Home Telecoms & NBN Expert says NBN Co 'misleading' public on FttP cost

The company building Australia's national broadband network has misled people on the cost of providing fibre-to-the-premises, according to a senior academic who was intimately involved with the project.

Rod Tucker, Laureate Emeritus Professor at the University of Melbourne and a member of Labor's Expert Panel that advised on the NBN, told iTWire that the justifications provided by Peter Ryan, NBN Co’s chief network engineering officer, were "misleading and omit a number of key facts".

Ryan had claimed that Australia's low population density was at the core of the problem, pointing out — correctly — that Hong Kong, Tokyo, Singapore and Seoul had higher population densities. But he had then gone on to compare the population density of Singapore with the whole of Australia, Prof Tucker said.

"NBN Co fails to mention that 90% of Australians — those people originally targeted with FttP under Labor’s NBN — are in cities and towns with relatively high population densities," Prof Tucker said.

"A much more appropriate comparison would be with cities like Auckland, Lisbon or Stockholm, all of which have similar population densities to Sydney and Melbourne. Importantly, the citizens of Auckland, Lisbon and Stockholm enjoy access to state-of-the art FttP broadband."

rod tuckerWhile the NBN Co has been insisting for four years that the cost of the FttP rollout was $4400 per premises, many FttP operators worldwide had reduced the cost by as much as half by using improved construction techniques, he pointed out.

A case in point was New Zealand, where the company in charge, Chorus, had reduced the cost of deployment by 44% over the last few years using a number of different approaches.

"It is nonsense for NBN Co to argue there are no improvements in FttP construction costs by ignoring technology improvements and refusing to learn from what has happened in other countries," Prof Tucker said.

"The continuing successful rollout of FttP in New Zealand by Chorus is clearly a thorn in the side of NBN Co. In the meantime, New Zealanders look at Australia’s second-rate NBN in amazement. Chorus’ corporate reports proudly point out that their costs for rolling out FttP are much less that what NBN Co claims."

Ryan had disparaged Chorus' use of micro-trenching and other techniques for reducing rollout costs — rather than using what NBN Co called "a properly constructed underground duct" — saying that the "very fragile fibre" would not be protected as well as it would inside a protected duct.

But Prof Tucker pointed out that what was omitted was the fact that modern optical fibre cables are not fragile and many countries were using micro-trenches and other ductless methods. "It appears that NBN Co is reluctant to admit that FTTP deployment techniques are improving and that radical new approaches can have a significant impact on reducing costs," he added.

He also took issue with Ryan citing Google Fibre as a company that stopped rolling out fibre because of the expense, when this company's situation was very different to that of the NBN Co.

Google Fibre had to compete with a number of other hybrid-fibre-coax and FttP companies which had parallel distribution networks, a situation similar to the competition in the 1990s between Telstra and Optus which had parallel HFC networks.

But, NBN Co had no competition, being the sole wholesale provider; it could, therefore, build a network at a lower cost per customer.

While Ryan had pointed out that most of the FttP and HFC build in the US was above ground, Prof Tucker said this had only caused problems for Google Fibre as it had to compete with other providers, all of whom wanted to string their fibre cables on the same posts.

"Significant cost increases and delays can arise when a new company like Google Fibre wants to install its fibres on power poles that already have cables belonging to other companies attached to them and there is no free space for Google’s cables," he said.

Legal hurdles were the main reason for Google Fibre being stopped. This eventuated because some cities had tried to give Google Fibre favourable treatment by implementing rules known as "one touch make ready", but this had annoyed competitors like Charter, Comcast and AT&T who sued those cities.

"The key point here is that Google’s decision to suspend its FttP rollout resulted from legal action brought about by competitors, not by the inherent costs," Prof Tucker said. "Google has stated that their cost for rolling out FttP is about the same as upgrading an HFC network to DOCSIS 3.1. Using NBN Co’s figures for FttP and DOCSIS 3.1, this suggests that Google’s FttP rollout costs are about 50% of NBN Co’s claimed costs for FttP."

The US company Verizon was cited by Ryan as one that could choose high-margin low-cost areas to roll out fibre while NBN Co had to serve everyone. But here again, the fact that a monopoly provider like NBN Co could build a network at a lower cost, as there was no other network running in parallel, was not mentioned, he said.

"They also fail to mention that Verizon provides FttP to suburbs in the US with population densities that are similar to Australian suburbs," Prof Tucker pointed out.

"Take away the misleading statements in the blog, add some important missing information, and it becomes clear that FttP is now cheaper to roll out than ever, and the rate at which it is being rolled out around the world is accelerating.

"There is no good reason why Australia should not be enjoying FttP. There are few better examples of how to embrace FttP than in New Zealand. Chorus is efficiently getting on with the job of rolling out FttP in New Zealand, while NBN Co seems to be fixated on finding excuses for why Australia is not able to do the same."

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Sam Varghese

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A professional journalist with decades of experience, Sam for nine years used DOS and then Windows, which led him to start experimenting with GNU/Linux in 1998. Since then he has written widely about the use of both free and open source software, and the people behind the code. His personal blog is titled Irregular Expression.

 

 

 

 

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