Bringing Australia’s Broadband Network

into the 21st Century

Laureate Emeritus Professor Rod Tucker Department of Electrical & Electronic Engineering

The University of Melbourne

National Broadband Network • April 2009: Announced by Federal Government

– 93% fibre to the premises (FTTP)..... by 2021 – $41 billion – “Single biggest infrastructure project in Australia's history”

• September 2013: New Government changes technologies – Fibre to the node (FTTN) in place of FTTP..... by 2016 – $28.5 billion – “fast, affordable, sooner”

• September 2015: Transition to FTTN (and HFC) yet to commence – Too slow, cost blown out to $46 - $56 billion, delayed till 2020

Summary • Technologies

– Options and global trends – Why FTTN is a bad idea

• Broadband supply and demand – Australian and global trends

• State of the NBN – Roll-out rate and funding

• Is Australia’s network moving into the 21st century?

Exchange Fixed Line 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

This Talk

Splitter

Fibre

Fibre to the Premises

(FTTP)

Fibre-Based Access

~ 50 m

Fibre to the Distribution

Point (FTTdp) Splitter

Splitter

Reverse-Powered Node

GPON: up to ~ 1 Gbps XGPON: up to ~ 10 Gbps FTTdp: up to ~ 1 Gbps

Exchange

Fibre to the Building (FTTB)

Downstream

Passive Optical Network (PON)

Upstream: > 100 Mbps

Fibre

Exchange

Copper-Based Access

ADSL

Hybrid Fibre Coax (HFC) Coaxial Cable

Amplifiers

Grid- Powered Node Fibre to the Node (FTTN) Copper

~ 400 m

Powered Node

(Copper)

FTTN: ~ 50 – 100 Mbps (depends on distance) HFC: up to ~ 1 Gbps (DOCSIS 3.1 upgrade)

Downstream Upstream

~ 40 Mbps up to ~ 100 Mbps

VDSL

Fibre

Technologies Compared

1

10

100

1000

10000

0 1000 2000 3000 4000

0.5 0 1.0 1.5 2.0 2.5 3.0 3.5 4.0 Length of Copper (km)

Dow

nloa

d bi

trat

e (M

bps)

4

Forbidden Zone (Shannon)

ADSL

VDSL

G.Fast

FTTP

FTTdp

FTTN

ADSL

HFC

FTTN

Powered Node Source: nbn

“The quality of (Telstra’s copper) network is not fully known... However, it is known that there is significant work required to remove broadband blockers from the copper network. If copper rehabilitation costs are prohibitively high in an area, nbn can choose alternative technologies to reduce costs.”

NBN Corporate Plan, August 2015

The Copper Bottleneck

Annual copper maintenance costs: ~ $1bn

9

• Orange (France) to pass 60% of premises with FTTP by 2022

• FTTP connections in Asia-Pacific reached 100 million in 2014

• China plans 40 million new FTTP connections by December 2015

• BT trial of G.fast (FTTdp) to 2 k premises this year - up to 330 Mbps

• Deutsche Telekom to expand FTTN coverage in Germany

• 1 Gbps now highly desirable in the USA

Some Global Trends

NBN Corp Plan, August 2015

10

AT&T submission to FCC (April 2015) Provider Maximum Speed Notes

Google 1 Gbps Available in 8 major cities in 2015

Comcast 2 Gbps (Symmetrical) In Atlanta by May 2015

AT&T 1 Gbps To be provided in 100 cities

Bright House 1 Gbps Available in parts of Florida

CenturyLink 1 Gbps Available in 10 major cities

Cox 1 Gbps In all markets by 2016

Suddenlink 1 Gbps Available to most customers in 2016

Verizon 500 Mbps Available in NYC

AT&T

11

AT&T submission to FCC (April 2015)

“Demand is growing for faster broadband speeds than AT&T, or anyone else, for that matter, can deliver with FTTN…” AT&T

12

0

50

100

150

200

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Glo

bal S

ubsc

riber

s (M

illio

ns)

FTTP (GPON)

HFC (DOCIS 3.0)

FTTN

Global Subscribers by Technology

Source: Ovum, 2014,15

All FTTP (Asia/Pac)

Not Speed for Speed’s Sake • Czernich et al., 2011: 10% increase in broadband penetration >1%

increase in GDP growth

• Kongaut et al., 2014, (European Investment Bank): Economic growth scales with broadband speed

• Soza et al., 2015: Gbps broadband → >1% increase in GDP growth

• Oomens et al., 2015, (EU Directorate-General for Communications): Socio-economic benefits of high-speed broadband (FTTP) are large

Measuring Broadband Speed

Ookla speed test

Exchange

Home modem

Akami Server

Retail Service Provider

Ookla Server

202.161.24.121

192.168.1.102

192.168.1.103

192.168.1.104

Ookla and Akami Measuring Broadband Speed

Down

Up

Measured Downstream Speeds

1

10

100

Jan-07 Jan-09 Jan-11 Jan-13 Jan-15

50

20

5

2

Akami (Average Peak)

Ookla (Average)

Dow

nstr

eam

Spe

ed (M

bps)

Slope = 24% p.a.

FCC 25-Mbps broadband threshold

Australia

Australia’s World Ranking

Rank

0

20

40

60

80 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15

Ookla

Downstream 1

Akami

Australia Compared

0

20

40

60

80

100

120

140

Jul-09 Jan-11 Jul-12 Jan-14 Jul-15

upstream downstream

Australia

China USA

downstream

upstream

downstream Singapore

Spee

d (M

bps)

Ookla Data

FCC Broadband Downstream

Threshold

Estimating Future Demand van der Vorst et al., 2014

Vertigan, 2014

• Sponsored by European cable TV trade association)

• Extensive involvement of industry experts • Includes “future revolutionary services”

• Sponsored by government • Conservative approach to uptake of

future services

Both account for a variety of user types (e.g. power users, innovators, mainstream users, and laggards)

NBN FTTN downstream

target

1

10

100

1000

Jan-10 Jan-13 Jan-16 Jan-19 Jan-22 Jan-25

Spee

d (M

bps)

Estimated Demand

van der Vorst (down)

Vertigan CBA, 2014

NBN Completed:

Jun-20

1

10

100

1000

Jan-10 Jan-13 Jan-16 Jan-19 Jan-22 Jan-25

Spee

d (M

bps)

Supply and Demand (Upstream)

Vertigan CBA, 2014

1

10

100

1000

Jan-10 Jan-13 Jan-16 Jan-19 Jan-22 Jan-25

Spee

d (M

bps)

Vertigan CBA, 2014

Supply and Demand (Upstream)

1

10

100

1000

Jan-10 Jan-13 Jan-16 Jan-19 Jan-22 Jan-25

Spee

d (M

bps)

Supply and Demand (Downstream)

Vertigan CBA, 2014

van der Vorst All users

NBN FTTN downstream

target

1

10

100

1000

Jan-10 Jan-13 Jan-16 Jan-19 Jan-22 Jan-25

Spee

d (M

bps)

Vertigan CBA, 2014

Akami

Measured Data Extrapolations

van der Vorst All users

Ookla

Supply and Demand (Downstream)

NBN FTTN downstream

target

Global View

Projected Supply by Country Do

wns

trea

m S

peed

(Mbp

s)

1

10

100

1000

10000

Jan-11 Jan-13 Jan-15 Jan-17 Jan-19 Jan-21 Jan-23 Jan-25

(Akami)

FTTP

ADSL

FTTN

FTTdp/HFC Germany

China Extrapolations

USA

Sweden

World Australia

Measured Data

FTTN • Will be obsolete before it is rolled out

– Yesterday’s technology tomorrow

• Will contribute to the nation’s decline in world broadband rankings – ~ 100th in the world by 2020

• Cost comparable to a full FTTP network – Complicated IT systems, costly repair of Telstra’s copper network, multiple trades

• Difficult to upgrade to FTTP at a later date – Lack of competitive incentives, legislated monopoly

Hybrid Fibre Coax (HFC)

Exchange

Fibre

Fibre to the Building (FTTB)

Fibre to the Node (FTTN)

~ 400 m

Fibre to the Premises (FTTP)

State of the NBN

~ 50 m

Fibre to the Distribution

Point (FTTdp)

Multi-Technology Mix

Fibre

Multi-Technology Mix

Source: David Pope. Reproduced with permission

Roll-Out Timeframes

Prem

ises R

eady

for S

ervi

ce (m

illio

ns)

Original Labor Plan

Plan delayed by one year

Labor

Coalition

Actual

Actual Plan

Plan

Coalition Target (>25 Mb/s) 90%

>50 Mb/s

0

2

4

6

8

10

12

14

0

2

4

6

8

10

12

14 2026-2028 for FTTP?

Prem

ises R

eady

for S

ervi

ce (m

illio

ns)

FTTP rolled out at 14 k prem./week

12 k FTTP prem./week (Q2 2015)

Labor Actual

Actual Plan

Coalition 22 k prem./week

FTTP completion (nbn Corporate

Plan 2015)

NBN Cost

Source: www.nicholsoncartoons.com.au

Peak Funding Estimates Pe

ak F

undi

ng ($

bn)

* Adjusted for contingency

*

Coalition

0 20 40

60

80

100

Dec-

10

Jun-

11

Dec-

11

Jun-

12

Dec-

12

Jun-

13

Dec-

13

Jun-

14

Dec-

14

Jun-

15

Labor

MTM: 30%

MTM: 66%

FTTP

MTM

Is Australia moving into the 21st century? • Slowly

• FTTN is bad for the NBN

• FTTN will exacerbate Australia’s downward slide in world rankings – Possibly 100th in the world by 2020 – Negative impact on national economy

• Upgrading to FTTP at a later date will be costly and slow

• “fast, affordable, sooner ” → “slow, costly, obsolete

Finishing on a Positive Note • Broadband will bring enormous benefits to the economy

• Both sides of politics support a National Broadband Network

• World-class broadband will eventually come to all Australians