News
Previous News Items
April 27, 2006
In April the Federal Government announced the creation of a National Broadband Network, based on Fibre To The Home (FTTH) technology rather than Fibre To The Node (FTTN). One of the most significant and debated aspect of this announcement is that the Government anticipates significant private investment in its $43 billion project with the eventual aim of selling off its interest in the company sometime after the completion of the project (estimated to be 8 years away). Many other arguments have been made for and against the initiative. This article will examine a number of these.
Before examining the relative pros and cons of the two fibre optic alternatives it is worth explaining in more detail what the difference really is. Essentially FTTN involves fibre optic cables connecting local exchanges, with the existing copper cables transmitting data to each home. FTTH would see the fibre optic cable going directly to the home.
Many of those who favour FTTN over FTTH argue that the $43 billion cost cannot be justified especially when we already have substantial infrastructure in place in terms of copper cables. They also believe that there is a real possibility that the estimated figure of $43 billion will ‘blow-out', at the cost of the national debt. However some experts such as Alcatel-Lucent futurist Geof Heydon state that the debate over cost is ‘misleading'. He argues that the debate over copper vs. fibre optic cable should not be thought of in terms of providing a faster internet service. He contends that the real question should not be about cost, but rather how the infrastructure can cater for a wide range of future services (such as internet, Internet tv, future media technologies, etc.).
One of the main concerns critics of FTTH have is a fear that a large amount of unsightly overhead cables will be required. Indeed Shadow Communications Minister Nick Minchin has claimed that up to 70% of Tasmania's National Broadband Network would be overhead. Communications Minister Stephen Conroy has moved to allay the concerns of local councils by telling them that the cables will not be an eyesore and will only be used where underground cabling is faster and not economically feasible. Surely this is a more than reasonable expectation. Nick Minchin himself virtually conceded that overhead cabling would not be a problem in a majority of areas by asking the government to announce which local council areas would actually be affected.
Critics have been vocal in suggesting that FTTH would possibly cost householders $70/month, compared to the current average of $40. However this argument is based on a misnomer. In fact the $70 cost will include local and national calls (although perhaps mainly through VOIP), will eliminate download costs, and provide unlimited downloads. Line rental will also be eliminated, as the fibre will connect to the business or home, rather than to the node. It is also worth noting that the cost of repairs to the existing old copper network will also be eliminated. Companies will also be able to create their own wireless networks that will allow them to offer broadband to their employees within a 20km radius of the business premises.
A recent ACMA report which quoted a 2008 survey of 20,000 internet users found that the service they believed that the service they received from their ISP was either ‘good' or ‘excellent' and that 62% were happy with the reliability of their connection, has been seized on by the Opposition as evidence that Australia does not require a National Broadband Network such as the one proposed by the Government. However the survey also revealed that 75% of respondents were in favour of a FTTH National Broadband Network. It is worth noting that a large number of the individuals surveyed could be regarded as very savvy technologically and that perhaps they represent a significant number of IT professionals who would obviously welcome the new technology.
The above paragraph raises the question of whether the 90% of Australians who will have access to the NBN actually need technology that delivers download speeds of up to 100 megabits/second, 100 times faster than those currently enjoyed by users. In fact, anecdotal reports and surveys such as the one quoted above suggest that Australians are happy with their current connection, and that all most people may really care about is the opportunity to download movies at ‘lightning' speeds. This ignores one extremely significant point. That is, the infrastructure the NBN will provide will allow for both an upgrade and improvement of many existing services and allow for the possibility to create new ones. It is important to remember that this project is looking at serving the needs of the future, not our current ones.
So what should the average Australian be looking forward to? For a start, internet tv (IPTV); a greater use of video streaming; over 50 television channels; and the ability for users to create their own local and community tv stations. In essence, the capabilities we can look forward to are far beyond our current You Tube experience. Advances in technology also mean that we should expect ever increasing speeds, which will provide further incentive for large companies such as Fox and Fairfax to look at new and innovative ways of delivering current services as well as creating new services.
As Senator Conroy has stated, the NBN will also bring many benefits to the public sector. Examples include the reduced need for hospitalisation, as in-home care will be much easier to facilitate. This will obviously reduce the current strain our health system. It is also a well-known fact that people, especially those living in rural areas, prefer (and often need-especially in the case of farmers) to spend more time at home. For these people, the reduction of long distance travel will also be more than welcome. In Education, the NBN will help to reduce geographical barriers and provide better services to students regardless of where they live.
Earlier I discussed some of the benefits that FTTH might bring to the average residential user. But it is not only the average citizen who can look forward to the introduction of the NBN. Many sections of Australia's small business community will become more competitive internationally as increased bandwidth and speeds will make it easier for them to send and receive large amounts of data. In a world increasingly dominated by digital communication this is a strong argument in favour of an NBN. Currently, business people who need to send and receive large amounts of data such as engineers, IT professionals, and those who wish to participate in videoconferencing need to pay extremely high amounts of money to set up their operations in inner city offices, as well as paying for their internet usage on top of that. Obviously after the rollout of the NBN these people will be able to work from home virtually anywhere in Australia. As one Whirlpool forum member said of the current situation, "If your business was in almost any other first world country but this one, you'd be able to get what you want without much worry".
But will outside investors be interested in committing to FTTH? One commentator notes that outside high-density areas or ‘city states' such as Singapore investors were not likely to receive any substantial financial return, and that even in Singapore a substantial government subsidy was required to promote commercial investment. However, as mentioned previously, we should expect larger companies to increasingly invest in this new technology as they see the possibilities available to them.
Of course critics of the FTTH approach point out that in Australia our low population density means that the cost of the creation of this network will be much higher than in many other countries. It is also true that even the Government anticipates that the new network will cover 90% of the population, with the remaining 10% who live in the most remote areas and low-density areas receiving wireless coverage. However, as mentioned, the NBN is being built with future needs in mind. For example, the Centre for International Economics has said that broadband could lift national economic output by 1.4% after five or six years. This is equivalent to $15 billion in terms of GDP in 2007/8.
Clearly for the average Australian internet user FTTH technology will provide services far beyond mere fast movie downloads. We realistically need to think of all the uses of FTTH from IPTV, more tv channels, and new possibilities in internet computer gaming, to name just a few. This short list ignores improved delivery of health and education services. For many business owners the NBN will allow them to be competitive internationally, as well as reducing many current costs and inconveniences. But most importantly, Fibre To The Home must be seen as technology for the future. Simply providing the infrastructure will allow innovation in current industries, and the creation of products and services that are virtually unimaginable to the majority of us.