Q: What happens to investment when a government threatens to nationalise infrastructure? A: Investment in infrastructure falls.
If you don't believe me, and you wish to ignore the mountains of international evidence supporting that answer, then ask yourself why Jenny Gibbs and the residents of Remuera, Howick and Paritai Drive are finding it difficult to get broadband. The answer in this morning's Herald is that Telecom is not investing sufficiently in infrastructure in those areas -- and why the hell should it, when that investment is subject to being taken out from under the investors by government edict. As Telstra Australia's CEO Sol Trujillo said in similar circumstances, threatening not to lay the fibre allowing an Australia-wide broadband network: “My duty is to our shareholders — including 1.6m ordinary Australians. I will only invest where I can earn an economic return.”
Unbundling Telecom's property will increase broadband penetration? Don't believe a word of it.
LINK: She's a multi-millionaire and still can't get broadband - NZ Herald
Telstra shrugs? - Not PC (May, 2006)
RELATED: Telecom, Politics-NZ
8 comments:
Now with the government unbundling of Telecom and splitting them into 3 services, confirm that we are going to fuck'n stuck with copper for the next 40 years or so, because no leecher (Ihug, CallPlus & darling Annete Presley, Orcon, Telstra, etc), is willing to invest in infrastructure. They just like to suck the blood out of Telecom network without any penny spent on national infrastructure. The leechers hope that Telecom will do that job on their behalf.
Copper has limitations and it can't be pushed any further to accommodate the ever increasing demand of high-speed because the laws of physics has taken over and imposes physical limitations in signal transmissions.
I am pissed off with the likes of David Farrar who had made posts in his blog site about this issue defending the government's action against Telecom. The InternetNZ according to Farrar which he is a member did make submission to parliament on this issue. InternetNZ is a fuckn lobby group whom assume the name because they think that they have knowledge & expertise about technology & engineering. They appear to be all techno-wannabes to me. There is no single member from them that I see who had an engineering background in 'Communication Systems'. They're all a bunch of lobbyists which includes organization as TUANZ.
I attended the opening of the Dodd/Walls Centre for Photonics and Ultra Cold Atoms on the 10th, December, 2006 held at Auckland University, where I managed to talk to a few world-renowned scientists in the field of 'Optical & Photonic Telecommunication Systems'. All their comments were saying that the long term solution for ultra-fast telecommunication lies with fibre-optics and not with copper. Now, this long term solution seemed to be about to come after 40 years or more as we're stuck with copper because Telecom don't want to invest in the infrastructure on behalf of the leechers.
Professor John Harvey,
http://www.phy.auckland.ac.nz/html/j_harvey.html
who is one of the top researcher's worldwide in utra-fast photonics telecommunication systems (fibre-optics), told me that this separation of Telecom by law is going to create a mess. It may create short-term solution, but long term, it means that some investments are needed to install nationwide fibre-optics because it can solve the high-bandwidth transmission required for services such as video on demand , online gaming, etc, etc, where copper can no longer handle this high-volume transmission.
I did ask John Harvey if he made any technical submission to Parliament Select committee about the foreseeable limitations of not moving from national copper network into fibre-network, and he told me , NO. He was thinking about it, but decided not to. Probably he was genuine in saying that ‘no’ answer indirectly, meaning that he didn't want his research funds from government to be cut. However, saying no that he didn't make submission, doesn't mean that he will never do so in the future. I urged him (of course I was lobbying) and a few other experts to make submission relating to technical issues about the limitations of copper network. John Harvey said, that he might do so (making submissions). I hope that the Select Committee should weigh heavily on advice from people with technical expertise, such as Prof. Harvey and not on techno-wannabes lobbyists such as InternetNZ, TUANZ and also leechers such as Ihug, CallPlus Orcon, and Telstra.
PC - your example only highlights exactly what was wrong with Telecom.
Broadband wasn't invented in the last 6 months. Telecom didn't provide adequate infrastructure, therefore they were regulated. Do you honestly believe that if the government hadn't acted that the situation would be improved? It certainly wasn't improving beforehand.
So, how exactly is the lack of infrastructure developement over the last several years the fault of legislation that is yet to come into force?
Watched the news report: within hours of her letter being published two other companies were on her street offering their broadband services independent of Telecoms infrastructure.
Somehow that doesn't sound the same as "Investment in infrastructure failing".
Hamish said...
[...other companies were on her street offering their broadband services independent of Telecoms infrastructure.]
Therefore, she knew about the existence of those services and that means Telecom didn't hold a gun to her head. All these months she had been waiting, she could have switched services then.
The Herald article today by IT journo, Peter Griffin described the limitations of the current copper network which it cannot cope with the future high volume/high speed transmission.
The services offered by Vodafone and Woosh for wireless broadband to Mrs Gibbs is a micro-wave based communication system. Microwave has limitations as well. Microwave transmission limitations stems from the medium that it propagates, and that is the atmosphere, where the air density can affect it directly. The high volume high speed transmission that is required of the future services & demands, must be fibre-optic and there is no question about this. The fibre-optic can be engineered to reduce the broadening effect of the signal light-pulse transmission or dispersion effect which enables high volume/high speed signal transmission and unlike microwave-based systems, the atmosphere limits the bandwidth transmission since we can't engineer the atmosphere in any way, such as decompression of it in order to increase the signal bandwidth .
This is the sort of investment in infrastructure (fibre-optic) that Telecom will be trying to avoid at all cost as they see that as doing a favour to the competitors.
Yep, I'm au fait with the physics (although I suspect that Vodafone might have been pushing their Vodem 3G service, rather than microwave) - that's not the point:
This is the sort of investment in infrastructure (fibre-optic) that Telecom will be trying to avoid at all cost as they see that as doing a favour to the competitors.
No, this is the sort of investment that they have always avoided at all costs.
Hamish, you asked: "So, how exactly is the lack of infrastructure development over the last several years the fault of legislation that is yet to come into force?"
I think you've missed the point. The question at the top of the page is, "What happens to investment when a government threatens to nationalise infrastructure?"
The operative word is "threaten." Threats alone from a Government eager to meddle are enough for investors to keep their investments away from the sector (or the country) threatened.
"No, this is the sort of investment that they have always avoided at all costs."
And how exactly is the legislation going to encourage that investment in future?
I have just seen Minister Cunliffe on TV3, with John Campbell (30th, Jan), saying that the proposed legislation to split Telecom in to 3 operational services, will allow major competitors to step in and build their own communication infra-structure such as installing their own fibre network. So, called experts that were interviewed by Mr. Campbell said, that unbundling will not improve the long term solution for fast transmission speed for super broadband of the future. The consumer broadband demand of the future could be as high as 40 Gigabits per second. This fibre-optic technology is now commercially available. The top speed of 160 Gigabits per second has now been realized, where a fibre system with 25 communication channels can achieve a system thoroughput of around 1 Terabits per second.
I think that David Cunliffe & the government do have a myopic view of future evolution of technology. His claim on Campbell Live that some other parties will step in to install their own fibre network, is bollocks. If no player including Telstra which could compete with Telecom in building their own network infrastructures cannot do it prior to unbundling legislation, then why should they be willing now, when Telecom's line's is forced to open up to the competitors.
The people will realize, that the opening the local loop is not the promise of fast transmission speed. The problem lies with the copper. Fibre optics can only come to the equation via competition and not legislation. If Telstra makes a move to build their own fibre network, if would force Telecom to do the same. Speed will be faster, and of course there will be a price war, which will drive it down.
For any interested reader can check out this freely downloadable paper about the advances that had been achieved within the last few years.
“Progress in Ultrafast Photonics”
http://www.aapps.org/archive/bulletin/vol16/16-2/16_2_p23p39.pdf
Some of the technologies described in the paper above, were covered in some of the invited talks in the opening of the Dodd/Walls Centre for Photonics and Ultra Cold Atoms on the 10th, December, 2006 held at Auckland University. One guy , a former AT & T described in his talk that Intel & AT & T are on the verge on producing the first all optical ‘photonics chip’, with a size of 1 square centimeter, that this type of ‘chip’ will replace current 1 meter high bulky cabinets that we see in exchange stations. These chip work with fibre network and not copper.
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