At the launch of the Coalition's broadband policy in April, Australian Communications Minister Malcolm Turnbull and Prime Minister Tony Abbott barely discussed plans for the existing Telstra and Optus hybrid fibre-coaxial (HFC) networks, but now those networks will likely make up one third of the total National Broadband Network (NBN) fixed network, and almost half of the Coalition's 2016 target for faster broadband by 2016.
The details of a proposal to use the existing HFC networks were first outed in NBN Co's strategic review, released on Thursday last week, as part of a "multi-technology mix" model for the future NBN. The model will combine fibre to the premises, fibre to the node, HFC, fixed wireless, and satellite that will require around AU$41 billion in peak funding.
Although 2.7 million premises are now passed by the two HFC networks, the strategic review points out that the networks could be extended to cover another 700,000 premises to bring the total to 3.4 million premises passed. The document suggests that in order to cope with peak demand on the networks and support 50Mbps by 2019, they will have to be upgraded. NBN Co redacted the cost of upgrading the HFC network from the document, but put the operating costs at AU$15 to AU$25 per premises per year.
The review assumes that NBN Co will gain access to the HFC networks in the second half of 2015, with the upgrades and expansions to be completed over the next four years. By accessing the network in 2015, NBN Co would gain access to the 2.6 million out of the 5.23 million premises that it has said will have access to at least 25Mbps download speeds by 2016.
This means that almost 50 percent of the total 43 percent of all Australian premises that the report says will have access to download speeds of 25Mbps by 2016 will come from the HFC networks already built. This comes despite a Coalition promise before the election that every premises will have access to 25Mbps download speeds by 2016.
"We've said by 2016, no one will have access to less than 25 megabits per second," Turnbull told 2GB in April. On Friday, the minister said that NBN Co had told him otherwise.
"What I said before the election was that we believe that we could get all Australians 25 megs by 2016, and the company has come back with its advisers and said they do not believe that is achievable," Turnbull told Channel Nine.
News of the proposed re-use of the existing HFC networks in the NBN has drawn criticism from some quarters, with claims that no upgrade to the HFC networks will be made at all as part of the proposed NBN takeover of the networks. However, Internode founder and new NBN Co board member Simon Hackett wrote in a personal blog post over the weekend that those views come from incorrect assumptions arising from the strategic review.
"The review proposes to take the existing Telstra and Optus HFC cable networks, and to transform them into a modern broadband network via major investment in these areas," Hackett said.
"For stand-alone premises in the rollout areas concerned, this includes repairing all existing lead-ins that need it, building all the missing lead-ins that were never done in the original HFC rollout, and expanding the HFC rollout into all the 'black spots' inside those overall rollouts that were left behind when the original rollouts ceased.
"The deployment also includes a laundry list of network upgrades and capacity expansions to deliver high-performance, low-contention ratio 100 megabit downstream rates."
Apartments and other multi-dwelling units would be covered by the HFC network through fibre-to-the-basement technology, Hackett said.
Contention ratios will be reduced on HFC by deploying nodes, and the spectrum being used on the cable will be expanded with new IP-capable data transmission equipment used in the network to improve speeds, Hackett said.
"HFC is capable of NBN-grade outcomes, providing sufficient investment is made in the infrastructure concerned," he said.
In fact, the incorporation of DOCSIS3.1 into the networks would be able to support up to 1Gbps download speeds, Hackett said.
The NBN Co board member pointed out in his blog post that this is his personal view, and does not represent the position of NBN Co or its board.
The use of the HFC networks of Telstra and Optus in the NBN is still entirely hypothetical at this point, as the agreements in place with both companies are to have customers moved off the network and onto the fibre-to-the-premises NBN.
Turnbull has indicated that initial discussions have commenced with Telstra for renegotiation, but given the 2015 date for getting access to the HFC networks, the company has set out close to 18 months for new deals to be struck with the two telecommunications companies.