Saturday, 16 March 2013

Don't forget that power-hungry copper

A small debate on Twitter tonight prompted discussions on the relative power consumption of the ALP's FTTH NBN and the Liberal's proposed FTTN model.  My initial thoughts were this was a do-able comparison, but certianly wasn't as simple as some make out.  The most common argument from the FTTH mob is that the local distribution cabinets use a passive splitter technology (PON - passive optical network), and so don't need power, whereas the FTTN cabinets do.  Of course, with FTTH, you still need to convert the optical signal to an electrical signal at the customer's premise, which isn't needed under FTTN.

A big thanks to Tristan (@blondgecko) who posted this link (Baliga, 2011), which is an academic paper comparing the relative power usage of different broadband network topologies

Hungry, Hungry Copper

As you could probably guess, copper is a hungry beast, and the FTTN network topology uses twice the power that FTTH uses.

To put monetary figures on it, in a per person rate, FTTN uses a whole 14W of power compared to only 7W for FTTP.  That might not sound like much, but remember that these systems tend to run 24 hrs a day, 7 days a week etc etc etc.

Do the sums, and the total dollar value of the difference in electricity usage is $12 per household.  Per year.  Certainly doesn't sound like much, but electricity prices have had a habit of increasing at a considerable rate in recent years.

With a 10% increase in power prices a year, over 25 yrs (life of fibre) gives a value of $737 per house in 2013 dollars for the extra power used by a FTTN system over the next 25 years. 
Table 1: Annual per household power cost difference between FTTN and FTTH

Compared to a perhouse cost of approximately $4000, this is a significant extra cost, but this is also not a particularly well-refined model.  While power prices are currently increasing at a high rate, that's no reason to suspect that they will continue doing so for the next 25 years.  Already we are seeing alternative power sources becoming more competitive with fossil fuels, so assuming that after another ten years, the average price increase in power is closer ot the CPI, at 3%, and the total cost difference reduces to a smidge under $500.

One further refinement is to remove the costs of power that the user pays, not the NBN (remembering that we are comparing costs between the two opposing models here).  According to Baliga, at least 65% of the power costs are borne by the final user, which leaves 35% of the $500, or about $175 difference in power costs to NBNco over 25 years.

What does this mean in practical terms?  To get best value for money for the taxpayer, if it is going to cost less than $175 to install fibre from the node to the premise then its a no brainer.  If the copper is still in good nick, and the fibre will cost more than $175 to install, stick with the copper and wear the cost of th extra electricity.

It also means that the government's (and Turnbull's) original FTTN plan, which was going to cost $4.7B, is still quite a bit cheaper than the new and improved FTTP NBN plan, even with power costs factored in.

Where to from here?

If nothing else, I hope this shows that any real economic comparison of the two models is quite complex, and simply yelling that one technology is somehow 'better' than another isn't going to change anybody's mind.

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