Slowly but surely, the Federal Coalition is moving on from their much-criticised 2010 communications policy, which effectively decreed that a speed of 12 Megabits per second (Mbps) was enough for anyone.

Although not official policy yet, by April 2011 Malcolm Turnbull was spruiking a Fibre To The Node (FTTN) system at 25Mbps. This could allegedly be achieved at a far lower cost that the National Broadband Network while delivering a service that would be “indiscernible” from the 1000Mbps (1Gbps) promised by the NBN. Come June 2011, Malcolm had moved even further, declaring that FTTN could deliver speeds of 60Mbps at half the cost of the NBN. Despite expert commentary to the contrary, Turnbull continues to claim there's simply no foreseeable need for 100Mbps (or more) to the home.

Anyone who has been following the debate might remember FTTN. It was the basis for the original 2007 NBN proposal, but was scuttled when a (then) aggressive Telstra refused to play ball. This lead to the Federal Government adopting the recommendations of assorted experts and skipping FTTN for a faster (and more expensive) Fibre To The Premises (FTTP) system. Even John Howard was advised to leapfrog FTTN for a longer-term fibre solution, but the advice fell on deaf ears. However, with Telstra under friendlier management now, the Coalition have seen the possibility of reviving the ALP’s original FTTN proposal.

Put simply, FTTN is the running of fibre to little street boxes close to homes, where it's attached to the old copper lines for the last few hundred metres. It would certainly be an improvement on what we have but is generally considered a stop-gap solution, with the consensus amongst telecommunications experts (and even FTTN manufacturers) that within 15-20 years, we will need to replace the remaining copper network with fibre anyway. The other problem is that to achieve the touted speeds requires the use of 2 phone lines, which most homes don't have.

Leaving aside that Mr Turnbull’s latest speed and cost figures are both rather dubious, what’s wrong with the FTTN policy?

While FTTN is certainly a cheaper short-term option, in the long term it is a huge waste of time and money. Despite a projected cost of $15-20 billion (plus another $15-odd billion to Telstra), the 5 year rollout would be quickly obsolete and on industry projections would require the almost immediate commencement of a 10-year FTTP rollout. Most of the FTTN equipment couldn't be reused, so it is not a stepping stone and in all likelihood an FTTP upgrade would cost another $35-odd billion. FTTN also consumes about twice as much electricity as a fibre network.

As the NBN continues to roll out, the potential cost savings of FTTN get smaller and smaller by the day. As with any major project, much of the NBN’s costs are spent in the startup phase, on the planning and backend systems. Additionally, there will be numerous supply and install contracts in place. By 2013 even if only 20% of the rollout is complete, it’s highly likely that much more than 20% of the money will have been spent. All that money will be wasted if the NBN is cancelled by a future Coalition Government and downgraded to FTTN. They would be forced to pay the break clauses in the existing contracts and then set about designing a whole new network and the associated backend systems from scratch. More money down the drain. Money that would have to be recovered from the users of the hamstrung network, meaning the envisaged lower subscription costs could not be realised.

Even worse, it would leave Australia in a situation where regional areas like Armidale would have access to vastly superior communications infrastructure than the major Australian cities! Surely a politically unsustainable outcome.

If enacted, by the time the coalition’s “cheaper” FTTN plan could be completed, I would be amazed if the cost came in under 75% of the NBN price, all to deliver a vastly inferior system and set us up for another massive expense when the remaining copper inevitably requires replacement. And as the political debate rages on, more and more countries around the World have been implementing their own full-fibre networks, putting Australia further behind the 8-ball every day.