Alternatives to the NBN

So, under Basics of the NBN we've covered a little of what the NBN is and how much it will cost. This has been, by no means an exhaustive study and I, myself, learn more everyday I read about the NBN. The scope of this project is such that individual reports about it don't do much in understanding it as a whole. As always, more reading = more knowledge.  So get out there and read it all! (read mine first though!)

But, there is a serious question as to whether or not the NBN is a viable project, too much too late, too much too quickly or any combination therein. There are a number of alternatives that have been put forward and I'd like to examine them.

What the competition thinks......

As always when it comes to Government projects, there is going to be a competing project.....although of course with politics, they call this a "policy"...... Yes, because that makes it more likely they can cancel it and call it a "policy change" rather than a waste of money.....

Anyway, ranting aside, we have 2 major parties in this country and the Coalition in this case DOES have an alternative "policy" to the NBN. In their case, it has been rather difficult to pin them down on exactly what their alternative would entail (here's a rather tongue in cheek funny).  But, the one fixed point seems to be this; the Coalition would seem to be working towards a FTTN (Fibre-to-the-Node) rollout to the vast majority of Australians, although there is currently no specific statement about this. The gaps would be plugged by a combination of fixed wireless (both microwave and "wireless" ethernet) and satellite coverage, as with the NBN, to provide "up to 100 Mbps down to 12 Mbps".

So, firstly, the wireless and satellite sections of both policies appear quite similar. However, they vary quite significantly in one important way; NBN Co. will deliver FTTH to 93% of Australian premises and the other 7% will be covered by this combination in wireless technology. The Coalition's plan does not specify how many Australians will be covered by the, as yet hidden FTTN rollout in their policy, only that, " 2016 Australia achieves a national broadband baseline with 97 percent of premises able to be served by high-speed networks...." The baseline has been given, up to 100 and as low as 12 Mbps, but there is no indication of who will get what speeds. Under the NBN, 93% of Australians will have, conclusive, access to minimum 12Mbps and up to 100Mbps at their choice. Current plans work on 12 Mbps, 25 Mbps, 50Mbps and 100Mbps speeds everywhere the NBN (fibre) is currently available. Obviously these speeds vary, but measured speeds have been very close to 100Mbps (94-95 regularly as measured by NBN Co.)  The other 7% will have access to speeds of 12Mbps, higher in the future. (EDIT: there have been recent articles about the NBN Interim Satellite Service providing significantly less than 12Mbps- this is true. For one significant reason- these are INTERIM services offered over existing satellites owned by commercial companies. NBNCo. is launching its' own dedicated satellites in 2014 and speeds will GREATLY increase at this stage. Even so, it's been reported more than 7300 people are already signed up to this service, most likely because it is subsidised by NBNCo. and are therefore, in general, cheaper than other available plans)

This, on the surface, then, appears similar, but is in actual fact quite a different strategy. The NBN offers 93% of premises 100Mbps from first connection, and this is just initial speeds. Recent speed tests in China have shown a single fibre core can handle 1.7 TERA-bps.....about 170 times as fast as current NBN speeds. The Coalition's plan will bring UP TO 100Mbps from initial connection......and yet even THIS isn't entirely accurate. Let me explain....

The FTTN rollout the Coalition plan may replicate much of what the NBN will cover; primarily, it will use backhaul (backbone) fibre across the country and install it to all exchanges and from there to nodes, bringing the fibre closer to the home than it is now (FTTN). It may also include running fibre, instead of, copper or otherwise, to ALL exchanges within the 93% area. So far so good; but this is where the divergence takes place. 

While these fibre runs will greatly increase efficiency and uniformity and thereby decrease congestion across badly affected networks, this is as far as the fibre goes. The last (up to) 2km from the local node installed beyond the exchange to the customers premises will STILL be whatever currently lies in the ground. To the vast majority of Australians, this is the Telstra CAN (Customer Access Network)- copper. There are several million premises now with the option of Telstra and/or Optus HFC or fibre, but this is still only a growing minority (in fact, only 900 000 Australians are actually using Telstra/Optus HFC, because of contention and MDU's- covered later); why would Telstra or Optus spend the money? It doesn't gain them much, as many Australians already baulk at paying for current broadband speeds, so they're unlikely to gain much revenue to begin with. This means the majority of Australians may well have fibre to their node......but be stuck with less than 50Mbps even under the BEST of circumstances (see my post on the Coalition plan for more info). This is a limitation of the copper, NOT of the exchange or backhaul. (EDITrecent tests by Alcatel-Lucent have shown speeds on copper "achieved downstream transmission speeds of 300 Megabits per second (Mbps) over distances up to 400 meters (or 50Mbps at 1km)"- READ- UP TO 1KM. For this to work in FTTN, more than 70 000 nodes must be installed across Australia, at an average rate of 7700 a year, as estimated by Telstra several years ago.....

Also, a FTTN network would be incompatible with a FTTH network when we do, inevitably, upgrade.  Why? FTTN means, if you want any upgrade in speed from current setups (thanks to last mile copper still being used from the exchange) you would have to install many intermediary fibre nodes on street corners, between the exchange and the premises, to shorten copper lengths. These also have to be powered, as to change from fibre (non-conductive) to copper (conductive) you must have a power source. So these nodes will be not unobtrusive (like this) and use significant (once you add many up) power. And when a FTTH network would eventually come along, even under the Coalition? They all have to be ripped out or heavy labour carried out of splicing fibre done in separate cabinets, because the fibre must go all the way to the premises and the nodes are useless on their own.....sounds like a massive waste of money if I've ever heard of one....

Part of the Coalition's plan also involves funding for "Providing a way forward to a higher bandwidth, more fibre-intensive Australia."  This is fairly vague and, when you read the statement, amounts to subsidising Telstra and other operators to increase the amount and decrease the timeframe of their own FTTN/FTTH rollout.  This, for fairly obvious reasons, doesn't amount to much, especially to unprofitable regions such as regional and rural areas.  And we'll still be stuck with the bewildering array of cross selling between competitors for use of their CAN's (anyone who has looked to see if their ISP has DSLAM's at their exchange will know what I mean).

So, to recap, the Coalition's plan "may" involve rolling out a FTTN network, which will result in the bottleneck moving even more from the exchanges, to the CAN's, and little extra speed for the majority of Australians in the next decade. And it will rollout wireless broadband/satellite to the other 3% not receiving FTTN. But those ON the FTTN will only be guaranteed 12Mbps, as will those on the wireless portion (EDIT: actually, on satellites, the Coalition have not said they will launch their own, like NBNCo., so they are likely to have speeds less than 6Mbps, as experienced by people currently on NBNCo.'s Interim plans because of usage contention on commercial satellites).  The speed bottleneck of copper (25Mbps now, with maybe 50Mbps within 1km) will be in place to premises until ALL CAN's are upgraded to fibre (or HFC), subsequently junking the FTTN and this has no timeframe. Only once all CAN's have been upgraded to fibre, can the true bandwidth of the FTTN plan be recognised.....because it becomes a FTTH network....

The NBN will bring FTTH to 93% of Australians guaranteeing minimum 12Mbps and most likely close to 100Mbps to that 93% by 2021. It will roll fibre PAST the exchanges, to the vast majority of premises, removing the bottleneck on speed. The other 7% will receive 12Mbps via wireless/satellite services to begin with, with more planned in the future.  These speeds are also only initial. Hardware upgrades can already achieve 1Gbps on the fibre NBN and much higher in the future. And NBNCo. has committed to further fibre rollout and cross-subsidies with communities to possibly roll fibre where NBNCo. isn't currently planning.

And the cost of this rambunctious rubbishing of our current cables compares?

Actually, yes.  The cost of the NBN, as I've discussed, is slated at around $36 Billion total and $28 Billion to the government.  The Coalition's costing of their policy? About $7 Billion.  Big disparity?  Yes, it is.  But, firstly, the service provided is much higher, as I've explained and further reaching, as the FTTN network would eventually have to be scrapped or heavily modified to keep up with speed demands.  Secondly, and, as is always the case in governmental spending, you can't simply switch from one to the other for free.  This is no different from tax savings in one governments budget and not in another's.....or a Carbon Tax in one, but not in the other.....If the Coalition were to be in power RIGHT NOW, it would still cost them several Billion just in penalty payouts to contractors for the NBN and several Billion more for penalties to Telstra (EDIT: they've changed their tune now but that means more NBN will be rolled out BEFORE their plan comes into affect....getting less like FTTN and more like FTTH everyday...) .....and that's not even possible as the next election isn't until 2013.

So while $7 Billion is a nice number out there all on its' own, as is always the case with political policy, it doesn't take into account real world costs.  It's been estimated that, should the Coalition get into power in the 2013 election, cancelling the NBN rollout in whatever its' current state, paying out penalties, doing feasibility studies, organising tenders and actually implementing their broadband policy would cost around $16.7 Billion.  Plus the already built part of the NBN that has to come off the budget, as it can't be payed back anymore with NBN Co. no longer another $15 Billion that will have been spent by then.  That's $32 Billion.....and we get what for it?  An inferior network, with many of today's problems and no increased reliability or real price difference to the Australian people.

Oh, and it wouldn't even START rolling out till 2016, 2 years beyond when they have said it'll be finished; because, first they need control of the Senate (mid-2014) and they've said they would require a CBA to be done and renegotiation with Telstra.  So it won't be done till 2020 with that timeframe.....the same year the NBN is due for completion.... (EDIT: this last bit about timing is my analysed opinion, but it is shared by this Citigroup analysis and other industry experts)

What about competition?

The NBN not only brings with it the physical upgrade of the cables in the ground and the hardware to go with that.  It also brings a wholesale network back under government control, something not in place since Telstra was partially sold off in 1996.  Alot of this Telstra guff is vastly influenced by people's political preferences, but the message from the ACCC over the years has been clear; until Telstra is separated into wholesale and retail divisons, true competition in the marketplace is difficult.  Why is that? Currently, Telstra have contracts with the government to provide a certain level of telecommunications service to Australians (see here for some of those requirements).  But Telstra is also a private company.  Over the years this has severely affected the way they do provide services as an almost sole owner of government built infrastructure.  Currently, if a customer on a competitors service requires an additional line to be installed, a repair of their line or just a diagnoses on it, they MUST go through Telstra if Telstra owns that CAN (most of which they do).  Anyone who has had problems getting broadband or has had a dirty line knows what I am talking about.  

NOTE: OPINION/RANT PIECE APPROACHING!! Skip to the bottom of the line if you're not interested....

My personal experience runs to the fact that, at one of my houses (back in 2003) I had dial-up and wanted broadband.  I rang iiNet, who seemed competitive and had good value-added services (such as VOIP).  They said I could not get broadband.  I had to ring Telstra.  Annoyed, I rang Telstra and was told broadband was not currently available in my area, but I could go onto ISDN with them.  I didn't know anything about ISDN, except that it was faster than Dial-up, required extra hardware, and allowed always on internet; what I wanted....for a price.  I agreed and they came out, the gentleman installing it had significant trouble, mumbling about his counterparts at HQ not having told him about a required "upgrade" before he left and he would have to come back with other equipment.  He came back a few days later, ferrying between the exchange and my house and eventually got me up and running.

All was well (other than the HIDEOUS cost of ISDN + phone calls dialling up all the time).  About 16 months later, I was getting rather disgruntled with my speeds and was talking to a neighbour across the road.  They happened to mention they were on broadband and had been for over a could this be I asked myself? I'm across the road from them??  I rang up iiNet again and was told my line was not eligible for ADSL, but after saying I was on ISDN, they did a Telstra check and found my line was capable, but it didn't show up because of the ISDN hardware on it.  I asked why they didn't tell me this over 12 months ago, that I could've gotten ADSL and after explaining what I had had done with Telstra, it became apparent what had happened.

ISDN could be run in situations where ADSL could not, back in the day, before advents such as Extended ADSL and ADSL2+.  This is mainly because of quality issues on poor lines.  BUT, hardware at exchanges has to be enabled for ADSL to be used on lines (this isn't even getting into pair-gain and RIM, both of which ISDN CAN run on, but ADSL can't).  What it transpired had happened, was Telstra had been in the process of upgrading our exchange, about 2km away, to be ADSL ready.  This was never mentioned, even though I asked.  About 2 months after I received ISDN, ADSL became available on our exchange, about the time our neighbours moved in.  I was never rung and never told this whenever I spoke to Telstra- until I told them I would be changing to iiNet....  iiNet told me this was commonplace; Telstra would provide a better service, when it became clear a competitor would get the business otherwise.  But it would NOT inform the customer if the situation changed, such as in my place, where I could now get ADSL.  Needless to say, I reported this to the ACCC/Ombudsman.   I was credited 1 months ISDN service......the month I cut it off and got ADSL with iiNet, which meant I couldn't use it.....

That long winded story should illustrate my point quite well; Telstra has no incentive to ensure a competitors customer has better or even equal access to services, although their contract stipulates they are to provide these services EQUALLY to ALL wholesale customers (retail competitors), they quite often didn't and still sometimes don't.  The Ombudsman quite regularly wrist slaps Telstra and publicly condemns them with the poor job after they were privatised.  The only way around this was if the competitor owned their own DSLAM in the exchange, but this was still limited if the actual line in the CAN (usually Telstra's) was damaged, degraded or, god forbid, a physical pair-gain line.

The upshot of all this is that with a vertically unseparated Telstra (retail/wholesale in one), there are major barriers to true, equal competition in Australian broadband and telecommunications services.  I, for example, would dearly like no home phone, and to use VOIP (I've used VOIP since I first signed up to iiNet and only use our home phone as a dial-in number).  On iiNet, Internode etc. this is known as Naked DSL and it saves you $30 a month on line-rental; another way of saying $30 a month of 'hiring Telstra's hardware'.  You pay for the broadband and VOIP service, but not the line rental.  This is ONLY possible if the company has a DSLAM at your exchange, which, living in a regional town, they don't.  Telstra don't offer Naked DSL, for fairly obvious reasons- they own the hardware and want the extra $30 out of you for line-rental, why would they allow you to circumvent that?

This sort of stifling of the competition is a result of a private company, wanting to increase profits, owning critical public infrastructure shared across the nation by many companies providing services.  As part of the the NBN, many of Telstra's copper access routes/conduits and some fibre lines will be leased and repackaged to use/house NBN fibre.  Telstra will become vertically separated and while they will will still own their copper and HFC networks, the Telstra Financial Heads Agreement will force them to be decommissioned and have users migrated to the NBN.  The copper CAN will be largely left intact, but their conduits and access will be leased to NBN.  This puts them on the same footing as all other ISP's in Australia, albeit with their larger market share to back them.

The NBN enables Telstra's stranglehold on the wholesale CAN to be lifted, but it IS replaced by another government owned company.  Some say this will result in a repeat of the Telstra situation with the NBN down the line.  This is speculation.  There is talk of selling off the NBN after construction.  If this happens, the likelihood of it being partly sold off like Telstra is slim- why repeat a mistake?  A wholly private company, regulated to be ONLY wholesale, owning the infrastructure has benefits and disadvantages, which I won't go into here, but suffice to say, it will NOT result in a Telstra-esque problem.

There has also been speculation that the NBN will stifle competition as it will provide the same service to all ISP's on the infrastructure and therefore there will be little to choose between.  This is true to a certain extent, but firstly Telstra owns 85% of the last mile in this country (the 70% on copper and 15% of the 30% covered by HFC) meaning there ISN'T much competition anyway and secondly this will actually likely mean better competition between ISP's (or RSP's- Retial Service Providers as they're known on the NBN) on pricing and VAS or Value-Added Services, such as VOIP, VPN's, cloud storage solutions, muti-cast IPTV and so on. RETAIL competition, which benefits the customer will thrive, while wholesale competition, almost non-existent now AND a part the customer doesn't care about (do you care who owns your power lines, or just about how much the electricity costs?) is removed.  What it does mean though, is that all Australian's will be able to receive fast, effective, reliable and cheap broadband collectively, rather than the patchy nature in which we receive it now.

What about wireless broadband?

Malcolm Turnbull has been vocal in his disagreements with the NBN (a pity he's in the Coalition, my gut tells me he knows the NBN is a decent deal, but he HAS to rally against it) and one of his discussions has been about "Next-Generation Wireless rendering the NBN obsolete."  This is an interesting question.  Could the current crop of "4G" mobile technologies coming to market be better, or at least as good as the NBN, but with mobile convenience?  Let's take a look.

Current technologies of 4G are clustered around a technology known as LTE (3GPP Long-Term Evolution; or 3rd Generation Partnership Project- Long Term Evolution.....thanks goodness for acronyms!).  In Australia, the only current 4G network is Telstra's 4G LTE network (this is not technically a 4G network (LTE-Advanced and WiMAXX 2 are real 4G) from the original definition (1Gbps downstream), but it's enough to be going on with and it has been recognised under the general umbrella of 4G).  Optus have (Edit: just started) to rollout this month.  Vodafone appear to be waiting for the dust to settle and have their own problems to deal with in the meantime.  But 4G has some promising characteristics.  If used in the right spectrum (Telstra's using 1800Mhz, Optus have tested in the 700Mhz but are also rolling out 1800Mhz) such as the 700Mhz range, where analogue TV is due to be turned off in 2013, then the spectrum sold off, it can provide 15-20Km radius cells with speeds of up to 40Mbps.  Telstra has shown off speeds of between 34Mbps -18Mbps down, but in real world testing, Gizmodo AU has found it reaches anywhere between 18Mbps and 8Mbps, which is still significantly better than 3G (HSPA-DC) at around 8Mbps tops.  However, this is still worse than some CURRENT broadband subscribers can achieve.

LTE-Advanced, when it is implemented, should bring speeds approaching 50-60Mbps in real world use.  But that is assuming the ideal scenarios including enough cells to handle all customers in any given area, line-of-sight to the cell tower, weather, and any of the normal affects on wireless such as solid walls (and the materials they're made of) and interference.  This is an awful lot to go right, and that JUST gets the signal to the cell.  The operator then has to have its backhaul (fibre) and connections to the landline backhaul (what the NBN will be) are all operating at peak efficiency.  Now, it's true operators will have to make sure their interconnects and servers are able to handle the load of their subscribers data requirements for the NBN to operate at its' optimal speeds.  But this is much easier seeing as their interconnects and servers are the ONLY things the operators have to look after, unlike in wireless networks, where they must look after ALL hardware and interconnection backhaul, rather than just the servers and interconnect.  They can spend less money, on less hardware but maintain higher throughput because they are only looking after their end, not the customers end.  And this doesn't even mention the fact that there will be many different frequencies of 4G in Australia, therefore many different devices required to access each network.  Or some sort of homogenising of the networks to make them all compatible (likely by government subsidy) which is unlikely.  

The NBN will be uniform with the same hardware provided to all customers for the same reliable level of service.  Operators will look after only their POI's (Points of Interconnect to the NBN) and servers (and their own backhaul if they choose to continue running it against the NBN) to maintain high throughput for customers; a much easier proposition than looking after an entire network.  Yes, they will have to pay NBN Co. to access the NBN, but all operators are charged the same, regardless of size or location, which puts the competition aside for providing higher throughput or more DSLAM's for access.  Wireless broadband uptake in Australia is very high, but this is to be expected- we have a large country and many of us travel large distances to work or to see friends and family.  However, many wireless broadband subscriptions are work related and many are because of the very reason the NBN is being rolled out; they don't have access to reasonable price, reliable broadband.  In my area, wireless broadband is a stop gap that barely allows you to check email and Facebook and forget streaming a youTube video at any sort of decent quality.  But this is ok for many older people, people who do not work with the internet or need it for work.  But the new generation is consuming data at an ever increasing rate:

This graph from the governments Department of Broadband, Communications and the Digital Economy's: Convergence Paper shows that the wireless consumption of data has decreased (but in fact over the same period wireless subscriptions increased) but the fixed line consumption has increased by a significant percentage (nearly 20% in fact).  This shows that while Australians have a love affair with being internet connected wherever they go (14.5 Million subscribers in June 2011) their heavy lifting, in terms of data downloading, is always done at home or in the office.  And the AMOUNT of data being downloaded is growing ever faster.  With the explosion of Internet TV, HD VOD, online movie rentals, music streaming, cloud-storage, online photos and video manipulation and catch-up TV, Australians are moving into the 21st century with open arms, embracing high data content on-demand wherever they are, but particularly from their couch or office chair. (EDIT: and this is just consumer value- we haven't even GOTTEN to business potential yet)

The NBN is as much about replacing Australia's ailing telecommunications infrastructure as it is bringing Australia, guns blazing, into the international digital battlefield.  It is, to a certain extent (as much as you ever can with technology) future-proofing Australia as we demand more and more from our internet connections.  We want fresh piped info, video, social networking, work and more all at our fingertips with no wait, no delay.  The NBN is the best equipped to do this, through its' total replacement of most of the current infrastructure.  There are cheaper ways to provide slightly better broadband to more Australians.  But Australia has always been at the forefront of most things we try to do.  Why should we kick back and watch as we're outstripped now?

A Coalition Broadband plan...maybe and FTTN vs FTTH....FIGHT!

So, we've covered some fairly broad information about the alternatives to the current FTTH NBN. But in this post, I want to discuss a little more in-depth, the differences of the major section of the network that may or may not get built, depending on currently, how the elections turn out in 2013. While wireless is likely to play an increasingly important role in our everyday lives, it will not do the heavy lifting required of businesses, Video-On-Demand (VOD) and Cloud storage. For these applications, we need fixed-line systems, such as we currently have with Telstra's CAN (predominantly copper), HFC networks (Optus and Telstra) and backhaul network (predominantly Telstra fibre).

The argument is, with a fixed-line network made up of FTTN, HFC and copper, as in the Coalition's current plan, we will have enough bandwidth to serve the majority of Australians for several years to come at a cheaper price. Whereas the FTTH network of NBNCo. and Labor will give us a network that is more expensive, but provide us with bandwidth to spare and to grow into. Note here I'm saying Coalition and Labor; unfortunately, this is where politics and the NBN clash directly. When I refer to "The Coalition" or "Labor" in this post, it is not an attempt to belittle or persuade, politically. It is simply a matter of fact that, as it stands right now, we have 2 competing ideas for a network, that span the 2 political ideals of our country. The NBN SHOULD be politically agnostic....but it isn't.

So, let's have a look a little more closely at FTTN.

FTTN and VDSL- Partners in crime

FTTN is a network architecture choice that many countries around the world have made- There are several in the US, including the big one AT&T's U-Verse (although we have to be careful, because some of it IS FTTH, but the majority is FTTN). Germany's Deutsche Telecom, under the subsidiary of T-Home (also offered in different countries). Bell Telecom Canada also, which offers its' services under the Fibe moniker and several others around the world. Finally, New Zealand, which has recently stalled its' FTTN rollout by TelecomNZ, the NZ incumbent. There is good reason they've stalled, and in fact decided to go with FTTH to 75% of premises, which will become clear. You'll note I've linked to Wikipedia's sites for these companies; it is significantly difficult to get information directly related to the FTTN architecture of a company, if you're not directly in the industry. It is usually sold under a moniker, such as in Australia, where HFC is sold under Telstra as Bigpond "Elite" Cable or BigPond "Ultimate" Cable, depending on your preference for speeds/price. For this reason I've linked to Wikipedia to give an overview, not a detailed analysis via this source.

These networks, depending on country, usually offer services on a "triple-play" basis; Voice, Internet, IPTV, all over one cable. The TV options vary (PayTV or VOD) as do Voice ("Analog" normal phone services or VOIP), but the Internet speeds can range from as low as 13 Mbps to as high as 200 Mbps. Now that is quite a range and, you might ask, why on earth is it such a big range? Is this speed tiered information? No, this is real-world data that has been received, such as this letter from the CEO of TelecomNZ, regardless of tier break down. So why then, if people are asking for 100Mbps, are they getting 13 in some cases? Such is the physics behind VDSL, the technology used to bring FTTN to the majority of premises.

VDSL (or Very-high-bit-rate Digital Subscriber Line) is a technology behind FTTN architecture. It is, essentially, running on a mix of copper to the premises, running back to a cabinet, where the signal is converted to fibre and sent on to the backhaul of the network. VDSL is HIGHLY dependent on premises' geography for its' speed:

This graphic, from Boundless, a "Rural Broadband company" in Britain, gives a good idea of the unfortunate reality of VDSL. If you live within, say, 300m of your fibre cabinet VDSL2 (the newest iteration) will give you better speeds than ADSL2+. Within 1km, VDSL1 will STILL give you better speeds than ADSL2+, but after that, you're better off sticking with good old copper all the way to your exchange (Note: other graphs go higher to 300Mbps for VDSL2; this is not possible for most Australians, as I will explain). Now, in a country like the US or UK, where there are small, densely populated areas and even the "rural" areas are only a couple of tens of km's away, VDSL can make a difference. But, as I've shown before, 60% of Australians are more than 2km from their exchange. Alcatel-Lucent are boosting that, to enable people within 2km to received higher than 24Mbps, but it drops below that after 2km....again, no good for the majority of Australians. Let's face it, we're a spread out country, even in the suburbs. Boundless themselves actually have a novel idea of "Wireless Fibre" or "Fi-Wi" (WARNING Copyright infringement likely over the "Wi-Fi" brand....) where the cabinets have high power, fixed wireless that enable MUCH faster connections to those beyond 2km, up to 100Mbps. But this is not currently what we're discussing, as I'll talk about below.

One of the problems when talking about FTTN arguments in this country is we don't actually have fine detail about the Coalition's plan for FTTN. For example, will FTTN cover...40%, 50%, 60%, higher? Lower? We don't know. We were only told "97 percent of premises are able to be served by high speed networks capable of delivering from 100 Mbps down to a minimum of 12 Mbps peak speed" and this comes from the Coalition policy on Broadband from 2010- it is NOT the idea of SPECIFICALLY FTTN that Turnbull has launched since mid last year and which Tony Abbott FINALLY mentioned in his Reply to the Budget speech a few weeks ago. It is in fact the original broadband policy that contributed to them losing the 2010 election, which was a mix of subsidies to increase HFC rollout by Optus and Telstra, wireless in the rural and regional areas and other "undisclosed" subsidies for improving FTTH rollout in Greenfields. I have explained this policy and its' disadvantages above. The Coalition seems to have realised this isn't a decent policy now and have gone to FTTN; but we still have no information about it.

So, in actual fact, we have NO details about FTTN in terms of how much of the Australian populace it would cover. There is good reason for that, as I will demonstrate. Note: I know I'm wading into politics here, but unfortunately, the Coalition are basing much of their policy around politics, not good ideas. Such is life, we now have to wade through the muck to get to the gold about the realities of the FTTN in Australia.

The Telstra Dog and Pony Show

Telstra offered up its' 2 cents several years ago in 2006 about FTTN to 60% of the population, although it was shown later that, in fact, it would be to 40% of Australians, in the most profitable areas....and it wouldn't really be available to competitors thanks to the non-ability of the cabinets required in FTTN to allow competitors DSLAMs (the hardware that connects a competitors fibre backhaul with the customer line) to fit in and use ULL's (Unbundled Local Loops), essentially re-establishing a full Telstra monopoly to these areas. Needless to say, the ACCC threw this one out.

Next was Labor's original NBN, or NBN-1.0 as some people like to call it, that would provide "broadband speeds of up to 12Mbps to 98% of the population".  Seeing as almost 50% of Australians can (with some reliability) already access these speeds, it was considered by many a waste of time and money, as it wouldn't actually substantially increase the speeds the majority of Australians could receive. And for those it wouldn't be by much (another 20% can get speeds up to 10Mbps). But this was not the worst of this plan; oh not by a long shot.

See, this "12Mbps to 98%" could only be achieved using FTTN. This, of course, meant rolling fibre to, presumably, 98% of exchanges, whereby cabinets would be installed to "splice" the last mile copper into the fibre network. These cabinets would be large, powered and managed by Telstra. The copper, was to remain an integral part and therefore, Telstra must be compensated for it, as it was essentially actually selling the copper, as it would now be in the FTTN system. Well, that's not something Telstra, particularly then with Sol Triullo at the head at the time, would've parted with lightly. This was THEIR infrastructure, bought by shareholders, they would want fair recompense. The government was told, confidentially, according to experts at the time, Telstra would accept nothing less than $15-20 BILLION dollars for the copper CAN. That would put the total spend, at the time believed to be around $5 Billion, to around $20 Billion MINIMUM, for essentially the same service the majority of Australians had already. Oh, and it got even worse- Telstra, who would be out for competition of this new network, would simply build over it with FTTH in profitable areas and wipe its' usefulness out entirely if their were no laws to prevent it (as there are in the NBN). Telstra's own advisor to Sol at the time admitted as much.

So, Labor came up with the new plan of FTTH to 93%- NBN-2.0. And then we have this unknown % rollout of FTTN by the Coalition. But WHY is it unknown? Is it because the Coalition have simply not fleshed out the policy being this far from the Election? Quite possibly. There is no reason to believe otherwise....but there is a reason to suspect why they MIGHT want to hold back on fleshing it out at all.

The FTTN Australian Dillema

Assuming the Coalition are serious about FTTN, and assuming they will stay with their mantra of fixed wireless/satellite to a large portion of remote, rural and remote regional areas, then it would follow then that approx. 40% of premises would be passed by this FTTN network (seeing as 35% are classed semi-urban (unprofitable for new networks) or regional/rural, ~25% are serviced by current HFC and rounded out 5% remote). So at 40% of premises passed (my assumption isn't bad, considering that's what Quigley has assumed too, once you take into account HFC networks), what would this cost? The Coalition are saying $7.6 Billion. We'll work on $8 Billion. So, $8 Billion to provide 40% of premises with....what? Again, we don't know. 12Mbps? 50Mbps? 100Mbps? More? Again, we're going to assume around 50Mbps. The explanation for this is that, because FTTN speed, using VDSL, is HIGHLY dependent on proximity of its' cabinets to a premises (ie. length of the copper between the premises and fibre splicing point) there has to be a point of economic efficiency. Let's face it, if you roll the fibre to within 100m of each premises to give maximum speeds to all, you're getting AWFULLY close to a FTTH network and most of the cost OF the FTTH network is fibre laying. So, shortening the fibre run by increasing the distance from premises to cabinet is cheaper, at the cost of speed. Hence, the middle ground of 50Mbps.

So, that's $8 Billion to provide 40% of Australians with average 50Mbps. Wait a minute "average"? Yes, that's right, average. Depending on copper line quality, whether you have a physical pair gain system (shared copper line between 2 houses, which to be fair, would probably be upgraded) AND, most importantly, if you have 2 copper lines run to your house, of which the majority of people, don't. Telstra's CAN, in many places, has a single bonded pair of copper running to homes, with no spares available. But for VDSL2 to work, requires 2 bonded that won't work unless you lay more copper....and that's getting a bit silly. Already that FTTN is on shaky ground for the majority then. Also, as I've pointed out before, the majority (60%) of Australians live more than 2km from their exchange, which means, seeing as only 40% of Australians are classed as semi-urban or regional/rural, there must be some portion of this 40% getting FTTN that will require cabinets considerably closer than their exchange.

This, then, means several hundred cabinets will have to be installed for these 40% to get ANY benefit whatsoever above the 24 Mbps available via ADSL2+ to most premises. Also, to make it a reasonable investment, even those inside the 2km limit, will likely need that cut in half to achieve 50Mbps, partly, because without adding a bonded copper pair, VDSL2 speeds aren't available, so VDSL1 is all we have. Hence, likely, several thousand cabinets. All these will, possibly, be administered and installed by NBNCo., as the Coaliton have recently stated they will keep working with NBNCo. if elected and not scrap the company. (this seems logical, now they've realised, because it cost nearly $600 Million just to set everything up (see the Corporate Plan)). Although, this presents a conundrum in itself, as the legislation covering NBNCo. requires that:

"An NBN corporation may provide eligible services only to a 'carrier' or a 'service provider' (as defined in theTelecommunications Act 1997).[13] According to the explanatory memorandum, this 'ensures that NBN Co will only supply services on a wholesale basis...'" (Australian Parliamentary Library)

This means, NBNCo. can ONLY provide wholesale services, under legislated law- unlikely to change given the Greens power in the Senate and their Pro-NBN status. Hence, an FTTN network would be a considerable obstacle, as it's inherent architecture, as discussed before, does not allow competitive use of the same infrastructure. The only ways around this are to either have EVERY possible competitor have their own cabinets (an VERY expensive and unlikely outcome) to hook in to premises copper OR have Telstra build the network.....hmmm, where have we seen that before.....

So, the FTTN has become a FTTC (Fibre-to-the-Curb) network, running to approx. 40% of premises, mainly in city suburbs and large regional hubs. We've fleshed this out ourselves, because, as I've said, we have no details of the Coalition's actual policy, but this is in agreeance with most experts and it seems,  at least some of the Coalition now (read the comments section). There will be ~25% of Australians covered by HFC networks (subsidised to increase competition and allow node-splitting to let more premises have access, unlike now). And that leaves 40% covered by the copper CAN, or, wireless. The Coalition have not yet said what % of this 40% will get wireless. Obviously, if wireless can only provide 12Mbps (as under the NBN) and some of that 40% can already get 8-10Mbps on copper, they're unlikely to get wireless. Let's say 10% of the last 40% would get wireless, at up to 12Mbps.

A Coalition Broadband Policy, finally....maybe....

So, here we are then, the Coalition's Broadband Policy, as produced (in copyright protection, of course) by me (backed up with help by Citigroup's analysis, if I need to be honest):

- FTTN upgrade to ~40% of premises in Urban, semi-Urban and high density Regional areas
- HFC to ~25% of premises in existence already, subsidies to make competition better and drive prices down and speeds up
- Copper CAN continuation to ~25% of premises, able to receive speeds of up to 24Mbps (many less)
- Wireless to 10% of premises currently unable to get much over speed over the CAN, if at all

So, this then, is the Coalition's "mixed technologies" plan, or "alternative path of upgrade" as Turnbull calls it in his speech to the Broadband conference in Malaysia recently.

What speeds do we get from this? Now? (or when it is done rather) 25% of premises up to 100Mbps (HFC), 40% average 50Mbps (FTTN), 25% up to 24Mbps (CAN) and 10% up to 12 Mbps (Wireless). So, if you want fast broadband, under the Coalition, looks like you'll have to choose carefully where you move for work or play. Ultimately, this plays against the Coalition, because this fragments the market, making it difficult for consumers who move around (and there are alot of us, look at the rental market). And, as Citigroup notes, it will actually promote, even more than now, the geographic nature of wholesale, and subsequent retail prices of broadband, meaning the digital divide we already experience gets significantly worse as private companies refuse to invest in non-profitable areas.

Upgrading...or not

However, of course, even this last paragraph is assumption. Because of course, we haven't dealt with the "white Elephant in the room" yet; the NBN. If the Coalition do indeed win the 2013 election and opt to stop the NBN where it sits, that will still leave somewhere between 10-20% of people on the NBN ALL over Australia. (perhaps THIS is why NBNCo.'s rollout seems haphazard, makes it more difficult to stop...sorry, conjecture not necessary)

So we need to modify our numbers again. Some people in Armidale will have access to 100Mbps on the NBN, while some people in Blacktown, Sydney, won't get above 24Mbps and that's if they're lucky enough to get that at all. This seems like a fairly farcical situation and indeed it would be. How would the Coalition deal with this? Part of the reason the NBN is going in is to "close the digital divide" of regional and urban Australians (or even semi-urban and urban Australians...). I don't have an answer for this. All I can assume is that they would choose to increase the amount of FTTN rolled out to deal with these areas that some have NBN and some don't. Otherwise, you'd be left with the East half of a town with 100Mbps and the West half with possibly little access to broadband at all!

So our policy price goes up. To what? This is pure conjecture here, but while it's clear from Citigroup's analysis it would indeed be more than the $8 Billion we've been working with, (they suggest $16.7 including all legislation) Citigroup work on the assumption of no NBN whatsoever, so we can't use those numbers. I would hesitate to put down a figure, but my guess would be.....$23-25 Billion, including all legislation and CBA, seeing as FTTN gets more and more expensive the further apart premises get. And much of the NBN would have stopped in regional areas, where FTTN may not have been slated under a "pure status quo" situation. Now, of course, we're in a situation where the % on copper has decreased, the % on wireless MAY have decreased and the % on FTTN increases, significantly. Possibly to as high as 55%, although likely hovering around 50%.

And there's the next question too, of where do we go from there? Paul Fletcher believes there is much technologically we can do yet with HFC, copper AND FTTN. Technologies like phantoming and DMM in FTTN can provide current bandwidth up to 300Mbps along last-mile copper, very true....but what he doesn't point out is that phantoming and DMM are VDSL2 technologies and, as I've said, many Australians don't have 2 bonded pairs going to their houses. Also, 300Mbps is PEAK speed at no more than 300m from the exchange. It drops rapidly after that.

Here's also an interesting tidbit from ospmag:

Due to the amount of calculations involved, vectoring will provide the best results in nodes with a limited number of lines (FTTN or FTTB deployments, for instance). The only requirement is that all lines are under full control of a single operator, meaning that there can be no sub-local loop unbundling. Indeed, if the lines belong to multiple operators and are terminated on different nodes, then there's no way to collect all the signal and crosstalk data.

Emphasis added; the vectoring here is talking about VDSL2 technology paths. Hmmm, single operator?....sounds awfully familiar...I seem to remember a certain incumbent telco back in 2006 presenting something like this....Of course, if NBNCo. was enabled to deal with the FTTN section, this would possibly be viable....but they're currently legislated to produce a wholesale only network..... But we, as yet, have no confirmation on any of this. Worrying nonetheless that FTTN higher bandwidth technologies simply do not ALLOW competitors to use the line if it was to be built by Telstra....

HFC? We could node split, much like FTTN where we put cabinets closer to the premises, to allow more connections and faster speeds. But apart from many large and unsightly cabinets, the investment would be substantial. How much? Unknown, until it becomes clear what sort of bandwidth is being demanded.

Copper? VDSL2 straight from the exchange is all we have at the moment. But being useless beyond 2km, that makes it useless for 60% of Australians, probably many of whom are the ones with the WORST current broadband. And of course it depends on copper quality too, which, depending on which side of the NBN argument you're on, appears to be "really bloody awful in general" or "quite adequate for the most part" half full/empty anyone? comment....

Wireless? Well, there's no question LTE is greatly boosting bandwidth for both fixed wireless AND mobile solutions. I've already talked about wireless as a "competitor" to the NBN above, so leaving that aside, what other wireless options are available? There's the "Fi-Wi" I mentioned earlier, where FTTN is run and instead of using the copper in the ground already, we could put high power LTE transceivers and hardware on nodes to provide coverage at anywhere from 3-20km depending on the frequency. The speeds would be in excess of 40Mbps (real-world) currently, and more in the future to many in the wireless serving areas, much higher than many have now. Obviously, this would be a secondary "internet only"connection as, to have reliable phone, copper connection would still be required. (VOIP would still be possible however)

There are problems surrounding this- contention, as has been explained before (think Sunday night, everyone's home, schoolwork, work work, watching youTube/iView...) and it applies here, as more people access it, the spectrum is shared, so it reduces throughput. Weather, although this is a minor factor unless high wind or lighting knock-out transceivers. Transmission power; this is because there would have to be several of these "Wireless nodes" to cover a decent number of premises and allow sufficient bandwidth for those premises, due to contention. The power would have to be enough to overcome interference from surrounding LTE transceivers AND domestic wireless devices. I won't go into this debate here, but we're ALREADY seeing much argument surrounding actual affects of EM radiation with just mobile wireless towers. I for one, DON'T believe it has everlasting harm, but that's me....

The bottom line

So what IS the bottom line here? The bottom line is....there isn't one, at least for the Coalition plan currently. We don't have enough information. But I believe my analysis (with help) has shown that even with some of the best circumstances, the Coalition's plan would deliver little benefit for the similar cost of the NBN. There is several quotes that come to mind, one being the famous "Do it Once. Do it Right. Do it with Fibre" mantra that was thrown around years ago on the topic of FDDI networks in large corporations. Of course, then Gigabit copper came along and removed its' much less cost too, as a slap in the face. However, I believe this applies for FTTH, unlike for LAN FDDI, which is short range only (less than 1km, usually less than 500m), mainly because of this statement from ospmag's "Turning Copper into Gold" article by Stefaan Vanhastel and Wim Van Daele:

FTTH, with fiber running all the way from the central office to each home and every apartment, is the clear endgame. FTTH architectures are future-safe, enabling operators to deliver (more or less) unlimited bandwidth: 100 Mbps per household today, with technology evolutions set to increase this in the future. Their main drawback, however, is that (nationwide) FTTH deployments require a lot of time and money.

And also:

FTTH is the clear end-game, supporting the delivery of 100 Mbps per household today and technology evolutions set to further increase this in the future.

So, we KNOW the NBN is going to cost between $27 Billion and, somewhere around $30 Billion (to the Government, total cost likely to blowout to maybe $45 Billion) once inevitable blowouts and inefficiencies are taken into account. (such as NBNCo.'s recent revelation that 1/3 of their address data (NOT their own) is wrong and Telstra's delay of 8 months in signing the Telstra Financial Heads of Agreement on NBN). This is high, but I've shown it is not a taxpayer burden and our government debt levels are some of the best in the Western world, therefore the risk is minimised.

Seeing as it appears ALL telco's are moving towards the ultimate goal of FTTH, as it gives the most bandwidth capability and the only reason they don't ALL jump straight to it is cost and investment risk, and the government is backing FTTH investment mitigating the risk, why NOT "Do it Once. Do it Right. Do it with Fibre" all the way? It would be a world first. A massive boon to our digital and real economy. Social benefits also innumerable in a country as vast as ours would prevail.

Why NOT be the envy of the world? We do it so well elsewhere....

1 comment:

  1. Long term, Between ADSL2+ and NBN I'd stick with NBN especially FTTH. Upgradable and fast, just hoping that the rollout would be complete soon. Can't wait.

    Until then I'm still stuck with ADSL