SubPartners has unveiled radical plans to build a submarine sensor network atop its planned APX-East cable, intended to link Sydney to the US.
The concept of such a network has been hotly debated amongst the submarine industry for years, and at one stage was even considered in conjunction with the defunct Pacific Fibre project. Now, thanks to a newly forged memorandum of understanding with TE SubCom as exclusive supplier for APX-East, SubPartners looks set to revive the concept – via an array of externally tethered marine sensors mounted on APX-East repeaters to form what’s been dubbed the ‘Oceania Sensor Network’.
Most of SubPartners’ public focus to date has been on its Perth-Singapore APX-West cable, but at present the much longer eastern system – envisaged as a 12,500km route with 4 pairs, 140 repeaters and 48 wavelengths per pair – is nevertheless still expected to be ready for service by Q4 2015.
It will link Sydney with California’s Hermosa Beach, with additional branches to Hawaii and potentially some of the Pacific Islands.
“APX-West has had a lot more movement, obviously, with the iiNet MoU being signed and a few other customers – and the actual formal contract that we signed with SubCom for West, as well,” SubPartners CFO Raj Sharan told CommsDay. “That’s probably what brought SubCom into the picture… [and] one thing that we’ve locked away with this MoU to some extent on the east route is exclusive access to TE SubCom’s sensor [port] technology.”
“With this sensor network, we’ve got an opportunity to change what submarine cable systems are actually viewed as being used for. Traditionally, it’s just massive data capacity, and obviously a current-generation system will give you current-generation tech… which means you get the chance to realise the maximum amount of capacity,” he continued. “But what SubCom provides on its repeaters is a standard port that can be connected to a vast array of marine sensors… you can have seabed monitoring sensors, [seismic sensors], temperature sensors and so on… and all of this stuff connects into the repeater and also actually uses the capacity on the system. But it uses a capacity that’s outside the standard range.”
That’s important because in SubPartners’ model for both APX-West and East, clients buy portions of the fibre pairs themselves rather than fixed amount of capacity at fixed rates.
“[Because] this sensor tech actually uses bandwidth outside the normal range, you don’t have the downside of losing capacity on a pair of fibres, and you have the upside of this sensor technology being able to report this data to whatever landing station – and then from there, carried on to wherever it needs to be,” said Sharan. “If you look at the route… it pretty much cuts the Pacific in half, and that means we’re potentially going to have the largest subsea sensor array for early detection of natural disasters, tsunamis and so on… as well as just general monitoring of the underwater environment in the region. From a research perspective, it’s going to be quite useful; I think some of the educational institutions are going to really want to get on top of this, if we can actually make the business case work.”
“But for us, this isn’t so much a leasing play or [something] to make money out of for general consumption; it’s not something that our business case hinges on, it’s just part of the overall value that we’ll provide. It was a way for us to take our system and make it different for the market; certainly, I think it will make our system more attractive to educational and research institutions, and particularly government entities as well – who see not only the ability to get the lowest-latency capacity, but also this added side benefit of monitoring of the Pacific and the region in general.”
REGULATORY CHALLENGES: TE SubCom has been talking about its sensor port tech for the last couple of years – and had even been working with now-defunct Pacific Fibre on the opportunity to add sensors to the latter’s planned Australia-New Zealand-US route. However, others – including Wiltshire and Grannis LLP partner and veteran submarine cable lawyer Kent Bressie – have long warned of potential legal and regulatory cross-border complexities around cable-mounted sensor nets. It’s an issue that SubPartners is very much aware of.
“I think anything with any kind of tech that Team Telecom [the group of lawyers from the FBI and US Departments of Defense, Justice and Homeland Security which, among other functions, carries out security reviews on new telecom infrastructure which traverses US territory] don’t like, we’ll know about pretty quickly,” said Sharan. “While I won’t say that we have any kind of approval, the idea has been floated… and no-one completely baulked. It was the usual response you get from those kinds of people: ‘we’ll wait to see the specifications and what it can do’.”
“I’m sure you can imagine that if you’ve got deep-sea sensors in the middle of the Pacific there are some concerns as to what else they could be used for!”
Meanwhile, key SubPartners execs are busy courting potential customers for the eastern route. “We’re talking to multiple parties on an ongoing basis; [founder] Bevan [Slattery] and [commercial director] Carlos [Trujillo], along with our new sales director Hamish Lee, are all in America at the moment, going through a roadshow,” said Sharan. “And we expect to be announcing some more MoUs on APX-East; I’d say at least a couple before Christmas.”
CommsDay held the latest edition of its annual Melbourne congress this week. We make available many of the powerpoints here. Where some speakers’ powerpoints are not available, it is either because the speaker has requested we not publish it or we have not yet been able to upload the specific file for technical or time reasons.
Operators around the world – as well as some governments – are on the brink of giving their old copper networks a new lease of life via a noise reduction technology known as vectoring. But what’s the real extent of the commercial commitments in play, and when and where will the tech actually see service? Petroc Wilton reports.
Thirty years of telecoms history, says Dr John Cioffi (pictured)– known as the ‘father of DSL’ – has consistently shown that one size does not fit all, at least in fixed broadband access networks.
Operators and governments globally may still envisage ubiquitous fibre-to-the-premises deployments, first mooted in the 1980s, as their eventual Nirvana. But right now, capital and time constraints are obliging most of them to wring as much value as possible out of their existing copper networks – particularly in the last mile, where the civil costs of upgrading to fibre spike up sharply.
That’s what has been driving telcos around the world – including AT&T, BT, Deutsche Telecom, Swisscom, Belgacom and Telecom Austria – to make large commercial commitments to a technology known as vectoring in the last couple of years. An upgrade for existing DSL systems, vectoring offers hefty performance improvements on copper in the right conditions; it was co-invented by Cioffi back near the beginning of the millennium but, with vendors now having shipped millions of lines’ worth of vectoring-ready hardware, it’s right on the brink of hitting the big time.
WHAT IS IT? Vectoring is essentially a transmission method that virtually cancels crosstalk noise on copper wire; the corresponding International Telecommunications Union standard was ratified in 2010.
As Alcatel-Lucent fixed access marketing director Dr. Stefaan Vanhastel explains, crosstalk gets worse at the higher range of frequencies used to drive higher speeds on copper, and has been a key factor holding back VDSL deployments from actually achieving their design speed – and thus competing with HFC and even first-generation FTTH networks.
“VDSL2 is fantastic compared to ADSL; you get 100Mbps downstream if you test it in the lab, at 400m,”says Vanhastel.
“[But] unfortunately, once you actually deploy VDSL2 and take it out of lab conditions, you don’t get that 100Mbps, because of the crosstalk between the telephone lines in the same binders – you maybe [get] 30-60Mbps, a significant drop. It depends, basically, on how lucky you are; your line might be in the centre of the binder, you’re surrounded by other lines, and you get interference from all of them. Your neighbour might be on the outside of the binder, and he’s only getting interference from a few lines. [And] the traffic patterns on individual lines change all the time.”
Vectoring, though, all but removes that crosstalk – pushing VDSL speeds, at least on short loops, up close to their theoretical levels. “Noise cancelling headphones are the typical analogy; you measure the crosstalk, and then you generate an antiphase signal. When you add the noise and the anti-noise you end up with… near zero noise on every line,” says Vanhastel. “But it’s way more complicated than the headphones [analogy would suggest] because you have to measure the crosstalk from each line into all of the other lines, you have to do that for four thousand frequencies, and you have to do that for upstream and downstream… multiple times per second in real time. And then, for every signal that you transmit on each of the lines, you actually have to generate [an additional] anti-noise signal – because that signal that you sent on Line 1 is going to create [its own] noise signal on Line 2, 3 and Line 400.”
“So it’s very complex and, while I hesitate to say that [the result] is zero [noise], it’s as good as zero –you cannot afford to let one bit of noise slip through, because it will wreak havoc on the other lines.”
WHERE CAN IT BE USED? It’s important to note that, from an end-user perspective, the absolute quantum of improvement from vectoring will depend on the degree to which crosstalk was impeding performance in the first place. In particular, at longer loop lengths (and to a much lesser extent, lower diameter cables), where attenuation rather than noise starts to become the limiting factor, the vectoring gain will be smaller – even though noise on the lines will still be eliminated.
Vanhastel says that while customers who’ve tested vectoring at 1,200m have still seen 10-20Mbps improvements, it’s at the loop lengths of 300-500m that they’ve been hitting the important 100Mbps bar, with the most impressive gains out to the 800m mark.
Other key vectoring vendors report similar experiences. “What we’re seeing for vectoring is that it’s being used anywhere between 500 and 100 metres,” says Huawei Australia CTO Peter Rossi. “BT, [for example], has deployed in such a way that it’s within that 500 metres.”
“Between 400 and 550m is a nice sweet spot,” adds ADTRAN carrier networks product marketing manager Kurt Raaflaub.
“Customers are going after the 100Mbps on the downstream… to compete with DOCSIS 3, or just keeping in line with – if you’re in North America – the FCC mandate for the year 2020, or the digital agenda in Europe where 100Mbps has been quoted.” That means vectoring can work well in fibre to the cabinet, fibre to the node, or fibre to the basement deployments, dramatically increasing line speeds across the short copper loops within apartment blocks or from cabinets to homes. “It’s very conducive for large apartment buildings, because you can put it down to the basement, utilising existing infrastructure, and minimise as much as possible the cost,” says Huawei’s Rossi. “But it’s [also] being used in fibre-to-the-cabinet type deployments, because that’s where…. crosstalk really causes a lot of problems.”
“Something that’s a misnomer is that many customers can’t be reached with [vectoring effectively], because a loop length of 500m is quite short,” adds Raaflaub. “But there have been quite a few studies where, depending on the nature of the country, between 65-80% of homes can be tackled with that 100Mbps – they’re inside that 500 metres. And in our studies of countries like Australia, they’re actually leaning towards the upper bound.”
WHO’S DEPLOYING IT? Vectoring is at least a few months away from household use at any scale, but is expected to ramp up sharply in the near future. Broadbandtrends forecast last year that 27% of all VDSL2 ports would be vectored by 2017. In terms of spend, the inflection point may already have been passed.
Cioffi – a pioneer in broadband over copper since the 1970s and now CEO of ASSIA, which holds some of the basic patents on vectored VDSL and is helping investors AT&T and Deutsche Telecom with their deployments – notes that AT&T has made a US$6 billion commitment to vectored copper, with Deutsche Telecom committing EUR6 billion as well.
“Those are real commitments – that part of it’s there, the money, and now it’s a matter of following the process to actually make it reality!” he says. “[But] you will not see large volume until we get into 2014 and beyond; a lot of the volumes being quoted right now are actually ‘vector-ready’ DSLAMs. They’ve sold this many ports…but the equipment that’s going into the field at the fibre-fed nodes is ‘vector-ready’ in that they can stick in a new card and it coordinates between the other cards and does vectoring in the future, but there is no actual vectored VDSL in service quite yet.”
Alcatel-Lucent says it’s shipped 1.3 million vectoring lines as of Q2 this year. It has sixteen vectoring customers, with the most advanced having deployed over half a million vectoring lines; only Belgacom and Telecom Austria have thus far gone public. “In our case, you can still choose to buy regular VDSL line cards or vectoring line cards… so if [operators] didn’t plan to do vectoring, they wouldn’t buy the line cards!” says Vanhaastel. “Operators are a bit reluctant to go public at this moment in time; one of the reasons is that many of them want to build out their footprint and achieve a certain coverage before they start advertising higher bitrates, in order not to disappoint…a number of other operators are still waiting for the final regulatory approval to activate vectoring services.”
“One way to estimate how close operators are to activating vectoring services is to look at the number of vectoring processors that are being shipped… we’ve shipped enough system-level vectoring processors to cover about 430,000 lines. So if you compare that to the 1.3 million vectoring lines shipped, it means that at the moment, about 1/3rd of those are pretty close to being activated, and in some cities, operators have already activated lines in vectoring mode – but without advertising the service.”
Huawei, for its part, has shipped over a million vectoring lines, with public customers including BT and Swisscom. “The biggest challenge in vectoring is the CPE… the availability of CPE for vectoring today is minimal. The capability will be there, it will just be the CPE itself. It’s easier to upgrade the exchange… than it is to upgrade every individual single user end-point. But that will occur,” says Rossi. “Now that we’ve come out with vectoring and G.fast I’d expect it to accelerate, and I’d expect to see [some] operators solely purchasing VDSL and vectoring – because it’s backwards compatible to ADSL fallback, it makes no sense not to go forward.”
HOW MUCH DOES IT COST? One of the key draws of FTTX VDSL and vectoring deployments is the lower capital cost compared to fibre, particularly since they use existing last-mile copper rather than installing a new last-mile fibre plant at tremendous cost.
“In terms of capex plus installation costs, we typically use ADSL as a reference point, so ADSL from the central office has a cost of 1. Of course this differs from country to country, but as a rule of thumb, we use a factor of 15 for FTTH, so it’s 15 times more expensive per subscriber. FTTN with vectoring is about 4-5, so it’s three times cheaper than FTTH,” says Alcatel-Lucent’s Vanhaastel.
“Some large telcos have thrown around 3x and 3.5x as the [capex] delta between 100% FTTH and a mix of FTTH/FTTX,” agrees ADTRAN’s Raaflaub. Cioffi is even more aggressive. “The costs really are a few hundred dollars, or euros, per customer to get them to this [50-100Mbps] speed with FTTN … it’s about 10-20% of what FTTH costs,” he says.
The opex discussion is slightly more complicated. Huawei’s Rossi, for example, suggests that opex on an FTTX build with vectoring would come in around the same or slightly higher than an FTTH build – but says that Huawei is still doing tests in this area. A frequent criticism of broadband plans using legacy copper plant is that maintenance costs on older copper can be high; there’s also the ongoing power cost to contend with. But Cioffi offers another perspective.
“I have seen two other large customers in the world who had been doing FTTH, and are also ASSIA customers for the DSL part of their network. We have been privy to the maintenance costs in both cases, and these are large deployments – at least a million of fibre and DSL each, and in most cases much more than that,” he says. “If the system is being managed by ASSIA, we make a reduction in operator costs, it’s one of our selling points; we reduce calls, trouble tickets, reduce dispatches, churn and so forth. If you look at those measures for the fibre network and you look at them for the DSL network, after we’re managing it it’s actually lower on the DSL side,” he says. “It depends on the situation – but it’s roughly 30% lower on the operating costs.”
“Part of that is that operators tend to offer more service on fibre, so there are more things that go on… but there’s no truth that the passive fibre is somehow less maintenance. It is passive, but it has additional problems because it is passive – particularly, if there’s a problem but they don’t know where, it’s a very expensive endeavour to find out where the problem is. You get all these consumers that are hung off the same fibre, and you don’t know which one has the problem at their home that is causing the issue. That’s part of it. And if you run fibre to the desktop, fibre is sensitive to movement, unlike copper – so if people move the box around, the optics can degrade. It depends on the fibre that you use how much it degrades…in Europe, for one of the major deployments they used the wrong fibre, and they have a very high call rate, double digit per month on the fibre network. And it’s because of people moving the boxes.”
“Active [electronics] in the loop plant, which is what VDSL introduces at the node, do have a powering issue, and that creates its own set of issues,” concedes Cioffi. “But typically, if it’s a well-managed system, the copper networks are coming in at a lower number of calls, a lower number of dispatches, and a lower churn rate.”
ADTRAN, which ships FTTH as well as FTTN gear, tells a similar story. “You’re removing a lot of the repeaters, a lot of the bridge taps – and those are the parts of the copper plant that have the biggest issues – when you get down to a shorter loop,” says Raaflaub. “We’ve been deploying FTTN systems with carriers for almost a decade – with nearly 100,000 of them in place,” adds CTO Dr. Kevin Schneider.
“Once you get down to the shorter loops… our experience is that there are fewer troubles there than there are with the very long cables from the central office.”
TECHNOLOGY MIX: None of the vendors are positioning vectored VDSL as a total replacement for FTTH in all cases. Rather, they all see higher-speed copper tech working along with fibre in an integrated network, with different access technologies deployed as necessary to meet specific needs. “Both economic and technical conditions are different from locality to locality,” says ADTRAN’s Schneider.
“A different tool may be needed to bring the broadband delivery, and hit the price and availability dates, that each region needs. The collection of different technologies is definitely in the future for us as an industry.”
“A lot of operators deploying FTTH, are looking at DSL again because of the time to market advance, but also because it allows it to connect more people within the same budget,” notes Alcatel-Lucent’s Vanhastel. “We have more fibre customers than VDSL customers, but the combination of the technologies is, in my opinion, a good way to deliver more broadband to more people quickly and cheaply.”
For Huawei’s Rossi, one of the key advantages of vectoring is that it enables copper last-mile access to keep pace with FTTH deployments, or close to it – avoiding a ‘digital divide’ in a mixed rollout. “Fibre will give you 100Mbps [in early deployments]… and I have the ability with vectoring and VDSL2 to give you 100Mbps, so I have a unified environment between copper and fibre,” he says. “We have a true environment where we can look at a pure, heterogeneous network where we can provide the same functions for all users – [one user] on the copper world can have the experience as another user on fibre.”
“And that’s the important part – we can sweat it without having to put out the huge amount of cost over a short period of time to rejuvenate or change that copper out.
For Cioffi, this kind of technology mix is in line with “the history of nearly everything that happens in telecom.”
“This thing about running a fibre to everyone’s home has been there since the mid-1980s, and it hasn’t happened anywhere – even though several nations have committed to this, the first of which was the US with what was called the National Information Infrastructure Act of 1988, and they all went through the same process of learning that it costs too much. So they backed off. Verizon stopped their fibre program two years ago, no more new homes passed because it cost too much. The situation in France has changed, they’re going to VDSL there because FTTH costs too much. The Germans didn’t even bother to try FTTH because they saw for everybody else that it cost too much,” he says.
“Where fibre makes a lot of sense is in the network, even out to the node, where you’re sharing the cost of fibre – digging up streets and other things. It does make sense on very high-speed links where you’re going to 100Gbps, IP networks at 200Gbps, IP networks in the core – that’s got to be fibre, and even if it costs a lot of money, it’s shared over so many users that it’s got to be productive. But when it’s shared over just one user, it becomes very, very difficult to manage that,” continues Cioffi.
“With copper, you don’t have that concentration problem; if you have 50 or 100Mbps, you’re not sharing it with anybody until you get way back into the core of the network, where you hit the fibre segments and you start to see aggregation occurring. But those are going to be much higher speed fibres, they’re not going to be running at 1-2Gbps like PON is.”
“It’s fools’ gold to believe that anyone is going to sell you a [single] piece of equipment, whether fibre based or copper based, that suddenly solves all the problems.”
Communications minister Malcolm Turnbull has told NBN Co to proceed with its current wireless, satellite, transit and POI network plans but cease issuing new instructions on brownfield fibre rollouts under a statement of expectations released in Sydney this afternoon.
The statement urges NBN Co to avoid service disruptions for consumers, minimise the impact of changes on the construction industry and implement the Coalition’s policy for a less costly and faster rollout as “seamlessly” as possible.
It wants NBN Co to continue to work on existing satellite, wireless, transit and greenfield fibre rollouts but to desist from new build or remediation instructions in brownfields pending further discussions and analysis. The fixed wireless rollout should take into account the potential for VDSL rollouts in its service area.
It also calls on NBN Co to prepare its next three year corporate plan and to provide weekly NBN rollout information.
Turnbull also said that the Department of Communications had begun a 90 day review of broadband quality and availability in different regions of Australia which will inform the future priorities of NBN Co.
Top executives and commentators across the telco industry have wasted no time in welcoming in the new federal government – and highlighting the top priorities they’d like to see in focus within the first few months of the new administration.
All eyes will be on Telstra in the early weeks of the new Coalition government, given that the firm’s important – and lucrative – role in the NBN project is likely to undergo some delicate re-negotiations under the Coalition’s FTTN-centric version of the policy. “We congratulate the Coalition on their election win and we look forward to working with them on a number of important policy areas,” said Telstra CEO David Thodey. “The NBN will obviously be a focus for us, but we’re also interested in engaging on telecommunications more broadly as well as innovation, regional economic development, trade and digital economy policies among others.”
“We will engage constructively with the Coalition government on how we can best help them deliver their NBN policy commitments. The new government has committed that they will seek to renegotiate our NBN agreements and keep Telstra shareholders whole. We will look to help facilitate this quickly with a view to minimise uncertainty,” continued Thodey. “While any negotiation takes place – our priority will remain to be focussed on meeting our existing commitments and winning customers on the NBN where it is available.”
Vodafone Australia CEO Bill Morrow, meanwhile, had his eye on regulatory settings – and possible changes to the remit of the NBN itself. “Vodafone’s focus remains on ensuring that the right settings are in place to deliver a more competitive market, continued innovation and more consumer choice. A productive economy needs world-leading broadband infrastructure and a vibrant, competitive telecommunications sector to deliver it,” he said.
“The NBN project will continue to be the foundation stone for upgrading Australia’s broadband infrastructure and overcoming the key weaknesses in the Australian market. But the world has changed since work started on the NBN in 2009. Since that time we have seen the rise of the smartphone and tablet and an acceleration of the process of fixed and wireless convergence. NBN’s remit needs to be updated to recognise the new requirements of consumers and technology. In particular we need to examine how mobile services and coverage can benefit from the NBN. This will result in a more cost effective NBN that will open up even more opportunities for the digital revolution.”
Communications Alliance CEO John Stanton told CommsDay that the industry peak body would be focused on the Coalition broadband policy requirement for Comms Alliance to develop standardised interfaces for different access technologies proposed under the Coalition’s NBN model, including FTTN but also potentially open-access HFC. “We’re enthusiastic [about] getting on with that task and pulling together an industry group to work on it,” he said. “And making sure that, whatever the construct of the NBN under the new government, it’s one that operates efficiently for service providers to undertake all of their operational activities and deliver services successfully.”
“There’s also the question of [Coalition] senator [Arthur] Sinodinos and his ‘red tape reduction’ program; we’ll be having some inputs, and putting some views to the new government about the nature and scope of what would be sensible regulatory reform in the new environment.”
Key telco vendors were also quick to respond to the change of government. Ericsson ANZ head Håkan Eriksson called for a focus on demand-side policies to help drive the digital economy. “I would firstly congratulate the government on being elected and reinforce that Ericsson will continue to deliver on its commitment to the NBN fixed wireless network, bringing high-speed broadband to regional and rural Australians,” he said. “Importantly, this will be a key enabler to ensure that all Australians benefit from participation in the networked society. To this end, Ericsson calls on government to extend its focus beyond the important issue of access connectivity to ensure that demand-side policies are also addressed, targets set and plans put in place to achieve these, in order to ensure that the full economic potential of the digital economy can be realised.”
Alcatel-Lucent Australia president Sean O’Halloran, meanwhile, congratulated Malcolm Turnbull for his approach to the comms portfolio as shadow minister while the Coalition was in opposition, and the detailed proposals he had put forward for the Coalition government.
“High-speed broadband, its potential for innovation, consumer and economic benefit, is firmly on the agenda and that’s a good thing,” he said. “I think that if the new government can move quickly and effectively, without disrupting momentum and industry stability, there is every chance they can achieve a very positive NBN outcome. Alcatel-Lucent has a long and proud heritage at the heart of Australian telecommunications and we look forward to being part of the next stages in its evolution working with Malcolm and the new team. I wish them all the very best.”
“Many congratulations to our newly elected government,” put in Nokia Solutions and Network ANZ head Stephen McFeeley. “We look forward to working with [them] to ensure that Australia becomes a global benchmark for the best telecommunications experience and cements its position as a leader for technology innovation.”
Optus corporate and regulatory affairs VP David Epstein, for his part, said that his firm would be looking as always for polices promoting competition and better outcomes for Australian telecoms consumers, and that Optus was pleased that the election had seen bi-partisan support for the structural separation of Telstra and a wholesale-only NBN. “There should also be a focus on policy initiatives beyond NBN that will protect and enhance telco competition, ensuring that Australian consumers reap the benefits through innovative and affordable products and services,” he added.
Shadow communications minister Malcolm Turnbull and parliamentary secretary for broadband Ed Husic have clashed in fierce debate on CommsDay’s Crosstalk podcast, just days out from the imminent federal election.
And while their exchanges still remained far more civil than Turnbull’s duels with ex-comms minister Stephen Conroy, the two pulled no punches on policy. Husic warned that re-opening negotiations with Telstra would be an Achilles heel for Coalition NBN costings, drawing on his previous experience with the telco, and that any effort to bring Telstra in to help with construction could jeopardise the industry reforms passed to support the NBN. Turnbull, meanwhile, accused the government of a sleight-of-hand in conflating the benefits from ubiquitous broadband connectivity with those specific to FTTP, and dismissed the ALP’s FTTP NBN plan as an “outlier” in global terms.
The shadow minister reiterated just days previously that he doesn’t expect to pay Telstra any more Telstra to lease its copper network than has already been committed under its existing NBN deal. Husic, though, was sceptical. “[Telstra CEO] David Thodey is not Santa Claus; he is going to, with a fixed commercial eye, extract maximum value – knowing that he has a very desperate customer in the form of a Coalition government that wants to get access to copper,” said Husic. “And that, when the other side of politics talks costs, is a big Achilles heel… having dealt with them as a former union official, I know that negotiating with Telstra is never a tea and biscuits affair!”
Turnbull, however, was adamant that Telstra would be willing to lease its copper network to NBN Co under the Coalition, without extra cost to the taxpayer. “Frankly, it’ll mean the NBN can be rolled out much, much sooner… and they will get their A$1,500 [cutover fee] per premise much, much sooner. So there is a time value of money for benefit for Telstra – which has now crossed the Rubicon,” he said. “They want to get the NBN completed, and they are frustrated by the miserably slow progress that has seen, after four years, only 33,000 premises with an active connection to the fibre!”
Turnbull also said that a change of NBN plan wouldn’t cause significant delays. “In order to use the D-side copper for a VDSL deployment you don’t have to change the legislation; you do have to reach agreement with Telstra, and we’re satisfied that can be done promptly. Yes, there would have to be redesign, but the reality is this: that the NBN itself has been seeking a redesign. The NBN Co has submitted to the government that VDSL should be used in multi-dwelling units; they did that some time ago, and that is an even stronger recommendation in the corporate plan that Anthony Albanese is refusing to release.” “And the government has rejected that for purely political reasons. But there has been quite a lot of work done at NBN Co on these alternative approaches, because they have recognised ….that the problem with FTTP is that it’s a great technical solution, but it takes a lot longer than people imagined, and costs a lot more.”
Husic, in response, stuck to the party line on FTTP. “[The Coalition has made] very much a political and ideological decision to go for FTTN – because they wanted product differentiation, in effect, on policy,” he said “We will finish this job, done right, done the first time… by 2021. The other side… will deliver their sub-par network, that can’t meet future data growth and will deliver less in terms of economic benefit to the broader community, by 2019.”
“The coalition will, as data explodes in terms of growth… come back and build fibre networks… at a higher cost. They will have to come back and do that.”
But Turnbull dismissed the FTTP plan as an “outlier” scheme compared to international peers, founded on a ‘great confusion’ created by the current government. “There are great benefits from ubiquitous broadband, but you don’t need to have everybody connected to fibre optic cables in order to have it,” he said. “The critical thing is ubiquitous and affordable connectivity – and that can be provided over different channels, wireless, HFC, VDSL, optical fibre and so forth.”
“The hybrid approach, using a lot of vectored VDSL as we propose is the norm! I’m sure Ed’s got it all over Deutsche Telecom, British Telecom, AT&T… if there was any justice in the world he’d be chief executive of all of them! But the fact is that the big telcos in the world are taking the approach we’re taking. And that’s because people such as those in Ed’s electorate who don’t have broadband want to get… their broadband upgraded quickly, cost-effectively and at a price that customers can afford,” added Turnbull.
“Telecom networks are being progressively upgraded all the time, and always have been. We are in a position to make a quick, cost-effective, affordable investment now which will deliver our needs now, and
in the foreseeable future. And if in ten years the network needs upgrading, then upgrade it then – and if you do it in ten or twenty years when demand is there, if it does come, you’ll be doing it with the technology of twenty years hence!”
TELSTRA INVOLVEMENT: One issue addressed by both participants was how Telstra might be recruited to help with more of the NBN construction side, regardless of which side of politics formed the next government. Turnbull acknowledged that, in this scenario, Telstra would likely be using many of the same sub-contractors currently engaged on the project. “But the big difference is that Telstra’s got so much experience designing and managing those contractors; if you look at these networks around the world… typically, they’re being built by incumbents,” he said.
Husic said that NBN Co, not politicians, would make the decisions about where to build up its resources – but also sounded a note of caution. “The key thing about having Telstra is that we undertook this massive reform that had eluded Labor and Liberal governments of times past, of the structural separation of Telstra. I’d be very careful of doing anything to reverse that, because it’s the most fundamental reform of telecommunications that any government has undertaken with respect to Telstra; I wouldn’t be rushing back.”
“There are two choices for the Coalition when the negotiate on FTTN; Telstra will either lease its copper or be forced to sell it,” he added. “[If] they lease it, Telstra will have an economic interest in terms of how FTTN is set up, and that brings back the whole question of [whether] after us finally structurally separating them, we have this creep back to structurally re-unifying them!”
Australasia’s leading thought leaders and players in the telecoms wholesale and data centre spaces converged on Sydney’s Westin Hotel last Wednesday for a day of discussion and discourse.
Their powerpoints are here:
SingTel Optus’ Paul O’Sullivan has been named Australian Communications Ambassador 2013. The winners of the prestigious 2013 Communications Alliance & CommsDay Awards were announced at the Annual ACOMM Awards Dinner in Sydney.
Attended by almost 500 of Australia’s telco industry leaders, the event was crowned by the Minister for Multicultural Affairs and Minister Assisting for the Digital Economy Kate Lundy and the Parliamentary Secretary for Broadband Ed Husic presenting the Ambassador award to O’Sullivan, who is the former CEO of Optus and presently CEO Consumer for Singtel.
The individual category awards were taken out by a star-studded line-up of Australian service providers – featuring long-established players and ‘new faces’ – including Internode, NetComm Wireless, Inomial, iiNet, Next Telecom, AAPT, iiNet/CSIRO and Optus
“The ACOMM Awards represent the pinnacle of achievement for the Australian communications industry and I congratulate all the winners and finalists in the 2013 ACOMMS,” said Communications Alliance CEO John Stanton.
“CommsDay congratulates the short listed nominees and the winners. It was a very tight race this year which highlights the continuing quality of Australia’s telecommunications industry,” said CommsDay founder Grahame Lynch.
The ACOMM organisers said the 2013 Communications Ambassador, Paul O’Sullivan is a recognised leader in Australian telecommunications and was for many years the most influential and visible industry champion of increased competition.
O’Sullivan joined Optus in 1994 where, after successful stints running the Optus retail presence and as Director, Mobile, he was appointed Chief Operating Officer in 1998. In 2004, Paul became Chief Executive Officer of Optus and oversaw the transition to a SingTel company. As CEO, he was responsible for the remarkable turnaround in Optus’ performance from a $304 million loss in 2002 to a $1.136 billion profit in 2013 with $1.111 billion in free cash flow.
He was responsible for multi-billion dollar investments in Optus’ networks that has resulted in a footprint of over 10,000 mobile base stations, including approximately 5,400 3G base stations and a growth in mobile subscribers from five to nine million in 2012, five satellites in orbit; six satellite earth stations, and over 26,000 km of HFC cable in Brisbane, Melbourne and Sydney.
Innovation, Large Company: Internode for being the first broadband company in Australia to offer IPv6 as a standard service for both ADSL and NBN customers. Since launching a 20-month public trial in 2009, Internode has consistently led the country in its adoption of IPv6.
Innovation, SME: Netcomm Wireless for its innovative wireless broadband—the NTC-30 Series. Outdoor technology that extends a powerful 3G/4G, phone, WiFi and Ethernet connection to homes, businesses and industry in remote, offshore and metropolitan black spot areas without fixed line services.
Innovation in Content Delivery: AAPT for its innovative system of ‘connect, transfer and store’ to empower broadcasters of all sizes to deliver content across the globe.
Services to the Industry, Professional Services: Inomial for its scalable, fault tolerant, real-time rating and policy management BigRating solution for voice, data, video on demand and utility service providers.
Satellite Provider of the Year Award: Optus for its First Release Satellite Service (FRSS) as a managed service provider to NBN Co; the Aurora Digital Platform adding to the established VSAT services for Free to Air Digital customers; and their off-the-shelf trailer-based V-SAT Solution for 3G coverage of remote workplaces.
Community Contribution: Optus for its primary mobile coverage and critical network support during the extreme weather events that took place in Northern NSW and QLD earlier this year.
Partnerships for Growth: iiNet and CSIRO for their Digital Productivity Services Flagship. Through this relationship, iiNet and CSIRO are able to share skills to develop products and services that are among the most innovative in Australia.
Commitment to Customer Service: Consumer: iiNet for its team of in-home support technicians – techii and techi which take the hassle out of connecting gadgets to super-fast iiNet broadband.
Commitment to Customer Service: Corporate / Business: Next Telecom for Next Telecom’s fresh approach to businesses communications.
Stephen Conroy’s reign as the most powerful communications minister in Australian history has come to an end with his resignation following the accession of Kevin Rudd to the prime ministership last night.
Conroy served as the communications minister since the election of the ALP to power in December 2007, emerging as a key backer of Julia Gillard when she took over the leadership of the ALP in 2010.
In his six year reign as minister he has proven the most powerful holder of that position in history: shepherding the government to make a $40 billion plus public investment in fixed broadband while enacting legislation and financial inducements to force a historic separation of incumbent operator Telstra. Such has been the influence of his policy that it has been largely adopted in principle by a Federal opposition previously disdainful of a government role in broadband provision.
Even from opposition prior to 2007 he proved influential, adopting the broad outlines of a Telstra-proposed public/private collaboration on fixed network investment and finding his policy partly adopted by the Coalition government at the time.
Valedictories for Conroy’s record as minister were mixed last night.
TURNBULL RESPONDS: Shadow communications minister and former opposition leader Malcolm Turnbull told CommsDay: “I have enjoyed my occasional debates with Stephen Conroy. However I wish that he had not committed Australia to a National Broadband project without any cost benefit analysis, without any cap or limit on costs – in short I wish he hadn’t written the largest blank cheque in our country’s history.”
“I am pleased however that he was not able to succeed in regulating the content of our newspapers but puzzled as to why after two and a half years he has not been able to present the legislation which would constitute his “new deal” on anti-siphoning which he announced in late 2010.”
“Vendors of men’s undergarments will mourn his resignation as telecom executives no longer buy red underpants to put on their heads as a precondition of having an audience with the minister.”
DICTATOR? Vocus Communications CEO James Spenceley, a critic of the NBN FTTH plan in 2010, said “Conroy’s legacy is one of lack of engagement, lack of understanding and lack of desire to work with, rather than dictate to the industry. His arrogance will not be missed by an industry than can hopefully now move forward together in conjunction with policy makers.”
But former Pipe Networks CEO and current SubPartners principal Bevan Slattery, who also was highly critical of the NBN policy, was more conciliatory. Conroy was “visionary, passionate, driven, fearless and one tough bastard who always gave as good as he got. Despite the many blues we have had in the early years, I have grown to have a tremendous amount of respect for both the man and the politician. The fact that both sides of politics are talking about a National Broadband Network is his major legacy, though I really hope both sides of politics support some of the key principles of the Digital Economy policy launched last month.”
Vodafone Australia was also praising of the minister. A spokesperson said “Senator Conroy has played a pivotal role in solving long-standing structural problems in the industry and has laid the foundations for continued telecommunications reform in this country. His courageous pursuit of change for Australian consumers has begun a shift that will change the telecommunications industry for the better.”
RIGHT TIME TO LEAVE: Informa analyst Tony Brown thinks the timing was right for Conroy to quit the position. “In some ways this is the perfect ending for Conroy, he can now watch from the sidelines as the Coalition—if they win the election—(take over) and criticise them for dismantling his perfect NBN solution—one that he no longer has to deliver.”
“However, in some ways Conroy’s legacy is now entwined with how successful Malcolm Turnbull is in delivering an FTTN-based NBN, if Turnbull can’t deliver an FTTN-based NBN then the conclusion will probably be reached that a nationwide FTTH network was a bridge too far anyway.”
“For all his faults Conroy has been a real warrior in his job, he has created a lot of enemies but at the same time pushed the telecoms landscape into a direction which was unimaginable not that long ago.”
BIGGEST CRITIC PRAISES CONROY: Even arguably Conroy’s most strident critic, former ALP comms advisor and consultant Kevin Morgan, praised his energy as a minister. “Though I disagreed massively about Senator Conroy’s stance on policy, as a fellow long time member of the Australian labour movement one could never doubt his commitment. His integrity and commitment is confirmed by his decision to stand down with Rudd’s return. It’s just a shame such a good Labor man should have nailed his colours to such a poorly thought out policy. Despite his NBN policy, had other ministers pursued their responsibilities with the same energy Labor wouldn’t be in the mess they are in today. I can only wish him the best.”
Another critic, economist and academic Henry Ergas, was less generous. “There is no doubt that he reshaped Australian telecommunications. Unfortunately, his complete disregard for sensible and indeed, proper policy process, extraordinary hubris, lack of clear principle and limited grasp of the substance meant that changes were invariably poorly designed, incompetently implemented and hence unlikely to be enduring. In instance after instance—the process that led to the NBN, the Australia Network tender, the media reforms—he has left a mess for his successors to clean up. He will be regarded as a minister whose grasp always fell far short of his reach.”
INTERNATIONAL RESPECT: One of Conroy’s strongest supporters, industry advocate Paul Budde, also praised his energies. “The achievements of this Minister have been nothing less than remarkable. This has been recognised internationally with the several awards that he has received for his vision and his work on the NBN and his appointment as a Commissioner of UN Broadband Commission for Digital Development. When I met Stephen Conroy for the first time in 2005 in Adelaide—where he attended a conference where I was speaking—he came to me afterwards and indicated his interest and support for the concept of fast broadband for its social and economic benefits.
“We continued our discussions and as a result of his vision and hard work the country now is building a National Broadband Network and with contracts in place for NBN connections for approximately half of the population, the future of the NBN is safe. The Coalition has also warmed to the plan and there is now bipartisan support for the NBN. This in itself is an enormous achievement.”
“Obviously there is nobody in the ALP who is as knowledgeable on the NBN as Stephen Conroy and it will be interesting to see who will be taking over his position. On the positive side however, the NBN is now so far advanced that this not a critical issue anymore, the NBN can stand on its own legs. Nevertheless, the NBN being the Government’s flagship achievement, it will play a key role in the election campaign so the position of the new Minister for Broadband will remain a critical one for the ALP. The emphasis now however will have to be on somebody with excellent communications skills to promote the benefits of the NBN to the voters.”
PRAISE FROM FORMER STAFFER: Former Conroy press secretary and current Alcatel Lucent executive Tim Marshall—also a former editor of this publication—remembers his time with the minister fondly. “Australian telecommunications is unlikely to see a force like him. Remember when he took this portfolio in Opposition, Stephen was maybe the first to take it really seriously, to raise it as a pillar portfolio. He also listened. His work in government was about meaningful change, structural change, fixing past mistakes and incomplete vision. The NBN isn’t about technology, which will always evolve, its about equity and stability. The NBN is a true reform in the national interest, and I think it will be a fine legacy.”
Another industry executive with extensive experience of working with Conroy as a lobbyist, Macquarie Telecom executive Matt Healy, concurred. “Senator Conroy has played a pivotal role in solving long-standing structural problems in the industry and has laid the foundations for continued telecommunications reform in this country. His courageous pursuit of change for Australian consumers has begun a shift that will change the telecommunications industry for the better.”
Communications Alliance CEO John Stanton was another with kind words for the minister’s personal industry. “I have had the opportunity to observe in action every Australian Comms Minister since Tony Staley. Stephen Conroy has, I believe, shown greater drive and courage than any of those predecessors. Of course our views differed on specific issues, plenty of them. But Stephen has genuine passion for the portfolio and its pivotal importance to Australia. He made the effort necessary to be across the detail and able to argue the substance. Forget for a moment the politics of the NBN debate. Stephen’s unwavering commitment to give Australia a broadband-based platform for our nation’s future economic competitiveness will be an enduring and worthy legacy.”
Stephen Conroy was easily the most powerful communications minister in the history of the Australian federation and arguably one of the most polarising. He came to office with an agenda largely informed by the often competing rhetorical ideals of Telstra and its competitors: in the case of the former, to rehabilitate a fixed network clearly not fit for purpose in the new broadband era and in the case of the latter, to provide a level playing field for retail competition with a neutral access provider.
His first attempt—the so-called NBN mark 1—failed in early 2009, at which point Conroy embarked on the most crazy-brave action of his six year ministerial career: securing a $43 billion public investment commitment from Cabinet for an internationally unprecedented national FTTH network to be operated by a start-up government agency. Telstra would be both legislatively cajoled through threats of spectrum bans and network divestiture to separate its network and retail functions, and massively financially induced to co-operate with the NBN build and migration. The policy may have failed several tests of economic prudence and competition principles but it demonstrated Conroy’s ability to get his way.
Perhaps if Conroy’s ambitions had begun and ended with a relatively narrow attempt to do something about the broadband investment impasse then history might judge him a little more kindly. But he will also be equally remembered as the minister for the internet filter and more latterly, the minister for newspaper censorship. Both these efforts failed under the weight of their own contradictions. He took massive collateral damage on both while achieving little actual result.
And unfortunately for him, even viewed with the noblest intentions, the NBN has also been more about pose than actual result. When Conroy was in opposition he ran very heavily on Australia’s apparently lowly position for fixed broadband penetration in the OECD. Six years later, the nation’s ranking is arguably worse and four years after its announcement, the NBN has improved the Internet experiences of barely two percent of the population. At the same time the government has set in train a series of policies that raise the underlying cost base of both fixed and mobile telecommunications to world-high levels. This will have significant ramifications in decades to come.
Conroy, for all his good intentions, was also blindsided by industry developments. He took at face value much of the immediate advice offered to him in the 2005 to 2009 period by people who often had vested interests. The increasingly singular emphasis on “reforming” the fixed access network market through separation and plumping for expensive FTTH highlighted much of the disconnect: fixed access provision has increasingly become a low-margin and unsexy commodity as the market moves on to mobile and over-the-top applications and services. The amazing policy emphasis on the NBN under Conroy’s reign looks a little over-egged when matched to the reality that fixed broadband accounts for only around 10% or so of the economic value or end demand of the overall telecommunications market.
Finally, in the case of a minister such as Conroy, there was no separation of the personal and the political. While he was often an engaging, affable and friendly fellow, his infamous “red underpants” comment betrayed a deeply contemptuous attitude towards the industry. This was repeatedly backed up by often boorish behaviour in Senate Estimates where he would often block legitimate inquiries in the public interest with sneers and sarcasm.
He also viewed his ministerial purview as an exercise in political patronage and prestige, constantly revealed through a succession of actions ranging from his personal supervision over the restructure of consumer telco lobbying representation, pressure on corporate boards to rein in or even replace executives who were seen as inimical to his political interests and more latterly, the succession of government-organised “industry conferences” designed to promote specific policy agendas. I lost count of the number of conversations I had with industry executives which were subject to confidentiality on the grounds of fear of ministerial retribution.
Ultimately, Conroy, his office and the department were trapped in a form of policy echo chamber with the minister, latterly and pathetically, resorting to name-checking anonymous supporting posters on Whirlpool in Senate hearings in the absence of any serious dialogue or discourse with industry.
This is all more likely than not to change with a new minister. As I say, Conroy was a deeply polarising figure. Some will view today as an industry equivalent of the fall of the Berlin Wall. Others will lament the loss of a minister seen as the only one who “got it”.
Either way there is no denying that, for better or worse, Conroy leaves an amazingly influential legacy which will continue to manifest over decades to come. He bent an entire industry and a political opposition to his will with little or no substantive protest. Few ministers can ever claim that.