Australian ‘FTTH for All’ dream fights for life

National Broadband Network CEO Mike Quigley opened up a huge can of worms when he said at the American Chamber of Commerce lunch in Sydney on February 22nd that he was open to the NBN being re-designed using different last-mile technologies rather than the current full Fiber-to-the-Home (FTTH) model.

Shadow communications minister Malcolm Turnbull was quick to shoot down the suggestion from Quigley, telling his long time adversary that his call was too late that any such review should have been conducted before the NBN was launched – it was too late to talk about other technologies now.

Putting politics and their personal enmity aside you would have thought Turnbull would be relived to finally get a discussion going about using Fiber-to-the-Node (FTTN) or even upgrading existing Hybrid Fibre Co-axial (HFC) networks for the NBN.

After all, whenever Turnbull tries to do so the reaction he gets from many – especially in the ICT community – is similar to what a father of young children might get if he offered them a fortnight’s family holiday at the Burleigh Heads Caravan Park – after his wife has already promised them a two week dream holiday in Disneyland.

Now it’s payback time
The truth is that while Australia’s current FTTH-led model would – if finished – put it in the broadband ‘Premier League’ with Korea, Japan and Hong Kong that it is actually going very much against the global trend of operators using existing network assets to avoid the huge costs of FTTH in brown field sites.

On a global basis FTTH remains a niche technology with only 14% of global subs currently receiving FTTH services – and if you exclude the ‘boom’ FTTH markets of Asia Pacific only 3% of global subs are taking FTTH services right now, with most subs actually getting Fiber-to-the-Building (FTTB) rather than full FTTH anyway.

So, accepting that FTTH under the current NBN Co. plan is expensive, complicated and very time consuming to deliver – witness the fact that NBN Co. had passed only 72,000 of the targeted 12.2 million FTTH homes at end-December – and that the current Labor Party led government seems doomed to defeat in the September election, can a compromise deal be reached?

The chances of Turnbull – even if his good wife Lucy banged him over the head with an antique vase from the Turnbull abode and he awoke a die-hard FTTH backer – being able to persuade the Liberal Party caucus in Canberra that they should stick with Labor’s current model are non-existent.

In fact, the irony is that despite the “uninformed, bilious abuse” that Turnbull says he has received from NBN supporters is that he is probably the best hope that they really have of actually ending up with anything like the current NBN, albeit using different last-mile technology, in the near-term.

Many in the Liberal Party loathe the fact that the current NBN has been foisted on them by the Labor Party, they hate the fact that it creates a monopoly in the telecoms market, are appalled at the closing down of working infrastructure such as Telstra’s HFC network and are vehemently against direct government intervention via NBN Co. in what they feel should be a private market.

That’s before we even talk about the $37 billion price tag for the NBN which many Liberals are not exactly over the moon about either.

The truth is that if you are a backer of the current NBN model there are far worse people who could be taking over the NBN than Turnbull, he won’t deliver them exactly what they want but given their druthers other potential Liberal Party communications ministers could deliver something much further from the current model.

Lesson from America
In what must be bitterly disappointing times for the current NBN’s most committed backers they should bear in mind that big structural changes such as the overhaul of an entire telecommunications system very rarely happen over a single government term, or even two for that matter.

The best example of this comes when you look at how President Obama handled the passage of the Affordable Care Act – AKA Obamacare – back in 2010 when he was urged by the left wing of the Democratic Party to go for the ‘Public Option’ and take on the power of the private health insurers head on.

In an ideal world Obama would have loved the ‘Public Option’ of government provided health insurance for all who wanted it but, ever the pragmatist, realised that going for the end goal in one big, bold move would result in the same all-out war with health insurers and ultimate farcical failure that President Clinton’s Health Care Task Force met with back in 1994.

So, Obama compromised and worked instead on a deal he could actually get done, that being to mandate private health insurance for all – thereby tipping millions of new customers into the hands of private health insurers – whilst they in return agreed to drop some of their more controversial practices and provide fairer coverage.

Sure, this was not the ‘Medicare for All’ dream that many in his party wanted from him but Obama realised that big changes to healthcare – a multi-trillion dollar industry – cannot be done via a revolutionary approach, the change must be incremental or you risk creating so much turmoil that you end up with no change at all.

The same goes for achieving universal FTTH in a difficult market like Australia, rolling FTTH via NBN Co. was always going to be a tough challenge unless the Labor Party held power for a very lengthy period and got most of the job done – and that does not look likely now – and even then would have been very tough to do.

Instead, in the longer run, we might end up seeing the arrival of NBN Co. into Australia’s telecoms market back in 2009 as actually being the first step towards eventual FTTH, with the next Coalition government deploying widespread FTTN and a future Labor government eventually re-launching the FTTH dream further down the track.

Comments
  • AJ February 27, 2013 at 5:20 am

    Many in the Liberal Party loathe the fact that the current NBN has been foisted on them by the Labor Party, they hate the fact that it creates a monopoly in the telecoms market, are appalled at the closing down of working infrastructure such as Telstra’s HFC network and are vehemently against direct government intervention via NBN Co. in what they feel should be a private market.

    Yes we want a Private Integrated Monopoly instead run by Telstra that has worked out well for us no that is not right hundreds of thousands of people have been denied ADSL simply for Telstra to save a buck then forced onto wireless which at peak times is so congested that you can’t even open a web page.

    On a global basis FTTH remains a niche technology with only 14% of global subs currently receiving FTTH services – and if you exclude the ‘boom’ FTTH markets of Asia Pacific only 3% of global subs are taking FTTH services right now, with most subs actually getting Fiber-to-the-Building (FTTB) rather than full FTTH anyway.

    We need a point of reference here what is the current percentage deployment of FttN worldwide?

  • HamboCairns February 27, 2013 at 3:14 pm

    Based on your last paragraph, the costs for FTTN + FTTP should be added and charged to LNP. That is the true cost of FTTN.

    The thing that gets me is that anti-NBN people always state the expense but expensive for whom? If it’s an investment that is paid back via a user pays model and will bring a projected return of 7% then it’s cost next to nothing right? Then you factor in the productivity, investment and innovation improvements which has been reported to improve GDP of any country that implements it then I don’t see the issue.

    It’s an infrastructure for ALL Australians, not just the rich or just the poor, EVERYONE.

    How do people think LNP’s model will be funded? Oh and are they aware that if they want any improvement on that they’ll have to pay even further or wait for a Labor Government?

    I just wish it had bipartisan support as it will build a platform for any encumbent party to shine on.

  • Post a comment