news The chief executive of ailing national mobile player Vodafone stated over the weekend that it wasn’t “important” whether Australia’s National Broadband Network policy pursued a fibre to the home or fibre to the node approach, with only “minor nuances” between the two platforms proposed separately by the Government and the Opposition.
The Coalition is focusing on a rival NBN policy predominantly based on fibre to the node technology, which would see fibre rolled out to neighbourhood ‘nodes’ and the rest of the distance to premises covered by Telstra’s existing copper network, as opposed to the fibre to the home model preferred by the current Labor Federal Government. Debate over which of the two models is the better one for Australia has been raging for the majority of the past decade, after then-Telstra chief Sol Trujillo proposed a fibre to the node solution in late 2005.
Technically, there is a major difference between the two technologies, with FTTH being able to deliver dramatically faster and more reliable services than FTTN (including much better uplink speeds), and with likely better latency. FTTH speeds over the current NBN are planned to reach up to 1Gbps, while FTTN speeds are currently limited to around 80Mbps in the best case, given current technology – although technology in this area is changing gradually. Most in the telecommunications sector believe FTTH to be the best long-term solution for national telecommunications infrastructure, although FTTN is being deployed in countries such as the UK (by incumbent telco BT) to meet short to medium-term telecommunications needs.
Speaking on the ABC’s Inside Business program (the full video and transcript are available online here), Vodafone Australia chief executive Bill Morrow – who took his company’s reins in May — said he thought the NBN was “a fabulous thing” for Australia. “I have a long history in both fixed and wireless mobile and when I see what Australia’s doing with the NBN, I just think it is the perfect model to go forward,” said Morrow, particularly noting the fact that it was very difficult for several competing companies to invest the same level of capital as the Government was currently investing – around $37 billion – in the NBN project.
“… you can argue the nuances of whether it is to the home or the node, those things aren’t important,” he added. And questioned on the difference between the two further by host Alan Kohler: “I think either are going to still be good. You can argue some minor nuances between the two but doing it really important for Australia. It’ll help digitise the country, it’ll help bring a new economy to bear. It will help the mobile services, it’s going to help the consumer.”
Shadow Communications Minister Malcolm Turnbull has argued that the Government’s FTTH NBN project is taking too long to deploy better broadband to the regions of Australia that need it most, and that a fibre to the node-style rollout would see better broadband deployed faster and at a cheaper price than would be possible under the current model.
In addition, some other local technology figures have backed the model. For example, in September, Vocus Communications chief executive James Spenceley told Computerworld that FTTN technology should make up part of the NBN, as it would better meet the needs of some residents and businesses located in regional areas.
However, there are also arguments on the other side of the fence. For example, NBN Co chairman Harrison Young gave a speech in early September claiming that the Coalition’s FTTN model could actually cost more than the more comprehensive FTTH model currently being pushed by the Labor Federal Government – meaning it would make sense in the long-term to pursue a FTTH build anyway.
“… the prospective cost savings of fibre to the node depend on what time frame you look at,” Young said. “Maintaining the copper that connects node to premise is expensive. Coping with legacy IT is expensive. The total system cost of fibre to the node is higher than its front-end cost. The same is true of fibre to the premise, but less so. The apparent cost advantage of fibre to the node decreases as you lengthen the time frame you look at. In the long run, as Keynes famously said, we are all dead. Estimating costs is an engineering problem. Deciding on the relevant time frame is a policy question.”
FTTN has also been criticised heavily in the UK by figures such as former BT chief technology officer Peter Cochrane. In April, Cochrane publicly stated that fibre to the node-style broadband was “one of the biggest mistakes humanity has made”, imposing huge bandwidth and unreliability problems on those who implement it. New Zealand has also backed fibre to the home as the preferred option.
I don’t agree at all with Vodafone chief executive Bill Morrow that it doesn’t matter whether Australia pursues a FTTH or FTTN-style National Broadband Network rollout. Of course it matters! It matters a great deal. There is a substantial technical difference between the two types of technologies, and FTTH is obviously dramatically technically superior than FTTN. In addition, even if Australia did pick a FTTN network for its NBN rollout, there is little doubt that that network would eventually be substantially upgraded to FTTH in the long-term. This is already happening on-demand in patches in the UK, where BT is currently deploying a FTTN-style network. And demand for faster speeds and greater network capacity will only grow over time. Are you going to build a six-lane highway, or only a four-lane highway? These things matter when we’re talking about infrastructure investment worth billions of dollars.
But perhaps Morrow is a little confused about the difference between the two technologies. We’re talking, after all, about Vodafone, the only national mobile telco in Australia which hasn’t launched 4G speeds. Perhaps Morrow doesn’t quite understand the step change in network capacity that comes from deploying a FTTH versus a FTTN-style network. Perhaps 18 months ago, the conversation at Vodafone HQ around 4G mobile broadband went something like: “4G or 3G? It’s not important — there are only minor nuances between the two.”
However, from a certain perspective, you can see where the Vodafone CEO is coming from. After all, Vodafone is a mobile telco. Its primary concern with respect to the NBN is, as Morrow also mentioned in the interview, whether it can boost fibre backhaul to its mobile towers (you know, the kind of fibre backhaul which Telstra and Optus have already built to most of theirs), and to a lesser extent, what commercial opportunities the network will offer Vodafone in terms of expanding into the fixed broadband market. From Morrow’s perspective, fixed broadband networks are so … passé. Pity how they’re still responsible for the vast majority of telecommunications traffic in Australia.
Image credit: Vodafone