems would have risen to those companies that have or are doing i

You couldn't even name companies that have done it. And I showed you in my above post, problems HAVE arisen. Are they enough to justify not doing it? Maybe not, but you're still yet to provide reasons to change the status quo.

I can tell you're trying *very* hard to argue constructively but you can't seem to grasp the basic idea of it.

~vaio writes...

On the other hand, the Financial Review argues that broadband policy is fine:

Shock horror!

A third-party not made up of CEO's of private companies has reached a conclusion that supports the policy?!??!!

They must be Optus-bashers.

CMOTDibbler writes...

We need transparency that all access seekers are paying the same price for the same service (accounting separation) and being treated equally (operational separation). We need to turn the adversarial relationship between the ACCC and Telstra into one of cooperation, with a streamlined dispute resolution process.

Functional separation will not change the laws of physics, ie. full exchanges will still be full, or of economics, ie. regional/rural backhaul will still cost more than metro backhaul. Equality of access can be achieved without functional separation.

Very well said.

The dispute process is protracted at the moment, it needs to be shortened to a matter of a few months rather than more than a year. However, I don't believe the ACCC should have price setting powers. The legislative framework should be constructed in a way that compels equal access rather than having a bunch of bureaucrats decide on a non-commercial basis.

ernal writes...

The operational seperation we have now is useless.

Ensuring that retail and wholesale fault reports and orders are treated equally by the network division is definitely not "useless".

Where are issues like equal access terms addressed?

The ACCC should do this.

What is to stop Telstra crippling speeds to competitors or something like that?

AFAIK the speed is set by the DSLAM port. Who owns the DSLAMs the network division or retail? If it's the network division then the ACCC should insist all access services provided to Telstra Retail are offered to all other access seekers. This rule should also apply to all other DSLAM owners. This requires regulation not necessarily separation.

Who deals with the inevitable Telstra small print? Surely we arent heading into a litigious future to replace the current litigious regime.

There will always be disputes, with or without separation. The ACCC needs stronger powers and a streamlined dispute resolution process regardless of the outcome on separation.

Marxx writes...

They must be Optus-bashers.

To be fair, the commentators are Telstra shareholders, so that must be kept in mind.

Marxx writes...

I haven't discredited SS in the slightest. I've discredited your shallow attempts to take part in a discussion.

So my posts doesn't isn't right, but that doesn't mean you can dismiss SS since it hasn't happen here.

You couldn't even name companies that have done it.

Oh please....

I'm pretty sure that as someone "knowledgable" as you are would figure that out yourself.

Silly me :/

CMOTDibbler writes...

Functional separation will not change the laws of physics, ie. full exchanges will still be full, or of economics, ie. regional/rural backhaul will still cost more than metro backhaul. Equality of access can be achieved without functional separation.

Good summary.

That's what this comes down too. Some of us are arguing that the status quo, or a slight change (Toughening legislation or giving the ACCC more power) is the best path to go down.

Functional separation of a company does no = open access. That's a misconception. My question remains - Those who are so adamant about open access (most of us) and believe that functional separation is the path to take, why do you believe that it will achieve open access? Has it done so on its own anywhere around the world? Would the same thing occur in Australia?

It's legislation and regulation that ensures open access not splitting the arms of a company.

Marxx writes...

It's legislation and regulation that ensures open access not splitting the arms of a company.

But doesn't Telstra want to relax those?

~vaio writes...

To be fair, the commentators are Telstra shareholders, so that must be kept in mind.

I was pre-empting that =P

The fact that the Financial Review saw fit to publish the article and make their views is enough for me not to purely discount them on the basis that they own shares.

Yes they have a stake in who wins. But the whole country has a stake in who wins. If we're comparing journalists from a reputed source with shares in a private company to the CEO of another private company, who should we listen to for un-biased, un-spun views?

MD351 writes...

But doesn't Telstra want to relax those?

Telstra can want whatever it wants? I'm sure every company in the world wants to relax legislation and regulation so they can profit.

The Labor party went to the election promising open access, open access is stipulated as requirement in their RFP and open access will be delivered. None of your scaremongering about Telstra is going to change that.

Spudda writes...

no one really has provided a thread of competent claims regarding the impact of separation on shareholder value.

Similarly, no one has provided any evidence that separation will fix the problems or that the problems cannot be fixed without separation.

Customers would be indifferent unless they are like us (more savvy to the whole fiasco and how this all came to pass)

The Telstra customers who will be affected by separation are the wholesale customers. Of course these customers are "savvy", and a lot more "savvy" than most posters here.

only those on the board who have managed to destroy shareholder value without separation are vocal on this subject

Nope. We've heard quite a lot from analysts and posters who claim structural separation would increase Telstra shareholder value. Not one of these people has provided evidence to back this up though. It's all just opinions and the opinions of these analysts and WP posters are worth no more than the opinions of the Telstra board.

Marxx writes...

how do you respond to the fact that Conroy introduced legislation to the parliament to force Telstra to give up network access thus making everyone happy but it was shunted to committee by those who control the Upper House, the Liberal's?

The fairly stock response to this was and still is, introduce the legislation, present the network information, fire the gun.

Seemingly and ridiculously, he has chosen to fire the gun and allow one potential bidder the advantage of bolting for the line while all other potential bidders are left at the starting gate waiting for crucial information.

In effect.

The fact that the Liberals are holding up the process and introducing extra delay (almost certainly to make Conroy look like an imbecile and why wouldn't they) is independent of the fact that Conroy has royally screwed up by not starting the RFP on a level playing field.

Marxx writes...

Telstra can want whatever it wants? I'm sure every company in the world wants to relax legislation and regulation so they can profit

Yeah but what I mean is that Telstra has always put in the effort to attack legislation/regulation trying to get their way to "lift" them.

Org'asmo writes...

I'll start by apologising to anyone I may have offended over the course of this conversation.

I don't think you've been offensive....wrong, but not offensively so :)

people who currently don't have ANY option for broadband beyond NextG, but are in the applicable coverage area, get first bite.

This is covered in the RFP. I'm quite hopeful Sn COnroy will take this seriously because there are votes in it.

being unwilling to make sure the end user is protected before implementation

I've said this many times, but here goes again...I don't believe the government can afford to let the NBN push up prices for existing services. It would be electoral suicide in terms of votes at the next election and minor party support in the senate in this term.

I think we need to get a bit further into the RFP process before we get too pessimistic. Let's see what bids we get and whether they're published or kept secret. Let's see what services and prices are on offer before we decide retail prices are going up. Then let's see if Sn Conroy has the cojones to say "NO" if he can't get the social outcome he wants.

CMOTDibbler writes...

Similarly, no one has provided any evidence that separation will fix the problems or that the problems cannot be fixed without separation.

No, however we have certainly shown how a structural separation has improved BT and that Openreach is a competent company that is profitable in its own rigtht.

The Telstra customers who will be affected by separation are the wholesale customers. Of course these customers are "savvy", and a lot more "savvy" than most posters here.

I know that was a thinly veiled insult towards me, but still the gross generalizations that people such as yourself use here without evidence (because someone listens to a monkey on a TV commercial and chooses Optus that they are savvy) is just bordering on ridiculous

Nope. We've heard quite a lot from analysts and posters who claim structural separation would increase Telstra shareholder value. Not one of these people has provided evidence to back this up though

Yes except they show precedence of successful implementations. McGauchie claims it is a failing overseas but when we press on evidence of that (if it is true there should be plenty) no one has yet cited ONE example

Marxx writes...

I want to know everyone thinks SS is so good.

www.buddeblog.com.au/str...ion-developments
re: New Zealand

Structural separation will be a quantum leap forward for competition and innovation in New Zealand. A totally separated company, and possibly one in the future with separate owners, will have a great incentive to maximize its infrastructure assets. They therefore will be able to eagerly selling access and other wholesale services to whoever wants to use it. It will also set itself up to be able to work together with others to share and expand infrastructure either on its own, or in partnership. (My emphasis)

Sounds pretty good to me. Paul Budde is a pretty big mover and shaker as far as the telecom industry worldwide is concerned (eg. www.buddeblog.com.au/net...he-south-pacific , check the guest list for the even he's chairing ;). If he's on board with it, I'm pretty confident it's a good idea.

I did find (and really like) this quote of his however:

In order for organisations to be able to use the national broadband infrastructure successfully it needs to be made available on an incremental cost basis. It cannot be priced according to vertically-integrated network/service structures. The rate of return on infrastructure investments required for vertically-integrated telecoms is double that of the ROI required by utilities-based infrastructure. Governments will not be able to afford to deliver these services based on the ROI required by vertically-integrated telecoms companies.

See www.buddeblog.com.au/end...or-national-ngns for a very interesting read.

But to flip it around somewhat, how about you list some reasons why it's bad? Why would structural separation be bad, for Telstra, for T shareholders for 3rd party resellers and for end user customers? Or reference a post if you already have and I've missed it. I'd like to get a bit of a comparison going on between the pros and cons.

Marxx writes...

As a Liberal voter,

I said I was disappointed in both the current and ex-government over their continual fumbling.

Please read the post before responding.

Open access is going to be ensured

What magic 8 ball did you pull that from?

Opel was "going to be" implemented. Then it got canned. Going to be =\= is implemented.

I'm not sure if this 100% relevant

Probably not as you didn't quote the part where I said "in the area of coverage". If they are covered by the NBN 98% 'guarantee' and currently don't have access to a wired service, these people should be first cabs off the rank, particularly before people with current access to DSL2+ class services.

~vaio writes...

To be fair, the commentators are Telstra shareholders, so that must be kept in mind.
Are we allowed to consider the commentators past as well?

John’s eighteen year career at Telstra included stints as Chief Economist, Pricing Manager and Director Strategic Studies. These roles put him at the cutting edge of developments such as universal service costing and the evolution of competition and regulation. www.deridder.com.au/about

ernal writes...

Are we allowed to consider the commentators past as well?

Of course.

I don't believe he was inherently biased in his piece, he was merely a pragmatist. There was nothing factually wrong with the article however it must be tempered by the fact that he was a former Employee and remains a current shareholder.

If you're going to castigate his opinion because of his history with Telstra then you must apply the same standard to any representative of other Telcos.

I await your scathing criticism of Paul O'Sullivan.

dandyandy writes...

Seemingly and ridiculously, he has chosen to fire the gun and allow one potential bidder the advantage of bolting for the line while all other potential bidders are left at the starting gate waiting for crucial information.

Why can nothing be done on a proposal without the network information? How did the G9 prepare their SAU, including detailed service descriptions and prices, without detailed network information?

Sure, you can't complete a detailed proposal without the network information but it's just plain wrong to claim you can't start one. Any potential bidder who is "left at the starting gate" does not deserve to be taken seriously.

CMOTDibbler writes...

Sure, you can't complete a detailed proposal without the network information but it's just plain wrong to claim you can't start one. Any potential bidder who is "left at the starting gate" does not deserve to be taken seriously.

I dunno what's scarier..... That comment or the thought you believe it.

Why would you expect that enterprises spend millions on a project to submit a bid even before finding out if the network information from Telstra will require them to go back to the drawing board and resubmit?

These people are smarter than me, which makes them obviously smarter than you.

Spudda writes...

Why would you expect that enterprises spend millions on a project to submit a bid even before finding out if the network information from Telstra will require them to go back to the drawing board and resubmit?

The G9 has already indicated it intends to bid (with the proviso that structural separation is mandated) even without detailed network information.

CMOT is perfectly correct. There's no reason why a bid can't be at least started. The G9 SAU was over 100 pages long as I recall and it didn't have a skerric of network information from Telstra.

CMOTDibbler writes...

Sure, you can't complete a detailed proposal without the network information but it's just plain wrong to claim you can't start one. Any potential bidder who is "left at the starting gate" does not deserve to be taken seriously.

Perhaps a poor turn of phrase but you get the drift. Running with your shoelaces tied together is perhaps more appropriate.

A minister with a sense of propriety would have surely done this. Conroy in my opinion seems to lack this basic attribute, condensing something of such national importance with crucial information not available until potentially July(?) at the earliest when the upper house changes hands.

Spudda writes...

however we have certainly shown how a structural separation has improved BT

Nope. I believe the undertakings and the board that monitors them have provided the improvement more than separation. Neither of us has "certainly shown" anything though. We just have different opinions.

I know that was a thinly veiled insult towards me

Not at all. You said WP posters were more savvy than the customers. I just pointed out that these particular customers are probably more savvy than us.

but still the gross generalizations that people such as yourself use here without evidence (because someone listens to a monkey on a TV commercial and chooses Optus that they are savvy) is just bordering on ridiculous

I'm not sure what you're getting at here, unless it's just retaliation for the peceived insult. Are you saying Optus' and Telstra's TV commercials don't influence the technically unsavvy?

Yes except they show precedence of successful implementations.

I haven't seen them show anything of the sort. Do you have some links? I don't have a firm opinion either way because I don't know enough about it. I want to see some evidence before I make up my mind. The only "evidence" I have at the moment is the previous government's decision to sell a vertically integrated Telstra because they'd get more money for it that way.

Marxx writes...

I can't even find an adequate example that is similar to what is being demanding by industry
*Sigh* What exactly is the model being "demanded by industry". As I said in one of my previous posts, structural separation is typically used as a generic term for separation, be it functional or structural or even operational. You are hell bent on finding some definition that fits your description, not some generic "industry" description.
Examples have been provided to you of separation working. Increasing numbers of countries are implementing separation in various forms.Chances are they wont meet your description either. There is plenty of evidence that separation works. Choosing to ignore it achieves nothing, other than aggrevating people.

People, including myself have detailed the need for separation to avoid Telstras anti-competitive history repeating. This has been the largest obstruction to broadband in Australia in the last decade. Structural separation would be the best outcome because it splits the company into clearly defined entities, providing transparency and accountability. These entities then need to compete on their own bat and no longer cross subsidise each other. It therefore creates more efficient individual companies, and promotes competition. It has also been said this could unlock much more shareholder value.
Anyway, I am just repeating myself here. Go back and read all the other posts. These things have already been covered.

Accusing people of ignorance simply because you wont accept their arguments and evidence does nothing for your credibility. How about answers to all the questions others have asked you? How about addressing the other question that was raised in the other thread about McGauchie claiming seperation has failed in other countries? Which countries? Why did it fail? How did they implement it? Its funny you know. I have done a lot of reading on this, and there are examples of successes, but I havent seen any failures. Please tell us where they are and what happened or are you just going to take Telstras word?

Care to link to the specific post? Go nuts, they are all relevant.

~vaio writes...

The G9 has already indicated it intends to bid (with the proviso that structural separation is mandated) even without detailed network information.

I'm not sure if that is quite true. It appeared to be a secondary concern and as far as I could tell from the interview Paul O'Sullivan did not directly answer the question when asked. From my interpretation he seemed much more worried about being able to complete their bid within the required timeframe than the requirement for structural separation.

There's no reason why a bid can't be at least started. The G9 SAU was over 100 pages long as I recall and it didn't have a skerric of network information from Telstra.

Who's to say other players haven't started preparing a bid? I'm sure the 40 odd staff at Optus working on one aren't sitting around twiddling their thumbs until the network information becomes available.. at least I hope they're not :)

Spudda writes...

Why would you expect that enterprises spend millions on a project to submit a bid even before finding out if the network information from Telstra will require them to go back to the drawing board and resubmit?

I didn't say they should submit a bid without the network information. Where did you read that? What I said was

Sure, you can't complete a detailed proposal without the network information but it's just plain wrong to claim you can't start one

Any potential proponent that is serious about submitting a proposal has already strated work.

These people are smarter than me, which makes them obviously smarter than you.

That is a very childish insult that really isn't needed in this forum.

dandyandy writes...

Perhaps a poor turn of phrase but you get the drift. Running with your shoelaces tied together is perhaps more appropriate.

I understand what you're getting at but I don't think it's as bad as some make out. As I said in the previous part of this thread...I think Sn Conroy is right to get the ball rolling because there's a lot that can be done. However, I think he's completely wrong to set the end date independently of the release of the network information. The proponents need time to complete their proposals once they get that information. I think he's going to have to give ground on this.

guruvee writes...

It appeared to be a secondary concern and as far as I could tell from the interview Paul O'Sullivan did not directly answer the question when asked.

That's because he can't be seen to be avoiding $4.7 billion of public money. It would be a bad reflection upon his shareholders and the market in general.

However, O'Sullivan has repeatedly criticised the lack of structural separation in the RFP and he has threatened to withdraw if his demands aren't complied with.

In any event, it's all posturing and politicking. We won't know much more until July 25.

Who's to say other players haven't started preparing a bid?

Where have I inferred that other players haven't started?

ernal writes...

There is plenty of evidence that separation works.

Correction: there is plenty of evidence that separation has occurred but scare evidence on its long term success.

CMOTDibbler writes...

However, I think he's completely wrong to set the end date independently of the release of the network information.

That seems a reasonable compromise to me. The danger though is the Liberals will sit on it for as long as they are able to make the entire process seem unfair.

While there may be much finger pointing on both sides of the house should this happen, the simple fact is he has set himself up for a fall with his ill conceived poorly ordered approach.

dandyandy writes...

danger though is the Liberals will sit on it for as long as they are able to make the entire process seem unfair.

Yep, I think they'll do just that, more to score political points than to benefit the public. I suspect Sn Fieldings support has been negotiated with ISP level filtering. I'm hoping The Greens will use their Senate numbers to bring some sanity to the process.

the simple fact is he has set himself up for a fall with his ill conceived poorly ordered approach.

Yep, that's why I think he will eventually have to give some ground.

CMOTDibbler writes...

Yep, I think they'll do just that, more to score political points than to benefit the public.

But they've shown how poorly Conroy has managed the situation. He should have anticipated such errant behaviour from the Coalition.

~vaio writes...

Correction: there is plenty of evidence that separation has occurred but scare evidence on its long term success.

Ok. Another subtle change in the light of actual evidence. These are becoming common now.
So if seperation is working and bringing benefits to consumers, telcos and the no doubt the economy, why would it suddenly stop working?

ernal writes...

So if seperation is working and bringing benefits to consumers, telcos and the no doubt the economy, why would it suddenly stop working?

Where is the evidence on the long term benefits? Indeed the following document highlights two major problems with functional separation:

Degradation of Service Quality

Firstly, it removes any incentive to ensure the operational quality and economic performance of access activities, which are subject to the separation obligation : the entity in charge of these, by its very nature and governance, has no direct interest in the smooth operation of retail services. Yet, the quality of access services calls for the deep and permanent involvement of the network owner, to ensure good intermeshing between the customer process and the network process. So, while such a separation may, on paper, lead to greater equality of treatment between retail operators in the perimeter defined by the separation process, it also means a general degradation of service quality. This has been observed with Openreach, as it has with the electricity and rail sectors and recently, unfortunately, in the British rail network.

In addition, equality remains theoretical, as long as the historic operator isn’t really supplied by the separate entity in charge of the access network, which, according to Ofcom, is still mainly the case of BT and Openreach. On the other hand, the success of unbundling in France shows that vertical integration spurs the historic operator to perform well and that this benefits the market as a whole, through the real application of the principle of non-discrimination, which is permanently controlled by multi-lateral working groups and the monitoring of operational indicators.

Risk of underinvestment

Secondly, separation presents a major risk of under-investment in the new access infrastructures, because of the lack of incentives for the access network operator, which, as a virtual monopoly removed from competitive pressure, has no interest in the development of offers in the retail market. Moreover, chronic underinvestment is a constant characteristic of cases of separation observed in network industries in the past.

Finally, unlike the electricity and rail sectors, the technologies of telecommunications access networks develop rapidly. So, wanting to fix an effective and durable frontier is a vain hope. The risk of errors, costs and delays in implementation are disproportionate against any eventual gains.

All of this shows that separation is not such a good idea after all. We can hope that, in this field, the players in the French market will go beyond the traditional roles they generally play: what France Telecom would lose in terms of efficiency, in both the operational and economic fields, following a functional separation, would not be gained by its competitors, who would suffer just as much, and would certainly not benefit consumers.

www.arcep.fr/uploads/tx_...lettre55-eng.pdf

This is clearly only one opinion, but the argument is compelling nonetheless in light of the almost blind favouritism conferred toward separation models.

I really hate quoting myself but I have yet to see anyone try to address...

But to flip it around somewhat, how about you list some reasons why it's bad? Why would structural separation be bad, for Telstra, for T shareholders for 3rd party resellers and for end user customers? Or reference a post if you already have and I've missed it. I'd like to get a bit of a comparison going on between the pros and cons.

I really want someone to do an in depth nitpick on the concept from whatever viewpoint and find all the things that are wrong with the concept.

If multiple companies adopting some form of separation around the world isn't evidence that the concept is possible, maybe even attractive given the regulatory climate, I don't really know what else to say. I have read many articles with upcoming separation, current and already implemented separation, people claiming it is destined to fail, but I haven't seen a single document where it has conclusively failed.

Another interesting snipped from mid-late last year.

BERLIN: Following its success in cutting mobile phone roaming fees, the European Commission is weighing a plan that could force some former EU phone monopolies to legally reorganize to open their networks to greater competition.

According to a person in Brussels with direct knowledge of the plan, the European commissioner for telecommunications, Viviane Reding, wants to create a new EU agency called the European Telecom Market Authority with power to override national regulators and pry open domestic markets.

One of the most potent weapons wielded by the agency, which would be made up of the directors of 27 EU national telecommunications agencies, would be the power to force former monopolies to legally separate from their physical transmission networks to give competitors equal access.

www.iht.com/articles/200...ss/telecom13.php

If you read down the article further, you'll get the industry's reaction (no prizes for guessing what it was ; ), terms of exercising the power to be in places where there is little hope of broad infrastructure competition (I'd class Australia as that) and notes that controlling the entire shebang currently via regulation is a very long, slow process that often involves years to complete.

And yes, I know, the EU is not Australia. The operational differences do not automatically disqualify the principle.

~vaio writes...

He should have anticipated such errant behaviour from the Coalition.

I wonder if he has. The opposition would make a very good scapegoat if he has to do a back-flip and extend his deadline.

Org'asmo writes...

I really want someone to do an in depth nitpick on the concept from whatever viewpoint and find all the things that are wrong with the concept.

I don't have enough knowledge to do that but I'll share a few thoughts that someone with more knowledge can correct :)

What are the benefits of functional separation for 3rd party resellers?

I'm not convinced there are any. They are still buying services from Telstra Wholesale. The exchanges are still full. Regional/Rural backhaul still costs the earth. The only difference I can see is that Telstra Retail have to pay higher prices for their services. Well whoopee-doo, Telstra Retail profit goes down, Telstra Wholesale profit goes up, Telstra Corporation profit remains the same.

Now let's try pushing up the wholesale prices to squeeze the Telstra Retail margin as small as we can. Now everybody pays more and Tesltra Wholesale's profit goes up by more than Telstra Retail's profit goes down. Telstra Corporation makes a killing.

I know, we'll get the ACCC to regulate wholesale prices so that can't happen. But if we do that, what have we gained? We have the same regulation as we have now. All we've done is make Telstra's internal processes less efficient. That will make some people happy, but it's not a good reason to change.

What are the benefits of functional separation for Telstra?

None that I can see (other than the possibility outlined above). They have to change all their vertically-integrated internal processes to accommodate the retail-wholesale boundary that's been introduced. There is an implementation cost to change the processes and IT systems, and an ongoing cost due to the boundary making the processes less efficient. Operating costs go up, share price goes down.

Org'asmo writes...

I really want someone to do an in depth nitpick on the concept from whatever viewpoint and find all the things that are wrong with the concept.

You'll find that three people have done that over two threads. My post here: /forum-replies.cfm?t=970534&p=3#r41

Lists some of the problems that are occurring with BT. Those problems are likely to transfer across into Australia since a monopoly will be maintained. So using that model, which apparently you and others are calling for, will solve no perceived problems. In fact the only plus that can be seen 1 year on from the BT separation was increased access to the network for third parties. And as has been shown by myself, Vaio and CMOTDibbler, regulation and legislation has been shown to do that effectively, without pitting the government against a private company and forcing them to split their business.

but I haven't seen a single document where it has conclusively failed.

I think you'll hard pressed to find anyone on the forum who's saying that it's a complete and utter failure anywhere in the world. However, just because something isn't a conclusive failure is not reason enough to implement it in Australia. The ones calling for a complete overhaul of the status quo are the ones who must provide reasons to do so.

CMOTDibbler writes...

What are the benefits of functional separation

No offense but what I said was find all the things that are wrong with the concept. regarding structural separation.

I want a list of actual negatives if structural separation is implemented against Telstra. From the point of Telstra/shareholder/end user etc etc.

Marxx writes...

My post here:

details "some of the concerns" re: BT, not actual eventualities as far as I can see. You don't state anything, you relate what people are concerned might happen... = \

eg. But: There was concern that future pricing of Openreach’s products may be set too high and therefore disputes may result.

There was some concern that the divisions between BT Wholesale and Openreach are not quite right.

One commenter complained that new installs often have to wait because there are issues with BT Wholesale’s consumption of power or space in the particular exchange (Lol, like we don't already have these problems with the current system)

There was concern that - while access to the Openreach might be fair and non-discriminatory - overall levels of service may be poor.

The only thing said outright is that there is problems gaining access to the infrastructure, problems we already currently have under the existing vertically integrated solution... = \

regulation and legislation has been shown to do that effectively, without pitting the government against a private company and forcing them to split their business.

Where? I'm not trying to be a pain in the butt, I just haven't seen anything near to proof that says regulation is more or less effective (or timely) than separation would be. "May", "might", "are concerned about" are not "is".

Besides, I already mentioned Germany where structural separation was being pushed by the EU (mainly because the German gov. is helping protect the incumbent monopoly by dawdling on regulation), more details were available in the links I posted.

So, instead of mays and mights for another country, someone please give me a list of the bad things that will result from structural separation in this country.

I'll get the ball rolling since everyone seems to be a wallflower at this dance (unless it comes to insulting people on the other side of the floor ; )

Structural separation will result in upheaval for Telstra staff, management and internal processes.

Org'asmo writes...

more details were available in the links I posted.

The link you posted was written in such a way that it was made to look as though structural separation was the only thing being considered by the EU. If you read closer you'll see that forceable structural separation was merely the strongest measure that would be given to the EU as a power to enforce open access. Even the commissioner who drafted the plan admitted that regulation was a better road to go down.

someone please give me a list of the bad things that will result from structural separation in this country.

You missed my point with the BT comparison. BT/Openreach is still a monopoly. Separating Telstra, we will still have a monopoly. Therefore the problems outlined in that blog post which I summarised in my post that specifically relate to monopolies, even so called "separated" ones will remain.

So at best, separation maintains the problems of the present. That's by your own admittance.

eg. (Lol, like we don't already have these problems with the current system)

Now if you want to convince us, Telstra and Conroy (The only one who can forcefully do it) to separate Telstra you're going to have to come up with compelling arguments to change the current method of legislation and regulation and begin a process of forceful separation. You'll find that the only benefit that came about from the only decent example we have was that access was made fairer. Was that an inherent boon of separation? No, it was because Ofcom (The regulator which was given more teeth) and BT both came to table.

If evidence of a lack of success of separation from other countries, which will transfer to Australia due to the monopoly situation, isn't enough for you, and you're demanding Australian examples, then why is your only argument to support separation coming from European examples?

Org'asmo writes...

I'll get the ball rolling since everyone seems to be a wallflower at this dance

Well, there is what I wrote about in the post that you dismissed:

For 3rd parties:
It opens up the possibility for Telstra to manipulate the wholesale price to increase costs for all access seekers but still benefit the Tesltra Corporation overall.

For Tesltra:
There is an implementation cost to change the processes and IT systems, and an ongoing cost due to the boundary making the processes less efficient. Operating costs go up, share price goes down.

Why don't those count?

edit:
Are you just talking about full structural separation or are you including functional separation as proposed by the EU (b)eurocrats?

Hmmm - one wonders if this thread should be renamed:
"The many types of separation" - lol

It is rather confusing given the different names:
Operational / Functional / Structural / (even Accounting)
- particularly so when different countries use the names interchangeably (eg Functional separation in the UK is called Operational separation in NZ)

Perhaps it would be useful to compile a list of the desired attributes of separation and call it the "Australian Separation Model" - lol


It is worth having a look through the Openreach document as it covers the background to the separation of BT and how it works

Some specific points worth mentioning:

The creation of a new organisation:
Communications Providers relied (and continue to rely) on local exchanges and the local access network to deliver competitive services to homes and businesses across the country. As demand grew, transparent and fair provision of service and maintenance from BT Wholesale to all Communications Providers became increasingly critical.
In response to this need, Ofcom launched its Telecommunications Strategic Review (TSR) in December 2003. After extensive public
consultation and dialogue with industry and BT, Ofcom accepted a set of Undertakings, or legally-binding commitments, offered by BT.
These were signed between BT and Ofcom on 22nd September 2005, marking a defining moment for the industry – and the beginning of Openreach.

Ofcom has a similar role to the ACMA/ACCC specifically for telecommunications
www.ofcom.org.uk/about


Openreach is responsible for the "last mile" part of the BT network
Openreach is owned by BT but it is a Separate Business Unit and it has its own Board of Directors
The performance of Openreach is monitored by an independent Equality of Access Board (EAB) which consists of three independent directors and two BT executives

Equivalence
* Provide the same products, services and relevant commercial information to all Communications Providers – with the same timescales, terms, conditions and prices
* Interact with all Communications Providers using the same systems and processes, and with the same degree of reliability and performance for all
* Ensure that our engineers remain impartial when interacting with end users

So essentially all communications providers receive the same services on the same terms without favouritism or discrimination

www.openreach.co.uk/orpg/aboutus/c_bro.do

Freycinet writes...

So essentially all communications providers receive the same services on the same terms without favouritism or discrimination

Indeed, but that's because of collaboration with the regulator (Ofcom). Separation wasn't a pre-requisite to open access and it isn't in Australia. Separation did not automatically deliver open access. That is a misconception.

What does "Open Access" mean to you ??

In the context of the NBN is it important that as well as "Separation" we also have "Open Access"
So what does "Open Access" mean to you

If we assume a scenario of a FTTN that for example is capable of 50Mbit/s downstream and 5Mbits upstream - then what criteria is essential to ensure "Open Access"

In my view "Open Access" means:

Any communications provider can access the full capability of the downstream and upstream bandwidth from minimum to maximum, ie there should be no restriction on bandwidth capability and no favouritism or discrimination against any provider

Any communications provider can supply services over that available bandwidth, whether they be: internet, VoIP, telephony, IPTV, video conferencing etc, ie the NBN operator should not be able to reserve bandwidth for their own particular services

There should be no "forced bundling", ie if a communications provider wants to provide "Naked DSL" services they should be allowed to and if they want to bundle services then they should be allowed to

What other requirements ??

(Obviously the services provided must be within the industry technical operating requirements for the NBN)

Marxx writes...

Separation did not automatically deliver open access

See above ^^

Freycinet writes...

Openreach is responsible for the "last mile" part of the BT network

What constitutes the "last mile" in a FTTN network?

Is it just the copper from the node to the customer? Does it include the node and/or the equipment in the node cabinet? I would think the fibre from the node back into the network would be considered part of the core network.

Freycinet writes...