Oct 152013

The assertion that internet connectivity drives economic growth is largely taken for granted although getting the maximum benefit from a broadband network investment may require more than stringing fibre cables or building wireless base stations.

A key document that supports the link between economic growth and broadband penetration is the International Telecommunication Union’s 2012 Impact of Broadband on the Economy report.

While the reports authors aren’t wholly convinced of the direct links between economic growth and broadband penetration, they do see a clear correlation between the two factors.

ITU Impact of broadband on the economy report 2012

ITU Impact of broadband on the economy report 2012

One of the areas that disturbed the ITU report editors were the business, government and cultural attitudes towards innovation.

The economic impact of broadband is higher when promotion of the technology is combined with stimulus of innovative businesses that are tied to new applications. In other words, the impact of broadband is neither automatic nor homogeneous across the economic system.

For South Korea, internet innovation is a problem as the New York Times reports. Restrictions on mapping technologies, curfews on school age children and the requirement for all South Koreans to use their real names on the net are all cited as factors in stifling local innovation.

In reading the New York Times article, it’s hard not to suspect the South Korean government is engaging in some digital protectionism, which is ironic seeing the benefits the country has reaped from globalised manufacturing over the last thirty years.

The problem for South Korea is that rolling out high speed broadband networks are of little use if local laws, culture or business practices impede adoption of the services. It’s as if the US or Germany built their high speed roads but insisted that cars have a flag waver walking in front of them.

Indeed it may well be that South Korea’s broadband networks are as useful to economic growth as Pyongyang’s broad boulevards just over the border.

Similar problems face other countries with Google’s high speed broadband network in the US so far not attracting the expected business take up and innovation, although it is early days yet and there are some encouraging signs among the Kansas City startup community.

In Australia, the troubled National Broadband Network has struggled to articulate the business uses for the service beyond 1990s mantras about remote workplaces and telehealth – much of the reason for that has been the failure of Australian businesses to think about how broadband can change their industries.

Like Japan’s bridges to nowhere, big infrastructure projects look good but the poorly planned ones – particularly those no-one knows how to use – are a spectacular waste of money.

Hopefully the fibre networks being rolled out won’t be a waste of money, but unless industries start using the web properly then much of the investment will be wasted.

Mar 202013
Demonstrating the benefits of the national broadband network

This is not good for the National Broadband Network project; contractor Service Stream announced it was handing back the Northern Territory rollout contracts to the Australian Security Exchange this morning.

It raises serious questions about the timetable of the project.

Service Stream advises that Syntheo, a 50/50 joint venture with Lend Lease, has reached agreement with
NBN Co to hand back the remainder of its design and construction activities in the Northern Territory. Syntheo is committed to working with NBN Co to complete its work in Western Australia and South Australia.
Given NBNCo abandoned its construction tender in April 2011 amidst hints of price fixing by contractors, this is a worrying development that indicates those ‘overpriced quotes’ may have been closer to the money after all.
I’ll be writing something up later today for IT News.
Jan 302013
The inventor of the World Wide Web

The man who invented the world wide web, Tim Berners-Lee spoke at the launch of the CSIRO’s Digital Productivity and Services Flagship in Sydney yesterday.

In telling about how the idea the idea of web, or Hyper Text Markup Language (HTML), came about Berners-Lee touched on some fundamental truths about innovation in big organisations.

In the 1990s the European Laboratory for Particle Physics (CERN) in Geneva had thousands of researchers bringing their own computers, it was an early version of what we now call the Bring Your Own Device (BYOD) policy.

“When they used their computers, they used their favourite computer running their favourite operating system. If they didn’t like what was available they wrote the software themselves,” said Tim. “Of course, none of these talked to each other.”

As a result sharing data was a nightmare as each scientist created documents using their own programs which often didn’t work on their colleagues’ computers.

Tim had the idea of standard language that would allow researchers to share information easily, although getting projects like this running in large bureaucratic organisations like CERN isn’t easy.

For getting HTML and the web running in CERN Tim gives credit to his boss, Mike Sendall, who supported him and his idea.

“If you’re wondering why innovation happens, one of the things is great bosses who let you do things on the side, Mike found an excuse to get a NeXT computer,” remembers Tim. “‘Why don’t you test it with your hypertext program?’ Mike said with a wink.”

There’s much talk about innovation in organisations, but without management support those ideas go nowhere, the story of the web is possibly the best example of what can happen when executives don’t just expect their workers to clock in, shut up and watch the clock.

One key point Tim made in his presentation was that it was twenty years after the Internet was invented before the web came along and another five years until the online world really took off.

We’re at that stage of development with the web now and with the development of the new HTML5 standard we’re going to see far more communication between machines.

Berners-Lee says “instead of having 1011 web pages communicating, we start to have 1011 computers talking to each other.”

These connections mean online innovation is only just beginning, we haven’t seen anything yet.

If you want your staff to stay quiet and watch the clock, that’s fine. But your clock might be figuring out how to do your job better than you can.

Tim Berners-Lee image courtesy of Tanaka on Flickr

Jan 292013

I’ve covered what the NBN is previously on the ABC for Tony Delroy’s Nightlife and on Technology Spectator last year looked at the challenges ahead for the project in 2013.

The National Broadband Network was always going to be one of the key issues in the 2013 Federal election, The Liberal Party’s policy launch on Sunday and Malcolm Turnbull’s comments on ABC Radio station 702 Sydney on Friday illustrated how critical it will be.

His assertion that wireless should be affordable is laudable, but the indications are that it is increasingly going to become less affordable.

It also puts the coalition in a bad position, losing the three to four billion dollars expected from the spectrum auction wouldn’t help their budget position.

One comment from Malcolm that particularly sticks out is on subsidies;

If I could just make one other point Linda, possibly the most important. The government as we know is spending a stupendous amount of money on building a national fibre to the premises broadband network. And the subsidies there run into the tens of billions of dollars –

The member for Wentworth is facturally wrong; there are no subsidies for the NBN, the government is providing the capital for the project which they hope will be paid back by 2018.

the value of the network once completed will be a fraction of what the government is spending on it.

On what basis? Certainly fibre has a 25 to 40 year expected life cycle, but that’s true of a roadway or an office building; does Malcolm suggest we don’t spend on that as well.

you could make a very powerful argument that the form, the channel of broadband communication which adds the most to productivity is in fact wireless broadband.

Possibly, but let’s see that argument. Currently data downloads to fixed lines still dwarfs mobile, both are growing exponentially.

Malcolm actually touches on the problem we’re facing with wireless — the shortage of bandwidth.

The government has been very slow at getting it out. As of the last report there was only about eight and a half thousand premises connected to the fibre optic network that they’re building throughout all of Australia

This is true, the rollout so far of the NBN has been disappointing. This is what observers are watching closely on this.

The Fibre to the Node setup also creates another problem – that of ownership. If Telstra retain ownership of the copper cable from the node to the premises, it means providers have to deal with two wholesalers one of whom is their competitor.

In fact it creates a whole rabbit’s nest of problems for retailers and could very quickly find us in a situation where telco access requires dealing with two monopolies — Telstra and NBNCo.

One the disappointing things about the National Broadband Network has been the poor debate around the topic, indeed the whole debate at times has been wrong headed. Any hope it’s going to improve during the election campaign isn’t likely

Nov 042012
old payphones in desrepair

One of the big problems during and after Hurricane Sandy was how the cell phone network fell over.

As the Wall Street Journal describes, many parts of New York and New Jersey still didn’t have mobile phone services several days after the storm.

Yang Yeng, a shopkeeper selling batteries, candles, and flashlights on the street in front of his still darkened shop in the East Village, said his T-Mobile phone was useless in the area. The situation, he said, reminded him of the occasional cellphone-service outages where he used to live, on the outskirts of a small city in southern China.

What’s often overlooked is that mobile networks are different products from a different era to the traditional landlines most of us grew up with.

The older landline phone systems used their own power and the batteries in most telephone exchanges had enough juice to supply the Plain Old Telephone Service (POTS). So in the event of a blackout most services kept running.

Of course POTS services could still be disrupted – a car could hit a pole on your street, those poles could burn down in a fire, your local exchange could be struck by lighting or a blackout could last longer than the telephone company’s batteries.

Most importantly, in times of major emergencies those exchanges would get overwhelmed by frantic callers trying to contact the authorities or their families.

All of the above would have happened during Hurricane Sandy, so it is somewhat unfair to single out the mobile networks for their ‘unreliability’.

There are some differences though with modern mobile and fibre based networks that shouldn’t be overlooked when understanding the reliability of these systems in times of crisis or disaster.

A hunger for power

Modern communications networks need far more power than the POTS network. Fiber repeaters, cell towers and the handsets themselves can’t be sustained in the way low powered rotary phones and mechanical telephone exchanges were.

The cost of providing and maintaining reliable batteries to these devices is a serious item for telcos and it’s no surprise they lobbied against laws mandating the use of them in cell phone towers.

Even if they were installed, the fibre connections to the towers are also subject to the same problem of needing power to connect them to the rest of the network.

Of course the problem of keeping power to your handset then kicks in. Many smartphones or cordless landline handsets struggle to keep a charge for 24 hours, further reducing their effectiveness during any outage that lasts more than a day.

Bandwidth Blues

Even if your cellphone does keep its charge and the local tower remains running and connected to the backbone, there’s no guarantee you can get a line out.

In this respect, the modern systems suffer the same problem as the old phone networks – there’s a limit to the traffic you can stuff down the pipe.

This isn’t news if you’ve tried to make a call on your mobile at half time at a sporting event or at the end of a big concert. If there’s too much traffic, then the system starts rationing bandwidth; some people get a line out while others don’t.

Prioritising traffic

Another way of managing demand during high traffic times is to ‘prioritize’ what passes over the network – voice comes first, SMS second and data a distant last.

This is why on New Year’s Eve you might be able to call your mum, but you can’t post a Facebook update from your smartphone and all your text messages come through at 5am the following morning.

During emergencies it’s fair to assume that if the mobile network stays up, social networks won’t be the priority of the operators and this is something not understood by those advocating reliance of social networks during disasters.

No best efforts

Probably most important to understand is the difference between the utility culture of the POTS operators and the ‘best effort’ services offered by ISPs and many mobile phone companies.

Under the ‘utility model’, the telco was run the same way as the power company and water board – largely run by Engineers with a focus on ensuring the network stays up for 99.99% of the time.

That four or ‘five nines’ reliability is expensive and the step between each decimal point means an exponential increase in costs and spare capacity.

Over the last three decades the utilities themselves have seen a reduction of reliability as the costs of maintaining a network that has a 24 hour outage once every three years (99.9%)* over three times a year (99%) interfere with a company’s ability to pay management bonuses.

ISPs and most cell phone networks never really had this problem as their services are based upon ‘best effort’. If you read your contract, user agreement or condition of sale you’ll find the provider doesn’t really guarantee anything except to do their best in getting you a service – if they fail, tough luck.

As we become more connected, we have to understand the limitations of our communications networks. The assumptions those systems will be around when we need them could bring us unstuck.

*the definition of uptime and what constitutes an outage varies, the definition I’ve used is a 24 hour blackout or suspension of supply in any given area.
Sep 032012
the era of the computer superstore is coming to an end

“Can Electronics Stores Survive?” asks the Wall Street Journal.

The future doesn’t look good with the liquidation of Circuit City in the United States and the exit of Australian giant Harvey Norman from the electronics markets.

Yet Apple Stores are growing and while it’s tempting to dismiss their sales training as brainwashing the truth is their staff are among the most profitable retail employees on the planet.

The real problem is the Big Box category killer store featuring wide product lines but poorly trained staff motivated only by commissions is a business model whose time has passed.

Customers can now go online, research website that are far more informative and honest than the staff at the megastore then get the appliance delivered and often installed for less than the shelf price at the mall.

The earliest industry this has affected is the computer sector – long ago companies like Dell and Gateway changed how people shopped for PCs.

Given the economics, it’s surprising the low margin big box stores survived as long as they could and the main reason they did was because appliances were an ideal channel for pushing profitable finance plans and extended warranties.

Often the store and sales assistant made more money out of the “interest free 72 months” deal, the three year warranty and the connector cables than they did from selling a top end laptop or plasma TV.

Now the easy credit era is over, those add-ons aren’t so profitable and with Amazon leading an army of e-commerce retailers changing customer expectations, those businesses locked into Big Box, easy credit way of doing things have to rethink how and what they are selling.

Harvey Norman’s founder Gerry Harvey said recently that people would still buy big items from his store. The reality is they are moving across to sites like Winning Appliances where they can choose the items, have them delivered installed and the old appliance taken off, a godsend when you’re dealing with a 50Kg washing machine or fridge.

Apple’s success shows retail does have a future. It just doesn’t lie in the low service, Big Box model that grew out of the easy credit and cheap energy economy of the late twentieth Century.

Sep 022012
fiber optics are the key part of fast communications

Despite the enthusiasm to be the first US city to have the high speed broadband offered by Google Fiber, it turns out interest in the Kansas City rollout is only running at half the rate expected.

This is consistent with the Australian NBN experience, with the takeup rate so far a dismal with less than 20% of Tasmanian properties passed taking the opportunity to get connected – only 10% of accessible premises are projected to sign up in 2012 according to NBNCo’s corporate plan.

Both the poor take up rates in the US and Australia raise the question “do we really want fibre broadband?”

The main difficulty are the incumbent players. In Kansas City reports are that Time Warner, the incumbent cable operator, is offering deals to lock their customers into existing plans.

A similar thing has happened in Australia with the major operators locking customers into existing ADSL and phone plans so subscribers face penalties if they churn across to an NBN service.

Most of those subscribers don’t need to churn right now, for most users the data plans they are currently on are fine and the NBN prices aren’t substantially different to the existing ADSL charges. In Kansas City, Google’s prices are lower, but the service is some way off and Time Warner can offer a connection now.

Another problem is demographics, neither Tasmania or Kansas City are major digital industry hubs and parts of both regions are economically distressed, which means they are less likely to take up the offer – or be able to make the investment – to get get connected.

That latter problem is the most concerning, as regional disadvantaged areas have the most to gain from being connected to broadband.

Just as towns lobbied in the 19th Century to get railways routed through their communities, in the 21st Century fast Internet connectivity is seen as essential to a region’s development.

But if individuals won’t get connected then it makes the business case for setting these networks up difficult to justify for corporations like Google or Governments like Australia. In future, it will make it harder to get incumbent network operators to replace aging copper infrastructure with modern and faster fibre.

As both projects mature, hopefully we’ll see a greater takeup, in the Australian case greater acceptance should be inevitable as the incumbent Telstra copper network is shut down and subscribers migrated across to NBN infrastructure.

The question does remain though of just how useful homes and businesses see fibre Internet connections to their homes, if they remain unconvinced about the value of a high speed data link then it maybe our communities miss out on the vital communications tool of the 21st Century.