Fraudband watch

Along with the Coalition’s victory in the 2013 Australian election comes the likelihood of NBN Co abandoning the ‘real’ Fibre To The Premises (FTTP) NBN, for a slightly cheaper  -but obsolete-  Fibre To The Node (FTTN) network, confusingly still called the NBN.

The Coaltion’s NBN has been widely described as “fraudband” by technophiles, much to the displeasure of Malcolm Turnbull. Given the accuracy of this title however, I’m going to use it here as I keep track of the shambles this project will undoubtedly become. This page will not cover the inadequacies of FTTN technology, which are already documented here.

Page Contents:

Promises

Malcolm Turnbull and Tony Abbott have made some key promises surrounding their NBN. Let’s look at some highlights:

  • Have the productivity commission conduct a thorough cost-benefit analysis < Seems to have quietly been removed from the policy, after the Commissioner publicly backed the FTTP NBN.
  • Peak funding of $30.4billion
  • Minimum download speeds of 25Mbps by the end of 2016 to 100% of Australian premises.
  • Minimum download speeds of 50Mbps to 90% of Australian premises (and network completion) by 2019
  • Substandard areas done first
  • Lower prices (on a speed-for-speed basis) for consumers
  • NBN Co will report more often to parliament than under the Labor NBN.

Analysis

Rollout and Speeds

Because ADSL2+ is incapable of delivering 25Mbps, the promise to deliver 25Mbps nationwide by end 2016 means that almost all of the proposed FTTN network will have to be completed by then. By 2016, the Coalition will have to:

  • Complete their promised comparative cost-benefit analysis comparing FTTN to FTTP (estimated at 6 months).
  • Re-negotiate the agreement with Telstra (which took almost two years to do the first time), to allow them access to the copper network.

(Note that the above must be completed before any work can begin on the next steps)

  • Test every connection to determine whether the copper in an area is in sufficiently good condition to achieve 25Mbps using VDSL2.
  • Design a nationwide FTTN network so that copper loops are kept <500m long to every one of ~9,000,000 premises.
  • Negotiate agreements with electricity authorities for access to the electricity grid to power the FTTN cabinets.
  • Pass legislation and/or negotiate agreements with state Govts and/or councils for construction of FTTN cabinets.
  • Tender and let equipment contracts.
  • Tender and let construction contracts for the FTTN network (contractors will have to employ and train a workforce).
  • Construct an estimated 50,000+ FTTN cabinets across the country.
  • Run optic fibre from the 121 points of interconnect to the ~50,000+ cabinets.
  • Power the cabinets, deploy VDSL2 equipment into them and make ~8 million fibre-copper connections (allowing for ~1 million HFC connections in the interim)

Making the generous assumption that it will take a total of 12 months to get to the stage of actual network construction, to meet their targets the Coalition will have to build approximately 25,000 cabinets and make 4 million fibre-copper connections per year (that’s 100 cabinets and 16,000 connections per working day).

But before they can even begin design or construction, the Coalition will have to re-negotiate the highly complex Telstra agreement, which Turnbull has been warned will not be a quick and easy task. Until that agreement is complete, NBN Co will not have access to the (questionable) maps of the copper network, and cannot even begin basic network design.

Throw into the mix facts like the current FTTP NBN construction contracts running until 2014/15, meaning there will be a shortage of contractors to commence FTTN, and the atrocious state of a good portion of the existing copper network, and things only get harder.

There’s one other factor that will probably come back to bite Mr Turnbull. He hinted several times that he won’t need to construct FTTN in metropolitan HFC cabled areas by 2016, since those areas already have access to >25Mbps speeds. But that is likely to be a false assumption, at least in part. There are many premises within the HFC footprint that cannot be connected for technical reasons, and therefore will have to be connected to FTTN to achieve 25Mbps. These premises are dotted throughout the areas, meaning that a sizeable portion of the FTTN network for those areas will have to be constructed by 2016 to service those ‘frustrated’ premises and meet the Coalition’s promise. That aside, the HFC networks are vertical monopolies/duopolies. Connections are expensive and congested, and Optus aren’t even accepting new connections in their HFC footprint.

My assessment: I predict that the Coalition’s plan has almost no chance of delivering 25Mbps to every premises nationwide by 2016, both because of the unrealistic timetable and the poor state of the copper network. It will be interesting to read the excuses and denials given the large number of warnings Mr Turnbull has received.

Substandard areas first

While this is an admirable goal in theory, in practise it is almost impossible and if carried out as Turnbull implies, would add substantially to the cost and duration of the build.

This is because ‘substandard’ areas exists in almost every city and town across the country, either because of the condition of the copper or the distance to the exchange. To truly connect all the substandard areas first, crews would be criss-crossing every suburb for 2 years, constructing cabinets and making connections in a very inefficient manner.

Note that the claim in the Coalition policy document that the FTTP rollout order is politically motivated (rather than technically) is demonstrably false. The rollout order was effectively determined by the ACCC when they decided the location for the Points Of Interconnect. Comparing the POI list to the NBN rollout plan clearly shows the rollout begins at each POI and fans out.

My assessment: It won’t happen, with the possible exception of areas with no access to ADSL being done early. Other than that, the network will be constructed in a technically logical order, just as the FTTP NBN is being constructed.

Lower prices than the FTTP NBN (speed for speed)

The Coalition claim this will be possible because the cost of rolling out FTTN is lower than FTTP. But build cost only half the story. The other half is income from the network. Since FTTN also has lower capability than FTTP, it also earns less income, because the high speed (and high-income) tiers of FTTP are simply not available to customers. The FTTP NBN offers 12, 25, 50, 100, 250, 500 and 1000Mbps tiers, while the Coalition’s FTTN will only offer most people 25-50 Mbps, with some able to achieve a maximum of 100Mbps.

It’s also worth addressing that the Coalition’s policy document is grossly misleading on the topic of projected pricing for the FTTP NBN. While NBN Co assume that average revenue per user (ARPU) will increase over time, that’s not because monthly prices increase substantially over time, but because they assume users will gradually choose faster and faster speeds, which cost more each month. As those higher speeds will not be available at all under the coalition’s policy, their ARPU costs will obviously be lower. But speed for speed, they will not.

Current/projected pricing:

To check this claim in future, here is a list of current FTTP prices from the 2012 NBN Corporate Plan; Projected maximum prices; and sample retail prices from iiNet:

Speed Wholesale price in 2013 Max price by 2021 under SAU rules* 2013 sample retail price (iinet) with 200GB/month
12/1 $24 $25.47 $59.95
25/5 $27 $28.66 $64.95
25/10 $30 $31.84 NA at this time
50/20 $34 $36.09 $74.95
100/40 $38 $40.33 $79.95
250/100 $70 $74.30 NA at this time
500/200 $100 $106.14 NA at this time
1000/400 $150 $159.20 NA at this time

 * The NBN propose in their SAU to the ACCC that they freeze prices until 2017, then allow a maximum increase of 1.5% below inflation for the next 25 years. Using this formula, I have calculated the maximum possible price for each speed by 2021 assuming that NBN Co increase by the maximum amount every year, and a 3% inflation rate. These figures clearly show the deception in the Coalition’s policy document.

My assessment: The pricing of the speed tiers will not be any lower under the Coalition’s NBN.

NBN Co will report to parliament more often

One of the loudest deceptions that the Coalition have made about the NBN is that there is a lack of information and transparency. Nothing could be further from the truth. The NBN is already more highly scrutinised than any other Government Business Enterprise. It has been subjected to Freedom of Information requests (unlike most other GBEs), and it regularly reports to two parliamentary committees,  Senate Estimates and the Joint Committee on the National Broadband Network.

My assessment: The entire premise of the claim is false. NBN Co already reports regularly. There will be little or no change to the regularity of reporting.

The Progress

Updates on the Coalition’s downgraded  NBN progress (or lack thereof) will be documented here as they occur.

Broken Promise #1

Prior to the election, Malcolm Turnbull stated on numerous occasions that all existing FTTP rollout contracts would be honoured. He did this as late as one week prior to the election, here. NBN contracts were signed for construction over the next 3 years, and were shown on the NBN rollout map.

Well, what a difference a few weeks makes. On 31st October, NBN Co removed most of the premises from their rollout map. That’s every premises where construction had not yet been completed, including the removal of 500,000 premises where construction or planning had commenced, and which were covered by the contracts he previously assured people were going to be honoured. See here.

Broken Promises #2 and 3

On 12th December 2013, the “strategic review” of the NBN (conducted by a group appointed by Mr Turnbull) was released. Amongst other findings, it stated that:

– The peak funding of the Coalition’s NBN policy would be $41 billion (up from the promised $30.4bn), despite the plan now excluding almost 30% of the fixed-line footprint from the build. This 30% is instead proposed to be served by upgrading the existing Telstra and/or Optus HFC network(s) after negotiating an agreement to buy or use them.

– That the Coalition’s pre-election promise of building the NBN more quickly, providing “25Mbps to 100% of premises by 2016” was undeliverable, and in fact only 43% of premises would be covered by that date. It also pushed back the overall completion date to 2021, 2 years later than promised prior to the election.

Comment: Before the project has even begun, the cost of the Coalition’s policy has increased by 33%, despite the FTTN footprint falling by 30%. HFC is a shared medium, and I am skeptical that it will be capable of delivering real-world 50Mbps speeds to every user given that it cannot currently deliver its 30Mbps target in peak times, despite there being only ~20% takeup within the footprint. I predict a lot of unhappy customers in 2021.

As noted above, the “25Mbps to 100% by 2016” promise was never achievable, a fact that Turnbull was warned about many times, well before the election. Yet it is a promise that he and Tony Abbott continued to make.

The My Broadband Sham

Mr Turnbull recently launched the My Broadband site, which is supposed to give an indication of the quality of broadband services at your premises and across the nation. It soon became apparent that the site is little more than a sham, providing ridiculously optimistic information for national broadband speeds and availability.

I ran my own test on the site, and the results speak for themselves (click to enlarge):

My Broadband Sham
My Broadband Sham
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7 thoughts on “Fraudband watch

  1. Arrest the new LNP government, on charges of false promises, etc!

  2. Australia have gotten the government its dumb, drunk and racist selves deserve.

    In time, they’ll get the interminable buffering, inadequate services and connection drop-outs they deserve, too!

    1. Unfortunately those who didn’t vote for them will get the same.

      1. Paul Mitchell of Forbes NSW 12 September, 2016 — 4:12 pm

        Dont blame me, I voted Labor! We want the NBN here in Forbes NSW, but as per usual it is not a priority of the LNP government until proberly the year 2050!

  3. More ways for NBN to save?

    Areas beyond the fixed line and fixed wireless areas will be serviced by satellite. That in itself is far less than ideal but most of those same people actually live on city fringes so they are not in the middle of nowhere. To get the cheaper plan though you need to be outside an existing ‘metro comparable’ network, read 3G. So if NBN are not providing you with fixed line, fixed wireless or satellite then they won’t be providing you with anything at all as far as I can see.

    Mobile broadband does provide a level of service so long as it’s just you in the cell that day, but the plans are structured around occasional use on a mobile device, not a household with the kids playing online games and you trying to stream a movie.

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