Tag: nbn

  • How do communications networks stand up to real times of disruption?

    How do communications networks stand up to real times of disruption?

    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.

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  • Do we really want fibre broadband?

    Do we really want fibre broadband?

    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.

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  • Google announces eTown awards for Australian towns

    Google announces eTown awards for Australian towns

    I don’t normally post media releases onto the site, but it appears there’s no posting of the Google eTowns announcement. As I’m writing a story for Technology Spectator on it, here’s the release.

    One thing that leaps out when reading the media reports on this is how many outlets just copy and paste. Only the Fairfax entertainment reporter went to the effort of rewriting the release and adding some additional context. You have to wonder how long ‘churnalism’ can survive given readers are onto this laziness.

     

    EMBARGOED UNTIL THURSDAY 30th AUGUST, 4:30PM (EST)

     

    Perth wins top spot in Google’s eTown Awards

    Western Australia capital beats out eastern states as centre of digital boom

    Perth leads the list of Australia’s top 10 eTowns, Google announced today. This new Google award recognises and ranks those communities which are outpacing the rest of the country in having its small businesses use the web to connect with customers and grow.

    The web is transforming all businesses in Australia, not just those typically considered to be “Internet businesses”. The digital economy is already worth as much as Australia’s iron ore exports, according to Deloitte Access Economics, and it’s forecast to grow by $20 billion to $70 billion by 2016.

    To provide a snapshot of this vital economic activity, Google looked at more than 600 local government areas to analyse which communities are contributing the most to the digital economy. The top 5 metropolitan and top 5 regional eTowns for 2012 are:

    Metropolitan

    1. City of Perth, WA
    2. City of Yarra, VIC
    3. City of Adelaide, SA
    4. North Sydney, NSW
    5. Ryde, NSW
    Regional

    1. Byron Shire, NSW
    2. Meander Valley, TAS
    3. Cessnock, NSW
    4. Wingecarribee Shire, NSW
    5. Scenic Rim Regional Council, QLD

    Federal Small Business Minister Brendan O’Connor, who is launching the inaugural eTown Awards at an event in West Perth today, said;

    “The digital economy is fuelling Australia’s economic growth and it’s important businesses of every size are well equipped to take advantage of the potential.  I hope this award encourages other small businesses to get online to connect with people who are actively looking for their products and services.”

    Perth’s Lord Mayor Lisa Scaffidi said, “Perth may be known for its mining boom but this award shows that our businesses are actively grabbing hold of the digital boom. The City of Perth is proud of its eTown Award and I am delighted to represent an area whose businesses are so connected with both their local community and the entire world thanks to the web.”

    Online advertising is a growing phenomenon and Google, through its online advertising and other services, is in a good position to act as a barometer for the strength of this commercial activity – particularly in small businesses. To come up with the eTown Awards list, Google analysed data on the number of local businesses in each local government area which are advertising with Google AdWords and/or have created a free website using Google and MYOB’s Getting Aussie Business Online initiative.

    Byron Shire, home to the popular holiday destination, leads the regional eTowns list with a high proportion of accommodation, recreational hire and tours providers using the web to drive their businesses.

    Claire Hatton, Head of Local Business for Google Australia said, “The eTown Award winners show that anyone anywhere can reap the benefits of the digital economy. These days being on the web is as important as having a phone. Australians expect to be able to seek out products and services online, and local businesses need to be found to compete.”

    For more information about the eTown Award winners and for case studies on how local businesses are succeeding online and driving economic growth, visit www.google.com.au/ads/stories [NB: website will be available after embargo lifts].

    Media are invited to attend the announcement of the eTown Awards with the Minister for Small Business, Perth’s Lord Mayor and Google Australia.

    Local businesses located in each eTown may be available for interviews.

    Thursday, 30th August at 2:00pm – 3:00pm
    The Yoga Space
    Shop 11, Seasons Arcade,
    1251 Hay Street, West Perth.

    To RSVP to the event or for interviews please contact:

    Redacted

    Notes to Editors

    1. AdWords is Google’s online advertising system which enables businesses of all sizes to advertise relevant text ads next to Google search results. Businesses decide the text and their budget and only get charged when someone clicks on their ad.
    2. The Google eTown award top ten list was created by comparing the number of small and medium sized enterprises that used AdWords in each local government area and/or have created a website using Google/MYOB’s Getting Aussie Business Online. The results have been normalised for the relative population of each LGA.

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  • Locking in the mobile market

    Locking in the mobile market

    Mobile phone carrier Vodafone yesterday announced its purchase of Cable and Wireless, the company that rolled out the telegraph and phone networks that connected Britain’s empire.

    Vodafone’s purchase is one of the final phases of the telco industry’s long term restructure where customers – both home and business users – have switched from land lines to mobile devices.

    It’s long been acknowledged the profit in this market lies in devices and data usage which is why Cable and Wireless steadily declined over the past quarter century.

    While there’s good money to be made in running undersea cables, which is what C & W did, the big profit is in delivering the data over the “last mile” to the customer.

    For most customers, that last mile is the radius around a cellphone base station.

    In Australia, this is best illustrated by Telstra’s undisguised glee at being able to offload their legacy copper network and backbone services to the government owned National Broadband Network allowing the former land line monopoly to focus on the mobile, data customer.

    That data aspect is important too, one of the big changes in telecommunications over the last 25 years has been the rise of data.

    A quarter century ago, voice communications were the main traffic of these networks. For companies like Cable and Wireless, data was a profitable sideline with services like Telex and ISDN being lucrative business niches.

    Those rivers of gold distracted incumbent telcos in the early years of the public Internet as they tried to protect those expensive data plans and discouraged customers from using the net.

    Over time, a new breed of Internet Service Providers rose who could supply those data services customers wanted.

    Ironically, the same thing has happened with mobile phone manufacturers and the rise of the smartphone. Unlike the incumbent telcos, they haven’t adapted.

    The incumbents phone manufacturers like Nokia and Motorola missed the rise of data communications and the mobile web as the iPhone and Android devices delivered the portable utility that “dumb phones” couldn’t deliver.

    For Nokia, that miss appears fatal with the company rapidly running out of cash as their smartphone devices fail in the marketplace and margins collapse in the sectors they still dominate.

    Research In Motion – the manufacturers of the Blackberry phone – are in the same trap. While their devices were data orientated they were more akin to corporate “feature phones” where they did one or two things well but couldn’t deliver the full features mobile phone users increasingly wanted.

    The rise of the iPhone threatened Blackberry’s market and the arrival of the iPad with applications like Evernote killed most of the product’s demand.

    Blackberry and Nokia’s decline while companies like Telstra and Vodafone survive – not to mention massive profits of companies like Mexico’s Telefonica – illustrate the value of government licenses to telcos and the breathing space it gives the management of these licensees.

    We shouldn’t underestimate though the risks to all these businesses if they don’t adapt.

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  • Playing with Dragons

    Playing with Dragons

    Chinese manufacturing has been in the news recently with various exposes of factory conditions by the New York Times, the now discredited Mike Daisey and a fascinating look at US store chain Wal-Mart’s supply chain by Mother Jones’ Andy Kroll.

    In his examination of Wal-Mart’s Chinese suppliers Andy Kroll interviews factory owners and managers with a common theme, they are all loath to be identified for fear of incurring Wal-Mart’s wrath.

    This is wall of silence is familiar in Australia; the reluctance of local suppliers to speak about the conduct of the Coles’ and Woolworths’ policies has hobbled enquiries into the domestic retail market.

    Another aspect Chinese and Australian have in common is how the retailers drive down costs with big buyers insist upon regular price reductions from their suppliers.

    This is what happens when your business is a price taker that relies on one or two suppliers; you accept what you’re offered or lose a large chunk of your business.

    With many of Australia’s industry sectors now dominated by one or two incumbents, this way of doing business is now the norm rather than the exception.

    As a nation Australia’s finding itself in that position as well. Now our governments and business leaders have decided Australia will only dig stuff up with a few favoured, uncompetitive industries like car manufacturing being being protected, the entire country is in a position not dissimilar to a Foshan coat hanger manufacturer.

    Having that dependency on one or two major customers is a risk and when the commodities boom turns to bust – commodities booms always do – our relationships with these customers will be tested.

    When that test comes, the clumsy way the Federal government has banned Chinese companies from tendering to the National Broadband Network or blocked investment in mining projects may turn out to be mistakes.

    This is the problem with being a price taker selling a commodity product, you become hostage to fortune and when the market turns against you there isn’t a great deal you can do.

    In the early 2000s computer manufacturers like Dell and HP decided to sell commodity products then watched with despair as Apple captured the premium, high margin end of the market. Neither business has truly recovered.

    Being trapped at the commodity end of a market is not a comfortable place to be, particularly if you don’t have a plan to move up the value chain.

    If your business is currently selling low margin, commodity goods then it’s worthwhile considering what Plan B is should the market turn against you. You might also remember to be nice to your customers

    At least you’ll show you have more forethought than our leaders in Canberra who seem to like to play with dragons without thinking through the consequences.

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