Digital Dividend Auction

My column for iTnews this week is based on the ACMA's Digital Dividend Spectrum Tune-Up.

In it I use some data put up by DBCDE to speculate on the values that will be raised at auction. You might recall that I estimated the $A equivalent for the French 2.5 GHz auction at $458M. I also noted the Italian 700MHz equivalent raised abiout 2 and a half times as much.

These are consistent with the ranges I've quoted in my article - of low, middle and high estimates for the 700 MHz of 594, 990, and 2970 million dollars, and for the 2.5 GHz of 308, 870, and 1540 million dollars.

It was a very very good spectrum tune-up.


Novae Meridianae Demetae Dexter delenda est

Asher's foolishness

So Allan Asher has been caught out providing Greens Senators with questions to ask him at estimates. The action has been called unwise and grubby.

It has been met with calls for explanation or resignation.

I agree with all those comments. Asher himself said;

I chose this unorthodox approach to bring my concerns to the attention of the Parliament and the public. I would welcome a discussion regarding the establishment of a parliamentary committee or some other accountability mechanism to specifically review my work and with whom I could raise issues of concern without compromise to the independence of my office.

Therein lies the particular issue. We have a number of statutory offices that are not subject to Ministerial direction like a Department. The ACCC, ACMA and ASIC are such bodies. Minister's can't really be "held to account" for administration in some ways by pleading the agency's independence.

Asher is not the first head of an agency to find budgets an issue. The ACMA utilised a number of channels to make submissions about the impact of Tanner's "efficiency dividend" on small agencies. There are routes other than feeding questions to Senators.

However, there does appear to be merit in creating more direct parliamentary oversight of agencies that are created to be independent of the Executive.

That said, it is hard to understand why Asher was not simply patient enough to include the issues in his annual report.


Novae Meridianae Demetae Dexter delenda est

France 4G spectrum "auctions"

As Australia's radiocommunications regulator the ACMA announces the use of a convoluted auction system for the 2.5GHz and 700MHz bands the French regulator has completed and allocation of the 2.5 GHz band (which they call 2.6GHz).

While the Australian auction is tagged as the 4G auction, there is nothing that actually ties the frequency to the technology. This is actually a benefit as we've already seen Telstra and Optus commiting to use existing 1.8GHz allocations for 4G. This "refarming" is not permitted in all jurisdictions despite the significant cost savings.

The French spectrum is restricted to use for 4G which they have described as "mobile networks whose maximum data rate must be at least 60 Mbps" which they assert is "significantly faster than currently available 3G connections." The Telstra HSPA network actually gets very close to that. It is also a weird concept to refer to the minimum level that the maximum speed can be.

The winners are France's existing four major mobile operators. The French system also allows the regulator to consider operator commitments to provide host MVNO's on their network.

The French announced this as;

The procedure therefore achieved its objectives of increasing competition in the mobile market by allocating 2.6 GHz-band spectrum between mobile network operators in a balanced fashion, and of obtaining significant commitments with respect to the hosting of mobile virtual network operators (under a full MVNO model).

The allocation of these frequencies also translated into a strong valuation of State property, bringing in the sum of €936 million – compared to the reserve price of €700 million.

The French model seems to be more about sealed bids rather than open auction. In other words taking the approach that you are allocating mobile licences rather than spectrum licences can be just as fruitful for generating competition and revenue.

The second stage will be the allocation of their Digital Dividend (what they call 800MHz and we call 700MHz). The interesting piece is the number here. France has a population of about 62M versus 22M for Oz, and one Euro riht now buys 1.38 $Oz so on an equivalent $'s per MHz pop basis the Australian 2.5 GHz should raise $458M.

The question is how many interested parties there will be, and whether the ability to refarm the existing 1.8 GHz reduces the mobile operators' interest. Australian prices are also likely to be lower because of the greater cost of building networks in Australia (that is, the population density).

Note: Section 60 of the Radcomms Act allows that the auction rules may include limits on the amount any one person may acquire, such limits to be set by the ACMA only on the direction of the Minister. The provision was added by Act No.41 of 1997. I know that on previous ocassions the Minister has sought the advice of the ACCC before determining the limits but it appears that is not mandated by the legislation. Good question for Conroy though - what is he going to do about competition limits.

Also good question to ask Conroy is how spectrum renewal discussions as announced to AMTA in March 2010 are going.....

Novae Meridianae Demetae Dexter delenda est

Digital Economy Round-Up - Issue 1

This will be an occasional series on the blog - starting now. It should be considered a contribution under my DigEcon Research brand. It picks up the fact that Digital Economy thinking and strategising has been revived throughout the (developed) world - not just Australia.

I'm going to start with two pieces from national regulators on convergence. "Convergence" has re-entered the policy discussion in conjunction with Digital Economy thinking because the regulation of telcos, media and ICT plays an important part in how successfully these services can be (positively) deployed for economic change.

Konrad von Fickenstein, Chair of Canada's CRTC gave an address last week which could have been from here - starting as it did with digital switchover and 700MHz and 2.5 GHz auction news.

We are in a new digital world now [in which] the Commission's ability to regulate through control of access is very much reduced.

I believe we need a conceptual rethink of the whole regulatory system....to be embodied in a single comprehensive Act to govern all communications.

The aim of the new legislation would be to create a structure for optimal regulation of the transportation of bits, whether by wireline or wireless technology, and whether they are carrying voice, video or data. This structure would support the development of a flexible, competitive and innovative system providing access for all Canadians to their choice of fast and efficient digital resources.

Here are some of the key points that might be included:
* A statement of objectives for the system—economic, social and cultural.
* A clear distinction between the broad policy choices to be made by the government and the powers to be assigned to an independent regulator in all areas of communication, including broadcasting, telecom and spectrum management.
Specific provisions on timelines and on regulatory tools, such as AMPs (Administrative Monetary Penalties), mandatory adoption of codes, and the power to impose arbitration.
* A coherent scheme for the support of Canadian content. This could include subsidies, or incentives in the form of regulatory exemptions and exceptions, or a mix of all of these methods.
* The responsibilities and governance of the public broadcaster, defining its special role in reflecting Canada's unique culture and values.

We should also consider a rationalization of our institutional framework. ... Should the powers of ex ante regulation be curtailed, while ex post powers of enforcement are increased? The aim should be to favour competition, with intervention limited to cases of market failure.

Should the relationship between the CRTC and the Competition Bureau be more clearly defined? What about the CRTC and the Copyright Board?

The industry must act

...

The kind of fundamental reform I'm talking about can only be realized through action by the government. The government, however, is unlikely to take action unless the industry itself is pushing for it. It is therefore up to you to organize yourselves and make sure the message gets out loud and clear.

Earlier in his speech he'd referred to an interesting initiative on "terms of trade" between increasingly large and powerful producers and broadcasters - an interesting initiative that he claims "will bring clarity and certainty to broadcasters and producers. They will also help to bring Canadians a steady supply of high-quality Canadian programming available on a variety of platforms."

The four dot points could work very well as framing points for our own Convergence Review, and the institutional question is equally valid.

On the industry point the Chair was particularly addressing the broadcasters. In Australia a similar position can be advanced about the telcos (but that is another topic).

The Chair of our own regulator, Chris Chapman, addressed CAMLA on the topic of convergence from a regulator's perspective a few weeks ago.

He noted;

Put simply, convergence is an everyday issue … the indisputable fact [is] that developments in communications technology are outpacing what was thought of as possible just five years ago, let alone what legislative frameworks considered would be required more than 10 years ago. Many of the controls on content and the provision of telecommunications services will need revision and adaptation for today’s reality and for the emerging digital economy.

He looked at the issues through separate timelines on devices, content, networks and services, usefully highlighting that "convergence" is an issue across each of these domains. Added to this he introduced the issues affecting consumers and citizens. He did not in this address highlight the important difference between the two words and the need to focus policy on the impact on individuals as both consumers and citizens.

Turning to regulation he noted;

As a result, in our view the Australian communications legislative landscape now resembles a patchwork quilt. It is fragmented and characterised by legislative ‘band-aid’ solutions that lack an overarching strategy, narrative or coordinated approach to regulating communications and media in a digital economy. Regulatory pressure has bitten into core legislative concepts and definitions, creating these strained or ‘broken concepts’. Ultimately, their ‘elasticity’ will expire at which time they will no longer function efficiently or effectively in a converged environment.

We at the ACMA have consistently documented and indicated our preparedness to grapple with the regulatory implications of convergence. ‘Broken concepts’ is a reasonably provocative phrase we have used to highlight the notion that legacy legislation, the rules for the communications sector that used to work nicely 20 years ago, now don’t entirely fit the circumstances we have to embrace now, let alone over the next 20 years.

Unfortunately he seemed good on diagnosis but limited in solutions;

The ACMA maintains an active review program to effectively and efficiently manage our response to convergence impacts on regulatory and co-regulatory arrangements for communications and media services. In this program, my staff have examined the convergence status of 40 or so key concepts in Australian communications legislation, and found that many of these are broken or straining in relevance. I will go into a little detail below on some specific examples to highlight the depth of the issue.

For convenience, will do so under the headings of the ‘four worlds’ that the ACMA regulates—telecommunications, broadcasting, radiocommunications, and the internet. Each of these ‘worlds’ had its genesis in a traditional, often physically defined analogue world, but they are all now trending towards that converging centre point. A common denominator across all of these is an evident need for much greater consistency in approach to definitions, concepts, regulatory policy, structures and approaches as well as compliance measures, available enforcement powers and actions.

What followed was a sample of his list of 40 broken concepts. He offered some further diagnosis of what is broken.

As I see it, there are actually three problems, which can be synthesised into an overarching meta-problem, which is what faces this Convergence Review:

1) Digitalisation broke the nexus between the shape of content and the container which carried it – ...This meant that regulation constructed on the premise that content could be controlled by how it is delivered has increasingly lost its force, both in logic and in practice. This problem began to be recognised as one of ‘convergence’ as far back as the end of the 1980s9; however, legislative response has been sporadic.

2) Based on digital content and carriage, IP networks have come to play an ever more important role. This has meant content has become increasingly non-linear, interlinked and ‘uncontained’ while people increasingly expect to connect and communicate seamlessly – anywhere, anyhow, anytime.

3) But here’s a curve-ball for you: the playing out of virtualization. maybe even then it’s not safe to go back into the water because, looking into the next decade and towards 2025 it seems plausible that we are moving towards a communications world of ‘virtualisation’, where network elements can and will be emulated in software, which will lead to an ever more intricate and subtle interconnection between networks, services and content as those very layers themselves become diffused as a consequence. So my initial provocation is this: even legislation and regulation possibly based on that radical horizontal (i.e. the layers model), and not based on the vertical, is itself likely to be challenged in a future environment.

The last point is indeed the one worth playing with - the horizontal model is one I favour but each element of the stack can emulate another raising the question of what's what.

He went on with some useful discussion about regulatory tools but these should wait for a different discussion (let me just say I disagree).

The final interesting development is an initiative in Coffs Harbour. As a second release site for the NBN they have advertised a series of workshops designed to ensure the region gets the most of its opportunity. Hopefully every LGA in a second release site will do this and not wait for the Feds "Digital Communities"and "Digital Enterprise" initiatives from the DE strategy.


Novae Meridianae Demetae Dexter delenda est

NBN Ad - misleading?

A big issue identified in the ACMA's Reconnecting the Customer draft report is that a lot of the customer service issues in the industry stem from the misleading nature of much of the industry's promotion.

the Government's expenditure on the NBN promotion clip has drawn attention today but the story doesn't analyse the content. Senator Conroy used the clip launching the Digital Economy strategy.

The news report mentions "Gen X and Y doesn't escape being targeted as "Travis" appears playing in a band with other musicians through the NBN" which happens in the clip at 4 minutes 30 seconds.

The issue is that the musicians are shown playing simultaneously using digital television - which doesn't allow for the timing delay from coding. In a video-conference the coding of voice and vision are synched. You'll get less delay if they are unsynchronised - but then you get the effect you get at a conference where the speaker is projected using digital television but the audio is analogue.

I'm quite happy to be corrected on this - but even at the NBN launch in Armidale they had to use slight of hand to co-ordinate two choirs.




Novae Meridianae Demetae Dexter delenda est

ISPs and shaping

Interesting report from the US that reveals work by a third party to measure the extent of traffic "shaping" being undertaken by ISPs.

It raises an important question in the context of the ACMA's Reconnecting the Customer project in particular, and the general idea of "informed markets" in particular.

There is a lot of heat expended on clarity of the "speed" of an Internet link, but speed from your PC to the edge of your ISPs network is one thing but speed through the network is another.

I'm also aware that one major consulting firm has done a thorough study for one wireless provider to validate the statistical basis of their speed claims. The same consultancy has declined to do a report for another provider on the basis that the provider is not prepared to undertake the work necessary to make the claim statistically reliable.


Novae Meridianae Demetae Dexter delenda est

Reconnecting the Customer - draft report

The ACMA this week released its draft report from the Reconnecting the Customer inquiry. They are to be congratulated on a very good report.

In particular the research that identifies the paradox between satisfaction with service but ot service provider draws the important line in the sand punctures the repeated claims by some in industry that the claims of widespread dissatisfaction are wrong.

The extensive treatment given to the information asymmetry problem and the explanation of why competition won’t fix it is another highlight of the report. I'm disappointed that the DigEcon Research submission that made these points didn’t get cited (in fact the draft makes no reference to the submissions on the progress report).

I wouldn’t be me without identifying what I think are a few shortcomings.

The first two relate to the reports recommendations on advertising and “unit pricing”. A code that prohibits something isn’t going to fix the language problem. Similarly there are too many components of a phone bill to really apply unit pricing. An alternative to both of these was made in the discussions of advertising and pricing in the submission I made to the TCP Code.

My second gripe is the failure to recognise that omplaints/customer is an ineffective measure. I outlined why in the second DigEcon submission. The good news is that there are successful techniques to get around this.

I have further issues with the way the ACMA represents how it regulates, the role of self-regulation and co-regulation and whether it has sufficient powers. But I don't want to detract from what is, overall, a very good report.


Novae Meridianae Demetae Dexter delenda est

Spectrum Policy

The ACMA has launched a consultation on spectrum requirements for mobile broadband to 2020. I'll admit to not having read the documents yet, but think there is a lot to be said for keeping the availability constrained to spur innovation.

Meanwhile over in the US the ITIF is about to hold a seminar that seems to be on the topic; Waves of Innovation: Spectrum Allocation in the Age of the Mobile Internet
Event (details below). If anyone wants to engage a researcher to attend on their behalf ... I am available.

I spend a lot of my life dealing with "false dichotomy", and spectrum policy is one such area. The dichotomy is between having government ownership and direct regulation of spectrum or of allocating the rights to a market. This is the traditional approach to considering solutions to the so-called "tragedy of the commons". While the initial concept was about over-grazing of cattle in common fields, the same is true of "unregulated" spectrum.

In his book Governing the Commons Elinor Ostrom notes that management of the commons by either government or a market implies omniscience by either bureaucrats or firms. He notes that there are many real-world examples where "common pooled resources" are managed by systems more dynamic than either of the two standards.

In general markets work better than central control because they work to communicate information between participants. But much of the theory of "auctions" as efficient allocation mechanisms assumes that the bidding firms are omniscient about both the market demand characteristics and the technology evolution for the entire life of the spectrum licence.

A further interesting twist is added by a very brief analysis of the history of mobile phones. In the first generation (analog) the USA had effectively a mandated standard (AMPS) while Europe had a proliferation of standards. The USA developed faster and stronger.

With the advent of 2nd generation (digital) Europe mandated a standard (GSM) while the US pursued the first spectrum auctions. This resulted in a fragmented market between GSM and D-AMPS (or TDMA). In this phase the Europeans (and Asian economies that followed) rapidly outpaced the US.

The advent of 3G has seen a more unified technology approach on UMTS with a number of variants. Differences are apparent in some spectrum choices. The only other candidate was TD-CDMA from China.

LTE (4th generation) seems to be settling on one standard in two variants - FD and TD. Devices will probably work on both, and TD-LTE will supplant the Mobile WiMax base. But the fact remains that service adoption has been better in markets with active regulatory involvement rather than those that don't.

*****************************************************************


Waves of Innovation: Spectrum Allocation in the Age of the Mobile Internet
Event

For many of us the term "spectrum policy" has to do with allocating relatively small parts of the radio frequency space to specific applications such as AM and FM radio, television, and public safety. It is a notion more apt for a time when we watched TV over the air and made phone calls over a wireline network. Today these patterns of usage are reversed, and we live in a world where mobile broadband has emerged as a general-purpose technology that can support a wide range of applications. We need a general-purpose spectrum and a spectrum policy that is ready for this and future technological advances. Join ITIF for an exploration of lessons learned in wireless networking that impact spectrum assignment policies and contemporary issues in spectrum policy, such as the development of 3G and 4G networks, the rise of Wi-Fi and other unlicensed technologies, the role of microwave, the impact of dynamic spectrum allocation, the utility of spectrum auctions, secondary uses, and secondary markets.

Date/Time:
Tuesday, May 17, 2011
12:00 PM-1:30 PM (add to calendar)

Location:
2168 Rayburn House Office Building
45 Independence Ave SW
Washington, DC 20515 (map)

Moderator:
Richard Bennett
Senior Research Fellow, Information Technology and Innovation Foundation

Steven J. Crowley
Consulting Engineer, Steven J. Crowley P.E.

Thomas W. Hazlett
Professor of Law and Economics, George Mason University

Matthew Hussey
Legislative Assistant, Office of Senator Olympia Snowe (R-ME)

Charles Jackson
Adjunct Professor of Electrical Engineering, George Washington University

Register for the event.




Novae Meridianae Demetae Dexter delenda est

Open letter to "asmith"

Interesting responses to my itNews column.

The very first response I got was by way of a feedback e-mail (to itNews) from the man at Harvey Norman, Gary Wheelhose, that read;

Hi David
Just a quick note and thanks for the feedback re the presentation last week. It's always good for us to do those events as the feedback afterwards is so valuable. I use social personally for my own service issues - two recent ones with telcos and one with BMW - so I think i know what works for the customer too.
Enjoyed your article and thanks again!
Gary

The comments section on the website scored one from a customer who actually said his provider (one notorious for high TIO stats) was getting better.

This was followed by one from someone in the telco industry. I think the name "asmith" is anonymous but I'm not sure. If it is the author is probably in breach of his own company's media policy. It read

The author of this article knows full well that the numbers reported by the TIO are fictitious and the number of real actual complaints that have any investigation by the TIO is less than 20,000 per annum. Using these numbers to justify the position is a very shaky foundation.

This has been picked up by almost every submission regarding the TIO and ACMA inquiries and also by independent academic research.

Yet for reasons unbeknown to the public but well acquainted within the Telecommunications industry, Mr Havyatt continue to bag Telcos without supporting evidence or true cause.

The new CA code will make things worse for consumers. Amongst many other things, it proposes no service delivery during cooling off periods, etc.

Do you think people want to wait 21 days for their DSL service to be connected?

Come on David, there's two sides to this story, and you know it. The populist route of Telco bashing is wearing thin.

I've placed a long comment on the itNews site. What I want to address here is the accusation that there is some reason why I would want to "bag telcos" - and that that reason would be well known to people in the industry.

I can only think the reason suggested is that I feel I have been thwarted in my more recent career aspirations. This is not only offensive, but just like the comment itself comes from within a heavily filtered world.

I went to the trouble of including the CHOICE presentation, the comment from David Jaffe, and the history of "telespeak" to try to provide some basis for my comments. In my post here I added the link to the submission I made to the ACMA to try to more fully explain why the market alone isn't a solution.

In case "asmith" or anyone else from a telco is listening I'll add to that theoretical piece.

Consumers who are constrained from making the “rational” decision expected of them in theory because of a lack of necessary information are said to exhibit “bounded rationality”. In a recent theoretical work Bounded Rationality and Industrial Organisation, Ran Spiegler modelled a market in which firms were able to induce bounded rationality by “obfuscation”.

His conclusion was that increasing competition (by increasing the number of firms) either retained or increased (depending on other assumptions) the economic surplus retained by the firms. In the best case the firms were making an excess profit of half what a monopolist would obtain.

I really hope "asmith" takes up my offer on itNews and gets in touch with me. I don't think I am engaging in telco bashing - I think instead I'm identifying why the industry solution of "let us compete" is not a sufficient response to those who say "regulate".

Let's be clear I think direct regulation of customer service would be WORSE than what we have. But the industry needs to do something different.

Novae Meridianae Demetae Dexter delenda est

Customer Service, Social Media and the Cluetrain Manifesto

It was fascinating to read earlier this month that;

Vodafone Hutchison Australia CEO Nigel Dews has admitted that the company could have handled social media feedback much better in the early stages of the company's highly publicised network issues late last year.

In presenting evidence to the ACMA's Reconnecting the Customer inquiry on 27 November 2010, Cormac Hodgkinson, Director for Customer Service and Experience for VHA said (in part);

We need to remember when we talk about customder service that it is not just contact centres. We do a huge amount of servicing through our retail channel, through self-service channels and also through social media which is growing. So whenever we are looking at a review of standards for customer service we need to take that into account because there are thousands and thousands of customers a day who are walking into a retail store, be that Vodafone or 3, and getting servicing (sic).

He went on;

the numbers calling the centres pale into insignificance when you look at the amount of servicing that goes on through self-care. ... From a service perspective there's huge investment we're committing to next year in terms of what that self-service capability is. We've actually got a new product coming at the end of November - My Vodafone - which significantly increases the capability for a customer to self-service.

and

The growth in social media is huge and we've also had to have a dedicated team set-up to deal with that, be it Twitter, Facebook,.. We've got a team of ten people. We think by the end of next year that could well be in excess of fifty people because that's the way customers are choosing to do their servicing interactions.

That's not the view that Mr Dews thinks they took though, the article reporting;

The telco boss said that the company had originally approached social media as another means of selling; however, now the company had taken the approach of "service first rather than selling first"..

Today there is news that Vodafone is "creating its own social forum".

That's something vividwireless did fairly soon after launch. It was really driven by the very splendid Sandra Davey but landed in my lap for a while. It created great consternation when for a while it was a place where negative comment on coverage gathered. But the good news was it meant we really could understand the impact of network performance on customers.

The motivation for the forum though really came from the desire to support the unsupported - when something happens that involves the interaction of equipment and the network it can often be other end users who can sort out the issue.

It also was a recognition that customers are going to talk about you whether you like it or not. This is one of the core observations of the Cluetrain Manifesto. The first of their 95 theses is "Markets are conversations."

While the idea of 95 theses is probably to trigger the concept of reformation it is too many to digest - and actually a bit repetitive. Sandra Davey is a great fan of this and crunched the 95 down to thirteen. I have worked from her list to come up with a far briefer ten (also published here):

1. Markets are human conversations
Markets are conversations, they consist of humans who sound human. The tone of your voice is as communicative as the words that you speak.
2. The internet has made the network the dominant form of organization
The internet is enabling conversations that make the network the dominant form of organization, replacing both markets and hierarchies. The people in these networks are changed fundamentally – they are getting smarter, more informed and more organized than they were in markets or hierarchies.
3. People rely on their network not authority
People have figured out they get better information and support fro their network than from vendors. There are no secrets, the consumers rapidly know more about the product than the vendors.
4. Principles need to replace positions, and be at the centre of the conversation
Corporations’ homogenized voice that has been used to “motivate” the staff and “enthuse” the market sounds flat, hollow and unconvincing. Companies need to “lighten up”, not with affected humor but by adopting big values, a little humility, straight talk, and a genuine point of view. They need to replace “positioning” with adopting principles.
5. Loyalty is built on honest two-way communication
Brand loyalty is like a marriage and we forget that “divorce is always surpriseful” at our peril. Our partner can leave us before we know what we’ve done. Companies need to pay attention to all the clues their customers and staff provide. Companies can’t afford not to be honest with those they profess to care about.
6. Corporations need to belong to a community
Human communities are based on discourse – the conversation defines the community. Companies need to decide what community they want to be in and engage in the conversation.
7. The market and the company are not separate – they are one
There is not an external market and an internal hierarchy, there is one network of people playing multiple roles.
8. Marketing is not a mediator between the customer and the company
Customers and workers want to talk to the company that we’ve kept hidden behind a smokescreen of flacks and hucksters. Both want the same kind of open conversation with a partner they can trust. The customers want to be involved in all the conversations of the company, not just those mediated by “marketing” or market research.
9. The customer-centric organization is dead
The customer can’t be put at the centre of the organization, they need and want to be at every part of the organization.
10. The revolution is happening.
Responding to it is not a matter of strategic choice, it is a necessity.

Note: The author still owns shares in HTAL.

Novae Meridianae Demetae Dexter delenda est

Hard to keep a public sector agency down

The relationship between Government agencies and the radio-communications frequency has always been fraught. It was the needs of Defence that saw Governments worldwide assert their right to manage spectrum. With the move to price based allocation of spectrum it is Government agencies that want access to spectrum so that its cost is not included in the cost of their project.

In 2007 the Australian Communications and Media Authority received a report it had commissioned on Government Spectrum Holdings. That report was in response to calls from various agencies for more spectrum. The report concluded that more effective use of existing spectrum for land mobile should be made by replanning the 400 MHz band.

This work led to a four stage process that was last updated in December 2010.

No sooner does the Government get clarity than two separate projects emerge seeking more spectrum for Government or public service use.

The various State Emergency Services Agencies (ESAs) have been running a campaign for some time to have some of the Digital Dividend spectrum allocated to them. However, work by the Attorney-General's Department concluded there was no case.

Not to be deterred they have used the recent natural disasters to whip up political support for a Senate inquiry on The capacity of communication networks and emergency warning systems to deal with emergencies and natural disasters. The Terms of Reference include;

new and emerging technologies including digital spectrum that could improve preparation for, responses to and recovery from, an emergency or natural diaster (sic).

Of course, no spectrum is actually "digital" - it is only the transmission over the spectrum which is digital - but we know what they mean.

Elsewhere the railways all have decided that they too need their own wireless network and have been putting together 1800 MHz licences (actually the old One.Tel licences). They too are having to go political getting Anthony Albanese to lobby on their behalf.

My difficulty with all this is that
(a) radio infrastructure has economies of scale - a network to support just a few trains in inefficient. Ditto a network for emergency services.
(b) modern technologies (e.g. LTE) can prioritise the traffic, so the public networks could prioritise emergency traffic
(c) the proposed use of spectrum for ESAs limits the utility of the public network services
(d) even if the ESA or railway isn't required to make the transfer payment for use of the spectrum the Cost Benefit Analysis for their project needs to value the spectrum at its next best use - i.e. what they would have paid in a price based allocation.

But you can't keep a good government agency down!





Novae Meridianae Demetae Dexter delenda est

It just doesn't follow

My Friday collection of brief links included one about comments made about the NBN. This elicited a comment from Ian noting he wasn't sure if my reference was sarcasm but that the AFP argument was ludicrous.

For the record, it was, and I agree with the assessment.

But these sort of things abound. Let's also look at the review of the TIO I also mentioned on Friday.

In announcing the review Minister Conroy said;

The recently released TIO statistics show that complaints to the Ombudsman remain at very high levels and this is not acceptable. While I acknowledge the hard work the TIO does to deliver consumers with quick and effective solutions, I want to ensure it has the appropriate tools to deal with complaints.

This got written up by one online journal as;

In a statement, Conroy said he had called for the review, because the number of complaints received by the TIO was unacceptably high.

This doesn't follow. It is at the very least not an accurate description of the Minister's release. If it is a restatement following a discussion, it still doesn't follow.

Why would a high level of utilisation of a service ever imply something wrong with the service? Surely the correct focus is on the providers, as the ACMA is doing with its Reconnecting the Customer project.

Meanwhile Lucy Battersby has done a really good job of looking at the cause and implications of Telstra's move to "per minute" billing.

The item points out that Telstra justified moving fixed line from per second to thirty second blocks two yrars ago to harmonize with mobile billing. But now they are taking both to per minute claiming it puts them in line with "industry standards".

Optus "followed suit" on the per second to thirty second move - claiming the move was to make price comparisons easier.

Telstra goes on to say that of course most customers won't be affected because they are on some kind of bucket plan and don't use the whole bucket.

Unfortunately Chris Zinn from CHOICE decides to hone in on the flagfall charges rather than asking the really obvious question. Since all of the price moves have been justified as simplifying things for customers, including price comparison, why not simply agree an industry standard measure and have everyone stick to it? It really isn't much different to agreeing to measure weight in kilograms and distance in kilometres. Standardisation of units of measure is an important institution that makes markets work!

I know the answer will be about competition and innovation. But it doesn't follow. As the providers own rhetoric shows consumers can't price compare plans using different charging bases.


Novae Meridianae Demetae Dexter delenda est