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NBN under competitive threat from wireless broadband: Former CTO

Former chief technology officer for the National Broadband Network (NBN) company Gary McLaren has said that while NBN pulled off a “coup” when the telecommunications regulator declared wholesale super-fast broadband, NBN is under even greater competitive threat from wireless providers. Arguing that wireless broadband could be a “massive disruption” to NBN’s business model, McLaren said that NBN’s two largest customers, TPG and Telstra, have a “huge” incentive to “bypass NBN” through the provision of wireless broadband services. McLaren used his personal blog to speak out against1 the decision2 by the Australian Competition and Consumer Commission (ACCC) last week to regulate all pre-2011 non-NBN fibre and hybrid fibre-coaxial (HFC) networks with speeds of more than 25Mbps — but not fixed-wireless, satellite, or mobile broadband services — saying it solidifies NBN’s “monopoly” in the face of the threat of competition from providers.

The ACCC made the decision in response to concerns raised by the Vertigan Review3 that there was the possibility of smaller monopolies and a lack of competition occurring outside of the federal government’s NBN to provide access to high-speed broadband networks — particularly after TPG announced that it would be offering a competing wholesale fibre-to-the-basement4 (FttB) product.

“Has NBN Co won the day? Has it been able to leverage the enormous power of its government shareholder in such a way that it is now a safe, secure fixed asset monopoly with nothing to fear from TPG Telecom or anyone else?” McLaren wrote.

“In the short term, the answer is probably yes. No new competitors are going to try and take on NBN Co in the fixed-line broadband market. TPG Telecom will probably limit its rollout to less than the 500,000 apartments it originally projected.”

However, McLaren contended that in the long term, NBN has left itself open to the threat of wireless broadband, which is growing rapidly — far riskier than the 500,000 apartments that would have received fixed-line broadband from TPG instead of NBN in the absence of such regulation.

“All of the protection measures for NBN Co’s monopoly are exclusively restricted to fixed-line broadband connections. Mobile broadband and fixed wireless are not captured in this regulatory net — and probably never will be because of the growth of mobile broadband,” he said.

“Significant investment is being placed into wireless technology that enable more spectrum and more fibre connected cell sites to be deployed for mobile and fixed-wireless broadband. The 5G technology road map is likely to mature around 2020. But even 4G with more cell sites can deliver more capacity before then.”

TPG, Telstra, and all other major telcos in Australia will be supporting this through leveraging their fibre network with small cells, McLaren argued.

“There is no doubt that TPG Telecom, and more importantly Telstra, will be following these trends and assessing the opportunity. The most important asset they both have to enable this is a “deep fibre” network that will allow many small cells to be deployed to provision the capacity necessary for fixed wireless broadband to compete with fixed networks.

“NBN Co and policy makers needs to think deeply about this. It is unlikely to be able to pull off a regulatory coup this time around, especially if TPG Telecom and Telstra are on the same side of the argument.”

McLaren left NBN in April 20145 alongside head of corporate Kevin Brown and CFO Robin Payne, following the election of the Coalition and the subsequent replacement of most board members and executives at the company rolling out the broadband network.

“Gary leaves the legacy of having created the technology architecture of the National Broadband Network and overseeing its initial delivery.

He has also built a strong team of technology professionals who are now well placed to deliver the multi-technology model,” NBN CEO Bill Morrow said at the time.

Once elected, the Coalition moved NBN from rolling out a full-fibre network to a multi-technology mix incorporating fibre to the premises, fibre to the node, fibre to the distribution point, FttB, HFC, satellite, and fixed wireless.

References

  1. ^ personal blog to speak out against (www.mclarenwilliams.com.au)
  2. ^ decision (www.zdnet.com)
  3. ^ concerns raised by the Vertigan Review (www.zdnet.com)
  4. ^ competing wholesale fibre-to-the-basement (www.zdnet.com)
  5. ^ McLaren left NBN in April 2014 (www.zdnet.com)

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