Coalition's NBN cheaper? No says MyNetFone CEO

Rene Sugo said while the Coalition's NBN could be delivered cheaper than the Federal Government's NBN, using the existing copper network will result in higher costs or service issues

MyNetFone's CEO has rebuked Malcolm Turnbull's claims the Coalition could deliver a cheaper model for the National Broadband Network (NBN), stating the cost of maintaining the copper network will add to a fibre-to-the-node (FTTN) deployment.

While Rene Sugo conceded the shadow minister for communications and broadband's approach of using fibre-to-the-node would be cheaper, he has called on the Coalition to provide analysis and research on what speeds would be guaranteed on a FTTN network.

"There are lots of issues around using the copper which will add cost or degrade the level of service that will be delivered by a fibre-to-the-node solution," he told Computerworld Australia.

Turnbull has consistently stated the Coalition could deliver a cheaper NBN – and sooner - than the one currently being rolled out by the Federal Government via fibre-to-the-node (FTTN), which would result in cheaper prices for consumers as NBN Co would not need as high a return on investment.

"Fibre-to-the-node, around the world, costs between one quarter and one third of fibre-to-the-premises. That is the experience in North America and Europe. And in Australia with very high labor costs the differential would likely be even more," he said in a blog post.

Turnbull did not state how much cheaper the Coalition could deliver the NBN.

Not only will a FTTN deployment also result in higher long-term costs, Sugo also said the quality and validity of Australia’s copper network, which provides the last mile between the network node and premises, is one of the biggest challenges for ISPs at the moment.

“The copper is very old. In some areas there isn’t enough of it. In other areas it’s really bad quality and if it rains you get service issues. Sometimes you get people up the road from one another having totally different speeds available and it’s all because of the copper,” he said.

“I think the reason we need a new NBN is to provide a truly universal service … If you’re looking at relying on the existing copper network you’re going to inherent all of the quality issues that we have today. I don’t see a way around it.”

Sugo also cited the availability of the copper network as an additional issue, with companies like Telstra using pair gain technology which allows the telco to provide two phones on one piece of copper.

“Once you have pair gain technology you can’t offer DSL or any form of broadband out of that copper,” Sugo said.

“Telstra’s also using what’s called RIMs, which is a remote module. If there’s a new estate built out in [the] metro surrounding the city, they’ll put a RIM in there. RIMs don’t have 100 per cent capability to offer DSL or broadband.”

Sugo said wireless is also an unviable solution for connecting a large number of premises to the NBN due to spectrum limitations, particularly in high density areas.

“You’ve got to keep in mind if [regional] areas do over populate with houses or apartment blocks you will need to start putting fibre in at some stage in the future,” he said.

“Certainly fibre-to-the-node in a lot of areas around Sydney, Melbourne or [any] capital city where the copper is old, unless they’re planning on replacing the copper, I think they’re going to have problems.”

Turnbull also argued that if technology can deliver broadband requirements to premises at the moment, it makes sense to deploy it now instead of waiting to deliver maximum potential bandwidth. However, Sugo said Australia needs scalable NBN technology which will help the country plan for broadband growth.

“We need technology that is scalable and the beauty about fibre and optics is that it’s almost infinitely scalable. You can use DWDM [dense wave division mulitplexing] technology [and] they’re improving the bitrate on fibre all the time as well so there’s so much technical advancement there,” he said.

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27 Comments

Lord Rocker

1

YES! Now this should be put on the front pages of the MSM! It would be if he was against it!

BrettV

2

Lots of "if this or if that happens" assumption in this article? Sounds like it was writtern by Pro Labor supporter rather that a transperent objective article. With the ongoing release of mobile wireless devices and the high demand for anywhere, anytime internet access the NBN seems to be a little old school and really missed the boat attempting to tie us down to a cable for internet access? The Liberals answer isn't that much better. That's the problem with poliies living in there Canberra bubble which often seems fare removed from the reality of life the rest of us live.

Abel Adamski

3

BrettV
You highlight the issue we have.
Good News
Libs will win and you will get what you want. Just don't whinge when the realities bite.
Any technical discussion that raises issues with the Liberal Short term Solution which in reality will never be upgraded, just patched up due to cost, is "Pro Labor".
Like it or not Pro NBN ers are not necessarily Labor Voters or supporters, just PRACTICAL Technically knowledgeable REALISTS

karl_w_w

4

BrettV
What "if this or that happens" assumptions are you referring to? The only one I can see is "if it rains", and I can assure you that happens relatively frequently.

The fact is, you have to use copper under a FttN plan, that's not an assumption. The other fact is that the current copper is falling apart, it is the reason ADSL is so unreliable. Just because that copper starts getting used in FttN doesn't magically fix the copper. So you either have to pay to fix the copper, or have exactly the same problems we have now.

Why build an FttN broadband network if it doesn't fix anything? There is no reason, you would have to pay the cash to fix it, and you would have to pay the high ongoing costs of maintaining it, and paying Telstra to let you use it.

Jay

5

What has been said in this article makes a lot of sense and I'm not even a Labor voter.

In a FTTN solution the copper is still there, the copper (so many decades old) is the current weak point and will remain that way if it's use for the last mile.

Shenanigans

6

Bring on FTTN!
I live in a metro area and the best speed I can get is a lousy 4MB/s. If Mr Turnbull has his way I'll be lucky to ever get any better than this.

Shenanigans

7

Oops - I mean bring on FTTP! How embarrasment.

Mike K

8

The original copper was layed between 1880 and 1940, not idea how much of the original is left. At my place I cant get ADSL Im 3 k from the exchange the copper is longer. We own 2 units and both suffer line noise every time it rains. Even if the the coalition installed FTTN it would have to be replaced within 10 years ( thats 10 years starting 2 years ago) with FTTH to keep pace with the demand. Do it once and do it right, FTTH is the most cost effective way to go. The coalition know this, they use the ignorance of the general public purely to gain votes and Labor would do the same.

Enrico

9

I'm only a Labor voter because of the coalition's NBN policy. Would love to vote against Gillard, but simply can't vote for FttN.

Richard Ure

10

When “forced” to upgrade to digital television receivers, how many people spend their own money on television receivers no grander than their analogue TVs? Experience shows most people, spending their own money, choose to over-upgrade.

In short, consumers' hunger for technology is greater than the Libs give them credit for. Tony Abbott’s announcement of their NBN policy on 7.30 Report says it all: shortermism. http://goo.gl/vLj6w

gnome

11

@10 Richard, you rightly note that people 'choose to over-upgrade.' Maybe that's because people aren't stupid, and they know that as technology advances they need to keep up with it to meet their future needs.

The coalition's supposedly 'cheaper and faster' FTTN, etc alternative relies on a grab-bag of outdated technologies. It would be no faster to rollout, given the headstart that NBN will have by the time the coalition wins power.

And by the time the FTTP NBN is scheduled for completion, the coalition's network architecture would already be out of date.

Not much common sense in that!

Josh

12

@Enrico

I agree wholeheartedly - the only reason I am voting for Labor is for the NBN! I'm sure there are many in the same boat!

James Linton

13

FttN is just the same as the Optus and Telstra cable networks, which provide NBN like speeds now to well over a million end users, compared to how many thousand NBN Co users?

Wouldn't the coalition just do what NZ did, and regulate what prices the incumbent could charge. Telstra, and Optus have FttN networks in every major metro area, it would be very cost effective to extended these without the insane amounts of money being spruiked by the clowns keeping the seats warm in parliament for the coalition.

Keithy

14

Fact: all silver spooners love the NBN and will not be able to look their children in the eye if they vote against it!!

karl_w_w

15

@13 James
Sadly, you are wrong. The cable networks don't provide NBN like speeds, what they provide is the potential to provide download speeds almost as good as the current NBN (100 mbit) in a best case scenario. That takes no account of the upload speeds, ping and reliability, the fact that NBN can and will go faster soon (1 gbit in the near future, who knows in the long run), or the fact that it's a shared medium.

Here's the shared medium part: the cable networks are shared, so more people on it means a slower speed, this is why Optus no longer actively advertise cable, it's reaching the point already where it's better for them if people just get ADSL and stop diluting the cable bandwidth. FttP is not a shared medium.

And you're still ignoring the whole point of the article. The cable networks still use copper. Copper is still exponentially more expensive to maintain.

Abel Adamski

16

James and Keithy - NBN speeds, really?
1) Contention is the issue, during peak times they crash like a rock, have inadequate upload at the best of times, are not Business capable, have very limited upgrade , and high maintenance costs. Neither Optus or Telstra wish to upgrade the infrastructure. Note no mention of HFC in Turnbulls comment. For good reason.

Currently 20,000 Fibre customers and rapidly increasing every day not the 3,700 Turnbull loves to quote from May at the beginning of the commercial rollout which is steadily ramping up.

I will go with practical realities that are reasonably costed to not cost the taxpayer over the long term and be a core assett for the nation over an ideologically driven wishy washy uncosted vague fantasy taxpayer funded solution pumping Billions into the private sector sucking on the taxpayer teat with nothing to show for it in a decade except an inadequate and overall very expensive failure

D Newman

17

@16 Abel +10 mate, but in most cases your preaching to those with fingers firmly in their ears, while screaming "Wireless will soon be faster than light", or "Dont waste money now ,wait 100 years more for Quantum entanglement"

James Linton

18

@15 and @16

Perhaps Optus and Telsrta do have contention issues, but wouldn't you think with some investment (a fraction of the projected cost of the NBN), these shortfalls could be easily resolved.

The NBN also doesn't take into account the fact that a large majority of the content Australians access is actually overseas.

Do you see any investment in new cable systems?

Abel Adamski

19

@17 James
2 Points
First, the actual cost for FTTH to the premises for 93% of premises is $12Billion. This for a product that is scalabvle , universal, standardised that does not require a customer modem, is also low maintenance and not a lightning attractor. Currently 2.5GPON is being used, 10GPON is available off the shelf for upgrade to 1Gb from 100Mb max. 40GPON is also being ratified and will soon be available. The limiting factor is the backhaul and transit networks which is where a lot of the NBN money is being invested in building and leasing. For the future with all the technologies available which are not even necessary at this time the sky is the limit. All that needs changing is the end equipment, the nodes are Passive and willl never at this point need upgrades.

2) HFC was designed and implemented for multicast cable TV and telephony as such gemnerally has over 100 customers per node and is shared spectrum. the feeder is with 100Mb 5Gb compared with 2.5Gpon for fibre + reserved spectrum for Cable TV . So nodes will need to be split reducing cust No's to less than 30 per node, plus upload is pathetic at 2Mb reducing to dialup under load, so once again more nodes. All these extra nodes require more feeder fibres. So effectively a quadrupaling or more of feeder fibres. Most cost effective upgrade is to replace the existing HFC and build in more Backhaul and Transit fibres, talking a Billion or much more for easy to install service covering ONLY the easy 30% of properties in major cities. requiring modems, high maintenance with very limited upgrade and coax feeders have a limited lifespan due to gradual breakdown of the dielectric.

Put simply a waste of money and resources, will limit fibre uptake where installed due to inertia and Foxtel damaging the fibre business case. Due to cost of upgrades and high maintenance costs will be no cheaper so no competitiuon benefits and loses so many of the business capable and flexibility options. A pointless cul de sac that only benefits the Cable TV providers such as Sky Channnel and Foxtel. Note the media organisation that is so rabidly anti NBN preaching competition and cost etc. Last thing Foxtel and Sky want is true competition which the NBN and iptv will provide.
Vested interests

karl_w_w

20

@18 James
"but wouldn't you think with some investment"
yes
"(a fraction of the projected cost of the NBN)"
no. it would take a large investment just to get the current HFC networks anyone near competing with an NBN-style rollout, let alone expanding them by any significant margin. And that still wouldn't fix the problem with higher maintenance cost.

Optus and Telstra have already said and shown over the last decade+ that they have no intention of expanding or improving the HFC networks, the only way they would do it now is if the gov't paid them. I don't see why the gov't should be paying a private company to provide a service they'll charge for, when the goverment could just build a superior service themselves and make a profit on it for the benefit of the taxpayer, which is what the current plan is set out to do.

Abel Adamski

21

@18 James
Content and cables.
First the NBN is not just for the domestic content consumer, however it does incentivise Potential new Australian Content providers, Actually it's major beneficiary is BUSINESS, not only corporations, branch offices and customers. Dealing with Government and Business. The Biggest winners are SMBE's with high upload speeds and access to cloud services and backups, customer interface. Business tools previously only available to Big Corporations with their dedicated links and fibre networks etc.
Major players look to invest ind provide Aust Located servers and facilities. HP already has BECAUSE of the NBN.

Cable, existing cables are being upgraded (just change the end equoipment). New cables are plannned , being held off pending what happens to the NBN even if they don't admit it (politically prudent). There actually is no shortage of overseas capacity, apparently we only use max 40% of current capacity.

The NBN as planned unlike the Taxpayer funded wishy washy Coalition Mickey Mouse look after Telstra offering is an enabler of business, opportunity, innovation, decentralisation, productivity, and efficiency and a better consumer experience.

Don't just believe Political and Media Spin and misinformation, do your own research and ascertain the facts

James Linton

22

@21

I work in the industry, and understand the facts, and can see beyond the political and media spin.

Abel Adamski

23

@13 James
Do you actually understand the Business Models and the end results. Research some facts rather than blindly believe intentional misinformation and prattling ignorant bitter and twisted old men shock jocks.

The NBN is a Goverment Business entitiy as such the Government is investing Borrowed money (cheaper rates), this will be repaid by the NBN from income from the customers who are getting better value for money than otherwise available, plus there will be a dividend of 3.5% above Gov Bond Rate. Meaning charges will reduce to stay within that legislated limit as usage and demand increases.
So no cost to the Taxpayer, why correctly not on Budget.

The Coalition version is based on multi Billion subsidies to the private sector and incentivisation payments to do what they never did over the last 20 years of competition. Plus subsidies to provide rural services.
Massive up front cost and very substantial ongoing txpayer funded outlays and subsidies with no return to the taxpayer. and NOTHING to show for it all except mickey Mouse crippleware Key infrastructure owned by the private sector

Truly horrendous economic incompetance in the name of misplaced ideology

Abel Adamski

24

@22
"I work in the industry, and understand the facts, and can see beyond the political and media spin."

1) Then why are you anti the curren NBN ?
2) So, limited expertise. I spent 30 years in Communications, transmission, networks from the days of Phantom circuits, arial cable trunks, manual exchanges through to Radio links, fibre and satellite and not at a basic level for much of that time, I am fully aware of the real reason Howard reversed Keatings in process separation of Telecom etc, seen all the spin and B.S. Since then I have been in small businees and private sector for close to 20 years, do some independant research

Keithy

25

In short, IT'S ALL ABOUT SCALE! The Libs have not got a long term vison and would never subject their plan to a cost-benefit analysis!

Keithy

26

@ 18, wtf? 'Contention' can't be overcome with bandaid/patch-up solutions: it is a systemic problem!!

Wireless takes the chords from out under your feet but in the end cold hard speed on comes from cable: the latest and greatest being non-hybrid optic fibre!!

Anthony

27

@15 and @19
Just for accuracy sake it should be noted that FTTh in Australia is also be a 'shared' medium.
It's just that there will be so much reserve in there that, for the medium term future, it won't be a problem.
In saying that, HFC (or FTTn) can't deliver what FTTh can deliver for minimum cost. There just isn't a way.
And hence the decision to go FTTh.
Add to the fact that Australia has a population density of about 2.5 per sq km compared to others that have something like 300 per sq km, which hinders our ability to do an upgrade on an upgrade. It just has to be done once with something that will last 2-3 times longer. And this is what FTTh does.
aw

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