With election results still trickling in over a week past election day, it is still unclear which party – the Liberals or incumbent Labor will emerge in power. The months and weeks leading up to the election were fascinating on many levels – but for our purposes, let’s just focus on one very significant issue – the National Broadband Network (NBN). 
Hotly contested, the proposed plan by the Labor party for a $43 billion National Broadband Network (NBN) would provide 100 megabits per second broadband access to approximately 93 percent of the population. Currently Australia has – for the most part – slow and expensive Internet service. In conjunction, the plan calls for a boost in broadband investment for businesses with hopes that it would directly support economic growth during the rollout.
The other side of the aisle, the challenging Liberal party wants to scrap the plan in favour of a $6.3 billion, privately run alternative.
All eyes in the broadband industry are waiting to see which side – and with them their broadband plan – would win out. Well we’re still waiting as the parliament remains hung while each side hope to sway Independents over to their side.
While we wait, let’s look at the issues:
- What is the $43 billion based on and is that an appropriate level?
- Who should build it? – and operate it?
- What return on investment can Australia expect from its broadband investment – be $43 or $6 billion?
- Will broadband investment result in a platform for innovation, competitiveness and growth that could propel
- Australia into a hotbed of technology and development?
These are important questions and no matter the party affiliation, taxpayers should be told how their money will be used – and what benefits and outcomes to expect.
Unfortunately, there has not been much discussion on the two most important aspects of this debate: how individual businesses, organizations and households would use the new broadband capacity – and what the economic or social impacts will be. Without that understanding there is no meaningful economic case, let alone business case, for investing in such a network. We refer to the economic case as many of the economic and social benefits are ‘off-balance sheet’ to the telcos.
Support and urgency for high-speed and high quality broadband connectivity gets lost without this critical information on utilization and quantified impacts – information that should be part of any due diligence. For example, if looking at a certain hospital – are they using remote diagnostics, electronic patient records, etc. – and should they be if they don’t? For businesses, if their utilization of e-solutions and Internet-enabled business practices is not at par with their global competition … what share of business can they expect to win in a globally competitive economy?
The community return on investment (Community ROI) needs to be understood because it is the only way that governments can justify using public monies to build broadband networks.
Explanation of current versus future demand for broadband is based on the utilization of e-solutions. When investing, you need to identify and understand the gaps between how e-solutions are currently being used versus how e-solutions can and should be used to maximize economic and social benefits. It is business 101 – you identify the need, you understand your customers and then you build your product or service to address the needs of the customers you want to target. This approach is taken when building the hardware that makes-up broadband networks, but this approach seems to be put aside when those broadband networks are being designed and planned.
Just like roads, high quality broadband networks enable economic activity and social services whose benefits far exceed the initial investment. SNG is a world leader in conducting such impact assessments of broadband and our work which has been quoted in the US’s Recovery Act that finds that for every dollar invested in broadband, there is a tenfold return on that investment to the community.
Whichever party forms the majority, they need to approach high speed broadband network investments focused on the demand-side (current and future) with the understanding that they are building infrastructure that serves all sectors of a modern economy. To realize these productivity and competitiveness benefits, Australia needs to act decisively and quickly. The opportunity cost of broadband infrastructure being hostage to politics will be borne by the Australian people.
In last month’s bandwidth, we discussed ‘smart grids’ and the fact that driving adoption requires awareness and a persuasive message. SNG’s recent studies show that the number of business owners and homeowners even aware of a smart grid falls under 5% of the population. This is a public relations and marketing problem for utilities and those promoting smart grids. 
Further results (as part of an e-Solutions Benchmarking study conducted by SNG) reveal that consumers, for the most part, are not willing to use the Internet to manage energy consumption in their homes and businesses. This is in spite of the fact that engaging this technology would bring financial and environmental gains (e.g. energy independence, global warming and emergency resilience issues – see Wikipedia on smartgrids).
It points to just how big the job ahead is for providers of energy to convince consumers of the value of smart grid technology. Deployment needs to be embraced and not mandated (see last month’s article on how to drive adoption among different audiences).
Beyond willingness to allow the local utility control of HVAC and major appliances in the home and business (of which less than 5% of consumers and small business are open to) – there is a major challenge to educate the public. “Demand Control,” “Demand Response,” and “Time-of-Use” rate structures currently being trialed are all concepts that need to be explained with something more compelling than a slip of paper stuck in a monthly bill.
Demand control, the ability to reduce energy consumption during peak periods, is one way utilities can avoid construction of new generating facilities, relying instead on the eventual development of renewable sources. For instance, employing demand control on a smart grid could eliminate $3.5 billion on a new energy plant.
With new smart meters installed, utilities have the ability to increase or decrease the per-unit energy cost dependent upon available supply and demand.
The problem – and biggest challenge of smart grids – is that they are dependent on electric firms serving as center of control and allocating energy needs between those who are served first, who can be dialed back, and – worst case – who needs to be temporarily shut down.
So we’re back to how to drive adoption of smart meters… the carrot or the stick? Smart meters being installed worldwide have the ability to send messages to individual Home Energy Management Systems, indicating rising demand and/or rising energy costs which will in turn causes consumers to modify behavior to better align with available power supply. (i.e. Raising or lowering a thermostat, delaying washing/drying dishes and laundry, etc. until the price subsides).
Broadband connectivity is the backbone of the smart grid because it enables us to manage our energy consumption from anywhere. The key for every home and business worldwide is to understand what is now possible and to take control of energy consumption. Whether the connection is fiber, cellular, WiFi, WiMAX or satellite, communities with universal access offer residents and businesses an opportunity to the energy consumed from anywhere in the world with the potential for real bottom-line savings.While local electric utilities go through the process of investigating smart grid investments and how end-users will be connected to the smart grid, SNG is helping communities adopt this critical e-solution.
Through our e-Solutions Benchmarking (eSB) studies, smart grids are one of the e-solutions SNG investigates to understand who is using broadband most effectively today so we can learn from them, and who is using it the least so we can raise their awareness and incentivize them.
This month we finish our three-part series covering the steps of the broadband lifecycle. In May we covered demand analysis and pre-planning while June’s discussion centered on strategy, investing, and building the network.
The last steps of the process to create a “platform for productivity, competitiveness and innovation” via broadband are both simple and complex, and the most critical step in the journey – driving usage.
Step 5: Awareness & Adoption Support
Upon the complex building or expansion of the network, we turn to the basics, in this case Marketing 101. Even the world’s best product or service has no chance without consumers learning about its availability. Likewise, if it is difficult or confusing to get their hands on your product/service, its most likely that consumers will just continue the status quo, never to adapt your offering, no matter how life-changing.
Your message should always focus on life changing the benefits of broadband – avoid a “features” discussion. No matter the product or service, consumers “buy” benefits. They want to know why and what will change in their lives… not how. Once your marketing has convinced consumers and businesses that they need/want the social and economic benefits of broadband, the “how” to get connected naturally follows.
SNG can help you drive utilization and with it, the effectiveness of your network and how do you get businesses and households to leverage the power of broadband. And with connections to broadband and e-solutions – your region reaps the rewards.
Step 6: Monitor Impacts and Outcomes
Critical to the ongoing success, sustainability, and funding for your expanding broadband network and efforts is measuring the direct community benefits. It is step six that validates the broadband investment decisions and the direct and indirect positive impacts. And with this validation comes compelling reasons for further investment in network expansion and upgrades and/ or additional adoption and awareness campaigns to increase benefits from a broader base of users. At the same time, measuring outcomes serves as a model for businesses and citizens to utilize broadband.
SNG can help you measure the impacts of your investment, its use, and the direct/indirect economic benefits. Make sure your investment is being used, promoting economic development – and where and how you can increase adoption.
Step “7”: Back to the Start
As your broadband network is an evolving asset, the Broadband Lifecycle begins again as you adjust your strategies to meet evolving needs. SNG helps identify and shore-up any gaps, resulting in continuing development, effectiveness, and impact.
The “Broadband Lifecycle” is SNG’s unique approach to each and every broadband initiative. Keeping it in focus will result in creating a platform for productivity, competitiveness and innovation” for your region rather than a network that may or may not be used.
Adjacent to Washington DC and the home of the FCC, Virginia is about to embark on journey along the Broadband Lifecycle. This is one trip the Bristol area in western Virginia is already very familiar with – as in 2007, SNG partnered with FiberToTheHome Council and BVU OptiNet (Bristol Virginia Utility) for step 6 of the broadband lifecycle – measuring outcomes. And with research of impacts, came an opportunity to uncover where to allocate additional fiber resources.
The Center for Information Technology (CIT) of Virginia is targeting surveys to 30 thousand businesses and over 8 thousand homes. With a statewide effort, this is a groundbreaking study on the benefits of a Fiber to the Home (FTTH) deployment. SNG will examine the economic and civic benefits that can be realized, give a holistic picture of the Community Return on Investment – and hopefully drive broadband development and growth throughout the Commonwealth of Virginia.
The project is a follow-up to a successful 2007 SNG study in which the small town of Bristol (17,000 residents) reported big benefits just 12 months after BVU’s initial fiber investment. SNG’s study found that for local businesses, fiber meant operational and sales efficiencies, cost savings, and employment opportunities. Bristol’s newly installed “platform for innovation” had created:
- Dozens of businesses reporting a total increase of $2.7 million in annual sales
- Two-thirds of businesses reporting cost-savings due to fiber use
- Nearly 300 new jobs, including a 10% increase in employment from organizations reporting an increase in sales as a result of the fiber network
Today, the Economic impact study of e‐solutions in the Bristol area is a core project component, quantifying the impacts of implementing e‐solutions from BVU OptiNet’s deployment. In conjunction with the state-wide initiative, SNG is again collecting data in Bristol that will serve as benchmarks for the rest of Virginia, helping identify the most significant and immediate economic and social benefits from e‐solutions. This will help guide Virginia as it makes decisions for what solutions are needed, and where, throughout the Commonwealth.
Findings from the Bristol test bed will be used to take effective awareness and adoption strategies for education, workforce, economic growth, healthcare and community. Learnings will also help prioritize planning activities, workshops, awareness campaigns, training on e‐solutions that will sustain and grow broadband.
Before we wrap up this issue of Bandwidth, a few words about smart grids. Before you tune out from this seemingly over-hyped and over-discussed topic, we’re with you – smart grids are not exactly the most exciting topic. While touting the need for smart grids, there seems to be a lack of discussion of the benefits.
Proponents of smart grids need to convey the benefits to drive awareness and adoption among businesses and households. Just like any broadband-enabled application, in order to drive adoption, change agents need to tell people why they should care and/or change their behavior – a “so what.” Smart grids are here, they are great… so what does that mean to me?
Driving awareness and adoption (Step 5 of the Broadband Lifecycle) seems to be a missing component in many of the early smart grid initiatives. And while finding the benefits that resonate for your audience is key to driving adoption – let’s not forget the first step – awareness. SNG’s recent studies show that the number of business owners and homeowners even aware of a “smart grid” falls under 5% of the population.
For those who do know the story of smart grids, the narrative seems to be closer to that of 1984’s “Big Brother” than 2010’s BP Oil Spill, creating more support than ever for the need for energy conservation and responsibility. So taking a look at smart grids from a perspective of a broadband-enabled application, how do we drive adoption among our different audiences?
The Pragmatist
There are a lot of reasons a pragmatist will like smart grids. Outages can be prevented through monitoring and proactive maintenance/repair of equipment as well as diverting energy to areas of need during peak demand.
The Environmentalist
Smart grids help reduce community carbon footprints – and help individuals spread out their energy consumption for conservation.
The Thrifty Consumer
Recently Baltimore Gas and Electric estimated that the average home owner will save $115/year by using a smart meter and effectively controlling the way that energy is being utilized. Many utilities are giving households the opportunity to earn “Negawatts” – which serve as credits that translate to refunds.
The Business Owner
Business owners for any size business can work with their utility to create a control for the disbursement of energy to their facilities and drive down costs. At the same time, by implementing smart grids community-wide, costly power outages like the one in Washington DC this week can be avoided.
So let’s get smart about smart grids, remember that just like all e-solutions, you need to drive awareness and adoption (even if government regulation forces adoption). At the end of the day, environmentalists and pragmatists alike will find smart grids a benefit to the community, with broadband once again enabling cost savings and – in this case – conservation.
As we focus on how we can make our broadband initiatives successful and network builds sustainable, have you ever been asked by your constituents – how do we compare? What are other communities doing to fully leverage broadband? What are the benefits of broadband that my business should be leveraging? How can my household better access health, educational, and civic services? In general, how am I doing?
SNG has developed a Digital Economy Index (DEi) – which scores how businesses, organizations, and households use key online practices. The DEi enables benchmarking of seventeen (17) key online practices for businesses and organizations and thirty (30) key online practices for households.
To personalize the value of broadband and online practices to individual businesses (especially small businesses that often do not have information technology directors), SNG has developed a DEi Scorecard that draws on industry leading metrics from our Digital Economy Database to assist small businesses and other organizations see where they stand. SNG’s DEi is a composite score of how organizations use online practices, or “e-solutions,” to drive productivity and competitiveness. By providing organizations’ with their DEi score, you are providing them insights into their competitiveness and relevance in an online economy by showing them how they compare to their peers and where they can adjust to increase efficiencies, innovation, and profitability.
The Digital Economy Index helps organizations develop their own broadband adoption plan (and economic growth path). Which leads into the next step, awareness & adoption support (Step 5 of the Broadband Lifecycle, or path to owning your digital future).
Across the globe the 2008-09 global downturn had deep impacts. Many households were stretched thin, looking for ways to supplement lost income or to supplement declining or stagnant salaries.
SNG worked with the e-North Carolina Authority in 2010 to conduct “eSolutions Benchmarking” across the state to understand how households are using broadband to tackle some of their challenges.
The study revealed the potential of broadband for competitiveness and economic opportunity:
- Nearly a third (31%) of the State’s broadband households operate a business from their home;
- The number of households either currently running (31%) or planning to run a business from their home in the
next twelve months (14%) is nearly half (45%) of the State’s broadband
households;
- Even more broadband households are either now using (41%) or planning to use (24%) broadband to sell items online.
That’s nearly two-thirds (65%) of broadband households using it to at least supplement their income;
- Most (85%) of home-based businesses said that broadband was essential to their business. More than half
(54%) said that they would not be in business if they did not have broadband while two in five (41%) would have to relocate if broadband was not available in their community.
In good times and in bad, broadband is critical for community members to earn income (and extra
income). But in bad times, research shows us that home-based businesses and sole proprietorships are more likely to sprout up. More than ever, it is critical for states and communities that want to remain competitive – and even thrive – to have broadband as a platform for innovation and competitiveness.
By Michael Curri – Broadband networks can create a “platform for productivity, competitiveness and innovation” in your community – delivering the infrastructure to capture economic and social opportunities, some known, some yet to be invented. Many communities fail during the broadband strategy, build-out and adoption phases as they lack focus and/or sufficient investment of time, energy, and resources.
Too often communities develop strategies based on following recipes from other regions. Instead of uncovering what the needed resources are, or how to leverage current efforts to best serve the specific and unique needs of the community, civic leaders race to “do what they did.”
There is no ‘one size fits all’ solution for successful broadband strategies that bring economic and civic benefits to a region and its citizens. Each community not only has different needs, but different strengths to best leverage the broadband platform. Strategic Networks Group (SNG) has for years been helping governments, at municipal, regional and national levels, to best understand where investment will make the biggest impact – and each and every time the best approach involves following the Broadband Lifecycle, or path to owning your digital future.
Continue Reading →
By Michael Curri
Much too often broadband initiatives that should be successful end up falling flat – for a myriad reasons. Perhaps they do not get off the ground because of a lack of vision, planning, or leadership. Many fail during the strategy and build-out process as they lack focus and/or sufficient investment of time, energy, and resources. Some initiatives may have been successful building the network but fail because they are simply taking a “we built it – you use it” approach and not driving applications and adoption. And even the most successful broadband projects, with ample utilization and economic and social impact can be perceived as a failure if the outcomes are not measured and reported.
It is for all of these reasons that SNG encourages its customers (and all broadband project managers for that matter!) to design and run their broadband initiative with “one eye on the Broadband Lifecycle.” In this issue of Bandwidth, and the next two, we will be taking a look at 2 of the 6 steps of the Broadband Lifecycle. In this issue: step 1 (identifying gaps, needs, and demand) and step 2 (pre-planning and assessment).
Continue Reading →
By Doug Adams
Now that you have funding, how can you make sure that your project lives up to the promise that got it funded in the 
first place? Hundreds of broadband projects are being funded in 2010 – be it from Stimulus or some other funding source – but how many will truly become a community asset that drives economic and social benefits?
Key to making sure your project will have a return on investment with quantifiable outcomes starts with these four guidelines:
- Don’t focus on engineering: it’s all about awareness and adoption;
- Use data to drive decisions before, during, and after the project;
- Create a “platform for innovation”: investing in broadband is NOT just about the financials;
- Frame the benefits, measure them, and promote.
Continue Reading →
