migNow that Labor has scraped their way back into power, it looks very likely that the National Broadband Network will go ahead in some form or another. Debates on the merits of the scheme continue apace, not least on Twitter, conveniently labelled with the #nbn hashtag. One frequent twitter on this topic, @pfh007, is also a regular commenter here on the Stubborn Mule. It seems that his thoughts on “Fibre to the Home” (FTTH) can no longer be constrained to a mere 140 characters, so he has now written a guest post for the Stubborn Mule.
A friend asked me a few days ago whether I could state my position on the current NBN proposal in 140 characters or less.
Although 140 characters suits my attention span and typing speed, the FTTH NBN proposal requires a few more.
Please note I have no academic, technical or professional background in this area to give weight to my opinion. So take it for what it is – sideline commentary from my IT shed. But first an initial comment about the FTTH NBN debate.
Unlike many commentators, I do not feel that the debate has been sterile or shallow. Certainly, there has been some partisan barracking where views expressed seem to be simply based on what position a person’s political team is taking on the issue, and some commentators have let their passions get the better of their reason, but overall I have found a broad range of thoughtful and considered thinking on the issue in both the traditional and electronic media. I am confident that a full and frank debate about the FTTH NBN proposal will eventually result in a policy that will be in the interests of all Australians.
Some important throat clearing comments first up:
- I believe that Australia needs better broadband access.
- I agree that optical fibre is technically the superior technical solution to supplying fast high capacity broadband.
Some other important considerations:
The attempt in Australia to regulate a private monopoly of the fixed connection network was a dismal failure. It seems clear to me that the government must resume an important controlling role in the delivery of a fixed connection network to ensure that at least some regard is given to the public interest. Accordingly, it is important that the government buy back the farm (a.k.a the wholesale fixed connection network currently owned by Telstra).
Having bought back the farm, the government should immediately sell down its interest to 51%. The remaining 49% can be sold to private investors, ideally the retail suppliers who have, or should have, an interest in the provision of a high quality fixed connection network and thus actively contribute to ensuring that the fixed connection wholesale supplier is well run. One approach might be simply to leave a 49% interest with Telstra and let them sell down their share as they see fit.
The advantage of this approach is that the new wholesale fixed connection entity would immediately have a source of cashflow and the capacity to generate a commercial rate of return. Some of that cashflow could then be allocated to the improvement of the fixed connection network – more on that below. Additional investment could be raised by debt or capital investment by the shareholders. In short this entity would be making money from wholesaling access to the existing copper network.
The 51% government stake in the new wholesale organisation must remain in public hands as regulating private monopolies does not seem to be a strong point of our public administration.
While I am not entirely convinced that, given the choice, consumers over the next decade will continue to believe that a fixed connection for telephone/ internet is necessary, for reasons set out below I have assumed that every house will want and continue to require a fixed connection.
On the assumption that a fixed connection to every house remains desirable, it seems sensible that any new connections to new houses should be via an optical fibre. While I have no statistics to back me up, the cost of laying a new fibre connection as opposed to a new copper connection to a new house should be roughly similar. To the extent that optical fibre may be more expensive, the advantages of that technology would greatly exceed the difference in cost.
Households who currently have little or no access to a decent ADSL or HFC cable connection (the stuff used by Optus and Foxtel Pay TV) should be prioritised for improved connections. These connections could be initially fibre to the node (FTTN), to allow fast ADSL access, and eventually FTTH or if it is more cost effective to skip the interim FTTN step, FTTH immediately .
Fibre connections to public buildings or commercial premises should be given high priority as these users are much more likely to benefit from and be in a position to make practical use of the faster broad band connection that FTTH allows. Most of the applications for FTTH that I have read about seem most relevant to public or commercial buildings.
Households who currently have good quality ADSL or HFC connections would be given a much lower priority and may not be converted to FTTH for a long time or at least until demand clearly requires or the proposal outlined below is implemented. Assessing demand will be quite easy as, by that time, large numbers of new houses will have acccess to FTTH and word will have spread if it proves to be a compelling proposition for residential users. We will not need to speculate whether consumers will choose to improve their existing ADSL or HFC fixed connections to optical fibre.
Where sections of the existing copper network fail or prove to be more expensive to maintain than to replace they should be replaced with fibre.
Competition by private wireless networks should continue and be encouraged.
Will there be a continuing need for fixed connections to households?
Perhaps the greatest weakness of the current FTTH NBN proposal is the assumption by its proponents that a majority of households will wish to maintain a fixed connection (for telephone or internet) of any description to their home.
Increasingly many people, particularly young people, do not bother having a fixed phone connection at all. They have a mobile number and that is that.
This trend seems highly unlikely to reverse.
What does this mean for internet access via a fixed connection, arguably the only remaining persuasive reason for a fixed connection to many houses?
This year can be regarded as the year of the smart phone/smart appliance.
Although Apple iPhone had the field much to itself over the last few years, the rise of android, improvements to Nokia’s symbion and the impending arrival of Win 7 mobile seem likely to herald the storming of the mass market by smart phones.
Needless to say the market for iPads, tablets and e-readers will only further expand the demand for mobile internet access.
Although the limitations of wireless broadband are obvious to the old hands of fixed broadband (myself included) it is dangerous to assume that young people whose primary experience of the internet is framed by their smart phone gadget will see things the same way.
It may be that for most of their needs their smart phone will be perfectly fine and they will see no more need for a fixed broadband connection than they do for a fixed telephone connection.
Simply put – they may settlle for second best wireless connection because second best suits what they want from the internet.
They may wish for improved wireless broadband but it is not safe to assume that they will have a need for a fixed broadband connection simply because it is technically superior.
Mobility may trump speed and capacity.
At the present time, in the midst of explosive growth in consumer demand for mobile connections, the proponents of a FTTH NBN network are simply failing to articulate a persuasive case as to why the community should spend a large amount of money replacing the existing copper and HFC cable connections to the millions of households who currently have access to adequate broadband connections using those technologies.
To the extent that it is possible to gauge consumer interest in the FTTH NBN, it is clear that there will be insufficient consumer demand for its high speed fixed connections unless the consumer is denied the current fixed connection alternatives available to many of them – copper and HFC cable.
The most compelling argument in favour of a FTTH NBN
I have read much about the exciting ways the capacity and speed of FTTH broadband can be applied, but few of them are convincing as mainstream applications for residential users.
I appreciate that this may simply reflect the limits of my imagination and the imaginations of the current crop of futurists vibing the brave new world of FTTH, so I will keep an open mind that someone will come up with something in due course.
I believe there is only one application that makes a compelling case for a FTTH fixed connection network. Broadcast TV and video on demand including Pay TV and IP TV.
If radio tramission of all television was to cease when an area is fully supplied with FTTH and all free to air TV was supplied via the FTTH then many, if not all, households would demand a connection and a device that would allow them to feed the TV signal into their TV set.
Not only would this create a genuine need for FTTH but it would allow the considerable amount of valuable radio spectrum currently used by the analogue and digitial television broadcasts to be reused for other purposes including possibly 3G and 4G wireless.
There seems little justification for continuing to use valuable radio spectrum for the purpose of delivering SD and HD video programming which could be delivered simply and effectively by an optical fibre.
It is better that as much radio spectrum as possible is available for the provision of mobile internet access particularly as it is likely that mobile internet access will be favoured by many if not most consumers.
The auction of that spectrum to telcos and other wireless internet providers would go someway to defray the cost of the FTTH roll out, particularly those sections of the FTTH network where a universal service obligation may be the only reason for construction.
The availability and universal coverage of the FTTH would also allow multiple existing and new pay TV providers to use the cable as their main method of service delivery – especially to areas not currently supplied by existing technologies.
In short the proposal is as follows:
- Have the government buy back a 51% interest in the wholesale fixed network – buy back the copper (this new wholesale fixed connection supplier would generate an immediate return from the existing copper fixed telephone and ADSL connections)
- Fixed connections to new housing to be optical fibre
- Existing houses with no access to HFC networks or ADSL to be provided with FTTN (or possibly FTTH)
- Prioritise optical fibre connections to public buildings and commercial premises
- No change to FTTH for existing houses with HFC or decent ADSL until it is clear that there is consumer demand to do so
- All existing free to air TV to be supplied via the optical fibre to build community acceptance for non-broadcast supply of TV
- As engineering and technical resources (including labour) allow progressively convert TV broadcast regions to FTTH and when connections are complete and operating turn off the broadcast TV signal
- Auction the broadcast TV digital and analogue spectrum for alternate uses – say 3G and 4G wireless
The irony inherent in the proposal set out above is that while the FTTH connection could be used for ‘internet access’ as we currently understand it, the primary objective of the FTTH would be to facilitate the provision of increasing amounts of wireless internet access to mobile devices by removing TV (analogue and digital) from the radio spectrum.
Furthermore, it also suggests that the proponents of a FTTH NBN might be better served by promoting the capacity of the FTTH to deliver TV, pay TV and other forms of video entertainment that the consumers value highly as this would allow improved wireless connections to deliver the lion’s share of the internet access that most consumers are likely to want in the future.
For remote houses that cannot be connected with FTTH – satellite delivery of free to air TV and Pay TV should be available.