Direct fibre could make NBN cheaper: Hackett

Direct fibre could make NBN cheaper: Hackett

Summary: Removing the so-called NBN connection boxes are one of the many ways Internode founder Simon Hackett believes the NBN could be rolled out cheaper.


NBN Co could reduce the cost of rolling out the National Broadband Network (NBN) in Australia by doing away with the six-port NBN connection boxes and leaving it to the retail service providers, according to Internode founder Simon Hackett.

Inside each premises that opts to connect to the fibre network, NBN Co will install a six-port unit that was previously known as a network termination device or unit (NTU) but NBN Co now calls a NBN Connection Box, that retail service providers then plug in their own equipment into one of the six ports to provide their own services over the NBN.

Speaking at the Communications Day Wholesale and Datacentre conference in Sydney today (slides and audio here), Hackett said that although he doesn't have access to NBN Co's accounting books, he believes the network construction could happen quicker and cheaper if NBN Co did away with the connection boxes, and just provided the fibre connection into the house.

He said much of connection box, and the associated battery backup unit, is there to continue to provide voice services for a what will be an increasingly smaller group of people in the community who have fixed line voice services provided that way, with many either switching to mobile or Voice over IP.

He said that of the six ports on the box, the vast majority of customers will likely only ever use one.

"The rest of it is a waste. It's a waste in a couple of ways," he said. "The NTUs that Alcatel-Lucent have delivered have got enormous amounts of custom software engineering built into them at NBN Co's expense in order to make that box look like six separate boxes.

"That virtualisation, running six virtual networks inside the box, is actually pushing what the Alcatel-Lucent box is capable of and it has caused large delays in getting feature sets out."

He said that the result was that the NBN software model would look different to GPON networks in the rest of the world and had the potential to lock in NBN Co to the one vendor, Alcatel-Lucent, which has picked up some of the biggest vendor contracts on the NBN. He said it would be significantly cheaper for NBN Co to just provide the single fibre port and let the retail service provider (RSP) handle the rest.

"Most RSPs deliver a box to their customer to deliver the value-added services that they want to deliver," he said.

"You can buy those routers today with the GPON port straight out of the box. So you can take the fibre out of the wall from NBN Co. Now you've not only taken the entire cost of those boxes away from NBN Co, you've recreated a genuinely competitive market of what the RSP does right at the edge of the network."

In addition to cutting costs on each connection box, Hackett said this would speed up the build times for subcontractors rolling out the NBN into each premises because it would remove the need to sort out electricity for the unit in addition to pulling the fibre through into the premises.

"I put it to you that a lot of the reason why this stress is happening in the deployment of the network, why subcontractors are starting to get upset about the process getting more and more squeezed is they are deploying a design which in itself needs to be reviewed," he said.

The construction of the network has been under pressure in Ballarat and Hobart this week as subcontractors ceased working on the construction of parts the network in those locations over pay disputes with Transfield and VisionStream.

The other benefit that removing the connection boxes could have, Hackett said was that with a standard GPON arrangement it could reintroduce competition for the network supplier for technology in the core of the NBN.

"You could have competitive tension alongside Alcatel-Lucent and Ericsson. Dare I say it some suppliers from countries the current government doesn't like very much. They could charge a hugely lower amount of money to deploy the inner works just as well," he said.

"Some of those suppliers would fall over themselves to charge Malcolm Turnbull's price for Stephen Conroy's network today."

He said he would also like to see the 121 point of interconnect model mandated by the Australian Competition and Consumer Commission (ACCC) scaled back to 14 points of interconnect as the government had originally wanted, and he again reiterated his desire for NBN Co to remove the contentious connectivity virtual circuit charge on bandwidth

NBN Co is already looking at ways to utilise the six-port connection box, iTNews today reported that the organisation is looking to reserve one port on each box in every Australian premises in the fibre footprint exclusively for the delivery of government services.


Topic: NBN


Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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  • Out of touch with users

    This is what some of us have been saying since day one. The NBN as it is being delivered, is over-engineered. NBNCo should be providing one fibre to one gigabit Ethernet port that would plug into a router. Then if anyone wanted more, that would be between them and their RSP. If NBNCo was providing some sort of termination unit it would make far more sense for it to be a router, not some sort of weird custom-designed box. Its just one of the examples that shows NBNCo listening to the techos with wish lists of everything that anyone could want, rather than listening to the people who'll use the network about what they want.
    Gordon D
    • Since Conroy's departure

      surprising the number of issues discussed freely without his abuse and retribution.

      Another day, another issue with the NBN.

      The basic designs needs to be reviewed, missing their targets can no longer be hidden. Minister and CEO now departed, lets have an election to work out the model FTTN or FTTH and revist everything with proper audited accounts.

      Clearly this project is a disaster, a reset required.
      Richard Flude
      • Is this the most offensive govt ever

        Clearly the most incompetent.

        Today's SMH (via delimiter):
        The Labor Party advertising agency that offered "exclusive" interviews with Kevin Rudd in exchange for free pro-Labor advertising and editorial on youth websites has been sacked - on the orders of the Prime Minister.
        The deal, which also encouraged journalists to produce "entertaining content on the theme of the inadequacy of the Liberal NBN plan", was rejected on ethical grounds by Fairfax Media's popular culture website, TheVine. Two other youth-focused websites - Vice and Pedestrian.TV - also received the same brief."

        The contempt of voters and taxpayers money is absolutely revolting!
        Richard Flude
        • Don't forget

          It was an account executive, not part of the ad agencies brief
          Abel Adamski
          • You know how these deals are done

            Offering access to senior Labor figures isn't done without authorisation. Save your spin.
            Richard Flude
          • Ah

            I see. It is naive to think that senior Labor did not back that agency's tactics. But it is not naive to suggest that the Coalition does not engage in similar tactics. Please, teach me more about naivete. Of course one knows that generally the purpose of hiring advertising agencies is to ensure the public has full access to the politician in question and receive perfect information instead of spin. That is why the Coalition will never resort to advertising, and why Abbott is coming to my home tonight for a private one on one.
        • Good to see

          That you you are seeking out a broader spread of information to ascertain the actual facts in the fog of spin
          Abel Adamski
          • Strange comment

            Quoted both sources before; to yet more howls of protest of bias.
            Richard Flude
          • Perhaps

            people think you're biased since you are posting entirely off-topic rants about the Labor party and making such ridiculous statements as "the most offensive and/or incompetent govt ever" (I think Stalin, Putin, and a few others would be stronger contenders). I do find it strange however that you consider it contemptuous of voters (and apparently more so than throwing critics into jail) for the Labor party to get rid of that advertising agency, so you obviously approve of the agency's methods. Now, getting back remotely on topic, let us see your incisive analysis of Abbott's alternative of spending a fortune on an infrastructure that will become outdated much more quickly, and would leave us behind much of Asia and Europe.
        • There's incompetent and incompetent

          “clearly to most incompetent”?

          Where does Vietnam and Iraq rank resulting in rather more unnecessary Australian deaths then pink batts.
      • wut wut in da but

        this is what happens when you go to construction without testing and feasibility checking...bzzt..who in the world does this except for maybe in 3rd world countryies LulZ.
    • Not the users that are out of touch

      Thats fine Gordon if you believe that a user should only ever have a single RSP. One of the fundamental principles of the NBN was that a customer should be able to access multiple services from different providers - and this 'optimisation' would kill that ability, forcing a user to get every service from the one provider, and if they wanted to switch one service to a different provider, they'd have to switch them all simultaneously.
      Sure it might be marginally cheaper - and an anticompetitive barrier to churn.
  • Single Port is all that's needed.

    A single gigabit port is all that's needed to plug direct into either an ISP supplied or purchased gigabit router, the voice phone plugged into the router. Voice services to homes without "broadband internet" could be supplied with a phone with a built in router much like DECT wireless phones.
    Kevin Cobley
    • I don't like the idea

      I live just 13 minutes from the centre of the largest WA metropolitan city outside Perth but I get virtually no mobile phone coverage at home. Power outages are frequent where I live (the last one lasted 5 days) and I also live in a fire prone area. My Telstra fixed line phone has saved my bacon several times because it is the most reliable service I have. Your idea of a fibre only service without a battery powered phone service sucks quite frankly.
      • Power outages

        Given its regularity, perhaps the power outage problem will be fixed during the life of the NBN.
      • Mike's power problem

        Mike, your unreliable electricity supply problem affects more than just your phone.

        If the utility cannot be made to fix the problem, you may need to consider a self-sufficient backup electricity system.

        I can also see a robust third party market happening, to supply solar battery backup units as a UPS for the 240V supply to the NBN fibre box and cordless phone base station. Provided the fibre remains lit, which will normally be the case, such a household or business would retain phone service during even a prolonged blackout.
        • Re Power

          I have been keeping a bit of an eye on that.
          An interesting aspect of home Solar Installs is that a large number of retirees are installing, not so much for the rebates but more for reducing their electricity bill especially as prices rise and smart meters charge higher rates during peak hours when solar is at max - i.e substitution meaning storage and inverters.
          Easy to provide no break power.
          (those FTTN cabinet batteries would be ideal).

          Battery storage.

          Abel Adamski
  • The 121 interconnect is mandated by ACCC!

    No chance of getting this requirement softened it would require changes to legislation altering the intervention form of the ACCC. No party would support such legislation, also regional ISP's should be allowed to participate in the NBN program not just the national giant Telco's.
    Don't think altering this would lower costs significantly for the end user or the NBN.
    Kevin Cobley
    • Exactly.

      Most of what Hackett said here makes sense, but he really does need to get over the POI thing.

      It's no longer practical to change.

      The 14 POI model was deeply flawed anyway. Backhaul is more expensive in regional areas, sure, but we only get one shot at this. The solution is not to make the NBN irreversibly haul everyone's traffic back to a capital city that might be 2000 or 3000km away. That's ridiculous and not thinking about the future at all.
      • Engineers should redesign the POI count, not the ACCC

        The ACCC cave-in to four longhaul fibre companies in November 2010 was bad news for competition from every other RSP, and bad news for customers.

        The 14-POI design, with two redundant POIs in each capital city, was expected to be optimised further with a few regional POIs, but this would be done for engineering reasons, not political ones, and certainly not due to blackmail by Telstra et al.

        The terms of the CBA proposed by Malcolm Turnbull should reassess the restrictive trade implications of the 121-POI model, and allow engineers to design the network in the interests of retail competitor access and customer benefit.