OPINION PIECE - NYT: WHAT NOT TO DO ON BROADBAND - 17 MAY 2017

I don’t receive much feedback about Malcolm Turnbull anymore – not at industry events, discussions with stakeholders in the communications sector, or even at street corner meetings in Blacktown.  There must be only so many times people can convey their disappointment.

But things now have gotten so bad for Malcolm Turnbull that one of America’s leading newspapers has performed a community service by warning the rest of the world about his second-rate National Broadband Network.

Late last week, The New York Times slammed the Turnbull Government’s broadband failures with an article that accurately reflects the sentiment of a nation:

“Australia, a wealthy nation with a widely envied quality of life, lags in one essential area of modern life: its internet speed.”

The article proceeded to forensically skewer the politically-motivated decision to saddle Australia with a copper NBN:

“The internet modernisation plan has been hobbled by cost overruns, partisan manoeuvring and a major technical compromise that put 19th-century technology between the country’s 21st-century digital backbone and many of its homes and businesses.”

Whilst the Coalition clings to copper to prop up every one of Malcolm Turnbull’s poor decisions – in technology choice, cost and delivery - the rest of the world is moving towards the very model he abandoned:  fibre-to-the-premise.

In January, Ovum declared that 2016 had been a “tipping point”’ for fibre deployment. FTTP subscriptions grew from 297 million to 382 million, surpassing DSL for the first time. Ovum also noted the rapidly improving economics of full fibre deployment:

“The business case for FTTP has improved dramatically over the past few years, with costs falling significantly. Ten years ago, Verizon’s cost to deploy FTTP was roughly $1,500 per home passed, plus another $1,500 per home to connect. Cincinnati Bell and CenturyLink have recently estimated the cost per home passed at $500–700, almost one-third of what it used to be.”

Ovum has also forecast FTTP will account for more than 50 per cent of the 1.1 billion total fixed broadband subscriptions worldwide by 2021.  In comparison, Australia’s technology mix will only have 17 per cent FTTP coverage by that time.

After reporting their half-year results last week, British Telecom proposed building a network to connect 10 million homes with ultrafast full-fibre broadband by the mid-2020s. The new push to expand fibre comes after a year of trials in which BT has reportedly reduced the estimated cost of new fibre connections by roughly half.

Cost reductions of similar scale have already been achieved by Chorus in New Zealand, which has reduced its fibre to the premises deployment costs from $4,753 in FY13 and FY14 to $2,689 in FY16 — a decrease of 44 per cent.

In his recent paper, The Tragedy of Australia’s National Broadband Network, Professor Rodney Tucker provides a direct account of his conversations at the 2017 Optical Fibre Conference (OFC):

“All operators that spoke at OFC have made it clear that FTTP deployment costs have been reduced by at least 5–10% every year through improved construction practices such as field-installed connectors, skinny fibre and micro-trenching, workforce training, improved location-dependent task management and newer technologies.  As an example, Verizon has reduced the cost of deploying FTTP by 50% since they started rolling out FTTP.” 

It’s no surprise that NBN Co’s secret 2014 trials of new FTTP construction methods in Karingal demonstrated per-premise costs could be reduced by between $450 to $600 from those improvements alone.  

When you then go on to repeat the fibre build to 10 million premises you will get good at it, and in turn bring down costs even further. The opportunities and incentives to be more efficient are huge.

So whilst Malcolm Turnbull’s original per premise FTTN costs have increased by 260 per cent, international operators have reduced their per premise FTTP costs by 40 to 50 per cent!

Just like his Prime Ministership, the hoax perpetuated by Malcolm Turnbull about the costs of deploying fibre compared to his preference for copper and HFC is utterly exposed.

The former NBNCo CEO, Mike Quigley, has thoroughly documented that in 2014, Malcolm Turnbull renegotiated contracts with NBN construction partners to increase the costs of FTTP by $500 per premise, undoubtedly for the purpose of politically manipulating the optics of the NBN debate in the public arena.

NBNCo management has maintained its practice of reporting an FTTP cost per premise in Australia of $4,405. Really? Give me a break.

When I see those ads about Australia’s internet speeds being slower than Eastern Europe and parts of Africa, I don’t laugh anymore.  And I’m certain I’m not alone.

 

This opinion piece first appeared in ‘InnovationAus’ on 17 May 2017, http://www.innovationaus.com/2017/05/NYT-What-not-to-do-on-broadband/