Friday, February 10, 2012

There's more to the NBN than fast Internet

People keep on framing debate about Australia's NBN (National Broadband Network) as if it's all about building a new service for faster Internet and that keeping the existing copper POTS infrastructure is a viable option.

Cost of services to end users as compared to POTS introduction

Look at the history of telephone rollouts. Initially they were unaffordable for many and there was a great deal of doubt about their utility - after all, you could usually just go to the local post office if you wanted to make a call, so what was the big deal?

Things are a bit different now.

On the other hand, unlike telephone rollouts (and their later enabling of MODEMs and dial-up banks) the NBN replaces an existing service. In that regard it's quite different, so we can't draw a direct comparison with the infrastructure rollout for phones. One could argue that the NBN is improving an existing service, rather than creating a new service, and at its cost is economically unjustifiable.

The POTS network is ailing

There's a reason why copper is being decomissioned where the NBN is being rolled out, and it's not just to provide economic incentive to push people onto the NBN and help fund it.

The copper phone network is ailing. There aren't enough physical lines to service increasing population densities as discrete houses are replaced with flats, high density developments, etc. High-frequency cross-talk from multiple ADSL services on long parallel copper lines is degrading service and causing poorer results for all users. Junctions and pits are needing more and more maintenance as they age and corrode. Installing new copper is more and more expensive as the price for copper goes through the roof.

Money spent on the copper network is being sunk into a network that's going to have to be dropped or massively rebuilt at some point. There's going to be a point where it's better to stop spending on it and replace it instead.

Given that, the NBN rollout is the replacement of infrastructure that'll otherwise become more and more overloaded, ineffective, and expensive to operate. I increasingly see its actual performance benefits as secondary. It's more like replacing that falling-down school with a fancy new building that happens to have air-conditioning and pretty skylights, but has to be built anyway because the old one has to be knocked down and rebuilt soon one way or another.

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