Posts Tagged ‘National Broadband Network’

October 2010: North Carolina Broadband Findings and Australia Update

Current Economic Impact of Broadband and Opportunities Revealed in e-Solutions Benchmarking and e-Strategy Reports from SNG 

(October 28, 2010) e-NC and SNG announced today the findings of a comprehensive study of residents and businesses in the state of North Carolina.  In all, 30,000 households and 70,000 businesses and organizations were surveyed to uncover utilization of broadband and e-solutions statewide, with 1,492 households and 6,266 businesses and organizations responding. The e-Solutions Benchmarking and accompanying e-Strategy report from SNG was funded by a grant to the e-North Carolina Authority by the National Telecommunications and Information Administration (NTIA) of the U.S. Department of Commerce.

The e-North Carolina Authority (e-NC), and its predecessor the Rural Internet Access Authority, have worked to improve both the supply and demand side of the broadband issue since 2001.  The SNG study, conducted between February and October 2010, revealed the potential of broadband for competitiveness and economic opportunity:

• Nearly one in five (18%) of new jobs were created as a direct result of Broadband Internet. Small businesses (less than 20 employees) are especially dependent on Broadband Internet as 28 percent of new jobs in that sector are attributed to using the Internet.
• More than half of all businesses (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;
• 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 North Carolina’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.

“We see in these findings how important broadband is to creating new jobs and improving quality of life in North Carolina,” said Michael Curri, president of SNG. “We now have the data that shows why it is so critical to promote broadband infrastructure along with adoption in North Carolina. e-NC has been and continues to be a leader in this field in making sure that North Carolina captures the benefits of broadband in the years ahead.”

The e-Strategy report revealed clear and direct paths to further leverage broadband and available resources to expand broadband’s reach.  E-NC will be tackling the state’s challenges with strategies for:

• Better connectivity in un-served and under-served communities
• Mobile broadband to extend flexibility and reach
• Driving broadband adoption
• Supporting adoption of new and ground-breaking e-solutions
• Collaboration, utilizing stakeholders, community networks and anchor institutions

By employing e-strategies on multiple fronts, North Carolina will be poised to further leverage broadband for job development and economic growth.

“Findings show thirty-nine percent of households say they would likely relocate if broadband was not available, while 55 percent of organizations say broadband is essential for staying where they are,” says Jane Patterson, Executive Director of e-NC.  “These numbers illustrate why it is important for all of us to continue to address the issue of broadband expansion in North Carolina. The e-NC Authority will continue to work with all providers to encourage greater broadband coverage across the state. We will also place a special focus on working with small businesses to show how they can increase their revenue potential through use of the Internet.”

About e-NC Authority

The e-NC Authority is the state initiative to link all North Carolinians – especially those in rural areas – to the Internet. The purpose of this organization is to use the Internet as a tool for helping people to improve their quality of life. Affordable Internet service will provide North Carolinians with increased access to commerce, health care, education and government services. Through the Internet, rural North Carolinians can utilize resources not located in their areas, contact friends and experts, grow their businesses and increase their personal knowledge – all while preserving the lifestyle that is an integral part of who they are. The e-NC Authority was preceded by the Rural Internet Access Authority, and was created on Aug. 2, 2000 by the N.C. General Assembly. The organization became fully functional in January 2001 and is governed by a commission appointed by the governor and the N.C. General Assembly. By legislative mandate, the e-NC Authority is housed and staffed by the N.C. Rural Economic Development Center. Visit www.e-nc.org.

DEi Expands to Score Industry Sectors 

In June, we announced SNG’s popular new offering: the Digital Economy index (DEi).  A composite score of how organizations use seventeen (17) Internet-enabled applications, or “e-solutions,” DEi is a unique assessment tool that can be used at any industry, sectoral, or geographic analysis of businesses and organizations to drive productivity and competitiveness.

DEI enables businesses and organizations to see where they stand relative to their peers. It can also produce customized scorecards at an individual organizational level showing where improvements can be made to be more productive and competitive in the 21st century knowledge economy.

As SNG’s DEi is a composite score of how organizations use Internet-enabled applications, or “e-solutions,” to drive productivity and competitiveness, DEi can also be shown strengths and weaknesses within industry sectors. 

As we’ve just completed our latest work in North Carolina, let’s take a look at the DEi results by industry and sectors for North Carolina. The overall median DEi for all organizations surveyed in North Carolina is 6.99, with 50 percent of organizations falling between a DEi of 5.34 and 8.45. These scores compare utilization of e-solutions between industry sectors and we’ll explore what that means below.

Opportunities for increasing DEi, with resulting economic benefits, can be identified for potential action to increase the utilization of e-solutions by businesses and organizations.

For example, in North Carolina, the Construction industry (DEi = 6.17) and Information Services industry (DEi = 8.16) have among the lowest and highest median use of 17 types of Internet applications or processes.  The average DEi for North Carolina was 6.99 (high is better).

Some of the differences in the DEi score reflect unique characteristics of the structure of that industry. For example, the Construction industry has very high use of certain applications, such as supply chain management and document transfer, while having low use of tele-working.

One interesting example of using the DEi is a comparison of the Education industry (high DEi of 7.96) and Health and Human Services industry (low DEi of 6.60). Comparing these two industries highlights the extent to which the Education industry has pioneered such Internet uses as direct service delivery and remote counselling, while Health and Human Services lag significantly in these areas.

SNG’s proprietary DEi analysis is very useful in designing initiatives aimed at increasing the level and productivity of broadband adoption. For proponents of broadband as a critical tool for economic development, DEi shows where organizations and industries are leveraging broadband – and where they should be employing more e-solutions.

Back to Down Under

It took several weeks to sort out, but Australia’s hung parliament emerged with the Labor party still in power – and the National Broadband Network (NBN) very much alive and well.  As a refresher, the proposed plan by the Labor party for a $43 billion National Broadband Network (NBN) will provide 100 megabits per second broadband access to approximately 93 percent of the Australian premises.  Currently around 62 percent of households have broadband now but – for the most part – it is slow and expensive. In conjunction, the plan calls for a boost in broadband investment for businesses with hopes that it will directly support economic growth during the rollout.

The influential Australian Industry Group lobby calls the NBN an “unprecedented opportunity” for business innovation and with the ubiquitous nature of the fibre roll-out – bringing with it unparalleled speed and reliability. The group cites the long term opportunities that broadband “everywhere” brings, creating an environment where Australian businesses are able to create services and business models that do not yet exist on a network which will give Australia the fastest internet access in the world.

Some of the NBN’s first cables are being laid in Willunga. This is trial site in Southern Australia; one of five across mainland Australia. The state of Tasmania is already offering fibre-based services as part of the NBN roll-out and hopes to complete its roll-out by 2015; at least 3 years ahead of the mainland.

The Australian roll-out target is expressed in terms of coverage: any premise in a street with fibre rolled down it must be connected within a few days of demand. Naturally, free connections are being offered as the roll-out takes place. Activation only occurs where a customer asks a retail service provider to provide service over the fibre.

Surprisingly, only 50 percent of households in Tasmania have taken the free connection compared with over 80 percent in the mainland trial sites. It is not clear what explains Tasmania’s experience.  Perhaps communication is poor (i.e. low or no awareness campaign activity) and customers expect Telstra’s copper network to remain; Telstra is planning to migrate all its customers to the new network. Tasmania is passing legislation requiring customers to provide written notice if they wish to opt-out of a free connection (versus opt-in as now). 

Worse, less than 1 in 10 customers connected in Tasmania have chosen to activate a broadband service over fiber. Perhaps, the offers made by several internet service providers are not attractive. A leading provider, iiNet, is providing exactly the same plans on fiber in terms of price and down load caps as it offers for ADSL2+ except that until June 2011 the down/up stream speeds will be increased from 25/2 (same as ADSL2+) to 100/8 Mb/s. Customers may prefer to stay with their current connection on ADSL2+ than become “guinea pigs” on the NBN network. That coupled with the “hassle” of changing providers, the question becomes whether the broadband status quo is unacceptable enough for people to spend the time and money to switch to the NBN? And do citizens understand the value of the opportunities afforded by the new fibre network?

The uptake challenges illustrate what we always say – Field of Dreams is a nice movie, but “build it and they will come” does not work in the real world.  To ensure that individual businesses, organizations and households connect to the NBN, Australia’s leaders need to promote adoption of those e-solutions that are customized to their needs.  To maximize the return on investment requires addressing local / regional drivers and barriers and with it appropriate awareness and adoption programs at a regional level. By following the Broadband Lifecycle, Australia will see major payoffs for their broadband investment in terms of productivity, competitiveness, and quality of life.

As always, thank you for your continued support. If you have any questions or feedback, please don’t hesitate to get in touch!

Communications Day – 02 September 2010

Australia’s broadband future hangs in the balance

 
With election results still trickling in over a week past election day, it is still unclear which party – the Liberal or incumbent Labor will emerge in power. The months and weeks leading up to the election were fascinating on many levels – but let’s just focus on one very significant issue – the National Broadband Network.

Hotly contested, Labor’s $43 billion National Broadband Network 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 NBN 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 – will 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. The economic case is the most important 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.

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.

See this article in the publication.

Australia’s broadband future hangs in the balance

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.