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America Planning for the Closure of Its Copper Network

In an interesting move the FCC’s Technical Advisory Council has outlined the need for setting a ‘sunset’ date for the closure of the circuit switched network. This is a first step that eventually could lead to the replacement of the PSTN in the USA, rather than letting the network slowly fade into oblivion the FCC proposes the bring the issue in the open so that it can be properly evaluated and discussed.

The Council also recommended the preservation of embedded last mile copper so that new high-speed technologies can take advantage of it.

A more silent or gradual move from the old to the new network could result in the incumbents simply transferring their dominance from one network to another. If the USA is serious about its digital economy it can’t let these incumbents be the gateway keepers to that economy, any new infrastructure used for that purpose should be based on open networks.

Drawing from my experience in dealing with the Obama Administration, the FCC and the Department of Commerce, I’m aware of the level of understanding that exists in relation to the importance of high-speed broadband infrastructure to the economic and social transformation that is needed to get the country back on track. The digital economy is key to new economic growth and job creation and in order to achieve this the transition from copper to fiber based infrastructure is an essential.

We assisted in the earlier discussions, leading to the introduction of the National Broadband Plan in America, and it is most disappointing to see that the dysfunctional political system in that country is preventing any progress being made. A recent analysis from George Soros on the deplorable political situation underlines this.

Australia is the only country at this point that is planning properly for the closure of its PSTN. This has recently been enshrined in legislation, providing the certainty and the security needed to prepare for the transitional period. This preparation includes financial deals worth $12 billion with the two leading Australian telcos, Telstra and Optus, that will see them to close their copper and HFC last-mile. There are, of course, arrangements for unforeseen circumstances, but otherwise the PSTN will be closed.

A new USO regime is now under development, and this will look after all of the legal elements in relation to customer protection, arrangements for special groups and other social and economic implications. For this purpose a new body, the Telecommunications Universal Services Management Agency (TUSMA), has been established.

The regulator (ACCC) will oversee all of the arrangement for the transition and it has been given specific powers to ensure a smooth changeover. The NBN will mainly be an FttH network (93%) and it is based on the open network principles. This means that there will no longer be the advantage of market dominance based on closed, vertically-integrated models.

The new environment will lead to more transparency and equality in competition. During the transition it is critical that the dominant carriers cannot misuse the situation by hoarding customers—the role of the regulator during this transition period, therefore, is most important.

It is paramount that these issues are also addressed in the USA, before any serious discussion takes place in relation to the closure of the copper based network. The successor of the PSTN needs to be a fixed (FttH) open network in order to deliver better competition and better consumer outcomes.

Of course, there are also technical issues that need to be considered, such as the need for uninterrupted power supplies, and here also Australia is leading the world, with electricity companies and the construction company responsible for the rollout of the NBN working together to explore options. This allows the organisations involved to, at the same time, look at the options of using the NBN for smart grid purposes.

These and other technical issues are currently being tested and investigated in the first release sites.

By Paul Budde, Managing Director of Paul Budde Communication

Paul is also a contributor of the Paul Budde Communication blog located here.

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The game's just getting started Richard Bennett  –  Jul 12, 2011 4:33 AM

It may be a bit early to be touting the Aussie NBN as the be-all and do-all of network infrastructure. It’s only running in three test sites and has a long way to go before it’s anything but a lab toy. The NBN plan has a number of dubious assumptions, not the least of which is the removal of a perfectly fine DOCSIS networks installed side-by-side by Telstra and Optus since Australians finally got cable TV in the ‘90s. Why did it take so long, you ask? Well, you can thank the ACCC (Australian Competition and Consumer Commission,) the same regulator who’s overseeing the NBN.

The NBN is not a dark fiber network as one might imagine: It uses the same GPON and EPON that Verizon pioneered in the US, so like DOCSIS it’s shared cable network. Shadow Minister for Communications Malcolm Turnbull, a likely pick to become the next PM, has said that he would prefer an FTTN network that could do all the same useful work as the NBN at a fraction of the cost and be much faster to deploy.

Australian is doing very interesting things in many economic sectors these days, but it’s not at all certain that the expenditure of $2000 per home is going to produce the hoped-for economic effects. Certainly, the majority is a bit vague on the benefits that might be produced by a shared gigabit network that uses fiber to do things that can be done just as easily with existing copper.

Let’s take another look when the project is out of the lab and in general use. There may be some amazing applications that Aussies can’t live without, but we don’t know what they are just yet.

Thx for your reply Richard. I have Paul Budde  –  Jul 12, 2011 5:09 AM

Thx for your reply Richard. I have no issue with your skepticism :) You are very right the proof will be in the eating! Yes it is ambitious and yes there are many uncertainties. But there is widespread industry support that will make this happen. Telstra as well as the rest of the industry are all adamant to make this work, their future is on the line. With such positive attitude I am convinced that Australia can pull this off. But you are totally right we will have to wait and see. These projects don’t get done overnight it will be a ten year long journey. You will be surprised about the applications, just looking at what some of the health insurance companies are planning is mind boggling. This is not about high-speed applications but about the combination of the NBN features: robust, capacity, ubiquitous low latency and so on. Think also the Internet of Things.

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