[AusNOG] The Elephant in the Room

Bevan Slattery Bevan.Slattery at staff.pipenetworks.com
Wed Oct 31 17:36:50 EST 2007

Sorry for the additional post, but the report was used to back up my
letter to Commsday as follows:

The Elephant in the Room

We are facing one of the biggest issues as an industry - ever. We have
politicians, journalists and voters all convinced that faster broadband
regardless of cost is a must-have and that FttN in itself will solve all
the problems. Cost to the consumer, taxpayer and competition appears not
to be the issue. The uninformed are seriously, considering proposals
from 2 parties seeking to create a new monopoly *and* take over an old
monopoly. Public comment and submissions have revealed that both
proposals are seeking to cut the copper at the node, which would have
the effect to 'strand' the competition at the exchange. No if's, no
but's, no choice. You've just been 'node'd!

I find the lack of intelligent discussion, disclosure and public
consultation in shaping FttN policy breath-taking. The 'Expert Panel'
dealing with FttN is made up of very few recognised industry experts
which I am sure are trying to deal with the issues in a diligent manner,
yet simply does not have the technical depth to deal with the multitude
of issues which confront them.

Let's be clear here. When you cut all the copper, you cut all the
copper. That means the copper to the home, big corporates in the high
rise buildings and to the 1.3+ million SME's around Australia. Too much
focus has been on about getting faster internet access. But what about
those services which connect offices together such as frame-relay, DDS,
alarm systems, ISDN, Megalink and PAPL? What is going to happen to all
those SME's in metro Australia which have their 2, 10 and 30 phone lines
delivered over ISDN when the copper get's cut? Obviously they will now
be required to 'migrate' to the new network. Telstra and the G9 must be
rubbing their hands in glee. Can you imagine holding the monopoly on
delivering phone lines to almost every consumer and SME? Take a minute
to even consider the large scale disruption to companies like Powertel,
Primus, AAPT, Macquarie, Soul and others which have a high level of
voice business delivered over their own DSLAM's. At some stage, possibly
not at their choosing they'll lose the ability to deliver a 30 line PRI
phone service at a cost base of $30 and be forced to pay wholesale
$500-$900 for the same service. Imagine if they have signed a 5 year
voice deal with a major national client in multiple cities based upon
delivering on their own existing infrastructure. Who is going to wear
any increase in the cost of delivering the same service 'via the node'?
More importantly, who is going to compensate the carrier providing these
services for all the time and effort in working with EVERY customer and
the new monopoly in migration? The government? The new monopoly? The

Where's the fairness test for consumers and competing carriers? Why
should the carrier or consumer be financially disadvantaged because of
well intended, but ill-considered policy? What is the path for ensuring
legacy services are able to be continued *and* without an increase in
cost? Where's the 'telecommunications fairness test' which ensures
carriers and ultimately the consumer are protected? We are being told
ADSL2+ and the 'node network cannot co-exist then how can you easily
migrate? It must be a turn off ADSL2+, turn on the 'node' right? Unless
of course it's not true. And here is the elephant in the room that
no-one seems to notice and that is:

With some effort in spectrum planning and CPE specification there is no
real technical reason why a vdsl2 based FttN network cannot co-exist
with the existing adsl2+ based exchange networks over the same copper
local loop.

It's true. If you had believed otherwise, then you've been hoodwinked.
In the first half of next year you will begin to see this actually be
formally ratified by ACIF right here in Australia. ISP's will be able to
run VDSL2 DSLAM's capable of offering speeds of 25mb/s downstream and
5mb/s upstream 1km from the exchange along side existing ADSL2+ services
from the exchange. Furthermore, you'll be able to run the same VDSL2
from the node and ADSL2+ from the exchange. So if there is no technical
reason for cutting the copper and wiping out the hard investment dollars
of competitive carriers, then why do it?

It's simply because there's no better rent than monopoly rent and as the
Soviet leader Nikita Khrushchev once observed, "Politicians are the same
all over. They promise to build a bridge even where there is no river."
They've discerned there are votes to be had by bringing about "faster
broadband" so they propose to do so by any means and whatever the cost.

Not so long ago NSW voters wanted a cross city tunnel in Sydney and got
one. It was all going well until the harsh reality hit home that some of
their local roads were blocked off or diverted simply to generate
suitable demand and 'justify' investment. These roads were fine and used
by many motorists. There was no operational reason requiring their
closure or diversion. Suddenly voters soon realised that they lost the
choice of using a still suitable road and were forced to use a more
expensive toll-road and as angry as they were about losing that choice,
there was no going back, well at least for the next 15 years or so.

The current FttN proposals are about building the National Cross City
Tunnel and both sides of the political spectrum and considering
diverting EVERY single road including yours, not because there is a
technical or operational requirement to do so, but simply because they
are being told that the FttN business case doesn't stack up otherwise.
That's the most absurd justification for wiping out exchange based
competition I have heard since being in this industry and creates much
laughter amongst my international colleagues, until they realise that
it's actually no joke. It's then the laughter stops...

So here are 10 questions I pose to both Senators to figure out what they
stand for this election in terms of telecommunications:

1. If there is no technical requirement to cut the copper under FttN
would they consider to do so, simply to ensure a commercially
non-feasible system becomes feasible
2. If the answer to 1 is 'yes', then would they accept that they should
also disconnect both HFC networks and all mobile/wireless broadband
networks for the same non-technical reasons?
3. If you're answer to 1 is 'yes', will the government provide a
'telecommunications fairness test' to ensure users are not financially
disadvantaged by any FttN plans or is FttN going to be the 'Workchoices'
of the Telecommunications industry?
4. Much is hyped about the FttN 'triple play'. Assuming watching HDTV
consumes 5Mb/s of bandwidth per end user, what will it cost for a
provider to deliver one HDTV stream from a US channel hosted in the US
to an end user per month? (noting that it costs approximately $250 per
month to get 1Mb/s of wholesale Internet capacity)
5. Will you implement an FttN monopoly and interconnection framework
against the express opinion of the ACCC that it is against the interest
of consumers and competition? If so, why and/or on what basis?
6. With so much importance being placed behind OECD numbers and
statistics, has either party sought the opinion of the OECD on any
proposals to reduce competition and its effect on the market and if not,
will they?
7. There are already two FttN networks in metro Australia being the
Optus and Telstra HFC networks which can provide over 30Mb/s+ to the end
user. If there is such a compelling requirement for high-speed services
then can you please explain why according to OECD reports these networks
have achieved such a poor penetration compared to 'inferior' xDSL
8. To ensure that any FttN monopolist does the 'right thing' will
government make it a "Condition Precedent" that any FttN monopolist must
first provide FttN services to all of the portion of 98% of Australia
not currently being serviced by competitive carrier ADSL/HFC
infrastructure BEFORE they get access to the areas which have? Surely
you must agree those who are currently living without need to be
serviced before those who have?
9. Much is hyped about 'E-Health' benefits for end users. With most
Australians having access to telephones for decades how often have you
been able to consult your doctor over the telephone without going into
his/her practice (and given the choice how many would want to)?
10. Finally, of the countries in the OECD broadband rankings higher than
Australia, which countries have a government sanctioned FttN monopoly?
More to the point, which countries in the OECD rankings have a
government sanctioned FttN monopoly in which the government has agreed
to disconnect all competitive carriers ULL/LSS access to ensure the FttN
monopoly investment 'makes sense'?

I'm fundamentally for FttN as a technology. I just don't agree with
needing to give an exclusive monopoly on all access (FttN and non-FttN)
to achieve it and I think you'll find neither does the OECD.

Bevan Slattery

-----Original Message-----
From: ausnog-bounces at ausnog.net [mailto:ausnog-bounces at ausnog.net] On
Behalf Of Bevan Slattery

A report from Layer 10 confirming same.


More information about the AusNOG mailing list