Networking The Nation: The Weakest Link?
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The uncertainty about Tasmania's Broadband e-Lab project meeting subscriber targets again throws the spotlight on the Networking the Nation (NTN) project.
"With the collapse of so many telco companies," says one ISP manager, "you would think that the government would realise that its not an easy business to be in at the moment (or any other time for that matter) so I can only wonder why the government would want to jeopardise such large amounts of taxpayers money on such marginal projects."
The controversial Networking the Nation (NTN) fund has become something of a whipping boy for the government's IT&T strategies. The major criticisms of the project are that funds fail to provide adequate telecommunications infrastructure in regional areas as the project was designed to do. The manager describes NTN as "good money after bad on so many projects." The project changed names from RTIF (Rural Telecommunications Infrastructure Funds) to NTN, "which was the Paul Keating initiative whose name they stole to cover the pork barreling of giving money for Web pages, cyber cafes etc."
Although NTN has lofty aims to develop long-term projects "to meet communications needs identified by regional, rural and remote communities," that's not the case, according to critics.
"The whole funding thing seems to be done in such an underhanded manner that people with some clue on how to actually implement something practical," says one ISP manager, "and in a sustainable way, are denied funding, while some newbie, wet-behind-the-ears twit who has no clue, gets a steaming pile of cash."
The manager submitted a proposal to install microwave infrastructure which had a high initial capital cost but would be matched dollar for dollar. He claims the project would be "self-sustaining and would offer high-speed backbones to improve (cost-effective) access to many people who simply had no access, or horribly slow [and] expensive access."
"The submission was dismissed "out-of-hand" because we are not a non-profit organisation," he explains.
However, a submission by another company, received an "obscene amount of money" to install a system which worked for a year but has lain unused since because they don't have the money to pay for on-going operation. The project included "satellite stuff for downlinks, but expensive frame-relay for back-channel -- what the hell for?" he questions.
"They provisioned large capacity for backchannel, then didn't even use the other direction. They were paying for it but ... someone had told them satellite was "the" answer."
The manager believes this is quite common with the NTN project. He adds, some government funding has been directed to finance the installation of equipment in areas where existing commercial entities are operating then discount below commercial prices using government subsidies which. In effect, putting the existing operator out of business.
The example is just one of many raised by ISPs and telecommunications providers operating in regional areas.
A Northern Rivers E-Town Wireless Local Loop Initiative was granted $1.5 million to establish "a Wireless Local Loop (WLL) service, providing quality telecommunications and affordable bandwidth initially to at least 450 users in three towns in the Northern Rivers region of NSW, featuring a 2MB, 2-way service for telephony and Internet."
Just over a quarter of a million was granted to provide digital mobile coverage in the Upper Clarence region of northern NSW.
The diffference with the mobile phone coverage project, says one ISP, is that "the locals have to raise $10,000 themselves and contribute to the project which will not only benefit them but everyone who uses that highway and has a Telstra mobile phone so they get to to raise money on everybody else's behalf."
"How fair is that?" he asks.
"Compare that to the E-Towns Local Loop whereby each participating household gets a private and exclusive benefit of $3, 333.33 (based on the $1.5m being spread over 450 households) and if they can afford to pay the heavily subsidised rate, will be sitting at home, feet up, cold drink in hand enjoying themselves whereby the good citizens of the Upper Clarence will be putting in hundreds of hours running chook raffles for the benefit of the Australian community."
While the mobile phone project is likely to be financially successful, the manager believes E-Town will follow the eLaunceston project and "at the same time send the local Internet providers broke."
eLaunceston is a three year Telstra Research Laboratories (TRL) research project announced in May 1999 and is run in conjunction with the Launceston Broadband Project (LBP). "TRL wants to test the idea that local information and services can increase the value of the Internet to existing users and make the Internet more attractive to non-Internet users," Telstra says.
The manager doubts the success of broadband in regional NSW given the experience in Tasmania.
According to the ISP manager, "Launceston has a labour force as at Mar-2001 of 33,190 persons, 2,611 unemployed and an unemployment rate of 8 percent. Launceston has a mean taxable income of $29,797 in the 1997/87 tax year (latest available)."
By comparison, "Maclean Shire has a labourforce as at Mar-2001 of 5,995 persons, 728 unemployed and an unemplyment rate of 12.1 percent. Maclean has a mean taxable income of $25,165 for 1997/98 which is bolstered by the surrounding sugar cane industry currently operating at world record low prices Byron Shire Council has a Labourforce as at Mar-2001 of 12,454 persons, 2,278 unemployed and an unemployment rate of 18.3 percent."
Highlighting recent challenges in regional NSW, such as the collapse of the dairy industry and recent floods, he says, "if they can't afford to pay in a more prosperous place like Launceston which in 1997/98 was earning on average another $4,632-$5,527 more per year ($89-$106 a week more), then the take up rate will be substantially lower in northern NSW."
Another major factor, he adds, is the extensive expertise and resources of Australia's largest telco in comparison to a local committee in the Northern Rivers region. In a letter of complaint to the NSW government in 1998, he expressed concerns about the "ability of the various RTIF committees to fully comprehend the complexities of the new telecommunications infrastructure, the pace of technological change and its impact on rural communities."
He uses the example of a carpet retailer, who is a committee member of an RTIF project, who publically admitted "he does not fully understand the issues involved."
Getting back to the major criticisms of the project, he believes, "there should be a method to prioritise rural infrastructure funding for NSW -- getting the most "bang for the bucks" rather than the current method. Infrastructure funding should result in telecommunications infrastructure [such as] hardware, such cabling projects, additional mobile base stations, larger local call zones that benefit the wider community and the industry."
With the complexity of new telecommunications infrastructure and substantial options available, the community "does not generally have the expertise," to understand what's required for the regions.
He likens the situation to a farmer. "If we went back in time and asked a farmer what he needed, he'd say he wanted a horse that was twice as strong and ate half as many oats. He wouldn't say he needed a tractor, because he may not have known what a tractor was. Yet that piece of equipment is exactly what he needed to be more productive."
To add insult to injury, one ISP manager has just discovered that his "competition" in the form of a newly installed POP at a remote site (thanks to government money) has just been told (basically), "hey, there's an extra $1,200 for you to spend on marketing. Send me a brief description of how you intend to use it, and an invoice, before October. If you don't send anything, I assume you don't want the money!"