For years, Telstra has complained about untimed local calls. Why? Because those folks who chatter for a long time take up valuable network bandwidth and have no incentive to economise. Well, that was the past. With the capacity now running across telco wires, this perhaps is not a major issue.
But what about mobile calls? Today, Telstra announced plans for untimed mobile calls (click here). Pay 25c and you can talk for as long as you like. But wireless networks have real congestion issues. Moreover, Telstra will have to pay for timed calls to carriers to connects to and, under accounting separation, to itself. So who is going to pay for the cost of people hanging on the mobile phone? It is a bit of a mystery.
The recent debate in Australia over FTTN has centered around the vexing issue of “economies of scale.” The argument is that FTTN requires a big lump of investment. Unless private firms can be assured of earning a decent rate of return on that entire lump, it is not worth investing. At present, for that stated reason, none of the investment is supposedly taking place. Continue reading “No USO for broadband”
The headline on news.com.au reads: “Foxtel is Telstra’s IP Choice.” I read, “Telstra has no intention of competing with Foxtel.” The article quotes BigPond chief Justine Milne:
The way I define IPTV will be pay TV delivered over IP (internet protocol) networks … We have already got a really fantastic pay-TV company in Foxtel.
My translation: “why on earth would we compete with something we own?”
And this is precisely why we destroyed competition by letting Telstra do what other telcos around the world dream of: holding the copper and cable networks. Jerry Hausman and I wrote the other week that this had harmed competition in telephony. Well, it is pretty clear that it will also harm future competition in television. Like we had a ton of that already!
Today’s Australian Financial Review carries an opinion piece by myself that outlines more completely my argument that the government’s current privatisation plans represent a half-way house under the cloud of the Future Fund. Actually, that Fund should be renamed the Fog Fund as it seems designed to hide away failed government policy. (Click here for the article).
Nick Gruen describes his experiences in networking his house and extolls the virtues of WiFi. His main idea — which is something I have thought about too for some time — is that we are thinking about wireless networking the wrong way. Currently, it is seen as a security threat — the view of the veto holder in our household. One reason for it being seen that way is that it is; outsiders can surf on your bandwidth and can also potentially access your own data. The latter is a big problem (although it is likely to pervade wired as much as wireless networks) while the former is, as Gruen points out, the solution to other issues. Namely, households are not the relevant unit for purchasing broadband; neighbourhoods are. Saavy internet providers should be thinking about how to network neighbourhoods.
Of course, I am almost sure there are terms in network access agreements that surely prevent this. But if that is the case, then it is removing restrictions on legitimate sharing and neighbourhood investment that should be a priority for governments.
On that score, the New Matilda website has a poll on what should be done with Telstra. 64% of voters appear to favour re-nationalising Telstra over any form of privatisation.