This is a reprint of an article Delimiter published in February this year. We re-publish it here to remind readers of analyst views of HFC cable networks, in view of the Government’s plan revealed last week to abandon the deployment of NBN infrastructure to up to a third of the Australian population, in favour of upgrading the HFC cable networks instead.
news Australian telecommunications analyst Paul Budde has published a strongly worded blog post arguing that the HFC cable networks focused on by the Coalition in its rival NBN policy are akin to steam trains in the 1930’s through the 1960’s — they’ll still around for decades, but don’t represent the future of their industry.
The Federal Government’s current National Broadband Network policy would see the HFC cable networks operated by Telstra and Optus shut down as the NBN’s fibre to the premise network is rolled out. The two networks are only used by close to a million premises in Australia and have not been strongly focused on by the two telcos over the past decade. Many in the technology industry consider them to be legacy technology as they represent a shared telecommunications medium which slows down dramatically when many premises use the networks simultaneously.
However, Shadow Communications Minister Malcolm Turnbull last week confirmed part of the Coalition’s telecommunications policy would see at least one of the networks – that belonging to Telstra — upgraded and opened for wholesale access. The Coalition’s policy would also see a national fibre to the node network constructed — but areas outside the HFC cable footprint would be prioritised, despite the fact that many within the HFC footprint cannot technically connect to the HFC networks.
In response to the issue, Budde published a lengthy blog post this week entitled “the end of HFC and FTTN networks is approaching”.
“While the DOCSIS 3.0-upgraded HFC networks theoretically can deliver 100Mb/s, the reality is that most are delivering speeds of between 20Mb/s and 50Mb/s,” wrote Budde. “The shared nature of these networks and the extra cost involved in providing consistent services at higher speeds to mass markets makes HFC increasingly less competitive with FttH networks.”
“This is not to say that the existing HFC and FttN networks will immediately die out,” the analyst added. “Diesel trains started to replace the steam train in the 1930s – this happened at the height of steam train technology (reaching 220km per hour) – but it was not until 1960 (30 years later) that the last steam trains disappeared in the USA and Europe. Good quality HFC and VDSL2+ networks could possibly survive for 10 to 20 years. The problem is that there are only a limited number of areas where this is technically possible or economically viable.”
Budde noted that it was definitely possible that the Coalition would win the upcoming September Federal Election and continue to use the HFC networks and a simultaneous FTTN rollout to support Australian broadband users.
However, the analyst noted that the low penetration rate of HFC cable in Australia was a clear indication that Telstra and Optus had never been keen to maximise the use of the networks. “the decisions by Telstra and Optus to not further pursue HFC were made well before anybody started talking about the NBN. If the industry is not keen on pursuing HFC it will be interesting to see what the Opposition will do to make it change its mind,” he added.
And the long-term future is also a question.
“FttN and HFC technologies are the modern-day equivalent of the steam train, and their days are numbered,” Budde wrote. “Customers who would be affected by a reversal of the FttH decision under a possible change of government will most certainly want to know the plans for their services once the old infrastructure finally begins to run out of steam.”
Budde’s comments come as others in the industry have also warned of the dangers of focusing on HFC cable technology for Australia’s future. Last week, The Competitive Carrier’s Coalition — representing most of the non-Telstra carriers — demanded Turnbull abandon what it described as his “HFC fantasy”, criticising it on commercial and technical grounds, as well as the long-term interests of consumers. ““These comments ignore the reality that such a proposal would mean that for 30 percent of the population there would be no effective competitive broadband market.” said Matt Healy.”
Not everyone has been so negative about the potential for HFC cable to provide for Australia’s medium-term broadband needs. In an extended opinionated article this week entitled “Get a grip … HFC could make a fine interim NBN technology”, the publisher of industry newsletter Communications Day argued that HFC was a suitable technology for Australia’s future needs.
“There are some in the industry who really need to take a good look at what they arguing for and against, especially their “see no evil, hear no evil” attitude to interim DOCSIS 3 and VDSL2 technologies,” wrote Lynch.
I don’t always agree with Paul Budde, but I think the analyst’s comments here represent a very solid view of the current situation in Australia when comparing the potential mix of broadband technologies to be used for the nation’s future telecommunciations needs. Could the HFC cable be used, in tandem with a FTTN rollout, to provide for the nation’s needs? Yes, in the mid-term, this is certainly possible. It’s one option on the table.
However, like the steam train situation, it is clear that this would not provide for Australia’s long-term future, which will no doubt be based on fibre running to every premise. I don’t think there is much doubt out there — no matter which side of politics or the industry you speak to — that in the long-term, say 30-50 years — fibre to the premise is going to be the dominant technology.
And this, as Budde correctly identifies, is the real issue. Do we really want to ditch the current FTTP NBN project, which represents the long-term future of the telecommunications industry anyway, and which has a huge head of steam behind it right now and the support of most of the industry, and move to a HFC cable/FTTN rollout?
Do we want to go through the hassle of forcing Telstra and perhaps Optus to open their HFC cable to wholesale access, incentivising them to upgrade it, legislating so that those in multi-dwelling units such as apartments can actually connect to it and incentivising retail ISPs such as iiNet and TPG to provide services over the HFC?
Personally, I say no. Let’s have some vision for once and go for the technology which everyone agrees is the right one for Australia’s very long-term future: Fibre to the premise. Just because a technology works, as the steam trains continue to to this day, does not mean they are the best technology out there. Personally, whenever I go to Japan I prefer to ride on the country’s high-speed Shinkansen train. Getting from Tokyo to Kyoto in a couple of hours via rail is a satisfying reminder of the things humans can achieve when we have some vision and the will to implement it.