42 Quarter Three 2012

NBN vs. UFB head to head comparison

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43Quarter Three 2012

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With the government-sponsored fibre rollouts under way in Australia and New Zealand, iStart takes a look at just what’s

on offer with the NBN and the UFB initiatives...

An important first point here is that I am not discussing the Rural

Broadband Initiative in NZ, so I will stay away from mentioning

wireless and satellite services aimed at remote Australian areas.

We will just stick to layer fibre.

Secondly, the approaches are fundamentally different in that

NBN co is a single entity rolling out fibre nationwide and then wholesaling it to

ISPs. However in NZ, four Local Fibre Companies (LFC’s) were signed by Crown

Fibre to roll out services in selected geographical areas, resulting in nuanced dif-

ferences across regions.

Circuit Access Speeds

New Zealand Australia

30mbps/10mbps (gPon) 12mbps/1mbps

100mbps/50mbps (gPon) 25mbps/5mbps

100mbps (gPon/P2P) 25mbps/10mbps

1gbps (P2P) 50mbps/20mbps

10gbps (P2P) 100mbps/40mbps

It seems to me that NZ has the edge on all fronts here, with a faster entry level

service, more symmetrical options, and a faster maximum speed range. I am not

sure why the NBN has chosen to go with asymmetrical speeds across the board,

or why they have tapped out before surpassing 100Mbps download. Business

needs are the same across both countries, so I don’t see how demand can be

met through the Australian offering, but it does seem to suggest that existing

networks have a substantial market space to keep a share of in that market.

Australia is rolling out GPON in isolation, whereas the UFB rollout comprises a

P2P suite of services and dark fibre in addition to the cheaper GPON tails, mak-

ing it a far more complete solution for users in every demographic.

Another difference between the approaches of our two countries is that the

NBN does not distinguish, whether it is based on price or speed, between resi-

dential or business access. NBN instead relies on traffic classes and ISP conten-

tion levels to distinguish between cost and performance.

Australian Traffic Classes

Traffic Class Description Notes

1 designed for telephony available now

2designed for high priority video traffic

Intended for future release – no eta set

3designed for generic high priority data

Intended for future release – no eta set

4 Best effort only available now

I have been unable to find any specific metrics on jitter, latency, or packet loss

for the above classes, but if anyone else has been successful in this area I would

love to hear from you.

New Zealand Traffic Classes

Traffic Class Frame Delay Frame Delay

Variation Frame Loss

cIr ≤ 5ms ≤ 1ms ≤ 0.1%

eIr n/a n/a ≤ 2%

NZ has a less complex solution in this space, and although you can tailor your

QoS structure to a greater degree in Australia, or rather, you will be able to once

the additional classes are released into production, the less complex a solution is,

the easier it is to succinctly package and take to market.

RSP hand-off designTo avoid confusion here I will again just focus on layer 2 services so we have

symmetry between each country’s product sets.

NZ has been split up into 33 regions and an RSP can connect in a couple of

ways. They can deploy a rack in an LFC’s exchange, or they can purchase an intra-

regional backhaul service to terminate services in an existing POP. There are a few

[Please note that the information around both the NBN and UFB initiatives is still quite fluid. Apologies in advance for any inaccuracies in the below text - Ed].

By Brendan ritchie

44 Quarter Three 2012

Glossary of acronymsP2P — Point to point

GPon — gigabit Passive optical network

rsP — registry service Provider

UfB — ultra fast Broadband, the nZ government’s fibre to the home initiative

nBn — australia’s high speed broadband network

PoP — Post office Protocol

cIr — committed information rate

issues with this, namely, that both processes are very expensive in terms of recur-

ring costs and insurance overhead when deployed nationwide, and at present

Chorus does not have an inter-regional backhaul service.

NBN works in a similar manner except that it has a very clear focus on provid-

ing national backhaul through its “connectivity virtual circuit” where an ISP can

purchase traffic classes on a per Mbps basis and get end user traffic back to their

core POP’s.

Both scenarios have the same issue in that only a select few ISP’s have the

resources to connect to either network nationwide and as a result both markets

are seeing the rise of third party wholesale aggregators, entities which will provide

services in low yield regions to ISP’s that can only justify rolling out UFB/NBN inter-

connects in key metro markets.

SLA’sThe NZ UFB rollout is far more advanced than its Australian counterpart, and

consequently the information available around fault restoration is almost non-

existent at this time for the NBN. What we do know is that the fibre network has

a target of 99.90 per cent uptime and that the highest level traffic class (TC-1) has

the following service parameters:

• Frame delay variation ≤ 16ms

• Frame Delay ≤ 25ms

• Frame Loss ≤ 0.04%

As the premier traffic class, these metrics sit well below the standards for CIR in

the UFB space, although having said that, the frame loss target is tighter or TC-1.

The lowest traffic class is simply best effort, and the other two options haven’t

been released as yet.

Chorus has the worst of the NZ LFC’s SLA’s, but none of them are good.

Crown Fibre missed a chance to justify the premium on the P2P products by

attaching a faster restoration target that included faults on the termination

device (ONT), but as it stands, you will wait for up to 48 hours for service restora-

tion on all services unless you pay extra, either monthly, or as a one off $700

charge, and of the three SLA options provided by Chorus, only the highest level

(and therefore the most expensive) includes faults to the ONT.

If I am not off base, then as the premier traffic class, it is sits well below the

standards for CIR in the UFB space, although the frame loss is a tighter metric

within the NBN.

PricingAs previously mentioned, the NBN does not distinguish between residential

and business last mile access. As such we see the following price points:

Australia Wholesale Price

12mbps/1mbps $24

25mbps/5mbps $27

25mbps/10mbps $30

50mbps/20mbps $34

100mbps/40mbps $38

The above numbers are attractive, but are not indicative of the final cost. All traf-

fic classes used for backhaul to the ISP will cost $20 p/Mbps, so contention ratios

will dictate retail price points given it is this portion of service delivery that attracts

the greatest overheads. On top of backhaul, co-location, and IP transit will combine

to determine final retail price points.

The UFB rates start at $37.50 for a residential 30Mbps/10Mbps (2.5Mbps each

way) GPON circuit, then goes up to $480 for a 100Mbps CIR symmetrical P2P cir-

cuit (and beyond). But again, these prices are not indicative of final price points.

At present DTS, Orcon and iiNET are a few of a small number of ISP’s that have

publicly stated UFB/NBN retail price points on their websites.

SummaryThe UFB network is designed to provide a connectivity upgrade nationally,

and where fast metro networks are already in place, it seeks to encourage

adaptation to ensure attractive price points through more cost effective delivery.

Conversely, The NBN is looking to bring connectivity where there essentially is

none at present, or it is of such poor quality that modern applications are not

able to be considered for use. Where it is rolled out in metro areas, the residen-

tial market and small business segments will be keenly interested, but larger

businesses will likely be better served by existing network providers.

Through offering more service layers and multiple delivery methods, the UFB

product suite is scalable and future focused, whereas the NBN service platform

will need to be substantially upgraded to have anything close to a comparable

benefit to businesses.

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Brendan Ritchie is the Australian-based CEO of DTS, a business-focused ISP oper-

ating in both Australia and NZ.

Twitter profiles: @DTSnz and @DTSaus

Feature // NBN vs. UFB