Experts say Government has got broadband network technology right

Broadband and technology experts have overwhelmingly embraced the Federal Government’s announcement that it will create a new company to a deliver a fibre-to-the-home national broadband network.

Michael Malone, managing director of internet service provider iiNet, has said that the announcement is “fantastic news”.

“No one expected this. A fully open access network, I can’t see any downsides to this. Very high speed access, fully transparent access, separation from wholesale and retail operations…it’s like a Christmas list,” he says.

The Government has announced that it will use fibre-to-the-home technology rather than fibre-to-the-node as originally planned. Fibre-to-the-node technology provides a “node” or hub in each neighbourhood, which houses then connect to using copper-based connections.

But copper results in slower speeds and creates data bottlenecks. Fibre-to-the-home technology provides fibre-optic connections directly to households, providing infinitely faster speeds and avoiding these bottlenecks.

Malone also says that the Government has ensured the technology used will remain viable even after the network is fully completed after eight years. 

“Fibre is the next generation. Fibre-to-the-node is a stepping stone, but fibre-to-the-home…you can always upgrade speeds and not have to adjust infrastructure. For the foreseeable future this is the best technology they could use,” he says.

“I’m quite stunned; but it’s a marvelous announcement and Rudd describes it as visionary and nation-building – and he’s 100% right.”

Ovum research director David Kennedy says the network announcement is a definite change in policy, but is “a good one”.

“The network they’re now proposing is a much better technology solution in the long run, and it’ll be the backbone of infrastructure for decades to come,” he says.

“Once fibre is in, there will be no need to upgrade it. It’s also quite expensive, $43 billion over eight years, but really just cuts through all of the problems they would have had with fibre-to-the-node. There will be no Telstra copper connections, so no legal problems, and they can regulate it any way they like.”

Kennedy says that there may be a need to upgrade electronics inside homes and businesses to ensure higher speeds, but this is a “relatively lower cost” than upgrading the network itself.

He also claims that the Government was right not to invest in wireless technology, as the telecommunications market is driving that industry on its own.

“I don’t think there’s really justification for investing in wireless; there’s private investment in that. The problem has always been in the fixed network,” he says.

“But what this means is that Australia will not be left behind relative to the rest of the world. This will keep us on par with the leading economics around the world, and really was necessary for that to happen.”

Andy Fung, chief executive of VoIP provider MyNetFone says that the announcement is “unbelievable”.

But Fung says that while the network decision is necessary to upgrade the country’s broadband infrastructure, the cost of the network is a concern.

“It’s all very well to talk about fibre-to-the-home, but there are very few countries that have done it and that’s because of the cost. Australia doesn’t have the population density, and you really need that – and the only place I’m aware of that have done it are like Hong Kong and Japan, where you have the density to run the fibre down the street,” Fung says.

“I don’t think it was the best cost-effective decision, but like anything else, the devil is in the detail and it hasn’t been filled in yet.”

Despite his concerns, Fung says that the network will provide ample opportunities for businesses in both creating the infrastructure and its long-term benefits.

“There are always opportunities for business when you have a huge infrastructure business like this. Starting from the basic civil engineering type of work like laying cables – and it’s a huge project, no question about that.

“I think MyNetFone will benefit, and so will a lot of other service providers. If it is going to be a pure wholesale network, which is good as it provides equal access, that will be good for the telco industry in general simply because you can deliver innovative services, and the market will determine the success and failures.”

David Markus, Combo managing director and SmartCompany blogger, says that while fibre-to-the-home connections are welcome, businesses should be connected as well.

“Fibre-to-the-home is fantastic, but what are they going to do for business? All the newest technology for business is now in the cloud, and the thing that’s holding back Aussie business is lack of access to cloud computing,” he says.

“If it’s rolled out to businesses, it means that a business can create cloud-based services to ensure our clients have access to the services they want, including hardware as a service – the days of distributed services are almost over.”

Markus also says that the Government has ensured the broadband network is a revenue-raiser that will come in handy when the economy recovers.

“I bet if the upturn and recession takes more than five years, they’ll hold on to it until there’s an upturn, because it’s a huge investment. Once it’s in and working, it’ll be worth an absolute fortune because it will control the communications of Australia.”

See also:

• BREAKING NEWS: Federal Government will build national broadband network
• The NBN will change business: Lindsay Tanner