Could election stalemate revive FTTN NBN?

Could election stalemate revive FTTN NBN?

Summary: As Julia Gillard and Tony Abbott scramble to woo the support of independents, could a broadband compromise help Abbott fulfil his dream of killing Labor's National Broadband Network?

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After months of heated rhetoric and policy opposition, the dead-heat election has left commentators at a loss and both sides scrambling to justify their cases to win the support of independents. Yet with NBN Co perhaps ready to down tools until it gets certainty and Telstra policy now in limbo, we're left wondering: what does all this argy-bargy mean for the NBN?


Will the election stalemate force Abbott to compromise the Coalition's minimalist broadband ambitions? (Screenshot by David Braue/ZDNet Australia)

A strong case could be made both ways. From Labor's perspective, the rebuke from Queenslanders cost the party dearly, but the party still managed a strong showing across the country — although one not really befitting an incumbent that wants to show it has voters' unqualified support. Nonetheless, Labor has squeaked ahead in the popular vote, and Gillard can use this as evidence to argue that a large number of Australians prefer Labor's version of the NBN.

There was also, however, strong support for the Coalition's plan: the party made strong gains across the board, reversing its disastrous showing in 2007 to pull within a hair's breadth of Labor and snare 43 per cent of the popular primary vote, compared with Labor's 39 per cent. And this, despite the Coalition's stated policy of axing Labor's NBN and instead pursuing a more austere network investment plan based around rolling out competitive backhaul, fixing ADSL2+ blackspots and connecting under-served areas with wireless broadband.

Tony Abbott will argue that this showing represents voters' rejection of Labor's NBN. Yet it's important to remember that the Greens also saw a record showing, with 11 per cent of the primary vote. If we are measuring NBN sentiment in terms of first-preference votes — the combination of Labor and Greens votes, which comprised 49.93 per cent of the primary vote and the majority of Monday morning's 50.67 per cent two-party preferred showing — suggests that there is strong support among the electorate for the fibre NBN.

Assuming that communications policy was at least somewhat important for many voters, the filter may have well been the factor shifting many of those votes from Labor to the Greens: for many voters, that party's pro fibre NBN and anti-filter stance would have seemed like the right way to show support and protest at the same time. Indeed, there is evidence that civil liberties were high on many voters' minds: even the Australian Sex Party pulled 8727 first-preference votes, many of which would have no doubt come from people supporting that party's anti-filter stance as much as responding to its catchy name.

The Coalition is also against the filter, and may have won over many voters that don't want the filter and can't stomach Labor's NBN or many of the Greens' other policies. Again, there is no way to tell exactly just how much of the vote was related to the NBN, and therefore just where the public's true feelings on the issue lie. The best indicator we can get comes from looking to Tasmania, where early reports suggested the NBN was a key election issue because that's the one state where the network has already begun to be rolled out, and has connected customers.

NBN a vote-changer?

If Tasmania is any indication, the NBN is most definitely a vote-winner: in two-candidate preferred measures, Labor out-polled the Liberals 57 per cent to 43 per cent in the Bass division, 55 per cent to 22 per cent in Denison (with 22 per cent to independents), 63 per cent to 37 per cent in Lyons, 58 per cent to 42 per cent in Braddon, and 61 per cent to 39 per cent in Franklin.

Lyons swung over 4 per cent towards Labor this time around, Bass by 6 per cent, Braddon by 5.6 per cent and Franklin by nearly 7 per cent. Can there be little question that much of this swing was due to the Coalition's threat of axing the NBN and selling off the Tasmanian network built to date? As we've already noted, the Tasmanian NBN can't go it alone.

There were other issues on the table on Saturday, of course, and there's no telling how many voters saw communications policy as the clincher. Indeed, the ongoing cliffhanger in Hasluck, WA, where Julia Gillard and Stephen Conroy quite-intentionally launched their NBN coverage maps a few weeks ago, shows that the NBN isn't necessarily a slam-dunk in marginal seats.

As Abbott runs frantic post-mortems on his campaigns and fights an equally introspective Gillard in the rush for the independent support they need to form government, he will be asking himself whether his party's alternate broadband policy cost it votes and whether a compromise in the communications area be enough to get it over the line. And, if so, just how much ground will he have to give?

The several ex-Nationals members hail from areas where the Coalition's previous communications policies have arguably failed to deliver equitable communications in the past, so it's safe to say they will be well aware of the potential contrasts between the two parties' NBN strategies.

Tony Windsor, for example, harbours lingering resentment over a Nationals back-down on bush telecommunications (and the Nationals in general), so might see the current situation as a chance to address that issue by siding with Labor — or wringing substantial concessions out of Tony Abbott's Liberals before making a cautious truce with the party. There may also be the potential for retributive deal-making: Windsor, like fellow independent Bob Katter, copped harsh attacks from Nationals leaders Warren Truss and Barnaby Joyce and could side with Labor as a thumb in their eyes.

FTTN redux?

Abbott, however, isn't done quite yet. He has indicated that he is willing to compromise on broadband as part of his negotiations to gain strong support. Just what this means in real terms has yet to be seen, but if he aims to shore up support among communications-starved independents, Abbott might have to get out the cheque book and commit to firm investments designed to close the digital divide once and for all — without relying on the private sector to do it for him.

Could this see him moving towards Labor's fibre-everywhere position? One option for Abbott is to float a more moderate compromise that would see him suggest a policy echoing Labor's original fibre-to-the-node (FTTN) plans, which were much less expensive than its ultimate fibre NBN.

This policy would be a compromise between the private-sector reliance of the Liberals' NBN election policy and Labor's own expensive but technically gold-standard policy.

Such a policy would require significant regulatory change, including more control over Telstra's local loop, since the FTTN strategy relies on leaving copper in-place but giving ADSL2+ a shot in the arm by bringing fibre much closer to the end-user premises. Yet this isn't such a big jump from the Coalition's existing plan, which has been said to require a wireless base station on every street to provide enough bandwidth to service needs. Each of these base stations will need to be connected to a fibre backbone — so if the backbone is going to be laid anyway, why not just hook it into a node that can leverage what copper is left?

Doing this, however, would require the separation of Telstra's copper-line network from the rest of the company and the creation of a government body to administer it, in order to ensure the alternate policy could deliver on its objectives. This would be a blast from the past, but frankly, the way things are going, this might be a blessing for Telstra: the company is investing heavily elsewhere and, as its recent results showed, the copper line has become a millstone around its neck. Telstra's strategy for growth no longer lies in dominating the local loop, as it has for so long.

By the time the next election comes, it will be well and truly too late for the Coalition to stop Labor's NBN; the current negotiations really are the Coalition's last chance to nip it in the bud. By stepping away from his minimalist policy and recognising the strategic importance of broadband across the country — and the real changes that need to be made to improve it — Abbott could give the Liberals the shot in the arm it needs to get across the line. He certainly has nothing to lose: the alternative is that Labor wins the support based on its NBN, and the Coalition is condemned to three more years as an even more frustrated opposition.

What do you think? How much did the parties' broadband policies affect the election outcome? Could the Coalition make it across the line by spruiking an expanded broadband policy?

Topics: Broadband, Government, Government AU, NBN, IT Employment

About

Australia’s first-world economy relies on first-rate IT and telecommunications innovation. David Braue, an award-winning IT journalist and former Macworld editor, covers its challenges, successes and lessons learned as it uses ICT to assert its leadership in the developing Asia-Pacific region – and strengthen its reputation on the world stage.

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38 comments
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  • The Labor NBN plan is the best if money was no object. At the moment there is some doubt that Australia can afford this gigantic investment. Tony Abbott will have to offer an acceptable alternate system to satisfy Australians. The FTTN alternative could be an acceptable system to improve deliverable speeds until the full FTTP is delivered as money becomes available.

    Private enterprise could be invited to provide capital for a full FTTP NBN and utilised to provide know-how and labour to expedite the roll-out. Whatever happens Tony Abbott will have to give ground as the NBN has become a major issue in the political turmoil that has engulfed the Australian political scene. Whatever political party gains Government Australians will be the broadband winner.
    sydneyla
  • I don't know that the NBN was a major vote changer here in Tas. I suspect there were quite a few other issues for most people. I just don't really think its a first order issue for most people, particularly those that can already get ADSL. There just isn't a real need for the extra speed (lets face it most of the servers aren't going to deliver a sustained 100Mb/s download let alone 1Gb/s) at present and until a "killer app" comes along that makes it useful to people they won't be that interested.
    Ubiquitous access to a reasonable usable speed (8-16Mb/s) is probably more of an issue.
    steve999-4a485
  • Every dollar spent on a FTTN is ultimately a dollar wasted. You can't simply upgrade a FTTN to a FTTP network without ripping out all the nodes you put in for FTTN.
    Going directly to a FTTP will cost < $43B.
    Putting in a temporary FTTN then changing to a FTTP later would ultimately cost $60B+
    But most Australian's seem to be myopic and couldn't see the best long term solution if they stumbled upon it. It's all me, me. me, now, now now!
    The same would apply if the coalition plan goes ahead with money poured down the drain on temporary band-aid fixes like proprietary incompatible wireless solutions and expanding the number of CMUX based DSLAM's which would all have to be replaced next decade.
    Get it done right for once and lay fibre that will last a century or more!
    davmel
  • The current NBN proposal may as well be FTTN anyway. They're running fibre out to nodes, which will use passive optical splitters to deliver service to properties around the nodes. It's a lot like cable; a shared access medium.

    Active FTTH would run individual fibre from the exchange (or whereever else the backhaul is) to each premises, without any passive splitter, just like the existing copper-to-the-home network. Each endpoint would get dedicated bandwidth to the backhaul connection, but as the backhaul probably can't even cope with the demands of the current NBN proposal that'd do you little good. It's like having gigabit Ethernet to your ADSL1 modem/router, ie not very useful.

    "Traditional" FTTN would probably cost a bunch more, because instead of small passive splitter nodes you'd need a fibre transciever, a DSLAM (or whatever your chosen tail delivery technology is), and new copper from node to property. It's not as if Telstra's current copper runs clump up neatly into local nodes; they all run direct to exchanges.

    Of course, down the track running enough fibre to service every property directly will be more future-proof, but it's not clear it's worth the cost. Personally I'm hoping they'll be laying a *lot* of dark fibre along with the live node backhauls as a bit of insurance, as laying more fibre is cheap when you've already dug the hole in the ground. It's the digging, the fibre joining, and the equipment it plugs into that's expensive.
    ringerc-d5785
  • "The Labor NBN plan is the best if money was no object."

    Actually, the proposed NBN uses passive optical networking, with every node sharing capacity. It's a lot like cable in that regard, by contrast to the dedicated line each user gets to the exchange with the current copper to the home system. It's more like FTTN, really, it just uses cheap passive splitters instead of expensive active nodes with DSLAMs and copper tails. Very smart.

    If money was really no object, though, a dedicated fibre run to each property (plus plenty of spares in the ground for future proofing) and a dedicated fibre transciever at the backhaul connection point for each property would be the trick. The downside is that it's mind-blowingly, insanely expensive to do things that way.

    Personally I hope they stick with PON as the most sensible compromise, but lay lots of extra fibre to the nodes when they're doing all that expensive trenching anyway. That way there'll be room to grow, room for high demand users to go direct/active down the track, etc.
    ringerc-d5785
  • This is very interesting as the consensus amongst the mainland journos seems to be that the definite swing towards Labor must have been driven by *something* and the NBN is the most common culprit. If not the NBN, could you speculate for us what other factors might have driven this trend? Because Labor got caned in Qld and other places, but did quite well in Tasmania. And I do hope you're not suggesting that Tassie doesn't actually *need* all that nice fibre? :-)
    davidaaaaaa6
  • Keep in mind speed aside, the NBN is far better value than current DSL plans.

    For example phone only costs $9 per month with unlimited calls when bundled with a 100Mbps broadband plan, which starts at $29 per month.
    Duideka-0e151
  • It's really not a gigantic investment, not even 2% of our budget. People see $26bn and panic without realizing it's over 10 years, so $2.6bn per year, and our budget is north of $330bn.
    Duideka-0e151
  • Not true at all!!! FTTN is terrible compared to GPON.

    GPON has a worst case scenario of 78Mbps with the current 2.5G splits, once we get 10G splits that becomes 312Mbps worst case scenario.

    The GPON's will almost always deliver speeds of over 100Mbps.

    FTTN on the other hand, like now, relies on copper, and we all know how well the 'up to' 24Mbps copper is doing right now :) Many can't even get 512Kbps or a connection at all!

    FTTH or nothing, every dollar spent on FTTN is a wasted dollar.

    $6bn might be cheaper than $26bn, but when you consider you are comparing $26bn for state of the art tech, compared to $6bn for something we rolled out 50 years ago... Yeah :)
    Duideka-0e151
  • You like to think it is the NBN that drove the Labor vote because tech journos like to think Communications policy is high in the hearts and minds of the average punter who votes because it's what is their minds, they get paid to write about it everyday after all.

    Victoria also voted for a Labor Government, was that the NBN also? - oh it must be what else could it be, surely everyone went into the voting booths on Saturday with a copy of the latest NBN plans from ISP's next to their voting slip just to remind them what they were in there for!

    :)

    :)
    advocate-d95d7
  • Meanwhile people sleep on the street, poverty is rampant in rural areas and a health system in crisis. Internet doesn't fix a single one of these things and countless other issues. But hey, as long as you get your youtube videos, torrents and p*rn faster.
    Ex0dus-32ea1
  • I wrote this elsewhere but it also fits here:

    More than 10 years ago Senator Alston was fighting public spending on communications infrastructure with glib comments about South Koreans getting faster access to porn.

    The impact that such a network has on the nation as a whole goes well beyond what the "tech heads" do for a living or how quickly Debbie does Dubbo starts playing.

    If you get away from the megabytes, gigabytes, porn, email, bla bla....

    * National communications infrastructure on aging high maintenance fault prone copper or less problematic + massively larger capacity fibre (it's upgrading all comms including the old copper phone network)
    * Human to human collaboration for health and productivity that includes not only a mix of detailed video, text communication and audio simultaneously but also tactile sensory feedback of what is happening at remote locations if needed.
    * Business to business automation on a more pervasive and efficient level (and that concept goes beyond just business, those efficiencies should flow to health, education and other areas that are not traditionally profit driven)
    * Entertainment. It sounds trivial huh? We're not robots. Without outlets such as sport and entertainment, we might as well all just pack it in. Entertainment (including outside what tech can offer) has a role in productivity.
    * Ubiquity of access. As far as practically and economically possible the above opportunities should be spread widely. That factored with the other components above makes for:

    the notion of regions taking pressure off unsustainable or undesirable growth in capital cities more than just a cute sound bite calling for a "sustainable Australia"

    Broadband communications absolutely helps employment and development in regional areas.
    neil_mc
  • "Broadband communications absolutely helps employment and development in regional areas."

    I have one key question for you, where is the evidence from overseas where FTTH has been deployed of the sudden boom of development and employment in those regional areas?
    advocate-d95d7
  • I don't know that I said there would be a sudden boom. Communications infrastructure will be a key factor in enabling more flexible work (not just for regional).

    I'm helping a business now where the owner has relocated from Sydney to a town of 6500. (before you say they're nuts, it's a highly productive area with low unemployment and high average income). The business is marketing/PR & is successful and expanding. Clients are in metro and rural. They have 7 educated professional staff. Only 2 of them are under the same roof. The others are in home or small offices in metro and country.

    It's doable now with a mix of ADSL2+ & wireless BUT ... even today (ignoring future needs and demands) their productivity is impacted greatly every day due to the poor maximum upload speed available (they collaborate on large documents and media files).

    Can you see a path to decent upload speed on reliable connections that doesn't force people to work in metro anywhere in the coalition's announced policy? I can't.
    neil_mc
  • A semi-flip this time Syd, LOL...

    CW - 24/8. "The plan for an underground fibre optic network to deliver high-speed broadband to Australians may be up in the air, but a Telstra tech boss says bigger is better"...

    "In Brisbane on Tuesday, Telstra's non-executive director, and the company's technical guru, Steve Vamos, who dodged many questions about the NBN, said it is best to prepare for the future".

    "As a citizen, as an Australian, clearly having great infrastructure and communications is a good thing for our society and our country and we should all support that," he told the audience at a QUT business leaders' forum"...

    Full story here...

    http://www.computerworld.com.au/article/358102/aussies_need_internet_capacity_telstra/?fp=4&fpid=5

    As usual Telstra (like you Syd) are shutting the gate, after the horse has (well may have) bolted...!
    RS-ef540
  • And advocate... where's your evidence to prove it won't?

    Love the way the naysayers always want absolute proof, but are unable to given even minimal evidence to back anything they say...

    Well, we are waiting...!
    RS-ef540
  • I wasn't making the point that it won't, only asking for the overseas evidence of a FTTH rollout into regional areas where it has.
    advocate-d95d7
  • And vice versa. So here's an intersting read from those who claim to know -

    http://www.computerworld.com.au/article/351736/broadband_no_regrets_investment_world_bank/

    (A largish snippet from within. CW - 30/6/10) "Although some observers have recently suggested a cost-benefit analysis of the NBN could be completed in three days given access to the assumptions used in the NBN Implementation Study, these statements appear to only consider the direct returns possible and not the wider socio-economic picture.

    In fact, most observers note there is a need for much more detailed empirical evidence and research into higher-speed broadband networks like that being promised in Australia. That is unlikely to come quickly, despite the efforts of organisations such as the Melbourne University-based Institute for a Broadband Enabled Society (IBES), investigating both the economic and social benefits of faster broadband.

    So while caution must always be taken when drawing conclusions on the existing body of research, it is noteworthy that the consensus view of organisations such as the World Bank and the Organisation for Economic Development (OECD) - two of the world’s most reputable economically-focussed intergovernmental bodies - is that faster broadband and specifically fibre optic networks are a very good thing for any economy.

    For instance, one recent World Bank study of 120 countries found that for “every 10-percentage-point increase in penetrations of broadband services, there is an increase in economic growth of 1.3 percentage points”.

    Other research by McKinsey & Company similarly concluded a 10 per cent increase in broadband household penetration produces a rise of 0.1 to 1.4 per cent in GDP growth.
    Booz & Company meanwhile suggested countries that have higher broadband penetration rates have achieved up to two per cent higher GDP growth than those with lower penetration rates.

    In Australia, a 2002 report commissioned by the then Australia’s National Office for the Information Economy (now the Australian Government Information Management Office or AGIMO) by authors Allen Consulting Group, estimated broadband would add 0.6 per cent to Australia’s gross domestic product (GDP) growth rate each year through 2005.
    In a second World Bank report, Broadband Infrastructure Investment in Stimulus Packages: Relevance for Developing Countries (PDF), author, Christine Zhen-Wei Qiang, concluded that “policy makers can wait for serious bottlenecks and areas of insufficient investment to appear before investing, or choose to invest as a way to attract economic activity”.

    “In the case of broadband network, the significant time lag between identifying a bottleneck and building a network can forego large economic gains, given its positive spillover and network effects,” she wrote.

    “Therefore, timely public spending in broadband infrastructure can realize immediate network effects and bring forward long-term aggregate spillover effects which improve the productivity of the entire economy.”

    Commonly it is the transport, healthcare, education, and electricity sectors that are presented as being the most easily identifiable benefactors of higher speed broadband. An Australian-focussed Access Economics report commissioned at the behest of IBM, The Economic Benefits of Intelligent Technologies also added water management to this list.
    It found that while it is hard to quantify the full economic benefits of using smart technologies in the electricity, irrigation, health and transport sectors on the back of a fibre-to-the-node (FTTN) broadband network, there were grounds to conclude that the significant benefits would have been greater had a FTTH network like the NBN been used.
    In short, it found the net present value of benefits of smart technologies on a fibre optic network to 2018 would be between $35 billion and $80 billion.
    RS-ef540
  • And who exactly is going to invest in this "killer app" that cannot run on the present network? And if they did, how does it become a "killer app" when no-one can use it?

    I guess we should wait til we get rolling blackouts until building new power stations. And we should wait til we start running out of water until we build new dams. Oh, wait.... actually that is the way we do things.
    xBeanie
  • What nothing to say "for once" advocate...?

    How about, thanks RS, you have healed my blindness, LOL!
    RS-ef540