Well reader, 'Indecision 2010' is finally over.
Or is it? Anyway, all we do know is that there's $43 billion of fibre optic cable heading your way. And you're getting it whether you want it or not. And whether you need it or not.
It all rather takes our mind back to the dot-com boom.
Back then optic fibre cable - or is it fibre optic, we'll use both just to confuse you - was all the rage. It was the thing that would be the making of technology companies.
It was the thing that would bring fortunes to the telco firms. And even boring old electricity companies were destined to get in on the act.
What? You may ask, electricity companies? Don't you remember?
Anyway, I'll get on to that in a moment. First, as you may remember, the telcos thought the internet was a licence for them to print money.
All they had to do was get all this optic fibre cable stuff out there and they'd be rolling in cash.
And to make them believe they were on the right track, customers were demanding it too. Not just big companies, but small ones as well. For instance, internet service providers were popping up all over the place.
There were the big players of course, Telstra had its Bigpond service and Optus had Optusnet. But there were others too.
In the midrange market we recall an upstart ISP called Eisa bursting on to the scene and attempting to buy what was then the second largest ISP, rival Ozemail.
It wasn't a happy ending. We can vaguely recall that Eisa made the bid near the top of the dot-com boom and then either went bust or was bought up in a fire sale not long after. What became of Ozemail we don't recall, and frankly we don't care.
Then there were all the small bit-part players. The ISPs set up by local computer stores as they recognised an opportunity to make some easy passive cash. Aside from selling and fixing computers they could get an extra income stream from selling internet access.
And there were also the tech boffins who realised they could run the whole show from home.
All they had to do was get a bunch of optic fibre cable connected to their house in Rowville, Sunshine or Moorabbin and they could run their very own ISP from the spare bedroom - lookout Bigpond!
That's how things were between 1998 and 2001.
The internet was paved with gold. Or they thought it was… but as with any bubble, it's always bound to burst. And as you know, that's exactly what happened.
But not before Australia was swamped with a massive oversupply of fibre optic cable. You see, the funny thing was, that anyone could put in an order with Telstra to get a fibre optic cable connection.
You could have got it connected to your home if you'd wanted to.
And even funnier, you didn't even have to pay for it!
That's right. Back then Telstra offered a fibre service that would provide the equivalent of 30 digital phone lines into a premises - more if you asked for it.
For those thirty lines you'd get the equivalent of thirty times 64k, or a speed of around 2Mb. Back then that was more than enough for a budding ISP to provide internet access to customers that were using dial-up modems.
But here's the thing. Under its universal service obligations, Telstra was compelled to provide fibre just on the basis of a customer phoning up and asking for it. And if you wanted the 2Mb service, then fibre is what you'd need.
Yet, if there wasn't fibre in the street then Telstra would still provide it. They'd let the customer know it would take a few weeks, but they'd get the fibre there eventually.
What would the customer have to provide in return? A deposit? Sign a contract committing to using the service perhaps? Er, actually nothing. In fact, the customer had no obligation at all. Telstra could roll out the fibre and then the customer could just change their mind and not install it after all.
Telstra would be left with a big bunch of fibre between the exchange and your home.
And not surprisingly this is exactly what happened when the whole dot-com farce collapsed. Even now we dare say there's plenty of unused fibre laying idly underground connecting exchanges with ex-ISPs.
But it wasn't just homes in the suburbs that were getting an oversupply of fibre optics. That's where the electricity companies - especially in the CBD areas - developed their grand plan.
It was fool proof. It couldn't possibly fail… or could it? Of course it could. Businesses make rubbish decisions all the time, and this was one of them.
What the power companies figured was that they were in a perfect position to directly challenge Telstra. They had something which no other technology company - except Telstra - had… building access.
The power companies had the same access to every building in Australia's CBDs that Telstra had. All they had to do was use the same conduits that they use for the electrical wiring and hey presto, they could directly challenge the big Telstra behemoth for some of its most profitable business.
Unfortunately the fibre optic dream didn't turn out as well as everyone had hoped.
The dot-com bubble burst, and the internet - while useful - wasn't then the massive moneyspinner that 99% of businesses thought it would be.
Even today we question how many businesses really get the internet working for them.
But ultimately, it was the development of Asymmetric Digital Subscriber Line (ADSL) services put the handbrake on fibre. Why? Because ADSL services could be delivered to the home using… the good old fashioned 'copper pair' wires.
Yep, the copper wires that probably 99% of households had going into their homes from the exchange, and which have been used since day one of telephony, are now being used to give you access to one of the best technological innovations of the last 100 years - the internet.
ADSL could be provided via all the ducts and pits and conduits that already lead into the home. And it was good enough to give internet users speeds of up to 12mb.
Why on earth would you bother with fibre when you're getting ten, twenty or fifty times the dial-up speed just from having a different bit of hardware on the end of your phone line?
And why would the telcos bother with expensive fibre roll-outs when they can just sell their customers a box that can be plugged into the existing RJ45 socket on your wall?
But now, times have changed of course, and the race is on for Australians to have the best of the best. And that means fibre optic cable connected into every single home in Australia.
Whether or not you want it or need it.
You'd be tempted to think that as a business which relies on the internet to deliver our daily, weekly and monthly newsletters that we'd be supportive of anything that could potentially help our business.
But you'd be wrong. For a start, $43 billion is a lot of money. As we noted a few weeks ago, that works out as around $4,300 per household to get a fibre connection to the home.
Not that you'll pay that directly, you'll be paying it through your taxes.
But not only that, what are the odds of the project coming in on budget or even under budget? The odds are pretty long we'd say. But we've covered that before. More importantly...
During the dot-com boom, some of the brightest and savviest IT folks bet their businesses and their reputations on rolling out fibre to businesses and homes.
Yet even they failed to anticipate the impact that ADSL technology would have on the provision of internet services.
Surely if they can't figure it out, what chance does the combined "brain" power of the Canberra bureaucracy have of anticipating the next technological development for the internet?
We'd say the chances are slim and the odds are long.
Let me be clear, in our opinion, the internet is the most liberating invention for humans since Johannes Gutenberg invented the printing press. In fact, possibly more so. The ability for anyone with just a few dollars to create a website and make their view known is wonderful.
So wonderful that the violent and oppressive regime in China is determined to stop it. Not forgetting our own Stephen Conroy who appears to be equally scared of freedom of speech.
But it's not just about freedom of speech, it's also about the ability for small companies to compete almost on a level playing field with much bigger companies in providing goods and services to individuals or other businesses.
The problem we have with the government controlled fibre roll-out is that it will ultimately burden the taxpayer with a much higher cost than otherwise would have been incurred if it was left to market forces.
And right now, market forces are saying that individuals don't value a fibre connection enough to pay $4,300 for it. If they did then they would, it's that simple. Instead, individuals would rather pay about $200 for an ADSL connection.
In fact many households don't even want to pay that, so they go without internet access. Not everyone wants access to the internet so why force them to have it. Just in the same way that not everyone wants to read a newspaper (we can understand that) yet so far no-one would suggest that buying The Age or Herald Sun should be made compulsory.
However, as usual, government thinks it knows best and so rather than allowing you to make up your own mind on how your money is best spent or saved, the government will make it up for you...
And then send you the bill later.
Or is it? Anyway, all we do know is that there's $43 billion of fibre optic cable heading your way. And you're getting it whether you want it or not. And whether you need it or not.
It all rather takes our mind back to the dot-com boom.
Back then optic fibre cable - or is it fibre optic, we'll use both just to confuse you - was all the rage. It was the thing that would be the making of technology companies.
It was the thing that would bring fortunes to the telco firms. And even boring old electricity companies were destined to get in on the act.
What? You may ask, electricity companies? Don't you remember?
Anyway, I'll get on to that in a moment. First, as you may remember, the telcos thought the internet was a licence for them to print money.
All they had to do was get all this optic fibre cable stuff out there and they'd be rolling in cash.
And to make them believe they were on the right track, customers were demanding it too. Not just big companies, but small ones as well. For instance, internet service providers were popping up all over the place.
There were the big players of course, Telstra had its Bigpond service and Optus had Optusnet. But there were others too.
In the midrange market we recall an upstart ISP called Eisa bursting on to the scene and attempting to buy what was then the second largest ISP, rival Ozemail.
It wasn't a happy ending. We can vaguely recall that Eisa made the bid near the top of the dot-com boom and then either went bust or was bought up in a fire sale not long after. What became of Ozemail we don't recall, and frankly we don't care.
Then there were all the small bit-part players. The ISPs set up by local computer stores as they recognised an opportunity to make some easy passive cash. Aside from selling and fixing computers they could get an extra income stream from selling internet access.
And there were also the tech boffins who realised they could run the whole show from home.
All they had to do was get a bunch of optic fibre cable connected to their house in Rowville, Sunshine or Moorabbin and they could run their very own ISP from the spare bedroom - lookout Bigpond!
That's how things were between 1998 and 2001.
The internet was paved with gold. Or they thought it was… but as with any bubble, it's always bound to burst. And as you know, that's exactly what happened.
But not before Australia was swamped with a massive oversupply of fibre optic cable. You see, the funny thing was, that anyone could put in an order with Telstra to get a fibre optic cable connection.
You could have got it connected to your home if you'd wanted to.
And even funnier, you didn't even have to pay for it!
That's right. Back then Telstra offered a fibre service that would provide the equivalent of 30 digital phone lines into a premises - more if you asked for it.
For those thirty lines you'd get the equivalent of thirty times 64k, or a speed of around 2Mb. Back then that was more than enough for a budding ISP to provide internet access to customers that were using dial-up modems.
But here's the thing. Under its universal service obligations, Telstra was compelled to provide fibre just on the basis of a customer phoning up and asking for it. And if you wanted the 2Mb service, then fibre is what you'd need.
Yet, if there wasn't fibre in the street then Telstra would still provide it. They'd let the customer know it would take a few weeks, but they'd get the fibre there eventually.
What would the customer have to provide in return? A deposit? Sign a contract committing to using the service perhaps? Er, actually nothing. In fact, the customer had no obligation at all. Telstra could roll out the fibre and then the customer could just change their mind and not install it after all.
Telstra would be left with a big bunch of fibre between the exchange and your home.
And not surprisingly this is exactly what happened when the whole dot-com farce collapsed. Even now we dare say there's plenty of unused fibre laying idly underground connecting exchanges with ex-ISPs.
But it wasn't just homes in the suburbs that were getting an oversupply of fibre optics. That's where the electricity companies - especially in the CBD areas - developed their grand plan.
It was fool proof. It couldn't possibly fail… or could it? Of course it could. Businesses make rubbish decisions all the time, and this was one of them.
What the power companies figured was that they were in a perfect position to directly challenge Telstra. They had something which no other technology company - except Telstra - had… building access.
The power companies had the same access to every building in Australia's CBDs that Telstra had. All they had to do was use the same conduits that they use for the electrical wiring and hey presto, they could directly challenge the big Telstra behemoth for some of its most profitable business.
Unfortunately the fibre optic dream didn't turn out as well as everyone had hoped.
The dot-com bubble burst, and the internet - while useful - wasn't then the massive moneyspinner that 99% of businesses thought it would be.
Even today we question how many businesses really get the internet working for them.
But ultimately, it was the development of Asymmetric Digital Subscriber Line (ADSL) services put the handbrake on fibre. Why? Because ADSL services could be delivered to the home using… the good old fashioned 'copper pair' wires.
Yep, the copper wires that probably 99% of households had going into their homes from the exchange, and which have been used since day one of telephony, are now being used to give you access to one of the best technological innovations of the last 100 years - the internet.
ADSL could be provided via all the ducts and pits and conduits that already lead into the home. And it was good enough to give internet users speeds of up to 12mb.
Why on earth would you bother with fibre when you're getting ten, twenty or fifty times the dial-up speed just from having a different bit of hardware on the end of your phone line?
And why would the telcos bother with expensive fibre roll-outs when they can just sell their customers a box that can be plugged into the existing RJ45 socket on your wall?
But now, times have changed of course, and the race is on for Australians to have the best of the best. And that means fibre optic cable connected into every single home in Australia.
Whether or not you want it or need it.
You'd be tempted to think that as a business which relies on the internet to deliver our daily, weekly and monthly newsletters that we'd be supportive of anything that could potentially help our business.
But you'd be wrong. For a start, $43 billion is a lot of money. As we noted a few weeks ago, that works out as around $4,300 per household to get a fibre connection to the home.
Not that you'll pay that directly, you'll be paying it through your taxes.
But not only that, what are the odds of the project coming in on budget or even under budget? The odds are pretty long we'd say. But we've covered that before. More importantly...
During the dot-com boom, some of the brightest and savviest IT folks bet their businesses and their reputations on rolling out fibre to businesses and homes.
Yet even they failed to anticipate the impact that ADSL technology would have on the provision of internet services.
Surely if they can't figure it out, what chance does the combined "brain" power of the Canberra bureaucracy have of anticipating the next technological development for the internet?
We'd say the chances are slim and the odds are long.
Let me be clear, in our opinion, the internet is the most liberating invention for humans since Johannes Gutenberg invented the printing press. In fact, possibly more so. The ability for anyone with just a few dollars to create a website and make their view known is wonderful.
So wonderful that the violent and oppressive regime in China is determined to stop it. Not forgetting our own Stephen Conroy who appears to be equally scared of freedom of speech.
But it's not just about freedom of speech, it's also about the ability for small companies to compete almost on a level playing field with much bigger companies in providing goods and services to individuals or other businesses.
The problem we have with the government controlled fibre roll-out is that it will ultimately burden the taxpayer with a much higher cost than otherwise would have been incurred if it was left to market forces.
And right now, market forces are saying that individuals don't value a fibre connection enough to pay $4,300 for it. If they did then they would, it's that simple. Instead, individuals would rather pay about $200 for an ADSL connection.
In fact many households don't even want to pay that, so they go without internet access. Not everyone wants access to the internet so why force them to have it. Just in the same way that not everyone wants to read a newspaper (we can understand that) yet so far no-one would suggest that buying The Age or Herald Sun should be made compulsory.
However, as usual, government thinks it knows best and so rather than allowing you to make up your own mind on how your money is best spent or saved, the government will make it up for you...
And then send you the bill later.
Post a Comment