Telstra has embarked on a program to improve customer service, including new CEO David Thodey making $40M of staff bonuses available for improvements in customer service.
On Saturday they announced a new program called My Telstra Experience. I just tried to enrol as part of this panel, but the second question asked if you or a member of your family work in market research, telecommunications or an ISP, advertising, or television or pay tv. By answering truthfully I got advised that they were already "oversubscribed" with people from that sector (which is theanswer you get for all 5 of those and really they mean they are screening you out).
So then I lied just to see what the enrollment process was like - but I stopped before completing it. Telstra will get a wealth of data from this - but how much "information" is doubtful. It is too easy to do what I did and lie to get in. The detail in the survey about prices paid for mobiles is stuff most people don't actually know.
Which is all a bit of a pity for me. I am a Telstra customer. Why? Simple, I've had a cable broadband service from before DSL and never seen a reason to change (it works, and when I was doing a trial for someone's ADSL it sucked big time). I don't make many LD or international calls so there are no savings for me in going elsewhere on the fixed line - though I did go to AAPT eventually when I worked there but left (probably to our mutual advantage) when I got a really badly constructed piece of corro about ending homelink 1800. I have Pay TV for rugby and hence my final choice (affter trialling both Optus and Foxtel in the mid 90s) was Foxtel - now billed on the Telstra account. (The mobiles are with Optus, I have a Bigpond 3G pre-paid dongle).
But what their little survey might not tell them are things like the story of my daughter moving into her new unit. Typical Gen Y wants fast internet, no need for a phone. Boyfriend works in IT. Logical choice a naked DSL from Internode. They place the order online - using a 3G wireless connection. Telstra rings to make the appointment for tech visit. Agreed that it will be between 10 and 2 on a Monday. Boyfriend is going to take day off and be at his place (2 mins away) so he can be using his Internet - they ask if the tech can ring on approach. Telstra call centre agrees!
Lo and behold on the appointed day, no phone call. After 2pm they ring Internode who hasn't heard anything, ring Telstra who says "yes a technician visited but there as no one at home", when asked about the phone call says "technicians cabn't be expected to call". Tech had turned up and left the "I called but you weren't at home" card. She finally gets Telstra to agree to a Saturday appointment on the grounds they aren't having someone off line for four hours again.
I'll let her words tell the conclusion to the story;
The highlight of the whole thing was undoubtedly at the end of the complaint call where, after telling me he can’t take my complaint because he has “no way of communicating it to their wholesale people” (which I don’t buy, you aren’t structurally separated YET!), the call centre guy had the audacity to ask me if I was interested in transferring any of my services to Telstra.
No. Not in a million years. Not even if you were the only provider. I’d sooner go without than deal with you ever again.
This is the bit our good friends at Telstra don't get. They are continually subverting their customer service to try to find ways to differentiate from their wholesale customers and screwing it up for everybody. Separation might help, but really just getting the idea that the service bit has to be perfect for retail AND wholesale customers is important.
And I'd say Telstra are the last tradies who don't "ring on approach." My plumber does, my electrician does. Sure Telstra might be coming to install "the phone" but we do have close to 100% mobile penetration. Have they thought how many ineffective "truck rolls" they could avoid that way?
Monday, December 07, 2009
Thursday, December 03, 2009
The cockroach
According to the ABC Online Julie Bishop has a new nickname;
"People are calling her The Cockroach," one MP told ABC Online. "She'd survive anything"
However I prefer the take over at the New Matilda;
However, as her colleagues say, Bishop is like a cockroach, inasmuch as she would be able to function just as well without a head.
Except without a head where would she hang all those pearls?
"People are calling her The Cockroach," one MP told ABC Online. "She'd survive anything"
However I prefer the take over at the New Matilda;
However, as her colleagues say, Bishop is like a cockroach, inasmuch as she would be able to function just as well without a head.
Except without a head where would she hang all those pearls?
The project for a humanist system of ethics
I was reading in a Christian newspaper last weekend a criticism of "relativism" in the church. The author was expounding the view that Christianity is not just an ethical system but really about subjugation to the word of God and consequently the author tought it was terrible that anyone could be like Bishop Sprong and not think that the resurrection was central to belief.
Also last week the NSW Government announced a plan to trial an "ethics" class to be conducted at the same time as religious clases for non-believers.
The first of these observations, in separating Christianity from merely being an ethics system, highlights the fact that our system of ethics has for a thousand years diverged from the system espoused in the Bible. As Christopher Hitchens pointed out in the debate on whether the Catholic Church was a force for good, the moral code of the bible is not Ten Commandments - "the Jews the Torah has a total of 613 commandments which includes the ten from the Decalogue" - and the first three of the famous ten instruct us to fear God.
The wonder of some of these was best displayed in the West Wing episode screened on 18 October, 2002. It is a delicious irony that this link to it appears on a right wing site that lists it as a case of (left wing) media bias. The flavour of the scene is captured in the Bartlett quote "Does the whole town really have to be together to stone my brother John for planting different crops side-by-side?"
There are two problems with the proposed trial. The first is defining the content of a secular course in ethics, and the information on the course provided by its designers at the St James Ethics Centre provides little real guidance. The second is designing the actual content (or even pedagogy). Religious education in primary schools (as in Sunday schools) consists of three standard components. The first is a story - often straight from scripture but sometimes just based on it , secondly a craft activity to support the story and usually some singing and maybe even some acting (role playing). The churches between them have developed quite a number of highly developed curricula and support materials. In fact a scripture teacher actually has far more teaching material provided to them than teachers of the harder core subjects like maths and english (ever since the demise of the primary school text book).
What the humanists need - or the secular ethics project - needs is firstly its statement of ethical principles. Then it needs a massive effort to build the stories that can be used to teach these principles (and should feel free to pinch the stories used by the various religions). Most importantly it needs to be managed in a non-confrontational way. That is, state "these are the principles of humanist ethics - many of these principles are shared by the world's great religions. They are shared because they work".
That makes me think again about my first principles reposted yesterday and the thought of contrasting those to the ten commandments. These principles were really first constructed as principles for political action rather than principles of ethics (the boundary of which is collective versus individual responsibility, or power). The big prohibitions on murder and theft are actually covered by the principle of mutuality. This suggests a few more simple principles for inclusion;
The principle of respect This is the principle that all people deserve to be treated with respect, both as individuals in themselves or in regard to any position they hold. This sort of includes the whole honour thy parents piece, and the deferrence to "God" if you happen to believe in one. At a more subtle level it includes the extra respect that should be accorded judicial officers, etc. The way to read that is that the individual performing the role of judge is due respect because they at times have to divorce themselves from their own values to exercise the function that is being asked of them. Similarly we should respect politicians in a democracy because they are fallible individuals doing their best (which might well not be good enough) to reconcile multiple vires on multiple issues. If there best is not good enough the individual critic has the responsibility to either offer themselves as an alternative or work for someone else to be an alternative.
The principle of faithfullnes This really encompasses the adultery bit, but in a far more modern way. It is about being true to one's own commitments. The ethical wrong in adultery is not in the sex but in the betrayal of the commitment given to one's partner. In fact adultery often includes a double breach because the adulterer often makes promises to the third party they do not intend to keep.
The principle of honesty This is really pretty straightforward but needs to be included.
As I noted in my earlest post on this topic the order is important because that should cover the heirarchy for resolution of conflict. But it may not always. On my last post there was a cynical comment that we just need to ad Asimov's Three Laws of Robotics to be done. Asimov actually used the three laws in his I, Robot short stories to demonstrate very effectively how a moral code based on laws can have paradoxical outcomes. Examples include the robot that literally gets stuck going around in circles as the relative potentials of the different laws incease and decrease, and the case used in the movie of actually getting a robot to commit murder.
This really makes the point about the so-called "ethics" classes for primary school kids. Exactly what can you teach?
Also last week the NSW Government announced a plan to trial an "ethics" class to be conducted at the same time as religious clases for non-believers.
The first of these observations, in separating Christianity from merely being an ethics system, highlights the fact that our system of ethics has for a thousand years diverged from the system espoused in the Bible. As Christopher Hitchens pointed out in the debate on whether the Catholic Church was a force for good, the moral code of the bible is not Ten Commandments - "the Jews the Torah has a total of 613 commandments which includes the ten from the Decalogue" - and the first three of the famous ten instruct us to fear God.
The wonder of some of these was best displayed in the West Wing episode screened on 18 October, 2002. It is a delicious irony that this link to it appears on a right wing site that lists it as a case of (left wing) media bias. The flavour of the scene is captured in the Bartlett quote "Does the whole town really have to be together to stone my brother John for planting different crops side-by-side?"
There are two problems with the proposed trial. The first is defining the content of a secular course in ethics, and the information on the course provided by its designers at the St James Ethics Centre provides little real guidance. The second is designing the actual content (or even pedagogy). Religious education in primary schools (as in Sunday schools) consists of three standard components. The first is a story - often straight from scripture but sometimes just based on it , secondly a craft activity to support the story and usually some singing and maybe even some acting (role playing). The churches between them have developed quite a number of highly developed curricula and support materials. In fact a scripture teacher actually has far more teaching material provided to them than teachers of the harder core subjects like maths and english (ever since the demise of the primary school text book).
What the humanists need - or the secular ethics project - needs is firstly its statement of ethical principles. Then it needs a massive effort to build the stories that can be used to teach these principles (and should feel free to pinch the stories used by the various religions). Most importantly it needs to be managed in a non-confrontational way. That is, state "these are the principles of humanist ethics - many of these principles are shared by the world's great religions. They are shared because they work".
That makes me think again about my first principles reposted yesterday and the thought of contrasting those to the ten commandments. These principles were really first constructed as principles for political action rather than principles of ethics (the boundary of which is collective versus individual responsibility, or power). The big prohibitions on murder and theft are actually covered by the principle of mutuality. This suggests a few more simple principles for inclusion;
The principle of respect This is the principle that all people deserve to be treated with respect, both as individuals in themselves or in regard to any position they hold. This sort of includes the whole honour thy parents piece, and the deferrence to "God" if you happen to believe in one. At a more subtle level it includes the extra respect that should be accorded judicial officers, etc. The way to read that is that the individual performing the role of judge is due respect because they at times have to divorce themselves from their own values to exercise the function that is being asked of them. Similarly we should respect politicians in a democracy because they are fallible individuals doing their best (which might well not be good enough) to reconcile multiple vires on multiple issues. If there best is not good enough the individual critic has the responsibility to either offer themselves as an alternative or work for someone else to be an alternative.
The principle of faithfullnes This really encompasses the adultery bit, but in a far more modern way. It is about being true to one's own commitments. The ethical wrong in adultery is not in the sex but in the betrayal of the commitment given to one's partner. In fact adultery often includes a double breach because the adulterer often makes promises to the third party they do not intend to keep.
The principle of honesty This is really pretty straightforward but needs to be included.
As I noted in my earlest post on this topic the order is important because that should cover the heirarchy for resolution of conflict. But it may not always. On my last post there was a cynical comment that we just need to ad Asimov's Three Laws of Robotics to be done. Asimov actually used the three laws in his I, Robot short stories to demonstrate very effectively how a moral code based on laws can have paradoxical outcomes. Examples include the robot that literally gets stuck going around in circles as the relative potentials of the different laws incease and decrease, and the case used in the movie of actually getting a robot to commit murder.
This really makes the point about the so-called "ethics" classes for primary school kids. Exactly what can you teach?
Wednesday, December 02, 2009
Ayn Rand Again
One of my earlier blog posts (May 2006) was on Ayn Rand. I was reminded of this by two recent events.
The first was a review in the NEw Yorker of two Rand biographies. The second was a Tweet from someone one of my alter egos follows that said "Just started reading The Fountainhead, after re-reading Atlas Shrugged. Looks good so far!"
I decided had to try to avert disaster by providing some straightforward views to said Tweeter (via the far more communicative medium of e-mail);
Both Atlas Shrugged and The Fountainhead are poorly written diatribes for an unsustainable philosophy. They are, however, both seductive. There is a bit in all of us that wants to be Howard Roark or John Galt – to be able to rise above criticism and feel you are doing the “right” thing just being yourself.
But the reality is that the necessary social institutions that make democracy and capitalism work cannot come into being and be sustained if everybody pursues the objectivism or enlightened self-interest that Rand sprouts. Ultimately these institutions rely on the Golden Rule of “Do unto others as you would have them do unto you”. This rule has no place in the Randian world.
The response was interesting;
Of course its an unsustainable philosophy -- Ayn Rand is to the real world as Karl Marx is. They are both idealists, and while that has its place in the real world, so does pragmatism.
Personally I am a Zen Buddhist, a creed which shares many ideals with Objectivism. However Zen would likely say about Objectivism that its central misunderstanding is that Objectivists don't understand that the idea of individual selves is actually a myth. There is no separate self, or a "self" at all. It's just a construction.
But I think that there is a concrete reason that Randian thought has made such a revival this decade. It features a return to fundamental values of strength and self-reliability that the postmodern generation rejected. Generation Y is seeking a return to concrete values after the destruction of values that took place in the 1980's and 1990s.
And Rand's ideals are seductive indeed. And contain many, many, kernels of truth.
Two things I love about Rand. Her sense of absolute rage and justice. And her amazing writing, which is so powerful. She was a master author and her work will be read and re-read, not just for her ideals but for her master storytelling ability.
I used to feel guilty about buying Ayn Rand in bookstores or talking about it. But no longer J Her thought has given me a strength of absolute freedom that has been lacking ;)
I'd have to disagre about the writing. As the books reviewed note some of her language is incredibly contorted and some of it is just meaningless. But yes it does carry that sense of "rage and justice" - just as a Hitlerian speech or Alan Jones on the radio can.
But what really strikes me is this claim that Gen Y, the post postmodern generation, is looking for some kind of new set of "concrete values". My suggestion is - if such a grounswell exists amongst Gen Y - that they should start on the "great humanist ethics project". I gave a bit of a start more as political philosophy than ethics responding to a Democrat post.
This gave me a starting point of 5 principles
1. Human economic progress has been delivered through co-operative endeavour, treating others as we would like to be treated ourselves. (The principle of mutuality)
2. There are many ways of achieving this co-operation, and we should be all free to live our lives the way we want to without interference if our choices do not infringe the princile of mutuality. (The principle of individual rights)
3. The consideration of the effects of our behaviour on others needs to consider future generations as well as our contemporaries. (The principle of sustainability)
4. The rights of all people are equal, irrespective of wealth, race or any other consideration. (The principle of equality)
5. Representative democracy is the most effective means of achieving these principles, and the principles themselves need to underpin the design of democratic forms. (The principle of democracy)
What is important is the need to subjugate the principle of individuality beneath the principle of mutuality - note that this is not subjugating the individual to the State (don't get all Hayekian on me), but a recognition that no progrss is possible without social institutions.
The Origin of Wealth and other similar writings note that humans are the only animal that behaves in social groups with individuals who are not family members. Cities could not exist were it not for the fact that we live with the principle of mutuality.
The first was a review in the NEw Yorker of two Rand biographies. The second was a Tweet from someone one of my alter egos follows that said "Just started reading The Fountainhead, after re-reading Atlas Shrugged. Looks good so far!"
I decided had to try to avert disaster by providing some straightforward views to said Tweeter (via the far more communicative medium of e-mail);
Both Atlas Shrugged and The Fountainhead are poorly written diatribes for an unsustainable philosophy. They are, however, both seductive. There is a bit in all of us that wants to be Howard Roark or John Galt – to be able to rise above criticism and feel you are doing the “right” thing just being yourself.
But the reality is that the necessary social institutions that make democracy and capitalism work cannot come into being and be sustained if everybody pursues the objectivism or enlightened self-interest that Rand sprouts. Ultimately these institutions rely on the Golden Rule of “Do unto others as you would have them do unto you”. This rule has no place in the Randian world.
The response was interesting;
Of course its an unsustainable philosophy -- Ayn Rand is to the real world as Karl Marx is. They are both idealists, and while that has its place in the real world, so does pragmatism.
Personally I am a Zen Buddhist, a creed which shares many ideals with Objectivism. However Zen would likely say about Objectivism that its central misunderstanding is that Objectivists don't understand that the idea of individual selves is actually a myth. There is no separate self, or a "self" at all. It's just a construction.
But I think that there is a concrete reason that Randian thought has made such a revival this decade. It features a return to fundamental values of strength and self-reliability that the postmodern generation rejected. Generation Y is seeking a return to concrete values after the destruction of values that took place in the 1980's and 1990s.
And Rand's ideals are seductive indeed. And contain many, many, kernels of truth.
Two things I love about Rand. Her sense of absolute rage and justice. And her amazing writing, which is so powerful. She was a master author and her work will be read and re-read, not just for her ideals but for her master storytelling ability.
I used to feel guilty about buying Ayn Rand in bookstores or talking about it. But no longer J Her thought has given me a strength of absolute freedom that has been lacking ;)
I'd have to disagre about the writing. As the books reviewed note some of her language is incredibly contorted and some of it is just meaningless. But yes it does carry that sense of "rage and justice" - just as a Hitlerian speech or Alan Jones on the radio can.
But what really strikes me is this claim that Gen Y, the post postmodern generation, is looking for some kind of new set of "concrete values". My suggestion is - if such a grounswell exists amongst Gen Y - that they should start on the "great humanist ethics project". I gave a bit of a start more as political philosophy than ethics responding to a Democrat post.
This gave me a starting point of 5 principles
1. Human economic progress has been delivered through co-operative endeavour, treating others as we would like to be treated ourselves. (The principle of mutuality)
2. There are many ways of achieving this co-operation, and we should be all free to live our lives the way we want to without interference if our choices do not infringe the princile of mutuality. (The principle of individual rights)
3. The consideration of the effects of our behaviour on others needs to consider future generations as well as our contemporaries. (The principle of sustainability)
4. The rights of all people are equal, irrespective of wealth, race or any other consideration. (The principle of equality)
5. Representative democracy is the most effective means of achieving these principles, and the principles themselves need to underpin the design of democratic forms. (The principle of democracy)
What is important is the need to subjugate the principle of individuality beneath the principle of mutuality - note that this is not subjugating the individual to the State (don't get all Hayekian on me), but a recognition that no progrss is possible without social institutions.
The Origin of Wealth and other similar writings note that humans are the only animal that behaves in social groups with individuals who are not family members. Cities could not exist were it not for the fact that we live with the principle of mutuality.
The great leaders are the ones who came back ...(or the Liberals part 4)
Wow. Now that was what I call excitement. But in all the toooing and throwing everyone is missing an important element here. Malcolm Turnbull may just have pulled off the most strategic play of all time.
Firstly let's just note that the two great Liberal Party icons - Menzies and Howard - were both ditched from the leadership (Menzies by the UAP) before going on to their reigns of glory. Both men at the point of being dismissed were reviled as divisive negative elements.
Secondly let's note that there is almost no chance of the coalition winning the next election. Most importantly on the biggest issue, managing the economy, Rudd/Swan/Tanner just are unbeatable. On climate change the issue seems to be that people don't understand the CPRS not that they don't like it. The most the coalition can mount is a fear campaign and they will need something more than that to win (fear campagns work better at keeoping oppositions out than ejecting Governments).
All parties have shown themselves relatively unforgiving of leaders who lose. The Liberals will be no different. And as long as Malcolm does stay put he will be the logical choice.
Don't get me wrong, it wasn't Malcolm's objective to lose the leadership - but losing it, doing so as a matter of principle and declaring war on the conservatives was a good second best. A very very good second best.
Meanwhile Julie Bishop has retained the deputy's job. At the press conference I'll swear Tony Abbott said this was because "she is a good looking girl". My own thinking is that its because when she says "I support you" no one can tell who she is looking at when she says it!
Meanwhile it is an interesting aside that the three leadership contenders are all from Sydney, all did combined law at the University of Sydney, all went to GPS schools (I think), all are Catholics. Plus they all were active in aspects of University life - Abbott and Hockey were both President's of the SRC while Turnbull was a Director of the USU.
Firstly let's just note that the two great Liberal Party icons - Menzies and Howard - were both ditched from the leadership (Menzies by the UAP) before going on to their reigns of glory. Both men at the point of being dismissed were reviled as divisive negative elements.
Secondly let's note that there is almost no chance of the coalition winning the next election. Most importantly on the biggest issue, managing the economy, Rudd/Swan/Tanner just are unbeatable. On climate change the issue seems to be that people don't understand the CPRS not that they don't like it. The most the coalition can mount is a fear campaign and they will need something more than that to win (fear campagns work better at keeoping oppositions out than ejecting Governments).
All parties have shown themselves relatively unforgiving of leaders who lose. The Liberals will be no different. And as long as Malcolm does stay put he will be the logical choice.
Don't get me wrong, it wasn't Malcolm's objective to lose the leadership - but losing it, doing so as a matter of principle and declaring war on the conservatives was a good second best. A very very good second best.
Meanwhile Julie Bishop has retained the deputy's job. At the press conference I'll swear Tony Abbott said this was because "she is a good looking girl". My own thinking is that its because when she says "I support you" no one can tell who she is looking at when she says it!
Meanwhile it is an interesting aside that the three leadership contenders are all from Sydney, all did combined law at the University of Sydney, all went to GPS schools (I think), all are Catholics. Plus they all were active in aspects of University life - Abbott and Hockey were both President's of the SRC while Turnbull was a Director of the USU.
Monday, November 30, 2009
The Left is winning again
In all the hand-wringing that goes on in left circles about "What's happened to the left?" I like to intrude with a simple hypothesis that the problem for the left was that it won.
It didn't win in the sense that there was a mass global outbreak of communism, or even fairly hard edged social democracy. But ultimately in the period from 1900 to 1970 there was a global settlement that was fundamentally Left. In Australia that was reflected in the so-caled Australian settlement introduced by Alfred Deakin and managed through to a Menzies Government that was highly interventionist and enacted massive social programs in extending pensions, higher education, state aid for schools and health care.
In his Crikey entry today Mungo McCallum has suggested that the problem for Malcolm Turnbull is there is no "right" party for him. Mungo makes the valid point that there never really has been a philosophical basis for the Liberal Party, writing;
Some breathless commentators have described it as a “battle for the soul of the Liberal Party”, which is frankly hogwash. The Liberal Party is a purely pragmatic body formed with just one purpose in mind: to oppose the Labor Party.
Until 1909 the conservative forces in Australia were split into two warring groups: the Free Traders and the Protectionists. But with a vigorous Labor Party on the rise, the sworn enemies united in a pact against the common threat. The recriminations were so severe, even violent, that they killed the speaker, Sir Frederick Holder, who fell from his chair with a cry of “Dreadful! Dreadful!” This was the inauspicious start of the Liberal Party Mark I, whose centenary was celebrated a few weeks ago.
Gerard Henderson is fond of pointing out that the Liberal Party of Robert Menzies was not some great small "l" liberal party of popular imagination, and did some pretty draconian things, like trying to ban the Communist Party, committing to two overseas wars and introducing conscription. In reality Menzies continued the great tradition of governing to keep Labor out, and his success was in reforming conservative politics to be more appealling to the mainstream - not more "liberal".
It was in the 1970s that the new conservative movement started to flourish. While the original thinkers like Ayn Rand and Fred Hayek that these conservatives draw upon had bee around a while, the start of a genuine philosophical movement that not only opposed the centralising tendencies of the left but also sought to promote the idea of "individual freedom" really only gained ground in the 1970s. There is extensive writing on this topic in the US, some of which I'm reading. But it is possible to conclude that the economic shock of the oil crises - shocks that were undoubtably made worse by the rigidities of the social democratic welfare state - created the framework for these ideas to gain purchase.
And so it was that through the 1980s and the 1990s the dominant global ideology became that of the free-market, smaller government and less state intervention. Even the parties of the left pursued this course. For the first time in three quarters of a century the left wasn't the only philosophical game in town. But the new right never really gained the kind of ascendency it imagined.
The question now is whether the conservative forces i the Liberal Party really do believe in the philosophical position or are merely (as Mungo thinks) habitually opposing what Labor offers. In the case of Nick Minchin I think it is definitely the former. His approach to all policy areas seems to be that the self-interest of players is the best outcome - no matter how "unfair" that contest may be.
Also in Crikey the more extreme Guy Rundle suggests that Malcolm Turnbull's choice of he loses the leadership might be to try to bring on a split - to take back the Liberal Party for the less ideological and more pragmatic approach of Deakin and Menzies and almost everyone else!
Splitting isn't really something the conservative side does, usually they reform after injections of talent from the other side. After the three great Labor splits (Hughes, Lyons and the DLP) the Liberals had their own one person split when the retired Don Chipp got together with some disaffected South Australians (Steel Hall) and the quixotic Australia Party to form the Australian Democrats. It hardly amounted to a split.
It would be fun to see what would happen in 2010 if Malcolm tried this on. I suspect young Mr Ridd would fair far worse against a Turnbull Liberal (or Australian Republican) Party and a Minchin Liberal (or Conservative) Party.
It didn't win in the sense that there was a mass global outbreak of communism, or even fairly hard edged social democracy. But ultimately in the period from 1900 to 1970 there was a global settlement that was fundamentally Left. In Australia that was reflected in the so-caled Australian settlement introduced by Alfred Deakin and managed through to a Menzies Government that was highly interventionist and enacted massive social programs in extending pensions, higher education, state aid for schools and health care.
In his Crikey entry today Mungo McCallum has suggested that the problem for Malcolm Turnbull is there is no "right" party for him. Mungo makes the valid point that there never really has been a philosophical basis for the Liberal Party, writing;
Some breathless commentators have described it as a “battle for the soul of the Liberal Party”, which is frankly hogwash. The Liberal Party is a purely pragmatic body formed with just one purpose in mind: to oppose the Labor Party.
Until 1909 the conservative forces in Australia were split into two warring groups: the Free Traders and the Protectionists. But with a vigorous Labor Party on the rise, the sworn enemies united in a pact against the common threat. The recriminations were so severe, even violent, that they killed the speaker, Sir Frederick Holder, who fell from his chair with a cry of “Dreadful! Dreadful!” This was the inauspicious start of the Liberal Party Mark I, whose centenary was celebrated a few weeks ago.
Gerard Henderson is fond of pointing out that the Liberal Party of Robert Menzies was not some great small "l" liberal party of popular imagination, and did some pretty draconian things, like trying to ban the Communist Party, committing to two overseas wars and introducing conscription. In reality Menzies continued the great tradition of governing to keep Labor out, and his success was in reforming conservative politics to be more appealling to the mainstream - not more "liberal".
It was in the 1970s that the new conservative movement started to flourish. While the original thinkers like Ayn Rand and Fred Hayek that these conservatives draw upon had bee around a while, the start of a genuine philosophical movement that not only opposed the centralising tendencies of the left but also sought to promote the idea of "individual freedom" really only gained ground in the 1970s. There is extensive writing on this topic in the US, some of which I'm reading. But it is possible to conclude that the economic shock of the oil crises - shocks that were undoubtably made worse by the rigidities of the social democratic welfare state - created the framework for these ideas to gain purchase.
And so it was that through the 1980s and the 1990s the dominant global ideology became that of the free-market, smaller government and less state intervention. Even the parties of the left pursued this course. For the first time in three quarters of a century the left wasn't the only philosophical game in town. But the new right never really gained the kind of ascendency it imagined.
The question now is whether the conservative forces i the Liberal Party really do believe in the philosophical position or are merely (as Mungo thinks) habitually opposing what Labor offers. In the case of Nick Minchin I think it is definitely the former. His approach to all policy areas seems to be that the self-interest of players is the best outcome - no matter how "unfair" that contest may be.
Also in Crikey the more extreme Guy Rundle suggests that Malcolm Turnbull's choice of he loses the leadership might be to try to bring on a split - to take back the Liberal Party for the less ideological and more pragmatic approach of Deakin and Menzies and almost everyone else!
Splitting isn't really something the conservative side does, usually they reform after injections of talent from the other side. After the three great Labor splits (Hughes, Lyons and the DLP) the Liberals had their own one person split when the retired Don Chipp got together with some disaffected South Australians (Steel Hall) and the quixotic Australia Party to form the Australian Democrats. It hardly amounted to a split.
It would be fun to see what would happen in 2010 if Malcolm tried this on. I suspect young Mr Ridd would fair far worse against a Turnbull Liberal (or Australian Republican) Party and a Minchin Liberal (or Conservative) Party.
TV and broadband
Together with the announcement that the Tasmanian government will be distributing TiVOs in Tassie, comes news that the TiVO in Oz will be bigger and come with an online content service "caspa". (see news.com, lifehacker, Gizmodo, and itWire)
But the question is whether this is all a little too little and too late. Firstly US figures as Gizmodo reports show the TiVO in decline. There are other choices now built around Windows and Microsoft Media Centre, together with open PC architecture which means the customer chooses their hard disk size and be free to move their content around. The one advantage of TiVO was the EPG but there are now plenty of on-line EPGs basically built as Wiki's.
The really big part of TiVO though is the creation of caspa (or Caspa) - which is a video rental model (7-14 days to start, 48 hours to watch once started) that includes movies from blockbuster, TV content from major studios, and free music videos from BanditFM plus concert rentals.
With all these online style services you get the privacy concerns raised. I don't think TiVO creates anything new here. That article also talked about the trials and tribulations of managing distribution of the iVO.
Meanwhile TiVO is also going to be up against the Telstra T-Box. This hooks up with the Bigpond TV and movie download service.
Ultimately the "smarts" of TiVO are meant to be in the digital rights management side, it is about buying the right to watch not the right to own a copy of all the 1s and 0s.
Interestingly there is no announcement from Seven about using this platform for its own "Catch Up" TV service. "Catch Up" TV is where the shows shown on FTA are available free online for a period - two weeks in the case of the leader in this field the ABC iView. The ABC has now created the ability for a PS3 to be an iView box.
For both TiVo and iView a particular challenge is the pricing model for broadband. Because the variable cost of international capacity is a relatively high proportion Australia has a broadband pricing structure that includes the highly rational concept of download limits and/or fees. This is a rational pricing structure for anything where there is common capacity shared between users. The challenge is who should pay in the case of local content. TiVO and IView have been separately negotiating "un metered" propositions with some ISPs, which Telstra rejects.
There appear to be two logical points for strategising here. The first is whether or not the ABC, TiVO and the Freeview collective should be joining forces on the un-metering debate. This may require creating some "peering points" in popular peering exchanges around Australia and negotiating collectively (and sharing common costs in content distribution and storage). It would also make sense to create one "catch-up TV" platform.
he second point is how all this changes with the NBN. The PVR set-top box as a centre for both FTA and VOD gets a big boost from the fact that most broadband connections can't support real time video downloading...that is the store and view model makes sense rather than the point-click-watch model. The NBN changes all that with a dedicated 10Mbps from home to "exchange". In that model there is no need to copy the movie from the central store to the local device. Indeed there is no need to have the PVR for FTA if the FTA is distributed from a datacasting store in the exchange - because I can pause MY feed without pausing everyone else's.
Ultimately though the latter is about a dedicated IPTV service as part of the NBN not just an "over the top" VOD through internet model. The Tasmanian announcement was really just another ISP deal deal for TiVO - to TasCOLT customers as part of NBn hype. It is not a model of video over the NBN.
But the question is whether this is all a little too little and too late. Firstly US figures as Gizmodo reports show the TiVO in decline. There are other choices now built around Windows and Microsoft Media Centre, together with open PC architecture which means the customer chooses their hard disk size and be free to move their content around. The one advantage of TiVO was the EPG but there are now plenty of on-line EPGs basically built as Wiki's.
The really big part of TiVO though is the creation of caspa (or Caspa) - which is a video rental model (7-14 days to start, 48 hours to watch once started) that includes movies from blockbuster, TV content from major studios, and free music videos from BanditFM plus concert rentals.
With all these online style services you get the privacy concerns raised. I don't think TiVO creates anything new here. That article also talked about the trials and tribulations of managing distribution of the iVO.
Meanwhile TiVO is also going to be up against the Telstra T-Box. This hooks up with the Bigpond TV and movie download service.
Ultimately the "smarts" of TiVO are meant to be in the digital rights management side, it is about buying the right to watch not the right to own a copy of all the 1s and 0s.
Interestingly there is no announcement from Seven about using this platform for its own "Catch Up" TV service. "Catch Up" TV is where the shows shown on FTA are available free online for a period - two weeks in the case of the leader in this field the ABC iView. The ABC has now created the ability for a PS3 to be an iView box.
For both TiVo and iView a particular challenge is the pricing model for broadband. Because the variable cost of international capacity is a relatively high proportion Australia has a broadband pricing structure that includes the highly rational concept of download limits and/or fees. This is a rational pricing structure for anything where there is common capacity shared between users. The challenge is who should pay in the case of local content. TiVO and IView have been separately negotiating "un metered" propositions with some ISPs, which Telstra rejects.
There appear to be two logical points for strategising here. The first is whether or not the ABC, TiVO and the Freeview collective should be joining forces on the un-metering debate. This may require creating some "peering points" in popular peering exchanges around Australia and negotiating collectively (and sharing common costs in content distribution and storage). It would also make sense to create one "catch-up TV" platform.
he second point is how all this changes with the NBN. The PVR set-top box as a centre for both FTA and VOD gets a big boost from the fact that most broadband connections can't support real time video downloading...that is the store and view model makes sense rather than the point-click-watch model. The NBN changes all that with a dedicated 10Mbps from home to "exchange". In that model there is no need to copy the movie from the central store to the local device. Indeed there is no need to have the PVR for FTA if the FTA is distributed from a datacasting store in the exchange - because I can pause MY feed without pausing everyone else's.
Ultimately though the latter is about a dedicated IPTV service as part of the NBN not just an "over the top" VOD through internet model. The Tasmanian announcement was really just another ISP deal deal for TiVO - to TasCOLT customers as part of NBn hype. It is not a model of video over the NBN.
A curious motion
I noted that the Senate select Committee on the NBN reported and the Senate agreed to amend its terms of reference again. In my earlier post I questioned how the committee was meant to report given that the Senate motion hadn't amended the reporting date.
I was advised that the committee website has been updated with the new date - so everything was sweet. But I was still confused as to how this occurred.
The current explanation is simple. Senator Fisher moved the changed terms of reference by moving that recommendation 12 of the committee be agreed to. My problem is that I have been reading from the summary of recommendations which says;
Recommendation 12
9.18 That the Senate agree to extend the Select Committee on the National
Broadband Network, under the following revised terms of reference:
a) That the resolution of the Senate of 25 June 2008, as amended, appointing the
Select Committee on the National Broadband Network, be further amended:
(2A) The Committee is to examine the findings of the National Broadband
Network Implementation Study, the Government’s response to the
Implementation Study and any subsequent implications of that report for the
National Broadband Network policy.
However where the recommendation actually appears in section 9.18 it reads;
Recommendation 12
9.18 That the Senate agree to extend the Select Committee on the National
Broadband Network, under the following revised terms of reference:
a) That the resolution of the Senate of 25 June 2008, as amended,
appointing the Select Committee on the National Broadband Network, be
further amended:
• to omit "25 November 2009", and substitute "30 April 2010"; and
• to add the following paragraph to the committee’s terms of
reference:
(2A) The Committee is to examine the findings of the National
Broadband Network Implementation Study, the Government’s response to
the Implementation Study and any subsequent implications of that report
for the National Broadband Network policy.
In other words the recomendation in the body of the report provided the extension of time. I doubt there would be no legal problem in this case with taking the later version, as the first version results in an ineffective amendment.
But what would the position be if there was something in the wording of the summary that was diametrically opposed (like the version of the King James bible that forgot the "not" in "though shalt not kill")?
I was advised that the committee website has been updated with the new date - so everything was sweet. But I was still confused as to how this occurred.
The current explanation is simple. Senator Fisher moved the changed terms of reference by moving that recommendation 12 of the committee be agreed to. My problem is that I have been reading from the summary of recommendations which says;
Recommendation 12
9.18 That the Senate agree to extend the Select Committee on the National
Broadband Network, under the following revised terms of reference:
a) That the resolution of the Senate of 25 June 2008, as amended, appointing the
Select Committee on the National Broadband Network, be further amended:
(2A) The Committee is to examine the findings of the National Broadband
Network Implementation Study, the Government’s response to the
Implementation Study and any subsequent implications of that report for the
National Broadband Network policy.
However where the recommendation actually appears in section 9.18 it reads;
Recommendation 12
9.18 That the Senate agree to extend the Select Committee on the National
Broadband Network, under the following revised terms of reference:
a) That the resolution of the Senate of 25 June 2008, as amended,
appointing the Select Committee on the National Broadband Network, be
further amended:
• to omit "25 November 2009", and substitute "30 April 2010"; and
• to add the following paragraph to the committee’s terms of
reference:
(2A) The Committee is to examine the findings of the National
Broadband Network Implementation Study, the Government’s response to
the Implementation Study and any subsequent implications of that report
for the National Broadband Network policy.
In other words the recomendation in the body of the report provided the extension of time. I doubt there would be no legal problem in this case with taking the later version, as the first version results in an ineffective amendment.
But what would the position be if there was something in the wording of the summary that was diametrically opposed (like the version of the King James bible that forgot the "not" in "though shalt not kill")?
Remember '96 ...(or the Liberals part 3)
Much is being made over the repeated claims by Malcolm Turnbull that a failure of the Liberals to do a deal on an ETS is a win for the climate change denialists and the sceptics. Turnbull repeatedly claims that the party will be annihalated at an election if it goes with a policy of climate change denial.
There sre two interesting historic comparisons here. The first is about how to behave in opposition. The second is about how to win Government.
The first is the simple interesting story of unfair dismissal laws. When I put to a Liberal recently the proposition that a cabinet Minister when in opposition told me he did not intend to try to "govern from opposition" he replied that this wasn't true as the ALP had rejected the Coalitions change to unfair dismissal laws 44 times. I reminded him that once the Liberals got control of the Senate they implemented that policy - and lost the next election. Lesson - if opopositions try to save Government from bad policy they help the government stay in power.
The second is to remember how John Howard won in 1996. While it is nice to think of this as a stunning repudiation of everything Paul Keating and Labor stood for, all the soft left causes, the reality was somewhat different. In fact, Howard went to the 1996 election with the entire environmental/green movement on his side because of the promise of a $1B environment fund to be created from the proceeds of the sale of the first tranche of Telstra.
While the structure of this was as much about making the sale policy palatable it was also significant in getting on board - or neutralising - a significant block. This was after all the block that Richardson had secured to deliver the 1990 (I think) election for Hawke.
The conservatives within the Liberal party need to learn these lessons.
There sre two interesting historic comparisons here. The first is about how to behave in opposition. The second is about how to win Government.
The first is the simple interesting story of unfair dismissal laws. When I put to a Liberal recently the proposition that a cabinet Minister when in opposition told me he did not intend to try to "govern from opposition" he replied that this wasn't true as the ALP had rejected the Coalitions change to unfair dismissal laws 44 times. I reminded him that once the Liberals got control of the Senate they implemented that policy - and lost the next election. Lesson - if opopositions try to save Government from bad policy they help the government stay in power.
The second is to remember how John Howard won in 1996. While it is nice to think of this as a stunning repudiation of everything Paul Keating and Labor stood for, all the soft left causes, the reality was somewhat different. In fact, Howard went to the 1996 election with the entire environmental/green movement on his side because of the promise of a $1B environment fund to be created from the proceeds of the sale of the first tranche of Telstra.
While the structure of this was as much about making the sale policy palatable it was also significant in getting on board - or neutralising - a significant block. This was after all the block that Richardson had secured to deliver the 1990 (I think) election for Hawke.
The conservatives within the Liberal party need to learn these lessons.
Friday, November 27, 2009
Policy inversion...(or the Librals part 2)
It is very hard to figure out exactly what any of the individual Liberals who are making a racket about the CPRS think. The statement by Sophie Mirabella in The Punch only adds to this confusion.
There seem to be a number of strands. The first are the outright denialists or sceptics. This is a very small group really, but led by the very vocal Nick Minchin who went on record claiming that climate change was a giant left wing conspiracy to bring down capitalism.
The second set is the we are too small set. This is the set that uses the language in Mirabella's piece that as we are the source of only 1.5% of the world's emissions then we aren't enough to make a difference. This is usually married with the concern that we will penalise our industry and only send the issue off-shore.
The third is the this is a tax argument, which focusses on the increased costs to families. This is perhaps the weirdest of them al, becaue the scheme is ultimtely NOT a tax, and even if it were it is a "good" tax in that it is designed to increasse the cost of what economists call "bads" (the opposite of goods). If the consequence of the scheme were to increase total Government revenues, then the expectation would be to elsewhere reduce tax. Just like the GST a new tax isn't bad itself, the champions of small Government really want the lowest over all tax take (as percentage of GDP) and that tax be raised as efficiently as possible.
The implementation of the scheme as an Emissions Trading Scheme is the response to all three of these criticisms. There are some who would argue that a more direct carbon tax or a more direct emissions limitation scheme would be better - but the ETS actually delivers the outcome through the economic methods hat should in theory be most favoured by the economic rationalists we thought populated the Liberal party.
Let's go through these.
Firstly, by implementing an emissions trading scheme Australia starts on a pathway that could be a GLOBAL emissions trading scheme. That means that in the long run the locational questions would be washed out - the cost to emit would average out across the planet. The sheme itself covers this by the compensation made available to trade exposed industries.
Secondly, to get to a global system veryone has to act. Being 1.5% makes us sound small - just like being 2% of the global economy does. But in reality we are in the top twenty economies and polluters. We have an obligation to be among the leaders. Further, we have an international credibility problem created by the Howard Government. They led the Kyoto discussions in many ays and got significant concessions and still didn't sign. We need to be going to Copenhagen saying "We are acting - you need to act too."
Thirdly, the idea of creating amarket in emissions simply is that the cost of carbon should be fully embedded in the price of products as finally consumed. That is, this scheme is a market driven scheme that delivers on the full Smith/Hayek demands that the invisible hand of consumer preference should guide production choices.
Finally, to the denialists, there is a simple response. The first is that waiting for incontrovertible evidence of warming before acting will be way too late. The second is that acting to put a higher price on the consumption of fossil fuels can be no bad thing as it will encourage greater efficiency in the consumption of a limited resource. Further, global relations would be fundamentally changed if we could reduce our reliance on oil.
In his column in today's AFR John Roskam from the IPA (article not on their site yet) highlights the fact that these Liberals opposing the ETS are deviating from the wish of he business community which is saying it wants certainty over the arrangements. Roskam is trying to make some political point by also pointing out that business supported the stimulus package. Indeed his claim is;
The split between the Liberals and big business says more about big business than it does about the Liberal Party. These days the objective of the organisations that represent big business is more likely to be to maintain a working relationship with the government of the day.
This is in effect a charge that business supports a "corpoartist" state. This charge, at least on the ETS, is wrong. It is business and the Government that are pursuing the "neoliberal" agenda of using markets. The Liberal is divided - those opposing the CPRS are either excessively short sighted on the question of global resource management or re willfully objecting to a neoliberal solution to a global problem.
There seem to be a number of strands. The first are the outright denialists or sceptics. This is a very small group really, but led by the very vocal Nick Minchin who went on record claiming that climate change was a giant left wing conspiracy to bring down capitalism.
The second set is the we are too small set. This is the set that uses the language in Mirabella's piece that as we are the source of only 1.5% of the world's emissions then we aren't enough to make a difference. This is usually married with the concern that we will penalise our industry and only send the issue off-shore.
The third is the this is a tax argument, which focusses on the increased costs to families. This is perhaps the weirdest of them al, becaue the scheme is ultimtely NOT a tax, and even if it were it is a "good" tax in that it is designed to increasse the cost of what economists call "bads" (the opposite of goods). If the consequence of the scheme were to increase total Government revenues, then the expectation would be to elsewhere reduce tax. Just like the GST a new tax isn't bad itself, the champions of small Government really want the lowest over all tax take (as percentage of GDP) and that tax be raised as efficiently as possible.
The implementation of the scheme as an Emissions Trading Scheme is the response to all three of these criticisms. There are some who would argue that a more direct carbon tax or a more direct emissions limitation scheme would be better - but the ETS actually delivers the outcome through the economic methods hat should in theory be most favoured by the economic rationalists we thought populated the Liberal party.
Let's go through these.
Firstly, by implementing an emissions trading scheme Australia starts on a pathway that could be a GLOBAL emissions trading scheme. That means that in the long run the locational questions would be washed out - the cost to emit would average out across the planet. The sheme itself covers this by the compensation made available to trade exposed industries.
Secondly, to get to a global system veryone has to act. Being 1.5% makes us sound small - just like being 2% of the global economy does. But in reality we are in the top twenty economies and polluters. We have an obligation to be among the leaders. Further, we have an international credibility problem created by the Howard Government. They led the Kyoto discussions in many ays and got significant concessions and still didn't sign. We need to be going to Copenhagen saying "We are acting - you need to act too."
Thirdly, the idea of creating amarket in emissions simply is that the cost of carbon should be fully embedded in the price of products as finally consumed. That is, this scheme is a market driven scheme that delivers on the full Smith/Hayek demands that the invisible hand of consumer preference should guide production choices.
Finally, to the denialists, there is a simple response. The first is that waiting for incontrovertible evidence of warming before acting will be way too late. The second is that acting to put a higher price on the consumption of fossil fuels can be no bad thing as it will encourage greater efficiency in the consumption of a limited resource. Further, global relations would be fundamentally changed if we could reduce our reliance on oil.
In his column in today's AFR John Roskam from the IPA (article not on their site yet) highlights the fact that these Liberals opposing the ETS are deviating from the wish of he business community which is saying it wants certainty over the arrangements. Roskam is trying to make some political point by also pointing out that business supported the stimulus package. Indeed his claim is;
The split between the Liberals and big business says more about big business than it does about the Liberal Party. These days the objective of the organisations that represent big business is more likely to be to maintain a working relationship with the government of the day.
This is in effect a charge that business supports a "corpoartist" state. This charge, at least on the ETS, is wrong. It is business and the Government that are pursuing the "neoliberal" agenda of using markets. The Liberal is divided - those opposing the CPRS are either excessively short sighted on the question of global resource management or re willfully objecting to a neoliberal solution to a global problem.
The Liberals....
The single best description of the current turmoil comes from the ABC. Chris Uhlmann comes up with the line;
There is an Australian inversion of Catch-22: if you want to lead the Liberal Party now you must be insane and shouldn't be allowed to.
His analysis is good, especially the problem for Joe Hockey. Joe needs to resist the temptation to run - the party room needs to know their choice is Malcolm or Tony. If Tony wins the moderates can bask in the knowledge that the coming electoral defeat will kill off the only credible conservatie leader for good.
But it does show what we've always known. As both Malcolm and Tony want to lead the Liberal party they are both insane!
There is an Australian inversion of Catch-22: if you want to lead the Liberal Party now you must be insane and shouldn't be allowed to.
His analysis is good, especially the problem for Joe Hockey. Joe needs to resist the temptation to run - the party room needs to know their choice is Malcolm or Tony. If Tony wins the moderates can bask in the knowledge that the coming electoral defeat will kill off the only credible conservatie leader for good.
But it does show what we've always known. As both Malcolm and Tony want to lead the Liberal party they are both insane!
Do we need 4 NBNs?
In the telco trade press there was some commentary following a report by Southern Cross Equities. I haven't read the full research but I gather the conclusion is that the NBN as a wholesale only access network means competitive advantage will come from core network, or brand. The research concluded therefore that Telstra, iiNet and Austar (Austar?) are well placed to benefit from the NBN.
The report highlights one of the current imponderables in the NBN discussion, which is exactly where the boundary points between the NBN as an access network and vrious core networks will exist. More importantly, should NBN Co be a participant in the national backhaul market as well as the access market.
It is hard to conclude that NBN Co should be allowed to be vertically integrated in backhaul and access and to at the same time compete in the national backhaul market, for exactly the same reasons that current policy rejects the access player participating in retail services.
But leaving "backhaul" to a competitive market also is a nightmare because of the differences between routes. As I've previously noted distance and traffic density are really important. In fact, the biggest issue for getting "equivalent prices" acrosss Australia isn't the differential cost of access but the differential of backhaul. It is also nonsense to suggest that "competitive supply" is a good outcome when the issue is lack of demand to meet the cost of ione fibre.
This suggests that a national strategy of one backhaul network still makes sense, priced at the same cost per megabit no matter where it is delivered. But that one "backhaul" network probably shouldn't be part of the NBN access network for the reasons above. This ultimately is the structure of the proposal that was put to the Government for NBN 1.0 by Axia.
So we need two NBNs at least - the national NBN in fibre access and the national NBN in backhaul. But there are still two more we need.
The first is to realise that exactly the same economic factors that mean we need one fibre access network are starting to come to play in mobiles. The two factors are that higher speed networks require wider allocations of contiguous spectrum. The ongoing fragmentation of spectrum for competitive carriers just doesn't suit the technology. The second is the existing inefficiency - the fact that a user can experience congestion i an area covered by a base station that is underutilised. The latter factior has seen its expression in the desire regularly expressed by regional consumers for roaming, as again noted by the RTR.
This issue now meets the challenge of using "advanced wireless" for the NBN. A couple of facts are relevant. The first is that the regional needs are best met using lower frequency spectrum for propagation. The second is that the areas that need to be served by the NBN wireless are not viable as stand alone wireless networks, they are better as additional sites on a single network.
This suggests that the govrnment coul take an NBN approach to future spectrum allocation. In particular when the 700 MHz (digital dividend) spectrum is allocated it should be allocated as one national lot that includes a must build condition as well as a must wholesale condition. To make the lot attractive it could include an allocation of the 2.5 GHz as well. Indeed it seems likely that the best outcome in 2.5 will be to seek only two licencees not three or more. The existing 1.8 GHz and 900 MHz allocations could be refarmed to provide a third operator with an LTE capability.
This requires the Government to think harder about the policy issues in spectrum.
But the same inefficient use of spectrum issues are now emerging in television broadcasting. In the analogue days there was a logic between the association between a 7 MHz frequency slot and a "channel" of broadcasting, but with digital the 7 MHz slot ca be used for different combinations of channels depending on coding. But each licencee using a 7MHz slot can have spare data capacity that is "going to waste". There has been insufficient discussion about why we are operating digital television through a separate multiplex for each licencee rather than combining all signals into one multiplex. The efficiencies are greater than in just frequency utlisation, but in frequency utilisation they are large.
So is there a logical policy for four NBNs - fibre access, backhaul, mobile and digital television? These are efficiency questions that all ultimately pit a static productive efficiency against a dynamic allocative efficiency argument.*
I'm not sure I know the answer. The outline here is not meant to be advocacy for these positions as such, but they do seem to be the kinds of discussions we should be having.
* Note the usual policy discourse defines three kinds of efficiency, allocative, productive and dynamic. I dispute that there are three - instead there are really four - there are the classic productve and allocative efficiency both of which are "static" fficiencies described by whether what happens in a specific point of time is efficient. The other are dynamic productive and allocative efficiency - the latter being the one most commonly thought of as "dynamic" efficiency which is choices over time about when to invest. At the CPRF Ben Frens gave a paper in which he referred to a concet of "governance" efficiency which he referred to as spectrum sharing and flexibility. I think this is the concept of dynamic productive effociency.
The report highlights one of the current imponderables in the NBN discussion, which is exactly where the boundary points between the NBN as an access network and vrious core networks will exist. More importantly, should NBN Co be a participant in the national backhaul market as well as the access market.
It is hard to conclude that NBN Co should be allowed to be vertically integrated in backhaul and access and to at the same time compete in the national backhaul market, for exactly the same reasons that current policy rejects the access player participating in retail services.
But leaving "backhaul" to a competitive market also is a nightmare because of the differences between routes. As I've previously noted distance and traffic density are really important. In fact, the biggest issue for getting "equivalent prices" acrosss Australia isn't the differential cost of access but the differential of backhaul. It is also nonsense to suggest that "competitive supply" is a good outcome when the issue is lack of demand to meet the cost of ione fibre.
This suggests that a national strategy of one backhaul network still makes sense, priced at the same cost per megabit no matter where it is delivered. But that one "backhaul" network probably shouldn't be part of the NBN access network for the reasons above. This ultimately is the structure of the proposal that was put to the Government for NBN 1.0 by Axia.
So we need two NBNs at least - the national NBN in fibre access and the national NBN in backhaul. But there are still two more we need.
The first is to realise that exactly the same economic factors that mean we need one fibre access network are starting to come to play in mobiles. The two factors are that higher speed networks require wider allocations of contiguous spectrum. The ongoing fragmentation of spectrum for competitive carriers just doesn't suit the technology. The second is the existing inefficiency - the fact that a user can experience congestion i an area covered by a base station that is underutilised. The latter factior has seen its expression in the desire regularly expressed by regional consumers for roaming, as again noted by the RTR.
This issue now meets the challenge of using "advanced wireless" for the NBN. A couple of facts are relevant. The first is that the regional needs are best met using lower frequency spectrum for propagation. The second is that the areas that need to be served by the NBN wireless are not viable as stand alone wireless networks, they are better as additional sites on a single network.
This suggests that the govrnment coul take an NBN approach to future spectrum allocation. In particular when the 700 MHz (digital dividend) spectrum is allocated it should be allocated as one national lot that includes a must build condition as well as a must wholesale condition. To make the lot attractive it could include an allocation of the 2.5 GHz as well. Indeed it seems likely that the best outcome in 2.5 will be to seek only two licencees not three or more. The existing 1.8 GHz and 900 MHz allocations could be refarmed to provide a third operator with an LTE capability.
This requires the Government to think harder about the policy issues in spectrum.
But the same inefficient use of spectrum issues are now emerging in television broadcasting. In the analogue days there was a logic between the association between a 7 MHz frequency slot and a "channel" of broadcasting, but with digital the 7 MHz slot ca be used for different combinations of channels depending on coding. But each licencee using a 7MHz slot can have spare data capacity that is "going to waste". There has been insufficient discussion about why we are operating digital television through a separate multiplex for each licencee rather than combining all signals into one multiplex. The efficiencies are greater than in just frequency utlisation, but in frequency utilisation they are large.
So is there a logical policy for four NBNs - fibre access, backhaul, mobile and digital television? These are efficiency questions that all ultimately pit a static productive efficiency against a dynamic allocative efficiency argument.*
I'm not sure I know the answer. The outline here is not meant to be advocacy for these positions as such, but they do seem to be the kinds of discussions we should be having.
* Note the usual policy discourse defines three kinds of efficiency, allocative, productive and dynamic. I dispute that there are three - instead there are really four - there are the classic productve and allocative efficiency both of which are "static" fficiencies described by whether what happens in a specific point of time is efficient. The other are dynamic productive and allocative efficiency - the latter being the one most commonly thought of as "dynamic" efficiency which is choices over time about when to invest. At the CPRF Ben Frens gave a paper in which he referred to a concet of "governance" efficiency which he referred to as spectrum sharing and flexibility. I think this is the concept of dynamic productive effociency.
I was (sort of) wrong ... NBN Select Committee
I noted the notice of motion that the Senate Select Committee on the National Broadband Network was seeking an extension of time to report and speculated this was a committee that just goes on.
In the end the motion was only seeking an extension from 23 November to 25 November. The reasons can be gleaned in the final report in the comments from Senator Ludlum. The draft report presented by the Secreteriat to the Committee had undergone significant changes by the majority (coalition) Senators, and Senator Ludlum needed therefore extra time to add his dissenting report.
In the end the report wasn't tabled till 26 November, and with it a motion was moved to adopt recommendation twelve of the report. The discussion in Hansard notes that the Government thought the further matters were more appropriately referred to the relevant (standing) references committee. The subtle difference between the two is who chairs them. Membership is not really that significant as lots of Senators not members of committees regularly "participate".
Recommendation 12 read;
That the Senate agree to extend the Select Committee on the National
Broadband Network, under the following revised terms of reference:
a) That the resolution of the Senate of 25 June 2008, as amended, appointing the
Select Committee on the National Broadband Network, be further amended:
(2A) The Committee is to examine the findings of the National Broadband
Network Implementation Study, the Government’s response to the
Implementation Study and any subsequent implications of that report for the
National Broadband Network policy.
An interesting part of this resolution is that it added a reference but did not amend the reporting date (as already amended) for the Committee. The current terms of reference specify the amended reporting date of 25 November 2009. So on my question - should I bother with the submission I finally think I want to make - I am no clearer. I think a Senate Select Committee cannot undertake further inquiries even if additional material has ben added to the ToR if it doesn't have a reporting date set for the future. And unless Senators sort this out today then the Committee can't do anything till February.
In the end the motion was only seeking an extension from 23 November to 25 November. The reasons can be gleaned in the final report in the comments from Senator Ludlum. The draft report presented by the Secreteriat to the Committee had undergone significant changes by the majority (coalition) Senators, and Senator Ludlum needed therefore extra time to add his dissenting report.
In the end the report wasn't tabled till 26 November, and with it a motion was moved to adopt recommendation twelve of the report. The discussion in Hansard notes that the Government thought the further matters were more appropriately referred to the relevant (standing) references committee. The subtle difference between the two is who chairs them. Membership is not really that significant as lots of Senators not members of committees regularly "participate".
Recommendation 12 read;
That the Senate agree to extend the Select Committee on the National
Broadband Network, under the following revised terms of reference:
a) That the resolution of the Senate of 25 June 2008, as amended, appointing the
Select Committee on the National Broadband Network, be further amended:
(2A) The Committee is to examine the findings of the National Broadband
Network Implementation Study, the Government’s response to the
Implementation Study and any subsequent implications of that report for the
National Broadband Network policy.
An interesting part of this resolution is that it added a reference but did not amend the reporting date (as already amended) for the Committee. The current terms of reference specify the amended reporting date of 25 November 2009. So on my question - should I bother with the submission I finally think I want to make - I am no clearer. I think a Senate Select Committee cannot undertake further inquiries even if additional material has ben added to the ToR if it doesn't have a reporting date set for the future. And unless Senators sort this out today then the Committee can't do anything till February.
Tuesday, November 24, 2009
When wrong means...advertising
Telstra through BigPond has become the latest ISP to try to monetise customers mistyping of URLs (or following broken links).
The idea is simple, your ISP runs a DNS server that your browser goes and queries when it is trying to find a web page (the DNS relates domain names as they appear in URLs to the IP addresses that routers atually use to make connections). When the server identifies that there is no match for the domain name then normally an error is returned to you - and what happens depends on your own browser settings.
The monetisation comes by sending mistyped requests off to search and producing a search page with typical sponsored links. There is a more advanced version of cyber-squatters who actually register the domain names of frequently mistyped domains (a good example is aple.com).
ISPs, of course, justify it as being a "service" to users. I guess personally I don't really mind because I will ignore the returned page anyway. But is it really just indicative of the whole damned relationship between telcos and customers? Isn't it really just abuse of the position of a service provider to attempt to profit from a customer's misfortune?
Thoughts....
The idea is simple, your ISP runs a DNS server that your browser goes and queries when it is trying to find a web page (the DNS relates domain names as they appear in URLs to the IP addresses that routers atually use to make connections). When the server identifies that there is no match for the domain name then normally an error is returned to you - and what happens depends on your own browser settings.
The monetisation comes by sending mistyped requests off to search and producing a search page with typical sponsored links. There is a more advanced version of cyber-squatters who actually register the domain names of frequently mistyped domains (a good example is aple.com).
ISPs, of course, justify it as being a "service" to users. I guess personally I don't really mind because I will ignore the returned page anyway. But is it really just indicative of the whole damned relationship between telcos and customers? Isn't it really just abuse of the position of a service provider to attempt to profit from a customer's misfortune?
Thoughts....
Monday, November 23, 2009
Broad and broadband
Much is being made over some recent comments by the CEO of AAPT Paul Broad that criticise Government policy making with respect to the National Broadband Network (the NBN). These comments are really part of a long running critique by Broad, and also reflect yet another strategic error by Telecom New Zealand with its AAPT asset.
I've found three Broad comments on the NBN to reference. The first was at the time of the bids for NBn 1.0 closing where Broad questioned the need for the additional speed. More significantly he indicated that the need for more broadband could be simply solved as;
There's willingness from all industry participants in this debate to pull a chair up to the table and ensure the access rules we play by prevent any one player obtaining an advantage.
This rather naive view was followed by an immediate criticism once the NBN morphed into NBN 2.0 (the FTTP) where he appeared on Lateline Business and criticised the economics of the proposal. At core however was his comment;
Getting speed into parts of the economy, where it hasn't got speed: right thing to do. But, please, don't duplicate what's already out there. Recognise that we've actually grown speed in this market considerably in the last two or three years, leveraged what we've done, incrementally changed the investment profiles that all of us have made. And we as a nation'll be better off.
His most recent comments appeared in the Oz where he claimed there was no need for the NBN and that it really was just a ploy to separate Telstra, saying;
The NBN is absolute rubbish. It is a political ploy to separate Telstra. It is a political tool to beat Telstra up with because (former Labor government communications minister Kim) Beazley got it wrong all these years ago when they formed Telstra. This is a way of trying to correct it.
Apart from the fact that the real decision not to separate was made by the Howard government (at privatisation) this statement is big on the claim that the NBN is only about industry structure.
The reality is that since its inception the NBN has been a plan with TWO goals. The first is to create the national broadband infrastructure needed for the 21st Century, the second has been to correct the market structure issues in the industry (that lay at the heart of Broad's first set of criticisms). The need for intervention to achieve the infrastructure outcome has been clear ever since Telstra announced in 2005 that it wanted to speed up the CAN, but do so in a way that denied their existing wholesale customers access or did so without regulation. The need for intervention was further revealed by the policy cock-up of the Howard Government in proposing to conduct a tender for policy outcomes (the plan of the original expert panel).
The structural issue is one where the ALP had looked before under Lindsay Tanner as shadow minister and recognised the practical difficulties of achieving a separation. Instead they turned their minds to the concept of a prospective separation, that is achieving separation at the time of the construction of new network.
Neither the need for speed nor the structural conundrum alone is the motivation for the NBN policy, it is both.
The really interesting question is why the CEO of AAPT has become the leader of the anti-NBN cheer squad. The answer can be found in the long stream of strategic errors made by TCNZ with AAPT.
The first of these was to acquire only 80% and leave the remaining 20% that was largely in the hands of management, this set up some interesting debates about conflict. The second was to buy a company that had come into play through a placement of 15% new equity to fund capital programs, and then not really be prepared to further invest. The third was to immediately fragment the business with two "Trans-Tasman" business units in mobile and internet created. These businesses, especially the internet one, proceeded to make a series of decisions that stalled AAPT's entry in its own name into the residential broadband market. The mobiles business ditched its original CDMA vendor Samsung to go with the vendor in NZ Lucent, a decision that failed to recognise that the Australian network requirement was more like the network Samsung built for Hutchison (Orange) than Lucent was building for Telecom.
These errors saw AAPT abandon its "CLEC" strategy that had required the capital funding. The next five years saw a dedicated focus to implementing an "infrastructure light" telco model. This included the decision to invest in a new customer service platform in Hyperbaric. A key feature of that platform was its ability to provide service in an infrastructure light model.
AAPT did very well in this cycle, growing both revenue and profit as the big lumps of underperforming investments and abandoned projects worked through the system, including the CDMA cost and the LMDS cost.
It did not, however, do well enough to justify the original price paid by TCNZ at the top of the telco boom. Part of its success was its developing relationship with Telstra as a wholesale customer. A focus on clearing disputes and positioning AAPT as an effective channel worked well. The failure in the strategy was to keep asking for too much, to seek new input prices on the promise of finalling getting to inking a longer term strategic relationship. This left AAPT exposed. When sentiment at Telstra changed against wholesale, AAPT had no medium term protection, and, indeed, some contacts at Telstra who had grown sick of the AAPT negotiating stance.
At this point AAPT was faced by a choice. Work harder on rebuilding the relationship, or make the call on buying infrastructure. At this time a third option was presented to TCNZ - sell the AAPT entity. This strategy was pursued but resulted in the party who had first approached TCNZ to acquire not even formally bidding at the end. TCNZ found no satisfactory buyer, but decided to instead buy one of its suitors, PowerTel, and make the decision that it was getting into the infrastructure business.
One of the key reasons AAPT stayed infrastructure light was that AAPT recognised that broadband over ULL was at best an interim technology and that a move to FTTN was almost certain. This was clear from the industry fights in 1999 and 2000 over the migration of loops from exchanges to pillars. This took some time to be realised - but from 2005 it was clear that something would happen.
Indeed through the period that TCNZ first tried to sell AAPT and then buy PowerTel there was not only the Telstra proposal, but the counter proposal from what was the G9 but became Terria. It appears that though PowerTel and AAPT were both part of this consortium, it was the belief of some that the combined entity did not need the partnership and (in TCNZ) a belief that nothing would happen.
They were wrong on both counts. Paul Broad's pronouncements on the NBN should be interpretted for what they are - the commentary of a CEO who has backed the wrong strategy.
I've found three Broad comments on the NBN to reference. The first was at the time of the bids for NBn 1.0 closing where Broad questioned the need for the additional speed. More significantly he indicated that the need for more broadband could be simply solved as;
There's willingness from all industry participants in this debate to pull a chair up to the table and ensure the access rules we play by prevent any one player obtaining an advantage.
This rather naive view was followed by an immediate criticism once the NBN morphed into NBN 2.0 (the FTTP) where he appeared on Lateline Business and criticised the economics of the proposal. At core however was his comment;
Getting speed into parts of the economy, where it hasn't got speed: right thing to do. But, please, don't duplicate what's already out there. Recognise that we've actually grown speed in this market considerably in the last two or three years, leveraged what we've done, incrementally changed the investment profiles that all of us have made. And we as a nation'll be better off.
His most recent comments appeared in the Oz where he claimed there was no need for the NBN and that it really was just a ploy to separate Telstra, saying;
The NBN is absolute rubbish. It is a political ploy to separate Telstra. It is a political tool to beat Telstra up with because (former Labor government communications minister Kim) Beazley got it wrong all these years ago when they formed Telstra. This is a way of trying to correct it.
Apart from the fact that the real decision not to separate was made by the Howard government (at privatisation) this statement is big on the claim that the NBN is only about industry structure.
The reality is that since its inception the NBN has been a plan with TWO goals. The first is to create the national broadband infrastructure needed for the 21st Century, the second has been to correct the market structure issues in the industry (that lay at the heart of Broad's first set of criticisms). The need for intervention to achieve the infrastructure outcome has been clear ever since Telstra announced in 2005 that it wanted to speed up the CAN, but do so in a way that denied their existing wholesale customers access or did so without regulation. The need for intervention was further revealed by the policy cock-up of the Howard Government in proposing to conduct a tender for policy outcomes (the plan of the original expert panel).
The structural issue is one where the ALP had looked before under Lindsay Tanner as shadow minister and recognised the practical difficulties of achieving a separation. Instead they turned their minds to the concept of a prospective separation, that is achieving separation at the time of the construction of new network.
Neither the need for speed nor the structural conundrum alone is the motivation for the NBN policy, it is both.
The really interesting question is why the CEO of AAPT has become the leader of the anti-NBN cheer squad. The answer can be found in the long stream of strategic errors made by TCNZ with AAPT.
The first of these was to acquire only 80% and leave the remaining 20% that was largely in the hands of management, this set up some interesting debates about conflict. The second was to buy a company that had come into play through a placement of 15% new equity to fund capital programs, and then not really be prepared to further invest. The third was to immediately fragment the business with two "Trans-Tasman" business units in mobile and internet created. These businesses, especially the internet one, proceeded to make a series of decisions that stalled AAPT's entry in its own name into the residential broadband market. The mobiles business ditched its original CDMA vendor Samsung to go with the vendor in NZ Lucent, a decision that failed to recognise that the Australian network requirement was more like the network Samsung built for Hutchison (Orange) than Lucent was building for Telecom.
These errors saw AAPT abandon its "CLEC" strategy that had required the capital funding. The next five years saw a dedicated focus to implementing an "infrastructure light" telco model. This included the decision to invest in a new customer service platform in Hyperbaric. A key feature of that platform was its ability to provide service in an infrastructure light model.
AAPT did very well in this cycle, growing both revenue and profit as the big lumps of underperforming investments and abandoned projects worked through the system, including the CDMA cost and the LMDS cost.
It did not, however, do well enough to justify the original price paid by TCNZ at the top of the telco boom. Part of its success was its developing relationship with Telstra as a wholesale customer. A focus on clearing disputes and positioning AAPT as an effective channel worked well. The failure in the strategy was to keep asking for too much, to seek new input prices on the promise of finalling getting to inking a longer term strategic relationship. This left AAPT exposed. When sentiment at Telstra changed against wholesale, AAPT had no medium term protection, and, indeed, some contacts at Telstra who had grown sick of the AAPT negotiating stance.
At this point AAPT was faced by a choice. Work harder on rebuilding the relationship, or make the call on buying infrastructure. At this time a third option was presented to TCNZ - sell the AAPT entity. This strategy was pursued but resulted in the party who had first approached TCNZ to acquire not even formally bidding at the end. TCNZ found no satisfactory buyer, but decided to instead buy one of its suitors, PowerTel, and make the decision that it was getting into the infrastructure business.
One of the key reasons AAPT stayed infrastructure light was that AAPT recognised that broadband over ULL was at best an interim technology and that a move to FTTN was almost certain. This was clear from the industry fights in 1999 and 2000 over the migration of loops from exchanges to pillars. This took some time to be realised - but from 2005 it was clear that something would happen.
Indeed through the period that TCNZ first tried to sell AAPT and then buy PowerTel there was not only the Telstra proposal, but the counter proposal from what was the G9 but became Terria. It appears that though PowerTel and AAPT were both part of this consortium, it was the belief of some that the combined entity did not need the partnership and (in TCNZ) a belief that nothing would happen.
They were wrong on both counts. Paul Broad's pronouncements on the NBN should be interpretted for what they are - the commentary of a CEO who has backed the wrong strategy.
The Committee that never ends
I was thinking of making a late submission to the Senate select committee on the NBN and noted on the website that today is the reporting date.
However, I note from the Dynamic Red that today there will be two motions today;
No. 641 – Chair of the Select Committee on the National Broadband Network (Senator Fisher) – Extension of time to report
No. 642 – Chair of the Select Committee on the National Broadband Network (Senator Fisher) – Authorising the committee to hold a private meeting otherwise than in accordance with standing order 33(1) during the sitting of the Senate today.
I have no idea whether they are seeking a short extension, or another long one on the basis that they need to see the Implementation Study first. In any case if the extension is more than four days then the report might as well be delayed to February (though it could be tabled out of session).
However, I note from the Dynamic Red that today there will be two motions today;
No. 641 – Chair of the Select Committee on the National Broadband Network (Senator Fisher) – Extension of time to report
No. 642 – Chair of the Select Committee on the National Broadband Network (Senator Fisher) – Authorising the committee to hold a private meeting otherwise than in accordance with standing order 33(1) during the sitting of the Senate today.
I have no idea whether they are seeking a short extension, or another long one on the basis that they need to see the Implementation Study first. In any case if the extension is more than four days then the report might as well be delayed to February (though it could be tabled out of session).
Customer Service Again
Further to my post two days ago, Paul Sheehan in the SMH has recounted his own recent telco horror story.
A part of that is his frustration with offshore "call centres". It does seem to me that this is a triumph of efficiency over effectiveness. That is, all our customer calls cost us a lot of money so let's bring the cost per call down rather than the harder task of reducing the need to call.
All customers will tell you, the best customer service is when I don't have to ring you.
A part of that is his frustration with offshore "call centres". It does seem to me that this is a triumph of efficiency over effectiveness. That is, all our customer calls cost us a lot of money so let's bring the cost per call down rather than the harder task of reducing the need to call.
All customers will tell you, the best customer service is when I don't have to ring you.
Broadband penetration - econometric wars
The FCC in the US published research by the Berkman Centre at Harvard to assess the impact of certain policy parameters on the speed of broadband adoption.
This research has been much criticised, with one particular criticism by George Ford focussing on the econometrics involved.
The issue has a particular Australian resonance because the original econometric model used is one developed by our own John de Ridder who first presented this work at the 2006 Communications Policy and Research Forum.
At issue is the appropriate econometric techniques to be used in estimating broadband demand, with the study utilising a simple OLS approach estimating demand only, rather than a simultaneous version that estimates demand and supply. I do not propose to enter that debate at all, except to note that this debate reflects an ongoing problem with almost all econometric studies. That is, the degrees of fredom available to researchers.
It also highlights another factor which is the relationship between published results and data sets. The Berkman report acknowledges John for making the data set available. I am surprised that in the age of the Internet it is not manadatory (or at least the expected norm) for datasets (unless confidential and the confidential detail cannot be "masked") to be published online.
The question for me is whether Panel data can ever be meaningfully used in either form to assess factors that determine an adoption rate. My reasoning is simple, that all adoption cycles follow some kind of S-curve and it is the shape of the curve that needs to be "explained" and that the points on the curve (the observed data) need to be first fitted to the curve and then the parameters of the curve estimated through a second exercise. Put another way, what needs to be explained is not the adoption level, but the rate of adoption.
Using Panel data (i.e. cross section data) in either of the methods used above carries an implicit assumption about what effects the shape of the curve.
First let's consider why adoption follows an S-shaped curve. I can identify three simple factors that would individually result in S-shaped adoption curves. The first is a simple demand effect, and the relationship of demand to income. Assuming price remains unchanged there will be an adoption process as progressively more people for whom the product is of interest can afford to buy it - that is as relative incme increases compared to supply costs.
The second is a supply effect, that the well known concept of the "experience curve" in production means that the cost of supply declines with increases in cumulative production. That is mathematically a similar effect to the above, but is driven by decline in cost rather than increae in income.
The third, and perhaps most important, is a variety of network effect. In the study of economic dynamics a simple exercise is to develop an adoption model that assumes that an individual's propensity to acquire a service is proportional to how many other people have already acquired it. This generates the simplest of all adoption curves, the logistic curve. This model also provides an interesting interpretation of the often claimed great Australian propensity to adopt. In practice Australian adoption curves start out very slowly, and then increase rapidly. An interpretation of this is that Australians are more influenced by what others do than other countries. In popular culture it looks like fast adoption because it progresses rapidly once it starts, but this ignores the slow start.
Fitting adoption to S-shaped curves suffers from a lack of clarity about what is the appropriate form of the curve, the fact that as a non-linear estimate it requires the study to choose some initial values and the fact that the "fit" may not be unique. The flip side is that the cumulative OECD data provides some very good data for the analysis - that shows all countries with some kind of S-curve with vastly varying slopes.
Finally, one has to wonder whether trying to use econometric analysis to determine the effectiveness of different policy settings on broadband adoption isn't just an overall inappropriate application of a tool. The data set cannot be adjusted forv the varying quality of the product, nor the complicated pricing structures.
Full credit to John for trying the initial study, I thought it was dodgy then and I still do. But equally I think the Ford conclusions are equally dodgy.
Note: Many thanks to Grahame Lynch of Communications Day for bringin the controversy to my attention through the pages of his newsletter.
This research has been much criticised, with one particular criticism by George Ford focussing on the econometrics involved.
The issue has a particular Australian resonance because the original econometric model used is one developed by our own John de Ridder who first presented this work at the 2006 Communications Policy and Research Forum.
At issue is the appropriate econometric techniques to be used in estimating broadband demand, with the study utilising a simple OLS approach estimating demand only, rather than a simultaneous version that estimates demand and supply. I do not propose to enter that debate at all, except to note that this debate reflects an ongoing problem with almost all econometric studies. That is, the degrees of fredom available to researchers.
It also highlights another factor which is the relationship between published results and data sets. The Berkman report acknowledges John for making the data set available. I am surprised that in the age of the Internet it is not manadatory (or at least the expected norm) for datasets (unless confidential and the confidential detail cannot be "masked") to be published online.
The question for me is whether Panel data can ever be meaningfully used in either form to assess factors that determine an adoption rate. My reasoning is simple, that all adoption cycles follow some kind of S-curve and it is the shape of the curve that needs to be "explained" and that the points on the curve (the observed data) need to be first fitted to the curve and then the parameters of the curve estimated through a second exercise. Put another way, what needs to be explained is not the adoption level, but the rate of adoption.
Using Panel data (i.e. cross section data) in either of the methods used above carries an implicit assumption about what effects the shape of the curve.
First let's consider why adoption follows an S-shaped curve. I can identify three simple factors that would individually result in S-shaped adoption curves. The first is a simple demand effect, and the relationship of demand to income. Assuming price remains unchanged there will be an adoption process as progressively more people for whom the product is of interest can afford to buy it - that is as relative incme increases compared to supply costs.
The second is a supply effect, that the well known concept of the "experience curve" in production means that the cost of supply declines with increases in cumulative production. That is mathematically a similar effect to the above, but is driven by decline in cost rather than increae in income.
The third, and perhaps most important, is a variety of network effect. In the study of economic dynamics a simple exercise is to develop an adoption model that assumes that an individual's propensity to acquire a service is proportional to how many other people have already acquired it. This generates the simplest of all adoption curves, the logistic curve. This model also provides an interesting interpretation of the often claimed great Australian propensity to adopt. In practice Australian adoption curves start out very slowly, and then increase rapidly. An interpretation of this is that Australians are more influenced by what others do than other countries. In popular culture it looks like fast adoption because it progresses rapidly once it starts, but this ignores the slow start.
Fitting adoption to S-shaped curves suffers from a lack of clarity about what is the appropriate form of the curve, the fact that as a non-linear estimate it requires the study to choose some initial values and the fact that the "fit" may not be unique. The flip side is that the cumulative OECD data provides some very good data for the analysis - that shows all countries with some kind of S-curve with vastly varying slopes.
Finally, one has to wonder whether trying to use econometric analysis to determine the effectiveness of different policy settings on broadband adoption isn't just an overall inappropriate application of a tool. The data set cannot be adjusted forv the varying quality of the product, nor the complicated pricing structures.
Full credit to John for trying the initial study, I thought it was dodgy then and I still do. But equally I think the Ford conclusions are equally dodgy.
Note: Many thanks to Grahame Lynch of Communications Day for bringin the controversy to my attention through the pages of his newsletter.
Sunday, November 22, 2009
Data retention and telco providers
Mark Newton has made a bit of a name for himself as a campaigner against the ALP's internet filter policy. He has now written to New Matilda on the subject of privacy.
What has caught Newton's attention is a proposed law in the UK requiring data retention by telco providers of all data that they have about customers. The bad news is that store and forward type communications like e-mail do spend their time on servers, whereas phone calls don't. But for communications that don't spend time there there will still be a requirement to "log" them.
This is not realy the dramatic erosion of freedoms described because this has always been the case for phone calls that were charged on an "event" basis. t is new for other forms of communication. It is notionally as well protected as access to the existing phone call log.
For a person who works in Australian Comms Newton might like to know that similar data retention proposals have been hanging around in the Australian space since the Blunn Review. Personally, I don't have a concern about this level of "monitoring". It actually already happens on our physical movements hrough CCTV.
What will be important will be both how well it is protected, both physically and lgally. The latter needs to include serious penalties for disclosure - such disclosure may be far from a victimless crime.
What has caught Newton's attention is a proposed law in the UK requiring data retention by telco providers of all data that they have about customers. The bad news is that store and forward type communications like e-mail do spend their time on servers, whereas phone calls don't. But for communications that don't spend time there there will still be a requirement to "log" them.
This is not realy the dramatic erosion of freedoms described because this has always been the case for phone calls that were charged on an "event" basis. t is new for other forms of communication. It is notionally as well protected as access to the existing phone call log.
For a person who works in Australian Comms Newton might like to know that similar data retention proposals have been hanging around in the Australian space since the Blunn Review. Personally, I don't have a concern about this level of "monitoring". It actually already happens on our physical movements hrough CCTV.
What will be important will be both how well it is protected, both physically and lgally. The latter needs to include serious penalties for disclosure - such disclosure may be far from a victimless crime.
Saturday, November 21, 2009
Telcos, customer service and regulation
Thanks for asking, the paper I mentioned I was giving at the CPRF went well. While the paper will appear in a volume of papers there, it is already available under speeches on my website.
The paper didn't really reach very dramatic conclusions as my survey data wasn't large or random, resulting in limited ability to make conclusions about the significance of the findings. It does appear that service provider employees and consumers share the same views of what good customer service looks like, and that telcos don't provide it.
The new hypothesis I have is that there is a fundamental flaw in the model of a modern telco, both in the factory approach to customer service (or call) centres and the idea that telco products are too complicated for even the staff tpo understand them.
The latter was a theme in the paper following mine by Elaine Lally and David Rowe titled "Impossible choices: complexity and dissatisfaction" that builds on an earlier paper they titled "Preparing for a Broadband World". The paper was very good and concluded that confusion is an issue and the solution might be found in "choice architecture". This includes the stuff in the book Nudge that I was first alerted to by Lindsay Tanner.
The idea might be appropriate, but I return to the issue in my paper which is how do we get the appropriate behavioural change in providers to implement choice architectures. Legislation is a very blunt instrument for this.
It was strange to note therefore an article in this weekend's Australian Financial Review by Tony Boyd titled The Most Hated Companies: Meet the confusolpoly. In it Boyd recounts his own recent customer service experience and writes;
Optus says technology products are complex to administer and sometimes this results in confusion in matters such as billing or movement from one service to another. It admits it needs to lifet its game.
It is unclear whether this is a telco admitting that complexity is impeding its customer service agents or merely its customers.
The article continues to compare and contrast the responsess of the three biggest providers, and the "tough talk" of the ACMA Chair Chris Chapman at ACCAN CEO Allan Asher. It is Asher that uses the "confusoply" term invented by Scott Adams, but first applied to telcos in Australia by Joshua Gans (at an ACCC conference).
The ACCAN itself recently conducted a half-day seminar on Responsive Regulation. After a few set pieces by regulatory types, most of which focused on the general idea that their mission was to make markets work for consumers (the ACCAN plan) there were four commentators at the end. These provide the four "alternative" views to the thrust for competition in telecommunications.
The first is the group that simply believes regulation is a necessity and that, despite evidence to the contrary, it works.
The second is the simple rejection of "economic" goals instead of social goals.
The third is to focus on the 5% of vulnerable customers and argue that competition will ignore them.
The final one is that competition depends on marketers, and that their approach is actually anti-consumer as they prefer a confused customer.
The beauty is that there is a grain of truth in all of these, but that the real challenge does lie in the learnings of behavioural economics as noted by Lally. But it is not just a better underrstanding that consumers aren't the model of rational decision makers assumed in theory, but understanding that providers aren't either.
The one thing I know is that you can't regulate for improved customer service.
The paper didn't really reach very dramatic conclusions as my survey data wasn't large or random, resulting in limited ability to make conclusions about the significance of the findings. It does appear that service provider employees and consumers share the same views of what good customer service looks like, and that telcos don't provide it.
The new hypothesis I have is that there is a fundamental flaw in the model of a modern telco, both in the factory approach to customer service (or call) centres and the idea that telco products are too complicated for even the staff tpo understand them.
The latter was a theme in the paper following mine by Elaine Lally and David Rowe titled "Impossible choices: complexity and dissatisfaction" that builds on an earlier paper they titled "Preparing for a Broadband World". The paper was very good and concluded that confusion is an issue and the solution might be found in "choice architecture". This includes the stuff in the book Nudge that I was first alerted to by Lindsay Tanner.
The idea might be appropriate, but I return to the issue in my paper which is how do we get the appropriate behavioural change in providers to implement choice architectures. Legislation is a very blunt instrument for this.
It was strange to note therefore an article in this weekend's Australian Financial Review by Tony Boyd titled The Most Hated Companies: Meet the confusolpoly. In it Boyd recounts his own recent customer service experience and writes;
Optus says technology products are complex to administer and sometimes this results in confusion in matters such as billing or movement from one service to another. It admits it needs to lifet its game.
It is unclear whether this is a telco admitting that complexity is impeding its customer service agents or merely its customers.
The article continues to compare and contrast the responsess of the three biggest providers, and the "tough talk" of the ACMA Chair Chris Chapman at ACCAN CEO Allan Asher. It is Asher that uses the "confusoply" term invented by Scott Adams, but first applied to telcos in Australia by Joshua Gans (at an ACCC conference).
The ACCAN itself recently conducted a half-day seminar on Responsive Regulation. After a few set pieces by regulatory types, most of which focused on the general idea that their mission was to make markets work for consumers (the ACCAN plan) there were four commentators at the end. These provide the four "alternative" views to the thrust for competition in telecommunications.
The first is the group that simply believes regulation is a necessity and that, despite evidence to the contrary, it works.
The second is the simple rejection of "economic" goals instead of social goals.
The third is to focus on the 5% of vulnerable customers and argue that competition will ignore them.
The final one is that competition depends on marketers, and that their approach is actually anti-consumer as they prefer a confused customer.
The beauty is that there is a grain of truth in all of these, but that the real challenge does lie in the learnings of behavioural economics as noted by Lally. But it is not just a better underrstanding that consumers aren't the model of rational decision makers assumed in theory, but understanding that providers aren't either.
The one thing I know is that you can't regulate for improved customer service.
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