... Carbon Measurement
Measuring carbon is a straightforward process, but many people feel mystified by the concept. Within three steps an organisation can quantify their carbon emissions from ICT and establish a baseline measurement.
Carbon emissions can be calculated from the energy consumption of your ICT department’s infrastructure, which is then useful in planning and prioritising projects. Step 1 – Establish a measurement team. Creating a team to measure the carbon footprint is important.
Asking each team member to carry out the measurement activity relevant to their responsibilities is key to measure correctly and to spark sustainable thinking.
Step 2 – Define a measurement timeline. It sounds basic, but putting a timeline in place will ensure that this activity, which may not be viewed as business critical, is completed in a timely fashion. Step 3 – Undertake and collate measurement activities. The rest of this chapter explains what and how to measure and how to convert energy consumption in to a carbon footprint.
This process will calculate a carbon footprint for the energy consumed by ICT and its supporting equipment. The environmental impact of manufacturing and shipping ICT equipment is a much more complicated issue and more difficult to assess, due to complicated and opaque supply chains. See the Beyond the Energy ICT Consumes section of this handbook.
What to Measure
Take an inventory of all equipment. Below is a guide to the equipment you should look to measure - the list is not exhaustive and should be tailored to your organisation. Desktop end user environment
- Desktops
- Laptops
- Monitors
- Thin Clients
- Printers
- Multi-Functional Devices Telecommunication and networking
- Routers
- Wireless devices
- Boosters Data Centre
- Servers
- Storage Drives
- Any telecoms equipment housed within the data centre
- Switch gears
- Cooling, lighting and other facilities
- Backup power supplies
You should note the total numbers, the make, model, specification and capacity (where appropriate) for each equipment type.
For some equipment types it may not be practical or cost effective to measure actual energy consumption, in which case a theoretical measurement can be used. Ensure that the source of the data is documented for future reference, for example supplier or equipment specification information. Use of theoretical data should be kept to a minimum to improve overall accuracy. When the detailed inventory is complete, the next stage is to measure the energy consumption for each equipment type while in its various states – for example in use, standby and off.
How to measure
Using the inventory, initiate a data collection exercise to capture the required consumption data.
Source any necessary energy meters. There are many types of devices available from sophisticated energy management systems that log electricity consumption over time to a central web console, plug in devices that display the current energy usage of equipment and clamp on meters that can measure the usage without having to unplug critical equipment e.g. servers. Select the most appropriate type of energy meter / monitoring tools for your organisation according to organisation size, your budget and type of ICT equipment.
- Involve facilities personnel who should be able to provide information on the organisation’s total energy consumption and may have breakdowns by site, floor, department etc.
- Measure the rate of electricity consumption of equipment in its various modes of operation and calculate how long those types of equipment are in each operational mode during a year. Using this information you can calculate the amount of electricity that will be consumed in a year.
- When the total electricity consumption has been established, the CO2 it is responsible for can be calculated by multiplying kWh by 0.537 to give kg of CO2 per kWh of energy22.
Please note that this multiplying factor is the 08/09 figure and it will change each year. Please check the Defra guidelines23 for subsequent years.
This exercise will take time to complete, but it is worth doing it as accurately as possible to establish your baseline.
Is Your Data Centre Efficient?
The data centre energy consumption is complex to measure accurately, because a number of different servers are often present and many data centres are housed in multi use buildings without separate data centre energy metering.
The data centre manager must obtain the total baseline consumption for the data centre and then divide it into the various components within the data centre, such as servers, cooling and lighting. If possible, load variations during the day should also be measured to obtain peak load versus average load. An assessment can then be made on where to focus efforts and prioritise areas for improvement.
A useful thing to do to understand the scale of potential benefit is to take the total measured energy consumption and cost it. Then set the bar high and assume (if you are starting from scratch) that you could save up to 50% – what financial saving does that equate to? Bear in mind that some organisations such as BT have committed to 60% savings on ICT energy usage!
The industry has also adopted a number of metrics which may add some value in assessing your position. Power Usage Effectiveness (PUE) PUE is used to assess data centre efficiency. It is a ratio that shows how much of the total energy consumed by a data centre is directly used to power the servers and other ICT infrastructure within it – i.e. a PUE of 2 means that for every watt your ICT equipment uses, the infrastructure to support it needs 2 watts. The average data centre has a PUE of 2.524 and best practice PUE has been quoted as 1.325, but whatever the starting point the aim is to continually reduce the PUE through data centre initiatives and energy efficiency improvements. If using PUE to assess data centre efficiency do not lose sight of the ultimate aim by focusing entirely on PUE to the detriment of the overall energy consumption.
Data Centre Infrastructure Efficiency (DCiE)
DCiE is the direct ICT equipment power expressed as a percentage of the power consumed by the data centre, which can be shown to be improving over time as it increases towards 100%. DCiE = (ICT Equipment Power / Total Facility Power) x 100% For an average data centre with a PUE of 2.5, the DCiE is 40% and a PUE of 1.3 would mean a DCiE of 77%.
What are the solutions?
Once measurement has taken place and a baseline established, the next steps are prioritising, planning and implementation. This should factor in the time and resources required for implementation of each project, the potential benefits and any existing or future regulations that will need to be met.
Recommended Approach
1. Measure the energy usage of all ICT assets and the associated facilities such as the data centre or machine room 2. Identify the quick wins for your organisation 3. Assess the value of longer term projects for your organisation 4. Develop a Green ICT Strategic Plan
At the end of each project or phase of projects we recommend that you measure the energy, carbon and cost savings achieved so far. By reporting financial savings made to date and projected savings, it will be easier to obtain backing and secure budget for further initiatives to green the ICT in your organisation.
Project Management Templates
Here are two links to management tools for Green ICT strategies which you could use to help manage your Green ICT initiatives. The Cabinet Office has produced the CIO Roadmap for Green ICT: http://www.cabinetoffice.gov.uk/cio/greening_government_ict.aspx John Lewis Partnership uses an acorn diagram to manage their Green ICT initiatives: http://www.greenict.org.uk/upload/documentstore/GreenAcorn.pdf ...
From: "Green ICT Handbook: A Guide to Green ICT" from the non-profit UK Global Action Plan, 2009
Thursday, December 30, 2010
Green ICT Handbook
The "Green ICT Handbook: A Guide to Green ICT" from the non-profit UK Global Action Plan provides a useful guideline to measuring and reducing greenhouse gas emissions from computers and networking equipment.
National Television and Computer Product Stewardship Scheme
Details of the Australian National Television and Computer Product Stewardship Scheme are in the latest "Television and Computer Scheme E-bulletin" from the Department of Sustainability, Environment, Water, Population and Communities. The Department issued a Product Stewardship Legislation Consultation Paper for comment 10 November 2010 and the 45 submissions received are avialable online. The need for such legislation is made more urgent by the success of the federal government's switch-over to digital TV, resulting in householders replacing old analogue sets with new digital models. The National Broadband Network is similarly likely to result in obsolete networking equipment needing to be disposed of from millions of households.
Unfortunately the e-bulletin is designed as a poorly formatted printed brochure provided in PDF and as a large Ms-Word document, not as an easy to read web page. Here is the text of the latest issue, converted to HTML (minus some images):
Unfortunately the e-bulletin is designed as a poorly formatted printed brochure provided in PDF and as a large Ms-Word document, not as an easy to read web page. Here is the text of the latest issue, converted to HTML (minus some images):
TELEVISION AND COMPUTER SCHEME E-BULLETIN
National Television and Computer Product Stewardship SchemeInside this issue
- Message from the department
- Progress made in 2010 towards establishing a national scheme
- Dates to note in 2011
- Byteback wins International Best Practice Award
Upcoming events
February 2011 - Television and computer regulation consultation paper and public meetings
Useful links
- National Waste Policy environment.gov.au/wastepolicy
- E-waste One-stop Portal environment.gov.au/ewaste
SUBSCRIBE NOW
To keep up to date with the development and implementation of the National Television and Computer Product Stewardship Scheme, subscribe to the e-bulletin at: environment.gov.au/ewaste
Message from the department
As 2010 comes to an end, the department wishes to acknowledge the significant contribution and commitment from our many stakeholders in progressing the development of the national product stewardship legislation and the National Television and Computer Product Stewardship Scheme (the Scheme). The Scheme is expected to be operational in late 2011.
Since the decision by the Environment, Protection and Heritage Council (EPHC) in November 2009 that the Australian Government would, under the new product stewardship legislation, implement regulation to support an industry-led scheme to collect and recycle end of life televisions and computers, a considerable amount of work has been undertaken. This final issue of the e-bulletin for 2010 contains a record of achievements made by the Scheme Implementation Working Group, as well as key dates and opportunities for further engagement in the development of the Scheme in 2011.
Of key note is the upcoming release of a consultation paper on the television and computer regulations, scheduled for February 2011. The consultation paper will provide the opportunity for all interested members of the community to be consulted in the development of the Scheme and to hear more about the proposed regulatory arrangement. More information will be made available at environment.gov.au/ewaste closer to the release date.
The department would like thank all subscribers for their continued support and interest in the development and implementation of a solution for end of life televisions and computers and looks forward to building on the substantial progress made in 2010.
On behalf of the IWG, we wish you a relaxing and safe break shared with family and friends.
Progress made in 2010 towards establishing a national scheme
The National Television and Computer Product Stewardship Scheme (the Scheme) Implementation Working Group (IWG) was established in March 2010 to:
- facilitate planning arrangements for the Scheme;
- consider the relationships between the operational aspects of introducing a national product stewardship scheme for televisions and computers;
- ensure industry developed schemes are consistent with government policy; and
- deliver on the core product stewardship objectives.
The IWG comprises representatives from the computer and television industry and Australian and state governments.
Since 30 March 2010 the IWG has formally met eight times; participated in three workshops; and established five sub-groups to focus on key areas of communication, standards, performance indicators, the national geographic roll-out plan and governance arrangements for the industry-led arrangements. As a result of this ongoing work the IWG has:
- created a formal work plan, risk management plan, stakeholder engagement strategy and communications plan;
- launched the National Television and Computer Product Stewardship Scheme one-stop portal and e-bulletin service;
- received approval from Standards Australia to establish an Australian Standard for the collection, storage, handling, transport and treatment of e-waste;
- assisted the Australian Information Industry Association (AIIA) and Product Stewardship Australia (PSA) to develop the draft interim industry standard for the collection, transportation and recycling of televisions, computers and computer peripherals.
- developed a draft set of key performance indicators (KPIs) for the Scheme; and
- developed a draft geographical roll-out plan for the Scheme.
In addition to these achievements, the IWG has actively engaged and consulted with many stakeholders throughout 2010. The IWG plays a vital role in disseminating information and educating interested individuals about the Scheme.
The IWG consulted stakeholders via the Stakeholder Reference Group (SRG) on the:
- an appropriate definition for e-waste;
- factsheet on the Responsible disposal of unwanted televisions and computers;
- interim industry standard;
- KPIs for the Scheme; and
- Scheme roll-out plan.
The IWG has also reached out to a broader audience by attending various conferences and events. In 2010 the IWG participated in:
- E-waste 2010, Brisbane (21 July)
- Enviro 2010, Melbourne (21-23 July)
- Zero Waste Summit 2010, Sydney (13-15 September)
- International Product Stewardship Summit, Sydney (9-10 November)
- Australian Waste and Recycling Expo, Sydney (10-11 November)
- Community Recycling Network Australia, National Meeting, Melbourne (19 November)
Further consultation has also occurred through meetings between the IWG and all sectors impacted by the Scheme. The IWG consulted through the Australian Government, with both Austraian Government and state government agencies. The IWG has also consulted with local councils, retailers, recyclers, reverse logistics, waste management operators, community and environmental non-government organisations, charitable and social enterprise organisations, and television and computer suppliers and manufacturers.
The many accomplishments listed above are a reflection of how much has already been achieved and outlines the focus to deliver the Scheme in 2011.
Byteback was honoured with an ICT Best Practice Award because it was considered by the judges to be the best excellent example in the region of how policy and project implementation through a public-private partnership can achieve significant outcomes for the ICT industry and broader society.
AIIA's National Policy and Program Manager for Sustainability, Josh Millen, who accepted the award in Taipei on behalf of the Byteback program, explained, "The Byteback program has proven that an effective collection and recycling program could be scaled up and delivered to the Australian community. The information collected over the past three years during the trial has already been informing the development of the national e-waste take-back and recycling scheme which will roll-out in 2011."
The brands involved in Byteback also share in this award with Sustainability Victoria.
"Sustainability Victoria is very proud to be accepting this award together with AIIA," Sustainability Victoria CEO Anita Roper said. The Byteback program is a fantastic example of how working in partnership with industry and local government can create solutions that improve resource recovery and recycling and create new business opportunities and markets. Since the program started in 2005, around 2883 tonnes of waste has been diverted, equating to about 11,500 tonnes of greenhouse gas avoided - or the equivalent of taking 2650 cars off the road."
"I would like congratulate and thank AIIA and its members for their commitment to Byteback, which is now set to roll-out as a national solution to e-waste," Ms Roper said.
Dates to note in 2011
2011 will see the planned introduction and passage of the Product Stewardship Bill through the Federal Parliament and the commencement of the National Television and Computer Scheme. There is still considerable work to be done to meet this timeline and the IWG will be continuing to work with all stakeholders to ensure outcomes are achieved.
The key dates for 2011 are:
- Jan - Frequently asked questions (FAQs) targeted to specific stakeholders available on the one-stop portal
- Feb - Public consultation on the Regulations (Information will be made available at: environment.gov.au/wastepolicy)
- Feb - KPIs for the Scheme finalised
- Mar - Scheme roll-out plan finalised
- March - Interim industry standard finalised
- September - Commencement of the National Television and Computer Product Stewardship Scheme
Byteback wins International Best Practice Award
AIIA's e-waste collection and recycling program, Byteback, was awarded a regional ICT Best Practice Award by the Asian-Oceanic Computing Industry Organisation in front of a Gala Dinner featuring the who's-who of APAC IT business leaders in Taipei on Friday 3 December. Byteback is run in partnership with Sustainability Victoria, leading IT equipment manufacturers (Apple, Brother, Canon, Dell, Epson, Fujitsu, Fuji-Xerox, HP, IBM, Lenovo and Lexmark) and with support from sites in Boorondara, Moonee Valley, Darebin and the Barwon Region council areas, and Officeworks in Ballarat and Dandenong. ...
From: "Television and Computer Scheme E-bulletin", Issue 4, Department of Sustainability, Environment, Water, Population and Communities, December 2010.
Monday, December 27, 2010
Broadband for a Broad Land
The Australian Parliament has invited submissions for an Inquiry into the role and potential of the National Broadband Network by 5 February 2011. Here is the first draft of a submission for the enquiry. It addresses two issues: the environmental costs and benefits of the NBN and the role of electronic document and records management in making the NBN useful to he community.
Recent public debate has become bogged down in the technical details of how to implement the NBN. However the NBN is intended to provide high speed broadband to households and small business. The householders and small business people will need training in how to use the NBN to make it of value.
The assumption is that the NBN will greatly benefit the Australian community, both culturally and economically as well as help the Australian environment. Australians will be able to have access to medical, financial and educational services, particularly in regional areas, not currently available. However, the NBN will only provide the link to the netowrk for households and small businesses. To provide a useful service, cultural, educational, medical, financial and government services need to be provided online. In most cases the necessary network connections are already in place for medium to large organisations, but appropirate software, procedures and trained staff are also needed. The cost of installing software and training staff will be far higher than the cost of the NBN itself.
The NBN can reduce dependence on transport of people and goods, thus reducing energy use and greenhouse gas emissions. However, this will not happen without explicit planning and investment. In the absence of planning and investment, there is a risk the NBN will take jobs away from Australians, particularly in regional areas, impoverish Australian culture and harm the environment.
The NBN will open financial, education, and health service providers in regional areas of Australia to competition from the cities, and all Australian service providers to competition from overseas. In the absence of strategies and investment to help with the change the likely effect of the NBN will be to lower the availability of face to face services and employment, particularly in regional areas.
The NBN will be a major consumer of energy in Australia and s increase greenhouse gas emissions. Consumer equipment made obsolete by the NBN will contribute to pollution of groundwater. An example of where the problem is now occurring is with the transition to digital TV. The Australian government has had a long term plan to replace analogue with digital TV transmission. However, no provision has been made for disposal of millions of obsolete analogue TVs, which are going into landfill.
An example where the NBN could be beneficial is in education. Australia is a world leader in e-learning, with the Australian developed Moodle open source software being deployed in schools, vocational education and universities. As an example the Australian National University uses Moodle for pure e-learning courses, such as Green Information Technology Strategies COMP7310 and Electronic Document and Records Management COMP7420. The ANU also uses the same software for blended online/classroom Engineering 'Hubs and Spokes' Project in collaboration with the University of South Australia. The allows advanced courses presented by world leaders in their field to be made available to more students. The use of online systems also lowers the energy sue and therefore greenhouse gas emissions by replacing classrooms with e-learning and reducing the need for students and staff to travel to a campus.
The Australian federal and state governments have jointly funded programs to educate school and university teachers on how to use online education, including EdNa and the Australian Flexible Learning Framework. These provide the opportunity for not only improving Australian education but also maintain Australia's major export industry in educating international students. It should be noted that the NBN represents a risk as well as an opportunity. Not only does this allow Australian students to enrol in Australian courses online, but they can equally choose to bypass Australian institutions and enrol in overseas courses. The international agreements which Australia has concluded for access to education with countries such as India, not only allows Indian students to study in Australia, but allows Australian students to study in India. The students now need not leave home to do this.
The Terms of Reference, listed listed eight areas to examine, in relation to the capacity of the National Broadband Network:the delivery of government services and programs;
What is the NBN?
The two Key Objectives for the NBN, as set down in the NBN Co. Corporate Plan, are to
There is a risk that the NBN by delivering two different levels of service: 100 mbps in the city and 12 mbps in the country, will perpetuate or make greater the disadvantages of distance. However, 12 mbps is sufficient for many current and foreseen online services and so is more likely to lessen the disadvantages of regional areas. Also many online services are now being designed for use with wireless smart phone and tablet devices, which will have much less than 100 mbps capacity, making a 12 mbps connection more than adequate.
Delivery of broadband to schools was already under-way through other government programs and so the NBN will have little direct impact. Similarly, organisations having medium to large offices are able to arrange the installation of high speed broadband and so the NBN will have little direct impact on these. It s in the area of micro and small business where the NBN can have more impact.
The NBN will have an impact on education, business and employment by allowing greater access from homes. Activities which previously required people to meet at a central location will be able to be done online from home. This will have a profound effect on education and business, at a local, national and international level.
The main issues for the NBN are not technological, but social, in terms of how people interact: how much will they use the NBN in place of face to face contact? The NBN can reduce financial, social and environmental costs by replacing travel to school, shop or office with online communication. But how many will use this and what might be the side effects?
Some early use of the technology provides pointers for the future. Australian educators are pioneering the use of online education. This shows that online education cannot completely replace face-to-face teaching, particularly for younger students. A blended hybrid) mode of education has been adopted in many areas. With this the student undertakes part of a course online and partly in a classroom. However, provision of broadband at home and in educational facilities is the simplest and least expensive part of the process.
The blended mode of education will require retraining of teachers, restructuring of courses and the remodelling of buildings. The cost of this restructuring of the Australian education sector will dwarf the cost of the NBN itself. The logistical and political complexity of changing the education system will be far higher than for the implementation of the NBN.
The cost and complexity of remodelling Australian classrooms will be far larger than the $14.2b Primary Schools for the 21st Century component of the Australian Government's "Building the Education Revolution". It has been assumed that providing broadband to schools involves providing a fibre cable to the premises and perhaps some re-cabling to deliver it to classrooms. However, to gain educational benefit from the broadband requires a change in the way education is done and the redesign of the classrooms to accommodate this, turning them into "learning commons".
One aspect of the change to education which will be less difficult is the curriculum. The work by federal and state government on a National Curriculum for Kindergarten to Year 12, will provide a useful framework for work on integrating online education into schools. This will allow resources to be shared across geographic and organisational boundaries. Students in different locations can share the same course materials, take part in the same classes and be part of study groups. Use of online educational facilities can greatly enhance the national curriculum, reduce the cost of its implementation and speed its introduction. Currently each educational system (state or non-government) in Australia has to separately work out how to incorporate the national curriculum. Schools, down to individual teachers then have to work out how to teach it. Online support can provide forums for working on the mechanism of introduction and provide sample materials for use. This can cut trough several levels of national, state and local bureaucracy. Teachers can interact directly on the teaching and prepare materials and share them. This approach is used particularity in Australia for vocational materials. This can be facilities through the use of Creative Commons licensing, which allows any teacher to use the materials produced by any Austrlaian educator, without the need for separate permission or payment of fees.
Broadband for a Broad Land: The role and potential benefits of the National Broadband Network
Tom Worthington FACS CP HLM
Version 0.1, 27 December 2010
Abstract
The Australian Parliament has invited submissions for an Inquiry into the role and potential of the National Broadband Network (the Inquiry) by 5 February 2011. This is a very important topic, as while billions of dollars have been committed to building a broadband network, little thought or investment has gone into what it might be used for. In the mid 1990s a series of Australian parliamentary inquiries looked into the role of what was then called the "Information Superhighway interest. There was a broad consensus across political parties that policies and investment by government to encourage what became known as the Internet was in the public interest. Roger Clarke wrote "Vision for a Networked Nation", with my assistance, for several of the inquiries. Successive state and federal Australian governments drew on the rhetoric and the specific proposals from these enquiries.Recent public debate has become bogged down in the technical details of how to implement the NBN. However the NBN is intended to provide high speed broadband to households and small business. The householders and small business people will need training in how to use the NBN to make it of value.
The assumption is that the NBN will greatly benefit the Australian community, both culturally and economically as well as help the Australian environment. Australians will be able to have access to medical, financial and educational services, particularly in regional areas, not currently available. However, the NBN will only provide the link to the netowrk for households and small businesses. To provide a useful service, cultural, educational, medical, financial and government services need to be provided online. In most cases the necessary network connections are already in place for medium to large organisations, but appropirate software, procedures and trained staff are also needed. The cost of installing software and training staff will be far higher than the cost of the NBN itself.
The NBN can reduce dependence on transport of people and goods, thus reducing energy use and greenhouse gas emissions. However, this will not happen without explicit planning and investment. In the absence of planning and investment, there is a risk the NBN will take jobs away from Australians, particularly in regional areas, impoverish Australian culture and harm the environment.
The NBN will open financial, education, and health service providers in regional areas of Australia to competition from the cities, and all Australian service providers to competition from overseas. In the absence of strategies and investment to help with the change the likely effect of the NBN will be to lower the availability of face to face services and employment, particularly in regional areas.
The NBN will be a major consumer of energy in Australia and s increase greenhouse gas emissions. Consumer equipment made obsolete by the NBN will contribute to pollution of groundwater. An example of where the problem is now occurring is with the transition to digital TV. The Australian government has had a long term plan to replace analogue with digital TV transmission. However, no provision has been made for disposal of millions of obsolete analogue TVs, which are going into landfill.
An example where the NBN could be beneficial is in education. Australia is a world leader in e-learning, with the Australian developed Moodle open source software being deployed in schools, vocational education and universities. As an example the Australian National University uses Moodle for pure e-learning courses, such as Green Information Technology Strategies COMP7310 and Electronic Document and Records Management COMP7420. The ANU also uses the same software for blended online/classroom Engineering 'Hubs and Spokes' Project in collaboration with the University of South Australia. The allows advanced courses presented by world leaders in their field to be made available to more students. The use of online systems also lowers the energy sue and therefore greenhouse gas emissions by replacing classrooms with e-learning and reducing the need for students and staff to travel to a campus.
The Australian federal and state governments have jointly funded programs to educate school and university teachers on how to use online education, including EdNa and the Australian Flexible Learning Framework. These provide the opportunity for not only improving Australian education but also maintain Australia's major export industry in educating international students. It should be noted that the NBN represents a risk as well as an opportunity. Not only does this allow Australian students to enrol in Australian courses online, but they can equally choose to bypass Australian institutions and enrol in overseas courses. The international agreements which Australia has concluded for access to education with countries such as India, not only allows Indian students to study in Australia, but allows Australian students to study in India. The students now need not leave home to do this.
The Terms of Reference, listed listed eight areas to examine, in relation to the capacity of the National Broadband Network:the delivery of government services and programs;
- achieving health outcomes;
- improving the educational resources and training available for teachers and students;
- the management of Australia's built and natural resources and environmental sustainability;
- impacting regional economic growth and employment opportunities;
- impacting business efficiencies and revenues, particularly for small and medium business, and Australia's export market;
- interaction with research and development and related innovation investments;
- facilitating community and social benefits; and
- the optimal capacity and technological requirements of a network to deliver these outcomes.
From: Terms of Reference, Inquiry into the role and potential of the National Broadband Network, House Standing Committee on Infrastructure and Communications, House of Representatives, Australian Parliament, 16 November 2010
The eight areas can be grouped into four broad categories:
- Social impacts:
- achieving health outcomes;
- improving the educational resources and training available for teachers and students;
- facilitating community and social benefits;
- Regional and environmental impacts:
- the management of Australia's built and natural resources and environmental sustainability;
- impacting regional economic growth and employment opportunities;
- Business impacts:
- impacting business efficiencies and revenues, particularly for small and medium business, and Australia's export market;
- interaction with research and development and related innovation investments;
- Requirements:
- the optimal capacity and technological requirements of a network to deliver these outcomes.
What is the NBN?
The two Key Objectives for the NBN, as set down in the NBN Co. Corporate Plan, are to
The NBN is in essence about delivering broadband to homes, schools and workplaces. The most significant aspect in terms of social policy is delivery to homes. It is likely that this will by the area it has most impact in terms of education, health, the environment, business and employment.
- Connect homes, schools and workplaces with optical fibre (fibre to the premises or 'FTTP'), providing broadband services to Australians in urban and regional towns with speeds of 100 megabits per second - 100 times faster than those currently used by most people extending to towns with a population of around 1,000 or more people;
- Use next generation wireless and satellite technologies that will be able to deliver 12 megabits per second or more to people living in more remote parts of Australia; ...
National Broadband Network Corporate Plan 2011 – 2013 (NBN Co., 17 December 2010),
There is a risk that the NBN by delivering two different levels of service: 100 mbps in the city and 12 mbps in the country, will perpetuate or make greater the disadvantages of distance. However, 12 mbps is sufficient for many current and foreseen online services and so is more likely to lessen the disadvantages of regional areas. Also many online services are now being designed for use with wireless smart phone and tablet devices, which will have much less than 100 mbps capacity, making a 12 mbps connection more than adequate.
Delivery of broadband to schools was already under-way through other government programs and so the NBN will have little direct impact. Similarly, organisations having medium to large offices are able to arrange the installation of high speed broadband and so the NBN will have little direct impact on these. It s in the area of micro and small business where the NBN can have more impact.
The NBN will have an impact on education, business and employment by allowing greater access from homes. Activities which previously required people to meet at a central location will be able to be done online from home. This will have a profound effect on education and business, at a local, national and international level.
The main issues for the NBN are not technological, but social, in terms of how people interact: how much will they use the NBN in place of face to face contact? The NBN can reduce financial, social and environmental costs by replacing travel to school, shop or office with online communication. But how many will use this and what might be the side effects?
Some early use of the technology provides pointers for the future. Australian educators are pioneering the use of online education. This shows that online education cannot completely replace face-to-face teaching, particularly for younger students. A blended hybrid) mode of education has been adopted in many areas. With this the student undertakes part of a course online and partly in a classroom. However, provision of broadband at home and in educational facilities is the simplest and least expensive part of the process.
The blended mode of education will require retraining of teachers, restructuring of courses and the remodelling of buildings. The cost of this restructuring of the Australian education sector will dwarf the cost of the NBN itself. The logistical and political complexity of changing the education system will be far higher than for the implementation of the NBN.
The cost and complexity of remodelling Australian classrooms will be far larger than the $14.2b Primary Schools for the 21st Century component of the Australian Government's "Building the Education Revolution". It has been assumed that providing broadband to schools involves providing a fibre cable to the premises and perhaps some re-cabling to deliver it to classrooms. However, to gain educational benefit from the broadband requires a change in the way education is done and the redesign of the classrooms to accommodate this, turning them into "learning commons".
One aspect of the change to education which will be less difficult is the curriculum. The work by federal and state government on a National Curriculum for Kindergarten to Year 12, will provide a useful framework for work on integrating online education into schools. This will allow resources to be shared across geographic and organisational boundaries. Students in different locations can share the same course materials, take part in the same classes and be part of study groups. Use of online educational facilities can greatly enhance the national curriculum, reduce the cost of its implementation and speed its introduction. Currently each educational system (state or non-government) in Australia has to separately work out how to incorporate the national curriculum. Schools, down to individual teachers then have to work out how to teach it. Online support can provide forums for working on the mechanism of introduction and provide sample materials for use. This can cut trough several levels of national, state and local bureaucracy. Teachers can interact directly on the teaching and prepare materials and share them. This approach is used particularity in Australia for vocational materials. This can be facilities through the use of Creative Commons licensing, which allows any teacher to use the materials produced by any Austrlaian educator, without the need for separate permission or payment of fees.
Boeing P-8I for Indian Navy
Boeing produced a video animation of the Boeing P-8I Poseidon Multimission Maritime Aircraft (MMA) depicting it in use by the Indian Navy to detect and destroy submarine and surface ships. The P8 is a modified 737 passenger aircraft for anti-submarine warfare, shipping interdiction and electronic intelligence (ELINT). India has agreed to buy 8 P-8I aircraft. Operators of the successful Lockheed P-3 Orion anti-submarine warfare (ASW) aircraft (which was also based on an airliner) are also considering the P-8, including Australia. The Indian Navy Information Warfare squadron currently fly locally made Do-228 aircraft using the same Israeli radar as Australia's P-3 Maritime Patrol Aircraft. So there is some potential for cooperation between India and Australia with the new aircraft.
E-learning handbook for university staff
The Indira Gandhi National Open University (IGNOU) produced "e-Learning: Stride Handbook 8" (Sanjaya Mishra, 2009) as a E-learning handbook for university staff. This is a 152 page 1.7M Byte PDF document avialable free online. This is a compilation of contributed chapters by authors around the world, including Leigh Blackall, University of Canberra.
The e-learning manual is one of a series of 15, produced by IGNOU's Staff Training and Research Institute of Distance Education (STRIDE):
The e-learning manual is one of a series of 15, produced by IGNOU's Staff Training and Research Institute of Distance Education (STRIDE):
- Open and Distance Education (P.K. Biswas & Ashok Gaba)
- Effective Learning (Sanjaya Mishra)
- Academic Counselling in Open and Distance Learning (Manjulika Srivastava)
- Assessment and Evaluation in Distance Learning (Basanti Pradhan & P.K. Biswas)
- Development and Revision of Self-Learning Materials (C.R.K. Murthy)
- Editing in Distance Education (P.R. Ramanujam)
- Media and Technology in Distance Education (Santosh Panda)
- eLearning (Sanjaya Mishra)
- Support Services in Distance Education (R. Satyanarayana) (Under development)
- Planning and Management of Distance Education (Madhu Parhar)
- Cost Analysis in Open and Distance Learning (Ashok Gaba)
- Programme Evaluation in Open and Distance Education (Basanti Pradhan & G. Mythili)
- Psychological Skills for Open and Distance Learning (P.K. Biswas)
- Staff Training and Development in Open and Distance Education (Dr. Sanjaya Mishra)
e-Learning: Stride Handbook 8
Contents
Foreword 1
About the Handbook 2
PART A E-Learning: Conceptual Overviews
Chapter 1: Pedagogical Affordances of Technology by Som Naidu 4
Chapter 2: Managerial Perspectives on e-Learning by Tony Bates 14
Chapter 3: Designing Online Learning by Sanjaya Mishra 28
Chapter 4: Level of Media Interactivity by Jon Baggaley 36
Chapter 5: The Global e-Learning Framework by Badrul H. Khan 42
PART B E-Learning: Technologies and their Applications
Chapter 6: Electronic Mail by Sanjaya Mishra 52
Chapter 7: Mailing Lists by Steve McCarty 56
Chapter 8: Asynchronous Conferences, Discussion Forums by Neil Harris and Maria Sandor 60
Chapter 9: Podcasting: a learning technology by Palitha Edirisingha and Anguelina Papova 66
Chapter 10: Online Video by Kevin Burden 70
Chapter 11: Using Collaborative Video for e-Learning by Leigh Blackall 76
Chapter 12: Synchronous Conferencing by Jon Baggaley 80
Chapter 13: Webcasting by Punya Mishra and M. Laeeq Khan 84
Chapter 14: Blogs in Learning by Stephen Downes 88
Chapter 15: Wikis by Ke Zhang and Stacey DeLoose 92
Chapter 16: Social Networking by Terry Anderson 96
Chapter 17: Social Bookmarking (Delicious) in Education by Gabriela Grosseck 102
Chapter 18: Slideshows by Brian Kelly 106
Chapter 19: Virtual Worlds by Sanjaya Mishra 110
Chapter 20: Really Simple Syndication by Sanjaya Mishra 114
Chapter 21: Using Micro-blogging (Twitter) in Teaching and Learning by Andy Ramsden 118
Chapter 22: Concept Mapping in e-Learning by Alberto J. Canas, Priit Reiska and Joseph D. Novak 122
Chapter 23: Interactive Whiteboards by Rozhan M. Idrus and Raja Maznah Binti Raja Hussain 128
Chapter 24: Web Surveys and Quizzes by Sanjaya Mishra 132
Chapter 25: Learning Management Systems by Sanjaya Mishra 134
List of Contributors 140 ...
about the handbook
... The Handbook has two parts: Conceptual overviews and technology applications. Many textbooks, research papers and reference materials have already been written about e- learning, and this one could easily get lost in that wealth of information, but for the conscious approach taken by the Editor to involve international scholars to share their ideas and experiences that could provide diversity and richness of the philosophy, technology and practices surrounding e-learning. So, you have 25 Chapters written by 26 experienced and emerging experts in the field of e-learning, sharing with you tips for successful use of e-learning technologies. You can use this Handbook in a linear manner from Chapter one to the end or read a specific chapter depending on your interest and immediate need and relevance. Most chapters provide you practical tips, resources and references to further reading, and we encourage you to go beyond this Handbook. Apart from the references and links provided in each of the chapters, we would direct you to another publication, released by the University of Colorado, Denver (Lawenthal, et al, 2009). ...
From: "e-Learning: Stride Handbook 8", Mishra, S., Ed., IGNOU, New Delhi, ISBN: 978-81-266-4451-3, 2009.
Friday, December 24, 2010
Ballast Point Park
Ballast Point Park, is a new, award winning post-industrial site overlooking Sydney Harbour. It is a short ferry ride from Circular quay. The park is a former oil storage depot, converted sensitively into parkland by Landscape architects McGregor Coxall. The concrete wharf has been retained and the shape of the former oil tanks are echoed in the structures of the park.The park features mostly hard surfaces: concrete and rock, softened by small plantings. One nice touch was the symbols for the rubbish bins (including DOT Litter Disposal) being drilled into the sides of the steel bins. This provides a vandal resistant sign, as well as echoing the industrial past of the site.
One failure are the wind turbines installed to generate electrical power for the park. These appear to be poorly positioned and a token attempt at energy reduction. A better approach might have been to fit one (or more) of the small wind turbines designed for use on yachts.
Note that you need to get off at the Balmain ferry wharf (aka Thames Street) and then walk along the foreshore to the north, over the former Mort's Dock. The main entrance to the park is on the top of the headland, but you can enter at sea level on the southern side, next to the abandoned wharf. This entrance to the park could be better signposted, as it looks like an uninviting abandoned industrial site, rather than a park from this side.
Lunar eclipse over Balmain
There was a lunar eclipse, 21 December, the solstice. A congenial place to view this was the balcony of the Town Hall Hotel, Darling Street, Balmain, with a tapas plate and high hops beer. It was easy to keep track of the time for moonrise on the clock of the Italianate tower of the post office opposite. The moon rose on schedule over Sydney on a slightly cool and unforgettable evening. Also just visible in the corner of the large version of the photo (taken on a camera phone) is the Sydney Harbour Bridge.Thursday, December 23, 2010
NBN B2B Specification
Communications Alliance Ltd have issued the first draft of a "NBN B2B Interaction Process Requirements Specification" (22 December 2010). This defines in detail how a retailer will request services from the NBN as a wholesaler, via an online "Business to Business" interface. This is based on the UK based Network Interoperability Consultative Committee B2B (NICC B2B) and ITU 3340 standards. NICC has standards for B2B Transactions, a Profile for ebXML Messaging and Location & Address Identification.TABLE OF CONTENTS
1 INTRODUCTION AND SCOPE 3
1.1 Introduction 3
1.2 Purpose 3
1.3 Scope 3
1.4 Relationship with other Communications Alliance NBN Working Groups
3
1.5 Process Framework 5
2 ACRONYMS AND ALIGNMENT OF TERMS 6
2.1 Acronyms 6
2.2 Alignment of Terms 8
3 INDUSTRY PARTICIPANTS’ ROLES AND RELATIONSHIPS 12
4 MULTIPLE PROVIDERS AND ACQUIRERS CONTEXT INTERACTION PROCESS
MODEL 14
5 FULFILMENT 15
5.1 Pre-Order Management 15
5.2 Order Management 28
6 APPOINTMENT MANAGEMENT 43
6.1 High Level Interaction Process 43
6.2 Appointment Management User Stories 44
7 ASSURANCE 52
7.1 High Level Interaction Process 52
7.2 Assurance User Stories 53
8 BILLING 63
8.1 Tariff/Pricing 63
8.2 Billing Event Files (BEF) 65
8.3 Billing Invoices 69
8.4 Billing Enquiries/Disputes 73
8.5 Bill Reporting 74
9 PRODUCT CATALOGUE ENQUIRY-USER STORIES 76
10 NETWORK TESTING, PERFORMANCE & DIAGNOSTICS MANAGEMENT 78
10.1 Network Testing & Diagnostics 78
10.2 Performance – SLA/QOS Management 79
11 NON-FUNCTIONAL REQUIREMENTS 80
11.1 B2B Certification 80
11.2 Security 80
11.3 Auditability 80
11.4 B2B Service Assurance 80
11.5 Performance & Performance Management 80
12 REFERENCES
From: NBN B2B Interaction Process Requirements Specification, Communications Alliance Ltd, 22 December 2010
Wednesday, December 22, 2010
Parliamentary Inquiry into the role and potential of Broadband
The Australian Parliament has invited submissions for an Inquiry into the role and potential of the National Broadband Network by 5 February 2011. This is a very important topic, as while billions of dollars have been committed to building a broadband network, little thought or investment has gone into what it might be used for. What is needed is an updated "Vision for a Networked Nation" to envision how the NBN will be used. Roger Clarke and I wrote a submission for the assorted government inquiries into the "Information Superhighway" of the mid 1990s. Australian governments drew on the rhetoric and the specific proposals of this and similar submissions from the ICT community in formulating programs to help the community and industry use what became known as "the Internet" . This is shown in the titles and content of government reports, such as "The Networked Nation" (ASTEC 1994) and (in the "Networking the Nation" policy (1997).
The NBN could greatly benefit the Australian community, both culturally and economically as well as help the Australian environment. Australians will be able to have access to medical, financial and educational services, particularly in regional areas, not currently available. The NBN can reduce dependence on transport of people and goods, thus reducing energy use and greenhouse gas emissions. However, this will not happen without explicit planning and investment. In the absence of planning and investment, the NBN will take jobs away from Australians, particularly in regional areas, impoverish Australian culture and harm the environment.
The NBN will open financial, education, and health service providers in regional areas of Australia to competition from the cities, and all Australian service providers to competition from overseas. In the absence of strategies and investment to help with the change the likely effect of the NBN will be to lower the availability of face to face services and employment, particularly in regional areas.
The NBN will be a major consumer of energy in Australia and s increase greenhouse gas emissions. Consumer equipment made obsolete by the NBN will contribute to pollution of groundwater. An example of where the problem is now occouring is with the transition to digital TV. The Austrlaian government has had a long term plan to replace analogue with digital TV transmission. However, no provision has been made for disposal of millions of obsolete analogue TVs, which are going into landfill.
An example where the NBN could be beneficial is in education. Australia is a world leader in e-learning, with the Australian developed Moodle open source software being deployed in schools, vocational education and universities. As an example the Australian National University uses Moodle for pure e-learning courses, such as Green Information Technology Strategies COMP7310 and Electronic Document and Records Management COMP7420. The ANU also uses the same software for blended online/classroom Engineering 'Hubs and Spokes' Project in collaboration with the University of South Australia. The allows advanced courses presented by world leaders in their field to be made available to more students. The use of online systems also lowers the energy sue and therefore greenhouse gas emissions by replacing classrooms with e-learning and reducing the need for students and staff to travel to a campus.
The Australian federal and state governments have jointly funded programs to educate school and university teachers on how to use online education, including EdNa and the Australian Flexible Learning Framework. These provide the opportunity for not only improving Australian education but also maintain Australia's major export industry in educating international students. It should be noted that the NBN represents a risk as well as an opportunity. Not only does this allow Australian students to enrol in Australian courses online, but they can equally choose to bypass Australian institutions and enrol in overseas courses. The international agreements which Australia has concluded for access to education with countries such as India, not only allows Indian students to study in Australia, but allows Australian students to study in India. The students now need not leave home to do this.
The NBN could greatly benefit the Australian community, both culturally and economically as well as help the Australian environment. Australians will be able to have access to medical, financial and educational services, particularly in regional areas, not currently available. The NBN can reduce dependence on transport of people and goods, thus reducing energy use and greenhouse gas emissions. However, this will not happen without explicit planning and investment. In the absence of planning and investment, the NBN will take jobs away from Australians, particularly in regional areas, impoverish Australian culture and harm the environment.
The NBN will open financial, education, and health service providers in regional areas of Australia to competition from the cities, and all Australian service providers to competition from overseas. In the absence of strategies and investment to help with the change the likely effect of the NBN will be to lower the availability of face to face services and employment, particularly in regional areas.
The NBN will be a major consumer of energy in Australia and s increase greenhouse gas emissions. Consumer equipment made obsolete by the NBN will contribute to pollution of groundwater. An example of where the problem is now occouring is with the transition to digital TV. The Austrlaian government has had a long term plan to replace analogue with digital TV transmission. However, no provision has been made for disposal of millions of obsolete analogue TVs, which are going into landfill.
An example where the NBN could be beneficial is in education. Australia is a world leader in e-learning, with the Australian developed Moodle open source software being deployed in schools, vocational education and universities. As an example the Australian National University uses Moodle for pure e-learning courses, such as Green Information Technology Strategies COMP7310 and Electronic Document and Records Management COMP7420. The ANU also uses the same software for blended online/classroom Engineering 'Hubs and Spokes' Project in collaboration with the University of South Australia. The allows advanced courses presented by world leaders in their field to be made available to more students. The use of online systems also lowers the energy sue and therefore greenhouse gas emissions by replacing classrooms with e-learning and reducing the need for students and staff to travel to a campus.
The Australian federal and state governments have jointly funded programs to educate school and university teachers on how to use online education, including EdNa and the Australian Flexible Learning Framework. These provide the opportunity for not only improving Australian education but also maintain Australia's major export industry in educating international students. It should be noted that the NBN represents a risk as well as an opportunity. Not only does this allow Australian students to enrol in Australian courses online, but they can equally choose to bypass Australian institutions and enrol in overseas courses. The international agreements which Australia has concluded for access to education with countries such as India, not only allows Indian students to study in Australia, but allows Australian students to study in India. The students now need not leave home to do this.
Terms of Reference
The Committee will examine the capacity of the National Broadband Network to contribute to:
- the delivery of government services and programs;
- achieving health outcomes;
- improving the educational resources and training available for teachers and students;
- the management of Australia's built and natural resources and environmental sustainability;
- impacting regional economic growth and employment opportunities;
- impacting business efficiencies and revenues, particularly for small and medium business, and Australia's export market;
- interaction with research and development and related innovation investments;
- facilitating community and social benefits; and
- the optimal capacity and technological requirements of a network to deliver these outcomes.
From: Terms of Reference, Inquiry into the role and potential of the National Broadband Network, House Standing Committee on Infrastructure and Communications, House of Representatives, Australian Parliament, 16 November 2010
Tuesday, December 21, 2010
Guadalajara ICT Declaration Transformative Low-carbon Solutions
The Guadalajara ICT Declaration Transformative Low-carbon Solutions was delivered by Hans Vestberg on behalf of the ICT industry by the Global E-sustainability Initiative (GeSI) at Cancun Mexico, in conjunction with COP16. There was also a supporting "ICT Solutions for a Low Carbon Future" paper detailing Mitigation, Technology Development and Transfer and Adaptation strategies.
A call for a solution perspective at COP16 and commitment from the ICT sector
We urge the negotiators in Cancun to:
1. Recognize and make full use of solution sectors (such as ICT), that through
their products and services can help in providing solutions which can significantly reduce emissions in order to avoid yet further climate change and
support adaptation.
- The ICT sector/undersigned companies commit to accelerate their efforts to
make available solutions, such as digital health and education, smart grids, remote working and intelligent transport systems, which use mobile and broadband connectivity to ultimately benefit all nations in the drive towards energy conservation and efficiency, and to continue work on its internal emissions at the same time.
2. Support the creation of a work stream with focus on transformative
low-carbon solutions from solution sectors (such as the ICT).
- The ICT sector commits to support a work stream with focus on transformative low-carbon solutions. We further commit to report back at COP17 regarding the possibility to accelerate uptake of transformative low-carbon solutions.
3. Support a global low-carbon ICT and broadband workshop to be organized under the auspices of the Global e-Sustainability Initiative and the
Broadband Commission for Digital Development and supported by regional
workshops. This activity would highlight government policy best practices in
enabling the solutions role of ICT. This could include a global science work-
shop to present the latest scientific findings and technological solutions on
1.5o-2.0oC pathways.
- The ICT sector commits to take part in driving and supporting such a workshop.
4. Recognize solutions with transformative potential in the negotiating text,
for example in the areas related to mitigation, the technology mechanism,
technology development/ transfer and adaptation.
- The ICT sector commits to engage on an ongoing basis in the climate change
negotiations and provide support and input regarding the possibilities to deliver mitigation and adaptation in new and resource efficient ways.
5. Support the development and adoption of an agreed methodology for
calculation and reporting of the positive impact of solutions, that companies
provide (including transformative ICT and increasingly broadband solutions)
- The ICT sector commits to work with the ITU-T Study Group 5 to help develop an international methodology and use it to quantify and report positive contributions in a coherent way.
6. Include ICT solutions in National Mitigation/Adaptation Plans and share
best practice.
- The ICT sector commits to support dialogues both nationally and internationally between Environmental Ministries, other relevant ministries and ICT companies about the potential of ICT for reducing CO2 emissions.
Guadalajara ICT Declaration For Transformative Low-Carbon Solutions is supported by GeSI. ...
Background
Although Information and Communication Technologies (ICTs) contribute approx 2% of global carbon emissions, they play an important role in providing solutions that enable other industry sectors to reduce the remaining 98% of global carbon emissions.1 Studies clearly show that more effective use of ICTs can deliver tremendous CO2e savings. A collaborative effort of the public and private sectors is essential to leverage this potential.2
This Guadalajara ICT Declaration for Transformative Low-Carbon Solutions is a result of a public private dialogue in Guadalajara, Mexico 8-9 November 2010 stressing the innovative and strategic role that Information and Communication Technology (ICT) solutions can play in the global climate change negotiations, and expresses the support of the ICT sector to the ITU
Resolution and Communiqué.
In addition, the 167 governments attending the Plenipotentiary Conference of the International Telecommunication Union (ITU) held in Guadalajara, Mexico 4-22 October 2010 unanimously adopted Resolution WGPL/10 “The role of telecommunications/information and communication technologies on climate
change and the protection of the environment” and the “Communiqué on ITU’s call to Cancun: ICTs must be part of the solution”. In this communiqué, ITU urged COP16 delegates to look to the ICT sector, and take maximum advantage of the power of ICTs to reduce emissions worldwide.
Context
To date the principal focus of the global climate change negotiations has been on the initial CO2 emission reduction targets as agreed under the Kyoto Protocol, about 5% reductions.
Recent evidence shows it is now time to shift focus on piecemeal carbon emission problems to focus on solutions that can help to avoid emissions all together, or that can deliver significant reductions such as 30% or more by 2020.
In order to deliver on the promise of such transformative emission reductions, more engagement of strategic private sector innovation and technology is critical, as is supporting government planning and policies.
The undersigned believe that COP16 in Cancun can be a turning point in the global climate change negotiations by initiating a dedicated work stream for low carbon ICT and increasingly broadband solutions to play a transformative role in decreasing global emissions.
The ICT sector is fully committed to do its part in furthering this agenda, and actively engaging with governments and negotiators going forward.
1. See Smart 2020: http://www.gesi.org/ReportsPublications/Smart2020/
tabid/192/Default.aspx
2. On 19 September 2010 the report of the Broadband Commission for Digital Development was submitted to the United Nations Secretary General. This report contains a recommendation on employing Broadband to help combat climate change. Please see: http://www.broadbandcommission.org/index.html
From: Guadalajara ICT Declaration Transformative Low-carbon Solutions, Global E-sustainability Initiative (GeSI), 9 December 2010
National Broadband Network Corporate Plan
Australian Prime Minister, Julia Gillard, released the National Broadband Network Corporate Plan 2011 – 2013, on 20 December 2010. This shows the NBN will not achieve a commercial rate of return on the investment, but at 7.04% higher than many public investments. One reason for the low return is uniform national wholesale prices cross subsidising loss making regional connections from profitable urban customers. The minimum wholesale price for a basic 12mbps / 1 mbps service (delivered by fibre optic in urban areas and wireless in rural areas) will be $24 per month. The total capital expenditure is to be $35.9 billion, with $27.5 billion from government.
However, the major question with the NBN plan remains as to if Australians will want fixed fibre optic broadband, in addition to the wireless broadband they will have through their mobile phones, tablet computers, netbooks, laptops and other portable devices. By the time the NBN is widely deployed, fixed line telephone services will be essential obsolete. The common way to access the web will be hand held wireless devices. The major obvious application for the NBN is to replace the current cable and satellite Pay TV services. It is not clear if it be worth paying for a fibre optic service just for pay TV.
On aspect of the plan which has not receive attention is the use of automation to service the large number of retail users. While NBN is a wholesale provider, and so will have few direct customers, it will have to manage the installation and maintenance of millions of terminations of the fibre and wireless connections. The NBN plan envisions progressive automation of the management of this, from April 2011 with manual processes for the start of the "End-User Trial Capability" to fully automated systems by August 2012 "Ready for Market". Telstra and other telecommunications companies have had ongoing problems with automated systems, despite decades of experience. There is a risk that NBN will concentrate on the engineering problems of installing a fibre network and assume that installing software is simple. Failure of the software would make the entire project unworkable.
TABLE OF CONTENTS
TABLE OF EXHIBITS 7
Points of Interconnect (PoIs) and the Implementation of Uniform National Wholesale Pricing (UNWP) - based on the work undertaken by NBN Co, under the guidance of the ACCC, has resulted in a list of 120 PoIs to be deployed by NBN Co; NBN Co's Role in New Real Estate Developments (Greenfields) - NBN Co, itself or using subcontractors, will provide fibre in developments that fall within its long term fibre footprint for the following: Greenfields Pits & Pipes - legislation to be introduced in early 2011 that will make it mandatory for developers who are corporations to install fibre ready pit and pipe (including conduit lead-ins) in new developments, and to provide access to this infrastructure;
...
The Corporate Plan was modified recently to increase the number of Points of Interconnect (POI) for retail ISPs to the NBN from 14 to 120. This is to maintain the profitability of privately owned backhaul network companies and will reduce the profitability of the NBN. The plan assumes a firm agreement will be reached with Telstra, both to allow for use of their access to homes and to prevent them from competing with the NBN.
The government has emphasised the public benefit of ubiquitous high-speed broadband is to productivity, jobs, healthcare and education, but has decided not to provide a cost benefit analysis to check if these benefits outweigh the costs.However, the major question with the NBN plan remains as to if Australians will want fixed fibre optic broadband, in addition to the wireless broadband they will have through their mobile phones, tablet computers, netbooks, laptops and other portable devices. By the time the NBN is widely deployed, fixed line telephone services will be essential obsolete. The common way to access the web will be hand held wireless devices. The major obvious application for the NBN is to replace the current cable and satellite Pay TV services. It is not clear if it be worth paying for a fibre optic service just for pay TV.
On aspect of the plan which has not receive attention is the use of automation to service the large number of retail users. While NBN is a wholesale provider, and so will have few direct customers, it will have to manage the installation and maintenance of millions of terminations of the fibre and wireless connections. The NBN plan envisions progressive automation of the management of this, from April 2011 with manual processes for the start of the "End-User Trial Capability" to fully automated systems by August 2012 "Ready for Market". Telstra and other telecommunications companies have had ongoing problems with automated systems, despite decades of experience. There is a risk that NBN will concentrate on the engineering problems of installing a fibre network and assume that installing software is simple. Failure of the software would make the entire project unworkable.
Here is the Table of Contents and Summary from the National Broadband Network Corporate Plan 2011 – 2013 (NBN Co., 17 December 2010), converted from the PDF, omitting some tables:
TABLE OF CONTENTS
TABLE OF EXHIBITS 7
- EXECUTIVE SUMMARY 11
- INTRODUCTION AND TIMING OF THE CORPORATE PLAN 11
- OBJECTIVES OF NBN CO 12
- MAJOR ISSUES RELATED TO OBJECTIVES 13
- NBN CO TARGETS FOR JUNE 2013 15
- NBN CO VOLUME ROLLOUT 16
- EXTERNAL BENEFITS 16
- STEPS IN DELIVERING THE NATIONAL BROADBAND NETWORK 17
- PART OF A 30-YEAR VIEW AND 9.5-YEAR DEPLOYMENT 22
- SUMMARY OF FINANCIAL FORECASTS: PLAUSIBLE SCENARIOS 25
- GOVERNMENT POLICY DECISIONS 26
- BUSINESS ENVIRONMENT 29
- THE ROLE OF NBN CO IN TRANSFORMING THE AUSTRALIAN TELECOMMUNICATIONS INDUSTRY .. 29
- CURRENT STATE OF AUSTRALIAN TELECOMMUNICATIONS INDUSTRY . 31
- WIRELESS-ONLY HOMES (RESIDENTIAL MARKET) 32
- AUSTRALIAN BROADBAND MARKET . 33
- KEY INDUSTRY TRENDS . 35
- BANDWIDTH DEMAND AND THE ROLE OF FIBRE . 38
- KEY ASSUMPTIONS 45
- KEY ASSUMPTIONS IN THE CORPORATE PLAN 45
- POLICY SENSITIVITIES 52
- FORMATION AND CORPORATE STRUCTURE 53
- BRIEF HISTORY 53
- MANAGEMENT STRUCTURE AND KEY ROLES 53
- HUMAN RESOURCE AND INDUSTRIAL RELATIONS 55
- FINANCE, PROGRAM MANAGEMENT AND RISK .. 56
- IT SYSTEMS 57
- PROCUREMENT 57
- NETWORK DESIGN AND TESTING 61
- NETWORK DESIGN – KEY OBJECTIVES .. 61
- MAJOR SUPPORT SYSTEMS AND FACILITIES 65
- NETWORK DESIGN TESTING . 67
- FIRST RELEASE SITES 68
- NBN TASMANIA .. 69
- LAST 7% . 69
- TYPE 2 PASSIVE NETWORK DESIGN .. 72
- BATTERY BACKUP . 73
- FUTURE PROOFING THE NBN 75
- NETWORK CONSTRUCTION .. 77
- CONSTRUCTION – KEY OBJECTIVES .. 77
- ACHIEVABILITY OF KEY OBJECTIVES .. 78
- MAIN ASSUMPTIONS OF THE DEPLOYMENT SCHEDULE 78
- MODULAR DEPLOYMENT 79
- GEOGRAPHIC COVERAGE PRINCIPLES 79
- CONSTRUCTION POLICIES 79
- QUALITY CONTROL AND CONTINUOUS IMPROVEMENT 81
- CONSTRUCTION PARTNER SELECTION PROCESS .. 82
- SUPPLY CHAIN MANAGEMENT 82
- WORKFORCE PLANNING – SKILLS AND ASSURANCE .. 83
- SUMMARY OBJECTIVES FOR CONSTRUCTION. 83
- COMMERCIAL OPERATIONS . 85
- ACCESS SEEKER AND END-USER ACQUISITION 85
- NETWORK OPERATIONS AND MAINTENANCE 87
- OPERATIONAL READINESS .. 88
- SUMMARY OBJECTIVES FOR COMMERCIAL OPERATIONS 89
- PRODUCT DEFINITION AND PRICING .. 91
- PRODUCT & PRICING APPROACH 91
- PRODUCT SUMMARY 91
- FIBRE PRODUCT 93
- WIRELESS PRODUCT 95
- SATELLITE PRODUCT 96
- PRODUCT DEVELOPMENT AND PRODUCT ROADMAP 97
- PRICING 100
- COMPARISON WITH EXISTING AUSTRALIAN WHOLESALE MARKET PRICING 104
- COMPARISON WITH INTERNATIONAL PRICING CONSTRUCTS 106
- SPECIAL ACCESS UNDERTAKING WITH THE ACCC .. 106
- SUMMARY OBJECTIVES FOR PRODUCT DEVELOPMENT ROADMAP 107
- REVENUE FORECASTS .. 109
- SUMMARY OUTCOMES 109
- FOUNDATIONS OF NBN CO’S REVENUE MODEL 113
- ADDRESSABLE MARKET 114
- TAKE UP OF BASIC SERVICES 115
- RESIDENTIAL AND BUSINESS MARKETS 118
- BENCHMARKING SPEED AND USAGE GROWTH . 120
- WIRELESS AND SATELLITE REVENUES.. 131
- RISKS OF THE REVENUE FORECASTS 132
- FINANCIAL FORECASTS 133
- SUMMARY FINANCIAL FORECASTS . 134
- DEPLOYMENT PROFILE 134
- TYPE OF DEPLOYMENT FOR THE FIBRE NETWORK: AERIAL VERSUS UNDERGROUND 135
- CAPITAL EXPENDITURE 135
- OPERATING EXPENDITURE 135
- WORKING CAPITAL 136
- FY2011 BUDGET . 136
- TAXATION 137
- FUNDING NBN CO 139
- DETERMINING NBN CO’S FUNDING REQUIREMENT OVER 3 YEARS AND 30 YEARS 139
- FUNDING THE FY2011 TO FY2013 PERIOD 140
- PART OF LONG-TERM FUNDING SCENARIOS 141
- ACHIEVABILITY OF DEBT FUNDING . 142
- COST OF CAPITAL . 143
- RISK MANAGEMENT 145
- RISK MANAGEMENT SYSTEM 145
- CORPORATE PLAN RISKS .. 146
1 EXECUTIVE SUMMARY
1.1 Introduction and Timing of the Corporate Plan
This Corporate Plan (Corporate Plan or the Plan) sets out the key objectives and priorities for NBN Co Limited (NBN Co or the Company) for the three years from 1 July 2010 to 30 June 2013.
The Corporate Plan is a critical part of the process of designing, building and operating the National Broadband Network (NBN) and achieving the Government's objective of providing affordable superfast broadband to all Australians, including through structural reform of the Australian telecommunications industry.
The purpose of the Corporate Plan is to identify and address:
- The key objectives set by the Government for NBN Co during the term of the Corporate Plan;
- The key assumptions made by NBN Co in developing the Corporate Plan;
- How NBN Co will measure its achievement of core financial and operational objectives;
- The major challenges expected to be faced by NBN Co in meeting its objectives;
- The critical risks to the Company, and strategies for mitigating those risks;
- The critical Government policy issues that will impact NBN Co's ability to achieve its objectives; and
- The financial forecasts, including funding requirements during the term of the Corporate Plan.
The Corporate Plan is prepared in accordance with the requirements of the Commonwealth Authorities Companies Act 1997 and Governance Arrangements for the Commonwealth Government Business Enterprises (June 1997).
The Corporate Plan was prepared with regard to the timing objectives set by the correspondence from Shareholders Ministers between June and December 2010.
1.2 Objectives of NBN Co
1.2.1 Key Objectives
The Government has stated its broad objectives for the NBN as follows:
“The new superfast network will:
- Connect homes, schools and workplaces with optical fibre (fibre to the premises or 'FTTP'), providing broadband services to Australians in urban and regional towns with speeds of 100 megabits per second - 100 times faster than those currently used by most people extending to towns with a population of around 1,000 or more people;
- Use next generation wireless and satellite technologies that will be able to deliver 12 megabits per second or more to people living in more remote parts of Australia;
- Provide fibre optic transmission links connecting cities, major regional centre and rural towns;
- Be Australia's first national wholesale-only, open access broadband network;
- Be built and operated on a commercial basis by a company established at arm's length from the government and involve private sector investment; and Be expected to be rolled-out, simultaneously, in metropolitan, regional and rural areas."1
To design, build and operate the broadband network required as the foundation of the Government's NBN policy the Government established NBN Co on 9 April 2009 as a Company under Corporations Law and operates under the Commonwealth Authorities Companies Act, 1997.
NBN Co's understanding of its objectives has been enhanced by correspondence from the Government. NBN Co's objectives can be summarized as:
- The network should be designed to provide an open access, wholesale only, national network;
- The technologies utilised should be Fibre to 93% of premises (including Greenfields developments) (defined in this Plan as the Fibre Network), Fixed Wireless to 4% of premises (delivering at least 12Mbps) (defined in this Plan as the Fixed Wireless Network or Wireless Network), and Satellite to 3% of premises (defined in this Plan as the Satellite Network);
- NBN Co should offer uniform national wholesale pricing over the network, from a PoI to a premises, on a non-discriminatory basis; and
- The expected rate of return should, at a minimum, be in excess of current public debt rates.
1.3 Major Issues Related to Objectives
This Corporate Plan is based on the premise that the Government's intention is to build the NBN as the sole fixed line network from premises to PoI, other than fixed line infrastructure already in existence as at 1 January 2011, and on the assumption that Telstra will structurally separate and migrate its customer base to the NBN. This Corporate Plan therefore assumes that appropriate mechanisms will be established by the Government to prevent the NBN from being “cherry-picked" in commercially attractive areas.
1.3.1 Cherry Picking
In building the NBN to meet the objectives set by the Government, NBN Co recognises that there are segments of the market that are not commercially viable. There are also areas of the market where an FTTP rollout would be commercially viable and, hence, attractive to other market participants.
These areas include Greenfields estates and denser suburbs with a high income demographic.
Given NBN Co's initial focus on regional areas and the need to cross-subsidise non-commercially viable market segments, NBN Co will not be able to compete effectively with cherry pickers, who focus on commercially attractive areas only.
The Plan assumes effective regulatory protection to prevent opportunistic cherry picking as set out in the Government's Statement of Expectations. New fibre networks built after 1 January 2011 for residential and small business purposes will need to be Layer 2, wholesale only and open access.
NBN Co will retain the option of overbuilding infrastructure. The Government will consider the introduction of a levy, if necessary, to prevent opportunistic Cherry Picking.
1.3.2 Points of Interconnect (PoIs)
In designing the network, NBN Co has made design trade-offs, some of which have implications for industry structure. The most significant of these network design trade-offs relates to the number and location of Points of Interconnect (PoIs).
In proceeding with a network design based on 14 centralised PoIs, NBN Co placed priority on achieving minimum wholesale input costs for Access Seekers, eliminating any single point of failure above the Fibre Distribution Hub and providing for rapid traffic growth in all backhaul links due to increasing video applications.
NBN Co has now reflected the Government's policy choice of a semi-distributed PoI model in this plan. NBN Co has worked with the ACCC to apply the ACCC “competition criteria" for PoI locations.
The application of the ACCC's criteria has resulted in 120 PoIs,2 and this has been reviewed by the ACCC.
In addition:
NBN Co has reflected the Government's decision that the Company should implement an internal cross-subsidy to provide uniform national wholesale pricing over the network, from a PoI to a premises.
- NBN Co is proceeding on the assumption that the ACCC will make access determinations for currently regulated transmission routes (with effect from 1 January 2011) and that the ACCC will also monitor pricing on currently exempted routes and, if necessary, will act promptly to re- examine exemptions in the event that pricing on those routes is not aligned with the ACCC's access determinations for regulated routes.
Since NBN Co has been designing and planning on the basis of 14 centralised PoIs since May 2010, there is an impact on deployment timing, costs and End-User take-up of moving to a semi- distributed PoI model, which has now been reflected in this Plan.
1.3.3 Unbundling and Separation
NBN Co has proceeded with its network and system design on the basis that it would provide a layer 2 bitstream service only, using predominantly a GPON architecture. The company is not preparing for the provision of layer one services, layer one unbundling, functional or structural separation.
However, as directed by Government, a trial of 'Home Run' architecture will take place in a Greenfields site in 2012 and NBN Co will establish an asset register and cost allocation methodology for asset and cost, but not revenue accounting.
1.4 NBN Co Targets for June 2013
Within the broader objectives outlined above, NBN Co has identified a number of specific high level deployment targets to be achieved by 30 June 2013.
These targets have been prepared from NBN Co Management's high level assessment of the of the change to 120 PoIs rather than 14 PoIs and the limitations a semi-distributed PoI system places on the sequence in which geographies can be rolled out. The targets and roll-out sequencing are informed by NBN Co's presumption that it will be the sole provider of fixed line network from premises to PoI, in effect roll-out sequencing will be based on engineering and national factors, instead of a need to compete with other carriers pre-emptively cherry-picking attractive markets.
Exhibit 1.1: Premises Passed or Covered (incremental Year-on-Year) ...
| FTTP Brownfields | FTTP Greenfields Build | FTTP Greenfields BOT | Satellite First Release | Wireless | Total | |
|---|---|---|---|---|---|---|
| June 2011 | 13,000 | - | 45,000 | 165,000 | - | 223,000 |
| June 2012 | 132,000 | 7,000 | 120,000 | - | 14,000 | 273,000 |
| June 2013 | 805,000 | 63,000 | 84,000 | - | 269,000 | 1,221,000 |
| Total | 950,000 | 70,000 | 249,000 | 165,000 | 283,000 | 1,717,000 |
Source: NBN Co
Note: Premises rounded to the next thousands.
A premise is passed / covered when the shared network and service elements are installed, accepted, commissioned and ready for service which then enables an end user to order and purchase a broadband service from their choice of retail service provider.
Exhibit 1.2: Premises with Active Service (Incremental Year-on-Year)
| FTTP Brownfields | FTTP Greenfields Build | FTTP Greenfields BOT | Satellite First Release | Wireless | Total | |
|---|---|---|---|---|---|---|
| June 2011 | - | - | 35,000 | - | - | 35,000 |
| June 2012 | 5,000 | 5,000 | 92,000 | 13,000 | 1,000 | 116,000 |
| June 2013 | 255,000 | 55,000 | 64,000 | 20,000 | 25,000 | 419,000 |
| Total | 260,000 | 60,000 | 191,000 | 33,000 | 26,000 | 570,000 |
Source: NBN Co
Note: Premises rounded to the next thousands.
A premise is activated when a valid service order is received to install the dedicated optic fibre cable connection to the premises, optical network termination unit and reliable power supply unit with battery backup option (for Fibre premises).
These targets are indicative as the rollout is dependent on:
- The availability of exchange facilities for the location of the semi-distributed PoIs;
- Negotiations yet to finalise on commercially attractive terms the procurement of Greenfields Build-Operate-Transfer (BOT); and
- Securing contracts with suppliers and construction contractors on competitive terms and conditions.
1.5 NBN Co Volume Rollout
Following the ramp-up into volume rollout described in the section above, a full deployment rate of almost 6,000 premises passed per day is planned for FY2014. A significant risk to achieving this planned rate, and hence, the volume deployment plan, is a possible economy-wide shortage of available construction resources at an acceptable cost. In particular, this will be dependent on the overall market demand for labour. NBN Co will work with the training industry to ameliorate the impacts of possible labour shortages.
A second issue which could impact on the number of new Greenfields premises available to be connected is the capacity of the housing construction industry. If new start housing was to be significantly impacted by labour shortages there would be a consequent impact on NBN Co's financials.
1.6 External Benefits
The Government has established NBN Co to design, build and operate a broadband network that satisfies the four objectives laid out in Sub-Section 1.2.1, Key Objectives.
It is NBN Co's understanding that once the NBN is available the Government will want to pursue the achievement of public policy objectives in the areas of healthcare, education, aged care and other areas, as deemed appropriate by Government. These additional services and policy objectives are not part of NBN Co's remit and hence, do not form part of NBN Co's Corporate Plan.
Sub-Section 1.2.1, Key Objectives, notes that the Government, as owner of NBN Co, must achieve a rate of return from its investment in NBN Co in excess of current public debt rates. This means the Government must receive its capital back plus interest.
This Corporate Plan sets out how this will be achieved.
NBN Co, which is the corporate entity charged with designing, building and operating the underlying broadband infrastructure, is an enabler of the Government's broader NBN policy objectives.
The Government has made numerous statements regarding the benefits Australian society can expect as a result of having access to the NBN Co (in addition to the financial return the Government will have as owners of NBN Co).
Numerous community and industry bodies have also made comments regarding the benefits specific communities and industries can expect as a result of having access to the NBN Co network.
It is not part of NBN Co's role to determine the nature, magnitude or prioritisation of these additional benefits, commonly known as 'externalities'.
Nevertheless, NBN Co intends to identify relevant market developments and trends for vertical segments in order to inform its product roadmap prioritisation. This is described in Section 8.6, Product Development & Product Roadmap, of this document. NBN Co anticipates commissioning an external company to undertake an analysis of the commercial impact of these trends.
1.7 Steps in Delivering the National Broadband Network
1.7.1 Achievability of the Programme Plan Timeline and Objectives
The major objectives and timeline described in this section have been informed by the recent policy decisions and announcements from the Shareholder.
Dependencies remain with regards to the execution of Government policies (and other matters external to NBN Co) as well as the progress of the negotiations with Telstra.
Therefore, the timeline and objectives may become impacted and would need to be revisited if these dependencies are not finalised within the timeframe NBN Co has currently assumed (as described in this Plan).
1.7.2 Annual Updates
The assumptions made by the Company, which underpin the Plan, together with the business strategies and development of capabilities of the business, how the Company will measure its achievement of the financial and operational objectives, and the management of risk and mitigation strategies, will be reviewed on a regular basis to take into account ongoing developments.
Accordingly, it is anticipated that the Plan will be updated at least once a year.
1.7.3 ACCC Special Access Undertaking (SAU) Process
NBN Co's announced intention is to lodge a Special Access Undertaking (SAU) for approval by the Australian Competition and Consumer Commission (ACCC). NBN Co's proposed approach to the SAU is further detailed in Section 8.10, Special Access Undertaking with the ACCC, below.
NBN Co has previously indicated its view that the SAU could be finalised and lodged with the ACCC once key policy matters such as the number and location of PoIs and the approach to uniform national wholesale pricing were finalised. Further, while the current regulatory regime provides for SAUs, NBN Co considers that it would be preferable if it did not lodge its SAU until both the Competition and Consumer Safeguards Bill (CCS Bill) and the NBN Companies and Access Arrangements Bills have been passed and have commenced. Together, these Bills contain amendments which affect the way NBN Co will operate and the powers of the ACCC in relation to the SAU.
Now that policy decisions with regards to PoIs and uniform wholesale national pricing have been made, and assuming that the CCS Bill commences in the form that it was passed and that the NBN Companies and Access Arrangements Bills are also passed and commenced in the first quarter of 2011, NBN Co is assuming the following timeline in relation to its SAU:
- Lodgement on or before 31 March 2011 at the earliest (or as soon as feasible after the Bills commence);
- The ACCC is subject to a statutory timeframe of 6 months to accept or reject the SAU, subject to extensions of time and 'stop clocks' (for example while the ACCC is waiting for information it may request from NBN Co); and
- Accordingly, it is unlikely that NBN Co will have an approved SAU in place until the final calendar quarter of 2011.
NBN Co is actively engaging with the ACCC in developing the SAU.
1.7.4 Timeline and Critical Dates
There are five broad areas of work required in the delivery of the National Broadband Network:
- Establishing NBN Co;
- Network Design and Testing;
- Network Construction;
- Commercial Operations; and
- Product Definition and Pricing.
The first area, Establishing NBN Co is now substantially complete, subject to the passing of enabling legislation. The corporate structure and key roles and responsibilities within NBN Co are discussed in Section 4, Formation and Corporate Structure. The period covered by the FY2011-FY2013 Corporate Plan primarily addresses the other areas: Section 5, Network Design and Testing, Section 6, Network Construction, Section 7, Commercial Operations, and Section 8, Product Definition and Pricing.
Exhibit 1.3: High Level FTTP timeline to 30 June 2013
Diagram omitted.
Source: NBN Co
Note: The dates stated above do not include the timing delays as a result of legislative timing and the requirement to hold an 8-week consultation process regarding Points of Interconnect.
NBN Co has identified five critical dates in the overall programme plan for FTTP:
Exhibit 1.4: Critical Dates for the Programme Plan
| Critical Date | Activity | Objectives |
|---|---|---|
| April 2011 | Start End-User Trial | Capability to connect at least one mainland based Retail Service Provider (RSP) with up to 400 trial End-Users offering a free subset of products to test preparedness. All NBN Co support with manual processes. |
| June 2011 | Completion of Telstra Definitive Agreements | All Conditions Precedent satisfied, including enabling legislation, and required approvals. |
| September 2011 | Ready for First Commercial Service | Capability to fulfil, activate and assure a limited number of products with multiple RSPs. Supported with a combination of basic semi-automated and manual processes. |
| February 2012 | Ready for Business as Usual Roll-out | Capability to fulfil, activate and assure an increased number of products with multiple RSPs. Supported with a combination of advanced semi-automated and manual processes. |
| August 2012 | Ready for Market | Fully automated systems, no limitation in activating as a percentage of premises passed. Multiple RSPs certified; critical volume available and predictable. Operations capability can fulfil and assure the NBN Co suite of products at scale. |
Source: NBN Co
The period to August 2012 will be focussed on the establishment of key systems required to support the roll-out of the NBN. This includes detailed testing of NBN Co's network design and construction methodologies through the establishment of a test lab, the early roll-out of FTTP in twelve First Release Sites (see Section 5.4, First Release Sites) (five mainland First Release Sites and seven sites in Tasmania). It also encompasses completion of essential support systems - including OSS/BSS and ERP - that need to be in place before full scale Access Seeker activations can commence.
NBN Co is currently scaling up the FTTP deployment from the First Release Sites (FRS) to full-scale network construction. It is anticipated that, following evaluation of the lessons learned from the First Release Sites, a series of 'Release 2 Sites' already announced (14 new sites on mainland in addition to 5 first release sites), will be used to refine construction methodologies and systems once the OSS/BSS and other critical support systems are in place and operational. Detailed design of the Release 2 Sites (FRS augmentation) has commenced in November 2010. The planning of the Tasmanian First Release Sites and for the mainland Second Release Sites is currently being reviewed in light of the move to a semi-distributed PoI model. The availability of the 120 semi-distributed PoIs will impact the current planning for First Release and Release 2 Sites; NBN Co is currently investigating how best to mitigate this impact.
During FY2011, NBN Co will also be designing and constructing the wireless solution and preparing for the satellite procurement for the 'Last 7%'. NBN Co is currently progressing with negotiations for wireless spectrum acquisition. After an expedited procurement process, the Company expects construction of the main wireless network to start in December 2011, following a series of proof of concept and First Release sites aimed at finalising key decisions around spectrum and wireless network build options.
The long lead times in satellite construction and launch mean that NBN Co does not expect to have its own satellites in orbit until FY2015. However, the Company expects to be able to offer an interim satellite solution, called Satellite First Release Sites, from June 2011 using spare capacity on existing satellites in order to provide continuity following on from the existing Government Australian Broadband Guarantee (ABG) program expected to cease on 30 June 2011.
Exhibit 1.5: High Level Wireless & Satellite Timeline to 30 June 2013
Diagram omitted
Source: NBN Co
Note: The dates stated above have not included any provision for timing delays.
1.8 Part of a 30-year View and 9.5-Year Deployment
The construction of the NBN is estimated to take 9.5 years to complete in a Telstra deal scenario (see Section 3, Key Assumptions), since NBN Co has access to existing underground infrastructure, exchange space and transit backhaul. The economic viability of NBN Co requires a long-term view extending well beyond this period, typical of any major infrastructure project. It is therefore important that the 3-year Corporate Plan is viewed in the context of the long-term business model for NBN Co.
Exhibit 1.6: Long-Term Timeline
Diagram omitted
Source: NBN Co</>
The Corporate Plan is an integral part of NBN Co's 30-year business model, which has been developed to assess the long-term viability of the Company, to articulate clear long-term objectives for the Company and to determine the long-term funding needs of NBN Co.
Whilst the Corporate Plan focuses on the 3 years from 1 July 2010 to 30 June 2013, Section 10, Financial Forecasts and Section 11, Funding NBN Co, specifically address the Corporate Plan in the context of the 30-Year business model. High level assumptions underlying the Corporate Plan are included in Section 3, Key Assumptions.
1.8.1 The Corporate Plan Projections and the NBN Full Deployment
The Corporate Plan targets are developed to achieve full deployment by December 2020, which would be nine and a half years from the Telstra agreements becoming unconditional by end June 2011. The major outcomes of the full deployment objectives are illustrated in Exhibit 1.7.
The forecasts include a substantial element of replacement and maintenance capital expenditure to achieve technological robustness of the three platforms (fibre, wireless and satellite).
Exhibit 1.7: Selected Targets and Projections of the Full Deployment Period (FY2011-FY2021)
- $21.8 billion total forecast operating expenditure; of which $13.7 billion are related to decommissioning and infrastructure payments.3
| Targets & Projections | Full Deployment Key Metrics (Rounded) (Nominal Dollars) |
|---|---|
| Coverage |
|
| FTTP Network Characteristics |
|
| Greenfields |
|
| Capital Expenditure (to Dec 2020) |
|
| Revenues (to Dec 2020) |
|
| Operating Expenditure (to Dec 2020) |
|
| Cumulative EBITDA (to Dec 2020) |
|
| Levered Funding (to FY2021) |
|
| Internal Rate of Return (IRR) |
|
Source: NBN Co
The financial targets of the Plan can be summarised in the following simplified profit and loss accounts and applications and sources of funds for the period to FY2013 and to December 2020, respectively.
Exhibit 1.8: Profit and Loss (Cumulative, $ Billion) (Nominal Dollars)
Omitted.
Exhibit 1.9: Funding Summary (Cumulative, $ Billion) (Nominal Dollars)
Omitted.
Source: NBN Co
Note: Distributions to Equity: the Corporate Plan embeds an assumption of debt raising, which if successful will provide a mechanism to distribute surplus cash and repay equity over time after the end of the Construction period.
Debt Funding: it has been assumed that Debt Funding equivalent to 33% of total funding required over the period FY2011-FY2021 would be raised; if actual debt raised at the time was lower than projected, then Equity Funding by Government would need to be increased.
1.9 Summary of Financial Forecasts: Plausible Scenarios
Detailed financial forecasts are provided in Section 10, Financial Forecasts. Based on the assumptions set out in this Plan, NBN Co expects to generate a financial return in excess of current public debt rates under most plausible scenarios (see Exhibit 1.10).
All plausible scenarios assume NBN Co is the sole provider of fixed line network from premises to PoIs and variations are built on:
- Construction scenarios based on high, medium and low assumptions of distances, labour and material productivity rates as well as civil costs; and
- Demand and Average Revenue Per User (ARPU) scenarios based on high, medium and low revenue per user and residential wireless substitution. In particular, plausible scenarios vary around revenue variables such as wireless substitution for the residential market, initial pricing of the Fibre products (speeds and usage) and growth of demand over time compounded with price decreases.
Further analysis of Internal Rate of Return (IRR) and other sensitivities is included in Section 3, Key Assumptions, for policy dependencies, Section 9, Revenue Forecasts, and Section 10, Financial Forecasts.
Exhibit 1.10: Sensitivity Analysis Impact on IRR (%)
| Scenarios | High Construction Costs | Mid Construction Costs | Low Construction Costs |
|---|---|---|---|
| Mid Demand - high ARPU | 7.6% | 8.3% | 8.8% |
| Mid Demand - mid ARPU | 6.3% | 7.0% | 7.6% |
| Low Demand - low ARPU | 5.3% | 6.1% | 6.7% |
Source: NBN Co
Note: Internal Rate of Return (IRR) rounded to 1 decimal point.
Exhibit 1.11: Sensitivity Analysis Impact on Peak Funding ($ Billion, Nominal Dollars, Levered Funding including FundingCosts)
| Scenarios | High Construction Costs | Mid Construction Costs | Low Construction Costs |
|---|---|---|---|
| Mid Demand - high ARPU | 43.1 | 39.5 | 36.5 |
| Mid Demand - mid ARPU | 44.6 | 40.9 | 37.9 |
| Low Demand - low ARPU | 44.3 | 40.6 | 37.5 |
Source: NBN Co
Note: Peak Funding corresponds to peak total funding requirement over the period FY2011-FY2021. It includes assumed interest costs for debt funding, and therefore refers to levered funding. It is expressed in nominal terms, i.e. funding at the time it is forecast to be incurred.
These returns would not attract investors from the start but may be acceptable to the Government.
The NBN Co Executive team is expected to manage the dynamics of the business to converge to the central case over time.
1.10 Government Policy Decisions
The policy decisions made by the Government in relation to the NBN to date have been communicated to NBN Co and are reflected in the CCS Bill and NBN Companies and Access Arrangements Bills. Recently, the Government has communicated to NBN Co a number of decisions in relation to outstanding policy matters.
The most recent decisions have been integrated into this Plan and they relate to:
- All 'broadacre' developments (new housing developments);
- 'Infill' developments (housing development sites within existing urban areas) in areas where it has rolled out its fibre network in a region; and
- 'Infill' developments in which 100 or more premises are built within a 36-month period in areas where NBN Co has not yet rolled out its network;
Home Run Greenfields Fibre Trial - to be conducted in a new development, by early 2012. The Government has confirmed that there will be no requirement to conduct a trial in a Brownfields site.
The plan assumes it will conduct a Greenfield's trial and any decision on any home run architecture would be made following this trial. The Plan assumes there will be no need to provide for Layer 1 unbundling and Home Run architecture following the Greenfields trial. The Plan would require substantial additional Capex adjustment and significant network and OSS/BSS redesign should NBN Co subsequently be directed to deploy Home Run architecture or provide for Layer 1 unbundling;
- Accounting Separation and Preparing for Future Structural Separation -Government has requested NBN Co to prepare for possible future structural separation by implementing accounting separation in consultation with the ACCC, covering assets and costs, but not revenues;
- Facilities Access and Carrier Powers and Immunities - The Government has agreed, subject to the outcome of public consultation progress other practical measures to facilitate the rollout to be developed in consultation with NBN Co and other stakeholders.
- ;
- Battery Backup -the provision of a battery backup for all Fibre Network Termination Units (NTUs) in which battery backup is installed for free at the time of the NTU install;
- Definition of Premises and Coverage - the Government has agreed to the definition of premises that NBN Co is required to connect (and count towards the coverage target) as described in Section 3, Key Assumptions.
- This means there will be no requirement to provide backhaul to third party mobile base stations outside NBN Co's optimal FTTP/transit backhaul footprint, although NBN Co may choose to do so on commercial terms.
- NBN Co notes that the Government requires NBN Co to connect payphones that are activated in compliance with the Universal Service Obligation. NBN Co has not conducted any costing of this requirement in this Plan as further information will be required from the Government for that analysis;
- Interim Satellite Solution - NBN Co will submit to the Government an interim satellite (First Release Satellite) solution for commercial services starting from 1 July 2011; and
- Cherry Picking - The Government will provide effective regulatory protection to prevent market participants entering the FTTP market and cherry picking the most commercially attractive areas ahead of the NBN build. The viability of the project is dependent upon this protection; and
- Trade Practices Act (TPA) Protection - The Government will provide any required legislative (or regulatory as appropriate) protection to NBN Co in order for the Company to implement the semi-distributed PoI model (including the cross-subsidy required by the Government to achieve universal national wholesale pricing by NBN Co).
To prepare this Corporate Plan, it has been necessary for NBN Co to utilise assumptions in relation to Government policy decisions; these assumptions are further detailed in Section 3, Key Assumptions.
1 Senator the Hon. Stephen Conroy, 7 April 2009, Joint Media Release - Prime Minister, Treasurer, Minister for Finance, Minister for Broadband, http://www.minister.dbcde.gov.au/media/media_releases/2009/022.
2 If additional PoIs are required to be established over time, the implications to the Business Model of an increase in PoIs will need to be considered.
3 Based on Telstra Financial Heads of Agreement (FHOA), signed 20 June 2010. Nominal Dollars in year when incurred.
4 http://www.dbcde.gov.au/broadband/national_broadband_network/fibre_in_new_developments.
...
From: National Broadband Network Corporate Plan 2011 – 2013, NBN Co.,
17 December 2010 (converted from the PDF, omitting some tables)
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