A recent report by the Organisation for Economic Co-operation and Development (OECD) also flags Australia’s broadband speeds as among the worst in the OECD, beating only Mexico, Chile and Greece in terms of internet speed and penetration.
This raises questions on NBN’s continued use of fibre to the node (FTTN) over a large proportion of the total NBN footprint.
When the coalition government came to power in 2013, it instructed a new NBN management team to stop rolling out fibre to the premises (FTTP) and instead build a multi-technology-mix (MTM) version of the NBN.
But, as predicted, it is becoming clear that the FTTN component of the network is inadequate for Australia’s future needs.
Who's to blame?
NBN chief executive Bill Morrow has deflected some of the blame for low speeds away from NBN and onto retailers, suggesting that their networks might not be up to the task.
He has correctly pointed that part of the problem is that many customers are opting for cheaper, slower services rather than the more costly faster ones.
In defence of its network, NBN points out that existing slow-speed ADSL services dominate the speed data quoted in the OECD report. It suggests that rolling out the NBN out across the entire country will help to improve Australia’s broadband ranking.
But this argument ignores any future developments in other OECD countries. There are numerous broadband initiatives in the OECD, and many of these initiatives use FTTP networks, which offer much higher speeds than FTTN.
Faster speeds overseas
Worldwide, the proportion of fixed broadband services using FTTP has increased by 77% in the past year and those using copper, such as FTTN, have decreased by 11.6%.
While the OECD and the rest of the world are moving forward with ramped-up FTTP deployments, Australia is moving backwards with its continuing rollout of FTTN.
New Zealand, for example, currently sits three places ahead of Australia in the OECD report. But in New Zealand, the telco and internet provider Chorus is installing FTTP around the country.
It announced in September last year gigabit-per-second services across its fibre footprint, starting at a wholesale price of NZ$60 (A$55) per month. This follows the announcement of gigabit services in Dunedin in 2015.
In the United States, fibre rollouts are expanding, and countries such as Sweden and Finland already have a large penetration of fibre in their networks. Many countries in Southeast Asia either have rolled out, or are rolling out, high-speed FTTP networks.
One of the reasons why FTTP deployments are expanding worldwide is that newer construction techniques and cabling technologies are driving down the cost of FTTP.
Enter Fibre to the Curb (FTTC)
NBN Co announced last September that it will roll out Fibre to the Curb (FTTC) to around 700,000 premises originally slated to use an upgraded version of the Optus HFC network.
FTTC is a relatively new technology in which fibres link the local telephone exchange to small existing pits in the street, outside a home or business. FTTC potentially provides speeds in excess of 500 Megabits per second.
Up to the pit, FTTC is essentially the same as a FTTP. The key difference is that in FTTC, a small waterproof electronic box in the pit connects the fibre to the existing copper wires that run into the home.
But FTTC is largely untested in large deployments such as Australia’s NBN. So a rollout of FTTC will carry a degree of technological risk.
NBN says it will cost about A$2800 to roll out FTTC to each premises, which is only $630 more than FTTN. Like FTTP, the cost of rolling out FTTC will decrease over time using newer construction techniques. FTTC and FTTP are both becoming more cost competitive.
With speeds as much as ten times higher than FTTN, FTTC has the potential to improve Australia’s rankings in broadband speeds and accelerate Australia’s transition into the digital economy. These were the original objectives of the NBN.
In a blog post, NBN’s chief network engineering officer, Peter Ryan, says that FTTC and FTTN are closely related, and uses this premise to paint a picture of how easy it will be to upgrade from FTTN to FTTC.
But FTTC has a natural relationship to FTTP and not to FTTN. In FTTN, fibres feed a cabinet on the side of a road that is connected to nearby 240-volt power lines. The power supplies backup batteries and banks of electronics that connect to the premises via the existing copper wires.
In FTTC (and FTTP, for that matter) the expensive powered node is not needed, meaning that the cabinets in the street could have to be trashed when FTTN is upgraded.
In an attempt to bolster its arguments for FTTN, NBN has asserted that those cabinets are “an extremely valuable asset … which can be used for a range of purposes”. But it is very hard to imagine what these purposes could be.
Despite the excitement over FTTC, it’s getting harder to cancel contracts for FTTN and move to a more sensible strategy.
Ryan points out it’s not possible to “tear up 18 months” of FTTN planning as that would only delay some connections for two to three years.
The NBN network is like an enormously long train; you can’t just bring things to a complete stop and change direction, it just doesn’t work that way and never will.