Tony Brown, Informa

Australian NBN 2.0 – Pragmatism Replaces Universal FTTP Utopia

Tony Brown, Informa
Tony Brown, Senior Analyst with Informa Telecoms & Media covering the broadband and Internet industries in Asia Pacific.

This post is by Tony Brown, Senior Analyst with Informa Telecoms & Media

Barack Obama’s grandfather in Kenya once allowed a traveler to cross his field to get home but warned him, “If your goat touches even half a leaf I will kill it,” – the man agreed but almost immediately the goat bit into a nearby bush and Obama’s grandfather ended its days with one swipe of his machete.

The traveller was horrified and protested furiously but Obama’s grandfather was unmoved saying, “If I say I will do something then I must do it. Otherwise how will people know that my word is true?”

I was reminded of this story by the extraordinary reaction to the release of the Strategic Review of the National Broadband Network (NBN) by Australian Communications Minister Malcolm Turnbull where he delivered much of what he said he would – although with a new price tag $11.5 billion higher – and still copped vitriol from all angles.

In the Strategic Review Turnbull announced that the Coalition government would be implementing an NBN using a mixture of technologies in the fixed-line component with 26% receiving Fibre-to-the-Premise, 44% Fiber-to-the-Node/Building and 30% services from existing Hybrid-Fibre Coaxial networks.

In addition, he announced that the Coalition network would cost $41 billion rather than the originally forecast $29 billion and that he would not be able to meet his election promise of providing 25Mbps nationwide by 2016.

The announcement generated an apoplectic reaction from many in the Australian tech community with one high profile technology journalist declaring that, “I have lost any faith I had in Turnbull in his role as the Communications Minister…[my] default position will be that the Minister is not acting in the best interests of Australia from an NBN perspective.”

Those are strong words but – accepting that Turnbull was too aggressive in his election promise of 25Mbps to all by 2016 – was anything in the Strategic Review really that much of a surprise?

Turnbull has talked endlessly about using a “mixture of technologies” on his NBN model and has previously described the shutdown of the Telstra and Optus HFC networks for delivering broadband as “economic vandalism” – so it is hardly a great surprise that HFC will play a major role in his NBN model.

Whilst the decision not to over-build HFC areas with FTTN or FTTB was a surprise, Turnbull’s comments last month about visiting Blacktown and finding that the NBN was being deployed in areas where both Telstra and Optus already had active HFC networks in place were a clear signal on where his policy was headed.

People can disagree all they like with Turnbull and it may turn out that he is making a horrific mistake – only time will tell – but he is doing exactly what he has said he would do for a very long time, that is building the NBN “quicker and more affordably” by leveraging existing network infrastructure.

This will inevitably lead to a less than perfect network – certainly not as technically good as the former ALP government’s all-FTTP solution – but Turnbull’s overwhelming desire is quite clearly to get the network done and dusted as soon as he reasonably can by building as little new infrastructure as possible.

Meanwhile, whilst many in the tech community are probably still sticking pins into their Turnbull voodoo dolls they should probably consider that the Strategic Review has actually blunted one of Turnbull’s major arguments against an all-FTTP NBN; that being how long it would take to build.

The Strategic Review accepted that the ALP’s all-FTTP NBN could be completed by mid-2024 – just three years behind its original schedule and only four years after the completion of Turnbull’s hybrid model – albeit $29 billion more expensively than originally promised by former Communications Minister Stephen Conroy.

Given the poor FTTP construction record of NBN Co. to date – with NBN Co. Executive Chairman Ziggy Switkowski saying recently the network was “three years old and two years behind schedule” – the Strategic Review’s conclusion that around 11.5 million premises could be passed by FTTP in the next ten years is very surprising indeed.

It is very hard to believe that Turnbull agrees with the all-FTTP completion date accepted by the Strategic Review – and it is pretty awkward for him that they have arrived at such a conclusion.

From a political perspective it now gives his political opponents the chance to ask, “Why are you delivering a second-class network when we could have a world-class FTTP network with just a couple more years work?”

In all fairness that is not an unreasonable argument and Turnbull now has only the extremely high cost of an all-FTTP network rather than time to build argument at his disposal when he pushes back against those loud and persistent voices still demanding an all-FTTP NBN be delivered.

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