Transcript Next generation networks in Australia and NZ

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11th ACCC Regulatory Conference
Next Generation Networks in
Australia and NZ
- Alternate paths to the same outcomes?
87260066
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Objectives
• Contrast approaches to NGN policy in Australia and NZ
• Highlight some key issues
• Reflect on Karl-Heinz Neuman’s paper
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Why are Australia and NZ leading the world?
• Are we visionaries? Better understanding than ROW of
the emerging digital economy?
• Do we enjoy different economics from other OECD
countries to justify NBN investment?
• Proved-in business cases to demonstrate NBN & UFB as
best use of nation’s capital?
• Other drivers?
• GFC, economic stimulus and Australia’s relative
prosperity
• Perceived under-investment in network and failure to
upgrade
• High cost, slow, and uncertain regulatory solutions to
market failures; incumbent behaviour over time
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NBN Snapshot – at least 90% fibre coverage
Cf Karl-Heinz data points:
•€1000-2000 per household
•FTTH x5 the cost of FTTN
•25% FTTH viable in France
•72% VDSL viable in Germany
•Cf EU NGN Agenda:
Source: NBN Co Limited
•BSO by 2013 for 100%
•30 Mbps by 2020 for 100%
•100 Mbps by 2020 for 50%
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NBN Snapshot – fibre + wireless + satellite
Source: NBN Co Limited
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NZ- LFC Candidate Areas
•Layer 1 and Layer 2 services
•Around NZD3000 to pass and connect
•Layer 1 equivalence after 10 year concession
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Key project differences
Australia - NBN
NZ - UFB
• 100% Government funded
• Form of PPP
• $43 Billion Govt
contribution
• $1.5 Billion Government
contribution
• 90% coverage
• 75% coverage
• Speeds to 100 Mbps
• Speeds to 100 Mbps
• Layer 2 services only
• Layer 1 and 2 services
• GPON architecture
• GPON architecture except
for Layer 1
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Key project differences -/2
Australia - NBN
NZ - UFB
• Telstra deal
• No deal with TCNZ at this
point
• Infrastructure access
by NBN
• Copper
decommissioning
• Ultimately one last mile
network
• Chorus as an LFC?
• Copper remains
• Open to TCNZ to
compete head-on with
LFCs
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Key regulatory and other differences -/1
Australia - NBN
NZ - UFB
• Unbundled local loop (ULL)
since 1999
• Unbundled copper local loop
(UCLL) & unbundled
bitstream access (UBA) since
June 2008
• Unbundled bitstream access
(LSS) declared Aug 2002
• Notional operational
separation since June 2006
• Full operational separation
since March 2008
• Chorus run as standalone business
• Equivalence
• FTTN rollout (10-20Mbps): to
80% of NZers by end 2011;
$1.4B cost
• ~$1000 per household
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Key regulatory and other differences -/2
Australia - NBN
NZ - UFB
• Regulatory design is work
in progress
• Regulatory design is work
in progress
• NBNCo Special Access
Undertaking
• Private party contracts
between CFH and Partner
to form LFCs
• ACCC approval
• LFC Deed of
Undertaking
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NBN/UFB Wholesale Services
Australia - NBN
NZ - UFB
• Layer 2 bitstream
ethernet
• Layer 2 bitstream
ethernet
• Implementation Study
recommended that NBN
be built for fibre network
unbundling
• P2P
• Layer 1 (dark fibre)
• FTTH unbundling (full
equivalence) after Year 10
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A comment on GPON versus P2P
• Karl-Heinz has suggested that P2P architecture < 10%
more than PON
• As I understand it, this is not what Australia and NZ
economics have indicated
• P2P adds cost:
• additional fibre count
• Increased civil engineering costs
• reduced ability to undertake aerial rollout (large
fibre runs) – going underground doubles cost
• reduced ability to use drill runs – needs open
trenching
• Power and CO costs (see over)
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Comparing P2P, Active Ethernet, GPON
Central Office Space
Fiber Raw Materials
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25000
50
Large C0 (20k)
35
30
25
20
15
10
Feeder fibers
Small CO (1k)
40
Small
CO (1k)
Large
C0 (20k)
Small CO (1k)
20000
Large C0 (20k)
15000
10000
5000
Power (W/user)
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CO racks
Power Consumption
3
2
1
5
0
0
p2p
AE
GPON
0
p2p
AE
GPON
p2p
AE
GPON
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Just some of the complex regulatory issues
• What is wholesale?
• Who can buy from NBN Co and LFCs
• Price discrimination
• E.g. volume discounts
• In NZ, preventing predatory conduct by TCNZ against
the LFCs
• Preventing monopoly profits
• Role of FCM
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Just some of the complex regulatory issues -/2
• Does network structural reform solve competition
problems permanently?
• Cf Karl-Heinz comments on the multi-fibre model
• How to regulate the ‘new fibre monopolies’
• Will content rights become a new bottleneck?
• How to regulate for the transition period?
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A Basic Comparison of Four FTTH Architectures
Central Office
More
concentrated
Point
-toPoint
IP
Active
Ethernet
IP
Access loop
More distributed
Home
Efficient Outside Plant


Small street/pole cabinet
No remote powering
Splicing
Ethernet
switch
Cost-effective Feeder

Ethernet
switch
Ethernet switch

Smaller duct sizes, Less RoW,…
CO consolidation
Best Scalability
Passive OSP, lowest CAPEX
CO scalability & Consol. (20+ km)
TDM
PON
IP
PON OLT
Optical splitter
Wavelength per user
WDM
PON


IP
PON OLT
Wavelength
Splitter
Few fibers in feeder section
CO consolidation