Why the NBN needs to go the full way
callumj.com
callumj.com
The scary thing is that you only get to do something like this once every 20 - 50 years. So whatever you install needs to well and truly anticipate the future. Spending billions of dollars to install technology that is already at the end of its generation is insane. If people are voting thinking "well the time just isn't right for it", they have to realize - there is not going to be another NBN. It just isn't going to happen, (effectively) ever. Not least because every up and coming politician is watching and learning from this that you don't get rewarded for having any vision about infrastructure. All it does is open up opportunity for your opponents to propose something cheaper and accuse you of waste. It will be very sad if that is the take away lesson from this election.
How fast is the actual rollout?
We don't know. Commercial-in-confidence. And NBNCo say they don't keep figures down to the street level anyhow (which begs the question of which basis they are using to pay contractors).
How much has already been borrowed? We don't know. Commercial-in-confidence.
How much has been spent? We don't know. Commercial-in-confidence.
Insofar as we have to dig up half the flaming countryside, FTTP is probably worth it on a long-term basis. But that doesn't excuse the project from normal project management requirements.
And it shouldn't be excused from being transparent to the Parliament and public. The abuse of commercial-in-confidence for companies completely owned by the government is a backdoor for politicians of all stripes to avoid budgetary accountability while still leaving states and the commonwealth on the hook for debts incurred.
Where was the proper front end cost/benefit analysis? There wasn't one. Where was the 3-5 years of planning, surveying and preparation? There wasn't any. Where is the proper contract management? Oh, I guess we'll let NBNCo contract it to Telstra who will contract it to an engineering firm who will contract it to that bloke who has a van and who used to work for Optus.
Ends are important. But for the amount of money spent, so are the bloody means.
How can you possibly quantify the future benefits of the NBN ? Nobody could have predicted that when the copper lines were installed that one day it would be primarily used for the internet. And the historic changes to the world economy it has caused. So why even attempt to do it ? Or why not just say it will cost $50 billion but result in $500 trillion worth of benefits.
http://en.wikipedia.org/wiki/Fiber_to_the_premises_by_countr...
You can also look at how much people valued the additional speed, what new things they did, etc.
Wish someone would write an article summarising the overseas experience of FTTP.
Also, what is opportunity cost of NBN? Could we spend money to create a high-tech sector in Australia perhaps?
The ALP tend to use the NBN as a catch-all for tech policy - "don't worry we have innovation covered - its all the NBN".
Works well in Singapore. Just the cable that goes out form Singapore to, say, the US is not fat enough.
You're right that cost/benefit analysis is hard for transformative things like this, but the citizens throwing their hands up and saying "I don't care WHAT it costs" is like Pavlov's bell to politicians.
When they promised it for 40 billion in 3 years ... well. No. That was never going to happen. Imagine how many streets there are in your suburb. How many suburbs are there in your city? How many in the country?
Somehow in just 750 working days they were going to source thousands of contractors, open hundreds of thousands of pits or dig thousands of new ditches, feed millions of kilometres of new cable, wire in millions of homes, install tens of thousands of new racks in exchanges without expanding the exchanges ... and somehow nothing would go wrong and nobody would fuck up and there'd be no asbestos or blocked tubes or inaccurate records or particularly tough ground or shonky contractors or labour shortages or bad weather or delayed deliveries.
3 years.
This is what makes me mad. We were promised an amazing thing and so many of my friends and colleagues took absolute leave of their senses over it. It's embarrassing. We bitch about salesmen promising impossible bullshit to close a sale ... and then we bought impossible bullshit hook, line and sinker.
If this can't be done, even to an order of magnitude, then is the project worth pursuing?
If we allow spending decisions to be guided by Pascal's Wager, why aren't we spending infinite dollars on it? Why aren't we investing all our taxes into fusion reactors, flying cars and the fountain of youth?
> Or why not just say it will cost $50 billion but result in $500 trillion worth of benefits.
Because infrastructure decisions shouldn't be made by Dr Evil.
If the alternative was proposing to do the full project but address all those concerns that would be wonderful. But that is not the choice we have. And it may not be a realistic choice at all. Every single large project like this that has ever been undertaken has had these kind of problems. Look at the east west link in Melbourne - no business plan, no (public) cost benefit analysis, the whole thing commercial in confidence. I agree it's disgusting and in my view ideally would be unconstitutional (when it's our money, we get to see how it's spent - even if that inflates costs, that's the price of democracy, suck it up).
But the bigger problem is that we've manufactured a political environment where it's more expedient to hide all this stuff than to openly talk about problems, uncertainties and vision far into the future. Even your own words reflect that - you're criticizing them for problems in planning a project that is a one of a kind - never been undertaken before anywhere, and never will again. It's just an unrealistic expectation at some level that it can ever go perfectly.
In the long run FTTP is the correct solution. In Turnbull's place I would have pushed for a slowdown on the rollout. No matter who does it, the NBN will probably not be finished in this decade.
When government is spending taxpayers' money it doesn't care about efficiency, only about getting a slice of the pie. Family members, business partners and overcharging contractors feast on these multibillion dollar projects, and only them.
We've seen this happen with "Building the edu revolution", house insulation and so on. Porting bloody e-tax to Mac cost them $5.2 million.
The smaller the spending on NBN the smaller the waste.
Govt should focus on reducing friction for business, eliminating monopolies and building a healthy economy.
Competition and market forces can take care of the fiber just fine. If we had those.
If we leave it up to the market then only the profitable sectors will get high speed internet. The rest (i.e. rural and country areas, outer city, poor neighborhoods) will be left with the decrepitated copper system. How exactly does that help anyone or the economy ?
"Light" and "electricity" only travel at the same speed in a vacuum. Neither fibre nor copper wire could reasonably be considered a vacuum; they have different propagation speeds.
Also, we are far removed from "gen 1 of fibre", which was developed in 1970, i.e. 43 years ago. If anything, we're currently developing "fifth gen" fibre optics communications.
Everything else you said is spot on, though.
But what happens when you close a circuit of a conductor across a potential difference is an electric field is set up surrounding the conductor. This electric field accelerates all the electrons in the conductor at once. This is why even though the drift velocity of an electron in a conductor is very low, when you switch on a light switch the bulb lights immediately.
The propagation of the electric field is at the speed of light (its electromagnetism). So "electrons" move slowly but "electricity" moves at the speed of light.
Update: found a wikipedia page on it: http://en.wikipedia.org/wiki/Speed_of_electricity
Not really. There is still a physical limit to how many light paths you can have in one fiber wire. If applications are relying more and more on available bandwidth and if more people or more connections are being made (and this is the case and it shows no signs of slowing down) you will want to increase bandwidth because the network will suffer congestion and then you are going to need to dig in the ground and install an additional bunch of physical cables. And that costs more than just tweaking the boxes at the edge of the network.
? Light travels at ~299m/s. This will slow down in a medium like fibre, but it's still faster than anything else.
At best, in a particle accelerator you can accelerate electrons to maybe 0.8, 0.9 c?
It's about 2 things, and neither are raw download speed.
1) It's about upload speed. That's the major upgrade that we don't see right now. As the net moves towards more and more user-generated content (youtube, dropbox file relocation, etc.) it's going to be upload speeds that are the Achilles heel of these technologies working.
2) Related to #1 and perhaps even more importantly, it's about leveling the playing field. Right now, if you design an online service you have to assume someone has DSL at 1.5Mb/sec down, as that's the minimum guaranteed DSL connection.
You can't assume people can stream HD. You can't assume people can move multiple GB of data down in a reasonable time, or even hundreds of MB up in a reasonable time. All of these assumptions play a crucial role in what online services can deliver in this country.
It would be as if some new technology came along for our road network that allowed people to drive safely at 500km/hr but there's also a cheaper alternative that allowed travelling at 200km/hr, then focusing on whether we need to be able to drive at 500km/hr or 200km/hr over our existing road network to get to work or not. That's completely missing the point. The thing that a 500km/hr road network allows you to do is completely change how and where towns are constructed.
Suddenly, traveling from Sydney to Melbourne by road is trivial, rather than a plane trip as it currently is. People can live in Newcastle (for non-AU people, a small industrial satellite town of Sydney) but work quite conveniently in Sydney, changing the game for the real estate pricing problems Sydney presently faces.
The problem is that people are extrapolating present-day experiences to this new tech and that is completely missing the point. Doing what we currently do, only faster, is about 1% of the puzzle. The overwhelming majority of the advantage comes about from completely changing the landscape on what online services can do, what they can assume, and how they will go on to affect what will undoubtedly be a huge array of facets of our day-to-day life.
When we upgraded from 56k dial-up to DSL, it wasn't about loading animated spinning wireframe skull gifs from Geocities faster. It was about being able to stream audio and (eventually) video. The landscape changed and suddenly Netflix/YouTube/etc. became possible.
The problem I see is that most are already possible with current internet speeds.
The ones like media production studios (http://www.nbnco.com.au/nbn-for-business/case-studies/increa...) do offer new opportunities which aren't possible with ADSL2.
The only issue here is that they can easily afford to pay the 2K for FTTH under the Coalition policy.
60-70KB/sec upload means that producing video content is out of the question. It means that dropbox-style syncing of content I produce on my mobile device to the could is not possible. Services like crashplan are a far-away dream.
There's many, many things that are not possible even with our current DSL network, even for people who are living in the highly developed parts of this country. Never mind those who are out in rural areas and for whom DSL is even more crippled.
If you want to get an idea of this, just look at the "DSLAM maps" for a major Australian ISP: http://www.tpg.com.au/maps/
The problem is: what's after video? There doesn't seem to have been a rash of such game-changing applications of faster networks coming out of Japan or South Korea. They've had very fast internet for around a decade; where are the step-function changes in what can be done and what are they?
It's such a false economy!
Turnbull says about 2K, the ALP 5K. Delimeter seems to indicate toward the lower value.
http://delimiter.com.au/2013/08/23/open-deception-albanese-c...
Who typically rents ? Young people.
Pay-to-connect isn't available to the users who'd want it most - young people. And I don't just mean unaffordable. If you're renting, good luck convincing your land lord to splash out $4k every time you move.
According to NBNCo modelling, which has never been published. We are told that it has been reviewed by Deloitte (as I recall). But we weren't told what Deloitte reviewed, we weren't told what assumptions Deloitte were told to make. You can get an "auditor" to pass anything you want if you control the assumptions of the model.
NBNCo have already had to progressively change their projections for rollout time, rollout penetration and end user takeup. Multiple times. Does this change their model? I am kinda sorta prepared to bet that it does.
This goes back to my personal beef about the very poor transparency and governance of the NBN project.
Bigger apartment with better kitchen, view, facilities, and lower price. There aren't many places connected yet, and it's not looking like many more will be.
a) is it affordable
b) how many people will actually do so
c) would it be cheaper to do all at once?
NLP is just less concerned with fairness and more concerned with cost/benefit even if that means that some people will not have access to the fastest possible internet.
Life is not fair. Look at private/public with respect to schools, uni, health insurance, taxation, etc. Top 25% earners pay 60% of tax. Some children will never be able to attend a private school. Some will never have access to certain treatments or medication. Some will never be able to afford the things they want.
Some people are okay with this, others are not. Both parties will work towards measurable outcomes but in the large areas of grey they fall back to their ideologies.
Yes, the benefits of FTTH are fantastic, but its important not to get swept up in thinking we must do something at all costs.
There are very sensitive assumptions that underpin the cost of the NBN which would change the cost of it substantially such as how many people sign up, how much they will be prepared to pay, etc. There are plenty of risks to the project and even more so considering the involvement of the government. These are just some reasons to be very considerate about the cost.
The ALP worries less about wasteful spending than the LNP. This is easy to do because its only in the long-term where we have to make tough spending decisions because of past wasteful spending.
In the same way you can't fathom the opportunities brought about by the NBN, you also can't fathom the future challenges to the country - ageing population, world population growth, climate change, war, etc.
The frustration the author feels about having a focus on cost/benefit and risk will only become apparent with time. I could argue for anything too if I didn't have to address how much it costs.
If the ratio of ARPU to rollout costs were equal, it would be an issue. The issue is that a VDSL network would not be able to recoup the construction cost proposed by the LNP.
For me, it changed everything. (Non technical) friends just didn't bother with torrents anymore. It was easier for them to download a movie legitimately instead of all the mucking around...
Although then they have to deal with secret caps on "unlimited" plans which you aren't told about until you hit them and the ISP berates you for it and cuts off your service -- Google "Comcast caps".
It's really only partly about fibre vs DSL. It's also about the new incentive structure that FTTH would create in the Australian broadband market. An FTTH NBN would be an economic game changer in AU.
Besides, the asbestos in the pits* would have to have been cleaned up some time anyway.
* (was NOT unforseen, my mistake)
http://safedesign.wordpress.com/2013/05/31/nbn-asbestos-rais...
Beyond that anyone who had looked at plans from the 1940s to 1970s would have known it was there:
http://safedesign.wordpress.com/2013/05/31/nbn-asbestos-know...
Either the NBN people were completely incompetent, which is highly unlikely, or the Asbestos problem was raised much earlier internally, probably as soon as people became serious about the project.
If I have to munge a lot of data I just do it on a VPS and shuffle data back and forth to different cloud storage. I try and avoid downloading anything I might have to send back. I created a pipeline to process some video for work from the home/office it was way too painful on ADSL.
I can't imagine what it is like if you are a content producer. Just syncing my mobile camera images when I get home takes forever. And if my wife and I try to do Coursera and both kids wanted to watch ABC iView on their iPads everything just stops. With everything moving to HD and pretty much all services (including education) moving online my kids future is looking bleak unless something radical happens.
We have substandard services for lots of things in rural areas including health and education but being withheld a quality Internet service by Telstra/Murdoch/Abbott might be the last straw for us.
I have absolutely no problems paying 2K or 5K for FTTH.
All it means is that the NBN will be expensive unless and until a third player enters the market ... and doesn't get immediately bought out.
http://www.smh.com.au/it-pro/government-it/net-capacity-down...
Looks more like an oligopoly of 5 companies. Australian bandwidth charges are well above international benchmarks.
Along with costs of mobile phone service, housing, electronics, appliances, beer, and damn near everything else.
It's absurd to hear politicians argue about how networks should be built. IMO that is the role of a competitive market.
To my understanding, it went something like this:
AU Govt: "Let's privatize all of our telecoms infrastructure.... what's that? Give it all to a single company, creating a de-facto monopoly and ensuring mediocre service, lack of upgrades, and the stifling of competition for years hence? What a capital idea!"
I would love to out the politicians whose pockets got lined by that move.
Land access, easement issues, pit access/location/sharing and so on are very difficult problems with no single solution.
Private industry wouldn't be able to take the risk.
The problem with a competitive market as applied to public utilities is that there is only 1 set of infrastructure. So either 1 player owns the infrastructure and provides the service, the current regime, or you break out owning the infrastructure and providing the service.
The plan with the NBN is that NBNCo will own the infrastructure and then lease last-mile connections to whomever that specific customer chose as their ISP.
Who owns this new infrastructure? The gov. What historically have federal and state governments done with valuable infrastructure assets? Sold them. Profiting? Don't make me laugh. Quick cash grabs have been at the heart of filling budget black holes in this country and the NBN won't be safe either. You're kidding yourself if you think it is.
So that leaves us with Telecom to Telstra, phase 2. It will put us back at the same limitations the current DSL debacle has left us in but oh it promises soo much more. If only our ideals became reality.
Is there a better way? Legislation currently restricts any company from building a competing network. Prior to the NBN, Telstra owned the infrastructure, period. After the NBN, even Telstra will be forced to use the NBN to provide broadband services to its residential customers. This sets a wholesale base price, creates an unnecessary retail layer on top, leaves little in the way of competition for the ISPs.. hold on. Haven't we just seen this with Electricity? That's working for us! Even if iiNet wanted to roll out FTTH before the NBN got there, they couldn't. Google want to come in and build a 1gbps network, sorry guys, we're not having that! But the NBN is fair, it's so reasonable, we won't ever need anything more because government dictates that innovation doesn't have to come at the infrastructure level, no just build services that run on it - that's all we're good for!
There are few people in Australia that know fibre like Bevan Slattery, founder of Pipe Networks. He is most known for building PPC-1, the $200m link from Sydney to Guam, forcing wholesale data prices to fall dramatically overnight. After taking the company public, they were taken over by TPG (the ISP, not the private equity firm) for $375m in March 2010. The rumour is he won big by buying the Telecom dark fibre assets that Telstra didn't want, connecting East Coast data centres from Brisbane to Melbourne, via Sydney, and owning the market for interstate DC redundancy. He is a man that knows all the difficulties in building fibre infrastructure in this country and has been a staunch critic of the NBN from the beginning. Not because having FTTH wouldn't be fantastic but because the game the government is trying to play, is one they can't win.
Here's how I think you build a better NBN.
1) Kill the idea the GOV needs to connect 93% of homes, schools and workplaces to fibre. 2) Prioritise GOVs efforts to invest solely in building a strong fibre backbone (think of our existing highway/motorway network). Allow inexpensive access to ISPs. Legislate a restriction on selling infrastructure for the next 99 years. 3) Legislate to allow competition in building new broadband infrastructure, particularly fibre. This involves allowing businesses to use existing underground conduit (even that built for other services - power, water, etc.) inexpensively or grant licence to put in new conduit and pits where suits. 4) Keep legislation that require new developments to be wired with fibre, not copper. 5) Cut the cost of accessing premium wireless spectrum and open limited ex-analog tv spectrum for free. Legislate against monopoly/duopoly leasing of spectrum, it must be opened to multiple providers. 6) Provide up to 100% tax deduction to investors who back broadband infrastructure projects, in exactly the same way they were offered to those people investing in Timber Plantation projects throughout the 1990s/2000s. 7) Target 'dark' areas that ISPs are unlikely to cover (regional and outback) and provide high-speed 4g access in either sole government or government-private partnership.
This plan encourages competition. It will allow companies like Google to offer massive speeds/data for low costs. IT will encourage new businesses to build new technology, the 4G LTE Advanced of the future! Consumers will get a better deal, government will be able to focus on other much needed infrastructure spending (roads, hospitals, schools) and overall everyone will experience the best of what technology has to offer, because it will be able to be offered.
That's my incredibly long two cents - now tell me I'm crazy. But before you cry out and say but I live in Macksville, NSW, its out of the way and no company will build there.. I'm talking about allowing an ISP, no matter how small, to connect to the (mythical) Macksville NBN pit off the Pacific Highway, very affordably, and sell high-speed services over fibre or wifi to the residents of Macksville at a reasonable price. Won't they price gauge the consumer? Unlikely given that a competitor can connect to the (mythical) Macksville NBN pit off the Pacific Highway, very affordably, and sell high-speed..... ahh you get the picture!
Okay, now you can tell me I'm crazy.