The Federal Government’s $36 billion National Broadband Network (NBN) aspires to be an open-access network which will eventually level the playing-field in the broadband market for ISPs nationwide.
But one company already has its own open-access network, albeit on a smaller scale.
TransACT began its life in the 2000 and has strong ties with the main utility services supplier in ACT, ActewAGL. Its origins stemmed from the fact Telstra and Optus left Canberra out of their HFC broadband network footprint.
In response, ActewAGL formed TransACT – though the companies are separate entities - to be an open access wholesale service provider that would rollout out a communications network able to provide high-speed broadband to Canberra citizens. There are currently 10 retail ISPs operating on the network.
“It’s very much like what National Broadband Network (NBN) is doing nationally, but we already started it in Canberra 11 years ago,” TransACT CEO, Ivan Slavich, said proudly.
And the company has been dealing with fibre-based broadband for many years as well.
Today, TransACT dominates Canberra and has over 200,000 customers on its network nationwide. Thanks to its ties with ActewAGL, the ISP runs a One Call Connects All (OCCA) operation which conveniently hooks up all utilities and telecommunications services at the same time for any premises in the city.
It is also a big player in the datacentre space and services a swathe of Government clients.
TransACT aims to dominate the telco market on a national scale and the NBN brings it one step closer to that objective.
But the company’s view on the NBN is not completely positive.
Being a major player in the rollout of fibre networks to newly developed estates, Slavich viewed recent NBN policies from the Government for greenfield areas as a threat to the TransACT business.
In other words, the NBN would be cutting TransACT’s grass in some greenfield estates.
There are also other bones TransACT has to pick with the NBN and the Government.
ARN chatted to Slavich about the company’s interesting history, its direction and its conflicting stance with the NBN.
So tell me how TransACT became involved in dealing with fibre-based broadband.
The fact electricity poles are located in backyards (as opposed to frontyards) in Canberra may have made it difficult for Telstra and Optus to rollout broadband networks – something NBN Co will find out in due course.
When TransACT started, we picked a solution called VDSL, which is a deep-fibre technology sometimes referred to as ‘fibre-to-the-curb’ where the node is very deep into the network, only 300m away from the home.
We rolled that out to approximately 60,000 premises and businesses.
After the .com burst in 2000, the equipment supplier of the VDSL gear went bust and we had some real problems rolling that technology out.
But we’ve evolved since then and it was quite fortuitous that the concept of unconditional local loop (ULL) came around where we could put our kit in a third-party exchange. We’ve subsequently deployed into 12 Telstra exchanges with DSLAMs providing ADSL2+ for the remainder of Canberra.
But while we have stopped the VDSL rollout, we’ve continued the rollout using ADSL2+ which covers another 50,000 premises.
The other big thing we’ve been doing is for all new greenfield areas in Canberra, we’ve rolled out fibre-to-the-premise (FTTP) using GPON technology. We now have 16,500 premises on contract to rollout FTTP which over 2000 customers are now connected; ironically more customers than the NBN has announced.
We use the same kit as NBN Co – Alcatel-Lucent kit – and corning cable.
We’ve also, in 2007, acquired Neighbourhood Cable in Victoria and have since rebranded it to TransACT. The network covers Geelong, Ballarat and Mildura. We updated the HFC network there from DOCSIS2 to DOCSIS 3 which means we can deliver 100Mbps to those customers.
The other thing we’ve been doing is upgrading our existing VDSL network to VDSL2, a standard which allows us to provide 80Mbps to residential customers.
Sounds like you guys have a fairly firm grip on the Canberra market.
We pretty much dominate Canberra.
We’re pretty strong in Geelong, Ballarat and Mildura as well but we are starting to branch out of our traditional markets on-net. We now have a very strong off-net capability.
We have good wholesale arrangements with Telstra and with Vodafone. We’re a mobile virtual network operator with Vodafone. We have in total 160,000 product customers and 30,000 mobile phone customers.
I’m interested to hear TransACT’s thoughts on the NBN.
I guess from a TransACT perspective, we’re certainly share the government’s vision of provisioning ubiquitous broadband services to the community; That’s essentially what we’ve been doing for 11 years and is really nothing new for us.
If you have a look at the genuine customer access networks across the country, it’s really Telstra, Optus and TransACT and there are a lot of other smaller players. We’re the top three.
Where we have a network footprint, it is our opinion that for NBN Co to overbuild where we have a network footprint would be an incredible waste of taxpayers’ money and we’d be flabbergasted if NBN Co did that.
If it did, we’d be like “hang on, we’ve already got a network, you’re overbuilding us so we’ll under cut you”. We’ll just put our price under NBN Co if that’s the case.
If people are staying on our network, getting the same speed for less money - why would taxpayers’ waste money doing that? That’s just really stupid.
So we’re talking about beyond Canberra as well?
I refer to that to where we have networks.
Our networks are capable of 100Mbps. That’s future-proofed.
DOCSIS3 on HFC networks – there’s 50 million customers on that technology in the US.
So there are heaps of vendors that continue to upgrade the technology and are already testing speeds of around 300-500mbps using DOCSIS over HFC so why you would build an FTTP network where there are existing HFC networks I find it a bit perplexing.
We haven’t seen the full details of the deal between Telstra and NBN Co but it’s my understanding Telstra – and even Optus - would be moving its customers will be moving customers off HFC and onto FTTP.
HFC networks will just be for provision of Foxtel services.
For me, the Government is going to be building FTTP networks where those HFC networks are.
My mum lives in Gymea and she has electricity poles outside her house. There is a Telstra HFC cable, an Optus HFC cable and now there will be a third NBN able under that.
Point number one is it’s going to be bloody ugly having a third cable when there is already fibre there and leaving HFC networks just for payTV doesn’t seem like a good use of taxpayers money.
I’m supportive of the Government but I would’ve thought more on where to rollout FTTP. There is absolutely no question it should be done in greenfield areas.
But how does HFC compare to FTTP?
FTTP and HFC, in terms of download, are comparable especially with DOCSIS3.
The one difference is FTTP better for uploads.
But what price are you prepared to pay for such a benefit? Most people download, they don’t upload.
But what about future applications that would require high upload speeds?
There have been a number of papers written on this. A lot of them have said what you should do is upgrade your HFC network progressively and when you actually hit that wall where the HFC can no longer cut it, you then rollout FTTP.
But you do it then but not before. That’s the point.
As a commercial organisation, you rollout capital when you need to, not before.
We have three fibre products: a 10Mbps, 30Mbps and a 100Mbps service. The price goes up with the download speed. Around 80 per cent of our customers take the 10Mbps service, 18 per cent are on the 30Mbps and only about two per cent take 100Mbps.
Customers just don’t need that speed at the moment. Who knows how long it will take for there to be applications requiring 100Mbps downlink?
If you want to upload a YouTube video or download a movie, you don’t really need those speeds because if the backhaul is not capable of those speeds and there is congestion or contention elsewhere in the networks, you’re just not going to get that speed.
The majority of Australian content online is sourced from the US.
So you want more investment in international links rather than the local network?
Backhaul and international links absolutely need to be upgraded.
No point everybody having 100mbps if there is a huge bottleneck between Sydney, Melbourne and Los Angeles.
Basically, you agree with the NBN’s goals but you dispute the methods used ot achieve them?
We absolutely agree with NBN objectives. That’s what we do and our company has put our money where our mouth is and done it. The question is if you have limited capital, how do you go about building it? Is the way we are going about it the right way to do it? I just think overbuilding TransACT, for example, would be crazy.
How do you think the NBN should be rolled out?
What’s really going to drive traffic on the Internet is video and we need to have those networks in place.
I agree wireless networks are simply not going to cope and in fact, what you’ve seen happen with Vodafone’s network is data absolutely smashing the it and that is why it has had so many problems.
Rumours within the industry was Optus was within weeks of being in the same predicament as Vodafone and it upgraded its network just in time.
Really, it is quite problematic for wireless networks so fixed-line is absolutely the way to go.
Since TransACT has had a history in working with an open access network, which is what the NBN aims to be, how would you rate the way it has been rolled-out so far.
TransACT is pretty frustrated with the process.
We bid for NBN mark one and missed out. We bid to rollout FTTP in greenfield estates for NBN and missed out.
In fact, NBN Co entirely changed the process.
I have to say the way the company has ran the whole request for tender was very poor and unprofessional.
After wasting all this time and money on it NBN Co didn’t even go the way it said it was going to in the request for tender. Then it decides to award a build contract to Fujitsu instead.
NBN Co could have avoided wasting everybody’s time and just told us that in the first place. It picked up all the IP from all these suppliers.
We’re part of the Greenfield Operators of Australia (GFOA) and the group is not too pleased about that at all.
Do you see any resolution to this issue?
There has been attempted by the GFOA and the [Communications Minister, Senator Stephen Conroy].
OPENetworks [part of the GFOA] has gone to the Australian Government Competitive Neutrality Complaints Office about this issue. The Government company is going against smaller organisations and it’s not really competitively neutral.
The other problem is NBN Co is telling developers to install the pits and pipes and it will do the rest.
As people that have been working in this field for many years, commercially, we can’t make that work and we can’t make a return on that model.
Normally we seek a contribution from the developer for a network connection and it’s a lot more than just paying for pips and pipes.
The beauty of the way the industry is operating is the developer pays for the costs and not the taxpayers. Whereas what’s going to happen now is in the future, the developer will pay for the pits and pipes but NBN co will be supplying all the fibre.
We as a commercial operator can’t make that work so we don’t know how NBN Co will make that work.
We do network and retail. NBN Co will just be doing network.
TransACT has traditionally been known as a regional telecommunications company. But you are planning to distance yourself from that label. Can you detail TransACT’s expansion plans?
We’re now going much more nation. We now have customers in Sydney and Melbourne.
We recently signed up the Aboriginal Hostels Limited and it has sites all over the country: In Alice Springs, Darwin, Sydney and Melbourne. So we’re going much more national now and with the NBN, we will become an retail service provider under NBN Co.
It’s a great opportunity. One of the great things about the NBN Co transit is whereas before we’ve dealt with Telstra, that fortunately are going through a structural separation undertaking with the ACCC. But even that isn’t going far enough.
We’re really looking forward to supplying our services on the NBN.
Doesn’t that put TransACT in a tricky position? One the one had the company has locked horns with NBN Co over greenfield arrangements and on the other NBN Co is helping you achieve a national reach.
I guess, ironically, if what’s going to happen in future greenfield areas – I mean what’s happened in the past in ACT is TransACT rolled-out FTTP for customers.
But if NBN Co is going to spend its money doing that and we can make a great return becoming an RSP on that then great.
If it wants to spend taxpayers’ money doing it, then good!
Tell me more about the bundled services TransACT offers.
It work’s brilliantly. Customers in the ACT can get all their services connected at the same time.
They just have to call our contact centre, One Call Connects All (OCCA) and we can hook up their utilities, phones, Internet and payTV all at once.
Is this something viable for other telcos? I know Dodo offers utilities with its broadband services as well…
Dodo does electricity but I don’t think it does it as a OCCA concept.
This is something we are looking to branch out beyond the ACT so hopefully some time in the future we ill be able to provide the OCCA service elsewhere.