news NBN Co has published an extensive report of the satellite and wireless aspects of its infrastructure rollout, finding that it will need to slightly delay its planned late 2015 satellite launch until early 2016 and that its current provisions for wireless broadband in outer metropolitan and regional areas is not quite adequate to serve its planned user base.
The two major sides of politics differ drastically in how each would prefer to provide faster broadband to the majority of Australians. However, when it comes to the remaining seven percent of the country — predominantly located in rural, remote and outer metropolitan areas — both sides are in agreement that satellite and fixed wireless technology should be used to serve the needs of premises in that footprint.
This afternoon NBN Co released a landmark report (PDF) into the satellite and wireless aspects of its infrastructure rollout. The report was prepared directly by NBN Co (led by chief strategy officer JB Rousselot) with assistance by consulting firm Boston Consulting Group, which was previously involved in the company’s more Strategic Review released in December last year.
The report found that if NBN Co were to continue along its current construction path in the satellite and fixed wireless footprint, around 200,000 of the planned one million premises in the footprint would not be able to be served with faster broadband.
According to Labor’s original National Broadband Network policy, all of the premises in the satellite and fixed wireless footprint were to have been covered by NBN Co’s infrastructure. However, NBN Co’s satellite and wireless report published today alleged that NBN Co had only planned for a certain level of take-up of the infrastructure. Out of the million premises, NBN Co’s report stated, the company had initially only planned for about 230,000 premises to take up its broadband services.
The report states: “The Review believes that take-up will likely be 2–3 times higher and that between 440,000–620,000 connections will be required across the footprint. While fixed wireless towers can accommodate some of the higher demand, at the higher take-up expected, ~200,000 premises would not be able to be served by NBN Co.”
Part of the problem is that NBN Co does not currently hold sufficient wireless spectrum rights in urban fringe areas, with other mobile telcos such as Optus owning some of the rights. “As alternative spectrum has not been secured, NBN Co has a spectrum gap in the urban-fringe zone around Canberra and the five mainland State capital cities,” NBN Co’s report states. This problem affects about 80,000 of the total 200,000 premises shortfall.
In addition, NBN Co’s report found a number of other problems. Its two satellites had planned to be launched in the third quarter of 2015, but are now expected to be launched in early 2016; its satellite products in general need a “more robust product construct” including a fair use policy, and the fixed wireless rollout program is behind in general.
In addition, NBN Co’s “functionally siloed organisation” had inhibited visibility and effective decision-making processes in the satellite and wireless areas, the report found.
To deal with the issues, NBN Co has recommended several possible solutions, both of which revolve around upping the mix of premises served by the company’s fixed wireless network (and deploying significantly more wireless towers — likely between 600 and 1,300 more than the current 1,400 planned) as well as deploying Fibre to the Node to a small percentage (between one and three percent) of the original one million premises outside NBN Co’s fixed-line footprint. It will also need to work with the Australian Communications and Media Authority and other telcos on securing additional spectrum.
NBN Co has considered the option of a third satellite, but does not appear likely to go down that path, and it has also considered the possibility of partnering with another telco to deploy extra satellite capacity. Either move will cost more — up to $1.4 billion, but it does not appear as though either move will have cost implications for NBN Co beyond the company’s already committed capital envelope.
Communications Minister Malcolm Turnbull has issued a statement noting the release of the report. “The advice contained in the Review is being considered by the Government and will assist in the Government’s consideration of the NBN Co Corporate Plan, due to be submitted and considered later this year,” he wrote.
“Importantly, the high-level assumptions align with those made about the non-fixed line footprint in the December 2013 Strategic Review. This means that there are no further changes to the peak funding requirements if NBN Co were to implement the recommended approach.”
It has been speculated recently that NBN Co might seek to sell off its satellite infrastructure, especially. However, the review found there was only limited immediate benefit to NBN Co changing any ownership arrangements of the satellite and wireless networks, although further options could be explored in future.
No doubt readers will see a huge wave of coverage surrounding the release of this report. In the press conference in Sydney today, journalists from both mainstream and minor media were asking a whole host of questions about the report and its implications; several of whom appeared to have already taken a decidedly antagonistic approach to specific issues mentioned in the document.
NBN Co itself has hyped up the release of the report as stating that broadband connections in the bush are to “triple” … despite the fact that Labor’s original broadband policy called for 100 percent of the population to be covered, no matter where they lived. And while Communications Minister Malcolm Turnbull didn’t show up to the press conference today, his Parliamentary Secretary Paul Fletcher did, and predictably blamed the entire situation on the previous Labor Government.
However, from my point of view, it’s a little hard to see what all the fuss is about. Sure, NBN Co might have to build a fair whack more towers as an outcome of this review. Its satellite service will be delayed a little, and the end user services will be subject to fair use policies. It will have to work with the ACMA and other telcos on access to wireless spectrum.
But the whole situation is hardly a disaster. What we’re seeing here is something in the vein of a ‘mid-course correction’. When NBN Co initially put together its satellite and wireless plans, it assumed a certain scenario. Now the company is seeing heightened demand for its infrastructure in the bush (why that should surprise anyone, I don’t know) and issues garnering the required wireless spectrum (again, hardly a surprise in Australia’s increasingly spectrum-constrained environment). As a result, it is having to upgrade its rollout plans.
But with both its wireless and satellite infrastructure rollouts trucking along not terribly, with the expansion requiring no real capital injections (despite the claimed billion dollar cost “blowout”, which after all is only a tiny two percent of NBN Co’s projected total capital needs) and with continued growing demand for its services, it’s hard to see a huge downside to all of this. It feels like NBN Co’s satellite and wireless report released today is a realistic look at the challenges which any major telco would only discover when it was mid-way through any major network rollout project.
It’s hardly the disaster which the Fairfax and Murdoch press have been promising us for months, and it’s hardly an indictment on Labor or the management of previous NBN Co chief executive Mike Quigley. This is reflected in the surprisingly sober statement which Turnbull himself issued today about the report.
The thing I sometimes love about the NBN project as a whole is that despite all the bluster coming from the Coalition about it, sometimes the deep analysis being conducted about NBN Co, especially by the consulting firms involved (who, despite the best intentions of their political customers, sometimes just have to tell the truth) broadly shows that the company’s founders — Quigley and his executive team, the ones that have now resigned or been sacked — were really pretty much broadly on the money in terms of their plans for the network rollout. Many things have gone wrong, but definitely within a manageable scope.
NBN Co’s Strategic Review showed this — proving that it would be possible to deploy universal FTTP around Australia for only a modest investment more and a few years more than a technically inferior FTTN/HFC hybrid network. And now NBN Co’s Fixed Wireless and Satellite Review has broadly shown the same: The project is moving along within broadly acceptable cost and timeframe boundaries.
That’s not the message which most of the media will shortly broadcast about NBN Co’s satellite and wireless operations — most of the media prefers to be hysterical rather than analytical. But it just so happens to be the truth.
Image credit: NBN Co