Few were surprised that the NBN Strategic Review strongly favoured a shift away from fibre-to-the-premise (FTTP) technology and a massive reliance on existing hybrid fibre-cable (HFC) networks. However, while evaluating the Strategic Review it is instructive to consider just how far the government's spin machines have twisted language and fact gone to paint its policy in a superior light.
Consider the repeated use of the phrase 'super-fast HFC', which appears several times in the document.
"Super-fast" is a word loaded with both subjective judgment and the implication that the contention is somehow supported by fact. It's the kind of weasel word that you'd expect to be immediately seized upon and parroted by the usual assortment of right-leaning radio talk-show hosts, who know nothing about the NBN but aren't prepared to let that fact get in the way of a good opportunity to score one for the team.
Anyone who has tried to use an HFC Internet service during dinner-time and weekend peak times will know that calling it 'super' is optimistic – and that even the word 'fast' is often just incorrect. HFC doesn't even meet the Coalition's promise of delivering 25Mbps to every home in Australia: I don't know about you, but my Speedtest.net runs consistently show a maximum of around 18Mbps downloads over HFC and molasses-speed uploads of around 0.4Mbps.
Telstra and Optus know this, which is why neither one sells their cable services with minimum speed guarantees. NBN Co, however, has been more than happy to gloss over the limitations of the services because it would be inconvenient not to. Even though NBN Co knows it can't meet the Coalition's speed objectives, the Strategic Review goes to great lengths to imply that HFC is somehow equivalent to the fibre that is currently being rolled out.
The nomenclature 'superfast' appears to have been suborned from IDATE, a French thinktank that tracks the global FTTX marketplace and whose IDATE FTTX Watch Service 2013 is cited in the Strategic Review document to support the government's well-worn bon mot that FttP is a technology well past its prime and HFC is a much better option.
Even though NBN Co knows it can't meet the Coalition's speed objectives, the Strategic Review goes to great lengths to imply that HFC is somehow equivalent to the fibre that is currently being rolled out.
It's right there on page 76: "While FTTN has generally overtaken FTTP in recent years, both are losing ground relative to super-fast HFC networks, which have grown rapidly to take a 33 percent share of superfast broadband premises passed."
The thing is: this is bunkum, as a reading of the actual IDATE FTTx Watch 2013 document makes very clear (I'll ignore for now the fact that the Strategic Review opted not to mention that IDATE recognises a higher tier of broadband, 'ultra-fast', to which FTTP and VDSL belong). Contrary to what the Strategic Review wants you to believe, IDATE's conclusion is that the world loves FTTH/B technologies.
Turnbull has always encouraged NBN commentators to look overseas for guidance on the best technology choices, but if you look past his Anglo-centric worldview IDATE offers a much different view of things.
For example, IDATE offers a complete rebuttal of the Strategic Review's assertions about FTTP/H: in a recent market update the firm notes that "FTTH/B remains the leading superfast broadband solution worldwide, way ahead of FTTLA and VDSL".
FTTLA (Fibre to the Last Amplifier), is analyst-speak for HFC, and IDATE notes that it is a leading technology in Western Europe and North America. However, that's not because carriers are rolling out new HFC; it's because they have already run coaxial cable to most premises to deliver cable TV – an infrastructure monopoly that has made them, in IDATE's words, "uncontested leaders in the American high-speed broadband market".
The reasons for that have been well-discussed and date back to the 1970s, when cable was identified as the technology of the future and cable TV became a standard fixture in American homes; even then the telcos knew that existing copper phone services simply weren't adequate for the future.
These days, telcos around the world are dealing with the same recognition, except that this time they're not considering mass cable rollouts. IDATE notes that "several top telcos are still grappling with the choice between an FTTH/B or VDSL rollout, especially in Europe" and calls it "encouraging" that many telcos are pursuing FTTH/B investments "at a time when the EU's telcos are seeing their margins shrink."
IDATE also says that FTTH/B is "clearly the technology of choice in APAC" – which refutes the Strategic Review's contention that FTTN has overtaken FTTP, or that either one is "losing ground" to HFC networks.
The figures in the IDATE white paper – the same one quoted in the Strategic Review – support this contention: there were some 57.9m FTTH connections in the Asia-Pacific region as of December 2011, it tells us, compared with just 738,000 FTTLA services and 510,000 VDSL services. In Eastern and Central Europe, FTTH outflanks FTTLA, 6.96m to 1.04m.
IDATE says that FTTH/B is "clearly the technology of choice in APAC" – which refutes the Strategic Review's contention that FTTN has overtaken FTTP, or that either one is "losing ground" to HFC networks.
IDATE's figures on homes passed also reveals the magnitude of the disparity: some 78.4m homes are passed by cable in North America, while just 24.6m have access to FTTH/B. The Strategic Review will call this a clear victory for cable, but the reality is that most of that FTTH/B will have been rolled out recently and the numbers are only going to grow.
In developing areas where there is a choice between topographies, FTTH/B is the hands-down winner every time. Indeed, IDATE notes that the technology is "firmly entrenched in South East Asia", and that second-place China's heavy investment in FTTH/B is seeing "very strong growth in fibre optic deployment" – which could soon see it passing Japan to become the world's top FTTH/B market.
Latin America – which IDATE notes is "still very concerned about the availability of high-speed broadband for all, which remains one of the major objectives of most of the South American governments" – is jumping on the FTTH/B bandwagon at breakneck pace: compare 350,000 FTTH/B premises (on 4.2m homes passed) with just 20,000 FTTLA homes.
Mexico alone has 1.41m homes passed via FTTH/B on the back of two "massive deployments" begun in 2010 by operators Axtel and TotalPlay; by 2015, TotalPlay is expecting to have 8m FTTH/B homes passed.
In Chile, IDATE tells us, Telfonica has invested $US2.5 billion to deliver FTTH to 700,000 households in a four-year rollout that was scheduled to complete this year.
In the Middle East, IDATE tells us, "VDSL is not the preferred architecture" but a heavy investment within the United Arab Emirates has seen 502,000 FTTH subscribers on 1m homes passed. Qatar created its own NBN Co to roll out FTTH to 95% of homes and 100% of businesses by 2015.
Forgive me, but those stories don't convince me that FTTP is a technology that is "losing ground to super-fast HFC networks", as the Strategic Review puts it.
Or, as IDATE actually puts it: "FTTH/B remains the primary architecture deployed in the region and tends to displace high speed DSL or cable modem access."
So, that's the reality of IDATE's market assessment – and it's a long way from the Strategic Review's assertion that FTTP is "losing ground" and, by extension, somehow unworthy of investing in.
This is just one example of the need for caution when interpreting any guidance from the current government: when read outside of the reality distortion field where the Coalition's NBN policy lives, they are a ringing endorsement of FTTH/B topographies. It's just another example of how the Coalition's spin machine is working overtime to lend legitimacy to justify a pre-ordained conclusion – no matter what its implications.