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The digital super highway

Rod Reynolds is new to Webdiary (although it has been inflicted upon him for ages). He is a chartered engineer with nearly 40 years in the communications industry from the days of the PMG through to the privatising Telstra in the late 1990s. For the last twelve years he has been intimately involved in intellectual property associated with ecommerce solutions for large businesses. As light relief he sings in choirs, records music and produces CDs, and is trying to turn his residence into a 21st century version of Sir John Soane’s museum – despite Fiona’s best efforts at prevention.

This is his take on the Government’s announcement of the National Broadband Network – thanks for putting quill to keyboard, Rod.


The digital super highway: A communications engineering view
by Rod Reynolds

The broadband push was a political promise at the last election that went to tender. The RFT documentation was restricted in scope – probably aimed at getting an early solution. Modern communications solutions tend to last for about 15 years and this one was going to take something like that to roll out fully. A clue to that is that the Telstra Digital Future Mode of Operation project on what was a predominantly existing network was only close to complete after 6 years after an initial estimate of half that – and that was only a $3.5Billion project. Putting to one side the commercial and political arguments on the ownership and delivery of the super highway, the “expert panel” (with whatever conclusions they argued) came to the obvious result that by the time the interim solution was close to delivery, that it was time to start all over again with a next generation solution.

Arguments about “fibre-to-node” and “fibre-to-premises” are relevant but may not be all that critical after all from a performance and function point of view. What is more important is that the old copper pair network that connects the system to the users has reached its “use-by date” when high capacity duplex data links push the limits of what can be carried on a given cable. You simply have to have more bandwidth in the ground, and fibre and new high density digital copper cable both provide that – although the fibre solution is generally the cheaper and has the higher performance.

The whole issue of data-carrying capability of the internet and associated services is complex in the extreme, and a very small proportion of the total users could actually use the capacity being talked about today, let alone know what to ask for. 100MB/sec can do an awful lot, and very few data sources can even generate data at that speed, nor are they likely to with the exception of a few business applications. And there is a technical detail to consider: Most of us are users of ADSL services. The “A” in that stands for Asymmetric, and that means that even in ADSL2 that the download is at 20MB/s while the upload is only at 1MB/sec. And for networking reasons the fastest download that most users see on that “super service” is only about 6MB/sec.

Technically then, this raises more questions. Does any consumer need or could even use 100MB/sec? If fibre is put into the ground for the first generation, could it ever be upgraded? (Oh, something that we are not being told is that the life of fibre is not all that good – especially where water contamination is possible as in a low cost suburban distribution system.) Internet 2 and beyond will provide all those other services like television etc etc. but in the Australian scene where we are just introducing free-to-air Digital HDTV, the idea that paid services via fibre will be viable is a nasty echo of the cable TV experience here.

The so-called “expert panel” who were looking after the recent botched RFT could only see the long term solution – ie they had no idea on how to deal with an incremental path (I suspect that most of them were escapees from reality) – and fed Rudd with a way of spending more money (financial injection) which was consistent with spending reserves (politically OK) and making it look as if he knew what he was talking about (OMG). The reality, of course, is that this is a massive project and every bit of that $43Billion will be needed – and by the way, they had better be thinking about replacing the roads and pathways too because they are already full of old cable and broken ducts that will have to be replaced as part of the project – er – and there is gas water power and lots of other services in there too in some places…

The current broadband system was based on inter-exchange networks, and cable TV and was introduced from about 1992. We could not have done any better at the time at any cost that the public might have accepted. The current plan to install a 100M to the home fibre network is throwing money at the problem and hopefully they will find a cheaper way of doing it before the job is too far under way. Do the arithmetic … $43Billion to serve 25 million people or maybe 5 million locations (90% of 4 – 5 persons per family). That means a capital cost of $8,600 per unit, and using a common amortization factor means a cost to that location of about $150 to $200 a month just for the link. Nearly all the links are domestic and any argument that the commercial or business sector will be enough extra to cross-subsidise the retail sector is fanciful. On top of that you have to have the ISP and content generations sectors etc who wants another $40 a month plus content costs. Suddenly your internet or “digital connection” account is starting to look like $250+ a month which might be fine for a business customer (and what they are paying today for a perfectly good broadband system with dual ADSL giving them effectively a 54Megs per second link) but not too many consumers are going to like that. Sorry – I am not confident that we have heard the last of this…


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Some technical points

The comments to date show that a lot of people are thinking positively about what a new super highway means, and that people understand the implications in cost and motivation terms. To what I had in the original post, I add the following observations.

Provided that the speed of the internet connection to a user is high enough (and 100Mb/s is certainly high enough!) the effective speed of a connection is defined by the weakest link to the source of the material which may be a long way from that high speed national network. Australia has always been unique in the history of communications in a way that has also been the source of its limitations.

Australia has big centres of population a long way apart. This has implications in the developing digital Internet of the 21st century that echo the historical problems when it comes to providing long distance services for telegraphs in the 19th century and telephones in the 20th century.

Conventional networks in cities can be built to provide efficient local services, but when it comes to connecting those cities, other issues dominate and the bottlenecks between those cities and the connections between Australia and the rest of the world (which is a long way away) then become the system limitation – crippling the quality of the fast local service. In the US for example, most of the source material is local and utilises high density services all the way. These are not as restricted as they will be when that same material is to be accessed from downtown Sydney for example.

Of course, Australia has a lot of slow local services that are a result of the fact that Australia was a very early adopter of the internet, and it is definitely time for the replacement of those services. However, don’t expect a simple upgrade of your local internet connection to 100Mb/s to make all that much difference to a download from the US or the UK.

On a purely technical issue, wireless broadband over large areas is limited when the usage densities start to rise. First-in users will be very happy as they have the network pretty much to themselves. However, as more users start to compete for the available traffic slots, the continuity starts to degrade and it becomes a very poor performer when compared with a wired or fibre network. Just ask anyone trying to use the wireless broadband service in London – or try to talk to a wireless user there on Skype. There are times in the day when it is virtually useless.

The Tasmanian initiative can be viewed from a historical perspective. It is an isolated population that is only a fraction of the total size of Melbourne or Sydney, but can be connected like a small city separated by Bass Strait from the rest of the world. Communications has always been an issue. It may come as a surprise that the first submarine telegraph cable between Tasmania and the mainland was 150 years ago – a private venture. The first telephone trunk cable in the world (defined as a common-use phone connection between exchanges in two towns) ran between Hobart and New Norfolk in 1889. And it was Tasmania that had the first interstate STD phone services in Australia in 1967, and was the first Australian State to go entirely automatic a few years later. Tasmania has a lot of other communication “firsts” similar to the above. Its confined and relatively small size and immediate need make it ideal for a new high speed internet service – and that is exactly what has happened.

The jury is still out

There isn't any private money for a reason. The project isn't commercially viable. That's not to say a project shouldn't be undertaken with tax dollars, it's to say that it brings with it risk - risk that deserves public scrutiny.

Has anybody mentioned the type of opportunity cost that 50 billion Aussie dollars brings to the table? Is this project the best use of such vast funds?

A politician using vague timetables, patriotism, and vague finance explanations isn't the most promising thing. I'm sorry for my scepticism

Any corporate bond issued (municipal, infrastructure etc) must be made attractive. This is a debt the Australian Government will be taking on. A debt added to the 100 billion or so already booked (as of today). At the current rate of debt accumulation, I'd be concerned about value being inflated away. Assuming of course that the bond is underwritten in Aussie dollars (depends on the market).

The point I make is that this money must come from somewhere (assuming the economy doesn't undergo a financial miracle). It can only come through tax, spending reductions, printing money or a combination of one, two or three. Nothing is the only thing that comes for nothing.

The second point is that the Australian Government is talking about selling the finished project. This strikes me as rather bizarre chatter. Either a government wants in a market or it doesn't. A government shouldn't be acting as a corporate risk taker. I can only assume that the government people are also eyeing of the debt numbers. This chatter may be a belated cry to quell future investors and Australian taxpayers?

People should always approach such things with maximum scepticism. These people are, after all, politicians. And politicians are the same the whole world over.

Sense in realistic terms

It's always nice to read an article making sense in realistic terms and not virtual or hope expectations expressed in babble. I've been slightly confused about this venture and also sceptical. I can't see how making things that much faster and the cost involved, will solve our sociological and business problems. The thought of internet TV sounds great, but will we have the same drop outs, lag times, increased latency because of traffic overload and a better more reliable service? Rod, thanks for an understandable and very informative piece.

John Pratt: “Rod, the people in Tasmania who already have superfast broadband seem pretty happy with it.”

I live in Tasmania and have no access to ADSL1/2. We rely upon satellite and some wireless. As the crow flies, I'm less than 30km from Hobart. John I do believe wireless is much slower than satellite, less reliable and very much slower then ADSL. My understanding is the more people on the wireless network, the slower and less reliable it gets. The people you speak of are in a very small area and are heavily subsidised.

I also believe this will become a fizzer as time goes on, luckily the first roll out will be the whole of Tasmania as a test run. After that, we may well see a rethink as Rod points out. Tasmania owns an unused fibre link with Australia which comes all the away to Hobart and they intend using that as the launch pad. Telstra refuses to increase speeds, or lower prices in line with all of Aus, as usual we are second class citizens. It will be nice if we actually get something that mob up there doesn't have.

There's one glaring fault with all this high tech virtual world stuff, switch off the power and it all disappears. The privatised electricity grid is collapsing as stake holders haven't renewed ageing cabling or infrastructure, to maintain their profit margins. Sydney has already experienced the birth signs of this in inevitable problem, it would be interesting to see how many IT providers and businesses have backup power that can sustain through a major power outage.


We are possibly not appreciating how useful this could become, and therefore the demand for bandwidth. This is the cheapest way of recreating the telphone system but one that is capable of enabling 40%+ of all work to be done without transport costs. The effect on the environment might be worth it in densely packed Europe and in our cities. It will mean that travel will only be for pleasure and not necessity. But it will affect lifestyle and may not be popular. The Tasmanian trial should be persuasive in deciding whether it will be acceptable. I have heard nothing of it though. I also wonder at the stated cost. It seems excessive. Way leaves/land license/access seem to belong to Telstra which should be cheap to buy soon, especially if stripped of its retail operation. If it doesn't belong to Telstra, but to the Federal government then it will be even cheaper. Given that there have been job losses, it is the perfect time to initiate an infrastructure project of this nature. Much of the cost will be local and therefore a stimulus.

It is probably a winner. Given the demands placed on water resources by dense population, it could also foster a tree change to the north of this continent so a nod to future population trends based on working from home, should be a strong part of the planning and marketing to gain from the effects of it. 

The lack of capital in the private sector was predictable and is associated with the job losses and falling costs that should make it a winner. The creativity acceleration should be anticipated and online university courses are to be anticipated, creating some new jobs for the trainers/educators. The loss of commute time will also be positive and so will the timing shift and creche demands. Temporary stimulus at the right time for a long term increase in productivity and cost reduction. A perfect infrastructure project?

Party politics has nothing to do with this.

Project methodology

The success of an investment of this magnitude depends, as much as on the technology, on the design of the project. Hopefully, it is designed to reap real benefits quickly, both for communications and for the economy as a whole. With the flexibility to change direction drastically when conditions change.

The nation building project

With all due respect to those technically savvy enough to criticise the technical capacity of the proposed project, I've heard this sort of comment before.  According to those in the know Windows was always inferior to some other operating system and Apple was always better than IBM and on and on it went.  Industry insiders always knew better than those who actually made the decision. 

In some instances they probably were quite correct. 

In this instance what we have is a population totally unused to the idea of a nation building project. We have become used to the idea of rapid technical innovation making today's technology redundant.  But numerous people still use public phones! In other words, there will always be a better option for those able to pay for the newest and best. 

By the time the roll out is complete at least the vast majority of users, and that would be those unable to pay for the latest and greatest, will have access to adequate standards of servce.  They certainly don't at the moment.  

And, as John Pratt is energetically pointing out, the ecological, economic and environmental benefits are just too obvious.  It is so clear that rapid, efficient and affordable information transfer is an absolute necessity for the future.

I think Rudd is making all the right moves here.

Will it be enough?

100mg/sec sounds a lot at present but I'm sure such bandwidth will get plenty of use as more and more digital inventions emerge requiring more and more bandwidth.

I remember when the laser beam was invented. It had no use at all. Now it has been adapted for all sorts of things unimagined at the time.

We already know what to do with digital data and how to use it. Maybe 100mg/sec will not be enough when we have our 3D interactive hologram entertainment and information consoles.

43 billion bucks is a lot of money, and knowing how these things pan out we'll most likely end up paying a lot more, but we do and will need top class internet stuff if we are going to stay in the game.

Thanks kindly, Rod, for taking the time.

Be excited at what's coming

Rod, the people in Tasmania who already have superfast broadband seem pretty happy with it.

For the past two years, David and Lynda Hanlon and their daughters Louise and Chelsea have enjoyed a fibre-to-the-home internet connection under a free trial, and they say the rest of the country should be excited at what's coming.

More than 1500 Tasmanian businesses and homes in the state government-funded FTTH trial are hoping to be among the first Australians to be connected under the Rudd Government's national broadband network.

"We used to get pretty frustrated with BigPond broadband -- you'd click on a screen or program and then have to wait for the computer think time before it came up," Mr Hanlon said.

The small box, or gateway device, in their house now delivers wireless internet for their two desktop computers and two laptops, cheap internet phone calls and digital TV channels.

A property valuer who normally works in an office in Hobart, Mr Hanlon has found working from home more productive thanks to the superior internet connection.

"I download quite a lot of research material, and the connection is just so reliable and a hell of a lot faster than sitting in my office in the CBD," he said.

Broadband could produce upto $30 billion in benefits per year

The Howard government's Broadband Advisory Group estimated that the next generation of broadband could produce economic benefits of $12 billion to $30 billion a year. In the absence of private capital during the financial crisis, Mr Rudd argues the Government must step into the breach. Laying a stand-alone FTTH network has the added benefit of ending Telstra's monopoly of wires to the home, effectively forcing the structural separation of network ownership and service delivery The Australian has advocated for decades.

Economic benefits of up to $30 billion per year and at the same time ending Telstra's monopoly: surely that is worth an investment of $43 billion.

The roll out will create upto 25,000 jobs:

The project, which will start in Tasmania next year, requires the installation of cables across the continent - a vast undertaking that the Government said would create 25,000 jobs a year during the eight years of construction.

Like the building of railways, the overland telegraph, and our national highway system, some things just have to be done.

It is the role of government to make sure we have the infrastructure in place to move us and the Australian economy into the 21st century.

Life's too short to spend hours in a flying tube

Life’s too short to travel to every meeting and the latest technology really makes you feel you are all together. Three dimensional images can also be created of conference speakers for larger audiences, walking life-size on stage. How they work The aim is rapid reduction in proportion of face to face global meetings, while strengthening team relationships at the same time. There are many ways to enable live communication between teams in different locations ranging from a group telephone call, to a videoconference linking one or more sites, to chat screens and so on. The best quality office-based video links use huge screens so that participants in other places appear life sized, as part of the group. One screen can show slides or documents, while others can show participants. Why they matter Over 25% of many corporation’s carbon footprint is travel and air travelis a significant element of this. Eyenetwork estimates that if a third of business travel could be turned into virtual meetings, it would reduce annual global emissions of CO2 by over 120 million tons.

We will need virtual meetings to reduce our GHG. The savings will pay for the cost of super fast broadband.

Think of the productivity that could be gained if we had a virtual Parliament.

Virtual meetings

John Pratt, can you imagine Rudd and his ministers giving up their overseas jaunts and having virtual meetings?

Build it and they will come

There are always Luddites who cannot see the future for the trees.

If the cost of fuel increases in the next decade or so due to peak oil or a tax on carbon we may need the digital super highway to get our work done.

If we had a fast digital network who knows how much work could be done from home. I would think that most office work could be done from home. The savings in road infrastructure and fuel costs would be enormous. How many of us spend more than $200 a month on commuting to and from work?

If we think how much travel could be reduced if we had fast voice/video/data networks, doctors or hospital  visits could be reduced especially if we attached blood pressure and heart monitoring devices to our connections.

The number of business trips could also be drastically reduced by computer conferencing.

Think of the savings in GHG emissions as well as the costs if we really shifted to a digital world.

Who knows what new technologies will be available in ten years time?

Build it and they will come.

Imagine a world where petrol costs $5 or $10 a litre and then imagine how much could be done in a truly digital world.

Broadband stuffup

Rod Reynolds, at last a commonsense look at the Rudd con on broadband.

If Rudd and Conroy say it will take 8 years to build, I think you can realistically expect it to take a minimum of 12 years with Labor's record of doing things.

I don't think they have done their numbers.

I don't think the public are going to swallow what Rudd is talking about. With the latest employment figures out today it looks as though Rudd will survive one term and then be tossed out at the speed of 100MB/sec.

Earth calling Kevin!

Thanks Rod,  for a very thought provoking piece.

It's certainly a worry when "Mr  popular " PM (or should that be populist ?) up and scraps the original plan and decides to splash out a cool 43 billion.

Just like that!.

Seems an ill thought out plan to me.

There will be inevitable cost blow outs. It will, as John says, more than  likely take much  longer than eight years to complete, by which time the infrastructure may be obsolete.  

" Suddenly your internet or “digital connection” account is starting to look like $250+ a month which might be fine for a business customer (and what they are paying today for a perfectly good broadband system with dual ADSL giving them effectively a 54Megs per second link) but not too many consumers are going to like that. "

I agree, Rod.  People will baulk at the idea once they realize that  a large chunk will be taken out of their hip pockets.

That last paragraph of yours neatly sums up why this grandiose plan won't get off the ground.

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