Now Lets Talk about Broadband Investment
March 22nd 2007 23:35
Now Lets Talk about Broadband Investment.
Time for Myapologetics to take of its political harpooning hat and put on its technical hat.
The policy announcement by Kevin Rudd to build a broad band backbone for Australia was announced just two days ago and so I won’t comment upon the specifics of his plan. However since my professional career was consumed by communication technology and the Internet I will comment upon the state of communications and what is required for the future of Australia.
Two reports have been written about communications and telecommunications that have had the greatest influence upon government policy since the late 1970’s. One looked at the monopoly of Telstra (then called Telecom) and saw it as a large heavily unionized workforce of around 80,000 people. Strategically if there was an industrial dispute one union could bring Australia to a complete stand still. It also looked at the future paths of international and telex data at the time. (Faxes and Modems were just starting out and no one could predict their future impact). Yet the future profitability of Telstra was s sure bet and the private sector wanted in. The decision was made to look at ways of breaking up Telstra and creating competition and removing the threat of Australia ever being unplugged. (Radical thoughts from a more radical time) The second report called the Beasley Report addressed the issues of data communications and the infrastructure required for Australia’s future needs. This is perhaps one of the few important documents that make me fall asleep when reading it. Fortunately there was a person paid to read this report and decipher it for me. Much has to with existing infrastructure, future infrastructure and future directions of data/internet communications.
In 2001 the Internet ball was dropped by the private sector and the Dot Com boom became a Dot Com bust. Investors that once saw anything slightly Internety suddenly ran the other way. The result of which was a massive worldwide down turn in IT employment and hold on development. The 9-11 terrorist attack was another crunch that left the whole industry punch drunk and lying on the canvas. Large corporations and smaller IT companies collapsed one after the other. There was no shortage of vapour ware company executives that had a well deserved dose of reality and scandals like MCI Worldcom added to the investor caution. It would be easy to conclude that it was Karma catching up with a crooked industry but just as many good and viable companies had their financial legs cut off as well. This resulted in mass sacking and a loss of private sector confidence in what is normally seen as an essential service. Had this industrial disaster happen in any other industry, like the motor or tourist industry I am sure that there would have been massive government support to save it. Instead the slow death was seen as industrial Darwinism cleaning up things for the private sector to take control. Either the government wanted to out of the Comms business for ideological reasons or it never saw how important it was.
Since that time Australia has been living off projects that near completion before the Dot Com collapse. Telstra had already set aside the finances for the DSL exchange equipment and the equipment was being installed at exchanges as early as 1999. RequestDSL had built a massive DSL backbone with aide of Cisco; Commindico had also invested in a massive backbone yet to be used and then there was Optus. All these large construction were being released at about the same time. There was at the time more backbone than we could use as long as you could purchase it off you competitor. The reality today is that despite there being a huge number of DSL seller they are most likely DSL resellers of the bigger networks. Changing companies will more often than not merely change who is billing you rather than what exchange equipment you are hooked up to.
So what is the problem now? The problem is one of time catching up with neglect. The build one and use it forever may work well for bridges and roads but for communications it is a disaster. Failure buy and invest in the latest technology is not only stagnation but a rapid decay as other countries invest your nation into obsolesce. That is why the broadband data in Australia has steadily declined in ranking over the years. Metaphorically we are still trying to sell and use VW Beetles in an age of flying cars. The market has moved on and sectors like the rural customers have been neglected. Move beyond 6 kilometers of an exchange and not only is broadband absent, even modems become nothing more than a paperweight. This is why selling off Telstra has been so controversial in rural areas. We have reasonable service in city and next to no service in the country and outer suburbs. Compared to any industrialized nation we really stink.
The private sector investor are not IT professionals and analysts, they are investors looking for a return. The national interest and the private sector interest may have some common goals but they can never be seen as one and the same. Investors want profits and Nations have many non profitable needs. The private sector has not come to boost the Australian Data backbone with massive investment for the future. Possible because what they have is seen as a low risk cash cow; possibly because they fear another IT crash and possibly because they are seeing better investments in other industries. Yet in order for Australia to function in the future across its vast distances it needs good communication technology. If the private sector won’t build what is needed for the National it is a no brainer, the government must step in and invest. This would never be a question asked for. Failure to do so will mean that the alienation of rural Australia will increase and make the lifestyle taken for granted in the cities unattainable. Failure to invest will also begin to alienate Australia from the advancing technology based nations in our region and further.
Time for Myapologetics to take of its political harpooning hat and put on its technical hat.
It is like we are living with black and white television in a colour age
Two reports have been written about communications and telecommunications that have had the greatest influence upon government policy since the late 1970’s. One looked at the monopoly of Telstra (then called Telecom) and saw it as a large heavily unionized workforce of around 80,000 people. Strategically if there was an industrial dispute one union could bring Australia to a complete stand still. It also looked at the future paths of international and telex data at the time. (Faxes and Modems were just starting out and no one could predict their future impact). Yet the future profitability of Telstra was s sure bet and the private sector wanted in. The decision was made to look at ways of breaking up Telstra and creating competition and removing the threat of Australia ever being unplugged. (Radical thoughts from a more radical time) The second report called the Beasley Report addressed the issues of data communications and the infrastructure required for Australia’s future needs. This is perhaps one of the few important documents that make me fall asleep when reading it. Fortunately there was a person paid to read this report and decipher it for me. Much has to with existing infrastructure, future infrastructure and future directions of data/internet communications.
In 2001 the Internet ball was dropped by the private sector and the Dot Com boom became a Dot Com bust. Investors that once saw anything slightly Internety suddenly ran the other way. The result of which was a massive worldwide down turn in IT employment and hold on development. The 9-11 terrorist attack was another crunch that left the whole industry punch drunk and lying on the canvas. Large corporations and smaller IT companies collapsed one after the other. There was no shortage of vapour ware company executives that had a well deserved dose of reality and scandals like MCI Worldcom added to the investor caution. It would be easy to conclude that it was Karma catching up with a crooked industry but just as many good and viable companies had their financial legs cut off as well. This resulted in mass sacking and a loss of private sector confidence in what is normally seen as an essential service. Had this industrial disaster happen in any other industry, like the motor or tourist industry I am sure that there would have been massive government support to save it. Instead the slow death was seen as industrial Darwinism cleaning up things for the private sector to take control. Either the government wanted to out of the Comms business for ideological reasons or it never saw how important it was.
Since that time Australia has been living off projects that near completion before the Dot Com collapse. Telstra had already set aside the finances for the DSL exchange equipment and the equipment was being installed at exchanges as early as 1999. RequestDSL had built a massive DSL backbone with aide of Cisco; Commindico had also invested in a massive backbone yet to be used and then there was Optus. All these large construction were being released at about the same time. There was at the time more backbone than we could use as long as you could purchase it off you competitor. The reality today is that despite there being a huge number of DSL seller they are most likely DSL resellers of the bigger networks. Changing companies will more often than not merely change who is billing you rather than what exchange equipment you are hooked up to.
So what is the problem now? The problem is one of time catching up with neglect. The build one and use it forever may work well for bridges and roads but for communications it is a disaster. Failure buy and invest in the latest technology is not only stagnation but a rapid decay as other countries invest your nation into obsolesce. That is why the broadband data in Australia has steadily declined in ranking over the years. Metaphorically we are still trying to sell and use VW Beetles in an age of flying cars. The market has moved on and sectors like the rural customers have been neglected. Move beyond 6 kilometers of an exchange and not only is broadband absent, even modems become nothing more than a paperweight. This is why selling off Telstra has been so controversial in rural areas. We have reasonable service in city and next to no service in the country and outer suburbs. Compared to any industrialized nation we really stink.
The private sector investor are not IT professionals and analysts, they are investors looking for a return. The national interest and the private sector interest may have some common goals but they can never be seen as one and the same. Investors want profits and Nations have many non profitable needs. The private sector has not come to boost the Australian Data backbone with massive investment for the future. Possible because what they have is seen as a low risk cash cow; possibly because they fear another IT crash and possibly because they are seeing better investments in other industries. Yet in order for Australia to function in the future across its vast distances it needs good communication technology. If the private sector won’t build what is needed for the National it is a no brainer, the government must step in and invest. This would never be a question asked for. Failure to do so will mean that the alienation of rural Australia will increase and make the lifestyle taken for granted in the cities unattainable. Failure to invest will also begin to alienate Australia from the advancing technology based nations in our region and further.
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Comment by Ahmed
techy.Bytes
Video Gamer Kids
Little Green Foosballs
PolyKicks
Qwerk
Cinema Three
I think our biggest problem that really held australia back was our old communications minister (forgot his name) who claimed that broadband was just for kids who wanted to play games or look at porn. To that end we were held back for YEARS and now we have to play catch up.
Not good in a country like this place where populations are seperated by lots of barren land
But yeah, Australia's telecommunications history is pretty badly buggered up...
Comment by Damo
For the Sake of Argument
My Apologetics
I'm not sure about another crash as the industry has been pretty well cleaned up over the past 6 years.
Many of the cowboys have moved on to work on to new get rich quick schemes. Then again the last one surprised me with how large and sustained it was.
The current minister is al that good either. She love the lights and bells of deregulation but none of the resposibility.
Definitly the biggest issue in Australian is the total neglect of data services beyond the capital cities. We have great highways and crappy sidestreets. Last mile connectivity is still the issue.
Comment by Jonathon
Anthroblogogy
i think we have so much land in australia, that we have really just jumped into the country and thrown everything up into the air. our cards fell way out into the middle of this massive country, and from there we have been trying to catch up with every form of infrastructure to these remote areas. god knows we certainly don't have the population to support what we are trying to do down here.
without trying to insult our farmers and those in remote areas, wouldn't a concentration of resources into our cities be beneficial? if urbanization was to occur, the problem of no broadband after 6 kms of an exchange wouldn't be a problem any longer. this would in turn boost commerce, followed by a increase of interest in investment within our information technology industry. and wouldn't this have a type of domino effect in increasing exchanging and building a network with real potential?
maybe 'get all of our people into our cities and start again' type of attitude would help. what are your thoughts?
Comment by Damo
For the Sake of Argument
My Apologetics
I am not sure that I can cover the redistribution of population in post this size. It also touches on issues of cetralization versed decentralization of power.
However when the outer suburbs of Melbourne still cannot get a decent service, we still have a problem.
The reality is that populations follow their income. Farmers farm where they can produce, not where they want to produce. Miners mine where the resourse are. That is the unchangeable reality of all nations.
My issue is how do we deal with the data and communication requirements of this reality instead of socially engineering society to match a singular vision.
My concern is that communication is the most fundamental issue to a nation. A failure to communicate causes everything to slow down and eventually stop.
Comment by Jonathon
Anthroblogogy
for example, it is interesting to compare the australian government with that of south korean. our government is still not sure if we need a department of communication, information technology, or arts. so why not role them all up into the one, as they are all kind of related to each other, yeah? and if you hunt around in this site for a while it fairly clear that there is no defining definition or ambition for development either. more so a re-assurance from the government that it will all be ok and it is still ok to invest into, and use the australian communication service.
however if you look at the south korean white report 2006, they are not only happy with how they have developed, but they have a clear cut plan of development and implementation of communication up until 2030, which also coincides with their 2030 vision. and i think this is a fairly decent benchmark to compare to.
the solution: i'm not sure there is a short term one, but maybe a 'collapse that the nation needs to have'.
government intervention is certainly needed to stimulate investment and development into our communication industry. however it is not that tempting of an investment for any company at the moment. so it might be said that the government has to bite the big one on this and look at installing some new technologies themselves. or else we
perhaps it is time to start stocking up on tin cans and string?
Comment by Damo
For the Sake of Argument
My Apologetics
I get the impression that you may have had a little bit to do with telecommunication in a previous life. You did gather some powerful evidence, which is rare for bloggers.
I do agree that the telstra sale not only shot us in the foot but also the head. But what can i do to turn back time?
One thing I can say is though we may disagree in detail we both agree that government intervention is now rquired to fix the problem.
Otherwise we will be back to using tin cans and string.