NBN Co chief gets frank about copper's problems

NBN Co’s outgoing CEO Bill Morrow has issued a frank assessment of how increased use of copper in the network has caused both the company and its customers problems.

Morrow stopped short of criticising the technology switch from majority fibre to a mix of access technologies - which happened under a change of government.

He still believed that reusing the copper and HFC networks was required to meet the expected pace of the rollout.

“While the use of the existing copper and pay TV networks has led to a faster network build and a lower cost-per-premises, there are consequences to this approach,” Morrow said in a position paper [pdf].

One of the main consequences was “the maximum speed limitations of copper versus the previous fibre-based model”.

He said, however, that the performance hit was deemed acceptable by the Vertigan review, such that “a minimum peak speed of 15Mbps would be adequate for most households now and into the near future”.

Copper, Morrow said, “would, therefore, be sufficient until the demand exceeded these levels”.

He did not provide commentary around when that useful life definition might be tested.

The increased use of copper in the last 1km of of the network also led to an “increased fault rate” as well as higher operating costs for NBN Co “versus the all-fibre alternative”.

But, he said, “these incremental costs are factored into the improved economics and are a small fraction of the incremental costs to build fibre to every home.

“The incremental fault rate was felt to be within reason,” Morrow said, though much of the rest of the industry disagrees: NBN Co is currently subject to a regulatory process that would impose binding rules around its service standards.

Morrow said the third main consequence of using copper and HFC is the “co-existence period” in which FTTN and ADSL (or HFC and Foxtel) services run simultaneously in a given area.

During this period, the performance of NBN services is purposely stunted to avoid disrupting or interfering with legacy services that rely on shared pieces of infrastructure.

“While there are exceptions, the co-existence period for HFC is 18-months,” Morrow said.

“For FTTN, however, the coexistence period is typically much longer as we need to migrate or manage all interfering services off the node before we can end co-existence and move to full power at the node equipment.”

In FTTN areas, that means the “minimum target speed for services ... during co-existence is 12/1Mbps” - leaving customers with services that likely fall short of expectations.

But again, Morrow said, “this co-existence was considered as a reasonable trade-off to the faster rollout and lower cost associated with the build”.

With Morrow due to step down from NBN Co at the end of this year, the position paper serves as a potted version of the history of the project, as well as the challenges incurred in Morrow’s tenure.

Morrow has spoken more freely about some of the directions that the NBN project has taken over the past year.

This has included suggestions that the government overrode NBN Co’s engineering recommendations in parts of the build, declaring them too expensive.