Election rant 1: wireless greed

Election rant 1: wireless greed

Summary: The Liberals say their wireless-based NBN is cheaper and faster to build than Labor's fibre. What they do not say is that their policy would nationalise our 4G wireless spectrum, derail private investment in 4G networks, and force rural Australians to suffer the status quo until at least 2014.

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TOPICS: Government AU
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The Coalition's broadband policy relies heavily on the use of wireless technologies to service regional areas with 12Mbps broadband. However, the party's chronic confusion over various wireless standards, and a reliance on currently unavailable radio-frequency spectrum, means that those regional areas won't see any new broadband until 2014 at the earliest and that an Abbott government could kill off the entire private-sector market for 4G wireless in the process.

Tony Smith

Smith nervously shifting in his seat(Credit: YouTube)

Politicians and onlookers have regularly confused the differences between Wi-Fi, 3G broadband, WiMax and Long Term Evolution (LTE) technologies — all of which are wireless but not all of which have the same performance characteristics or usage models. Malcolm Turnbull, for one, committed this egregious error when he held up his iPad at the weekend internet filter forum, and said the NBN was outdated because all people are interested in these days is mobility.

That may be true, but there hasn't been an iPad, iPhone or smartphone yet invented that can connect to the WiMax or LTE networks the Liberals are relying upon. The party's formal broadband policy document makes the same mistake, citing the rapid takeup of wireless broadband in recent years as proof that they are a substitute for fibre-optic services.

Those wireless broadband services, of course, run on existing 3G mobile networks, which are already struggling to cope with the burden placed on them by millions of smartphones and iPads. High latency and suboptimal speed make those networks fine as complementary internet services, but they're far from ideal as the primary internet services into fixed properties.

Furthermore, they exist in a market space that is totally controlled by Telstra, Optus, and VHA; unless the Coalition is planning to subsidise the expansion of existing 3G wireless networks and use them as the basis of their expansion, they should stop talking about today's wireless broadband like it has anything to do with their future vision.

Better wireless, and its problems

Another practical obstacle is latency: as anybody who has ever actually used wireless broadband knows, latency over wireless is much higher than over landline connections. You might be able to get used to it on an individual basis, but when you start adding more users in a single premises, or try to do anything more complex than basic web surfing, the delays quickly accumulate.

Today's web pages, and tomorrow's online applications, require a growing number of back-and-forth web queries, and each one of those queries introduces its own latency when run over wireless. Add them up, and you've got one long series of delays. Put a small business on your typical wireless connection in the morning, and they'll be pulling their hair out in frustration by lunchtime. Throw in a networked server trying to do a remote backup at the same time, and they'll put up the CLOSED sign and go home.

Smith's [plan to] 'quarantine' the 'digital dividend' spectrum proved... the Coalition's policy is one of total inaction for the next four years.... Rural and regional residents will have to make do with whatever broadband they have now until at least 2014.

True, next-generation LTE technologies have a flatter architecture that reduces overall latency to something that only falls feet, rather than miles, short of that on a fibre network. But LTE has its own problem: namely, that it's not going to exist in Australia until 2014, when the analog TV switch-off releases "digital dividend" wireless spectrum for other uses.

The same problem plagues WiMax, the 12Mbps alternative about which Smith is actually speaking (although it's not clear whether he knows that); There simply is not enough free spectrum out there to build a national network footprint of the type the Coalition is depending upon.

Tony Smith showed his total ignorance of these issues during this week's debate, getting flustered when Stephen Conroy rightly asked him over which radiofrequency spectrum the Coalition's big wireless network was going to run. Smith's answer, a desperate throwaway that he would "quarantine" the "digital dividend" spectrum, proved only that the Coalition's policy is one of total inaction for the next four years.

Yes, four years. Under a Coalition plan, the first wireless broadband services will be hooked up until after the next election. An Abbott government would be able to do exactly nothing — zero, zip, zilch — to roll out wireless broadband in its first term in government. Rural and regional residents will have to make do with whatever broadband they have until at least 2014; in the meantime, the Coalition will focus its spending on patching up broadband blackspots where ADSL2+ services are currently substandard. That's hardly the kind of policy to merit a ringing endorsement, and you'd think the Nationals would be spitting chips over it.

Even when the wireless services become possible, they will come at a very significant cost: competition itself. After all, Smith confirmed that the Coalition's nationwide wireless broadband policy is based on the idea that the government will take over what would have to be the entire 126MHz of digital dividend spectrum: much less, and there's no way they could even contemplate servicing an entire town.

The thing is: the mobile industry is counting on this spectrum being auctioned off so they can build the next generation of LTE mobile services. If the government moves in and "quarantines" this spectrum for specific uses, carriers will lose a key competitive weapon and the Liberals will have introduced a serious disincentive to wireless competition.

Losses from this action — direct, from the loss of billions in licensing revenues, and indirect, from the opportunity costs of stifling proper private-sector competition in the 4G wireless space — would be absolutely massive. The policy is like buying up houses through a suburb to build a highway, then charging the residents with picking up rubbish off the nature strip. Most of them will simply move elsewhere.

The devil in the details

Then, there are the practical issues: as a shared spectrum topology, wireless is a shared resource and trying to service an entire town using a finite amount of spectrum is always going to present its own issues. You may be able to alleviate things by adding more towers, but both Abbott and Smith were absolutely devoid of ideas as to just how many towers they might need to set up to fulfil their dream.

The government will take over what would have to be the entire 126MHz of digital dividend spectrum ... but the mobile industry is counting on this spectrum being auctioned off so they can build the next generation of LTE mobile services.... Carriers will lose a key competitive weapon and the Liberals will have introduced a serious disincentive to wireless competition.

The answer, of course, is: quite a few. And these towers don't come cheap, nor does the backhaul to connect them. The Coalition's inability to explain details of its towers strategy suggest that aspect of the policy has simply not been considered. Abbott and Smith expect the market to take their word for it that the roll-out will still be cheaper than a fibre-optic NBN, but have no numbers to back their arguments.

Tony Smith knows this: he seemed embarrassed, and shifted in his seat several times when Stephen Conroy raised perfectly reasonable questions about the wireless plan. Despite his entreaties that the Coalition will take "a proactive approach to spectrum", Smith conceded a significant shortcoming of the Coalition's broadband policy: that it's putting all its hopes for broadband equality on the supposed promise of a relatively low-speed technology that won't be available for years.

That is, however, a distinction that seems to be lost on many others, who seem perfectly happy to shout from the rooftops that the fixed NBN is a waste of money because all anybody wants these days is mobility. This is an egregious lack of understanding around wireless and it comes not only from politicians but from all over the place — in online forums, public debates, chats I've had with friends and relatives and people on the streets.

Sure, mobility is important. But it is rightly a complement to, and not a replacement for, fixed internet services: as long as we live in houses and work in offices, we're going to need fixed broadband. If you're one of the people that thinks the NBN should be scrapped to focus on mobility, just take a moment to think about how your school, or your workplace, or your local council, is connected to the internet. If you think it's over wireless, you're wrong. And if you think it could be, unfortunately, you're wrong again.

So is the Coalition. Its policy says we get good enough broadband over copper; common sense and everyday experience says this is utter rubbish. The Coalition wants to stop the country's roll-out of future-proof fibre to put regional broadband on hold until four years from now, when it will start trying to roll out a nationwide footprint based on a technology that has never been used at the scale the party is talking about.

Common sense says this is a risky bet with massive opportunity costs; by 2014, after all, the fibre NBN will be half built and will have connected most regional areas if NBN Co pursues an outside-in build. Risk-averse observers need to consider all the implications of the Coalition's wireless policy before buying into it and consider that, no matter how good mobility is, it will always only be a complement to future-proof, effective broadband services that can connect all of Australia without interfering in and destroying our highly capitalised, massively successful wireless industry.

This is the first in a series of seven election rants, one for each deadly sin, aired each business day until the big day.

Topic: Government AU

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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Talkback

76 comments
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  • Woah. Agree with it all - this is without doubt the best article written so far relating to the NBN.

    Thanks!
    Duideka-0e151
  • what a great rant... I agree 100% with what you have written... cant wait to read the next one haha

    anyone with 1/2 a clue about fixed line vs wireless knows that the Libs plan is off in "fairly land" and is just not going to happen due to the factors you outlined above

    I have no major problem with the NBN (even though I would only be in the wireless footprint area) so long as FTTH to everywhere that has copper is the end game at some stage (not to distant future after the 93% roll out is finished) and the only way this will occur is if it is not sold off after the roll out occurs... I say sell it off once the current copper phone lines have ALL been replaced by fibre as an extension beyond the 93% sure as hell wont happen after its sold (Telstra MK2 anyone...)

    I see it as a necessary infrastructure upgrade that will need to occur at some stage, and rather than doing it @ss end backwards like most things which costs more $$$ in the long run, do it once and do it right the first time... (but that's not to say I agree with it 100% as where copper currently reaches so should fibre but at least Labours vision its a start in the right direction)

    the way I see it
    Labor = something progressing in the right direction
    Liberal = the same as we have now no future planning
    1 looks to the future, and 1 does not... that simple...
    garvs
  • Great article as it explains the issues with the Coalition's policy to a high level of detail. By the time they overcome their technology issues, including a severe lack of spectrum, the speeds that their plan will produce will be obsolete. These guys have no idea what they are talking about, have no idea what benefits the NBN will provide, and they probably secretly wish that they had supported it all along. As it is, all they have left is a policy that was dreamed up just before the last election, dusted off for this one, without any thought to what is required and what will be required in the future. Whilst mobile internet usage would no doubt expand organically, if people can't get decent speed because every desktop and mobile device is trying to share the same wireless pipe, then mobile usage will go the same way as fax machines and beta videos.
    dickster-e7b60
  • Wireless does indeed create significant Latency, something all gamers, developers and on demand service providers can attest to.

    The NBN with Labor was something progressing in the right direction but for the wrong reasons.
    AzzX
  • I would just like to point out that my school connects to the internet via a direct line-of-sight wireless connection to the top of a skyscraper in the city. Not typical wireless, I concede, but wireless nonetheless.
    alistaircase
  • And the reply, from the conservative side of the fence :)

    http://www.zdnet.com.au/election-rant-1-wireless-greed-339305187.htm
    RenaiLeMay
  • Renai has sadly been not playing the devils advocate, but rather bagging the NBN and basically being Abbott's personal speedos adjuster for weeks now...(look Tony no hands)

    Rather than Renai's being the reply, it's more like David's well thought out and commonsense stories, are replies to Renai's... whatever it is Renai is trying to achieve with his new found Liberalism?

    Nice work David and ZD, you guys (& girls) have certainly improved since Suzanne took over (ouch)...
    RS-ef540
  • A very good point. You would most likely be using point-to-point directional microwave links of the type that have been used for years to bridge buildings and link university and company campuses with relatively high-speed links. However, as you point out, they're not typical wireless -- being privately owned and operated -- and would most certainly fall outside the scope of the wireless the Coalition are talking about. Unless they actually want to install millions of towers and dishes on top of every regional and rural property in Australia. In which case, I'd love to see the costings!
    braue
  • ok we get your drift your a huge labor NBN fibre to the home fanboy.
    I for one dont believe that two thousand dollars per person for the NBN is even going to be a quarter of the final cost and what do we get for it? quicker google searches and yet another telstra type company to deal with.
    walobs
  • $2000 a person is nothing. especially over 10 years - that is $200 a year then. That's not even taking into fact the 9.11+ million connections that will be migrated onto the NBN - even at $10 a pop that is $91m a month income, $1.09bn a year $10.09bn in 10 years..

    Unlike other investments, the NBN actually makes money!

    Besides, your tax is a constant - it's already paid. You are not paying for anything, your tax is just being invested in something different for a change (gasp)

    All this cash spent on centrelink, pension, health, insulation, baby bonus, maternity leave, building schools, building hospitals, emission reduction and god knows what else - if you think all of those don't add up and make $43bn look like chump change you are highly mistaken.
    Look I agree alot of those plans are good, but cash is still going to be invested in all of them even with the NBN. Question, when was the last time we invested in any significant infastructure project? or even technology project?

    I know I would rather my tax dollars go into providing something I will benefit from instead of paying for other peoples children, other peoples health, centrelink tax I don't even claim... List goes on.
    Duideka-0e151
  • You know what, I'll add to my last post some more:

    This is the 2009-2010 government budget:

    http://www.aph.gov.au/budget/2009-10/content/overview/html/overview_40.htm

    THE BELOW PRICES ARE PER YEAR:

    $110bn Social security + welfare
    $12bn community services and culture
    $51bn health
    $80bn general government services (is this the private jets?)
    $13bn industry and workforce
    $35bn education
    $20bn defense
    $13bn infastructure transport and energy.

    NBN works out to be $4.3bn/year

    In the same time the NBN will cost $43bn, welfare and social security will cost $1.10 trillion...

    So some think it's OK to **** away cash on every sector than telecomunications, but even spending 4% of our budget on building a broadband network to bring us out of the dark ages is blasphemy?
    Duideka-0e151
  • And what about Julias Gigabit connection speed with Labors NBN announced yestyerday? When I can get files to transfer around my own office network with cat 6 cabling and gigabit ethernet adapters and switches I will believe it.

    Telling people that the NBN will deliver gigabit speed is nonsense. You have better chance of winning a ticket on the first flight to Venus.....
    CFIT-265d9
  • @walobs. Ok we get your drift, you're (yes you're - as in you are) a huge Liberal, nothing to the anything fanboy.

    Please place head back in sand (better put fingers in ears first, too, just in case)... now. Thank you.
    RS-ef540
  • I have no doubt the NBN would be capable of gigabit speeds. If you can't get your network to work at gigabit speeds don't automatically assume that no-one else can, the technology you use in your office is completely different from that used by telecommunication providers (Copper vs. Fibre Optic to start with).
    m00nh34d
  • Spot on! i dont know why media is making a big deal out of "suddenly it now gigabit" this was always the advantage of going fiber, it's upgradeable! All they have done is figured that they may as well tell people this. :-)
    i couldnt agree with this post more.
    aforce
  • So what you guys are essentially alluding to is...

    CFIT should say greetings (or even g'day) to the Venusians for us...LOL!
    RS-ef540
  • $80bn general government services = ACTA/ACMA/Surveillance/"Free" Trade/Federal data centres consolidations/Government reach and bloat. Just saying.
    envirotex
  • I't not hard to setup wireless in the country I've seen great directional antennas made from chip cans we need to go cheap cause were broke!

    The much bigger issue here is that the copper network is very old Telstra spends mega bucks fixing the current system. It needs upgrading and replacement of the copper with fiber is the logical step. The issue is the legislative guts to mandate the telcos to only install from now fiber as defined by the nbn for voice/data so in a blackout you still have a phone opps that's why we have a mobile. And that the telcos if they want the customers have to replace the copper with fiber over a legislated period. The NBN is need for the country areas as the big too like all companies are only after profit maximisation and theres too many costs there. Look at all the microwave links in the country still being used not fibre to regional country cities. Force the telcos to reinvest to keep our patronage or then threaten with an NBN something like the hospitals.
    bunny_au
  • ['I't not hard to setup wireless in the country I've seen great directional antennas made from chip cans we need to go cheap cause were broke!']

    Haha no we are not... The government wouldnt be spending over a trillion per 10 years on welfare if we were not.. Our budget is $330bn per year....
    Duideka-0e151
  • yes, so would I and I suspect it would be significantly cheaper than rolling out FTTN to EVERY house in Australia.

    What is wrong with using an array of fiber connected towers across ALL of Australia that provide directional microwave links to individual properties.

    It may not be the fastest, but it should certainly be cheaper and would be fast, and it would allow scope for direct private fiber channels if you really need more.
    So we get a high level base across ALL of Australia (leaving no one behind) and it would have a user pays upgrade path.
    mweaver-a6557