NBN, British Telecom and turning back the clock

This week in Business Spectator NBN boss Bill Morrow recently highlighted that the company formerly known as NBN Co has instigated an information sharing scheme with UK’s biggest telco British Telecom (BT). It’s an informal agreement and while Morrow says it’s all a friendly exchange of knowledge to bolster NBN’s understanding of efficient network rollout and learning from BT’s extraordinarily high rate of fibre to the node (FTTN) deployment, is the path forged by BT really worth following? Despite its achievements BT’s performance can only be described as second-rate.

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NBN boss Bill Morrow recently highlighted that the company formerly known as NBN Co has instigated an information sharing scheme with UK’s biggest telco British Telecom (BT).

It’s an informal agreement and while Morrow says it’s all a friendly exchange of knowledge to bolster NBN’s understanding of efficient network rollout and learning from BT’s extraordinarily high rate of fibre to the node (FTTN) deployment, is the path forged by BT really worth following?

Despite its achievements BT’s performance can only be described as second-rate.

Between 2005 and 2010 the telco spent about $20 billion on the 21st Century Networkproject that upgraded the core network and subsequently led to the commencement of an approximately $15 billion FTTN/VDSL2 rollout around 2010 that lasted until late 2014.

BT is now rolling out “fast, fibre optic broadband to homes and businesses in the UK” and it is difficult to find any mention of anything other than fibre optics and all-fibre access networks on BT’s website.

BT’s move to a focus on an all-fibre access network is unsurprising when you consider what BT has achieved after expending about $35 billion or roughly $10 billion less than what NBN is likely to spend on the Coalition’s multi-technology mix (MTM) National Broadband Network.  

The 2014 Ofcom report (PDF) into UK fixed-line broadband performance states that the average UK residential fixed-line broadband speed was 22.8 Mbps at November 2014. What this means is that after spending about $35 billion (excluding OPEX over the period) the average UK residence has a broadband connection speed of less than 25/3 Mbps which is the US FCC’s latest definition of broadband.

Second-rate multi-technology mix

Communications Minister Malcolm Turnbull has on many occasions highlighted BT’s multi-technology mix broadband network as something that Australia should aspire to have. Yetindustry analysts have pointed out time and again that BT’s broadband network would not provide the UK with anything other than a ten year stop gap network that would be obsolete before it was finished.

That scenario has subsequently come to pass, with BT now reacting to competition from all-fibre network providers by refocusing on providing all-fibre network solutions.

In 2012 the former BT chief technology officer Peter Cochrane slammed BT’s decision to rollout FTTN/VDSL2 describing it as “one of the biggest mistakes humanity has made” and “imposes huge unreliability risks”.

And BT has been building the UK network since 2005, which means that for Australia to commence rolling out Fibre-to-the-Node (FTTN/VDSL2/vectoring) now the result would put Australia ten years behind the UK and probably further behind countries that have commenced or completed Fibre-to-the-Premises (FTTP) rollouts.

Information blackout

One aspect of BT’s broadband rollout that NBN appears to be mimicking is the use of commercial in confidence and non-disclosure agreements to prevent public knowledge of what NBN is doing. Information surrounding the network is becoming increasingly difficult to obtain even though Turnbull has on several occasions stated that “bloggers” are writing about the NBN without the facts that can be obtained by seeking advice from his office or directly from NBN.

Proponents of gigabit broadband are not the only group finding NBN a tough nut to crack when it comes to getting up to date information. Last week Senator Stephen Conroy threatened to subpoena NBN chief technology officer Dennis Steiger if he failed to attend the next hearing of the Senate Select Committee on the National Broadband Network. Steiger has a history of failing to attend Senate hearings and the committee has a valid point when it comes to making a fuss about access to Steiger.

Winding back the clock

Calls for BT to be split into two companies have grown louder recently but the telco is already fighting a rear guard action to head off this possibility, citing the structural separation that it underwent that saw the network infrastructure moved into BT’s Openreach in 2005.

Australia has to look no further than New Zealand to see a successful model of how to deal with an incumbent telco at work. The Kiwi decision to split Telecom New Zealand intoChorus (wholesale) and Spark (retail) is a model that should have occurred here ten years ago.

The recent calls in the UK for BT to be split in two could mean that the UK will adopt the NZ model and Australia will be closer to this model now than it was in 2005 when the Howard government failed to convince Telstra to commence a fixed-network upgrade.

Like a bad dose of déjà vu NBN management, together with the Abbott Coalition government’s blessing, has decided that we should wind the clock back to 2005 and re-enact BT’s second-rate broadband network rollout.

Winding back the clock, now that’s something BT really can help NBN with.

Mark Gregory is a senior lecturer in the School of Electrical and Computer Engineering at RMIT University.