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Australia's broadband future and why the Coalition alternative 'won't work'

The world's foremost internet traffic study and growth forecast, which historically has been proven very accurate, describes a furthermore explosion of internet traffic around the world and in Australia. The findings illustrate a requirement for fibre optic cable "deep deep into the infrastructure" both for wired and wireless broadband connections.

The global study carries with it political ramifications in Australia where the opposition Coalition parties maintain that the optic fibre-based infrastructure currently being implemented by NBN Co is not needed to fulfil the promised benefits of the NBN and that suggesting so is "one big lie." After all, the study furthermore illustrates, using measured figures and reasonable growth curves, how the Coalition's alternatives won't just be unable to support the benefits to health, education, power distribution, business and society that NBN Co's current planned infrastructure will provide, however also that they won't be able to support the regular organic growth of the general internet requirements that we have now - within just four years!

There are few more respected and influential broadband forecasts than Cisco's Visual Networking Index. Cisco is the company most associated with the actual infrastructure of the internet and is in the best position to measure the traffic that moves across it and, more importantly, the growth trends. These hold enormous implications for broadband infrastructure at international, national, regional, city-level and domestic scales and subsequently telcos and governments all over the world pay a great deal of attention to the study.

For the past six years the forecasts have very closely resembled the measured figures - nevertheless ultimately they were conservative in their predictions. As such, the numbers coming from the last few forecasts, with their continued astronomical growth have huge implications for Australia's broadband infrastructure requirements with observations that broadband connection requirements will outgrow the current infrastructure by 2016.

Recent VNI announcement

Speaking at a recent VNI announcement was Dr Robert Pepper, Cisco's Vice President of Global Research Policy. He has sat on the board of the Federal Communications Commission in the USA and currently sits on the UK's equivalent, Ofcom. In these roles he briefs governments and network operators from around the world on infrastructure, what to expect from future data requirements and modes of broadband usage based upon traffic stats and growth curves. He is an American based in the USA and has no dealings with Australian politics. Some of the key points he made were:-

Inevitably with an article like this there are some terms which can befuddle those not used to dealing with the innovation industry. These are some of the most important terms to understand:-

The mobile phone network

Mobile network/3G/4G/macro network - are all terms used to describe wireless data flowing over the mobile phone network.

WiFi allows for super-fast connections to the wired internet from mobile devices like laptops, tablets, games consoles, set top boxes and phones nevertheless only at short range. The mobile network's range is far superior yet data is far more expensive and performance drops dramatically when many people share the connection. It's typically used by phones, some tablets and some laptops at present.

The 'A' in 'ADSL broadband' stands for Asymmetric

Symmetry - the 'A' in 'ADSL broadband' stands for Asymmetric. This refers to the fact that virtually all standard consumer broadband connections have high download speeds however much slower upload speeds. To illustrate, a top ADSL2+ Australian connection might provide 12Mb/s download speeds yet only 1Mb/s upload speed. Future requirements require more symmetry - fast download AND fast upload speeds.

Global internet traffic will increase 4x from 2011 to 2016 and break the Zettabyte barrier for the first time - that's 10x more than all internet traffic generated in 2008 and is equivalent to one trillion gigabytes or 38 million DVDs per hour.

Global internet traffic has been increasing at 32% Compounded Annual Growth Rate year on year. The numbers are now so large that the "Law of Large Numbers" means that percentage rate increases might be going down however actual increases are on the whole "dramatic."

In that time, the average broadband speed will increase nearly 4x from 9Mb/s to 34Mb/s. When that happens, over two YEARS of video will be crossing the internet every second.

The video figure in 2010 nevertheless

Short form YouTube style clips made up 20% of the video figure in 2010 nevertheless, in spite of large growth, they are set to make up 14% of the figure in 2015 due to larger increases in other areas. The total amount of short form video consumption in 2015 is over half the total broadband consumption for 2011!

The fastest-growing category which, as Pepper says, was "nearly non-existent in 2010" is internet video to TV. This is fuelled by production houses developing long form web only content. An example given by Pepper describes how, in the USA, the sports associations dealing with football, baseball and basketball have taken back control of their distribution rights: they're on the whole using free to air broadcasts, however they are offering simulcast services online along with other packages to create multiple revenue streams through their own distribution.

Similar vein

In a similar vein, US video on demand service, Netflix, accounts for a staggering one-third of all US downstream broadband traffic. Last week, Paul Colley, Sony Group Manager for Network Services and Research, described how all of Sony's new TVs now focus on displaying video from the internet because, "Most television will be consumed over the internet in three years." Sony's rivals have said similar.

It doesn't end there. Kevin Bloch, Cisco Australia's Chief Research Officer, pointed out that new technologies consistently appear and skew the predictions furthermore. "Tablets didn't as a matter of fact exist two years ago nevertheless now they're driving the market". Apple's move to HD displays in its latest iPad and latest laptops could impact figures furthermore such is their enormous popularity and influence on content.

Locally, Australia's consumer internet video traffic grew 55% in 2011. In 2015, internet video traffic will be 81% of all Australian consumer internet traffic - up from 50% in 2010.

In Australia, internet traffic reached 120 Petabytes per month in 2011 which was up from 93 Petabytes per month in 2010. This was in line with global trends. Nevertheless, Australian internet traffic will grow 6-fold from 2011-2016 during the global trend is 4-fold.

By 2016 there will be 142 million networked devices in Australia. That's 5.7 per person - up from 4 in 2011. 40% of them will be wireless connected.

Fixed broadband speeds will increase from a 7.9Mb/s average in 2011 to 36Mb/s in 2016. Internet video traffic will make up 80% of Australia's consumer traffic by 2016.

There will be 20 million internet users in 2015 - up from 14 million in 2010. Most will not be connected by wire - WiFi, 3G or 4G. Dominant will be fixed WiFi.

A key figure was that in Australia the average internet user will generate 19.5GB of internet traffic per month in 2015 - up 562% from 3GB per month in 2010. More importantly, the average Australian internet household will generate 44.2GB traffic per month in 2015 up 588% from 6.4GB per month in 2010.

Pepper says, "Australia is about three years behind America and Western Europe in its consumption pattern." This is not in every way surprising considering the non-ubiquity of broadband access in Australia and that our market has only very recently started to remove strict data allowances on internet plans that didn't exist elsewhere in the world.

These massive rises in local data consumption begged the question as to whether fibre to the node as favoured by the Coalition would to tell the truth work. Pepper's response to the question of connecting each home to the nearest node using 4G-style LTE (Long Term Evolution, latest standard in the mobile network technology) fixed wireless, as has been mooted by the Coalition was telling. Without having any knowledge of the politically-charged question, and staring as although I hadn't been paying attention to anything in his presentation he said, "It won't work... look at the figures." He added that copper can be used for fixed connections in some circumstances nevertheless that it would have to be short, high-quality and with a low contention ratio - of around 8 connections per node. This rules out Australia's existing copper infrastructure and its HFC networks, which have much higher contention ratios, for being able to cope with the growth in demand either.

A good analogy used here is that this is the equivalent of lobbying for a one-lane Sydney Harbour Bridge as that was all that was needed in the 1930s. But, during it took several decades to congest the Harbour Bridge and subsequent Harbour Tunnel the current copper network will likely be congested in just four years and fibre is the only innovation capable of coping with the demand and future growth.

Buzz word in the industry for some time

Cloud computing has been a buzz word in the industry for some time. For businesses, storing information and running computing services from devices based on the internet is much cheaper than buying, maintaining, supporting and upgrading their own infrastructure.

Pepper says, "Network requirements for each level of cloud application are as a general rule 2-3Mb/s per application. So each household or business needs multimegabit symmetrical connections [to allow for] these applications to stack up and be used simultaneously. However advanced cloud services require less than 50ms of delay. No networks can currently meet this. The Japanese and Korean networks nearly can.

The FCC looked at differences between fibre

"The FCC looked at differences between fibre and copper and found that fibre had about half the latency of copper. If Cloud is growing this rapidly, and we have cloud as a core component of the use of internet broadband going forward, advanced cloud services [those requiring pursuant to this agreement 50ms latency] are going to require low latency which translates as fibre to the premise or fibre very very very deep in the network."

Pepper went on to point out that Latency was originally thought just to affect high definition video conferencing. However it's as well about collaborating over networks and performing basic functions for small businesses and enterprise-level businesses alike. At a consumer level it's required for VoIP (Voice over Internet Protocol) calls, Facetime, Skype, telepresence health and education services. These as well require fast upload speeds.

Should anyone want some furthermore reading on cloud, Parallels recently released its SMB Cloud Insights Report which describes how "the market possibility for cloud services will grow to a total of $865 million in 2012." It goes on to say that "15% of Australian SMBs report using hosted servers, a 28% increase from the previous year. But, this is however below the global average of 20% of SMBs in other developed countries."

Pepper points out, "The biggest trend that we see is called offloading. Between 65% and 85% of mobile phone data takes place indoors sitting down. Facetime won't work over the macrocell network because it puts on such a load... that it won't work. It's in some cases to do with available bandwidth and part latency."

The problem

Pepper described some steps being taken to get round the problem, "AT&T built US public hotspots and signed a contract with Starbucks. The biggest trend that we see is called service provider offloading. This leaves voice on the macro [mobile] network and puts data on the fixed [WiFi] network... All towers are going to have to have fibre connections in order to accommodate multiple users and multiple connections."

Offloading is as well happening in the UK with BT Openzone. There, phone and internet subscribers can seamlessly access BT's mesh of WiFi hotspots when out and about.

Pepper went on to say, "Offloading at home is important too" and spoke about Femtocells. These are being given away in some countries. They're already appearing in Australia. They sit in a home or office and your phone automatically connects to them like a regular mobile network. They boost mobile signals for those with weak reception and automatically channel data traffic off the network and onto your wired broadband connection. With the massive increases in data being consumed by 4G users, these may before long become more common in Australia.

By 2016 we'll be consuming 2.5GB per month on smartphones. 4GB on tablets and 7GB on laptops. To all appearances the new iPad may skew things furthermore. Pepper says, "Apple keeps blowing up our models every year and [due to the 3rd gen iPad's penchant for HD content] it could be higher."

He adds, "In 2011 90% of mobile devices were laptops. Now 3G dongles are being replaced by smartphones. Smartphone growth is 200%."

Pepper says, "That's a huge increase. We show this to the operators and they kind of go [gasp!] How am I going to do that?" He continued, "Now imagine you're a telco in 2012 wondering what sort of investment is required to allow your network to cope with the increase in demand. New research and business plans are required. Two thirds of the traffic is video."

He goes on, "Telcos used to think WiFi was their enemy. Now it's their friend." Kevin Bloch continued, "We spoke to Telstra who said that they didn't need to think about this as their 3G network was the best in the world. Nevertheless it's all changed in the last 12 months."

They've not been announcing changes but because the infrastructure for offloading isn't ready or required - come to think of it, it's on the whole spruiking its phenomenal-when-it-works 4G system. However Cisco maintains that even Telstra realises that future growth demands and increased 4G adoption mean the networks won't be able to cope with all that traffic without offloading it via WiFi. The amount being offloaded in 2015 might look small, yet it closely resembles the entire amount of mobile traffic for 2012!

The growth in wireless

With so much talk about the growth in wireless and wireless futures it's easy to forget that WiFi is simply a way of accessing the nearby wired network, wirelessly. As Pepper puts it:-

The theme of Cisco's report is incessant - the growth of data size, data speed and latency is so huge for all forms of broadband connection, be it wired, 3G/4G or WiFi, that ultimately everything is connected to the same fibre network with as much traffic being offloaded from the wireless networks as possible. Another important reason is because when many wireless devices communicate with networks or other close-by devices the airwaves become full and performance degrades. The more people, the more devices, the more data required, the bigger problem this is.

We've already seen how regular mobile phone networks will struggle with the massive imminent growth in mobile traffic. But, there are issues and challenges on the wider and smaller wireless scales too.

But there are potentially significant close range problems. Pepper says, "All tetherless devices... are going to overwhelm the traditional methods of connecting devices. Just in case for needing spectrum for traditional networks we as well need to open up more frequencies for short-range devices."

The fact that many televisions

Add to this the fact that many televisions and other devices have built-in cameras and add to it the growing trend of people interacting with phones and tablets during a television show is running, and everything points to congestion at a domestic level. The brand new 802.11ac WiFi standard which is faster and more-efficient than current WiFi will help nevertheless the more spectrum there is available to spread the device signals across, the better.

Machine to machine wireless communication is only going to increase. We already see examples of cars communicating with iPods and phones and people beaming video from their mobile devices to their televisions in the same room.

Pepper says that "In many ways Australia is ahead of Japan and Korea. To illustrate, it's been a struggle to get small businesses to use broadband in Japan... It's difficult to start a business in Korea and there are taxation issues."

Sweden currently comes top for both infrastructure and ecosystem. An example of its innovative broadband usage can be seen with this electric car charging program which makes use of a power distribution 'smartgrid', mobile communication and location based services.

Pepper says, "All roads lead to fibre. The backhaul [cross country broadband connection] is no longer just the core of the network, it's not just the middle mile, it's now how I connect every device. It's my WiFi base station at home in the office, it's in the open air or the antennae on the mast on top of a tall building.

"Our only advice to network planners is that fibre is going to have to be pushed very very deep, whether it's to the premise or the cabinet right outside the premise. The question is, "What do you do from the node?" If the node means using existing twisted pairs... it's not going to be good enough. If the node means coax and it's close, it might be good enough. Nevertheless if I'm going to have to replace the node to the home all the same, it may as then be fibre."

When asked, "What about 4G?" he said, "If it's a dedicated fixed radio link that can give me a dedicated link with no contention, you probably can make that work. However on a 4G mobile network that's not the case because the whole neighbourhood is going to share that. If each of us is on 4G and we are going to be consuming 28x [what we are now] and if each of us are going to be consuming multimegabit in our homes... in point to point mode, in the bush, where there are multiple flavours of 4G [it can work]. Yet if I'm talking about suburban Sydney, that's not going to be enough.

What we see based upon the data

"From what we see based upon the data... I don't know anything about the politics of this or who said what... I'm just looking on it as someone who looks at innovation, policy, trends and data and in my mind facts matter. I as well sit on the UK regulator Ofcom's board and Ofcom talks about evidence-based policy making. So I just look at the trends and the data. Considering what our forecast looks at, if I'm in an urban area, a 4G connection in an area of high-density housing, is not going to be enough. It just will not scale to the same extent as fibre deep deep into the network."

"We are going to need fibre deep deep into the network, going to need increased 4G spectrum and as a matter of fact going to need to address the unlicensed spectrum inside and around buildings. WiFi is much more efficient. From a network operator point of view, one of the highest costs is the immediate handoff from cell to cell on mobile network. Passing that load on to WiFi is more efficient and cheaper.

The OpEx of fibre is dramatically less than copper

"The OpEx of fibre is dramatically less than copper. So it becomes a CapEx issue. If you can get the Capital for investing in the network... once it's there, every operator in the world finds fibre dramatically reduces OpEx. So similar prices equals higher profits."

Bloch added, "The value of [Australia's] network is not the copper wires, it's the ducts they lie in." In point of fact, much of the copper is old and needs replacing, the power costs are much higher to drive it and it costs $1bn per year just to maintain.

When Malcolm Turnbull recently told Katherine Danks at The Telegraph that "The promotion of the NBN is based on one big lie - that the benefits of super-fast broadband can only be achieved by a fibre to the premises network whereas in truth the undoubted benefits of broadband can be achieved sooner and at much less cost with alternative technologies" he was already on shaky ground. The fast, reliable, high-bandwidth, symmetrical, low-latency broadband connections that are required by for the NBN's significant enhancements to Australia's health service, power distribution, education system, business, cloud requirements and social benefits all require performance and infrastructure that goes beyond fibre to the node.

Furthermore, as this article was being published, a spat developed between Joe Hockey and Delimiter over comments made about 4G being superior to Labor's NBN. These claims have been dismissed many times earlier - 4G is complementary to the NBN and not a competing innovation. It couldn't hope to remotely rival fibre for all of the reasons listed above. As such, Hockey's rebuttal of Delimiter's rebuttal, which states, "Wireless technology just as 4G has the capacity to be far superior to a fixed broadband service just as Labor's NBN" is as well factually incorrect. Just to stress this again, 4G and WiFi are methods of connecting to the wired/fibre network. They can't possibly hope to carry a nation's broadband infrastructure and will start to be overwhelmed in less than four years without overhauls in infrastructure. They are undoubtedly more-convenient and popular connection methods than wired. Maybe that is what Hockey means?

Reading between the lines, it appears that the Coalition is sticking to its famous "12 megabits is enough" stance and believes that rolling out a cheaper infrastructure which relies on existing research, infrastructure, data sizes, speeds, latencies and symmetries is all Australia needs.

The course of time previously coming to pass

But even if Cisco's forecasts were to double in the course of time previously coming to pass, any fibre to the node infrastructure is not going to get completed previously it is overwhelmed. The old networking adage is true: you can't push a pumpkin through a hosepipe.

It will be interesting to see how the Coalition reacts to these figures. Hopefully they are food for thought. Recent history suggests if not - there are already many questions hanging in the air. The Coalition after all has not even acknowledged the NBN's benefits to health, power, education, business and society let alone explain how 12 megabits is enough to cater for them. Even Stephen Conroy toned down the politics recently to pose some valid observations and questions.

Technology is blind to politics. In articles like this it's impossible not to mention it nevertheless valid conclusions can't be drawn, by any side, which rely on political affiliations. The innovation is either valid or it isn't. As Pepper says, "Who pays for it is a separate debate. As a matter of it being innovation and demand, I don't see there being any question."

The last bastion of valid discussion regarding the NBN is "Who should pay for it?" - hence the calls for a cost benefit analysis, even though even this question has largely been answered. Based on all the existing evidence, the Coalition's claims regarding the research simply don't stand up to scrutiny. If it turns out they do, at that time they need to explain why just about every expert on the matter has got it so wrong.

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