The faulty arguments that stifle the NBN’s potential

The idea of government agencies becoming retailers on the NBN is deeply flawed, as is the idea of cutting features to make the cost of Labor's Fibre to the Premise (FTTP) match the proposed cost of the Coalition’s FTTN NBN.

Critics of the National Broadband Network (NBN) are striving to outdo each other in the lead-up to the federal election. As realisation sinks in that the Coalition’s “cheaper and built faster” argument won’t wash with Australians, critics are now jumping on every anti-NBN bandwagon rolling by, and some are resorting to FUD.

On July 17, iTnews reported that NBN Co plans to reserve one of the four data ports on the Network Termination Devices (NTD) for government to provide unmetered health and education services into homes. The publication subsequently posted a clarification from NBN Co on July 18, which highlights that health and education services can be provided by any business, organisation or government that registers as an access seeker.

The question is will government agencies register as access seekers to provide health and education services? Well, to put it simply, no.

Government agencies are unlikely to register with NBN Co as access seekers because of the associated operating and compliance costs and legal obligations outlined in theTelecommunications Act 1997.

Why would government agencies want to do this when the Australian Broadcasting Corporation (ABC) has already shown other government agencies the way forward? In return for access to the ABC’s iView online media library internet service providers (ISP) had to agree to not meter iView downloads.

Future government agency services including health and education will add value to service provider offerings. Service providers that do not offer the full suite of government agency services will be tempting fate and may find themselves with few customers.

A smart government would leverage its position by telling service providers to carry every government service with no download charge to customers or lose access to the lot – no ABC, no iView, no access to any government or government agency website and unfriendly visits from tax auditors annually.

Telcos and traffic

Michael Wilson, head of the Northern Territory-based remote education software developer REACT, was quoted in the iTNews story as saying that “government agencies were at the mercy of RSPs; unable to guarantee Quality of Service (QoS) required to deliver health and education consistently.”

NBN Co’s network design and roll-out plan highlights traffic class management will be implemented across the NBN by the end of 2015 and this includes multicasting.

Multicasting is necessary for internet television and a raft of other services including some of the new and innovative health and education services that are being developed now. There should be no doubt that NBN Co will provide multicasting capability.

The telecommunications industry is likely to jump on the QoS and multicasting FUD bandwagon. Offering traffic class management to corporate customers has provided carriers with a river of gold over the past decade so why would they willingly offer traffic class management to the masses without a fight?

You should expect the telecommunications industry to be desperately lobbying government and the Coalition to ensure that NBN QoS and traffic class management can be provided to their corporate customers and not to residential customers.

Multicasting and traffic class management concepts were developed more than twenty years ago and nearly all core network devices sold today include traffic class management capability at little or no cost. So why is it that Australians are still waiting for improved QoS and traffic class management?

As far as the telco industry is concerned, it’s not what NBN Co is offering that’s the problem but how it’s being offered. This harks back to the industry’s deep concerns with NBN Co’s wholesale business model. Telcos might plead that they aren’t making huge margins on data carriage, especially across the NBN, but that’s what industry pressure is all about.

Internode co-founder Simon Hackett has also been a constant critic of NBN Co’s CVC based pricing model and in response to the persistent criticism from carriers in 2011, NBN Co moved to reduce CVC costs by rebating charges for the first 150 Mbps through a CVC connection until there were 30,000 premises passed in a Fibre Serving Area (FSA). NBN Co’s decision to reduce initial costs aimed to ensure smaller RSPs would not be faced with high CVC costs in a FSA whilst the customer pool was small.

What will the FTTN do

There’s also the issue of what impact the Coalition’s Fibre to the Node network (FTTN) has on multicasting and traffic class management.

A hybrid copper fibre network may be capable of providing the services but it is inherently unfriendly for multicasting and traffic class management. That’s because the disparity in connection quality and speeds around Australia will negate effective implementation of the services. Turnbull is yet to address this matter despite repeated calls for him to do so.

Whether or not NBN Co has the right pricing model is no reason for arguments to be put forward that quality of service and multicasting cannot be made available over the NBN to all Australians.

Speeding up the last mile will not cut it

Recently Hackett put forward a perplexing perspective during a speech at the CommsDay Wholesale and Data Centre Summit in Sydney on July 17. Hackett argued that NBN Co should aim to cut features so that the Labor Fibre to the Premise (FTTP) NBN cost matches the proposed cost of the Coalition’s FTTN NBN.

Hackett’s argument is wrong on multiple counts and unfortunately further muddies the waters. The Coalition’s FTTN has not been adequately costed, a detailed network design has not been provided and the timeline is unrealistic.

Yet Hackett suggests NBN Co should dump three data ports and the two UNI-V voice ports from the NTD. Hackett went further to say that the "extensive quality-of-service controls" should also be dumped.

What Hackett has failed to do is to identify what a next generation network should achieve and why. Rather he would have Australia spend $30 billion to swap out copper for fibre but leave everything else as it is. Surely Hackett understands that high bandwidth real-time services such as video conferencing, internet television, collaborative education and health services, etc. require QoS and traffic class management? Simply speeding up the last mile will not cut it.

Hackett’s “personal hope” that the NBN achieve "fibre outcomes on a copper budget" should be dismissed outright because the cost savings he talks about are negligible and the result would be a loss of capability that would in effect give strong argument for the NBN to be scrapped entirely.

What are all the ports for?

The NTD has four data ports and two phone ports. The purpose of the two phone ports should be self-explanatory. Customers can take their existing handsets and plug them in which reduces the cost of purchasing network enabled Voice over Internet Protocol (VoIP) handsets.

Most residential customers are likely to only use one port, because by connecting to two RSPs they would need two firewalls or be required to move their firewall connection every time they wished to switch RSP. However, as more and more people become telecommuters they may find it necessary to connect to one RSP for work and another for home use. This equally applies to home offices scenarios.

Business will take advantage of the four ports to connect to RSPs offering specialised business applications, offering different data prices, connect to business partners through different RSPs or to provide connectivity with teleworkers who might be on low feature/cost RSP connections.

Cloud computing will be a major driver for more than one data port to be used. Business will look to reduce IT costs by connecting to RSPs that offer included free data when accessing cloud computing facilities.

So what has NBN Co achieved by including four data ports and two telephone ports on the NTD? Customers get flexibility, opportunity and ultimately improved competition between RSPs. Who could ask for more?

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.

Mark Gregory is a Senior Lecturer in Electrical and Computer Engineering at RMIT University