SNMP Toaster

1. SNMP Toaster

2. This presentation will probably involve audience discussion, which will create action items. Use PowerPoint to keep track of these action items during your presentation • In Slide Show, hold down the control key and click the mouse button • Select “Meeting Minder” • Select the “Action Items” tab • Type in action items as they come up • Click OK to dismiss this box • This will automatically create an Action Item slide at the end of your presentation with your points entered. The Last Mile Arms Race Simon Hackett Agile Communications / Internode simon@agile.com.au

3. The Last Mile Arms Race • The problem space • The playing field • The players • The hidden battleground

4. Fixed-site home/soho broadband • The speeds keep going up • The price charged keeps going down • Triple play may be needed to hold average revenue per user (ARPU) to a sustainable level in the future

5. Main challenge is not technology • Moore’s law doesn’t apply to labour costs • Digging up the road is expensive • Hence the appeal of wireless, but… • … we’ll get to that

6. What defines the playing field? • Our Designated Monopoly:- • Owns key infrastructure built from historic income sources that no longer exist • Resists access to that infrastructure by others • Constrains monopoly-coverage broadband speed to protect monpoly-rent income sources • E1, Frame Relay, ATM data services vs ADSL2+ • Foxtel vs VoD/IP-TV • Uses retail market price changes to damage competitors’ builds & damage wholesale market • $29.95/month - the ultimate two-edged sword

7. The Would-Be Heroes • 3G wireless (and relatives) • Too expensive, too slow, too late • Mobile email and SMS isn’t broadband • Broadband over Powerlines • The Leyland P76 of broadband technology • Fibre to the Home • It works, just far too expensive to build • Labour costs main issue, not hardware costs

8. Greenfields Challenges • Old habits die hard • Developers still giving the farm to Telstra • Education needed • Habits need to be changed • Few other triple-play enabled carriers (yet) • Telstra lobbying to excise FTTH from requirements to provide wholesale access to competitors.

9. Brownfields Challenges • Multiple technologies for the local loop • All try to re-use existing infrastructure on ‘opportunistic’ basis. • One size does not fit all • Some geographic areas can’t be solved this way • The losers (‘blackspots’) often hard to solve economically • No USO for real broadband • ISDN is not broadband!

10. The wireless magic bullet • Ever read these claims? • >2Mb/s to your mobile phone • Unfortunately, ‘one at a time, please’ • Wi-MAX will solve all broadband access challenges and usurp wired broadband • “real soon now” • Broadband over Powerlines will deliver 100 megabits to your home… • “real soon now” • … all despite the laws of both physics and economics tending to act against their success

11. So where does wireless fit? • Direct relationship between screen size and bandwidth required • Inverse relationship between travel speed and screen size required

12. Wireless Value is really Mobility

13. Best weapons for target market • Hybrid Networks • Use the old stuff where you can • minimise cost, maximise reach • Build new only where you must • High speed backhaul paths to aggregation points

14. Fibre to the Node • xDSL - The current winner (in .AU) • Fibre to Node, Copper to customer • Dedicated bandwidth per customer • Competition enabled by regulatory intervention • HFC - The niche player (in .AU) • Fibre to Node, Coax to customer • Shared bandwidth per customer • Insignificant new geographic expansion • Cable operators deny access to others

15. ADSL advances • ADSL v1 (G.DMT) • Up to 8Mb/s • Telstra artificially constrain to 1.536 Mb/s. • ADSL2 (G.DMT.BIS) • Up to 12 Mb/s • Being deployed by Internode/Agile today • RE-ADSL2 mode for extended line range • ADSL2+ (G.DMTPLUS) • Up to 24 Mb/s • Spectrum-doubled ADSL2 • Will be deployed by Internode/Agile by circa June 2005

16. ADSL performance chart

17. The Star-Wars solution • Direct Fibre To The Home (FTTH) • Technical optimum for ultra-bandwidth ‘forever’ • Constraint is economics, not technology • Not about ‘more trials’; $$$ simply don’t add up. • Current customer income (even from the triple-play) has ARPU insufficient to fund FTTH overbuild in brownfields sites

18. Bandwidth for the Triple Play • Triple-play services: • Voice (4 concurrent calls + o/head): 0.25Mb/s • 2 x 2-3Mb/s MPEG-4 HD-TV streams: 6Mb/s • Internet @ 5-10 Mb/s • Total 11-16 Mb/s • ADSL2+ can service this data rate for at circa 80% of the Australian population • FTTH business case awful before ADSL2+ • How much worse if <20% of the market is left?

19. Backhaul: The secret war • The real war is for access to backhaul at pricing compatible with current retail pricing for broadband services • Without very low cost, very high availability, very high capacity backhaul, the war is lost before it even begins

20. Backhaul already exists, but… • Telstra own it and protect access to it • Single Mode fibre to most exchanges • Sufficient bandwidth for ultra-broadband backhaul • Funded by their historically higher price points, and monopoly income base, for voice and data services over past decades • Older, higher, phone call rates • Older, higher, ISDN data rates • These income sources no longer exist • Insufficient potential income to fund overbuild • Especially true in context of regional/intra-state backhaul

21. Some (potential) magic wands • ACCC intervention in backhaul pricing • Declared direct access to inter-exchange Fibre and/or: • Lower the ACCC price cap for Declared inter-exchange Transmission services • Telstra structural separation • Watch out… there goes that flying pig!

22. Conclusions: Wired vs Wireless • Wired vs Wireless is the wrong battle • Its low cost backhaul that wins the war • Some specific areas can be fixed now, but… • We need a general solution for backhaul cost: • 1) Force it out of Telstra (ACCC intervention) • 2) Spend ‘nation building’ money to replicate it • 3) Convince > 1m broadband customers to double their current spend to change the world • I didn’t say it was easy :)