NBN alternatives: NZ does the homework Australia should have done

Stuart Corner
Tuesday, 16 December 2008 03:41

Opinion and Analysis

Amid all the controversy surrounding Australia's National Broadband Network, let's not forget that the promise of at least 12Mbps to 98 percent of the population for around $9b was basically an ALP 'back of the envelope' calculation. Thanks to InternetNZ, a much thoroughly researched approach has been taken across The Ditch.

InternetNZ has just released the second of two reports commissioned from independent consultancy Network Strategies under a research project initiated in June 2008 (The first report was released in September) to investigate the investment required under differing scenarios to introduce broadband with at least 100Mbps for domestic users and 1Gbps for commercial users for 75 percent of the New Zealand population within 10 years.

According to InternetNZ, the report "concludes that utility expansion provides the best opportunity for dramatic improvement of New Zealand's broadband infrastructure."

Executive director, Keith Davidson said: The model of utility expansion hasn't been visible in the ongoing public debate in respect to broadband infrastructure and now must be seriously considered. The potential cost benefits of using utilities for broadband expansion cannot be ignored."

Dr Suella Hansen, director of Network Strategies, said that the consulting team had applied a techno-economic modelling approach to investigate in detail different technology, business and market scenarios, and had concluded that: “Public sector participation will be important as our modelling shows that the levels of required investment are beyond that of a commercial operator's typical payback expectations."

Network Strategies examined four business models (its cost estimates for each are show in brackets):
- The lit-fibre (Layer 2) fibre to the premises (FTTP) operator that provides ethernet services (using either GPON or active ethernet technologies), and has to build its network from scratch ($NZ5.1b);
- The 'Layer 0' provider that provides an open access structure-only (duct) network ($NZ3.9b);
- A 'Layer 1' provider that provides unlit fibre in a GPON architecture (rather than a point-to-point topology) ($NZ4.4b);
- The utility expansion model where a utility uses existing ducts and poles to deploy fibre (and offers Layer 2 services) ($NZ3.2b).

None of these FTTP models were based on an extension of Telecom's ADSL2+ cabinetisation nor did they rely on use of the Telecom's network fibre and ducts (or more correctly those of Chorus, its structurally separated access network operators).
CONTINUED