NBN fibre to the premises - what are the real costs, benefits and value?

Electronics & Technology NBN
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Continuing the discussion from NBN fixed wireless:

Varies, depending on conditions. Most of the cost is in the digging. The fibre itself is dirt cheap (one rule of thumb that I was given a decade or so ago is that copper which used to cost the PMG ~$10,000/km could be replaced by fibre costing <$300/km). Then there’s the fact that, while copper begins to degrade markedly after about three decades, the anticipated service life of fibre is a century or more (so the cost is amortised over a period 3 to four times as long).

A typical mistake. Look at the big picture. I’ve seen it written that, over the service life of fibre, running it to every premises on the mainland would probably cost less than $1 per week, per premises, on average. Some would cost a lot more, some a lot less. If we foul our nappies over the most expensive, then we’re not really Australians.

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The cost of fibre per km for a one off install is astronomical.

The best known example of a FTTP upgrade to the suburb of Shaw in Townsville cost $218,000. I used to live in the next suburb. A good guess was the run was more than 5km and less than 10km. Most of this would have used existing cable ducts.

Basically somewhere between $20,000 and $40,000 per km.

Fibre optic cable in a full sheath suitable for direct burial and termite resistant to serve a single customer is expensive when it serves only one customer.

There is also the option of overhead wire reinforced FO cable, assuming you have something to string from. The encapsulated fibre is low cost, but the wire reinforced carrier cable or sheath is not!

The issue of easements or rights of way for the route of either buried FO or overhead also need to be considered.

There are many other cost variables that need to be considered. Public infrastructure, EG road crossings, other services, all add cost.

In a past life including several projects that used aerial strung FO carried on shared infrastructure. I’d expect little change from $10,000 per km just to add the FO cable!

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Many of the quotes (particularly by Telstra and NBN Co) are politically inflated. Bear in mind what was done with copper. Bear in mind that the current crop of :face_with_symbols_over_mouth: won’t maintain what our forebears built, even though they (Telstra) are paid hundreds of millions of dollars per year to do precisely that.*

Yes, costs vary depending on conditions. It’s a trade-off. Cable fit for a mole-plow will cost more than that designed for ducting, but ploughing it in will cost less than trenching-in ductwork. This has all been done with copper. The substantive difference is that fibre costs far less and lasts far longer.

*- On a side note, an example from Facebook:

Has anyone had problems getting an additional phone line with Telstra??? My order has now been cancelled twice, firstly because the sales rep didn’t listen to my request for a third line and now because of some agreement with NBN and the inability to supply a new line in a satellite area…they suggest I use VOIP. This is for our schoolroom so VOIP is not an option…

So Telstra can’t (or won’t) do what was done before.

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That reminded me of a few years ago:

At that time, I managed to speak to some of the contractors who were working for NBN Co in the Hunter Valley. Their comment was that the difference between what things cost and what NBN Co charged was obscene (actually, I think the response included the term ‘robbery’).

I’ve just noticed that I can apply for a ‘Technology Choice’ switch from fixed wireless to FttP. Apparently, I’d have to pay hundreds of dollars just to ask, then hundreds more to (maybe) get an answer. Might give that a miss (my place is five kilometres from the nearest fibre).

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The piecemeal approach is incredibly expensive. Add political inflation on top and we end up with crimes against the people. Labor’s original coordinated plan would have been a far better investment. Too late now, but it does highlight that we need to treat telecommunications infrastructure as nationally significant, not a political football.

England’s B4RN employs microducting, with air-blown fibre. Fibre fit for blowing costs a lot more than that typically bundled into cables, but the ducting can be installed by unskilled labour.

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$660 for an individual approach but you can ask your neighbours if they would like to get the quote as well and this becomes an Area Switch quote which can be shared by up to 200 premises with a total cost of $1,100 or in terms of roughly 200 premises about $5.50 per house.

Though it isn’t perhaps yet available the Tech Switch from FW to FTTC should soon be made available and this would be substantially cheaper than a FTTP cost which NBN Co have held at what I think are extortionate rates compared to the real costs.

Taking into account that FW CPP (Cost Per Premises) is by NBN Co’s costing $3,757 (rising to over $4,000 by end of build) and FTTC is $3,000 per premises, the move to FTTC would probably be a decent cost saving to NBN Co and may be reflected in a better quote on build cost.

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That’s what they call the design fee (or it was called something like that). I believe there’s another fee at the initial application stage (or there was - maybe it’s changed).

Even if I might be able to afford it, I wouldn’t apply. This should be done at the national level. “Those who can pay, do. Those who can’t pay, do without” is not the Australian way.

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The $1,100 is the first fee for an estimation of cost ranges, then there is the actual quote which includes the planning etc (called the “Design and Quote fee”) and this is then the final build payment if you go ahead. For an Area Switch see:

https://www1.nbnco.com.au/residential/learn/network-technology/technology-choice-program/area-switch/pricing-factors.

In an Individual Switch the initial $660 is both the application fee and the “Design and quote” fee combined and then only the final build payment is made on the costings provided.

https://www1.nbnco.com.au/residential/learn/network-technology/technology-choice-program/individual-premises-switch/pricing-factors

What is the Australian way? There is always this line splashed about (the fair go etc etc etc) but really when telephones were first introduced it was only provided to those who could afford it, it wasn’t a universal right of access. That was the Australian way in the beginning. Some operations needed by people could only be had by those with the money and still this occurs today. Some drugs that would improve and/or save some peoples’ lives can only be afforded by the more well off. So while I agree the system is unfair and not right the reality is this has always been the “Australian way” sadly.

I should also add that an Area Switch allows a greater choice in most cases of Tech choice eg FW to FTTN, FTTB, FTTP are options & Satellite to FW, FTTN, FTTB, FTTB but FTTN and FTTB only have an upgrade path currently to FTTP.

Individual Switches only get the choice of FTTP regardless of current allocation.

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These days: Dog eat dog & the Devil takes the hindmost. I’d rather work toward better for all.

FttC probably wouldn’t work for my area. Premises are too far apart. Not much point anyway. FttC shares with FttN, design features calculated to make upgrades more expensive than necessary. For some details, check out Kenneth Tsang’s blog. The end game will always be FttP (even with Malcolm’s crippling of the topology).

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I think the dog eat dog was ever thus but I want a fairer outcome for all but until those in power move the way they should the only alternatives are to suffer a service you really don’t want or unfortunately pay to see if an upgrade is affordable. Here I note that your local government members and State members can use their powers and money to provide a clear and different outcome if they are so inclined but many again are generally very hesitant to use their monies to provide decent services.

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Australian tradition has been the much-derided “fair go”. That doesn’t mean the same for all, it means decency - equity. Not every failure of equality is a failure of equity.

The mere fact that I might be able to afford more than my neighbours doesn’t motivate me to take it. I’d much rather have a little less myself and see the rest with a little more.

Yes, only some could afford a 'phone in their home or business. The rest of us had public call boxes. In the regions, the PMG ran lines as far as possible from the exchange. From there, subscribers made their own arrangements (often involving fence wire). A failure of equality, perhaps, but not a failure of equity. As a community, we did what we could afford. These days, we’re too fearful and self-centred for that.

A telephone in the 1950s was far less of a necessity than telecommunications in general today. Whether we regard access as a “right” is a matter of opinion and conscience.

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It’s worse than that. With the current ripoff (and inflexible) arrangements from NBN Co, even those who can pay, don’t. Almost noone is “Switching”. There are the occasional stories (like the $218,000 in Queensland above) but the total number of Australians who have paid to “Switch” is a tiny tiny fraction of those who could “Switch” (and who, money aside, would benefit from doing so).

I can understand why NBN Co has to charge the fee just to generate a quote - and that isn’t the problem. The problem is the quote itself.

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Which is deliberately inflated. Part of the inflation is that NBN Co is calculating on a one-off basis. Part is because the network is designed to be as expensive as possible to upgrade. Part is because we can’t even apply until after a service has been activated (the original Fibre on Demand allowed application before the build had commenced. That didn’t inflate the costs enough, hence the current arrangement).

Nobody I’ve found who currently contracts for NBN Co will talk about costs. All I have are ancient costings from the days of the Australian Telecommunication Commission (strangely enough, I couldn’t find anything from after that body was restructured into a corporation in 1989) and earlier.

Two factors I found interesting:

  • The longer the run, the lower the cost per kilometre and;
  • The cost of trenching decreases exponentially, the shallower the trench.

As mentioned previously, fibre is substantially cheaper than copper, but most of the cost isn’t in the cable. The only solid long-distance costing I could find was from the PMG (that’s old). It was for inter-exchange cabling, trenched well over a metre deep. Adjusted for inflation, that ran at $30,000 per kilometre in today’s currency. A third of that was for the copper cable, so fibre would probably reduce the sum to a bit over $20,000/km.

For customer access network (CAN) cabling, the best I could find was a job from the early 1980s. That ran at about $1,000/km (for less than 10 km), but there was some subsidy involved.

In regional areas, the CAN is typically trenched or ploughed a nominal 30 centimetres deep. Taking that as a guide and assuming a coordinated project (not multiple one-off jobs), carried out by a public sector body (with all the legislative supports and efficiencies that implies), the cost per kilometre for our notional “sheep station that is 200 km from anything” would have to be more than $1,000/km. Assuming we’re a nation, rather than a bunch of self-centred individuals, we’d offset that against the majority of installations which, while more expensive per kilometre (because we’re doing more in each kilometre), would be a fraction of the cost per premises.

Not a simple answer, but I can see where the “less than $1 per premises per week” comes from.

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Suppose the “sheep station” already has a phone line, and the phone line is underground all the way. Wouldn’t they use the existing ducting? (which would reduce the cost?)

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Outside densely-populated areas, ducting isn’t common. Even on urban fringes, 'phone lines are generally direct-buried. An existing copper line would show that a land line is feasible. That hasn’t stopped the likes of Telstra saying that they won’t maintain or replace an existing line. The private sector simply can’t do what the public sector did as a matter of course.

Ducting throws up another interesting point. At present, ductwork is limited to places where distances are typically measured in tens of metres. Microducts work over kilometres.

While individual fibres fit for air-blowing are more expensive that individual fibres in a cable, air-blown fibres are cheaper than cables. Ducting allows individual fibres to be added, as required. The economics could be interesting.

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Depends as @n3m0 said how the cable was laid. If in ducting that is still in good condition yes it could be used to feed the fibre. A lot of the FTTC, FTTN is an example of using existing ducting (ex Telstra owned) to run fibre in most suburbs and the major works were mostly the removal & replacement of the old pits ( which were mostly asbestos containing). Most sheep stations that had a copper line relied on non ducted works eg aerial lines or simple trenching without duct work or a mix of both. I must add nationally the really major works was creating the NBN fibre backbone to tie all the regional Fibre Area Networks (FANs) together.

A farmer or similar could indeed dig a trench through their property to their boundary line but public works would require approvals etc to allow them. So if your boundary was 100 km from your house you could in consultation with NBN Co run the trench to the point where NBN Co would meet your boundary but the 100 km extra that runs under other properties or public lands would be still a huge expense. If you shared the trenching with neighbours you could possibly reduce this cost a bit but there would still be an amount of “public works”.

There are small “telcos” who do run private cable that eventually connects into the NBN as do the larger players eg Qld Government’s private fibre network, Telstra’s Velocity Fibre, TPG’s Dark Fibre, Optus Evolve. Please note some of these names relate to their business offerings but there is a domestic side as well but for some of these they are only in what they term “greenfield” areas ie new subdivisions and new areas. Telstra and a select few others have had these choices for some time so could be in “brownfield” areas (already developed) but would have been laid only a few years before NBN appeared on the scene. The common name for all these private networks is “Dark Fibre”.

I used this business linked after here for our broadband for some time before our area went NBN. If you go to the website and click the fibre tab you will see that they only charge $250 to trench the conduit to the house, that is from the house to the street pit…makes you really wonder about the actual cost to NBN Co as they say the greatest cost of fitting FTTP to a house is street to house costs, some $1,000s’ of dollars…
http://www.clearstream.com.au/

In the ACT for many years this fibre network has also existed see TransACT. Most of these dark fibre networks link to the NBN backbone but some are isolated and are used strictly to connect one business location to another eg headquarters to various subsidiaries.

An area who had enough interested parties could either contact one of the bigger players or even a small more local telco business to run a network and then you pay them for the access to the web (similar to the TransACT network) and this may end up being a "up front"cheaper alternative to the NBN Co running a fibre out, as the business could be able to charge an amount for service that over time repays the outlay. Small scale dark fibre providers are exempt from the pricing structure that requires mirroring of NBN Co charges by larger dark fibre providers.

Alternatively an area could set up their own network using wifi and other connection techniques that also then eventually links into the NBN or another dark fibre provider’s network.

The benefit however of fibre is that if it is in place it is very easy to upgrade the transmission technology to obtain higher speeds in the future, it has a low maintenance cost per metre once installed. It is fairly robust against damage from natural events eg fires, floods. As an example even if the fibre line was aerial and the supports are burnt down fibre can still provide a good connection unless the fibre itself is damaged as it is completely immune to electrical interference, copper if it loses it insulation can easily earth or short circuit. Fibre cable is much more resistant to stretching damage than copper, it can be even knotted and still effectively transmit so a reasonable amount of kinking can be tolerated.

“LAN copper is more susceptible to damage via pulling, with approximately a 25 lb pull tension limit. Fiber, even though it contains glass, is stronger than LAN copper cables and may have a Pull Strength of 100-200 lbs for standard cables. Rugged fiber cables may have up to an 800 lb pull strength.”

Another benefit is the length of runs that can be achieved before needing boosting…over any length, copper loses roughly 94% more electrical signal than light is lost over fibre. So very long runs of up to 130 km of single mode fibre without other support is possible yet with copper this must be boosted many times. Multimode fibre which is not what the NBN uses has a limit of about 2 km but this fibre is mostly reserved for building/premises applications.

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Years ago the response to a quote that was deliberately inflated was ‘just tell us why you don’t want to do it.’ In my experience some of the reasons included corporate policy that ‘it’ won’t happen under our watch (business reason), inability to execute or lack of skills they won’t admit, fear of setting precedents, and (drum roll) political pressure.

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Aside from the cost of fibre to the premises, can we actually put a tangible value on the benefits?
The Federal Government and NBN Co do so based on economic modelling. :confounded:

In the real world the benefits may be very different household by household.

For a home business there is a cost that might easily be determined by each owner,
For a family with teenage students and a regular movie habit (streaming instead of a trip to the movies or video store) the costs are about education and convenience.
For my mother-in-law who at 90 plus simply just wants a working phone the NBN is more of a liability than a benefit. FTTP or FTTN etc they all come with a modem and need for power. There is a penalty in the cost of adding battery backup and an added mobile phone account or builtin fall over SIM.

For the average property owner, a different view on the cost of not having a full speed NBN connection.
What will the loss in average property value be at sale with sub-standard NBN compared to one with a full fibre or equivalent solution. (If anyone was to suggest just 1% less it is between $3,000 and $10,000 depending on where you live).

Nationwide a loss in property value of between $12B and $40B just for the approx 4M FTTN connected premises. This may be an exaggeration, it may be short of the mark. Nobody really knows yet.

As background our local real estate agents are all very convinced that not having the NBN or a quality NBN
service is irrelevant to a property values. However having town water, reticulated sewerage, access to power, and mobile phone coverage do have an effect! In past times FTA TV reception was also a game changer for many sales?

Guess they are wasting money listing on line then? :upside_down_face:

,
P.S.
The discussion of the cost of running fibre more than a km or two is challenging. Consumers do not have access to the source data or costings of the NBN Co. There are no independent reviews to refer to. There are a number of published senate inquiries and an ACCC report and the earlier NBN proposals/assessments.

We are not alone in seeking answers to the costs.
Northern California, 2018, a small community in nowhere (well 13,000 and it’s the USA), $100US pm for uncapped plans >250GB pm.

P.S.2
It might be worth considering that the approx 400k premises in the satellite footprint mostly have mains power often by SWER. The electricity network providers know how many properties and also the exact supply distances of their networks. A simple base case cost estimate of providing a fibre solution to all these more distant properties could be based on the average cost of aerial strung FO over the installed lengths. No access issues other than getting on to the poles. Add also a factor for nodes, and interconnection etc. If going in ground is lower cost and there are no access issues to negotiate then even less than the base case guess. This estimate would also pick up a portion of the more rural FW network.

For the FW coverage areas there are approx 2,400 towers covering less than 100sqkm each. One figure suggests as little as 20% of each footprint has access to the FW towers. For 700,000 maximum customers, that’s an approx density of between 3 and 15 premises per square km. Back in 2013/14 the NBN Co estimate cost of FTTP up until then was more than $20,000 per premise including the furthest high cost connections. An adjusted cost of approx $10,000 per premise excluded the more distant properties. The exact historic numbers are now a poor guide, however it is likely a reliable upper cost guess. It suggests that most of the FW network could also be history for under $7B. There is a CAPEX (total cost) within the NBN Co reports for the total cost of rolling out both the FW and satellite solutions.

Both these options would likely need to accept that some of the network could still be on FW or satellite. Both remaining services would perform much better with far fewer customers, although the economics would need that they are provided on the public purse, and not as a profit making enterprise?

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Not great in the satellite footprint in the sense that after every storm brings down a tree somewhere it takes out the internet as well as the power (currently just the power).

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Would be to go to a different provider? Oh wait …

Therein lies some of my concern about “NBN Co” the effective behemoth monopoly. They do only what they want to do. They tell you only what they want to tell you. Internet under their rules or no internet at all.

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You need to start somewhere with a dollar estimate and some tangible information.

It is always useful to understand the alternatives. The actual rural power network numbers are buried away in state government reports if anyone cares to go searching.

As @grahroll noted previously overhead FO is not easily damaged - more resilient than we might expect.

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