Month: April 2014

Fibre pit hauling

Malcolm, FTTP was apolitical…

Kenneth Tsang Leave a comment

Despite repeated claims of by Minister of Communications, Malcolm Turnbull — the choice of the 93% Fibre to the Premises plan as chosen by the former Labor Government was not a “political” choice.

In a recent opinion piece by Minister Turnbull on ABC’s The Drum, he writes:

But it is critical to remember one very big difference between our Government and Labor’s on this matter. Labor made a thoroughly political decision to use FTTP for 93 per cent of the country – heedless of the economic consequences.

But anyone who remembers the original plan for the National Broadband Network was actually an Fibre to the Node network.

The original plan was to undergo a tender process to ask companies like Telstra, or Optus to propose a network construction. The proposal was that the Government would contribute $4.7 million dollars (by selling off the Government’s remaining Telstra shares) to the construction of the network.

Six companies submitted proposals, including six Acacia, Axia NetMedia, Optus on behalf of Terria, TransACT and the Tasmanian Government. However, the Government announced on the 6th April 2009 that they did not find any of the proposals satisfactory. “Deterioration of the economy” during the global financial crisis (GFC) was cited to be the root cause of this failed request for proposal (RFP) by then-Communications Minister Stephen Conroy. Instead, it was announced that a Fibre to the Home (FTTH) network would be constructed by a Government-owned company, soon to be known as NBN Co.

How, I ask Malcolm Turnbull, is a failed request for proposal due to the global financial crisis a political decision? This one has seriously left my head scratching…

Inside an NBN node at Umina Beach

Anti-cherry picking limiting consumers in FTTN

Kenneth Tsang Leave a comment

Whether you like it or not, NBN Co’s business case benefits from the so called “anti-cherry picking” laws — or Telecommuncations Act 1997, Sect 141B to be exact. It basically gives monopoly provisions for NBN Co to build a “superfast carriage service” (basically an internet connection able to normally deliver 25Mbps or greater speeds) without competition from other carriers. This gives NBN Co the ability to cross-subsidise and create uniform pricing across Australia.

The fundamental problem with Section 141B in this new MTM network architecture being undertaken by the new NBN management is that consumers no longer have a choice of speeds. Australians covered by the FTTN/dp/B and HFC components of the “new” NBN network will only ever be able to get what NBN Co delivers to them.

The issue…

Just to illustrate the issue here… For argument’s sake, you’re sitting at the fringes of a copper Distribution Area (DA) and your service gets peak speeds of 25/5 Mbps thanks to NBN Co’s“innovative” Vectored VDSL2+ FTTN rollout. Now, say in 2017… the company you work for has migrated to a cloud-based computing system that would greatly benefit from having burst capacity of 100/40Mbps so the internet doesn’t congest significantly when you start working. The problem is — no other competing network builder can come along and build a faster (and cheaper, especially in metro areas) fibre network for you — no matter how much you pay. Even small businesses can not get access to alternative “superfast carriage service” other than that provided by NBN Co.

Legal definition of Superfast
Defining superfast; 25/5Mbps is legally superfast under the Telecommuncations Act 1997

It works for an FTTP-dominated network

This framework was perfect under a universal and uniform fibre service that’s able to deliver services beyond the typical needs of a 2014-household. It keeps NBN Co’s monopoly and business case for cross-subsidy… and Australian residents and small businesses need not be worried by the restrictions of law on their ability to upgrade to higher and more reliable speeds since the GPON specification is future-proof with a backward-compatible XGPON upgrade path already available.

Just not FTTN…

But clearly, this does not work in an FTTN-dominated NBN. All residential and small businesses are legislatively bound in what their internet connection speeds achieve, that is, you will get at best what NBN Co is able to provide (a best-effort 25/5Mbps service). And if you think about it in the context of 2017 and beyond, that’s not a lot.

But without the current laws, NBN Co can’t possibly have a profitable business case. Its cross-subsidy plan for the rural fixed-line, fixed wireless and satellite services would crumble.

It’s a tough gig, but a self-inflicted gig

The Minister for Communications, Malcolm Turnbull, has a tough weight to balance. With the economical viability of NBN Co to struggle with, the party ideology of a free market and a self-imposed ideology of an FTTN network — one would wonder why we didn’t just stick with FTTP…

Disclaimer: this is based on my understanding of the Telecommunications Act 1997, Section 141B. Feel free to correct me if you believe what I’m asserting is incorrect — politely of course 😉