How to fix the NBN

James Calligeros

It’s finally 2020, and as the NBN rollout starts to wind down now is a good time to take stock of just what the flipping heck happened over the last 10 years. We were promised in 2009 that by the end of this year we would have an all-fibre access network to replace Telstra’s and Optus’s dilapidated twisted pair and HFC access networks. Instead, thanks to some absurdly transparent political manoeuvring around 2013, what we actually got was… Telstra’s dilapidated twisted pair and HFC access networks under new management. And while this was good for my Telstra shares, it was and still is an absolutely diabolical, unforgivable, politically-charged sabotage of objectively good national infrastructure, intended to do nothing more than prop up Rupert Murdoch’s crumbling media empire and to Fortnite dance and then piss on the political legacies of Kevin Rudd and Stephen Conroy.

Since this change in strategy, even mentioning the NBN in less technical circles gets nothing but an exasperated groan and tales of incessant dropouts, slow peak hour speeds, and a government agency intent on flatly denying that there’s a problem. This, as has already been discussed, is by design. But now that the rollout is finished, what can be done to actually fix the problem?

Opacity

The biggest problem with the NBN right now has nothing to do with technology. With the change of government in 2013 came a new board for NBNCo, one that the company’s two shareholders (being the Minister for Finance and the Minister for Telecommunications) knew would carry out their will without question. Gone was Dr Mike Quigley and his corporate ethos of transparency and accountability and in came Ziggy Switkowski, an ex-Telstra executive with ties to the government. According to Switkowski and his new board of ex-Telstra executives, the first and foremost priority for NBNCo was to immediately redact all commercial documents pertaining to the rollout. From September 9 2013 until mid 2014, after the company’s “independent strategic review” was completed, no internal document was available for viewing. When they became available again, most details that interested parties had become accustomed to having access were redacted and deemed to be “commercial in confidence” – information such as fault incidences, revenues and services connected. This included most of the strategic review itself, including its frames of reference and key assumptions made when coming to the decisions it recommended (which conveniently enough for the government involved doing exactly what their election manifesto promised). During this time, all construction work was suspended, and an undisclosed sum was spent on rebranding the company with all references to NBNCo being replaced with nbn™. A worthy use of taxpayer funds from the Strong Economic Managers.

By the time the FTTN/FTTB/FTTC/HFC/anything-that-isn’t-FTTP rollout was underway, this corporate culture had become entrenched. Even nbn™’s customers, the ISPs, were left in the dark about most operational matters to the point where they were entirely powerless to deal with end user complains about slow speeds and dropouts. ISPs would refer customers to nbn™ who would deny any problem on their end and flick them back to the ISP. This is a problem that persists even today, despite the ACCC’s intervention forcing RSPs and nbn™ to publish speed data and refund customers unable to achieve the speed tier they’re paying for.

In virtually every HFC deployment around the world users are allowed to access their modem’s statistics page, which gives extremely important information about the quality of the signal entering the home. On the NBN, access to this page is disabled as soon as the CM8200 gets its configuration parameters from the remote end. There is absolutely no reason to do this other than to obfuscate problems with the HFC network, problems which the company denied for 3 years until they became so widespread and so disruptive that they were forced to put the entire rollout on hold to deal with them. This “pause” as they called it took the better part of a year and still problems persist in certain areas on the HFC network. Had these network metrics been available for public viewing (as they should be) the company would have been forced to act much sooner. People only noticed because Telstra Cable and Foxtel share the same network infrastructure, so those services were also impacted by nbn™’s activities.

Transparency is a necessary facet of accountability and right now nbn™ are doing all that they legally can to avoid being accountable to anyone. The simple fact is that operational transparency highlights the great flaws in what has been deployed when compared with what was meant to be deployed.

The problem with this pathetic attempt to save the Liberal Party’s face using taxpayer money is that it leaves consumers and ISPs totally powerless to resolve disputes with nbn™ unless nbn™ deems the dispute to be “reasonable”. Currently, the criteria set by nbn™ for a “faulty” FTTN service is either a downstream sync speed lower than 20Mbps or 16 (yes, sixteen) dropouts per day with no more than 1 hour between dropouts. If a service syncs at 21Mbps or only drops out 15 times a day, it is considered to be within spec by nbn™, regardless of whether or not there is actually an issue with the connection. The company’s contempt for the end user and their own customers is on full display here. The entire corporate structure exists not to facilitate the rollout of a National Broadband Network, but to actively frustrate that process.

The only way to get the NBN truly back on track is to simply demolish the entire corporate structure and return to a positive culture of operational transparency and accountability, free from the influence of ex-Telstra corporate stooges with deep links to high profile members of any particular political party. Like any government body, nbn™ should be accountable not only to its two shareholders but to everyone in the nation as it used to be. The NBN is being run in a manner similar to Home Affairs and ASIO which is quite simply disgusting for a national infrastructure project that’s been forced on us through legislation.

Productivity (but only for me and my mates)

Public-private partnerships are a spook. And in the case of the NBN, they’re a bigger spook than the bogeyman. There’s not a lot to say here except for that the NBN is being built by layer after layer after layer of contractors, each one taking their cut off the top before passing down what’s left until the guy actually splicing the fibre on the street is on barely above minimum wage. This was a decision made in the very early days of the rollout, as it was decided that amassing and training a workforce would be too costly and take too long. This decision, however, was a poor one. The only reason the private sector was so quick to get going was quite simply because they cheated.

There are people working on the HFC network right now who failed to demonstrate the basic competency of crimping an F connector yet were given their ticket to perform work by dodgy RTOs in exchange for a case of beer. These same RTOs also give their students the answers to the theoretical components involved in becoming certified, leading to a fundamental misunderstanding of standard practice or how various network elements are meant to behave.

The contractors themselves are complicit in this workforce deficiency, too. In order to cut costs (not to save the Government money, but to increase profit margins), most contractors exclusively subcontract to 457 visa holders. There have been instances of fully qualified Australian citizens being fired simply to make way for temporary work visa holders. There has been at least one instance of this occurring because the citizen refused to ignore workplace health and safety regulations where his 457 colleague did not.

The NBN was meant to see Australia return to a publicly owned last-mile access network, as we had until Telstra was privatised. Before said privatisation, Telecom Australia had an entirely in-house workforce of highly trained professionals building and maintaining their network. Such was the quality of this workforce that industry giants such as Ericsson, Siemens and Alcatel would frequently visit Telecom Australia’s various training facilities around the country and take our practices back to Europe to share with the world. Telecom Australia literally set new world standards in telecommunications practice. nbn™ on the other hand is barely capable of meeting existing ones. The company has virtually no quality control measures in place and is entirely at the mercy of cowboy contractors just looking for a free ride on a government gravy train.

Now that the rollout is ostensibly complete, and as the various contracts nbn™ has with its contractors start to lapse, the company must shift towards an internally trained workforce of linesmen, engineers and technicians in order to properly service (and upgrade) this monstrosity they have built with at least a modicum of quality control. Being a telecommunications technician was once an honourable and respected career path for young men, and Telecom Australia was one of the country’s most enjoyable companies to work for. There is absolutely nothing stopping nbn™ from carrying forward Telecom’s legacy save for a boardroom and government entirely hellbent on transferring wealth from the taxpayer to their mates.

High standards (for 1995)

During Dr Quigley’s tenure at the top of the NBNCo corporate structure, the company actually did look something like a true heir to Telecom’s legacy. Hundreds of millions was invested in research and development, and from this came new standards for large-scale FTTP rollouts. NBNCo was instrumental in popularising the adoption of “skinny” fibre, ribbon-like fibre optic cables that are both cheaper to manufacture and easier to deploy in the field. NBNCo also innovated on removing the need for a Fibre Distribution Hub, instead replacing it with a more compact multiport joint closure which fits inside a standard double-length Telstra pit. By April of 2013, the average cost per premises of deploying FTTP had dropped from the initial $2,400 during the rollout’s infancy to a meagre $1,100 in brownfields – already existing homes. Interestingly, as soon as the government changed this figure seemed to increase by precisely 4 times to conveniently make it more expensive than the average cost per premises of FTTN (which now costs over $5,000 per premises in some cases). But I digress.

With the change of rollout strategy, no longer was it necessary to continually innovate or spend money on creating new standards. Telstra had all the standards handily ready to go. In the case of the HFC network, such is the legacy of Telstra’s standards that the brand new tags used by nbn™ to label customer drop cables and outside plant refer to Telecom Australia with the orange and blue T, branding which has been defunct since 1995.

nbn™ were also happy to spruik the latest innovation in HFC technology, DOCSIS 3.1. Despite DOCSIS 3.1 being objectively good, it will never live up to the company’s expectations. Since remedial work on the HFC network started, the company has been deploying ARRIS 1GHz and 1.2GHz rated equipment in the street – a requirement for full DOCSIS 3.1 compliance. However, inside those countless millions of beige nbn™ boxes and grey Telstra boxes on the sides of homes lives one of the many weak links in the HFC deployment – the isolator. When Telstra first rolled out the HFC network, the original DOCSIS specifications used only a small portion of the available bandwidth on a coaxial cable, and as such built the network to a lowest common denominator specification of 750MHz. And despite nbn™’s insistence on activating DOCSIS 3.1, they continue to use the Telstra-prescribed 750MHz isolators in almost all brand new installations simply because this was Telstra’s accepted practice. While DOCSIS 3.1 will work across these isolators, nbn™ will find themselves running into problems as they try increase bandwidth across the network past 750MHz for “Full Duplex” operation. The most insulting part is that Telstra’s HFC network was second-rate even in the 90s compared to most of the world, so nbn™ are relying on decades-old standards that weren’t even standard in their heyday.

As if “adapting” these standards wasn’t bad enough, how about outright plagiarising them? When shifting to a mix of technologies, it was necessary for nbn™ to create documents outlining and explaining the various technical intricacies of this new bastard network. One such document is the Authority to Alter, or A2A, which details what parts of the network on a customer’s property registered cablers are and are not allowed to mess with. Every version of this document, save for the most recent, was a simple copy-paste of Telstra’s old A2A documents, most of which date back to the early-mid 2000s, when Telstra stopped deploying new network assets. In the grand scheme of things this is pretty minor, but it illustrates just how determined nbn™ are to be as wholly unremarkable and ambitious as they possibly can.

nbn™’s entire corporate structure is arguably the biggest problem with the rollout post-2013. A government enterprise sworn to secrecy by its shareholders to obfuscate the utter inadequacy of its “Cheaper, Faster, Better” network. A government enterprise hijacked by the Liberal Party and their Telstra cronies to transfer wealth from the taxpayer to their private contractor friends. A government enterprise so blatant in their goal to simply continue on with Telstra’s mediocrity that they go so far as to reuse and outright steal Telstra materials and documents from 20 years ago. Sure, there are technical problems with the NBN that we will to, but these all stem from the deficient corporate culture imposed on the project by the Liberal Party. Even with the multitude of technical failings wrought upon the nation by the socioeconomic vandals in the Liberal caucus, by putting an end to the absolute rort that is the public-private partnership, increasing internal transparency and resuming the in-house development of work standards and methods, the NBN could slowly and steadily become something that Australia can actually take pride in. We were once leading the entire world in telecommunications, pushing the boundaries of connectivity and setting trends in the industry globally. We can return to this role, or we can continue playing court jester to countries like Romania and Kenya.

Part 2: This time, it’s technical

Having now fixed nbn™’s culture problem (and re-rebranded it to NBNCo), we’re ready to get into the minutiae of actually fixing this travesty of a network. We’re going to make some key assumptions that will make this process a lot less painful.

  • The NBN is put on budget as a national infrastructure expense (it is currently ostensibly paid for with government bonds)
  • The Statement of Expectations has been altered to remove the profit motive (at least for now)

Basically, we’re assuming that money is no object. With the NBN now on the Government’s budget, it can direct funds directly to the project. This is currently not possible, and NBNCo has to ask its shareholders (currently Mattias Cormann and Paul Fletcher) for cash injections. This doesn’t work when the Government’s core election promise was to achieve a budget surplus, and doubly doesn’t work when they don’t actually care about the NBN.

Altering the SoE allows NBNCo to just plough money into the network with no expectation of making a return on it. Some good the expectation of a return is doing now anyway, the company only recently posted a record $2bn loss. Good news is that this doesn’t have to be permanent, and as part of the technical solution for fixing this steaming pile, we will also be looking at how the NBN makes money.

Considering the needless complexity of the current rollout, which precludes a simple catch-all solution, we will be going through each current rollout technology individually. We will briefly discuss each technology, why it sucks, and what can be done to make it not suck.

Fibre to the Node: The fifth horseman

By now, everyone in the country should be aware of what a mess Fibre to the Node (FTTN) is. Originally touted by Tony Abbott and Malcolm Turnbull to be a cheaper, as-good alternative to Labor’s Fibre to the Premises (FTTP) network, the technology has been nothing short of a spectacular failure. Such was the magnitude of its failure that very shortly into its rollout, NBNCo (and PM Turnbull) were forced to drastically change tack, and began casing out the possibility of eating up Telstra’s and Optus’s old Cable networks.

Dr Ziggy Switkowski, the current NBNCo chair, fronted a 2003 Senate inquiry into the state of broadband access in Australia. It was at this inquiry that he declared Telstra’s phone line network to be, “Five minutes to midnight,” basically dead in the water (sometimes literally). It is this same Dr Ziggy Switkowski who was charged by the Liberal Party to roll out an FTTN network utilising this same Telstra phone line network.

FTTN is really only suitable for short lengths of copper. Fibre is run to a box somewhere in the neighbourhood, in which DSL line cards are installed and connected to the various phone lines running to houses. The flavour of DSL used in FTTN drops in speed precipitously with distance from the node, performing around the same as traditional ADSL 2+ at around 1km of line length from the node, assuming the line is in good nick.

NBNCo found out very quickly that Dr Switkowski was not lying for a change in 2003 and many, many phone lines in this country simply not suitable for upgrading to FTTN. Regardless, the Government made the company forge ahead until complaints of slow speeds and dropouts became so deafeningly loud that they could no longer ignore FTTN’s shortcomings. Today, the FTTN footprint covers about 30% of the population, a far cry from the original plan of around 76% coverage. Around 15,000 premises in the FTTN footprint are unable to achieve even 25Mbps download, the speed that was promised to be guaranteed by 2016, and the minimum speed in the Government’s own SoE. The ACCC recently came down like a ton of bricks on both NBNCo and the ISPs for failing to identify customers who were paying for services they could not achieve on FTTN. Customers were being charged for a 50Mbps service while barely receiving half, or even a quarter of that in some cases.

There’s no two ways around it. The entire FTTN rollout was, and remains, a total failure. There is only one logical solution, and that is to completely tear it out and replace it with FTTP. Given NBNCo’s SoE mandates them to provide a baseline of 25Mbps to all premises in the country, we would naturally start with those 15,000 locations unable to attain 25Mbps downstream. NBNCo have access to the line condition of every single FTTN connection in the country, and as such once the priority sub-25Mbps connections are fully remediated, they can assign crews to overbuild the FTTN in order of line quality from worst to most acceptable.

Replacing FTTN should be the number one priority on NBNCo’s list, given that is absolutely the weakest link in the fixed line footprint and responsible for 30% of the country receiving a subpar broadband experience.

Replacing FTTN with FTTP is the only sensible option. FTTP, due to its use of fibre optics all the way into the home, guarantees that the end user receives the speed they pay for, be it 25Mbps or 2500Mbps. FTTP is also future proof; higher speeds can be unlocked simply by replacing the electronics on each end of the fibre, and current fibre optic technology is capable of delivering a throughput of around 27Tbps (yes, terabits per second) over a single connection. Most importantly however, FTTP is by far the most reliable communications technology available. Unaffected by the weather, power outages or even simply your neighbour’s cheap solar inverter (believe it or not, solar inverters have been responsible for many DSL interference problems), FTTP can remain active pretty much indefinitely with no degradation of service, a welcome change for FTTN users stuck on drop-out prone lines.

With FTTN out of the picture, NBNCo actually has a shot at delivering on its Statement of Expectations, as well as delivering quality telecommunications to a segment of the population which has been totally neglected for the past seven years. With access to the Internet being viewed as a basic utility by most now, it is a disservice to the nation to leave people in the FTTN footprint high and dry with last-century broadband speeds and third world electricity grid levels of reliability.

Hybrid Fibre Coaxial: The most least-shit

In 2015, it became apparent to both the Government and the board of NBNCo that continuing to push forward with FTTN would result in a national uprising. Interestingly, the revelation that FTTN is untenable came at around the same time Malcolm Turnbull usurped the Prime Ministership from Tony Abbott.

Returning to FTTP, as per Labor’s original plan, was simply politically unacceptable. The only other technology capable of delivering high speed, fixed line broadband is Hybrid Fibre Coaxial (HFC), but HFC networks are ruinously expensive to deploy, and in the process of being replaced with FTTP in the rest of the world. Luckily for the Government, the solution to the cost problem was right there, buried under a big T. But first, a history lesson. A very long – but ultimately necessary – history lesson.

In the mid to late 1990s, Telstra and Optus were engaged in a fierce battle over pay TV supremacy. Optus was first to market with an HFC network, carrying the OptusVision service. Telstra followed suit, entering a partnership with Rupert Murdoch’s Fox. FOX would bring the subscription TV content and TELstra would bring the infrastructure required to deliver it. Optus’s network utilised a Motorola-designed system called CableComm to also deliver telephony services over HFC, in a bid to rid themselves of Telstra’s monopoly on communications. Since Telstra had no need for such a system, it designed its network predominately for Foxtel. Optus and Telstra then locked themselves into what amounted to little more than a dick waving contest. Rollout targets were aggressive, and both networks’ footprints expanded massively over the course of relatively little time. In order to meet their aggressive rollout targets, however, Optus and Telstra both elected to cut corners in the design of their networks. These cut corners are irrelevant for the delivery of cable television, but become very important later.

In 1996, the first version of the Data Over Cable Service Interface Specification (DOCSIS) standard was released, allowing HFC networks, which were at the time used almost exclusively for cable television, to act as a broadband data network. Since that time, DOCSIS has become the industry standard for broadband delivery over HFC networks.

Telstra were able to call Optus’s bluff with their near infinite cash reserves and when the latter was acquired by SingTel, who pulled the plug on further HFC investment, Telstra too saw no further need to continue rolling out their own network. Both networks were left pretty much to rot for the next 20-odd years, with only essential maintenance being performed to keep services running.

Instead of seeing an old, tangled up mess of rotting coaxial cables, NBNCo saw a free lunch. A free lunch that cost them around $3bn when all was said and done.

After purchasing Optus’s HFC network for $800m, NBNCo quickly found out that not only had Optus neglected to perform routine maintenance, but they had also seriously oversubscribed the network in an effort to maintain revenue in the face of relentless competition from Foxtel/Telstra. Contention ratios across the network were usually well in excess of 600:1. That is, 600 homes sharing a single link back to the exchange. Due to the lack of upgrades over the years, this shared link was usually 1Gbps, meaning that each subscriber on a given coaxial segment was allotted 1.7Mbps downstream. Optus’s network in its twilight years was plagued with complaints of poor speeds and poor reliability. After running trials in Redcliffe, NBNCo deemed Optus’s network so far gone that it was beyond cost-effective remediation, and ultimately elected to abandon it completely, to be replaced with yet another worthless stop-gap technology, Fibre to the Curb/Kerb (FTTC). $800m down the gurgler so far.

The company also purchased the Telstra HFC network – this time for an undisclosed amount via a renegotiated $11bn asset lease deal, originally put in place to allow NBNCo the use of Telstra’s cable ducts and pits, as well as space in their exchanges, fees for remediating unsafe pits and compensation for the forced decommissioning of its HFC and PSTN assets. This renegotiated deal instead put in place an asset transfer for the HFC and PSTN networks, and awarding them even more public money for the privilege. Most importantly, it also gave Telstra a spectrum license to continue using the HFC network to deliver Foxtel indefinitely, with NBNCo to foot the maintenance bill for this. It is estimated that the total value of the HFC asset transfer was somewhere between $1.1bn and $1.3bn.

Someone neglected to tell NBNCo that Telstra’s network design was based on two very major assumptions that made it unsuitable for what NBNCo required of it.

  • The network would be used predominately for pay TV.
  • The network would have a takeup rate of around 30% of passed premises

The first assumption allowed Telstra to get away with using lower bandwidth equipment on the coaxial side of the network since Foxtel only uses a relatively small amount of bandwidth compared to the total a regular HFC network would be capable of. The second allowed Telstra to under-provision the network relative to the number of premises it passed. Simply put, these were cost cutting measures intended to allow Telstra to keep up with and leapfrog Optus’s HFC rollout. Telstra were able to get away with providing DOCSIS services since there was so much spare spectrum available on the network on frequencies that their cheap equipment could still work happily with, and services were so expensive anyway that few in the network’s footprint took up said services.

Having not been made aware of these shortcomings, NBNCo gleefully began relentlessly connecting new customers to the network. CEO Bill Morrow said that the purchase of the HFC network would “…shave years off the rollout…” This was before people started noticing their Foxtel and Telstra Cable services starting to sporadically drop out, when previously they had been stable for years.

HFC is a shared medium. That is, end users all share a single coaxial trunk cable back to the optical node. With each end user you add to this coaxial ‘segment,’ you lower the signal level to each of the other users. NBNCo tried taking an HFC network barely suitable for 30% uptake to 100% uptake without making the necessary upgrades to the equipment in the field. As signal levels across the network fell, dropouts, fuzzy Foxtel pictures and slow speeds became more and more apparent until late in 2017, NBNCo announced that it would be stopping all new HFC connections until further notice to investigate the issues.

A prolonged investigation into the cause of these disruptions made multiple significant findings:

  • Telstra had used low quality fittings and connectors, and had not replaced old ones when they had worn out
  • The amplifiers and nodes Telstra used were ill-equipped to handle the frequencies NBNCo were forced to use (Foxtel and BigPond taking the good spectrum for themselves)
  • Telstra had oversubscribed the network, but to a lesser degree than Optus
  • Poor maintenance standards meant that the network was prone to RF noise ingress
  • Much of the network’s declared footprint was not serviceable and no HFC infrastructure actually existed where it was said to

All of these physical shortcomings were compounded as NBNCo went around disturbing the infrastructure and adding connections. NBNCo kept new connections on ice for around a year while they conducted expensive remedial works. This work included installing new nodes, replacing faulty 30 year old amplifiers and taps, fixing noise ingress points, replacing old connectors and fittings and building out the network to fill in the gaps in the footprint. The sales freeze was ostensibly lifted in April 2018, however many were still not able to order a service until around August of the same year. This “pause” in the HFC rollout as it has come to be known cost the company $900m, bringing the total amount of taxpayer money stolen on HFC to around $3bn, with the total rollout cost blowing out to $51bn. This is $8bn more than the projected cost of a full FTTP rollout.

It is accepted in the industry that while HFC/DOCSIS itself is still more than suitable for delivering high speed broadband, when done correctly. The assumption that simply buying Telstra’s and Optus’s HFC would be a silver bullet for NBNCo comes from data on HFC networks in the United States – HFC networks which cover most of the population, have take-up rates nearing 100%, and as such are aggressively maintained and upgraded by their operators. The Australian HFC networks could not have been further from their US counterparts if they tried. The Telstra/NBNCo network is, to put it simply, an obsolete and failing 90s network with some late 2000s quality of life features gaffer taped on to keep it barely functioning for another 5 years at best; good taxpayer money after bad in the Liberal Party’s pursuit of facial salvation.

This failed abortion of a network is currently the designated technology for again around 30% of the population. Unlike FTTN, however, DOCSIS is unaffected by distance from the node, is mostly immune to noise ingress and doesn’t care if Uranus is in retrograde. As such, the service quality is much, much higher and a full FTTP overbuild is largely unwarranted. That said, in its current form, the HFC network will never be able to keep up with bandwidth demand. NBNCo are already having difficulty getting 1Gbps plans on the network, plans which have existed on the company’s own FTTP network since early 2013.

So, without throwing the proverbial chessboard and starting over, how do we fix the HFC network? Luckily, the people who design, and the US network operators who ratify the DOCSIS standards are a little more forward thinking than NBNCo could ever hope to be in its current iteration. Built in to the latest version of DOCSIS are a number of enhancements which prepare compliant HFC networks for the future.

One of the major limiting factors to HFC network performance is the number of amplifiers between the node and the end user. Current best practice is to utilise an N+0 architecture. That is, the Node plus zero amplifiers between it and the end user’s cable modem. The NBNCo network is currently at an N+3 architecture, which makes it largely incompatible with the latest DOCSIS standard, DOCSIS 3.1. This is especially true if you take into consideration that there remain many of the old Telstra/Foxtel amplifiers still in service, as they were deemed to be working to an acceptable level for DOCSIS 3.0. While NBNCo have been progressively enabling DOCSIS 3.1 on select parts of the network, this is mostly due to its efficiency gains rather than for increasing performance for the end user. D3.1’s increased efficiency means that NBNCo can maintain current performance without performing any physical upgrades to the network.

One of the most important and effective upgrades NBNCo will need to make in the immediate future is moving the physical plant to N+0 Distributed Access Architecture (DAA). N+0 takes fibre deep into the HFC network, maximising network performance by minimising the amount of noise-prone and lossy coaxial cable between the node and the user, as well as lowering contention ratios to a level where the shared bandwidth is not even noticeable.

N+0 and DAA go hand in hand. Where N+0 deals purely with the physical side of the network, DAA is an upgrade that fundamentally shifts how the network itself is provisioned. Traditional HFC networks have the Cable Modem Termination System (CMTS) and RF combiner located centrally at the headend. The RF “DOCSIS signal” generated by the CMTS is then modulated into an analog light beam and sent along the fibre to the node, where it is converted back into an electrical RF signal. DAA introduces a profound paradigm shift with the Remote PHY (R-PHY) unit. This device replaces the CMTS at the headend, and instead resides in the node itself. Instead of the “DOCSIS signal” being generated at the headend and sent to the node in an analog fashion, it is instead generated at the node which talks to the headend digitally for service provisioning. In other words, the communication between the headend and the R-PHY is fully compatible with PON, the fibre architecture used to roll out FTTP.

DAA has huge implications for NBNCo, as it gives the company a simple and cheap upgrade path to full FTTP for when the time comes. Upgrading an N+3 DOCSIS 3.0 network is senseless, as the fibre component is incompatible with PON, and the whole lot would either need to be duplicated or upgraded in situ, which would cause mass service disruptions. By being fully PON compatible, DAA allows NBNCo to simply attach the fibre equivalent of a double-adaptor to the input of the R-PHY device and bypass it with FTTP while leaving DOCSIS services active and uninterrupted. In most cases, this ‘multiport’ is installed at the time the DAA fibre is installed in anticipation of FTTP upgrades. DAA also allows NBNCo to reduce maintenance costs across the HFC network, which is vital as the company currently has a network-related operating expenditure of around $2.3bn. Removing expensive, old, power hungry and short-lived active HFC equipment can lower this figure significantly. Importantly, it also lowers the cost of deploying FTTP to new developments in the HFC footprint, which common sense would dictate should receive FTTP from the get-go.

In terms of end user outcomes, DAA enables the efficient and reliable delivery of ultra-speed broadband plans in excess of 10Gbps download, whereas there would be no hope of delivering such services over the current N+3 DOCSIS 3.0 architecture. For those users who engage in NBNCo’s Technology Choice Program, it also makes upgrades to FTTP significantly cheaper, encouraging its uptake before even NBNCo are ready to do the upgrades themselves. Cynics would also note that every user-pays upgrade NBNCo makes through the TCP is one less the company has to pay for when it goes around upgrading the network itself.

Fixed Wireless: The ugly stepchild

It’s no great secret that the LTE component of the rollout has been spectacularly mismanaged. Utilising LTE to get high speed broadband access to properties too costly and too remote for wireline technologies was a good idea, however as with all things of this nature, cost cutting has led to a service so broken and so unreliable that many within its footprint elect to retain their ADSL services. Since switching to Fixed Wireless NBN, Whirlpool user Greg Lehey has experienced no less than 288 hours of downtime. Stories like this have emerged all over the country, with people reporting their services simply become unavailable during peak times. This is mostly due to bandwidth constrains imposed by the ineherent design of the NBN LTE network.

One of the biggest oversights in relation to the LTE network is the lack of backhaul capacity from each tower to its respective POI. As LTE is a shared medium, multiple users must share a single link back to the NBN Point of Interconnect, or POI. This is a colocation facility, where user traffic is handed off to the various ISPs’ networks. In order to cut costs, NBNCo elected to underprovision the amount of backhaul from each tower to the POI. Normally, it would be pretty trivial to increase backhaul capacity, as it would simply be a matter of increasing the bandwidth of the fibre optic link to the tower. However, NBNCo’s cost cutting method is so spectacularly stupid that this is simply not a possibility.

Instead of running a fibre optic cable to each tower for backhaul capacity, NBNCo has elected to use a wireless microwave link for many towers in a hub and spoke model. A microwave link is established between the POI and a master tower, which then divides the bandwidth of that link between multiple slave towers, which then connect actual end users to the network. This makes it incredibly hard to upgrade backhaul capacity to each tower, as it involves replacing expensive antennas or increasing the wireless bandwidth used, which often (always) isn’t possible due to extremely limited wireless spectrum available, and legally mandated power limits on wireless transmitters. While NBNCo have claimed that there exists a list of towers and backhaul sites that require upgrading, there is little to no evidence that they have actually undertaken any such work. People are simply being left with the choice of either braving the peak hour congestion, or retaining their ADSL services and thus being forced to spend more than they need to. Regional areas within the LTE footprint are historically underserviced with DSL too, often only being able to get a connection from Telstra.

There are two solutions for remediating the LTE network. Obviously, the most pressing matter is getting sufficient backhaul to each tower in order to alleviate the peak hour congestion and inherent unreliability that comes with using a cascaded microwave link. The only way to do this is to run fibre optic backhaul to each tower. This is an absolute necessity if NBNCo ever hope to make Fixed Wireless a viable solution for regional broadband access, and should have been the only backhaul method specified in the Network Design Rules. Not only will it remove the weakest link in the network in terms of bandwidth capacity, it will also allow NBNCo to free up the wireless spectrum they currently use on backhaul and reallocate it to increasing bandwidth on the consumer side of the network.

Another pressing matter for the LTE rollout is tower oversubscription. Much like with HFC, there are simply too many end users competing for bandwidth from a single tower. Of course, with multiple towers sharing a microwave link back to the POI, this is simply a cascade effect of underprovisioning of backhaul capacity. However, assuming we have now supplied each tower with its own fibre optic link, we can address this issue by splitting down towers, again much in the same way an HFC node split works. Assuming a 1:2 split, this would mean an effective doubling of available bandwidth for each end user between their premises and the tower. This increased bandwidth availability then allows NBNCo to offer faster plans across the network, making the same plans available across both wireline and fixed wireless technologies

Another minor consideration to make is the rising adoption of 5G, and the improvements it brings over LTE. At this stage, such an upgrade would be purely optional, and made in consideration of private competition. The expense necessary to cover regional Australia with 5G for either NBNCo or a private competitor would be ruinous, and so we will not consider this other than to remark that it is a possible (and likely) upgrade path in the medium to long term. With the bandwidth increases we have made above, LTE is still perfectly capable of delivering high speed broadband for some time to come, and any 5G upgrade would either be purely marketing or for increasing bandwidth efficiency to enable a greater number of customers to connect to the same tower.

Part 3: The Economics

One of the major hurdles to the NBN being a profitable enterprise is low Average Revenue Per User (ARPU). The cause for this is multi-faceted, and I make no pretences that I am an economist so this section will be short, however there seem to be two major causes for NBNCo’s money troubles:

  • High bandwidth costs make high-speed plans unfeasible
  • High speeds unattainable over most technologies

The cost of purchasing bandwidth on the NBN is very high compared to other wholesale networks. NBNCo’s pricing structure involves two access charges, billable to RSPs: the Access Virtual Circuit (AVC) and Connectivity Virtual Circuit (CVC).

The AVC is a per-connection charge, essentially the equivalent of the traditional line rental. AVC is charged based on the link speed between the end user and the RSP’s network and can be considered the “base cost” of providing an NBN service. For example, a 50Mbps downstream/20Mbps upstream (50/20) AVC provided over FTTP or HFC costs an RSP $34 per month. This is not the only cost to the RSP, however. Per the Wholesale Broadband Agreement (WBA), the AVC charge only covers the speed of the connection between the end user and the handoff to the RSP’s network. Using the plumbing analogy, the AVC charge determines only the size of the pipe between the end user and the POI. The RSP must also pay for the data sent across that connection.

CVC is a very controversial and divisive topic. CVC is a charge billed to RSPs based on how much data they transfer over the NBN, and currently costs $17.50 per Mbps per POI. A few years ago, most RSPs were engaged in a pricing race to the bottom in order to try and capture new customers during their transition to the NBN. This led to many severely under provisioning CVC at the POI, causing excruciating peak hour slowdowns even on FTTP. Again using the plumbing analogy, CVC determines the size of the pipe between the POI and the RSP’s own network. In order to keep costs down, RSPs were under sizing the pipe for the amount of flow, and as such the pipe was continually clogged.

The ACCC eventually intervened, forcing RSPs to advertise the “typical evening speed” for each service, which is a decent indicator of whether or not the RSP has purchased enough CVC from NBNCo. This of course led to RSPs actually purchasing enough CVC, as none wanted to be seen selling 100/40 AVCs which could only realistically hit 25/5 during peak hour. This stopped the race to the bottom price-wise, and now most RSPs offer very similar prices for equivalent services.

Part of this under provisioning scheme remains today, however. One may have noticed that a 50/20 AVC would, naturally, require 70Mbps of CVC to use to its full potential and as such should cost . But the typical 50/20 service costs around $70 a month, not $1,259 a month. This is because RSPs use statistics to minimise the amount of CVC they must purchase at each POI. The key assumption is that not everyone is going to be saturating their connection at the same time 24/7, and so RSPs can provision enough CVC to satisfy average peak demand across a given POI, rather than trying to provision enough bandwidth to satisfy constant 100% utilisation. The average amount of CVC provisioned per AVC across the NBN is around 2.3Mbps, up from around 1.8Mbps during the worst of the pricing war. If we assume a provisioning of 2Mbps CVC for a typical 50/20 service, then the NBN cost-price of such a service is $691. NBNCo are attempting to bring this figure up to 2.5Mbps, however this problem is indicative of a wider issue with NBNCo’s pricing scheme, which is acting as a huge barrier to uptake of higher speed plans.

The cost of bandwidth is fixed. That is, it costs NBNCo the same whether you download 1GB or 1TB. Thus, CVC is a manufactured cost. CVC was conceived in order to help fund the rollout by minimising the impact on the public treasury and is essentially a bandwidth tax. It also served a political purpose; the Liberal Party would attack the NBN for being an unprofitable venture and so CVC was used to ensure that the network would be profit-making early in its life to pre-emptively quash such an angle from its detractors.

Under the original FTTP plan, the CVC charge was to be gradually lowered and then removed as NBNCo’s costs fell. The key to making this work was that FTTP’s maintenance costs are extremely low, and beyond the initial rollout, overheads would be somewhat fixed outside of upgrades and emergencies. However, in late 2013, plans changed. With the change to FTTN/HFC/FTTB/anything-that-isn’t-FTTP, NBNCo could no longer rely on the assumption of low and fixed overheads. FTTN and HFC are extremely expensive. Telstra’s old copper network alone costs NBNCo around $1bn a year simply to keep running, let alone fault fixing and upgrades.

The reality is that the change in rollout plans has precluded the elimination of the CVC charge, as was originally planned and has locked out much of the rollout footprint from being able to attain even the currently available high speed plans. Broadband prices will continue to remain artificially high simply to cover the inordinate expense of maintaining this failed, dilapidated, stillborn network while also trying to generate the 7% ROI expected of it.

The Blame

Someone has to take the fall for this. Well, not someone, but a group of someones. And over the last eight thousand words, it should be pretty obvious to all which group of someones has to cop it.

Wrath

The government has, with reckless abandon, neglected the needs of Australia for the last ten years. What should have had bipartisan support from day one as a necessary Government intervention (depending on your economic sensibilities, a regrettable one) in a failed private market was instead attacked relentlessly by an opposition fuelled by pure vitriol and hatred, and then dismantled piece by piece by a vindictive Government intent on doing nothing more than erasing the legacy of its predecessor. For ten years, the Liberal Party has been vehemently opposed to the NBN not because of any technical or economic reason. It has been opposed to the NBN because it was Red Team policy, and under the leadership of Tony Abbott, had become obsessed not with holding the Government to account, but with attempting to undermine and destroy it by any means necessary. If the Australian public become collateral to that, then so be it.

Greed

The destruction of the NBN has been, from day one, primarily self-serving. It has long been said that success in Australian politics is predicated on “kissing the hand” of one Rupert Murdoch, Australia’s own exported oligarch. Not only did Tony Abbott kiss the hand, he led Murdoch to the bathroom and gave him a happy ending, in return for a happy ending of his own. It’s no secret that Murdoch felt threatened by the NBN due to the rise of streaming services and access to media outlets beyond his control. In exchange for a free ride to the Lodge, the Liberal Party agreed to gimp and destroy the NBN by any means necessary. So begins this Government’s long and proven record of wanton corruption.

The corporate reshuffle at NBNCo in the months following the 2013 election was of course nothing more than a wealth transfer exercise from the Treasury to Liberal Party supporters. Gone was the original board, stacked with international telecommunications experts such as Dr Quigley, and here to stay was a board stacked with Telstra executives of the Sol Trujillo era – the Telstra era immediately following privatisation. It was during this time that numerous contracts with third party rollout partners were cancelled, and contracts with Telstra renegotiated and expanded to include asset transfers, larger cash payments, spectrum licensing agreements, and maintenance contracts in perpetuity. Dr Ziggy Switkowski, chairman of the NBNCo board, was once CEO of Telstra and a board member of Foxtel. Once a vocal critic of Telstra’s copper network, now he champions FTTN and HFC as cheaper alternatives to FTTP.

The one exception to this rule is Simon Hackett, founder of Internode. Once extremely opposed to the Liberal Party’s plan for the NBN, he was appointed to NBNCo’s board by the Government in November 2013. While this obviously wasn’t a decision made to reward Hackett, it was done instead to silence a very high profile critic of its plan, one who was very influential in the telco industry. Hackett took the position thinking he could perhaps influence NBNCo from within, however resigned when it became apparent to him that the organisation had been thoroughly politicised, and no amount of influencing would change either the Government or NBNCo’s mind on how best to proceed with the rollout. Hackett resigned in 2016 and was replaced with Michael Malone, founder of iiNet. Mr Malone stated in 2017 that if he were managing the rollout, he would penalise critics of NBNCo by moving their connections to the “back of the queue” if they complained to the media.

These are the people the Liberal Party sees fit to be running a public utility.

Pride

It should have been apparent very, very early into the post-2013 rollout that the new plan was a total dud. In fact, it was apparent. Rather than admit a mistake and assume responsibility by quietly returning to an FTTP-based rollout, the NBNCo was more than content to help the Government save face by wasting undisclosed billions of taxpayer dollars on technological dead-ends like HFC.

We haven’t really discussed Fibre to the Curb (FTTC) yet. I deliberately left that for this section. Fibre to the Curb doesn’t technically exist. After the unmitigated disaster that was the Optus HFC trial and the eventual unmitigated disaster that was the Telstra HFC rollout, NBNCo were faced with a dilemma. Either move un-fixable Telstra and Optus Cable connections to the inferior FTTN (and face the complaints that come with that), or bite the bullet and deploy FTTP. NBNCo chose neither of these options, instead quietly enlisting networking hardware provider Netcomm to invent a new technology – FTTC. FTTC involves rolling out a GPON network to the street, much like FTTP. Unlike FTTP, however, a box known as a DPU is installed in the pit. The GPON signal is fed into this box, and it outputs four VDSL signals to service homes using their existing copper line.

Take a couple of minutes to really contemplate the significance of this. NBNCo, and by extension the Liberal Government, wasted billions and billions of taxpayer dollars in an effort to do no more than salvage what few morsels remain of the Liberal Party’s reputation. FTTC is perfectly indicative of this. For the sake of a few metres of fibre optic cable up a driveway, NBNCo has spent hundreds of millions of taxpayer dollars developing FTTC not for some technical or economic reason but simply to avoid the brief political awkwardness that would come with pushing that few metres of cable up the driveway. If the argument of FTTP being significantly more expensive were true, then this wouldn’t matter as much. However, when you take into account the public money that has gone into developing FTTC, the cost of each DPU, the training of technicians and the commissioning of backend systems, FTTC ends up costing about the same as FTTP. And that’s based on NBNCo’s post-2013 FTTP costs, which in their 2013 Strategic Review (conducted externally by Deloitte and KordaMentha) magically seemed to double for no apparent reason, with FTTP OPEX being classed as CAPEX again for no apparent reason.

To Close

Make no mistake, what the Liberal Party have done to the NBN is simply unforgivable, and is indicative of their wider open contempt for the Australian electorate, its money and its intelligence.

Rather than offer Labor bipartisan support on objectively positive legislation, they elected to obstruct and attack the NBN on every possible turn, aided by Rupert Murdoch and Telstra.

Rather than accept that FTTP is vastly superior in literally every aspect to their own policy, they chose to simply lie about the cost of FTTP, and then obfuscate or redact every single available document that made reference to the cost of FTTP prior to December 2013. This deception continues today; where FTTP costs around the world are plummeting, NBNCo’s internal documents for some reason show costs increasing. NBNCo continues to be accused of artificially inflating the costs of FTTP by industry experts and economists the world over.

Rather than admit that they fucked up with FTTN when it was apparent, they forged ahead with it until the situation was so bad that even the Murdoch press were beating up on the Government for it.

Rather than quietly go back to FTTP, they spent billions of taxpayer dollars – your taxpayer dollars – on short-term distractions like HFC and FTTC for no reason other than to avoid having to admit that Labor was right about something.

The Internet has become a public utility on the same level of necessity as electricity. Greece, a nation known mostly for the corruption and inefficacy of its government, acknowledges Internet access as a basic human right. Australia, ostensibly a free, first-world nation, has a government that has for the last 10 years actively frustrated efforts to bring forth ubiquitous and reliable Internet access; and for what? For some old cunt in New York to sell more newspapers.

Should we elect a government that actually cares about the common good more than it cares about its donors and reputation, it is my hope that at least some of the recommendations made here be acted upon as soon as humanly possible, lets Australia be relegated to economic backwater status in an age increasingly defined by the Internet. The fixes outlined here represent a realistic, achievable and cost-effective way to give Australia a fighting chance at achieving universal broadband access. Sure, it’s not 93% FTTP as was originally envisioned, however the days of that being achievable in the short term are sadly long gone. With these proposed upgrades being a realistically achievable interim goal, hopefully one day soon that dream will indeed be realised.

If you don’t have time to do it right, when will you have time to do it over?

1 Note that this is very close to the retail price of many 50/20 plans. In 2018, NBNCo began offering CVC discounts on 50/20 AVCs in order to encourage uptake, bringing the effective CVC price to $10/Mbps for 50/20. However, considering such discounts beyond acknowledging their existence needlessly complicates things. From now, we will assume that all RSPs pay the full price for CVC.

2 Comments

  1. Am hoping roll out is NOT FINISHED as I still DO NOT HAVE NBN
    Not sure that I really want it anyway because they are still using old lines to the home and ours are SO OLD that they keep cracking and every time we have excessive rain we can’t even talk on our landline because of static. What is the point in spending $ on rolling out NBN and then using infrastructure that is so OLD it doesn’t work efficiently. Where is the commonsense in all of this

    Like

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