BuddeBlog

With countries like Australia and New Zealand implementing infrastructure that can deliver 100Mb/s for their next generation broadband – and with most Europeans not too far behind this – it is quite shocking to see that the $7.2 billion economic stimulus package in the USA (under the RUS Broadband Initiatives Program (BIP) and the NTIA Broadband Technology Opportunities Program (BTOP)) requires nothing more than 768 kilobits per second (kb/s) downstream and 200 kb/s upstream.

I am sure that some of you will think that I have misread this but, no, that is indeed the case.

In 2003 Hong Kong decided not to classify as broadband any service that didn’t provide 2Mb/s!

The sad part of the story is that, as this money will mainly be deployed in rural America, this guarantees an enormous digital divide in the USA. AT&T and Verizon already offer FttH services in some of the more affluent suburbs, and they are currently extending these services guaranteeing a progressive increase in the quality of broadband services provided to these markets; however, for the foreseeable future there is little hope of seeing such service quality increase (speed) beyond the major cities.

Google’s Vint Cerf comment is lethal:

The definition of broadband sucks so badly we should use it to sequester carbon dioxide.

With little government leadership it will now depend on the competitive process of the allocations of funds to see if there are some good, willing providers who will offer a better service for the same money they receive from the funds. This might happen in the upper end of the target areas but those communities further down the list might be stuck for a decade or longer with what can only be described as one of the worst broadband services available anywhere in the world.

My colleague Susan Estrada, on her blog (demandbroadband.blogspot.com), made further mention:

Cost-effectiveness for the BTOP local loop projects is based on the ratio of the total cost of the project to households passed. That just seems dumb. Lots of cities with urban density will be very happy to see that.

For some unknown reason it is not seen as one single infrastructure project and this is beyond the understanding of most people in the industry. The plan places artificial breaks between last mile, middle mile, public computing and innovative programs. This makes the production of integrated programs, which the Department of Commerce says it wants to see implemented, very difficult.

Susan comments on this as follows:

The money chunks (available funds) are oddly constructed. It’s not very clear why. The BIPpers have made all of their $2.4B available, chunked out as $1.2B for last mile projects — remote or non-remote areas. Middle mile projects are allotted $.8B. The BTOPers set aside $1.6B in this round out of their $4.3B.  $1.2B goes to infrastructure but only $50M to public computer centers and $150M to sustainable broadband adoption in this round.  Kinda cheesy.

But the bad news doesn’t end there. The documentation of underserved by census block is totally inadequate and is going to cause endless discussions and delays.

Susan:

Underserved and unserved definitions require more study and a deep knowledge of Census blocks, last calculated in 2000. There is also a strange and weird condition of funding where, after an organization has jumped through all the stage 1 and 2 hoops, the BIPpers and BTOPers will post their planned awards so the masses can object to funding if there is already service in the area awarded. This needs much further cogitation and I can see a potential of some very bad outcomes due to this rule.

On the more positive side – because of certain other parts in the rules – there are indications that most of the RUS & BTOP money could be going to fibre deployments, and this would provide higher speed services, despite the low requirements. With the government paying for most of the build the carriers hopefully will in general choose fibre (for landlines) and more than 3Mb/s for wireless. The real exception would be in poor areas.

The extremely low speed the policies have prescribed is a way of ensuring that there will be very limited exceptions, thus avoiding the politics.

So far, however, our interpretation, and the comments that I have received from my American colleagues, raises very serious concerns, and represents a massive setback for the deployment of broadband in regional and rural America.

Paul Budde

See also:

• USA - Broadband Market - Fibre to the Home (FttH) Overview, Statistics & Forecasts
• USA - Broadband Market - Cable modem & DSL - Analysis, Statistics & Forecasts
• USA - Telecommunications - Key Statistics
• USA - Telecoms, Wireless & Broadband - Overview & Analysis 2008-2009
• USA - Telecoms, Wireless, Broadband and Forecasts
• Australia - National Broadband Network - Overview & Analysis
• Australia - National Broadband Network - Critical Considerations
• Global Next Generation Telecoms - FttH and Trans-Sector Strategies
• Global Recovery will Depend on Trans-Sector Vision

A new Netherlands Ambassador was recently appointed to Australia.

I met His Excellency Willem Andreae a couple of months ago at a reception to welcome him. He told me that the project that is most important to him is the construction of a new Dutch Embassy in Canberra.

And his goal is nothing less than to build the world’s first smart embassy!

This includes various ‘green’ and ‘smart’ aspects – from design to materials used, production of the raw materials, climate control, daylight, acoustics, temperature, ventilation, lifespan of the building, trees on the site and water usage.

The aim is to be 100% carbon neutral.

The architecture of the building is stunning. It is a round structure with an atrium in the middle and a ‘sun mill’– a sun panel that moves with the sun – on the roof, similar to the Dutch windmills that were turned according to the direction of the wind.

The building will also use thermal energy.

But the vision of the Dutch government goes beyond the actual building. They also want to use this project to bridge the distance between the two countries, to make it a joint venture. It was designed in the Netherlands but will be built by Australians, with local expertise and materials.

The Netherlands will also use this to position themselves for the future. There is a rich history between the two countries but here the focus is on the future. It is envisaged that experts and companies from both countries will use the opportunity to build research, expertise and commercial bridges. There was an open invitation from the ambassador for others to become involved with ideas, suggestions and participation in the project.

Of course, when he mentioned this project to me I immediately saw a connection with the other smart activities that are happening in Australia. I thought of the trans-sector potential that this project offers, particularly in relation to other ‘smarts’ such as telecoms (connected to the National broadband Network), smart grids, and other communications and IT smarts. So I suggested organising a meeting at the embassy with industry representatives to develop this further.

It was a very successful meeting, and further follow-ups have already been planned. It clearly spoke to the industry imagination and fitted in nicely with the many activities that are currently underway in Australia, from both the government and the industry. Some of the obvious links that can be established are with the TransAct broadband network, ACTEWAGL’s smart grid and the proposed sun farm in Canberra. Both the ACT government and the universities can be involved in various studies, promotions and other activities. E-health was also addressed. A study project looking at the current work situation of embassy staff and comparing it with the situation in the new embassy at a later date could show if smart buildings also make for happy people.

It will be fascinating to see how all these different elements will come together in this project, delivering one truly integrated end result. The aim for completion is late 2010.

The embassy is currently developing a website where it will present its plan, and where progress reports will be published. They will have blogs about the many aspects of the building and they hope to engage students and other interested parties to discuss and debate the pros and cons as the building progresses.

I envisage that this could become a highly visible demonstration of a smart building project; it will enable the broader industry to show how a ‘green’ and ‘smart’ trans-sector approach can work. Presentations of this project – in both Australia and the Netherlands – will certainly also feature in some of the industry conferences covering various smart areas in relation to planning and architecture, energy and sustainability, communications and IT, and this would highlight the capabilities of those involved in the project in both countries.

Paul Budde

See also:

• Netherlands
• Smart Cities, Buildings & Communities
• Smart Grids - Energy & Environmental Issues
• Smart Grids - Grid IT - Where Energy Meets Comms
• Smart Grids and the Communications Revolution
• Australia - Smart Grids - Climate Change and Photovoltaics
• Australia - National Broadband Network - Overview & Analysis
• Australia - National Broadband Network - Critical Considerations
• Global Next Generation Telecoms - FttH and Trans-Sector Strategies
• Global Recovery will Depend on Trans-Sector Vision

Indonesia has built a substantial telecom sector, providing a solid platform for further growth despite the occasional serious setback. This country of around 250 million people presents a huge potential market; however, it faces some particularly big challenges that need to be confronted if it is to successfully continue the building of the telecommunications infrastructure needed to support what is a uniquely complex geography. At the same time, there is no avoiding the fact that Indonesia must also deal with a range of social, political and economic issues that have been proving problematic. 

The Asian economic crisis of the late 1990s saw the government’s efforts to reshape the telecom industry take on a new impetus. Prior to this the government had certainly been addressing the issues and working towards a more competitive market, but progress had been slow. In the last decade or so the reform process has accelerated; over the same period Indonesia has been experiencing healthy sustained growth in subscriber numbers and revenues. 

While fixed-line teledensity remained disconcertingly low for a number of years, a recent upturn has delivered much better outcomes (over 12% fixed-line penetration by early 2009), thanks largely to the advent of fixed wireless services. These services have boosted the growth rate in the last few years and provided much-needed basic telephone services to previously unserved communities. The roll-out of fixed wireless infrastructure has been given good support by the operators with Bakrie Telecom and PT Telkom leading the way. Although the published statistics have been somewhat imprecise, by end-2008 fixed wireless services made up about two thirds of the total fixed-line subscriber base. 

Meanwhile, Indonesia’s mobile market continues to grow, expanding at an annual rate of close to 50% into 2009. The total mobile subscriber base had passed 130 million by January 2009, up from 12 million just six years earlier. With the country’s mobile penetration suddenly approaching 55%, the industry view is that there remains considerable potential for further growth and the operators have been scrambling to meet the anticipated demand. 

Furthermore, market interest has started to focus on the 3G services already being offered by five operators. While 3G subscribers comprised only around 7% of the national subscriber base by early 2009, the potential of 3G to boost ARPU was not lost on the operators and competition was starting to heat up on the 3G front. Telkomsel is indeed making its presence felt in this market segment, claiming about 72% of the nine million 3G subscribers at end-2008. 

The number of Internet users in Indonesia was estimated at just over 30 million by early 2009, representing a relatively low overall penetration of 12%; at the same time, the Internet subscription market was generally depressed with less than 5 million subscribers. Broadband Internet access was virtually non-existent, with broadband subscriptions running at around 15% of the total Internet subscriber base. While the government continues to promote greater use of online services, these efforts appear to be having only limited impact on the take up rate of the various Internet services on offer. 

In a move that some observers feel could have a negative impact on investment in the country’s telecom sector, Indonesia’s competition watchdog, the KPPU, announced in 2007 that there was evidence of cross-ownership of Indosat and Telkomsel that was violating the country’s anti-monopoly laws. The KPPU alleged that the cross-ownership by Singapore’s state-owned holding company Temasek in two of Indonesia’s mobile operators violated the 1999 anti-monopoly law.

At the time, Temasek owned a 56% stake in Singapore Telecom, which had a 35% stake in PT Telkomsel. Temasek’s wholly-owned Singapore Technologies Telemedia controlled 75% of Asia Mobile Holdings, a company that owned 40% of PT Indosat. Together, PT Telkomsel and PT Indosat controlled more than 80% of the domestic mobile market. The issue subsequently underwent a process of resolution by the courts. In June 2008, the parties were waiting on a decision by the Supreme Court, after Temasek appealed a lower court’s adverse ruling. The Indonesian Supreme Court threw out the appeal in September 2008. 

Key highlights:

• Indonesia’s mobile market passed 130 million subscribers in early 2009 with penetration running at 55%.
• After more than seven straight years of strong growth, the annual increase in mobile subscribers was almost 50%.
• Indonesia’s 3G market was still in its infancy three years after launch, with 3G subscribers representing only about 7% of the total mobile subscriber base.
• Mobile market leader Telkomsel has made a big impact on the still small 3G market with 72% of the nine million subscribers coming into 2009.
• Internet penetration remains low (12% user penetration by end-2008) and Internet subscription rates are considerably lower.
• Broadband Internet access numbers in Indonesia are starting to grow, but penetration remains exceedingly low (0.2%).
• DSL remains the dominant broadband platform with about 95% of the broadband subscriptions. 

BuddeComm’s Annual Publication Indonesia - Telecoms, Mobile, Broadband and Forecasts provides a comprehensive overview of the trends and developments in the telecommunications and converging media markets in Indonesia.

For more information see: Indonesia - Telecoms, Mobile, Broadband and Forecasts