I know it will be built. I know it will cost more than $50B I'll probably even invest in a few of the NBN suppliers. Ive read all the NBN myths debunked. But I still think its a bad decision. Its just another huge expence that I dont get to vote on. I'll just have to wait and see I guess.
Vote 1 Warwick McKibbin, PM THE global economy is facing ''a slow-motion train wreck'' with Greece only the first nation to be hit, Reserve Bank director Warwick McKibbin has told a Melbourne conference.
50 billion total cost is about $10,000/house and not every house will use it. That means the cost is about $1000/house/year just to service interest payment on the 50billion. Looks very Greekish investment.
I'm all for the NBN and as fishball implied, there's no way wireless can outperform fibre. The NBN will be great for business. I know because I can already see how I'd apply it to my business BUT... what I'm worried about is who's in charge of the project O_O
$36 billion divided by, what 8 million houses in Australia...that's a little bit less than $10k per house to hook up the whole country.
Not to mention the Hospitals, Schools, Libraries, Offices, Government Buildings, Banks and a heap of other entities which may use the NBN in the future. Surely the potential may not be immediately realized but in time we will look back and wonder how we lived without NBN.
That is less, about $4500 if goes as planed, but I only calculated the about 50% of the houses will actually use the service and they have to pay the entire cost.
So funding a project that will only suck more money out of us with debt is a good option because they are not pulling $50 billion out of the coffers that we don't have anyway? Interesting. Arguing that the money could be better spent elsewhere is moot because it's borrowed money? Why don't we build the best public transport system in the world using pretend debt money instead of real money then? I don't understand how these things work any more than the average Aussie but I would assume that adding interest payments to a bad investment would only make that investment a bigger burden not smaller one.
The debt is funded and repaid through revenue generated through the NBN's day to day activities in the future. This is how tunnels and highways are funded as well I believe. I believe this quote on Whirlpool sums it up best, If you don't understand this then please research this so you can see how the benefits will outweigh the downsides. Look, if you consider 36 billion over 10 years, it is 3.6 billion per year (10 year project). Consider we have 6 major states (sorry Tassie/ACT), that is 600 million per state per year. I'm sure our government departments are wasting more money than that. Billions spent on trains in Sydney and they're still horrendous.
Telstra is ripping up the copper network as part of the deal. A lot more than 50% of households will be using services delivered via the NBN (including everyone who wants to keep their landline). Sometimes you have to bite the bullet and buy a new whatever because the old one doesn't do a good enough job any more. The copper network was already costing $400-$500 million a year to maintain (passed on to customers obviously) and the cost of continuing to maintain it could only ever increase.
"The debt is funded and repaid through revenue generated through the NBN's day to day activities in the future." Ok, that's interesting, but how do you raise the funds to build it now using funds that are generated through the NBN's activities in the future?
If You know that there will be X number of connections being provided at $Y/month (where $Y is constant because the NBN is only a wholesaler and will receive the revenue regardless of which telco a household signs with), its pretty easy to find someone to lend you money.
Thanks guys, appriciate the feedback here. Let me see if I've got the basics right here, please correct me if I'm wrong - Regardless of future use, funds will need be borrowed in some shape or form. Interest will be attached in some way and paid back by "future use" So the viability of the entire project depends on how many people will use it and how much they will pay for it?
I can't help thinking that building the NBN now is like a family already struggling to meet their mortgage payments deciding to add extensions to their house because it will give the children a place to study in peace.
That's about it. Whether its a good idea or not depends on whether you think Australia will stop using phones, TV and the internet and any time soon.
Well there goes $12b in future profits right there. But observe the way they are creating value: - Paying for access to something the public already paid for while Telstra was a public company; - Paying to have existing, perfectly adequate infrastructure ripped up; and - Colluding with existing service providers to acquire their customers. It's just got to be a win for the consumer. $11B here, $800M there. . . was that part of the $36B budget?
