Hard News by Russell Brown

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Hard News: Shooting for the Moon

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  • Rich of Observationz,

    Well, with both Iridium and CDMA supposedly intelligent people with access to all the best advice made a bum decision.

    I think the problem with Iridium in the early 90's, when the decison was made to build it, wasn't the technical problems that Russell rightly highlights. It was more that the rate of GSM deployment was vastly underestimated, so that by the time the very expensive satellite system was ready, very few people had a need for a satphone.

    My point is really that any new technology deployment has a lot of risk. A low risk utility is something like Vector that knows its exact income stream into the distant future.

    (Unless of course, somebody else, like the government, assumes the risk and simply pays a company to build and operate the network for a flat fee).

    Back in Wellington • Since Nov 2006 • 5550 posts Report Reply

  • Steve Barnes,

    Matthew,
    I grudgingly agree with you about wiMax, I wish i didn't. I know that wireless sucks the life out of Mtu's but some bright spark will come up with somthing like header comperssion with dynamic error correction and the whole need for cable and fibre will be history. Then people will be asking "why did we spend $5 billion on burying all that glass?" Maybe we would be better off turning all that glass into crystal balls because who knows what is just around the corner?

    I hadn't thought of it like that, but you're right.

    Now there's a first :-) Can I have that in writing? ......Oh it is ;-)

    Peria • Since Dec 2006 • 5521 posts Report Reply

  • Matthew Poole,

    My point is really that any new technology deployment has a lot of risk.

    Fibre's not a new technology, though. Not even vaguely close. People have been putting bits and bytes over skinny lengths of glass for longer than I've been alive. It's not a dying standard, unlike CDMA, and it's not experimental and obscenely expensive to use, unlike Iridium.

    Here's a question: Would you consider Telecom's existing network to be low-risk if it was entirely expropriated and turned into an SOE? Ignoring any question of longevity and historic underinvestment, would you say that a primarily copper phone/data network run by a company that does nothing else is a risky investment?

    Auckland • Since Mar 2007 • 4097 posts Report Reply

  • Matthew Poole,

    I know that wireless sucks the life out of Mtu's but some bright spark will come up with somthing like header comperssion with dynamic error correction and the whole need for cable and fibre will be history.

    It's not just MTUs, though that's part of it. It's also latency, and the shared medium, and a bunch of other things that are actually really difficult to overcome. A point-to-point fibre link operates at fairly large fractions of the speed of light (I've seen 1/3 and 1/4), and wireless doesn't have a snowball's of ever getting to that kind of latency.
    Fibre also scales beautifully, as witnessed by how phat the SCC is now compared to when it was laid and for only the cost of upgrading the end-points and amplifiers - designed for 120Gbs, now at 860Gbs less than a decade later and potentially offering 2.4Tbs (or more) by the end of the 16 years of life it has left. That's an increase of 2000x in 25 years, and it's real increases not theoretical ones. Wireless is showing no signs of coming anywhere near that exponential scalability.

    Auckland • Since Mar 2007 • 4097 posts Report Reply

  • Peter Ashby,

    Back in the old days of NZR when they electrified the NI main trunk (1980 to 88) they put in a fibre optic pipe all along beside the line while they were doing it. The signals run off it for one thing but was the first fibre backbone in NZ.

    IIRC the universities' network ran on it too.

    Is that old enough, in the NZ context, for you?

    Dundee, Scotland • Since May 2007 • 425 posts Report Reply

  • Peter Ashby,

    As for how to roll out such a system, the cable cos here in the UK run their fibre along the footpaths, so two lengths per street, but no street closures. It sits in the street under little cast iron cover until I ring them up and request an installation whereon a man comes and puts the fibre from the street to my house. Cost me iirc 50quid and that included all the house wiring (we had a box put in upstairs) and the phone line. He was amenable to taking it around the front garden instead of across it too. To save time and be nice I allowed him to coil the cable for next door under the gum tree. Saves the next chap if next door ever want it.

    They have Sky but.

    Dundee, Scotland • Since May 2007 • 425 posts Report Reply

  • Rich of Observationz,

    under the gum tree

    You have gum trees in Dundee?

    Would you consider Telecom's existing network to be low-risk if it was entirely expropriated and turned into an SOE?

    Depends. Assuming that it gets enhanced with FTTC or whatever else works commercially, and that the government doesn't subsidise a competitor, then low-medium risk. (Like I say, Vector is my idea of a low risk utility - people can't get their juice any other way).

    But an interesting point. If I had Telecom stock, I think I'd prefer that the government compulsorily purchased the copper than dropped a competing network in. The former they'd have to pay for, the latter they could just do.

    Back in Wellington • Since Nov 2006 • 5550 posts Report Reply

  • Matthew Poole,

    Rich, the Government wouldn't pay all that much for the copper though. It's demonstrably run-down, hasn't been cared for, and was flogged off at a seriously discounted rate. Why reward a company that hasn't maintained the asset?

    Auckland • Since Mar 2007 • 4097 posts Report Reply

  • Peter Ashby,

    Yup, we have a mountain gum in Eastern Dundee, on the hill above the beach. It's as tall as the lamposts now. I can't claim credit for putting it in, but I did stake it hard to stop it pushing over the front wall and I prune it too.

    Doesn't look too out of place with the 3 Phormium tenax next to it.

    One of the big paper gums or bluegums wouldn't grow here, but there are gums high up in the Blue Mountains where it snows. This is one of those.

    Also the climate is not that dissimilar to Dunedin. More cold Easterlies perhaps, but as much snow and frost.

    Dundee, Scotland • Since May 2007 • 425 posts Report Reply

  • Kyle Matthews,

    Rich, the Government wouldn't pay all that much for the copper though. It's demonstrably run-down, hasn't been cared for, and was flogged off at a seriously discounted rate. Why reward a company that hasn't maintained the asset?

    if you took it to a scrap metal place you could get a pretty bundle for it.

    Since Nov 2006 • 6243 posts Report Reply

  • Matthew Poole,

    Assuming that it gets enhanced with FTTC or whatever else works commercially, and that the government doesn't subsidise a competitor, then low-medium risk.

    So why do you say that creating an open-access fibre network that Telecom can access but not control is high risk? I don't understand that logic, I really don't.

    Auckland • Since Mar 2007 • 4097 posts Report Reply

  • Matthew Poole,

    Oh, and PS:

    and that the government doesn't subsidise a competitor

    I specifically posited it being spun off and run as an SOE. Why would the Government subsidise a competitor to itself?

    Auckland • Since Mar 2007 • 4097 posts Report Reply

  • Neil Smart,

    I went last night to listen to Mark Ratcliffe the CEO for Chorus. He was quite interesting and discussed the cabinetisation and the speeds possible with copper. He was asked lots of questions from the floor about the risk of preferred treatment for Telecom subsidiaries which he answered quite well.

    It would seem that given the degree of separation that has taken place that a purchase of Chorus would be a perfectly straightforward exercise.
    For anyone interested he is doing he same talk at a TUANZ after five in

    Hamilton - Skycity 22 May 08 5:00 p.m.
    Auckland - Crowne Plaza 26 May 08 5:00 p.m

    He has already done Christchurch and Wellington

    Since Nov 2006 • 71 posts Report Reply

  • Russell Brown,

    It would seem that given the degree of separation that has taken place that a purchase of Chorus would be a perfectly straightforward exercise.

    I'm similarly impressed with the thoroughness of operational separation, the whistleblower provisions, etc. But Chorus does share various systems with the rest of the business -- I gather that it cost BT quite a lot to duplicate those systems when it was structurally separated.

    Auckland • Since Nov 2006 • 22850 posts Report Reply

  • Gareth Ward,

    I'm similarly impressed with the thoroughness of operational separation, the whistleblower provisions, etc. But Chorus does share various systems with the rest of the business -- I gather that it cost BT quite a lot to duplicate those systems when it was structurally separated.

    The precise example being Yellow Pages efforts to separate systems when they were split off last year.
    Do-able but a huge amount of work/cost...

    Auckland, NZ • Since Mar 2007 • 1727 posts Report Reply

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