Apparently Labor doesn’t intend reverting to the full Fibre to the Premises (“FTP”) version of the National Broadband Network it previously championed if returned to government later this year:
The opposition leader admitted that he would not unpick all of the Coalition’s changes to the NBN, which include the introduction of mixed technologies like copper wire to keep the costs of the project down.
Instead it appears Labor would somehow put greater emphasis on FTP and less on Fibre to the Node (“FTN”) (which relies on old copper wires to bridge the last 400 metres from the “node” to the premises). Exactly how and to what extent Labor would do this isn’t made clear by Shorten, but it really needs to be spelled out given the importance of genuinely high speed broadband to Australia’s future.
The problems with Turnbull’s hybrid FTN fraudband model have been well publicised so I won’t repeat them here. However I have some sympathy for the argument that most home users probably don’t need anything much faster than around 25Mbps, which can arguably be delivered by hybrid FTN. The most bandwidth-intensive need most people currently have is to download or stream online movies. But even then FTN makes no sense in the apparently very large number of parts of Australian suburbs and towns where the existing copper network is so degraded that the cost of remediation to ensure that it can achieve those speeds may well make it cheaper to move straight to full FTP.
Moreover it seems that the cost differential between FTN and FTP is now significantly smaller than it was, even in the absence of heavy copper remediation costs:
The company building the national broadband network has quietly trialled a new, low-cost fibre-to-the-premises technology that could achieve the speed and reliability of an all-fibre system to the home, as originally intended by Labor, but at a reduced construction price. …
A leaked internal NBN Co document – the second this week – reveals the company has successfully trialled a new “type-3” system or “MT-LFN” or multi-technology local fibre network, which uses cutting-edge, thinner optical fibres combined with flexible joints and other improvements. …
Its apparent success suggests that, at the same time as some construction costs of the federal government’s cut-price fibre-to-the-node (FTTN) model have increased, according to a separate internal NBN Co assessment revealed exclusively by Fairfax Media on Monday, the costs of the alternative fibre-to-the-premises (FTTP) option preferred by the previous Labor government, may be coming down.
I would like to see Labor clearly commit to re-embracing full FTP in all suburban residential areas where existing copper is significantly degraded, and in ALL retail, commercial and industrial precincts. The average householder might not need any more than 25 Mbps to access movies and porn, but there is a huge range of exciting, innovative bandwidth-intensive technologies that businesses will need to embrace to remain competitive in the 21st century.
I’m even hopeful that Turnbull will quietly move in that direction if re-elected, even if he can’t afford to concede on it publicly before then. Abbott gave him a communications policy sh*t sandwich by assigning Malcolm the job of demolishing Labor’s NBN by finding a vaguely plausible cheaper and quicker alternative. Turnbull managed to eat it while smiling through gritted teeth between bites. But being the highly digitally literate individual that he is, he surely knows that the Coalition’s hybrid NBN is a dog’s breakfast that will inhibit rather than facilitate Australia’s progress as an agile, innovative nation.
Maybe I’m an incurable naive optimist but I hope not, because I have a deep personal stake in the outcome as a result of my own dual professional career. The online law degree program I developed for CDU 13 years ago is heavily dependent on teaching via sophisticated voice and video-enable online classrooms (think Skype with bells and whistles). It works acceptably in the environment of Australia’s current ADSL fraudband world, but it’s extremely clunky and will be immeasurably improved when the vast majority of students have genuine high speed broadband.
Similarly, my part-time private legal practice is heavily dependent on a “cloud-based” practice management and file storage system. Jen and I work from home, CDU, a city office and fairly frequently from interstate premises in Melbourne. Because it isn’t practical to carry large numbers of physical files with us every day, we are probably one of the few law firms in Australia that has actually successfully implemented something very close to a genuinely “paperless” office system.
This means that we are uploading and downloading large documents (frequently 50 pages or more plus multiple attachments) numerous times every day. It’s perfectly doable but we’re seriously slowed with those larger documents by existing ADSL Internet speeds averaging around 8 Mbps for downloads and 0.9 for uploads (speeds in my CDU office usually are slightly quicker).
Our reliance on the Internet and need for genuine high speed broadband might be a little higher than must current businesses but I suspect it will soon be the norm, unless Australia keeps being held back by the current Coalition hybrid NBN.
Australia has stuffed up communications since way back when. It goes back at least to Beazley v Keating and the marvellous idea of providing half of Australia’s households with access to two cables and half with none but it probably goes back well before that.
The two things that always struck me about the ALP’s embrace of NBN were
1) it was a gutsy call and not one I was expecting (that isn’t to say it was the right call)
2) an ALP government should at least have considered providing the NBN as a subsidised public good rather than as a private good. It may have been good economics. I’m pretty sure it would have been good politics. But the Overton Juggernaut meant that it wasn’t something to which they gave any serious consideration.
Nicholas
The Act for implementation of the NBN was exempted from the Office of Best Regulatory Practices requirement to do a RIS:
do you think FTTP (especially for all homes) etc would have passed the cost benefit etc ?
Would be happy enough to see either-any sort of conection, before I am too old to care- Apparently the NBN authority hopes to finish the build ( of some sort of network)and connect 8 million homes by 2020.
Hope so but (most possibly all ) of the preexisting buildings on Danks st Waterloo , just five K’s from Martin Place and the middle of a dense mix of apartments and commercial operations is still waiting for something to start.
Ken, a few observations:
* I’m repeating myself here, but the technological structure of the Internet means you can have a lot of competing last mile providers. It kind of bewilders me that almost no-one ever talks about this.
* The lack of talk about encouraging diversity in last-mile provision may very well be – no offence intended – a sign that most people in the debate are fairly ignorant of the economics, the technology or both. (Also not talked about: open-access ducting, and individual ownership of the cable from the boundary to the premises.) This may sound harsh, but the shitty quality of Australian discussion of broadband is not helping the country.
* If your access from CDU (with its fat broadband link) is barely better than your access from other places, that may be telling you that last-mile improvements will not necessarily make a huge difference to Internet throughput. (Or maybe it’s something else entirely; feel free to explain.)
* Anecdotes have their place, but anyone claiming that ultra-high-speed broadband will bring vast economic benefits needs to demonstrate what it has done in places like Hong Kong, South Korea and Japan, where it’s been in place for many years.
* Before we start believing that all of Australian telecommunications policy is screwed up because we have slow fixed-line broadband, we should note that we have some of the fastest mobile broadband in the world, with multiple infrastructure providers. We then have to explain why the same supposed idiot policymakers who created a fixed-line broadband disaster also created a mobile broadband triumph. (The alternative is to believe that the whole thing is more complex than most people usually allow.)
Sorry, typo above. It should read “… anyone claiming that ubiquitous ultra-high-speed broadband will bring vast economic benefits …”
My understanding is that my CDU office speeds being only modestly better than ADSL despite the university as a whole being on AARNet backbone is because the building we inhabit has crappy old wiring that they have no current plans to replace/upgrade, It’s a but like FTN relying on crappy degraded copper wire to the home.
I would take a fair bit of convincing that any competitive benefits to having multiple private contestable provision of last mile hardware would not be overwhelmed by complexity, confusion and impenetrable blame-shifting from a consumer viewpoint.
The model of allowing private “last mile” provision of services has been tried for water supply in two jurisdictions that I know of. In most cases it works and people crow about how cheap it is. Then something goes wrong, and the blame shifting, obfuscation and high repair costs turn the whole thing to a nightmare. The reason being that unlike a wireless signal over the ether, care and maintenance of underground cables or pipes needs a great deal of competence to connect two points. That competence is not usually found in either the customer or sales departments of telcos. In the case of water supplies, you’d think “just call in a plumber to fix it” should work. Nope. The game of “my supply was fine till your plumber came and broke my pipe….no she didn’t! Did! Didn’t! And who’s repairing the footpath?”
You’d think that having all this spelt out in contracts would cover it…nope. This is truly a situation where the devil is in the detail.
However, if anyone could work out a system that worked, go to your local water utility with it, there’s a mint to be made.
David
The policy came first- a monopoly, the evidence , and reasons, came third.
Politics didn’t get in way of developing mobile broadband.
No-one talks about it because it’s flat out wrong.
One of these things is a natural monopoly and one isn’t. Hence, the same neo-liberal policy will fail badly in the first and not fail badly in the second.
A couple of proposals:
* Joshua Gans’ 2006 proposal for a multiplicity of local providers
* Michael Porter and Joshua Gans papers adressing the issue of maximising competition in the system.
It’s not the specific proposals that matter here so much as the general approach taken. The specifics are really hard. But note, for instance, that you don’t have to have two competitors wiring up each street to have competition of a sort between providers. (Back in the 1990s, of course, we did actually have two competitors wiring up quite a lot of streets.)
David, maximising competition as an end in itself in telecommunications can be counter productive to end user outcomes when the playing field is not level, as it tends to reinforce incumbent monopolies and prevents necessary cross-subsidisation which would deliver quality services to marginal customers. I have been arguing this point here for over five years, since my one and only guest post, and it seems none of you have listened to me.
It is saddening that economists and tech geeks haven’t been able to come to an informed consensus on this. Our disorganisation only benefits those who work to subvert competition on behalf of Howard’s battling Telstra share owners.
People keep missing the key point – it’s more about the upload capacity than download. Sure, fine, you just want to consume movies. But for people that create content or need to interact globally, the UPLOAD speeds are what counts.
25Mb down implies significantly less than the FTTP 40Mb we can get.
Raoul
Hi
But does that really mean that we need to do FTTP to every house ?
Why do we need to do all of the built up areas the same, don’t get it.
BTW
Where I live ( regional town)about one third of the population are on the aged pension unlikely to want to spend a lot on downloads or uploads , and about another third are young families on combined incomes of around $50 to 70 k ( at most) they are unlikely to need , or afford ,the sort of speeds you are talking about. (Least for the foreseeable future.)
So why do it?
The article linked in the primary post about the new “type-3” system or “MT-LFN” or multi-technology local fibre network says that it may bring the cost of a connection (presumably from “node” to premises) down from around $1200 to $600. I vaguely recall Turnbull suggesting prior to the 2013 election that people who needed a genuinely fast FTP connection rather than just FTN might be able to get it on a “user pays” basis, but I haven’t heard the idea mentioned since.
If that option could be offered for between $600 and $1000 to those who need or want it (for business, creative or other reasons) that would surely meet John’s objections. The standard “public good” semi-fast 25 Mbps service would be connected for free, but if you want more you would have to pay for it. But it would be offered by NBN Co not by a plethora of private providers as David suggests (which IMO would be a nightmare).
Ken the articles I have read seem ‘ confused’ some say the diference is between costs if the order of $2000 vs $ 2000 and others $600 vs $1200, don’t know what to make if it.
Obviously I agree with the idea that if you have a need for extra fast connection then you can make a co- payment.
Sorry typos
Some reports put the cost difference in the region of $2000 vs $4000 others at $600 vs $1200.
That statement by Turnbull is illustrative of how blithe handwaving can get one into trouble.
As an example, let’s say someone halfway down the street from a node wants fttp. Does one pull a single fibre to that house? Or does one pull a cable capable of serving all the houses it passes? Or does one pull a cable capable of serving all the houses in the street on the basis that someone further away from the node might want a connection later, rather than pull out the earlier cable and have to junk it?
The economics and impracticality of that is a nightmare.
Marks
Does that mean that FTTP , in practice ,must be compulsory for all ?
Well, anything can be done if someone is prepared to pay enough, but my suspicion is that it might be cheaper to move.
Practically, it is likely to be either everyone has fttp, or everyone in the street has fttn which can be upgraded if sufficient numbers of people in the street are willing to pay for an upgrade. Of course, that raises the question of how to deal with free riders.
A further question will arise soon enough, and that is, once it is realised that some areas have fttp and good upload and download speeds, and others with fttn do not, will overseas experience of house price differentials appear?
Marks thanks
I am with Ken and Nick
Did you ever stop and think, David, that the reason experts don’t talk up diversity of last-mile is because they have expert knowledge which you do not about why it isn’t a good idea, and thus you shouldn’t be lecturing anyone about ignorance?
Service extensions and upgrades to utilities is one of the most vexed and least understood areas of service provision.
On the one hand, it appears, superficially, to be simple, but on the other hand details, and the sheer impossibility of one size fits all policies satisfying all stakeholders means it devolves into a nightmare very quickly.
Having said that, public discussion is a good thing. If people are interested, and ask for reasons for policies, most service extension people are glad of shoulders to weep on.
Marks
God bless you:-)
Paul
I sincerely pray that I will never be an expert
John, I pray you will never be consulted on topics requiring expert knowledge.
Fine the ” cutting edge of conformity” is crowded enough as it is.
One man’s “cutting edge of conformity” is another man’s “reality-based community”.
Good question, Paul. The answer is twofold.
1) Most people who have been involved in the Australian broadband debate over the past two decades are not experts. They often know a fair bit about the technology, occasionally know a fair bit about the economics, but rarely know much about both. The people with expertise in both fields do tend to talk about different forms of diversity in last-mile provision, even if not all of them have at various times accepted particular models of diversity.
2) I did indeed think for some time that the reason more people didn’t talk up diversity of last-mile build out was because they had expert knowledge which I did not. Indeed, it was my first hypothesis, a long time ago. It took me more than half a decade to move to voicing the speculation you quote above.
The point of good Australian telco policy since deregulation is to limit the remaining monopolistic power of Telstra, as their interests are often opposed to good market outcomes. Last-mile provision diversity is yet another area where Telstra have all the operational advantages, not just with superior numbers of boots on the ground in installation and maintenance, but also with long-term contracts in place in a lot of new housing estates to lock up their conduits. Unpicking those contracts to allow open commercial competition would be a nightmare – far better to have one government-mandated NBNCo line in and be done with it.
The main problem with economists talking about the NBN is that the technological idiosyncrasies of the industry, and the history of regulatory failures creating the Telstra hegemony, defy normal economic analysis. I have had many conversations like this, patiently trying to explain to those who don’t know much about prevailing market conditions why vanilla models don’t apply when you’re dealing with a monopolistic behemoth.
Insulting people about their ignorance is not going to get anything done. Economists think one thing in theory, domain experts in the field think another because they know the theory won’t work. Neither is wrong within their own field, but the Australian telco industry is a decades-long experiment in what happens when theory meets reality. So far, Telstra’s still dominating and the consumer still has to pay massive economic rents.
Paul, my observation about the absence of discussion of diversity in providers was not intended to insult you, Ken, Nick or anyone else in particular (and indeed Nick and Ken are two people who have been willing to talk about this in the past). My comment was a development of my previous observation that “it kind of bewilders me that almost no-one ever talks about this”.
I see we agree, thankfully, on the need for more people who understand both the technology and the economics – as well as the realities on the ground. I spent about half a decade covering this at close quarters for Fairfax – including Frank Blount’s horrifyingly successful broadband network defence against Optus – so I’m not entirely ignorant of the behemoth’s behaviour.
David
Are you the author of ” Not Dark Yet” ?
If the argument for the NBN is that more people can easily do a law degree, lets stop the damn thing now. More with law degrees is something we need like a hole in the head.
What we do need is a reasonable connection for normal usage. Ask the 120 homes that can’t get any net connection, because the exchange is beyond it’s capacity. Ask the 800 homes with a connection that often runs slower than the old dialup for the same reason.
Then tell them that no upgrade will be undertaken until the NBN comes through our area. Then tell them that it could still be 5 years away.
If we do ever get a reasonable internet system, we will be paying ridiculously high prices for something we never wanted or needed, just so a few with special interests can have what they want. NBN is a dirty word around here.
Well, assuming that some future government gets round to connecting you to a system, what would you prefer? Door A with copper that corrodes and is slow, or door B with fibre that doesn’t corrode and is faster…for almost the same cost?
Part of the reason for the NBN is simply that much of the copper system was simply let to fail by a privatised Telstra. The present government is replacing failed copper with copper rather than fibre, rewarding Telstra by paying substantial amounts for a decrepit system. Don’t you think that is likely more the reason for your inability to get a decent connection, rather than a copper vs fibre argument? I reckon for the amount paid to Telstra for decrepit copper you could have had ten connections with change left over. How that’s the fault of the NBN is a little unclear to me.
In Canberra- ACT, they have done Acton and Civic and also much of Queanbeyan .
Outside those areas it seems to be only new builds that are ‘ready’. Is the problem in existing areas about getting the nain cable to the ‘street’ or is it about the last few metres?
Or is it something else?
Marks most of Canberra is not that old, most is post 1980 in build ( a lot is much more recent)
And its ,dry a good climate for metals like copper.
So why the slowness re existing areas?