the nbn doesnt add up

this guy from AAPT seems to make a lot of sense

PAUL BROAD: Well if you project yourself 10 years ahead, you have a $43 billion investment. On any sort of reasonable return, say of 10 per cent, you've got to generate $4.3 billion just to make a return on the investment. And you add up all the bits to run a wholesale and retail business, you'll see that the average punter will be paying something like $200 a month for this service. And when you think today they get not 100 megabits, but they get probably 50, 45, for about - well, for less than half that. I mean, I just don't think that people'll are going to pay double for something they don't need. And I always get reminded of the Cross City Tunnel. You know, wonderful piece of infrastructure, but no one wants to use it for the price.

ALI MOORE: You say double, but isn't it really too early to work out exactly what the price structures are going to be? Because the range in the market now is anything from 55 up. Can you really say what it's going to take to make the network viable?

PAUL BROAD: Well the simple maths are, you work it out, you say $43 billion, 10 per cent, that's 4.3. Run a wholesale and retail business, you're probably after another $4 billion. So that's $8 billion a year you got to generate from 8 million customers. That's if everybody else turned off Telstra, asked Optus and went to this system. You did that in the most optimistic case - the most optimistic case; it's hard for the maths to come out anything less than $200 a month.

interestingly he is suggesting that the government could make the network profitable if they were to buy the old networks and build off them.

"I think - well, my simple answer would be: buy Telstra, buy us, and incrementally grow off us from what we've got today. Leverage what we've got, don't repeat or replicate what we've got for wasteful expenditure, replicate - grow from what - from a really solid base. And if the ultimate aim is to structurally separate Telstra, then buy Telstra's network from them and then grow from that."

also he is suggesting only having high speed for certain areas

"If you're looking at the best decisions we could make, then it is getting speed into hospitals, schools and other facilities which need speed. Totally agree with that. But do you then go the next step and put fibre-to-the -home to meet a demand which is not there today? And I don't see it being there in 10 years' time."

now tell me if this all doesn't make sense

buy the existing network
only put high speed to hospitals, schools and unis

for the full interview

http://www.abc.net.au/lateline/business/items/200904/s2538992.htm