A tale of two NBNs: the Coalition’s broadband policy explained

“Quick and dirty” or “slow but consistent”? The policies are now on the table. Dan Peled/AAP Image

Today in Australia, the Coalition released its policy on the National Broadband Network (NBN). So what is the proposal?

Amid rhetoric claiming Labor government inefficiency, cost blowouts and failure to meet roll-out targets, the Opposition leader Tony Abbott and shadow communications minister Malcolm Turnbull unveiled the detail of the efficient, value-for-money NBN we should expect under a Coalition government.

The plan calls for the existing NBN rollout to stop, and be restarted using Fibre to the Node (FTTN) technology. FTTN involves delivering optical fibre to a shared “cabinet”, which in turn provides internet access to customers within one kilometre - necessitating the placement of many cabinets throughout suburbs and towns.

This differs from the existing plan for the NBN, as supported by the Labor government, which will deliver Fibre to the Home, or FTTH.

Household equipment in a typical FTTH NBN installation. bit.ly/14Ilvcq

FTTH, as the name suggests, involves installing optical fibre directly to houses, apartment buildings and businesses to provide high‐speed internet access. The fibre goes to what’s known as a fibre access node (FAN) – comparable to a telephone exchange – which can service many suburbs.

The Coalition’s plan flies in the face of advice the Australian Competiton and Consumer Commission (ACCC) gave the government in 2006.

The advice highlighted the high costs of installing nodes, and described an FTTN network as:

not so much a stepping stone towards a future FTTH network as a distinct network alternative.

Labor’s vision

To better understand what the Coalition is offering, we should understand the NBN being rolled out today:

Lukas Coch/EPA

The NBN is designed to deliver high-speed broadband Australia-wide using three delivery methods:

Fixed wireless and satellite are uncontroversial - both sides of politics support these key technologies in regional and remote areas.

FTTH vs FTTN

Fibre to the Home is planned for 93% of Australian households.

To do this, the NBN uses an implementation called Gigabit Passive Optical Network (GPON) – the main advantage of which being that it operates without any powered equipment between a house and the fibre access node.

That means greater reliability due to fewer points of failure, and lower running costs due to lower electricity consumption, fewer deployed electronics, and so on.

Passive fibre networks are cost-efficient by sharing a single fibre across 32 homes. Mathew McBride

Speeds offered to each customer under the existing NBN plan are potentially as high as 1,000Mb/s - around 500 times faster than most Australian broadband users utilise currently - but an expectation of between a quarter and a half of those speeds is more realistic.

Presently the NBN offers speeds of up to 100Mb/s.

The main drawback of a FTTH system is the reliance on fibre optic cables. The cables must be drawn through existing conduit, or laid in new trenches to each house in the coverage area.

The labour costs of doing this are huge and increase the total cost of rolling out the network by double or triple when compared to a cheaper FTTN network.

Passive optical network implementations similar to GPON have a proven track-record in countries such as South Korea and Japan - where access to high-speed broadband has been taken for granted for years.

The Coalition’s vision

The Fibre to the Node system promoted by the Coalition does have several advantages.

The installation of the network will be significantly quicker – the Coalition claims their NBN will reach most Australians by the end of their first term in 2016, compared to the current estimated completion date of 2021 – as FTTN networks re-task existing copper phone lines.

Technologies such as very-high-bitrate digital subscriber line (VDSL) and asymmetric digital subscriber line (ADSL) will be used to deliver data to customers’ home.

In short, because existing phone lines are used, significant capital costs are avoided because there is no need to lay fibre to every household.

Fibre to the Node explained.

Using VDSL, theoretical speeds of up to 200Mb/s are achievable (under perfect conditions) – but it has been pointed out these speeds rapidly drop off as the houses become more distant from the node.

One kilometre drops the speeds to a very ADSL2-like 30Mb/s, and two kilometres from the node provides no advantage over sticking with ADSL2, which many people will currently be using.

Copper

The biggest issue with a FTTN version of the NBN is not if it can be done, but how consistent, and how reliable, this network can be. It has been claimed by some that Telstra’s copper network is “rooted”; although Telstra has hit back, claiming approximately 1% of all services experience a fault each year.

wormwould

Responding to this concern, Mr Turnbull announced that mouldering copper would be dealt with on a business-case basis - either the copper would be repaired, or replaced with fibre.

Today’s announcement also devoted some time to discussing how technology always progresses, and so copper can be pushed to carry more data as improvements are made.

Vectoring was specifically mentioned – a technology that continually fine-tunes the connection between the end-user and the network, and allows significant improvement in speeds.

But critics have pointed out that vectoring may still be years away.

Costs of maintaining FTTN

While the Coalition’s policy today focused on the installation cost of a FTTN network, claiming savings of billions of dollars, little acknowledgement has been given to the cost of maintaining a FTTN network.

According to the ACCC, up to 90% of the costs of running a FTTN network relate to maintaining the nodes.

In the US, the broadband and telecommunications company Verizon cited significant savings of US$110 for each household on fibre compared to copper.

Comparing the policies

The costs of rolling out FTTN then upgrading to FTTH is prohibitive.

FttH. dvanzuijlekom

The Labor party policy of deploying the NBN as FTTH can be summarised as having an initially painful installation cost, but offering a more consistent outcome with greater spare capacity to meet future needs.

By comparison, the Coalition policy can be described as quick and dirty: the network will be available to more Australians earlier, and will cost less up-front, but will attract ongoing maintenance costs, and be expensive to upgrade as demand grows.


Further reading:
The Coalition’s NBN policy is a triumph of short-termism over long-term vision