NBN Co's multi-technology mix has much to prove

NBN Co is banking on HFC to deliver on connections before its June 2016 deadline but the network builder can't afford to be slack on remediation of the copper and the cable networks.

The latest rollout plan released by NBN Co represents the first real attempt by the network builder to put forward a case for why the Coalition government’s multi-technology approach is the best course forward for the project. As expected, the headline figure of 1.9 million connected premises by June 2016 now looks set to be substantially boosted as NBN Co lights up the HFC networks.

But chasing a number, and ostensibly trying to beat it, may pose some risks, especially if the existing copper and HFC infrastructure requires more fixing than expected.

With more than 400 new suburbs added to the list, the rollout plan has been designed to provide retail service providers further guidance and a modicum of reassurance that the wheels are in motion.

There’s also guidance for the contractors on where the construction focus will rest.

As for the public, the message is all about recognising that multi-technology is the new face of NBN.

If all goes to plan, and it’s a big if, Communications Minister Malcolm Turnbull will have substantial ammunition to extol the virtues of MTM by the time the next federal election edges closer.

With a paltry 300,000 premises connected to the NBN since the conception of the project, the Coalition will no doubt enjoy telling the public how it has made faster broadband a reality for millions of Australians.

However, NBN Co chief executive Bill Morrow will be acutely aware of the carnage ‘heroic’ forecasts and assumption can inflict. One need only look back the opprobrium hurled at Morrow’s predecessor and his management

If Morrow’s confidence with regards to the resolution of the Telstra deal is correct, and the latest announcement would suggest as much, then beating the 1.9 million premises target shouldn’t be a problem for NBN Co.

Both the Fibre-to-the-Node (FTTN) and the HFC component of the network depend on the deal, without it NBN Co can do nothing more than run trials and keep its teams on a war footing.

The real action comes after the renegotiated deal gets the required blessings and NBN Co has at least put a tentative target in place. It may be subject to revision but falling short really is not an option that Morrow and his team would like to contemplate.

Existing infrastructure is pivotal to the Coalition’s MTM model. It makes economic sense, at least on paper, but it has also left NBN Co heavily dependent on the state of the infrastructure (copper, HFC) it will soon inherit from Telstra and Optus.

There is little concrete data, apart from the anecdotal evidence that crops up from time to time, on the state of Telstra’s copper network. The relative health of the copper will play an important role in whether NBN Co stays on course or not.

There’s some talk that NBN Co may implement a singular bloody mindedness to the deployment of FTTN, where the technology is deployed irrespective of the state of the copper. A lot of this fear is driven by the fact that so far there has been very little information provided by NBN Co on how much remediation of copper has been done on the FTTN trials. 

According to NBN Co, the reason for that is that the trial sites of Umina and Epping have top notch copper and no remediation has been required.

As for the wider trials, NBN Co is currently in the process of standing up the nodes, so we’ll have to wait and see how that plays out.

Then there’s Telstra and Optus’ respective HFC networks and while their reach is substantial providing consistent service has been an ongoing issue.

The HFC networks will have to be remediated and made fit for purpose, although that’s probably not going to happen in a hurry.

As NBN Co’s chief technology officer Denis Steiger told the Senate Select Committee hearing in Canbera yesterday the upgrade to DOCSIS 3.1 is not high on NBN Co’s agenda.

According to Steiger, DOCSIS 3.0 does the job when it comes to service delivery and there’s no “immediate driver” to upgrade to DOCSIS 3.1.

Steiger is right in his assumption that there’s no immediate impetus to propel a move to DOCSIS 3.1.

With two million premises currently on HFC, all NBN Co needs to do is transfer these connections on to its books, once the deals with Telstra and Optus are signed. There’s little need for remediation and no new installations of lead-ins.

All NBN Co has to do is install the 200 cable modem termination systems (CMTS) and away you go,except for the construction work required to build out the footprint.

So exceeding the mid-2016 rollout target is unlikely to be a problem for NBN Co but the devil will be in what’s left in the too hard basket.

While NBN Co’s expanded rollout ambition shows a level of confidence within management that the legacy issues of past are slowly being remedied, for many it’s further proof of how the Coalition government has managed to hobble a once in a lifetime opportunity.

Reconciling those concerns may prove to be an even bigger challenge for Morrow and his team than connecting 1.9 million premises to the NBN by June 2016.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles