Yesterday, a group of telecommunications CEOs put out an open letter that described an alternative broadband infrastructure. The letter received plenty of coverage in the media but in our view creates more questions than it provides answers. So we thought we’d give them a quick reply.
Dear Alliance for Affordable Broadband signatories,
We are grateful for your letter and suggestions. Indeed it is pleasing to see individuals of your repute publicly join the broadband infrastructure discussion and to provide alternative suggestions. We would encourage this from more people in the ICT industry.
To help kick the conversation along we thought we’d give you a quick response with some (but not all) of our questions. To get to the point, though, we really wish you were already at release 3.7, because the NBN 3.0 plan, like a lot of first releases, leaves a lot to be desired and really doesn’t use the good parts of 2.0 or even 1.0.
At first read it sounds grand: Give 4G wireless to almost everyone through a public/private national wholesale-only network, fibre to the hospitals/schools and “most” businesses, and encourage investment through market competition. All for a bucket load cheaper than Labor’s $43 billion national broadband network (NBN).
And I think we can all agree right now that everyone wants “a competitive National Fibre Backhaul Network (NFBN) platform”, and it is something all parties have put forward plans on.
At second glance, however, the plan seems to fall into the same Conroy/Rudd mistake of being hastily pulled together, missing some key elements and arguably introducing a contradiction or two - although perhaps the points just weren't explained in enough detail. So we have a few questions:
1. Do you have any suggestions as part of your plan for changing the current fixed line market structure, which is dominated by a vertically integrated Telstra as is sought by many players in the industry? Would you agree this needs to be addressed as part of any broadband infrastructure plan?
2. Are you suggesting the history of the rollout along with the current circumstances with the HFC networks – high prices, limited coverage and no open access - are good examples of infrastructure-based competition?
3. How is creating a national wholesale-only 4G wireless network where you will have to choose between competing technologies – WiMAX and LTE – while at the same time introducing tough competition to 3G players and potentially forcing them to give up on their considerable investments to migrate to your network, any different from the NBN Co situation with fibre? Isn’t this also “crowding out” other wireless infrastructure (i.e. if you choose LTE, what happens to WiMAX?) and existing competition (i.e. between the Optus and Telstra wireless networks)?
4. What spectrum will you use for the 4G network and why? When is it available? Have you done an analysis of the opportunity cost of using this spectrum for other purposes?
5. How did you come to the 98 per cent figure for the 4G network? Have you worked out how many towers will be needed and whether you will connect them by fibre or microwave?
6. Please explain how you came to the $3 billion figure. Is this the total cost of your plan or just the 4G wireless portion?
7. Can you really guarantee a “ubiquitous” service with this plan when it is next to impossible to provide a committed level of service (both in terms of bandwidth and geographic coverage) with existing broadband infrastructure and the wireless technologies you suggest? You mention “up to 100Mbps” but what is the minimum download speed all Australian organisations and individuals should receive? Shouldn’t we all get at least the same level if any tax payer money is going to be spent?
8. The Coalition's alternative broadband plan sees the majority of action enacted after the first term of government, yet you mention that the solution could provide deliverables within one term. What exact deliverables would this be?
9. How long do you expect the “serious investigation and independent cost estimations, cost-benefit analysis, genuine industry and public consultation as well as a review of its impact on the Australian competitive telecommunications landscape” to take to complete? What assumptions will you use in this?
10. You say in the short- to medium-term there is no demand for up to 1Gbps - and that is entirely accurate with qualifications – but how do you define these time frames? And in the long term? If you do forecast more than the 4G networks can provide, why not aim higher then your plan and get the competitive advantage by investing early in a technology we know will support that, thereby encouraging participation in the digital economy and leap-frogging competitor nations?
11. If schools, hospitals and “most” businesses need the better speeds, why wouldn’t others, including SOHO and consumers? Doesn’t suggesting they won’t go against the history of technology adoption and internet usage?
12. What kind of plans and data caps would be reasonably expected for both businesses/organisations and consumers as part of your plan?
13. What about Defence and government agencies? Will they continue to pay more to private companies for connectivity as a result of this plan?
14. What upstream speeds will you guarantee to incentivise businesses and individuals to become participants in the digital economy?
15. How does your plan support other areas of economic activity and how exactly will it be integrated? What impact would it have on our competitive edge in the global economy as opposed to alternatives?
16. Why settle for 12Mbps for the satellite portion of your plan?
17. What about Greenfield estates? Do you suggest continuing with mandating they roll out fibre?
18. On R&D – do you recommend rolling out existing technologies or investing in the development of new varieties as is being pursued by the CSIRO?
19. Have you considered that some people may not want to have a 4G wireless network in their area, but would prefer fibre services? Is there scope to let communities or councils choose on a case by case basis what they want?
20. What provisions would you recommend for improving our international links and the price paid by ISPs for IP transit?
These are just some of the questions we seek answers and clarification on. We have plenty more (including your motivations as individuals for putting this letter out now) but figure it is best to stop here as this might take a bit of time to respond to.
In your letter you mentioned that the Labor NBN plan has "failed to convince". That may be the case for some who hold similar views as yourselves, but until you are able to answer the above questions (and those we haven't included) the same accusation can and should be levelled against your suggested plan. Your plan may simply be a proof of concept to show that an alternative to the NBN is possible, but we look forward to seeing mature, formulated business plan that can replace Labor's current rollout as it stands from day one.
Thank you in advance AAB and we look forward to your detailed response.
(Let us know what you think of the plan in our poll)