Broadband provider Internode wants indefinite retention of exchange-based ADSL2+ equipment to ensure competition keeps down prices on the Government-backed Fibre to the Node (FTTN) network.

In a submission to the National Broadband Network expert panel, Internode managing director Simon Hackett dismissed the “myth” that FTTN would make the current generation of ADSL2+ equipment redundant. “It is entirely possible – and for pro-competitive outcomes it is necessary – to preserve indefinitely the existing facilities-based investment framework, including ADSL2+, while building and operating a future FTTN-based National Broadband Network,” he said.

“If we start from the mistaken belief that we must do a full Node cut-over – that is, completely disconnect all of the copper wires leading back to the exchange from every area in which a new Node is deployed – the consequences for the industry and consumers will be detrimental and long-lasting.” These include:
  • Stranded investments: Massive investments made over many years in the existing ADSL2+ facilities-based access regime will be destroyed

  • Stalled deployment: Regardless of who wins the tender, impacted parties will take legal action to recoup their lost investments or lost future earnings, substantially delaying the new network

  • Less consumer choice: Losing access to ADSL2+ services and price points invites the risk that new services may offer worse price/performance and actually drive consumer benefit backward

  • Higher prices: Replacing the current diversity of services with an FTTN monopoly will destroy competitive tension. Only the continued presence of competitive services in the market can provide sustainable protection against “monopoly rent” being extracted from consumers.

In his submission, Mr. Hackett notes that the VDSL2 DSL standard was the most logical mechanism to “drive" the shorter copper loops of an FTTN network.

“VDSL2 is essentially the next incremental evolution after ADSL2+: By operating across a far wider range of frequencies ‘on the wire’, VDSL2 offers higher peak speeds than ADSL2+ with the potential of maximum copper-line based speeds in the order of 50-100 megabits per second,” he said.

“However the claim that it is technically necessary to remove exchange-based ADSL2+ services in order to deploy Node-based VDSL2 is simply not true. Strong technical evidence exists to show how this ‘hybrid’ mode of coexistence can work very effectively in practice.

"Indeed, the critical point of this entire submission is that exchange-based ADSL2+ services can coexist with Node-based VDSL2 services, with practically no performance impact to either service type.”

Node-based VDSL2 services, with practically no performance impact to either service type.”

Other “myths” challenged by Mr. Hackett’s National Broadband Network submission include:
  • FTTN needs “overbuild protection”: If a network requires overbuild protection to survive, its existence is an “un-natural” one. Preserving current ADSL2+ investments will create a scenario in which overbuild is actually designed into the process

  • The economic necessity of “full Node cutover”: Mr. Hackett disputes a claim that all copper lines from an exchange must be cut over to the FTTN cabinet simultaneously due to the high labour costs of one-at-a-time migration. He said ISPs currently pay per-connection fees to migrate customers to ADSL2+ ports and simply recoup these costs in their pricing model

  • ADSL1 customers will be disadvantaged: By the time FTTN is fully deployed, very few customers will use a broadband router that is not ADSL2+ capable.

A public version the submission to the National Broadband Network expert panel is available here.

Editors Comment

While companies such as iiNet, Internet and Adam have done a lot for the creation of a competitive Broadband environment (for which I am very supportive and thankfull), I cannot agree with a number of points raised in the submission particularly the choice of VDSL2 as a viable technology to deliver the NBN. Read a article here on "The Myth of FTTN". Both iiNet and now Internode have rejected the suggestion of a monopoly FTTN infrastructure network as it strands the assets they have installed in Telstra exchanges at substainial cost to their shareholders.

It was for this reason that the recommendations of the SIG where to build an overlay network thus allowing the existing network to service customers until the new network is built and the customer decides to migrate over - if they want.


At 16 April, 2008 07:13 Anonymous said...

Whilst I can understand Internode, and others, wanting to retain there exchange based investments, the FTTN plan also involves migrating POTS to the node (housing). TELSTRA's POTS switches are largely at the end of life and will be retired. The exchange based DSLAMs will be left without POTs capacity. Internode need to consider this when proposing retention of their DSLAM equiment (which may not be able to provide POTS servies).


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