NBN Co should open up its networks to others

August 27th, 2015, by

I strongly support NBN Co plan to allow retailers to buy telecoms services directly from the company.

Telecommunications has gone way beyond the traditional services of telephone calls, internet access and so on. It has become the digital infrastructure for the new economy, an economy that is far more reliant on a smart use of ICT. This includes Gigabit fibre infrastructure, cloud computing, big data, data centres, data analytics, IoT and M2M. The importance of the networked economy goes way beyond the interest of the traditional telecoms industry alone.

The ACCC made a very serious mistake when it gave in to the lobbying of the big telcos to increase the number of POIs (points of interconnect to the NBN) from 4 to 121. By allowing this to happen the ACCC shut the door on anyone other than the big telcos using the NBN for their specific digital services. In other words to deliver national services organisations such Woolworths, Australia Post, Google, Myer and Medicare would have to build their own connections to these POIs in order to deliver digital services to their customers. None of them would be able to build a network to all of those 121 points, and they are forced to use the telcos as the middlemen to get access to this new digital infrastructure. Such has been the result of the clever lobbying carried out by the big telcos back in 2010.

People like me successfully fought hard to at least give public utilities, including healthcare and education, an option to negotiate directly with NBN Co, as this major national investment was made for the social and economic benefit of the country and not just for the benefit of the telecoms industry.

With a utilities-based facility also in place for others – as has now been suggested by NBN Co – wholesale access to the NBN would become a viable option for all who want to utilise the digital economy in the most efficient and effective way; and it would be up to the telcos to come up with real value-added services to entice those other companies and sectors to utilise their services instead of going directly to NBN Co.

The way Telstra is providing services to the healthcare sector is a good example of adding value-add to basic wholesale access.

So I am all in favour of NBN Co rectifying the mistake the ACCC made, and I support its plan to link the POIs together itself in order to better facilitate the potential for opening up the digital networked economy to all. In the end NBN Co still only provides a wholesale service, but we should leave it up to the organisations who depend on the digital economy to make their own decisions about whether they want to go directly to NBN Co for wholesale access or utilise the intermediate (and value-added) services offered by the telcos.

Such a regime, with more open access, would also greatly stimulate competition and innovation.

Paul Budde

See also:

Australia – National Broadband Network – Developments and Analyses 2015

Australia – Fixed Broadband Market – Insights, Statistics and Analysis

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The need for smart infrastructure policies

August 27th, 2015, by

Ever since the beginning, around 2005, of the discussion on what is now the NBN BuddeComm has been suggesting to the government that it embed in these discussions and consequent policies the fact that this is not just another telecoms network to download movies, but a totally smart, but equally physical, infrastructure that can service a range of sectors such as e-commerce, the sharing economy, healthcare and education.

The previous government shared that vision and for example started to look at how the NBN could be used in the development of smart grids. For this purpose they took up our suggestion of the $100 million Smart Grid, Smart City project. Another example was that the then Minister for Infrastructure was asked to investigate how smarts could be embedded in bridges, roads, rail, waterways, tunnels, etc and how the NBN could assist in creating smarter infrastructure. Another example was that Medicare legislation was changed to include certain telehelath consultations and the NBN was also looked at in the context of education.

However all of these initiatives were discontinued after 2013. In May 2015 there was a ray of hope when the current Minister for Infrastructure opened up a new Inquiry on smart infrastructure. Also the setting up of the Digital Transformation Office, while less ambitious, does to a certain extent rectify the situation.

There was a moment of déjà vu when National ICT Australia (NICTA) responded to the smart infrastructure Inquiry with a request to the government to mandate the use of smart ICT infrastructure for projects accepting public funding. The support of this important R&D organisation will hopefully lead to better policies in this area, as the country is wasting valuable opportunities to become a smart country. When smarts are embedded at a greenfield level the extra costs are less than 10%, whereas if infrastructure needs to be retrofitted the costs increase by 30%-50% ( a lesson the government is now also learning from retrofitting the NBN)

Also NICTA believes that underutilisation of infrastructure assets is rife across Australia, in both the private and public sectors. What is needed here is government leadership and vision to include smart requirements to make infrastructure more efficient and effective.

One of the problems we noticed during the 2005-2009 period was that silo thinking was endemic. It was difficult (for this read ‘impossible’) for the minister for communications to convince ministers for infrastructure, healthcare etc to look at the use of ICT across government from a more holistic perspective. Often each of these sectors was trying to build its own infrastructure, developing proprietary solutions, etc – no sharing, no standardisation, no interconnection arrangements.

BuddeComm initiated the set-up of a separate industry group of CEOs to talk to the various ministers, promoting a more holistic approach to the use of ICTs, and in particular the NBN. In 2009, the Prime Minister authorised the Minister for Communications to act on his behalf on ICT-related cross-ministerial issues like this. Only then did we see a change in government policies across the various departments, looking at how ICTs can be used in a more horizontal way, to assist developments across departments. It is a real pity that we could not build on these early initiatives, instead dismantling them, to then, five years or more later, start all over again.

Of course, technology doesn’t get stopped by party politics. The emergence of IoT and M2M are making many of these smart infrastructure projects more and more feasible. The deployment of LTE-A(dvanced) and eventually (after 2020) 5G will further stimulate a full integration of infrastructure into the overall concepts of smart cities and smart countries. This will all happen regardless of government policies, but if we as a country could be smart and build rather than demolish, we could take a leadership role at the front of these developments instead of being relegated to the role of follower and buyer of overseas expertise, products and services developed by organisations in countries with a more visionary leadership.

Paul Budde

See also:

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Hong Kong – Affordable broadband underpins the digital economy

August 26th, 2015, by

Hong Kong’s telecom market continues to develop in line with its status as one of the leading economies in the world. Heading towards 2016, over two thirds of fixed broadband connections are fibre, with the remainder a mix of DSL and HFC. This has propelled Hong Kong to boast the highest peak average broadband speeds in the world, surpassing South Korea, Singapore and Japan.

Broadband proliferation is not just limited to fixed broadband, with three quarters of the population owning a smartphone. With such widespread access to broadband services it is little wonder that Hong Kong has developed a vibrant digital economy, where over half the population has accessed e-government services and the country’s healthcare system has launched a personal healthcare record, giving patients control over their data and supporting effective and efficient provision of healthcare services. Digital media, often the frontrunner of any digital economy, is well entrenched in Hong Kong with both legal and illegal streaming music and video in high demand.

The benefits of integrating technology into utilities is becoming evident; smart grid trials have shown consumers are willing to modify electricity consumption patterns in response to near real time feedback about usage. At the same time the government has taken the first steps towards coordinated development of a smart city, releasing a blueprint to oversee integration of technology into all aspects of everyday life to improve liveability and sustainability.

Underpinning delivery of these new digital economy services is increasing affordability and sophistication of end user devices and IOT connected sensors as well as continual investment in network infrastructure to connect devices reliably and with minimal delay, through new submarine cables as well as integration of new mobile related technologies designed to improve wireless broadband capacity and service quality.

For detailed information, table of contents and pricing see: Hong Kong – Telecoms, Mobile and Broadband

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Disrupting the disability sector

August 26th, 2015, by

For perhaps as long as 70 or 80 years telecommunications facilities within the disability sector has largely been supported by government handouts. Back in the 1920s the teletypewriter (TTY) was invented, which allowed for some basic communication by deaf and hearing-impaired people and up until the present day this remains one of the key subsidised tools available for this group. Innovation has largely bypassed this sector as it was ‘looked after by the government’.

This is all changing very quickly because of the rapid developments in ICT. Devices such as smartphones and tablets have led to an explosion in apps and several of these are aimed at the disability market. In general, however, for a number of reasons a significant proportion of the market has been slow to take up these new tools. It is by its nature a conservative market when it comes to change – change makes a considerable impact on the well-being of the person involved and so the tendency is to preserve the status quo.

There are two key reasons, however, why these new developments will totally disrupt the way this sector communicates.

Because of the subsidised nature of the market services have been strictly limited to those eligible for the service, largely ignoring people who have a partial disability – and, in the case of deaf and blind people for example, the way others communicate with them.

New smart technologies are changing this. With affordable and smart technologies it will be possible for most people to access new services without the assistance of subsidies; and at the same time those with partial disabilities, as well as friends, family and others who want to communicate with disabled people, will all now be able to share similar affordable communication and information tools to do so.

Furthermore, people with disabilities will at several points in their life have to review their tools because of changes to their environment. They start in a home environment, move into study and from there into work; and at all of these points the way they communicate will change. Taking this further, similar changes occur when people go on holidays, go on a business trip, or visit an event, performance, movie, museum, and at all these times new tools are available that would allow them to much more fully participate in these activities.

This enables people with disabilities to operate in a much broader market, and makes the integration far more inclusive and seamless.

Organisations that can harness these disruptive changes and position themselves in the middle of them will be able to build sound business models around these communities. There will always be the need for a government-funded safety net, but at the same time there are plenty of commercial opportunities that will benefit the community and that will allow them to be much more independent, making their own decisions and selecting from a competitive market rather than just being fed the product that is subsidised by the government.

This market, however, remains highly specialised and a large amount of personal service will still be required. And quality-wise it needs very trustworthy suppliers. A range of the personal care services will need to be integrated into this new environment and it is therefore critical for the carers and everybody else directly involved in this sector to play a key role in the transformation, and education, information and high levels of customer service are required to achieve this.

The organisations traditionally involved in this are therefore well-positioned to continue and extend their key role in these markets. However it is a disruptive development and also these organisations will have to transform, wean themselves – at least partially – off subsidies and look for broader opportunities to build new business models around the customers they service. As new technologies are in general significantly cheaper than the old ones, and closed systems and technologies are rapidly being replaced with open systems, the barriers for others to enter this market have been lowered and new companies will be very keen to jump in and take their share away from those who are lagging behind in this transformation.

As this market becomes far more inclusive it will cover much more than just disabled people. As mentioned, it will include others with whom they communicate, as well as businesses and organisations that need to communicate with them. However, a very specific sector is closely linked to these developments also, being the more general ageing population. As with the digital transformation in other sectors, here also disruption will come from outside the traditional organisations servicing these communities. This will lead to a far more horizontal development, breaking down the many silos that exists within the social sector many of them still trying to hang onto their traditional subsidy models.

Key technologies that are going to play a key role in the transformation are, aside from the devices such as smartphones and tablets, broadband for access and interactivity, data centres, cloud computing and data analytics. Developments in IoT (internet of things) and M2M (machine-to-machine communication) will see the private environments of people with disabilities becoming smarter as well.

All of this is good news for people in the disability sector, as they will be able to benefit much more from the innovations that are flooding the general market, at lower cost and based on far greater community inclusion.

Because of this inclusiveness more people and organisations are becoming positively exposed to people with disabilities, and as a result further developments and further innovations can be expected. This will lead to a far more seamless integration, affecting everybody. In the end this is a ‘good feel’ development for everybody and as such it will be supported by the broader community.

I will present at the ACCAN National Conference on the 2nd of September in Sydney. The theme is Dollars and Bytes – communications affordability now and tomorrow. I will also address the conference based on my views on how broadband can assist the disability community (free report).

Paul Budde

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The NBN – more lies leading us from bad to worse

August 25th, 2015, by

I am sure that I am just as frustrated as most Australians – especially as month after month, year after year, it becomes clearer that what I, along with others, have been saying since 2011 – that a cheaper and faster NBN such as the Coalition Government is trying to install by retrofitting ageing copper networks is not delivering.

First of all the minister promised a quick six-month turnaround for the policy change; but now, two years later, apart from pilots, none of the so-called multi-mix technology (basically a retrofit of the old copper and coax cables) has eventuated. Now the government has also admitted that this retrofit might cost up to $15 billion more than expected.

It becomes clear that this government didn’t have a clue about its proposed ‘cheaper and faster option’. It was nothing more than political rhetoric.

Aside from the delay, the government has now also been forced to admit that its second-rate version of the NBN could cost as much as $56 billion. If it was not so sad it would be funny.

When this government was in opposition it claimed that an FttH rollout would cost $90 billion. We now know that it was plucking a number out of the air simply to scare people and at the time I was angry about that, as most of the media use those statements without doing their own proper investigation. Every statement a politician makes is regurgitated by most of the public media, with no fact checking. (Having learnt their lesson from lying politicians some of the media have since started to implement fact checking in their reporting.)

Once it was in government the Coalition then had to admit that the $90 billion figure was perhaps a bit too high; but at the same time it warned that an FttH-based NBN would still have cost Australia a shocking $56 billion. Fast forward to today and the government now states that, due to the many unknown costs linked to its retrofit policy, its second-rate version of the NBN would now also cost $56 billion.

This makes me despair. We mentioned that the Coalition’s policy turnaround for the NBN would take two to three years and that retrofitting could be far more costly than predicted, because the quality of the ageing networks that need to be retrofitted is largely unknown. All of this is now confirmed. Perhaps some of you might recall that at the time Malcolm Turnbull specifically suggested that journalists should not just listen to Paul Budde.

So now we have a significantly delayed and far more costly NBN. However the real problem is that it will still only deliver a second-rate network – and this at a time when other countries are rolling out FttH. In Singapore 75% of users are already connected to FttH; and countries such as South Korea, Japan, Sweden, the Gulf States, Estonia and others are not far behind them

My real problem is not the delay and the higher costs, but the fact that for all of that we get a network that will not deliver us the capacity and quality needed to build a modern economy and society.

It appears to me that the Communications Minister, Malcolm Turnbull, has totally under-estimated the consequences of changing the fundamentals of such a large national infrastructure building project midway through the process. In my opinion he simply didn’t have a clue what he was doing.

It also seems that he has under-estimated the rapid growth of the digital economy. His aim remains to deliver a network that provides 25Mb/s services to all Australians. Admittedly, those on FttH (20% of the population) will have much more, but if your aim is to provide equal opportunity to all (for example, those in outer metro suburbs, regional and rural Australia), as well as delivering ubiquitous services in the areas of telehealth and e-education, then everybody in the country needs to have access to a network that can deliver such services.

For instance, some people have extremely slow access to the MyGov website because many don’t have the broadband capacity needed to make effective use of this site. This is a clear indication that for such national services you need a network with ubiquitous quality.

But, aside from the social and economic requirements, many people in rural and regional Australia also have problems getting good quality access to entertainment services such as iView and Netflix. The minister seems to have under-estimated the incredible uptake of such services, as well as the use of smartphones and tablets, all of which require more capacity and better quality. In its latest report NBN Co also indicated it was surprised by the effect that Netflix has on its network – this despite the fact that people like me have warned about it for a long time.

I had always thought that the minister had an excellent understanding of these developments. When the then Opposition leader Tony Abbott wanted to kill the NBN Malcolm Turnbull secured its survival, and I thought that after their election win he would slowly move the national broadband network towards its final destination of FttH. As we suggested on many occasions, he could, for example, simply have had the rollout of the FttH NBN delayed in certain areas in order to spread the cost over more years, using the existing HCF and ADL2+ networks to extend the rollout, without any serious overall negative effect. At that time (2013) I thought that he would come back with some sort of plan that would, without too much political damage to the government, somehow see FttH reinstated, at least as the end solution. But when he kept going on about 25Mb/s services being more than enough for Australians it became clear to me that a more visionary approach to the NBN would not be forthcoming, and I started to question his understanding of what was happening in the digital economy.

The fact that he hardly ever links the NBN to the digital economy is really disappointing. For what reason, other than the national interest, would the government invest such a lot of money in an NBN? My reading of this is that he knows very well that his second-rate NBN will not be able to provide that digital backbone for the Australian economy.

Based on current growth in broadband requirement I think that the Farmers’ Federation was not far off the mark when it stated that the capacity on the new satellites would have started to run out by 2020. For more than a decade now rural Australia has been starved of any form of quality broadband. The pent-up demand there is enormous and high-quality broadband will finally allow these people to join the rest of the country.

They don’t have cinemas around the corner and will be heavy users of video entertainment. Imagine what this will mean for the network! And if one looks at the Smart Farm applications used in Armidale it is easy to see that the business use of the NBN for farmers will be equally spectacular. And with teleconferencing and cloud computing rapidly becoming the norm the latency problems associated with satellites will become real issues for those who depend on satellite-based broadband. Rural Australia will be by far the largest users of telehealth and e-education, and the latency problem will hamper these developments.

What value, then, do we put on the Minister’s statement on ABC TV: There is nothing more important to me as minister than ensuring people in rural and remote Australia have absolute first-class telecommunication.

This became very clear to the people of Birdsville when, during his visit to the region, they personally negotiated with the Prime Minister a $7 million fibre optic link to deliver that first-class service – only to have Tony Abbott dishonour the deal a few months later, leaving the people of Birdsville with a second-class solution. Who can you trust?

There is no doubt in my mind that far more fibre will be needed in rural Australia to sustain the farming and mining communities, and satellite will simply not cut it.

The minister now promises nine million NBN connections by 2018, but based on his current track record few will trust him this time around. I honestly hope that I am proved wrong. I had the same hope when I made my predictions about delays and higher costs back in the 2011-2013 period but, unfortunately for Australia, the minister has proved me right.

Paul Budde

Just a small selection of than many analyses we made in the 2012-2015 period on the NBN along the lines as discussed in the one above.

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