.melbourne, .sydney and .victoria are go, .nsw a maybe

The NSW and Victorian governments have selected ARI Registry Services to prepare their application for new top-level domains (TLDs): .melbourne, .sydney and .victoria.

The two state governments released a joint tender in October, seeking a registry operator to manage the application to the Internet Corporation for Assigned Names and Numbers (ICANN), which governs the granting of new TLDs.

The NSW government is still determining whether it will apply for a .nsw domain, which has raised as a possibility in the original tender. ARI Registry Services CEO, Adrian Kinderis, said that ICANN's rules governing the new generic TLDs (gTLDs) mean that the state government may not be guaranteed to be granted .nsw.

"We're working through some of those issues so it's certainly not ruled out," Kinderis said. "We'd love to have it in the mix obviously from a registry perspective, but that is yet to be ratified. So we're working through that issue at the moment to make sure the money is spent wisely if indeed they do go for the application and that they're giving themselves a good chance of securing it."

Kinderis said he was disappointed that other Australian cities and governments had not taken advantage of ICANN's opening up of new gTLDs. "I don't believe anyone else is coming forward. it's really disappointing because this is an amazing opportunity and for places the Gold Coast and Brisbane which really work hard on promoting themselves internationally as destinations, we would have thought this would have been a no-brainer."

Kinderis said that it's not too late for other governments to apply for gTLDs despite the 12 April deadline for filing applications with ICANN. "I don't think it's too late [but] the message needs to be 'mobilise now'."

ICANN is committed to opening up a second round of gTLD registrations, but Kinderis said he didn't anticipate this would be for another three years at least.

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NBN Broadband Satellites Please Farmers

The federal government's plan to buy two satellites to provide high-speed broadband services to the nation's most remote areas has pleased farmers, but the opposition says it's too costly.

Labor on Wednesday announced a $620 million deal between NBN Co, the government-owned enterprise rolling out the national broadband network (NBN), and US firm Loral Space and Communications to make the Ka-band satellites.

When they are launched in 2015, around 200,000 homes and businesses in the remotest regions will have access to internet download speeds similar to those currently available in urban centres.

"We won't be leaving those Australians who live in the remotest parts of the nation behind," Prime Minister Julia Gillard told reporters in Canberra.

Under the $35.9 billion NBN project, fibre-optic cable delivering high-speed broadband services will be rolled out to 93 per cent of Australia's 13 million homes, schools and businesses by 2021.

Fixed wireless technology will provide high-speed internet to four per cent of premises, and the remaining three per cent will be supplied by the two satellites to remote areas.

Communications Minister Stephen Conroy said the satellites would give users affordable world-class broadband connections to be paid for by cross-subsidies built into the NBN plan.

"It ensures remote families and business pay the same entry-level wholesale price for services in the city," the senator said.

"Using these satellites, rural businesses can make it easier to expand in national and international markets."

The new satellites would be launched separately, the first one by March 2015 and the second one six months later.

The National Farmers' Federation said the plan was a "very positive" development for rural communications.

"We're looking forward to the day when all Australians have equal access to telecommunications - and we will work with government to ensure that the commitment made today is upheld and delivered," NFF president Jock Laurie said in a statement.

But opposition communications spokesman Malcolm Turnbull described the plan as expensive, comparing it to buying a top-of-the-line luxury car when it wasn't needed.

"Don't buy yourself a Camry, a Falcon - buy yourself a Rolls-Royce, a Bentley," he told reporters.

"Nothing but the best will do, nothing but the most expensive will do."

Mr Turnbull said the telecommunications industry had told him there was enough capacity on existing and scheduled-to-be-launched satellites to provide broadband services to rural and remote Australia.

He also queried why the existing interim satellite service could not be upgraded to a permanent one.

Senator Conroy dismissed reports an Australian company had missed out on the contract, saying no local company had the capacity to build the satellites, which will be made in the US.

The hardware will deliver initial peak speeds of 12 megabytes per second downloading and one megabyte a second uploading.

"It will be possible for retail service providers to offer services to homes and businesses in the satellite footprint that are as good or better than the services many city people currently experience," NBN Co chief Mike Quigley said.

The satellite contract is part of a total investment of about $2 billion over 15 years required to deliver the NBN long-term satellite service.

The opposition is opposed to the existing NBN plan and prefers a mix of technologies to achieve its own version.

But Mr Turnbull acknowledged contracts such as the satellite deal could be hard to cancel if the coalition wins the next election in 2013.

"They are putting contracts in place and we may have to live with it," Mr Turnbull said.

The NBN is due to be completed by 2021.

Peak provider aspiring to grow iiNet's reach

CLIMBING a wall of ice is one way of getting a break from the stress of running Australia's fastest-growing internet service provider, iiNet chief executive Michael Malone says.

"When you are halfway up an ice wall, suspended by crampons and axes, you are not thinking too much about work," he says.

Correction: NBN prices will not be higher - National Broadband Network

Analysis In several radio interviews this week, Shadow Communications Minister Malcolm Turnbull stated that the National Broadband Network project would cause consumer broadband prices to rise higher than those currently on the market. However, unfortunately this statement was factually incorrect.
To illustrate why, firstly, let’s go through what Turnbull said. According to transcripts available on Turnbull’s website, Turnbull said the following on 2GB in an interview with Ben Fordham on Wednesday:

” … Australians are waking up to how much this is going to cost them – not just as taxpayers but also it’s going to be more expensive as a consumer. You see this is the penny that hasn’t quite dropped. I think most people recognise that this is a very, very expensive project. But what they haven’t quite – the penny hasn’t quite fully dropped that this is going to be expensive in terms of the usage charges.”

“Now what’s going to happen here is because there is no competition, because this is a government monopoly and because they are spending so much money so they’re overcapitalising it, inevitably prices are going to be high.”

In a separate interview on the same day with 2UE’s Paul Murray, Turnbull said the following: “What we do know is that it’s going to cost a bomb, and it’s not going to make broadband access any cheaper. It’s going to make it more expensive.”

The Coalition has publicly stated its opinion that broadband prices will be higher under the NBN than the current ADSL-dominated broadband market repeatedly over the past six months. In September, Liberal MP Paul Fletcher stated that new NBN pricing released by iiNet at the time was higher than existing ADSL prices. And several months earlier, Turnbull stated that early pricing released by Internode for services on the NBN demonstrated the project would drive consumer broadband prices higher.

However, unfortunately the Coalition’s statements on this matter have been factually incorrect.

Almost all of Australia’s major ISPs released their first tranche of NBN pricing over the closing months of 2011, and in almost all cases, the prices are directly comparable to current pricing available over Telstra’s copper network (ADSL) or the HFC cable networks operated by Telstra and Optus.

To illustrate this fact, let’s examine the NBN prices of Optus, and compare them with the telco’s existing ADSL broadband prices. In naked DSL, Optus currently offers three plans, at $59.99, $69.99 and $79.99 monthly price points, and with 120GB, 150GB and 500GB of data quota included. And in naked NBN, Optus offers exactly the same price points and download quotas.

In bundled DSL, Optus currently offers five plans, at $79, $99, $109, $129 and $149 price points, and with 120GB, 500GB and terabyte download quotas, with varying amounts of call charges included — usually unlimited ‘standard’ local and national telephone calls within Australia, to both landlines and mobile phones.

And in bundled NBN, Optus offers many of the same price points and quotas — except sometimes they’re cheaper. The company’s $79 plan with 120 GB of data has morphed into a $64.94 plan (with, admittedly slightly lesser calling value). The $109 bundled plan with 500GB of data and unlimited calls has been copied straight across, and so has the $129 plan with a terabyte of data and unlimited calls.

It should be clear that virtually every single aspect of Optus’ NBN pricing plans represents better value than the telco’s current ADSL plans — and for exactly the same price. Optus doesn’t currently actively promote its HFC cable offering, so it’s tough to get an idea of what its prices are there. But if you compare its ADSL broadband plans to its NBN broadband plans, it seems clear that the plans are virtually identical.
It’s a similar case with Australia’s second-largest provider of ADSL broadband services, iiNet.

If you sign up for a naked DSL broadband plan through iiNet on its own network, (which comes with a bundled Internet telephony phone line), you’ll get a total of 100GB of quota (50GB on- and 50GB off-peak) for $69.95 per month. A similar plan with a bundled traditional telephone line and 100GB of on- and off-peak quota will cost you a total of $79.90 per month. If you’re not using iiNet’s DSLAM infrastructure in exchanges, you’ll pay a bit more — or the same, but with less download quota.

iiNet has two NBN plans which are comparable to this. The first comes with speeds of 12Mbps and 100GB of on- and off-peak quota, for $69.90 a month with an included Internet telephony line. Then iiNet has a 25Mbps plan with the same quota and telephone line for $74.90 a month. In short, like Optus, iiNet’s NBN plans are almost exactly the same as its ADSL plans. However, the NBN fibre technology is more reliable, has better guaranteed speeds and lower latency (responsiveness) than the current copper network.

Still not convinced? Let’s look at a another major provider, Internode, which was recently bought by iiNet, but whose prices so far remain independent. Internode currently offers a 300GB ADSL plan with a bundled telephone line for $99.90 a month. The top speeds possible on this plan are limited to 24Mbps, due to the limitations of the copper network, and most people will be getting less than 16Mbps. But for $94.95 a month, on Internode’s NBN plans, you can get a 100Mbps connection with the same 300GB monthly download quota, plus a bundled internet telephony line. Yup. A broadband plan four times faster, using more reliable technology, for $5 a month cheaper. That’s the NBN.

Now there are some anomalies in NBN pricing so far which may give the Coalition some basis for its pricing claims. For example, cut-rate ISP Exetel has priced its NBN plans significantly higher than its ADSL plans. In another example, when you get to really high-end plans — 100Mbps plans with a terabyte of download quota — pricing can shoot up in some cases.

However, these cases are not the rule.

Further analysis reveals that Exetel is still offering low-end NBN plans starting at $34.50, and its prices don’t start to get expensive compared with its ADSL pricing until you start to get to the point where you’re downloading more than 100GB of data per month. Exetel has acknowledged it’s not targeting big-downloading customers, so we’re not really surprised by its lack of competitiveness at the top end.

There is also the fact that Exetel has a miniscule share of Australia’s broadband market compared with Optus and iiNet, which are the second and third-largest providers of broadband in Australia. The prices offered by Optus, iiNet (and its subsidiary Internode) are, by definition, mainstream price points which the majority of Australians will be buying services at. And those prices are even more mundane and normal when you look at the mid-range plans (between $50 and $70 a month) bought by most Australians.

Two other major Australian broadband providers, Telstra and TPG, are yet to release NBN pricing. If both exhibit radically different pricing structures from Optus and iiNet, I will be more than happy to revisit this topic at that future date. However, I would not expect Telstra’s NBN pricing to be radically different from its current broadband pricing, which is already at the pricey end of the market. TPG’s pricing has historically been at the discount end of the market, and I would expect this trend to continue.

Lastly there is one other important fact which needs to be taken into account.

NBN Co has lodged a document with the Australian Competition and Consumer Commission called a ‘Special Access Undertaking’. This document, among many other commitments, states that NBN Co will maintain prices for its key wholesale prices at the current levels for five years. In addition, the company will limit future increases to be less than the rate of inflation for 30 years. In short, in real terms, NBN Co’s wholesale prices will remain fairly stable for the next 30 years.

Taking this binding commitment into account alongside the fact that current mainstream NBN prices are directly comparable, often for a better service or even slightly cheaper, than current ADSL pricing, it is factually incorrect for the Coalition to state that consumer NBN prices will be higher than current broadband prices. And if prices were to increase, given the fact that NBN Co’s prices will remain the same, that price increase is not the NBN’s fault. That blame could be laid at the door of the retail ISPs.

With all this in mind, I would hope that the Coalition would refrain from making this claim in public in future. Or, if it does make this claim, I would hope that it would provide some evidence to make its case. This debate is not a matter of opinion. This debate is about objective fact.

Telstra Warns Price for Using NBN May Blow Out

TELSTRA has undermined central pillars of Labor's promises on the benefits of the National Broadband Network by warning that prices for superfast internet could be unnecessarily high under the NBN Co pricing strategy. 
 
The nation's biggest telecommunications provider is urging the competition watchdog to consider whether NBN Co should adopt an alternative pricing model to its controversial two-tariff pricing plan, under which internet service providers are charged a baseline connection fee and usage-based fees for the amount of data carried through the network. Telstra says a different model could be better for consumers.

Under the two-tariff pricing model, Telstra says, the usage charge that an internet service provider pays to NBN Co for each of its customers on the basic 12-megabit a second service could rise from $1 a month to $50 by 2025. It is expected usage charges, which form a part of a wholesale customer's monthly bill, will be passed on to retail customers.
Taking a hard line against several aspects of NBN Co's pricing strategy in a submission to the Australian Competition and Consumer Commission, Telstra also declares that, over the long term, the government's return would likely exceed the cost of its investment, that NBN Co would more than recover its costs and that wholesale prices would be "unnecessarily high".

Higher wholesale costs could result in fewer incentives for internet service providers to compete through investment, innovation and service development, Telstra says.

The warnings undermine some of Labor's main arguments for the $36 billion project. Communications Minister Stephen Conroy has insisted that the creation of the NBN as a wholesale broadband backbone would unleash new competition between retail service providers and bring on pricing pressures that would benefit consumers.
NBN Co insisted it was "confident that as a wholesale-only open access network, we're opening up competition in retail telecommunications in Australia".

Telstra's critique of NBN Co's "special-access undertaking" that outlines its price and non-price terms is all the more surprising because Telstra is set to reap $11bn under a deal with NBN Co and the government that will mean it becomes NBN Co's biggest customer, not its rival.

NBN Co has promised to freeze wholesale prices for the next five years, then increase them at only half the rate of inflation - making internet access cheaper in real terms.

Under NBN Co's plans, the maximum monthly usage charge would remain at $20 per megabit per second until mid-2017, rising to $24/Mbps by 2033.

Telstra argues that while these price increases may appear small, they will be much more acutely felt on a per-customer basis.

This is because NBN Co's business plan assumes that usage per customer will grow massively as consumers purchase higher-quality services such as internet-based television.

On that basis, the monthly usage cost a wholesale customer would pay for each "service in operation" could increase from $1 to $50 monthly by 2025. The government's corporate adviser, Greenhill Caliburn, has already warned that a consumer backlash against the usage-based pricing model is one of the key risks to NBN Co's revenue assumptions.

Internode founder Simon Hackett last night blasted Telstra as "the pot calling the kettle black", saying that it was imposing "massively more expensive" usage charges for rivals providing internet access over its copper telephone lines.

"It would seem disingenuous at best for Telstra to be arguing for NBN Co to modify their charging regime when Telstra itself are so flagrantly overcharging the industry today using the very same pricing mechanism," Mr Hackett said.

In the submission to the ACCC, Telstra bases its warning that prices could be unnecessarily high on NBN Co's claim that its weighted average costs of capital - a key influence on NBN Co's profitability and prices - should be about 8.6 per cent over the long term. This level is akin to what a private sector company would seek.

"Government has changed legislation and policy to reduce the risk faced by NBN Co, presumably including systematic or non-diversifiable risks - the same risks that continue to be faced by private firms such as Telstra," Telstra states.

It concludes that a private sector-style rate of return would be more appropriate when NBN Co is privatised.
NBN Co spokesman Andrew Sholl said last night its special-access undertaking "strikes the appropriate balance between the interests of NBN Co and its customers".

He said an independent consultant's report had backed NBN Co's approach and found that it was reasonable to set a figure that included a margin over the the long-term government bond rate.
Late yesterday, opposition communications spokesman Malcolm Turnbull said that NBN Co's undertaking "lacks the necessary concrete commitments on price or standards of service".

He called on Senator Conroy "to immediately ensure that NBN Co does not . . . avoid the scrutiny of the ACCC".

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Australia's Internet Filter Switches On In July

Four Australian internet providers, including the country's two largest, will begin voluntarily censoring the internet next month by blocking access to more than 500 websites.

Australia's plan to filter the naughtiness out of the internet has been kicking around for years but it never seemed to go anywhere because when you get right down to it, effectively censoring the whole internet is a pretty daunting technical challenge. That doesn't even take into account the fact that a significant number of people who actually use the internet are pretty vehemently opposed to the idea. But beginning in July, internet access for many Aussies will in fact be censored, not by the government but by the voluntary actions of four of the country's ISPs.

Telstra and Optus, the two largest internet providers in Australia, along with two other small outfits, confirmed that they will begin to block access to "child abuse websites" provided by the Australian Communications and Media Authority and other unnamed "international organizations" beginning next month. The filter is being put into place despite the fact that the government dropped funding for the plan in May because of "limited interest" from the industry.

"The ACMA will compile and manage a list of URLs of child abuse content that will include the appropriate subsection of the ACMA blacklist as well as child abuse URLs that are provided by reputable international organizations [to be blocked]," an ACMA rep said.

But while Donna Ashelford of the System Administrators Guild of Australia said that concerns about reduced access speeds caused by the filter are probably unwarranted, she also pointed out that the scheme won't have any meaningful impact on the distribution of child porn either.

"The effectiveness will be trivial because you're just blocking a single website address [and] a person can get around it by changing that address with one character," she said. "Child abuse material is more likely to be exchanged on peer-to-peer networks and private networks anyway and is a matter for law enforcement."

Another worry, according to the Electronic Frontier Foundation, is that there is no transparency or accountability in the creation and maintenance of the blacklist, which greatly increases the chance of legal websites being inappropriately blocked. It's not known which organizations are contributing to the list of forbidden beyond the ACMA , but the ACMA's own blacklist from 2009, revealed by Wikileaks, included the website of a Queensland-based dentist and other sites unrelated to illegal pornography. There also appears to be no appeals process for any sites mistakenly caught up in the filter.

But possibly the greatest concern is simply that it sets a precedent. Once the filters are in place and Australians have adjusted to the idea, is it much of a stretch to see them put to use blocking content the ACMA decides is "indecent" or controversial? "We've been waiting to hear details on this from the Government," said EFF board member Colin Jacobs. "It they turn out to be zealous with the type of material that is on the list then we'd want to have a discussion about ways to introduce more transparency."

.Australia Signs Deals to Expand Internet Service

Australia’s $38 billion plan to deliver high-speed Internet to more than 90 percent of its households cleared one of its last major hurdles Thursday when the government signed $12.5 billion worth of network deals with Telstra and SingTel.

The National Broadband Network, the biggest Australian infrastructure project in decades, will use Telstra’s network in a bid to knit together a country the size of Western Europe with high-speed broadband, with wireless or satellite services covering any gaps.

The National Broadband Network, also known as NBN, which is owned by the state, will pay Telstra 11 billion Australian dollars, or $11.6 billion, to hand over much of its network.

Optus, which is owned by SingTel, will receive 800 million dollars to move customers from its fiber-optic network onto the national broadband network.

The deals are a victory for a deeply unpopular Labor government, which has made the network a major plank in its program, as the vast distances and rugged terrain in Australia keep Internet speeds slow and costs high.

Some approvals still remain before the two deals can be settled, including a vote by Telstra shareholders Oct. 18 and clearance from the competition regulator for the company’s plan to split.

The deals also face a challenge from the conservative opposition, which has argued against the National Broadband Network and promised to review the project if it comes to power.

“What we want to do is get the broadband delivered, but at a lower cost, and that would involve at least in part redesigning the network,” Malcolm Turnbull, a telecommunications spokesman for the opposition, told Australian radio.

“These contracts will make that more difficult, but I don’t believe they’ll make it impossible. But there’s no question of anything being destroyed, ripped up or terminated, or anything like that,” Mr. Turnbull said.

The network will require total capital expenditure of 35.9 billion dollars and will need 40.9 billion dollars in debt and equity. The government plans to put up 27.5 billion dollars in financing, while the project will have to borrow 13.4 billion dollars from the debt markets.

The Optus chief executive, Paul O’Sullivan, said that the company looked forward to using the National Broadband Network to turbo-charge competition.

“This deal supports the NBN to create a level playing field for all telcos. Australian consumers will be the winners,” Mr. O’Sullivan said in a statement.

As for Telstra, the deal removes an uncertainty that has weighed on its shares, but a short-term rally is unlikely because of challenges in executing the deal and then adapting to the new marketplace, said Angus Gluskie of White Funds Management, an Australian wholesale investment manager.

“People will view it as a positive that they’ve got across this final step,” Mr. Gluskie said. “But it’s still an incredibly challenging environment for a telecommunications company to be in.”