22 May 2013

NBN to buy TransACT's FttP network off iiNet

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That title makes less sense the more you read it.

Instead of over-building and trying to compete with iiNet, the NBN are opting to buy TransACT’s network from the internet provider.

The TransACT network currently covers 8,500 premises, and a further 4,500 premises are planned or already under construction. iiNet announced that the deal would be settled over the next two months subject to Australian Competition and Consumer Commission approval.

Under the deal, TransACT will also complete the construction of pit and pipe infrastructure in new estates until 2017 and then transfer ownership to NBN Co. NBN Co would also get access to ducts across the ACT as part of the deal.

iiNet had been looking to sell the network to NBN Co since the takeover of TransACT in 2011. In addition to the fibre network in the ACT, TransACT also owns a HFC network in Geelong, Mildura and Ballarat. Under legislative changes made as part of the implementation of the National Broadband Network (NBN) policy, iiNet would not have been able to expand these networks, and the company was concerned that NBN Co would overbuild in those areas.

In late 2012, iiNet CEO Michael Malone warned he would undercut NBN Co on prices in those areas if the company did decide to overbuild rather than buying out iiNet’s networks.

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Grrrr said :

thatsnotme said :

Obviously things will be different in an NBN world, because we won’t have that land line any more,

Yes, we do – it’s just fibre instead of copper but it still offers PSTN voice. Your phone plugs into the Uni-V port on the NBNCo (or TransACT) ONT just like a regular phone line. This difference is you don’t have to have a phone service anymore.

I don’t know why TransACT are refusing to sell a Netphone service to someone on FTTH, because their website says it’s available to anyone using TransACT broadband. As pointed out, you can get a VOIP service from anyone if TransACT are stupid enough to refuse to sell the service to you.

Sorry, you’re right, and I should have been clearer. It will still be an option, but one that I certainly wouldn’t be taking up. As soon as i can ditch the landline and its associated monthly payment the happier I’ll be, and I’ll be more than happy to rely on VoIP completely.

thatsnotme said :

Obviously things will be different in an NBN world, because we won’t have that land line any more,

Yes, we do – it’s just fibre instead of copper but it still offers PSTN voice. Your phone plugs into the Uni-V port on the NBNCo (or TransACT) ONT just like a regular phone line. This difference is you don’t have to have a phone service anymore.

I don’t know why TransACT are refusing to sell a Netphone service to someone on FTTH, because their website says it’s available to anyone using TransACT broadband. As pointed out, you can get a VOIP service from anyone if TransACT are stupid enough to refuse to sell the service to you.

VoIP can be a confusing area, but there are really only a couple of things that you need to be able to sign up and use VoIP – and neither of them are dependent on your ISP, or the type of connection you have.

Firstly, you need a phone / modem combo that is compatible with VoIP. There are phones designed for VoIP, and there are modems designed to accommodate a normal analog handset. Basically, your phone needs to be able to connect to your internet connection, and talk over it.

The second is a VoIP provider, and this does not have to be your ISP. When you sign up, you’ll be allocated a new VoIP phone number, and you tell your modem to dial out using that number. It will route your phone calls via your new VoIP provider, whoever and wherever they are.

For example, on my ADSL connection at home, I have a Fritz!Box modem, and a Fritz!Box phone. All of our outgoing phone calls are sent through our PennyTel VoIP provider – for $5 a month, we effectively get free local and national calls, plus 5 cent/minute international calls to most of the world.

Ingoing phone calls come via our traditional landline. They come to the same phone handset – it just means that we didn’t have to tell anyone about a new phone number, they just use the old one.

Obviously things will be different in an NBN world, because we won’t have that land line any more, but for now, it means that despite us having to pay line rental, our calls are capped at $5 a month. I’d think this should be possible on TransACT fibre as well, with the right hardware – although if you’re on TransACT fibre, it’s probably worth waiting until the sale to the NBN goes through before doing much more.

Thanks! I’ve only ever had VoIP via my ISP. They provided the hardware and instructions so I don’t have any idea how it actually works.

I don’t want to be without internet or phone for too long after we move in, which should be in 3 weeks time. But I am not game to sign up for a 2 year plan with TransACT now either…

Watson said :

Very little to do with the OP but I’m going to continue anyway because it bugs me and it’s to do with TransACT’s stupid business model.

I called Transact back specifically to ask about Netphone and they said it wasn’t compatible with FTTP. I would have been willing to pay the extra $10 a month on top of the line rental charge (what line, I ask?) for VoIP so I could avoid their excessive landline charges. And at least I would be able to call overseas at a cheap rate, which I like to be able to do.

I also checked the iiNet rates, but you cannot get their VoIP without signing up for a data package, and they are considerably more expensive than the TransACT data packages. It would’ve cost me an extra $30 something a month to go that route.

I cancelled my TransACT account for now while I try to figure out what to do.

VoIP can be a confusing area, but there are really only a couple of things that you need to be able to sign up and use VoIP – and neither of them are dependent on your ISP, or the type of connection you have.

Firstly, you need a phone / modem combo that is compatible with VoIP. There are phones designed for VoIP, and there are modems designed to accommodate a normal analog handset. Basically, your phone needs to be able to connect to your internet connection, and talk over it.

The second is a VoIP provider, and this does not have to be your ISP. When you sign up, you’ll be allocated a new VoIP phone number, and you tell your modem to dial out using that number. It will route your phone calls via your new VoIP provider, whoever and wherever they are.

For example, on my ADSL connection at home, I have a Fritz!Box modem, and a Fritz!Box phone. All of our outgoing phone calls are sent through our PennyTel VoIP provider – for $5 a month, we effectively get free local and national calls, plus 5 cent/minute international calls to most of the world.

Ingoing phone calls come via our traditional landline. They come to the same phone handset – it just means that we didn’t have to tell anyone about a new phone number, they just use the old one.

Obviously things will be different in an NBN world, because we won’t have that land line any more, but for now, it means that despite us having to pay line rental, our calls are capped at $5 a month. I’d think this should be possible on TransACT fibre as well, with the right hardware – although if you’re on TransACT fibre, it’s probably worth waiting until the sale to the NBN goes through before doing much more.

Grrrr said :

Watson said :

Funny. I’ve just come off the phone with iiNet. … I asked about TransACT’s “Netphone” and was told that it wasn’t compatible with FTTP.

Did you call iiNet, or TransACT? The sales departments are still different groups.

iiNet Netphone may not be offered on TransACT’s network because it’s an iiNet product, not a TransACT product. The two networks are still separate in almost every way.

If you called TransACT and they didn’t want to tell TransACT Netphone – well, that’s a bit odd. I’d try calling them again.

Note that there is no way to purchase FTTP from TransACT without effectively paying for the regular phone service, though.

You might as well pick any Australian VOIP provider that you like the look of.

Very little to do with the OP but I’m going to continue anyway because it bugs me and it’s to do with TransACT’s stupid business model.

I called Transact back specifically to ask about Netphone and they said it wasn’t compatible with FTTP. I would have been willing to pay the extra $10 a month on top of the line rental charge (what line, I ask?) for VoIP so I could avoid their excessive landline charges. And at least I would be able to call overseas at a cheap rate, which I like to be able to do.

I also checked the iiNet rates, but you cannot get their VoIP without signing up for a data package, and they are considerably more expensive than the TransACT data packages. It would’ve cost me an extra $30 something a month to go that route.

I cancelled my TransACT account for now while I try to figure out what to do.

Re the Actew/Better Place issue

I’m not in the finance industry but I would have thought that not receiving expected earnings of $60m over ten years, completely contingent on another party, would not constitute a $60M loss in any accounting standard.

Could a CPA confirm either way?

JC said :

So what exactly does that have to do with Transact, other than proving that you have an irrational weed on over ACTEW. Did they turn you down for a job or something?

What does Better Place have to do with TransACT you ask?
I thought that would be a no brainer. Better Place is almost a carbon copy of TransACT; surely you can see that.
And they didn’t turn me down for a job because I have never applied for one with them. Mind you, if I did I wouldn’t last long there because they wouldn’t like my management style.

So what exactly does that have to do with Transact, other than proving that you have an irrational weed on over ACTEW. Did they turn you down for a job or something?

JC said :

dungfungus said :

I give up – please continue the difference of opinion with Noel Towell from the Canberra Times.
http://www.canberratimes.com.au/act-news/taxpayers-lost-55m-in-transact-sale-20111222-1uvmu.html
By the way, Actew not only tipped in extra monies to keep TransACT afloat, they also provided standy facilities which as far as I could tell were not shown as contingent liabilities in their balance sheet. Then again, they got someone’s salary wrong as well and that was forgiven.
While you are “hot”, would you care to explain your theory on how much Rhodium Asset Solutions made for the ACT Governmnet as well?

You just don’t get it. Writing down assets is very common in the business world and is considered a paper loss. The article you linked to says as much.

You are also carping on about the ACT taxpayer loosing out, which is not the case either. ACTEW Corp put money obtained through commercial means (ie not from the Government) into Transact who built infrastructure that is still in use today again not using not taxper payer money. Over the course of 5 years or so they wrote the value of that infrastructure down, which as mentioned is very common, especially in the IT area where most equipment is on a 5-7 year depreciation cycle.

They then sold up to iiNet. That is not a $55m loss of real money no matter which way you look at it. Saying that is like buying a car for $50k then 5 years selling it for $20k. The paper loss is of course $30k, but that doesn’t factor in the benifit you got during those 5 years.

The following is an extract from an ABC News report of 30/1/13 at 11.54am regarding the problems with the Better Place project:
“Canberra power retailer ActewAGL has a $60 million 10-year contract with Better Place to supply electricity for the network.

ActewAGL’s Diane O’Hara says the contract has just been delayed and will go ahead.

“At this stage it will delay the Australian operations, which is obviously very disappointing, but there has been a decision to consolidate some of their overseas operations and that may well slowdown some of their planned deployments in Australia,” she said.

Ms O’Hara says ActewAGL remains confident its electric car dreams will be realised.”

Now that Better Place has totally failed (details elesewhere on this blog), please explain to our readers how ActewAGL is going to convert the $60 million dollar loss they are facing into one of those amazing paper products that actually turns a profit without the ACT Ratepayers losing a cent?
Sure, they have created “valuable infrastructure” like a few recharging stations for the half dozen electric vehicles in Canberra.

dungfungus said :

thatsnotme said :

dungfungus said :

steveu said :

Personally I think TransACT was a pretty gutsy and innovative move, 10 years ago it gave residents who had power poles in their backyard to VDSL technology which was a leader at the time (you know, the thing that a political party thinks is hi-tech). Now of course it’s old hat however it did put Canberra on the map for a little bit. Disappointing that their sales force people were telling outright lies to people etc. which didn’t help the reputation of the company. Not delivering through Telstra conduit didn’t help either (though I think they very well knew it was never gong to happen). Dreams of an transact intranet were ambitious as well (though never happened). I’m sorry to see TransACT go this way, as it could have shown up the rest of the country if we had a high speed broadband network before everyone else etc. but glad to see that it got snapped up by iinet and now nbnco.

Makes sense to use their infrastructure with NBN co, last thing we want is a repeat of when installation of cable was privatised and you had Telstra and Optus running their own cabling infrastructure side by side in certain parts of Sydney…

The NBN is a nation-building infrastructure program of work – which never should have been the subject of political debate. Shame on our politicians for not recognising this and just getting on with the job in the best interest of the country.

The “best interest of the country” as far as funding the NBN is concerned is about 3% p.a. at the moment.
If the price blows out to $90 billion and interest rates go up to 5% p.a. then Australia will be forking out $4.5 billion a year for something that will be worth nothing in 10 years time and we will still have a $90 billion debt.
It never was the subject of political debate either as it was thrust on us without even a business plan.
Another TransACT on a grand scale.

Worth nothing in 10 years time? How do you figure that?

The TransACT experience.

That’s like saying that Telstra’s mobile broadband network will be worth nothing in 10 years time, because of the Vodafone experience.

A better comparison is ‘The Telecom / Telstra experience’, where their aging copper network, despite being woefully out of date and crumbling, is still worth something. That’s what the NBN is replacing. The TransACT experience was a small network in a comparatively small city. You’re comparing apples and oranges.

dungfungus said :

The “best interest of the country” as far as funding the NBN is concerned is about 3% p.a. at the moment.
If the price blows out to $90 billion and interest rates go up to 5% p.a. then Australia will be forking out $4.5 billion a year for something that will be worth nothing in 10 years time and we will still have a $90 billion debt.
It never was the subject of political debate either as it was thrust on us without even a business plan.
Another TransACT on a grand scale.

Whilst 4.5B sounds like a lot of money, in the grand scheme of things it is still only 5%, which is a hell of a lot lower than the debit carried by the individual citizens of this country.

dungfungus said :

[The “best interest of the country” as far as funding the NBN is concerned is about 3% p.a. at the moment.
If the price blows out to $90 billion and interest rates go up to 5% p.a. then Australia will be forking out $4.5 billion a year for something that will be worth nothing in 10 years time and we will still have a $90 billion debt.
It never was the subject of political debate either as it was thrust on us without even a business plan.
Another TransACT on a grand scale.

Of course you need to factor in the benefit to the community and the fact that the current Telstra system needs replacing. Or maybe you believe that 4G is the answer and we should have that instead. It is much cheaper afterall.

dungfungus said :

I give up – please continue the difference of opinion with Noel Towell from the Canberra Times.
http://www.canberratimes.com.au/act-news/taxpayers-lost-55m-in-transact-sale-20111222-1uvmu.html
By the way, Actew not only tipped in extra monies to keep TransACT afloat, they also provided standy facilities which as far as I could tell were not shown as contingent liabilities in their balance sheet. Then again, they got someone’s salary wrong as well and that was forgiven.
While you are “hot”, would you care to explain your theory on how much Rhodium Asset Solutions made for the ACT Governmnet as well?

You just don’t get it. Writing down assets is very common in the business world and is considered a paper loss. The article you linked to says as much.

You are also carping on about the ACT taxpayer loosing out, which is not the case either. ACTEW Corp put money obtained through commercial means (ie not from the Government) into Transact who built infrastructure that is still in use today again not using not taxper payer money. Over the course of 5 years or so they wrote the value of that infrastructure down, which as mentioned is very common, especially in the IT area where most equipment is on a 5-7 year depreciation cycle.

They then sold up to iiNet. That is not a $55m loss of real money no matter which way you look at it. Saying that is like buying a car for $50k then 5 years selling it for $20k. The paper loss is of course $30k, but that doesn’t factor in the benifit you got during those 5 years.

steveu said :

NBN funding is off money borrowed overseas, based off our AAA credit rating. Yes it’s not going to make money strait away, however in the long term there will be benefits that will recoup the cost. And like it or not, telecommuting is going to the the big business “saving” in the next few years. Savings on commercial rent + the fact bosses will relish the thought of making joe worker put more time in as they can do a lot of work from home I am sure will be a big driver.
Anyone who thinks the 100 year old copper in the ground at the moment is going to last us, and support us in the global market perhaps is a little short sighted.
I don’t think transact was such a failure as people made it out to be, I think it was managed poorly as a company, and there was some great technical expertise used to build (what I found anyway) a stable network, and a welcome move away from the ridiculous infrastructure that Telstra built for itself over the last few decades.

I was quoting the interest rates based on overseas rates but no one knows (apart from the government exactly where the NBN money is coming from as it is “an off-balance sheet investment”).
If you believe in the global credit agencies you will also believe in the tooth fairy. These agencies gave Lehman Bros. an AAA rating too, remember?.
What you say about Telstra is true (in hindsight). I can remember in the 1970’s when it was called Telecom and they were still developing and trying to market teletype machines (young people should refer to Wiki) when everyone was ditching them and buying faxes.
The irony is that Telstra and their shareholders are going to be the major beneficiary of the NBN no matter which governmnet is in power.

thatsnotme said :

dungfungus said :

steveu said :

Personally I think TransACT was a pretty gutsy and innovative move, 10 years ago it gave residents who had power poles in their backyard to VDSL technology which was a leader at the time (you know, the thing that a political party thinks is hi-tech). Now of course it’s old hat however it did put Canberra on the map for a little bit. Disappointing that their sales force people were telling outright lies to people etc. which didn’t help the reputation of the company. Not delivering through Telstra conduit didn’t help either (though I think they very well knew it was never gong to happen). Dreams of an transact intranet were ambitious as well (though never happened). I’m sorry to see TransACT go this way, as it could have shown up the rest of the country if we had a high speed broadband network before everyone else etc. but glad to see that it got snapped up by iinet and now nbnco.

Makes sense to use their infrastructure with NBN co, last thing we want is a repeat of when installation of cable was privatised and you had Telstra and Optus running their own cabling infrastructure side by side in certain parts of Sydney…

The NBN is a nation-building infrastructure program of work – which never should have been the subject of political debate. Shame on our politicians for not recognising this and just getting on with the job in the best interest of the country.

The “best interest of the country” as far as funding the NBN is concerned is about 3% p.a. at the moment.
If the price blows out to $90 billion and interest rates go up to 5% p.a. then Australia will be forking out $4.5 billion a year for something that will be worth nothing in 10 years time and we will still have a $90 billion debt.
It never was the subject of political debate either as it was thrust on us without even a business plan.
Another TransACT on a grand scale.

Worth nothing in 10 years time? How do you figure that?

The TransACT experience.

NBN funding is off money borrowed overseas, based off our AAA credit rating. Yes it’s not going to make money strait away, however in the long term there will be benefits that will recoup the cost. And like it or not, telecommuting is going to the the big business “saving” in the next few years. Savings on commercial rent + the fact bosses will relish the thought of making joe worker put more time in as they can do a lot of work from home I am sure will be a big driver.
Anyone who thinks the 100 year old copper in the ground at the moment is going to last us, and support us in the global market perhaps is a little short sighted.
I don’t think transact was such a failure as people made it out to be, I think it was managed poorly as a company, and there was some great technical expertise used to build (what I found anyway) a stable network, and a welcome move away from the ridiculous infrastructure that Telstra built for itself over the last few decades.

dungfungus said :

steveu said :

Personally I think TransACT was a pretty gutsy and innovative move, 10 years ago it gave residents who had power poles in their backyard to VDSL technology which was a leader at the time (you know, the thing that a political party thinks is hi-tech). Now of course it’s old hat however it did put Canberra on the map for a little bit. Disappointing that their sales force people were telling outright lies to people etc. which didn’t help the reputation of the company. Not delivering through Telstra conduit didn’t help either (though I think they very well knew it was never gong to happen). Dreams of an transact intranet were ambitious as well (though never happened). I’m sorry to see TransACT go this way, as it could have shown up the rest of the country if we had a high speed broadband network before everyone else etc. but glad to see that it got snapped up by iinet and now nbnco.

Makes sense to use their infrastructure with NBN co, last thing we want is a repeat of when installation of cable was privatised and you had Telstra and Optus running their own cabling infrastructure side by side in certain parts of Sydney…

The NBN is a nation-building infrastructure program of work – which never should have been the subject of political debate. Shame on our politicians for not recognising this and just getting on with the job in the best interest of the country.

The “best interest of the country” as far as funding the NBN is concerned is about 3% p.a. at the moment.
If the price blows out to $90 billion and interest rates go up to 5% p.a. then Australia will be forking out $4.5 billion a year for something that will be worth nothing in 10 years time and we will still have a $90 billion debt.
It never was the subject of political debate either as it was thrust on us without even a business plan.
Another TransACT on a grand scale.

Worth nothing in 10 years time? How do you figure that?

steveu said :

Personally I think TransACT was a pretty gutsy and innovative move, 10 years ago it gave residents who had power poles in their backyard to VDSL technology which was a leader at the time (you know, the thing that a political party thinks is hi-tech). Now of course it’s old hat however it did put Canberra on the map for a little bit. Disappointing that their sales force people were telling outright lies to people etc. which didn’t help the reputation of the company. Not delivering through Telstra conduit didn’t help either (though I think they very well knew it was never gong to happen). Dreams of an transact intranet were ambitious as well (though never happened). I’m sorry to see TransACT go this way, as it could have shown up the rest of the country if we had a high speed broadband network before everyone else etc. but glad to see that it got snapped up by iinet and now nbnco.

Makes sense to use their infrastructure with NBN co, last thing we want is a repeat of when installation of cable was privatised and you had Telstra and Optus running their own cabling infrastructure side by side in certain parts of Sydney…

The NBN is a nation-building infrastructure program of work – which never should have been the subject of political debate. Shame on our politicians for not recognising this and just getting on with the job in the best interest of the country.

The “best interest of the country” as far as funding the NBN is concerned is about 3% p.a. at the moment.
If the price blows out to $90 billion and interest rates go up to 5% p.a. then Australia will be forking out $4.5 billion a year for something that will be worth nothing in 10 years time and we will still have a $90 billion debt.
It never was the subject of political debate either as it was thrust on us without even a business plan.
Another TransACT on a grand scale.

Personally I think TransACT was a pretty gutsy and innovative move, 10 years ago it gave residents who had power poles in their backyard to VDSL technology which was a leader at the time (you know, the thing that a political party thinks is hi-tech). Now of course it’s old hat however it did put Canberra on the map for a little bit. Disappointing that their sales force people were telling outright lies to people etc. which didn’t help the reputation of the company. Not delivering through Telstra conduit didn’t help either (though I think they very well knew it was never gong to happen). Dreams of an transact intranet were ambitious as well (though never happened). I’m sorry to see TransACT go this way, as it could have shown up the rest of the country if we had a high speed broadband network before everyone else etc. but glad to see that it got snapped up by iinet and now nbnco.

Makes sense to use their infrastructure with NBN co, last thing we want is a repeat of when installation of cable was privatised and you had Telstra and Optus running their own cabling infrastructure side by side in certain parts of Sydney…

The NBN is a nation-building infrastructure program of work – which never should have been the subject of political debate. Shame on our politicians for not recognising this and just getting on with the job in the best interest of the country.

JC said :

dungfungus said :

To use a terrible pun, you are “papering over” the real issue here given that you use the real world as the domain this all happened in.
Actew didn’t own TransACT either; they were a shareholder and if you are trying to tell that they borrowed money privately to buy that shareholding you are totally wrong. In fact, it was Actew who kept loaning money to TransACT to keep them afloat – there is no financial information available on TransACT except the ACT Government auditor did qualify Actew’s Annual Report once referring to the fact that TransACT’s financial returns had not been audited. Your analogy of a building being depreciated is wrong as well.
At the end of the day, Actew invested $55 million dollars into an ill-judged equity venture which had nothing to do with the charter they have of supplying essential utilities to the ACT. They sold their equity for $4 million and however they handle that on their balance sheet still means the ratepayers of the ACT lost the benefit of that $51 million net being returned to the Government as a dividend.
Next thing you will be saying is that the Skywhale was an “investment”.
As I said, it is no wonder this country is on the skids.

The taxpayers of the ACT did not loose $51m. As you said yourself ACTEW Corportation as major shareholder put funds into Transact, but you fail to mentioned that those funds were not ACT government funds but funds borrowed elsewhere (in fact a bit like NBN who despite what the Liberal party are saying are not getting funding off the government).

So the ACT taxpayer didn’t loose the money, Transact did and it was a paper loss. Is it really that hard to come to terms with?

I give up – please continue the difference of opinion with Noel Towell from the Canberra Times.
http://www.canberratimes.com.au/act-news/taxpayers-lost-55m-in-transact-sale-20111222-1uvmu.html
By the way, Actew not only tipped in extra monies to keep TransACT afloat, they also provided standy facilities which as far as I could tell were not shown as contingent liabilities in their balance sheet. Then again, they got someone’s salary wrong as well and that was forgiven.
While you are “hot”, would you care to explain your theory on how much Rhodium Asset Solutions made for the ACT Governmnet as well?

dungfungus said :

To use a terrible pun, you are “papering over” the real issue here given that you use the real world as the domain this all happened in.
Actew didn’t own TransACT either; they were a shareholder and if you are trying to tell that they borrowed money privately to buy that shareholding you are totally wrong. In fact, it was Actew who kept loaning money to TransACT to keep them afloat – there is no financial information available on TransACT except the ACT Government auditor did qualify Actew’s Annual Report once referring to the fact that TransACT’s financial returns had not been audited. Your analogy of a building being depreciated is wrong as well.
At the end of the day, Actew invested $55 million dollars into an ill-judged equity venture which had nothing to do with the charter they have of supplying essential utilities to the ACT. They sold their equity for $4 million and however they handle that on their balance sheet still means the ratepayers of the ACT lost the benefit of that $51 million net being returned to the Government as a dividend.
Next thing you will be saying is that the Skywhale was an “investment”.
As I said, it is no wonder this country is on the skids.

The taxpayers of the ACT did not loose $51m. As you said yourself ACTEW Corportation as major shareholder put funds into Transact, but you fail to mentioned that those funds were not ACT government funds but funds borrowed elsewhere (in fact a bit like NBN who despite what the Liberal party are saying are not getting funding off the government).

So the ACT taxpayer didn’t loose the money, Transact did and it was a paper loss. Is it really that hard to come to terms with?

JC said :

In the case of ACTEW they invested in an asset. They had use of that asset for a number of years (the benefit of which really needs to be added)

You seriously believe that ACTEW had the use of some Internet services, providing them significant benefit?

If ACTEW actually got any benefit (IE were provided Internet services) then they would have paid TransACT like any other customer, so there was no hidden benefit. Even if they got a discount, the benefit would have to be trivial compared to their losses.

JC said :

dungfungus said :

JC said :

dungfungus said :

“paper” loss?

Yes it was a paper loss because the wrote down the value of the asset.

No wonder this country is on the financial skids.
Explain what would have happened if the $55 million if it wasn’t invested in TransACT please? You will say probably that there would have been a “distiubution of paper” to the ACT government.

Really? Maybe you go need to learn about the real world of finance. Asset write downs are very common in the big bad financial world and when writing down assets ends up being a net loss for a company it is called a paper loss, because no money was actually lost, yet they get all the tax benefit from having a loss.

In many ways it is like someone owning an investment property and claiming loss on depreciation of the buildings, then turning around and saying they made a loss on the investment. Never mind the cost of the rent more than covered the cost of the mortgage and left money in the investors pocket. It was still a loss.

In the case of ACTEW they invested in an asset. They had use of that asset for a number of years (the benefit of which really needs to be added) and then sold it at market value, which just so happened to be at a significant paper loss. What ACTEW could have done with that money is totally irrelevant. And I say ACTEW as the money was not gifted by the ACT government, you do realise that ACTEW Corporation, who owned Transact is a government corporation, not a government department, the money was obtained on the private money market.

To use a terrible pun, you are “papering over” the real issue here given that you use the real world as the domain this all happened in.
Actew didn’t own TransACT either; they were a shareholder and if you are trying to tell that they borrowed money privately to buy that shareholding you are totally wrong. In fact, it was Actew who kept loaning money to TransACT to keep them afloat – there is no financial information available on TransACT except the ACT Government auditor did qualify Actew’s Annual Report once referring to the fact that TransACT’s financial returns had not been audited. Your analogy of a building being depreciated is wrong as well.
At the end of the day, Actew invested $55 million dollars into an ill-judged equity venture which had nothing to do with the charter they have of supplying essential utilities to the ACT. They sold their equity for $4 million and however they handle that on their balance sheet still means the ratepayers of the ACT lost the benefit of that $51 million net being returned to the Government as a dividend.
Next thing you will be saying is that the Skywhale was an “investment”.
As I said, it is no wonder this country is on the skids.

dungfungus said :

JC said :

dungfungus said :

“paper” loss?

Yes it was a paper loss because the wrote down the value of the asset.

No wonder this country is on the financial skids.
Explain what would have happened if the $55 million if it wasn’t invested in TransACT please? You will say probably that there would have been a “distiubution of paper” to the ACT government.

Really? Maybe you go need to learn about the real world of finance. Asset write downs are very common in the big bad financial world and when writing down assets ends up being a net loss for a company it is called a paper loss, because no money was actually lost, yet they get all the tax benefit from having a loss.

In many ways it is like someone owning an investment property and claiming loss on depreciation of the buildings, then turning around and saying they made a loss on the investment. Never mind the cost of the rent more than covered the cost of the mortgage and left money in the investors pocket. It was still a loss.

In the case of ACTEW they invested in an asset. They had use of that asset for a number of years (the benefit of which really needs to be added) and then sold it at market value, which just so happened to be at a significant paper loss. What ACTEW could have done with that money is totally irrelevant. And I say ACTEW as the money was not gifted by the ACT government, you do realise that ACTEW Corporation, who owned Transact is a government corporation, not a government department, the money was obtained on the private money market.

JC said :

dungfungus said :

“paper” loss?

Yes it was a paper loss because the wrote down the value of the asset.

No wonder this country is on the financial skids.
Explain what would have happened if the $55 million if it wasn’t invested in TransACT please? You will say probably that there would have been a “distiubution of paper” to the ACT government.

dungfungus said :

“paper” loss?

Yes it was a paper loss because the wrote down the value of the asset.

JC said :

dungfungus said :

JC said :

dungfungus said :

One can’t critisize you for not reading the annual reports from Actew because the Chief Minister and her Treasurer didn’t either or else they would have “discovered” the excessively massive amounts being paid to their executives.
The losses of $55 million accumulated over about 10 years through Actew’s TransACT shareholding and the $4 million was the pro-rata share of the sale price to iinet. An Industry Super Fund lost substantailly more than the $51 million that ACT ratepayers lost thanks to Actew’s foray into an area they knew nothing about.
TransACT is still a business name but Actew have nothing to do with its ownership – it is all owned by iinet now.

That’s old news though. ACTEW sold out the best part of 2 years ago!

I was referring to the statement “So don’t think iiNet have made a $55m loss and not sure where ACTEW’s loss was either”

As mentioned ACTEW’s (paper) loss is old news, so not sure why it was being dragged up again in this thread when they haven’t had anything to do with the company for a few years.

“paper” loss?

Watson said :

Funny. I’ve just come off the phone with iiNet. … I asked about TransACT’s “Netphone” and was told that it wasn’t compatible with FTTP.

Did you call iiNet, or TransACT? The sales departments are still different groups.

iiNet Netphone may not be offered on TransACT’s network because it’s an iiNet product, not a TransACT product. The two networks are still separate in almost every way.

If you called TransACT and they didn’t want to tell TransACT Netphone – well, that’s a bit odd. I’d try calling them again. Note that there is no way to purchase FTTP from TransACT without effectively paying for the regular phone service, though.

You might as well pick any Australian VOIP provider that you like the look of.

Rollersk8r said :

As a long-term iinet customer I don’t understand why they’ve never contacted me to offer some kind of a deal to get on the TransACT network?? I assumed getting as many Canberra customers as possible on to TransACT would be priority no.1 after they made the purchase??

Because if you were in a TransACT FTTH area, you’d already be on it. There is no fixed-line alternative in those suburbs – IE no Telstra copper.

As for the rest of the TransACT network (VDSL, ADSL) those networks cost more to run than iiNet’s own ADSL – and aren’t being sold to NBNCo (..yet)

dungfungus said :

JC said :

dungfungus said :

One can’t critisize you for not reading the annual reports from Actew because the Chief Minister and her Treasurer didn’t either or else they would have “discovered” the excessively massive amounts being paid to their executives.
The losses of $55 million accumulated over about 10 years through Actew’s TransACT shareholding and the $4 million was the pro-rata share of the sale price to iinet. An Industry Super Fund lost substantailly more than the $51 million that ACT ratepayers lost thanks to Actew’s foray into an area they knew nothing about.
TransACT is still a business name but Actew have nothing to do with its ownership – it is all owned by iinet now.

That’s old news though. ACTEW sold out the best part of 2 years ago!

I was referring to the statement “So don’t think iiNet have made a $55m loss and not sure where ACTEW’s loss was either”

As mentioned ACTEW’s (paper) loss is old news, so not sure why it was being dragged up again in this thread when they haven’t had anything to do with the company for a few years.

thatsnotme said :

I’m not sure where the $6 million figure comes from – all reports I’ve seen indicate a $9 million initial payment. That’s for premises already passed, around 8,500 premises. There are plans for another 4,500 on top of that as well, so additional payments will come when they’re completed.

Seems like a win for everyone to me. The NBN boost their numbers instantly, and iiNet can start to resell their own ISP services over the network. Everything I’ve read about the iiNet takeover of TransACT indicated that TransACT’s back end processes were antiquated. Instead of iiNet needing to worry about bringing those processes up to scratch so that they can compete with the NBN, and offer their own services on that fibre, they offload that to the NBN.

I’m sure that iiNet can’t wait for the NBN to be available to the rest of Canberra either, so they can retire the aging VDSL network.

Actually I said $6 not $6m and it was a typo.

Holden Caulfield11:49 am 24 May 13

HFC?

Oh, so that’s why iiNet sponsors Hawthorn Football Club now.

JC said :

dungfungus said :

One can’t critisize you for not reading the annual reports from Actew because the Chief Minister and her Treasurer didn’t either or else they would have “discovered” the excessively massive amounts being paid to their executives.
The losses of $55 million accumulated over about 10 years through Actew’s TransACT shareholding and the $4 million was the pro-rata share of the sale price to iinet. An Industry Super Fund lost substantailly more than the $51 million that ACT ratepayers lost thanks to Actew’s foray into an area they knew nothing about.
TransACT is still a business name but Actew have nothing to do with its ownership – it is all owned by iinet now.

That’s old news though. ACTEW sold out the best part of 2 years ago!

I was referring to the statement “So don’t think iiNet have made a $55m loss and not sure where ACTEW’s loss was either”

I’m not sure where the $6 million figure comes from – all reports I’ve seen indicate a $9 million initial payment. That’s for premises already passed, around 8,500 premises. There are plans for another 4,500 on top of that as well, so additional payments will come when they’re completed.

Seems like a win for everyone to me. The NBN boost their numbers instantly, and iiNet can start to resell their own ISP services over the network. Everything I’ve read about the iiNet takeover of TransACT indicated that TransACT’s back end processes were antiquated. Instead of iiNet needing to worry about bringing those processes up to scratch so that they can compete with the NBN, and offer their own services on that fibre, they offload that to the NBN.

I’m sure that iiNet can’t wait for the NBN to be available to the rest of Canberra either, so they can retire the aging VDSL network.

dungfungus said :

One can’t critisize you for not reading the annual reports from Actew because the Chief Minister and her Treasurer didn’t either or else they would have “discovered” the excessively massive amounts being paid to their executives.
The losses of $55 million accumulated over about 10 years through Actew’s TransACT shareholding and the $4 million was the pro-rata share of the sale price to iinet. An Industry Super Fund lost substantailly more than the $51 million that ACT ratepayers lost thanks to Actew’s foray into an area they knew nothing about.
TransACT is still a business name but Actew have nothing to do with its ownership – it is all owned by iinet now.

That’s old news though. ACTEW sold out the best part of 2 years ago!

JC said :

Grail said :

As for ACTEW’s claim of 55M in losses? Well, what ACTEW calls a loss some people call an investment: installing fibre optic cable (i.e.: engaging in an infrastructure project) costs money. Let’s see if ACTEW reports “losses” for the installation of the expanded Cotter Dam, or if they write the money off as capital investment. If they write off the expanded Cotter Dam as capital investment or any other form of non-loss, they are hypocrites.

Where does this $55m loss come from? As I understand it iiNet brought Transact, including all it’s services for $60 in 2011.

After reading the press release yesterday it seems as if what they are now selling is PART of the company, specifically the fibre to the premiss network in Gungahlin for $6, but on the basis of reading the release it seems as if they are still keeping the rest of the business.

So don’t think iiNet have made a $55m loss and not sure where ACTEW’s loss was either.

One can’t critisize you for not reading the annual reports from Actew because the Chief Minister and her Treasurer didn’t either or else they would have “discovered” the excessively massive amounts being paid to their executives.
The losses of $55 million accumulated over about 10 years through Actew’s TransACT shareholding and the $4 million was the pro-rata share of the sale price to iinet. An Industry Super Fund lost substantailly more than the $51 million that ACT ratepayers lost thanks to Actew’s foray into an area they knew nothing about.
TransACT is still a business name but Actew have nothing to do with its ownership – it is all owned by iinet now.

Grail said :

As for ACTEW’s claim of 55M in losses? Well, what ACTEW calls a loss some people call an investment: installing fibre optic cable (i.e.: engaging in an infrastructure project) costs money. Let’s see if ACTEW reports “losses” for the installation of the expanded Cotter Dam, or if they write the money off as capital investment. If they write off the expanded Cotter Dam as capital investment or any other form of non-loss, they are hypocrites.

Where does this $55m loss come from? As I understand it iiNet brought Transact, including all it’s services for $60 in 2011.

After reading the press release yesterday it seems as if what they are now selling is PART of the company, specifically the fibre to the premiss network in Gungahlin for $6, but on the basis of reading the release it seems as if they are still keeping the rest of the business.

So don’t think iiNet have made a $55m loss and not sure where ACTEW’s loss was either.

Rollersk8r said :

As a long-term iinet customer I don’t understand why they’ve never contacted me to offer some kind of a deal to get on the TransACT network?? I assumed getting as many Canberra customers as possible on to TransACT would be priority no.1 after they made the purchase??

This post at least reminded me to check the TransACT website again – yep, still very confusing and appears too expensive to bother investigating further…

You will find that if you were in an suburb served by Transact fibre to the node network (basically places with Transact outside of Gungahlin) unless you wanted TV and phone then you would have been better off staying on the Telstra copper network being served by a iiNet DSLAM (ADSL multiplexer)

Again as mentioned above Transact owns Grapevine which is an ISP, but they are not an ISP themselves. So with iiNet owning Transact what benefit would there be to the company as a whole to move you to Grapevine, bearing in mind that iiNet, even after the brought Transact didn’t offer services over Transact?

Rollersk8r said :

As a long-term iinet customer I don’t understand why they’ve never contacted me to offer some kind of a deal to get on the TransACT network?? I assumed getting as many Canberra customers as possible on to TransACT would be priority no.1 after they made the purchase??

This post at least reminded me to check the TransACT website again – yep, still very confusing and appears too expensive to bother investigating further…

Deals tend to get better as time goes on, thus companies won’t usually let you know when a new deal comes up. Make sure you check regularly.

As a long-term iinet customer I don’t understand why they’ve never contacted me to offer some kind of a deal to get on the TransACT network?? I assumed getting as many Canberra customers as possible on to TransACT would be priority no.1 after they made the purchase??

This post at least reminded me to check the TransACT website again – yep, still very confusing and appears too expensive to bother investigating further…

gazket said :

so the government is buying Transact so they can limit competition and charge us more to access the internet.

well played .

No. I’m with Transact’s FTTP network and Transact force us to pay line rental, when it’s clearly unnecessary. With NBN the internet packages are better value and you don’t have to pay line rental, instead relying on VoIP. I can’t wait to move over to cheaper telecoms when NBN buy them out. I’ve been sharpening my ombudsman knives over this one, so I’m really glad to see it go through.

thatsnotme said :

dungfungus said :

Why is it referred to as “TransACT”s network?
I understood that iinet purchased TransACT (you remember, Actew got $4 million dollars for their share after losing about $55 million but it was still a “win win” deal) so shouldn’t this article read “iinet are selling thenetwork to the NBN?”

I would be interested to know the figures involved.

Although iinet bought them, the TransACT name still exists, and they’re still run as a separate company – in much the same way as Internode do, despite being purchased by iinet. So it’s probably correct to still describe it as TransACT fibre. Makes no difference in the long run though.

Thanks for that – sounds totally sensible.
I see in the CT today that purchase price was $6 million. I have no idea if that is cheap or expensive but it would be interesting to crunch the numbers using $6 million as a benchmark for a known number of residences that receive the service and then apply that to all residneces in Australia. This could give us the likely cost of the NBN which so far has eluded even the people that are responsible for it.

Funny. I’ve just come off the phone with iiNet. Trying to find an affordable alternative for TransACT’s only phone plan available to FTTP customers. What a bloody rip-off! I had been using VoIP for years and now I will have to pay connection fees and timed rates for ALL my calls?! I asked about TransACT’s “Netphone” and was told that it wasn’t compatible with FTTP. Are you joking? Surely the only way to deliver phone services over optic fibre is via the internet? And iiNet does over a VoIP service for fibre, but to use them as my ISP would cost me more for the same data compared to when I just get my data through TransACT.

Eaglehawk said :

Ok, let’s see if I can get this right.

TransACT Broadband consists of 5 different technologies

VDSL, VDSL2, FTTP, ADSL, HFC.

Of those 5, only 4 apply to Canberra. (HFC isn’t available).

They’ve only sold the FTTP connected premises to NBN. These are mainly Forde, Bonner, some parts of Franklin, some of Casey, most of Crace. Nobody really is sure.

Grapevine is an ISP that provides services to any of the 4 types of connections, so whether you’re affected or not depends on which area you live in.

Hope I got that mostly right

TransACT owns/owned these technologies: FTTN (optic fibre in the street, VDSL 1 to the home with those funky white modems which split the VDSL service into TV/set top box, POTS and a data connections), ethernet (i.e.: you can actually buy an Ethernet connection from one side of town to the other, with TransACT taking care of the fiddly details like lighting the fibre), dark fibre (i.e.: you can actually buy a spliced-through fibre optic cable from one side of town to the other), and FTTP (fibre right to your building, which terminates at a breakout box which provides TV, data, POTS) which some people mistakenly refer to as FTTH: FTTP is Fibre to the Premises, meaning that if you’re in a multiple residence premises such as an apartment block there is a fibre (or fibres) to the premises, and then typically a VDSL 2+ infrastructure inside the complex to the individual residences. Except for Axis apartments because the builder was dumb.

In addition to those, TransACT was leasing naked copper, ADSL and ADSL 2+ in Canberra. So if you are outside a TransACT fibre area but still getting a TransACT service, odds are you are getting ADSL 2+ from TransACT that they have leased off someone else. In many areas, TransACT actually owns the ADSL equipment and is just leasing the copper in the ground from Telstra (and leases the space in the exchange to house the ADSL equipment, etc).

The HFC network is known to us layfolk as “cable TV” and is what is used in Ballarat & Mildura. And incidentally if you think cable TV can serve as a basis for the high speed broadband network of tomorrow or the next year, you should move to Ballarat and try it out. You’ll be back with your hat in your hand in a few months, don’t you worry.

As for the areas of Gungahlin serviced by FTTH, you can bet that there are people who are very sure of which suburbs (nay, which individual residences) are serviced by FTTH, otherwise TransACT would have a heck of a time sending bills out to get the money to pay for the network. Harrison, Forde, Bonner, Crace,

AFAIK, the FTTH rollout include(s/d) Wright and Coombes (the new Molongolo township between Weston and the Molongolo river).

As for ACTEW’s claim of 55M in losses? Well, what ACTEW calls a loss some people call an investment: installing fibre optic cable (i.e.: engaging in an infrastructure project) costs money. Let’s see if ACTEW reports “losses” for the installation of the expanded Cotter Dam, or if they write the money off as capital investment. If they write off the expanded Cotter Dam as capital investment or any other form of non-loss, they are hypocrites.

gazket said :

so the government is buying Transact so they can limit competition and charge us more to access the internet.

well played .

Nope. Neither Transact* nor NBN provide internet. Both provide the underlying infrastructure so that others can provide internet. Now don’t know about you but I don’t want competition in the infrastructure. I remember when I lived in Sydney during the pay TV wars and always found it bizarre to see Telstra and Optus crews putting up near identical systems on the same poles. Just adds far too much cost and discourages competition.

In fact this is one of the reasons people who live in areas with RIM’s installed (ie most of Gungahlin and most newer suburbs) couldn’t get choice of ADSL2 providers. Under the laws Telstra had to provide wholesale ADSL to other ISP’s at a given price, but not ADSL2. Now with a RIM the ADSL equipment needs to be in the street, so no ISP other than Telstra/Bigpond could justify the expense, so want ADSL2 go to Bigpond (which is what I have done), or stick with ADSL1.

*Transact was also clearly in the ISP market too with Grapevine, but they were separate business.

dungfungus said :

Why is it referred to as “TransACT”s network?
I understood that iinet purchased TransACT (you remember, Actew got $4 million dollars for their share after losing about $55 million but it was still a “win win” deal) so shouldn’t this article read “iinet are selling thenetwork to the NBN?”

I would be interested to know the figures involved.

Although iinet bought them, the TransACT name still exists, and they’re still run as a separate company – in much the same way as Internode do, despite being purchased by iinet. So it’s probably correct to still describe it as TransACT fibre. Makes no difference in the long run though.

Why is it referred to as “TransACT”s network?
I understood that iinet purchased TransACT (you remember, Actew got $4 million dollars for their share after losing about $55 million but it was still a “win win” deal) so shouldn’t this article read “iinet are selling thenetwork to the NBN?”

I would be interested to know the figures involved.

Ok, let’s see if I can get this right.

TransACT Broadband consists of 5 different technologies

VDSL, VDSL2, FTTP, ADSL, HFC.

Of those 5, only 4 apply to Canberra. (HFC isn’t available).

They’ve only sold the FTTP connected premises to NBN. These are mainly Forde, Bonner, some parts of Franklin, some of Casey, most of Crace. Nobody really is sure.

Grapevine is an ISP that provides services to any of the 4 types of connections, so whether you’re affected or not depends on which area you live in.

Hope I got that mostly right

MERC600 said :

I regret I’m not realy up on all this thing, but I’m with Grapevine, so is this what NBN are looking at ?

New parts of Canberra that were built pre current NBN had fibre installed. These connect at much faster speed than the old parts of Canberra. NBN is buying this.

NBN Co had to buy transact FTTP its the only way they can bump up their install numbers for no 2013 cost!!!!

iiNet would be screwed either way, very limited footprint for FTTP and Gov has forbid them from ever upgrading their network to reduce competition for NBN, so it might actually make money (despite the overly optimistic 10 year finish date.)

Why doesn’t NBN Co subcontract out iiNet to connect the ACT?

MERC600 said :

I regret I’m not realy up on all this thing, but I’m with Grapevine, so is this what NBN are looking at ?

Not really. To put it simply NBN are an infrastructure “company”. They build the infrastructure then lease this to service providers such as ISP’s like Grapevine.

Transact is also an infrastructure company that builds and leases. Where it gets a tad messy I guess is Transact is now owned by an ISP and Grapevine is owned by Transact.

What I gather will happen here is the Transact infrastructure will go to NBN, the release above says FTTP, which is in new suburbs such as Forde etc. Above it does mention the HFC (or fibre to the node network) that transact installed elsewhere in Canberra (where there were power poles) but it is not clear if this is also included in the sale. I gather grapevine will remain with iinet as that is more up their ally.

so the government is buying Transact so they can limit competition and charge us more to access the internet.

well played .

Makes sense to me. But then again, perhaps i’m a bit slow!

It sounds like overbuild is still on the cards for HFC areas though?

I regret I’m not realy up on all this thing, but I’m with Grapevine, so is this what NBN are looking at ?

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