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Analysis, Telecommunications - Written by Renai LeMay on Monday, July 30, 2012 11:06 - 145 Comments
Turnbull needs evidence for FTTN claims
analysis A consensus is developing amongst National Broadband Network commentators that Shadow Communications Minister Malcolm Turnbull needs to provide more evidence that Fibre to the Node is the best style of broadband infrastructure rollout for Australia’s long-term telecommunications needs.
Last week, Turnbull published an article on his website in response to a television appearance made by Communications Minister Stephen Conroy several days before. In the article, Turnbull made a number of points arguing that the Coalition would not sabotage or destroy Labor’s NBN project, but would “complete” the project and “do so sooner, cheaper and more affordably for users”.
In his argument, the Member for Wentworth strongly pushed the potential to use a Fibre to the Node (FTTN) style of broadband infrastructure rollout. FTTN is a deployment style which would see fibre extended from Telstra’s telephone exchanges located around the nation to neighbourhood cabinets, instead of all the way to home and business premises as under Labor’s plan (Fibre to the Home, or FTTH). The remaining distance would be covered by Telstra’s existing copper cable. Turnbull also made a number of other points about the Coalition’s vision for broadband, such as an alternative method of supplying wireless services to rural areas. Delimiter subsequently invited readers to fact-check Turnbull’s article, in the interests of keeping the debate over the National Broadband Network objective and based on fact. This article is a follow-up to that article and the discussion amongst readers it created.
What emerged from that process (both on the site and in private communications) was predominantly a strong concern by many who follow the NBN debate that Turnbull has not yet provided sufficient evidence to back the claim that FTTN is a better style of broadband infrastructure rollout to meet Australia’s long-term needs, compared with Labor’s FTTH style, which NBN Co is currently deploying. Many readers agreed that FTTN was a viable style of broadband infrastructure deployment in Australia, subject to certain constraints, however they questioned what the long-term impact of that choice would be.
For example, on the issue of cost, one poster, ‘Brendan’, wrote that he agreed with Turnbull’s premise that FTTN was a cheaper deployment model than Labor’s FTTH. “That’s not a lie. It’s quite true,” he wrote. However, he added, this cost was “one side of a two-sided coin”, because the real expense appeared when there was a long-term need to transition from FTTN to a FTTH-style model. “This is the point where Mr Turnbull will not comment. Will not provide policy,” Brendan wrote. “There are deployments (overseas) he has used as examples of FTTN being the answer. Those same places are now struggling to come-to-terms with how to translate to FTTH.”
“The world is moving towards fibre. We can either spend now, or spend later. Either way, we spend — It’s not an avoidable, optional decision. Turnbull would have us believe minimal Government expenditure will solve the problem. It doesn’t; his policies simply delay the inevitable. So someone else has to clean up the mess.”
Another poster, Sydney, pointed out that a document on Turnbull’s site disclosed that up to half of the outlay on a FTTN-style deployment would have to be written off, if there was a later switch to FTTH. And another poster, Goresh, highlighted the fact that the cost of a FTTN-style network was debatable, given the high ongoing cost of maintaining the copper portion of the network over a long period. Others highlighted the differing returns which could be made from each style of network deployment, which could affect the overall return on investment (if any).
Others questioned the timing of Turnbull’s FTTN proposal. For example, PeterA addressed Turnbull’s statement that FTTN could be delivered “in a year or two” by pointing out that it took more than a year for NBN Co to reach an agreement with Telstra in relation to the current NBN project, and a further six months for the Australian Competition and Consumer Commission to approve that deal. “It is very unlikely that the FTTN could rollout within 2 years,” he wrote. “More information from Malcolm is required regarding his rollout if he wishes to call this a fact.” Another poster, Dean, wrote: “How are you going to deliver FTTN in a year or two? That seems laughably optimistic.”
Another aspect which was questioned was the time frame in which a FTTN-based NBN would continue to be useful, before a transition to a FTTH-style would need to occur, based on increasing bandwidth requirements. “I don’t know for certain that FTTH is the ultimate technology but it has the potential to serve Australia’s requirements for the internet and other data communication platforms for the next 30 years or more,” wrote another poster, Bob.H. “Now the claim is that using FTTN as a basis, we can put in a “suitable for now” system that will meet current demands but this doesn’t address how long “suitable for now” will last.”
“If we put in a “suitable for now” system to meet current demands then it is obvious that when the demand increases in the future, as it inevitably will, then this system has to be upgraded. The upgrade is likely to be, and most of the experts say, is certain to be, a FTTH system. The question then becomes how long and how much is it going to cost to upgrade the “suitable for now”system to the FTTH system that is going to be required. If the FTTN system has to be totally replaced and extra fibre deployed then have we really saved any time or have we just deferred the upgrade and condemned Australia to a future substandard system while the upgrade is done.”
Not all commentators agree that Turnbull’s NBN proposal wasn’t viable, however.
On the other side of the fence, a commenter named Mark Addinall pointed out that the UK, Germany, France and Italy were all adopting FTTN models that were providing a mixture of ADSL2+ and VDSL2 services over existing copper networks, with some vendors such as BT offering FTTH as an extension to the FTTN in place. “It is interesting to note that all of these countries first planned a full FTTP network roll-out,” wrote Addinall. “But on the analysis of the costs versus the benefits to the consumer, the more modest approach has been taken. So Mr. Turnbull’s plan puts Australia on par with the global internet community.”
Carl Jackon, a technologist with experience building fibre networks, gave a number of real-world examples relating, for example, to TransACT’s fibre network in Canberra.
“To build VDSL2 FTTN in canberra came out at about $800 per home connected. At that price you could put a node with 100m of 99%+ of premises in the city and guarantee 50Mbits/sec. To build FTTH in Canberra came out at over $1400 per home connected for houses with aerial wires, but far more for suburbs with underground wiring,” Jackson wrote. “I can’t imagine a way you could price FTTN to be anything but much, much cheaper than FTTH, and that is the experience right around the world – I read through detailed case studies from Verizon, France Telecom HK Telecom, Malaysia and many others. This is not a serious topic of conversion in the industry. FTTN is cheaper than FTTH full stop.”
In addition, Jackson added, FTTN could be deployed “way faster”. “People who argue otherwise probably haven’t had the experience of building both,” he said. And the reduced cost of FTTN could also make deploying FTTN to rural areas cheaper — meaning some locations which aren’t currently slated to receive NBN FTTH could receive FTTN under the Coalition’s plan.
Writing on the ABC’s Technology & Games site last week, telecommunications journalist and analyst Richard Chirgwin published an extensive analysis of the Coalition’s FTTN policy, noting that it had many challenges and limitations, but also that the plan was possible. “Is it feasible to build an NBN-like network using FTTN?” Chirgwin asked. “Yes — subject to a very long footnote.”
More information needed
I’ve followed the National Broadband Network rollout and policy debate day in, day out over the past five or so years, and I’m familiar with all of the evidence that Turnbull and other Coalition figures have put forward with respect to their alternative NBN policy.
After reviewing Turnbull’s comments last week, and the evidence which commenters on both sides of the fence put forward to support their views of which of the Shadow Communications Minister’s views are based in fact or not, I think it’s safe to say that many agree with Turnbull that a FTTN-style rollout is viable in Australia. As a number of commentators pointed out last week, many other major countries are currently deploying FTTN-style broadband networks, with optional FTTH extensions where needed.
However, there is also general agreement that from a factual perspective, Turnbull has not yet presented enough evidence yet to support his statements that a FTTN-style rollout would serve Australia better than the FTTH-style rollout currently being used by Labor’s NBN project.
It appears that most informed technical commentators on that policy are highly sceptical of Turnbull’s FTTN model at the moment, with most holding the view that although FTTN could be deployed in Australia, that it is a worse long-term solution for Australia’s telecommunications needs than FTTH, and that in this kind of infrastructure rollout the Federal Government should be thinking long-term rather than short- or even medium-term.
It seems clear that Turnbull and the Coalition have not yet done enough to demonstrate how overseas examples of FTTN-style deployments such as in the UK could apply to Australia, or how the current NBN model could be evolved to take on a similar FTTN-style approach, with issues ranging from timing to costs, long-term RoI, the interaction of NBN Co and the Government with Telstra and so on. With this in mind, and based on last week’s debate, Delimiter will forward the following questions to Turnbull’s office and invite lengthy responses, in an attempt to give the Coalition a chance to further explain its policy:
- What international examples of FTTN-style broadband deployments do you consider most pertinent to the Australian situation, and why?
- How long do you estimate it would take, if the Coalition wins the next Federal Election, to deploy FTTN to more than 90 percent of the Australian population?
- What, specifically, do you estimate would be the cost difference between deploying FTTN and FTTH as part of the NBN rollout?
- Do you consider it possible to re-work the current Telstra/NBN contract to focus on FTTN instead of FTTH, and how long do you estimate this would take?
- What broad details of this contract would need to change, and how long do you anticipate the ACCC would take to approve a modified version?
- Do you have a long-term plan to upgrade a FTTN-style network to a FTTH-style network, or a medium-term plan to allow ad-hoc upgrades of this network to FTTH?
- What do you consider to be the time frame on which a FTTN-style network would continue to be used without an upgrade to FTTH? Will there, in fact, be a need to upgrade in the long-term to FTTH? On what evidence do you have these beliefs?
- How would you address the claim that FTTN is a short to medium-term technology that will be superceded over the next several decades by FTTH, and that Australia should only be investing for the long-term when it comes to this kind of telecommunications infrastructure? On what evidence do you feel this way?
We’ll publish Turnbull’s responses in full if/when we receive them. In the meantime, I’d like to thank everyone who contributed with comments to this process; it has already been highly valuable in terms of uncovering further information about possible future telecommunications policy in Australia.
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