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  • Analysis, Telecommunications - Written by on Wednesday, April 23, 2014 12:04 - 24 Comments

    Neither AT&T nor Turnbull are telling the whole truth

    Three Wise Business Monkeys

    analysis The local debate over AT&T’s plans to deploy gigabit fibre to 100 US cities starkly demonstrates that neither giant telcos nor the politicians regulating them can be trusted to give Australians 100 percent of the truth about how next-generation broadband infrastructure rollouts are being or should be deployed.

    If all you read about the announcement by giant US telco AT&T this week regarding its plans to deploy gigabit fibre throughout its home country was its press release, you would probably have walked away from the situation with the belief that the United States was very rapidly slated to become the sort of high-speed broadband nirvana that Australia would have eventually become had Labor’s all-fibre NBN plan not already been butchered by the Coalition.

    AT&T’s statement on its rollout plans certainly painted an attractive picture of a future US blanketed by technically superior Fibre to the Premises (FTTP) technology. The headline factors: 100 cities in 21 metropolitan areas, gigabit fibre to the premises, bundled services such as TV and an imminent timeframe based on trials already in the ground in Austin, all looked great on paper.

    Then too, AT&T’s statement wasn’t just about the numbers. AT&T executives such as Lori Lee waxed lyrical about unlocknig “a new wave of innovation” and fuelling “economic development”, with “the most advanced technologies” leading the way. Heady stuff for an Australian population which is constantly being told by the Coalition and NBN Co itself just how irrelevant gigabit broadband speeds are.

    AT&T’s announcement also looked like the perfect counterpoint to demolish the argument made on the ABC’s Triple J station just last week by Malcolm Turnbull that the US telco was a poster child for the Communications Minister’s preferred Fibre to the Node (FTTN) rollout methodology. “If you look around the world, the type of technologies that are being used, are precisely what we are proposing,” the Minister had said. “Fibre to the Node, that is what AT&T have done.” Well. Not quite.

    The only problem is, as US-based commentators such as DSLReports’ Karl Bode quickly made clear, AT&T’s plans were pretty much nothing short of a “big, fat bluff”, aimed largely at preventing rivals such as Google from expanding their own FTTP broadband networks into key areas.

    In the wake of the telco’s announcement, Bode and others pointed out that AT&T was marketing its efforts as a massive FTTP deployment across the US, but that in practice what they amounted to was the telco upgrading “a few high-end developments where fibre was already in the ground and pretending it’s a serious expansion of fixed-line broadband”.

    It’s a theme Bode has personally attacked companies such as Google and AT&T for previously. The writer calls the phenomenon “fibre to the press release”. In a post on US site Techdirt last month, he writes:

    “In a fiber to the press release deployment, a carrier (usually one with a history of doing the bare minimum on upgrades) proudly proclaims that they too will soon be offering 1 Gbps broadband. The announcement will contain absolutely no hard specifics on how many people will get the upgrades, but the press will happily parrot the announcement and state that “ISP X” has suddenly joined the ultra-fast broadband race. Why spend money on a significant deployment when you can have the press help you pretend you did?”

    In short, the current approach by AT&T and, to a certain extent Google and other telcos in the US, is not dissimilar to that taken by then-Telstra chief executive Sol Trujillo back in 2005, when he announced Telstra was constructing a nationwide FTTN network. At the time, the executive’s PowerPoint deck was appended with a small asterisk noting that the upgrade was subject to favourable regulatory conditions. As it turns out, Telstra didn’t get its restrictive demands met by the Government of the day — and so the FTTN rollout never went ahead.

    On the face of it, the criticism of commentators such as Bode gives Turnbull an easy out from those seeking to use AT&T’s rollout to remind the Communications Minister that FTTP rollouts are indeed going ahead globally and may result in Australia — shackled to inferior HFC and FTTN technology under the Minister’s ‘Multi-Technology Mix’ vision — behind in the dust.

    And Turnbull certainly attempted to make that point in a statement published on his blog this morning.

    “There has been some predictable excitement about AT&T’s recent announcement that it plans to increase its fibre to the premises deployment in a number of US cities and claims from some tech bloggers here in Australia that this means AT&T has abandoned its fibre to the node technology platform,” the Minister wrote. “That is not the case at all.”

    AT&T, Turnbull argued, as Bode had done, was mainly planning to deploy FTTP to areas that did not already have the telco’s FTTN service; the telco was expanding its FTTP footprint to carefully selected areas where the economics were favourable; and FTTN as a technology was, in fact, thriving in the US, even against its HFC cable competition.

    “Even in areas where they are deploying FTTP, the technology used by AT&T in brownfield [multi-dwelling units] is almost entirely fibre to the basement, ie a “node” is installed in the telecom cupboard of the building and connects to the copper LAN in the building,” Turnbull added, referring to NBN Co’s plans to do the same.

    “In other words, AT&T is using what we would call a Multi Technology Model, using the technology platform that makes the most sense economically in each particular location – just as the NBN Co is planning to do in Australia.”

    The difficulty with Turnbull’s statements is that, like those of AT&T in its much-hyped press release earlier this week, and like so many of the Minister’s statements on global broadband trends, they contain kernels of truth but not the whole truth.

    For example, it is true that AT&T is deploying FTTP in areas where it is economically favourable to do so. But what Turnbull doesn’t tell readers is that according to NBN Co’s own Strategic Review conducted under the Coalition’s watch, deploying FTTP to 93 percent of Australian premises as Labor had planned is also economically favourable, in that such a deployment model would generate a return on investment as high as 4 percent to the Federal Government’s capital invested in the project.

    We covered this issue last week, when Turnbull openly fibbed on the issue to listeners of the ABC’s Triple J radio station.

    Turnbull’s statement that AT&T’s FTTN service is also increasing its market share against HFC cable competitors in the US is also true. However, if you follow that logic through to its inevitable conclusion (which Turnbull did not), one might well ask why, if customers are demonstrably preferring FTTN in the US, the Coalition recently abandoned its election commitment to deploy FTTN in up to a third of the country, instead preferring to buy, upgrade and extend the metro HFC cable networks in Australia owned by Telstra?

    And, one might well add, what long-term implications will the Coalition’s abandonment of Telstra’s copper network in metro areas in Australia have? Virtually every other first-world country is currently upgrading its national copper network to either FTTN or FTTP, with HFC cable in many cases (such as the US and UK) serving as a competing legacy infrastructure force. In Australia, in many metro areas, the Coalition plans to do the opposite — investing in the HFC cable networks which are stagnating globally, and abandoning the copper networks which are a huge focus for investment around the world.

    Then too, Turnbull’s statement that AT&T is actually deploying Fibre to the Basement — not full FTTP — in many apartment or office blocks where it is investing may also be true. It’s what NBN Co is planning to do in Australia, after all, and what most commentators agree should have been done right from the start under Labor, given the complexity of getting cables into so-called Multi-Dwelling Units (MDUs).

    Yet what the Minister didn’t mention is that the FTTB technique — where fibre is deploying to a building’s basement and then the existing in-building copper used to each separate unit — delivers significantly degraded broadband speeds compared with FTTP.

    AT&T explicitly mentioned 1Gbps (gigabit) fibre speeds in its media release. But NBN Co’s trials and commercial installations in Australia have hit a ceiling of between 90Mbps and 100Mbps — ten percent of AT&T’s planned gigabit speeds and one percent of the speeds Google is planning with its competing Google Fiber service.

    According to Turnbull and his NBN Co executive chairman appointee Ziggy Switkowski, such speeds aren’t needed. But AT&T explicitly stated it was seeing “high demand that has exceeded expectations”. That just happens to be commercial — if not political — reality.

    In short, if you look at both sides of this extremely contested story, what we’re seeing is that neither AT&T or Turnbull are actually giving people an accurate picture of what future broadband infrastructure will look like. Both are abusing the English language to paint a picture which strongly favours and defends their entrenched position.

    AT&T has near-monopoly powers over much of the US when it comes to telecommunications access, and is using marketing hype to attempt to protect its revenues from rivals such as Google, which itself is using the same techniques to hype up its own planned network rollouts. And for his part, Turnbull has ably demonstrated since becoming Communications Minister that he is happy to bend the truth in whichever direction benefits him — or even just abandon it entirely if he thinks his audience is ill-informed enough to believe his misleading statements.

    So what is the truth?

    The truth is that globally, all fixed-line networks (including copper as well as hybrid-fibre types such as FTTN, FTTB and HFC) are steadily but gradually developing towards universal Fibre to the Premises over the medium term. The reason this is happening is that no other technology is available to meet the massively expanding bandwidth demands that individuals and organisations need from their broadband connections.

    All we are debating right now is the terms under which that universal FTTP development will occur. Forward-thinking organisations such as Labor and Google want it to happen sooner, so that we can all reap the benefits sooner. Conservative organisations such as the Liberal Party of Australia and AT&T are seeking to postpone that trend, either to defend entrenched positions or for ideological reasons.

    But make no bones about it: The trend as a whole is unstoppable in the long term. Conservative players such as Turnbull and AT&T can bluster all they want. But I guarantee that in a few decades, virtually every first-world country globally will have almost universal FTTP broadband access. If the last 30 years have taught humanity anything, it’s that technological development is unstoppable. In the meantime, don’t believe everything you read.

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    24 Comments

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    1. Tailgator
      Posted 23/04/2014 at 12:30 pm | Permalink |

      And don’t believe everything you hear, especially when it comes from a politician like Turnbull cynically pushing his political ideological agenda while display contempt for the very processes he proclaims to support.

      And the PR agenda continues with talk of selling off parts of NBNCo.

      Again all before a CBA is produced. But then even that has been bought into question by Turnbull with cronies appointed to produce the required outcome. Not only is he now known as Mr Fraudband but also Mr Fraud Politician.

    2. Mark
      Posted 23/04/2014 at 12:38 pm | Permalink |

      Thanks Renai for your Article!

      It has been well documented that incumbent Telco’s around the world have upgraded their own copper infrastructure to FTTN etc. to squeeze the last little bit of useful life out of it before it needs to be completed replaced. Some even acknowledge that they have a road map to retire their existing copper infrastructure completely. The thing that should be noted (yet again), is that NBN Co doesn’t have an existing Copper infrastructure of it own to upgrade to FTTN. They are going either buy or lease it from our incumbent Telco. Yes makes complete sense!

      Cheers!

    3. CMOTDibbler
      Posted 23/04/2014 at 1:13 pm | Permalink |

      “All we are debating right now is the terms under which that universal FTTP development will occur. ”

      That’s what the debate should always have been. FTTP is inevitable. The debate is about the most cost-effective way to get there. It’s a pity that debate wasn’t had in 2009 rather than in 2014.

      • Graham
        Posted 23/04/2014 at 7:42 pm | Permalink |

        A lot of people seem to be missing the point here.

        I think if you press Turnbull hard enough, eventually he will concede that FTTP is inevitable. So will any sane person.

        What is not inevitable is who owns it and profits from it.

        The LNP are spending $30+ billion to cripple NBNCo and to put in place a process that ensures that the “right” people end up owning the fibre infrastructure in this country.

        In the 21st Century the new oil will be data. Whoever controls the data will have a licence to print money.

        I think in this respect, Turnbull is ahead of the industry. We are still thinking in technological terms, when it’s actually about the most profitable outcome for a very select group.

        • HJR
          Posted 23/04/2014 at 9:53 pm | Permalink |

          Hear hear! I couldn’t agree more. Turnbull knows exactly what he’s doing, and he will do that and nothing else. It’s just that we think that as an elected member of parliament, he is working for the people, but he’s not.

          All of the hate that’s been heaped onto him slides right off, while he busily works for those “right” people. Why else would he so blithely and arrogantly ignore the majority of the population’s view on the subject? Why else would he sneer and lie so openly? Why else would he talk so much and listen so little?

          He’s not scared of us. He’s scared of some one else.

          Turnbull’s nothing really. He’ll get his few million, but as Graham has said, the “right” people will get far, far more.

    4. Brad Cann
      Posted 23/04/2014 at 1:46 pm | Permalink |

      its all because we build for today and maybe tomorrow, but never for the future. Why spend $100 and build for tomorrow when you can spend $90 today and $50 next year. Sure it costs more, but that is next years problem and more then likely next governments problem.

    5. David Ferstat
      Posted 23/04/2014 at 2:04 pm | Permalink |

      “Turnbull openly fibbed on the issue to listeners of the ABC’s Triple J radio station.”

      I’m a bit disappointed, Renai. Earlier you accused him of lying. Now it’s just a fib?

      Surely this is no time to go soft on him. :)

      • GENIII
        Posted 23/04/2014 at 3:23 pm | Permalink |

        Yeah i don’t like the word fib. Makes it seem like it’s ok it’s only a fib.

        Call a spade a spade i say. He is a liar, he is a fraud, he is scum.

    6. Duke
      Posted 23/04/2014 at 8:08 pm | Permalink |

      It will be interesting, if and when the Libs shaft Turnbull, which boards he will slimily slide onto to keep him in Grange for his declining years…

    7. CharlieM
      Posted 24/04/2014 at 12:09 am | Permalink |

      Renai,

      In the interest of full disclosure, I work for an equipment vendor that specialises in HFC and Last Mile Fibre access network equipment….so take the following with that grain of salt in mind.

      Look at a technology called RFoG (Radio Frequency over Glass).
      Its going gangbusters in countries like China, and the US, specifically because of the long term evolution of HFC and other fibre-deep technologies eventual migration towards full deep fibre.

      It allows the continued, and even extended-reach operation of HFC plants (CMTS in headend, CM in field, and management software to handle everything), whilst at the same time allowing the exact same fibre optic cable to carry xPON traffic, and 1550nm CATV overlay carriers.

      Couple this with another emerging technology, DPON (DOCSIS over PON), and you have yourself an industry on the very edge of tipping straight from HFC to full fibre.

      DPON facilitates the use of HFC headend equipment (CMTS and related EMS/OSS/BSS software) to manage the vastly different xPON hardware, as if it were a cable modem.

      Zero added cost for integration on the headend and management side…its just a single chip that sits in a transponder which can translate DOCSIS signals, into PON signals.

      Add RFoG and DOCSIS over PON together….you have an industry primed for a direct swap from HFC to direct fibre to the home, with very very little headaches for the operators.

      One more layer to add to the picture you are trying to paint here, I’m not sure if AT&T are using these two technologies, but they would be absolutely mad not to.

      • Abel Adamski
        Posted 27/04/2014 at 3:25 pm | Permalink |

        Just interested Charlie
        I assume all these active bits associated with the HFC are powered, How.?

        • CharlieM
          Posted 29/04/2014 at 1:25 am | Permalink |

          Hi Adam,

          Which active bits are you asking about?

          The headend CMTS equipment? – Connected generally to a UPS / generator backup, fed by the grid power in a main headend.
          The child exchange lasers and receivers? – As above.
          The field ODN nodes strung on poles? – In-line power taken from the lines which they are suspended from.
          The field RF amplifiers strung on poles? – As above, however generally fed from the ODN nodes (in-line).
          The DPON Micro nodes? Powered at the customers house (or apartment building demark) by a 220vac brick, OR can be powered in-line by the field ODN node strung on a pole.

          The splitters and multiplexors are all passive devices.

    8. tinman.au
      Posted 24/04/2014 at 12:24 pm | Permalink |

      The huge flaw in Malcolm’s plan is, and always has been, that it would be “economically favourable” for Telstra to build a FTTN network. No one else, just Telstra.

      No one in the world, not a single one, has done, or is planning to do, what Malcolm is wants to do. Unless he can get the CAN/HFC networks for next to nothing, his plan is economic vandalism for political point scoring.

    9. Brendan
      Posted 24/04/2014 at 12:36 pm | Permalink |

      “All we are debating right now is the terms under which that universal FTTP development will occur. “

      In the climate of a Minister who labels people who want to see Fibre earlier, zealots.

      Also, define “we”. Turnbull has not stated if or when the Coalition would action any “universal FTTP deployment”. The Minister, the Ministry and indeed NBNco, are not.

      So “we” in this instance doesn’t include the government, and it doesn’t really include the opposition.

      Et tu?

    10. welllol
      Posted 24/04/2014 at 1:19 pm | Permalink |

      So pretty much AT&T is bluffing they will install FTTP to the most populated 100 cities in USA to slow down Google fiber rolling out their infrastructure to the 10 most populated cities in USA. This apparently justifies an Australian fiber roll-out to 90% of Australian premises including some dirty back-alley way in the middle of nowhere.

      • Relim
        Posted 25/04/2014 at 2:23 am | Permalink |

        The truth is that globally, all fixed-line networks (including copper as well as hybrid-fibre types such as FTTN, FTTB and HFC) are steadily but gradually developing towards universal Fibre to the Premises over the medium term. The reason this is happening is that no other technology is available to meet the massively expanding bandwidth demands that individuals and organisations need from their broadband connections.

        All we are debating right now is the terms under which that universal FTTP development will occur.

    11. My2c
      Posted 24/04/2014 at 4:18 pm | Permalink |

      You should be on the panel for Q&A Monday Renai.

      Also, should we believe everything you write?..

      • Posted 25/04/2014 at 3:16 am | Permalink |

        “Also, should we believe everything you write?..”

        Not at all. I would recommend applying the exact same test to my writing as you would apply to Turnbull or the telcos. Weigh what I say against the available evidence and use your own judgement to come to your own conclusion. I am sometimes wrong and I need you guys to point it out when I am. I can be stubborn about it. But you need to ensure you keep on shoving evidence in my face :D

        • Bewildered
          Posted 25/04/2014 at 9:45 am | Permalink |

          And drop post not protecting the party line it seems (less relevant posts retained).

    12. Posted 24/04/2014 at 4:31 pm | Permalink |

      Speaking of Q and A, Turnbull will be on again Monday.

      They almost never direct actual questions on his portfolio to him, but we should keep firing them through.

      Renai I’d love to see your top 5 questions to ask Turnbull in an article and I’d back a campaign to have users send their own variants in.

      He can’t be allowed to skirt responsibility for his own portfolio and the pressing problems that need to be answered.

    13. paul
      Posted 25/04/2014 at 12:20 pm | Permalink |

      In the Uk the take up rate of the FTTN on offer is only 10%. This is because the benefits are not far greater than what most have available now on ADSL. Why spend the Billions of dollars now to only upgrade it eventually. ( not even that far away) Do it once, do it right.
      In the strategic review there is no mention of the cost to go from FTTN to the inevitable FTTP
      Paul

    14. Ace
      Posted 25/04/2014 at 2:56 pm | Permalink |

      Nice to see where the money is spent? Military aircraft.
      For the cost of these planes, the NBN could be built complete to the home. the whole country would benefit.
      Creation of 1000’s of jobs/ new industries ect.

      The aircraft purchase is in addition to another set already purchased. How many do we really need Mr PM?
      And Mr Turnbull (bull dust) where where you on this announcement?

      • Abel Adamski
        Posted 27/04/2014 at 3:29 pm | Permalink |

        Ace.
        The US is in an economic POO POO pile with high unemployment and too many on low incomes. Note GMH and Ford shipped manufacturing back to the US as well as Korea etc.. Now of course the US’s allies taxpayers are asked to pay for their Hi Tech Manufacturing.

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