NBN technology road map will see FttN shift to FttDP

The technology road map being relied upon by the company rolling out Australia's National Broadband Network (NBN) will see the fibre-to-the-node (FttN) rollout eventually replaced by fibre to the distribution point (FttDP), along with a number of other technology upgrades to increase speeds.

"We've got a road map that we've talked about for a number of years for the technologies themselves," said Sarah Palmer, NBN executive general manager for Product and Pricing, speaking at the CommsDay Datacentre and Wholesale Summit in Sydney on Tuesday.

"So GPON becomes 10-GPON, FttN becomes fibre to the distribution point, DOCSIS 3.1 is on the road map in order to produce 10Gbps services."

NBN kicked off a nationwide trial of FttDP in April as a solution for what NBN labelled a niche problem: Premises in more remote areas, with lead-ins of between 50 metres and 300 metres, where it is too expensive to roll out either FttN or fibre to the premises (FttP), and not remote enough to implement fixed-wireless or satellite services.

In October, NBN signalled its intent to deploy FttDP for premises that are located more than 1 kilometre from a node, and in March, NBN CEO Bill Morrow said it has been a year since the company became aware that FttDP was getting close to becoming the most cost-effective network technology to deploy, saying it costs only AU$400 more per premises than FttN.

Later in March, NBN said the FttDP network could begin being rolled out in 2017.

Despite this, Morrow in May said that even if FttDP were available to be deployed today, the company would hold back on making the product available due to additional work needed on its IT system to integrate FttDP.

Palmer also provided an update on NBN's connectivity virtual circuit (CVC) pricing structure, calling the current and much-criticised form a "first step".

"This is something we've been working with the industry on for quite a long time," Palmer said.

"Always the commitment from the NBN was as data usage grew, the price of the CVC would come down. However, there was an opaqueness about how much or when. So what the dimension-based pricing discounting does, introduced on the first of June, is complete transparency as to when and by how much that CVC pricing discount price does decrease.

"There is still significant work with the industry, and this is definitely step one of a way of looking at more in the CVC to ensure that high-quality services are delivered to end users."

NBN announced its new discounted CVC wholesale pricing structure in April, which involves a series of industry-wide tiers, rather than being calculated separately for each retail service provider (RSP).

The new pricing structure, being implemented for two years as of June 1, will be calculated as an average of CVC dimensioning per end user across all customers on the NBN, with the changes effected after feedback from RSPs.

The CVC pricing is far more paramount than the debate surrounding the broadband technologies being used to roll it out, telecommunications providers have said.

"As it stands, the CVC charging regime may be one of the biggest obstacles to the NBN delivering on what it was intended to deliver ... this is because of the Netflix effect, crudely," Optus vice president of Corporate and Regulatory Affairs David Epstein said.

"What is unfolding is an intersection of a change in customer behaviours and the product economics of the NBN."

Epstein added that levying an industry-wide charge will also stymie innovation and competition among providers.

NBN's wholesale pricing incorporates a two-part model, with the CVC charge paid in addition to the access charge levied across all speed tiers. The CVC charge reserves a consumer's bandwidth from the point of interconnect (POI), and will now see a dimension-based discount (DBD) pricing structure to encourage more dimensioning of CVC capacity -- or greater usage of data.

When asked why NBN didn't proceed with levelling charges on an RSP-by-RSP basis, Palmer in April said the model was "not workable" as yet.

Palmer on Tuesday said POI redundancy is next on the integrated road map.

"POI redundancy is obviously key. Our POIs will eventually deliver services to up to or approximately 100,000 end users or end-user premises ... and so POI redundancy becomes really key. We do have our interim POI migration, so many of you will recall our first services back in 2011 were delivered on some interim POIs based in capital cities.

"These interim POIs or datacentres will eventually be closed down, and notifications have been sent out around that. It won't happen for some 18 months or so, [but] the migration is starting to happen now. So the wholesale market in terms of backhaul etc needs to step up to be able to facilitate this migration event that's happening on the NBN today."