FttDP becoming better option than FttN, but premature for entire NBN: Morrow

For a couple of hundred thousand homes in the NBN rollout, FttDP is the faster and cheaper option, but more work has to be done before it completely overtakes fibre to the node as NBN's preferred technology.
Written by Chris Duckett, Contributor

It has been a year since the board of the company responsible for rolling out the National Broadband Network (NBN) across Australia was made aware that fibre to the distribution point (FttDP) was closing in on becoming the most cost-effective option for NBN to deploy, but NBN CEO Bill Morrow has said the technology is not quite ready yet.

The difference between the cost of using FttDP and fibre to the node (FttN) now sits at around the AU$400 mark, Morrow told the Senate Select Committee on the National Broadband Network on Tuesday.

"That has opened so many more opportunities; we see a couple of hundred thousand homes that would otherwise be getting FttN or fixed wireless that this now has passed over and broken over into the faster, cheaper driver that we have," he told the committee.

"That cost, because of that cost difference, still has yet to be cheaper than FttN ... is yet to reach that point to be quicker and cheaper.

"Therefore, we are steady-state on the technology mix, this is one that is increasing in terms of the volume."

Morrow said he could see the NBN board, Coalition government, and Labor opposition all backing FttDP as the costs continue to fall in the future.

"We want it," he said. "If those prices can continue to come down, and [we] can continue to find ways to shave off more weeks, more months of that construction build, then we will move into and use this technology over that of FttN."

Earlier this month, a leaked document showed that NBN has been working with smaller kit, dubbed "skinny fibre", that is cheaper and removes the need for the company to deploy fibre distribution hub cabinets.

"Even the results of the skinny fibre, it's not good enough," Morrow said.

"I think the government would be very supportive of going down that path; it's just not quite there, but we've made a major step forward with this trial."

NBN CFO Stephen Rue said the company had looked at the total cost of moving to FttDP, which he said included capital and operating expenditure as well as revenue delayed due to extended rollout time, but said the technology would bump up peak funding requirements and result in the company missing its 2020 targets.

"When you take all those into account, unfortunately at this point in time, it is still more expensive to do full-scale FttDP ... however, we would be very enthusiastic in using DP technology when it fits into the statement of expectations that we abide by," Rue said.

In his opening statement, Morrow defended complaints over the company's FttN network, and again said the blame does not lie with the technology itself.

Responding to complaints raised in February, Morrow said the company had looked into the complaints, and found that the blame for issues lay elsewhere.

"We went through every complaint with the staff in these offices to check progress and what the root cause was," Morrow said. "None were directly related to the FttN technology itself or the copper circuit. The majority related to installation issues, the type of modem end users were sent, the timing of existing services being switched over, and the understandable frustration of missed appointments.

"There were also a number of speed complaints, particularly speeds dropping during peak times. This is not related to the technology; it is exactly the same on FttP, and is mostly a function of the manner in which a few of the RSPs have dimensioned their capacity."

Morrow touted that the average speed on FttN connections sits at 83Mbps down and 36Mbps up. However, in the morning, NBN said that those numbers also included fibre-to-the-basement (FttB) users.

In the afternoon, NBN revealed the average speed on its FttN connections is 76Mbps down and 34Mbps up, and for FttB customers the average speeds are 102Mbps down and 43Mbps up.

NBN has in the past refused to break down what percentage of Australians could expect FttN, FttB, or FttDP.

"To disaggregate these would reveal NBN's strategic business direction to potential infrastructure competitors, and are therefore commercial in confidence," the company said in February.

Of its FttN customers, which may include FttB, NBN said 88 percent of them are on plans with speeds of 25Mbps or less, with 67 percent on 25Mbps plans, and 21 percent on 12Mbps.

"People don't feel that they either need to pay for, or need, more than a 25Mbps service, today," Morrow said.

"And what's the trajectory going forward into the future? We have an upgrade path ... hopefully we can get it to the point where the company pays for it itself, rather than requiring anymore debt or investment by the tax payer."

The company revealed late in the day that it had undertaken approximately AU$1 million of copper remediation so far in the rollout.

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