NBN Watch: FTTN, FTTC and the future bill

NBN Watch: FTTN, FTTC and the future bill

NBN Co addresses a range of criticisms to the network - but are they on the mark?

Shortly after I sent off my piece last week for publishing, NBN Co published a blog post on FTTN, defensively titled “Setting The Facts Straight on Fibre To The Node”. In it, top NBN Co PR executive Katrina Keisler splices together anecdotes from NBN Co Chief Network Engineer Peter Ryan in attempt to steer criticism away from FTTN due to the increased use of FTTC in the mix. It’s all very interesting, and genuinely welcoming to hear comment from an engineer, rather than a group of PR and marketing representatives.

Much of what Ryan says is right, but it’s also strangely convenient to NBN Co’s mandate and talking points. Much of the justification in relation to using FTTN over FTTC are not engineering problems but the same old nuggets we’ve been hearing ever since the Coalition decided to remove FTTP as the single connection option – time and money.

On FTTN’s versatility:

“This is the real benefit of FTTN; it allows us to deliver nbn services to end-users in a time and cost effective manner which allows us to connect end-users much sooner than we could with other technologies – but also provides a simple upgrade path to higher-speeds.”

On why FTTC isn’t replacing FTTN right now:

“We cannot discount the possibility that our projected FTTC cost per premises might increase in the field as we find out more about deploying FTTC in real world conditions – we cannot simply assume that cost is correct and switch entirely to FTTC on that assumption.

On the unknowns of FTTC:

“If we find out down the track that FTTC is actually coming in at an additional $500 per premises across four million premises then that’s another $2 billion added to the cost of deploying the network that we would have to find.

On further delays:

“I can appreciate that people are excited by the potential of FTTC, but on a project the size of the nbn™ network 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.

“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.

NBN’s aim in this post is to basically state the following:

FTTN will allow us to meet our 2020 deadline. FTTC is cheaper than FTTP or even HFC, but we may run into problems that could escalate costs. We can’t reverse FTTN installs because we’ve signed contracts and set deadlines. FTTN is good because its versatility means it can be easily upgraded because the copper can be replaced in the pits via copper relatively cheaply.

There are few titbits of information that are new – we know the average distance of nodes from households is 450m, with 2/3rds of householdsare within 400m. We know that NBN Co won’t pull nodes out of the ground after any future upgrades, considering them “important assets” – pointing at the conversion of phone boxes to Wi-fi access points as a demonstration of future tech transition we might not be aware of yet.

But we all know that NBN Co is willing to make dramatic changes to the network if they must. When the Optus HFC system turned out to be an enormous dud, they unceremoniously dumped it to install FTTC in its place. The arguments around cost and time were thus largely irreverent in this case – NBN needed a technology that fit the bill of providing equivalent speeds, at a low cost, quick deploy, and low impact. Then they upgraded another 250,000 residences from FTTN. In the blog, they reference cost and time as impediments to more – but this sounds to me like concerns around backpedalling.

I have no doubt in my mind that FTTC will creep further through the network. I also have no doubt that almost immediately after the completion of the rollout in 2020 that the inevitable upgrades of FTTN will start, as those who would likely suffer the worst – poor copper, faulty installs, node distance – start piling complaints onto their RSPs, the TIO and their representatives.

In the blog, Ryan mentions that these cost savings and increased revenues from a faster rollout will, quixotically, also allow NBN Co to finance these upgrades without taxpayer support. This seems like a logical fallacy – why not do it right, the first time? Why retroactively spend money, forcing customers through terrible speeds and complaints processes, to promise something better, later? Taxpayers will be the customers of this network. Whether it’s their direct payments or tax payments it’s still the same money.

My last piece spawned dozens of comments from customers who had already started dealing with these problems – long distances from nodes, poor provisioning, CVC issues, and mass confusion. This wholesale model was originally designed to avoid this problem via universal access – by giving everyone FTTP, we were all on the same page. This mishmash of acronyms, technologies and PR muddies the waters, shifting blame and building bad justifications of poor policy.

FTTN isn’t the devil, but it’s the worst-case scenario. Every jurisdiction that has implemented it is now attempting to move away from it, while we, somehow, build it from scratch. This current rollout will no longer face any drastic change in policy; The Coalition government will be in place until 2019, meaning any Labor win would not be able to change anything as contracts would have almost certainly been signed and solidified to finish it off by then.

Labor’s NBN policy going into a 2019 election would likely be around remediation and upgrades. I would gather most promises would relate to directing NBN to fixing/upgrading, initially, the worst connections before deciding what to do about that 30% in the long term. I have a feeling this would likely involve a long term –  three to five year plan – to upgrade all FTTN connections to FTTC. It would be fought tooth and nail by any opposition, and probably face a strong battle in the Senate due to its cost.

As Ryan says in the blog post, it would cost a mere, less than 5% of the total NBN budget, $2b to change 4 million potential FTTN connections to FTTC now. I dare say this cost would likely double, or even triple, to upgrade after they were in place. Bill Morrow said customers should be ready to pay. But Ryan says NBN might. Taxpayers would look to the government.

Who will be left with the bill after 2020?

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