Rollout cost NBN Co has been insisting for 4 years that the cost of rolling out FTTP in Australia remains constant at $4400 per premises. But many FTTP operators around the world have reduced the cost of FTTP by as much as 50 per cent by incorporating improved construction techniques. For example, in New Zealand, Chorus has reduced the costs of FTTP deployment by 44 per cent over the past few years, using a variety of approaches. Telstra missed out on the "day two bounce" after its shares fell heavily on Thursday. Credit:Louie Douvis It is a nonsense for NBN Co to argue there are no improvements in FTTP construction costs by ignoring technology improvements and refusing to learn from what has happened in other countries. The continuing successful rollout of FTTP in New Zealand by Chorus is clearly a thorn in the side of NBN Co. In the meantime, New Zealanders look at Australia's second-rate NBN in amazement. Chorus' corporate reports proudly point out that their costs for rolling out FTTP are much less that what NBN Co claims.

In the blog, NBN Co disparages Chorus' use of micro-trenching and other techniques for bringing the fibre into each home, rather than what they call "a properly constructed underground duct". NBN Co says: "this method does not protect the very fragile fibre as well as if it is safely inside a protected duct". What NBN Co omits to mention is that modern optical fibre cables are not fragile, and there is widespread use of micro-trenching and other ductless methods in many other countries. It appears that NBN Co is reluctant to admit that FTTP deployment techniques are improving and that radical new approaches can have a significant impact on reducing costs. Google Fiber NBN Co points to Google Fiber in the USA as an example of a company that found it too expensive to build a FTTP network. They do not acknowledge that Google Fiber's situation is very different from NBN Co's situation in Australia. For a start, in the USA, multiple hybrid-fibre-coax (HFC) and FTTP companies compete with parallel distribution networks, much like the parallel HFC networks installed by Telstra and Optus in the 1990s. As the sole wholesale provider, NBN Co is free of these issues and therefore able to construct a network at a lower cost per customer. As pointed out by NBN Co, much of the FTTP and HFC infrastructure in the USA is aerial, but this has caused headaches for Google Fiber. The big problem is that competing companies use the same utility poles for their cabling. Significant cost increases and delays can arise when a new company like Google Fiber wants to install its fibres on power poles that already have cables belonging to other companies attached to them and there is no free space for Google's cables.

Some cities in the USA tried to assist Google Fiber overcome the extra costs and delays by implementing rules, known as "one touch make ready" rules that would allow Google to move the competitors' cables to make space for Google's cables. But some of Google's incumbent competitors, Charter, Comcast and AT&T sued those cities and Google was left with no option other than suspend rolling out FTTP. It is expected that Google Fiber's FTTP rollout will resume when one touch make ready rules are implemented. The key point here is that Google's decision to suspend its FTTP rollout resulted from legal action brought about by competitors, not by the inherent costs associated with FTTP. Google has stated that their costs for rolling out FTTP is about the same as upgrading an HFC network to DOCSIS 3.1. Using NBN Co's figures for FTTP and DOCSIS 3.1, this suggests that Google's FTTP rollout costs are about 50 per cent of NBN Co's claimed costs for FTTP. Verizon NBN Co points out that Verizon in the USA has the ability to cherry pick high-margin, low-cost metropolitan areas, while NBN Co has to serve everyone. Again, it does not mention that as a monopoly provider, with no competing networks running in parallel, NBN Co is able to build a network at a lower cost per premises. It also fails to mention that Verizon provides FTTP to suburbs in the USA with population densities that are similar to Australian suburbs. The upshot

Loading Take away the misleading statements in the blog, add some important missing information, and it becomes clear that FTTP is now cheaper to roll out than ever, and the rate at which it is being rolled out around the world is accelerating. There is no good reason why Australia should not be enjoying FTTP. There are few better examples of how to embrace FTTP than in New Zealand. Chorus is efficiently getting on with the job of rolling out FTTP in New Zealand, while NBN Co seems to be fixated on finding excuses for why Australia is not able to do the same. Rod Tucker is a Laureate Emeritus Professor at the University of Melbourne. He was previously director of the Institute for a Broadband-Enabled Society and was a member of the panel advising the Rudd government on the original FTTP-based NBN.