Broadband in Australia
1. Introduction and Executive Summary
Broadband in general electronics and telecommunications is a term which refers to a signalling method which includes or handles a relatively wide range of frequencies which may be divided into channels or frequency bins. Broadband is always a relative term, understood according to its context. The wider the bandwidth, the more information can be carried. In data communications a modem will transmit a bandwidth of 64 kilobits per seconds (kbit/s) over a telephone line; over the same telephone line a bandwidth of several megabits per second can be handled by ADSL, which is described as broadband (relative to a modem over a telephone line, although much less than can be achieved over a fibre optic circuit, for example).
Broadband in data communications is frequently used in a more technical sense to refer to data transmission where multiple pieces of data are sent simultaneously to increase the effective rate of transmission, regardless of actual data rate.
2. Technology
Broadband is any connection that allows 200,000 bits per second (200K) of information to be sent to users computer from the Internet Service Provider (referred to as “downstream”; also ISP) or from the user’s computer to the consumer’s Internet Service Provider (referred to as “upstream.”)
Broadband is any technology that allows a user to connect to the Internet at speeds faster than a 56K modem and can be connected to the Internet 24 hours a day without prolonged interruptions. Although 56K is not available in every part of the country, we assume that it represents basic Internet access, and that broadband is anything faster.
There are seven broadband technologies. While these technologies make the same general promise– faster and more reliable access to the Internet– they vary in the method and speed at which this is accomplished. Overall, there are two approaches to broadband access: (1) technologies that augment or enhance existing 56K access, such as DSL or ISDN (both will be discussed later). These technologies enhance dial-up access lines and allow users to send and receive data at higher speeds than 56K and (2) alternative technologies that bypass traditional 56K telephone lines. These alternatives include geo-synchronous satellites paired with earth-bound uplinking and downlinking technologies, low earth orbit satellites, terrestrial wireless microwave systems (e.g., MMDS, LMDS), T-Carriers, cable, and fiber optic.
The seven broadband technologies are described as:
a. Digital Subscriber Line (DSL) – one of the two most commonly used broadband technologies. It is the primary technology for enhancing existing 56K telephone lines. It is offered as a service by many (but not all) local telephone companies.
DSL uses a coding system to transform ordinary phone lines into high-speed digital lines by compressing signals, allowing them to be transmitted at a significantly higher speed than dial-up. It does this without interfering with regular phone service. Users can simultaneously talk on the phone while surfing the net.
DSL uses a telephone line to access the Internet in much the same way as a traditional analog modem. Unlike the analog modem, DSL is always on, so users don’t need to dial any numbers to connect to the Net. In addition, unlike cable modems, a DSL line establishes a connection to the Net that is the user’s alone and isn’t affected by how many other people are using the wire.
A problem with DSL is that its signal can extend only 18,000 feet (about 3.5 miles) from the provider. This is a significant impediment in many rural areas. Also, many phone companies have problems in installing and maintaining the lines, which require special procedures. It can also be expensive and tricky to set up DSL service for multiple PCs in a home or business.
Consumers of DSL can expect to pay an up-front charge of about 0 – 0. This includes the DSL modem and installation. Monthly charges range from approximately to 0 depending on the desired Internet speed. (DSL comes in different varieties: ADSL, RADSL and IDSL.).
b. Integrated Service Digital Network (ISDN) – another technology that can be used to augment existing 56K telephone wires. Like DSL, it is a complicated technology that augments dial-up service in order to provide high-speed digital transmission of both voice and data. An ISDN network integrates voice (analog) data with digital data from the Internet over the same network by creating two channels over a single twisted pair telephone line. One channel carries data, voice, fax, or video signals, and the other is used by the phone company to identify whether the information being sent over the wire is data or voice. Channels can be combined to provide a high-speed connection to the Internet or to support video conferencing applications. ISDN is capable of transferring information from the Internet at speeds ranging from 126,000 bits per second (126 Kbps), for the basic service, to 1,472,000 bits per second (1,472 Kbps) for advanced ISDN services.
Business consumers make up the bulk of ISDN subscribers. Connecting ISDN to a personal computer requires a network terminator and an ISDN terminal adapter. The network terminator is where the line from the ISDN provider enters the consumer s computer. From there, the wire is sent to the terminal adapter, which is the modem in this installation. The terminal adapter is also the device that allows the same wire to be used to receive telephone calls or faxes.
c. Cable Modem – The most widely used broadband technology involves accessing the Internet via the same wires that bring cable television into the homes of consumers. The signal travels over coaxial cable, which is capable of carrying more data than telephone lines. Coaxial cable is a high-capacity cable used in communications and video. The cable was originally designed for one-way communication. New routers and other equipment installed by cable companies allow two-way communication. This two-way communication ability is what allows cable to be a broadband Internet solution.
Currently, local cable companies are the only providers of this service. Nationally, there are two major cable ISPs: Telstra and Optus.
Cable’s other weakness relates to its ability to carry data. While it is one of the fastest services currently available with possible download speeds of 27,000,000 bits per second (27 Mbps), it suffers from a feature that other technologies do not. The more people using the service, the slower it becomes. When a certain limit is reached and additional people attempt to use the Internet, they will all experience slower service.
The monthly and up-front costs for cable Internet access are higher than that of dial-up service. Typically, a consumer can expect to pay approximately 0-400 for installation of the cable modem and equipment. Monthly costs are approximately -50 for the home user.
d. Satellite Service – Consumers today can receive high-speed Internet service via satellite. The consumer must have downlinking equipment that is pointed to a specific satellite that is in geostationary orbit approximately 22,000 miles above the earth. Such satellites have a constant ‘footprint” and remain in the same relative position to the earth.
The satellite sends data to the user’s satellite dish at a download speed of approximately 350,000 bits per second (350 kilobits per second), more than 6 times faster than dial-up service. To send information from the user s computer, users must use dial-up service since direct satellite uplinking technologies are not yet generally available on a commercial basis. Hence, satellite-based Internet service bypasses dialup service when moving downstream from the satellite to the user, but uses dial-up service to send signals to the Internet.
For consumers, start-up costs are about 0 for the modem, and about -40 per month for the subscriber fee. The satellite dish can be purchased from a number of retailers.
e. T-Carriers – a family of technologies that require the use of a dedicated digital communications line and specialized computer equipment at both the user’s site and at the site of the company that provides the service. T-Carrier service may be provided either by local or long distance telephone companies or by the Internet Service Provider. The user must have a dedicated computer to manage the flow of data coming in and to route it to other computers for processing. Basic T-Carrier service is called T-1, and faster applications are called T-2 and T-3.
DSL and ISDN use standard 56K twisted pair lines and specialized equipment to send signals at higher frequencies. In contrast, T-Carriers use dedicated lines that can be either twisted pair (in some TI applications), or fiber (for T2 and T3 applications).
The cost of a T-Carrier line depends on the distance the line must travel. Unlike dial-up access, cable or DSL, a T-Carrier is not just a plug-in technology. Switches, bridges and routers are required to configure the channels, to transfer data from the T-Carrier line to the computer network and to direct the data to the right destination. All of this equipment takes a specialized staff to ensure that the system works as designed.
f. MMDS/LMDS Terrestrial Wireless Service – Terrestrial wireless is an important technology that allows users to send and receive Internet signals using a land-based system similar to that used by cellular telephones. All versions of wireless service work on the same principal. Signals are sent from a transmitting tower to an antenna on the recipient’s home for a fixed wireless system. (This compares with mobile wireless systems that send signals to the recipient’s cell phone or laptop.). Two technologies capable of delivering broadband are known as Multipoint Multichannel Distribution System (MMDS) and Local Multipoint Distribution System (LMDS). Both systems use microwave towers that were originally designed to deliver television signals to consumers.
g. Fiber Optic Cable – Fiber optic cable uses light waves sent through small glass tubes to carry information from one point to another. It currently represents the ultimate in high-speed Internet access. Devices located at each end of the cable convert the digital signal into light and then back to digital. Information can be anything from TV signals, voice, live teleconferences, data, or Internet web sites.
Fiber optic cable was developed to carry signals hundreds of miles without the need for signal boosters and without loss of signal strength or integrity. This is why the long distance telephone network relies almost exclusively on fiber optic cable to transmit calls.
The connectors which attach fiber cable to transmitters, receivers, and other fiber must provide a near-perfect interface, with little room for error. To a light wave traveling along the cable, a gap the size of a human hair at a connector is a major obstacle. Fiber optic cable is wrapped in five layers of protective material to prevent damage from weather or abuse. This adds to the cost and time it takes to deploy the cable.
Although initially expensive, many cooperatives are installing fiber optic cable or participating in local projects with other providers. Some cooperatives are connecting their headquarters, district offices and substations with a fiber link to improve utility operations and communications. The same link could then be used for other e-commerce applications. Some of this investment can be recovered by selling excess capacity (which is almost unlimited) to local businesses.
3. Stakeholders
In Australia, the major telephone company Telstra owns the majority of the infrastructure and is the main provider of DSL at 1.5 Mbit/s. Competitors resell this, and some provide options – such as their own DSL networks over Telstra copper wiring with speeds up to 24 Mbit/s, a cable network at 10 Mbit/s, business in fibre in city centres and various wireless choices (these are predominantly in large cities.). Like many ISPs around the world, the majority of Australian ISPs traffic shape residential customers after a monthly download quota has been exceeded.
ADSL became available in 2000 and Telstra limits ADSL speeds to 1.5 Mbit/s downstream / 256 kbit/s upstream, and also sells slower speeds of 256 kbit/s/64 kbit/s and 512 kbit/s/128 kbit/s. SDSL services at 256/256 and 512/512 are available but cost a little more.
Telstra is now legally required to sell its ADSL service wholesale to other ISPs. Until early 2002, Telstra’s retail branch BigPond was the only reseller. Since then, the main ISPs to resell Telstra’s ADSL include: OptusNet, iiNet, Primus, TPG Internet, Westnet, AAPT (Telecom NZ), People Telecom, Internode, Exetel, Netspace, Dodo and Comindico.
Tesltra
Telstra Corporation, formed from Telecom Australia, is an Australian telecommunications company under joint public / private ownership ( 51.8% government ownership), holding a dominant position in landline telephone services, large share of mobile phone services, domestic consumer (including dial-up access and Broadband internet broadband cable modem, satellite and ADSL services (under the BigPond and Hypermax brands) and business data services, and cable television. Despite setbacks, Telstra remains a profitable telecommunications company. The Australian Federal Government recently announced that is expects to sell its remaining share this year.
Telstra announced the following information about their operations during a public meeting: (1) Productivity gains are flowing to consumers, in fact Telstra’sproductivity outpaced the economy by 2.2 times since 1997. Nearly 100% of such benefits are passed to consumers; (2) Phone calls are getting cheaper – Real prices have declined by at least 30% since 1991, and basic broadband prices have halved; (3) Telecommunications in general contributes 2.65% of GDP, and in the ten years to 2005, the sector grew 60% faster than the economy; (4) The benefit for ordinary Australians is significant. Telstra contributed during 2005, some billion dollar in the form of revenue, wages dividends etc.; (5) There are 153 telephone companies, and 688 other internet providers in the market who are actively competing against Telstra. ADSL services reach 10 million Australians and account for 60% of all ADSL lines; (6) Because of low density population coverage, it can cost more for a rural phone service, in fact 40 times. One Telstra payphone, makes a loss of per call and 25% of service dollars are spent on the most remote 5% of services; (7) Regulatory compliance costs Telstra enough money, that if put into funding broadband in rural exchanges, would be enough to fund 155 extra rural exchange conversions and upgrades.
Optus remains the companies’ closest rival for lucrative business networks. However, Telstra supplies almost twice as many customers in the ASX (Australian Stock Exchange) with Dedicated Internet Access services.
Optus
SingTel Optus Pty Limited is the second largest telecommunications company in Australia, and is a wholly-owned subsidiary of SingTel. The company primarily trades under the Optus brand, while maintaining several wholly-owned subsidiary brands, such as Virgin Mobile Australia in the mobile telephony market and Uecomm in the network services market.
To provide services, Optus owns and operates its own network infrastructure, as well as using the services of other network service providers, most notably Telstra Wholesale. It provides services both directly to end users and also acts as a wholesaler to other service providers.
The company was formerly known as Cable & Wireless Optus Pty Limited and prior to that, as Optus Communications Pty Limited.
Optus still is the single largest customer of their competitor, Telstra. To really become competitive, Optus would need to lay its own local phone network. To provide a killer application for this, the Australian Federal government decided to sell subscription television licences. Optus, as well as the Seven Network, businessman Kerry Stokes and American cable company Cablevision, formed the Optus Vision consortium. News Corporation, PBL and Telstra created the rival Foxtel consortium.
Optus reached profitability, and merged with its subsidiary to form Cable and Wireless Optus. C&W Optus was later listed on the Australian Stock Exchange. Cable & Wireless Optus was later taken over in a friendly take over bid by SingTel and is now known as SingTel Optus Pty Ltd.
In the 2003 & 2004 Financial Year, Optus reported a profit of AUD 0 million. This was an improvement of AUD 2 million from the previous year.
4. Potential Future Directions
There are ongoing developments in Australia. This includes fibre networks offered by Telstra and competitors in major cities (eg: east-coast capitals by Powertel, and mid to west-coast capitals by Amcom). Three phone networks provide 3G data connectivity, Telstra via EVDO, and Optus and Vodafone via 3GSM. Wireless networks are provided by Unwired, and iBurst in several cities, and Austar has announced wireless plans for regional areas (and Internode received state government funding for wireless in rural South Australia). The federal government is financially aiding better rural broadband access, including encouraging competition where feasible as these are less profitable areas – with less customers, greater line lengths and a higher ULL wholesale line rental from Telstra, and higher rates from Telstra charges for data connections (backhaul) to the cities.
5. Conclusions and Recommendations
It is common to hear the claim that the Internet is the most significant new communications medium of our times or that ‘the Internet changes all’.
The Internet is not simply a new distribution channel or a new mode of communication. The Internet is a beast of a different kind. It is a communication hybrid: partly an information system where people can go searching for information they seek through the many search engines; but is also a medium where people can create their own content and distribute it widely using the platform of the World Wide Web. The term Internet refers to the plumbing of the system and the World Wide Web is the software platform that facilitates what has come to be termed as ‘global connectivity’. The Internet facilitates sending individual email, or the creation of group electronic directories and online chat groups. It is also a tool for the commercial exchange of goods and services, usually termed electronic commerce, or e-commerce. One of the reasons why it has attracted so much attention in recent years is the extraordinary range of people who access the Net, for different purposes.
Telecommunications has become the world’s fastest growth industry in the past decade. In Australia, telecommunications has exhibited phenomenal growth in the past 25 years or so: in 1977, Telecom Australia was edging towards a billion in total revenue, but by 1991 (as Telstra) it had become a billion profit earner (post-tax) on a revenue base of billion, and by 2000 had an .6 billion revenue company profit (post-tax) of billion. (Annual Reports, Telecom Australia and Telstra). This is an unprecedented corporate growth rate in the history of the Australian economy. In January 1999, Telstra became the first Australian company to reach a market capitalisation of 0 billion—symbolically, BHP, at that time the ‘big Australian’, had a market capitalisation of billion.
These major changes within the service sector of the economy have led to contentious policy debates about whether Australia has an ‘old economy’ still primarily based upon mining, raw materials and secondary manufacturing. In some quarters, especially international financial investors, Australia is perceived to have an economy that has not been ‘modernised’. The push is to build a ‘new economy’ based on a vibrant financial and service sector where telecommunications networks and services become the centrepiece of new forms of economic opportunity and growth. The share market failures of many dot.com companies in recent times do not lead to a valid conclusion that this was an ephemeral phase of industrial change. Telecommunications and information technology remain the enabling technology of our times.
Credit:ivythesis.typepad.com
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