Thursday, 23 May 2013

NBN: The Big Little Questions and their difficult answers.

In addressing the Topsy-Turvey Debate,  "what's important isn't discussed and what's trivial is cause for endless turmoil", some hard questions remain unanswered.

As far as I can judge, this whole debate revolves around maintaining a functional copper telephone network, the sole advantage of which is allowing 1925 rotary-dial phone equipment to still work
Not, for me, exactly the strongest or most compelling of arguments.

The Big Little Questions

A dear friend quite innocently asked me "Why do we need an NBN?" and it floored me.

I had no simple answer for her. I've explained some finer points of Quantum Theory and complex Computer Science problems, like Virtual Memory, to lay people "in 50 words or less", but had no such explanation for my friend.

Q: Why should I care?
I have multiple friends who are 'over' the NBN debate after 5 years of "noise and fury" in the media and have turned off the debate.

A: For our kids and grandkids. We have one shot at implementing a first version of an NBN, why should we let a very small, very vocal group of malcontents get their way at the expense of everyone else? If we stop caring, they win, that is their game plan.

This, moving to a "born digital" network, is the single biggest change in Telecommunications any of us will ever see. As Tony Windsor says: "Do it Right, Do it Once, Do it with Fibre".

Hanging onto a copper telephone network never designed to be digital, just so we can be compatible with 1925 equipment is sheer madness, technically, economically and socially.

Q: Why do we need an NBN?

A: Because the private sector should've built us one by 2010, but they didn't.
Copper is a century-old medium that is crumbling and corroded, has given us everything it can and now it is time to embrace the future. An estimated 2% of services are reported as faulty at any time. Many more are faulty but never fixed.

The Telstra CEO is on-record saying he'd come across a 1995 paper by a previous CEO, Frank Blount, expecting their replacement of the copper phone network (with broadband) to be completed by 2010.

There is no technical or economic reason that this could not have been done within normal funding if it had been started in the early 1990's as planned. Why this is not so is another question.

It's a matter of public record that in 2005, a world-wide search for the most competent Telco executives for Telstra landed us Sol Trujillo and his team. Within five weeks of taking on the job, he was meeting with the Prime Minister and his senior cabinet telling them that:
 a) Telstra was in very bad shape financially because it hadn't built a successor network to the telephone and
 b) the way out was a National Broadband Network.

But instead of taking the advice of the best talent in the world, the Howard government did nothing, as it had for the nearly 10 years before during the incredible rise of the Internet.

In 2001, a Fibre to the Node (FTTN) network for an NBN was a brilliant idea, technically and economically. So much so that in Canberra, TransACT raised $40MM to do exactly that.

In 2005, an FTTN network was still a great idea, otherwise the most able Telco execs in the world would NOT have pitched it to the Government.

In 2007, an FTTN network still seemed a good idea, which is what the ALP took to the pre-GFC election.

But it turned out in 2009, on the recommendation from the best Telecommunications & Economics experts in the country, that without Telstra's active involvement, an FTTN was not viable. Spending money on old copper technology was a waste because it could never pay for itself.

Every year since 2009, the technical, commercial and economic arguments for an NBN have moved more strongly towards Fibre and away from Copper.

Anyone still arguing in 2013 for extending the life of the copper network beyond 5-7 years thinks they are living in 2000, when Al Gore's "Information Super Highway" was 1-2Mbps and 56k dial-up was still "cool".

Q: What's it going to do for me?
or: I'm alright now, why should I pay for anything new?

A: Because what you did with the Internet 10 years ago is nothing like what you do now, so why do you think Nothing Will Change for another 10 years? You're not the only person in the world, others are in different circumstances and want different things to you. The only constant in this world is change. We know nobody can accurately predict the future, but the best hint we have with the Internet is that it will exceed our wildest expectations, just as it has for the last 20 years.

Every person in Australia benefits from the communications network, even a one minute old baby may need it. Even if you don't have a current need for anything better, there are increasingly large numbers who are desperate for basic services and those who have a pressing need or desire for high-end services.

I've another dear friend with a 45-yo panel van, bought new, a computer over 10yrs old and who until a year ago was still using dial-up to get email and free Internet at Libraries to do genealogical research. He doesn't have a mobile phone or credit card, either.

He asked me, very seriously, "Why should I change? I can't see why things shouldn't just keep working".
There is no short answer for anyone who hasn't grasped technological change is fundamental in this world.

In Computing, and now Telecommunications, 10 years is 3-4 generations of hardware. Old equipment costs more and more to keep running, while actually slowing down as you expect more and more from it. Businesses who've attempted to keep old systems & software running discover why companies like Digital Equipment used to support obsolete products for a price: doubling maintenance costs every year until the customer saw their way to replacing it with cheaper, faster, more efficient current technology.

Hanging onto "old faithful" is an exercise in self-deception and false economics.
Kogan, the discount on-line electronics store, levies a 6.8% surchage to users of (ancient) "Internet Explorer 7"to defray the extra coding costs forced on them.

I discovered this in 1990 when, after 20 years of car ownership, I leased my first new car: even with full insurance and the most expensive ownership regime possible, leasing, I saved 20-25% in Total Cost of Ownership for a faster, safer, better handling, more reliable and much better equipped car.

Having "run the numbers" for myself, I got to appreciate the need to check the economics of default decisions, like "keep the old car" or "squeeze the last drop out of the copper network".

Q: Fibre is really expensive, we don't need to spend all that money!

A: A full Fibre network is at most 10% more than a copper FTTN, will last another 50 years and the over the 10-year construction project is only $400/house/year to install. It's anything but expensive, not the least because it isn't paid for out of our taxes, but from what you'll be paying anyway on phone and Internet. There is nothing not to like in the current scheme. [While the Fibre cable is cheap, laying and connecting it isn't.]

For that 10% extra there's unlimited upgradeability for those that want it, and exponentially decreasing costs for those that don't want or need upgrades.

It's the best of all possible worlds for both camps:
The avant-garde consumers get their new play-things and live "on the bleeding edge", while laggards, including myself, get to ride for free on their coat tails with ever decreasing download costs.
The full Fibre NBN is about consumer choice.

Q: I don't want to subsidise the uber-geeks with their "fast speeds" of 1Gbps.

A: It's the other way around! They pay for the rest of us to get very cheap downloads.

Even a superficial look at the NBN Co plan shows it's a phenomenal deal for both those who want to faster and faster services and those who want lower speeds and smaller download limits.

The NBN Co plan is for conservative growth, but on the Internet, that's explosive compared to any other business:
NBN Co will drop the price of downloads 19% a year, every year, while their conservative growth forecast is 30%/year. The average revenue per user will increase by 5.3%, while in just 32 months total downloads will double.
Everyone gets the benefit of exponentially falling prices. If current prices are a bit steep for you, just wait 2-3 years and they'll be halved. Imagine if you could get that deal on petrol, groceries or your mortgage...

Q: "The Internet is for Porn", that's the only reason people want 1Gbps.

A: There are many compelling uses for higher bandwidths, like uploading large files, video included, or simply backing up your data. We gave up banning books & magazines and being publicly judgemental of personal preferences & interests at least 40 years ago. What people choose to spend their money and time on is of no concern to others.

Making any absolute, general statement is sheer nonsense and that applies to the Internet as well.

14yo boys and girls are overly interested in sex and have relatively too much time on their hands.
But if all they ever used the Internet for was Porn, then you'd see very different films coming out of Hollywood.

New media, dating back to postcards, movable type and lithographs, have understood "Sex Sells".
At some point the novelty wears off and the market matures. We left Public Guardians of Morality behind in the 1950's. Arguing this position comes from ignorance and a desire to enforce a private moral code on everyone else - anathema in a Democracy.

It's been more than a decade since the Internet was driven by porn sites, this is at best a specious argument by the uninformed and ignorant.

A view from Telstra in 2003 that ADSL was both only an interim technology, that the copper network needed immediate replacement and that the lead time for this was considerable.

Wednesday 12 November 2003. Senate inquiry into broadband services [pg 80/1]
WARREN, Dr Tony, Group Manager, Regulatory Strategy, Telstra Corporation Ltd

Dr Warren—What makes Australia very unusual is that the regulator required ULL to be ready and operational before we could roll out ADSL. That has not happened in almost every other OECD country. There may be good reasons for that. The ACCC did not want Telstra to get a first mover advantage.

Dr WarrenI think it is right to suggest that ADSL is an interim technology. It is probably the last sweating, if you like, of the old copper network assets. In copper years, if you like, we are at a sort of transition—we are at five minutes to midnight. There is quite a long delay in lead times on all this

Senator LUNDY—Five minutes.

Dr Warren—but I think it is fair to say that everyone is thinking, ‘What’s the next network?’ and a lot of parties are trying to put down bets. Telstra is obviously asking: ‘Which bet do we put down? Is it
wireless? Is it satellite? Is it fibre to the home? Is it whatever?’

Senator LUNDY—Isn’t it a bit of everything?

Dr Warren—It probably will be a bit of everything. There are two interesting questions for us. We are the national carrier and whether or not we are forced to do it we will always have to try and do it as close to ubiquitously as possible. That is a fact of life. For us it is not a cherry- picking model.

Mr Scales—And, Senator Lundy, your point is exactly right: it is probably all of the above. The balance of all of that is a very tricky question for us. The only point of clarification, just so that there is
no misunderstanding, is that when we think about the copper network we are still thinking about 10 years out. So five minutes to midnight, in this context—

Dr Warren—Doesn’t mean five years.

Mr Scales—It does not. It could be 10 or even 15 years, just to get some context into that.

Telstra Investor Update 19 April 2012. In 1995, Telstra had planned, without special funding, to have replaced the copper network by 2010.

David Thodey, p4
When you talk about an all data world, what that means is everything goes digital. Your voice used to be analogue; it goes digital. That's not new. I was going through some old papers the other day of Frank Blount's, who some of you would remember Frank. It was a strategy paper from 1995.
 Now, this may show how we don't always get our forecasts right, but we expected PSTN to have gone away by 2010.

2005 Telstra FTTN

August 2005: Sol Trujillo briefing to Prime Minister and senior cabinet)

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