Wednesday, April 16, 2014

The TAF - a brief history

In his speech to the CommsDay Summit 2014 Telstra's Dr Tony Warren said he'd like to see an industry led co-operative process to work out more of the processes for migration to the NBN. 

In part he said:

All of us - regulators, NBN Co and industry - have so far not delivered a consistently positive experience when it comes to switching to the NBN. Telstra offers NBN fibre services in every available market. Across all these markets, end users frequently experience delays and disappointment when they try to switch to the fibre network.

The problems will be well known to many people in this room – including too many premises not actually being fibre ready, connection delays and incomplete product sets. Retailers have encountered their own issues as well. To their credit, NBN Co has improved their performance recently in many areas around the connection experience. However, their efforts have not been helped by the fact that there is currently no single framework with clear responsibilities as people migrate from one network to another.

 Migration necessarily involves multiple parties – only Telstra can disconnect customers from our network; only NBN Co can connect people to theirs; only RSPs can deal directly with their customers; and only the service providers of medical alarms and the like can be responsible for making sure their devices work on the new network...

To bring all these parties together in a more efficient and effective way, we the industry, need to refocus the end-to-end migration process at improving the customer’s experience. This will mean a shift away from traditional regulatory structures. Migration issues are overwhelmingly operational or customer service issues. As such, our view is that industry participants led by the Comms Alliance are best placed to drive the solutions and improve operational efficiency. 

A questioner (Phil Dobbie) asked why an industry process was needed - wasn't migration an NBN issue. In reply , Dr Warren said that he had in mind something like the TAF - but he suggested that only David Havyatt (i.e. your blogger) would be able to explain that.

However, Susan Huggett, now NBN Co's GM of Industry Engagement, was also in the room and knows a lot about the TAF too.

But since the issue has come up I might explain a bit about what the TAF was and did - and of its demise.

The 1997 Telecommunications Act was drafted with an assumption that as multiple parties built infrastructure an active market would develop in wholesale services. It also was based around the principle that industry should be given the opportunity to work out its own issues beore regulators stepped in (the Act's stated objective of maximising self-regulation).

The provision for Industry Codes is relatively well understood - but not necessarily the scope of those Codes. In its original guise as the Australian Communications Industry Forum (ACIF), CommsAlliance wrote codes that covered consumer issues, network issues, cabling issues and operational issues. While most public focus has been on the consumer protection ones, it was the operational and network codes (and associated documents) that had the most significance for market development. For example, mobile number portability comes about by the operation of both a network and operational code. That multiple operators can all operate DSLAMs from one exchange is due to the ULLS Network Deployment Rules.

Separately the Act provided for a Telecommunications Access Forum (the TAF) that worked as part of the declared services regime. It could recommend declaration of services or write standard terms and conditions of access.  I was at about the 4th meeting of the TAF representing AUSTAR (whose subsidiary Windytide had a carrier licence for a small HFC network in Darwin). I returned in 1998 when I joined Hutchinson.

The TAF was mostly a great battleground between Telstra and the rest of industry. The standard terms and conditions for the deemed declared services (those that were declared by the 1997 Act because they already were supplied to Optus and Vodafone) were relatively quickly settled.

The next great TAF issue was over whether the service description for mobile terminating and originating services should be amended to include CDMA networks (the deemed service declaration referred only to GSM). I attended a meeting in late 1999 representing Hutch and argued vigorously against the variation - we didn't think we needed regulation for access to our network. Susan represented Optus and argued vigorously for the variation to capture Hutch's and Telstra's CDMA networks.

Before the next meeting two things happened. I moved from Hutch to AAPT and the ACCC published a paper by Josh Gans and Stephen King that effectively argued the price for mobile terminating access should be zero.

At the first meeting in 2000 then I was arguing completely the opposite case - CDMA should be included. Susan however was now also arguing a completely opposite case - Optus now wanted no regulation of any mobile services. It was, to say the least, a very funny meeting.

The next TAF task was trying to write standard terms and conditions for ULLS, and to consider declaration of a Line Sharing Service. The latter simply didn't progress and it took a few more years for the ACCC to declare it. he ULLS standard terms and conditions were however largely agreed but a few outstanding issues had to in the end be resolved by the ACCC.  The funniest part of these was a battle about what rights parties had if issued with a competition notice. Telstra's representative Mitchell Landrigan implored us to realise the clause was reciprocal and said we should think about how it would help us if we were issued with a competition notice. My reply was "AAPT dreams of having sufficient market power that it could be issued with a competition notice."

The most challenging part of writing the ULLS spec was the question of migration from State A to State B deployment - which was the way we described exchange based DSLAMs and a future hypothetical node based DSLAM. This was a task that we tried to co-ordinate with the technical group - and ultimately failed. The issue was that if both State A and B ran together the DSLAM at the node would have to be powered back to an extent that it largely matched the exchange based. And there was little incentive to resolve it in 2000 because it would only have been Telstra at the node/pillar.

While the TAF never finalised a recommendation on declaration nor indeed a standard terms and conditions, it actually very valuably reduced the set of decisions/determinations left to the ACCC to make.

However, during the Productivity Commission review of the operation of Parts XIB and XIC everyone other than Telstra and AAPT argued the TAF was pointless and should be abolished. When the PC ultimately made that recommendation Telstra's rep (Mitchell) and I pointed out to our colleagues on the TAF that there was no legislative requirement that it exist and it could be dissolved by its members. So on a resolution moved by AAPT and Telstra it was decided to wind up the organisation. However, I think technically it never met after that day but the industry was so captive of the idea of regulation that it waited till the legislation was changed before the TAF formally ceased.

It is somewhat strange in a period where the industry is again considering regulatory structures - both through red tape reduction and the Vertigan review - to hear the TAF being referred to. It is less strange when I realise that once NBN Co was formally established it decided to walk away from the multilateral process started by Gary McLaren with CommsAlliance that gave the industry a head start on the NBN architecture. Equally NBN Co thought the way to develop an access agreement was to negotiate it with the ACCC rather than industry. It was a hoot to hear the early NBN Co presentations about "deep dives" with access seekers. Only later did they realise the value of a multilateral process through the Product Development Forum.

There is now a separate concern that the PDF is becoming a substitute for public policy discussion. The reports today that proposed product specs for the FTTN products will not guarantee upload speeds beyond 1 Mbps are cause for concern. This is fundamentally a policy issue - as Microsoft CEO Pip Marlow has noted upload speeds are critical for utilisation of cloud services. This should not be a discussion conducted in a private forum.

Friday, April 04, 2014

Nothing to see here - move on please


Troy Bramston's big story under the heading "Labor to loosen its union links" was nothing more than a repeat of what various Labor bods had said all week - that the union links would be "loosened" by no longer requiring members to be unionists.

I don't know why anyone thinks this is a big reform - because it doesn't already apply. And even if some Branch Secretary somewhere is insisting on it, under current rules in NSW you can join any branch in your state electorate, or you can join the "Central Policy Branch". 

Evidently Mr Shorten is going to announce "his plans" in Melbourne on Monday.

Apart from that big "news" the Bramston column is otherwise a news report of an Op Ed that appears in the same paper - by NSW General Secretary Jamie Clements.

Oh and one other item - the suggestion that delegates will be directly elected to national conference, that the party is considering "centralising membership and making membership rules uniform".  Which is al pointless and meaningless because control of the party happens at State Conferences, not National ones. And the party structure is technically a Federal one - the State organisations and the national organisation have their own rules.

Now it might indeed be easier to achieve real reform were the party to centralise, but I don't see that happening.

The biggest joke of the lot was in the Clements column where he rejected the Stephen Loosley idea of conference decisions being non-binding. He wrote:

"I've always believed Labor conferences create a good litmus test. They provide Labor leaders with a forum to argue their case for reform. To convince the public, our leaders hone their arguments before representatives of Labor's rank and file and affiliated union members. If you can't convince your Labor colleagues, you won't convince the voters."

This is just outright fantasy. The "key reforms" he claims Hawke and Keating took to conference first were actually narrow pieces over privatisation and uranium mining. Nothing like it has happened at a NSW Conference over recent years - except the rolling of a Premier. The leader only appears for the orchestrated triumphal entry after the mandatory video-clip to a rapturous standing-ovation. Every vote is decided before conference starts on the block votes of the aligned unions.

It is hard to believe that there has ever been a person whose view was changed by the debate at conference, and even less whose vote would have changed.

So be ready - as I predicted yesterday we are going to have another round of leader announced "reforms" around which the membership must coalesce.

Footnote: Today's Australian was also dominated by the story of the ALP number one position holder in the WA Senate by-election, Joe Bullock, giving a speech that revealed he was not exactly in tune with modern Labor. I don't recall him from University but his claim that he was the one to convince Abbott to join the Liberals was part of the same David Marr story that revealed the punch.

Thursday, April 03, 2014

The stirrings of Labor Reform - yet again.

Interesting tweet by Troy Bramston tonight
This follows a week of media discussion of reform - starting with three separate articles in The Australian  on Monday.

The first picked up some  comments from Tanya Plibersek on Sunday television which followed on from an earlier discussion about the rules where Bill Shorten had suggested weakening the union ties - by no longer requiring party members to be members of a union.

The second was a contribution from former NSW General Secretary and Senator Stephen Loosley.  After a discussion about Tony Blair's UK reform - notably the jettisoning of the Rule 4 nationalisation platform - he goes on to suggest Shorten needs to find something similarly iconic. He rejects the idea that this might come by reviewing the "socialist objective" because "it is so old, it now has mould growing on it".

The genius recommendation is to make a rule that the decisions of conferences are only advisory and no longer binding on the parliamentary parties. This we are told "At a single stroke it would eliminate any claim that Parliamentary Labor is subject to the dictates of trade union affiliates." The funny thing is though it wasn't following a decision of conference that Paul Howes got his head all over TV taking credit for the knifing of KRudd.

The third contribution was an editorial that smeared the ALP for the Williamson and Thompson convictions and called on Labor to "think carefully about its future ties to the union movement." It also called on Labor to throw its support behind the royal commission into union corruption.

No one unfortunately pointed out to the Oz that the ordinary legal processes had already worked just fine, and that what Labor had called for was a police Strike Force - which would be more likely to result in prosecutions than a Royal Commission.

There have been further dribbles since. The Victorian Fabians had a forum on the issue, based on which Latika Burke interviewed Andrew Giles.
The speech Giles gave to the Fabians was thin on specifics. In the interview he defended the union association and spoke very generally about the need to create extra ways for people to "have a say" in the party. He really is trying to encourage discussion leading up to the National Conference in 2015. But everyone is crazy if they think Bill Shorten's address to the National Policy Forum provided much insight.

My own views are very straight forward - the most essential reform is breaking union control of conferences and party structures. Not all unions are affiliated, so when people talk about there being 2 million trade unionists, remember that only half of those or less belong to affiliated unions (or more strictly affiliated divisions of unions). But really it is the union movement that has as much to gain by breaking the ties as it is the ALP.

But the real risk we face now is a re-run of reform under Crean and Gillard. The leader will make a pronouncement, that will not have been consulted on widely. Very rapidly the party power structure will enforce a position that it is more important to appear to be unified than it is to have a meaningful debate. As a consequence "party reform" will rapidly be defined as doing whatever Bill says.

I will hold the rest of my fire until I see what pronouncements are made tomorrow - or at least what has been dropped by Shorten's office to Bramston. This may be more of a kite flying exercise, a trial run to see the reaction to the proposals when written up by Bramston as what Shorten will announce.

Monday, March 31, 2014

The sexism of Tony Abbott - and the anachronism of Letters Patent

In all the discussion about the reintroduction of "knights and dames" to the Order of Australia, the inherent sexism has been ignored.

When a fella gets awarded a knighthood his wife gets to call herself Lady. Hence Sir Frank and Lady Packer. When a person of the other gender gets the equivalent honour they are called a Dame - but their partner remains just plain Mister.

So there is rampant sexism here - not just in having different titles - but in the implications for the partner of the awardee.

It makes one wonder why some other form of gender neutral honorific couldn't have been chosen by the Prime Minister. The honorific many of us are familiar with is "the Honourable". As Peter Hartcher reported today Quentin Bryce having no other title (being neither a former politician, judge or soldier) would have reverted to being just plain "Ms." But that was fixed last year, the Honourable Quentin Bryce was staying the Honourable Quentin Bryce.

It could be that the Prime Minister thought something better than "the Honourable" was called for as lots of politicians get called "the Honourable" and it has confusingly different application around Australia.

The alternate possibility was to revive and redefine the term "the Right Honourable". This historically refers to members of the Privy Council, but it would seem to be an appropriate title to be given for life to the people the Prime Minister proposes to give the knighthoods and dameships (?) to.

But here is where it ALL gets interesting. We see the reference to the May Gazette being about a decision of the Queen to bestow the title "the Honourable". We see also that knights and dames snuck back in by "letters patent" by Her Majesty.

Isn't the Order of Australia is an Australian honours system, notably NOT an Imperial honours system. It turns out that it is not "imperial" in the sense that OBE's and GBE's were an honours system of the empire (created in World War I), and there are a few others that are the personal gift of the queen. That's why the Order of Australia website says "Imperial honours (except for a few which are in the personal gift of the Queen) are no longer awarded to Australians."

See it turns out that the whole of the Order of Australia is created by Letters Patent, first issued by the Queen on the advice of Gough as PM in 1975.

So just to be clear, Troy Bramston gets it wrong when he thinks the decision to create knights and dames deviates from the Queens view in 1990 that Australia should stick to its Australian honours system, with her as sovereign. We still are, she just changed the rules on the advice of her Prime Minister. She would not  accept a recommendation from a State Governor/Premier to make an award in the Order of the British Empire, though the letters patent for that probably still apply.

So what the are these "Letters Patent". That old reliable Wikipedia calls them "a form of open or public proclamation and a vestigial exercise of extra-parliamentary power by a monarch or president. Prior to the establishment of parliament, the monarch ruled absolutely by the issuing of his personal written orders, open or closed."

Here it is important to understand sequence. In 1975 using Letters Patent by the Queen to establish the Order of Australia made sense. It makes absolutely no sense following the passage of the Australia Act which aimed to cut direct governance powers from the UK.

Bill Shorten last week made clear that the ALP has opposed Imperial Honours from 1918 - the year after the Order of the British Empire was created.  It was the ALP that adopted the Statue of Westminster in 1942, that introduced the Order of Australia in 1975 and passed the Australia Act in 1986.  It is time the Platform was updated to also pass legislation removing Her Majesty's power to issue Letters Patent with respect to Australia, and that the monarch of Australia not be the "sovereign" of the Order of Australia and instead the people of Australia represented by the Parliament and the Governor-General be the creators of the honour. Similarly the decisions about the use of the honorific "the Honourable" and 'the Right Honourable" should belong to Australia's parliament not our absentee monarch.

In a twittersation with Troy he has disputed my assertion that he is wrong in his article. I haven't seen the original 1990 letter but there are three points in the article made about it.

The first is "it is more appropriate at this stage in Australia’s development that Australian citizens should be recognised exclusively by an Australian system of honours, of which she herself is proud to be sovereign" - this proposition still holds as the knights and dames to be awarded are within the Australian honours system of which the Queen is sovereign.

The second is "The Queen suggested Australia 'honour its citizens exclusively within its own system'." This also still holds as the knights and dames are awards within the Order of Australia.

The third is "Moreover, she indicated she no longer thought it appropriate to ­approve Australian honours, which Abbott has reinstated." This is the only point on which it is arguable that the Abbott decision formally deviates from the Queen's view. This is because the award of knighthoods will be made by the Queen on recommendation of the Prime Minister.

In my original post I indicated that I thought Bramston wrong to claim about the use of the Australian honours system exclusively. That is the claim he leads with and it is wrong to assert it.

Bramston is technically right on the assertion that the Queen's view was that she should have no role in determining Australian honours. But really my point is that if we were serious the legislative basis for the Australian Honours system would not be Letters Patent.

It is also important to remember the context of the Queen's advice - which was about State Governments making recommendation for knighthoods under the Order of the British Empire and this was the Queen's plea for there to only be the Order of Australia. It wasn't specifically a commentary on the award of knights and dames within the Order of Australia, It is impossible to conclude from the letter that "While Abbott has, with the Queen’s consent, reinstated knights and dames within the Order of Australia, she clearly saw the titular honours of knight and dame as, well, passé." Were she to do so she wouldn't be doing it in the UK, New Zealand and other places.

Wednesday, February 12, 2014

Tony Abbott's Garma Festival Speech

That Tony Abbott was going to spend his first week as Prime Minister on country in East Arnhem land is one of the great "claims" that endures fro the election campaign.

His actual Garma Festival Speech did not say this. At about 20:27 in the YouTube clip of the speech he says he will as PM spend one week a year on country, and the context of the subsequent statement is clear that this reference to "first week" was not "first week as PM" but "first of my annual weeks."

 In researching this I found this article which talks about the extent to which the promise was originally reported. It is astonishing the extent to which the story was allowed to run given how clearly it can be constructed that Mr Abbott did not mean his first week.

This isn't a failure of Mr Abbott it is a failure of those around him.

The AFR begs the question

The AFR opinion pages (behind paywall) have two comments that refer to the changing shape of the Australian economy.

The editorial The future must let go of the past talks at length about the need to accept the changing nature of our industry, and not to try to retain existing industries.

Unfortunately the editorial is devoid of any commentary on what the future looks like, only that the past must be let go.

On the facing page the heading of the opinion piece How to pick the industries that suit us best initially ofers hope.  It doesn't however, tell us what those industries are, but it has a far more informed policy prescription than anything else.

The writer, Bill Carmichael, helpfully reminds us of the difference between what economists call productive efficiency and allocative efficiency. In management babble this is the difference between doing things right and doing the right things.

Carmichael points out that the real advances in our economy in the 80s and 90s came not from productive efficiency but from allocative efficiency. It is also instructive to note that in the 90s competition policy was embraced by all Australian business sectors, offering by criticising each other. Everyone complained about how lack of competition in banking, transport, energy and telecommunications was restricting their ability to perform. Today that same business community only talks about productive efficiency and in particular wages and employment costs.

He notes that the industries that are closing have realised that no level of improvement in their productivity would have made them competitive.

He concludes that "Unless policymakers acknowledge the dominant contribution improved allocative efficiency has made to the performance of the economy, they risk creating a large and growing constituency for unproductive reform." 

Against which I would note that the slowing of Australian productivity improvement coincided with the creation of the Productivity Commission.

Somewhere in this whole discussion one would hope that the importance of high speed broadband infrastructure might feature.  But that seems to be beyond the AFR.

Tuesday, February 04, 2014

Contrasting views in The Australian

Two items in The Australian IT worthy of comment.

The first is a reported claim by John Cioffi that fibre-to-the-home is slower than VDSL because it is a shared infrastructure and hence gets "clogged" when everyone is using it. This is firstly an incorrect description of how GPON works as I understand it. The fibre is split optically and the amount of committed AVC sold is less than the sum of the capacity of the fibre.  NBN Co sells a guaranteed AVC rate.

That doesn't mean that the experience reported might not occur of getting a slower speed once a service is converted to FttH, because there is an element of shared capacity called the CVC that connects a FAN to a POI.  That is contended, but in the NBN Co model RSPs make their own decision about what contention they want.

But as iiNet and NBN Co have reported a consequence of providing bigger pipes is that consumers use it more. If an RSP was to migrate its customers from DSL to FTTH but use its previous contention ratios it is entirely possible that light users would see a slowing down.  But as I said that is in the control of the RSP. 

This of course isn't the case with HFC where the connection provider (assume NBN Co) can't guarantee the access speed of the AVC.  And HFC will be 30% of the Coalition Broadband Network.

Cioffi also reportedly claims neighbours can spy on each other's traffic with the "right equipment." As the data is encrypted it is more than equipment you need, it is the ability to crack the encryption.  If Cioffi can do that he is in the wrong business.  I understand it uses Advanced Encryption Standard, which is what the NSA approves for US Government. It is unknown (as I understand it) if this is one of the encryption standards "cracked" by the NSA.

So the story can be put in the bucket of reporting of unsubstantiated claims - just like the ABC and asylum seeker burns.  But don't tell The Australian that!

The other story was about how game developers Secret Labs' in Tasmania were able to use the NBN to grow their business. Secret Labs wrote about theie experience on their own website. Their own more detailed comment is;

Realistically, we don't care what technology the remaining NBN rollout is delivered by, but we don't believe that the plan currently suggested by the coalition government can deliver an NBN that will truly serve Australia, and offer the same opportunities and capabilities to Australia, the way that FTTP has changed our business in the few short weeks we've been connected. Disturbingly, the majority of the published material from the current government regarding their NBN plans does not mention upload speed at all – upload is the most transformative aspect of FTTP for us.

This is probably reflective of most of Australia. People don't really care what the technology is, but they are concerned if the replacement can't at least provide the 100 Mbps down and 40 Mbps up.

Monday, January 20, 2014

Optimism bias

The Productivity Commission public inquiry into Public Infrastructure has received its first initial submissions. Number 87 comes from Henry Ergas in his private capacity.

Having done similar things I applaud his eagerness to participate in the process, even though I disagree with almost everything he says. It is, however, pleasing to see him acknowledge that telecommunications networks are a natural monopoly.

The key issue that I wanted to highlight is Ergas comments about discount rates.  He states about large infrastructure projects that;

The discount rates used do not properly incorporate a mark-up for optimism bias and other distortions in public sector decision-making. The extent of that mark-up should reflect the option value of deferring investment, which in turn depends on the extent to which updated cost and demand information could lead to a reconsideration of the timing and extent of investment.

This is a very, very big call.

I first want to talk about "optimism bias." The phenomenon of "optimistic bias" is well researched. One item quoted the following cases;

  • "People expect to complete personal projects in less time than it actually takes to complete them" (Buehler, Griffin & Ross (1994)) (basis of Hofstadter's Law)

  • "Students expect to receive higher scores on exams, at least when those exams are still some time away, then they actually receive." (Shepperd, Ouellette and Fernandez (1996))

  • "Second-year MBA students were found to overestimate the number of job offers they would receive, the magnitude of their starting salary, and how early they would receive their first offer." (Hoch (1985))

  • Professional financial analysts "were reasonably able to anticipate periods of growth and decline in corporate earnings, but consistently overestimated earnings realised." (Calderon (1993))

  • Vacationers "anticipate greater enjoyment during upcoming trips than they actually expressed during their trips." (Mitchell, Thompson, Peterson and Cronk (1997))

  • Newlyweds "almost uniformly expect that their marriages will endure a lifetime" despite the large proportion of marriages that end in divorce. (Baker and Emery (1993))

  • Students "consistently reported that they would behave in more socially desirable ways - for example, that they would be more resistant to unwanted social influence, or more likely to donate time to a worthy charity - than did people who have not first been asked to make predictions about their behaviour". (Sherman (1980))

  • "Most people expect they have a better-then-average chance of living long, healthy lives; being successfully employed and happily married; and avoiding a variety of unwanted experiences such as being robbed and assaulted, injured in an automobile accident, or experiencing health problems." (Weinstein (1980))

  • "Between 85% and 90% of respondents claim that  their future will be better - more pleasant and less painful - than the future of an average peer" (Armor, 2000, unpublished raw data)

  • Most smokers believe they are less at risk of developing smoking-related diseases than others who smoke. (Weinstein, 1998, unpublished manuscript)

  • Further analysis reveals that the bias is also described as the "planning fallacy" which Wikipedia credits to the great founders of behavioural and experimental economics - Tversky and Kahneman.

    In perhaps a blow to the critics of NBN Co's corporate planning, the bias is subjective, since "The bias only affects predictions about one's own tasks; when uninvolved observers predict task completion times, they show a pessimistic bias, overestimating the time taken."

    In the context of infrastructure bias Ergas quotes the oft cited case of Sydney's Cross City Tunnel for which the investors got seriously burned due to overstating demand.

    In the futurist business there is a principle referred to as Amara's Law which states "We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run."  I am not aware of any empirical test for this, but it is consistent with my observations of previous historical predictions. While we all often laugh about the great underestimation quotes like Tom Watson and the world market for computers, look at the average success rate of product forecasts and they over-estimate early sales and under-estimate the long run.

    This is certainly the case with most of the road projects. 

    In other words the optimism bias in long run projects is a tendency to flatten out the growth curve rather than predict  more normal exponential-like (meaning any of a family of S shaped curves) adoption. 

    Ergas solution to the perceived problem of optimism bias is to increase the discount rate. He is reintroducing here a concept called "real option theory" that he tried for years to have incorporated in regulatory proceedings by the ACCC to increase the WACC (discount rate) that should be applied to accessing Telstra infrastructure. This is a weighting supposed to reflect the benefit of waiting to make a decision in the future when there was greater certainty of demand.

    One of the difficulties with this approach though is that absent the actual infrastructure there is no way to determine the real demand - the preference for driving on that road or for using that broadband service can only be revealed by having the road or service available.  This is not "build it and they will come" so much as "build it and you will know its use".

    But this then brings us to the fact that take-up curves are S-shaped, use promotes further use. If this is the case, and importantly if the optimism bias in the early period of the project is counterbalanced by a pessimism bias in the long run, then the approach of adopting a single higher discount rate is wrong, because it penalises more the forecasts that are further out and more likely to be right.

    The correct response to optimism bias isn't a higher discount rate, it is to deal with the sensitivity analysis of the forecasts in both the short and long term. From a finance perspective it certainly means investors should note be financing with a lot of debt financing upfront that immediately requires servicing out of forecast cashflows (which was the real problem for CCT). Ideally you need equity investors who are prepared to be patient in generating a return.

    Ultimately that is what makes the case for Government ownership. Only Government can afford to absorb the risk in the short term.

    Ergas second point in the paragraph quoted is about "public sector decision making".  This follows from an earlier assertion about the kinds of projects that attract investment; saying;

    The incentives in political decision-making lead to an undue emphasis on ‘ribbon cutting’ opportunities, generally associated with very major (‘mega’) projects, at the expense of periodic maintenance and of small-scale ‘de-bottlenecking’ options that could postpone or even avoid the need for costly asset expansions.

    This shows a lack of understanding of politics.  The NBN was a great project because it delivered lots of ribbon-cutting (or button pressing) opportunities.  Lots of small projects would actually be more appetising.

    But the real problem with this is the arrogance of the techno-crats...that political decision making is somehow less reliable than other forms of analysis. But in the final analysis political decision making is driven by what voters actually want. The technocrats need to not deride the people but get into the explaining business if they genuinely believe the wrong decisions are being made.

    It will be interesting to se how much of Mr Ergas own views features in the report of the CBA review of broadband policy.

    Monday, January 13, 2014

    Response to Rear Window

    The AFR 's Rear Window paid me the dubious honour of making a whole item about me today.  Only problem is that I didn't really deserve it.

    The first error is to claim I achieved a degree of infamy as a Conroy adviser. I think it is more correct that I had my infamy first. I think the only press references to me at the time was the stories that I'd been hired and the ones about me being retained by Minister Albanese.  A quick Google reveals plenty of earlier references...even a whole Op Ed in the AFR.

    The next part about my tweet regarding the ASX delisting of 21st Century Fox is an accurate description of the post.  But the contact with Clare's office was a call to me.  Wow how surprised would the journalist have been if I had said it WAS the party line.  Also let's be clear, I don't like the way Mr Murdoch runs his business these days.  I haven't always had that view since when News was my customer when I was at Telstra I did a fair bit of work to help the Foxtel JV happen. 

    But it is also true that I posted here only a few days ago that I thought the claims if Mr Murdoch's political influence are overstated.  On 21st Century Fox I think I am not alone in still wondering whether NSW taxpayers really got a good deal from the redevelopment of the old showground site as Fox Studios...but now Entertainment Quarter. 

    Then the biggy where Godwin's law might be in play.  Context is everything. Firstly I never used the word Nazi, for a reason.  The comment followed Christopher Pyne's assertion that the Liberal party is the only true national party because it doesn't represent any sectional interests. This was said by Pyne in the context of his two dodgy mates being appointed to review the national curriculum.  Now Pyne really questions the three cross disciplinary focus areas of Asian century, indigenous past and the third I can't remember. He loves to question the relevance of these to maths and science, as a distraction from his view that shouldn't feature in history or civics.

    When you analyse the Liberal position on teaching history it is very strongly "nationalist"...European tradition is better than everything, our judeo-Christian heritage is more important than our place in Asia.  Sounded very much to me like the kind of nationalism that the German national socialists espoused publicly, not the far more brutal version they believed privately. So quite reasonably is response to Pyne's claim the Liberals were a national party, I suggested they might be better able to claim to be "national socialists". Perfectly reasonable claim.  

    The journalist thought the tweet had been about the Nationals because basically he was lazy and was taking a feed from someone and really had done no research.  And he ran my correction as if it was an extra story, rather than as pointing out his original version was wrong.

    So hopefully next time I make it to rear window it will be by someone who knows I have been infamous in tech circles for a while now, and it will be about something substantial and not just a selective reading if a couple if tweets. 


    1. The columnist for the AFR was Will Glasgow.  My grandfather Carl Frederick Spencer Glasgow was a UAP member if the NSW Legislative Assembly for one term.  Makes it possible young Will is a distant cousin.  Just proves you can't chose your relatives.

    2. The tweets had been referred to Will by someone, and he just laughed when I suggested he should just ignore future tip offs from Liberal staffers.  Could have been an AFR journalist following me I guess. But most of them would know better on the history.  Anyhow if someone is noticing then something is going right.

    Wednesday, January 08, 2014

    Business, Economics and Strategy

    Former Internode execs Simon Hackett and John Lindsay are no longer parts of iiNet. 

    Mr Hackett we know resigned from the Board of iiNet to take up a position on the Board of NBN Co. ZDNet reported this week that Lindsay had "quietly departed" from iiNet, though Delimiter today reports that Lindsay was made redundant.

    I wish them both well. They, like Michael Malone at iiNet, feature in my allegory about understanding "purpose" in business. Both firms were founded by people who liked the internet at university and wanted to make it available to themselves and friends after university.  (In Malone's case making it available to friends was about subsidising his own access). Focussing on that purpose enabled them to establish a valuable business.

    But this does not make either of them infallible. 

    One of the quotes attributed to John Lindsay in the ZDNet article was "If you build something like a new network that has abundant capacity and then you arbitrarily limit that for commercial ends, you've basically created artificial scarcity."

    While this may refer to the CVC issue, I believe it also relates to a concern that differential pricing for AVCs is wrong. My reason for that belief goes back to discussions at the time the "G9" was putting together an alternative FTTN proposal. A sticking point was determining pricing structures - and the representative from Internode (not John by recollection) argued that we should charge the same price per port because that is what the cost base was. The same reasonin would be that AVC charges on the NBN should be the same as the cost is the same.

    It is relatively easy to demonstrate why that doesn't, or mightn't, work. It is because different consumers have different preferences expressed as willingness to pay. Let's assume we have two customers. Customer A is prepared to pay $3 for a 100 Mbps service but only $1.50 for a 10 Mbps service. Customer B is prepared to pay only $1.50 for 100 Mbps and only $1 for 10 Mbps.  As the supplier we have one expense which will provide two 100 Mbps services, but we can limit them to 10 Mbps (with the unused 90 not available for sale).

    If our costs are above $4.00 but we sell only one product which is the 100 Mbps one, at an averaged price we can't make a case that recovers our cost.  The average price will be $2.00 and customer B won't pay it. With differential prices Customer A will pay $3 and B $1. 

    When it comes to the NBN this is significant, because the bottom price tier is essentially set at the price of a voice access line - because some of these customers will only be using it for that.

    So having a price point that limits capacity can create supply, nor reduce it.

    Simon Hackett in his defence of HFC on his blog said "Despite claims to the contrary, this use of shared segments in the last part of the [HFC] network is also the case in the existing NBN fibre (FTTP) design....The trick (in both technologies) is to keep the contention ratio acceptable in each of these shared segments. There is a commitment in the NBN HFC context to do that, just as in the FTTP rollout, so that the result is great for all users."

    I don't think this is technically correct. While the 1 Gig plus of fibre from the FAN is repeatedly split in the FTTP scenario, it is split in a controlled way. There is no actual "capacity sharing". More specifically the RSP can be sure about how much capacity a fibre customer will have available in the AVC, they can't be sure in the case of HFC.

    Hackett and Lindsay are both projecting their experience from how they ran an ADSL2+ network.  The economics and strategy question for a national broadband network are different. 

    Tuesday, January 07, 2014

    Telstra and all that cash

    The AFR today speculates on the possibility of a Telstra $6 billion share buy back. This follows the sale of CSL and planned sale of autohome.

    However, Telstra has repeatedly indicated it is seeking opportunities to expand. It, like most incumbent telcos, has struggled with how to be a successful entrant when its core skill has been managing networks.

    When Telstra sold TelstraClear in 2012 there was speculation that Telstra was shaping for a go at Telecom New Zealand.  That was dismised with the revelation that the deal included non-compete clauses.

    This was confirmed when the deal cleared its last hurdles in October 2012. There are few details of the non-compete clause available. The last item referred to said;

    The takeover includes a non-compete cause, of unknown duration, that prevents Telstra entering the NZ market.
    Regardless, most analysts dismiss the notion that cash-rich Telstra is clearing the decks for a run at Telecom. Telecom is struggling to turnaround declining profits at a time when Telstra is eyeing high-growth opportunities at home, and in Asia.

    The interesting fact is that Telstra has been divesting its investments in Asia.  The AFR article concludes "Telstra has long pledged to increase the amount of revenue it generates from Asia, and Thodey is chasing corporate customers in the region with cloud computing and telecommunications services."

    The reality is that the most important market to secure first is New Zealand, because most corporations now run their A/NZ operations together.  The second is that no matter the current financial state of Telecom, the synergies between the two businesses are immense.  The ability to operate the New Zealand mobile business as a component of the Australian one is alone worth a lot.

    At the time of the original speculation the biggest barrier wasn't the non-compete clause, it was that Telecom still owned its asset - AAPT. That is now resolved as well.  The only other impediment is New Zealand regulation about domestic ownership, a hurdle that would not be hard for the Kiwi Government to deal with if the suitor was Telstra.

    An acquisition of Telecom is one of the few cases where Telstra could genuinely say it was investing the money better than Telstra shareholders could on their own.

    Sunday, January 05, 2014

    Just how influential is the Murdoch Press?

    A fixation during the 43rd Parliament, the lead up to the 2013 election and the campaign itself was the perceived influence of the Murdoch press in Australia. This generally means the collection of News titles – The Daily Telegraph, The Courier Mail, The Herald and Weekly Times, The Advertiser and The Hobart Mercury – as well as The Australian.

    As the campaign started Sydney University academic David Knight wrote a piece titled “Murdoch and his influence on Australian political life” for The Conversation. He opened with a quote attributed to Murdoch that what gives him the most pleasure in running his empire is “trying to influence people.”

    McKnight claimed Murdoch has had influence on elections previously, but his primary source was the Murdoch press’s own claim about the 1992 UK election that “It Was The Sun Wot Won It." He then simply assumed the influence and sought reasons for Murdoch wanting the end of the Labor Government.

    He dismissed the claim made by PM Rudd that Murdoch’s focus was on the threat to News from the NBN, and that really his interest was entirely ideological.

    This focus in the campaign followed a few years where the role of the Murdoch press had been part of public debate.

    The key trigger point was a press conference by Christine Milne on 21 July 2011.

    As reported by the Herald Sun Milne called for a federal inquiry into the media saying "The important thing here is that out of the scandal in the UK there is an opportunity now for Australia to look at a number of issues. One is concentration of the media ownership for the print media in Australia. Another is the privacy issues. Others relate to licensing and fit-and-proper person tests. All of those things should come out in an inquiry."

    The next day Prime Minister Gillard got herself into bother over comments that given the serious nature of the international allegations in the UK, the Australian arm of News Corp arm to answer 'hard questions'. In the same article Tony Abbott was reported to have given qualified endorsement to the idea of improving Australia's privacy rights and his communications spokesman Malcolm Turnbull says the privacy reform discussion is 'a debate worth having'.

    News Corp didn’t immediately dismiss the idea of improved privacy laws, with a spokesman in the same article saying “Without statutory protection of freedom of speech in Australia, there is a danger that a law to protect privacy will curtail the media's ability to hold governments, corporations and individuals to account. Any increased protection of privacy must be balanced against the need to ensure information that is clearly in the public interest is available to the public.”

    The SMH on the same day reported “The government has given mixed messages about its enthusiasm for a review and about exactly what it would be inquiring into. Some ministers have attacked News Ltd publications for running what they say is biased coverage, and senior sources said yesterday some investigation of media regulation and 'ethics' remained a real possibility.”

    On QandA three days later Milne said

    Look, the Murdoch press has been running a very strong campaign against action on climate change. The bias is extreme in The Australian in particular.

    You’ll see column inch after column inch after column inch of every climate sceptic in the country run with exactly the same authority as the intergovernmental panel on climate change as if they are the same. You’ll find, day after day, a real attempt at regime change.

    Now, a newspaper is supposed to be running with fairness and with balance and that paper is not doing it and one of the useful things about the hacking scandal in the UK is that it will lead to an inquiry into the media in Australia and that is well and truly overdue and we are, at last, going to see some real discussion about issues around rights to privacy, around issues like the level of ownership and dominance of the Murdoch press in several capital cities around Australia.

    We’ll also have a look at a range of other issues, including who are fit and proper people into whether we need that test of people to be running media outlets. So I think this is a really useful opportunity, especially at the media is changing so rapidly. Everything is going online. Newspapers online, you wonder if you can call them newspapers anymore in that sense, so it’s time we had a good inquiry.

    next day The Australian reported

    Julia Gillard has said she is open to an inquiry, declaring News Ltd, publisher of The Australian, had “hard questions” to answer following the UK phone hacking scandal.

    In a separate move, the government will act on a three-year-old report by the Australian Law Reform Commission calling for a legally-enforced right to privacy.

    The Prime Minister's office said Ms Gillard was yet to talk to Greens Leader Bob Brown about the inquiry.

    The Minister for Broadband, Communications and the Digital Economy announced the Independent Media Inquiry on 14 September 2011. Its report was incorporated into the overall Convergence Review, which was released by the Government with little fanfare and no comments about the Government’s intentions.

    The void was filled by a virulent attack, led by News CEO Kim Williams, on any proposal to regulate print media. After months of rumours but no action the Government suddenly introduced a package of reforms in March. The two most controversial related to a diversity test and a strengthening of the mechanism for enforcing standards for privacy protection and accuracy.

    The response from News was immediate and strong. But the Bills implementing these reforms failed not because of the News campaign but because the proposals could not overcome reservations held by Parliamentarians that were different to the complaints of News.

    That News publications continued to be biased in their reporting on a number of issues was very apparent. The screeching headline in April proclaiming the cost of the NBN would be $94 billion based purely on a Coalition thought bubble was simply one of many cases.

    The position of News translated into a fixation by the Rudd campaign on the issue, though there seems to have been some initial surprise at the extent of the bias. It may be that there was a presumption in the Ridd camp that the News Corp campagn was anti-Gillard rather than anti-Labor.

    Bruce Hawker in his book The Rudd Rebellion states that going into the first week of the campaign there were major challenges to sort out. He notes “What we didn’t know, however, was that News Corp was planning its own campaign – one that would make its previous forays into partisan reporting look like the picture of even-handedness.”

    He records a conversation at Kirribilli House on 1 August to respond to the arrival of Col Allen in Australia and the all-out News Corp campaign. Hawker notes “I had a long talk to [UMR research CEO John] Utting about the research required to see if News Corp actually does change people’s minds and if there are ways of successfully countering an attack or even pre-empting one by reference to Murdoch’s financial or political ambitions.” He also talked about research to monitor the extent of actual bias.

    On 3 August he records that Utting argued against the proposed 7 September election date “to take more time to prosecute our economic credentials.” Hawker argued that “going late just gives News Corp an extra two weeks to attack us – as we know they will.”

    Later as the campaign has kicked off Hawker recites all the stuff about editors and journalists saying they had never seen anything like the concerted News Corp campaign. He claimed the impact was felt in 5 ways;

    1. They sought to undermine Rudd’s “legitimacy and credibility;

    2. They fed shock-jocks and thus were repeated throughout the day;

    3. They diverted attention from the issues Labor wanted to discuss – for example the stories about Rudd’s use of notes in the first debate diluted all the messages in the content of the debate;

    4. They allowed News Corp reporters to suggest Rudd was off message and chaotic – news conferences became dominated by talking about the News Corp reports;

    5. They allowed Abbott to stay positive all the time.;

    When one analyses these impacts one realises they really were cases of “don’t think of a square.” The key person being distracted by this was Rudd – he and Hawker were obsessed.

    In his epilogue Hawker claims “The other remarkable aspect of this election was the highly partisan role played by the News Corp press…News Corp is easily the most powerful political force in Australia – bigger than the major parties or the combined weight of the unions. The fact that the swings were lowest in the States where News Corp’s anti-Rudd invective was at its most virulent is a welcome reflection on the maturity of the Australian people. We shouldn’t use this as an argument to downplay the News Corp influence in this election”,

    But really – we should do exactly that. Murdoch’s influence comes from the perception by politicians that he has a great deal more influence than he really does. NSW Labor learnt the similar lesson some time ago about Alan Jones.

    A little research reveals that the power of the print media to influence is over-stated. University of Sydney academic Rod Tiffen wrote the chapter on Australia in The Handbook of Election News Coverage Around the World. He notes that “As in other democracies the most publicly debated media impacts concern allegations of partisan bias.”

    Tiffen goes on to note the limited competition in Australia’s print media, but also notes that for most of Australia’s history all of the print media’s support has gone to the Liberals.

    Tiffen notes that the most valuable set of polling data on Australian elections comes from the Australian Electoral Survey and that none of the surveys has found a strong correlation between party vote and any patterns of media consumption.

    Prior to the 2013 election, the most debated cases in Australia were the 1972 and 1975 elections. As Tiffen says in both cases “the electoral tide was running so strongly that press partisanship would likely not have had any impact on the result.

    Tiffen also notes “In recent years, there have been some claims by Labor that the Murdoch press is still biased against it, although the nature of media politics now is that a company like Murdoch’s also has an interest in being perceived as supportive of whoever wins the election.”

    As the Guardian reported UK politician Rory Stewart said this week;

    "But in our situation we're all powerless. I mean, we pretend we're run by people. We're not run by anybody. The secret of modern Britain is there is no power anywhere." Some commentators, he says, think we're run by an oligarchy. "But we're not. I mean, nobody can see power in Britain. The politicians think journalists have power. The journalists know they don't have any. Then they think the bankers have power. The bankers know they don't have any. None of them have any power."


    1. Tiffen also has useful observations on agenda setting and the building of political momentum. He also argues that journalists frame election campaigns as horse races to distance themselves from the politicians and parties. To comment on actual policy may force them to express a view about it, whereas talking about how a policy has been crafted to appeal to the electorate removes the need to actually comment on the policy itself.

    Hence the objective of “unbiased” reporting possibly has the consequence of hollowing out politically coverage in the media.

    2. The tendency for the splash in the morning tabloids to create the news story of the day that runs on talkback radio and then becomes the headline of the nightly news is real. However, tightly scripted events providing good visual images combined with strong messages can disrupt the momentum

    In the case of the Labor 2013 campaign it was Rudd and his personal advisers who were doing more than anyone to distract the campaign and destroy plans for getting the story to be Labor’s message of the day. The case of campaigning on the NBN is one – of which hopefully I will share more in a later post.

    Saturday, January 04, 2014

    Supplying Consular Assistance and Mandatory Insurance

    It is hard not to agree with Julie Bishop that there is merit in reviewing how Australia provides Consular assistance to travellers in trouble overseas. 

    Reports suggest that it is not thought that Australia should do less, but that there are circumstances in which citizens might be required to repay the cost of that assistance.  These include where citizens don't take insurance or they wilfully engage in breaking the law of countries they visit.

    The issue has been raised again because of the case of Greenpeace activist Colin Russell.  In an article the Guardian seems to have prodded him to give the traditional reply that the Australian government "could have gone into bat a little bit more for me".

    There is a problem with consular assistance in that somehow people think that it is the Australian government's responsibility to conduct a whole defence on their behalf, or worse, that somehow Australian consular assistance is a means to have the Australian citizen's conduct considered under the provisions of Australian law.  This is like presuming that the Treaty of Nanjing providing the British with "extra-territorial rights" in China existed for Australians for the whole world (when the right was actually relinquished in 1943).

    The related issue is the crazy definition that Greenpeace and others apply to "peaceful protest." Even in Australia deciding to climb onto a structure is not a "peaceful protest."  But the offences took place in Russia and it is the Russian definition, not the Australian definition, that counts.

    By all means be a martyr to your cause by wilfully breaking the law in another country to highlight its politics or your issue - but you didn't do it for Australia and deserve no more than standard assistance. 

    This is exactly the same argument that applies to Julian Assange.

    The second is the expectation of provision of assistance for "insurable events".  The most common is repatriation of a citizen who falls ill overseas, but can include the cost of proper legal representation.

    The Minister has suggested that one case where citizens could be required to repay would be when they hadn't taken out insurance. 

    More useful would be to actually require citizens travelling overseas to take out a minimum level of travel insurance.  This is no more extreme than the requirement on owners of motor vehicles to have third party personal insurance.  It would not be hard for an Australian leaving the country to present a certificate of insurance at passport control when leaving the country. 

    But the most important issue is getting people to understand that when travelling overseas it is the foreign law, not the Australian law, that applies.

    Thursday, January 02, 2014

    Think tanks on the left - a preliminary survey

    Two related but slightly different twitter engagements have me writing this blog post.

    The first followed

    This question from @Gwyntaglaw was not something I could answer in 140 characters!  (The first part of my two part reply had read "ALP does not have the policy strength to tackle the question of thorough reform of the welfare system - but it could."
    @VanBadham's argument is that the changes that "pushed Australian single parents from a family pension onto the dole once their child turned eight" were a betrayal of Labor values.  The argument did not reject the validity of attempting to deliver reform, just that the reform chosen under the label "Building Australia's Future Workforce" did not reflect the kind of policy development that previous Labor Government's showed.  In fact, the policy seemed to be more about addressing the failure to deliver a surplus and indeed a bit of pandering to those who peddle the story of young women only having children to get benefits.
    It was summarised as:
    The party of Whitlam, Hawke and Keating has the policy knowledge, history and experience to do what is required to reform welfare as a system that equalises social opportunity for all Australians. That it squandered its chance for meaningful reform through the BFAW and then abandoned single parents to the politically fabricated budget panic belies a party which has allowed itself to become spooked by the propaganda of its opponents.
    I was questioning whether the party today indeed actually had the "policy knowledge, history and experience" described. 
    It followed on from an earlier engagement with @Gwyntaglaw also on the topic of left think tanks.
    It seems to me that it really isn't possible to mount a review of welfare policy until there is a wider socio-economic program to underpin it.  Hence I am serious about the question of the need for a "seminal text" (noting that Marx is definitely not it) that is a subject for another longer piece of writing.  As an example at the end of my post on confirmation bias I used the term "social justice" as an example at the end on terms that are used by one side of political debate that result in a completely different interpretation from the other.
    For now this is just a quick trawl through the left think tanks and a thought about their capacity to assist Labor.
    The first observation to make is that while the history of Think Tanks is long, especially in the USA, they are perhaps more renowned for the role they played in the rise of the neoliberal right in that country.  Indeed it was based on a call by William Simon that "The only thing that can save the Republican Party … is a counter-intelligentsia. … [Conservative scholars] must be given grants, grants, and more grants in exchange for books, books, and more books."  In short, the Think Tank was seen as a response to the perceived excessive influence of the Left in other institutions - especially Universities.
    So it comes as a bit of a shock to refer to the left wing think tanks, though there are such things even in the US. 
    Wikipedia provides a list of think tanks by country.   At the time of writing it listed the following [with my assignation of the leaning of the body in square brackets];
  • Air Power Australia [unaligned]
  • Australia Institute (TAI) [left]
  • Australian Institute of International Affairs (AIIA) [unaligned]
  • Australian Strategic Policy Institute (ASPI) [unaligned]
  • Brisbane Institute [unaligned]
  • Committee for Economic Development of Australia [right]
  • Centre for Independent Studies [right]
  • Centre for Policy Development [left]
  • Development Policy Centre [unaligned]
  • East Asian Bureau of Economic Research (EABER) [unaligned]
  • Evatt Foundation [left]
  • Grattan Institute [unaligned]
  • H.R. Nicholls Society [right]
  • Institute of Public Affairs (Australia) (IPA) [right]
  • Lowy Institute for International Policy [unaligned]
  • Mannkal Economic Education Foundation [right]
  • Per Capita [left]
  • Sydney Institute [right]
  • Strategic and Defence Studies Centre (SDSC) [unaligned]
  • United States Studies Centre [unaligned]
  • Western Australia Policy Forum [right]
    The count is 4 left and 7 right - but the list is not complete (it doesn't include the McKell Institute, Whitlam Institute or Catalyst for example). 
    The left think tanks as I can identify them and what they say about themselves is;
    "The Australia Institute is the country’s most influential progressive think tank. Based in Canberra, it conducts research on a broad range of economic, social and environmental issues in order to inform public debate and bring greater accountability to the democratic process. ...The Institute is determined to push public debate beyond the simplistic question of whether markets or governments have all the answers to more important questions: When does government need to intervene in the market? When should it stand back? And when regulation is needed, what form should it take?"
    "Though we call ourselves a think tank, the Australian Fabians are more than this. We are based on a social and intellectual movement: the UK Fabian Society has been a central part of democratic socialist, social-democratic and Labor tradition thoughout the 20th century in Britain, and the Australian Fabians in Australia since 1947. Our output is thoroughly contemporary and relevant: by dint simply of who we are, it is organically connected to the history of the left.
    Our goal is not merely (as by and large it is for other think tanks) to produce interesting ideas for the elite policy community. It is the promotion of socialist and progressive thought throughout society. We aim to change the intellectual climate of the Australia (and indeed of the wider world). We want to make broadly left of centre ways of thinking commonplace."
    "Catalyst is a collaborative policy network. We work closely with trade unions, non-government organizations, academics and practitioners to promote progressive policy solutions to some of today’s most pressing social and economic issues.
    Our simple vision is for good lives, good work and good communities."
    "The Centre for Policy Development is a public interest think tank dedicated to seeking out creative, viable ideas and innovative research to inject into Australia’s policy debates.
    We give a diverse community of thinkers space to imagine solutions to Australia’s most urgent challenges, and we do what it takes to make their ideas matter."

    "The Chifley Research Centre is the Labor Party’s official think tank, committed to the advancement of public policy debate and progressive thinking in Australia. To this end, the Centre promotes policy discussion in universities and throughout political and industrial forums; commissions academic research into pressing and long term public policy issues affecting Australia; provides strategic policy advice to the Federal Parliamentary Labor Party; and works in conjunction with other research and intellectual bodies to promote better understanding of the Australian political and policy environment."
    "The Evatt Foundation is committed to advancing the highest ideals of the labour movement, such as equality, participation, social justice and human rights, by promoting:
    research and discussion of public issues;
    awareness of social, political and economic aspects of Australian life;
    academic and applied research for trade unions, the labour movement and other community organisations;
    education and vocational training;
    young artists in Australia."
    McKell Institute
    "The McKell Institute is a public policy institute dedicated to developing practical policy ideas and contributing to public debate. The McKell Institute will explore and discuss a wide range of policy issues and reforms including:
    Improving the State’s infrastructure, particularly transport, to encourage economic growth and development and meet the needs of a growing population.
    Economic policies that support growth, foster job creation and the expansion of small business.Supporting increased economic engagement with key international trading partners to deliver investment and create jobs.
    Making housing more affordable for all Australians, particularly for low income families.
    Creating and maintaining work environments which are safe and free from discrimination, while providing fair remuneration and conditions for workers, particularly those in low paid jobs.
    Preserving our natural environment and taking action to protect future generations from the effects of climate change by moving to a low carbon economy.
    Providing quality and affordable health and dental care for all Australians, while increasing investment into mental health research and support for sufferers.
    Ensuring that governments invest in our public and private education system at all levels, to provide all Australians with a first class education and the opportunity to retrain when necessary."
    "Per Capita is an independent progressive think tank dedicated to building a new vision for Australia.
    ...The study confirmed the gap in the Australian marketplace for ideas. Well-funded conservative think tanks were presenting detailed arguments in the public arena, but progressives had failed to seriously contest these conservative positions. ...
    We decided to establish Per Capita to present the economic and moral cases for progressive policy reform in Australia."
    "The Whitlam Institute records the historical legacy of Gough Whitlam’s years in public life and fosters the contemporary relevance of the Whitlam Program to public discourse and policy.
    The Whitlam Institute is guided by the ‘three great aims’ that drove the Whitlam Program of 1972. They are:
    to promote equality; 
    to involve the people of Australia in the decision-making processes of our land; and 
    to liberate the talents and uplift the horizons of the Australian people.
    “We want to give a new life and a new meaning in this new nation to the touchstone of modern democracy — to liberty, equality, fraternity.” Gough Whitlam, ALP Policy Speech 13 November 1972"
    The immediate observation one makes is that this constitutes quite a high number of separate think tanks - especially since none of them individually achieves the cut-through of the IPA, the Sydney Institute or even the Centre for Independent Studies. 
    The next observation is that there really is a lack of clarity about the objectives.  Catalyst stands out because it is actually quite narrowly focussed on the Corporate Social Responsibility agenda. 
    The rest have either fairly vague notions of encouraging involvement in policy processes or otherwise to promote "progressive" thinking.  I haven't done the research but I don't think right wing think tanks talk about promoting "conservative" ideas - they do talk about promoting the concepts of freedom and of markets.
    To a large extent this vagueness then permeates a lot of the work - with lots and lots of stuff on environmental and rights issues, and less on economic issues.  And where economic issues are addressed they commence from the framing of the right - that economic issues are about markets - rather than the framing of the left - that economic issues are about institutions and in particular power structures. 
    Turning to the actual question posed by @Gwyntaglaw of which left leaning policy shops are up to the task of really grappling with the structure of the welfare system - to create a post welfare state welfare system?  The answer is that the troika of Chifley with Per Capita and CPD could do it.  Ideally Chifley would frame the overall project and the other two would do elements of it.
    Chifley was getting close to addressing the issue at the Progressive Australia conference late last year - a theme of which was to pay particular attention to what could best be described as "early intervention" to escape disadvantage.  The difficulty is that the thinkers still seem to frame "disadvantage" as some kind of statistical luck-of-the-draw event.  In reality it is an outcome of the operation of power structures. 
    A very simple example of this is how the metaphor of a "labour market" has seen corporations largely vacate the field of skill development. Where once a young Australian could hope to be employed by one of our large firms or state owned enterprises and be trained to do a sequence of jobs now the employer is only interested in getting skills from the market - if their skill needs change they sack the workers they have then hire a new lot.  This has become particularly destructive behaviour in the field of ICT skills. In short the adoption of the concept of "labour market" has pushed the responsibility, cost and risk of skill development entirely onto the worker, while the corporation disproportionately benefits from the "surplus value" thus created. 
    An analysis of the welfare system needs to recognise these institutional distortions.
    1. Institutional Economics.
    There are many economic theories that constitute the field of heterodox economics. Institutional economics is one of these - that simply has at its core the proposition that "institutions" cannot be removed from proper analysis in political economy.  In some respects Marx was an institutional critic of the classical economists Smith and Ricardo. Veblen was an institutional critic of the neo-classical economists. More recently there are different strands - one based on the concept of transaction costs that seeks to explain the existence of firms, the others like Galbraith focus on how institutions result in deviations from market theory. 
    2. How the single parents pension won a conservative voter.
    My mother was a conservative voter her whole life (her father had been very briefly a UAP member of the NSW Legislative Assembly).  The only time I think she might have voted Labor was for Gough - and in particular for the single mother's pension. As a doctor she had seen too many women staying in abusive relationships because they would have had no means to support themselves if they left.  The pension and no fault divorce were incredibly significant reforms.