Thursday, 1 November 2012

NBN: Is this the Coalition's NBN proposal?

Mr Turnbull recently published two pieces, a response to Graeme Samuel and his address to the CommsDay Conference [2012], which appear to give us our best detailed view of the Coalition NBN policy.

To Mr Samuel, he addresses "Multi-Service Access Nodes" as a technology solution: FTTN Nodes with VDSL line cards that can be swapped for Fibre Optic line cards.

Mr Turnbull rails against the co-opting of the term "NBN" (National Broadband Network) by the Government to mean both NBN Co and their national FTTP network. One of the commenters suggests the name "NPN", I presume National Premises Network, as an alternative name for "product differentiation". Better than National Narrowband Network.

In his CommsDay address, Mr Turnbull quotes the Liberal member Paul Fletcher, once on Richard Alstons' staff, an ex-executive of Optus and author of "Wired Brown Land", a 2009 commentary on Telstra.
After all, we know the approximate budget and timetable such a strategy entails, because a nationwide Fibre to the Node upgrade has been painstakingly costed, and the logistics of rolling it out carefully analyzed, no less than eight times during the past eight years.

A series of evolving designs for such an upgrade were presented by Telstra to the Howard Government in November 2005, August 2006 and August 2007.

My colleague Paul Fletcher’s book ‘Wired Brown Land?’ describes the last of these plans in some detail:
The Telstra submission revealed that it now planned for an FTTN network which used VDSL, not ADSL2+…It could deliver a target downstream speed of 25 Mbps and a maximum downstream speed of 100 Mbps, much faster than its original proposal. The copper lengths would be a maximum of 800 metres (not the 1.5 kilometres of its November 2005 proposal)…”
So, is this the Coalition NBN Policy?
  • FTTN with VDSL2,
  • 25Mbps guaranteed,
  • 800m max. wire-run.
  • no announcement on supporting existing analogue phones or compulsory transition to full digital network, including Voice over IP.
It's consistent with his "7:30 Report" interview where he talks about "under 1,000 metres" and speeds of "25-80Mbps".

That design could fit in with the current NBN-POI design.

Mr Turnbull also suggests that he'd rollout his NPN in priority need: i.e. those who most need better connections first, citing his 13,000 survey responses as the driver.

He also criticises the NBN Co rollout, which priorities construction on cost-effective issues like contracts and availability of staff/resources, for not addressing subscriber need first. Which appears contradictory: NBN Co is executing the roll-out in the most cost-effecive manner whilst the Coalition has criticised them for wasting money. Can't have it both ways.

Mr Turnbull has consistently claimed his FTTN proposal would be a savings "of about three quarters".
But that can only be on the fibre construction, not the whole network.

In the NBN Implementation study, there's a figure of $9.9 billion for the fibre construction, more recently $12 billion is widely quoted.

So is Mr Turnbull claiming the edge network, the FTTN, could be built for $3 billion?
The "fibre and transit" component of the $37.4B Aug-2012 budget is $26.4B.
That changes the edge network from $26.4B to $17.4B, or the total project under $30B, a savings of 25%. Mr Turnbull cannot be claiming he can reduce the whole project ($37.4B) by 3-4 times, i.e. to $10-12B, because of the cost of satellite, fixed wireless, transit/backhaul and current contracts. The FTTN component would need to be zero cost: not possible.

I find the $3B estimate for 12M subscribers (93% premises) hard to justify.
The August 2005 FTTN presentation by Telstra had some interesting aspects:
  • Only 5 major cities with a total of 5.4M premises
  • but only 4M premises would be served by their FTTN
  • the maximum wire-run distance was 1.5km, ADSL2+ at 12Mbps
  • They estimated 20,000 nodes needed to cover 66% (2.7M) premises
  • the other 1.3M premises would be directly connected to 450 exchanges
  • One of the 4 major project headlines was remediating the copper lines to subscribers.
  • No estimated cost was given, but named components were $5.5B
  • rollout timetable was 3 years
  • the rest of Australia, including Canberra and Hobart and all regional centres would be ignored.
That counts out at least one of the eight FTTN proposals - this was anything but a precise estimate.

Simple scaling to 12M serviced premises would suggest at least 3 times the cost.
As the NBN Implementation study points out: the cost of supplying services is far from identical. The 90th percentile for fibre costs 1.6 times the 50th percentile, with the 93rd percentile 4-5 times the cost.

As premises density drops, the savings from FTTN drop exponentially: very quickly you get to 1 premise per node. When it's much better and cheaper to run fibre directly to the premise...

On top of the three-fold increase of the Telstra 2005 proposal, is the halving of the maximum run. Simplistically, you'd need four times the number of nodes in the same area.

Did we just define a network of 275,000 nodes taking around 10 years to roll out to get 93% of premises connected?

The catch-all is Fixed Wireless (fixed 3G mobile phone access): when the incremental cost of premises on a node is more than the higher Fixed Wireless cost, the network build would use wireless, with all its problems.

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