A tale of two NBNs: the Coalition's broadband policy explained

By Karl Schaffarczyk, University of Canberra

Today in Australia, the Coalition released its policy on the National Broadband Network (NBN). So what is the proposal?

Amid rhetoric claiming Labor government inefficiency, cost blowouts and failure to meet roll-out targets, the Opposition leader Tony Abbott and shadow communications minister Malcolm Turnbull unveiled the detail of the efficient, value-for-money NBN we should expect under a Coalition government.

The plan calls for the existing NBN rollout to stop, and be restarted using Fibre to the Node (FTTN) technology. FTTN involves delivering optical fibre to a shared “cabinet”, which in turn provides internet access to customers within one kilometre – necessitating the placement of many cabinets throughout suburbs and towns.

This differs from the existing plan for the NBN, as supported by the Labor government, which will deliver Fibre to the Home, or FTTH.

Household equipment in a typical FTTH NBN installation. Alan Kerlin

FTTH, as the name suggests, involves installing optical fibre directly to houses, apartment buildings and businesses to provide high‐speed internet access. The fibre goes to what’s known as a fibre access node (FAN) – comparable to a telephone exchange – which can service many suburbs.

The Coalition’s plan flies in the face of advice the Australian Competiton and Consumer Commission (ACCC) gave the government in 2006.

The advice highlighted the high costs of installing nodes, and described an FTTN network as:

not so much a stepping stone towards a future FTTH network as a distinct network alternative.

Labor’s vision

To better understand what the Coalition is offering, we should understand the NBN being rolled out today:

Lukas Coch/EPA

The NBN is designed to deliver high-speed broadband Australia-wide using three delivery methods:

• Fibre to the Home
• fixed wireless
• satellite

Fixed wireless and satellite are uncontroversial – both sides of politics support these key technologies in regional and remote areas.

FTTH vs FTTN

Fibre to the Home is planned for 93% of Australian households.

To do this, the NBN uses an implementation called Gigabit Passive Optical Network (GPON) – the main advantage of which being that it operates without any powered equipment between a house and the fibre access node.

That means greater reliability due to fewer points of failure, and lower running costs due to lower electricity consumption, fewer deployed electronics, and so on.

Passive fibre networks are cost-efficient by sharing a single fibre across 32 homes. Mathew McBride

Speeds offered to each customer under the existing NBN plan are potentially as high as 1,000Mb/s – around 500 times faster than most Australian broadband users utilise currently – but an expectation of between a quarter and a half of those speeds is more realistic.

Presently the NBN offers speeds of up to 100Mb/s.

The main drawback of a FTTH system is the reliance on fibre optic cables. The cables must be drawn through existing conduit, or laid in new trenches to each house in the coverage area.

The labour costs of doing this are huge and increase the total cost of rolling out the network by double or triple when compared to a cheaper FTTN network.

Passive optical network implementations similar to GPON have a proven track-record in countries such as South Korea and Japan – where access to high-speed broadband has been taken for granted for years.

The Coalition’s vision

The Fibre to the Node system promoted by the Coalition does have several advantages.

The installation of the network will be significantly quicker – the Coalition claims their NBN will reach most Australians by the end of their first term in 2016, compared to the current estimated completion date of 2021 – as FTTN networks re-task existing copper phone lines.

Technologies such as very-high-bitrate digital subscriber line (VDSL) and asymmetric digital subscriber line (ADSL) will be used to deliver data to customers' home.

In short, because existing phone lines are used, significant capital costs are avoided because there is no need to lay fibre to every household.

Fibre to the Node explained.

Using VDSL, theoretical speeds of up to 200Mb/s are achievable (under perfect conditions) – but it has been pointed out these speeds rapidly drop off as the houses become more distant from the node.

One kilometre drops the speeds to a very ADSL2-like 30Mb/s, and two kilometres from the node provides no advantage over sticking with ADSL2, which many people will currently be using.

Copper

The biggest issue with a FTTN version of the NBN is not if it can be done, but how consistent, and how reliable, this network can be. It has been claimed by some that Telstra’s copper network is “rooted”; although Telstra has hit back, claiming approximately 1% of all services experience a fault each year.

wormwould

Responding to this concern, Mr Turnbull announced that mouldering copper would be dealt with on a business-case basis – either the copper would be repaired, or replaced with fibre.

Today’s announcement also devoted some time to discussing how technology always progresses, and so copper can be pushed to carry more data as improvements are made.

Vectoring was specifically mentioned – a technology that continually fine-tunes the connection between the end-user and the network, and allows significant improvement in speeds.

But critics have pointed out that vectoring may still be years away.

Costs of maintaining FTTN

While the Coalition’s policy today focused on the installation cost of a FTTN network, claiming savings of billions of dollars, little acknowledgement has been given to the cost of maintaining a FTTN network.

According to the ACCC, up to 90% of the costs of running a FTTN network relate to maintaining the nodes.

In the US, the broadband and telecommunications company Verizon cited significant savings of US$110 for each household on fibre compared to copper.

Comparing the policies

The costs of rolling out FTTN then upgrading to FTTH is prohibitive.

FttH. dvanzuijlekom

The Labor party policy of deploying the NBN as FTTH can be summarised as having an initially painful installation cost, but offering a more consistent outcome with greater spare capacity to meet future needs.

By comparison, the Coalition policy can be described as quick and dirty: the network will be available to more Australians earlier, and will cost less up-front, but will attract ongoing maintenance costs, and be expensive to upgrade as demand grows.

Karl Schaffarczyk lives in a Canberra suburb where the NBN is due commence construction within one year.

This article was originally published at The Conversation. Read the original article.

Smacking down online piracy – does New Zealand know best?

By Karl Schaffarczyk, University of Canberra
We know online piracy exists; we know governments want to stop it – but what are the options?
Richard Freudenstein, CEO of Australia’s largest pay-TV provider Foxtel, has joined the chorus of entertainment industry bodies to call on the government and internet service providers (ISPs) to clamp down on online piracy.
During his speech to the 2013 ASTRA conference last week, Freudenstein demanded that a new anti-piracy enforcement regime be delivered before the National Broadband Network (NBN) is rolled out “because with super-fast broadband the floodgates could really open”.
Freudenstein’s belief that Foxtel’s business model would be under threat from the NBN is scarily similar to the recent wailing and teeth gnashing of the music industry: the faster internet speeds the NBN will bring will lead to dramatic increases in the illegal downloading of TV shows.
Peak music industry bodies claimed the NBN would be a “disaster” for copyright infringement in a recent report.
So, what’s to be done?

Kiwi solution: the one we nearly had to have

In Australia, talks have been held in recent years between content owners and ISPs, with the aim of agreeing on a “graduated” copyright warning and enforcement system – that is, a system in which users who breach copyright are sent a series of warning notifications.

Search Engine People Blog

Repeat offenders under this type of system risk punishments such as bandwidth reduction and possible temporary account suspension.
Talks were again held by former attorney-general Robert McClelland during 2011/12, but fell apart after the major ISP iiNet withdrew from the talks, citing concerns that the entertainment industry was only attempting to force ISPs to act as the police to enforce a broken system – one which fails to meet the demands of consumers.
Freudenstein named New Zealand in his speech among a number of nations who have a co-operative enforcement systems between ISPs and content owners.
So what does New Zealand’s co-operative system look like? And could it work here in Australia?

Three strikes

New Zealand operates under a three-strikes system. Introduced in 2011, the requirements of the Copyright (Infringing File Sharing) Amendment Act oblige ISPs to issue infringement notices to internet account holders when content owners (rights holders) allege file-sharing activity by the end users of that ISP.
The scheme is structured as “guilty until proven innocent”. A rights holder’s allegation is considered to be sufficient evidence of infringement, unless the account holder can disprove the claim.
No matter who carried out the infringing behaviour, account holders are held solely responsible for infringements. Issues relating to children using their parents accounts, neighbours stealing Wi-Fi, and small businesses providing internet hotspots have been raised by media and in blogs.
The “strikes” are as follows:
1) The first infringement notice issued by an ISP to an account holder is called a detection notice. That notice must spell out the details of alleged infringement, warn the account holder of the consequences of continued infringing behaviour (such as file-sharing), and explain how the notice may be challenged.
The infringement notices must be sent to the account holder by the same method in which bills are delivered (i.e. online or in posted paper form).
2) If the file-sharing activity continues beyond 28 days from the date of the detection notice, the ISP is then obliged to issue a warning notice. The requirements of this notice are similar to the detection notice, and it must also make reference to earlier notice, and warn of the consequences of continued file-sharing.
3) An enforcement notice is then issued where rights holders allege file-sharing activity has continued beyond a further 28 days. Once the enforcement notice has been issued, the rights holder is provided with a copy of the enforcement notice, but that notice must not contain the name or contact details of the account holder.
The rights holder is then entitled to have the matter heard before the New Zealand Copyright Tribunal.

Silver bullets

Simple answer? New Zealand’s three strikes system has not been the cash cow some may have expected, and not the silver bullet for stopping illegal downloading either.

Iain Tait

Despite the legislative amendments that brought the scheme to life in 2011, the first case was not brought to the Copyright Tribunal until the end of January 2013. Only five file-sharing cases have been heard by the Copyright Tribunal to date, and all bear similar features:

• The applicant, the Recording Industry Association of New Zealand (RIANZ), has claimed thousands from each account holder, that amount being the price of purchasing the music legally multiplied by an estimated 90 possible uploads, in addition to deterrent amounts and reimbursement of fees incurred. In one matter, RIANZ claimed a whopping NZ$3,931.55.
• In each case the Copyright Tribunal awarded the price of purchasing the music legally without any multiplier to account for uploads.

The highest award under this head of damages was NZ$7.17, which was arrived at by using the iTunes rates of NZ$2.39 per song, multiplied by three infringing songs.
This has occurred in three cases: here, here and here.

• The claims for reimbursement of fees paid to the ISPs were in each case reduced in accordance with legislation to contributions of NZ$50, representing approximately two-thirds of the claimed amount. Reimbursement of the NZ$200 tribunal fee was upheld in each case.
• The deterrent fee was considered by the tribunal according to the culpability of each account holder. The tribunal varied between awarding nothing at all and NZ$180 per song.

With the largest amount awarded to RIANZ falling short of NZ$800 – after ISP and tribunal fees are removed that amount falls to around NZ$525 – it is easy to see that the recording industry might feel a little short-changed.
Indeed, in the most recent case, involving infringements that were alleged to have occurred while the account holder was serving in Afghanistan, the tribunal awarded just NZ$255.97.
This resulted in a loss to RIANZ of at least NZ$20 once the ISP and tribunal fees are deducted.
Given the time and effort RIANZ must go to in order to enforce its claims – and the limited resources of tribunals – the tiny returns from their enforcement action make it hard to imagine this system being viable in New Zealand, let alone worth setting up in Australia.
Richard Freudenstein, is this really what you want?
Karl Schaffarczyk does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.

This article was originally published at The Conversation. Read the original article.

The NBN will be disastrous for the music industry ... really?

By Karl Schaffarczyk, University of Canberra

The NBN could have disastrous results for the local [music] industry.

At least, that was the view of peak recording industry body the International Federation of the Phonographic Industry (IFPI) and local bodies, the Australian Recording Industry Association (ARIA) and Music Rights Australia, in a recent report.

But why would Australia’s National Broadband Network (NBN) be problematic?

The Age, The Register and other media describe the claims of IFPI and ARIA as “bleating”. The joint claim of the recording industry bodies is that without government and internet service provider (ISP) intervention to curb piracy, the NBN will destroy the music industry.

But this is just business as usual for the content industry. These claims are continuing a long tradition of claiming every technological innovation spells disaster, if not the end, of the industry.

Some 30 years ago the then-Motion Picture Association of America president, Jack Valenti, described the VCR as the movie industry equivalent of the Boston Strangler.

Even high-speed dubbing and blank tapes, digital audio tapes, Napster, Grokster and countless other technologies have been named as threats over the years. Despite these threats, the recording industry is still with us.

The beat goes on

Not only is the recording industry still with us – in Australia, at least, it is doing well. IFPI and ARIA report impressively strong growth (up 40%) in Australian digital music sales, and a small increase in overall revenue.

In an Australian context, the sales data in the graph below clearly shows that while sales of physical recordings are declining (dark green), those losses are being offset by the growth in sales of digital recordings.

The changing nature of music sales, as reported in the IFPI Digital Music Report 2013: Australian Case Study. IFPI

IFPI’s annual Digital Music Report repeatedly advocates for legislative intervention from government to compel ISPs to better enforce copyright.

They want ISPs to become “content gatekeepers” by either preventing consumers using services that permit file-sharing, or implementing enforcement protocols such as the American six strikes Copyright Alert System, which warns (and then reduces the internet speeds for repeat offenders) users who engage in illegal file-sharing on the internet.

Australian lawmakers have so far been reluctant to make this happen, and a major issue in the recent High Court case of Roadshow Films v iiNet was iiNet’s unwillingness to be the gatekeeper for Hollywood.

ARIA is now holding out for the current Law Reform Commission review of copyright and the digital economy to deliver a strong[er] copyright framework.

Human behaviour

Alarmist claims about the NBN tell us more about the music industry and its attitude to consumers than any inherent faults in consumer behaviour.

It is widely accepted that people download music and other content due to the failure of the market to deliver what the consumer wants.

This failure takes the form of insisting that old business models such as selling CDs and tapes in discrete markets be continued – while refusing to embrace the new digital culture.

Granted, the marketplace for legally-downloadable music has developed over the last few years and we now have online music stores and streaming services, but until now the online offerings have been inferior in many ways. Saddled with Digital Rights Management (DRM), small repertoires and high prices, many people had instead resorted to file-sharing services.

The logic in the IFPI report is attractively simple: if people can download songs from the internet using peer-to-peer (P2P) networks, and those people are then given faster internet speeds as provided by the NBN, they will download much more music. More downloads means fewer sales, and fewer sales means disaster for music distributors.

By giving Australia high-speed broadband, Communications Minister Stephen Conroy’s NBN project may pose a threat to the music industry. AAP/Lukas Coch

While there will always be people who prefer to “freeload” and not pay for content, the impact of Apple’s iTunes store has demonstrated that many pirate downloaders will happily convert to paying customers, but that iTunes has a negligible impact for existing content purchasers.

What this shows is that consumers want a simple interface from which they can pay for their music.

The music industry has long insisted on “digital locks” (“DRM”) to prevent the sharing of legally-bought digital music. But technological compatibility and digital rights management have also been a strong deterrent for consumers. Why pay for a song that only works on one or two music players?

It has been shown that DRM-free content – such as songs which are sold without any form of digital lock to prevent file-sharing – actually drives sales.

A grand don’t come for free

Price is another important factor in consumer needs. For decades when buying technology, Australians have been paying higher prices than our overseas counterparts. This applies to online and offline music sales too.

On Apple’s iTunes store, the standard price for one song is US$1.29 for Americans, yet the price for Australians is almost double that, at A$2.19 for the same song.

Timing and geographic segmentation is yet another issue for which the content industry fails to deliver to consumers. This is most obvious in the film industry, where Australians often need to wait months or years in some cases before a released film hits our screens.

The music industry is not immune to this either, and it is still standard practice to release all but the biggest names in music one market at a time.

While it is a long bow to draw to claim that piracy will disappear if content became cheap, DRM-free, easy to buy, and simultaneously released worldwide, it is clear that these are important factors driving online piracy, and fixing these matters will significantly reduce demand for infringing product.

Highway to hell

If the music industry is scared of a piracy-driven disaster occurring because Australians have high-speed broadband, it means they believe the only thing saving their bacon is the lack of bandwidth available in most homes.

It also means that despite being aware of what drives music piracy, the industry intends to continue treating its customers with contempt. Frances Moore, CEO of IFPI, summed up industry attitude to consumers in last year’s Digital Music Report:

The truth is that record companies are building a successful digital music business in spite of the environment in which they operate, not because of it.

The time has come for the music industry to find common ground with consumers, not do business in spite of them.

Karl Schaffarczyk does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.

This article was originally published at The Conversation. Read the original article.