Appendix A – Background
Current broadband services in Australia
1.
The term ‘broadband’ can be loosely defined as a service that delivers
data transfer speeds faster than those achievable using the ‘narrowband’
dial-up internet services that were ubiquitous in the 1990s. The actual speed
of a broadband service may therefore vary greatly. The Australian Bureau of
Statistics (ABS) defines broadband as ‘an “always on”internet connection with
an access speed equal to or greater than 256 kbit/s’.[1]
This compares to 56 kbit/s for most dial-up connections. ‘Always on’ means that
the service can remain constantly connected to the internet without disrupting
voice telephone services.
2.
The OECD also defines broadband as internet connectivity capable of
download speeds of at least 256 kbit/s,[2] while the US Federal
Communications Commission recently updated its definition of broadband to refer
to speeds of at least 4 Mbit/s download and 1 Mbit/s upload speeds.[3]
3.
Advertised speeds for all types of broadband services are usually an
indication of peak speed, which is the theoretical maximum speed allowed
by the technology. However, the actual speed of data transfer experienced by
users will vary greatly depending on a number of other factors, including their
distance from the nearest exchange or transmission tower (particularly for DSL
and wireless broadband), the number of other users on the network at the
particular time (particularly for wireless, satellite and cable), and physical
barriers and weather conditions (particularly for wireless and satellite). The
average speed that is experienced by users is usually significantly lower
than the peak speed.[4]
4.
According to the ABS, 43 per cent of Australian internet access
connections in December 2010 were DSL broadband, closely followed by mobile
wireless broadband at around 40 per cent. Dial-up internet connections now make
up less than 7 per cent of connections, a decrease from 47 per cent in June
2006. The remainder of connections are made up of cable, satellite, fixed
wireless and a small number of fibre connections and other technologies, as shown
in the below figure.[5]
Figure A.1 Number of internet subscribers by connection
type, all ISPs, 2006-2010
Source Australian
Bureau of Statistics, 8153.0 – Internet Activity, Australia, Dec 2010
DSL broadband
5.
Currently, most fixed line broadband services in Australia are Digital
Subscriber Line (DSL) connections. DSL uses existing copper-based telephone
networks to digitally transfer data.[6] Asymmetric DSL (ADSL) is
the most common type, and simply indicates that data is uploaded at a lower
rate to that at which it is downloaded. ADSL 2 and 2+ are common variations of
this technology which enable faster download speeds than more basic ADSL 1 standard,
provided premises are close enough to a telephone exchange. Other variations
include VDSL (Very High Bitrate DSL), which can provide even faster transfer
speeds close to an exchange.[7]
6.
Unlike dial-up internet, DSL data is transferred at different frequencies
to voice data, enabling users to be connected to the internet at all times
without affecting their telephone services.[8]
7.
The use of existing copper networks makes DSL services theoretically
available to all premises with a telephone line; however, there are several
limitations which mean ubiquitous DSL broadband is not currently possible.
Firstly, local telephone exchanges must have equipment known as DSL Access Multiplexers
(DSLAMs) installed by an internet service provider (ISP) before DSL services
can be offered.[9] While ADSL 2+ is now
available at most metropolitan and larger regional exchanges, the limited
commercial appeal of more remote exchanges mean that it is still not available
in many areas. According to the NBN Implementation Study, DSL broadband of some
type is available to approximately 92 per cent of the population.[10]
8.
Secondly, a lack of competitive fibre ‘backhaul’ networks in many parts
of Australia means that high quality and affordable DSL services are not
possible without significant new investment in infrastructure, which the
private sector has been reluctant to undertake given limited potential for
return.[11] The government’s
Regional Backbone Blackspot Program (RBBP) is going some way to addressing this
problem (see further details below).
9.
Thirdly, and most importantly, the speeds of DSL connections vary
significantly depending on the distance of the premises from the local
telephone exchange. This is due to loss of signal along the copper lines.
Premises very close to an ADSL 2+ enabled exchange may obtain download speeds
of over 20 Mbit/s, while those several kilometres from an exchange may only
receive 1 to 2 Mbit/s, or not be able to receive DSL broadband at all.[12]
The deteriorated condition of copper lines also reduces the quality of DSL
services in many areas.[13]
Wireless broadband
10.
Wireless broadband has been rapidly increasing in popularity in recent
years. It uses a range of technologies to transmit data to users’ devices
without the need for a telephone line or other fixed line service to their
premises.
11.
There are two main types of wireless broadband technologies: fixed
wireless and mobile wireless. Fixed wireless refers to services that are
designed to be transmitted to premises equipped with a fixed antenna (often
externally). Mobile broadband services transmit to small portable devices such
as ‘smart phones’ and laptops.[14]
12.
While fixed wireless does not currently exist on a large scale in
Australia,[15] mobile broadband has
become increasingly popular in recent years. The numbers of subscribers to
mobile broadband services have increased from less than 500 000 in December
2007 to over 4.2 million in December 2010, and as a proportion of total
broadband subscriptions, mobile broadband has increased from 7 per cent to
around 41 per cent over this period.[16]
13.
The NBN Implementation Study puts the current growth in mobile broadband
subscriptions down to a number of temporary factors, including recent price
drops, rapid take-up in the business sector and poor fixed line broadband
services.[17] The ongoing substitution
of standard mobile phones with smart phones and other devices has clearly also
increased the number of connections. The Implementation Study notes that the
vast majority of mobile broadband customers also have a fixed line broadband
service.[18] ABS data shows that
fixed line services still account for over 91 per cent of all data downloaded
in Australia, compared to less than 9 per cent for wireless.[19]
14.
With denser tower distribution and more effective receiving antennas,
fixed wireless is capable of providing faster speeds and more consistent
performance than mobile wireless broadband, particularly if external antennas
are attached to premises.[20] However, both types of
wireless technology are affected by geography, with performance dropping with
distance from a tower and due to physical barriers such as hills and trees.
Users of wireless broadband must also share capacity, meaning the more people
that are using their connection the lower the performance (this is known as
‘contention’). For these reasons, fixed wireless broadband is considered a
suitable alternative to fixed line services in areas with lower population
densities where it is not economical to provide fixed line broadband
infrastructure.[21]
15.
These ISP-delivered wireless broadband services should not be confused
with short-range wireless technologies such as Wi-Fi. Wireless Local Area
Networks in homes, workplaces and publicly accessible wireless ‘hot spots’,
such as in cafes and libraries, almost always use a wireless router that is
attached to a fixed line broadband connection.
Other broadband technologies
16.
Hybrid Fibre Coaxial (HFC) cable broadband, often known simply as
‘cable’, is available to many consumers in larger cities, primarily using
Telstra and Optus networks.[22] This service uses the
same infrastructure as that which delivers cable subscription television
services, and can deliver very fast broadband speeds with only negligible loss
of signal. It uses fibre optic cables to transfer data to nodes close to
premises, then coaxial cable for the ‘last mile’ of transfer from the node to
premises.[23]
17.
HFC is essentially a proprietary form of fibre-to-the-Node (FTTN), which
is the generic name for infrastructure where fibre is laid out to equipment
‘nodes’ in each neighbourhood rather than all the way to individual premises.
HFC is more widely deployed in Europe and North America than in Australia.[24]
The NBN Implementation Study notes that while HFC is capable of providing fast
broadband connections, compared to alternative technologies there are questions
about its ability to provide a wholesale open-access network, keep pace with
future bandwidth requirements and, due to its higher contention ratios, deliver
reliable average speeds and enterprise-grade services to customers.[25]
18.
Satellite broadband currently has around 111 000 subscribers in
Australia,[26] mainly provided through
IPSTAR and Optus. Current satellite services are slow compared with other
technologies, and performance suffers from high ‘latency’, a delay in response
time caused by the distances that signals need to travel to reach and return
from satellites orbiting around 36 000 kilometres above the earth.[27]
However, satellite broadband is often the only viable broadband option for many
people in remote areas. Current satellite broadband services are provided by
geostationary (GEO) satellites operating over the Ku band. Under the Government’s
Australian Broadband Guarantee program, which ended in June 2011, residential
and small business premises in locations unable to access ‘metro-equivalent’
broadband services were able to access satellite broadband services at a
subsidised price.[28]
19.
Fibre-optic cable, or just ‘fibre’ for short, is made of thin threads of
glass that carry data in the form of pulses of light. As fibre is less
susceptible to ‘noise’ and ‘interference’ than other technologies, it is able
to transfer large amounts of data over long distances without loss of quality
or speed.[29] A single fibre is
capable of extremely high bandwidth transmission, with recent studies
demonstrating speeds of over 100 terabits per second
(100 000 000 Mbit/s).[30] The actual speed of
transmission depends on the equipment that is installed in exchanges,
aggregation points and end user premises.[31]
20.
Fibre is already used extensively in backhaul telecommunications
networks, including international submarine cables. Fibre is also increasingly
being used for network connections closer to individual premises.
Fibre-to-the-premises (FTTP) refers to fibre delivered all the way to an
individual home or business (the ‘last mile’), eliminating any dependence on
copper cabling. FTTP has been increasingly made available in new developments,
and many large businesses and public institutions, including schools,
universities and hospitals, also already have fibre connections,[32]
although these connections are often under-utilised due to cost barriers.[33]
Overview of the NBN
21.
The National Broadband Network (NBN), as announced by the Federal
Government on 7 April 2009, promised to deliver a ‘super fast’ FTTP network
delivering broadband services of up to 100 Mbit/s to 90 per cent of Australian
premises, with the remaining 10 per cent to be serviced by wireless broadband
with speeds of at least 12 Mbit/s.[34]
22.
Shortly after the announcement, NBN Co was established as a wholly
government-owned company to build and operate the NBN. Mr Mike Quigley was
appointed as NBN Co’s Chief Executive Officer on 25 July 2009.[35]
23.
In August 2009, McKinsey–KPMG was appointed by the Government as the
Lead Advisor for the NBN’s Implementation Study.[36]
The Government released the Implementation Study in May 2010.[37]
Among other things, the study recommended the FTTP component of the NBN plan
should be extended to 93 per cent of households. Fixed wireless technology
would deliver broadband to another 4 per cent of households, and next
generation satellite technology would service the remaining 3 per cent of the
population. Figure A.2 below gives an overview of the type of infrastructure to
be used, and Figure A.3 shows NBN Co’s indicative coverage map of each type of
technology. The government’s official response to the Implementation Study,
accepting its key recommendations, was publically released on 20 December 2010.[38]
Figure A.2 NBN technologies
Source Australian
Government, ‘21st Century broadband’ <http://www.dbcde.gov.au/__data/assets/pdf_file/0005/110012/National_Broadband_Network_policy_brochure.pdf>
viewed 14 January 2011.
Figure A.3 Indicative coverage of NBN fibre, wireless and
satellite services
Source NBN
Co website <http://www.nbnco.com.au/our-network/maps.html>
24.
The NBN will be an ‘open access’ network, which means that NBN Co will
be a wholesale-only company that provides the basic fibre infrastructure and a
‘Layer 2 bitstream’ service, which retail service providers (RSPs) will be able
to draw upon on an equal basis.[39] Only RSPs will deal
with end-user customers and offer a range of higher level products. This
structure is different from the ‘vertically integrated’ structure currently in
place for most of the existing copper network, in which Telstra is both the
wholesale infrastructure owner and a retail service provider. The fibre-based
NBN, which will eventually replace the copper network, will therefore
structurally reform the telecommunications industry in addition to providing
new infrastructure.
25.
Figure A.4 gives an overview of the typical infrastructure that will be
used to deliver the NBN’s fibre network in each of around 980 fibre serving
areas (FSAs) around Australia.[40] The NBN distribution
fibre will connect to retail backhaul networks at what is known as a Point of
Interconnect (PoI) (the Fibre Access Node shown in Figure A.4 incorporates a
PoI).
Figure A.4 Indicative NBN infrastructure design: a typical
Fibre Service Area (with POI)
Source NBN
Co, Consultation
Paper: Connecting to the National Broadband Network (Fibre Network), 25
October 2010 < http://www.nbnco.com.au/assets/documents/connecting-to-the-fibre-network.pdf>
viewed 22 August 2011.
26.
Following extensive public debate and the Australian Competition and
Consumer Commission (ACCC) advice on the matter, in December 2010 the
government and NBN Co announced that there would be initially 120 PoIs, only in
locations that have competitive backhaul available. This ‘semi-distributed’
model was designed to balance the competing goals of competition on backhaul
infrastructure with the Government’s commitment to uniform national wholesale pricing
across Australia.[41] For Fibre Access Nodes
without a PoI, the NBN will supply its own ‘transit’ backhaul fibre to the
nearest PoI.
27.
Downstream from the Fibre Access Node, distribution fibre will be laid
out to connect a network of Fibre Distribution Hubs, each connecting to around
200 premises using local and drop fibre. Gigabit Passive Optical Network (GPON)
technology will be used to deliver fibre connections capable of speeds of
around 2500 Mbit/s downstream and 1250 Mbit/s upstream, shared by up to 32
premises.[42] Given that not all
connections are likely to be used simultaneously and that data is usually
transmitted in bursts not continuously, GPON is capable of fulfilling the
government’s requirement of providing speeds in excess of 100 Mbit/s to each of
the 32 premises being served.
28.
As demand for bandwidth increases in the future, it would be relatively
inexpensive to replace the GPON components with newer technology that allows
for even more bandwidth over the same fibre network.[43]
NBN Co has also indicated that point-to-point (PtP) fibre connections will be made
available for some business users, meaning bandwidth would not need to be
shared with other premises at all.[44]
29.
The fibre cables that make up the network will be primarily underground,
although around 25 per cent of premises with have overhead cables.[45]
Each of the premises on the network will be equipped with an internal or
external Optical Network Termination (ONT). Multi-dwelling units (MDUs), such
as apartment blocks, will be equipped with fibre to individual premises using
internal fibre.[46] Individual householders
may connect their devices through to the ONT (or a connected internal device)
using standard telephone or Ethernet cables, or by setting up a local wireless
network using a wireless router.
30.
On 1 June 2011, NBN Co announced that it had signed a 10 year contract
with Ericsson to build and operate the fixed wireless component of the NBN
using 4G Long Term Evolution (LTE) technology.[47] The fixed wireless
network will offer peak speeds of 12 Mbit/s and is expected to begin offering
services from mid-2012, with the network complete by 2015. In February 2011,
NBN Co had announced that it had acquired 2.3 GHz and 3.4 GHz spectrums from
AUSTAR,[48] and additional spectrum
was purchased in July 2011.[49] The first communities to
receive fixed wireless NBN services are expected to be the areas surrounding
Ballarat, Darwin, Geraldton, Tamworth and Toowoomba.[50]
31.
At the time of writing, the precise details of the satellite broadband
service that will be delivered to the remaining three per cent of the
population had not yet been announced. The NBN Implementation Study recommends
that NBN Co launch two ‘next-generation’ GEO satellites operating over the Ka
band, which would provide substantially better service than the current Ku band
satellites and meet the objective of delivering broadband with peak speeds of
at least 12 Mbit/s download across the country. However, mainly due to the
latency effect inherent in high-orbiting satellites, it is expected that
satellite broadband will only be taken up by customers who cannot access fibre
or wireless services.[51]
32.
Given that the time taken to design and launch a new satellite is around
three to four years,[52] NBN Co began offering an
interim satellite solution in July 2011 using spare capacity on existing
satellites.[53] The Interim Satellite
Service is a substitute for the Government’s expiring Australian Broadband
Guarantee program, and delivers peak speeds of around 6 Mbit/s. The long term satellite solution is expected
to be deployed by 2015.[54]
The NBN fibre roll out plan
33.
NBN Co plans to achieve full roll out the NBN by 2021, around nine and a
half years after completion of the mainland first release sites.[55]
Although precise fibre coverage details will not be known until later in the
construction period, NBN Co has indicated that fibre will be deployed to all
mainland communities with over 1000 premises, in addition to communities with
more than 500 premises that are passed by transit backhaul routes.[56]
NBN Co has also announced that it is trialling a fibre extension program in early
roll out sites in Tasmania, in which premises outside the proposed fibre
footprint can be connected with fibre if they agree to pay the additional
incremental cost involved.[57]
34.
The Regional Backbone Blackspots Program (RBBP) is being funded by the
government to fill gaps in existing fibre ‘backbone’ infrastructure that will
be utilised under the NBN. The term ‘backbone’ refers to the main backhaul
fibre routes that connect major towns and cities. Locations to be linked
include Longreach and Emerald in QLD, Geraldton in WA, Darwin in NT, Broken
Hill in NSW, Victor Harbor in SA and South West Gippsland in VIC. All links are
expected to be in place by the end of 2011. As of July 2011, the RBBP links to
Geraldton, Victor Harbor and South West Gippsland had been completed, enabling
new services to be provided by ISPs in those locations. [58]
35.
On 8 April 2009, the government announced that the NBN would begin being
rolled out in Tasmania.[59] In July 2009, Smithton,
Scottsdale and Midway Point were announced as the ‘Stage 1’ pre-release trial
sites where the roll out would begin. NBN Tasmania Limited was created to
oversee the wholesale roll out of the network in Tasmania and was established
as a wholly owned subsidiary of NBN Co.[60] Seven more ‘Stage 2’
towns were announced in October 2009,[61] and four larger ‘Stage 3’
locations in March 2010.[62] Figure A.5 shows the
location of these sites. NBN trial services were launched in the Stage 1 sites
in August 2010,[63] and construction start
dates and fibre maps were released for the Stage 2 sites in April 2011.[64]
Figure A.5 NBN first, second
and third stage rollout sites in Tasmania
Stage 1 Communities |
Stage 2
Communities |
Stage 3 Communities |
|
|
Midway Point
Scottsdale
Smithton |
Deloraine
George Town
Kingston Beach
Sorell
South Hobart
St Helens
Triabunna |
Burnie
Devonport
Hobart
Launceston |
|
|
|
|
|
|
|
Source Australian
Government, National Broadband Network website < http://www.nbn.gov.au/follow-the-rollout/tasmanian-rollout/>
viewed 19 July 2011.
36.
On 2 March 2010, five ‘first release’ trial FTTP sites were announced
for the mainland—Brunswick (Victoria), Townsville (Queensland), Minnamurra and
Kiama Downs (NSW), Armidale (NSW) and Willunga (SA).[65]
Fourteen more release sites around mainland Australia (and extended coverage in
the five first release sites) were announced on 8 July 2010.[66]
Figure A.6 shows the location of these sites. User trials of the first mainland
services (beginning in Armidale) were launched by the Prime Minister on 18 May
2011.[67]
Figure A.6 NBN first release
and RBBP locations on mainland Australia
RBBP priority location |
First release sites |
Second release sites |
Geraldton (WA)
Darwin (NT)
Victor Harbor (SA)
Emerald (QLD)
Longreach (QLD)
Broken Hill (NSW)
Sale (VIC)
Wonthaggi (VIC) |
Willunga (SA)
Townsville (QLD)
Armidale (NSW)
Kiama Downs (NSW)
Brunswick (VIC) |
Gungahlin (ACT)
Riverstone (NSW)
Coffs Harbour (NSW)
Casuarina (NT)
Inner North Brisbane (QLD)
Springfield Lakes (QLD)
Toowoomba (QLD
Modbury (SA)
Prospect (SA)
Bacchus Marsh (VIC)
South Morang (VIC)
Geraldton (WA)
Mandurah (WA)
Victoria Park (WA) |
Source Australian
Government, National Broadband Network website < http://www.nbn.gov.au/follow-the-rollout/australian-mainland-rollout/
> viewed
19 July 2011.
37. Figures A.7 and A.8 provide an indication of the expected deployment
timeframes for the NBN.
Figure A.7 NBN Deployment Schedule to FY2021
Source NBN
Co, Corporate
Plan 2011-2013, p. 77.
Figure A.8 NBN Fibre Premises Passed Targets
Source NBN
Co, Corporate
Plan 2011-2013, p. 83.
38.
NBN Co has divided the network into 16 Roll-out Regions in which fibre
will be deployed concurrently during the full scale construction period.[68]
Precise details of when each area can expect to be connected to the fibre
network have not yet been announced.
39.
During the rollout of the NBN to existing premises, it is estimated that
an addition 2 million new ‘greenfields’ premises will be constructed.[69]
Under the government’s policy announced on 9 December 2010, NBN Co will be
responsible for installing fibre at all broadacre developments (i.e. those in
previously undeveloped areas) and at infill developments (i.e. those in areas
which are already developed) with 100 or more premises.[70]
NBN Co intends to procure contractors to deliver fibre to these developments.[71]
Telstra will remain responsible for providing infrastructure (primarily copper)
to infill developments with less than 100 premises.
40.
On 23 June 2011, NBN Co signed binding definitive agreements with
Telstra to help facilitate the efficient rollout of the NBN.[72]
Under the agreements, Telstra will progressively migrate its customers over to
the NBN fibre network as it is rolled out and NBN Co will be given access to
Telstra’s existing infrastructure, including lead-in conduits, pits, ducts,
backhaul fibre and exchange space. The deal is subject to approval by Telstra
shareholders and review by the ACCC. On the same day, NBN Co also announced it
had signed a binding agreement with Optus (also subject to ACCC review).[73]
Under that agreement, Optus has agreed to migrate its HFC customers to the NBN
and decommission the non-essential parts of its HFC network.