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Analysis, Telecommunications - Written by Renai LeMay on Wednesday, April 23, 2014 12:04 - 24 Comments
Neither AT&T nor Turnbull are telling the whole truth
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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