Should the National Broadband Network (NBN) be dumbed down? Should the “extraneous hardware and extraneous software feature sets” be removed? Some would have you believe the engineers over at NBN Co have been adding things to the NBN without rhyme or reason. What FUD!
As Simon Hackett alluded to in his piece last week, there are “pots of gold” to be saved by removing everything that he deemed unnecessary during a recent NBN-related presentation including competition, flexibility and quality of service.
Industry attacks on NBN Co are nothing new and Hackett’s remarks display yet another attempt to hobble the NBN and enshrine the industry’s ability to fleece customers while providing a third world digital network.
Before Hackett’s comments can be addressed it is important to identify what he did not say because by failing to provide his vision for a next generation network his rationale for gutting the NBN remains unknown.
A vision for a next generation network
The key criteria for a next generation national network that should have been available in 2014 includes:
1. Minimum access network speeds of 1 Gbps download and 400 Mbps upload
2. Average 100 GB per month per customer increasing tenfold over the next decade
3. Network utilisation below 70 per cent.
4. Implement Quality of Service (QoS) utilising four traffic management classes
5. Three backhaul provider connections at each Point of Interconnect
6. Access to multiple service providers simultaneously
The key criteria provide a definition that highlights the gulf between what is available today and what should have been available.
Australia is not the only country where frustration has been felt at the glacial pace of change within the telecommunications industry. In the US, Google became so frustrated with the US telecommunications industry that it set about forcing change through the Google Fiber project.
The sixth key criterion has been added to an earlier list of key criteria because it appears to be necessary to highlight the need for increased competition amongst service providers – a concept that some in the industry have failed to grasp.
Now that we have a list of key criteria for a next generation network we can review Hackett’s points and benchmark what Hackett would provide Australia. The Australian ADSL industry, of which Hackett has been a very successful participant, has simply connected devices to both ends of the existing copper infrastructure and then utilised backhaul provided by third parties. Very few players in this space have had the experience of significant deployment.
Quality of service
Hackett makes the comment that quality of service is only effective in networks with constrained bandwidth, and tries to paint a confusing picture that the NBN is all that we should be concerned with. The NBN is and will always remain a small part of a larger national and international digital network.
The argument that “it is always more cost effective to just turn up the speed” for an access network taken in isolation is, to use Hackett’s words, “fanciful at best”.
Google has provided an excellent description of why speed matters as a justification for Google Fiber, but it is not the end game. Analysts at Bernstein Research identified the Google Fiber business model risks when they were quoted by Wired in early 2013: “Google is (and should be) concerned about the long-term market power of broadband access providers. … Carriers, which are de facto intermediaries between Google and end-users, could at least in theory ask Google to pay for service, or at least for quality-of-service.”
If NBN Co turned on QoS for the NBN alone it would have no effect on service quality because the time taken for customer traffic to traverse the NBN (the access network) is minor compared with the time taken for the traffic to traverse, backhaul, service provider and international networks if necessary.
One key consideration is that telephony will no longer occur over copper – that is, unless the Coalition fibre to the node network comes into play, and if telephony is to achieve a level of quality similar to that currently experienced over the public switched telephone network (PSTN) then QoS is necessary across the national digital network in its entirety and NBN Co has implemented traffic management class TC-1 for this reason.
NBN Co understands that QoS over the NBN would be pointless without service providers also turning on QoS. An NBN Co spokeswoman told Technology Spectator, “The reason we went with QoS levels is to allow retail service providers to tailor different services for different requirements – and only pay for the level of service they need for that product. We did a lengthy consultation with industry on this, starting nearly four years ago.”
Telstra certainly were part of this consultation, and the telco has been ramping up its efforts to facilitate user-configurable QoS across its NextIP network, for which it has trademarked the name Application Assured Networking™. Telstra’s enterprise customers now enjoy the benefits of QoS, and it should only be a matter of time before Telstra demonstrates the benefits of QoS over the NBN, which is after all an optical network – the best possible infrastructure.
The NBN is being built to have a life-time of 30 years. Think back for a second. How much bandwidth was used in 1980? How much bandwidth is used now? That should put Hackett’s argument into perspective. The list of bandwidth-hogging applications that we should expect to see in 2020 will cover so many pages and we will need a toilet roll to list them all by 2040.
Just another reason of how Hackett’s point (about QoS) highlights the urgent need to force the telecommunications industry into making traffic class management available for everyone, not just business.
The costs charged for QoS are simply not justifiable in 2013.
NBN rollout well worth a rethink
Hackett points out the NBN rollout could take as many as three visits to a site before NBN connections become active. He is quite correct that there are problems with the construction approach taken by NBN Co.
Is there a need for the construction process to be revisited? Absolutely.
However, gutting the NBN of fundamental capabilities to artificially reduce the time taken for the rollout will not wash. There is no evidence that the approach described by Hackett will save any time at all as the major time delay will remain, and that is getting the fibre into the premise rather than “passing the premise”.
A better method would have been an integrated approach that would result in premises becoming active as fibre is rolled out. A number of factors contributed to this approach not being adopted at the outset of the project, including a lack of trained personnel. However, no amount of excuses can justify why this approach is being persisted with three years down the track. The NBN rollout needs a rethink and any avenue that provides a better outcome for consumers is well worth considering.
Four data ports or one?
Hackett’s comments regarding the superfluous nature of the four Network Termination Device (NTD) data ports begs the question of whether he truly believes that service providers will all offer consumers the same access to the same applications.
The industry’s track record doesn’t inspire confidence and if spending an extra couple of hundred dollars for the four data ports reduces the frustration and anxiety associated with churn for consumers, then it’s worth it.
The argument that people can simply churn from one service provider to another as they do now may be well intentioned but is ultimately useless. Let us think back to how ten years ago the telco industry fought tooth and nail to prevent churn from being possible at all in the first place.
How many horror stories have you heard over the past decade about churn? My favourite is finding your ADSL network goes down at 5pm on a Friday and the technicians won’t be available at the exchange until Monday morning to connect your copper pair to your new ADSL provider.
Once churn was forced upon the industry all it did was find new approaches to make churn such a misery that most people are still not prepared to go through the torment. We should also not forget the other mechanism used by industry to lock in customers – two-year contracts.
Just imagine the joy that will abound when Australians can order a new service provider connection on a different data port, knowing that they can cancel the old service provider after the new connection is up and running.
The purpose of the four ports is to enhance competition – and that’s an important foundation of our digital future. Hackett is quite right to say that Virtual Private Network (VPN) connections can be used in some of the cases described, but providing QoS over VPN is an evolving area of technology that will be very expensive using current pricing models.
However, VPN is not an adequate solution for a multi-service provider solution because the VPN traffic targeting a service offered by one service provider would pass over the other service provider connection. Ever heard of paying twice for the same thing?
Competition and pricing
The NBN Co’s pricing model has caused much consternation for telcos and commentators alike. That’s not surprising given that the model was devised with the sole purpose of “turning a profit” as quickly as possible – an entirely flawed approach for national infrastructure.
However, the constant attacks from the industry are also misguided. Arguing there should be only one data port and not four is counter-productive. Even Hackett admitted there are situations where there is a need for more than one data port when he wrote, “The only rational use case for lighting up second and subsequent NBN Co NTU data points is where there are multiple, absolutely independent businesses (or homes) in a single location. In those circumstances, then the NBN Co NTU can simply be delivered ‘by exception’ to that location.”
There are many tens of thousands of buildings and business parks across Australia that house small businesses. Many of these will connect to the NBN rather than pay for separate fibre. It becomes cost effective for service providers to look at competitive offerings for small business that include cloud computing and hosting solutions.
For small business, the future includes connecting to more than one service provider to gain access to the myriad of B2B solutions available now and in the future. Why wouldn’t small business take advantage of specialised offerings if there is a business case to do so?
The NBN will increase competition among service providers, and this appears to be either forgotten or dismissed when arguments against the NBN are thrown around. Service providers will strive to provide applications that entice people to become customers. There will be many instances where residential, small or medium businesses will connect to more than one service provider at a time.
Advice to government
The best thing the federal government can do, now and after the election, is to fix the construction process and lower prices to entice more people onto the NBN faster.
Labor has had remarkable success over the past month doing somersaults and back-flips on a raft of policy. Surely the Coalition can see the benefit that a double-somersault with no FTTN back-flip would bring? The FTTN is a major vote loser and now that this election is no longer a sure thing, you would think that the Coalition’s advisors would be suggesting the best way forward is to adopt FTTP, and the mantra: “We’re the Coalition and we’re business gurus, so we’re going to provide FTTP faster, cheaper and with more features than you will ever get from a Labor government."
Or has the Coalition dug such a deep hole that it cannot find the way out?
Alan Kohler will be debating Malcolm Turnbull on Coalition NBN policy at a business lunch at the Sheraton Wentworth in Sydney on August 1. To book a ticket click here.