Fears of overbuild in Ultra Fast Broadband rollout
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Should Chorus be building a new network in areas where fibre optic connectivity is already available?
TUANZ CEO Paul Brislen is questioning the need for Chorus – which was awarded 70 percent of the UFB contract – to be building on top of networks, instead of utilising the fibre infrastructure already in place.
“To me this is a waste of resource, particularly in a time where we are supposed to be rolling out greenfields fibre,” says Brislen.
Regional fibre company Network Tasman (NT) has been rolling out fibre networks since the early 2000s, several years before the decision to roll out the government’s $1.5 billion UFB network was made in 2009.
The fibre company is an offshoot of the regional power line trust. The initial goal of the fibre network was to strengthen communication to substations and generators across the grid, which is used to manage peak loads.
Network Tasman has to date rolled out 400 kilometres of fibre in the Tasman Lakes, Nelson and Blenheim areas.
“Network Tasman has a fairly large network and customer base. Chorus should be using its open ducts and striking a deal to use its fibre,” Brislen says.
NT’s $13 million fibre network mainly services government, educational, and business premisses, but operations and telco manager Andrew Stanton says Chorus could use its existing network to service the residential market also.
In 2009 NT, along with several other regional power line companies, formed the New Zealand Regional Fibre Group (NZRFG) to tender bids to build out the UFB in their areas.
Stanton says once Chorus was awarded 70 percent of the build, NT approached Chorus to negotiate a deal to use its fibre network which has so far been unsuccessful.
Stanton says Chorus has been overbuilding in Blenheim since the beginning of the year, and is starting to do the same in Nelson.
Chorus spokesperson Robin Kelly told the Nelson Mail earlier this month that Chorus was not overbuilding, but was instead unable to use NT’s point-to-point fibre architecture which is more expensive than the point-to-multipoint GPON used by Chorus.
“To suggest that we’re overbuilding their fibre with more fibre, it’s not really true. It’s a different network,” says Kelly.
“We literally have to build another network architecture.”
Stanton says he is surprised by this statement, and says Chorus has never spoken to NT about technological problems with accessing its network.
“I think that New Zealand would benefit if the fibre is extended as far as possible. Anything that reduces the cost of the rollout would be good,” says Stanton.
Stanton says NT was looking at expanding into the residential fibre market, but those plans have been shelved following the UFB decision. The company is investing less money into expanding its fibre network because it is unable to compete with the government-backed Chorus.
Kelly says Chorus is open to partnering with other providers, and has done so with FX Networks for backhaul capacity, and Unison Fibre’s ducts in the Central North Island.
Unison built over 112 kilometres of fibre before the UFB decision in Taupo, Rotorua and Hawke’s Bay. Wayne Baird, sales and marketing manager at Unison, says Unison’s network will be complete by the end of October.
Unison’s fibre in the Central North Island now passes 6000 business premises. Baird estimates that Unison has between 200 and 250 customers using fibre internet from one of the 10 retail service providers (RSPs) using Unison wholesale.
Unison would prefer to be the sole fibre provider in the region, but Baird says he sees the Chorus overbuild as beneficial to local businesses. Chorus and Unison often plan earthworks together, he says.
Asked if he personally thought Chorus could use its resources more efficiently by utilising already existing networks in the Unison region better, Baird said he would not comment.
"It's always been an absolute known for us that Chorus would build in the same place we are," says Baird.
The retail service provider One Fibre, which utilises both Chorus and Unison networks, says competition between the two fibre networks is negligible because the price points for wholesale fibre is so low.
The Auckland-based company peers with Chorus, Unison, and players in other region like Citylink and Vector.
Co-director Dwayne Smith says One Fibre uses Unison as its preferred network in the region because it's smaller and easier to deal with.
For instance on properties that are cross leased by several business customers, consent is needed from all parties. Smith says Chorus maintains it does this process itself, which can take a long time and requires some prompting. Unison puts this consent process squarely on the RSP, which means One Fibre is able to better manage the consent approval process.
Rohan MacMahon, strategy director for CFH, says a degree of overbuild is inevetible but it is in Chorus' best interest to reduce costs where possible.
"CFH’s payment are fixed, per premise passed. So Chorus and the LFCs have an incentive to explore such measures – as they would receive the full benefit of any reduction in costs," says MacMahon
Posted by MadEngineer at 14:45:46 on October 24, 2012
Posted by Anonymous at 15:04:12 on October 24, 2012
However I am seeing more support for remaining on copper. What is wrong with you all? Lets move into the 21st Century already!
Posted by Anonymous at 13:53:46 on October 24, 2012
Posted by Anonymous at 13:59:13 on October 24, 2012
Why is it that we need fibre to the door? I thought, and could be wrong, that copper could sustain high bandwidth? Also, couldn't you use high speed wireless in dense urban areas?
Just curious! Don't ridicule!
Posted by SImple at 8:51:58 on October 24, 2012
The latest copper technology which was covered extensively at the World Broadband Forum last week in Amsterdam is VDSL2+ with Vectoring, which gives download speeds of 100mbps and upload speeds of 40mbps on copper runs of 400metres long - I would guess that covers around 800,000 households in New Zealand. Its backwards compatible with existing technology, would cost $100 capital per household to upgrade the cabinets and exchanges, and could be deployed over 2013-2014. Then consumers who wanted the extra speed could simply swap their dsl modem. I'm picking the fibre to the home project is going to actually cost well over $2,000 per household for Auckland and the other major cities, will take well over 10 years to be ubiquitous and will only deliver a similar speed under the existing design.
Unfortunately this is politically unpalatable because the government has picked a technology (fibre) and Chorus is not permitted under their agreement to consider this.
It was a great initiative for the government to facilitate the fibre rollout and the fibre-past-the-home initiative was imperative, but they now need to change the rules and specify speed rather than technology.
Posted by Malcolm Dick at 8:35:57 on October 25, 2012
At a time when we are all supposed to tighten our belts, cut costs in govt etc.. we are wasting money on a luxury we can all ill afford.
Would love to hear Paul Brislen's and other UFB advocates identify the things we will be able to do with Fibre in the home that we cannot do today.
Posted by Anonymous at 12:34:22 on October 24, 2012
It's not what you can do today, it's what you'll be doing in ten years' time (when the network is completed) that's the issue.
Today there is no business case for UFB. That's not only well established, it's the reason for government involvement in the first place - if there was a business case it would be based on pressing need. There isn't one.
But look ahead to 2020 and there will be more than enough need to fill the network. By then, if my current download trend continues, I'll need terabytes of data delivered at 1Gbit/s speeds.
No, I've got no idea what I'll be doing with it. Probably a lot of high-def video, running a business connection from home, video calling... if I had a better answer I'd be patenting it.
But I look at my usage trends over the past decade and it's an exponential curve. Ten years ago I had 3Mbit/s download and 600MB traffic limit. Today I make do with 15Mbit/s down and 160GB data... ten years from now I'll need fibre.
Hope that helps,
Posted by Paul Brislen at 15:25:32 on October 24, 2012
So tuanz is stating here that there is no mass market need for fibre for ten years. So why are those building UFB being caned by CFH for failing to get the RSPs onto the fibre bandwagon? Shouldn't the 'pioneering' government instead focus effort and resources into building a great network quicker so that it is ready for the revolution and allow the RSPs to depreciate their recent, expensive investment into ucll and uba; to think they are going to invest in fibre product and campaigns until that time (or the even more remote possibility that a regional tin pot noticeably starts eating their lunch) is folly. We need to get the crown real on this play. Steve
Posted by CyberSteve at 22:43:40 on October 24, 2012
In any event, overbuilding creates competition and is in the consumers best interest. Imagine the prices if we only had one mobile network rather than three which have all overbuilt each other.
Posted by Malcolm Dick at 8:44:12 on October 24, 2012