The magazine of the Melbourne PC User Group 2006: Broadband Revolution Cable or Wireless? Matt Rocke |
At the 2006 Internet Industry Association annual dinner, several industry leaders drew attention to Australia's broadband penetration, which is below comparable levels in other developed countries. Australia has about 15 broadband subscriptions per 100, behind much of Europe and below the OECD average. It has been argued that to compete successfully, broadband should become the fourth utility after water, electricity and gas. But how are we going to get there?
For a while we've been familiar with the three forms of Internet connection: dial-up, cable and ADSL. Most of us have experienced wireless broadband only as far as our fixed connection may run to a wireless router to 'airport' devices under the one roof.
With margins evaporating from fixed infrastructure big strides have taken place in Australia's wireless footprint. The Blackberry phenomena shows a demand for wireless connectivity moving beyond the business world to a mainstream driver of growth.
Delivery: Broadband by Cable
Cables and conduit are an ugly business. If you've visited Bangkok and looked up, one can hardly believe that networks function at all. There are cables tied to cables, strapped to anything that will hold them. Here in Melbourne poles and pillars, hubs, amps, taps, and lead-ins are equally unsightly. In many suburbs the PSTN network, two cable networks and the power supply fight for space with gum trees and possums.
There's the famous court case in 1994 where Boroondara Council impounded one company's trucks to stop a cable roll out on the basis it was detrimental to the streetscape. Concurrently, in the shiny marbled foyer of unsaid Telco, every pot plant was strangely cut off at the knees in protest.
Thereafter, in less quarrelsome councils, the company changed the cables from
black to a 'less offensive' grey and dumped plans to cable Adelaide entirely;
only 10 years later selling the catenary wire strung node to nowhere.
More recently, council approvals have reportedly caused delays in the overhead
fibre optic trial in Hobart and Devonport. Despite this, TasCOLT's project
development manager, Brian Beswick has confidence the roll out will meet
objectives, saying, "We want to really show that such access technologies are
deployable, are commercial, and that therefore carriers should really be making
an effort to pursue that route rather than the more conservative approach".
Going Underground
Going underground is a desirable solution. One problem here, our national
carrier owns the majority of the underground network, and to date, leasing the
space for new networks has proved all but prohibitive, bar inner city or tech
park type roll outs to lucrative corporate customers. Competitors have hence
added services for all to see.
For new residential developments, high-speed underground fibre to the home (FTTP)
is being trialled by Telstra. Speaking of a new roll out in Queensland's
South-East growth corridor, a Telstra spokesman said,
"It is anticipated that FTTP technology will progressively become Telstra's
standard infrastructure for most new estates and significant multi-dwelling unit
developments over the next four to seven years."
But for those of us with power poles in the street, our dogs can expect to enjoy
their much-loved marking points for some time to come.
Unfunded liabilities
In a recent Newspoll study conducted by Vodafone, 20% of respondents said they
would give up their fixed line if they moved. In the same study it was revealed
up to 900,000 regular lines may be disconnected by 2010 if the intentions of
respondents came to fruition. This leaves a massive maintenance dilemma.
Currently the way networks are funded is via line rental and usage. As much as
we hate to pay it, if there's servicing required to the network boundary for a
fixed line, the line rental we dutifully pay covers the cost for technicians to
visit and resolve issues. Disconnect the land line, and even if you're running
ADSL and VoIP for example, expect to pick up the full charge if anything goes
wrong.
This is because Internet is a fully contestable proposition, built on a usage
only model, not a network plus usage model as is the traditional communications
system. Let's do the arithmetic; according to the above study, nearly a million
lines are in jeopardy, at an average of $30 per month - that's $360 per annum.
Multiply by 900,000 and it's no wonder Telstra is posting warnings based on this
trend!
And so, at the margins, fixed networks come under intense cost pressure. The
approach to arrest this decline is the "triple play", where carriers bundle
services like interactive cable TV, Internet and IP services to create premium
propositions to make networks again pay for themselves. And of course other
communications traffic, including wireless, depends on the integrity of fixed
networks. Traffic over wireless is still a premium, so to back haul to the
exchange cables are more cost effective.
Who's going to build a new fixed network?
Last November I wrote a story for PC Update about ULL, the unbundled local loop,
where service providers install DSLAMs at Telstra's local exchanges to route
high bandwidth traffic to their own switches while offering ADSL+2 Internet. For
example, Perth-based company iiNet has just announced it will invest $15 million
to install 150 DSLAMs in exchanges across Australia by January 2007.
At that time Telstra suggested it might build a new fibre network that would
supersede the PSTN copper network, but required "a more stable regulatory
environment" to make its investment viable. I wrote at the time that a new wide
area network was very unlikely. In December, to everyone's surprise Telstra
announced its intention to deliver a new fibre network, estimated to cost about
$10 billion. Telstra then made an 11th hour offer to jointly roll out with
Government.
Soon after, surprising nobody Canberra rejected the offer and Telstra withdrew
saying, after a strategic review it had decided to focus on other technologies.
This outcome prompted a number of equity companies to propose a consortium build
a new fibre network to then lease it back to whichever entity wanted and paid
for access.
A rather muted reaction was received from Telstra, who could see a clear threat
to its core business, as well as another spark to the debate over wholesale
infrastructure charges which is under adjudication in the Federal Court after
being escalated outside the ACCC.
Enter Communications Minister Helen Coonan, who in mid March told the annual
meeting of the Australian Telecommunications User Group (ATUG) she was
considering using government funds to "stimulate the development of a
competitive wholesale access network in regional Australia" adding, "
[a]
consortium approach that builds scale and combines the strengths of different
industry partners is attractive".
The funds mentioned are the $3.1 billion sitting in the Connect Australia
package -money set aside for broadband services under the "Clever Networks"
program designed to fund the development of "a competitive wholesale access
networks" in regional Australia.
The Ministers statements are audacious, yet not surprising given the
deterioration of the relationship between the Telstra and Canberra and the
primacy of competition policy in the Howard Government.
Following months of conflict over the pricing framework for access to Telstra's
existing local loop and Telstra's appeal for safe harbour for new networks,
something had to give.
Delivery: Broadband by Wireless
Australia is ranked 21 in broadband penetration, so while deliberations go on
and on over the expensive business of cabling the nation, where is wireless?
Part of the "other technologies" referred to above in Telstra's strategic review
is 3G. And while many wireless options for broadband exist, 3G is quickly
becoming a standard because it will become the new backbone for mobile
communications.
Telstra has announced its CDMA network (only 7 years old) will be closed. 3G
expansion will replace not only CDMA in rural Australia but GSM in cities as
well. In the press the key concern highlighted with this transition was the need
for country folk to purchase new handsets. The real story is the future of fixed
networks.
No wires - but panels on spires
Out of sight out of mind? On the Gold Coast there are numerous synthetic 'palm
trees' routing mobile call traffic. Like cables, wireless technology has its own
urban presence. Towers hide in tunnels and church steeples as our cell display
or hot spot IDs testify. Love them or hate them, it seems we expect faultless
data carriage more than we dislike the aesthetics of telecommunications grid.
In 1997 the telecommunications Act was amended so carriers are no longer
required to seek local council approval to construct infrastructure, a move that
angered the Local Government Association. It was argued federally at the time,
that communications are a national imperative and so should be given special
consideration. This consequently ended in the planning of many new mobile tower
sites going into protracted (and often less than transparent) mediation.
Network sharing is becoming a common way of minimising the number of disputes.
Yet carriers are never fully co-operative, as an entrenched turf war for
coverage goes on.
Broadband Via 3G
This coverage war is essentially for 3G or third generation mobile. Due to
falling margins on fixed infrastructure, wireless is in line for big
investments. It's potential for improving broadband is based on trends that say
more and more consumers are demanding an Internet everywhere service, the
Blackberry e-mail device being an early version.
Connections that seamlessly roam between the GSM(GPRS), 3G(WCDMA) and Wi-Fi
(IEEE 802.11b and 802.11G) are making wireless more than a preserve of laptop
users in the frequent flyer lounge or coffee bar.
If you have a computer with a Type II PC-card you are a prospect. As well as
those flyers in your letterbox twice a week, annotations on your bills and
billboards at the train station - don't be surprised if you hear a lot more
about 3G Internet.
Does it Stack Up?
Data speeds on the 3G leg of transmission fall between a respectable 200-384
Kbit/s, quite a bit under Wi-Fi, but 3G coverage fills many coverage areas where
mobile broadband was previously unavailable. The speed does depend on signal
strength and the number of users accessing the same base station.
At present this option is priced like first-class travel, and like most Internet
plans on the market the more data you agree to use per month, the cheaper it
becomes. Like mobile phone calls you are looking at a price premium per MB of
two or three times that of a fixed connection, but if you download a regular and
moderate amount per month you can end up paying about the same. If you're a high
user you may need to wait for caps to come in as this market matures. Depending
on the plan, the data card is either subsidised through a plan or can be
purchased outright.
The other concern is encryption. All carriers insist their services move data
through a secure tunnel established after authentication, even roaming overseas.
The USIM, which slots into the data card and provides network access, uses
128-bit encryption.
Time To Cut the Cable?
Are we really ready to cut our cables? I suggest a qualified maybe. 3G is but
one method of improving broadband penetration. Look up the definition of
disparity in the dictionary and it should say: quality of broadband on offer in
Australia via cables. Can you believe, depending on luck and location, your
speed may vary between a poor dial-up connection on a pair gain line at 19.8
Kbit/s to ADSL+2 service in the city at speeds in excess 5 Mbit/s.
To check your
own speed I recommend http://www.ozspeedtest.com.
Clearly if Australia is to rise in the broadband ranks other channels must
become available. Without doubt wireless is becoming a mainstream alternative.
As it provides levels of service at prices close to fixed, the long held belief
in widespread data services over wireless draws closer and closer.
Reprinted from the April 2006 issue of PC Update, the magazine of Melbourne PC User Group, Australia
