Rod Tucker University of Melbourne

The story of Australia’s National Broadband Network

Infrastructure for Australia’s Digital Economy:

Politics confront Technology

Australia’s National Broadband Network • April 2009: Announced by Federal Government

• 93% fibre to the premises (FTTP)

• Investment of AU $43 billion

• The "single biggest infrastructure decision in Australia's history”

• September 2013: New Government resets key parameters

• FTTP largely replaced by fibre to the node (FTTN)

Source: NBNCo

Original Technology Footprints 93% 4% 3%

Exchange FTTP

Customers

Point of Interconnect

NBN Backhaul

Competitive Backhaul

Wireless Customers

Satellite Customers

Retail Service Provider

NBN Monopoly Wholesale Network

(L2)

Aggregator

Retail Service Provider NBN Access

Network Competitive

Wholesale Network (L2/3)

NBN Structure

Splitter

Passive Optical Network (PON)

Exchange

Fibre

Fibre to the Premises

(FTTP)

Wireline Technologies

Fibre to the Building (FTTB) Copper

Fibre

Copper

ADSL

Hybrid Fibre Coax (HFC)

Coaxial Cable

RF Amplifier

Existing

Telstra Ducts (~ AU$ 11 billion)

Pricing Principles • Uniform Pricing

– Uniform wholesale pricing across Australia irrespective of the delivery technology and location

– Price depends only on product-specific bitrate

• Avoidance of Cherry Picking – Protections against cherry picking for low cost / high revenue regions – Business plan dependent on NBNCo monopoly

2007 2008 2009 2010 2011 2012 2013 2014

Proposal for public-private-partnership to establish an NBN fails Federal Election - Change Government

Government-appointed Panel recommends FTTP-based network Government announces establishment of NBNCo

Finalization of agreement to use Telstra ducts and pits NBNCo announces downward revision of rollout rates

Federal Election - Change of Government Strategic Review Cost/Benefit Review Public Policy Review

Federal Election - NBN a major issue in election

Multi-Technology Mix (MTM)

Labor Coalition

FTTP rollout commences

Seven Years of Flux

Coalition champions replacing FTTP by FTTN

Government

Issues in the Political Debate • Overall project cost

– Cost-benefit analysis

• Choice of technology

• Speed of rollout

• Monopoly versus facilities-based competition

Cost • AU $43 billion over 8 years (~ AU $5.5 billion per year)

~ AU$ 300 per person per year

• Some commentary: – a “shockingly misconceived, wasteful exercise in public policy” – a “dangerous delusion”, cost/benefit analysis required – a “brilliant initiative that will transform Australia”

• Annual spend on roads: AU $16 billion

Cost

Source: www.nicholsoncartoons.com.au

Choice of Technology • Many ill-informed opinions in the press, e.g.:

– Replace FTTP by “mobile technologies and existing fibre”

• Strong political statements, e.g.: – a “dangerous delusion” – a “white elephant on a massive scale”

• Dearth of informed technical debate

Technologies

Reprinted with permission from Sean Leahy

Technologies

Source: Cathy Wilcox. Reproduced with Permission

Speed of Construction • Delays caused by factors such as:

– Difficulties in mobilizing a large workforce

– Delays in finalizing agreements with Telstra

– Asbestos in Telstra pits

• Much political debate about these delays and reports of “cost blowouts”

• Labor has since admitted it underestimated the difficulties in ramping up the project

The Debate around User Demand

1

10

100

1000

10000

100000

1000000

10000000

1990 1995 2000 2005 2010 2015 2020

*

Year

ADSL

Dial-up Modems

HFC

GPON

Dow

nloa

d Ra

te (b

/s)

10 k

100 k

1 M

10 M

100 M

1 G

10 G

60 % p.a. growth

xGPON * VDSL (FTTN)

> 20M

G.fast

Delays

0

2000

4000

6000

8000

10000

12000

14000

Prem

ises

Pas

sed

('000

s)

Premises passed by fibre (Plan)

Premises passed by fibre (Actual)

Plan delayed by one year

Premises passed by fibre (plan)

Plan delayed by one year

Premises passed by fibre (actual)

2007 2008 2009 2010 2011 2012 2013 2014

Proposal for public-private-partnership to establish an NBN fails Federal Election - Change Government

Government-appointed Panel recommends FTTP-based network Government announces establishment of NBNCo

Federal Election - Change of Government Strategic Review Cost/Benefit Review Public Policy Review

Federal Election - NBN a major issue in election

Multi-Technology Mix (MTM)

FTTP rollout commences

Due this month

Seven Years of Flux Labor

Coalition

Finalization of agreement to use Telstra ducts and pits NBNCo announces downward revision of rollout rates Coalition champions replacing FTTP by FTTN

2013 Election and Beyond

Strategic review (December 2013):

Multi-Technology Mix:

FTTP: 20-26% FTTN/dp/B: to 44-50% HFC: ~ 30%

> 98% of footprint to achieve > 25 Mbps by end of 2020

Coverage

Total Cost

Coverage

Total Cost

"Fast, Affordable, Sooner"

Finished: 2021 2019

Splitter Passive Optical Network (PON)

Powered Node

Fibre to the Distribution Point

(FTTdp)

Hybrid Fibre Coax (HFC)

Coaxial Cable

RF Amplifier

Exchange

Fibre

Fibre to the Building (FTTB)

Fibre to the Node (FTTN) Copper

Distribution Point

~ 400 m

~ 50 m

Fibre to the Premises (FTTP)

VDSL2 (Vectoring)

VDSL2 G.fast

Multi-Technology Mix

"Faster, Sooner, Cheaper"

Multi-Technology Mix

Reprinted with permission from David Pope

Powered Node Exchange

Fibre

Fibre to the Node (FTTN)

Fibre on Demand

Copper

Fibre (on demand)

Copper

If a user needs more bandwidth

– Fibre installed on user-pays basis

– Cost depends on distance to node etc.

Worldwide FTTP Developments • FTTP rollouts in more than 100 countries

• Most of Scandinavia, the Netherlands, and many of the Arab oil states have FTTP penetration levels of more than 50%

• In developed economies FTTP is predicted, over the next 5 years, grow to around 30% - 50% of the population (Budde)

• Google: Offering 1 Gb/s to cities such as Kansas City and Austin

• AT&T: Tentative plans for 1-Gb/s to ~ 100 cities in 21 metro areas

• By the end of 2014 China aims to have 100 million households connected to fibre

Final Words

• Telecommunications is essential infrastructure - c.f. roads, rail, water, electricity, sewer systems

• Engineers need to become more involved in political debate - Counteract technical confusion and misinformation

• FTTP will eventually come to Australia - But by a circuitous route