The short answer is yes. But, on balance, would you want it to? Credit: Rodolfo Clix, file photo (www.sxc.hu)

Discussion of FTTN (Fibre-to-the-Node) isn't a new element in the NBN debate. However, now that the Federal Opposition is taking a more active approach to offering alternative NBN architectures - and has abandoned the untenable position that everything we need can be done with wireless technologies - FTTN is back in the centre of the debate.

That's introduced a term which may be unfamiliar to Australians, since it describes a technology with only a small proportion of users here - VDSL2, which figures prominently in explanations of how an FTTN network could offer a "faster, cheaper" alternative to the government's FTTH (Fibre-to-the-Home) network.

In this article, I hope to stick sufficiently to the purely factual as to sidestep the sound and fury of the political debate (although I have no great confidence that this will be possible).

There's some important data that inform this article: around half of Australian households are more than 1.5 KM from their nearest exchange - and about 35 per cent of households are more than 2 KM from their exchange. In the context of an FTTN rollout, as we'll see shortly, distance matters.

A question

Is it feasible to build an NBN-like network using FTTN?

An answer

Yes - subject to a very long footnote, because a FTTN rollout would have significant challenges of its own.

The very long footnote

We should abandon any notion that a VDSL2 deployment in Australia could offer widespread speeds above 100 Mb/s. It won't: demonstrations of (say) 300 Mb/s VDSL technologies use multiple copper twisted pairs (a discussion of Alcatel's technology, for example, is here). We cannot assume that enough homes have four wires available to them to expect a VDSL2 rollout to top 100 Mb/s.

Local companies like Fusion Broadband are using bonded pairs to deliver higher speeds, but it's chiefly a business play - unlike households, many or even most business premises are served by multiple copper pairs, a legacy of the era where two phones meant two phone lines.

Australia's best-known case study for VDSL2 - the TransACT network - has an aggregate speed (downloads plus uploads) of around 100 Mb/s (a bit over 60 Mb/s down, nearly 40 Mb/s up). The technology worked, partly because TransACT had advantages that the Telstra network lacks.

Free of the tyranny of history, TransACT had a clean-sheet design that let it put the nodes close to its customers from day one; service lanes between houses in Canberra's layout helped immensely.

Outside that footprint, TransACT had to revert to the Telstra copper and ADSL speeds - and it was never a money-spinner for its owners, which is why iiNet now owns TransACT.

A rapid VDSL2 primer

To understand VDSL2's limitations, we have to understand how it achieves its high speeds.

In one way or another, all of our data communications need an analogue "carrier" of some kind: the radio signal in our telephones, the lightwaves in our fibres, or the different electrical frequencies we send along wires for our fixed broadband services.

VDSL - very high bit-rate digital subscriber line - is one in a long line of technologies that dates back to the 1980s and ISDN. Unlike analogue modems, which had to work with the 2.4 Kilohertz bandwidth of a telephone line, DSL technologies use much higher analogue frequencies to get higher data rates. This comes at a cost, however: the highest frequencies fade fastest with distance.

ADSL, which dates back to the early 1990s, achieved speeds of 8 Mb/s using a 1.5 Megahertz "carrier" frequency; today's ADSL2+ gets its 24 Mb/s out of around 2.2 Megahertz analogue bandwidth.

VDSL2 is a cheetah: using carrier frequencies of up to 30 Megahertz, it can blast off at 100 Mb/s (download speed) within 300 meters of its equipment, manages a respectable 40 Mb/s at 1 KM, has the brakes on at 1.8 KM, and at 3 KM, it's useless (my source for VDSL speeds is a white paper from Aware Inc - published here; ADSL and ADSL2+ speeds can be viewed on this chart published by Internode).

Could Australia roll out a VDSL2-based FTTN?

Certainly - but it would pose its own challenges. The distance limitation poses a formidable deployment challenge, and the technology creates issues of regulation and industry structure that must be solved before the build.

A short distance from the node to the home is an imperative: with 50 Mb/s download as a benchmark, the copper distance must be less than 600 meters; at 100 Mb/s, the loop needs to be around 300 meters maximum.

The best-documented FTTN plan in Australia remains Telstra's November 2005 strategy document, described in this presentation. That proposed installing 20,000 nodes within 1.5 KM of 4 million addresses - for a mediocre outcome of just 12 Mb/s guaranteed, capital city coverage only, over three years, and at a cost of between $3 billion and $4 billion.

To get the loop down from 1.5 KM to 600 meters (achieving 50 Mb/s if the copper is in good condition) or 300 meters (for 100 Mb/s performance) needs many, many more nodes - as many as 50,000, perhaps as high as 70,000. Each of these nodes needs electricity (today, the copper network mostly supplies a mere trickle of electricity to standard telephones - not Kilowatts to power big kerbside boxes) for power and cooling.

Such a rollout would not be accomplished in three years without spending more than Telstra proposed. If we take Telstra's proposed rollout pace as a benchmark - around 6,667 nodes per year - a 50,000-node rollout would take seven years, and a 70,000-node rollout more than ten years (comparable to the NBN).

To adequately cover regional areas makes the problem much harder, even without getting lost in the desert. Within a handful of kilometers of Goulburn, for example, you're in a place where a 600 meter loop length would mean one node per customer. Other examples abound.

Copper quality

I took some VDSL questions to an acknowledged expert, Dr Paul Brooks, a consultant who is a member of several Communications Alliance working groups. Among other things, Dr Brooks helped craft the deployment rules that govern how ADSL2+ services are offered today.

Many people criticize VDSL2 FTTN because it depends on poor-quality Telstra copper, but having analysed the tests that helped formulate the ADSL2+ deployment rules, Dr Brooks gave the issue less emphasis than many others I've spoken to.

His reason is this: much of the "worst" of the copper network isn't in the one-or-two cable runs that connect individual premises. It's in the very large bundles of 100-plus copper pairs exiting Telstra exchanges - and these would be replaced by fibre.

An FTTN could eliminate the estimated billion-dollar annual bill spent on maintaining the copper - but only if it really did eliminate those copper bundles. Doing so would create a new set of problems relating to stranded infrastructure, regulation and competition, which I'll deal with now.

Stranded infrastructure

The NBN "strands" today's competitive infrastructure, it's true: the NBN approach to stranded infrastructure is to offer a new wholesale service to ISPs, which mostly won't arrive until after equipment like DSLAMs has paid for itself.

An FTTN network would also strand infrastructure. ISPs like iiNet, TPG, and smaller operators have installed ADSL2+ equipment in many Telstra exchanges. This equipment needs copper all the way to the home (one of the first big regulatory battles of the broadband era was fought to preserve access to that copper - it ended with the ACCC's first Unbundled Local Loop declaration in the early 2000s).

An FTTN network strands that infrastructure without any clear adjustment plan for ISPs. Either the new infrastructure will compete with what's already in place; or ISPs will have to buy new DSLAMs to install at the nodes; or the FTTN will eliminate facilities-based competition.

If ISPs are to retain their existing investment, the exchange-based copper would have to operate in parallel with the FTTN. That means the operator won't get any savings on copper maintenance - and it might not work.

Dr Brooks explained that injecting a DSL signal at a node, in parallel with signals originating from the exchange, causes severe interference referred to as differential crosstalk.

Preserving the existing investment therefore degrades both the old network and the new.

Facilities-based competition

A criticism of the NBN is that it eliminates facilities-based competition in the broadband market. So does an FTTN network.

If the ISPs have to disconnect and discard their existing ADSL2+ equipment, the question arises: who will operate the DSLAMs at the nodes?

The only options are to put the nodes entirely in the hands of a network operator; or to allow multiple equipment owners at the nodes. The first option clearly eliminates facilities-based competition - the retailer simply buys a bitstream from the network operator, like the NBN but without the fibre.

And the second option - multiple owners competing at the nodes - is only marginally feasible, from a technical point of view. In hotly-contested areas, there would be at least four competitors - Telstra, Optus, iiNet, TPG and iPrimus - and that's ignoring the remaining business-specialist or regional-specialist DSL owners.

With that many DSLAMs in a node, interference and incompatibility between owners is a near-certainty, unless the network operator mandated a single-vendor build.

Who owns the copper anyway?

Copper ownership would pose a difficult regulatory challenge. Let's explore two scenarios.

1. Telstra retains the network and offers wholesale services to access-seekers; or

2. Telstra's copper is transferred to NBN Co.

The first of these would mean we would never escape regulatory warfare between Telstra, other ISPs, and the ACCC.

Forcibly transferring the copper itself to NBN Co would demand payment to Telstra over and above the funds already earmarked to transfer Telstra's customers to the NBN. Either the government or the network operator would have to negotiate a price with Telstra to acquire an asset that is (except where the copper is relatively new) already beyond its depreciation life.

Technology Futures Inc is a US advisory that sets benchmarks for telecommunication assets - the kind of data that fund managers use to put a value against a carrier like Telstra. It sets the depreciation life of fibre at 25 years, meaning today's NBN build will only "expire" as an asset 2037. Copper, on the other hand, has a depreciation life of just 15 years - which means much of Telstra's network has already passed its asset lifetime.

Note on distance calculations

My calculation of distances to Telstra exchanges is an approximation based on Australian Bureau of Statistics Level One Statistical Areas, and exchange locations. It's not exact: for that, I would need access to the national address file, a very large data set that's difficult to use.

The ABS areas act as a good proxy for household location, however: they contain all of the households in the Census, and most of them are small areas. The median "SA1" area is just 0.2 of a square kilometer - so the difference in distance to exchange across the whole area isn't huge. From the centre of an "SA1" area to the exchange is more-or-less the average distance for the whole area.

The calculation itself is slow, but trivially simple: any geographic information system can perform it.