Affordable retail pricing on the NBN

Revisiting Mackay Online

On 22 October 2019, TelSoc held its second NBN Futures Forum in Melbourne on the theme of realising the user potential of Australia’s National Broadband Network. Four speakers discussed various aspects of usage, including digital inclusion, access and affordability, broadband-enabled services, and service pricing. While the NBN has increased access to broadband, affordability remains an issue and the evidence suggests that gaps in digital inclusion are not being closed. The New Zealand experience suggests that demand for high-speed broadband will continue to grow if wholesale and retail prices are appropriately set. The cost of the NBN rollout remains a challenge for wholesale prices. Various improvements in affordability, including direct subsidies for low-income households, were canvassed.

The national broadband network (NBN) is the largest public infrastructure project undertaken in Australia, and NBN Co is the government-owned company responsible for building the network. By using operations research, NBN Co expects to avoid more than $AUD1.7 billion in unnecessary construction and design costs on this $AUD36 billion project. At the beginning of this 10-year project, NBN Co divided the country into more than 3,000 fiber-serving-area modules (FSAMs), each covering approximately 2,500 premises, and will design and construct one FSAM each day. NBN Co contracted with Biarri Networks, an Australian commercial mathematics company, to optimize the design task. To accomplish this, Biarri created a fiber-optic network design (FOND) software product based on a network-flow mixed-integer programming engine. This engine minimizes the cost of materials and labor for each FSAM, subject to a variety of constraints, and provides a solution in less than five minutes. To date, more than 650 FSAM designs have been completed using FOND. This has saved NBN Co an estimated $AUD325 million in avoided construction cost, and the planning time per FSAM has decreased from 145 to 16 days.

The Limpopo Province is home to South Africa’s significant tomato engenderer, which is withal the most immensely colossal engenderer of the commodity in the Southern Hemisphere. Regardless of its consequentiality in the tomato industry of the country, there are few studies analyzing the mechanism through which prices of tomatoes are resolute and transmitted from the farm gate in Limpopo to the sundry provincial, local and international markets. This study endeavors to fill the erudition gap on the performance of Limpopo province’s tomato markets by examining vertical price linkages amongst successive marketing levels. With the aid of both surveys and document analysis, daily tomato prices were accumulated at three levels that reflect the marketing chain of Limpopo engendered tomatoes. Through marketing margin analysis, it was established that the farmers’ portion of the consumer’s Rand is low. About 85.1% of the consumer’s Rand goes to pay for marketing margins. Granger causality tests show that both the wholesale and retail prices are caused by farm gate prices, whereas an independent causal relationship was found between wholesale prices and retail prices. The study additionally found a long run co-integration relationship between farm gate prices and retail level prices, and not identically tantamount for the relationship between farm gate and wholesale prices. Furthermore, it was found that retailers are expeditious to react to increases in farm gate prices and slow in adjusting to price decreases. On the other hand, wholesale prices were found to be symmetrical to farm gate prices. These results suggest that the mediation of price information is more efficient between the farm and wholesale markets than between the farm and retail markets. Nonetheless, there is scope for increasing efficiency of tomato marketing in the province.

This study reviews the economic benefits analysis conducted in 2014 for the National Broadband Network (NBN), one of Australia's largest ever public infrastructure projects. The review identifies that the NBN's benefits were overstated due to error by an estimated $17–20 billion in 2014 present value terms, an amount sufficient to eliminate the NBN's forecast net economic benefits. To provide an updated view on the benefits of high-speed broadband in 2022, a stated choice experiment is conducted, finding that the WTP has grown since 2014 at an annual real rate of 8.8 percent for download speeds and 11.5 percent for upload speeds. Even at these growth rates, however, the benefits of the NBN remain materially lower than forecast in 2014. Further, the analysis finds high heterogeneity in the household WTP, with smaller and lower-income households reluctant to pay a premium for speeds much faster than 50 Mbps, indicating that the adoption of the fastest available broadband speeds is likely to remain low. The study highlights the potential value of cost-benefit analyses, but also the risks, particularly where they are relied on to justify enduring extensions of government ownership and control. The paper concludes by identifying learnings for policymakers and cost-benefit analysis practitioners seeking to assess and optimize the economic value of public infrastructure investments.

In April 2009, the Australian Government announced plans to roll-out the National Broadband Network (NBN) Company Open Access Network in Australia. Australia’s NBN will bring high speed internet access to areas and people that otherwise would have been without. Predicting consequences (both positive and negative) arising from the NBN, as well as risks and opportunities that it will generate differentially between places, groups and sectors, is inherently uncertain. With little reliable data available on social impacts of NBN-style access at the household and community level, policy-making and regulation risks responding to optimistic speculation and commercially motivated spin rather than carefully weighed evidence. The research reported in this paper aimed to address this gap with a preliminary assessment of the social impacts of the NBN-like broadband roll-out at one New South Wales test site in southwest Sydney. The paper discusses the research methods and findings and frames recommendations for further research to address both limitations that arose in the research reported here, and broader gaps in understanding the social impacts of new forms of broadband access and associated applications. Due to the small sample size, this preliminary report provides details and findings from a scoping research perspective that aims to inform future research in this area.

As the price of local onions is greatly impacted by the price of imported onions at these two levels of the supply chain, the goal of this study was to ascertain whether onion prices in Bangladesh are transmitted asymmetrically at the wholesale and retail levels. To analyze asymmetry, the study employed the nonlinear autoregressive distributed lag (NARDL) model in the short and long run using monthly time series data from January 2006 to December 2020. The NARDL model captures the effects of both positive and negative shocks in the short as well as in the long run. The empirical results from the NARDL indicate that the wholesale price of local onion shares a short-run relationship with the wholesale price of imported onion while the local retail price of onion shares a long-run relationship with the imported retail price of onion. In addition, the short-run impact of local wholesale and imported wholesale prices is asymmetric. Long-run evidence supports the existence of an asymmetric effect between the local and imported retail onion prices. Using the Pairwise Granger causality test, we examined the causal relationships between wholesale and retail prices. The direction of the casual relationship indicates that the wholesale and retail prices of imported onions lead to the wholesale and retail prices of local onions. A clear understanding of the onion market, how prices move between market actors, and its role in determining market price interaction could be gained by analyzing the asymmetric relationship between the local and imported onion prices. As a result, significant policy recommendations could be made to control the onion price in Bangladesh.

As the price of local onions is greatly impacted by the price of imported onions at these two levels of the supply chain, the goal of this study was to ascertain whether onion prices in Bangladesh are transmitted asymmetrically at the wholesale and retail levels. To analyze asymmetry, the study employed the nonlinear autoregressive distributed lag (NARDL) model in the short and long run using monthly time series data from January 2006 to December 2020. The NARDL model captures the effects of both positive and negative shocks in the short as well as in the long run. The empirical results from the NARDL indicate that the wholesale price of local onion shares a short-run relationship with the wholesale price of imported onion while the local retail price of onion shares a long-run relationship with the imported retail price of onion. In addition, the short-run impact of local wholesale and imported wholesale prices is asymmetric. Long-run evidence supports the existence of an asymmetric effect between the local and imported retail onion prices. Using the Pairwise Granger causality test, we examined the causal relationships between wholesale and retail prices. The direction of the casual relationship indicates that the wholesale and retail prices of imported onions lead to the wholesale and retail prices of local onions. A clear understanding of the onion market, how prices move between market actors, and its role in determining market price interaction could be gained by analyzing the asymmetric relationship between the local and imported onion prices. As a result, significant policy recommendations could be made to control the onion price in Bangladesh.

The paper has applied time series model to investigate the wholesale and retail price market integration of major pulses (tur, gram, moong, urad, masoor) in five major regions namely north zone (NZ), south zone (SZ), east zone (EZ), west zone (WZ) and north east zone (NEZ) in the country based on their volume of production. The study has shown that there exists a strong cointegration among the wholesale as well as retail prices of these major pulses, although the cointegration varies. In addition to the horizontal cointegration, the vertical cointegration between the wholesale and retail prices of different pulses has also been investigated. Different causal relationships have been found between wholesale and retail prices in these five zones. The application of vector error correction model (VECM) has indicated that all the error correction terms (ECTs) are negative and most of these terms are statistically significant, implying that the system once in dis-equilibrium tries to come back to the equilibrium situation. The study has also used Impulse response analysis which shows that change in wholesale prices of these five pulses in one zone will cause change in wholesale prices in other zones. The paper has concluded that price signals are transmitted across regions indicating that price changes in one zone are consistently related to price changes in other zones and are able to influence the prices in other zones. However, the direction and intensity of price changes may be affected by the dynamic linkages between the demand and supply of pulses. The study has provided an interesting insight for policy makers, and for contributing to improve the information precision to predict the price movements used by marketing operators for their strategies and by policy makers for designing the suitable marketing strategies to bring more efficiency across the markets.

Abstract: In this paper the impact of the introduction of the Euro on the vertical price transmission in German food markets is analyzed. It is hypothesized that following the introduction of the Euro the presence of money illusion might have lead to higher real prices, and if so it is likely accompanied by higher margins between respective wholesale and retail prices. While other studies have mainly focused on the behavior of average prices, here reactions at the individual store level are investigated. For cucumber and carrots the vertical price relationships between retail and wholesale prices are estimated by employing an error correction approach, which is enhanced to test for structural breaks with a flexible time frame using a F-max approach. The results indicate significant changes in the vertical price relationships for one forth of the retailers under study. Though significant the directions of changes do not uniquely fit the theoretical predictions for money illusion. Thus, the majority of German food retailers has not used the introduction of the Euro to increase their mark ups.

While most critiques of the Coalition Government?s National Broadband Network (NBN) policy have focussed on the wisdom of its Fibre to the Node technology choice, a more fundamental weakness in its NBN election policy promises to make it a financial debacle if not corrected. This paper spells out the many negative consequences of the Government's policy to remove the NBN Co's current monopoly in providing fixed broadband access infrastructure: to the federal budget, to the competition framework in telecommunications, to a forced premature sale of NBN Co, and to the affordable rollout of high-speed broadband access across the nation. The Minister of Communications is urged to correct this policy element rapidly, in the national interest.

Based on the physics of normal electric power transmission, the paper proposes a new, science-based approach to determining the wholesale and retail electricity prices for industrial and equated consumers, which is accounted the effect of schemes for their power from the power system and reactive load on the economy of electric power transmission process. Given the fact that pricing in the electricity system is the basic system calculation that determines the economics of its operation, it is proposed to conduct three levels: selling price; wholesale price; retail price. In the article is scientifically based the principles for determining the selling, wholesale and retail electricity prices, which takes into account the physics of the impact of voltage electricity network on pricing (as a potential form of electricity) that feeds consumer, its active loss and bandwidth depending on the concept consumer connection to electric networks of electric power transmission organizations (as the basis of the methodology for determining wholesale prices) and reactive power load for specific electricity consumer (as the basis of the methodology for determining the retail price) for the consumed electricity in the current period.

The purpose of this study is to examine the causality between the different grades of Korean beef (Hanwoo) in the same marketing channel and to identify a leading price for each marketing channel. The efficiency of the Korean beef market is evaluated through the existence of asymmetric price transmission. As a result of the analysis, asymmetric price transmission between the farm and wholesale price is found for the 1++ and 1+ grade beef. On the other hand, asymmetry in the price transmission is not found between wholesale and retail prices. These results support that downstream Hanwoo market is efficient because there is no market power in the marketing chain from the wholesale to retail markets. However, the fact that asymmetry is found between farm and wholesale prices in high grade beef implies the upstream marketing chain is inefficient.

In order to reduce the carbon emissions of manufacturers and retailers in their business activities, carbon emission limits must be set for manufacturers and retailers respectively, and they must make favorable decisions within the limits. This paper will focus on a two-level supply chain system composed of a single manufacturer and a single retailer, and explore the optimal wholesale price, optimal retail price, and optimal profit under four scenarios: neither is constrained by carbon quotas, only the manufacturer is constrained by carbon quotas, only the retailer is constrained by carbon quotas, and both are constrained by carbon quotas, by constructing Lagrange functions. Comparative analysis will be conducted. Research has shown that only when manufacturers are subject to carbon quotas, the optimal wholesale and retail prices will rise, and the optimal profits of both manufacturers and retailers will decrease; When retailers are constrained by carbon quotas, whether manufacturers are constrained by carbon quotas does not affect the optimal price and profit; When both are subject to carbon emission restrictions and retailers increase their carbon emission quotas, manufacturers will lower wholesale prices and retailers will lower retail prices.

Learning the extent of price volatility is critical to ensure the producer and consumer’s economic welfare. Hence, we have envisioned assessing the price transmission relationship over time among the farmgate, wholesale, and retail markets for the four major aquaculture products, namely Rui, Catla, Tilapia and Pangas in Bangladesh. The Granger causality test examined the causal relationships among the farmgate, wholesale and retail fish prices. The Houck/Ward and error correction approach was also applied to study their price transmission pattern. Results indicate that the retail price leads the wholesale and farmgate price. In most cases, the coefficient of variation decreases as the fish handover from the farmgate to retail levels. Out of 15 pairs of farmgate, wholesale, and retail price-series analyzed, 14 pairs are co-integrated (p < 0.01). Current results also suggest that the price transmission pattern is symmetric in the short run but could be a mixture of symmetric and asymmetric in the long run. This asymmetric price behavior indicates that changes in retail prices do not get reflected fully at both farmgate and wholesale prices, and the transmitted prices may vary according to the retail prices based on their rising or falling pattern.