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News, Telecommunications - Written by Renai LeMay on Wednesday, May 2, 2012 9:56 - 121 Comments
Copper maintenance cost not an issue, says Turnbull
news Upgrading Telstra’s copper network to fibre to the node was the “quickest and easiest” way to get better broadband for Australians, the office of Shadow Communications Minister Malcolm Turnbull said this week, highlighting a study which had shown that the cost of maintaining the decades-old infrastructure was not significant compared with the overall investment required for universal fibre.
Yesterday Delimiter published a photo gallery of the “worst of the worst” aspects of Telstra’s copper network, which was first constructed gradually over the past century. The photos show that in many cases the network has not been adequately maintained, with many aspects of it open to the elements or in obvious need of repair. Currently, the network is slated to eventually be scrapped and replaced by optic fibre infrastructure under Labor’s National Broadband Network plan, but the Coalition is proposing to re-use portions of Telstra’s network under a modified plan to run fibre only part of the way to end users’ premises, in a rollout style known as “fibre to the node”.
In a response to the photo gallery, a spokesperson from Turnbull’s office said the Coalition’s policy was to be “technologically agnostic”, so it wouldn’t rule out using one technology or another.
“We recognise that in some areas, the cost of maintaining or upgrading the copper will make it uneconomic to upgrade,” they added. “But the experience around the world by telcos is that there has been a lot of investment in upgrading the copper because that is the quickest and most efficient means of upgrading broadband.”
The spokesperson said that on a recent trip to the United States, Turnbull had learnt that major telco AT&T had opted for a fibre to the node approach to upgrading its broadband network, taking the view that there was “no technical need” to go to the NBN’s fibre to the premise-style rollout in most areas where the copper network already existed.
“BT in the UK takes a similar approach. The technology is moving quickly and the right approach is one which combines a rigorous cost effective approach with an open minded attitude to technology,” they said.
The spokesperson also forwarded Delimiter comments Turnbull made to a recent conference in April, where the Liberal MP extensively commented on the cost of maintaining Telstra’s copper network.
At the time, Turnbull acknowledged that some advocated for the FTTH option had stated that costs for network maintenance, fault remediation and provisioning were lower with fibre, with US telco Verizon stating that eventual reductions as large as 80 to 90 percent could be possible, assuming a fully fibre network (compared with a copper network). Research house Analysys Mason had also analysed the issue, he said, finding that in the long term, the cost of operating a FTTH network could be in the region of 30 percent lower than the costs of operating the current copper network.
However, according to Turnbull, Analysys Mason also found that in the short-term, the total operating costs may increase due to the inefficiencies of operating parallel fibre- and copper-based networks, as Telstra and NBN Co will do for some time while the NBN is being rolled out.
In addition, the analyst firm found that the “the magnitude of the savings in operating costs is relatively small when compared to the overall investment required. In the case of [FTTN], therefore, the available savings are unlikely to be sufficient to make a business case unattractive; for [FTTH] the savings are likely to be substantially less than would be required to fund the investment based solely on savings in operating costs.”
Personally, I really don’t understand the argument that Turnbull is making here. Yesterday I sent his office an email asking him, given the somewhat shocking photos we published, whether Telstra’s copper network represented infrastructure worth upgrading to a fibre to the node-style deployment. In return, I got this complex economic analysis.
It’s important to note that at this stage, discussion over the cost of rolling out the National Broadband Network is somewhat moot. The network is slated to make a modest return on investment over the long term; hence it will not cost taxpayers money and is not an expense; in fact, it is an investment which will make money. This return is virtually guaranteed by the fact that there will be no fixed infrastructure competing with the NBN’s fibre (with Telstra’s copper network to be shut down and the Telstra and Optus HFC cable networks to stop providing broadband).
If the Coalition has analysis showing that the NBN will not make a return, then it should present that evidence. Until it does, we can only rely on the information we have right now, which shows the NBN will make a return.
With this in mind, the discussion about the NBN should now be turning purely to technical grounds. And on technical grounds, which I was trying to get at with the photo gallery I published yesterday, there really is no comparison between FTTN, which will partially rely on Telstra’s often-dodgy copper infrastructure, and the NBN’s FTTH style of rollout, which will completely replace it. Those awful shots of network infrastructure we published yesterday? All of those cables and terminating units will be ripped out and replaced with brand new gear under the NBN.
Unlike some commentators, I do feel the FTTN model has merit, and I agree with Turnbull that it would still meet many of the aims that both the Coalition and Labor hold with respect to delivering fast broadband to Australia. Personally, I’d love to have FTTN rolled out to my house, as it would deliver an instant speed and reliability boost over teh current copper network.
But I don’t feel that the Coalition has yet done enough to make its argument yet for FTTN; I’d like to see it try harder to justify its preference for this style of rollout. Labor’s NBN policy is a complex and highly evolved platform which the Coalition has not yet matched with its own plans. Before we start tearing down Labor’s vision, we need to see more detail about what it could be replaced with.
Image credit: Office of Malcolm Turnbull
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