tag:theconversation.com,2011:/africa/topics/telstra-1680/articlesTelstra – The Conversation2022-03-02T05:10:08Ztag:theconversation.com,2011:article/1781692022-03-02T05:10:08Z2022-03-02T05:10:08ZHow Tasmania’s major digital blackout was fixed, and how another could be avoided – an electrical engineer explains<figure><img src="https://images.theconversation.com/files/449438/original/file-20220302-15-174aqgd.jpeg?ixlib=rb-1.1.0&rect=155%2C17%2C3830%2C2217&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Tasmanians <a href="https://www.abc.net.au/news/2022-03-01/widespread-telecommunications-and-internet-outage-in-tasmania/100871822">yesterday suffered a six-hour digital blackout</a>, with phone and internet services down across the state. Some radio and television broadcasts were also affected, as well as banking and electronic payment services.</p>
<p>The impact was so severe that Tasmania’s connectivity to the rest of the world was reportedly <a href="https://www.skynews.com.au/business/tech-and-innovation/tasmania-rocked-by-statewide-internet-outage-with-cause-still-unconfirmed/news-story/822f9b0963a15707cb04c429ac5840a9">reduced by 70%</a>, before services slowly began being restored around 6pm.</p>
<p>The state is connected to the Australian mainland (and the rest of the world) by three fibre-optic cables. Two are deployed by Telstra, and the third is owned by the Tasmanian government and laid along the BassLink electricity cable into Victoria. </p>
<p>By an astounding coincidence, different construction crews cut the two Telstra cables in two separate incidents: one was cut at around 11am in Victoria, near Frankston, and the other was cut at a remote location in Tasmania at around 1pm.</p>
<p>It’s not clear how this happened, given the perennial advice for construction crews to “<a href="https://www.1100.com.au/safety-information/home-owner-information/">dial before your dig</a>”. It could be the crews were working with inaccurate information, and didn’t realise they were digging on the cables’ routes. </p>
<p>The breaks in the two cables led to a major disruption to all internet and telecommunication services in Tasmania. Priority services, such as triple zero calls, were kept alive using the <a href="https://www.theguardian.com/australia-news/2022/mar/01/internet-and-mobile-services-down-across-tasmania-after-two-cables-cut">third cable</a>. </p>
<h2>A complicated setup</h2>
<p><a href="https://www.google.com/url?sa=i&url=https%3A%2F%2Fen.wikipedia.org%2Fwiki%2FSubmarine_communications_cable&psig=AOvVaw1SXqJm1oZiolwP-ifvA9YM&ust=1646216864443000&source=images&cd=vfe&ved=0CAsQjRxqFwoTCMDPke3ZpPYCFQAAAAAdAAAAABAD">Undersea fibre-optic cables</a> are made of bundles of glass fibres, each one about as thick as a strand of human hair. Information is carried along these fibre strands at high speeds in the form of light pulses.</p>
<p>The fibres are carefully arranged inside the cable, with each strand supported by a strengthening sheath. The entire cable is also protected by an outer waterproof sheath, making it suitable for undersea deployment. </p>
<p>Undersea cables leave the shore via special landing sites and loosely sit on the ocean floor. <a href="https://blog.telegeography.com/what-happens-when-submarine-cables-break">They can suffer damage</a> from anchors of passing ships, or natural disasters – which happened during the recent volcanic eruption in Tonga. But these incidents are very rare. </p>
<p>On the shore, the cables are laid underground and only accessible at key network exchange locations.</p>
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Read more:
<a href="https://theconversation.com/the-tonga-volcanic-eruption-has-revealed-the-vulnerabilities-in-our-global-telecommunication-system-175048">The Tonga volcanic eruption has revealed the vulnerabilities in our global telecommunication system</a>
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<h2>Repair logistics</h2>
<p>Repairing damage to undersea cables requires <a href="https://www.youtube.com/watch?v=r3tPI0qbLaE">specialist ships</a> that draw the cable to the ocean’s surface. One by one, the individual glass fibre strands are separated, cleaved with a diamond blade (to achieve clean polished ends on the strands), and then fused or welded back together to complete the repair. </p>
<p>The repaired link is mechanically strengthened with a protective covering, after which the network engineers run a range of tests before the link can carry network traffic again.</p>
<p>In yesterday’s events, however, the damage to the two fibre-optic cables happened along their land routes, so repair crews could fix them relatively quickly. Had the cables been damaged at undersea locations, repairs could have taken days.</p>
<p>Any delays yesterday would have mainly been a result of getting the right equipment and technical crews to the locations – especially the more remote one on the Tasmanian side. </p>
<h2>What’s the fix?</h2>
<p>The digital blackout highlighted Tasmania’s over-reliance on the <a href="https://www.abc.net.au/news/2022-03-02/tasmania-reliance-on-undersea-cables-fails-again/100873280">current fibre links</a>. The Tasmanian government has in the past failed to be part of other <a href="https://www.itnews.com.au/news/tasmania-hires-advisor-to-consider-subpartners-20m-cable-offer-402542">undersea cable projects</a> that could have provided a more diverse connection between Tasmania and the mainland. </p>
<p>The state could run into more trouble in the future, should it fail to bolster its connective capabilities. </p>
<p>As the distance between Tasmania and the mainland is about 200km, deploying wireless links (such as those used by radio towers) wouldn’t be realistic. This would require very high antenna towers and multiple repeaters in the sea. </p>
<p>And while <a href="https://www.nbnco.com.au/blog/the-nbn-project/five-questions-with-nbns-satellite-program-director">NBN satellites</a> could be used to provide some connectivity, undersea cables remain the best option. </p>
<p>Ideally, there should be investment not only in establishing a potential fourth cable link, but also in upgrading the existing infrastructure to broaden its capacity. Cables would still be impacted during adverse events, but the entire system would become much more resilient overall.</p>
<p>Diversity in the cable network is also critical, especially in terms of the physical cable routes. In situations where links are damaged, we need to be able to reconfigure the network quickly (and without human intervention). So even if a fault happens, signals can be automatically rerouted to bypass faulty links.</p>
<p>With the world’s increasing dependence on digital connectivity, and the emergence of 5G, operators like <a href="https://www.crn.com.au/news/telstra-to-splash-16-billion-on-new-fibre-networks-across-australia-575459">Telstra</a> and newcomer <a href="https://hyper.one/">HyperOne</a> are planning to build new national fibre networks. </p>
<p>In February Telstra announced plans to expand its current network in Australia, with roughly A$1.6 billion worth of upgrades expected – but specifics about where and how the money will be spent aren’t known. </p>
<p>HyperOne <a href="https://hyper.one/">also has plans</a> to build additional undersea cables linking Perth, Adelaide, Melbourne, Launceston, Hobart and Sydney. This could provide more diversified connectivity to Tasmania.</p><img src="https://counter.theconversation.com/content/178169/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Thas Ampalavanapillai Nirmalathas receives funding from the Australian and Victorian Governments as well as received funding for collaborative projects with organisations such as Telstra, Nokia, AT&T, Transurban, Digital Falcon, Eirene Holdings, InstaWireless, nbn, and Google. </span></em></p>Undersea cables are made of bundles of glass fibres, each one as thick as a strand of human hair.Thas Ampalavanapillai Nirmalathas, Professor of Electrical and Electronic Engineering and Deputy Dean Research at Faculty of Engineering and Information Technology, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1499912020-11-13T03:49:12Z2020-11-13T03:49:12ZSplit decision: Telstra’s carve-up plan comes 23 years too late for competition and customers<p>Telstra’s plan to split into three entities is the most radical shake-up of Australia’s largest telecommunications company since the Howard government began privatising it in 1997.</p>
<p>But as David Hetherington, a senior fellow at progressive think tank Per Capita, has suggested, it <a href="https://twitter.com/davidheth/status/1326698783443349504?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Etweet">comes 23 years too late</a>. </p>
<p>In privatising a public monopoly – controlling the copper wires and other infrastructure – the Howard government created a perfect storm for imperfect competition. It meant Telsta competed against other telcos to which it provided critical infrastructure services – hardly an ideal situation.</p>
<p>With the politicised and botched roll-out of the National Broadband Network, the market has become even murkier. </p>
<p>The NBN model championed by the Labor governments of Kevin Rudd and Julia Gillard – fully replacing the century-old copper-wire network connecting the nation’s homes and business with fibre optics – might have corrected the mistakes made in in the way Telstra was privatised, putting monopoly infrastructure back in public hands.</p>
<p>But the Abbott government neutered that by choosing to roll out a half-baked NBN, and now the federal government has its eyes on privatising the broadband network.</p>
<p>This is why Telstra wants to split into three entities. It is positioning to acquire NBN, putting itself back in a monopoly position. That might be good for shareholders. But it’s not good for competition and consumers.</p>
<h2>Strategic sense – for shareholders</h2>
<p>Telstra’s <a href="https://www.fool.com.au/tickers/asx-tls/announcements/2020-11-12/3a555182/proposed-corporate-restructure-roic-and-guidance/">plan</a> is this. Its existing infrastructure business, InfraCo, will continue to operate Telstra’s fixed-line assets. Mobile infrastructure will be hived off to form InfraCo Towers. The third entity, ServeCo, will own the active parts of Telstra’s mobile phone business, which includes its radio access network and spectrum assets that maintain the network’s coverage.</p>
<p>This makes strategic sense for Telstra. </p>
<p>In 2010, to make way for the National Broadband Network, the Australian parliament passed legislation requiring Telstra to split its retail and wholesale division, and sell its copper and cable broadband networks to the government-owned NBN Co.</p>
<p><a href="https://www.itnews.com.au/news/analysts-nbn-co-the-winner-from-any-telstra-split-156321">Analysts</a> at the time said it was a plus for Telstra as it would get a return on its ageing assets and free it up to focus on higher-margin revenue businesses such as its Next G Mobile and HFC Cable networks. </p>
<p>But it has lost an estimated <a href="https://www.afr.com/chanticleer/the-real-cost-of-the-nbn-to-telstra-20200213-p540dx">A$3.5 billion</a> in earnings from giving up control of its network. </p>
<h2>Positioning for a privatised NBN</h2>
<p>The split will give Telstra the opportunity to acquire a privatised NBN. </p>
<p>Federal Communications Minister Paul Fletcher last year <a href="https://www.smh.com.au/business/companies/fletcher-rules-out-nbn-sale-to-telstra-20190709-p525j0.html">ruled out</a> any chance of Telstra acquiring the NBN. No entity delivering retail telecommunications could own the broadband network, he said. “NBN cannot be owned by a vertically integrated telco.”</p>
<p>The restructure answers that: it won’t be Telstra buying NBN but InfraCo.</p>
<p>As Telstra’s chief financial officer, Vicki Brady, told <a href="https://www.morningstar.com/news/dow-jones/2020111112031/telstra-to-restructure-for-nbn-privatization-tower-monetization-update">Dow Jones</a>:</p>
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<p>The government has indicated at some point their intention is to privatise NBN and we wanted to make sure we had the optionality at that point to make sure we are at the table.</p>
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<p>Analysts now say Telstra is the most appropriate partner for a privatised NBN. It could potentially deliver a better service for NBN customers and create a more efficient Telstra.</p>
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<a href="https://theconversation.com/what-should-be-done-with-the-nbn-in-the-long-run-99294">What should be done with the NBN in the long run?</a>
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<p>Certainly NBN Co isn’t doing very well. In February it reported a half-year net loss after tax of <a href="https://www.abc.net.au/news/2020-02-11/nbn-on-track-and-on-budget-says-ceo-stephen-rue/11953694">A$2.8 billion</a>, adding to consecutive multibillion-dollar losses. It latest half-year result was a big improvement, but still <a href="https://www.zdnet.com/article/nbn-halves-ebitda-loss-in-fy20-as-revenue-grows-by-a-third/">a A$648 million loss</a>. </p>
<p>The NBN’s biggest problem is that its creation has been muddied by politics.</p>
<p>The Abbott Coalition government (elected in 2013) proclaimed it could deliver the NBN for less money by cutting back from a purely fibre-optic network to a mixed bag of fibre, coaxial cable, a century-old copper network and <a href="https://theconversation.com/around-50-of-homes-in-sydney-melbourne-and-brisbane-have-the-oldest-nbn-technology-115131">second-rate technology</a>. </p>
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<a href="https://theconversation.com/around-50-of-homes-in-sydney-melbourne-and-brisbane-have-the-oldest-nbn-technology-115131">Around 50% of homes in Sydney, Melbourne and Brisbane have the oldest NBN technology</a>
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<p>It promised to deliver the NBN for $29.5 billion, rather the estimated A$50 billion for Labor’s plan. The result: costs have blown out <a href="https://www.itnews.com.au/news/nbn-co-to-buy-telstra-network-for-11-billion-215939">fixing outdated technology</a> and NBN Co has delivered an inferior product.</p>
<p>The NBN is way over budget, over deadline and is delivering a product that’s slow and expensive. Global rankings of download speeds show Australia in 62nd place. That puts it just ahead of Montenegro, Kosovo and Kazakhstan, but trailing Uruguay.</p>
<h2>Cause for competition scepticism</h2>
<p>Telstra’s chief executive, Andy Penn, <a href="https://exchange.telstra.com.au/restructuring-telstra-our-most-significant-change-since-privatisation/">says the split</a> will improve efficiency post-NBN and ensure customers will get the best possible service. But its track record doesn’t necessarily support such confidence.</p>
<p>In 2011, for example, the Australian Competition and Consumer Commission <a href="https://www.accc.gov.au/media-release/accc-calls-for-comment-on-telstra%E2%80%99s-structural-separation-undertaking-and-draft">expressed concern</a> about Telstra’s insufficient assurance its wholesale business would treat its former retail arm and its competitors equally during the rollout of the broadband network. The competition watchdog <a href="https://www.accc.gov.au/media-release/accc-accepts-telstras-structural-separation-undertaking">green-lighted</a> the separation plan only after Telstra made changes including on pricing transparency.</p>
<p>Certainly Telstra is a technology leader in areas like mobile. But its customer service is notoriously bad. Just try calling Telstra. It is not an easy company to deal with compared to some of its competitors in the mobile and broadband retail market. </p>
<p>There should be scepticism about how effective the restructure will be and whether it can deliver a better NBN. </p>
<p>Private monopolies are rarely the best solution for customers.</p><img src="https://counter.theconversation.com/content/149991/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Leon Gettler does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Telstra is positioning itself to acquire a privatised NBN. That might be good for shareholders, but not for competition and consumers.Leon Gettler, PhD Candidate, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1481022020-10-15T05:44:19Z2020-10-15T05:44:19ZApple releases fast 5G iPhones, but not for Australia. And we’re lagging behind in getting there<figure><img src="https://images.theconversation.com/files/363599/original/file-20201015-21-1tqph2s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Following in the footsteps of Samsung, Apple has <a href="https://www.abc.net.au/news/2020-10-14/apple-iphone-12-launch-5g-charger-headphone-cost-australia/12764668">released</a> its first high-spectrum 5G smartphone, the iPhone 12. But only US customers will benefit.</p>
<p><a href="https://www.legislation.gov.au/Details/F2020L01016">High-spectrum 5G</a> uses millimetre-wave frequencies in the 26GHz range (25.1GHz to 27.5GHz). But Australia’s mobile phone networks, although they can access the mid-range 5G spectrum, don’t have access to these high frequencies. </p>
<p>Unlike the US version, the iPhone 12 model for Australia <a href="https://www.theaustralian.com.au/business/technology/apple-unveils-four-iphone-12-models-with-5g-capability/news-story/00b2f77c5f9b41f4807b83ba6d053f45">lacks</a> the distinct millimetre-wave antenna necessary to access them. In other words, Australians who purchase an iPhone 12 wouldn’t be able to access high-spectrum 5G even if it was available here.</p>
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<p>This is another stark reminder of the effort needed to enable Australia’s “<a href="https://www.industry.gov.au/funding-and-incentives/industry-40">fourth industrial revolution</a>”. Not having high-spectrum 5G available for the public and businesses right now is a letdown and will set the country back as it struggles to recover from a <a href="https://www.bbc.com/news/business-53994318">recession</a>.</p>
<h2>How did we fall so far behind?</h2>
<p>Using millimetre waves such as the 26GHz frequency range allows massive data transfer capacity over short <a href="https://exchange.telstra.com.au/weve-smashed-another-speed-record/">distances</a>. </p>
<p>Millimetre waves are what will help US iPhone 12 users reach speeds of up to 4Gbps (gigabits per second). The extra bandwidth will be especially useful in public spaces that require higher data capacity <a href="https://www.apple.com/au/newsroom/2020/10/apple-announces-iphone-12-and-iphone-12-mini-a-new-era-for-iphone-with-5g/">throughput</a>, such as shopping centres and sport stadiums.</p>
<p>In the US, Samsung’s Galaxy S20+ and Galaxy S20 Ultra, <a href="https://www.cnbc.com/2020/03/02/samsung-galaxy-s20-ultra-review-5g-100x-zoom-camera-120hz-display.html">launched</a> in March, both support millimetre-wave frequencies. But telcos AT&T, Verizon and T-Mobile had rolled out the network even before the millimetre wave 5G-capable smartphones were released. Meanwhile, individual customers and businesses in Australia are still limited to 5G in the sub‑6 GHz range.</p>
<p>The higher-frequency 5G technology is currently only available in the US, but has also been assigned in Italy and Finland. Several other <a href="https://www.rcrwireless.com/20200430/5g/global-outlook-mmwave-5g-2020">countries are planning</a> to upgrade soon, including Singapore, Japan, Taiwan and South Korea. Local licenses are also available in the UK. </p>
<p>According to a European Commission report, 15 of the European Union member states, as well as the UK, have already completed at least one <a href="http://5gobservatory.eu/wp-content/uploads/2020/07/90013-5G-Observatory-Quarterly-report-8_1507.pdf">26GHz spectrum auction</a>. And at least one spectrum auction was scheduled for this year for 25 countries, as well as the UK. </p>
<p>On the other hand, the Australian government is planning to <a href="https://www.communications.gov.au/departmental-news/spectrum-allocation-limits-released-5g">auction off</a> the use of the 26GHz frequencies in March next year, for the first time ever. </p>
<p>This leaves us trailing behind. The longer the delays in bringing the millimetre wave spectrum to Australia, the longer we’ll have to wait before benefiting from it.</p>
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Read more:
<a href="https://theconversation.com/no-5g-radiation-doesnt-cause-or-spread-the-coronavirus-saying-it-does-is-destructive-135695">No, 5G radiation doesn't cause or spread the coronavirus. Saying it does is destructive</a>
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<h2>Sold to the highest bidder</h2>
<p>Following next year’s scheduled auction, Australians may not be able to experience any 5G millimetre wave connectivity until late 2021, or even <a href="https://www.whistleout.com.au/MobilePhones/Guides/5g-in-australia-what-you-need-to-know">early</a> <a href="https://exchange.telstra.com.au/weve-smashed-another-speed-record/">2022</a>.</p>
<p>The result will depend on the best business cases put forth by mobile companies during the auction, as well as how they allocate the bandwidth between individuals and business customers. The spectrum will likely be prioritised for industrial use first, before it’s rolled out to residential customers. </p>
<p>That said, if businesses such as manufacturers, sports stadiums, shopping malls, offices and high-rise residential buildings benefit, then individual customers are likely to benefit as well. This is because costs would likely drop and prices would follow. </p>
<p>This was the strategy followed in the US and which Optus has indicated it’s also <a href="https://www.accc.gov.au/system/files/Optus_31.pdf">likely to follow</a>.</p>
<h2>What speed tests in Australia reveal</h2>
<p>During isolated tests in Australia, non-millimetre wave 5G speeds were recorded to be at least 3.9 to 4.6 times faster than 4G, for Optus and Telstra. But this is still slower than the 1Gbps speeds usually associated with <a href="https://www.opensignal.com/reports/2020/08/australia/mobile-network-experience-5g">5G</a>.</p>
<p>According to a <a href="https://exchange.telstra.com.au/world-first-5g-trial-data-call-over-26ghz-mmwave-spectrum/">Telstra report</a> from last month, millimetre-wave tests conducted by the company promised speeds of 4.2Gbps. While this was for a <a href="https://exchange.telstra.com.au/weve-smashed-another-speed-record/">data call</a>, as opposed to wifi access, these results are positive and on par with what Apple is promising for new iPhone 12 users in the US (but not <a href="https://www.theverge.com/circuitbreaker/2020/10/13/21515128/iphone-12-mini-pro-max-mmwave-5g-antenna-window">yet</a> the UK). </p>
<p>Telstra claims it already has live mobile sites that can support millimetre-wave frequencies on its network, ready for deployment. It says it has spent the past 18 months laying the foundations for a millimetre-wave 5G <a href="https://exchange.telstra.com.au/weve-smashed-another-speed-record/">network</a> to come into use once the frequencies become available.</p>
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<a href="https://images.theconversation.com/files/363596/original/file-20201015-23-mdloc0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Apple iPhone 12 promo photo." src="https://images.theconversation.com/files/363596/original/file-20201015-23-mdloc0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/363596/original/file-20201015-23-mdloc0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/363596/original/file-20201015-23-mdloc0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/363596/original/file-20201015-23-mdloc0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/363596/original/file-20201015-23-mdloc0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/363596/original/file-20201015-23-mdloc0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/363596/original/file-20201015-23-mdloc0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Apple’s iPhone 12 allows super-fast 5G capability, but so far only in the US.</span>
<span class="attribution"><span class="source">Apple</span></span>
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<h2>We’re letting ourselves down</h2>
<p>In today’s age, compounded by a global pandemic and severe economic downturns the world over, it matters whether or not a nation has millimetre-wave 5G. </p>
<p>This technology has been available in the US <a href="https://www.cnbc.com/2020/01/09/what-is-5g-heres-what-verizon-att-sprint-and-t-mobile-offer.html">since 2019</a> and its adoption is separating the world’s trailblazers from those trailing behind.</p>
<p>Millimetre-wave frequencies are important for advanced <a href="https://www.researchgate.net/publication/308274354_Industrial_wireless_communications_over_the_millimeter_wave_spectrum_Opportunities_and_challenges">manufacturing</a> <a href="https://www.sciencedirect.com/topics/engineering/millimeter-wave">processes</a>, <a href="https://theconversation.com/robot-take-the-wheel-waymo-has-launched-a-self-driving-taxi-service-147908">self-driving vehicles</a>, factory automation and reliable <a href="https://www.sciencedirect.com/topics/engineering/millimeter-wave">communications</a> across hospitals and the (now heavily remotely-operated) educational sector. These are just some areas in which high data capacity is a necessity. </p>
<p>Once millimetre wave-enabled industrial applications are rolled out, we should see customers in high-density public places prioritised for such services, before this trickles down to individuals at home. A focus on boosting business will likely underpin this sequence. </p>
<p>Australia wants to upscale its emerging technologies, research and <a href="https://www.theaustralian.com.au/nation/politics/manufacturing-vision-drives-scott-morrisons-blueprint-for-future/news-story/a877d47e2e39768e48fdc5de15f52765">manufacturing</a> capacity, with a focus on the COVID-19 bounce back. But to do this, we’ll need an even speedier resolution than under normal circumstances. </p>
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<a href="https://theconversation.com/what-is-5g-the-next-generation-of-wireless-explained-96165">What is 5G? The next generation of wireless, explained</a>
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<img src="https://counter.theconversation.com/content/148102/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Stanley Shanapinda does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Next year’s ‘spectrum auction’ will give telcos a chance to bid for access to high speed, millimetre-wave 5G. But big businesses are likely to be prioritised, not you.Stanley Shanapinda, Research Fellow, La Trobe UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1258152019-10-29T02:30:14Z2019-10-29T02:30:14ZTelstra’s new high-tech payphones are meeting resistance from councils, but why?<figure><img src="https://images.theconversation.com/files/298885/original/file-20191028-113962-lo0nuj.jpg?ixlib=rb-1.1.0&rect=14%2C8%2C1902%2C1267&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Telstra's new digital advertising payphones can be found at Melbourne's Bourke Street Mall. In this photo, the older centre booth sits between two of Telstra's larger high-tech booths. </span> <span class="attribution"><a class="source" href="https://participate.melbourne.vic.gov.au/advertising-payphones">City of Melbourne</a></span></figcaption></figure><p>Australia is witnessing the first major redesign of the payphone booth since 1983. But Telstra’s new vision is meeting resistance from some councils, and the matter is in the courts.</p>
<p>In an effort to make payphones relevant to the needs of modern Australians, Telstra’s revamped payphones feature mobile charging, Wi-Fi access through <a href="https://www.telstra.com.au/telstra-air">Telstra Air</a> (free or via a Telstra broadband plan, depending on the area), and large digital advertising displays.</p>
<p>Sydney’s Lord Mayor Clover Moore <a href="https://www.theguardian.com/business/2019/oct/20/telstra-and-city-councils-head-to-court-over-new-3m-tall-phone-booths">described</a> the new booths as “a craven attempt” to profit from “already crowded CBD footpaths”, and a “Trojan horse for advertising”.</p>
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Read more:
<a href="https://theconversation.com/will-australias-digital-divide-fast-for-the-city-slow-in-the-country-ever-be-bridged-60635">Will Australia's digital divide – fast for the city, slow in the country – ever be bridged?</a>
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<p>Under existing Universal Service Obligation (USO) agreements, Telstra has to provide payphones as part of its standard telephone service. The USO is a consumer protection measure that ensures everyone has access to landline telephones and payphones, regardless of where they live or work. Telstra is the sole provider of USO services in Australia. </p>
<p>The USO is funded through an industry levy administered by the <a href="https://acma.gov.au/Industry/Telco/Carriers-and-service-providers/Universal-service-obligation/payphones-universal-service-obligation-acma">Australian Communications and Media Authority</a>. This means registered carriers with revenues over A$25 million per year contribute to the levy, including Telstra. </p>
<h2>The face of the new Aussie payphone</h2>
<p>In a <a href="https://exchange.telstra.com.au/modernising-payphones/">blog post</a> last March, a Telstra employee said the new “<a href="https://www.telstra.com.au/consumer-advice/payphones/smart-payphone">smart payphones</a>” provided emergency alerts, multilingual services, and content services including public transport information, city maps, weather, tourist advice, and information on cultural attractions.</p>
<p>The booths are 2.64m tall, 1.09m wide, and are fitted with 75-inch LCD screens on one side. In 2016, 40 payphones were approved by City of Melbourne planners and installed over the following year, marking the start of Telstra’s plans for a nationwide rollout.</p>
<p>Telstra’s submission to the city claimed the booths were “low-impact” infrastructure and therefore planning approval was not required, in accordance with the <a href="https://www.legislation.gov.au/Series/C2004A05145">Telecommunications Act 1997 (Cth)</a>.</p>
<p>In 2017, Telstra and outdoor advertising company JC Decaux <a href="https://www.jcdecaux.com.au/press-releases/jcdecaux-renews-long-term-partnership-telstra-reinvent-payphone-australia">announced</a> a partnership to “bring the phone box into the 21st century”. </p>
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Read more:
<a href="https://theconversation.com/better-public-wi-fi-in-australia-lets-send-a-signal-17116">Better public Wi-Fi in Australia? Let's send a signal</a>
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<p>It would initially have 1,860 payphones upgraded in Sydney, Melbourne, Brisbane, Adelaide and Perth. These five cities represent 64% of the country’s population and 77% of advertising spend.</p>
<h2>Taking matters to court</h2>
<p>Earlier this year, Telstra’s application for 81 new booths was blocked by the City of Melbourne, and the city commenced proceedings in the Victorian Civil and Administrative Tribunal to have the booths redefined as not being low-impact.</p>
<p>Given the council allowed 40 booths to be installed in 2017, it’s unclear why its position has since changed. </p>
<p>In May, Telstra hit back by starting federal court proceedings against the council in an effort to overturn prior proceedings. In June, the Brisbane and Sydney city councils joined the City of Melbourne as co-respondents.</p>
<p>Melbourne Councillor and Chair of Planning Nicholas Reece said the new payphones would create congestion on busy footpaths, describing them as “monstrous electric billboards masquerading as payphones”. </p>
<p>He said the booths were “part of a revenue strategy for Telstra”.</p>
<p>But Telstra <a href="https://exchange.telstra.com.au/modernising-payphones/">claims</a> the new payphones are only 15cm wider than previous ones. A company spokesperson said the extra size was necessary to accommodate fibre connections and other equipment needed to operate the booth’s services. </p>
<h2>Who pays for, and profits from, payphones?</h2>
<p>In 2017, a Productivity Commission inquiry into the USO <a href="https://www.pc.gov.au/inquiries/completed/telecommunications/report">reported</a> an average annual subsidy of A$2,600-50,000 per payphone, funded through the industry levy.</p>
<p>But the levy doesn’t cover the cost of installing and providing advertising on booths. Also, Telstra’s advertising-generated revenue doesn’t directly offset the cost of installing and operating the payphones. </p>
<p>Telstra has advertised on its payphones for the past 30 years. But display screens for advertising on new booths are <a href="https://participate.melbourne.vic.gov.au/advertising-payphones">60% larger</a> than previous ones. </p>
<p>The City of Melbourne is concerned because <a href="https://www.sgsep.com.au/publications/insights/the-economics-of-walking-deserves-far-more-attention">commissioned research</a> by SGS Economics and Planning estimates a 10% reduction in pedestrian flow because of the new booths. This would happen as a result of people getting distracted by the payphone advertising, and would cost the city A$2.1 billion in lost productivity.</p>
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Read more:
<a href="https://theconversation.com/optus-apology-on-coverage-highlights-multi-network-problem-25204">Optus' apology on coverage highlights multi-network problem</a>
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<p>That said, federal legislation doesn’t prevent Telstra from placing advertising on payphones. So the existing court case could hinge on Melbourne city council’s argument that by increasing the size of digital displays, Telstra’s new payphones are no longer low-impact. </p>
<p>The outcome should be known early next year.</p>
<h2>Do we still need payphones?</h2>
<p>At a time when consumers and businesses use about <a href="https://www.accc.gov.au/media-release/new-report-tracks-internet-activity-on-mobile-and-fixed-lines">24.3 million mobile handsets</a>, it’s reasonable to <a href="https://theconversation.com/will-australias-digital-divide-fast-for-the-city-slow-in-the-country-ever-be-bridged-60635">question whether</a> payphones are still required. </p>
<p>The number of payphones in operation today is sharply down compared with the payphone’s heyday in the early 1990s, when more than 80,000 could be found across Australia.</p>
<p>But there’s strong evidence they continue to supply a vital public service.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/298804/original/file-20191027-113991-16vo5j8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/298804/original/file-20191027-113991-16vo5j8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/298804/original/file-20191027-113991-16vo5j8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=254&fit=crop&dpr=1 600w, https://images.theconversation.com/files/298804/original/file-20191027-113991-16vo5j8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=254&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/298804/original/file-20191027-113991-16vo5j8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=254&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/298804/original/file-20191027-113991-16vo5j8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=320&fit=crop&dpr=1 754w, https://images.theconversation.com/files/298804/original/file-20191027-113991-16vo5j8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=320&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/298804/original/file-20191027-113991-16vo5j8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=320&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Telstra’s payphones operate in many small regional communities such as Woomera, South Australia. It has a population of less than 200 people.</span>
<span class="attribution"><span class="source">georgiesharp/flickr</span></span>
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<p>Currently, Telstra provides more than 16,000 public payphones. Last year, these were used to make about 13 million phone calls, of which about 200,000 were emergency calls to 000.</p>
<p>So regardless of the verdict on the Telstra case, the public payphone is and will continue to be an iconic and integral part of our telecommunications landscape.</p><img src="https://counter.theconversation.com/content/125815/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Mark A Gregory has received funding from grant organisations, including the Australian Research Council and the Australian Communications Consumer Action Network. He is the Chair of the Australian Association for Information and Communication Technology and the Managing Editor of the Journal of Telecommunications and the Digital Economy.</span></em></p>The new payphones have Wi-Fi, mobile charging and transport information. But city councils are concerned they’re digital billboards for Telstra, which could cost billions in lost productivity.Mark A Gregory, Associate professor, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1021992018-08-31T02:27:17Z2018-08-31T02:27:17ZWhat is a mobile network, anyway? This is 5G, boiled down<figure><img src="https://images.theconversation.com/files/234167/original/file-20180830-195313-2916py.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Once it's up and running, the main change for 5G users will be increased speed and reduced delay. </span> <span class="attribution"><a class="source" href="https://unsplash.com/photos/FPt10LXK0cg">Robin Worrall/Unsplash</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span></figcaption></figure><p>Who will build Australia’s 5G mobile phone network? </p>
<p>Not Chinese telecommunications infrastructure company Huawei, which was recently <a href="http://www.abc.net.au/news/2018-08-23/huawei-banned-from-providing-5g-mobile-technology-australia/10155438">excluded from involvement</a> via a statement from then acting Home Affairs Minister Scott Morrison – now prime minister – and Communications Minister Mitch Fifield.</p>
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Read more:
<a href="https://theconversation.com/explainer-why-chinese-telecoms-participating-in-australias-5g-network-could-be-a-problem-97690">Explainer: why Chinese telecoms participating in Australia's 5G network could be a problem</a>
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<p>Australia’s 5G is likely to be up and running sometime in the <a href="https://ajtde.telsoc.org/index.php/ajtde/article/view/63">next few years</a>, with some <a href="https://www.telstra.com.au/aboutus/media/media-releases/Telstra-offers-Australias-first-taste-of-5G">trials already underway</a>. </p>
<p>Nevertheless, widespread rollout needs equipment to be purchased, tested and deployed. It needs sites to be obtained for base stations. It needs software upgrades to billing and management systems. So it’s likely to be a little way off yet.</p>
<h2>The nuts and bolts of a network</h2>
<p>5G will have the same high level architecture as previous cellular networks, but the intricate details are very different. </p>
<p>In very simple terms, a cellular mobile network consists of three components: mobile devices, a radio access network and a core network. </p>
<p>The mobile device might be a smart phone, tablet, or a computer with a USB dongle, but could also be a low-cost sensor with a simple transmitter. </p>
<p>The radio access network consists mainly of base stations (mobile phone towers), and is connected to the core network. The base station uses radio waves to relay communications between the mobile device and the core network. The area covered by a base station is called a cell.</p>
<p>The core network’s main role is to set up communication with other devices and other networks, user management and record information for billing. </p>
<p>Each generation of cellular networking has introduced radical changes to what the network does and how it does it. </p>
<p>Previous generations have seen communications moving from analogue to digital, have introduced data services, have moved to a simplified architecture, have increased the data speed available to end users and increased bandwidth efficiency.</p>
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Read more:
<a href="https://theconversation.com/only-with-urgent-change-can-australias-mobile-networks-meet-our-voracious-demand-for-data-99442">Only with urgent change can Australia's mobile networks meet our voracious demand for data</a>
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<h2>How is 5G different?</h2>
<p>Many of the changes introduced by 5G will be in the base stations and core network. These are less apparent to end users, but very important for the network operators.</p>
<p>5G will make use of much higher frequencies for radio communications than has been used in cellular networks in the past. </p>
<p>Since higher frequencies attenuate (weaken) with distance more rapidly than lower frequencies, 5G will use much smaller cell sizes than previous generations. In urban areas cell sizes might only be a few hundred metres in diameter. </p>
<p>Small cell sizes make available previously unused radio frequencies – but introduce additional complexity in managing interference and handover of mobile stations from one base station to another. </p>
<p>5G will also support very large numbers of devices per cell. <a href="https://www.itu.int/md/R15-SG05-C-0040/en">One of the working parties developing 5G standards</a> specifies a minimum of one million devices per square kilometre.</p>
<p>Being able to support such large numbers of devices is important for the “<a href="https://theconversation.com/internet-of-things-when-objects-threaten-national-security-96962">Internet of Things</a>” – where household devices and machinery are also connected to the internet.</p>
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Read more:
<a href="https://theconversation.com/the-5g-network-threatens-to-overcrowd-the-airwaves-putting-weather-radar-at-risk-97179">The 5G network threatens to overcrowd the airwaves, putting weather radar at risk</a>
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<p>5G will make use of sophisticated signal processing techniques such as Multi Input, Multi Output (MIMO) antennae – which will improve the efficient use of bandwidth. </p>
<p>Because the frequency is higher, the wavelength is smaller (around one millimetre). Optimal antenna size is related to the wavelength. Small wavelengths mean more antennae can be used per mobile node than has been possible in the past which is the basis of MIMO.</p>
<p>Another significant change for 5G will be to centralise much of the processing that in the past was carried out at the base stations. Dealing with the high density of devices and doing sophisticated processing requires a great deal of computing power. Rather than having each base station doing it, the raw data will be transmitted to a central location and be processed there.</p>
<p>China’s Huawei has taken a leading role in the development of 5G. It has made substantial contributions to the standards development process and has been among <a href="https://www.reuters.com/article/us-telecoms-5g-china/chinas-huawei-set-to-lead-global-charge-to-5g-networks-idUSKCN1G70MV">the first to carry out substantial trials</a>. </p>
<p>China is expected to be the largest global market for 5G with some <a href="https://www.telecomasia.net/content/china-capture-40-5g-subs-2025">predictions of more than 400 million connections by 2025</a>. </p>
<h2>Will my phone service improve?</h2>
<p>Once it’s up and running, the main change for 5G users will be increased speed and reduced delay. </p>
<p>Plans are for peak data rates of around 20 gigabits per second (Gbps) down to the receiver, and 10 Gbps up to the base station. The delay (the time taken to get a packet from the mobile device to the base station) will for most users be less than 4 milliseconds. </p>
<p>Fixed wireless setups are already operating in Europe that use technologies we know will be used in 5G. </p>
<p>However, even though we know what technologies 5G will use, the detailed standards for mobile cellular networks are still to be formalised. Without them, companies cannot produce networking equipment and handsets. </p>
<p>Telecommunications companies need to find sites for the base stations, install the systems and upgrade their software. Consequently, we are still a few years off widespread deployment. </p>
<p>And we don’t know who will build it in Australia.</p><img src="https://counter.theconversation.com/content/102199/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Philip Branch does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>5G is similar to existing mobile networks, but with key differences in hardware and software. And we still need to work out who will build this infrastructure in Australia.Philip Branch, Associate Professor in Telecommunications Engineering, Swinburne University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/880722018-08-23T01:55:27Z2018-08-23T01:55:27ZCompanies keep slashing jobs, but new technologies won’t replace good management<p>As technology improves, it’s tempting for company executives to <a href="http://www.abc.net.au/news/2018-08-22/telco-wrap-nbn-new-ceo-tpg-vodafone-talks-optus-cuts-jobs/10151410?section=business">slash jobs</a> that are “standard” and “routine”, <a href="https://www.pc.gov.au/research/completed/digital-disruption/digital-disruption-research-paper.pdf">making them easy to automate</a>. But research shows focusing on improving management practices will do more to improve companies’ bottom lines.</p>
<p>In a <a href="https://www.nber.org/papers/w23300">study</a> of 32,000 manufacturing firms, American researchers showed firms using certain management practices had 20% better productivity than firms that neglected to use them. </p>
<p>At the same time, integrating technology into business practices was found to only improve firm productivity by 10%. </p>
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Read more:
<a href="https://theconversation.com/why-coaching-not-gadgets-is-key-to-getting-the-most-out-of-employees-87769">Why coaching, not gadgets, is key to getting the most out of employees</a>
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<p>The firms <a href="https://www.nber.org/papers/w23300">studied</a> varied widely in how much they used structured management practices - targets, performance monitoring and incentives. Targets and monitoring make it clear what <a href="http://www.jstor.org/stable/pdf/977173.pdf">employees need to do and whether they are doing it</a>. The right incentives give them a reason to make the necessary effort.</p>
<p>This suggests organisations such as <a href="http://www.abc.net.au/news/2018-08-22/telco-wrap-nbn-new-ceo-tpg-vodafone-talks-optus-cuts-jobs/10151410?section=business">Optus</a>, <a href="http://www.abc.net.au/news/2017-06-14/telstra-confirms-1400-jobs-axed-in-australia/8617074">Telstra</a>, the <a href="https://www.businessinsider.com.au/the-big-banks-have-cut-4200-jobs-in-12-months-2016-5">big four banks</a>, <a href="https://cpsu-csiro.org.au/2017/09/15/job-cuts-set-to-rock-csiro-minerals-and-data-research/">CSIRO</a> and the <a href="http://about.abc.net.au/our-abc-our-future/">ABC</a>, who have all cut jobs citing the possibility of new technology, may be pursuing the least effective option. </p>
<h2>What’s good management in practice?</h2>
<p>To avoid over-relying on technology while keeping up with change, managers must have the <a href="https://iedunote.com/management-science-art">creativity and persuasiveness of an artist as well as the objectivity of a scientist</a>. </p>
<p>While standard, routine problems can be automated, others require managers to invent a range of options, choose among these alternatives, and then persuade other people to follow that choice. </p>
<p>In “<a href="http://classics.mit.edu/Aristotle/rhetoric.1.i.html">The Art of Rhetoric</a>” Aristotle described the skills necessary:</p>
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<li><em>ethos</em>: an understanding of human character and goodness. To change a situation, managers need credibility and authenticity</li>
<li> <em>logos</em>: the capacity to reason logically. Managers must put forward a rigorous case for converting a firm’s problems into ideas, then options, then actions</li>
<li> <em>pathos</em>: the ability to understand emotions. To persuade people, especially in large numbers, managers must understand their audience.</li>
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<p>Managers shedding staff in the interests of organisational survival face a severe test of all three persuasion skills. In terms of <em>ethos</em> (credibility and authenticity), managers need to admit they cannot offer loyalty to employees and so should not expect it. </p>
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Read more:
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<p>Rather than <a href="http://www.abc.net.au/news/2018-08-22/telco-wrap-nbn-new-ceo-tpg-vodafone-talks-optus-cuts-jobs/10151410?section=business">shedding jobs in favour of technology</a>, and at a minimum, organisations should offer training to prepare people for the time they will no longer be needed. And, respecting <em>pathos</em> (emotional understanding), treat departing employees with care and respect.</p>
<p>A drop in share price is a sign shareholders lack confidence in the <em>logos</em> (reasoned logic) of an organisation’s strategy. But there are other, more subtle signals an organisation has over-played its digital capabilities. </p>
<p>An example is the reputational damage to organisations that use cybervetting - seeking information about job applicants from social media and search engines. <a href="http://onlinelibrary.wiley.com/doi/10.1002/9781118955567.wbieoc054/full">Studies of cybervetting</a> show some employers use technology to better their business at potentially the expense of good management. </p>
<p>Employers see cybervetting as a digital extension of background checking that increases organisational efficiency. Some even see it as the beginning of an employment relationship. But applicants disagree with this logic, perceiving the practice as unfair. </p>
<p>Cybervetting reduces applicants’ trust and identification with the organisation because they perceive it as lacking <em>ethos</em> (credibility and autheniticity). Its reputation is damaged in their eyes so they are less likely to accept a job offer.</p>
<h2>Framing a solution</h2>
<p>Applying technology to organisational processes is part of working smarter, not harder. Careful management is the other part. But as organisations’ technological capacities grow, managers need to ask themselves what is possible and desirable when using technology. </p>
<p><em>Logos</em> (reasoned logic) and <em>ethos</em> (credibility and authenticity) will be useful as they do this. Then, using <em>pathos</em> (emotional understanding), they must try to understand how others are likely to frame their answers to similar questions. </p>
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Read more:
<a href="https://theconversation.com/why-the-end-of-auto-manufacturing-wont-be-as-apocalyptic-as-previous-mass-layoffs-85521">Why the end of auto manufacturing won't be as apocalyptic as previous mass layoffs</a>
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<p>Applicants, unlike employers, don’t see cybervetting as a more efficient replacement for personal interaction during the early stages of an employment relationship. To use <a href="https://books.google.com.au/books?id=nz1RT-xskeoC&printsec=frontcover&dq=karl+e+weick&hl=en&sa=X&ved=0ahUKEwjHy7OH4Y3YAhUOObwKHRdSAaQQ6AEIKTAA#v=onepage&q=karl%20e%20weick&f=false">Karl Weick’s term</a>, job applicants and employers <a href="https://pdfs.semanticscholar.org/c5ef/1af1d6b68ed0d97b7aa19de748550a379fa7.pdf">make sense</a> of the same situation differently. </p>
<p><a href="http://classics.mit.edu/Aristotle/rhetoric.1.i.html">Aristotle’s ancient typology of management skills</a> promises to remain useful as digital solutions - and dilemmas - increase.</p><img src="https://counter.theconversation.com/content/88072/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Mary Barrett does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Management trumps technology in making companies productive, but that doesn’t mean firms can be complacent when it comes to keeping up with change.Mary Barrett, Professor of Management, University of WollongongLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/992942018-07-22T20:09:59Z2018-07-22T20:09:59ZWhat should be done with the NBN in the long run?<p>The National Broadband Network (NBN) should be built and fully operational by 2022, having cost about A$50 billion. <a href="https://telsoc.org/ajtde/2018-06-v6-n2/a155">The question will then be</a> whether the government should retain the NBN or sell it off. </p>
<p>The current government has <a href="https://www.communications.gov.au/departmental-news/government-responds-vertigan-reviews">laid the groundwork</a> for NBN to be broken up and sold off. But this could end the NBN’s positive disruption of the telecommunications market, which includes lower prices, increased competition, improved access for consumers and more services being offered.</p>
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Read more:
<a href="https://theconversation.com/telstra-may-be-simpler-but-where-will-revenue-come-from-98768">Telstra may be simpler, but where will revenue come from?</a>
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<p>In a <a href="https://telsoc.org/ajtde/2018-06-v6-n2/a155">recent paper</a> I outlined four options for the NBN:</p>
<ul>
<li>government retains the NBN</li>
<li>sell NBN as a single entity</li>
<li>disaggregate NBN technologies and sell them separately</li>
<li>disaggregate NBN technologies, excluding satellite and fixed wireless, and sell off separately.</li>
</ul>
<p>Breaking up the NBN could result in the creation of geographic monopolies, hurting rural and regional consumers especially.</p>
<p>Telstra’s recent decision to hive off its infrastructure into separate companies gives Australia the opportunity to do what <a href="https://www.chorus.co.nz/">New Zealand has done</a>: create a new, publicly listed company that contains the NBN and parts of Telstra’s infrastructure.</p>
<p>But there is a valid argument for the government to retain NBN Co. as a government enterprise beyond the NBN rollout.</p>
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Read more:
<a href="https://theconversation.com/australias-digital-divide-is-not-going-away-91834">Australia's digital divide is not going away</a>
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<p>The NBN has brought about an unprecedented period of positive change in the telecommunications market. But there is more to be done, including a further reduction in the <a href="https://theconversation.com/australias-digital-divide-is-not-going-away-91834">digital divide between urban and regional and remote areas</a>, and upgrading from fibre to the node to fibre to the curb or fibre to the premises.</p>
<p>By retaining ownership of the NBN for the next decade, the government could provide a stable level playing field upon which the telecommunications market can thrive. </p>
<p>For the major carriers, the focus over the next decade will be to build competing 5G networks. The sale of the NBN during this time could return the industry to the chaos that existed before the NBN.</p>
<h2>Who would buy the NBN?</h2>
<p>The first major concern for anyone buying part of the NBN is the A$15 per customer per month <a href="http://parlinfo.aph.gov.au/parlInfo%E2%80%8C/search/summary%E2%80%8C/summary.w3p;%E2%80%8Cadv=yes;orderBy=customrank;page=0;query=nbn%20Date%3A24%2F10%2F2017%20Dataset%3Aestimate;resCount=Default">paid to Telstra</a> for a majority of the fixed connections to the NBN. </p>
<p>This is a payment for the use of Telstra’s existing infrastructure, such as the ducts that run along streets and the telephone exchanges where NBN systems are now located.</p>
<p>This payment is a major impediment to the NBN having a successful business model. There is some doubt whether Optus, Vodafone or TPG would bid for part of the NBN knowing that they would be required to make a monthly payment to Telstra for most of the customers they connect.</p>
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Read more:
<a href="https://theconversation.com/nbn-faces-irrelevance-in-cities-as-competitors-build-faster-cheaper-alternatives-92275">NBN faces irrelevance in cities as competitors build faster, cheaper alternatives</a>
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<p>Telecommunications networks are a “<a href="https://www.investopedia.com/terms/n/natural_monopoly.asp">natural monopoly</a>”, similar to roads, rail, gas and electricity. This is because of the high startup costs of building the networks, especially for the segments closest to homes and businesses (also known as the last mile).</p>
<p>In high-value urban areas it is possible to build financially viable infrastructure that competes with incumbents. But this does not solve the problem of competition in lower-value outer urban, regional and remote areas.</p>
<p>No solution to this problem has been forthcoming. This is one of the reasons the NBN came into being in the first place.</p>
<h2>How do you break up the NBN?</h2>
<p>Outside of the high-value urban areas there is no guarantee of infrastructure-based competition, so regulation is required to ensure broadband in those areas keeps up with what is offered in the high-value urban areas.</p>
<p>The government <a href="http://johnmenadue.com/mark-gregory-a-new-broadband-levy-in-another-nbn-bungle/">has already</a> introduced a levy to subsidise the cost of providing broadband in regional and remote areas. But more needs to be done to ensure regional and remote telecommunications is improved continuously.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/5g-will-be-a-convenient-but-expensive-alternative-to-the-nbn-86216">5G will be a convenient but expensive alternative to the NBN</a>
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<p>Breaking up the NBN will also likely result in smaller geographic monopolies, with different technologies used in each network – fixed wireless, satellite and transit etc.</p>
<p>So rather than have one infrastructure monopoly (NBN Co.) wholesaling products and services, we could end up with the bigger telcos becoming monopoly providers by purchasing one or more of the technology footprints.</p>
<p>Consumers, especially those in regional and remote areas, will likely be hit with steep price rises with the end of uniform national wholesale pricing.</p>
<h2>The New Zealand option</h2>
<p>Telstra has <a href="https://exchange.telstra.com.au/establishing-standalone-infrastructure-business/">announced</a> that it is creating a standalone company called InfraCo, that will be:</p>
<blockquote>
<p>… accountable for our copper and HFC networks; all our fibre network that is not dedicated to supporting mobiles; all ducts, pits and pipes; property including exchange buildings and data centres; and international and domestic subsea cables. These assets will be combined with Telstra Wholesale and the teams in Telstra Operations that provide services to NBN Co.</p>
</blockquote>
<p>This provides Telstra with the opportunity to participate in the future sale of the NBN. Telstra could spin off InfraCo as a separate ASX-listed company, take on infrastructure investors for a future purchase of the NBN, or part of the NBN, and effectively follow what happened in New Zealand with Telecom New Zealand becoming Spark (retail/mobile) and Chorus (wholesale).</p>
<p>If Telstra splits into two ASX-listed companies so that InfraCo can purchase the NBN, the result would be a company with about A$10 billion in revenue and A$30 billion in infrastructure assets. This would be a viable company that is able to service the government debt repayments while making a reasonable return to shareholders.</p>
<p>It is likely this outcome would be more palatable to the rest of the telecommunications industry because the positive disruption to the market caused by the NBN would continue.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/the-nbn-needs-subsidies-if-we-all-want-to-benefit-from-it-81562">The NBN needs subsidies if we all want to benefit from it</a>
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<p>If the NBN is sold off, the focus must shift to the telecommunications legislation and regulations, setting a minimum broadband connection speed and capacity that infrastructure wholesalers are to provide without penalty, and focusing on how to further reduce the digital divide between urban and regional and remote areas.</p>
<p>The key for a future government decision on what to do with the NBN is that it should not be considered in isolation. There are a number of linked issues, including the <a href="https://www.communications.gov.au/what-we-do/phone/phone-services/universal-service-obligation">universal service obligation</a>, <a href="https://telsoc.org/ajtde/2015-12-v3-n4/a45">universal access</a>, <a href="https://www.telstra.com.au/aboutus/investors/frequently-asked-questions/foreign-shareholding">foreign ownership restrictions</a> and wholesale competition.</p><img src="https://counter.theconversation.com/content/99294/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Mark A Gregory does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The NBN is on track to be privatised after the infrastructure is completed, but there are a number of other options that would retain the benefits of its disruption of the telecommunications market.Mark A Gregory, Associate professor, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/987682018-06-26T19:49:20Z2018-06-26T19:49:20ZTelstra may be simpler, but where will revenue come from?<p>Telstra’s <a href="https://exchange.telstra.com.au/telstra2022-our-plan-to-lead/">recent restructure</a> slashes jobs, simplifies its operations and product offering. But this is just a short-term accounting fix. It does not solve what is for Telstra a long-term problem – finding new sources of revenue.</p>
<p>The new strategy is centred on investment in 5G while making Telstra smaller and simpler. But 5G might not fill the <a href="https://www.businessinsider.com.au/ratings-downgrade-telstra-nbn-2018-5">A$3 billion hole</a> caused by the national broadband network (NBN). And the last few years are littered with Telstra’s abortive attempts at investing and building new sidelines in emerging markets and technologies.</p>
<p>Telstra has identified new products and services based on the Internet of Things, big data and data analytics. But this is just as offerings from Microsoft (Skype) and Netflix (media) are gaining ground.</p>
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Read more:
<a href="https://theconversation.com/australia-post-telstra-and-the-dying-business-dilemma-27859">Australia Post, Telstra and the 'dying business' dilemma</a>
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<p>Telstra’s <a href="https://www.asx.com.au/asx/share-price-research/company/TLS">share price</a> has fallen from A$6.735 on February 4 2015, 16 days before CEO Andy Penn was <a href="https://exchange.telstra.com.au/david-thodey-retires-andrew-penn-appointed-new-chief-executive-officer-of-telstra/">appointed</a>, to a low of A$2.68 on June 22 2018. </p>
<p>On August 17 2017, Telstra <a href="https://exchange.telstra.com.au/telstra-full-year-financial-results-2017/">announced</a> a 33% fall in full-year profit to A$3.9 billion, with revenue expected to remain flat. Dividends were reduced from 31 cents per share in FY17 to 22 cents per share in FY18.</p>
<p>To address these issues, the strategy is to reshape the company through a net reduction of 8,000 employees (about a quarter of Telstra’s workforce) and divest some infrastructure into a new company, InfraCo. </p>
<p>The key points are:</p>
<ul>
<li>radically simplify product offerings and create all-digital experiences</li>
<li>establish a standalone infrastructure business unit</li>
<li>greatly simplify the company’s structure and ways of working</li>
<li>pursue a cost-reduction program and portfolio management.</li>
</ul>
<p>Speaking at Telstra’s <a href="https://www.telstra.com.au/aboutus/investors/financial-information/investor-presentations">strategy update</a> last Wednesday, CEO Andy Penn said:</p>
<blockquote>
<p>Currently around 15% of homes in Australia choose to have no fixed broadband service, and we can see a situation where this increases by a further 10 to 15 percentage points. This isn’t about bypassing the NBN. This is about giving customers what customers are looking for.</p>
</blockquote>
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<p>
<em>
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Read more:
<a href="https://theconversation.com/5g-will-be-a-convenient-but-expensive-alternative-to-the-nbn-86216">5G will be a convenient but expensive alternative to the NBN</a>
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<p>A key problem with the focus on 5G is that competition from Optus, Vodafone and TPG will be fierce, making any missteps all the more difficult to overcome. Penn recently said that telco revenues <a href="https://www.afr.com/opinion/columnists/andy-penn-bets-telstras-future-on-5g-20180620-h11mv4">were expected</a> to fall by 2-3% over the next financial year.</p>
<p>With 5G revenues not expected to make an impact until 2020 and beyond, the immediate future for Telstra is to shrink, simplify offerings and survive.</p>
<p>The move to create a <a href="https://www.businessinsider.com.au/telstra-new-infrastructure-business-2018-6">new infrastructure business</a> with about 3,000 employees, A$11 billion in assets and revenue of A$5.5 billion is a long-awaited step that could ultimately lead to a post-NBN rollout listing of Telstra’s InfraCo on the ASX.</p>
<p>Separation of the business also permits Telstra to place an internal emphasis on the increasingly competitive retail and mobile offerings. This is an important move because Telstra has to accept lower margins from its mobile division to protect market share.</p>
<p>The market had anticipated that Telstra would reduce its employees and product offerings, and the decision to separate the retail and infrastructure businesses was seen as long overdue. However, the restructure <a href="https://www.theaustralian.com.au/business/companies/telstras-revival-plan-fails-to-convince-investors/news-story/9c6c799325135893431ba474daa488fc">failed to convince investors of a revival</a> in the short term and the share price has continued to languish.</p>
<h2>A spate of poor investments</h2>
<p>Earlier this year, Telstra made the <a href="http://www.abc.net.au/news/2018-02-02/telstra-writes-off-ooyala-investment-to-zero/9387794">decision</a> to write off the remaining A$273 million in the Ooyala video streaming business, making the total writedown A$500 million over the past two years.</p>
<p>Telstra’s <a href="https://www.afr.com/brand/chanticleer/telstras-andy-penn-cools-on-asian-strategy-to-futureproof-core-network-at-home-20160811-gqq52d">unimpressive forays into Asia</a> include a Chinese car sale website, a failed effort to break into Vietnam and the Phillipines, and a partnership with PT Telkom.</p>
<p>A defensive shift in 2016 saw Telstra <a href="https://www.afr.com/brand/chanticleer/telstras-andy-penn-cools-on-asian-strategy-to-futureproof-core-network-at-home-20160811-gqq52d">back away</a> from its “ambitious plans to expand its retail reach into Asia in favour of shoring up its core business in Australia”.</p>
<p>Over the past three years, Penn has described how Telstra <a href="https://www.smh.com.au/business/companies/can-andy-penn-save-telstra-and-his-job-20180518-p4zg3b.html">would become</a> a “world-class technology company that empowers people to connect”, with a major impact in growth technology areas <a href="https://www.afr.com/technology/andy-penns-plan-for-telstra-to-become-a-global-tech-giant-takes-shape-20170825-gy4e7c">including</a> “cloud computing, cyber security, the Internet of Things and media content delivery”.</p>
<p>Other investments, including a tech startup lab and Telstra’s much-vaunted eHealth strategy, haven’t produced the goods either.</p>
<p>Telstra’s new strategy appears to be a <a href="http://www.abc.net.au/news/2018-06-20/telstra-to-slash-8000-jobs/9889116">shift away from growth opportunities</a> in the short term while bold action is taken to shore up the core business.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/google-schmoogle-how-yellow-pages-got-it-so-wrong-27936">'Google Schmoogle' – how Yellow Pages got it so wrong</a>
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<p>This strategy might arrest the slide in investor confidence, but it enshrines the notion that Telstra has failed to take advantage of growth opportunities in the top products and services over the past decade. This has resulted in Telstra now being under siege.</p>
<p>Microsoft (Office365, Skype and Linkedin), Netflix (streaming media) and a <a href="https://www.smartcompany.com.au/startupsmart/advice/business-planning/australias-top-10-internet-of-things-companies-to-watch/">plethora</a> of Internet of Things companies are making inroads into the Australian market.</p>
<p>Telstra’s stop-start approach to future investment and growth opportunities has meant that it has failed to establish itself in any of these markets.</p>
<p>The next global wave of <a href="https://www.credit-suisse.com/corporate/en/articles/news-and-expertise/the-emerging-consumer-drives-gaming-and-esports-growth-201804.html">internet-based product and service development</a> includes eGames, eSports, eGovernance and virtual reality, yet Telstra does not appear to be an active participant in emerging consumer growth products.</p>
<p>And this is possibly the biggest problem Telstra faces today. It does not seem to have the vision and long-term strategy focus needed to be anything more than a local telecommunications company.</p><img src="https://counter.theconversation.com/content/98768/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Mark A Gregory does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The new strategy is centred on investment in 5G while making Telstra smaller and simpler. But 5G might not fill the A$3 billion hole caused by the NBN.Mark A Gregory, Associate professor, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/870952017-11-09T05:01:23Z2017-11-09T05:01:23ZThe ACCC investigation into the NBN will be useful. But it’s too little, too late<p>The Australian Competition and Consumer Commission (ACCC) has <a href="https://www.accc.gov.au/regulated-infrastructure/communications/national-broadband-network-nbn/nbn-wholesale-service-standards-inquiry">launched</a> a public inquiry into the National Broadband Network (NBN). Already, <a href="https://www.accc.gov.au/media-release/telstra-offers-to-compensate-42000-customers-for-slow-nbn-speeds">Telstra</a> and <a href="http://www.abc.net.au/news/2017-11-09/optus-latest-telco-to-compensate-customers-for-slow-nbn/9132778">Optus</a> have come forward, offering to compensate customers whose expectations of internet speed delivery were not met. </p>
<p>But it’s four years too late. The ACCC dropped the ball when it allowed Telstra, Optus and its competitors to launch their NBN services without specific rules concerning <a href="https://adstandards.com.au/products-issues/misleading-and-deceptive-advertising">misleading and deceptive advertising</a>, or an enforcement mechanism to hold the NBN company to account for connection delays, missing appointments and fault rectification. </p>
<p>Now we’re in a position where the problems with the NBN run deeper than what can be solved through an investigation or more monitoring. Bad decisions about the technology, lack of hard data on performance and a war of words by competing providers makes it hard to untie responsibility for the mess.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/like-it-or-not-youre-getting-the-nbn-so-what-are-your-rights-when-buying-internet-services-85904">Like it or not, you're getting the NBN, so what are your rights when buying internet services?</a>
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<p>The <a href="https://www.accc.gov.au/regulated-infrastructure/communications/national-broadband-network-nbn/nbn-wholesale-service-standards-inquiry">stated aims</a> of the ACCC public inquiry are to determine whether NBN wholesale service standard levels are appropriate, and consider whether regulation is necessary to improve consumer experiences. </p>
<p>The data released this week by the ACCC <a href="https://www.accc.gov.au/media-release/accc-releases-quarterly-report-on-the-nbn-wholesale-market-4">Wholesale Market Indicators Report</a> shows that:</p>
<ul>
<li>NBN Co is supplying more than three million wholesale broadband access services</li>
<li>there are 26 NBN Co retail and wholesale internet service providers (ISPs - also known as “access seeker groups”) directly connected to NBN Co’s network</li>
<li>the top four ISPs are Telstra, Optus, TPG Group and Vocus. </li>
</ul>
<h2>Optimism bias, and how we got here</h2>
<p>In <a href="https://en.oxforddictionaries.com/definition/behavioural_economics">behavioural economics</a>, optimism bias refers to the phenomenon that we think markets are going to work out well even when there is no rational basis for supposing so. A similar optimism bias is often seen in infrastructure projects. </p>
<p>In the case of the NBN there were a few strategic opportunities to reduce the chances of market failure, but optimism bias by policymakers let the opportunities slip by.</p>
<p>And now we’re in the position where – in common with <a href="http://www.news.com.au/finance/business/cheat-sheet-how-your-energy-provider-measures-up/news-story/a84a6c7860fb09779869360e2d6a2b34">energy retailers</a>, deregulated providers of <a href="https://www.theguardian.com/australia-news/2015/oct/14/crackdown-alleged-unscrupulous-vocational-education-providers">vocational education</a> and <a href="http://www.smh.com.au/small-business/the-venture/epic-fail-australias-worst-customer-service-20101212-18ue0.html">financial services firms</a> – ISPs have taken internet consumers and their regulators for a ride. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/5g-will-be-a-convenient-but-expensive-alternative-to-the-nbn-86216">5G will be a convenient but expensive alternative to the NBN</a>
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<p>In 2013, when the NBN provided a <a href="https://www.nbnco.com.au/sell-nbn-services/special-access-undertaking-sau.html">Special Access Undertaking</a> (setting out prices and terms of access to ISPs) to the ACCC, there was a great opportunity to require objectively verifiable disclosure of wholesale operating speeds. However, the government allowed NBN Co to negotiate the service level agreement <a href="http://www.afr.com/business/telecommunications/accc-mulls-more-nbn-regulation-20171102-gzdbf3">with ISPs directly</a>, and left the ACCC to watch from the sidelines. </p>
<p>Similarly, there should have been truth in advertising rules imposed on Telstra, Optus and their competitors to prevent false service speed claims.</p>
<p>The absence of enforceable regulation was taken as a green light for ISPs to continue to promise unrealistic and unattainable internet speeds, as they had done for years before in relation to <a href="http://www.abc.net.au/news/2012-06-20/tpg-fined-242m-over-misleading-ads/4082454">price and package data allowances</a>. Connection speeds have become the new wild west in communications.</p>
<p>In the case of the NBN, the failure by the government and the regulator to require an adequate transparency measure, or even to monitor wholesale services standards has allowed the deterioration to the current state of affairs.</p>
<h2>Not all is lost</h2>
<p>In relation to false and misleading claims about internet service speeds, the ACCC has established a <a href="https://www.accc.gov.au/consumers/internet-phone/monitoring-broadband-performance">broadband monitoring program</a> to generate data about broadband speeds and performance.</p>
<p>Under the scheme (which is based on similar ones operating elsewhere), the ACCC will install monitoring equipment in 4,000 homes across Australia that are connected to fixed-line NBN services – including fibre to the node, fibre to the basement, fibre to the premises, and hybrid fibre-coaxial. </p>
<hr>
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<span class="attribution"><span class="source">Various/The Conversation</span>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span>
</figcaption>
</figure>
<p><em>FTTP = fibre to the premises; FTTN/FFTB = fibre to the node/basement;
HFC = Hybrid Fibre-Coaxial</em></p>
<hr>
<p>Real-time data will determine average fixed-line NBN speeds at various times, and is expected to be published at least in part by the end of 2017.</p>
<p>A trickier task will be to sort out the real culprit in cases of service failure or performance shortfall. At present we see a culture of <a href="http://www.smh.com.au/comment/nbn-let-the-blame-game-begin-20171023-gz6ux6.html">passing the buck</a>, where complainants to ISPs are shunted off to the NBN, while the NBN just as vigorously points the finger at ISPs. </p>
<p>NBN argues (with some justification) that the ISPs are scrimping on the amount of capacity or bandwidth they are buying to on-sell to consumers. <a href="http://www.nbnco.com.au/blog/the-nbn-project/nbn-ceo">According to NBN Co</a>, they are being criticised for something that’s just not their fault. Sorting of this provisioning stoush will not be easy even with the panel data.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/the-nbn-how-a-national-infrastructure-dream-fell-short-77780">The NBN: how a national infrastructure dream fell short</a>
</strong>
</em>
</p>
<hr>
<p>Following the ACCC inquiry into the NBN’s wholesale service standards, possible regulatory changes would include imposition of fines, and establishing a process through which consumers could seek compensation at a retail level when minimum whole service standards are not met.</p>
<p>Finally, in an attempt to control deceptive claims about the speed of networks, the ACCC has issued <a href="https://www.accc.gov.au/publications/broadband-speed-claims-industry-guidance">Broadband Speed Claims – Industry Guidance</a>. This advises retailers how to advertise speeds for NBN broadband services, including clearly identifying typical minimum speeds during peak periods.</p>
<p>It is unclear whether the proposed measures are intended to solve the problems or just to be seen to be doing something and so reduce the clamour. </p>
<p>Sadly, it’s something we could have avoided if policymakers and regulators were just a little less optimistic.</p><img src="https://counter.theconversation.com/content/87095/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Allan Asher has previously worked with the ACCC and the Australian Communications Consumer Action Network </span></em></p>Australia’s problems with the national broadband network run deeper than what can be solved through an investigation or more monitoring. Maybe we were just too optimistic.Allan Asher, Visitor, Regulatory Institutions Network (RegNet) & Chair of Foundation for Effective Markets and Governance, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/762152017-04-19T06:33:45Z2017-04-19T06:33:45ZHere’s what Australia’s cellular network scene could look like by 2020<figure><img src="https://images.theconversation.com/files/165772/original/image-20170419-6360-h4tle8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">We'll probably see 4G as the dominant cellular network technology for some time to come in Australia. </span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/download/confirm/114134854?src=N75KQkXHR6kz-vyZrQhEdQ-1-17&size=huge_jpg">from www.shutterstock.com </a></span></figcaption></figure><p>TPG Telecom Ltd <a href="https://www.crn.com.au/news/tpg-takes-on-telstra-optus-vodafone-as-australias-fourth-mobile-network-operator-with-126b-spectrum-acquisition-458101">has announced</a> it intends to become Australia’s fourth mobile network operator, along with Telstra, Optus and Vodafone. </p>
<p>TPG Telecom Ltd has purchased spectrum licenses for A$1.26 billion and will spend another A$600 million building the network infrastructure. However, it has emphasised it will not be competing across the whole Australian market, <a href="https://www.crn.com.au/news/tpg-takes-on-telstra-optus-vodafone-as-australias-fourth-mobile-network-operator-with-126b-spectrum-acquisition-458101">just 80% of the population</a>. </p>
<p>So what will the mobile network environment look like in a few years time? It is reasonable to make some informed forecasts. </p>
<p>If the market can indeed support a fourth network, the network scene is likely to be dominated by four carriers whose main offering is 4G mobile communications standard. However, significant inroads by Wi-Fi based services can be expected. Also, “<a href="https://theconversation.com/explainer-the-internet-of-things-16542">Internet of Things</a>” devices may constitute a revenue stream to the four main operators, but that may well be undermined by emerging linked technologies. </p>
<h2>Economic factors</h2>
<p>Whether Australia can support a fourth operator is an open question. Consumers are certainly benefiting already, as the major operators find themselves having to <a href="http://www.itwire.com/open-sauce/77668-tpg-shows-it-want-to-play-with-the-big-boys.html">cut margins</a> as a result of competition.</p>
<p>In 2016 service revenue dropped 1% in the first six months and a further 3% in the second six months. </p>
<p>The effect of TPG’s announcement on the profitability of the companies is an open question. However, <a href="http://www.afr.com/brand/chanticleer/david-teohs-tpg-spectrum-splurge-scares-telstra-investors-20170412-gvjars">investors responded</a> by selling off shares of all the major mobile operators following the announcement, suggesting they suspect it will have a negative effect on profits throughout the industry. </p>
<h2>New and old networks</h2>
<p>TPG make the point that one advantage it will have over existing operators is it will have <a href="http://www.computerworld.com.au/article/617634/tpg-announces-1-9bn-national-4g-network-plan/">no legacy 3G networks to support</a>. Existing networks tend to be quite difficult to shut down. Typically a substantial number of customers will be happy with their existing service and see no reason to go through the expense and effort of purchasing a new handset and possibly changing plans to connect to a network that provides services they are not interested in. </p>
<p>Telstra only shut down its twenty year old 2G GSM network <a href="https://www.itnews.com.au/news/telstra-says-goodbye-to-2g-443018">last year</a>. By only running a 4G network, TPG will have a substantial advantage over other operators through not having to operate unprofitable legacy networks. </p>
<p>However, 4G itself may well become a legacy network in the not too distant future.</p>
<p>There has been a great deal of work on the next generation (5G) of cellular network, which is expected to start being deployed <a href="https://theconversation.com/the-g-in-5g-how-mobile-generations-have-evolved-53102">in the next few years</a>. </p>
<p>Will 5G cellular make TPG’s 4G network a “legacy” network? It is unlikely. 5G cellular is still in the early stages of standardisation, and appears to be facing some political challenges that will take time to resolve. Even when standards have been finalised it will be some time before it can be deployed in Australia. </p>
<p>Chinese telecommunications companies and manufacturers <a href="https://www.ft.com/content/f84f968c-b45c-11e6-961e-a1acd97f622d">have taken a leading role in 5G standardisation</a>, and technology choices are likely to be influenced by Chinese requirements, in particular those related to frequencies used.</p>
<p>One of the goals of 5G is that it uses higher frequencies of radio spectrum than has been accessed in the past. Higher frequencies generally propagate shorter distances than lower frequencies. For densely populated countries this is less of a problem than for countries like Australia with much lower population densities. It may be necessary to use lower frequencies in Australia than in other countries. Resolving this and other issues may delay 5G introduction into Australia. </p>
<p>Consequently we are likely to see 4G as the dominant cellular network technology for some time to come. </p>
<h2>Challenges to be met</h2>
<p>5G is not the only technology that poses challenges to TPG and the existing carriers. </p>
<p>A very interesting recent development has been the proliferation of Wireless LAN (Wi-Fi) <a href="https://www.cnet.com/au/news/telstra-switches-on-first-150-public-wi-fi-hotspots/">hotspots offered by Telstra</a>. Access points are deployed in sufficient numbers so as to provide significant coverage. Because Wi-Fi operates in the lightly regulated ISM bands and the technology is lower cost than cellular, there are far fewer barriers to entry for Wi-Fi based service operators. Businesses deploying Wi-Fi hotspots may well pose a threat to traditional cellular operators.</p>
<p>One of the areas of considerable growth in 4G is likely to be the “Internet of Things”. However, this area may well be undermined by technologies such as LoRaWAN specifically designed for such applications. LoRaWAN is a low power, low bitrate wireless technology able to transmit over distances of a few kilometres, designed to provide connectivity for Internet of Things devices. Significantly, like Wi-Fi, LoRaWAN operates in lightly regulated spectrum, meaning barriers to entry are low. </p>
<h2>City dwellers win again</h2>
<p>So will the consumer be better off as a consequence of TPG’s move to become a mobile operator? For consumers in the larger cities, almost certainly. </p>
<p>City dwellers are spoilt for choice when it comes to which mobile operator they do business with, and consequently there is a great deal of competition for subscriber business. </p>
<p>For consumers outside major population areas, perhaps not so much. This does lead to the question as to whether consumers could be served better if mobile infrastructure were treated as a natural monopoly with infrastructure built once, and licenses issued to operators to use it. </p>
<p>It seems wasteful that in the suburbs of the capital cities there are typically three, soon to be four, mobile base stations within a few hundred metres of each other. In rural and remote areas there is typically one or no service. </p>
<p>An interesting development in this area is that competition regulator the ACCC has recently proposed that Telstra might be obliged to <a href="http://www.theaustralian.com.au/business/companies/telstra-faces-546m-loss-from-acccs-mobile-roaming-decision/news-story/d2898d4b1732a0b4191a091e0aa2db00">share its infrastructure in rural areas with other carriers</a>. We may be seeing a de-facto move towards a utility model of mobile infrastructure. Perhaps consumers overall would be better served if mobile infrastructure were provided by a single, regulated entity. </p>
<p>As ever in telecommunications, we live in interesting times.</p><img src="https://counter.theconversation.com/content/76215/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Philip Branch has received industry funding to support his research. </span></em></p>Consumers who live in Australian cities will most likely benefit from the entry of a fourth player in the mobile network scene.Philip Branch, Associate Professor in Telecommunications Engineering, Swinburne University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/714862017-01-19T05:17:19Z2017-01-19T05:17:19ZAustralia’s privacy laws gutted in court ruling on what is ‘personal information’<figure><img src="https://images.theconversation.com/files/153381/original/image-20170119-26548-11xxmlw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Not all the data captured by Telstra on how you use its technology is considered 'personal information'.</span> <span class="attribution"><span class="source">Shutterstock/blurAZ</span></span></figcaption></figure><p>In possibly Australia’s most important privacy case to date, the Federal Court today dealt a severe blow to Australia’s information privacy laws by <a href="http://www.itnews.com.au/news/landmark-australian-ruling-on-what-counts-as-personal-information-448049">narrowing the definition</a> of “personal information”. </p>
<p>Australia’s data privacy laws only protect “personal information”, which is defined by whether a person is identified or identifiable from data. </p>
<p>By reasoning that data is only “personal information” if a person is the actual subject matter of that information, the court’s decision means “personal information” may not include data that only reveals identity if linked with other data.</p>
<p>This means certain data held by Telstra, including IP addresses, URLs (websites) visited and geolocation data, are not protected by Australian privacy law. They are not subject to any restrictions on processing or disclosure to other entities.</p>
<p>By ignoring the possibilities of data linking, the court leaves us with one of the weakest data privacy regimes in the Western world. This may be appropriate for the age of print media, but it’s hardly adapted for the thoroughly datafied world we live in today.</p>
<h1>The background</h1>
<p>If data is deemed “personal information” it is then subject to the <a href="https://www.oaic.gov.au/privacy-law/privacy-act/australian-privacy-principles">Privacy Principles</a> set out in the Australian data privacy acts.</p>
<p>One of these protections is the ability to access “personal information” held about you. This allows you to know what information is held and, for example, to correct inaccurate information.</p>
<p>This case began when former Fairfax journalist <a href="http://www.smh.com.au/digital-life/consumer-security/spies-can-access-my-metadata-so-why-cant-i-my-15month-legal-battle-with-telstra-20141010-1146qo.html">Ben Grubb asked Telstra</a> to provide him with the information retained about him under Australia’s mandatory data retention laws. He was investigating the significance of that regime for journalists.</p>
<p>Telstra acknowledged that the subscriber and billing information it held about Grubb had to be provided under privacy law.</p>
<p>But it refused Grubb access to his internet browsing histories (URL addresses visited), assigned IP addresses and geolocation (cell tower) data. It’s argument was that this information did not reference his name or telephone number, and was thus not “personal information”.</p>
<h2>What is ‘personal information’?</h2>
<p>The definition of “personal information” (from the legislation applicable at the time) includes:</p>
<blockquote>
<p>[…] information or an opinion (including information or an opinion forming part of a database), whether true or not, that is recorded in a material form or not, about an individual whose identity is apparent, or can be reasonably ascertained, from the information or opinion </p>
</blockquote>
<p>In Privacy Commissioner v Telstra, the question was whether anonymous mobile network data, such as geolocation data and URLs visited, might still be “personal information” because it could be linked to identified subscriber and billing information.</p>
<p>This question has become extremely relevant in the context of a rapidly evolving technological environment in which government and commercial entities increasingly use profiling, data linking and data matching.</p>
<p>Data matching, the technology that presently has Centrelink in hot water, is the process of comparing multiple systems of records to aggregate data about an already identified subject.</p>
<p>Data linking on the other hand, involves linking identified databases with anonymous databases to re-identify (or de-anonymise) the anonymous data by finding data fingerprints. These are often linked to some third or associated data set. </p>
<p>The data fingerprint in the Privacy Commissioner v Telstra case was the IP address of the device visiting websites or creating the location data. This is because it was linked to identified information in other network assurance, subscriber and customer management databases held by Telstra.</p>
<p>But Telstra argued that, while it was possible to link URLs and geolocation data to an individual this way, it was extremely difficult because the data in those databases was only retained for between three to 30 days. Further, linking would require complex historical searches.</p>
<p>Telstra did acknowledge that law enforcement could possibly request data be linked in this way.</p>
<h2>Data ‘about’ a person</h2>
<p>While the court accepted Telstra’s arguments, it did not actually base its decision on the difficulty or reasonableness of data linking the data in question. Rather, the court focused on a threshold question of whether that data was “about” a person in the first place.</p>
<p>The court did note that information might only become “about” a person if combined with other information. But in the judges’ minds, that meant that a person had to be the actual subject matter of the information.</p>
<p>Because the court confined itself to this very basic question of statutory interpretation (the meaning of “about”) and ignoring the broader issues, the Australian decision has produced a highly antiquated data privacy regime that ignores the working reality of contemporary information infrastructures and processing.</p>
<p>Failing to consider the relationship between data linkage and “personal information” puts Australia out of step with the global approach, where data linking is the focus of substantial discussion and several European privacy cases. </p>
<h2>The European example</h2>
<p>The latest comparable international decision, <a href="https://theconversation.com/drafts/71476/edit#">Patrick Breyer v Germany</a>, directly explored whether the definition of “personal information” in European law included dynamic IP addresses that could only be identified when linked with data held by a third party (in this case an ISP).</p>
<p>The dispute in that case concerned storage by the German government of the IP addresses of devices that visited government websites. </p>
<p>The court found that even though a dynamic IP address is not itself personal information, it can become personal information when linked with other data.</p>
<p>It reasoned that the inclusion of the word “indirectly” in the European definition of “personal information” included the possibility of linking data held by one party (the German government) with datasets held by third parties (the ISP).</p>
<p>That is, the term “indirectly” means that the question of whether an individual is identifiable from one particular data holding does not resolve the question of whether it is personal information. Rather the focus is on how reasonably likely such data linkage was to occur.</p>
<h2>The Australian case</h2>
<p>Unfortunately in Australia, the court has not taken into account the international discussion on how individuals need to be protected in the telecommunications technology of contemporary society.</p>
<p>This case began as an exploration of the reach and significance of Australia’s metadata retention laws. These laws are presently being reviewed to consider whether access to retained data should be allowed in certain civil affairs rather than exclusively criminal matters. </p>
<p>But the court left standing a Tribunal decision that not all metadata retained under the data retention laws are “about” a person, and thus are not “personal information”.</p>
<p>This is also very different to the situation in Europe where rights of data protection and privacy have profoundly circumscribed mandatory data protection laws. </p>
<p>European privacy standards have now clarified that no untargeted, indiscriminate collection of data is permissible, even if it is for the purposes of protecting national security or investigating serious crime. </p>
<p>On the other hand, here in Australia, the court has decided that the categories of data, namely data such as an IP address, that give potentially the most intimate information away about a person (but only when linked with other data held by ISPs, communications companies, or the government) receive the least protection, or none at all.</p><img src="https://counter.theconversation.com/content/71486/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jake Goldenfein is a board member at the Australian Privacy Foundation, which made an unsuccessful amicus curiae application in this case. </span></em></p>The Federal Court has narrowed the definition of what can be deemed “personal information” in any data stored about you.Jake Goldenfein, Lecturer, Swinburne University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/601042016-05-30T10:00:19Z2016-05-30T10:00:19ZTelstra Health will hold Australians’ cancer details, so we need to ensure their privacy is protected<figure><img src="https://images.theconversation.com/files/124473/original/image-20160530-7709-cbdlms.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Telstra Health has won the contract to manage the National Bowel Cancer and Cervical Screening Program registries.</span> <span class="attribution"><span class="source">from shutterstock.com</span></span></figcaption></figure><p>The <a href="http://www.health.gov.au/internet/main/publishing.nsf/Content/mr-yr16-dept-dept002.htm">Department of Health recently announced</a> that Telstra had won a <a href="http://www.abc.net.au/news/2016-05-26/telstra-wins-contract-for-new-national-cancer-screening-register/7449782">A$220 million contract</a> to manage the register for the <a href="https://www.tenders.gov.au/?event=public.cn.view&CNUUID=66915281-B57C-EAA6-5B01CC6955068808">National Bowel Cancer and Cervical Screening Programs</a>. </p>
<p><a href="https://www.telstra.com.au/telstra-health">Telstra Health</a> – the company’s health arm – will aggregate and manage data currently held by various state registries into one national database. There is potential that other cancer screening registries, such as breast screening, might also be contracted to Telstra Health in the future.</p>
<p>The registries not only contain personally identifying information, such as names and addresses, but also the results of pap smears that allow inferences about a person’s sexual status.</p>
<p>When Telstra Health’s venture into the market place was first foreshadowed in late October 2014, <a href="https://theconversation.com/telstra-gets-serious-about-health-but-will-the-public-trust-it-33360">commentators highlighted</a> potential issues around the privacy of Australians’ personal information. So it was no surprise that this first Australian outsourcing <a href="http://www.theage.com.au/federal-politics/political-news/health-consumer-groups-warn-telstra-could-profit-from-cancer-register-20160526-gp4igz.html">provoked consumer advocates</a> to highlight similar concerns. </p>
<h2>Why outsource?</h2>
<p>In 1993, two American management gurus, David Osborne and Ted Gaebler, proposed a <a href="http://www.gutenberg.org/ebooks/4910">magic pudding recipe</a> for what they termed as <a href="http://www.amazon.com/Reinventing-Government-Entrepreneurial-Spirit-Transforming/dp/0452269423">Reinventing Government</a>. In their model, government could set its objectives and use market-based approaches – including contracting out functions to private companies – to provide services to achieve them. </p>
<p>More than 20 years later, the waters of government contracting out are lapping at the gates of Medicare. The 2014 <a href="http://www.budget.gov.au/2014-15/content/bp2/html/bp2_expense-14.htm">federal budget proposed</a> outsourcing, or “market testing”, the <a href="https://theconversation.com/modernising-medicare-is-a-great-idea-but-needs-a-radical-approach-54477">processing of Medicare payments</a>. And while we wait, the Telstra contract has become the first such outsourcing in Australia. </p>
<p>Private registry operators have been <a href="http://www.registrypartners.com/oncology/cancer-registry-operations/">established in the United States</a> for a number of years and <a href="http://www.prnewswire.com/news-releases/precyse-solutions-wins-contract-to-provide-cancer-registry-services-to-the-state-of-vermont-73940027.html">have won contracts</a> to run cancer registries in some states. So far, no data security breaches have been reported in these. But this doesn’t stop Australian health experts from worrying.</p>
<h2>Privacy concerns</h2>
<p>The Department of Health has taken the unusual step of <a href="http://www.health.gov.au/internet/main/publishing.nsf/Content/mr-yr16-dept-dept002.htm">issuing a media release</a> in the middle of an election campaign to assuage concerns. It confirmed that Commonwealth privacy legislation will apply to the cancer registry data managed by Telstra Health and that “any misuse of data could be an offence under the Criminal Code”. </p>
<p>Although that language sounds strong, criminal prosecutions usually require proof of malicious intent, recklessness or negligence – a high standard that isn’t always likely to be obtained. </p>
<p>What is more likely is that well-meaning staff might not be scrupulous in rejecting data requests from those who, on first glance, appear to have a legitimate reason for knowing personal details. They might, for instance, release an address to a police officer hunting for a missing person who sought the information without a warrant. Or they might release data by mistake.</p>
<p>Concerns about privacy are exacerbated by the fact that Telstra has breached its customers’ privacy before. In 2011, <a href="http://www.smh.com.au/technology/bigpond-plugs-privacy-leak-20111210-1oox7.html">around 60,000 BigPond</a> users’ passwords were temporarily displayed on the internet, leading to an <a href="http://accan.org.au/our-work/media-releases/404-advice-for-customers-affected-by-latest-telstra-privacy-breach">investigation by the Privacy Commissioner</a> for security breaches. </p>
<p>And in January this year, <a href="http://www.smh.com.au/digital-life/consumer-security/telstra-privacy-breach-leaves-customers-voicemail-exposed-20160122-gmbpjm.html">personal voicemails</a> of one Telstra user were mistakenly sent to another. This may be a small example of a data breach, but everyone is entitled to their privacy.</p>
<h2>Contractual protections</h2>
<p>Beyond legislative threats, privacy concerns can only be assuaged through contractual provisions, whether in the cancer registry contract or with the processing of Medicare payments. Unfortunately, we don’t know how strong the provisions are in the proposed contract and what the renewal provisions are.</p>
<p>Unauthorised release of data <a href="https://www.naaccr.org/LinkClick.aspx?fileticket=FwXMy_n2HMg%3D&tabid=265&mid=742">potentially costs registries</a> in terms of investigations and regulatory compliance, but these costs should be increased to ensure managers have even greater incentives to take strong action to protect patient privacy.</p>
<p>The automatic consequences of release of data – inadvertent or not – must be made so great that any <a href="http://infostore.saiglobal.com/store/Details.aspx?productID=1378670">risk-management matrix</a> will ensure the organisation and its managers always have patient privacy at the forefront of their mind. It will not be good enough to do the standard dance after the data is released, or inappropriately used, where the contracting organisation (in this case, the Department of Health) tut-tuts, and the contractee (in this case Telstra Health) issues a mea culpa.</p>
<p>The contract should prescribe tough financial penalties that have automatic effect after any data release, allowing little discretion for the penalties to be lobbied away with promises of future good behaviour. The contractual penalties need to be strong enough (A$1 million per person identified or data element used, for instance) so management ensures that patients’ rights and privacy are protected. </p>
<p>Consumers might also be given a right to sue for breach of their privacy to further focus management’s mind.</p>
<p>Clearly, the cancer screening registry contract is only the first of the potential outsourcing of health programs. It creates a precedent that needs to be right.</p><img src="https://counter.theconversation.com/content/60104/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Stephen Duckett does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The cancer screening registry contract won by Telstra Health is only the first of the potential outsourcing of health programs. It creates a precedent that needs to be right.Stephen Duckett, Director, Health Program, Grattan InstituteLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/579702016-04-20T23:38:01Z2016-04-20T23:38:01ZThe real cost of Telstra’s backflip on marriage equality<p>Many major companies supporting marriage equality recently have been under pressure as the Catholic Church requested them to retreat from this campaign. </p>
<p>Last week, Telstra appeared to fold to this pressure by retreating from its publicly supportive stance, only to renew its <a href="http://exchange.telstra.com.au/2016/04/18/marriage-equality/">“active position”</a> following public backlash from the public and its customers.</p>
<p>The Catholic church reportedly had warned corporations which supported last year’s <a href="http://www.australianmarriageequality.org/open-letter-of-support/">Australian Marriage Equality campaign</a> that they risked <a href="http://www.smh.com.au/federal-politics/political-news/church-told-gay-ceos-at-qantas-sbs-to-stop-supporting-marriage-equality-20160414-go6xxj.html">religious organisations cancelling contracts</a>. </p>
<p>Such pressure from large institutional customers puts participating organisations in a difficult position of weighing up pursuing objectives of being a good corporate citizen against the potential of losing large corporate customers. </p>
<p>Resisting pressure from the Catholic Church does not have a big impact on the bottom line - however, as Telstra discovered, bowing to this pressure can cost businesses dearly. </p>
<h2>Why do companies support marriage equality?</h2>
<p>There are a number of reasons why companies take an active role in influencing social issues in the community (such as climate change, gender equality and marriage equality), even though they have the potential to create tensions among its stakeholders. </p>
<p>Companies may opt to take up a corporate social responsibility (CSR) position from the perspective that businesses have moral obligations to act in a way that benefits society at large, beyond mere profit-making activities. In the context of marriage equality, showing public support positively paints the organisation as socially progressive valuing diversity, inclusion and equality. </p>
<p>From an economic perspective, companies that signal their business is socially responsible win kudos among customers, employees and investors that place importance on social issues.</p>
<p>Engaging in CSR is not always a question of should or should not; sometimes it is influenced by societal demand or pressure from diverging groups in our society. Taking stock of their positions and ideologies helps to deal with their influence and tactics, minimising any backlash and other negative consequences for the business. </p>
<h2>Do the moral and economic arguments of Catholic Church stand?</h2>
<p>The Catholic Church employed both moral and economic arguments in putting pressure over companies’ support of marriage equality. </p>
<p>Over the course of the marriage equality debate, the Catholic Church stated that it is willing to engage in a respectful debate. However, preventing companies from participating in this marriage equality campaign raises the concern if the church shows respect for all points of view of those engaged in this debate. </p>
<p>The argument from the church that corporations “overstep their purpose” is a weak one. <a href="http://journals.cambridge.org/action/displayAbstract?fromPage=online&aid=9459982&fileId=S1052150X00005261">Florian Wettstein</a> argues that corporate obligations are not merely to respect human rights, but include proactive company involvement in the protection and realisation of human rights. From this perspective, it is companies’ moral obligation to respect and proactively support marriage equality. Support from corporations is crucial in minimising the <a href="http://www.theage.com.au/comment/why-a-plebiscite-on-samesex-marriage-is-dangerous-and-divisive-20160414-go63vs.html">potential detrimental impacts on LGBTIQ community brought from a plebiscite on same-sex marriage</a>. </p>
<p>And then there was an economic pressure from the Catholic Church that it could withdraw business from participating companies. Most businesses are well aware that their profit from the general public outweighs those from the church, and supporting marriage equality provides both symbolic and material gains. For example, recently research has indicated that support for diversity and equality issues is associated with <a href="http://asr.sagepub.com/content/74/2/208.short">increased sales revenue, greater market share, higher profits</a>, <a href="http://link.springer.com/article/10.1023/A:1006289817941">increased attractiveness as a employer</a>, <a href="http://link.springer.com/article/10.1007/s10551-010-0697-5">higher retention</a> and <a href="http://williamsinstitute.law.ucla.edu/wp-content/uploads/Business-Impact-LGBT-Policies-Full-May-2013.pdf">more engaged workforce</a>. </p>
<h2>Losing public trust</h2>
<p>So withdrawing support for marriage equality can prompt a community backlash, and loss of customers and talented employees, particularly when <a href="http://www.australianmarriageequality.org/crosby-textor-same-sex-marriage-research-2014/">72% of Australians, and 67% of Catholics</a> support marriage equality.</p>
<p>Such a zigzag approach Telstra has taken shows the risk of companies using social issues in a self-serving or opportunistic way, rather than as a base for its moral and social obligations. Telstra now faces the loss of trust from the public and potentially their own workforce as a result. </p>
<p>It is clear that from both moral and economic perspectives, companies’ stance on continuing support for marriage equality is legitimate. Compromising their stance, on other hand, is where the real cost lies.</p><img src="https://counter.theconversation.com/content/57970/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Withdrawing support for marriage equality can prompt a community backlash and alienate employees and customers.Raymond Trau, Lecturer, RMIT UniversityJeff Shao, PhD Candidate, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/500692015-11-02T06:15:26Z2015-11-02T06:15:26ZOptus, the new player in Australia’s sports media rights battle<p>In surprising news, Optus has <a href="http://mumbrella.com.au/optus-snatches-broadcast-and-digital-rights-for-english-premier-league-from-fox-sports-328118">secured the media rights</a> to the English Premier League (EPL) for three seasons commencing from the 2016-17 season.</p>
<p>Optus already has the rights for the EPL in its hometown in Singapore. The new deal includes the broadcast and digital rights (broadband and mobile) for all 380 matches broadcast in Australia.</p>
<p>The <a href="http://www.afr.com/business/sport/optus-snatches-australian-english-premier-league-from-fox-sports-20151101-gkocnf">Optus bid</a> is rumoured to be more than double the A$20-25 million paid by Fox Sports currently. This is a significant investment by Optus and gives a clear indication it wishes to be part of media distribution in Australia, particularly sports.</p>
<p>Optus CEO Allen Lew <a href="http://www.adnews.com.au/news/optus-wins-exclusive-broadcast-and-digital-rights-to-the-barclays-premier-league">said</a>:</p>
<blockquote>
<p>“We are dedicated to delivering the best domestic and international entertainment for our customers. With 930 million followers worldwide, the Premier League is one of the most sought after sports properties for content providers.”</p>
</blockquote>
<p>This is a significant defeat for Fox Sports, which has seen the EPL as a <a href="https://www.foxtel.com.au/watch/epl.html">flagship</a> for its programming lineup.
This will see an end to Foxtel’s almost 20 year association with the league, which began in 1997. Foxtel is yet to release a statement, although it quickly removed the story discussing the deal from its website after it was posted at <a href="http://www.foxsports.com.au/football/optus-to-broadcast-epl-in-australia/story-e6frf423-1227590580615">foxsports.com.au</a>.</p>
<h2>Where will Optus broadcast in Australia?</h2>
<p>Much of the discussion about the Optus EPL deal has been on who will broadcast the games, given Optus is not a traditional broadcaster. </p>
<p>There are a few options Optus could take to utilise the EPL media rights. A deal to on-sell them to Foxtel is extremely unlikely. There are other options that Optus could establish, which would see them in a position to compete with Foxtel, in particular FoxSports. These developments could see a shake up for future sports media rights in Australia and also the way in which sports is distributed. </p>
<p>Optus also has the digital rights, an increasingly important part of all sports media rights deals. It could be that the EPL is offered by Optus as an additional subscription channel on FetchTV, its streaming service that competes with Telstra TV and Foxtel streaming services. FetchTV can now be bought outright at many electronics stores, and could see an increase in uptake if Optus were to open the subscription access to all FecthTV customers. </p>
<p>In addition to the streaming of EPL games, Optus could utilise its strength as a telecommunications company and supply a “Live Pass” version of the games. This is comparable to the AFL and NRL Live pass streaming services, where the rights are currently held by Telstra.</p>
<p>Optus may also enable SBS to broadcast some of the games on the free-to-air station, similar to the arrangement between Foxtel and SBS.</p>
<h2>Future of sports rights in Australia</h2>
<p>“Optus has never been in sports rights and we’re now in the game,” said CEO Allen Lew, not after this latest EPL deal, but one that appears to have passed many without notice. </p>
<p>Last month Cricket Australia <a href="http://www.cricket.com.au/news/cricket-australia-optus-deal-live-streaming-test-series-classic-matches-highlights/2015-10-22">announced</a> a three-year deal with Optus as its “<a href="http://www.cricketaustralia.com.au/about/partners/commercial">Official Mobile Media Partner</a>”. This will not only see Optus customers get free access to <a href="http://www.optus.com.au/shop/entertainment/cricket?CID=part:con:ca:careg:perks:enter:sport:claim&utm_source=ca&utm_medium=part&utm_campaign=partcaregperks&utm_content=sport">Cricket Australia’s Live Pass</a>, but also exclusive content for Optus customers, which includes historic matches.</p>
<p>The next move made by Optus could be associated with the NRL media rights. Both Foxtel and Telstra are yet to agree to a new NRL deal. Optus may secure a deal with the NRL that would see it acquire the rights that both Foxtel and Telstra currently have. This would further entice new subscribers to its Internet Service Provider (ISP) services.</p>
<h2>The battle of the ISP and sport</h2>
<p>It’s clear that Optus’ intention from these new media deals is to entice new customers to come across to its mobile and broadband services. Part of this may be to counter the recent move by Foxtel to become an ISP with packages that <a href="https://www.foxtel.com.au/get/broadband-bundles.html?SEMFOXTEL&gclid=CjwKEAjw8NaxBRDhiafR-uvkpywSJAAxcl6f-N2wKgcCuDb4sZKPuz8lCFodncfpXukQTvR5S8heJxoClhjw_wcB&gclsrc=aw.ds">bundle in</a> its pay television services.</p>
<p>With the sports deals Optus has secured it is not only taking on Foxtel, but also Telstra. These deals, particularly the EPL deal, add competition to a market dominated by the latter two interlinked media giants. It could potentially add choice for Australian consumers, or alternatively fragment the sports media landscape in Australia, frustrating consumers further than they already are.</p><img src="https://counter.theconversation.com/content/50069/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Marc C-Scott is a board member of C31 Melbourne (Community Television Station)</span></em></p>As Optus takes the fight for sports viewers to Foxtel and Telstra, it’s unclear if consumers will benefit.Marc C-Scott, Lecturer in Screen Media, Victoria UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/460742015-08-14T03:08:27Z2015-08-14T03:08:27ZFoxtel boxed into a corner as sport streaming takes hold<figure><img src="https://images.theconversation.com/files/91731/original/image-20150813-21416-1xkbwqk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Sports viewing: TV no longer required.</span> <span class="attribution"><span class="source">Image sourced from Shutterstock.com</span></span></figcaption></figure><p>The Nine Network this week <a href="http://www.smh.com.au/business/media-and-marketing/nine-holds-onto-nrl-television-rights-20150809-giva5s.html">secured</a> the broadcast rights for the NRL, in a five year deal to start from 2018. This has removed the possibility of Foxtel and Ten establishing a <a href="https://theconversation.com/ten-and-foxtel-in-box-seat-for-next-wave-of-sport-broadcasting-45656">combined bid</a> for NRL, although the AFL rights are yet to be confirmed.</p>
<p>The deal will see Nine pay A$185 million annually for the <a href="http://www.smh.com.au/business/media-and-marketing/nine-holds-onto-nrl-television-rights-20150809-giva5s.html">NRL rights</a>, which some argue will see Nine not place a bid for the new AFL rights. The amount Nine will pay could be lower if the NRL allows pay simulcasts of games, although Foxtel has not yet confirmed its interest.</p>
<p>Former NRL adviser Colin Smith <a href="http://www.theaustralian.com.au/sport/nrl/nrl-broadcast-rights-fox-snub-puts-cash-target-in-doubt/story-fnca0von-1227479489625">was unimpressed, saying</a> the rights deal announced by Nine and the NRL was disrespectful toward Fox Sports, a long-term broadcaster, and left them with “crap content”. He says the the public announcement of the deal, before “ever going to market properly”, could make it more difficult for the NRL to secure a deal with Foxtel.</p>
<h2>Digital is the future</h2>
<p>One of the biggest surprise shifts to come from the new deal is associated with digital rights. As part of Nine’s deal it has secured the streaming rights, with no confirmation how this will impact the previously titled “digital rights”. </p>
<p>It comes as Telstra this week revealed growth in <a href="http://www.telstra.com.au/uberprod/groups/webcontent/@corporate/@about/documents/document/uberstaging_296433.pdf">streaming</a> of both AFL and NRL games which “increased by over 70 per cent and 100 per cent respectively in the past year”.</p>
<p>Nine boss David Gyngell has said the NRL deal is <a href="http://www.smh.com.au/business/media-and-marketing/nine-holds-onto-nrl-television-rights-20150809-giva5s.html">“transformational”</a> because it enables “viewers to see the best of the NRL, live and free, four days per week, anywhere, on any device”.</p>
<p>This statement in itself shows commercial television broadcasters are no longer solely concerned about TV content being viewed on TV sets. Content is king, regardless of the platform it is viewed upon. It also shows that live sport, as many have already argued, will be a key contributor in the future success of free-to-air broadcasters, particularly in Australia.</p>
<h2>What about digital rights?</h2>
<p>If Nine is to hold the streaming rights, what does this means for the digital rights currently held by Telstra?</p>
<p>It appears from the NRL’s CEO, Dave Smith, that digital won’t be segregated in the same way it has for previous rights deals. Smith <a href="http://www.smh.com.au/business/media-and-marketing/nine-holds-onto-nrl-television-rights-20150809-giva5s.html#ixzz3ieuPHylV">says:</a></p>
<blockquote>
<p>“By 2018, the digital world will be very different and we want to be in the best possible position to take advantage of any changes. So negotiations with the pay-TV and digital providers will continue and, again, our focus will be on ensuring the most widespread coverage on whatever platform fans choose to watch rugby league.”</p>
</blockquote>
<p>Recent reports are making it unclear as to how Telstra will approach the new rights of both the NRL and AFL. It has been <a href="http://www.afr.com/business/telecommunications/telstra-backs-off-from-bigbucks-sports-rights-20150807-gitue9">reported</a> that Telstra will pull back from paying any big fees to gain the rights for both codes. In addition, it could be that Telstra doesn’t make a bid at all, yet could still be able to stream games via its services.</p>
<h2>Sports subscriptions</h2>
<p>There are various ways Telstra could still stream games, if they were not bid for the rights. The first would include Foxtel, which Telstra has a 50% share in. If Foxtel were to make an agreement with the NRL for broadcast rights, Telstra could provide the stream to its customers via the <a href="http://www.foxsports.com.au/mobile">Foxtel Sports app</a>.</p>
<p>Another option relates to Nine and the way in which it may utilise its rights to stream NRL games. Nine is currently involved in two online ventures that could be utilised for streaming of the games – 9Jumpin, which is the networks catch-up TV service and also Stan, its video-on-demand service; a joint venture with Fairfax Media. </p>
<p>Stan is currently struggling to compete with the other major video-on-demand (VoD) service, Netflix. To ascertain a point of difference, the streaming of games in addition to other exclusive content via Stan, could give the service the difference needed to claw back some of the lead gained by Netflix. Netflix has said it is <a href="https://theconversation.com/ten-and-foxtel-in-box-seat-for-next-wave-of-sport-broadcasting-45656">not interested in live sport</a>. </p>
<p>The VoD service Presto could also take the same approach, with its joint partners Foxtel and Seven. Foxtel has used Presto subscription figures to lift its <a href="http://mumbrella.com.au/foxtel-admits-subscriber-figures-include-presto-users-but-claims-cable-still-biggest-growth-driver-311968">overall result</a>. It could use Presto to stream the NRL content if it was to obtain the rights. This may provide fewer issues, than Nine and Stan, due to Nine’s rights associated with free-to-air, where as Foxtel and Presto are both subscription services. </p>
<p>But how would this help Telstra?</p>
<h2>Telstra the all-in-one provider</h2>
<p>Telstra has recently announced <a href="https://theconversation.com/up-next-video-on-demand-shakes-up-the-television-industry-45434">Telstra TV</a>, and has been in negotiations with the three prominent VoD providers, Presto, Stan and Netflix to have all three services available via this new service. </p>
<p>This could see Telstra take on a role as a media aggregator, a role used to describe itself in its <a href="http://www.telstra.com.au/uberprod/groups/webcontent/@corporate/@about/documents/document/uberstaging_296433.pdf">2015 annual report.</a></p>
<p>Telstra says:</p>
<blockquote>
<p>“Rather than restrict our customers’ choices, we are open to hosting all Subscription Video on Demand services on our platforms and making it easy
for them to get all the content they want in the one place.”</p>
</blockquote>
<p>This could see Telstra less focused on obtaining the digital rights themselves, but rather providing the digital rights holders alternative platforms for content distribution.</p>
<p>The announcement of the NRL rights with Nine and the lack of clarity for any additional bidders raises many questions for the future of sports broadcasting and the rights in Australia. Could it be the sporting organisations themselves that obtain the digital rights and provide the services currently provided by Telstra, removing the middle man? </p>
<p>The urgency by Nine and the NRL to announce the rights deals, of which only part has been confirmed, is also questionable. The NRL rights will not start until 2018. This is a year later than the AFL’s, which is yet to announce any of its rights agreements or any make any suggestions of deals. </p>
<p>The announcement this week could impact the new AFL rights and its yet to be seen if it will be a positive or negative one. What the announce does signal is a change in the way in which Australians will view sport in the future.</p><img src="https://counter.theconversation.com/content/46074/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Marc C-Scott is a board member of C31 Melbourne (Community Television Station).</span></em></p>Commercial television broadcasters are no longer solely concerned about TV content being viewed on TV sets.Marc C-Scott, Lecturer in Screen Media, Victoria UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/454342015-08-03T02:56:58Z2015-08-03T02:56:58ZUp next: video-on-demand shakes up the television industry<figure><img src="https://images.theconversation.com/files/90396/original/image-20150731-11829-fpge7g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">There are more television services than ever before.</span> <span class="attribution"><span class="source">Glenn Brown/Flickr</span>, <a class="license" href="http://creativecommons.org/licenses/by-nc/4.0/">CC BY-NC</a></span></figcaption></figure><p>Telstra last week <a href="http://www.smh.com.au/business/telstra-launches-roku-to-take-on-apple-and-google-20150728-giltvh.html">announced</a> that it will launch <a href="https://exchange.telstra.com.au/2015/07/29/telstra-tv-coming-home-near/">Telstra TV</a> in September. This could be the “all-in-one” video streaming service many Australians have craved, bundling together the three leading video-on-demand (VoD) services: Netflix, Stan and Presto. </p>
<p>However, it also puts Telstra in an odd position, straddling multiple services, some of which compete with other products Tesltra is intimately involved in, such as Foxtel.</p>
<p>It also underscores how the introduction of VoD services have <a href="https://theconversation.com/tv-shifts-from-hero-to-zero-but-even-netflix-cant-kill-pirating-45087">disrupted and fragmented</a> the television market in Australia. Even ISPs are now starting to play a role in delivering content to the biggest screen in the house.</p>
<p>So what will the future of television look like in Australia?</p>
<h2>All-in-one</h2>
<p>Telstra TV will run on the <a href="https://www.roku.com/products/roku-2">Roku 2</a> device, which is comparable in function to <a href="http://www.google.com.au/chrome/devices/chromecast/">Google Chromecast</a> and <a href="https://www.apple.com/au/appletv/">Apple TV</a>. The <a href="https://www.roku.com/products/roku-2">Roku 2</a> already runs hundreds of international apps, although it is unclear how many will be available when the device launches in Australia. </p>
<p>An attractive feature of the new service could be that it will launch with access to Netflix and Presto, with Stan to follow. Telstra has <a href="http://www.news.com.au/technology/home-entertainment/telstra-to-launch-roku-streaming-platform-for-netflix-presto-and-stan-in-september/story-fn8tnfhb-1227460964733">said</a> it is trying to negotiate a bundled price for all three services for less than A$30 a month.</p>
<p>The announcement by Telstra raises questions about where the company sees its future and involvement, not only as an ISP but also as a media distributor.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/90395/original/image-20150731-11800-zbc8ye.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/90395/original/image-20150731-11800-zbc8ye.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/90395/original/image-20150731-11800-zbc8ye.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=350&fit=crop&dpr=1 600w, https://images.theconversation.com/files/90395/original/image-20150731-11800-zbc8ye.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=350&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/90395/original/image-20150731-11800-zbc8ye.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=350&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/90395/original/image-20150731-11800-zbc8ye.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=440&fit=crop&dpr=1 754w, https://images.theconversation.com/files/90395/original/image-20150731-11800-zbc8ye.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=440&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/90395/original/image-20150731-11800-zbc8ye.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=440&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The Telstra TV device, based on the Roku 2, and remote.</span>
<span class="attribution"><span class="source">Telstra</span></span>
</figcaption>
</figure>
<p>Telstra is already heavily involved in a number of areas of the Australian media, across broadcast and streaming. The company has an even share of 50% with News Corp Australia in <a href="http://www.foxtel.com.au/index.html">Foxtel</a>, which has <a href="http://www.foxtel.com.au/foxtelplay/index.html">Foxtel Play</a>, arguably a competitor to Netflix, Stan and Presto. Foxtel itself is involved in a <a href="https://www.foxtel.com.au/about/media-centre/press-releases/2015/presto-confirms-next-stage-for-development.html">joint venture</a> in Presto with Seven West Media. </p>
<p>Foxtel also <a href="http://www.abc.net.au/news/2015-06-15/foxtel-takes-15pc-stake-in-ten/6546298">recently</a> purchased a 15% share in the Ten Network, and last year completed the joint production of <a href="https://theconversation.com/television-is-not-dead-its-just-changing-channels-34001">Goggle Box</a> with the network, which was broadcast on pay television with a one day delay to free-to-air (FTA).</p>
<p>In addition to Telstra’s various media company associations, it also has services that could be argued to compete with its new Telstra TV service. Telstra’s current <a href="https://www.telstra.com.au/entertainment/tbox">T-Box</a> could be seen as offering many similar digital services to Telstra TV. Despite this, there is no discussion that it will be discounted when the new service is launched.</p>
<p>One key reason for this could be due to the fact that T-Box provides access and recording of FTA broadcast television, similar to its competitor <a href="http://www.fetchtv.com.au">Fetch TV</a>, a service linked with Optus and iiNet. The Roku 2 does not allow FTA viewing or recording, therefore solely relying on internet and app entertainment.</p>
<p>As a Telstra spokesperson <a href="http://www.smh.com.au/business/telstra-launches-roku-to-take-on-apple-and-google-20150728-giltvh.html#ixzz3hLhsAvAc">said</a>: “We will not be positioning this as a substitution for Foxtel at all. This is very much for non-pay TV customers.”</p>
<p>Despite this claim, Damien Tampling from Deloitte <a href="http://www.smh.com.au/business/telstra-launches-roku-to-take-on-apple-and-google-20150728-giltvh.html">said</a> there is “potential the move would cannibalise Foxtel customers”. </p>
<p>The Roku service does provide access to <a href="http://www.hbogo.com/">HBO Go</a>, which provided immediate access to the most recent season of <a href="http://www.hbo.com/game-of-thrones">Game of Thrones</a>, a series high on the <a href="https://theconversation.com/from-convicts-to-pirates-australias-dubious-legacy-of-illegal-downloading-39912">piracy list</a> for Australians. If HBO Go was to become available in Australia this would impact Foxtel, which relies heavily on exclusive programs such as Game of Thrones. </p>
<h2>Shake up</h2>
<p>This move by Telstra also raises questions for the future of television and VoD in Australia, such as: who will be the big media players in the future? Will the future of these services rest with the current traditional broadcasters, free-to-air and pay-TV? Or will ISPs play a larger role in this space in the future?</p>
<p>Telstra has the largest number of individual customers subscribed to Netflix of all Australian ISPs, but the <a href="http://www.roymorgan.com/findings/6342-netflix-makes-further-gains-in-australia-svod-market-june-2015-201507140645">lowest percentage</a>: only 5.2%. This is far less than the leader, iiNet, at 16.8%.</p>
<p>Stan and Presto are yet to have a strong uptake since their launch at the beginning of this year. Recent figures show Netflix had <a href="http://www.roymorgan.com/findings/6312-netflix-already-dominates-streaming-video-on-demand-television-may-2015-201506230322">three times more users</a> than Presto, Stan, Quickflix and Foxtel Play combined.</p>
<p>Telstra’s spokesperson <a href="http://www.smh.com.au/business/telstra-launches-roku-to-take-on-apple-and-google-20150728-giltvh.html#ixzz3hLhl8P31">said</a> live sports will be the reasons for customers to stay with Foxtel and free-to-air TV. But even <a href="https://theconversation.com/youtube-could-change-the-way-we-broadcast-sport-in-australia-43332">sports broadcasting is changing</a>, with new players such as YouTube, along with sporting organisations becoming their <a href="https://theconversation.com/the-future-of-sportscasting-cricket-australia-launches-on-apple-tv-35253">own broadcasters</a>.</p>
<h2>What’s next on TV?</h2>
<p>There is no doubt that 2015 will be an interesting year for TV. </p>
<p>We will see how VoD might force old players to adapt to the changing media landscape. Seven and Nine are already involved with VoD services, with only Ten yet to make a move in this space, although the recent purchase by Foxtel could change the network’s direction.</p>
<p>There will also be interest around any new players that may appear as the race continues to establish some structured approach to a changing media distribution environment. In this we might see ISPs take a greater role as media outlets.</p><img src="https://counter.theconversation.com/content/45434/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Marc C-Scott is a board member of C31 Melbourne (Community Television Station).</span></em></p>Telstra’s release of an all-in-one streaming service further complicates the television landscape in Australia.Marc C-Scott, Lecturer in Digital Media, Victoria UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/453622015-07-31T03:56:14Z2015-07-31T03:56:14ZTelstra on the TV casting couch to trump its telco peers<figure><img src="https://images.theconversation.com/files/90371/original/image-20150731-10542-1tvkjle.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">TVappa</span> <span class="attribution"><span class="source">Image sourced from Shutterstock.com</span></span></figcaption></figure><p>What we used to call television is changing before our eyes. </p>
<p>This week, Telstra announced it will shortly introduce a new streaming video set top box. For a number of reasons, this is a very smart move. </p>
<p>Australia’s largest media and telecommunications company has responded quickly to a series of local developments in a way that seems likely to consolidate its market-leading position. It is targeted at the 70% of Australian households that continue to resist signing up to Foxtel’s pay television service. </p>
<p>Some see this as as another <a href="http://www.smh.com.au/business/telstra-launches-roku-to-take-on-apple-and-google-20150728-giltvh.html">nail in pay TV’s coffin</a>, and an indication that Telstra is having an each way bet on the future of television given its 50% stake in Foxtel. </p>
<p>Others say it could benefit the beleaguered commercial free-to-air incumbents and <a href="http://www.theaustralian.com.au/business/netflix-faces-fightback-from-telstra-tvs-coalition/story-e6frg8zx-1227462267116">“check Netflix’s encroachment”</a>. The argument here is that the subscription video on demand (SVOD) services of the free-to-airs will be able to leverage Telstra’s customer base - 3 million broadband subscribers, or over 40% of the Australian market - and use Telstra’s well-developed billing and customer service operations to their advantage. </p>
<p>Telstra TV has already claimed one casualty, however. Telstra’s T-Box personal video recorder will cease to be sold, although the company is promising to continue to support its existing 800,000 users.</p>
<p>In September this year, Telstra plans to make the Roku 2 set top box available to subscribers to its Bigpond broadband service. The new platform strengthens Telstra’s greatest competitive advantage - its capacity to offer bundled services combining home phone, mobile, broadband, pay-television and SVOD. </p>
<p>While it is similar in look and feel to the Apple TV box, the Roku 2 is a much more open system. Its US and UK versions boast thousands of apps and many more services than Apple’s equivalent. Its interface is customisable, and it allows users to search for films or content across multiple services simultaneously. </p>
<h2>Piracy not required</h2>
<p>This may prove to be a major selling point, particularly if all three of the main SVOD services - Netflix, Stan and Presto - are offered on the new Telstra TV box. It may also address one of the industry’s major bugbears: content piracy. After the Copyright Amendment (Online Infringment) Act entered into law in June, <a href="https://theconversation.com/there-are-better-ways-to-combat-piracy-than-blocking-websites-43701">commentators argued</a> that making content more easily accessible could do more than blocking infringing websites in preventing piracy. </p>
<p><a href="https://www.communications.gov.au/sites/g/files/net301/f/DeptComms%20Online%20Copyright%20Infringement%20Report%20FINAL%20.pdf">A recent survey conducted for the federal Department of Communications</a> covering the three months just before Netflix launched in March estimated that roughly a quarter of Australian internet users over the age of 12 had streamed or downloaded content illegally. Of those surveyed who admitted to illegally accessing content, almost 40% said they would stop if content was cheaper. </p>
<p>Almost 40% said they would stop if more legal content was available. And more than 60% said they would sign up to a (legal) movie subscription service if it was priced at $10 or less per month. The SVOD service Stan costs $10 per month, while Netflix is currently $9. It is therefore conceivable that, as in the UK, easier access to content through SVOD services and platforms like Telstra TV, may well lead to a reduction in piracy.</p>
<h2>Foxtel and sport in sight</h2>
<p>As the Telstra TV announcement indicates, the popularity of new SVOD services is clearly having an impact on free-to-air and pay television companies’ business models and strategies. Telstra has a 50% stake in Foxtel, the company <a href="https://theconversation.com/is-foxtel-most-at-risk-in-the-new-game-of-screens-39783">that may be most at risk</a>. In June, Foxtel made a bid for 15% of Channel Ten, shortly after the latter’s CEO warned that falling advertising revenues could see free-to-air fold. </p>
<p>Foxtel’s move - widely considered to have been instigated by its other major stakeholder, Rupert Murdoch’s News Corp - will potentially allow Ten’s content to be included on Foxtel and Seven West’s flagging SVOD service, Presto. It could also place the three partners in the box seat to acquire the rights to major sports events, subject to the approval of various regulatory bodies.</p>
<p>And despite Telstra’s protestations that its interests in sports rights are confined to mobile, the Telstra TV box could indeed provide a platform for the company to launch future bids for online rights to major events. It has already been suggested that a “sports pass” will be offered to Telstra TV users that will provide access to Fox Sports channels. On one hand this could boost viewers of Foxtel’s flagship sports channels. On the other, it represents a further unbundling of the pay television service.</p>
<p>More than anything, though, the Telstra TV announcement reaffirms the company’s ambitions to be a major player in service provision, if not in content production. Just a few days ago, shareholders in the second largest Australian Internet Service Provider, iiNet, voted to approve a merger with the third largest ISP, TPG. The merged company will still have a smaller subscriber base than Telstra’s Bigpond, but it is a significant statement of Telstra’s intent that it has so quickly moved to unveil this new offering.</p><img src="https://counter.theconversation.com/content/45362/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ben Goldsmith does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Telcos are positioning themselves to be at the top rather than the bottom of the content food chain.Ben Goldsmith, Senior Research Fellow , Queensland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/354872014-12-16T00:38:17Z2014-12-16T00:38:17ZCan we please just get on with the National Broadband Network?<p>Earlier this year, I attended a dinner for about 150 people. The first thing we all did was head for the bar to grab a drink, swamping the staff and setting back the dinner schedule by nearly two hours. We learned that it is better to place a bottle of cheap wine and a jug of lemon squash on each table just to manage the crowd. The same lesson is now being applied to the NBN.</p>
<p>Last Sunday saw the long-awaited signing of two <a href="http://www.minister.communications.gov.au/malcolm_turnbull/news/nbn_co_and_telstra_sign_revised_definitive_agreements#.VI9seGSUfUA">deals</a> and new rules which will, hopefully, pave the way for the National Broadband Network under the current government’s Multi-Technology-Mix model. It’s a positive development for getting more people reasonably happy sooner, but there are significant long-term challenges ahead.</p>
<p>The <a href="http://www.comlaw.gov.au/Details/F2014L01699">Carrier Licence Conditions (Networks supplying Superfast Carriage Services to Residential Customers) Declaration 2014</a> is intended to manage so-called cherry-picking of profitable residential customers of fast broadband. The previous model under the Labor government discouraged anyone other than NBN Co from rolling out the local access network. In part this was to break the vertical integration stranglehold Telstra has over both retail and wholesale provision of access through its legacy plain old copper network; it was also to ensure NBN Co would not be undermined by competition. However, a loophole in the regulations was identified by <a href="http://www.itwire.com/it-industry-news/telecoms-and-nbn/65731-turnbull-moves-on-tpg-cherry-picking">TPG</a>, allowing it to reach up to 5% of the NBN footprint as a retail provider of Fibre-to-the-Basement through its own network.</p>
<p>The new regulations recognise the advantages of other parties choosing to roll out their own networks, but require that such networks be available on a wholesale basis to other retailers - which is to say there is a requirement to structurally separate wholesale and retail operations on NBN-equivalent services. The regulations only apply to new networks rolled out after 1 January 2015. Services already in use, such as <a href="https://www.transact.com.au/en-ACT/about-us">iiNet’s TransACT fibre-to-the-node network</a> are excluded. The wording has clearly been carefully sculpted to capture TPG’s plans.</p>
<p>Deals with both <a href="http://www.minister.communications.gov.au/malcolm_turnbull/news/nbn_co_and_optus_strike_deal_for_faster_nbn_rollout#.VI9u0GSUfUA">Optus</a> and Telstra were also signed. Both companies have agreed to progressively hand over ownership of their relevant infrastructure, Telstra’s copper access network and the HFC cable networks of both, to NBN Co. Previously, the arrangement was that these networks would be decommissioned, but they are now critical implementation options for the NBN. Agreements are consistent with maintaining the valuations of the previous arrangements so that shareholders are no worse off.</p>
<p>Mention has also been made of actively tapping Telstra’s experience and capabilities in the NBN rollout. There is some sensitivity around this statement from the Department of Communications, after <a href="http://www.computerworld.com.au/article/270911/telstra_banned_from_nbn/">Telstra was effectively excluded from tendering to build the NBN in 2008</a>. There would appear to be a significant mending of relations.</p>
<p>But there are troublesome times ahead. The original Fibre-to-the-Premises-dominated NBN was big on vision but caused an overnight drop in investment in moderate-speed broadband technologies such as ADSL. This meant customers were stuck with 2008-vintage speeds while NBN Co geared up for planning and deployment. The political fix negotiated by independents Tony Windsor and Rob Oakeshott in 2010, which shifted priorities to rural areas, provided some longer term certainty for infrastructure investment in profitable urban areas, but further delayed urban rollout. The new policy settings encourage infrastructure competition on the basis of structural separation, once again providing opportunities for parties other than NBN Co to compete in the wholesale space.</p>
<p>However, the new NBN model is focused on initial speeds of 25MBit/s up to 50MBit/s in the short term, but with no mention of Committed Information Rate or specifics of upload speeds. This myopic vision fails to recognise that the NBN is not just about “more of the same, but faster”. It is entirely about enabling fundamentally new services to domestic households, both for entertainment and for productive work-at-home. </p>
<h2>What we’re left with</h2>
<p>The emerging NBN is barely capable of delivering a couple of high-definition video streams in real time, yet this is common in a modern family household with independent internet-enabled devices. If you want to download a one-hour standard definition video, it will take about five minutes. However, if you want to produce and upload such video content, it will take three hours. Upload figures for high definition and the emerging ultra-high definition video are about fifteen and thirty hours, respectively. Cloud-based services will continue to stumble as long as policy direction fails to recognise the importance of delivery of data <strong>into</strong> the network.</p>
<p>The much deeper issue is what happens after 2016. I’ve argued <a href="https://theconversation.com/sooner-cheaper-faster-can-power-lines-speed-up-the-nbn-rollout-19960">previously</a> that “[o]ptical fibre is the only known viable technology beyond 2025. The only justification for considering anything else in the meantime is to buy us time”. </p>
<p>A Fibre-to-the-Node deployment will at least provide the option of upgrading to a passive optical link to the premises of customers who want it, and some of us just can’t wait. But there is no guarantee that every other technology deployment has a similar evolution option. It would be wise for competing infrastructure providers to think this through, but there is no guarantee that solutions deployed in the next few years will evolve, efficiently, to the robust projected demands beyond 2025.</p>
<p>So is this good news? Actually, yes. The NBN capital expenditure won’t be any cheaper if we consider a realistic 20-30 year timeframe, but that doesn’t matter if the faster deployment of the interim Multi-Technology-Mix generates revenues and productivity gains sooner, offsetting peak funding. The interim solutions won’t deliver a clean evolutionary pathway, but that doesn’t matter if enough customers are sufficiently satisfied in the short term. The long-term fibre-to-the-premises deployment can be managed more calmly, if less efficiently, over a longer time frame.</p>
<p>The line at the bar is still too long. Pass me the bottle, please.</p><img src="https://counter.theconversation.com/content/35487/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Matthew Sorell does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Earlier this year, I attended a dinner for about 150 people. The first thing we all did was head for the bar to grab a drink, swamping the staff and setting back the dinner schedule by nearly two hours…Matthew Sorell, Senior Lecturer, School of Electrical and Electronic Engineering, University of AdelaideLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/333602014-10-24T00:29:58Z2014-10-24T00:29:58ZTelstra gets serious about health, but will the public trust it?<p>Australian telecommunications company Telstra has this week <a href="http://www.afr.com/p/technology/telstra_inks_ehealth_deal_with_medgate_dfUoP2yhYylu0uxVskoPDI">announced</a> its intentions to significantly develop its health business. The latest addition to its portfolio of health services will come through a collaboration with Swiss company <a href="http://www.medgate.ch/en-us">Medgate</a>. Medgate currently offers Swiss patients the ability to consult with a doctor via telephone or computer and to order prescriptions online for home delivery.</p>
<p>The arrangement with Medgate will launch in Australia as Telstra ReadyCare, some time in 2015. It is unclear what the financial arrangements for this service will be and whether patients will be able to claim the consultations against Medicare or whether they will be required to pay the entire amount privately.</p>
<p>Telstra has <a href="http://www.theaustralian.com.au/business/telstra-answers-emergency-call-on-health-with-plans-for-services-unit/story-e6frg8zx-1227099078402">spent</a> A$100 million so far on a product and company acquisitions and investments to form the basis of its health services division The collection of companies and technologies were by no means leaders in their individual areas, and it’s yet to be seen whether Telstra, with little background in the health business, can really make a coherent whole out of these disparate parts. </p>
<p>This starting point hasn’t prevented Telstra retail group executive Gordon Ballantyne from claiming that the division will grow to a A$1 billion business within five years. Given that Telstra’s health services area was responsible for just A$43 million in fiscal 2014, hitting that target would require revenues to double each year until 2019. A big ask.</p>
<h2>A difficult market</h2>
<p>Other than the fantastic growth Telstra will have to achieve to reach its revenue targets, it faces other significant challenges if it is to reach its goal. The health market generally is already saturated with a large number of <a href="http://www.health-e-directory.com.au/">products</a> including, for example, several dominant players who control the majority of GP desktops. There is little scope to break into the market now in a significant way. This means Telstra will be battling with a large number of others over the “scraps”.</p>
<p>The Australian health IT sector has always been a <a href="http://www.theaustralian.com.au/technology/poor-prognosis-for-medical-software-sector/story-e6frgakx-1225989797345">tough</a> area to do business in because of the nature of the Australian health environment. Federal government funding makes up a large part of the money that drives health projects in Australia and this has largely dried up as a result of the current government’s conservative budget. In fact, health spending growth as a whole has recently slowed to <a href="http://www.aihw.gov.au/media-release-detail/?id=60129548933">record lows</a>.</p>
<p>Australian states have also been cutting back significantly on health IT spending, and where they are investing it tends to be on the larger system providers rather than the sorts of smaller products that Telstra and the majority of Australian IT health software companies provide.</p>
<p>The virtual GP market may represent a significant market opportunity, but developing it will take time as users adapt. Telstra will not be the first to offer such services. Companies like telehealth group <a href="http://www.lifehacker.com.au/2014/04/elevator-pitch-gp2u/">GP2U</a> already offer similar access to GPs online or over the telephone. Indeed, the Australian government has itself provided access to registered nurses and GPs over the telephone via its <a href="http://www.healthdirect.gov.au/">Health Direct</a> service. This service is provided by <a href="http://www.medibank.com.au/">Medibank</a>, and with its impending privatisation it may become a significant force in the health services sector. Medibank has significantly more experience and capability of succeeding in the market Telstra hopes to enter.</p>
<h2>Privacy concerns</h2>
<p>The other major significant barrier Telstra faces is its brand perception with the public and whether they will trust the telco with managing their health, and more importantly, the privacy of their data. </p>
<p>Telstra has faced significant <a href="http://www.smh.com.au/technology/bigpond-plugs-privacy-leak-20111210-1oox7.html">security breaches</a> including up to 60,000 Bigpond customer account details being posted on the internet, and a separate incident involving the mis-posting of 220,000 letters containing account information to the wrong customers. </p>
<p>More <a href="http://www.themercury.com.au/news/breaking-news/complaints-spur-training-change-at-telstra/story-fnj6ehgr-1227097137924">recently</a> Telstra had to retrain its staff after a large number of complaints to the ACCC about customers being misinformed about their customer rights. </p>
<p>On the plus side, Telstra has managed to grow and <a href="http://telstra2014ar.interactiveinvestorreports.com/">make money</a> from different parts of its business delivering media over its home set-top device the T-Box, and in its network applications and services division. This would point to Telstra being able to take new business areas and learn how to grow revenue and profits, even possibly with something as challenging as health. </p>
<p>The promise of e-health has yet to live up to the hype as a panacea for our ageing, overweight, and increasingly sickly population. It will definitely be part of the solution in delivering more efficient services, but we will have to wait and see whether Telstra will be one of the drivers.</p><img src="https://counter.theconversation.com/content/33360/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David Glance receives funding from the sale of a clinical product in the same sector as some of those offered by Telstra.</span></em></p>Australian telecommunications company Telstra has this week announced its intentions to significantly develop its health business. The latest addition to its portfolio of health services will come through…David Glance, Director of UWA Centre for Software Practice, The University of Western AustraliaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/326632014-10-08T19:03:50Z2014-10-08T19:03:50ZCustomers to provide the hotspots in Telstra’s new Wi-Fi plan<p>Telstra’s plans to rollout Australia’s largest <a href="http://www.telstra.com.au/broadband/wifi/index.htm">Wi-Fi network</a> over the next five years involves asking existing customers to allow part of their broadband connection to be used as hotspots.</p>
<p>More than two million new hotspots are planned as part of the A$100 million-plus strategy to increase broadband connectivity in the places that Australians live, work and visit daily. The first 1,000-hotspots will go live before Christmas. </p>
<p>But only two years ago Telstra <a href="http://www.itnews.com.au/News/282168,telstra-shutters-wireless-hotspots.aspx">shelved</a> its plan to build a 1,000 hotspot Wi-Fi network, citing a lack of profitability and a clear customer preference for 3G connectivity.</p>
<h2>So what has changed?</h2>
<p>In contrast to the fixed line National Broadband Network (<a href="https://theconversation.com/au/topics/nbn">NBN</a>) quagmire, the shifting position of Telstra with regards to Wi-Fi reflects a rapidly evolving wireless telecommunications market.</p>
<p>The continued uptake of smart phones, tablets and other mobile devices, and the increasingly central role these devices play in social, economic and political life, is generating a phenomenal demand for wireless data.</p>
<p>This is outpacing the development of cellular network capacity and creating congestion and reduced service quality on these networks. Telstra’s interest in developing a Wi-Fi network to offload some of this data traffic mirrors that by its <a href="https://www.btwifi.co.uk/news/news_20140911.jsp">international counterparts</a>.</p>
<p>The fundamental role that wireless communications now play in contemporary life has also translated into government interest in the provision of public Wi-Fi as civic infrastructure. Governments are well placed to do so since they control assets, such as light poles, on which the large number of low-range Wi-Fi access points can be mounted.</p>
<p>While Telstra will make use of some of its own assets, such as public pay phone booths, it is seeking to establish hotspots in partnership with <a href="http://www.telstra.com.au/broadband/wifi/">governments</a>. This will spread the cost of provision, but Telstra are also undoubtedly keen to maintain some control over public Wi-Fi developments to make sure it reduces cellular congestion without cutting into its existing revenue streams. </p>
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<span class="caption">Some of Telstra’s payphone booths will become new Wi-Fi hotspots.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/spelio/3754043187">Flickr/spelio</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span>
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<p>Telstra has also developed a business model that it believes will make sure Wi-Fi becomes a profitable revenue stream. Use of Wi-Fi hotspots by Telstra’s contracted home and business broadband customers will count towards their already monetised bandwidth allowance.</p>
<p>Those without Telstra home broadband services will pay a fee to access the hotspots, the pricepoint of which will likely be structured to facilitate casual use but encourage regular users to consider signing up to Telstra broadband.</p>
<p>Compelling as these reasons may be for Telstra to dip back into Wi-Fi provision, shareholders might be forgiven for worrying that the rollout of two million hotspots is an overcommitment, and one that will present similar headaches to those faced by NBN Co. But they should fear not, as Telstra will build just 8,000 of these hotspots, with the majority actually rolled out by Telstra’s customers themselves.</p>
<h2>A Fon on your Wi-Fi network</h2>
<p>A fascinating aspect of Telstra’s plan is its partnership with the European-based bandwidth sharing enterprise <a href="https://corp.fon.com/en">Fon</a>. Telstra hopes that two million of its customers will follow the lead of Fon users around the globe and make part of the bandwidth they purchase for their home or business broadband service available to other users.</p>
<p>So what is Fon, and are Telstra’s plans feasible? </p>
<p>Fon was established in 2005 by Argentinian entrepreneur Martin Varsavsky. The company is headquartered in Spain, a country with a significant history of community wireless activism, such as <a href="https://guifi.net/">guifi.net</a>.</p>
<p>Despite affectionate references to its community of “foneros”, Fon has moved some way from its cooperative roots. Backed by some heavyweight venture capitalists, Fon broke even after four years of operation.</p>
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<p>The company has been signing exclusive deals with foreign telcos like Telstra as a means of rapidly expanding its international hotspot network. The company now claims to have more than 13 million Fon spots worldwide. These will be available to Telstra customers through the deal.</p>
<p>Fon’s bandwidth-sharing scheme is not unique, but its scale and ambition sets it apart. Commentators have been intrigued by the company’s evolving blend of user-generated and commercial elements.</p>
<p>But its service model – which concentrates provision in private homes and residential areas – has been criticised for its variable <a href="http://www.sciencedirect.com/science/article/pii/S0736585310000523">accessibility and reliability</a> .<br>
This concern would seem to be amplified in the large spaces of Australian cities.</p>
<p>How many of the projected two million hotspots will be in low density neighbourhoods where Wi-Fi signals may not extend much beyond the front gate, or where there is little passing foot traffic? Will lingering outside houses to utilise the network boost commitment to the sharing economy, or arouse suspicion? </p>
<p>Such suspicion will hardly be allayed by Fon’s unfortunate description of non-sharing network users as “aliens”.</p>
<p>Telstra, then, will be tasked with boosting provision in commercial and tourist areas, and identifying incentives for householders to sign up and share.</p>
<h2>Who benefits from the deal?</h2>
<p>Specifically, it enables Telstra to secure a new footing in Australia’s rapidly evolving Wi-Fi scene. By asking Telstra’s customers to purchase and maintain a key component of the network infrastructure – the signal splitting modem – Telstra outsources infrastructure investment.</p>
<p>More speculatively, the new network may generate revenue from casual users and remove data traffic from mobile networks in favour of premium voice services.</p>
<p>Fon is aiming to build its global community but its business is currently <a href="https://corp.fon.com/en/maps">concentrated</a> in Europe, North-east Asia and South America. An alliance with Telstra brings Fon into the Asia-Pacific region. Partnering with major telcos may also help counter criticism of Fon’s reliability.</p>
<p>The new hotspot network will provide a new platform for Telstra customers to access bandwidth from their home broadband plan and, depending on pricing and performance, may provide cost effective internet access for non-customers.</p>
<p>More generally, roll-out of the network is likely to expand commercial Wi-Fi coverage in Australian cities, and may promote innovation and further technical development.</p><img src="https://counter.theconversation.com/content/32663/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ian McShane receives funding from the Australian Research Council.</span></em></p><p class="fine-print"><em><span>Chris K Wilson and Mark A Gregory do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Telstra’s plans to rollout Australia’s largest Wi-Fi network over the next five years involves asking existing customers to allow part of their broadband connection to be used as hotspots. More than two…Ian McShane, Senior Research Fellow, Centre for Urban Research, RMIT UniversityChris K Wilson, Research Associate, Centre for Urban Research at RMIT University, RMIT UniversityMark A Gregory, Senior Lecturer in Electrical and Computer Engineering, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/279362014-06-19T20:56:13Z2014-06-19T20:56:13Z‘Google Schmoogle’ – how Yellow Pages got it so wrong<figure><img src="https://images.theconversation.com/files/51300/original/ndcyyy5p-1402981116.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Is your Yellow Pages destined for the recycling?</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/designwallah/4885177922/in/photolist-8rFPcy-7WT1X-5J7iwL-69KEhx-5qgjo4-7eZ9Dv-bQg2fP-ejTY2i-4kkV5X-7k99Gv-MURGx-9wC2ia-91mhpC-dnfsDG-4KatBt-5CUrDr-5D47jJ-7aarBA-EYzh-KGTZe-5D48cs-zjiwB-6GXpSR-5CUqvV-6H2u6h-5tkpSV-5oRT8K-7kCPsg-5FUNuY-7BfkS9-4MbCrj-9XsLn6-4APEL2-31QxED-bxiFYr-4APESe-6udToj-4B8dLK-BHWpL-4Bcvoh-4nyh7h-dHAK6u-9rydZY-kto1b-2xf3Xm-6wNt6B-9tgoRn-99CkMk-3wBLzZ-ay1LTh">Flickr/Francis Mariani </a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span></figcaption></figure><p>Yellow Pages directories have been appearing on doorsteps across Australia in recent weeks. As often as not, they go straight into the recycling bin. In the world of the internet and e-commerce, the very notion of a book the size of two bricks being the source of valuable purchasing information seems plain silly.</p>
<p>Once directories like the Yellow Pages served a valuable need in most developed economies. They provided basic and inexpensive local advertising, especially for small businesses. </p>
<p>As the internet emerged as the preferred means of accessing such information, the potential for directory owners like Telstra to translate directory information into a valuable online business opportunity seemed promising. As is often the case in the unpredictable world of the internet, it was not quite so simple.</p>
<p>In January 2014, <a href="http://about.sensis.com.au/Media-Releases/?ItemID=1249">Telstra sold a 70% share of Sensis</a>, its directories subsidiary, to a US hedge fund for A$454 million, only 2.4 times projected 2014 earnings. This is quite a turnaround from the <a href="http://www.theaustralian.com.au/business/companies/print-directories-falling-off-cliffs-around-globe/story-fn91v9q3-1226804541047#">A$12 billion value</a> suggested to Telstra’s Board in 2005. At the time, Telstra’s chief executive Sol Trujillo declined to spin-off the business, suggesting Sensis (Telstra’s directory business) would be <a href="http://www.zdnet.com/telstra-traces-decline-of-golden-egg-sensis-to-gfc-and-google-7000025056/">“bigger than Google”</a>.</p>
<h2>Google Schmoogle?</h2>
<p>Indeed, with characteristic ebullience, Trujillo commented in November 2005, “Google Schmoogle”. Contrary to that prediction of sorts, since 2005 Google’s market capitalisation has increased tenfold, to more than half a trillion dollars. Among Trujillo’s many strategic mistakes, his misunderstanding of the relative potential values of Google and Sensis probably takes the cake. </p>
<p>It’s fair to say, however, that Trujillo was not alone in misunderstanding the radical changes in the economics of information over the last decade. These changes have completely upturned the value of directories businesses globally. The investors who <a href="http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aaRE5oC5wCUI">bought Telecom New Zealand’s directories busines</a>s in 2007 for $2.1 billion (at an earnings multiple of 13.6 times) at the height of the private equity bubble have done most of their dough.</p>
<h2>Knowledge is Power (and Money)</h2>
<p>The 2.4 earnings multiple on the recent Telstra sale suggests two things - that the business is still profitable, but that profits are expected to rapidly erode. How can we explain this sudden, anticipated and precipitous decline in the value of information available through directories like the Yellow Pages?</p>
<p>The economics of information is changing rapidly. Economists George Akerlof, Michael Spence and Joseph Stiglitz won the <a href="http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/2001/popular.html">2001 Nobel Prize for economics</a> for their seminal work on the economics of information, especially information assymetries between buyers and sellers. </p>
<p>Most famously among the suite of work done by these economists was Akerlof’s 1970 paper <a href="http://www.jstor.org/stable/1879431">“The Market for Lemons”</a>. Like all great academic work, its beauty lay in its simplicity. In essence, buyers and sellers have “asymmetric” information. In the example in his paper, the seller of a used car knows if it is a “lemon”, though the buyer rarely does.</p>
<p>A consequence of Akerlof’s Lemons paper for sellers is that it made sense for them to signal to the market aspects of the quality of their products – by suggesting that they are selling “cherries” (great used cars) and not “lemons” (cars on their last legs). One simple way to do this was through advertising. This was especially useful where the buyer’s knowledge of the seller was limited, as would often be the case for the buyers from small businesses who advertise in directories like the Yellow Pages.</p>
<h2>Better information, less asymmetry</h2>
<p>The steep decline in the generic, supplier-provided data that is the essence of Yellow Pages has been driven by a set of related phenomena.</p>
<p>First, sites like <a href="http://www.tripadvisor.com.au">TripAdvisor</a> have emerged to provide detailed and generally reliable information on services including hotels, tourist attractions, restaurants and the like. Importantly for Yellow Pages, sites such as these are becoming the first place for buyers to visit. As the quantity of collected reviews increase, the value of such sites increases greatly, as they provide a level of information on sellers that static directories cannot match.</p>
<p>Second, the costs of “searching” for information is in steep and terminal decline. Once, buying a set of golf clubs for the best price, for example, required a multitude of phone calls or, worse still, visits to stores with pushy salespeople. Now, finding the best price in the market is a few keystrokes away through Google.</p>
<h2>Too late for Sensis?</h2>
<p>This begs the question – can the Yellow Pages reinvent itself to be a new portal for information on sellers that will be valuable for buyers, and thus continue to attract advertisers? The answer is probably not. As a late mover into such information provision, it will have an almost insurmountable challenge to build an equivalent body of information in comparison to its competitors. More so, it will be a generalist in an industry full of specialists, the last site visited by buyers and thus the least valuable site for sellers to direct their advertising dollars to.</p>
<p>This makes the 2.4 times 2014 earnings paid in January for Sensis seem about right. Such a multiple suggests that this year’s Yellow Pages might be the last one to lob onto Australia’s front porches. If this is bad news for Sensis, it is good news for the millions of trees that will be saved!</p><img src="https://counter.theconversation.com/content/27936/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Rice is a member of the National Tertiary Education Union and the Australian Labor Party.</span></em></p><p class="fine-print"><em><span>Nigel Martin does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Yellow Pages directories have been appearing on doorsteps across Australia in recent weeks. As often as not, they go straight into the recycling bin. In the world of the internet and e-commerce, the very…John Rice, Associate Professor in Strategic Management, Griffith UniversityNigel Martin, Lecturer, College of Business and Economics, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/278592014-06-11T20:33:47Z2014-06-11T20:33:47ZAustralia Post, Telstra and the ‘dying business’ dilemma<p>Who would run a former government-owned monopoly these days? In the last week, <a href="http://www.afr.com/p/national/australia_post_to_split_in_two_jobs_B3aSRiZA0L5glhPMdvSlQK">Australia Post’s Ahmed Fahour announced</a> 900 administration jobs were to go from its Melbourne operations, while last week Telstra’s David Thodey recounted discussions from his recent trip to the US, where he was told his <a href="http://www.commsday.com/commsday-australasia/telstra-ceo-connectivity-will-remain-key-focus-for-company">“business model is dead”</a>.</p>
<p>Both organisations, ironically once part of the same <a href="http://en.wikipedia.org/wiki/Postmaster-General's_Department">Commonwealth Postmaster General’s department</a>, face massive disruptive change from new technologies. How they manage these changes will have consequences far beyond their corporate results, with important consequences for the nation.</p>
<h2>The Good Old Days …</h2>
<p>Once, for Telstra and AusPost, the future was certain. Growth in the core telecommunications and mail businesses was seen as a function of general economic growth. The demand for these essential services, it was expected, was assured.</p>
<p>The internet, in different ways, put paid to those certainties. For AusPost, the most significant change was the collapse of the traditional letter delivery business. Once a monopolistic license to print money, the era of the internet has seen the demand for its core letter delivery services <a href="http://www.smh.com.au/federal-politics/political-news/australia-post-chief-executive-ahmed-fahour-confirms-900-jobs-will-be-axed-20140610-39vag.html">collapse by 30%</a> over the last five years. This has seen this segment of the business become a significant drain on the organisation’s performance – letter delivery lost A$122 million in 2011, A$187 million in 2012 and A$218 million in 2013.</p>
<h2>Future Ready or Future Shock?</h2>
<p>In 2010, AusPost announced its <a href="http://auspost.com.au/media/documents/AP-annual-report-0910.pdf">“Future Ready”</a> strategy, seeking to identify future market segments where its performance could be developed and improved. This strategy revolves around developing three areas, namely communications (digital and physical), the provision of a physical portal to access government, business and financial services and finally as a deliverer of parcels.</p>
<p>Of the three business segments identified in Future Ready, one is promising (parcels), one is questionable (the services portal business) and one is abominable (letters) – hence the recent manoeuvres to clarify and separate the business into its core elements, most probably with a view to the future privatisation of that part of AusPost that makes profits – parcels.</p>
<p>AusPost is seeking to innovate – thus far with limited success. For example, in 2012 it launched <a href="http://auspost.com.au/parcels-mail/digital-mailbox.html">MyPost Digital Mailbox</a>, seeking to offer customers a secure way to pay bills (sound familiar, <a href="http://www.theaustralian.com.au/business/its-like-the-post-calling-the-kettle-black/story-e6frg8zx-1226891492908">BPay</a>?). Recent reports suggest it has met with limited success.</p>
<p>The Digital Mailbox illustrates two key problems for AusPost as it attempts to transform itself into a digital transaction hub. First, it pursues such initiatives as a late mover, confronting established incumbents with deep pockets and an installed base. Second, any such intiatives are subject to eventual competition from the likes of PayPal, and indeed the Australian banks, whose global reach and e-commerce capabilities should frighten AusPost.</p>
<h2>Whither Telstra?</h2>
<p>Telstra too faces serious challenges. Ever since voice was digitised, telecommunications companies have essentially been in the business of shifting data between users. The problem with this is that the transfer of data is rapidly commoditising, with a large number of alternative and interoperable access arrangements or gateways (wireless, optic fibre, copper) and network infrastructure (NBN, satellites, subsea communications cables) interconnected through the internet.</p>
<p>The risk for players like Telstra has always been that one day (soon) virtual Telcos would emerge, bundling fast data and seamless access points located within cherry-picked markets like our major urban centres.</p>
<h2>Don’t forget the Community Service Obligations</h2>
<p>A major problem for both AusPost and Telstra relates to their community service obligations. These are enshrined in the relevant Commonwealth legislation for both <a href="http://www.communications.gov.au/telephone_services/voice_telephone_services/connecting_the_telephone">Telstra</a> and <a href="http://www.communications.gov.au/post/australia_post/australia_posts_performance">AusPost</a>, generally requiring both companies to provide an adequate service to all Australians, wherever they be.</p>
<p>The problem is that postal and telecommunications services to rural and remote areas, while of fundamental importance to those communities, tend to be a financial deadweight for the companies.</p>
<p>For example, one aspect of AusPost’s community service obligations is the provision of at least 2,500 outlets in rural and remote Australia. These are often integrated into local retailers, providing an important hub for communities, allowing access to mail, banking and financial services. Significant closures of these outlets would have devastating consequences for many rural communities.</p>
<p>Thus the government should proceed with caution with any plans to allow AusPost to split in two, and it should monitor carefully the implications of technological change on Telstra. For AusPost, selling the profitable parcels business would leave a legacy letters and services business that would almost certainly see declining use and huge financial losses into the future. For Telstra, the consequences of a myriad of new competitors cherry picking its profitable city markets, while ignoring the costs associated with ubiquitous infrastructure in the regions, could be calamitous.</p>
<p>Regardless of promises and projections, the temptation for AusPost’s and Telstra’s managers to cut services and costs to reduce (especially non-urban) losses could well be irresistible.</p><img src="https://counter.theconversation.com/content/27859/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Rice is a member of the Australian Labor Party.</span></em></p><p class="fine-print"><em><span>Nigel Martin does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Who would run a former government-owned monopoly these days? In the last week, Australia Post’s Ahmed Fahour announced 900 administration jobs were to go from its Melbourne operations, while last week…John Rice, Associate Professor in Strategic Management, Griffith UniversityNigel Martin, Lecturer, College of Business and Economics, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/252042014-04-03T05:52:38Z2014-04-03T05:52:38ZOptus’ apology on coverage highlights multi-network problem<figure><img src="https://images.theconversation.com/files/45486/original/cptw85x9-1396495414.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Telstra takes a bite at Optus claims over mobile phone coverage.</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/andrewscott/2736872067/in/photolist-5aRbHr-56a9TH-4UPT2v-3sQ2Zd-o4QsM-53Nic9-4Wj295-5dNqDa-bkScmJ-brjpJg-bm2qHQ-8CPziW-byM7ba-aQMnJz-8mQeFD-i4GD6q-i4GDbJ-PZULB-dJ5ra1-7Fh7Ti-4P3u4z-kgqiE-4i1vLW-4i3cL5-38KNVb-38KPCw-38KPsq-38Ff8X-38Fg5g-38KPPm-abCXv1-5h2ove-kgqiC-677Dbb-ab1rdh-aaXvWR-aaXkFF-aaXAYV-ab1qeY-aaXreK-ab1o1f-ab1odL-ab1krw-ab1ffW-ab1afG-ab1nsj-ab1c6N-aaXvyi-aaXo5a-aaXsoR/">Flickr/Andrew Scott </a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-sa/4.0/">CC BY-NC-SA</a></span></figcaption></figure><p>Mobile coverage of two of the major telecommunications companies is <a href="http://www.zdnet.com/au/optus-customers-offered-contract-release-by-court-7000027905/">in the news again</a> after Telstra took Optus to court over an advertisement that was found to be misleading.</p>
<p>The complaint against Optus was that it conflated landmass and population when it said it had 98.5% coverage compared to Telstra’s 99.3%, a difference of “less than 1%” the television advertisement said.</p>
<p>Optus <a href="https://media.optus.com.au/media-releases/2014/optus-responds-to-legal-action-on-tvc/">denied any wrongdoing</a> but the <a href="http://mumbrella.com.au/victorian-supreme-court-rules-optus-mislead-australians-ads-207577">complaint was upheld</a> in the <a href="http://www.austlii.edu.au/au/cases/vic/VSC/2014/35.html">Supreme Court of Victoria</a> earlier this year.</p>
<p>Optus Singtel was ordered to pay for a <a href="http://www.afr.com/p/business/companies/optus_ordered_into_one_month_correction_asK0krlAjaIvi559m3YRML">series of adverts</a> – appearing in newspapers today – saying any Optus customer who believes they were misled now has the option of withdrawing from the contract.</p>
<p>So why the confusion? Why the complaint?</p>
<h2>How do you measure coverage?</h2>
<p>The reason for the confusion is that the Australian population is and has been for a long time one of the most urbanised in the world.</p>
<p>Most Australians <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/4102.0Main+Features30April+2013#back7">live in the largest cities</a>. To cover most of the population it is only necessary to cover those cities.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/kvtr_CXekik?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">The new version of the Optus television advert.</span></figcaption>
</figure>
<p>The new new Optus “correction” adverts say Telstra can claim to cover 99.3% of the Australian population, yet its geographical coverage is 30.6% of the Australian landmass or about 2.4 million square kilometres.</p>
<p>Optus claims to cover 98.5% of the Australian population, yet its geographical coverage is much smaller, approximately 1 million square kilometres or 12.6% of the Australian landmass. More than 50% difference in landmass coverage means less than 1% coverage in population coverage.</p>
<p>The accusation was that Optus’s advertising misled consumers into confusing population coverage with geographic coverage.</p>
<h2>Confused signal</h2>
<p>It’s understandable but unfortunate that companies use population rather than geographic coverage in their advertising. Coverage of 98% or 99% sounds much more impressive than coverage of 10% or 30%.</p>
<figure class="align-left zoomable">
<a href="https://images.theconversation.com/files/45490/original/6ftx7x8k-1396496336.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/45490/original/6ftx7x8k-1396496336.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/45490/original/6ftx7x8k-1396496336.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=660&fit=crop&dpr=1 600w, https://images.theconversation.com/files/45490/original/6ftx7x8k-1396496336.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=660&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/45490/original/6ftx7x8k-1396496336.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=660&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/45490/original/6ftx7x8k-1396496336.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=829&fit=crop&dpr=1 754w, https://images.theconversation.com/files/45490/original/6ftx7x8k-1396496336.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=829&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/45490/original/6ftx7x8k-1396496336.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=829&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">A typical mobile phone tower, in Camberwarra, NSW.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/yewenyi/233623892">Flickr/Brian Yap</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc/4.0/">CC BY-NC</a></span>
</figcaption>
</figure>
<p>But as this case shows, a small difference in population coverage means an enormous difference in geographic coverage. Yet, it is often geographic coverage that is most important to consumers.</p>
<p>The times when we most urgently need a phone will often be when we are outside the major population centres. If we are stranded with a broken down car on a lonely road a long way from the nearest town, geographic coverage is much more important to us than population coverage.</p>
<p>In the early 1990s the Australian government <a href="http://www.abs.gov.au/ausstats/abs@.nsf/Previousproducts/1301.0Feature%20Article432001?">chose to have competition</a> between mobile carriers. The whole issue of marketing of coverage gives rise to questions as to whether or not this was a good decision and whether mobile telephony coverage is a natural monopoly.</p>
<h2>Duplicate networks</h2>
<p>Because of competition there is quite a lot of duplication of infrastructure, such as base stations, within the major population centres. At the same time large parts of the country are not covered by a mobile service.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/45492/original/74hhy9df-1396496629.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/45492/original/74hhy9df-1396496629.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/45492/original/74hhy9df-1396496629.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/45492/original/74hhy9df-1396496629.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/45492/original/74hhy9df-1396496629.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/45492/original/74hhy9df-1396496629.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/45492/original/74hhy9df-1396496629.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/45492/original/74hhy9df-1396496629.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Several mobile networks vie for space on a water tower.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/mikecogh/8535841755/in/photostream/">Flickr/Michael Coghlan</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<p>Perhaps it would make more economic sense for there to be a single wholesale carrier managing the base stations and competition among retail service providers.</p>
<p>But it is easy to imagine some intractable problems a return to a monopoly carrier would bring and, while duplication of infrastructure is wasteful, monopolies have their own problems.</p>
<p>Ultimately such questions are for the economists and the regulators. Perhaps the lesson for the rest of us is that we need to be aware of the way coverage is marketed, that population and geographic coverage are very different things, and make our decisions accordingly.</p><img src="https://counter.theconversation.com/content/25204/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Philip Branch owns 400 shares in Telstra. </span></em></p>Mobile coverage of two of the major telecommunications companies is in the news again after Telstra took Optus to court over an advertisement that was found to be misleading. The complaint against Optus…Philip Branch, Senior Lecturer in Telecommunications, Swinburne University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/248802014-03-28T01:46:29Z2014-03-28T01:46:29ZThe politics of unshackling the NBN from politics<p>Nobody can ever state with certainty how much it will cost or how long it will take to deliver broadband services to more than 22 million people spread out over 7.6 million square kilometres. Even more difficult to project are the revenues from such a service years from now. Anybody who could know would certainly possess a global monopoly along with their crystal ball.</p>
<p>Likewise, there is no perfect technology that will solve all of tomorrow’s problems. Indeed, it is an iterative process. And network technologies create legacies that are difficult to anticipate. Telstra’s copper network, for example, is a legacy that just refuses to go away.</p>
<p>All of these facts didn’t stop another round of <a href="http://www.itnews.com.au/News/380891,nbn-strategic-review-inaccurate-unreliable8217-says-senate-committee.aspx">bickering</a> between politicians after the release this week of the interim <a href="http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/National_Broadband_Network/NBN/index">report</a> from the Senate Select Committee on the National Broadband Network. </p>
<p>What are reasonable assumptions to make when analysing the progress of the NBN to date? Here’s a few: high-speed internet access is essential for a variety of social, political, economic and familial reasons. Fibre-to-the-premises (FTTP) is better than fibre-to-the-node (FTTN) but it costs more. It is expensive to deliver broadband to the bush. When the market works, it works, and when it doesn’t, government should act. And any broadband is better than no broadband.</p>
<p>So why are there so many reports yet so little action in delivering broadband services? Why should government insist on delivering it exclusively?</p>
<h2>A history of interference</h2>
<p>It is an Australian tradition that politicians use the communications industry as a big policy switch to be flicked when politicking calls for it. Flick the switch one way and provide numerous reports to support the view, then flick it the other and the process starts over again. And then focus so much on the minor short-term issue that the big picture is lost for centuries.</p>
<p>Politicking is the stuff of democracy. But when services that can be delivered by the market are caught up in politicking, the system falters.</p>
<p>Government has always been slow to deliver communications technologies in Australia (you only need to compare Australia with other OECD nations over time to see this). And with about 160 years of experience, Australian businesses have learnt that first movers pay a hefty price for taking the initiative.</p>
<p>Here’s a quick look at governments (of all persuasions) and their long record of failed interference in the telecommunications sector:</p>
<ul>
<li><p>A commercially sustainable private telegraph system was shut down by government when it threatened revenues for the South Australian Government’s network.</p></li>
<li><p>The first Australian telephone exchange was run by a business (established two years before London’s exchange). Government shut it down to improve “quality”.</p></li>
<li><p>Australian designs for telephones and exchanges were overlooked by various colonial governments in favour of foreign imports.</p></li>
<li><p>Wireless was available right from the beginning, but government took control of it, refused to let businesses use it, and then did nothing for more than a decade. Amalgamated Wireless Australasia (AWA) - the first wireless agent in Australia - came about largely because the Australian government had infringed wireless patents trying to build its own systems.</p></li>
<li><p>FM radio didn’t happen for decades because government decided we didn’t need it.</p></li>
<li><p>Who can forget disconnecting all their non-Telecom devices any time there was problem with the phone line, otherwise Telecom made you pay just for turning up. We learnt quickly not to have the audacity to use non-Telecom products, even though Austel said we could.</p></li>
<li><p>The “Rolls Royce” version of Aussat, Australia’s domestic communication satellite system, hardly made a dent in Australia’s poor access to television content. In the far north, you could either watch NQTV or the ABC. Everywhere else in the developed world you could watch hundreds of channels.</p></li>
<li><p>Monolithic Telstra was created by government then prevented from acting like a normal business because government got its privatisation plan wrong.</p></li>
</ul>
<h2>Wasting time</h2>
<p>How did the Rudd/Conroy government try to solve our broadband problems? It took control again, but this time with NBN. Instead of focusing on market failure in the bush, politicians decided to run the whole show.</p>
<p>In every instance more reports trying to figure out why it just wasn’t quite working as the politicians had planned. Always caught up in politics. Always slow and uncertain.</p>
<p>Politicians would hardly instigate a report that didn’t support their own position. And because nobody can ever be certain, we can bicker endlessly about assumptions in reports designed to support a particular political position.</p>
<p>The government’s recent strategic review and subsequently the Senate Committee’s findings are no different. Should we have FTTP or a multi-technology mix? Asking who is right or wrong is the wrong question. We should be asking: what is the point?</p>
<p>Businesses will build whatever the government pays for - they’ve been doing this since the first telegraph network was established. But will we have a vibrant and innovative communications sector? Not if Australians are to have affordable access to effective communications technologies - now and into the future. The question we need to be asking is what role government should play in facilitating the deployment of communications technologies. </p>
<p>TPG is pushing the boundaries and <a href="http://www.itnews.com.au/News/376070,tpgs-fttb-build-enters-construction-mode.aspx">delivering fibre</a> right now. NBN Co wants this to stop. Business is delivering, government is reporting. It’s not hard to work out which approach is addressing our broadband problems.</p>
<p>Let the market work where it works, let government step in where it doesn’t. Nobody should be surprised to learn that it is expensive to provide broadband to remote and regional communities. But instead of transparently setting out how much it costs to deliver broadband to the bush, government gets everyone in on the gig so it can hide the inevitable cross-subsidisation. Never mind the effect on industry, but it sure makes for good politics.</p>
<p>But while the traditional political game continues, the future of our communications industries will remain the subject of more reports, not action.</p>
<p>A long-term industry has been shackled to three-year political terms for far too long. The only way to unshackle NBN from politics is to get government out of the marketplace where it exists. Of course, the legacy of sunk costs will make this difficult. But by the time we stop bickering about the latest lot of reports, it will be time to deal with the next communications technology problem.</p>
<p>Much better to be using an affordable broadband service (regardless of whether it’s FTTP or FTTN) than reading yet another report trying to second-guess the market.</p><img src="https://counter.theconversation.com/content/24880/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michael de Percy does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Nobody can ever state with certainty how much it will cost or how long it will take to deliver broadband services to more than 22 million people spread out over 7.6 million square kilometres. Even more…Michael de Percy, Senior Lecturer in Political Science, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/209432013-12-01T19:27:45Z2013-12-01T19:27:45ZSenate hearing circus shows politics has no place in NBN<figure><img src="https://images.theconversation.com/files/36564/original/vdhgn5vr-1385875735.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Former communications minister Stephen Conroy relished the opportunity to attack new NBN Co boss Ziggy Switkowski on rising costs and the state of Telstra's copper network in the Senate hearing last week.</span> <span class="attribution"><span class="source">AAP/Lukas Coch</span></span></figcaption></figure><p>As Stephen Conroy interrogated the incoming NBN Co chief Ziggy Switkowski in last week’s Senate hearing into the network’s rollout, it became increasingly clear that politics is getting in the way of good policy.</p>
<p>The Federal Parliament’s <a href="http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/National_Broadband_Network">Select Committee on the National Broadband Network</a> latest proceedings, which concluded Friday, focused on the state of Telstra’s copper network, the use of alternative technologies and the expansion of the NBN’s footprint. </p>
<p>But it was hard not to be reminded of Monty Python’s Dead Parrot Sketch – particularly when Dr Switkowski and Stephen Conroy sparred over the copper. Is copper dead? Is it resting? Will it voom if you put four million volts through it?</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/4vuW6tQ0218?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Is it dead? The Senate Committee heard that Telstra’s copper wire network needed to be replaced some time ago.</span></figcaption>
</figure>
<p>At the same time, journalist David Braue of Fairfax Media had a <a href="http://www.smh.com.au/it-pro/government-it/confidential-briefing-nbn-unlikely-to-meet-coalitions-deadline-20131128-hv3tp.html">scoop</a> after obtaining a draft analysis from a source in NBN Co, which was apparently used as part of the content of the “blue book” briefing for the incoming government.</p>
<p>Technical problems experienced in the Senate hearing – specifically the failure of a video link with Senator Scott Ludlum, reflected the frustration all of us experience with the current condition of broadband in Australia. It was a fitting allegory for the state of domestic internet services.</p>
<p>Dr Switkowski was in the hot seat on Friday, making the clear point that he is focused on expanding the footprint of the NBN rollout to get it back on track, and this is how it should be.</p>
<p>But it is unfortunate that the politics of the NBN is sucking the oxygen out of the task of getting the job done, and the blame lies in equal measure with both sides of politics.</p>
<h2>A short history</h2>
<p>If you have a long memory, by communications technologies standards, you might recall that the 2007 concept of the NBN was for a Fibre-to-the-Node network proposed by the then opposition ALP under Kevin Rudd.</p>
<p>The Fibre-to-the-Node option was abandoned in favour of a Fibre-to-the-Premises model, in part because it was the best long-term technical solution, but mostly as a means of forcing Telstra’s structural separation between wholesale and retail services. </p>
<p>The Fibre-to-the-Node approach would have involved buying back Telstra’s copper network, while Fibre-to-the-Premises turned out to be cheaper by rolling out fibre and compensating Telstra as it decommissioned the copper network. </p>
<p>The copper network was widely acknowledged to be in a poor state of repair and unable to keep up with conservative estimates of demand for high-speed internet. </p>
<p>The situation was complicated by the compromises made in reaching an agreement to form government with independents in 2010, resulting in a shift of priority to regional areas such as Armidale ahead of urban areas. </p>
<p>The result was that the initial stages of the NBN rollout were much more about feel-good politics than the rational commercial reality of getting the customers most engaged and willing to pay connected to the high-speed fibre network. That approach would have generated revenue and built up demand.</p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/36565/original/dm559hyq-1385875917.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/36565/original/dm559hyq-1385875917.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=800&fit=crop&dpr=1 600w, https://images.theconversation.com/files/36565/original/dm559hyq-1385875917.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=800&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/36565/original/dm559hyq-1385875917.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=800&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/36565/original/dm559hyq-1385875917.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1005&fit=crop&dpr=1 754w, https://images.theconversation.com/files/36565/original/dm559hyq-1385875917.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1005&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/36565/original/dm559hyq-1385875917.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1005&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">NBN Co has been hit with delays after Telstra stopped work to deal with the discovery of asbestos in pits, like these bags found during work at Mount Clear in Melbourne.</span>
<span class="attribution"><span class="source">AAP/CEPU</span></span>
</figcaption>
</figure>
<p>The aggressive rollout schedule was also a political folly. It was unrealistic, with even more delays caused by protracted negotiations with Telstra and the <a href="http://www.smh.com.au/it-pro/government-it/nbn-rollout-hits-asbestos-hurdle-20131030-hv2ap.html">discovery that asbestos in pits</a> had not been remediated by Telstra. </p>
<p>It became a political hand grenade because of the emphasis on the number of homes connected at each milestone, rather than the proper emphasis on getting the foundations right first.</p>
<p>Of most concern is that the NBN’s rollout effectively froze investment in alternative technologies by competing networks. Why would you invest in high speed ADSL when you only have three years for a return on that investment?</p>
<h2>As many homes, as quickly as possible</h2>
<p>In this context, the Senate Committee heard from Dr Switkowski that the emphasis is now on getting something – anything — rolled out to pass as many homes as possible as quickly as possible.</p>
<p>Suddenly the copper <a href="http://news.idg.no/cw/art.cfm?id=82C53892-F5A9-1EFC-253C396C20BA4244">isn’t dead</a>, according to Dr Switkowski.</p>
<p>But the <a href="http://www.zdnet.com/au/telstra-copper-network-an-absolute-disgrace-comms-union-7000023717/">Communications, Electrical, Plumbing Union (CEPU)</a> says the condition of the copper is “an absolute disgrace”. </p>
<p>Who do we believe? Both sides of this argument have a political agenda, so the truth, as always, probably lies at some unknown point in between. </p>
<p>Dr Switkowski’s contention that ADSL working up to 10 megabits per second is out there, working, and meeting public demand on the existing copper is missing the point. </p>
<p>The average downlink internet speed in Australia was recently <a href="http://www.news.com.au/technology/state-of-the-internet-australia-web-speeds-ranking-dwindles-to-40th-place-globally/story-e6frfro0-1226560992748">reported as around 4.5 megabits per second</a>, and there is a very robust argument that says there will be consumer demand for this to exceed ADSL’s 10 megabits per second capability by 2015. </p>
<p>Upload speeds remain cripplingly low, and there is a disconnect in the minds of policy makers between what customers are putting up with now versus what they would be happy with to meet their telecommunications requirements.</p>
<p>The current government’s policy to support competing technologies, by competing providers, simply creates competition where there is the most demand. </p>
<p>The Senate Committee heard evidence on Thursday that this, in addition to a shift to lower speed plans and an inability to support services such as multicasting, would <a href="http://www.theaustralian.com.au/technology/nbn-revenue-to-be-hit-by-triplewhammy/story-e6frgakx-1226770526546">dig deep into NBN Co’s wholesale revenue projections</a>.</p>
<p>Where to from here? Both policy and action needs to shift toward these following priorities:</p>
<ol>
<li><p>Accepting that Fibre to the Premises should be the goal by 2025, and taking action to roll it out with a realistic and achievable fifteen year time frame. This will mean having to shift the political discourse away from getting fibre “sooner” and instead work on a properly managed timetable to achieve the end goal.</p></li>
<li><p>Meanwhile, demand moves on, so there needs to be an interim and incremental series of solutions which will deliver an adequate job. Fixating on Fibre-to-the-Node is not the answer. Using Fibre-to-the-Node where it makes commercial sense is a much better approach, alongside other technologies. This means shifting the political discourse away from “faster” and towards “what we need, when we need it, where we need it, at the scale we need”.</p></li>
<li><p>Fixating on a total capitalisation figure makes no sense – a successful network with high take-up by customers will, necessarily, need to invest in the network to continue to upgrade profitable services. The rhetoric needs to step away from “cheaper” and focus on “cost-effective”.</p></li>
</ol>
<p>A previous <a href="https://theconversation.com/sooner-cheaper-faster-can-power-lines-speed-up-the-nbn-rollout-19960">article</a> pointed out that “Optical fibre is the only known viable technology beyond 2025. The only justification for considering anything else in the meantime is to buy us time”.</p>
<p>It is time to buy us time. Is it too much to ask the politicians to tone down the rhetoric and let NBN Co get on with the job?</p><img src="https://counter.theconversation.com/content/20943/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Matthew Sorell does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>As Stephen Conroy interrogated the incoming NBN Co chief Ziggy Switkowski in last week’s Senate hearing into the network’s rollout, it became increasingly clear that politics is getting in the way of good…Matthew Sorell, Senior Lecturer, School of Electrical and Electronic Engineering, University of AdelaideLicensed as Creative Commons – attribution, no derivatives.