The need for speed

No matter who wins the election on September 7, Australia's telecommunications networks will receive a long-overdue multibillion-dollar facelift funded by the federal government.

Australia has never topped global broadband rankings for speed and value. The OCED ranks us 25th in the world for fibre connections in its latest communications outlook report and Australia still has more dial-up internet connections than any other country in the OECD, apart from New Zealand.

While policy wonks and politicians claim broadband remains one area where the major parties offer voters a real choice, there are more similarities than many realise.There are differences - real time Location system, construction efforts, and using the Telstra copper network - but not as many as Labor politicians have been claiming during this campaign.

For example, Communications Minister Anthony Albanese claims towns will be ''divided by broadband'' and that ''planned [broadband] construction … will be cancelled''. While NBN Co under a Coalition government might change fibre-to-the-home installations to fibre-to-the-node in years to come, the Coalition no longer plans to halt construction and sell off the network like it did in 2010.

Earlier this year the Liberal Party adopted the very un-Liberal policy of publicly funding a government-managed and operated broadband network. This is because it can't unscramble Labor's omelet, and partly because it recognised votes were lost in 2010 when its broadband policy seemed to lack vision and did nothing to improve broadband speeds.
''It certainly was one of the things that affected us, definitely,'' says one Coalition frontbencher. ''Tony's [Abbott's] 7.30 Report interview was pretty bad. And the press conference with Andrew Robb and [former opposition communications spokesman] Tony Smith where they unveiled our policy was a debacle.''

The new broadband policy ''makes the best of a bad situation'' and the ''vast majority'' of Coalition members support it, he adds.The opposition's current communications spokesman, Malcolm Turnbull, convinced Tony Abbott the party needed a better policy. It turns out that policy will cost $30 billion, but at least the party can argue against accusations of being troglodytes.

Turnbull says his plan can be delivered sooner and at less cost with ''everyone in the nation'' getting access to minimum speed of 25 megabits per second [Mbps] by 2016 and 100 Mbps to the majority by 2020.

Turnbull says he still believes the best model is private sector upgrades done with ''judicious levels of government subsidy to make sure uncommercial areas are dealt with''. However, he has to live with the facts on the ground and work out how to complete the network that has been started.

''The gap between the parties' [policies] would be regarded outside Australia as being relatively modest … what I have got to do … is completely depoliticise this thing,'' he says in an interview with Fairfax Media. ''Our job is to open all the books, rtls, lay it all out and say, 'Ladies and gentlemen, this is where we are. This is the business you own. This is the position you're in. Here are our options for sorting it out.'''

Turnbull's policy adopts Labor's plan to raise tens of billions of dollars through government bonds, which keeps the project off the budget, and spend that money building networks that are available to all service providers at the same prices. Both aim to separate Telstra so its retail operations cannot benefit from it also owning infrastructure and evenutally privatising NBN Co to recoup costs.

The Coalition's regional communications spokesman, Luke Hartsuyker, says both broadband policies are ''very very similar'' for the 7 per cent of Australia's population in regional areas that have been told to expect a fixed wireless or satellite connection.

''We will maximise the value of the assets that we inherit. We will not be junking the work that has been done on ideological grounds,'' he says.Albanese says the differences between Labor's NBN and the ''Coalition's lemon of an alternative couldn't be more stark''. He pointed to faster speeds, guaranteed upload speeds, free fibre installations and universal pricing.

''The Coalition's alternative relies on last century's copper, will be obsolete before it is finished, forces homes and businesses to pay as much as $5000 to connect directly to fibre, will result in regional Australians paying more for broadband than people living in the cities, and costs only 3 per cent less in terms of government investment than Labor's vastly superior NBN.''

There is certainty in Labor's policy that is missing in the Coalition's, partly because Turnbull wants to initiate three reviews if he becomes minister that could change his current rollout plans. Labor's NBN Co charges the same wholesale prices around the country, whereas the Coalition wants a regulated price cap that allows lower prices in viable areas. While Telstra's is settled under Labor's plan, the regulations surrounding NBN Co have stalled over concerns about cost and pricing into the future.

NBN Co has now grown to 1620 employees and spends about $1 billion a year in operating costs, including payments to Telstra. It had commitments worth $3.9 billion at the end of last financial year. The latest financial information has not been released by Albanese, even though guidelines for all government business enterprises, including Australia Post and Medibank Private, recommend corporate plans be submitted by July 31.

NBN Co has 33,000 households connected to its fibre, and 36,000 with fixed wireless or satellite connections, for a total of about 70,000. About 130,000 households have been ''passed'' by fibre, which means they can connect to the NBN, although apartment blocks remain a logistical nightmare. About 30 per cent of users are paying for the fastest speeds possible and downloading more than average households.

Fibre construction has started at 1.15 million more premises and Labor argues not all of these houses can be completed under the Coalition's plan, which expects just 2.8 million premises to be connected directly to fibre, including premises with degraded copper and 1.6 million future houses in new estates.

NBN Co announced in March it was three months behind schedule, but has not said if it expects to catch up by July 2014 when its target is to have 551,000 premises connected.Recently NBN Co has been criticised for contractors working with asbestos, claims of cost overruns and construction delays. Some of these issues are beyond NBN Co's control and not its responsibility - such as asbestos in Telstra's pits. The cost-overrun stories are based on unsourced industry figures claiming current contracts are too stingy and should be at least $5 billion more generous.

But there is genuine concern about the lack of skilled technicians available, exacerbated by government policies requiring NBN to install fibre in new housing estates. Estates are springing up around mines and regional towns, so NBN contractors are stretched across all states and working in remote places.

The lack of centralised training and registration in Australia's telecommunications industry that has led to under-skilled subcontractors working for Telstra and NBN Co and a high level of rework, according to Kevin Fothergill, training consultant at industry peak body CITT and TITAB.

''We have all the national training programs developed where competencies have been specified for all the various skill levels,'' he says. ''All the core material is in place. What is not in place is a viable telecommunications group training model and industry plan to have people trained and able to be deployed on a needs basis.''
It now appears the tenders for NBN construction work underpriced the cost of subcontractors. Most of the work has ended up in the hands of mega-companies such as Lend Lease, Downer EDI and Leightons that can afford to absorb losses or cross-subsidise from other projects.

This election, voters are being asked to choose between technology options and who they believe can better manage NBN Co, which is ultimately owned by the communications minister and the minister for finance.The obvious difference between the two policies is the choice between a direct-fibre connection into households or a fibre-boosted copper connection. Each choice comes with different construction costs and time frames. At the moment, voters can only rely on estimates produced by consultants and NBN Co, or the estimates produced by Turnbull's office.

Fibre into the home can already deliver download speeds of up to 100Mbps with upload speeds of up to 40Mbps and can be upgraded in the future. A fibre-to-the-node rollout by BT Group in the UK is advertising download speeds of up to 76Mbps and upload speeds of up to 17Mbps.

Senior research engineer at the Australian National University's College of Engineering and Computer Science, Bob Edwards, says speed is the main difference for consumers. He says there is little evidence that research labs around the world are working on applications that expect households to have speeds of 100Mbps or more.





Read the full products at http://www.ecived.com/en/.