Will Turnbull leapfrog Telstra's copper?

As broadband copper slowly corrodes, all-mobile broadband is looking like an increasingly strong competitor for customers who may later make the jump to fibre.

The strategic review of the NBN is not due for another month, but while its authors are busy assessing the next phase of our biggest-ever infrastructure project, the very ground beneath their feet is shifting.

Or rather, the copper beneath their feet is corroding.

And while that slow process continues, rapid changes above ground raise big questions over how much we need copper at all.

The point of Communication Minister Malcolm Turnbull’s ‘technology agnostic’ approach to the NBN is that it looks at what people want to do, and aims to provide it as cheaply and as soon as possible.

It has long been assumed that that means fibre backhaul, delivered via a mix of copper, fibre and wireless connections to the punters at home.

That was the whole point of reviewing Stephen Conroy’s 93 per cent fibre-to-the-premises plan – to allow the proportion of copper/fibre/wireless to be more fluidly determined by the costs/benefits of various levels of broadband service.

That’s both a plus and a minus. 

Outraged free-marketeers will be feeling waves of relief that a publicly-owned ‘white elephant’ will be drinking less deeply at the public trough.

But that relief should be tempered by the fact that a $49 billion project is being replaced by a still-expensive $29 billion project. It’s a smaller breed of elephant, of a slightly different hue. And Telstra still gets around $11 billion of each of those figures.

The obvious downside is for the business community. The Conroy project offered to fully socialise the cost of making 93 per cent of customers available to businesses at effectively the same speed. In business terms, the other 7 per cent, in regional areas, hardly mattered.

Australian businesses could have served single online products – or ‘user environments’ – to virtually every customer in the country without having to worry about the service freezing, stalling or malfunctioning along the way. It would have saved the nation’s web developers a fortune and added value to the economy by making better ‘environments’ available on an utterly robust platform.

That vision is all but lost. The new patchwork broadband vision being mapped out by new NBN Co executive chairman Ziggy Switkowski will be very good, but will not produce the same single-speed benefits.

But then the business community’s loss is the Coalition’s gain. They successfully sold their patchwork vision to voters and Turnbull looks likely to go down in history as the man who ‘tranformed Australia’ by giving us much, much better broadband. He said recently that “90 per cent of premises in the wireline area will have at least 50 mbps as their minimum” by 2019.

Just try not to think about trials of 4K super-high-definition TV in the UK. Communications Day today quotes Internet Service Providers’ Association representative Craig Nelson saying that 4K TV services will require “minimum broadband speeds of about 100Mbps to work properly.”

But then Turnbull isn’t trying to tell Australians they can’t have 4K TV. If they want it they can buy it, by paying an as-yet uncertain sum to connect their home to the street-corner ‘node’ with fibre.

And developments in recent days in Tasmania suggest this might be done more cheaply if we can get over an aversion to overhead fibre cabling, instead of expensive underground fibre.

Tasmania’s current premier, Lara Giddings, is writing to Turnbull to ask if they can please finish that state’s fibre rollout by stringing cables between state-owned power poles. Yes, they burn up in bushfires and are more costly to maintain, Lara will write to Malcolm, but at least Tassie will be a world-class test-lab for an all-fibre system.

That’s not a bad idea, it would seem. Already Vodafone has decided to shift its call centre work from India to the Apple Isle, creating 750 new jobs in the struggling state. Tasmanians may be no prettier than anyone else in the country, but in an all-fibre world those Vodafone staff might become our first high-definition video call-centre workers. Who knows?

But bringing jobs home to Australia is not all Vodafone’s been doing to shake things up.

It commissioned the ALP-backed think tank the McKell Institute to write a report, ‘Superfast Broadband: The future is in your hands, which argues strongly in favour of mobile broadband as being the tranformative technology of our era.

It notes: “Mobile devices that did not exist five years ago are now essential tools for both consumers and business, with products and applications in fields as diverse as healthcare, aged care, education and even domestic violence prevention. Almost half of Australian businesses expect to transact with their customers using a mobile application in the next three to five years.

“This explosion in mobile data usage has the potential to not only improve productivity, access to services, and quality of life, but also economic growth, with studies estimating that a doubling of mobile data usage increases GDP per capita by 0.5 per cent.”

The report, which was launched by Parliamentary Secretary for Communications Paul Fletcher (that’s right, a Liberal launching a report by a Labor think-tank) “makes the case that the NBN, far from becoming redundant due to the explosion in mobile internet access, is in fact crucial to delivering better mobile services to both regional and urban areas without any significant increases in cost.”

The report argues that “the recent development of small mobile base stations (able to be placed on lampposts for example), connected to the NBN, can significantly increase and improve mobile coverage in both urban and regional Australia. This has the potential to radically reshape Australia’s economic and social future for the better.”

Vodafone has a strong interest in working to ensure as much data traffic as possible goes through mobile base-stations. If the NBN fibre network can be used to radically increase the number of these stations, this will happen. If it does, mobile network operators would be effectively co-investing in building the NBN.

At the launch, Fletcher said: “Under the previous government, we saw NBN Co had little appetite to sell backhaul to mobile operators. We take a different view, and if NBN Co can make the economics work, we will certainly not be standing in their way.”

Australians have voted not to have the full fibre experience. Under the Conroy plan, ‘mobile’ data would have flowed through Wi-Fi networks, bypassing the mobile phone networks.

Under the Turnbull plan, the reverse seems likely – that there will be strong competition between copper-based broadband and all-mobile broadband, with a few people buying fibre if they really need it.

As a regular user of 3G, 4G, copper ADSL, and fibre-backed Wi-Fi (I work from five desks in Melbourne, Canberra and rural Victoria) it seems likely to me that under Vodafone’s plan, customers could be quite happy with all-mobile services until they decide to ‘jump’ up to fibre. 

That could end up making the copper network look like a 20th century curiosity – a rusty-brown elephant, worth little to anyone.