The Pencil Guy: Hourann's illogical blog

Fibre at what cost?

Wednesday 8 April 2009 at 7:38 pm

Reader response time: an e-mail I got yesterday pointed out that at no point in the Prime Minister’s announcement did he talk about how much people would pay to get shiny new FTTH connections! And presumably this will be a significant detail for any private investor deciding whether they want to jump into the venture. In fact, cost questions seem to be the crux of most of the criticism I’ve read (not counting fluff from people who don’t understand that upgrading speeds on fibre is relatively easy; just because it’s built at 100Mbit doesn’t mean it’ll stay there).

Thus I thought I might do a quick and thoroughly unrepresentative survey. In Hong Kong, it’s HK$600 per month for PCCW 100Mbit fibre (that’s US$75 or A$100-ish), while Bredbandsbolaget in Sweden charge 320 kronor (US$40 / A$55) for the same. In New York, Verizon will slug you $140 (A$200) for 50Mbit or $60 (A$95-ish) for 20Mbit — though note that their base US$45 offering is worse than my iiNet connection in Perth!

However, none of those networks was built with government money. South Korean fibre got about $1.5 billion worth of subsidies in the early 2000s (mostly for rural areas), and a Korea Telecom 50Mbit connection in Seoul costs a mere 26 000 won (US$20 / A$27) per month.

Of course, prices in Australia would never start that low. But then, my dial-up connection in 1996 was $5 per hour of use (thank you, Telstra), and of course prices will drop over time. Early adopters may well be slugged $100+ a month to cover construction, but given that the network will be owned by a wholesaler that’s not likely to remain a problem long-term. Optic fibre won’t go obsolete anytime soon; a properly-managed FTTH network should hopefully mean cheap and fast Internet five or ten years after it’s built …!


A new series of tubes, oh my!

Monday 6 April 2009 at 5:39 pm

So the Ruddster has gone and made a post-overseas-trip splash of a technology / economy / “nation-building” announcement, dumping the old decent-but-not-great fibre-to-the-node proposal with an infinitely larger, more expensive, and more complicated fibre-to-the-home solution.

That said, FTTH is also more awesome! We are being promised 100 megabit, the same speed as a typical home wired network, and fibre has plenty of room for technology upgrades. But the 2017 completion date and complicated-sounding public-private partnership are less awesome; how the owner of the new network behaves will be an important question (or in other words, keep yer grubby mitts off, Telstra!). Details are just as scant as they were with the old proposal, so it’s no easier to draw conclusions.

To compare, the best residential Internet in California is 15 megabit, but most people (me included) have closer to 5 megabit; in New York City the fibre service maxes out at 50 megabit (though that’ll likely be upgraded). So it’s not fair to diss on this as slow — unless you compare to places like South Korea and Hong Kong, where crazy population densities allowed even my dodgy hostel to provide a hundred-megabit connection (on good days, at least).

A better question is whether this will be a worthwhile investment, given alternatives. If it works, I can see this giving long-term support to new online services, online TV and VoIP and the like — which would be a great way to nudge growth in the tech and media sectors. But it might also become an ineffective burden on the public purse rather like how Optus and Telstra competed to lay coax TV cables. That technology isn’t outdated and the cables are still useful, but the money could probably have been better spent in mobile coverage or international data links.

Thus I reserve judgement. All else being equal, FTTH is cool, and will be a good thing — it’s just that the devil, as always, lies in the detail.

no comments »