NBN in more than 140 characters

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.

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28 thoughts on “NBN in more than 140 characters

  1. Mark Aufflick

    A minor nitpick (which shouldn’t be read as an endorsement of the rest of this piece ;) Providing (and repairing) optical fibre connections is not equivalent to copper for end point termination for a number of reasons:

    1. The skill required is higher which increases labour costs and reduces the ability for temporarily increasing your workforce for rollouts

    2. unlike copper, you can’t just smush together (which is basically what Krone blocks etc. do) optical fibres – the ends need to be polished, and then accurately aligned, held and sealed. This requires expensive (in context) fittings, special equipment and time.

    3. the termination equipment (ie. an Internet modem or phone) requires more expensive equipment – certainly for the forseeable future anyway.

    Note that these issues don’t hold for long haul or even metro links, but for a connection to every house they certainly have an implication. Whether the benefit outweighs the downside or not.

  2. pfh007 Post author

    Thanks Mark, It sounds like the more specialised requirements of optical fibre are such that some care should be taken to ensure that the pace of any roll out of fibre supports a viable ongoing industry of fibre technicians. The last thing we need is a fibre ‘gold rush’ where the roll out is too fast for the available skilled labour supply, thereby forcing up costs and perhaps compromising quality, with a lot of unemployed or under employed skilled workers left at the end of the process. By starting with fibre connections to new housing a base level of skilled workers could be developed who would form the core of the ongoing new connection industry. It may be some time before there would be sufficient skilled technicians to go beyond new connections and attempt any significant conversion of the established ‘copper to the home’ areas.

  3. Zebra

    If I said there was a system whereby you could keep your mobile device but at home or cafe you would have increased bandwidth to download movies etc I think the mobile generation would go for it. But this is just what I already have with a fixed line + wifi repeater or high street hot spot. You can bury the repeater in the wall and make it optional but the question here is really cost rather than high bandwidth thru fibre optic OR wifi/radio mobility but not both – maybe not always but definitely when indoors.

    Otherwise a great article and worthy of being in the Pantheon of guest posts.

    ps. I originally tried sending a version of this comment through the MuleApp for iPhone but it crashed on me so I’ve resorted to old-fashioned fixed-line.

  4. Mark Aufflick

    @Zebra – I think that’s the most reasonable approach, for built up areas.

    Further, in addition to the base level of Wifi or 4G cells provided by a carrier, imagine if users could install a good quality connection (whether fibre or copper) and plug their wifi cell into the publicly managed network – you could sell bandwidth back in just like you can sell excess solar power into the power grid.

    That would ensure that high density areas are well serviced and could also work for rural areas.

    There’s a layer of technology that’s not quite there to make such a system happen, but it’s easily in the reach of, say, NBN corp to provide.

    I guess that illuminates my beef with the NBN – it’s just not innovative. It’s easy to say let’s get fibre to every house but expensive and slow to deliver. There must be faster and cheaper ways to achieve 99% of the benefit that would bring.

  5. Zebra

    @Mark Aufflick
    In London you can do just this. Or at least they were proposing it in 2008 when I last lived there. You can sign up so any roving mobile user can hook into your house bandwidth and visa versa.

  6. Tom Davies

    One of the more sensible discussions of the NBN that I’ve read.

    But isn’t using individual FTTH to deliver free to air TV far more expensive than HFC?

  7. pfh007 Post author

    Thanks Tom, Yes that is a good point. Considering a couple of million houses already have the HFC cable running down their streets and thus may already have no need for ‘broadcast TV’ my argument about ‘getting video off the radio spectrum’ as a reason for laying fibre to private residence may only make sense for new houses and existing houses which do not have access to HFC (assuming that the cost of laying optical fibre is not a lot more than laying new HFC connections). One possible argument for eventually replacing with FTTH that was raised in the NBN implementation plan is that the HFC is not designed as a wholesale platform and thus it may be difficult to sell wholesale access to retail service providers via the HFC.

  8. flare

    Whilst I agree with most of the comments and the article here. I think there are a couple of issues missing:-

    1. In some areas HFC was laid to cover 90% of an area. In these cases it makes no sense to do the other 10% as Fibre and not do the HFC areas (yes legacy of a badly implemented policy)
    2. Wireless in some areas just won’t handle the terrain or the weather or the environment. When bad weather comes it will be like watching analogue TV with a whole load of noise.
    3. I like the idea of letting the homeowner dig the trench to kerbside – they have the ability to control the route of the cable through their garden.
    4. When ADSL first came out the modems were slow and expensive, now the prices have dropped alot. The costs will come down during an NBN rollout.
    5. Wireless covergae is usually calculated using theorectical plots, which are great for flat areas, and areas without trees but in areas where there are a combination of both they become less accurate.

    Curently suffering from points 1 & 2, so can’t wait for the fibre to arrive. I just won’t believe any wireless figures until it is thoroughly tested in my area (previously tried unwired, and iburst both only maginally better than dial-up), and the figures are not produced using theoretical plots.

  9. Tom Davies

    @flare worth trying 3G mobile, as long as you don’t want to download vast quantities of data. Depending on your location you have a good chance of getting 2-3Mb/s.

    You say of fibre ‘the figures are not produced using theoretical plots’ — but they *are* — the 100Mb/s and 1Gb/s figures are just for the fibre from the exchange to you. My ADSL2+ syncs at c. 19Mb/s, but I rarely get anything near that, due to the latency to the server I’m talking to (even with large window sizes latency puts an upper limit on TCP/IP throughput), the backhaul congestion at the exchange, and congestion on other hops.

  10. Stubborn Mule

    Tom: I think @flare agrees with you about theoretical plots. The point was the figures will not really be trustworthy until they are no longer produced using theoretical plots.

    Mark: did you watch the video that @cyberdoyle posted? It looks like there are quite easy to use little gadgets available for joining fibre appropriately.

  11. pfh007

    Some questions outside my area.

    Is anyone able to estimate on what buying back the wholesale fixed network (or just 51% of it) might cost?

    If the deal was that Telstra will start with the remaining 49% and be allowed to sell down to other buyers – would that help the valuation process or complicate it?

    If consumer preference is strongly heading in the direction of mobile/wireless connections notwithstanding the limitations (current at least) of that technology, the value of the fixed network and a 51% share of it may be falling, perhaps quite quickly.

    Naturally, while this may mean the government could get 51% control of the wholesale fixed network back at lower price than expected it may mean even lower consumer demand to convert houses currently supplied with decent ADSL or HFC fixed connections to fibre.

    But on the bright side at least new houses, public buildings and commercial premises are more likely to get good fibre connections than under the current wholesale arrangements.

  12. Zebra

    Sometimes people make assumptions about availability of cabling to new buildings that aren’t always true. I live in a block of about 400 “high end” apartments that is about 5 years old and there is no HFC cabling. Go figure. There are similar blocks around me and I assume most of them have it but not 100% sure.

  13. Mark Aufflick

    Sorry – missed the above while in Melbourne speaking at the Apple University Consortium developer conference.

    Great video – how appropriate that the fibre junction box is in the “stables”!

    That fibre joining tool is certainly more advanced than the ones I’ve seen used. It’s probably expensive, but I can’t imagine too much expertise is required to use it which does mute that concern. I wouldn’t mind trying one out!

    It is interesting though, that they are using fibre for a short run across their property to link into a wifi network. That’s the reverse way fibre and wireless are traditionally used together, but exactly the kind of innovation we could get if people were able to take things more into their own hands instead of waiting for the government or Telstra to do it for them.

    That has its own issues though, in 2008 a US Telco sued Minnesota for installing their own city-wide cable (which they did because they were sick of waiting for the telco to do it for them).



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  15. golman

    I agree – there are much more effective and cheaper ways to deliver broadband to Australia.

    I’m a big fan of FTTN – mainly because it is shown to be very successful in most of the rest of the world and because it’s an effective incremental step that’s much cheaper than taking fiber to everyone’s home.

    FTTN (VDSL2) is getting 50-300Mbps depending on how close the node is to a house. That’s pretty impressive given that you can reuse the last mile of copper instead of ripping up footpaths, front yards and rooftiles (the guvment doesn’t have a good track record when it comes to working in peoples’ roofs – remember the insulation program?), rewiring each house.

  16. Goresh

    I would point anyone who seriously believes that wireless could deliver an NBN to the article named “Jammed”in New Scientist 30/10/2010.
    Basically, rather than wireless being a competitor to a fiber NBN, a fiber based NBN will be the saviour of wireless.
    The reason is simple, wireless technology has improved to the point where it is pushing the theoretical limits.
    Current 3G has managed to squeeze 1 data bit into 1Hz of bandwidth. That is, one 1 or zero transition into one positive to negative waveform transition. LTE squeezes it slightly more because the positive to negative transition is actually a positve – zero – negative transition so you can, in absolutely perfect conditions, get 1.5 bits into each transition.
    Sadly that’s it folks. Short of magic or Dr Who’s Tardis, the inside (data signal) cannot be bigger than the outside (the carrier bandwidth).

    Currently wireless traffic is doubling each and every year (actually, a little faster than that). On current estimates, places like New York will go into total meltdown sometime in 2013. Other metro areas will follow shortly after.
    Building bases isn’t the solution. If there are 10,000 bases this year, in a perfect world, we would need to build 10,000 more next year, to provide the same data rates per user, 20,000 new bases the year after, 40,000 the year after that.

    Last year in this country, most 3G mobile bases got a second frequency. This year many were expanded to 6 sectors (6 transmitters) effectively 2 bases per site. Next year some extra 21MHz carriers may be brought on line. But thats it, there is nothing else in the pipeline. After that data will need to be rationed.

    There IS a solution however, and the New Scientist article discusses it. Femtocells.
    Basically they are a small mobile base in a box that can be installed into each and every house.
    Each and every house that is that has a reliable, high speed data connection.

  17. Mark Aufflick

    @Goresh, the thing is, most of Australia is nothing like New York. Maybe the Sydney CBD is, but Castle Hill or suburban Tasmania certainly isn’t! I don’t think anyone is suggesting that, say, corporate networks in CBDs or even business parks should be wireless, just that the last mile doesn’t need to be fibre. I’m perfectly happy for the last mile in residential areas to stay copper where it is already installed, but wireless would also be fine – maybe a cell per street or similar.

  18. Goresh

    Mark Aufflick:
    “@Goresh, the thing is, most of Australia is nothing like New York. ”

    I didn’t suggest that it was. It was used to illustrate the problem.
    There, even with cabled broadband taking the majority of the load, the mobile network will run out of capacity, just dealing with mobile traffic with a couple of years.
    If we tried to force all our fixed line traffic onto wireless, we would be talking wireless traffic densities as high or higher than what New York currently experiences.
    “I’m perfectly happy for the last mile in residential areas to stay copper where it is already installed, but wireless would also be fine – maybe a cell per street or similar.”
    One cell per street would not be enough. The simple fact is that you lose about 20dB of signal just going through a wall. A mere 10% of the signal on the street gets inside, and that’s a best case scenario.
    You also have to allow for the fact that as a shared resource, each doubling the users will halve the data rate. 1 user may be able to get 100Mb/s, 2 users will get 50Mb/s each 4 will get 25Mb/s etc. After that, they are likely to be too far from the transmitter to get the maximum rate so they have to deal with distance as well. Twice the distance means 1/4 of the signal. Due to poorer signal they will start getting errors from noise so that will mean being pushed to a slower protocol with more error correction which means even greater speed hits.
    The only sensible place to put the cell is INSIDE the house as the NS article suggests.

  19. Goresh

    “FTTN (VDSL2) is getting 50-300Mbps depending on how close the node is to a house.”

    No, VDSL2 gets 50-300Mb/s in the lab. The real life numbers I see quoted in conferences, are an order of magnitude less than that, and most of them are talking about the “node” being on the building and the copper pair distribution being the connection to the individual apartments within the same building.

    One of the arguments used for FTTN is it leaves the current telephone system in place but that is a misrepresentation of reality. The problem with putting VDSL2 onto an existing cable system is that the massive levels of crosstalk it generates will render the cable useless for any other technology. This also ignores the problem of physically having to chop the cable in to to get access to the cable when you connect it to the node. One of the reasons for the abandonment of the original FTTN vision for the NBN was the requirement to “resume” the copper network from Telstra and physically destroy it.

  20. Goresh

    “Alan Kohler argues it all comes down to video”

    When did Alan Kohler become an expert in Telecommunications?
    What he IS however is an employee of “The Australian” whose owner is a 25% shareholder of Foxtel which, in this very article you point to, he makes the case that the NBN will obliterate the business model of.
    I do not see any disclaimer about his obvious conflict of interest in the article.

    I will start going to financial journalists for advice on technology when ALan Kohler starts quoting expert advice from the editor of Electronics Australia on financial investments.

  21. golman

    Just coincidentally these Pay TV networks happen to also be delivering the highest residential bandwidths in the nation. A friend of mine is currently sitting on 84mbps!!!! on his Optus cable – a speed that is sure to decrease as demand increases – but certainly the figure is something Conroy doesn’t want people knowing about as it’s hard to convince people spending $Xbillion on FTTH is a good idea for suburban Australian while the cable network is currently delivering way more than the 12mbps base line fibre plan… hmmm, hence he has to change the laws of the land to enable the anti competitive practices of the NBN and we (taxpaying fools) cough up the billions required to buy out and close down competing technologies… if it sounds like it’s a really complex mess that doesn’t make any sense … then you’ve just understood the bowl of dog’s vomit that is the current NBN!

    When will the masses start to understand what’s really happening here – hopefully before it’s too late.

  22. flare

    I am glad you think you know what’s going on but an awful lot of people are not able to receive good speeds and never will be able to unless someone invests in new infrastructure. As the existing telcos have not for the Last 30 years it comes down to the government.

    Also the nbn is all about video and the next technologies. Plus latency, this is the key for me ftth is I think the only one that can provide this if it is implemented correctly.

  23. pfh007

    While business plans, forecasts and predictions are interesting (and good fun to discuss), the debate will only really heat up when a decent number of households have been wired up with fibre and the various predictions about cost and more importantly usage by consumers can start to be tested.

    100,000 – 200,000 FTTH equipped users should be enough to start getting answers to some key questions:

    1. Will access to a fibre connection slow or reverse the current decline in fixed voice/data connections to households.

    2. Despite the superiority of fibre over wireless as a connection technology will consumers opt for wireless connections and live within the constraints of that technology.

    For example: How many people are buying smart phones and finding that they are sufficient for phones calls, web browsing, emails and general communications. Perhaps, the ability to download video is something people did because they had a connection but would not be sufficient reason by itself if everything else can be done on a wireless smart phone.

    3. Will there be a flowering of technologies/services that actually need the capacity of fibre or will they just be ‘great ideas’ that never translated into practical applications. (the idea that people will have video consults with medical specialists from their own home is one that leaps to mind).

    4. Will certain age groups show little or no interest in the wonders of fibre? What are the implications for the business plan projections.

    And most importantly

    4. To what extent could the services being used by these fibre ‘pioneers’ have been supplied by ADSL technologies delivered by a FTTN or just plain Jane ADSL2+ connection.

    I am sure that there are many other NBN FTTH questions that can be tested in the near future – perhaps the next 12 months.

    Of course there is the argument that many of the ‘Buck Rogers’ applications require much more than a few hundred thousand users to reach critical mass but those resorting to that argument should be encouraged to focus on applications and services that are capable of being tested as the population of fibre equipped houses grows.

    No doubt the NBN Co will be monitoring usage to answer these questions. Whether Mr Conroy will give a commitment to release the results may be another question. Commercial in Confidence is a popular buzz phrase in ministerial offices.

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