This article is by Matthew Hatton, an opinionated writer from Newcastle. It first appeared on his blog and is re-published here with his permission.

opinion There’s a lot interesting fallout regarding the Federal Court’s decision allowing Optus to offer its customers a service that can save free-to-air television broadcasts in the “cloud” and then stream the audio and video to their mobile phones. If you’re familiar with the SlingBox service that’s available in the United States, you’ll find it’s very similar to that.

But I cannot fathom on what grounds the AFL would be unhappy with either (i) what Optus is offering or (ii) the decision of the Federal Court in relation to it.

Most of the criticism coming from Telstra and the AFL is that this somehow breaches the copyright the AFL holds over the broadcast of matches. They claim that Optus’ service will devalue the broadcast rights (which were renegotiated last year to be worth a record breaking $1.25billion over 5 years), thus placing the future of the sport in jeopardy. As part of that new broadcast deal, the AFL signed with Telstra to allow Telstra customers to stream matches to Telstra’s T-Box and other devices (such as smart phones) connected to Telstra’s Next-G mobile phone network. According to reports that part of the deal is worth some $153 million over 5 years.

And it’s here where things start to get derpy.

Firstly, Optus’ TV Now service is only available to Optus customers (in much the same way that Telstra’s deal is only available to Telstra customers). So, this service isn’t encroaching on Telstra’s turf at all. It can be argued that having a service such as this available may result in people not switching from Optus to Telstra if they wish to get AFL coverage on their mobile phone, but I cannot for the life of me imagine that the number of people who would consider doing that would be all that high.

So what Optus is essentially providing is a service that has the potential to increase the AFL’s audience, not shrink it. And, for any sporting body, eyeballs watching matches are what make you money.

At best, the TV Now service is capable of showing matches on a 90 second delay – which for the sake of the argument is as good as live. Which means that viewers are also going to be subjected to the advertisements that are broadcast during the match.

It seems to me that what the AFL, Optus and Channel 7 (the free-to-air broadcast partner who’s coverage the TV Now service will be able to capture and stream) should be doing is looking at how many people are using this service and factoring that into advertising rates during matches – assuming of course that a higher audience number means a higher charge placed on ad spots during the match broadcasts.

Yes, Telstra has more of a right to be upset, but practically I can’t see just how they’re going to be losing out. Do people really change mobile service providers based off one tiny piece of exclusive content? Hell, are these extra services even used that widely? I’d love to know how many people paid their money for Cricket Australia’s streaming service that was available through the Vodafone produced Cricket Live app.

The reaction from the AFL in particular demonstrates just how completely out of touch they are with the changing attitudes towards television and broadcast sport. Optus’ TV Now service is something that they should be leveraging for their own benefit, not castigating because they reckon that the services that are going to be provided through the deal with Telstra are adequate enough.

More eyeballs in front of live sport broadcasts are what matter. The AFL should be encouraging people to watch their product. Trying to stop them is just completely counter-productive. The Federal Court and see that, why can’t they?

Image credit: Flying Cloud, Creative Commons

opinion In Australian society, so much of the ongoing narrative about the current generation of students in our schools is focused around the different way that they understand and use technology; and so much of that narrative is focused around fear.

Every second week a story pops up about a new way which technology can harm children. One week it’s cyber-bullying, with dramatic pictures being painted of abusive schoolyard bullies using blogs to hound fellow students into depression. Next it’s children inadvertently stumbling across Internet pornography, or using Facebook to harass teachers, spreading false rumours about them which could cost them their employment. And of course, there’s the ever-present threat of ‘sexting’.

Even the mundane can be troubling. Students, we’re told, no longer sit quietly in classrooms learning and working with their peers as older generations used to, faithfully solving problems from textbooks and respectfully listening to their teachers. Instead, the demon lure of technology seduces them away from their studies; distracting them with a constant series of text messages from their friends, pop-up instant message windows, YouTube videos and Facebook. School assignments are plagiarised from Wikipedia or outsourced to India. Teachers falsely believe they are in control of a class, when there’s actually a secret undercurrent of dissent undercutting their every attempt to impose discipline.

Underlying all of this constant hyperbole and outrage is a concept which has long found favour in anthropology, political science and even psychology: The idea of ‘the Other’ — a grouping of people or concepts which are alien to ourselves, and by extension, which help us define the limits of what we classify as “us”, or “we”.

Young people these days aren’t like us, is the dominant message. They’re different. They don’t obey. They can’t be controlled. They just want to muck around. They don’t want to learn. They’re into drugs, sex and dangerous music because they’re exposed to it too early via the Internet. They won’t make good workers when they finish school. They won’t get jobs. They’ll drop out and have teenage pregnancies. They’ll get into gangs. Generation Y, video games, Nintendo, social media, society will collapse and it’s all technology’s fault!

As a narrative, this idea of a ‘different’ generation of students passing through Australian schools armed with technology is a powerful one.

It allows the ‘adults’ of older generations such as politicians, social commentators, businesspeople and often even parents to easily apply what is perceived as a blanket trend to the next generation of young people. A thousand marketing articles are published discussing the different ways in which today’s young people can be better targeted through ‘social media’. Politicians call for Facebook to be banned or brought under control, religious groups attempt to have violent computer games banned and bureaucrats bulk issue laptops to school students in an attempt to address the needs of ‘digital natives’.

And it allows adults to more strongly reinforce their own identity construction — telling themselves they were part of a better, simpler time, when life wasn’t so complex and difficult to understand, with so many competing technological demands. A rose-tinged view of the past which aids in framing (or, perhaps more accurately, mis-framing) the policies of the future.

But, as with so many uses of the ‘Other’ in societal discourse (think of how Australian politicians regularly characterise refugees seeking to reach our shores, for example, or the historical injustices perpetrated on indigenous Australians), this one-sided narrative often obscures the real truth about what’s really going on inside our education system right now, and with young Australians in general.

Perhaps the deepest thinking I’ve witnessed recently about the actual complexities of what’s going on in schools has come from a one hour documentary produced by Queensland-based ICT analyst house Longhaus. It’s available online — and there’s a trailer below:

Longhaus’ documentary, entitled The Connected Generation, does begin by raising all of the same fears and stereotypes that the Australian media loves to perpetuate about technology in schools and the changing nature of today’s youth. After 20 minutes of watching it, you’re gasping for air and asking yourself how society will cope with this radically different generation. In the first part of the documentary, students are strongly characterised as ‘other’ than the viewer — different, alien, constantly having hidden conversations which ‘normal’ adults can’t penetrate. Chilling classical music plays in the background and it seems as if the doom of Australia’s education system is nigh.

However, at about a third of the way through the documentary, it takes a radical shift towards a more meaningful discussion.

At that stage, insightful, modern teachers enter the discussion to highlight how classrooms, educators, schools and even the nature of education itself are gradually shifting along with the technology and the students. Students admit they don’t know where things are going, and highlight the ongoing need for structure, guidance and the importance of schools as a focus for learning. Educators stress the ongoing and enduring fundamental nature of deep student and teacher relationships — despite the fact that on the face of it these relationships may be changing in some ways — moving online and moving outside hours through social media.

Supportive teachers who integrate technology into the learning process and are aware of the constantly shifting dynamics of students’ digital lives. Principals who are evolving their schools to become more flexible, more interactive and more student-focused. Departmental bureaucrats who are evolving curriculums to become more relevant in an age where legacy subject matter is quickly proven out of date by Google. Parents who are not isolated from their children’s lives, despite the fact that education and adoption of technology differs between generations.

What Longhaus paints is a picture of a more multi-faceted educational environment: Where technology is not only a threatening force for social disruption, but also an opportunity to free everyone in the process from unnecessary strictures; not only a tool employed by students but also one taken advantage of by teachers; not solely a factor which might impact on skillsets in demand by workforces but a factor which might create new ones.

In one memorable moment, several students laugh as they dream of an educational future with “no more textbooks, no more school uniforms and no more teachers”. “We might even have no teachers at all,” speculates another. “We might just have robots as our teachers.”

“I think students would like to think that teachers maybe won’t be needed any more in the classroom of the future, that we’ll all be online and we’ll be talking to robots,” chuckles a teacher shortly after in the documentary. “But I think what needs to happen is that step back from technology, and just remember it’s about education and that really can only come from collaborative learning, from meaningful learning activities and from social interaction.”

It’s this more complex future that I’d like to see discussed more when we think about technology in education — a meme which is only going to grow. Moving away from the binary idea of bulk-ordering laptops or even tablets for schools and focusing specifically on how those devices could be used to enhance educational outcomes. Moving away from the idea of banning bits of the Internet in schools and towards the idea of incentivising students through social media and video game theory to visit and use useful Internet sites. Moving away from the idea that ubiquitous mobile phone ownership by students is a threat to classroom discipline, and towards ideas about how it could be used to enhance collaboration between students.

It’s only when society at large starts to look at technology in education in this light — which, I think, many students and teachers in Australia’s education system already are — that we’ll get past this fear, uncertainty and doubt surrounding how young Australians use technology differently and begin to realise that using technology in education isn’t what you are; it’s what you do, and that our young people aren’t somehow fundamentally different from us; they just got access to better tools at a younger age.

For many of us who are older, it’s about time we caught up with them.

opinion Over the past week a rather pathetic little game of bluster, bluff and ultimately light blackmail has played itself out in Australia’s telco sector as a handful of Australia’s major ISPs have done everything in their power to demonstrate just how self-interested they can be when it comes to exploiting the National Broadband Network.

This game — let’s call it Quigley’s Hold’em, or perhaps Dalby’s Five DSLAM Draw — probably kicked off, as most such shady efforts do, late in the week, perhaps as the shadows of last Friday night were drawing near and the weekend, with all its inherent vices, began to beckon the players away from the clear sunlight of honest dealing.

At the time, the head negotiators from most of Australia’s major ISPs — at least including iiNet and Internode, but likely Telstra and Optus as well — informed the National Broadband Network Company that they were not planning to sign the comprehensive wholesale agreement which it had labored with them for some 15 months to develop.

Despite the fact that the document had already been through five draft iterations and hundreds of hours of consultations, the ISPs told NBN Co, it had still not addressed some of their key concerns; namely, the ability of the Australian Competition and Consumer Commission to oversee the relationship, the liability in the case of problems, and equivalence issues with all ISPs signing the same document.

Now, normally this kind of issue would be part of the normal cut and thrust of negotiation between the ISPs and NBN Co — fair points to raise. But, to add a little punch to their demands, at the last moment, the ISPs played two hidden trumps: Timing, and the media.

Unlike the ISPs, NBN Co has been on a clock in the negotiations. The existing trial agreement between the two sides, which has allowed some 4,000 customers to be signed up to NBN Co’s infrastructure nationally, expired today. This isn’t a problem for the ISPs. After all, they need be in no rush to move their existing customers onto the NBN’s infrastructure. Either way — if the customers stay or go — the ISPs get paid.

But it is a vast problem for NBN Co.

The ridiculous furore that erupted when NBN Co released its current customer sign-up numbers just after New Year’s Eve should go some way to illustrating the fact that the company is currently fighting for its own survival. If NBN Co can roll out enough infrastructure and sign up enough customers over the next year, it faces a chance of continued existence under a Coalition Government; if its effort stall, it will fall victim to Tony Abbott’s oft-repeated promise to shut the project down.

The ISPs know this. And so, when faced with NBN Co’s intransigence in modifying the terms of its wholesale contract, at the eleventh hour, they bent the company over a barrel and reached for one of the easiest and most manipulable weapons available to anyone in Australian society: The media.

“NBN Co to bar defiant telcos,” screamed the Financial Review’s article on Monday morning, which painted NBN Co as a draconian monopoly, “threatening” to “ban” ISPs from signing up new customers. And the rest of the media swung into line, with more headlines: ‘NBN Co pressures telcos on access agreements’; ‘NBN Co stands firm on wholesale contract’; ‘Under 50% of ISPs sign onto NBN contract’; ‘Tension as NBN trial agreement ends’; the headlines went on forever.

On Monday, NBN Co was standing fairly firm, soberly highlighting its extensive 18 month consultation efforts and the lengths to which it had gone to meet the ISPs’ demands. But it only took two days for the company — flailing under a fictional ‘pressure’ entirely created by the ISPs and a media ravenous for fresh meat in the slow news days of the new year — to buckle. NBN Co’s bluff had been called as the ISPs refused to give ground.

This morning, it was again the Financial Review which brought us the new developments. “NBN backs down on agreement,” the newspaper reported. And “sources close to negotiations” — read: the ISPs — noted that NBN Co had retreated in precisely the areas the ISPs were complaining about.

Game over. Quelle surprise!

Now, I don’t want to go too far in alleging improper behaviour on the part of the ISPs. Solid journalistic efforts by the AFR’s reporter on this issue, David Ramli, did faithfully bring this important issue to light. And, of course, the fact that we know about all of this is itself a positive thing: Transparency in the NBN process is only to be lauded. Then, too, it is common commercial practice for companies of any stripe to use any legal tool at their disposal to bring negotiations to a successful close. Nothing illegal has been done here, and probably even nothing unusual for the private sector.

However, there are several disturbing aspects to what happened this week which I think bear further rumination.

The first is the adoption by several major ISPs of the sorts of language during this NBN process which we are more accustomed to hearing from the Daily Telegraph. Internode carrier relations manager John Lindsay, for example, raised a rather unusual scenario when speaking to the AFR about the liability issue. “You don’t want to be in a position where NBN Co’s installers have wrecked your customer’s house or have no incentive to do connections in a timely fashion, with you getting the blame,” he said.

Really? Painting NBN Co as house wreckers? I would have thought that below Lindsay.

Then there was this curious statement on the part of iiNet regulatory chief Steve Dalby, again on the liability issue: “It means that if customers are affected by outages they can sue us, but we can’t pass that liability through to the cause, which would be NBN Co, and that just doesn’t make any sense.” Really? It’s extremely rare — in fact, almost unheard of — for a customer to sue an ISP about their connection going down. I can’t imagine this will be a regular event under the far more reliable fibre future NBN Co has planned for us. NBN Co ‘wreckers’, customer lawsuits? Is the iiNode which we know and trust? It doesn’t seem like it to me.

Then there was the nature of the negotiations themselves.

Wikipedia defines a cartel as being a formal (explicit) agreement among competing firms, which Australia’s ISPs most certainly are. It then goes on to explain that cartels usually occur in oligopolistic industries, where there are a small number of sellers, usually selling homogeneous products. The aim of cartels, it adds, is to increase the profits of individual members by reducing competition.

Maybe I’m taking this argument a bit far, but when most of Australia’s ISPs gang up together on the same issues and force a major wholesale service provider like NBN Co to back down, by exerting pressure through the media, that sounds a great deal like a cartel to me. There’s no competition here; there’s no fair play; there’s only a gang of what — five or six ISPs, representing overwhelming market share — effectively publicly blackmailing a joint supplier.

Then there’s the political angle.

The whole reason why the ISPs are able to exert pressure on NBN Co is because the company has aims that are not commercial. NBN Co’s mission is to roll out telecommunications infrastructure around Australia and then sign customers to use it, through utilising relationships with retail ISPs. This isn’t a commercial business proposition — it’s a mandated government policy. And so while it doesn’t really have to ‘sell’ its products and services to ISPs as such, as they will be forced to use them eventually anyway (when other broadband networks are shut down), neither do ISPs have to buy them, until that shutdown date comes.

The difficulty is, however, is that while NBN Co is locked into its course of action and cannot deviate from its mission, the ISPs are not, and they all have varying degrees of cooperation with the NBN policy. Some, such as Internode (or should I say, iiNet?), are pretty much wholly on board, while others such as TPG are so far ignoring the whole thing altogether. This gives the ISPs an extraordinary degree of non-commercial negotiating power.

This week, the ISPs flexed that muscle. “Back down on your commercial contracts,” they told NBN Co, “or else we’ll make the NBN project look like it’s stalling, and your political masters very unhappy.” The pathetic statements they issued this afternoon, seeking the validation of the public and the media for signing contracts with NBN Co — whose public credibility they flirted with wrecking through their game — only makes blisteringly obvious their belief in the usefulness of the press in the negotiating process.

As a believer in free markets and the value of competition, all of this makes me very, very uncomfortable. We have collusive action by Australia’s telecommunications giants, leveraging political angles and the threat of the media. We have bluster from formerly honourable ISPs painting an important national project as “wrecking” people’s homes. And we have an 18 month NBN negotiation process undercut at the very last minute. Who knows what the long-term implications will be.

If I were the ACCC, I would be looking very, very carefully at the events of this week, as I’m sure Shadow Communications Minister Malcolm Turnbull and other elements of the Coalition are. How far can we trust the major players in Australia’s telecommunications sector? At this point, I am far from sure.

opinion If there is one thing which maverick Australian entrepreneur Dick Smith is good at, it is causing controversy.

From Australian manufacturing to population control, from environmentalism to freedom of speech, from terrorism to civil aviation, if Australia is debating an issue, then Dick Smith is likely to have an opinion on it, and all it will take for that opinion to spill forth is a quick call from a journalist. Ten minutes later, Bob — or maybe Dick — is your uncle and the media has a new, sensationalist and usually apocalyptic quote from an Aussie icon to slather all over itself, in big gooey, slightly radioactive globs.

Last night proved no exception.

For reasons which I have been unable to ascertain, given that he sold his flagship electronics chain to Woolworths 30 years ago (almost before the Internet was even invented, and at a time when it predominantly sold black and white TVs and bits of wire), the ABC’s normally excellent discussion show The Drum called on Smith to proffer his expertise on the issue of online retailing. How might Australia’s supposedly ailing retail industry take itself forward with vim and vigour, The Drum’s host Tim Palmer wondered out loud, with the ominous threat of the Internet hanging over every cash register, siphoning transactions daily from the great wheel of commerce?

And of course Dick had the answer.

As I — and no doubt, countless others — watched, aghast, the 67-year-old Smith sequentially shut down every other member of the panel discussion of which he was just one part, and proceeded into an epic nationally broadcasted rant about economic protectionism, Gough Whitlam, the cost of Australian wages, the ongoing complaints by retailers like Gerry Harvey about online GST collection and why politicians should “tell the truth” about jobs going offshore.

In one memorable moment, Smith claimed that if international online retailers weren’t charged the “$600 million” worth of GST he claimed they should be paying, Australia wouldn’t be able to pay decent wages for our police forces or even fund the ABC, and that the retail industry for items with a value less than $1,000 would eventually cease to exist as Australians bought everything online.

As rants go, it was fantastic. My blood pressure rose several points as I fought an overwhelming urge to throw my dinner at the television screen, and Dick was successful in drawing the entire focus of The Drum’s panel discussion into a shouting match between him and normally impeccably behaved commentators like the ABC’s Annabelle Crabb and the Institute of Public Affairs’ Tim Wilson. To put it nicely: Our Dick was on fire.

I recommend you watch the entire segment to catch the Aussie icon at his finest; the debate starts here at the 29 minute mark.

Now, I wouldn’t describe Smith’s rant as entirely coherent; it was less in the line of reasoned argument and more in the line of an angsty rambling monologue which sought to sledgehammer the Government on a whole range of issues while avoiding any modicum of responsibility on the part of bricks and mortar retailers for the less than perfect “trading conditions” which they currently find themselves in. But that didn’t matter really. It wasn’t as if anybody else on the panel was qualified to speak on the issue anyway … Dick’s only real control factor was the host, Palmer, whose feeble protests about the strengths of Apple’s retail stores was brushed off by the entrepreneur within the space of about three seconds.

However, after I calmed down, finished my dinner and started thinking about Dick Smith’s history and the issue of retailing in the electronics industry in general, a wider point begun to surface in my mind. For that, Dick, and for almost making me choke on my brussel sprouts, I thank you.

As Australia’s technology sector has begun its annual two-week saturation experience with news emanating from the Consumer Electronics Show in Las Vegas, it is increasingly clear that globally, many technology manufacturers and retailers still largely see themselves as being caught in what I would describe as the paradigm of ‘marketplaces’ for their goods and services being sold.

Companies like Sony, LG, Samsung, Canon, Microsoft, Nokia, HTC and others are currently launching thousands of products at CES, and will launch hundreds more at the upcoming Mobile World Congress confab in Barcelona, with the view of attracting broad interest. The idea is that they will then work with retailers like Harvey Norman and distributors like Telstra, Optus and Vodafone to offer these products to customers.

The concept — call it historical — is that customers wanting a new gadget will walk into stores or browse their options online and make a choice between the various products. They will then buy the one which they want. It’s this sort of buying pattern which retailers like Dick Smith and Gerry Harvey have grown up with. It’s all they know. And it dates back millennia, to the days when community markets were the only place where regional goods were sold. From Rome, to Egypt, to China, every city, every civilisation has had its markets, and Dick Smith and Gerry Harvey are but the latest scions which this epic economic cycle has created.

The only problem is, in many cases, consumers are no longer making the traditional types of choices about what products they buy, because something like 95 percent of new products don’t matter.

Take the mobile phone market. Right now, if you talk to industry insiders, it is becoming appallingly clear that despite the fact that new phones are being launched all the time, in reality consumers are predominantly buying just a handful of devices. The huge number of Australians who bought a new smartphone in 2011 were far more likely to have bought an iPhone, a HTC Desire or Sensation, or a Samsung Galaxy S II, than any other handset.

They didn’t go to a “marketplace” and make a choice. They bought one of the top three or four options directly from a telco and ignored the bottom 50. And when the Samsung Galaxy S II, likely 2011′s best smartphone is available for peanuts — $39 per month (including plan) over two years on Vodafone — can you blame them?

It’s a similar situation in tablets, where something like 90 percent of Australians are buying iPads, which is virtually the only tablet brand with any market penetration right now. The only other tablet device Australians are really interested in is the Amazon Kindle. And often people will own both, because the Kindle is the best eReader. In laptops it’s a little more diverse, but again there are only a handful of models, led by Apple’s MacBooks and with the most popular models from HP, Dell and Acer hovering around as well. Lenovo in the business world. In television sets right now, according to my peer group, it’s Samsung. In furniture, Ikea.

The rapid integration of technology platforms with each other is only increasing this trend. Many people no longer use separate MP3 players, GPS navigation units, fixed or video cameras, audio recording devices, portable gaming consoles and so on. They just use their smartphone for all of these purposes. And I’m sure in a year or two laptops will start dying as keyboards are better integrated into tablets. TV brands will start dying when Apple eventually launches the iTV or whatever. We all know it’s coming.

Other areas are being touched by this trend as well. ISPs like iiNet do not want consumers to make choices about their ADSL routers. They want them to buy their standardised BoB device. Telstra does not want consumers to use their own digital video recorder. Telstra wants customers to use its T-Box. Video gaming options have increasingly become condensed to Microsoft’s Xbox and Sony’s PlayStation 3 consoles, and we’re not too far away from a future where all content to those platforms will be delivered digitally, doing away with yet another “marketplace” — the physical video game retailer.

Even within these digital marketplaces, choices are becoming less important. If you’re into role playing games, in late 2011 you were probably playing just the best one — the Elder Scrolls V: Skyrim. If you were into action adventures, there is no doubt you would have been playing Batman: Arkham City. For many people, there has been no need to make choices about which game to play, when it has become incredibly obvious which one is the best one to suit your needs. When you can get the best experience in a convenient format at a decent price, there is no need to settle for second-best.

The reason why this is occurring should be obvious by now: Globalisation.

When most of the top products are available globally (at least in first-world countries), there is no need any more for consumers to make choices — and hence, compromises — about the products they buy. They can simply read an authoritative review on the whole category of products on a global site like Engadget, and then follow that site’s recommendation for the best global product at any time. Then, you can often buy that product directly from the manufacturer — for example, Apple or Amazon — rather than dealing with a local distributor.

This process is inherently better than dealing with third-party distributors. You get the best stuff from the people with the best expertise about that stuff. You might pay more for it than those living in the manufacturer’s home country, but then you’d pay more at retail anyway, and this way you avoid the uncomfortable experience of dealing with retail staff who usually know less about the products you sell than you — or your cluster of Internet review sites — do. It’s this concept which is behind the success of Apple’s retail stores. If you buy stuff from Apple directly, you know they have the model in stock, you know precisely what the price is going to be, you get great service (albeit with a free dose of reality adjustment thrown in) and you’re getting one of the top products in whatever category you’re shopping in.

This concept — of the demolition of the idea of ‘choice’ and ‘marketplaces’ — is also evident in other areas of consumer electronics.

One of the central issues with Google’s Android platform is the difficulty consumers have with upgrading their handsets to the latest version. Honeycomb? Ice Cream Sandwich? Gingerbread? Froyo? We don’t care. We just want the latest version, whatever it is, and we don’t want that download to be controlled by our carriers, because they’re not the people who make our smartphones. Just get out of the way, the mantra goes, and provide one central, standard way through which Android can be updated, directly from the source to you.

A lot of what Dick Smith talked about last night, and what manufacturers will be talking about post-CES, is distribution. Jobs for people in stores. Deals being signed with carriers. Country-specific marketing campaigns. Economic protectionism for local manufacturing. But the reality is that increasingly, consumers don’t care about any of that. Many people would prefer the third-party retail ‘marketplaces’ which have existed for millennia to simply disappear as the ability to build relationships directly with the people who actually make the stuff we buy becomes possible, and in fact, completely normal. That middle men have a vastly reduced future in the global economy should, by now, be obvious to everyone. And this capitalist class — which has long made its margins on the top of the real innovators — deserves to die an ignominious death.

Dick Smith and Harvey Norman are fabulous examples of retail marketplaces where you can buy anything. But increasingly, people don’t want to buy anything. More often than not, they only want to buy the best thing. And that’s the one thing which mass market retailers never quite seem to want to sell you.

Image credit: Dick Smith on The Drum last night, believed to be covered under fair use

opinion Reality check: Simon Hackett didn’t sell Internode because of the National Broadband Network. He didn’t sell it to cash out. And he certainly didn’t sell it to take Internode to the next stage of its development. He sold it because one man — no matter how strong — can only hold up a visionary ideal for so long, and twenty years of doing so is more than enough.

In Haruki Murakami‘s recently published novel 1Q84, one of the leading characters refers to a famous literary technique employed by the Russian physician and author Anton Chekhov. “According to Chekhov, once a gun appears in a story, it has to be fired,” the character tells another. “Meaning, don’t bring unnecessary props into a story. If a pistol appears, it has to be fired at some point. Chekhov liked to write stories that did away with all useless ornamentation.”

In short, as a symbol of violence and death, a gun is such a potent image that an author shouldn’t introduce it into a story unless it will eventually be used. The very presence of a gun implies that it will be taken up and fired. It’s not an object so much as the visual representation of an inevitability. A similar concept appears in the writings of American author Don DeLillo, who famously had one character warn another that all conspiracies or plots tended towards a single endgame: death. Someone must eventually die as the fulfilment of any conspiracy, DeLillo suggested; the gun must be fired once it is known to exist.

Faithful to this ideal, Murakami’s character in 1Q84 does introduce a gun into the story; one which becomes a central plot element. I haven’t finished the book yet; but I can already sense where things are going. It’s a one way street.

In the days before Christmas, it’s not hard to imagine that much of Australia’s telecommunications industry must have felt themselves to be wandering around in a Murakami novel; distanced from their emotions, with a confusing world vaguely swirling around them; unsure what to feel about iiNet’s sudden and unexpected announcement that it would buy its long-time rival Internode.

An iiNet buyout of Internode had been speculated about for so long that when the news actually arrived, it did so in the sort of surreal atmosphere with which Murakami is famous for. iiNet founder Michael Malone and his counterpart at Internode, Simon Hackett, have such large personalities; everything they do and say is virtually the stuff of industry legend. To hear them on the same teleconference promoting the marriage of their companies felt like your parents taking you aside and announcing that they were to be separated. You weren’t quite sure what it all meant; all you knew was that your world had irrevocably changed.

On the conference call, neither could really explain why the buyout had occurred. There were plenty of facts, figures, EBITDA ratios, customer numbers, strategies and plans. But underpinning all of it was a confusion that left most onlookers out of sync with reality. Wasn’t it only one month ago that Malone had publicly called for Hackett to “cash out” of his company? What had changed? Why was Hackett selling? What made now the right time? Nobody seemed to know.

The reaction from Internode customers was instant and clear. Although it was mostly expressed online, at the time I visualised many of them raising their heads and hands to sky and crying: “Noooo!” iiNet was a good company, many of them seemed to feel, but Internode has always represented something more. Something they cared strongly about.

There is no doubt that this feeling revolves around and stems from the fact that Simon Hackett has never been a ‘normal’ executive or entrepreneur in the usual sense of the word.

Where executive like Malone have followed a path of rapid expansion through constant acquisition, Hackett has preferred to quietly and steadily build Internode’s customer base through the constant development of its network infrastructure. Where companies like TPG have blanketed Australia with massive and misleading marketing campaigns, Internode has virtually relied on word of mouth alone. Where many of Australia’s ISPs have gone public and made their founder instant multi-millionaires, Internode has remained independent and almost 100 percent in the hands of Hackett himself.

Where some ISPs have cooperated to a certain extent with the big bad, Telstra, Internode has waged a war against the nation’s biggest telco that has now lasted several decades and has seen no quarter or mercy given. Where almost every ISP holds back some information from its customers, sometimes for their own good, Internode has been unflinchingly, brutally honest in its dealings constantly. Rarely do you wonder where Internode sits on a certain position. Internode does not deal in shades of grey — only black and white.

Hackett’s naked honesty in places such as Whirlpool has become the stuff of legend. His blog posts on Internode’s own blog have exhaustively disclosed how the company is serving its customers, including fine details of its financial model. And his rare industry speeches are always packed houses as those attending await to hear how one of the only true ‘outlaws’ left in the sector sees the ISP industry of today — and what he will do next.

And yet, Internode has not been a perfect company in the capitalistic sense over the years.

Hackett’s ongoing and very public war with Telstra has no doubt led to his company receiving less favourable terms from the former monopolist’s wholesale division than more diplomatic companies like TPG have been able to achieve; with the net effect of hurting Internode’s bottom line and its ability to compete for customers.

The company’s reluctance to spend any money on marketing has drastically limited its reach outside South Australia — Hackett joked on the acquisition conference call that “both” of Internode’s customers in Western Australia were extremely satisfied with its service — and its reluctance to go public or accept any outside investment has limited its ability to expand. Perhaps most critically, the lack of Internode interest in acquiring other companies to build scale has left the company in TPG and iiNet’s dust as a distant fifth player in Australia’s broadband market.

There are also other troubling aspects to Internode’s management style.

In August 2008, Internode appointed staffer Patrick Tapper as its chief executive, with Hackett to continue to set the strategic direction of the company as managing director but Tapper to grow the company in practice. At the time there was much speculation that the move was a precursor to Internode listing; speculation that Internode itself helped fuel.

But in reality Tapper became a virtual nonentity.

Does Tapper really exist any more? It’s hard to say. I’ve been covering Internode constantly for the past half-decade and as far as I can recall, I have never spoken to the man. I’ve never emailed him. I’ve never received an email or a message of any kind from him. He does not issue press statements. He does not appear as an important figure in the occasional leaks I receive from other staff inside Internode.

For all intents and purposes, Patrick Tapper has become like the Sheep Man from Murakami’s novel Dance, Dance, Dance; an almost mythical figure locked away in the disused back room of a dilapidated hotel, surrounded by reams of information on things which almost nobody cares about; signifying perhaps nothing, nowhere visible, existing only on the strength of a rumour.

It is extraordinary that Tapper — Internode’s CEO — did not participate in the conference call with Malone before Christmas regarding Internode’s acquisition. What it signifies is that Tapper does not run Internode and never did. The company has always been Hackett’s baby and Hackett’s alone.

All of these aspects of Internode — both the positive and the negative — has lent the company an anti-capitalist, anti-authority swagger infused with the technical excellence that technologists of any stripe worship. Internode has always felt like a company composed of sysadmins, providing services for sysadmins (see: Hackett’s constant re-tweeting of the DevOps Borat Twitter account). And so many have loved the company for it. On that journey, Internode’s weaknesses have become its strengths; its strengths magnified by its honesty. Its capitalist success; perhaps, driven often by its anti-capitalist leanings. Its network engineers, even, permitted high-profile public battles with the nation’s Communications Minister.

Likewise, Hackett has become something more than a man to many in Australia’s IT industry. Instead, he has represented an ideal; a new Internet visionary for the modern era; Australia’s Vint Cerf — promoting online freedom, impeccable quality broadband at a decent price, independence from the mainstream, and even alternative energy sources and communion with the sky.

But all of this could only last so long.

Ultimately, like most companies, Internode’s strengths and weaknesses all stem from its founder. Hackett’s refusal to let Internode become a ‘normal’ company like any other could only last as long as he was personally able to shoulder the responsibility for leading the ISP himself. And now — after twenty years — the time has come where he wants needs to pass on that burden.

That the several reasons which Hackett has professed for handing over his baby don’t stack up is fairly obvious. As Exetel’s John Linton has pointed out, there is no reason for Internode to need scale to handle the NBN, when the NBN has not yet been built. There is no reason why Internode could not list on the ASX and gain enough funding to expand further, with Hackett remaining a dominant shareholder to prevent takeovers (something Hackett has been discussing as recently as September 2011). There is no reason why Internode could not take private investment from a company such as a major private equity firm.

There is also no reason why Internode couldn’t continue on as it is now, gradually buying wholesale services from NBN Co or one of its burgeoning aggregators as the network is being rolled out. This ‘wait and see’ approach will actually likely result in Internode continuing to gain market share as hundreds of thousands of Telstra and Optus HFC cable customers are unbundled from their broadband network for the first time in a decade.

The only reason why Hackett would want to sell at this time is because he is tired of shouldering the responsibility for his company — the avatar of his vision of great Internet access and the power of technology — alone, and he knows that if he hands over the company’s management to someone else, be that through different ownership or simply a different managing director, the company will change; it will become a more normal part of the capitalist system. It won’t be aligned so strongly with his personality any more.

The Chekhov’s gun in this epic story of Hackett’s is Michael Malone’s decade-old offer — continually renewed over the past ten years — for Internode.

What the iiNet acquisition represents for Hackett is a soft exit from his responsibilities at Internode which makes sense. Not financially — because Hackett is already a rich man — but ethically and idealistically. Although iiNet has taken vastly greater steps towards becoming just another part of the capitalist system than Internode has, Michael Malone’s presence at the company continues to ensure it is somewhat on the side of ‘good’ in the vast ethical scale of the economy; the scale on which companies like Telstra, Optus and TPG sit squarely on the side of ‘evil’ — or at best, ‘neutral’.

The minute Malone made the offer to Hackett a decade ago, Hackett must have seen the inevitability of the deal eventually taking place. As someone who is primarily a technologist, Hackett must have known for years that his personal ideals have been holding back Internode from becoming just another company — but he must also have known that an iiNet acquisition would allow much of the soul of Internode to remain in future — although Hackett himself will no doubt depart from its doors. This opportunity — of exiting Internode gracefully, with most of his integrity intact — must have eaten away at Hackett over the many years — the best of many alternatives — until just before Christmas, he finally decided to pull the trigger.

For Hackett himself, the sale will be a good thing. Many commercial matters will now pass from his hands, and he will be free to focus on what he loves best — better technical outcomes for everyone. I am glad for him, and as a fellow Australian, proud of him. Hackett started Internode to solve a problem — universal Internet access — and has lived to see that problem resolved in Australia. Shortly, it may be resolved in the best possible way, with universal fibre to the home.

For the industry, however — and this is why the iiNet acquisition is already so mourned — the true passing of the Internode torch may not be a good thing. We need more visionaries like Hackett and more remarkable, independent companies like Internode. They are truly few and far between. And for iiNet? Well, iiNet has its own inevitability; its own date with destiny; its own imminent question which needs to be answered.

iiNet’s Chekhov’s gun has but one name, in three syllables: TPG.

Image credit: Carl Malamud, Creative Commons

opinion Prediction: When Amazon’s Kindle Fire launches in Australia next year, it will very quickly become the second most popular tablet locally behind Apple’s dominant iPad, easily eclipsing rival offerings from the likes of Samsung, Motorola, Research in Motion and more.

What basis do I have for making this statement, which would appear to be controversial on a number of levels? Let me count the reasons.

Let’s start with the timing. Although Amazon has not yet confirmed when or if the Kindle Fire will go on sale in Australia, it’s likely that it will launch locally in about six months’ time. Why? Because the company has established a pattern of this kind of launch timing in the past.

The original Kindle was released in November 2007 in the US and never came to Australia. But the Kindle 2, which was released in the US in February 2009, was made available internationally in October that same year. The Kindle DX was released in May 2009, followed by an international launch in January the following year. And the third-generation Kindle was initially announced in August 2010, and shipped internationally at the same time as in America.

Now, normally you’d bet that it would take a while for the manufacturer, Quanta, to ramp up manufacture of this new type of device to scale internationally. The Kindle Fire is qualitatively a different device than the previous e-ink based Kindles, after all — Amazon hasn’t previously sold a touchscreen Kindle with a colour LCD screen.

But in this case, Quanta has already for some time been manufacturing a very similar device, Research in Motion’s BlackBerry PlayBook, for international sale for some time. So it shouldn’t be too much of an extension for the company to produce enough Kindle Fires in bulk to meet global demand. The Kindle Fire started shipping to US customers in November. We’d expect it to be available internationally by mid-2012 at the latest.

This brings us to the question of demand.

With companies like Toshiba, Motorola, Samsung and Acer already having launched Android-based tablets in Australia over the past year, and even RIM getting into the action with the PlayBook, what evidence is there that the Kindle Fire will be able to take the number two spot locally behind Apple, when every other company has had such a huge start?

Well, plenty.

For starters, a report from Taipei this week in influential industry journal DigiTimes suggested that Quanta had already shipped between three and four million Kindle Fires to Amazon, with shipments to reach five million units by the end of December or early January. This report dovetails with a report by analyst firm iSuppli that Amazon would ship 3.9 million Kindle Fires in this quarter this year.

Technology industry blog and analyst house GigaOM points out that these sales mean that Amazon will easily become the second-largest tablet supplier in the US — with iSuppli allocating it an estimated 13.8 percent of the market, compared with 4.8 percent from Samsung (whose Galaxy Tab 10.1 device is being blocked in Australia by Apple legal action) and 4.7 percent from Barnes and Noble with its Nook e-Reader — which also isn’t available in Australia.

It’s not quite clear where Motorola fits into the picture with its Xoom tablet, but given the price of the Xoom has been cut in half in Australia just a few months after the device went on sale, I can’t imagine its share of the market — in the US or in Australia — is going to be huge.

Now all of this is extrapolation, of course — none of these figures appear to be direct from Amazon, and perhaps the Australian market is different, after all. However, there is another direct piece of evidence pointing to the Kindle Fire’s imminent popularity in Australia — web traffic.

Several weeks ago Delimiter published the first Australian review of the Amazon Kindle Fire, after we imported one of the devices locally. And reader interest in this article has been huge — at least double that of any other review of a tablet device which we’ve published this year. And that’s only taking the first several weeks of traffic to the Kindle Fire review into account. I would expect our Kindle Fire review to eventually become one of our most popular articles of all time.

Bear in mind that the overwhelming majority of those viewing this review are Australians. They primarily arrive at the page through searching Google for the availability of the new Kindles in Australia. Those searching from other countries will generally pick up international reviews of the Kindle Fire through sites like Engadget or Gizmodo.

Personally, I believe all of this somewhat circumstantial evidence is enough to show that the Kindle Fire will be huge in Australia in 2012.

The only question which remains is why. Why will the Fire become a strong competitor to the iPad in Australia, when the Motorola Xoom, Samsung Galaxy Tab family, Toshiba Thrive, BlackBerry PlayBook and more have all failed to gain scale? It’s simple: Australians do not really see the Kindle Fire as a competitor to the iPad.

Over the past few months since the new Kindles were unveiled (including the Kindle Touch etc), the question I’ve been getting asked by my friends and family about them has not been: “Should I buy an iPad or a Kindle?” The questions have primarily come from people who want to buy a Kindle to jump onto the incredibly powerful eBook revolution which is sweeping Australia right now, but don’t quite know which device to buy. They know they want a Kindle, because that’s what everyone else uses to read eBooks — but they don’t quite know which one out of the new bunch they should buy.

In the mind of many Australians, iPads and Kindles are for two completely different purposes. The iPad basically replaces many of the functions which were previously carried out on a laptop or even a smartphone, while a Kindle (of any kind) is a replacement for physical paper books. Many people are not really that aware that the Kindle Fire can perform many of the same functions as the iPad, or that the iPad can access any Kindle library through the iOS Kindle App.

With this in mind, many people will buy both; while many of those who didn’t want an iPad or an iPad alternative will buy a Kindle Fire to get access to eBooks. This is the genius of Amazon’s Kindle strategy: It’s not positioning itself as an iPad alternative. And this is why it will succeed in taking a huge slice of Australia’s tablet market next year — because many people won’t see it as one.

Image credit: Amazon.

opinion In September 2010, Tony Abbott set one of the Coalition’s most senior politicians loose on Labor’s flagship National Broadband Network project, with instructions to wreck and “demolish” it. Fifteen months later, with Malcolm Turnbull’s credibility in the portfolio in tatters and his arguments falling on deaf ears, it is clear that mission has failed, with his criticism having only clarified and strengthened the NBN policy.

For me, the history of Turnbull’s thought process and line of argument in the portfolio can be traced back a month before his appointment as Shadow Communications Minister, to a landmark public forum he held at the Paddington RSL in August 2010. I remember the day well. It was a cold and blustery afternoon, and a friend and I had made the trek down to Paddington to hear Turnbull speak. The focus of the event was not actually the NBN; Turnbull had called the event in order to hear views from his electorate on another controversial Labor policy: The mandatory Internet filtering scheme.

But while the filter was discussed long and loud, it wasn’t long before talk turned to the NBN as well.

Questioned about the issue, Turnbull delivered a refrain which would become common over the next 15 months. His argument revolved around three key issues: The cost of the network, its imposition as a Government monopoly on the free operations of the telecommunications market, and the idea that its underlying fibre to the home technology may not be the right one, both because Australians may not need the 100Mbps speeds which it will provide, as well as the remarkable growth of wireless alternatives.

At the time, Turnbull’s ideas were fairly revolutionary, coming from the Coalition.

The MP’s predecessors in the shadow communications portfolio had largely been bit players in the national political arena — figures such as Tony Smith and Bruce Bilson, who made little to no impact on the national telecommunications debate. Where higher profile figures such as Nick Minchin had held the role for the Coalition, they had largely been seen as negative forces which didn’t really engage with the debate or provide any alternatives to Labor’s popular NBN policy.

Turnbull’s appointment to the portfolio changed all that.

Even before he was officially confirmed as Shadow Communications Minister a month after the filter forum, Turnbull had demonstrated a level of engagement with the debate and an understanding of the dynamics of the telecommunications sector which was a level exponentially higher than his predecessors.

By flagging issues such as the cost of the NBN, the popularity of wireless, the lack of demand for 100Mbps speeds and the impact of a new government monopoly on the telecommunications sector, Turnbull — for the first time in the NBN debate — provided the conservative side of politics with a bunch of weapons with which to attack Labor. His sky-high level of popularity with the general electorate also rocketed the NBN issue in general into the top of the national debate.

Following educational visits to the world’s most broadband-saturated countries in Asia, Turnbull has also taken the Coalition’s own broadband vision further than ever before, proving that he can not only oppose telecommunications policy but also propose some of his own. As I wrote at the time, there was much to like about the more minimalist telecommunications vision which Turnbull outlined in August this year.

Then too, over much of his period in the portfolio, Turnbull has been extraordinarily successful in opposing the incumbent minister, Stephen Conroy. It’s been highly enjoyable watching Turnbull mock Conroy repeatedly over the past 15 months, from offering to teach him “Economics 101″, to telling NBN proponents to “lay off the Kool-Aid” and describing the NBN as similar to communist Cuba. The Member for Wentworth has a wonderful way with words.

However, I think we need to take a step back from this process and look at the outcome after 15 months.

Turnbull’s argument about the cost of the National Broadband Network has largely become moot. Although opinions differ about the exact amount of capital expenditure required for the initiative, debate in this area has died down as Australians have started to see the infrastructure of more than an investment with eventual social, economic and even direct financial returns.

Turnbull’s argument about the nature of the NBN as a monopoly being imposed on the telecommunications sector has largely become moot, with virtually every major telco — even including Telstra — supporting the policy. Debate in this area has died down as NBN Co has navigated its way through the ongoing sea of complaints and issues about its operations.

Turnbull’s argument about the lack of demand for 100Mbps speeds has largely become moot as Australians have started to wrap their heads around future telecommunications requirements and have started to better understand high-bandwidth applications such as IPTV, telehealth, online education and more. Debate in this area has also died down.

And lastly, Turnbull’s argument about the popularity of wireless has largely become moot as Australians have started to accept that wireless and fixed broadband connections are complementary. Very few of us have given up our fixed broadband connections, despite the fact that we now have 3G and 4G broadband on the side. The debate in this area has died down as the nation has realised we need both.

Now, all of these debates have been furiously fought in Australia over the past half-decade. However, what we have witnessed over the past several months has been a calming down of the discussion. A consensus is emerging that the NBN policy has weathered the storm of controversy which has raged around it over the past few years.

Nowhere is this calm more evident than in the end of year wrapup rant which Turnbull published earlier this week. In it, the Shadow Communications Minister doesn’t further develop any of the Coalition’s previous complaints about the NBN, because those complaints have been debated and addressed exhaustively over the past 15 months. Instead, Turnbull is reduced to publishing a series of quibbles.

NBN Co isn’t transparent enough, he writes, although the company’s CEO, Mike Quigley has been nothing but, and tirelessly so. NBN Co’s financials aren’t solid enough, he writes, although that issue has been addressed through countless reviews and projections after projections. And the rollout is not what it should be; despite the fact that it’s actually going rather well, and with no real deal-breaker problems so far.

All of these things are mere quibbles; skirmishes around the edges. Right now, Turnbull is finding himself flat out of substantial arguments when it comes to the NBN policy. Why? Because, through a democratic process of debate and argument, all of the possible arguments about the NBN have been debated back and forth over the past several years; and many of those arguments could now be described as having been objectively settled, with a fairly large consensus existing.

This leaves us with the Coalition’s own policy.

As I have previously noted, the Coalition’s rival NBN policy as announced was pretty good. It was a credible , fiscally conservative and more minimalist alternative to Labor’s NBN project, and it was precisely what the NBN debate needed at that point in time. Its publication helped clarify Labor’s own NBN strategy and keep it accountable.

However, as I have also written, Turnbull has done nothing to develop or further outline the Coalition’s policy since it was released almost six months ago. The effect that this has had upon it is pretty stark. While Labor has substantially addressed all of the criticisms of its NBN policy over the past few years, the Coalition has not done the same. Turnbull has not continued to push his policy in public, outline it further or respond to criticism. This has had the consequence that it has largely been rendered obsolete; out of sight, out of mind. Australia has moved on.

One further item is worth noting. Turnbull’s personal credibility — while very high with the general population — has likely hit record lows in the telecommunications sector at this point. The MP’s incessant personal attacks on Mike Quigley earlier this year, his constant repetition of his core arguments (increasingly against the consensus) and now, with his line of arguments reduced to minor issues with the NBN policy; all of these things are affecting Turnbull’s ability to get the Coalition’s message out when it comes to telecommunications policy. I believe the Member for Wentworth’s relative silence on issues in his portfolio over the past few months constitutes evidence that he realises this fact.

What does all this mean? For the Coalition, it’s bad. Turnbull’s attempt to “demolish” the NBN has only succeeded in flushing out the strongest arguments against the policy and having them refuted. For the Government, things are great: Its NBN policy is even stronger than before Turnbull was appointed, and it has addressed all of the substantial arguments against it.

But perhaps most importantly, Turnbull’s failure as Shadow Communications Minister is a success for democracy. In any age where all political debate tends to turn cynical quickly, the Australian debate over the NBN has illustrated that out of the fire of vitriolic political discussion, good policy may be tempered and clarified. And that can only be good for the nation.

The following opinion/analysis piece is by Tony Brown (Twitter), a senior analyst with Informa Telecoms & Media. It originally appeared on Brown’s blog and is replicated here with his permission.

opinion In Asia Pacific, only two countries are undertaking nationwide government-backed rollouts of an FTTH-based national broadband network (NBN): Singapore and Australia, markets that could scarcely be more different in terms of geographic size and suitability for ubiquitous FTTH-network deployment.

Since Singapore’s NBN deployment is in a far more advanced stage than the Australian version – which is being deployed by the National Broadband Network Company (NBN Co.) – the Singaporean rollout can offer some indication to NBN Co. of what can be expected on the long road ahead.

In Singapore’s case, the principal problem that OpenNet – the SingTel-led consortium that is responsible for building, managing and operating the Singaporean NBN – is experiencing is the difficulty of gaining access to multiple-dwelling units (MDUs) such as high-rise apartment buildings and other large housing complexes to install FTTH connections, a problem that will be familiar to many other FTTH-network operators in the region. Although Singapore’s NBN has been connected to about three-quarters of the country’s buildings, as of end-June the network had just 40,200 subscriptions, well behind the government’s original expectations.

MDUs cause problems
The principal reason for the slow take-up has been the fact that many building owners have yet to give permission for OpenNet to install last-mile FTTH connections in their buildings, meaning that the country’s NBN retail-service providers are unable to offer services in many buildings.

According to data from the Infocomm Development Authority of Singapore, as of November 2010 about 90% of management/corporation-strata title (MCST) owners of MDUs contacted by OpenNet had rejected OpenNet’s offer to install FTTH connections in their buildings.
A renewed effort by OpenNet has improved the acceptance rate: As of end-August the firm had contacted 47% of the owners of the country’s MDUs, half of which have since completed their NBN installations. The rest have yet to give approval for installation.

OpenNet has yet to establish contact with the remaining 53% of MCST owners in the country, and it looks unlikely that they will be any more forthcoming than the initial batch contacted by OpenNet with regard to last-mile NBN installation, though OpenNet is working with the government to solve the problem of gaining access to MDUs.

Although OpenNet – in truly efficient Singaporean style – is likely to overcome its problems with accessing MDUs and finally deploy its last-mile FTTH connections, it will probably be a while before every household has access to the shiny new NBN.

The Hong Kong experience
Veteran FTTH-network operators in Hong Kong warn that gaining access to MDUs is by far the hardest part of deploying a FTTH network and say that in a significant number of cases it can prove impossible for an operator to gain access to a building to deploy infrastructure.

“Getting into the buildings from the street or up the buildings requires a number of factors, such as forming a working relationship with the building management or owners, and that’s just to get permission to enter the building in the first place,” a senior executive from Hong Kong incumbent operator PCCW told Informa Telecoms & Media.

“From there, you then have to deal with a lot of different factors, such as the amount of in-building decoration that has to be disturbed in order to deploy the in-building wiring. This is actually a really serious but often overlooked factor in deploying network infrastructure.”

In addition, the executive says that one a firm has gained permission to access a building, in-building deployment can often be delayed by unforeseen problems, such as blockages between the floor riser and the entry doors of each home in the building.

The executive says another common problem that the firm has encountered in its FTTH deployment is the need to reinstall ducting in many older buildings, usually because the existing ducting is in too poor a condition to support FTTH wiring, meaning that the firm must spend additional time and money to install new ducting in the entire building before installation can take place.

A senior executive from Hong Kong Broadband Network (HKBN) says it took the company “years to resolve this problem of getting in-building access,” though he adds that HKBN has largely overcome the barriers it faced in the earlier years of deploying its near-nationwide FTTH network.

Although PCCW and HKBN have both widely deployed FTTH networks in Hong Kong, not all firms in the country have been able to gain in-building access to deploy network infrastructure. Most notably, leading terrestrial broadcaster Television Broadcasts (TVB) found its plans to deploy a nationwide digital SMATV network to carry its pay TV platform stymied by an inability to gain access to buildings to deploy a last-mile cable-transmission network to individual homes. The firm was ultimately forced to abandon the project.

The Australian NBN challenge
The issue of gaining in-building access to MDUs will be of crucial importance to NBN Co. in Australia, given the company’s estimation that about 37% of NBN connections will be installed in MDUs, equating to about 4.5 million of the 12.2 million FTTH premises on the network.

In an interview published Nov. 8, NBN Co.’s general manager of operational support systems, John King, told ZDNet that NBN Co. was trying to ease the deployment of the NBN in apartment buildings and townhouse complexes by working with body-corporate groups – the management arms of MDUs – to develop standard processes for NBN installation. Under the current plan for connecting an MDU to the NBN, the company meets with individual body-corporate groups and formulates a design for installation in the building, which the group then needs to approve.

In the early phase of its network deployment, NBN Co. has been running into problems gaining access to MDUs, most notably in the early-rollout area of Brunswick in inner-city Melbourne, where only just over half of premises opted to have the NBN connected. NBN Co. says it typically makes several attempts to gain consent from body-corporate groups to install the network in a building before declaring that access to the MDU in question is being officially “frustrated.”

Another problem experienced by NBN Co. has been the fact that many apartments inside MDUs are occupied by rental tenants, meaning that the firm has to get consent from both the renter and owner of the property before it can install a connection to the property – an extremely labor-intensive and time-consuming process.

The operator says the key to gaining in-building access to MDUs in the longer term will be in continuing to consult with body-corporate groups as closely as possible. The process is likely to be facilitated by the gradual switchoff of the existing Telstra copper network, which will persuade body corporate groups to grant NBN Co. access to buildings or face losing access to fixed-line telecommunications altogether.

Lessons learned the hard way
Amid the hype over FTTH deployments and talk about 1Gbps access speeds and the extraordinary applications that such bandwidth can bring, people often overlook the fact that some unfortunate individuals are out there doing the hard labor to make the technical revolution possible in the first place.

It’s not just a sweaty, boiler-suited technician running fiber-optic cable into an apartment building, either: It is also a small army of administration workers trying to track down elusive apartment owners to get permission to install FTTH in their rented properties or working out a network-installation plan with a confused body-corporate group.

Deploying an extensive fixed-broadband communications network is hard work and can take a long time, sometimes a lot longer than folks had planned for, even in a market such as Singapore, which appears to be one of the easiest places to deploy a nationwide FTTH network because of its small size and high population density. Given that Australia’s NBN is over 10 times the size of its Singaporean counterpart, it is inevitable that NBN Co. in Australia will run into its fair share of deployment headaches in dealing with MDUs. We know that just from its early rollout experiences in Brunswick.

The real question is what the cost of these difficulties will be in both time and money. It is going to be extremely expensive and time-consuming if NBN Co. has to make multiple visits to a rollout site to connect MDUs in the area, a state of affairs that would put pressure on budgets and completion targets. The situation is made even more complex by the turning off of the Telstra network: Although in many cases it should prompt body-corporate groups to pull their act together and have their MDUs connected to the NBN, it might cause some buildings to be cut off from fixed-line telecoms services altogether – a nasty prospect from a PR perspective.

Overall, Hong Kong’s experience suggests that NBN Co. in Australia will ultimately be able to gain access to most – but maybe not all – MDUs with recalcitrant owners to complete its network rollout, but doing so will require the patience of Job and might take a lot longer than anyone thought.

This article is by Bruce Arnold, a lecturer in law at the University of Canberra. It originally appeared on The Conversation.

opinion Santa has arrived early this year, with good news for consumers, lawyers, journalists and people who wonder about the legitimacy of Australian patent law.

Yesterday, the Australian Federal Court released its decision regarding an appeal by Samsung regarding its dispute with Apple over patents at the heart of touchpad devices. Those devices include Apple’s iPad and a range of tablet computers, currently “must-haves” for people looking to fill the Christmas stockings or just upgrading from a traditional laptop.

This marks the latest development in an ongoing battle between the companies that is being played out in courts across the globe, that began with accusations from Apple that Samsung had “slavishly” copied iPod and iPad designs.

What does it mean?
The decision, in essence, means Samsung can begin sales of its Galaxy Tab 10.1 in Australia as of tomorrow, December 2. Samsung had planned to scrap Australian sales of the newest Galaxy tablet if it couldn’t meet the Christmas shopping season. Missing Christmas would render the device “dead”, the company’s lawyer Neil Young said at a hearing in October.

Apple has claimed Samsung is infringing its patents, in essence unfairly exploiting Apple’s innovation. The dispute has been taken to court, with Apple relying on protection under the Patents Act 1990. The act provides short-term protection – a non-renewable 20 years – for an individual or corporate inventor.

Protection includes being able to restrict someone else from unauthorised commercial use of what has been patented. Apple’s lawyers have accordingly asked courts in Australia and overseas to stop Samsung selling devices claimed to infringe Apple’s patents. Samsung has disputed the validity of those patents and referred to patents of its own claimed to have been infringed by Apple.

A blow for Apple
As with much commercial law, yesterday’s decision did not occur in isolation. Earlier this year, a single judge of the Federal Court granted Apple an injunction stopping Samsung from selling devices that allegedly infringed Apple’s patents. That restriction was temporary, pending the court’s consideration of conflicting claims made by the two competitors.

The rationale at Apple is that the company would suffer financial loss if Samsung’s products appeared in the shops in the busiest retail season of the year. On appeal, the full court has overturned that restriction. It has allowed Samsung to get its products into the market, subject to a record-keeping that will allow Apple to gain compensation if the court eventually decides that Apple’s patents are valid and have been infringed by its competitor.

The court thus has not recognised Apple or Samsung as having exclusive rights to any/all touchpad technology. Yesterday’s decision was essentially procedural, although high stakes. It’s another battle in the “tablet wars” rather than the final victory for either side.

Winners and losers
It looks likely, in any case, that Samsung’s Galaxy tablets will be in the shops before Christmas. The news is of course good for lawyers. Some will be collecting fees for their expertise and hard work in the dispute. Others will be busy advising clients about the implications of yesterday’s decision. For lawyers – and legal academics – it’s business as usual.

The decision is also good news for journalists, as it provides more headlines about a subject that’s close to the hearts – or just the hip pockets – of many consumers. That reporting tells readers something about how ordinary Australians discover and understand – or misunderstand – the law.

For patent lawyers, academics and policymakers the decision is less exciting than recent disputes on pharmaceuticals and medical devices that haven’t grabbed the attention of the mass media.

Courts resolve disagreements about patents and other intellectual property every week. Few of those disagreements are deemed newsworthy. Fewer still are really understood by journalists and their audiences. But the Samsung decision is also good news for people who wonder whether patent law has gone off the rails. What we’ve seen in the Samsung/Apple dispute is two large corporations seeking to protect their innovation. There’s a lot of money at stake, along with a lot of creativity.

Back to court
Australian judges have responded quickly and intelligently. The courts have explicitly based their decisions on perceptions of community benefit and on a coherent interpretation of what the national Parliament, through the Patents Act 1990, wants the law to do. The latest decision shows that patent law is working, and working well.

Where does the dispute go from here? The answer, of course, is back to court. Apple has until 4pm tomorrow to launch a High Court appeal, after which there’ll be a decision on the merits of arguments by Apple and Samsung about the specific patents.

That process is deeply traditional: the current dispute is reminiscent of now-forgotten appearances in Australian and overseas courts during the 1890s and 1920s about patent protection for things we now take for granted: pharmaceuticals, plastics, electrical components, lifts, escalators, plumbing, medical equipment, brassieres.

Stay tuned for the next battle.

This article was originally published at The Conversation. Read the original article. Image credit: Shinkai, Creative Commons

opinion Over the past few months, I have alternately been appalled, disgusted, saddened and ultimately bored at the degree to which naked self-interest is ruling the ongoing debate about how Australia will deal with the issue of online copyright infringement (Internet piracy).

Now, there is no doubt that the debate has been a vibrant one. There have been strong opinions from multiple sides. There have been complicated legal, commercial and ethical arguments presented ad nauseum. There have been many speeches made, public discussion papers issued, off the cuff comments thrown into the ether and the overall entertainment factor has been extremely high; worthy, almost, of its own reality show on prime-time TV.

However, what has been lacking from the debate at its core has been any real consideration for the underlying factors underpinning the growth of Internet piracy and how they might be addressed. Unfortunately, but perhaps predictably, the major players in the debate — the ISP and content industries and the Government — appear to be almost purely engaging in this dialogue out of their own self-interests; nothing more, and nothing less.

Let’s take last week’s release of a discussion paper by a number of Australia’s major ISPs and representative group, the Communications Alliance, on the issue.

On the face of it, as many commenters agreed over the weekend, the paper sounds pretty good. It avoids unsavoury approaches to dealing with Internet piracy such as disconnecting users’ broadband connections, includes significant avenues for appeal and independent oversight and works within the boundaries of Australia’s existing law on a predominantly education-based approach to dealing with the issue. However, when you dig a bit deeper into the rationale underpinning the paper, it becomes clear it has broader aims.

Ask yourself: What does Australia’s ISP industry really think about the issue of Internet piracy? Well, the answer to this question is clear: It wants the issue to go away. Australia’s ISPs want their users to continue to funnel money into their revenue trough for broadband connections with big quotas, and they don’t want to be on the receiving end of lawsuits such as AFACT’s action against iiNet while they’re doing it. Australia’s ISPs primarily see the issue of online copyright infringement as being one between content producers and content consumers; they want no part of the whole shebang.

The discussion paper released last week reflects this belief. It positions ISPs as outside the cycle of online copyright infringement by having them passively pass on educational and warning notices to users whose activities will in turn be tracked by the content industry; then, when users don’t listen, the ISPs again step out of the way and pass their details back the other way. There’s also a limiting factor on how many notices they’ll pass on. It’s all quite neat and clean — and predictable.

The response from the content industry (film, TV, video game and music studios and distributors) has also been predictable.

Ask yourself: What does the content industry think about the issue of Internet piracy? Well, the answer to this question is also clear: It wants to hold onto existing business models. The content industry wants its consumers to continue to funnel money into its revenue trough, forking out for pay television, DVDs, sitting through ever-increasing amounts of advertisements on free to air TV, buying video games at full prices, buying whole albums of music and more. The content industry has a whole superstructure set up which has been custom-designed to part you from your money, and it doesn’t want to migrate to a new system.

Hence, the content industry primarily sees the issue of online copyright infringement as being one between users and ISPs. They can’t control what users download, but ISPs can, so they want ISPs to take responsibility for undercutting their existing business models. The content industry’s response to the ISPs’ discussion paper released last week reflects this belief. When the Australian Content Industry Group’s Vanessa Hutley says the proposal “falls short”, she means that there’s no responsibility in the ISPs’ model which would require them to take any enforcement action against their users.

Then there’s the Government.

Governments are a complex beast. Beset by a thousand different competing political and bureaucratic demands, Ministers such as Federal Attorney-General Robert McClelland are positioned at the heart of a huge spider web with a thousand different cords pulling on them simultaneously.

Consequently, they don’t pay attention to industry lobby groups such as the Internet Industry Association, Communications Alliance, Australian Information Industry Association, Australian Content Industry Group, Interactive Games & Entertainment Association and so on unless there is clearly an issue which the industry can’t resolve itself.

When this happens — as it clearly has in the case of online copyright infringement — the Government will normally order a public enquiry to get all sides of the story, and try to get the warring sides to sit down around a table to negotiate under its steely gaze. This is precisely what has occurred in this case as well. Closed door discussions about Internet piracy are being held by the Attorney-General’s Department, and a number of public consultations are under way about the issue of the Internet in general.

The Government primarily sees the issue of online copyright infringement as being one between ISPs and content owners. They want these two industries to sit down and work out the issue themselves. If this ultimately fails, the Government will be forced to devote resources to legislating on the matter — something which it wants to avoid.

Now, have you noticed something about all of these approaches? In all three cases, the prime actors (the ISPs, the content industry and the government) have avoided taking any personal responsibility for the issue. None of the major three sides of Australia’s Internet piracy debate fundamentally believe that the issue is theirs to resolve. They want someone else to do it for them.

What this has meant for the debate is that it has constantly gone around in circles, with each side of this odious tri-pointed star constantly evading responsibility and passing the buck. In addition, they have each avoided discussing the real issues underlying Internet piracy.

Now, there are two further parties in the debate which have remained largely silent on the issue of Internet piracy so far: Those who actually create the content — rather than distribute it — and those who consume it. I’m speaking, of course, about artists and the general public.

I was struck recently by a comment which Greens Senator and Communications Spokesperson Scott Ludlam made on this issue in a post on Delimiter. Ludlam wrote:

“This is a complex and opaque clash of commercial self-interest, with old media conglomerates seeking to retain their incumbency in a world which doesn’t need them as much as it used to. Amazing how little we hear from the artists and creative people themselves about how they’d like to be paid for their work.”

That’s right — real artists! What a shocking concept!

As Ludlam rightly points out, it is not film and TV directors, producers or actors, musicians, video game development houses or any other form of artist calling for the issue of Internet piracy to be resolved. These people — artists — do not really care about the issue. Their main concern is that they are allowed to produce their art without gross commercial interference, and that art gets distributed to consumers in a way which allows consumers to get access to it and at a reasonable enough rate of return to allow them to continue making it and even profit a little.

Art has other aims than just profit, although profit is usually mixed in there somewhere. Strange to hear this said out loud, isn’t it?

It is a similar situation with the general public. All Joe Citizen wants is to be able to get whatever content they want, at the same time as everyone else, on whatever device they want to be able to view it on, and at a reasonable price that they can afford to pay. Sounds pretty simple, doesn’t it? The average Australian couldn’t give two hoots about content industry groups, record labels, film and TV distribution networks, television stations (pay TV or otherwise) or video game retailers. What they want is the content, plain and simple.

I was struck by a comment by ABC managing director Mark Scott, who said (as reported by Mumbrella) in a recent speech that the ABC’s iView platform had demonstrated that there is a strong and growing online audience for “great content, well-curated and delivered in an accessible format”. “Our research suggests that when audiences discover iView, they love it — they use it, they keep coming back to it,” Scott added.

Precisely. When the barriers to consuming content are taken away (as they have been on the ABC’s stellar iView app), content consumption explodes. I personally use iView almost every day — on my PC, on my media centre, on my laptop, on my iPad, on my iPhone — anywhere. Sometimes the content isn’t great, but it’s so readily available that I consume it anyway.

Australia’s love affair with piracy is not an effort to gyp content creators of their rightful remuneration for that content — it’s a simple attempt to get at content which is too hard to consume otherwise. Once again, audiences want to be able to get whatever content they want, at the same time as everyone else, on whatever device they want to be able to view it on, and at a reasonable price.

Now the thing to understand about both artists and consumers is that they are absolutely the key stakeholders in this debate — everyone else are just middlemen. In addition, they don’t have many linkages with the other three groups who are driving the debate.

Content consumers primarily see their main relationship as being with artists directly — the film buff who follows a director’s career, the music fan who buys all of a band’s albums, the Gears of War fan who follows every comment Cliffy B makes in public. And on the flipside, the artists see their main relationship as being with their fans — talking to them, producing content for them, performing for them. Neither places ISPs, content industry groups or the Government as stakeholders of high importance in the way they consume content.

And yet it is these middlemen who are driving the debate about online copyright infringement in Australia, who are negotiating behind closed doors on the issue, suing each other in court, and threatening to legislate about it. For self-interested reasons.

When artists and consumers themselves get involved in the debate, a remarkable thing tends to happen: Self-interest largely disappears from the picture. Great art is never created from self-interest. It can only be created when an artist is driven by their creative impulse, and applies discipline to develop their talents. Great art is never consumed from a sense of self-advancement. It is consumed with wonder, for entertainment, to take oneself away from our normal lives. The commercial agenda is present but rarely the most important factor — it is usually the middlemen who tend to bring it into the picture — not the artists, nor the consumers of that art.

Other things happen as well, when artists and consumers take the online piracy debate back into their own hands. Video game developers create their own publishing platforms which users prefer to piracy. Artists call for their fans to pirate their albums rather than buy them from greedy music labels — and then start publishing them online themselves, without the assistance of intermediaries. Internet video platforms arise to stream content when, where and how consumers want. And more. A direct connection is made between artists and consumers without middlemen.

Now, I’m not saying every middleman in Australia’s online piracy debate is purely motivated by self-interest. Some ISP leaders, like iiNet’s Michael Malone and Internode’s Simon Hackett, also have altruistic motives and do care about their customers. And the same can be said of some figures within the Government and content industries.

But what I am saying is that we are letting middlemen rule a debate which should be rightly ruled by Australian consumers and artists themselves. Let’s set self-interest aside from the issue of online copyright infringement and ask consumers and artists what they want. Now that would be the real definition of an “industry solution”.

Note: To show that I am serious about my comments in this article, I’m licensing this article as Creative Commons (no derivatives or commercial uses). This does not include the images used in the article, on which I do not own the copyright. Please replicate this article as you see fit under these terms. Content production is not always about making money.