Wholesale ditching of FTTN not an option, NBN argues

NBN not backing away from FTTN, company executives argue

NBN’s fibre to the node rollout is capable of being upgraded to fibre to the curb (FTTC) down the track, but any decision to ditch the current deployment of FTTN would impact the rollout’s speed and the company’s financial health, NBN executives have argued.

“I can appreciate that people are excited by the potential of FTTC but on a project the size of the NBN you cannot just tear up 18 months of design, planning and construction work that is in the pipeline for FTTN deployment to several million homes and change them to FTTC – that is not how things work in the real world,” Peter Ryan — NBN’s chief network engineering officer — said in a series of prepared statements defending the company’s decision to continue the rollout of FTTN.

Some critics of the NBN rollout, such as Internet Australia, have argued that FTTN should be dumped in favour of FTTC.

“If we were to do this, to put it quite simply, we would have to tell residents in several million premises that were scheduled to get NBN services over the next 18 months via FTTN that they would not now be getting connected for another two to three years as we’d have to re-start the entire design, planning and construction process,” Ryan said.

The NBN executive compared the process of any shift to greater use of FTTC to the gradual winding down of brownfields fibre to the premises (FTTP) deployments after the switch away from an all-fibre network. (FTTP is the fastest NBN connection available and relies solely on optical fibre.)

“The NBN is like an enormously long train, you can’t just bring things to a complete stop and change direction, it just doesn’t work that way and never will,” he said. A significant amount of brownfields FTTP deployment continued despite the decision to not use it as the primary fixed-line technology for the NBN after the 2013 election.

FTTC has a much higher theoretical maximum speed than FTTN, as optical fibre is deployed significantly closer to an end user’s premises.

Both technologies rely on making use of a household’s existing copper phoneline. However, in the case of FTTC the point of connection between the fibre and copper is the telecom pit on the footpath in front of a home. FTTC involves installing a distribution point unit (DPU) in the pit.

By way of contrast FTTN involves the use of on-street cabinets (nodes), which must be independently powered. With FTTN, the length of copper between a node and a home averages around 450 metres — substantially longer than with FTTC.

According to NBN, around around two-thirds of end-users are within 400 metres of the node used to connect them to the National Broadband Network. Beyond a kilometre, the technology is unlikely to meet NBN’s minimum target download speed of 25 megabits per second.

“The people that are out at the one-kilometre level … are going to be sitting at 25[Mbps] and no more,” NBN CEO Bill Morrow told a recent Senate Estimates hearing. “Anybody beyond — again, with a little bit of variation — we have to find a different solution, and fibre to the curb is our preferred solution for them.”

As Morrow indicated, NBN had originally planned to only use FTTC in a relatively small number of cases. However, the company has since largely ditched the use of Optus’ pay TV (hybrid fibre-coaxial — HFC) infrastructure and said it will make greater use of FTTC.

A commercial launch of FTTC services is planned for 2018, with NBN currently aiming to roll it out to 700,000 premises — including 400,000 in the Optus HFC footprint.

As of the end of 2016, FTTP reached 1,334,824 homes and businesses. FTTN was available at 1,452,396. HFC connected 158,938 premises (NBN plans to continue using Optus’ HFC infrastructure in one suburb, as well as Telstra’s HFC infrastructure where it is available).

As of the end of the 2016, the average cost per premise of FTTP connections in existing buildings (brownfields) had dropped to $4405. The CPP of FTTN was $2172 and HFC $2259. NBN currently estimates the CPP of FTTC will be $2800. The company’s management has been at pains to caution that that is a preliminary figure and subject to change as it gets more experience with the technology.

“On the HFC for Optus, we know what the cost per premises is now that we have all of that new data,” Morrow said during Senate Estimates. “We know what the information is on FTTC cost per premises. So let’s go ahead and switch that, because we think that we can learn more.

Even if it does cost slightly more we can learn more from doing more fibre to the curb in a bigger area. If we nail that and get that right then that clearly is going to be one of the solutions when we come back to needing to offer more speed on that proper network, especially at the long loop lengths.”

Morrow said that NBN is confident it can roll out FTTC at scale. “The issue is, quite frankly, if we can get that at a lower cost then we will see ourselves even doing more of that than FTTN,” the CEO said. “I am excited. I do think that, even with the up to 700,000 or 800,000 [premises] that I mentioned, our teams are pushing hard to see if we cannot do more of that.

“But, again, we are trying to get this built as fast as we can at the [lowest] possible cost, and, when we have that kind of breakthrough on it, we are going in and replacing some of that fibre-to-the-node stuff and, in this case, also some of the HFC.”

However the company argues that the revenue hit to a rollout that swapped out FTTN wholesale in favour of FTTC would hinder the overall speed of the rollout as well as NBN’s revenue (the equity contributed to NBN by the government is kept off the budget because it is classed as an investment — which requires an eventual return for the government).

NBN’s leadership claims that even if FTTC is rolled out in areas where FTTN has already been delivered, the ‘worst case’ scenario is that the FTTN infrastructure would have already delivered revenue to the company.

In a defence of FTTN penned by Ryan and NBN’s corporate affairs head, Karina Keisler, the pair argue that the cabinets used for the technology would also be necessary if a progressive FTTN-to-FTTC upgrade took place in a locality.

“FTTN sets us up very well should the demand for faster speeds arise and a move to FTTC later on makes sense — we are very much designing the network with future upgrades in mind,” Keisler said.

The pair also argue that there are copper-based technologies — such as G.fast and XG.fast — that can also be used as part of an FTTN upgrade path.

In addition, there are further potential uses for the cabinet infrastructure, the executives have argued.

“You only need to look at how many operators around the world have turned their old phone boxes into new Wi-Fi hot-spots to see how in field assets can be re-purposed,” Ryan said. (Telstra’s national ‘Telstra Air’ Wi-Fi network uses old payphones as hotspots.)

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