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Telstra costed fibre to the premises before it was Telstra

Cabinet documents reveal a history of might-have beens for Australia's internet

By Richard Chirgwin, 12 Jan 2016

Australia had a shot at building a national fibre-to-the-premises (FTTP) network in the 1990s, but decided not to press the go button.

The opportunity arose during the nation's awful hash of telecommunications policy leading up to the privatisation of Telstra in 1997.

Nearly a decade before that, the Hawke government initiated an inquiry into how to introduce pay TV in this country, and in 1989, the House of Representatives Standing Committee on Transport, Communications and Infrastructure issued its report.

There's a fascinating gem in the report, To pay or not to pay? Pay television and other new broadcasting-related services. Deciding sensibly that cable delivery – the hybrid fibre-coaxial system – would dominate, and made this recommendation about getting the network built:

  • 4. (a) Telecom Australia be made the common carrier for cable pay television, as prescribed in legislation; and
  • (b) the legislation prohibit Telecom Australia from being a pay television operator and from influencing the program content of such television.

Considering that Australia has since walked away from a plan to build a national FTTP network, it's easy to wish that the Hawke government had taken up the idea.

Crikey journalist Josh Taylor had earlier posted a link to this 1991 cabinet note, and it's also informative.

By 1991, Telecom Australia was imagining a fibre-to-the-home future, and had even run up the odd speculative spreadsheet.

You have to scroll a fair way down, to Attachment H, page 38, to find that “Telecom Australia has estimated [AUD]$5.7 billion to connect homes in Australian capital cities”, and that it would take “up to a decade” to connect “the majority of individual consumers”.

And this, which in 2016 seems somewhere between “gold” and “a bitter irony”: “Recent advice from Telecom is that they see 1997 as the likely year when the economies will be right to commence installation [of fibre-to-the-home – El Reg]”.

And what of hybrid fibre-coax (HFC), now to become a substantial part of Australia's national broadband network? In 1991, the cabinet note said: “A hybrid network could be started now but it would be obsolete before the end of the century and … would not significantly add to the development of Australia's telecommunications infrastructure.”

As it happens, HFC is not obsolete. Arguably, it didn't really add much to the development of telco infrastructure in Australia: it became a money-burning competition in the 1990s between Telstra and Optus, and Optus blinked first to quit the build. In 2016, it's sucked money out of the development of Australia's telecommunications infrastructure, with AU$800 million promised to Optus for a network of unknown effectiveness an reliability.

However, in 1991 – remember, this was before the Internet really exploded – nobody could see an economic upside to the rollout. Pay TV alone wouldn't cut it, the as-yet-to-start-up networks weren't interested in raising capital to help fund the build, and frankly, government probably heard the distant echo of an incumbent in search of a subsidy.

And nothing happened, because by the time the government worked out its pay TV policy, it was also working on other things that made Telecom Australia/Telstra unwilling to roll out fibre: the Hawke/Keating governments started investigating the privatisation of Telstra; competition in telecommunications began in the mobile market, which directed Telstra's investments; and pay TV arrived with Telstra as a player.

Telstra continued to fool around with fibre-to-the-home. It conducted experiments like a network in one of Australia's most affluent addresses, Centennial Park, with a focus on multimedia because the Internet of the 1990s was text-based and rudimentary.

As Vulture South's research of the archives of a long-gone telecommunications magazine, Australian Communications (the author edited the publication from 1997 to 2003, and kept a copy of the old DOS-based text index), Telstra had its backup strategy ready-to-go. In October 1991, it announced the development, in partnership with Alcatel, of the “remote integrated multiplexer”.

The now-infamous RIMs offered a fibre-to-the-node path, except nearly none of them ever got fibre. That's a different rabbit-hole of history.

What blew Australia's evanescent, ghostly shot at being an early adopter of fibre-to-the-home? To quote Harold Macmillan, “events, dear boy, events.” ®

Bootnote: One of the most persistent political myths of broadband policy is that Senator Stephen Conroy worked out the budget for the NBN on an airline napkin. Knowing that Telstra had costed a build in 1991 should at least hint that the big numbers were well-known in policy circles for a very long time.

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