CANBERRA, Australia -- In this sleepy national capital, the issue of open access to high-speed cable systems for Internet service providers is no longer an issue at all.
In a radical fiber-to-the-curb trial, the local water and electricity utility has decided to throw open its high-speed telecommunications system to ISPs. Two are on the system already.
If the system goes to commercial rollout later this year, there'll be room for plenty more, said Robin Eckerman, business manager for TransAct, the cable subsidiary managing the test for Australian Capital Territory Electricity & Water, or ACTEW.
"In fact, we'd like every ISP in Canberra to offer service to customers through our system," Eckerman said. "We'll counsel them and even help them come on."
It's all a far cry from developments in the United States, where cable companies such as AT&T are resisting efforts by cities like Portland, Oregon, to force them to open their high-speed systems to competing ISPs. By pursuing both a radical technical architecture and ground-breaking business model, ACTEW's Canberra trial raises questions about how best to bring broadband to the masses.
The Canberra system uses super-fast fiber-optic cables that come within 300 meters (984 feet) of individual homes. The last stretch is covered by Very High Digital Subscriber Line, or VDSL, a kind of high-capacity, office-style cabling. The layout is known as fiber-to-the-curb. Now serving only 200 homes, by this time next year the system could be rolled out to 90,000 additional homes.
Using the system's switched digital architecture, services such as voice telephony, pay TV, and blindingly fast Internet access can be tailored to individual homes with little or no overall network degradation. That's because each home feeds into a neighborhood-based fiber cable less than 300 meters away -- meaning there's plenty of room for everyone's two-way traffic.
By contrast, hybrid fiber-coaxial cable systems, like those spreading across the United States, suffer from a lower volume "shared capacity" architecture. Under those systems, the demands of each additional user on the system in any particular area slows the through-put to everyone else.
The Australian trial therefore begs a legitimate question: Are the hybrid fiber-coaxial systems in the United States already obsolete?
To Eckerman, it's not quite that simple. US cities already have cable laid to residential homes in many cases, so they're stuck upgrading the existing systems for new data services. By contrast, Canberra was completely bypassed in 1995 when cable-TV companies wired Sydney and Melbourne. That opened the way for ACTEW to build a brand-new system last year with the most advanced architecture it could find.
So far, the company has spent about US$6 million testing its system and estimates it can be rolled out commercially for about $520 per home, not including central equipment or network costs. Even so, fiber-to-the-curb remains very rare, and ACTEW is unsure whether it will be able to find enough content and services to fill a massive 36 megabit-per-second pipe to the home. Cable modems at present can download material at a maximum of 10 mbps.
By aggressively selling access to all comers, TransAct aims to push traffic as hard as it can onto the system. In doing so, it hopes to collect pennies from lots of users rather than premium prices from a few.
With its open business model, ACTEW is selling shovels to gold miners, making money regardless of who strikes gold and who goes home broke in the content area.
Even churn -- the practice of jumping from one ISP to another -- won't be a problem, Eckerman said. Regardless of the ISP, ACTEW will carry the traffic.
To Mark Smeaton, a business development manager with Ozemail, Australia's largest non-telco ISP with more than 300,000 subscribers nationwide, the trial proved the concept of broadband coexistence over high-speed cable systems.
Since November, the company has been cohabiting with few difficulties with local Canberra ISP Spirit Networks.
"Hopefully this is a sign of things to come and shows there's a lesson to be learned, particularly against the conventional wisdom that throwing open the pipe is either too hard or too expensive," Smeaton said.
In the United States, AT&T and its Excite@Home unit aren't so optimistic. Milo Medin, founder and chief technology officer of Excite@Home, has been at pains to point out the technical difficulties of allowing access by multiple ISPs to broadband cable infrastructure. Among other things, he said it would force a revision of the system architecture, slowing deployment.
Matt Wolfrom, spokesman for Excite@Home in Redwood City, California, has only praise for the Canberra system. Anything that extends broadband services into the home is a "rising tide lifting all boats."
But he questioned the economics of splitting infrastructure access services from content and advertising.
"If you are going to recoup your costs through just selling capacity on the pipe, your pricing ability will keep going down and down at the same time as you have to keep upgrading and maintaining the network," he said. "You'll be getting less and less margin, which you'll need to offset either through advertising or passing those new costs on to customers."
