G9, Helen Coonan and the ACCC keep Broadband plan to themselves

26 04 2007

Renai LeMay asks What did the G9 leave out of its press release? “the G9 group of telcos (Optus, AAPT, iiNet and so on) … issued a press release detailing the formal lodgement of their draft proposal for a new nationwide fibre broadband network.”

The press release contains interesting points like:

“The SAU would be for 12 years from the commercial launch of the service in order to provide investors with appropriate long term certainty in relation to return on this significant long term asset.”
There’s no mention of how these assets might depreciate over 12 years and with current accounting practices out of step with perceived market value, this may be a questionable investment. A copper phone line of insufficient quality to sustain new technologies should be depreciated at a more rapid rate if it’s to be held in line with other new technologies such as computers. The value of a building wired with old copper wire is not enhanced by the wire, the market value of a building wired with broadband cable is enhanced. This technology has evolved dramatically in less than 12 years, exactly how is depreciation and this investment expected to run over the 12 year span?

“The FTTN Network will be an IP based next generation network capable of delivering high speed broadband services to over four million Australian homes.”
What percentage of Australians will actually benefit from this? The last measurement of Australian homes I saw pegged us at 7.8 million homes. If this number is still accurate, the G9 proposal only supplies broadband to less than half of Australian homes!

More information please.

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