Tangled in the web

The Australian Bureau of Statistics (ABS) has recently (16 July) released data from a survey of businesses that show that only about half of all businesses in Australia are presented on the web, and this share even dropped slightly between 2012-13 and 2013-14 - from 47.2% down to 47.1%.

Notably, of those that did not have a website, around 58.2% believed they had no need for it, and this may reflect Australia's large share of very small businesses (micro-businesses with 0-5 employees). Still, for around 40% of businesses this was not the reason why they had not developed a homepage or a website.

Instead, a lack of technical expertise (20.1%), too high set up (16.2%) and too high ongoing costs (11.4%) were indicated by businesses with no web presence as major barriers.

However, the data highlight another emerging trend: between 2011-12 and 2013-14, the percentage of businesses having a presence in social media rose by more than 70%, from 18.1% to 30.8%, and they used it mainly to advertise themselves or their products (78.6%) or to communicate with customers (69.0%).

So, do businesses that find it difficult to develop an own web presence take up social media as an alternative route to communicate with customers?

Two years ago, the Forbes website reported on US research which found that especially smaller businesses often understand the importance of having a website but opt for social media as this is deemed easier and cheaper.

ABS figure on business web presence; Click image to enlarge

However, a figure published by the ABS suggests otherwise for the Australian situation. It shows that the vast majority of businesses engaging in social media also have a web presence, and therefore their social media activities appear to be part of a broader online strategy.

This could mean that many, especially smaller businesses abstain from building a web identity altogether, despite having an understanding that they could benefit from it.

According to the ABS survey, one in five (19%) Australian businesses with access to the internet used a paid cloud computing service during 2013-14, most commonly for cloud-based software (indicated by 87% of businesses) and using cloud-based storage capacity. Asked about the benefits they received from these services, the simplicity of deployment of cloud based solutions and an increased productivity were most commonly mentioned by businesses that had used the cloud (47.2% and 46.3%, respectively).

While a reduction of costs played a lesser role (34%) across all business sizes, this was more important for larger businesses with 200 and more employees (50%).

Given the significant benefits it raises the question what prevents the remainder of around 80% to access these new services. The ABS found that around 41% of these businesses encountered some form of barrier, and across all sizes of businesses, around 20-25% did indicate insufficient knowledge of these services as a major limitation.

However, the relative importance of many other barriers was found to be associated with the size of the business. Especially larger business are still cautious in engaging with the cloud, and cloud service providers may still have some way to go in convincing businesses that their products are safe to use.

Thus, for 30.4% of large businesses a risk of a security breach limited the use of the cloud, whereas this mattered only to 14% of micro-businesses (0-5 employees).

Similarly, issues such as the uncertainty about the location of data, as well as legal, jurisdictional or dispute resolution mechanisms concerned, in percentage terms, large business twice as often than micro and small businesses (0-19 employees).

Netting in

Sales and service income from internet services in 2013-14; click image to enlarge

Data released by the ABS in June show that in 2013-14, sales and service income generated through traditional publishing fell by 7.3% to $9.7 billion and remained flat for the broadcasting sector at $9.7 billion.

By contrast, internet service providers, web search portals and data processing services experienced strong growth, with combined income increasing by 17.4% to $5 billion.

The combined earnings from all internet related activities was $19.7 billion, more than a quarter (27%) of the IMT industry's total of $72.8 billion.

The ABS report also notes the growing importance of cloud computing, which comprises application hosting, and data and information storage services. Together, these services generated over $5 billion in income in 2013-14.

Long-distance check

The Remote-I platform captures high-resolution images of a patient's retina

images: CSIRO

The program identified 68 patients at serious risk of going blind, including through macula edema, the most common cause of diabetic retinopathy.

The condition affects the Indigenous population at nearly four times the rate of the non-Indigenous population and often leads to irreversible blindness, although this can be prevented when diagnosed early.

The problem is that remote communities often lack access to essential services such as regular eye checks.

CSIRO hopes that this disadvantage can be overcome with the Remote-I platform system, which works by capturing high-resolution images of a patient's retina with a low-cost retinal camera.

After the images are uploaded over satellite broadband by a local health worker they can be examined by a metropolitan-based specialist.

Having successfully trialled the technology in Western Australia and Queensland, the CSIRO researchers now aim to roll-out the technology across other states and territories.

And Remote-I has also been licensed to a Silicon Valley spin-off TeleMedC, which plans to take the technology to the US and world markets as part of its 'EyeScan' diagnostic solution.

One for everything

One of eight globally, the centre will include locations in Perth at Curtin University and in Sydney at Sirca, a not-for-profit firm supporting data-intensive financial research in universities.

The Cisco centres are to catalyse and showcase IoE innovation and development, which Cisco describes as the intelligent connection of people, processes, data and things to the Internet.

The centres bring together a broad spectrum of stakeholders, ranging from customers and businesses to government organisations and universities, and they facilitate activities that include the development of proof of concepts, features and functionalities, as well as rapid prototyping.

The initial ecosystem partners of the Australian Cisco IoE Innovation Centre include Sirca (owned by 40 universities across Australia and New Zealand), Curtin University and Woodside Energy.

Cisco estimates that IoE based solution could deliver US $19 trillion of economic value worldwide over the next decade, and a recent Cisco study?identified Australia as one of the countries with the greatest potential to benefit from IoE. According to the report, the value of IoE activities for the Australian economy could amount to more than US$74 billion over the next 10 years.

It's a broadbandit's world

In this the Government took up recommendations from the Vertigan review, which produced three major reports on different aspects related to the NBN, including the first cost-benefit analysis (CBA) of the project.

Broadly beneficial

The Vertigan review's CBA broadly supports the Government's decision to walk away from delivering fibre-to-the-premise (FTTP) technology to 93% of Australian households and instead pursue the multi-technology mix (MTM) approach proposed in NBN Co's 2013 Strategic Review (read here for details).

The CBA draws on NBN Co's financial analysis but broadens its scope to economic benefits for the entire community.

Its key conclusion is that nationwide access to high-speed broadband could deliver total benefits in excess of $40 billion.

Factoring in project costs, the net benefits for society were found to be positive for both the FTTP-focussed strategy and the MTM approach, if compared to a theoretical scenario that assumes a stop to the current rollout of high-speed broadband network with no further investments in high-speed broadband infrastructure. However, while the net benefits with MTM were estimated at $17.8 billion, the previous FTTP-focussed strategy may have delivered only $1.8 billion. The gap of $16.1 billion are a result of the assumed faster delivery of the MTM technology and lower upfront investment.

This conclusion assumes that around 72% of investment costs in a 'FTTP only' fixed network would not be matched by corresponding benefits, a conclusion that is based on complementing research on future broadband demand.

Interestingly, though, the review report details a scenario of an unsubsidised rollout of high-speed broadband by private operators, which would not reach the 7% of premises located in commercially less attractive urban fringes and rural/remote areas. Nevertheless, the net economic and social benefits compared to the scenario of a stop to the rollout were estimated at $24 billion. Thus the politically preferred option of connecting all Australians with high-speed broadband will come at a net cost of around $6 billion.

The CBA relies on estimates how future bandwidth demand by Australian households will unfold. The expert panel acknowledges that predicting the willingness of households - and where applicable businesses - to pay for high-speed broadband is a key uncertainty. But it believes that the FTTP focussed rollout was particularly vulnerable as it was locked in on the expectation that demand for high-speed broadband would rapidly grow. The MTM approach avoids the sunk costs associated with the FTTP deployment and thus is more 'future proof', also as it could be upgraded at a later date (However, the review report does not mention the potentially arising inequities as households would have to pay for the upgrade themselves, while the upgradability of the connection would depend on the technology deployed in their area).

Independent research, commissioned by the review, suggests that demand for bandwidth and download speed will be slower than assumed in the original NBN planning. It also suggests that at this point in time households would be prepared to pay more for additional download speeds at the lower end of the spectrum than for higher speed brackets. Thus consumers on broadband with download speeds between 1Mbs and 5Mbs were found to value an additional Mbps at $1.50/month, but only 70 cents/month when connected with download speeds of 50 Mbps, and those connected with 90Mbs were not prepared to pay more for additional speed. And a survey by the University of South Australia indicates that at present households favour faster access to better broadband than a delayed delivery of broadband at even higher speeds.

Obviously, though, this could change rapidly as new, more bandwidth-demanding applications become available.

Nevertheless, the review revealed that net benefits of the multi-technology option, with the possibilty of future upgrades, would be greater than with the FTTP scenario even if consumer demand did grow four to five times faster than currently predicted. In fact, the CBA analysis considered a broad spectrum of possible future scenarios and found that the MTM NBN outperformed the FTTP centred approach in 98% of their simulations, and assuming it is upgraded to FTTP as sufficient consumer demand emerges, the MTM network outperformed FTTP network in 100% of simulations.

In December 2014, the Government released two policy papers in which it sets out its plan to reform the telecommunication sector. They include:

• the Telecommunications Regulatory and Structural Reform Policy; and
• the Telecommunications infrastructure in new developments policy (open for comments until 15 January 2015.

The proposed changes are based on recommendations made by the Vertigan review's NBN Market and Regulation Report, which encompassed industry structure, infrastructure-level competition, service provision and market regulation.

The panel did not overtly criticise the decision of tasking a government-owned company, NBN Co, with the deployment and operation of a high-speed broadband network on a wholesale-only basis. However, it set the tone by describing the NBN project as "highly unusual" among comparable countries in that it establishes a de facto, structurally separated, network monopoly and is reverting to government ownership and taxpayer funded telecommunications infrastructure.

Thus the panel's view is that "relying on NBN Co as an integrated entity to be the principal means of delivering those services is deeply problematic". And in light of NBN Co's current shift towards an MTM rollout, the company's current control over the full spectrum of these technologies bears 'unacceptable risks' for consumers by inhibiting competition and effective regulation.

The review recommendations include major structural changes to NBN Co, including the disaggregation of the company into competing business units that would result in roughly equally matched networks

However, while not ruling out such a restructuring in the future, the Government does not intend to pursue this during the project's implementation, because of its high estimated costs and the negative impact this could have on the rollout.

But it will take up other recommendations of the Vertigan Review, with the aim to provide a more competitive regulatory framework and to make NBN Co more 'competition ready'.

In particular, the Government plans target the 'unsustainable' model under which NBN Co receives competitive protections in commercially attractive areas for it to be able to cross subsidise its substantial non-commercial serices in urban fringes and rural/remote communities. The costs for the cross-subsidies are currently embedded in the NBN Co's wholesale access prices, and the Government will task the Bureau of Communications Research to assess potentially more transparent funding arrangements.

It also wants NBN Co to replace the current uniform wholesale prices with price caps, as this could provide scope for reduced offerings in some of the more competitive urban markets.

A further issue raised by the Vertigan review concerns new housing developments. At present NBN Co delivers its broadband infrastructure free of charge, which the company funds through internal cross-subsidies. The Vertigan review panel noted this as an unfair advantage over private sector infrastructure deployment companies.

The Government proposes a new policy to take effect in March, under which developers and home-owners of new developments would be required to meet some of the costs for broadband infrastructure upfront. However, the cost recovery will be capped to prevent material impact on housing affordability. The NBN Co will also trial alternative models to recover infrastructure costs, as was promised in the 2013 election.

These and other proposed new measures, such as a new two-year carrier license requiring high-speed broadband providers to be functionally separated in their network and retail operations, are to be implemented during a transition period (2015-16). The structural separation will then become a default requirement with the start of the new regulatory framework on 1 January 2017. The Government will then also seek to legislate NBN Co as the telecommunications infrastructure provider of last resort.

Stay away from bleeding hearts

While Australia's cyber-security capabilities were recently ranked second in the Asia-Pacific region, the Enabling Australia's Digital Future: Cyber Security Trends and Implications report reveals that our security capabilities are challenged in keeping up with technological developments. As a result we could become more vulnerable to threats such as the recent Heatbleed incident.

The CSIRO report identified significant emerging vulnerabilities.

For example, by 2025 our electricity grid is expected to be highly automated with 'smart' digital meters in widespread use. The report explores the scenario of a cyber attack from inside through a 'not-so-trusted insider' causing major power outages across the country during a heatwave. The fallout of such an incident would be complex and potentially cost billions of dollars and include fatalities.

The advance of the digital healthcare systems is also yet to be matched by improved security and compliance processes. It is estimated that fraud from practitioners and cybercrime rings will cost the system around $16 billion by 2023. This would equate to around 10% of Australia's total healthcare spending.

The report focussed on energy, healthcare and government, but cyber crime will increasingly be an issue across all sectors of society.

According to the report's authors, the challenge ahead is not just technological. What is needed is a "cultural shift, extending cyber security responsibility out to every organisation, every government, and every individual".

Business, public-sector organisations and the broader public are urged to act now, including by embracing more open disclosure and working together when a breach occurs. Other key considerations are:

• the development of simplified digital systems that include 'hassle-free' security measures; and
• investments in new systems that verify and protect an individual's digital identity from theft or fraud (the CSIRO is currently working on digital identity frameworks for use in Australia and the European Union).

A peak in sight

The enormous growth in mobile service delivery through wireless communications requires available radiofrequency spectrum, for which demand could almost triple by 2020.

Click to enlarge; Ngara technology - how it works

But the radiofrequency spectrum has practical limits and is hence a limited resource. Consequently, there is the possibility that we are heading toward a 'spectrum crunch', and the challenge will have to be met through advances in technology development and expanded infrastructure.

This is according to a new CSIRO report which canvasses a 'wireless' future with new digital services that are likely to have a pervasive impact on almost every aspect of our life. And the agency promotes its own Ngara technology platform as a tool to prevent potential spectrum bottlenecks in rural and remote Australia.

The adoption of wireless is particularly strong in Australia with 2013 OECD data revealing that Australia has the highest rate of wireless broadband subscriptions per capita in the world. In June 2013, 7.5 million Australians accessed the Internet via their mobile phones, an increase of 510% within 5 years, according to data by the Australian Communications and Media Authority,.

But the authors of the A world without wires report argue that Australia needs to rapidly expand its infrastructure to prepare for future "game-changing" applications and social developments.

This is will also be necessary to prevent the digital divide between urban and regional/remote areas of the country to grow even further.

The report foreshadows the eventual replacement of digital TV and telephony services with Internet-based, personalised streaming services. Technologies that improve almost every aspect of our daily lives could soon be omnipresent, and digital service delivery the norm for government and business.

Yet according to the report it is wireless positioning systems that are set to revolutionise our way of life, for which the adoption of driverless cars in the transport grid is a prominent example.

Emerging non-fixation issues

By no means these are confined to remote or even regional Australia, but often are at the edge of cities, metro fringe areas and the outskirts of country towns.

In May, NBN Co released its redacted review of the progress made in the non-fixed line footprint, and identified substantial issues with the approach taken by the company.

Authored by the new NBN Co board and independently assessed by The Boston Consulting Group, the review found that the fixed wireless program is currently running behind target. The new NBN Co board is also critical of the company's "functional siloed organisation" which it says has hampered effective decision making. It also believes that the timeline for the satellite program is too optimistic, with a delay of up to 6 months likely which would push the launch of the satellites out to early 2016.

The review also found that the $3.5 billion allocated in the NBN Co's latest 2012-15 Corporate Plan for the non-fixed line footprint will not be sufficient to provide access to 100% of Australian premises. The funds for the construction of 1,400 fixed wireless towers, the launch of 2 satellites and the installation of end-user premises equipment were based on an estimated take-up rate of 22% to 25%, with around 230,000 premises connected in non-fixed line areas. However, the review estimates that the take-up rate will be 2-3 times higher, with connections to 440,000 to 620,000 premises required. While the Corporate Plan did allow for some additional capacity, this would still mean a shortfall of around 200,000 premises that NBN Co would not be able to service.

The review also notes that around 80,000 of these premises will be in the urban-fringe areas where Optus currently holds the 2.3GHz and 3.4Gz spectrum rights. This is the same spectrum NBN Co uses to service regional areas. But the company has so far not been able to secure an alternative spectrum for the urban-fringe areas, potentially leaving it with a substantial spectrum gap.

The review proposes four different scenarios to overcome the shortfall. Thes include to ramp up the number of base stations (1), extending where feasible the current Government's preferred Fibre-To-The-Node (FTTN) fixed line option to the non-fixed line footprint (2), the construction and launch of an additional satellite (3) and an additional satellite implemented in a partnership with an external party(4).

The preferred option for the non-fixed line footprint, scenario 2, could include a mix of technologies in 2021 with 57% serviced with fixed wireless, 40% with statellite and 3% with FTTN. While this would come at an additional cost of $1-1.3 billion this would be in line with the NBN Co's 2013 Strategic Review and not have a significant impact on the overall estimated peak funding of $41 billion.

Productively connected on the run

03 April 2014 - New research released by the Australian Communication and Media Authority (ACMA) revealed a link between Australia's mobile broadband connectedness and its productivity and overall economic growth.

Click image to enlarge

Commissioned by ACMA and the Centre for International Economics, the Economic impacts of mobile broadband on the Australian economy, from 2006 to 2013 study surveyed 1,002 Australian businesses.

It found that in 2013 mobile broadband led to an estimated increase in Australia's economic activity of $33.8 billion, of which $26.5 billion was attributed to time savings for businesses using mobile broadband.

Mobile communications, which include mobile broadband, account for only 0.5% of the Australian economy. Yet, as the report highlights, they have profound impacts on the productivity of the broader economy, particularly in the current economic environment of slowing overall productivity growth. "Without mobile broadband, this means that Australia's productivity and economic growth would have been lower still and that the Australian economy would be $33.8 billion smaller in 2013."

However, the report also notes that mobile broadband development is strongly influenced by Government policy. Spectrum allocation is seen as critical by the industry and could potentially constrain or reduce the future economic value of mobile broadband.

Further key findings of the report include:

• The productivity of the mobile sector increased by 11.3% per year from 2006 to 2013.
• In 25% of businesses mobile broadband adoption led to reduced business operating costs.
• Growth in mobile broadband productivity, use and demand has led to greater competition and affordability as the average cost of a mobile telecommunication connection decreased by 21% between 2006 and 2013.

Over the next five years, mobile data use is expected to grow rapidly driven by the increasing uptake of 4th generation mobile broadband (4G). While 4G data traffic is expected to increase by 76% each year between 2013 and 2017, mobile data use is set to increase by 38% each year, from an estimated monthly average of 22.2 petabyte (PB) in 2013 to 81.1 PB in 2017.

Improving the rollout or putting the cart before the horse?

Through the flexible deployment of technology considered by NBN Co as best suited for a particular area to deliver optimised economic returns, it is claimed the project could save around $32 billion while still delivering at least 25 megabits per second to all premises and 50 megabits per second to 90% of fixed line premises.

The Government expects NBN Co to include existing hybrid fibre coaxial (HFC) cable networks in the rollout, in addition to fibre-to-the-node, fibre-to-the-premise, fibre-to-the-basement, fixed wireless and satellite.

Public investment in the estimated $41 billion project will be capped at $29.5 billion, with the remainder to be funded by the private sector.

And further, NBN Co is to prioritise areas identified as poorly served by the Government's Broadband Availability and Quality Report to the extent commercially and operationally feasible.

Reactions in media reports have largely focussed on the timing of the announcement, ahead of the independent cost-benefit analysis for which the Government has appointed a Panel of Experts. The Panel, led by business man and former secretary of the Tasmanian Department of Premier and Cabinet, Michael Vertigan is not expected to report before mid-2014.

There is also a Senate Select Committee on the National Broadband Network underway, which tabled an interim report in March. It states that there are "significant concerns with the accuracy and reliability of the Strategic Review". And further: "The Committee concludes that the Strategic Review does not comprise a sufficient information base for the NBN Co Board or the Minister to adopt an alternative deployment path for the NBN." Predictably, this conclusion was rejected in a Dissenting Report" by Senators from the Coalition.

Obviously, the interpretation of these developments is a matter of political persuasion. However, in any case the Government's move to speed up the process has left it open for criticism.

Thus Renai LeMay writes in an article in the online publication Delimiter:

"I have only one question for Minister Turnbull today, and I suspect it is one of those that will forever go unanswered: How can the Minister possibly justify the Government's decision to go ahead with the 'Multi-Technology Mix' for its broadband project, when it has not completed a cost/benefit analysis into the project? And, if the Minister will allow me a relevant follow-up question: Does the Minister consider it incredibly hypocritical to go ahead without a cost/benefit analysis, having ranted on for three straight years in Opposition about how appalling it was for Labor to have done the same?"

However, the Financial Review cites Ovum research director David Kennedy saying the document's release was not premature. "I think this leaves NBN Co enough flexibility," he said. "There's nothing in the statement of expectations that is inconsistent with what the government has said in the last six months."

And according to a piece by Supratim Adhikari in the Business Spectator, the Government's decision to effectively lock NBN Co into pursuing a mix technology strategy puts the final nail in the coffin for Labor’s full-fibre initiative.

"Realistically, that option was taken of the table last year but the subsequent months have been one steeped in inertia and uncertainty both for NBN Co and the telco sector. The decision to hand down the final instructions to NBN Co without the benefit of a cost-benefit analysis looks to have been dictated by the desire to fill this policy vacuum."

Meanwhile, Communications Minister Malcolm Turnbull responded to crticism writing in his blog that the Statement of Expectations would give the NBN Co management a lot of flexibility in the choice of the best technology for a location. "The reason for providing the SoE now is simply so that the NBN Co has the formal approval from Government for continuing with its move to a multi technology approach."

Strategic cable salad

Constraint by a tight time line of just over five weeks, the review's objectives included analysing the progress and the estimated cost of the NBN project under the previous Government's fibre-to-the-premise (FTTP) objective, as well as assessing NBN Co's financial and operational status. It was also to explore alternative strategies of NBN Co and the NBN rollout.

Expert input was provided by advisory firms Deloitte, the Boston Consulting Group and KordaMentha.

The NBN Co report, which is only available in a substantially redacted version, provides a scathing judgement of the company's operations under its former leadership. This, it states, caused significant failures in reaching the company's objectives as set out in its Corporate Plan (see box).

According to the report, "the culture and leadership of the organisation are widely seen to be a major problem."

Among the factors that contributed to this were an "unrealistic assessment by key internal and external stakeholders of the complexity and time required to complete the task" and "blind faith" in the achievability of the Corporate Plan, "notwithstanding clear factual evidence to the contrary".

The report further attests the previous leadership of NBN Co a "lack of deep internal experience in complex infrastructure, construction projects and project management".

The review explored various alternative scenarios as to how best to proceed with the NBN project, including continuing the implementation of the FTTP plan under more efficient operational settings. On the basis of this, the review recommended as the best option an optimised multi-technology approach, which would deliver access to at least 50Mbps to ~90% of the fixed line footprint (that is premises with access to fixed broadband) and 100Mbps to 65-75% by 2019.

An optimal mix of technologies in the fixed line footprint could included the FTTP option for around 20-26% of premises, and for further 44-50% of premises access to fibre-to-the-node (FTTN). FTTN technology entails that broadband services are transported through fibre optic lines to a node, a common network box, from where it is then distributed to premises through various forms of wire (copper, cable or fibre). NBN Co estimates for the Australian context that FTTN would cost around $350 - $700 per connected premise compared to around $1,100-1,300 per premise for FTTP.

In addition, NBN Co proposes to connect around 30% of premises through upgraded Hybrid Fibre Coax (HFC) cable networks, in which fibre optic cables transport broadband signal to a node server to then be distributed to the premise through existing coaxial cables (however, as technology journalist Adam Turner details in a commentary for the Sydney Morning Herald, the technology can have considerable pitfalls at the user end.) The upgrade of an existing, fully deployed and connected HFC network could cost around $100 per premise.

Apart from cost savings, the plan could deploy broadband services to most of the 8-10% in the fixed line footprint area that currently have no or very low levels of broadband two years earlier than with all other investigated scenarios. It estimates for the fixed line footprint that:

• around 40-45% would have access to at least 25Mbps by 2016;
• around 90% at least 50Mbps by 2019; and
• 98-100 percent would have at least 25Mbps by the end of 2020.

Compared to the previous FTTP deployment, NBN Co claims that its new proposal would provide an upgradable path at lower cost, provide substantially earlier revenues, with peak funding expected to be around $41 billion compared to the revised outlook of around $73 billion now estimated for the FTTP rollout.

Network patchwork

It is the first release of its broadband availability and quality analysis.

The data are to inform NBN Co on currently underserved areas, which may then be prioritised in the NBN rollout wherever feasible.

A full report is expected to be released in the coming months.

Overall, the analysis estimates that 1.4 million premises (13%) are in areas of inadequate broadband infrastructure, often in regional or remote areas, where fewer than 40% of premises can access a fixed broadband service.

Click image to enlarge;
Percentage of Australian premises in each fixed broadband availability and fixed broadband quality band.

graph from the Broadband Availability and Quality: Summary Report

Broadband Availability and Quality: Summary Report

Key findings for Australian premises:

• 9.9 million premises or (91%) have access to fixed line broadband services.
• 3.1 million premises (28%) have access to a high speed broadband platform (fibre-to-the-premises, fibre-to-the-node, hybrid fibre coaxial networks or fixed wireless networks).
• 8.8 million premises (81% have access to 3G mobile broadband services and 6.4 million premises (59%) have access to 4G services.
• All Australian premises are covered by satellite broadband, although due to a capacity ceiling not all premises can access a service.
• Accessible peak download speeds are 25 Mbps and 110 Mbps for around 3.1 million premises (28%), less than 24 Mbps (copper) for 7.1 million premises (65%), while 0.7 million premises (6%) premises have no access to fixed broadband services.
• 3.7 million premises with access to xDSL broadband services over copper are located in areas with an estimated peak median download speed of less than 9 Mbps, and 920,000 in areas with an estimated peak median download speed of less than 4.8 Mbps.

Click image to enlarge

graph from the Broadband Availability and Quality: Summary Report

The most common form of fixed broadband subscription is provided through Digital Subscription Line (DSL) technologies, which broadly defines digital technologies transmitted through the existing telephone network and, as shown in the figure, these greatly range in peak download speeds.

Gap finder

The broader objective of the research was to reveal how and why the Internet is used and this is influencing individuals and organisations.

There are a range of opportunities that may come from faster broadband, such as improved health, education and government service delivery, better communication across distance and a revitalisation of regional centers. For business it promises improved service delivery, reduced costs of running a business and better access to new markets.

The research findings does support this expectation. But patterns of online behaviour were found to vary significantly across sectors of the community. For example, older people are in the majority online but their use is less frequent and covers fewer activities compared to younger people.

The standard of living also influences somewhat how people use the Internet. Thus compared to the better off, people in lower socio-economic circumstances use the Internet just as often but more frequently to access social networking sites and less often for email. They also have less often desktop computer at their disposal

However and more importantly, around 20% of people do not use the Internet at all. Across all age groups and socio-economic backgrounds, the research found lack of skills and confidence rather than the cost of Internet services to be major barriers.

Thus even among non-users on low household incomes ($30,000 per year or less), lack of skills was selected as a main reason by the majority (62.5%) of respondents, whereas less than a third indicated affordability as a problem.

As the report points out, it is ironic that those that are likely to benefit the most from Internet use, older people and the less well-off, are also most at risk of being left behind.

The findings suggest that the potential benefits of ICT developments and how to realise them are often not well understood.

Click image to enlarge;
Profitability changes over five years, for businesses which reported increased IT investment in 2007 (red line) compared to those which did not (blue line).

Engaging with the Internet or investing in ICT does not automatically create economic benefits. Instead, the benefits depend on how this is done and they often take considerable time to realise. Thus, the researchers found that investments in a web presence or IT technology may take five years to return greater profits.

The various identified barriers for small business to successfully engage with the Internet include:

• not understanding the benefits of online applications;
• lacking the time or financial resources to implement and manage online applications;
• a perception that current business practices are adequate; and
• lack of access to trusted ICT suppliers or funds for outsourcing ICT skills.

While the study reveals deficits in the digital readiness of the Australian community and the broader business sector, the possible solutions are less forthcoming.

The authors write that the challenge will be for to design effective means of engagement and training that target individuals and business owners who lack relevant confidence and skills. "Evidence suggests more strategic training initiatives are needed to support these sub-groups."

Spectral make-over

The final report of the review, which was released in May, included 11 recommendations as part of three broader recommended changes to current legislation, the government's use of available spectrum, and the spectrum pricing structure.

In a statement, the Australian Communications and Media Authority welcomed the announcement, expecting that the agency can now move to a single, streamlined and more flexible approach to radiocommunications licencing.

The changes would provide "a more responsive regulatory regime rather than 'black letter law' that will take away unnecessary barriers, reducing delays and costs of getting new technologies to the market", ACMA's deputy chairman Richard Bean said.

Broadbandits rolling on

The government's recent announcement that it would accelerate the project through the recruitment and training of around 4,500 workers, effectively doubling the construction workforce, also highlighted skill shortages that could derail the NBN's completion target.

NBN Co's corporate plan confirms that its projections are still riddled with vagouries. The government's take is that the project is simply so complex that the 'risk profile' of the project remains significant.

The plan itself lists a range of possible scenarios that could add $1 billion to its overall peak funding requirement. These include:

• Failing to meet the company's take-up target in the fixed line footprint by around 5 per cent.
• A seven month delay in either its fibre to the node (FTTN) or hybrid fibre-coaxial (HFC) product launch.
• A failure to meet its target increase in the average revenue per user by $3.

Despite the risks and increased costs, the government remains adamant that its equity contribution will remain $29.5 billion. And it also defends the new strategy of now pursuing a multi-technology mix strategy, which many commentators have critisised as significantly less future proof than the previous approach of delivering mainly fibre-to-the-premise connections.

Sticking with the old plan would have required peak funding of between $74 and $84 billion and the project would not have finished before 2028, according to new estimates included in 2016 NBN Co's Corporate plan.

One of the fiercest critics of the current NBN strategy is Professor Rod Tucker, Laureate Emeritus Professor from the University of Melbourne.

This is not all too surprising as Professor Tucker was a member of the Panel of Experts that advised the previous Labor Government on the establishment of the NBN.

However, in a recent article in The Conversation Professor Tucker laid out in detail why he believes the current broadband network rollout will "not provide adequate bandwidth, will be no more affordable than Labor's FTTP network and will take almost as long to roll out.

"The Coalition sold the Australian public a product that was supposed to be fast, one-third the cost and arrive sooner than what Labor was offering us. Instead the Coalition's NBN will be so slow that it is obsolete by the time it's in place, it will cost about the same as Labor's fibre-to-the-premises NBN, and it won't arrive on our doorsteps much sooner.

But in an interview with the Australian Financial Review, NBN Co's new chief executive Bill Morrow described the situation the company is operating in as difficult, while also presenting a major opportunity. He said that Australia has probably one of the most distant falling behind infrastructure set-ups for broadband networks.

In July, prior to the release of NBN Co's 2016 Corporate Plan and also published in the Australian Financial Review, David Havyatt wrote that the "mess" of the NBN project "is a direct result of policy shift by the Coalition government."

Mr Havyatt is executive director of DigEcon Research but he is also a former policy adviser to federal Labor as well as an active member of the ALP.

In his article, he makes the point that many of the risks now associated with the project are a direct result of the change of direction NBN Co by introducing the 'multi-technology mix' approach, which added fibre-to-the-node, fibre-to-the-basement and two hybrid-fibre coaxial networks to the rollout.

"Management of these networks includes the ability to provision services, but it also includes the requirement to have a record of the assets and manage maintenance of those assets."

One of the more balanced, yet still quite critical assessments is by Richard Chirgwin, who published in the UK technology website The Register a point-by-point review of NBN Co's progress against promises made before the 2013 election.

He found the NBN reporting mechanisms greatly improved, but that nevertheless many of the promises were not kept. Especially the change to fibre-to-the-node would have to be regarded as the greatest disappointment, as the government failed to deliver either the rapid rollout or the amount of savings promised in the policy.

In regard of the projected costs the current government has not performed better than its predecessor:

"The pre-election assertion that the FTTP network would cost $90 billion was quickly revised down to $73 billion, which is still a lot of money, but at the same time, Turnbull's statements about the cost of the multi-technology model have repeatedly been revised upwards."

Data prospects

This is in line with global trends, which were detailed in the global Cisco Visual Networking Index™ report released in May.

In the five years from 2014 to 2019, Australian data traffic via the internet is set to treble in the five years from 2014, with 1.2 exabytes (10¹⁸) of data transferred each month by 2019. Per capita, traffic will more than double, from 17 gigabytes in 2014 to 47 gigabytes in 2019.

The download-upload of videos will be primarily responsible for the growth. Cisco forecasts that the internet video traffic will grow four-fold in the five years to 2019, and then account for 81% of all internet traffic.

Cisco's research identifies as the main drivers of the growth in internet traffic (and total IP traffic) the growing number of devices used by Australians, and the mobility of these devices.

By 2019 there will be around 220 million networked devices in Australia, almost twice the number used in 2014 (116 million).

Fixed Wi-Fi will be the dominant form of mobile connectivity in 2019, accounting for around 65% of total internet traffic, but the share of mobile connections (cellular) is also on the rise, from 7.4% to 14.1% by 2019.

Reflecting developments in the broader community and the digitalisation of the business landscape, IP traffic (and internet traffic) in Australian businesses will double between 2014 and 2019. The use of mobile data traffic in businesses will increase five-fold and the use of internet video increasing more than three-fold -.

Click image to explore an interactive VNI infographic at the Cisco website

Cisco projects that by 2019 the average global citizen will own three networked devices, driving a threefold increase in IP traffic and internet traffic over the period 2014 to 2019.

By 2016 annual IP traffic is forecast to surpass one zettabyte (10²¹) to then reach two zettabytes in 2019.

The Cisco report also highlights global growth in fixed broadband speeds, which are projected to double to 43 megabits per second (Mbps).

While this is in line with projections for the average fixed broadband speed in Australia, many parts of the developed world will have a significantly higher percentage of fast connections.

Thus, 35.9% of fixed broadband connections in North America will be faster than 50 Mbps in 2019, with Western Europe and the Asia Pacific region (24% and 34%, respectively) also trumping Australia: here only 12.9% of fixed broadband connections will be faster than 50 Mbps in 2019.

Gone phishing

Digital Video Guard; image DSTO

The DVG is inserted between a host computer and a display that allows the contents of a known video signal to be trusted. If the display is decrypted and rendered successfully, so does not show just garbled random pixel data, then the user can be assured that the integrity and confidentiality of the data is intact.

Developed for applications related to defence, the DVG can also secure content delivered over untrusted networks for the banking and finance industry and the medical industry.

For example, the biggest threat to internet banking is through keystroke loggers or phishing attacks where a user is redirected to a fake logon screen. The DVG can protect against these attacks and secures logon details, account information and authorisation of transactions.

The device is also capable of securing content sent via email or instant messaging applications

There is not need for any software to be installed and the DVG can be adapted for the use with a desktop, laptop or embedded directly into tablet.

Space connections

Launch of Sky Muster, one of two satellites that will provide broadband to rural and remote Australia; Image: NBN Co

The two satellites are part of NBN Co's NBN project strategy and will service regions in Australia unsuitable for other broadband technologies.

Ultimately they will cover more than 400,000 homes and businesses, delivering wholesale speeds of up to 25 megabits per second (Mbps) download and 5 Mbps upload.

With Sky Muster now up in orbit, the second satellite will be launched early next year, while user connections are expected to be available in the first half of 2016.

According to NBN Co, the satellites are among the largest commercial satellites launched to date. Each will project 101 spot beams providing coverage to Australia and to five offshore locations: Christmas, Cocos, Lord Howe, Norfolk and Macquarie Islands.

They will be supported by a network of 10 ground stations which NBN Co has constructed in specific locations across Australia.

Super-fast in old age

October 2015 - Our existing copper wire network is deemed a major obstacle for the delivery of ultrafast broadband via fibre-to-the-node (FTTN) technology.

However, G.FAST technology could provide a cheap solution to the problem - at least cheaper than rolling out fibre-to-the-premise (FTTP), which is a winning argument in austere times.

Recent trials by the European telecommunication companies BT and Alcatel-Lucent achieved speeds of 5 gigabits per second (Gbps) over a single 35 metre copper pair, although under laboratory conditions.

In October, the Australian Government announced the first Australian trial of the technology, in which nbn, the company establishing Australia's national broadband network, achieved 600 megabits per second (Mbps) over 100 metre of a more than 20 year old copper wire.

The length of the used wire is an important issue. With the government now pursuing a multi-technology mix approach, and with fibre-to-the-node a preferred option, G.Fast is to overcome the distance between homes and the node, the so called last mile.

However, the delivery of very high speeds using G.Fast is limited to shorter loops of copper (ideally less than 100 metres).

Another limiting factor may be the varying condition of copper cables in the field, which in many cases may be too poor to deliver desired outcomes.

According to Tony Cross, chief architect at nbn, G.Fast has nevertheless the potential "to give us tremendous flexibility in delivering very fast speeds to end users in a wide range of different environments". This includes that G.Fast can deliver symmetrical speeds, meaning equally fast upload and download speeds.

Importantly, as he points out in a blog post on the nbn website: "G.Fast really allows us to remove the need to actually enter premises to deliver ultra-fast speeds".

Frequency news

As a signatory to the ITU Convention, Australia is bound by the treaty, and the ACMA will have to integrate revisions made at the WRC into domestic regulations.

The 2015 WRC held in Geneva in November was the largest and most difficult to date - 3,700 delegates were grappling with over 40 agenda items, which reflects the complexity of the modern day global radiocommunications environment.

Decisions in this area are marred with difficulty, and often contentious, as mobile services tend to interfere with other radiocommunication services in the same geographic and spectrum space.

However, it is clear that further demand for mobile services will have to be met, although the WRC-15 deferred a decision on additional spectrum for IMT in frequency bands below 6 gigahertz (GHz).

Hailed by ITU secretary-general Houlin Zhao as a landmark decision in the development of broadband mobile on a worldwide scale, the WRC-15 also provided enhanced capacity for mobile broadband in the 694-790 MHz frequency band in Europe, Africa, the Middle East and Central Asia.

The decision will globally harmonise the use of the frequency band, which is dubbed the 'digital dividend' freed up by the switch from analogue to digital television. Previous WRCs had already opened up the band for IMT in other regions of the world (and Australia is now included as a country in the Asia-Pacific region).

Comments by ITU representatives suggest that the move could help bridging the digital divide, as the global harmonisation of the band will allow manufactures and mobile operators to offer mobile broadband at an affordable price in currently underserved areas.

As pointed out by the ACMA, the administrations will now be able to choose a subset of that frequency range so as to leverage the economies of scale for PPDR equipment.

And while the frequency range is not specifically earmarked for narrowband or broadband PPDR, the decision is expected to enhance markets for broadband PPDR equipment, which typically are 4-G technologies.

The WRC also identified the regulatory conditions that may be applied to such systems internationally. In addition, the WRC-15 agreed on spectrum for wireless avionics intra-communications (WAIC) to allow for the heavy and expensive wiring used in aircraft to be replaced by wireless systems.

The frequency band has been allocated to the aeronautical mobile-satellite service (Earth-to-space) for reception by space stations of Automatic Dependent Surveillance-Broadcast (ADS-B) emissions from aircraft transmitters.

This will facilitate reporting the position of aircraft equipped with ADS-B anywhere in the world, including oceanic, polar and other remote areas.

It's a virtual world

More than half (54%) of Australians aged 18 and using the internet communicated with others via such an 'over-the-top (OTT)' communications app, with 49% sending messages, 28% making voice calls and 25% making video calls.

Traditional free-to-air and subscription television still continues to dominate content viewing, but this is about to change, with 34% of Australian adults also accessing online television or online professionally-produced video content in a given week in 2014-15.

More than 90% of Australians are now in reach of a 4G mobile network, and almost 80% of online adult Australians access the internet over their mobile phone (up from 76% in 2013-14).

And more Australians are getting connected through their tablets, with 58% using these devices in 2014-15 compared to 54% in the previous year.

However, it is the amount of downloaded data that highlights how much of Australian life is now taking place online:

The volume of data downloaded via mobile handset increased by 85% from the quarter to June 2014 to the quarter to June 2015. The average mobile phone internet user downloaded 3.4 gigabytes of data in the quarter ending June 2015, but this pales the 207 GB of data downloaded by the average fixed-line broadband user.

In total, Australians downloaded 1,460,269 terabytes of data in the June quarter 2015  a 41% increase on the June quarter 2014.

And despite this significant growth, the Australian Internet Security Initiative reported only a slight increase in the average number of computer infections, up from 25,839 per day in 2013 14 to 26,645 per day in 2014 15, suggesting consumers are becoming more aware of the threats and use effective antivirus software.

Chatterbox vision

December 2015 - The Australian Communications and Media Authority (ACMA) has proposed to make it easier for operators of machine to machine (M2M) wireless communications links used in the Internet of Things (IoT).

The IoT refers to the inter-connection of many devices and objects utilising internet protocols, and it is regarded as the next stage in digital communications convergence within the wider economy.

Significant productivity benefits are also expected to be realised, with a recent McKinsey report estimating a potential global economic impact of IoT applications totalling US$11.1 trillion per year in 2025.

The IoT has also been a topic of an occasional paper the ACMA released in November 2015. There the agency identified areas for regulatory attention that could be important for IoT developments in Australia. They include:

• resource allocation such as spectrum and telephone numbers needed for communications infrastructure;
• network security and integrity;
• the interoperability of devices and information; and
• the level of digital technical capabilities and literacy of Australian business and consumers.

The ACMA proposes to remove a technical barrier to the operation of narrowband low powered wireless networks that is presented in the current Radiocommunications (Low Interference Potential Devices) Class Licence 2015.

These changes in the 900 megahertz, 2.4 gigahertz (GHz) and 5.8 GHz bands are to encourage innovations in the M2M and IoT spaces, by supporting a variety of applications such as data telemetry, machine data and monitoring, sensor networks, smart metering, security systems and industrial control.

Other proposed changes to current regulatory arrangements include the addition of the new frequency bands for radiodetermination transmitters used as industrial sensors; in-ground ultra-wide bandwidth transmitters used in automated parking management systems; building material analysis devices used for detection of objects in walls ceilings and floors; and to align for European arrangement for short range devices in the frequency bands 122.25-123 GHz and 244-246 GHz.

Big genomic data is coming

The collaboration will mean that the large-scale genomic data generated by the 70 bioinformaticians at Garvan can be cost-effectively archived, while it also will become easier for collaborating research partners to access the data for research purposes using the NCI s supercomputer or high-performance cloud computing infrastructure. Importantly, the NCI is maintaining strict rules of access that ensure data remains secure.

Partnering with Garvan marks a new direction for the NCI, whose hosted datasets have until now focused on geological and meteorological data, climate science, and information from satellite imagery.

As Australia s national, high-performance research computing facility, NCI manages the Southern Hemisphere s most integrated supercomputer and filesystems, delivering high-quality computational and data services to researchers in three national science agencies, and nearly 30 of Australia s universities.