Tag: infrastructure

Winning the gig

The US city of Chattanooga is showing how public broadband networks can be rolled out, and the benefits of doing it properly

A year back this blog asked if Chattanooga’s experience shows how city infrastructure can drive private sector investment.

“The Gig”, as Chattanooga’s civic leaders have branded the city’s broadband rollout, came about because the city decided to treat internet services as a utility like water and roads. Vice Motherboard reports how this has reaped dividends for the town.

As Vice’s Jason Koebler describes, Chattanooga’s unemployment rate has halved since the depth of the Great Recession and in 2014 was listed as having the third highest wage growth among the United States’ mid-sized cities.

There are downsides though, Koebler warns, and one point is that having good broadband on its own isn’t a sure fire bet.

“Like the presence of well-paved roads, good internet access doesn’t guarantee that a city will be successful,” he writes. “But the lack of it guarantees that a community will get left behind as the economy increasingly demands that companies compete not just with their neighbors next door, but with the entire world.”

The advantage Chattanooga had though was its electricity company was owned by the city which meant a major part of the existing infrastructure was already in public hands and made it relatively easier and cheaper to roll out the network.

What Chattanooga does show is a well planned and structured fibre roll out can be done, it is easy or cheap and takes sensible planning. The latter is something other broadband projects can learn from.

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Australia’s NBN debacle

However when it comes to missed targets, broken promises and the sheer scale of money wasted, Australia’s National Broadband Network dwarfs all the world’s broadband roll outs.

One of the most stunning examples of Australia’s uncompetitive, post-mining boom economy is its National Broadband Network.

Announced in 2009 to provide high speed data access to the nation to address the effects of thirty years of poor decisions and poorly thought out policies by successive governments, the project was intended to upgrade the telecommunications network and break the near monopoly of the incumbent telco, Telstra.

Sadly the project quickly foundered as the managers of the company set up to build the network made a series of poor decisions that stemmed from their underestimating of the project’s scope and their arrogant hubris in rejecting the advice of those who did.

To compound the problem, the project was politicised by the intellectually lazy and opportunistic Liberal opposition who promised they could build it for less by utilising existing telephone and Pay-TV infrastructure. On becoming government, the then communications minister and now Prime Minister changed the scope to do that and promised a quicker and cheaper rollout.

Last Friday, the folly of the Liberal Party’s plans were shown when the National Broadband Network company, nbn™, issued their updated business plan that detailed a further retreat from both the original project scope and the government’s promises.

The Melbourne Age’s Lucy Battersby illustrated how completely Malcolm Turnbull and the Liberal Party bungled their costings, showing just how mediocre and dishonest the government and Prime Minister have been in estimating the cost of the project.

However, NBN Co underestimated the cost of using existing hybrid-fibre coaxial [HFC] cables laid by Telstra and Optus in the 1990s. Last year it calculated an average cost of $1800 per house. But detailed field work discovered the cost was actually $2300.

…

In 2013 the Coalition estimated FTTN connections would cost about $900 per premise and this was raised to $1997 in a 2014 strategic review, and raised again in 2015 to about $2300.

In the real world, being out by nearly 300% would cost an estimator or executive their job and for a small business could well see them being put out of business, but in the carnival of mediocrity that marks modern Australian politics, those responsible for such mistakes only thrive, as do the managers of nbn™ who recently awarded themselves fat bonuses.

Adding insult to injury for the long suffering Australian taxpayers and broadband users is that the nbn™’s management have revised the scope again to overcome increased costs and now only 21% of consumers will get a fibre connection as opposed to the 40% claimed when the new government changed the scope.

Those scope changes beg the question why anyone bothered in the first place. Had the network been left with Telstra there’s a reasonable chance 20% of customers would have ended up on fibre by early next decade as the economics of maintaining and installing the technology overtook the older copper system.

Probably the biggest insult though to Australian customers though are the desperate attempts to make the new network profitable with plans to gouge the nation’s telco users as Fairfax’s Elizabeth Knight reported.

Data use per user is anticipated to grow at a compound rate of 30 per cent per cent to 2020.

At first blush these increases in usage might look exaggerated – but wait. Only last year NBN was working off the expectation that this year its existing customers would consume 90 gigabytes per month. But the current rate of consumption is actually 131 gigabytes per month – and rising.

Thus as the years progress towards 2020, NBN not only gets an increase in customers, it get an increase in revenue per customer .Monthly average revenue per user is forecast to increase from $43 this year to $52 in 2020..

 

So Australians will be expected pay more for their substandard connections to help an organisation that has consistently failed to meet its promises and targets. It should also be noted that rising Average Revenue Per User (ARPU) is the opposite of what’s been happening in the real world over the last twenty years as revenues, and profits have fallen.

To be fair, it’s not just Australia that has struggled with rolling out fibre networks. In the US, Google Fiber is going through blood letting and scope changes as the company struggles to meet targets and keep costs under control. That same experience has been repeated around the world.

However when it comes to missed targets, broken promises and the sheer scale of money wasted, Australia’s National Broadband Network dwarfs them all.

Australian taxpayers, voters and telecommunications users should be asking hard questions of their political leaders

 

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Connecting bridges to the internet of things

A project connecting sensors to the Sydney Harbour Bridge shows the potential of the internet of things.

On Networked Globe today I have a description of NICTA’s Sydney Harbour Bridge Monitoring Project where the research agency is rolling out 800 sensors across the structure to reduce maintenance costs.

The project a good example of how cheap sensors and abundant computing power is changing workplaces, connecting the bridge to the Internet of Things makes it easier for asset managers and engineers to understand what is happening to their structure.

While the project promises a lot, it’s only a fraction of what’s possible as the sensors are only measuring movements so there’s a lot more they can do.

The big promise though is for smaller structures than the Sydney Harbour Bridge. Around the world local governments are struggling to maintain their assets, if NICTA can develop a feasible monitoring product then many agencies will be looking at how they can reduce their budgets.

While we tend to focus on connected kettles and other household devices when we talk about the internet of things, the real benefits and profits lie in the ‘big iron’ industrial and infrastructure applications.

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You can’t get there from here

What the world can learn from the failure of Australia’s National Broadband Network

I swore – mainly for my own sanity – that I wouldn’t discuss Australia’s National Broadband Network on this site anymore, today though the topic raised an interesting point about business leadership and project management that can’t be ignored.

Australian Communications Minister Malcolm Turnbull today released the Broadband Availability and Quality Report (PDF) along with the accompanying My Broadband website that identifies the nation’s telecommunications blackspots.

Extraordinary failure

“It is extraordinary that in six years of Labor talking about Australians having inadequate broadband they never bothered to do the work of actually identifying where services were good, bad or indifferent,” said the minister at the announcement.

Turnbull’s comments are correct, although the criticism is just as valid of previous Liberal and Labor governments who’ve all made incredibly poor decisions in the telecommunications portfolio without considering what was actually happening outside the ministers’ offices.

A bigger lesson though is that before commissioning a project the size of the NBN – estimates have put its cost anywhere between twenty and eighty billion US dollars – it’s a good idea to know where you are are and where you want to go.

Big Hairy Audacious Goals

To put the comments that follow into perspective, I was a supporter of the NBN concept although I thought it was a Big Hairy Audacious Goal.

In the shadow of the Global Financial Crisis the NBN project ticked all the boxes; it put cash into the economy, it employed an army of workers and upgraded Australia’s telecommunications network that had been neglected by thirty years of incompetent government policies mixed with incumbent telco greed.

Australia could have afforded ten NBNs during the mining boom of the 2000s; it was an opportunity to rebuild the nation’s ports, roads, railways, schools and tax system that all needed reinvestment and reinvention to meet the needs of the 21st Century.

Building a middle class welfare nanny state

Rather than reform the economy or build modern infrastructure, the Howard Liberal government decided to spend the mining boom’s proceeds on building a middle class welfare state.

Keen students of Australian politics crack a wry smile that the recently elected Abbott Liberal government, of which Turnbull is a member, proposes a paid parental scheme that will complete John Howard’s grand vision of a Middle Class Welfare Nanny State.

One of the tragedies of the populist and cowardly Gillard and Rudd Labor governments that succeeded Howard was neither had the courage to dismantle the Liberal party’s middle class welfare state.

At least though both Rudd and Gillard were prepared to make some big infrastructure investments, even if they weren’t fully thought through and chronically underfunded.

Failing to think through the needs, scope and costs of the project meant the National Broadband Network project quickly collapsed into a managerial mess exacerbated by the dribbling incompetence of the company’s executives, government officials and contractors, which bought us to Turnbull’s announcement today.

A project in search of a scope

The project’s failure is a worrying commentary on the abilities of Australia’s management elites in both the private and public sector, however the lesson for the entire world is understanding both where you are and where you want to go to is essential for a project’s success.

Spending on well planned and necessary infrastructure is good, but to avoid disasters like Australia’s NBN it’s good to start with understanding the problems you want to fix and a project scope that clearly identifies the work that needs to be done.

Unfortunately too many governments and businesses don’t know where they are or where their plans will take them.

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Taking care of our own

Our governments can’t fix every problem or address our every need. We need to take matters into our own hands.

“The council ought to do something” growled a friend who’d been stuck in a peak hour traffic jam.

That innocuous comment illustrates the fundamental challenge facing the developed world’s politicians – that we expect our governments to fix every problem we encounter.

In the case of the local traffic jam, the cars creating gridlock are parents driving their children to two nearby large private schools.

Despite the problem being caused by the choices of individuals – those decisions to send their kids to those schools and to drive them there – our modern mindset is “the government aught to do something” rather than suggesting people should be making other choices.

Socialising the costs of our private decisions is one of the core beliefs of the 1980s mindset.

Eventually though the money had to run out as we started to expect governments to solve every problem.

We’re seeing the effects of this in the United States where local governments are now having pull up black top roads, close schools and renege on retirement funds as those costs become too great.

As a society we have to accept there are limits to what governments can do for us.

Increasingly as the world economy deleverages, tax revenues fall and the truth that a benign government can’t fulfill our every need starts to dawn on the populace, we’ll realise that expecting politicians and public servants to save us is a vain hope as they simply don’t have the resources.

Bruce Springsteen puts this well in his song “We Take Care Of Our Own.”

The truth today is the cargo cult mentality of waiting for governments or cashed up foreigners to come and save us is over.

We’re going to have to rely more on our own businesses, families and communities to support us in times of need.

The existing institutions of the corporate welfare state are beginning to collapse under the weight of their own contradictions.

Joe Hockey knows this, but as a paid-up agent of the establishment he doesn’t dare nominate the massive cuts to middle class welfare and big business subsidies that are necessary to reform those institutions.

Waiting for the council to fix the local roundabout is nice but it doesn’t address the bigger problems.

It’s up to us to build the new institutions around our local communities and families. This is not a bad thing.

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ABC Nightlife: Explaining the National Broadband Network

What does the NBN mean for Australian households and businesses?

For the February 2012 Nightlife technology spot Tony and Paul looked at Australia’s National Broadband Network, exploring the pros and cons of the project designed to connect all Australians to high speed broadband.

So what is the NBN and what does it do? Here’s some of the points we discussed along with some of the answers to listeners’ questions.

What is the NBN?

The National Broadband Network is intended replace the existing copper wire telephone network that was rolled out across the nation over the Twentieth century.

Eventually the network will provide fast data access across the country replacing the older network that was designed for telephone calls rather than computer communications.

Most of the country will be connected to fibre optic cables and areas where this is too expensive then wireless or satellite services will be used.

Why do we need a government run national network?

The NBN is the culmination of three decades of bad policy out of Canberra. We should remember that the Howard government struggled with how to provide high speed broadband access to the bush.

For coalition things became particularly bad once they privatised Telstra and no longer had any power over the company’s policies.

We’ve had a mix of ideological beliefs and rubbery figures from both sides of politics which have left Australia in the situation where the core telecoms network has had to be re-nationalised.

What are these different ways of connecting up?

The biggest part of the network will be fibre optic cable where the connection will run along the street like the existing telephone wires and will connect to a box outside your home or office.

This box – know as an NTD (Network Terminating Device) is then connected into either the existing household telephone system or into a computer network.

In areas receiving wireless and satellite subscribers will get dishes or receivers that plug into their existing home telephone or computer network.

There are different types of wireless

The different types of wireless networks cause confusion. The NBN is going to use 4G or LTE telephone wireless, which is what Telstra have started to roll out and Optus will be starting in the Hunter Valley around Easter 2012.

Most of us are using 3G networks on our phones which is what the bulk of the mobile phone networks are.

Another type of wireless is the Wireless Local Area Network. These are what we connect our home or office computers to. These plug into the existing services like the existing ADSL internet connections or the NBN’s fibre network.

We shouldn’t confuse Wireless LANs with the mobile phone technologies being used by the NBN or phone companies.

Who is running the NBN?

The organisation set up to build the NBN is NBNCo. They are setting the standards, negotiating access to existing infrastructure and building the network. Their head office is in North Sydney but major operations are also based in Melbourne.

In turn they are hiring contractors around the country to build the network, run the cables and connect buildings to the new services. Most of us will deal with those contractors and the companies selling NBNCo’s services.

How is National Broadband Network going to work?

We won’t talk to NBNCo directly, instead companies like Telstra, Optus, Vodafone and iiNet will buy services from them and then onsell them to us.

Telstra are playing an interesting game on competing. They are already offering 4G services in regional areas where NBNCo hasn’t announced rollouts and they are planning to upgrade their cable TV network to the DOCSIS 3.0 standard that can sometimes deliver speeds similar to the NBNs proposed service.

What happens if you don’t let them connect you

If you don’t let NBNCo’s contractors connect you to the new network then you’ll have a problem a year or so later.

The copper telephone network is going to be turned off in areas where fibre optic cables are installed so if you aren’t connected to the new system, you won’t have access.

Anyone who’s done some building or landscaping work knows it isn’t cheap and that’s what building owners who don’t allow access will have to pay for access later.

In Tasmania a few property owners who were just outside the NBN area asked about getting connected up and apparently the costs were prohibitive.

One of the things to watch out for is uncooperative building managers preventing NBN contractors from accessing their premises leaving all the residents disconnected when the phone network is turned off.

Will it really cost $14,000 to wire up your house?

No but there will be a cost to connect the building’s existing phone lines and power supply to the NBN’s Network Terminal Device (NTD) that will be bolted to the outside of the building.

The NTDs are designed to plug into existing phone systems and data networks so it shouldn’t be necessary to spend a fortune on connections or upgrades.

One area where there might be problems is in buildings that have substandard wiring. Licensed electricians and cablers will refuse to work on systems that don’t comply with standards so building owners may find they are faced with big bills to bring their systems up to standard.

Does the system work if the power goes out?

Yes, the basic cabling doesn’t need power, although the repeaters and local exchanges will – just like the phone network. Where the system does need power is at the NTDs which will come with a battery providing two to three hours power.

If the NBN gets hit by lightning, does it stop working?

Lightning is an incredibly powerful force. It doesn’t matter whether we’re talking about telephones, power or fibre optic networks – anything that is hit by lightning is going to be damaged.

We should keep in mind that the wireless alternative to fibre is more prone to lightening strikes as base stations are at high points.

Electrical storms, and other natural forces, are a fact of life that we have to work around. The existing systems are just as prone to interruptions.

Is it running behind schedule?

Yes, as of the beginning of 2012 the project seems to be about six months behind. With only 4,000 connections at the end of last year instead of the 30,000 expected by the middle of last year.

NBNCo are putting this down to delays in finalising negotiations with Telstra and other existing fibre providers.

How much is it really going to cost?

There’s still the $43 billion dollar number on the table, which comes from a KPMG study in 2010 although the government claims their investment is going to $27 billion.

Of that 27 billion, the government expects to recoup it by 2034 based on a 7% return.

In contrast the opposition are claiming the real cost is $50 billion as they are including the cost of buying Telstra’s infrastructure back.

The real number is anyone’s guess. The track record of both political parties and Canberra’s bureaucrats on estimating costs on projects like this is less than impressive.

Is it really worth the money?

We should keep in mind a lot of this money was going to be spent by Telstra or the other providers anyway over the next two decades as the copper telephone reached the end of its life.

The risk was we would see something like the cable TV rollout where the big players fought over the most lucrative parts of the country and ignored the rest. The NBN avoids that.

There are real concerns though as the NBN is running behind schedule, the procurement processes – particularly the construction contracts – appear to have been poorly handled and there has been little discussion about the technology options.

Overall though, this is an opportunity to get the 21st Century infrastructure right. Where Australia failed with the roads in the 20th Century and the trains in the 19th, we can get this one right.

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The case for faster internet

Is the argument for a national broadband network being lost?

The National Broadband Network (NBN) is a project designed to deliver faster and more reliable broadband to Australia’s regions. While a good idea, it’s not without its critics and a fair degree of controversy.

One of the problems the project has is the inability of NBNCo, the company established to build and run the network, to articulate the benefits and scope of the project.

Last Friday night “John from Condobolin” grilled the Gadget Guy, Peter Blasina, about the project. John’s questions, and Pete’s answers, which can be found at 35 minutes into his program, illustrates the confusion the surrounds NBN and the failure of the project’s supporters to explain the benefits.

So how should proponents of the National Broadband Network – people like me who believe that high speed broadband are the freeways and railways of the 21st Century – respond to questions. Let’s answer John’s questions from last Friday.

Lightning might affect fibre networks

John’s first question was about lightning affecting the NBN, commenting when Pete confirmed electrical storms would affect the network that “it’s no better than the existing service.”

Sadly all infrastructure is affected by weather – a freeway is just as affected by fog as a dirt road, perhaps even more so, but it doesn’t mean you don’t build a highway because of that. The same applies for the NBN.

Interestingly the wireless and satellite alternatives proposed to fibre optic cable are even more susceptible to electrical storms, which perversely makes a better argument for running a fibre optic network.

I don’t need any NBN

“I have got quite good reception in Condobolin and I don’t need any NBN, I can assure you” was John’s next big statement.

That’s nice for John that he’s happy with what he has – the rest of us should be so lucky.

For many of his neighbours and those in the surrounding district, particularly those dealing with remote suppliers and overseas markets, reliable and fast communications are essential.

Now is good enough

A farmer doesn’t need broadband for selling into America, he’s able to do that today, was the crux of John’s next comment after he and Pete had an exchange about rolling broadband out to remote locations.

It’s true that farmers can do a lot with today’s satellite and ADSL connections, then again they were able to ship exports in the days of bullock carts and sailing ships. We could extend that argument against railway lines, roads, containers and bulk carriers.

Once upon a time some guy argued against the wheel. Today’s technology has been good enough has always been the argument of those who don’t see the benefits of new tools; we’re talking about tomorrow’s markets and society, not today’s.

Broadband is all about fibre

“You’re talking about satellite dishes and things like that, not NBN.”

The National Broadband Network isn’t just about fibre; fibre optic cables makes up the network’s core and bulk of connections, but wireless and satellite are essential in order to make sure the entire nation has access to the network.

Unfortunately the nonsense argument that technology improvements in wireless will render fibre optics redundant has been allowed to take hold by self-interested politicians and sections of the media pushing a narrow agenda.

Wireless, satellite, fibre optic and other cable technologies are all part of the mix, the real argument is on the proportions of that combination and the consequences to the government’s budget.

Spotting the clueless

As an aside, the cable versus wireless argument is a good yardstick for measuring the knowledge of anyone joining the NBN debate.

Someone clueless arguing against the project says investment in fibre optic cable is unnecessary as it’s speed and data capacities will be one day superseded by those of Wireless networks.

This betrays a failure to grasp the inherent advantage of having a dedicated cable connection to your property as opposed to sharing a wireless base station with hundreds, if not thousands, of others.

Equally anyone pro-NBN who says that fibre is faster because it travels at the speed of light is equally clueless as wireless, copper wire and even smoke signals also travel at – or close to – the speed of light.

Games and videos

“Is this only to watch videos and DVDs?” was John’s last question.

Well, does Condobolin have a video store? A quick Google search shows it does, along with local and satellite TV stations. So the residents of Condobolin are just keen as the rest of us to watch the tube.

Increasingly our viewing habits are moving online and fast broadband is necessary to deliver that. John may be happy to exclude his town from being able to do that, but my guess is plenty of his neighbours would like to have that option.

What’s more, many of those farmers, processors, trucking companies and other service providers in the Condobolin region will need those video facilities for tele-conferencing with suppliers, customers and training companies.

Building for the future

Video conferencing isn’t the only application for what we consider today to be high speed networks, these are going to change society and business in the same way the motor car changed us in the 20th Century and railways and telegraph in the 19th.

Australia made a mess of the railways and the roads, in both areas we’re still playing catch up. The National Broadband Network is an opportunity to avoid the mistakes of the last hundred years and get the 21st Century right.

Unfortunately, the objectives of building a better nation are being lost in a fog of disinformation, political opportunism and corporate incompetence. We can do better than this.

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