Federal Communications Minister Helen Coonan has for the first time raised the prospect that a super-fast fibre to the home network could be the outcome of the broadband tender process currently under way.
The Government would consider kicking in significant public funding if a viable fibre to the home broadband proposal was submitted to the expert panel managing the tender process, Coonan reportedly says.
Until now, the Australian broadband debate has focused on fibre to the node, which involves laying fibre optic cable to the street corner but leaving copper wire to carry information to the home.
Because it replaces ‘last mile’ copper wires with fibre, internet speeds in fibre to the home networks can reach up to 1000 mbps, compared to a maximum of about 50 mbps for fibre to the node.
The trade off, however, is much heftier price tag: around $20 billion for fibre to the home, compared to something less than $10 billion for fibre to the node.
The price tag could present a substantial hurdle for any fibre to the home proposal, according to David Kennedy, research director with ICT consultancy Ovum.
“Our modelling shows that provided you can get sufficient scale you can justify fibre to the node for things like internet television, but fibre to the home kind of pushes the cost benefit ration into the red,” Kennedy says. “We’re not surprised there aren’t too many serious proposals for fibre to the home out there yet and probably to do it now it would require serious government subsidy.”
And question marks remain over exactly what we would do with download speeds almost 1000 times faster than those we currently enjoy, Kennedy says.
“There is no doubt there is a big step up there in terms of speed, but its not clear how commercially important that step up would be. Are there services out there that require those kind of speeds that would make money? It’s a good question,” he says.