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COMMSDAY SUMMIT 2014

Wireless Session

Presenter: Jason Ashton8 April 2014

Introduction

Reflecting on the last 20 years

Spectrum regulation

Wireless trends

NBN - where to from here

Today’s agenda

Celebrating 20 years

You could connect to the Internet at 14.4Kbps (or 28.8Kbps if bleeding edge)

Telstra was still called Telecom Australia for domestic services

Mobile phones were becoming portable

twenty years agoAARNET had recently upgraded the entire Australian “Internet” from 1.5Mbps to 4.5Mbps

Celebrating 20 years

twenty years ago

A company called Netscape released a web browser

and Amazon.com looked a little different

Cisco acquired a little known company, Kalpana, that produced ethernet switches

Celebrating 20 years

twenty years ago

10Mbps ethernet cards had dropped to around the $100 mark

You could order a pizza online

and play games online too using a modem

Spectrum Regulation

Has spectrum policy fostered competition?

Spectrum charges continue to escalate despite

-

● 15 years of deflationary pricing for

Internet access

● Regulated fixed line charges

continuing to decline

Our spectrum costs are some of the highest

globally

● eg. in USA the FCC charges less than

Aus for an apparatus license and they

include the entire band (all

polarisations) at no additional cost

(effectively 50-75% cheaper versus

Australia).

➔ Spectrum Auctions are designed to maximise financial returns for the

Government of the day

◆ LMDS (28GHz/31GHz) - AAPT paid $66m in 1999

◆ 3.5GHz (FWA/WiMAX) - Unwired paid $100m in 2000

◆ 2.3GHz (MMDS) - Austar invested $183m in 2000

➔ These auctions prevented meaningful competition and delivered

limited commercial application until very recently. We need spectrum

licenses to have a “use it or lose it” clause

➔ Non-financial outcomes are often more important

Spectrum Regulation

➔ Opportunity to create spectrum parks

◆ Registration of devices

◆ Harmonisation of use

➔ WiFi is the best example of what is possible with this approach

➔ More focus is needed on efficient use of spectrum by Govt (eg. Dept

of Defence)

Spectrum Regulation

“When the commission did unlicensed spectrum for the first time, thirty years ago, no one knew what it would lead to. It was a platform for innovation and it led to these cool things: cordless phones, baby monitors, Bluetooth, Wi-Fi. And so another potential big idea is a new generation of unlicensed spectrum with much better propagation characteristics. I believe will lead to a whole new generation of innovation”

Julius Genachowski, Former Chairman FCC

Wireless trends

Microwave◆ 10Gbps +◆ self aligning;◆ minimal footprint◆ super low cost

WiFi◆ 802.11ac◆ 802.11ad

Mobile◆ LTE -> LTE Advanced◆ 5G (beyond 2020

mobile communications technologies)

"It is dangerous to put limits on wireless"Guglielmo Marconi (1932)

Where to from here?

Lessons learned since 1994

● Telstra remains the only substantial network outside metro

● Alternative DSLAM infrastructure does not represent real alternative

infrastructure (it still runs over Telstra copper)

● Alternative fiber infrastructure (eg. PIPE, Vocus, Amcom) is largely

limited to lucrative inner city business markets

● The opportunity for alternative wireless infrastructure has been

frustrated by policy in several areas:

● ACMA spectrum access and allocation policy

● Land access notice policy (Schedule 3)

● State land administration policy

NBN - where to from here

Infrastructure based competition has failed, but why?

● Lack of competitive backhaul [its not possible to buy expensive

backhaul and deliver a viable alternative last mile network]

● The failure to declare backhaul services has limited innovation

in the access layer

● Despite this NBN has 121 points of interconnect creating a

structural barrier to entry for new competitors

● Intercapital (longhaul) backhaul is limited to just 4 players in a

rapidly consolidating market … will it be 3 players soon?

NBN - impact of 4G/LTE/5G?

“the obvious consumer preference for wireless that is often ignored by technology determinists will ensure that 5G becomes a very dangerous ‘complement’ in terms of NBN ARPUs and share of wallet.

5G will not obviate the need for more fibre in the network. However, it will not be your grandfather’s “shared and congested” wireless, given the antenna theory behind 5G essentially mimics a point-to-point network.”

Grahame Lynch, Communications Day, 15th May 2013

NBN - why not go mobile?

● Regional Fixed wireless rollout could be redesigned as

wholesale only 4G mobile network

● Delivering the dual benefits of improved broadband access

along with better regional mobile coverage

● 98% coverage guarantee imposed to ensure economic benefits

● Much stronger business case

● Optus, Vodafone & MVNOs

Thank you