NBN is already obsolete

By in Australian budget

| 32 comments

Australia’s $51 billion National Broadband Network (NBN) is not even finished but already requires upgrades to compete against new emerging technologies, such as 5G, at an additional cost of $7 billion:

NBN Co is considering upgrading its problem-plagued fibre-to-the-node (FTTN) and fixed wireless footprints to fibre-to-the-premises (FTTP), a report in telco industry newsletter CommsDay claimed on Monday.

Australia’s major telcos including Telstra, Optus, and TPG, have stepped up their competition to the NBN, setting their sights on capturing close to a third of the nation’s broadband market with 5G.

Telstra has acclerated the rollout of its 5G network, last week pledging that 75 per cent of the population will have access to Telstra 5G by June next year.

The telcos believe they “can get a 30 per cent share of the broadband market, and that cost would really hurt the NBN Co”, independent telecommunications analyst Paul Budde said.

This threat has forced the NBN Co to heed the pleas of experts and seriously consider the prospect of pivoting to fibre-to-the-home…

These upgrades would cost about $7.1 billion, or $1500 per premises.

One of the biggest shortcomings of the NBN is that the Coalition Government chose to stick with the old copper network in many areas instead of rolling out fibre optic networks.

While this decision saved money initially, it has severely limited the NBN’s speeds and reliability, leaving it poorly placed to compete against emerging technologies like 5G.

The Parliamentary Budget Office recently reported that the “fair value” (or saleable value) of the NBN was only $8.7 billion. This is less than one-third of the federal government’s equity investment. As such, the NBN requires a $21 billion writedown.

With every competing 5G service, the likelihood of NBN Co ever making a profit recedes. It also makes the PBO’s “fair value” estimate increasingly fragile, in turn ensuring the federal government faces an even bigger writedown.

The whole NBN project has become a giant boondoggle of waste and mismanagement.

Unconventional Economist
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Comments

    • Anon

      Even bigger write down – would’ve cost heaps more.

      FTTP only made sense in built up areas – that’s why TPG were going to do it (and I think are to big apartment buildings). FTTP in Tasmania and Tony Windsor’s electorate NEVER made economic sense.

      • Stephen

        That’s absolutely not the case. Plenty of rural places around the world have FTTP – in fact, fibre works really well in rural areas because you can run fibre for many kilometres without any loss of speed (unlike copper cable). That, and it’s extremely future-proof because you can just upgrade the boxes on either end for each generation without having to replace or reduce the length of copper cable, and it’s chemically inert and everything is better water sealed so it tends to require less maintenance and therefore have lower operational expenditure. Fibre doesn’t cost any more than running any other kind of cable, all the cost is in trenching, directional boring, pulling cable, etc. – but again, this is actually easier in rural areas, because they can directly trench it in alongside roads without having to go through as many driveways (a lot more directional boring is required in cities, which is why when they were doing FTTP they made a deal with Telstra to use their pit and pipe infrastructure, but unfortunately a lot of it has been under-maintained since Telstra was privatised).

  2. GeordieMEMBER

    5G technology is not without its challenges, however. Significantly, there are two different parts of the radio spectrum that are being used to deliver 5G and one of these frequencies finds it harder to pass through objects, confirms Einbinder. “These are radio frequencies that are similar to current cellular frequencies, this is what is called Sub 6 Gigahertz, and extremely high frequency millimeter wave bands, commonly abbreviated as mmWave. At these frequencies – such as the proposed 28 GHz and 39 GHz – radio behaves differently. These short wavelength mmWaves are much more easily blocked by tree leaves and by your body.

    “And, to make matters worse, they are quickly absorbed by the air. That means that even without obstacles, they may only travel less than a kilometer before petering out, whereas conventional frequencies can easily travel several kilometers and often more.”

    Thankfully, 5G even in mmWave bands can be made to go pretty much where ever it needs to go, reveals Einbinder, but it’s not a simple or cheap process. “If a mobile provider is building out 5G mmWave services in an area they will need many more cellular base stations,” he says. “Now clearly an operator can’t put up a big cell tower every 1,000 meters. But you can imagine small cells on every tenth utility pole in a neighborhood.”

    As so many of these small cells will need to be deployed to make 5G on the mmWave viable, 5G will likely be initially launched in highly populated areas and once again those in rural areas who have always been lowest on the priority list when it comes to improving voice and data signals will remain at the back of the queue.

    The first mmWave applications won’t be on smartphones though, predicts Einbinder. “They won’t be mobile. The industry will first use mmWave for fixed wireless applications. Your home may have a 5G radio near a window that receives a 5G broadband signal and converts it to wifi in the home for your set-top box and Internet. Or you may be able to get a 5G modem for your laptop.

    • myne

      You hook those devices on every 10th pole to…

      *drumroll*

      Fibre.

      Good luck dealing with the pole owners. There’s a reason most of NBN was underground – they like to get others to pay for old crappy poles to be replaced. At ~20k a pop it’s usually cheaper to dig.

    • myne

      You hook those devices on every 10th pole to…

      *drumroll*

      Fibre.

      Good luck dealing with the pole owners. There’s a reason most of NBN was underground – they like to get others to pay for old crappy poles to be replaced. At ~20k a pop it’s usually cheaper to dig.

      • darklydrawl

        Make you realise that flogging off all this infrastructure that was paid for and owned by the taxpayers to the highest bidder was probably a dumb idea. Sure, profitable at the time, but long term stupid. Sums up Oz fairly well.

  3. NelsonMuntzMEMBER

    The whole NBN project has become a giant boondoggle of waste and mismanagement.

    Did we ever expect any other outcome from our Grubberment?

  6. kannigetMEMBER

    What do you expect when the political masters decided to force a technology shift mid stream to what was already an outdated technology.

    Dont buy the 5G story though,

    1. There are lots of claims being made by carriers as standard features that the standards body has said are best case laboratory only.
    2. The current coverage is small, only major centres and only the 5G-Low, which is only slightly better than 4G.
    3. To get the true speed improvement you need to go to 5G-Med and 5G-High. Both of which have distance limitations.

    Even this “https://www.choice.com.au/electronics-and-technology/internet/connecting-to-the-internet/articles/what-is-5g” sprouts a few mistruths about 5G… like the 1ms promise… current 5G-Low only has a slightly lower latency, at best around 10ms lower than the current 4g of 40-60ms.

    5G is one of the most hyped technical changes to communication in decades and only being pushed like mad by telcos to make people think the NBN should be abandoned.

      • kannigetMEMBER

        Where did I say fibre was outdated…. I said the mix mode technology was outdated…. Based on VDSL over copper….

    • Comment Only

      Read and appreciated your reply. Sorry I wasn’t able to answer under your comment.

      Wireless is going to happen and it’s going to thump NBN’s shaky business case. You are right that coverage isn’t always available for the existing 4G network but that’s not the way to think about this – what they are really talking about here is for high density areas (with relatively short runs from node to cpe), not older coverage limited cells. Nobody will upgrade those until they absolutely have to.

      You are right, there will still be some latency and even some of that latency will be due to it being a wireless network compared to a fibre NBN connection – but watch and see that get dwarfed by every carrier out there overbooking CVC capacity. It won’t matter whether you go wireless or fibre to your house, it will be all about how your carrier’s aggregation and (maybe) core are built

      No disagreement about the MTM and the broad politics of it btw, I just can’t believe they got away with destroying so much value.

  7. LukeMEMBER

    It should have been kept as FTTP and never moved to a mixed technology. It’s hardly called a waste because since March its kept what ever is left of the economy going while in lock down. Seems to me the value of the NBN is more then just the outlay of cash.

    5G and FTTP will complement each other, it will never be one or the other. A more reasonable argument is that bandwidth requirements for applications has sky rocketed so exponentially compared to 2007, that end of life for the mix technology is bringing it forward.

  8. seanraceMEMBER

    I went 5G in March… Family of 5, 250GB usage per month…. massive speed increase over the cable…. Both in upload and download speeds…. latency is slightly higher…. but unless you are a gamer its not an issue and you cannot notice it.
    Key issue I see is that if everyone goes 5G then the spectrum will get congested very quickly and the throughput will fall off a cliff…. but this is not the case right now.

  9. AngryMan

    “NBN Co is considering upgrading its problem-plagued fibre-to-the-node (FTTN) and fixed wireless footprints to fibre-to-the-premises (FTTP), a report in telco industry newsletter CommsDay claimed on Monday.”

    Its odd but i was told sometime last year in a conversation with a guy who worked on the co-coordination team for the WA roll out that NBN was already budgeting to upgrade the FTTN to fiber to the curb. I know sometimes the acronyms get mixed up or used incorrectly so hopefully when they say FTTP it really is fiber into the house, but i would bet it ends up realy being FTTC.

    At the very least the original roll out should have been fiber to the curb so you could get reliable 100mb. but i also have some co workers who have FTTN with the cabinet being some distance from the house and they still get a full 100mbs which surprises me.

    Crapbot and Turdbull have a lot to answer for in the debacle this NBN has become.

      • AngryMan

        No they are not the same thing.

        Fibre to the Node (FTTN)
        An FTTN connection is a more affordable alternative than the FTTP. It is easier and faster to install in high-density suburban areas since it uses existing copper cables that are connected to a central location or node often found at the end of the street.

        Fibre to the Curb (FTTC)
        Another term for FTTC is FTTDP or Fibre to the Distribution Point or Fibre to the Driveway. The fibre connection runs through an underground pit that is closest to the user’s home. Compared to FTTN, FTTC is better and faster.

        • LukeMEMBER

          Both FTTC and FTTN use copper as the last mile, which is the whole bloody issue that makes the NBN obsolete. Stop trying to save pennies and just bang in FTTP for once and for all like originally intended. Remember how $30B-40B back in 2007 was too much, and today we’ve dolled out like $300B for this bloody pandemic . Its a bloody drop in the ocean to see it through.

          Here is an explanation for you: So many freaking Boomers on this bloody site who don’t know anything and shout from the loudest tower.

          https://www.aussiebroadband.com.au/blog/fttp-vs-fttn-connections-national-broadband-network-explained/

          • AngryMan

            As per your link
            FTTC or ‘Fibre to the Curb’ uses a fibre connection almost all the way to your home, taking advantage of the existing copper wiring to complete the connection between your home and the curb. This is the latest iteration of this type of connection, and promises to give a faster speed to the user in comparison to FTTN, as well as providing a cheaper option for NBNCo compared to FTTP

            Maybe read it.

            FTTC does not use a mile of copper between fiber optic between fiber and the house. I have FTTC. There is a fiber cable in the pit just outside the fence line in the same spot telephone used to connect. It then runs copper into the house max 20 Meters if that. It’s like that for the entire suburb. I watched them put it in. I watched the guy connect it up in the pit. The finer runs into the pit. There are no cabinets in this suburb. The unfortunate ones who have FTTN have what you say. But if the cabinet is close enough and the copper in good condition they may still get 100mbs flat out like I do. but for FTTN it’s a lottery. If you have FTTC and can’t get 100mbs either your ISP is limiting you or you need to check the copper wire between the house and put. But there is not a mile of copper wire to the house. What you may find in some cases is if a side street has less than a certain number of dwellings then it may be copper from the main Street to premises in the side street with a micro node hidden in a main Street pit at the corner. They still call that fftc but should not be allowed to. But legally they can because they claim FTTC is a brand name not a tech description that covers multi tech types.

          • myne

            You’re wrong. And right.
            Right because FTTC and FTTN use a ‘node’ to convert light to DSL.

            Wrong because they mean different things. One’s somewhere on your block usually and serves a few hundred people. The other’s usually pretty close to your house and serves 4 people.

          • Comment Only

            In case it clarifies, “Last mile” is a special term that just means the last “leg” of the journey. It doesn’t mean a mile.

    • robertcMEMBER

      Re FTTN customers managing to get 100mbs

      Have these people checked performance at peak usage times? During something like a community lock down or in the evenings.

      The faster FTTN lines should cause interference in neighbouring cables when carrying traffic. If there are multiple fast lines carrying traffic in the same trunk performance should tail right off

      Ie is fast as long as you and your neighbour are both not doing much

  10. V

    This is what people told you at the time (and more) but you were far too engaged with NBN Fanboyisim.

  11. HaneiMEMBER

    if only it worked. have had nothing but hassles with our NBN and the telecom ombudsman is useless

    • m8

      Onion muncher deserves a long hard ICAC up the clacker for wrecking the NBN on Murdoch’s behalf.