NBN: A cogent outsider view of the Turnbull Plan

This piece is worth a read: Australia's NBN becomes a political football, TelecomTV One , 10 April 2013.

At long last, after years of aggressive criticism of the Australian Labor Party's National Broadband Network (NBN) plan, the opposition has released an alternative vision. Benoit Felten reports.

To save you TLDR (1,000 wds) I've summarised his points below.

• He's not trying to meddle in Aussie politics, acknowledges the opposition coalition is likely to win next election, it worth examining what should be our next national network. 

• Effectively, the Coalition is betting the house on vectoring not only delivering its current promise but continuing to improve performance in the coming years whilst sacrificing upload speeds.
• upload or upstream are nowhere to be found in the document
• The coalition seems to view the internet essentially as a broadcast network.
• Also unsurprisingly, the Coalition plan is significantly cheaper than the current NBN plan, about 45% at $20.4bn vs. $37.4bn.
• Choosing FTTN is an arbitration made for cost reasons. 

• The key issue with the plan as I understand it, focuses on demand issues for NBN Co services.
• The full acceptance of an infrastructure monopoly makes a lot of sense.
• Public ownership is not the only way to build an NBN, but makes sense and eliminates demand uncertainty from the infrastructure funding.

• The coalition reintroduces demand uncertainty in two ways:
• It keeps alive existing cable networks and
• opens up the possibility for Telstra (or others) to deploy their own FTTP network.
• Where an alternative infrastructure exists, the commercial success of NBN Co will inevitably be affected, especially as well managed HFC and FTTP will offer superior performance.

• By lowering the performance of the access network, it allows Telstra and other mobile operators to position LTE as an alternative to wireline.
• The Coalition also plans to significantly lower the NBN Co’s wholesale prices.

• One wonders about the compounded impact of all this on the revenue side of the equation, a topic that is not addressed in the Coalition’s plan.

• The costs of deploying an FTTN in the Coalition plan raise questions of feasibility: 
• the quality of the copper has been questioned, but that’s a hard to assess.
• More importantly, the assumption that FTTN is systematically cheaper than FTTP is definitely questionable.

• It’s unlikely the Coalition has done an in-depth geomapped assessment of FTTN deployment costs,
• experience in other countries suggests that the low costs of FTTN are largely dependent on targeted deployments.
• I.e. the numbers quoted by the Coalition are from deployments in select areas where deployment is feasible and deployment costs are low.
• Nationwide FTTN on the scale the Coalition is contemplating has not been undertaken anywhere, even in Britain.
• That doesn’t necessarily mean the Coalition is wildly off,
• but it’s a further level of uncertainty.

• Some of the more minor propositions in the document are clearly political in nature and infeasible in practice.
• The notion for example that people would be able to ask for a dedicated FTTP line and pay for half of it themselves is absurd.
• Not only are costs be prohibitive due to the absence of economies of scale
• but the network management issues would be insurmountable
• since the FTTP topology of choice for NBN Co is point to multipoint, which only works for mass deployment.
• The Coalition is trying to suggest that if you really want FTTP you’ll get it.
• But it won’t happen.

• From the start, political risks were the biggest challenge for Labor’s NBN Co plan
• This is looking increasingly so.
• Changing courses midstream, especially for large scale infrastructure projects, is never a good idea. 

• Politically however, the Coalition has made the NBN such a big issue that taking a milder stance on revising the NBN Co approach is no longer an option.
• By choosing a more radical redesign, are they endangering the whole thing?
• The answer is likely no.

• The Coalition’s plan is workable on paper.
• delivering better broadband than what is currently available,
• whilst not as good as what the current NBN plan promises.

• The biggest risks associated with this new plan are:
• its economic fragility and
• the absence of contingency planning if FTTN and vectoring are 
• more expensive or
• don’t perform as well as hoped.

• The core of Labor’s NBN plan is retained:
• structural separation of networks and
• equal access to a regulated wholesale platform.

• The Coalition offers a plan that is within the continuity of what has been done.
• It’s less ambitious and a little more risky
• on the financial and technology sides,
• but it’s also significantly less costly in the short term.
• That’s an tradeoff worth considering, at least.

Benoît Felten is the founder and Chief Reseach officer of Diffraction Analysis, a research firm specialised in next-generation broadband. He recently released a report entitled Building the Optimal NGA Service Portfolio.