Putting a value on the NBN
Martin Aungle | September 19, 2011
It’s a shame that I wasn’t able to make it to this year’s National Economic Review 2011: Australia’s Annual Growth Summit. Last year’s Summit was a great event, and I found it hugely thought-provoking.
Two things have stayed with me from last year’s event: the amazing lunchtime address from Professor Robert A. Cummins; and the figure of $32 billion that was mentioned by Warwick Watkins, at the time the Chief Executive, Land & Property Management Authority, NSW Government and Chairman, Australian Spatial Consortium.
Mr Watkins was referring to the National Broadband Network (NBN), and $32 billion was the figure calculating the contribution that the NBN would add to national productivity in relation to the spatial information industry.
Before I go on, I just need to refer to something that seasoned IT journalist and analyst Richard Chirgwin wrote on Twitter:
When tech journalists think they’re economics, political and business experts; when bankrupt economists think they’re tech and political … …experts, and when business journalists think they understand how light and electricity work, it’s time to abandon the NBN debate.
When it comes to the NBN, I’m not even going to pretend I understand what a cost-benefit analysis is, and I don’t even think it’s worth debating whether 12GPS or 100GPS upload and download speeds are necessary.
The issue is that we’ve barely begun to consider what applications or functions we will be able to deliver when we have a standardised national broadband network. And that’s a huge problem for the NBN’s standing in public debate – because I think there are a number of highly-specialised industry sectors and organisations, like the spatial information industry, that are sweating on the NBN to be rolled out, so they can take advantage of the connectivity it provides.
As just one example, it’s seen as critical to the success of Australia and New Zealand’s bid to host the $2.1 billion Square Kilometre Array (SKA) radio telescope.
Now back to the 2010 Annual Growth Summit and Warwick Watkins.
In his address, speaking about the NBN, Mr Watkins said that it was difficult to articulate the linkages and benefits of the NBN. When he said the NBN would contribute $32 billion in added national productivity in relation to the spatial information industry, I wasn’t sure I heard him correctly – I had to check some days later that he did actually say $32 billion.
I confirmed that the figure quoted came from a report prepared by The Allen Consulting Group Pty Ltd on behalf of the Victorian Department of Sustainability and Environment and the Cooperative Research Centre for Spatial Information. In the final report, “Economic benefits of high resolution positioning services”, published in November 2008, it states:
“Additional cumulative benefits of between $32 billion and $58 billion (gross) could be generated with the national rollout of a standardised network.”
It got me thinking, especially in light of what I believe is a highly-politicised debate over the relative merits of the NBN, what would happen if more industry groups, public sector bodies and private enterprise were to complete studies much like the “Economic benefits of high resolution positioning services”, looking at the economic benefit a standardised national broadband network would have in their specialised field?
By coincidence, a few days after the 2010 Annual Growth Summit, I received an invitation to attend the launch of the Victorian Department of Sustainability and Environment’s Vicmap Position – GPSnet™ network.
In his address, Mr Watkins had also referenced the work that was being done by done by the Victorian Department of Sustainability and Environment (DSE) in rolling out location-based services providing GPS readings to an accuracy of 2cm – as opposed to the 20 metre accuracy of standard GPS devices. The Department’s work is also referenced in “A Faster Future” by Brad Howarth and Janelle Ledwidge – an excellent work discussing what faster broadband services will bring to Australian business and society.
While I couldn’t go to the GPSnet launch, it was great to re-establish contact with James Millner, the Development Manager for GPSnet.
If you take the spatial information sector – or Global Navigation Satellite Systems (GNSS) – three major industries are cited to benefit from the technology: mining, agriculture and construction. I have some insight into this sector for a number of reasons. I worked with Mr Millner on a submission to the AIIA iAwards back in 2005, and my wife’s a geologist who specialised in computerised mine mapping and design – so I had an appreciation for the significant benefits that would come from very accurate positioning capabilities.
Back in 2005, DSE’s network had the capacity to provide GPS coordinates to an accuracy within 50cm compared to the 20 metre accuracy from traditional mobile GPS devices. Now, through further investment in data centre and networking infrastructure, and the increased number of base stations (which DSE refers to as “Continuously Operating Reference Stations”), that accuracy enables GPSNet to pinpoint a position and height above sea level anywhere in Victoria, to within a few millimetres.
The key to the successful provision of corrected GPS readings is the speed at which the raw data can be sent and processed, so that the corrections can be provided to the user in real-time. For this style of service to be rolled out nationally, the NBN provides that high-speed and ubiquitous infrastructure to make it achievable.
The benefits of a very accurate GPS service are felt across a range of industries. The service ensured the accuracy in laying down the Formula One Grand Prix track in Melbourne, and also for the Mitcham-Frankston Freeway development in the east of the city. In terms of government operations, it ensures that vital infrastructure is not compromised when construction works are taking place. Workers on site can ensure that no major pipelines, telecommunications infrastructure or power cabling is damaged through excavation.
The service can also be used to measure geotechnical movements, such as in the snowfields – triggering warnings that will avoid another disaster like that in Thredbo in 1997. In agriculture, its use for machine-guided ploughing, sowing, fertilising and harvesting on broadacre cropping increases yields and reduces input costs, and introduces new techniques such as wide-row spacing, which increases crop efficiencies, and tramlining, which will reduce the effects of soil erosion.
In mining, machinery can be more precisely guided, and can more accurately correspond with the computerised mine models developed to ensure the most efficient ore extraction. It can also take into consideration shifts in position – mine sites are notoriously unstable.
Taking Victoria’s GPSNet model and using the NBN to apply it nationally; it’s pretty clear to see an economic benefit in line with the $32 billion calculated by the Allen Consulting Group back in 2008. Extrapolate this benefit to other public and private sectors, and the overall costs to roll out the NBN quickly start to pale into insignificance.
Martin Aungle established Explore Communications in August 2011 to provide marketing and stakeholder communications services to organisations exploring new markets, new territories, new technologies or new ways of doing business. The name of the company was inspired by the concept of “Exploration and Exploitation”, discussed by professor of psychology James March in his 1991 paper, “Exploration and Exploitation in Organizational Learning”. In it, Professor March distinguishes between the explore and exploit activities in organisations, and Explore Communications is focused on providing communications services to assist with organisations’ activities in their “explore” mode.
Martin brings over 15 years’ marketing and corporate communications experience in the Australian ICT sector. In addition to his role at Explore Communications, Martin is also a Communications Consultant at Dimension Data, providing advice, guidance and specific services to support Dimension Data’s Australian marketing communications needs. Martin also provides communications services to the Dimension Data’s Executive Committee, People & Culture team and Innovation Council.
LinkedIn profile: http://au.linkedin.com/pub/martin-aungle/0/196/5aa
Twitter: @maungle
Website: www.explorecomms.com.au
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Martin Aungle
September 21, 2011 at 3:42 am
NBN committee delayed by missing KPIs
It’s interesting that NBN Co wasn’t able to present a progress report to the Federal Government’s committee last night (see http://www.zdnet.com.au/nbn-committee-delayed-by-missing-kpis-339322763.htm). If NBN Co was left to do what it was set up to do, rather than have to deal with constant attacks from opponents of the NBN, we might see more progress. For anyone who has a problem with the NBN, they should be raising it with the people who made the decision – the Labor Government – rather than people in the company set up to roll it out.
Brad Spencer
October 18, 2011 at 10:26 pm
NBN benefits
Yes its a no-brainer really and putting the known uses for the NBN to one side, has anyone estimated the benefits of Telstra separation to this country. That alone will free up competition and introduce affordable applications [spatial and non spatial] we have never imagined. Who can put an ‘guestimate’ on that benefit?
Brad…