NBN offering not good enough for 21st Century Australia

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Telstra has announced that it will downgrade its plan for half of its NBN customers (images edited by Dan Jensen).

Australia's internet speeds continue to lag behind that of other nations, says Laurie Patton.

TELSTRA'S decision this week to only offer a maximum 50 megabits per second (Mbps) plan to more than half its NBN customers is another setback in the quest for better broadband and further vindication of Labor’s plan to make Australia what former Prime Minister Malcolm Turnbull has dubbed an “innovation nation”. It’s the latest instalment of a highly political decision by Tony Abbott to instruct Turnbull to demolish NBN Co.

Our biggest telco has stopped offering its top-line 100 Mbps plan to customers with fibre-to-the-node (FTTN), fibre-to-the-curb (FTTC) and fibre-to-the-basement (FTTB). These are the technologies that replaced a full-fibre rollout for fixed-line customers in the original NBN model when the Coalition introduced its so-called multi-technology mix (MTM) model in 2013.

FTTN and FTTB were always destined to disappoint because they rely very heavily on old copper wire telephone lines. FTTC is a good interim option, but its ability to provide fast broadband has been hampered by issues relating to a new delivery technology called G.Fast which, when it is finally available, promises much faster speeds over the relatively short length of copper that runs from the kerb into the premises. That said, the poor quality of so much of the old Telstra copper wire network will present challenges.

Earlier in the week, TelSoc held a joint event in Melbourne and Sydney at which we learned about overseas broadband initiatives. What we heard was quite disturbing, frankly.

Over in New Zealand, 87 per cent of premises will have access to FTTP by the end of 2022. FTTP is already delivering gigabit speeds to many customers across the ditch.

The beauty of fibre is that it has an unlimited capability to be upgraded as faster delivery technologies enter the market from time to time. The outdated 20th-Century NBN Co was forced to use by the Abbott Government has already passed its use-by date and cannot compete in an emerging digitally-enabled world.

South Korea will have made FTTP available to 99 per cent of customers by 2022, with half the population able to receive an eye-watering 10 Gbps. By the end of this year, Thailand will see 100Mbps available to 95 per cent of premises in its cities. China is understandably focusing on urban delivery, with 100Mbps on-offer to 50 per cent of city-based broadband customers.

Here in Australia Labor’s plan was for a nationwide network with 93 per cent FTTP coverage. Under the Coalition’s model, only around 20 per cent of NBN Co customers will enjoy FTTP. Around a third of fixed-line premises will be lumbered with FTTN.

In time, market forces and ongoing media scrutiny will hopefully force the Government to overrule itself and start replacing FTTN – either with FTTP or at least FTTC. This is already happening by stealth as NBN Co progressively reveals that more areas of the old Telstra copper network are unusable.

That’s on top of having to abandon plans to use the old Optus Pay-TV (HFC) cables and the additional, unbudgeted, costs of remediating large portions of the Telstra HFC network. In my area, they are also abandoning Telstra HFC and deploying FTTC. Whereas I currently receive more than 100 Mbps the best I can be guaranteed when the NBN is connected is half of that.

RMIT’s Dr Mark Gregory has estimated the potential cost of repairing the discredited MTM at around $16 billion. Internet Australia chair, Dr Paul Brooks, argues that the replacement process should begin pretty much straight away once NBN Co cries "mission accomplished" in June this year – the scheduled completion date for the MTM-based rollout.

Swinburne’s Dr Steven Conway agrees with Brooks that while it will be expensive fixing the NBN must be done without delay.

He told New Daily:

'When you compare us to any other first-world country, in terms of the speed at which data can move and the amount of data we have to move, we’re going to be left in the dark ages.'

Meanwhile, NBN Co continues to post staggering losses and is having to borrow more than the $19 billion the Government originally promised. Long-term financial success requires upselling customers to the faster speed packages where margins are better. But that’s proving a tad difficult with a mix of such inferior technologies.

The secret of success in New Zealand, as TelSoc members were reminded this week, is that both sides of politics have always agreed on the need for a state-of-the-art broadband network.

As I have been saying for some time, and TelSoc recently re-iterated, we need a bipartisan rescue plan for the dud NBN. And we need one now.

Laurie Patton was CEO/Executive Director of Internet Australia from 2014 to 2017. He is currently the Vice President of TelSoc.

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