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national broadband network

  1. 1. NBN1 National Broadband NetworkThe National Broadband Network (NBN) is a nationalwholesale-only, open-accessdatanetwork under development in Australia. Up to one gigabit per second connections are sold toretail service providers (RSP), who then sell Internet access and other services to consumers. TheNBN has been subject to political and industry debate for a number of years, before constructionactually commenced.The network is estimated to cost a$35.9 billion to construct over a 10-year period, including anAustralian Government investment of a$27.5 billion. The build cost has been a key point ofdebate. NBN Co, a government-owned corporation, was established to design, build and operatethe NBN, and construction began with a trial rollout in Tasmania in July 2010. The mainlandrollout began with five first-release sites with the first services connected in April 2011.The fibre to the premises (FTTP) rollout is planned to reach approximately 93 percent of thepopulation by June 2021. Construction of the fixed wireless network is planned to begin in 2011,delivering its first services in 2012 and to be completed by 2015. Two satellites will be launchedby 2015. The network will gradually replace the copper network, owned by Telstra and currentlyused for most telephony and data services. As part of an agreement with NBN Co, Telstra willmove its customers to the NBN, and lease access to its exchange space and extensive networkducting to assist in the rollout.2 Contents 1 Policy development o 1.1 Previous attempts at national broadband networks  1.1.1 Broadband Advisory Group 2003  1.1.2 Telstra Copper Upgrade Plans 2005  1.1.3 Broadband Connect Policy & OPEL Networks 2006/07  1.1.4 G9 Consortium 2007 o 1.2 Current policy  1.2.1 Initial failed federal government RFP 2007/09  1.2.2 Current policy announcement April 2009  1.2.3 Creation of NBN Co April 2009  1.2.4 National Broadband Network Companies Act 2011  1.2.5 Agreement with Telstra and Optus 2011 o 1.3 Responses by stakeholders 2 Network design o 2.1 Fibre to the premises o 2.2 Fixed wireless and satellite o 2.3 Equipment and connectivity
  2. 2. 3 Expected cost and return 4 Implementation o 4.1 Trial rollout in Tasmania o 4.2 First release sites o 4.3 Second release sites o 4.4 National rollout  4.4.1 Fibre to the premises  4.4.2 Fixed wireless  4.4.3 Satellite services 5 Retail offers 6 See also 7 References 8 External links3 Policy developmentSee also: Telecommunications in Australia4 Previous attempts at national broadband networks5 Broadband Advisory Group 2003In a report released on 22 January 2003 the Howard government’s Broadband Advisory Group(BAG) recommended the Federal Government work with other governments and industrystakeholders to form a "national broadband network". A subsequent Senate committeerecommend the Federal Government replace the "increasingly obsolete" copper network with anew network based on fibre to the node (FTTN) or alternative technologies.6 Telstra Copper Upgrade Plans 2005On 15 November 2005 Telstra, the owner of the national copper network, announced a plan toupgrade its ageing networks, including a rollout of a fibre to the node (FTTN) network. At thetime, the Federal Government was the majority shareholder of Telstra, but the plan did notinvolve any additional government investment. The rollout was later put on hold after theHoward Government refused to exempt the new network from laws requiring third party access,instead saying Telstra could achieve the exemption by applying to the competition regulator, theAustralian Competition and Consumer Commission (ACCC). Telstra dropped plans for the newnetwork on 7 August 2006, after reaching an impasse in negotiations with the ACCC. FormerACCC chairman, Graeme Samuel later said the proposal was "an illusion on cost and on thecapacity to truly deliver high-speed broadband to end users".7 Broadband Connect Policy & OPEL Networks 2006/07In June 2006 the Broadband Connect policy was announced by the Howard Government with anaim of providing greater access to broadband services in rural and regional areas.
  3. 3. OPEL Networks—a 50–50 joint venture between Optus and Elders—was announced on 18 June2007 as the sole successful bidder in tender However, on 2 April 2008 CommunicationsMinister Stephen Conroy terminated the agreement because OPEL had "failed to meet the termsof [the] contract".8 G9 Consortium 2007Nine telecommunications companies—AAPT, Internode, iiNet, Macquarie Telecom, Optus,PowerTel, Primus, Soul and TransACT, formerly known as G9—proposed its own FTTNnetwork on 20 April 2007, however, it was rejected by the ACCC on 17 December 2007 becauseof future unknown conditions for access.9 Current policy10 Initial failed federal government RFP 2007/09In the run-up to the 2007 federal election, opposition Labor party leaders announced a LaborGovernment would build a "super-fast" national broadband network, if elected.The network was estimated to cost a$15 billion including a government contribution of a$4.7billion which would be raised in part by selling the Federal Governments remaining shares inTelstra. After the election, the new Labor Rudd Government issued a request for proposals (RFP)to build the NBN, and six proposals were submitted by Acacia, Axia NetMedia, Optus on behalfof Terria, TransACT and the Tasmanian Government (covering their respective states only), aswell as Telstra. Telstra’s submission was later excluded leading to warnings that if the projectwere to go ahead, Telstra would be entitled to compensation estimated at A$15–20 billion Withthe other bidders neither able to meet the governments requirements nor able to raise thenecessary capital during the global financial crisis, the RFP was terminated on 7 April2009Current policy announcement April 2009After terminating its initial RFP, the Rudd Government announced it would bypass the existingcopper network by constructing a new national network combining fibre to the premises (FTTP),fixed wireless and satellite technologies.Tasmania was selected for a trial deployment based on the Tasmanian Governments submissionto the RFP.11 Creation of NBN Co April 2009NBN Co was established on 9 April 2009 and Mike Quigley was appointed chief executiveofficer on 25 July 2009, an implementation study was commissioned in April 2009 and releasedon 6 May 2010 by the Rudd Government. McKinsey & Company and KPMG concluded theNBN can be implemented and made 84 recommendations in the study, including expanding thefibre footprint to 93 per cent from the original 90 per cent. NBN Co released its business plan on20 December 2010, including forecasts and network design. A number of changes were made aspart of NBN Co’s business plan, including an increase in the peak speed to one gigabit persecond, in response to Google Fibre and giving "priority" to regional and rural areas during the
  4. 4. rollout following the events after the 2010 election.National Broadband Network CompaniesAct 2011The Parliament passed the National Broadband Network Companies Act 2011 and a related billon 28 March 2011with amendments by the Greens and independent senators adopted on 26March 2011. The amendments centred on transparency, freedom of information and competitionconcerns, including the adoption of uniform national wholesale prices for NBN connections. TheGovernment has required support from the Greens to pass NBN legislation through theParliament. The Greens have voted in favour of NBN legislation, but have also won support foramendments that make NBN Co subject to freedom of information laws, and that make anyproposal to privatise the NBN subject to review by the Parliament and by the ProductivityCommission. The Government has also required the support of other independent and minorparty members and senators for NBN legislation. Independent senator Nick Xenophon alsosupported NBN legislation in the upper house, but only after the government agreed to release asummary of NBN Co.’s business case.Agreement with Telstra and Optus 2011A Cable Pit for access to Telstras ducts; this infrastructure is used by NBN Co.Following threats by the federal government to force a structural separation of Telstra, NBN Cosigned a definitive agreement with Telstra on 23 June 2011 estimated to be worth a$9 billionpost-tax net present value, Building upon the signing of a financial heads of agreement a yearbeforehand. Instead of separating, Telstra agreed to "disconnect" its Internet customers from thecopper and hybrid fibre-coaxial networks in areas where FTTP has been installed, and agreed tolease dark fibre, exchange space and ducts to NBN Co. Apart of the agreement, Telstra wouldnot be able to market their mobile network as an alternative to the NBN for a number of years.This clause is similar to the one in the agreement with Optus over its hybrid fibre-coaxialnetwork estimated to be worth an$800 million post-tax net present value. The ACCC—whoseapproval is required before both agreements take effect—raised concerns about the clauses beinganti-competitive. Both Telstra and Optus would remain the owner of their respective networks.On 18 October 2011, Telstra shareholders overwhelmingly approved the deal.Network design
  5. 5. 12 Fibre to the premisesThe FTTP network.Premises within the FTTP footprint are connected using Ethernet over a gigabit passive opticalnetwork (GPON) giving a peak speed of one gigabit per second. A fibre-optic cable, known asthe "drop fibre", goes from the premise to the street ending at the top of a power pole or in anunderground pit. The "drop fibre" cable joins a "local network" which links a number ofpremises to a splitter in the fibre distribution hub. A "distribution fibre" cable connects thesplitter in the distribution hub to a fibre access node, which is linked up to a Poi. Mike Quigleysaid one of the advantages of a GPON network is the distribution hub requires no electronics. Heused an example in the United States where a hub was "under water and full of mud" and itcontinued to function while the fire department used a high pressure hose to clean it withoutelectronics, the distribution hub does not require a power supply, nor a battery for power outages.In a GPON network only the local exchanges housing the fibre access nodes and the equipmenton premises require a power supplyThe FTTP network architecture chosen by NBN Co comprises a number of replicating moduleswhich is combined to make up the FTTP network. A fibre distribution area includes up to 200premises linked up to a fibre distribution hub. A fibre serving area module comprises 16 fibredistribution areas, which services up to 3,200 premises. A fibre serving area comprises 12 fibreserving area module connected to a fibre access node, which services up to 38,400 premises.During the 10-year construction, NBN Co plans to build or lease approximately 980 fibre servingareas, servicing up to 37,632,000 premises. Mike Quigley said the modular design will decreasethe construction risk of the NBN and allow continuous improvements in the construction,network design and supply chains.13 Fixed wireless and satellite
  6. 6. NBN Co wireless outdoor antennaApproximately 93 per cent of the population is planned to be serviced with fibre to the premises(FTTP), with the remainder serviced by either fixed wireless or satellite technologies. The FTTPbuild costs for each premise increases with each percentile in the last 7 per cent, because of a lowpopulation density. The current funding could only achieve approximately 93 per cent FTTPfootprint, however, the FTTP footprint will be expanded where users or communities are willingto pay the incremental costs of installing FTTP.NBN Co will deploy a 4GLong Term Evolutionfixed wireless network covering approximately 4 per cent of the population outside the fibrefootprint. The premises in the fixed wireless footprint will be hooked up to an antenna allowing aconnection to a wireless base station; the base station links to a Poi via a backhaul. The 2.3 GHzand 3.4 GHz spectrums will be used to deliver these fixed wireless services. Unlike the mobilenetworks, only premises can connect to the NBNs fixed wireless network. The number ofpremises assigned to each base station will also be limited. Mike Quigley said the limits willensure users received a "good service" because of the "high[er] throughput". Users at the edge ofthe coverage for each base station will receive a peak speed of 12 megabits per second, the speedincreases "considerably" moving closer to the base station.NBN Co is planning to launch two Ka band satellites by 2015, each offering 80 gigabits persecond of bandwidth, compared to four to six gigabits per second capacity available from currentsatellites servicing Australia. In the interim, NBN Co will use existing satellite to provide sixmegabit per second to a limited number of premises which currently do not have access tobroadband speeds. The satellites will be used to bounce signals from a satellite dish on thepremises to an earth station, known as a "gateway"; the gateway is then connected to a PoI via afibre backhaul. Mike Quigley said the satellite design was "not easy", because the requiredcoverage is about "five per cent of the worlds land mass" containing "at least 200,000 premises"spread across "over 7,000 kilometres" of area between Cocos Islands and Norfolk Island.[83]14 Equipment and connectivity
  7. 7. How RSPs and wholesalers connect to the NBN.Internet access and other services using the NBN are sold to consumers from a retail serviceprovider (RSP), who connects their network to the NBN at a Point of Interconnect (PoI). MikeQuigley has said the "ubiquity and standardisation" is important in the NBN, he continued RSPswill be able to connect to PoIs "using the same BSS processes and interfaces, at the same pricesand with the same product constructs as far as is possible across all three technology products".Layer 2 network access is sold to RSPs, with uniform pricing within each of the threetechnologies regardless of where the service is delivered and across the technologies for the basicpackage. To provide this uniform pricing, regional and rural areas will be cross-subsidised withthe lower cost metropolitan areas. To prevent other potential providers from undercutting NBNCo in metropolitan areas, new fibre networks are required to be open access and charge similarprices; these rules are known as the "anti-cherry picking" provisions, which were passed into lawwith other NBN legislation.When completed the NBN will have 121 PoIs available to RSPs. Originally, NBN Co plannedfor a more centralised model with only 14 PoIs, however, was overruled by the FederalGovernment on the advice from the Australian Competition and Consumer Commission(ACCC). The ACCC considered the plan to be "mission creep" and would have given NBN Co amonopoly over backhaul, however, NBN Co said centralised model would have allowed smallerRSPs to connect without going through a wholesale aggregator. ACCC recommended 121 Polsafter public consultation. Internode criticised the "insane" number of PoIs and after its pricingannouncement warned it might have to charge more in regional areas because of the increasecosts. In response, Shadow Minister for Communications, Malcolm Turnbull said the"government cant deliver on a crucial promise" of "national uniform pricing", however, Minister
  8. 8. for Communications, Stephen Conroy said we "guaranteed uniform wholesale pricing" not retailpricing.The NBN will use one of the three technologies to connect the RSP and its network to thenetwork termination device (NTD) on premises. The NTD will allow devices to connect theNBN using the Ethernet or telephone ports. An external source is required to power the NTD,while a battery will supply power for a limited time during power outages. NBN Co will supply abattery during the rollout, however, the end users or their RSP will be responsible formaintenance and replacement of the battery. Mike Quigley said the batteries are the biggestsource of complaints from trial users with some users doubting they will ever use the battery.The Federal Government and NBN Co are in talks over the issue. Chinese Telecom manufacturerHuawei were prohibited from bidding by the Australian governmentExpected cost and returnThe Rudd Government estimated to the total cost of the project initially to be a$43 billion. NBNCo later revised down the cost in its business plan to a$35.9 billion. The project is to be financedby a combination of a Federal Government investment of a$27.5 billion and private investmentfor the remainder. The size of the government investment in the NBN has been a key point ofboth criticism and praise. The Coalition called for a cost-benefit analysis, describing the NBN as"a white elephant on a massive scale". The Economist Intelligence Unit (EIU) criticised the NBNas a "huge cost to the public sector", however, Minister for Communications, Stephen Conroysaid the EIU were a "right-wing dogma" and would criticise any government investment ininfrastructure. Vint Cerf, co-creator of TCP/IP, said the NBN is "a stunning investment"andasked for a "full and frank breakdown of the costs" at the conclusion of the project, to "aid andinform attempts by other countries to build a national network". NBN Co intends to begin payingdividends back to the Federal Government in 2020, and to have fully repaid the Governmentscontribution by 2034. NBN Cos business plan forecasts a return on investment of 7 per cent,expecting to turn over revenue of a$5.8 billion by 2021. Prime Minister Julia Gillard says"taxpayers will be repaid their investment in the NBN with interest", however, Shadow Ministerfor Communications, Malcolm Turnbull said "expectations of strong early revenues [for NBNCo] are looking overly optimistic".Of the first 4000 residences in Hobart, only 10.9% have actually taken up a service. However,part of the agreement with Telstra was to decommission the existing copper network where theNBN was available, and further to restrict wireless services so that they do not compete with theNBN. Thus it is expected that the NBN will have a high take up rate as it will be the only optionfor fixed telephones and broadband internet access.Implementation15 Trial rollout in Tasmania
  9. 9. The trial rollout in Tasmania, including stage one (in red), two (in yellow), three (in green) andfibre "backbones" (in grey).Tasmania was selected as the first state to begin the rollout of the NBN, based on the TasmanianGovernments "shovel ready" submission to the RFP for the original NBN.[25] A new company,NBN Tasmania (previously Tasmania NBN Co), was formed on 8 April 2009 to build the NBNin Tasmania. The Company was planned to be a joint-venture between NBN Co, Aurora Energyand the Tasmanian Government. The Tasmanian Government also floated an idea to investa$12.7 million in Aurora Energy to get access to its fibre network, however, the joint-ventureand deal were both cancelled on 9 November 2010 when the negotiations reached an impasse.Although the joint-venture was cancelled, Aurora Energy still plays a role in the construction ofthe NBN in Tasmania.The trial rollout in Tasmania comprises three stages. Stage one was announced on July 2009 withthe first customers being connected a year later. Stage one included connections to premises inSmithton, Scottsdale and Midway Point and construction of fibre "backbones" from Port Latta toSmithton, Cambridge to Midway Point, Midway Point to Triabunna, George Town to Scottsdaleand Scottsdale to St Helens. On completion of stage one, 4,000 premises were offered fibreinstallation; 51 agreed to be "NBN Ready" (at no cost), but only 10.9% actually took up theservice as of 6 May 2011, 712 premises have an active service and 11 premises are awaitingservice activation by a retail service provider (RSP).The Tasmanian Parliament passed opt-out legislation on 18 November 2010, to allow NBN Coto install fibre connections to premises unless the property owners explicitly decline theinstallation. The fibre connection is free, however, if the installation is declined and a connectionis ordered at a later date, NBN Co may charge a connection fee. The bill passed the Tasmanianlower house with the support of all members. During his second reading speech, then-Premier ofTasmaniaDavid Bartlett said the take-up rates were "a good early result", however, he said it was"important to increase the participation rate". In his closing remarks, Bartlett said "[the] NBN inTasmania is a once-in-a-generation opportunity to create jobs and contribute to a new economicdirection". In her second reading speech on behalf of the Tasmanian Opposition, Elise Archer
  10. 10. said "the NBN is an important infrastructure", but that "the State Liberals have some concern thatthe NBN business model seems to rely more and more on eliminating competition and othertechnologies".Stages two and three were announced on 21 October 2009 and 1 March 2010, respectively.Approximately 11,150 premises in Sorell, Deloraine, George Town, St Helens, Triabunna,Kingston Beach and South Hobart were included in stage two. Stage three includesapproximately 90,000 premises in Hobart, Launceston, Devonport and Burnie. Stage two willinclude a trial of expanding the FTTP footprint to areas not included in the initial rollout. Thetrial will allow individuals and councils to pay the incremental cost of a fibre connection overfixed wireless in order to receive a fibre connection from NBN Co. The costs will includeprovisioning further space in exchanges and rolling out additional fibre optic cables.At the time of launch, the access prices for RSPs were temporarily set at a flat rate of a$300 perpremises with no ongoing monthly charges. Mike Quigley said one of the reasons for the flat rateis the OSS and BSS systems was not built to make the process automatic. He continued if NBNCo charged a monthly charge without the systems, it would have been a "very manuallyintensive process" and not a "sensible proposition". However, RSPs did charge a monthly fee tocustomers, to cover the cost of the trial.First release sitesThe first (in red) and second (in green) release sites of the NBN rollout.Five areas comprising around 14,000 premises were chosen as the "first mainland sites", eachrepresenting rollout challenges the NBN was expecting to face during an Australia-wide rollout,with the first services going live on 19 April 2011. Commenced on 17 August 2010, Armidalewas the first site to officially launch on 18 May 2011 with 2,900 premises included of which90% did not opt out for connection. Kiama Downs and Minnamurra was the second site toofficially launch, following Armidale on 29 July 2011. Approximately 2,350 premises werepassed, of which 80 per cent did not opt out for installation. Brunswick had the lowestinstallation rate at the time of its official 4 August 2011 launch: of the approximately 2,689premises passed, only 50 per cent opted for installation. Aitkenvale and Mundingburra followedBrunswick on 1 September 2011 with approximately 3,100 premises passed and 63 per cent did
  11. 11. not opt out for installation. Willunga was the fifth and final "first release site" to officially launchon 16 September 2011 with approximately 940 premises passed and 91 per cent did not opt outfor installation.These figures are for passive installation of a dark fibre to the premises. To activate it residenceneed to purchase a service from an RSP. Furthermore, following the low take up rates inTasmania, the government has adopted an opt-out model in which users are assumed to want theservice unless they explicitly opt-out. Thus passive installation figures may be quite differentfrom the proportion of residences that actually use the NBN service.16 Second release sitesFourteen second release sites comprising 54,000 premises in all states and territories wereannounced on 8 July 2010 with construction commencing in August 2011. The sites comprisepremises in Aspley, Bacchus Marsh, Casuarina, Coffs Harbour, Geraldton, Gungahlin,Mandurah, Modbury, Prospect, Riverstone, South Morang, Springfield Lakes, Toowoomba andVictoria Park.[151] [152] Telstra had agreed to allow NBN Co to use its exchanges and ducts in thesecond release sites before the agreement was finalised.17 National rolloutConstruction of the NBN began with a trial rollout in Tasmania with the first customersconnected in July 2010 NBN Co plans to complete the FTTP rollout by June 2021, along withthe completion of the fixed wireless and satellite rollout by 2015.Fibre to the premisesIn April 2010, NBN Co began a tender for the major FTTP rollout. 14 vendors submitted aproposal, however, NBN Co suspended the process on 1 April 2011, as the prices were"unacceptably high". After the suspension, NBN Co entered into an agreement worth up toA$380 million with Silcar on 1 June 2011. The agreement covers the construction of the NBN inQueensland, New South Wales and the ACT by Silcar, a company joint-owned by Siemens andThiess. The agreement also includes the option of a two-year extension with an additional valueof a$740 million.Fixed wirelessThe 2.3 GHz and 3.4 GHz radio spectrums will be used to provide Long Term Evolutionfixedwireless covering approximately 4 per cent of the population outside the fibre footprint. NBN Cobought spectrum from Austar for A$120 million in February 2011, with the remanding spectrumcovering areas in Western Australia, the Northern Territory, South Australia, outbackQueensland and New South Wales were bought on 13 July 2011 for A$1.3 million in an auctionby the Australian Communications and Media Authority. NBN Co said the spectrum boughtfrom Austar and in the auction covers "all the geographic coverage it needed" to build its fixedwireless network.
  12. 12. NBN Co-signed an initial 12-month contract on 1 June 2011 with Ericsson to design, build andoperate the network with options to extend the contract for up to 10 years at a total cost of a$1.1billion. Construction will commence in 2011, with the first five locations announced as theregional and rural communities surrounding Geraldton, Toowoomba, Tamworth, Ballarat andDarwin. The first services are scheduled to begin in 2012 and completion in 2015.Satellite servicesWhile the planning continues on the two satellites due to launch by 2015, NBN Co has launchedinterim satellite services on 1 July 2011, providing up to six megabits per second. Due to thelimited satellite capacity, these services were given to customers who did not have access toalternative "metro comparable" services, similar to the Federal Governments AustralianBroadband Guarantee (ABG) program which ended on 30 June 2011.The criteria for alternative "metro comparable" services were minimum data speeds of at least512 kilobits per second, a 3GB per month data allowance and a total price to the end customer ofno more than a$2,500 over three years. To provide these services NBN Co bought managedsatellite services and satellite capacity from Optus for $200 million and additional satellitecapacity from IPstar for A$100 million.NBN Co has contracted Space Systems/Loral to build and launch two Ka band satellites in 2015at a total cost of a$2 billion, each offering eighty gigabits per second of bandwidth.18 Retail offersAs of September 2012, there were a large number of Retail Service Providers for NBN basedservices.Pricing for fixed broadband varied across retail providers, for example Telstra charges $90/month for 200GB, Optus charges $69.99 for 150Gb (split on/ off-peak) and iinet charges $59.99for 200GB (split on/ off-peak).19 References 1. ^ Broadband Advisory Group (22 January 2003), The Broadband Advisory Groups Report to Government, Minister for Communications, Information Technology and the Arts, retrieved 17 June 2011 2. ^ Environment, Communications, Information Technology and the Arts Senate Committee (August 2004), The Australian telecommunications network, Parliament of Australia, retrieved 17 June 2011 3. ^ Ferguson, Iain (15 November 2005), Telstra to slash tech costs under review, ZDNet, retrieved 30 April 2011 4. ^ Maiden, Malcolm (16 November 2005), Telstra dives as $10bn plans unveiled, The Age, retrieved 30 April 2011
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