Ovum calls for copper broadband network shutdown

Ovum telecommunications fibre

Ovum’s Australia-based research director David Kennedy says if New Zealand’s government is serious about making Ultrafast Broadband work, it must name a date to close the copper network.

Kennedy says:

“Tensions in the New Zealand telecommunications policy framework will persist as long as New Zealand has two access networks, FTTN and UFB, operating in parallel.

He links this to the copper network access price issue that has caused so many problems for Chorus and by extension the government:

Apart from the pricing problems, New Zealand telecommunications would operate much more efficiently if demand were consolidated onto one fixed access network. Policy currently envisages a gradual, organic migration to fibre, but at some point the FTTN network must be shut down in the UFB footprint.”

Kennedy is based in Australia. His proposal is similar to the heavy-handed approach Australia’s government originally aimed to take with its NBN fibre project.

That line of reasoning says giving consumers choice is an indulgent luxury. Kennedy appears to agree:

“If the Government remains committed to the UFB program, then migration should not be left to chance. A migration timetable, with scheduled shutdown of FTTN where UFB is established after a reasonable transition period, is the logical extension of the government’s commitment to UFB.”

Kennedy also sees closing the copper network as a way to get around the financial problems facing Chorus. He says:

“The regulator’s recent pricing decisions significantly affect Chorus’ revenue base and investment capacity after 2014, and will also make fibre relatively unattractive to end users.

We’ve heard this argument before. The rationale is that pushing the wholesale price of a copper connection significantly below the price of a fibre connection means customers will be more inclined to choose the cheaper option.

However Kennedy takes it a step further. He says the regulated copper price also makes delivering copper connections relatively more attractive to retail ISPs.

He says:

“Chorus and the other UFB investors are structurally separated and so are dependent on these ISPs to promote fibre to end-users. The ISPs now have less incentive to do so.

[digitl 2013]

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4 thoughts on “Ovum calls for copper broadband network shutdown

  1. The big difference is simply that Fibre with 100Mb/s down and 50Mb/s up or more is much faster than VDSL for Speed for up (5 times) and down (3 times), Latency and website downloads.

    A larger range of speeds would make Fibre a lot more attractive as will applications that need those speeds.

    Upload speeds of even 20Mb/s or more will be a major advantage allowing for better use of cloud applications. A change to the standard product from 30/10Mb/s to 30/30Mb/s would improve the performance beyond copper without changing the product costs.

    TrueNet expects to publish detailed results of Upload tests in January 2014.

    • I sometimes wonder why the UFB designers went with GPON which seems to be a limiting factor on how much bandwidth users will actually get from fibre connections. But that’s an entirely different discussion.

  2. In the draft discussion proposal for the UFB network in March 2009, there was a declared bias in favour of Point-to-Point over PON, but in the final plan released in September 2009, it stated that as long as there was provision for open access, the government was essentially agnostic about network design.

    It struck me at the time that this was shortsighted, and I really would have wished for more discussion about what I think is a very crucial aspect of the UFB – its fundamental architecture. But at the time the debate was raging about whether or not Telecom would structurally separate so it could participate in the network build. And the P2P vs PON debate just didn’t surface.

    • I remember that. If I recall correctly, GPON wasn’t chosen until later in the day – the first time I heard it discussed as THE choice, not A choice was at the Huawei UFB seminar at the Hilton. Heard some opinions over drinks later telling me why it wasn’t the best choice. Apparently it could become a problem when cabinets and street level networks overload.

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