Blowing the digital dividend on wireless NBN

Summary:With the 2013 federal election likely to fall within weeks of the opening of the 700MHz spectrum, could Malcolm Turnbull again be considering an increased role for wireless?

With the next federal election still over a year away, Malcolm Turnbull has found great joy in leading the telecoms community in a prolonged game of Twenty Questions when it comes to the Coalition's alternative NBN policy. That has left speculation rife about what the plan will entail — for example, that the Coalition would actually buy Telstra's copper network outright — but a cursory look at the calendar suggests that something else may also be on offer.

Specifically: it cannot have escaped Malcolm Turnbull's notice that the next federal election will be held in late 2013 — and that this date coincides nicely with the end of analog television on 31 December 2013, which will enable the release of the precious 700MHz "digital dividend" spectrum. While Turnbull has kept details of his alternative NBN sketchy — apart from regularly repeating claims that it will use a fibre-to-the-node (FttN) architecture, and be cheaper and completed faster than Labor's plan — it's worth considering whether the digital dividend might also play a role.


(Cell tower image by Joe Ravi, CC BY-SA 3.0)

The Coalition's love for wireless has been well documented (and, indeed, past Communications Minister Helen Coonan recently revived the ghosts of the failed OPEL wireless project) but OPEL's reliance on the interim WiMAX technology was one of many problems with the plan. Another was its requirement for base stations on every few street corners to match demand with available 3G and WiMAX spectrum.

If, however, an alternative NBN architecture could tap in to long-term evolution (LTE) services running over newly freed 700MHz spectrum — which has been demonstrated to provide healthy speeds at long distances — theory at least says that a heavy wireless component might deliver decent speeds to large swathes of the population without the ridiculous density of base stations calculated under previous coalition wireless plans.

After all, commercial mobile operators are already planning to roll out LTE networks that will largely utilise their existing towers rather than requiring massive numbers of new sites. Using this for an NBN alternative, rather than distance-constrained WiMAX, might be more palatable than any wireless solution discussed so far — and would indeed get rural residents connected quickly and relatively effortlessly; that's why NBN Co is using it for the much-discussed 4 per cent of homes that are too remote for fibre, but too urban for satellite.

Theory at least says that a heavy wireless component might deliver decent speeds to large swathes of the population without the ridiculous density of base stations calculated under previous coalition wireless plans.

If such an infrastructure were available on a widespread basis, the Coalition could adjust its overall NBN costs by playing with the sliders on the network's coverage figures — balancing the capital costs of its own network against the cost of modifying or cancelling existing fibre NBN contracts. By adjusting Labor's 93 per cent fibre and 4 per cent LTE coverage to, say, serving 60 per cent of the population with FttN and 37 per cent of the population with LTE wireless, Turnbull could theoretically defer significant construction costs while quickly servicing broadband blackspots with something that's better than, well, nothing.

All of the usual concerns about wireless capacity and infrastructure would of course still apply, as would the need for extensive fibre backhaul to support the wireless infrastructure. But such a model would also call for a fundamental shift in the country's wireless infrastructure: since the 700MHz spectrum is expected to be auctioned off later this year, a new coalition government would need to negotiate with the eventual spectrum holders to gain a guaranteed swathe of its spectrum, presumably on a long-term lease arrangement.

Turnbull has already flagged this sort of arrangement when discussing satellite services; in his attack on NBN Co's $2 billion satellite program in February, Turnbull said the Labor strategy ignored the possibility of leasing what he said would be adequate existing satellite capacity (it's not, but that's another story).

Turnbull has made a habit of referring to privately owned networks as though they are indiscriminately available for use at the Coalition's whims. He has referred to Telstra's copper network many times in a way that suggests that Telstra was a willing and eager participant in years of fierce negotiation with Labor; he has also made a habit of speaking paternally about Telstra and Optus HFC networks, treating them as open and available to competitors — even though they're, well, not.

So, it's not a huge stretch to posit that Turnbull's faster, cheaper broadband solution could be based on configuring NBN Co as a mobile virtual network operator (MVNO) of sorts — taking advantage of its massive bandwidth demands to chisel bulk discounts out of commercial operators.

Those operators might be happy to have guaranteed business, but such a plan would also run the risk of saturating their bandwidth. LTE may be more efficient than WiMAX or 3G HSPA protocols, but once you throw in the demands of millions of mobile broadband users, you're looking at a significantly higher usage profile. Mobile telcos would need to do extremely careful usage monitoring and traffic shaping to ensure that their pursuit of government business didn't interfere with their own commercial LTE plans.

Were this to form a part of the Coalition's strategy, the government would need to offer carriers other sweeteners to ensure their participation. I'd suggest that this would likely take the form of extensive subsidies to help private operators build out their LTE capacity, particularly in rural areas where carriers can't just leverage off of extant mobile towers. This would return the country to the days of the government-run Australian Broadband Guarantee program — and it would be entirely consistent with the Coalition's subsidy-focused mentality.

It's not a huge stretch to posit that Turnbull's faster, cheaper broadband solution could be based on configuring NBN Co as an MVNO of sorts — taking advantage of its massive bandwidth demands to chisel bulk discounts out of the commercial operators.

Without more details from the Coalition, this discussion is purely academic and theoretical, but the coincidental timing certainly merits contemplation. Building a baseline capacity using wireless would indeed deliver on Turnbull's promise to broadband many areas faster and more cheaply than digging fibre — although the logistical issues and massive financial impact in leasing and auction-revenue opportunity costs would not be insignificant. Whether Turnbull would risk building a new strategy around wireless, when the last one failed so spectacularly at the polls, is another big question, but until he provides more clarity around the party's real plans, questions are all that we can really have.

What do you think? Would a 700MHz strategy deliver on Turnbull's objectives? Could the private-sector LTE industry service the capacity demands of such a solution? Would it? And should it?

Topics: Broadband, Government : AU, NBN, Tech Industry

About

As large as the US mainland but with a smaller population than Texas, Australia relies on ICT innovation to maintain its position as a first-world democracy and a role model for the developing Asia-Pacific region. Award-winning journalist David Braue has covered Australia’s IT and telecoms sectors since 1995 – and he’s as quick to draw le... Full Bio

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