hybrid fibre coax (hfc) -...

BREAKFAST POINT

HYBRID FIBRE COAX (HFC)

PREPARED BY: BRIAN STEVENS DATE: 4th MAY 2015

REVISION: Rev 1.0 PROJECT DOCUMENT: 01-425-01

BREAKFAST POINT | HFC NETWORK REVIEW

DATE | 4 MAY 2015 REVISION | Rev 1.0 COMMERCIAL IN CONFIDENCE PAGE | 2

CONTENTS

1 | EXECUTIVE SUMMARY ................................................................................................................................... 3

1.1 TELSTRA OFFER SUMMARY....................................................................................................................................... 3 1.2 COMPARATIVE TECHNOLOGY DEPLOYMENT COSTS ................................................................................................... 4 1.3 DETERMINATION OF TELSTRA OFFER .......................................................................................................................... 4

1.3.1 The technology offered ................................................................................................................................. 4 1.3.2 The future of the technology offered ............................................................................................................ 4 1.3.3 The cost of deployment ................................................................................................................................. 5 1.3.4 The requirements of Breakfast Point ............................................................................................................ 5

1.4 OPINION ON TELSTRA OFFER .................................................................................................................................... 5

2 | TELSTRA CLARIFICATIONS .............................................................................................................................. 6

3 | TELSTRA OFFER .............................................................................................................................................10

3.1 NOTES ON TELSTRA OFFER ..................................................................................................................................... 10 3.2 BREAKFAST POINT NETWORK .......................................................................................................................... 11

3.2.1 CONC 13A - Plan .......................................................................................................................................... 12 3.2.2 CONC 12A - Plan .......................................................................................................................................... 13 3.2.3 CONC 09A - Plan .......................................................................................................................................... 14 3.2.4 CONC 08A - Plan .......................................................................................................................................... 15 3.2.5 MDU Example – Spyglass Hill ...................................................................................................................... 16

4 | NBN @ BREAKFAST POINT ............................................................................................................................17

4.1 FOXTEL OVER NBN ............................................................................................................................................... 18

5 | APPENDIX A – SUPPORTING INFORMATION..................................................................................................19

5.1 SWISS BROADBAND EXAMPLE SHOWS WAY FORWARD FOR NBN .................................................................................... 19 5.2 NBN HFC COMMITTMENT .................................................................................................................................... 20 5.3 NBN GIGABIT UPGRADE FOR HFC .......................................................................................................................... 21

6 | APPENDIX B – TELSTRA INFORMATION .........................................................................................................23

7 | APPENDIX C - HFC/DOCSIS OVERVIEW ..........................................................................................................25

7.1 WHAT IS HFC? .................................................................................................................................................... 25 7.2 WHAT IS DOCSIS? ............................................................................................................................................ 26

8 | APPENDIX D - ABOUT HOUSLEY ....................................................................................................................27

8.1 ABOUT BRIAN STEVENS ......................................................................................................................................... 27



1 | EXECUTIVE SUMMARY Breakfast Point has received an offer for the reticulation of Cable TV (Foxtel) and Internet services via Hybrid Fibre Coax (HFC) from Telstra that requires commitment to the proposal by 29 May 2015 as well as payment by that date. Housley has been requested to review the proposal and provide an opinion on the merit of the proposal for consideration of the Owners Corporation. There is already HFC servicing some nearby communities (such as Spring Park and Fairwater, which are primarily single dwellings) and some areas of Breakfast Point will be appended to this existing infrastructure. Although there are some NBN services already in the Breakfast Point Precinct, the majority of residents utilise ADSL for broadband access and Satellite for Foxtel services. The NBN rollouts that have occurred in the Breakfast region have only been “Green Fields” sites (ie new developments). There is currently no detail from NBN on any extension of the NBN to “Brown Field” (ie developments already in place) sites in the Breakfast Point Precinct We have been informed that the general requirements of Breakfast Point users are as follows:

1. Increase the speed and reliability of internet access (most residents currently only achieve ADSL1 speeds)

2. Provide the ability to deploy Foxtel HD/iQ3 technology to Breakfast Point Residents (most buildings currently only provide Foxtel via satellite connections and are not currently wired for iQ3 support)

3. Provide 1& 2 in a cost effective manner to Breakfast Point Residents

In compiling this report we have:

Reviewed information provided by Telstra

Sought further information and clarifications from Telstra

Reviewed and recently published information regarding HFC networks

Utilised industry knowledge

Overlaid the requirements with the solution offered

This report contains our review of the information provided and our opinion on the offer presented by Telstra. 1.1 TELSTRA OFFER SUMMARY

Telstra will deploy a HFC (Cable) Network that will enable Breakfast Point Residents to receive internet download speeds of up to 100Mbit/s and have the ability to support Foxtel iQHD over the same network. Telstra’s HFC network can deliver download speeds of up to 100Mbit/s and upload speeds of up to 5Mbit/s. Telstra has produced “offer documents” for all Buildings covered by this offer as well as detailed design drawings for each MDU and Hub distribution area at no cost to Breakfast Point. Telstra will significantly subsidise the construction cost for the new infrastructure and only charge each Strata a small portion of the overall cost of the deployment. The agreed cost per lot (Unit) is $100 (inc GST). This means that for a building with (say) 50 lots, the cost will be $5,000 (inc GST).



The project will proceed provided Telstra receives acceptances from Strata’s representing 70% of the lots covered by the offer. The offer needs to be accepted and paid for by 29th May 2015. The Telstra offer represents a cost of $107,600 for 1076 units (~70% of 1537) or $153,700 for 1537 units in the Telstra plan. Telstra estimate this service will become operational to the Breakfast Point Community by September 2015. 1.2 COMPARATIVE TECHNOLOGY DEPLOYMENT COSTS

We have reviewed the costs previously proposed for “Brown Field” sites (ie sites that have already been developed, rather than those not currently developed) to reticulate Broadband technology and have found that costs ranging from $500 to $3000 are typical per lot. We have also conferred with industry colleagues on this cost and they concur with this figure. They also concur that the $100 per lot cost represents a considerable discount from typical reticulation charges for Broadband technology. Recent anecdotal evidence in regards to the cost of the rewiring of a single building (of some 30 units) to support Foxtel iQ3 via satellite distribution has been charged at some $30K (~$1K per unit). For Breakfast Point with 1537 units (or 1076 being 70% of total) the typical minimal deployment costs for Broadband and Foxtel (iQ3) would be:

1537 Units 1076 Units

Broadband @ $500 per unit $768,500 $538,000

Foxtel IQ3 @ $1000 per unit $1,537,000 $1,076,000

Total $2,307,037 $1,615,076

1.3 DETERMINATION OF TELSTRA OFFER

We considered the following in determining the value provided by the Telstra offer:

The technology offered

The future of the technology offered

The cost of deployment

The requirements of Breakfast Point

1.3.1 The technology offered HFC is a standards based technology and is utilized both in Australia and worldwide for the delivery of broadband services and cable TV services over the same infrastructure. HFC is the only technology available in the Australian market that delivers high-speed internet and traditional Foxtel services. 1.3.2 The future of the technology offered The HFC network will initially deliver speeds of up to 100Mbit/s (down) and 5Mbit/s (up) to residents. There are standards (DOCSIS 3.1) already defined that will increase the internet speeds for download to 10Gbit/s and upload to 1Gbit/s. This standard is also more efficient and delivers up to 50% more data than is possible over current standards (DOCSIS 3.0). The NBN has announced DOCSIS 3.1 as their standard offering and expect to implement this in 2017. This network will transfer to the NBN at some point due to agreements in place between Telstra and NBN.



1.3.3 The cost of deployment The costs to deploy the Telstra HFC solution as significantly subsidised by Telstra, if this subsidisation was not being offered, the cost of an equivalent upgrade (using alternate technologies) would be substantially higher (by a factor of at least 10x). 1.3.4 The requirements of Breakfast Point The deployment of HFC services is the only single technology solution that addresses the requirements of the Breakfast Point community.

1.4 OPINION ON TELSTRA OFFER

Based on the above considerations, the HFC rollout offer provided by Telstra offers not only a cost effective rollout of services in a relatively short timeframe, but addresses the needs as articulated, therefore it is our opinion that the offer should be accepted by the community.



2 | TELSTRA CLARIFICATIONS In undertaking this review we were provided with information from Telstra, however some detail on the solution was not provided. We formulated the questions below and sent these to Telstra for clarification on 29 April 2015 and further clarifications on 30 April 2015. The questions and clarifications are provided below.

1. Confirmation Telstra will be cabling to all units is each building regardless if the individual unit subscribes to the service. Also provide details of the termination in each Unit and what device will be supplied by Telstra for customer interconnection to the network and what sort of costs (eg installation) and devices (including estimated cost) that customers will need to use the HFC network

Telstra Answer: For each of the buildings that will have signed up for the delivery of HFC network within their confines, each apartment or unit will be provided with cable facilities unless otherwise noted on the plan. This is an exception for I believe there is 1 MDU whereby 4 addresses pose difficulties in cabling. So essentially all addresses are to be catered for in a strata building. Cable facilities means that the customer will have connectivity to the network. Once the building is cabled customer connection costs will be in line with the services and products that they wish to purchase. As a part of the campaign to assist sales inside of Breakfast point installation fees, if any, will be waived for a set period. A resident will be under no additional fees associated with standard service installations. Details of termination in each unit is dependent upon the unit itself and the abilities within to place or reuse cable. Where a unit has a satellite feed it is intended that this feed be converted to HFC, internally there should be no changes to the signal outlet point, (no changes internally to the unit). The satellite lateral cable will be switched over to the HFC feed cable. Where a building does not have a satellite distribution Telstra will install the backbone cabling along with lateral cables to the unit boundary point. This is best described as the communal access side if their door. This is called Lateral provisioning, a cable is left looped on the outside of the unit. Upon customer service order this cable will be brought into the apartment and further cabling and wall plate termination will be installed to reach a point desired by the customer and practical for the installation technician. Telstra does not provide a device for customer interconnection as such. Telstra will provide connectivity to the network through a interconnecting wall plate. The devices are based upon the services requested, either a FOXTEL set top box or a Telstra Cable Modem gateway. Customers are not charged for access or utilisation of the HFC network except through their use and payment of a service be it Foxtel or Bigpond, additional charges are not levied due to the customer

utilising a HFC network.

2. How customers with existing Foxtel contracts are able to use this new network and any costs or issues for changing from a standard (non IQ) connection over Satellite to one over HFC.

Telstra Answer: Customers are able to switch to Foxtel Cable from Foxtel satellite at no cost. From our surveys we have identified approximately 554 addresses that do not have cabling for Foxtel services that can be utilised.

3. How customers will be able to the upgrade to Foxtel IQ over the HFC and any limitations and

costs.



Telstra Answer: Transfer to HD Foxtel packages are more expensive than standard Foxtel. The brochure (appendix B) outlines the costs together with the link. These costs and packages do change, To provide services Telstra will have to install extensive cabling throughout the development as well as cabling inside of each building. The costs are associated with all network elements to be installed, street infrastructure, building backbone cabling and lateral cabling for unit connectivity. Even dwellings with existing IQ cabling will require some further cabling, be it backbone and or lateral cabling along with the network components to utilise the HFC network

4. What plans (and the cost) will be offered to customers for

a) Internet Only b) Foxtel Standard Only c) Foxtel IQ Only d) Internet/Foxtel IQ

Telstra Answer: Refer example Brochure (appendix B) for indicative costs.

5. Please include all plan details (including speed, data allowance etc) including all inclusions

and terms and conditions and any limitations.

Telstra Answer: The basic (HFC) speed is 30Mbit/s all Breakfast Point customers will receive the speed boost to 100Mbit/s at no charge (provided they sign a service agreement within 90d days of buildings installation). This is valued at $20 per month. They will receive this as a $20 per month discount on 24 month plan as well as Free installation on 24 month contract for services signed within 90 days on buildings installation.

Example brochure (appendix B) provided, a personalised brochure for Breakfast Point will be prepared

6. Confirmation that DOCSIS 3.0 speeds will be available on day 1

Telstra Answer: Confirmed. It is Telstra standard delivery format on the HFC network nationally for broadband to utilise the DOCISS 3.0 standard.

7. Details on how/when an upgrade to DOCSIS 3.1 speeds will be undertaken and any likely cost

for these speed increases

Telstra Answer: Upgrade to DOCIS 3.1 is not envisaged by Telstra. NBN has selected DOCIS 3.1 as the standard for distribution over a HFC networked owned and managed by NBN. Any transition of HFC network standards from 3.0 to 3.1 and the costs of such will not be the responsibility of a customer. Programming of such a change is dependent upon NBN and their technology mix solution and programming of NBN ready for service dates. Current plans costs for broadband services in a NBN wholesale environment would be dependent upon the services and levels of service requested by the customer. NBN has indicated that they have a 5 or 6 year plan for migration and integration of HFC networks throughout Australia. So in effect NBN may not complete the transition of Breakfast Point up until 2021.

8. I understand interconnection will be to the following Hubs:

CONC-12A

CONC-13A

CONC-09A

CONC-08A

Can you provide details on the number of connections expected on each hub after this HFC implementation



Telstra Answer: CONC08 currently 815 + 74 new. CONC09 currently 611 + 67 new. CONC12 614 new. CONC13 768 new. These numbers are the number of individual addresses that have serviceability from Telstra network they do not represent the number of addresses or services that have an active account. The active account numbers are confidential and I am unable to publish them.

Can you also provide any expected performance (eg throughput/delays) of the HFC network based on the above numbers

Telstra Answer: The numbers above have little relevance to interconnecting speeds as this is managed within our exchange based equipment and is continuously under review to ensure standards and speeds are meet. Telstra performance for the HFC broadband network is kept in line with our customer communications, in that speeds of up 100Mbit/s can be expected except in periods of peak demand.

9. Any other information relevant to our considerations of this proposal.

Telstra Answer: The only other advice I can give is that a reliance upon NBN to deliver a service with performance greater than Fibre to the basement (max speeds of 50 Mbit/s) for residents in Breakfast Point would be in vain. With the HFC solution you will be future proofing the services and offerings available to residents as NBN has indicated a possible upgrade path to 200 Mbit/s services on the HFC network. Even if this does not eventuate a 100 Mbit/s service will be more than sufficient to be of a leading standard.

10. Is there any active equipment in any of the buildings for which power or space will need to be

provided?

Telstra Answer: Where there are amplifiers required in a building a local GPO will be required. The locations as to where these are required will be included on the individual building plans to be submitted for Body Corp sign off. Where a LPS cannot be accommodated due to practical restrictions there may be an option to utilise network powering.

11. When the cutover from satellite to HFC occurs will there be any down time and does the

client need to do anything or will the existing Foxtel box just auto sync now via the HFC?

Telstra Answer: Downtime will be minimal and be only as long as is required for the service technician to carry out the necessary cable installation and or cutover. The time required to register the set top box is small. There will be a requirement for the set top box changeover from satellite to cable if a customer request is made.

12. Does the DOCSIS modem connect to its own coax socket on the wall of does it split from the

Foxtel outlet

Telstra Answer: Connectivity to the Foxtel set top box and the cable modem can either be at different outlets or at the one outlet with an external splitter. The self install kit for cable modems comes with a splitter so that a customer can place the modem at the same outlet as their current service.

13. What is the current DOCSIS model Telstra provides with a service that is ordered

Telstra Answer: (exact Make/Model not provided) but high level specs below provided

Cable 3.0 (HFC)

Ethernet WAN

Wi-Fi 802.11 b/g/n certified®

4x Gigabit Ethernet ports



2x USB

DLNA Certified®



3 | TELSTRA OFFER Telstra has produced “offer documents” for all Buildings covered as well as detailed design drawings for each MDU and Hub distribution area. Telstra will significantly subsidise the construction cost and only charge each Strata a small portion of the overall cost of the deployment. The agreed cost per lot (Unit) is $100 (inc GST). This means that for a building with (say) 50 lots, the cost will be $5,000 (inc GST). The project will proceed provided Telstra receives acceptances from Strata’s representing 70% of the lots covered by the offer. The total number of lots representing this development will need to be confirmed and paid for by 29th May 2015. The Telstra offer represents a cost of $107,600 for 1076 units (~70% of 1537) or $153,700 for 1537 units in the Telstra plan. Telstra estimate this service will be operational to the Breakfast Point Community by September 2015. 3.1 NOTES ON TELSTRA OFFER

The following should be noted regarding the Telstra Offer:

1. Commencement of the works is contingent upon receipt of payment, payable to Telstra 2. The quote is only valid for 30 days from 4 May 2015

3. 1076 Living Units (LU’s) out of a Total of 1537 LU’s must proceed within 30days. 4. Each MDU proposal needs to be signed as approved by each relevant committee or

corporation.

5. The cost of the works is like all capital works programs it is not fixed and work may be discovered outside original scope of works. If any difference or variation of the proposed work is discovered during construction and works cannot be completed, a redesign or resurvey is required. The Body Corporate / Owners Corporation / Developer will be advised and a re-quote may be submitted.

6. The quotation assumes the availability of existing underground telephony pit and pipe infrastructure that is in good condition at time of Telstra Cable Network construction.

7. Clearance and/or repair of blocked or damaged conduit may incur additional charges and variation to the final price.

8. Cable reticulation will be via underground telephony pipe, cable trays and riser shafts within

development. Quotation assumes that there will be existing useable and allocated space on cable trays, installed by developer. There will be allocated space within riser shafts and cupboards for HFC cable and devices.

9. Telstra will not charge the Body Corporate for any of the costs of operating and maintaining

the HFC Cabling under this Agreement, unless the HFC Cabling is damaged due to an act or omission of the Body Corporate (including its affiliates, employees, agents or contractors).

10. Telstra will install, operate and maintain the HFC Cabling in accordance with Telstra’s

standard procedures. Telstra will give the Body Corporate reasonable notice of proposed works at the Property, and the Body Corporate waives any statutory requirement for Telstra to give any such notice.



11. Telstra will endeavour to minimise damage to the Property as a consequence of installation

or removal of the HFC Cabling, and the Body Corporate agrees that Telstra shall not be liable for damage to the Property which is a usual consequence of installation or removal.

12. The Body Corporate must:

a) Provide Telstra with safe access to the Property for the purposes of installing, operating, removing, maintaining, inspecting and testing the HFC Cabling and the use of the HFC Cabling;

b) Comply with all reasonable directions of Telstra in relation to the HFC Cabling; c) Ensure that no damage is done to the HFC Cabling or that it is in any way interfered with by any

person; and d) meet the costs of supplying electricity needed to power any equipment which may be included in

the HFC Cabling.

13. The initial term of the Agreement shall be 20 years from the date of signature, or until

Telstra ceases to operate the HFC Network, whichever is the earlier. This Agreement shall continue in effect after the initial term unless terminated by either party on 6 months prior notice.

3.2 BREAKFAST POINT NETWORK

In the Telstra proposal not all units will be connected the same hub. It is proposed that 4 Hubs service the community, there are designated

CONC-12A

CONC-13A

CONC-09A

CONC-08A

An approximation of the service area of each of the 4 hubs is shown below.

The above information is based on Telstra drawings and is an approximation only and provided for informational purposes only.



3.2.1 CONC 13A - Plan Telstra have provided the following information on the proposed network for Breakfast Point for the Hub CONC-13A



3.2.5 MDU Example – Spyglass Hill Telstra have supplied proposed construction drawings for all properties covered in their offer, below illustrates the plan for Spyglass Hill, which will attach some 79 units to Hub CONC-12A



4 | NBN @ BREAKFAST POINT There are currently NBN rollouts occurring in the region, however these are only to “Green Fields” sites (ie new developments). There is currently no detail from NBN on any extension of the NBN to “Brown Field” (ie developments already in place) sites in the region. Below shows current NBN in the Breakfast Point area of interest (for illustration and information purposes only).

Source: NBN Website (4 May 2015)



The following information was obtained from the NBN website on 4 May 2015 regarding rollouts to the Breakfast Point region. As can be seen all rollouts are to Green Field (GF) locations.

4.1 FOXTEL OVER NBN

At the present time the traditional Foxtel service (ie Foxtel box connected to subscribers TV) is not available over NBN Fibre to the Home (FTTH) or Fibre to the Node (FTTN) technology. There are however, a number of services that can provide partial “Foxtel Content” that can be delivered as “streaming services” over NBN infrastructure, these are however not directly comparable with the traditional delivery of Foxtel content to traditional devices for the consumption of this content. The only broadband infrastructure technology that also delivers traditional Foxtel services is HFC. We are not aware any plans for Traditional Foxtel services to be delivered over NBN FTTH or FTTN technology.



5 | APPENDIX A – SUPPORTING INFORMATION The following information has been reviewed to assist in forming our opinion of the Telstra HFC Offer. 5.1 SWISS BROADBAND EXAMPLE SHOWS WAY FORWARD FOR NBN

Source: David Kennedy The Australian (March 31, 2015)

NBN Co’s recent announcement of a vendor for its hybrid-fibre-coaxial cable network upgrade brought predictable criticism it was adopting a second-rate technology. Far from being second rate, HFC has a bright future as a high-speed broadband technology. That much ought to be obvious from HFC’s dominance of the broadband market in the US, and its ability to hold its own in fibre-rich markets such as South Korea. Nor are HFC operators sitting still. Recent advances in technology mean HFC can support download speeds of up to 500Mbps, and more symmetric upload-download speeds. Cable operators are offering up to 250Mbps speeds. These facts have been rammed home by the recent visit to Australia of Klaus Liechti, project director for Swisscom’s high-speed broadband rollout in Switzerland. Switzerland leads broadband development measures in Europe. One thing it has done right is to allow broadband competition between Swisscom, the telco incumbent, and the HFC cable broadband industry. It is clear Swisscom regards HFC as serious competition. This competition led Swisscom to launch fibre to the premises in 2008. But by 2011 it was clear the extensive civil works needed to roll out FTTP were too slow. HFC broadband was going to reach key suburban and rural areas long before Swisscom, threatening Swisscom’s position in those markets. In response, Swisscom decided to introduce a range of hybrid fibre-copper technologies to deliver faster broadband in these areas. Swisscom’s network now includes many of the technologies being considered by the National Broadband Network: fibre to the node, fibre to the street and vectoring (a technology that reduces interference and increases speed on copper cables). The costs are lower, but the biggest benefit of these technologies is faster rollout. Slow rollout delays the benefits of fast broadband. The high cost of delays was one of the key findings of the 2014 Vertigan review’s cost-benefit analysis of the NBN. The analysis found for any reasonable discount rate the benefits of a national FTTH network were outweighed by the costs of its slower rollout. From a technical perspective, rolling out fibre to the premises everywhere is best. But telcos and policymakers need more than just technical performance. They must achieve the benefits of fast broadband at the lowest possible cost and with the least delay. Those are economic, not engineering, considerations and that is why FTTH can’t be the right choice everywhere in Australia. Finally, the Swiss example shows the importance of competition between HFC, FTTH and other providers. NBN Co’s monopoly structure restricts this right now. That is why the Vertigan review recommended the ultimate disaggregation of the NBN Co into competing companies. The taxpayer investment in the NBN will deliver the greatest benefits once it delivers genuine competition into the market. David Kennedy is research director at Ovum, a telecoms and media advisory and consulting company. He was a consultant to the Vertigan review.



5.2 NBN HFC COMMITTMENT

Source: Dennis Steiger Chief Technology Officer at NBN Co (23 February 2015) NBN Co has sealed a key deal with US technology firm Arris which will help us launch HFC services by year-end This latest deal is a key stepping stone towards our delivery of world-class broadband on our HFC network – and we can’t wait to work with the team at Arris to deliver great services to Australia. Under the deal, Arris will supply us with the all-important Cable Modem Termination Systems (CMTS) – consider these the engines of the network – as well as other important network technology, and their extensive HFC network deployment expertise. Arris is a world leader in the HFC broadband space and supplies its technology to major cable operators including the likes of Comcast in US, SK Broadband in South Korea and a number of big operators across the European market. One thing I would like to make crystal clear is that we are putting very considerable resources towards building a substantially upgraded HFC network for the NBN. The best way to describe what we are doing is that while we are re-using the valuable last-mile infrastructure on the Telstra and Optus networks we are actually putting a lot more capacity into the network and taking it to a new level. The key to this will be the state-of-the-art CMTS that we will be getting from Arris that will be deployed on the network and which will act as new and much more powerful engines – kind of like upgrading from a four-cylinder to a new eight-cylinder engine. I know that there has been a lot of conjecture these last couple of years about all the different broadband technologies available in the marketplace and the pros and cons of each one. We don’t need to get back into that debate today but here is what I can say with a lot of confidence; HFC is a world class, competitive broadband technology solution that is being used all around the world to deliver top class broadband services to consumers and it can do the same in Australia for many years to come. Even using current generation Docsis 3.0 technology we are seeing cable operators around the world pushing the boundaries beyond what a few years ago seemed impossible – we are seeing operators pushing towards 1Gbps in some markets – and Docsis 3.1 will take us to the era of global Gigabit cable. One of the great things about the HFC networks we have purchased from Optus and Telstra is that they provide us ready-built lead-ins to almost 2 million properties saving us a huge amount of time and money. This means we can bring world-class broadband to several million Australian homes in the HFC footprint faster and at a substantially lower cost than alternate technologies. Now we are lucky enough to have them on board Arris is going to help us build a new, world-class HFC network here in Australia and help us get towards our goal of having 8 million homes on the NBN by 2020.



5.3 NBN GIGABIT UPGRADE FOR HFC

Source: Rohan Pearce Computerworld (13 March, 2015) DOCSIS 3.1 standard to be rolled out for HFC networks acquired from Telstra and Optus NBN Co has confirmed it will roll out the DOCSIS 3.1 standard for the Hybrid Fibre Coaxial (HFC) cable broadband networks it is acquiring from Telstra and Optus. The announcement was made overnight by NBN Co's CTO, Dennis Steiger, at Cable Congress 2015 in Brussels, and comes on the heels of announced yesterday. The standard supports speeds of up to 10 gigabits per second down and 1Gbps up and can handle data more efficiently than existing cable networks, according to NBN Co. A statement issued by Communications Minister Malcolm Turnbull said that households with HFC NBN connections will be able to access 1Gbps/100Mbps speeds when the standard is rolled out. The rollout of DOCSIS 3.1 will begin in 2017. "NBN will utilise a network that is already deployed across millions of homes and businesses in Australia," Steiger said in a statement. "By re-architecting the ratio of homes to a node and the use of the latest technology underpinning DOCSIS 3.1, Australia’s HFC network will become one of the most state-of-the-art technologies used to deploy broadband services. "Effectively, this technology has the potential to offer speeds equivalent to what’s on offer by full fibre to the premises and up to 100 times faster (up to 10Gbps) than what is currently provided by today’s HFC network." NBN Co has previously confirmed it would upgrade to DOCSIS 3.0 the HFC networks it will progressively take possession of in deals it signed with Telstra and Optus last year. NBN Co has already signed a contract with ARRIS to provide equipment for the HFC component of the NBN. NBN Co CEO Bill Morrow earlier this year talked up the potential for gigabit speeds over HFC. "The fact that we're going to be able to do this with our HFC network the fact that that HFC network is a far lower maintenance element than any of the other metallic-based, copper delivery services is good news for the consumer," the CEO said. "The fact that we're getting this asset virtually for free from these two carriers means that that cost per premises element on this super-high-speed, easy to maintain, good product is going to be good for the taxpayer. The initial commercial release of HFC services on the NBN is slated for Q1 2016, according to the January 2015 edition of NBN Co's product roadmap. NBN Co 'Technology Choice Program NBN Co today revealed details of its program to allow individuals and communities to pay for an upgrade to the type of technology used to hook them up to the National Broadband Network. The program will allow, for example, premises to be upgraded from a fibre-to-the-node rollout to fibre-to-the-premises. The 'Technology Choice Program' has two components: 'Area Switch' for communities or individual apartment blocks and 'Individual Premises Switch' for individual households and businesses. "The cost to change technology for Area Switch can range from tens of thousands of dollars to several millions of dollars," according to NBN Co.



"The cost for Individual Premises Switch can range from a few thousand dollars to tens of thousands of dollars. The cost generally depends upon the size and complexity of the project. As various factors will impact on the final cost to move to an alternate technology, NBN Co will assess every application individually so that these various factors can be taken into account and so that it can provide applicants with a high level cost estimate. An application fee is payable to procure the cost estimate."



6 | APPENDIX B – TELSTRA INFORMATION



7 | APPENDIX C - HFC/DOCSIS OVERVIEW

7.1 WHAT IS HFC?

Hybrid fibre-coaxial (HFC) is a type of broadband network that combines optical fibre and coaxial cable. It has been commonly employed globally by cable television operators since the early 1990s. In a HFC System, the television channels are sent from the cable system's distribution facility to local communities through optical fibre trunklines. At the local community a box called an “optical node” translates the signal from a light beam to a radio signal, and sends it over coaxial cable lines which are connected individual residences or units in a Multi Dwelling Unit (MDU). As shown below.

The fibre optic network extends from the cable operators' master headend, sometimes to regional headends, and out to a hubsite, and finally to a coaxial cable node which serves anywhere from 25 to 2000 homes. A master headend will usually have satellite dishes for reception of distant video signals as well as IP aggregation routers. Some master headends also house telephony equipment for providing telecommunications services to the community. This optical transmitter converts the electrical signal to a downstream optically modulated signal that is sent to the nodes. Fibre optic cables connect the headend or hub to optical nodes in a point-to-point or star topology, or in some cases, in a protected ring topology. The coaxial portion of the network connects 25–2000 homes (500 is typical) in a tree-and-branch configuration off of the node. RF amplifiers are used at intervals to overcome cable attenuation and passive losses of the electrical signals caused by splitting or "tapping" the coaxial cable. Trunk coaxial cables are connected to the optical node and form a coaxial backbone to which smaller distribution cables connect. Trunk cables also carry AC power which is added to the cable line at usually either 60 or 90 V by a power supply and a power inserter. The power is added to the cable line so that optical nodes, trunk and distribution amplifiers do not need an individual, external power source. From the trunk cables, smaller distribution cables are connected to a port of the trunk amplifier to carry the RF signal and the AC power down individual streets. If needed, line extenders, which are



smaller distribution amplifiers, boost the signals to keep the power of the television signal at a level that the TV can accept. The distribution line is then "tapped" into and used to connect the individual drops to customer homes. These taps pass the RF signal and block the AC power unless there are telephony devices that need the back-up power reliability provided by the coax power system. The tap terminates into a small coaxial drop using a standard screw type connector known as an “F” connector. The drop is then connected to the house where a ground block protects the system from stray voltages. Depending on the design of the network, the signal can then be passed through a splitter to multiple TVs. If too many splitters are used to connect multiple TVs, the signal levels will decrease, and picture quality on analog channels of TVs past those splitters will go down requiring the use of a "drop" or "house" amplifier, or more crudely, multiple drops to the same building. The HFC network is typically operated bi-directionally, meaning that signals are carried in both directions on the same network from the headend/hub office to the home, and from the home to the headend/hub office. The forward-path or downstream signals carry information from the headend/hub office to the home, such as video content, voice and internet data. 7.2 WHAT IS DOCSIS?

Data Over Cable Service Interface Specification (DOCSIS) is an international telecommunications standard that permits the addition of high-bandwidth data transfer to a cable TV system. It is employed by many cable television operators to provide Internet access over their HFC infrastructure.

DOCSIS 1.0 - Released March 1997

DOCSIS 1.1 - Released April 1999, the specification standardized quality of service (QoS) mechanisms that were outlined in DOCSIS 1.0

DOCSIS 2.0 - Released December 2001, DOCSIS was revised to enhance upstream transmission bandwidth. This was due to increased demand for symmetric services such as IP telephony.

DOCSIS 3.0 - Released August 2006, the specification was revised to significantly increase transmission bandwidth

DOCSIS 3.1 - Released October 2013, plans support capacities of at least 10 Gbit/s downstream and 1 Gbit/s upstream using 4096 QAM.

Cross-version compatibility has been maintained across all versions of DOCSIS, with the devices falling back to the highest supported version in common between both endpoints: cable modem and cable modem termination system (CMTS). For example, if one has a cable modem that only supports DOCSIS 1.0, and the system is running 2.0, the connection will be established at DOCSIS 1.0 bandwidths.



8 | APPENDIX D - ABOUT HOUSLEY Housley is a name synonymous with the Australian Telecoms market, and for 42 years Housley has provided Consulting services in the Asia Pacific region. Housley Consulting is Australia’s longest established, vendor and service provider independent ICT consultancy. During 42 years of operation we have undertaken projects for the majority of this country’s major private sector organisations and Government Departments. Over this period our engagements have earned Housley the reputation for quality services and supplier independence. A reputation of which we are very proud and diligently protect.

In 2014 we introduced our new branding that describes to our clients exactly what we do and what they should expect from us; results in telecommunications cost reduction - TeleResult

Housley specialise in independent Technology and Telecommunications consulting, including data, voice, image, and video. We are not allied with any vendors or service providers therefore we are in a position to provide unbiased and objective advice to our clients. Housley’s primary business is in assisting large corporate and Government organisations achieve savings through the appropriate use of telecommunications services for the benefit of that organisation. We work at both the tactical and strategic level and have assisted many organisations rationalise and reorganise their telecommunications environment.

Housley Consulting covers a wide variety of disciplines including:

Telecommunications Audits and Reviews

Telecommunications Billing Analysis

Strategic Planning

Data and Voice Network Reviews

Tender Preparation and Evaluation

Communications Solutions and Architectures

Call Centre Review, Design and Strategy

Regional Telco Strategy and Development

Project Management Having provided services to more than 2,000 clients throughout Australia, Housley is a recognised market leader in all spheres of Telecoms consultancy. Housley Consulting is able to provide services that cover the complete development cycle of communications systems, from the establishment of user needs and business objectives to design, integration, implementation and management. 8.1 ABOUT BRIAN STEVENS Brian has almost forty years of experience in the Telecommunications sector, and has over 17 years experience as a Telecommunications Consultant. He has previously worked for a Telecoms Carrier, a Telecoms Equipment Manufacturer and has led over 500 telecoms consulting engagements. This broad range of experience in the telecoms industry has provided him with a unique perspective which he brings to each project. Brian Stevens has been involved in the design and implementation of some of Australia’s largest voice and data networks. He has worked extensively with large government departments and large corporate organisations.



Brian has various technical qualifications as well as qualifications in Industrial Management from and a Masters degree in Business and Technology (MBT) from the University of NSW. Providing direction and management from strategy and system concept, to operational acceptance of multi-discipline telecommunications projects, and their subsequent operational management issues, are some of the key skills Brian Stevens brings to a project. He has had articles published and has presented at seminars, such as Interop in the USA, where he presented a paper on the International take up of Frame Relay Technology, and has served on International bodies/committees such as the Frame Relay Forum Marketing and Technical Committees and Government Working Groups in Australia such as Austel WG2/2 and WG3/2. In 1997, Brian released his first book, entitled "Going Global". Going Global is a practical guide to assist Australian IT companies achieve success in international markets. Brian has worked extensively in the area of regional telecommunications deployment and has led six (6) projects across NSW that reviewed the costs and opportunities to reticulate new broadband services to specific areas of NSW. Since 1997, Brian has been the Practice Director of Housley Consulting.

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