The Coalition’s National Broadband Network (NBN) plan is in trouble and the Prime Minister Malcolm Turnbull should heed the mounting calls for Coalition NBN plan to be dropped before the nation’s digital future is harmed irreparably.
In June it will be three years since Turnbull, as Minister for Communications, launched the Coalition’s NBN plan, extolled its benefits and introduced the slick, catchy and ultimately misleading slogan “Fast, Affordable and Sooner”.
Whilst the government’s commitment may appear to have been laudable at the time, the rationale behind the decision to shift away from building a network that would connect 93 per cent of premises to the NBN by fibre was flawed.
A recent advertising campaign by the giant US telecommunications company Verizon has highlighted why fibre is cheaper and performs far better than copper based technologies like Hybrid Fibre Coax (HFC).
The Coalition’s decision in late 2013 to change NBN technologies mid-rollout caused delays and huge cost blowouts and the hodgepodge of obsolete copper technologies that Turnbull introduced is having a detrimental effect on Australia’s international broadband ranking.
In the latest State of the Internet report by the US content delivery network provided Akamai, Australia has fallen from 30th to 60th over the past couple of years in the global rankings for average peak internet speed, which is an important measure of broadband performance.
Australia’s opportunity to be a leader in the global digital economy is rapidly losing steam and Turnbull is yet to answer his critics other than by restating the platitude that the government is committed to building the NBN cheaper and faster.
What Turnbull fails to address is the rapid adoption of all fibre access networks by Australia’s major competitors in the global digital economy and if Australia continues to rollout an obsolete second rate NBN the end result will be Australia sinking like a stone in the race to become a nation of digital innovators.
On the 8 April 2014 Turnbull and the Minister for Finance Mathias Cormann wrote to NBN Co and described the government’s commitment to “ensuring all Australians have access to very fast broadband as soon as possible, at affordable prices, and at least cost to taxpayers.”
“NBN Co will determine which technologies are utilised on an area-by-area basis so as to minimise peak funding, optimise economic returns and enhance the Company’s viability.”
So having determined that there would a public equity limit of $29.5 billion, the Coalition’s plan goes on to stipulate that the NBN provide “download data rates (and proportionate upload rates) of at least 25 megabits per second to all premises and at least 50 megabits per second to 90 per cent of fixed line premises as soon as possible.”
The Coalition plan is therefore, to rollout the cheapest NBN possible utilising obsolete second rate copper based technologies that will provide Australians with download speeds of at least 50 megabits per second, which is half the target download speed set for Labor’s NBN in 2010. And as has happened in the UK, NBN Co is unlikely to meet this target connection speed to many homes due to distance from nodes and old infrastructure.
Over time, the cost of operating a copper based NBN will be between 40-60 per cent more than the cost of operating an all fibre access network for the 93 per cent of fixed line premises based on international experience. What this means for Australia is that about seven years after a home is connected to the NBN the extra cost of installing an all fibre connection versus a copper based connection would have been paid off and every year after this the copper based fixed access network will continue to be 40-60 per cent more expensive to operate than the all fibre access network.
The life-time of an all fibre fixed access network is about 50 years, with upgrades amounting to minor construction work and replacing the boxes at each end of the fibre. The copper based technologies being rolled out by NBN Co don’t have an effective life-time as they’re now obsolete and an upgrade involves major construction work, replacing the boxes at each end of the copper and replacing other equipment in the network.
The cost of upgrading the copper based fixed access network to either all fibre or a more recent copper based technology will add another $10 billion or more to the cost of the NBN and it appears the government intends to complete the NBN rollout by 2020, sell off NBN Co and leave the problem of upgrading the network to the new owner.
And if this is not bad enough, Turnbull is well aware that NBN Co could be rolling out an all-fibre fixed access network utilising NG-PON2, which is the latest revision of the Passive Optical Network (PON) fibre access technology adopted by NBN Co in 2010. NG-PON2 is cheaper to rollout than the earlier GPON being rolled out now by NBN Co and can provide connections of either 1 Gbps or 10 Gbps to homes over distances of up to 40 km.
If the government fails to heed the growing criticism of its broadband policy, Australia is likely to fall 10 or more years behind most other nations and this means that our Akamai average peak speed ranking could fall towards 100 or lower.
Possibly Turnbull thinks that the government’s failure to admit that its broadband policy is a dud won’t be a major election issue and if this is the case the government will have thrown away an opportunity to do the right thing by admitting a mistake has been made and to set about building an internationally competitive broadband network that will promote jobs, innovation and ensure that Australians gain access to improved service delivery.
Mark Gregory is Senior Lecturer, School of Engineering, RMIT and Managing Editor, Australian Journal of Telecommunications and the Digital Economy.