National Broadband Network

Lots of nonsense continues to be written and said about the Australian government tender process for the National Broadband Network (NBN) and the supposed merits of excluding Telstra from the bidding process, allegedly having submitted a non-conforming bid.

Be that as it may, let the government exclude Telstra and instead fund a separate, capital-city only network to be built by one of the other bidders. At the same time, allow Telstra to build their own national network, presumably coast-to-coast including major regional areas.

For all its problems, the current network coverage of Telstra is far superior to any of its competitors outside of the capital cities. It is impossible for anyone to build a network with broadband access to 98% of the population without subsidies. Either cross-subsidies inside the network provider, where city dwellers pay more to subsidise our country cousins, or government subsidies to maintain equalisation of prices.

The idea has been raised by several commentators, the socialist commentariat in particular, that Telstra should be prevented from building a competitive network to compete with whom ever is the winner of the current bid. Notwithstanding the fact that such a ludicrous, anti-competitive suggestion could be made on the grounds of consumer benefit is the silliness of begrudging the success of the shareholders who own the mostly-privatised entity.

Does this behaviour evince some kind of juvenile spite towards the management and shareholders of Telstra? The current management team is, by definition, subject to change. The shareholders, on the other hand, see the value of their investment further diminished (not to mention the diminution in value of shares held by the Future Fund, the largest shareholder in Telstra) by government intervention in what should be a free market for communications services.

Let the new network providers charge their fair price, presumably undercutting Telstra in areas of high population since their "national network" will be limited to those areas where they (or anyone else) can deploy at low cost and still earn a high marginal return on their investment. It is to be expected that Telstra will meet this price point in some centres, providing strong competition, and will also offer the benefits of a truly-integrated national network for premium customers, including business and government.

Completely putting aside what applications(*) and economic benefits,(**) if any, will flow from the 100+ megabit per second bandwidth that will be usable for homes and small businesses to connect to the Internet, let them build their NBNs and allow the market to decide which way customers will run.

It is another story altogether to consider how much the national capability in telecommunications has been diminished by the relegation of Australia's Telecom, a formidable research and development organisation, to just another utility company known as Telstra.

The growth of directory and media services does not make up for the national loss of innovation and competency in the telecommunications space formerly held by Telstra Research Laboratories, now only partially filled by exceptional organisations like WATRI.

(*) Yes, I know about eHealth application and I am aware of the nebulous future expectations to be delivered by the digital economy. Please define for me what you expect to to be the majority of uses.
(**) Please explain how an increase in network bandwidth improves productivity by: 1) increasing production per person; 2) improving return on capital or investment; or 3) by minimising input costs per unit production.

Innovation in Marine Technology

Nigel Gee, Innovator-in-Residence at the Centre for Marine Science and Technology (CMST) , Curtin University gave a very interesting talk about marine innovation focusing on his specialty of naval architecture which stimulated a vigorous discussion about innovation in general.

He spoke about the original Norwegian innovation in producing the modern catamaran, with 1000 of similar type worldwide, followed by more-recent Australian innovation in wave piercing multi-hull by Incat in Tasmania, having created a whole new market with at least 150 vessels, mostly from Australia. The West Australian company, Austal, has continued the winning trend with the first advanced trimarans to enter the car-carrying ferry market and is on its way towards a major US defence contract for the new littoral combat ship, described as an all-aluminum, new generation, high speed warship.

Nigel emphasised that aesthetics and the nexus between science and the arts have a major part to play in vessel design and by way of example showed a fairly traditional ferry design designed by his firm in comparison to another design of a sleek, modern-looking type with similar performance and capacity, asking which one would we prefer. Form follows function is the typical refrain of engineers (including yours truly) but Nigel decries this approach for one that encompasses both aspects and may benefit the marine industry and the wider community.

The differences between the approaches of industry and acadame towards innovation were represented in a table with the usual points, profit, control and intellectual property on the industry side; research, sharing and publication on the other. The questions of regulation, government intervention and funding were raised along with the telling point that studies point towards a deficit of collaboration (citing an ECU PhD) . I assert that WA has not developed the industry clusters one would expect where on one hand, a number of companies dominate their global industry (eg. mining software) and others have potential opportunities to do so (eg. subsea acoustics, telemetry and control systems).

Nigel made the point that while the US has fallen by the wayside in respect of innovation in naval architecture, whereby it lacks a domestic capability for designing and building high-speed catamarans for commercial and defence applications, they are leaders in scientific innovation. For example, he cites the example of a physicist who says they can improve performance by x% will find themselves showered with funds. There are lessons to be learned from this experience with regard to industry innovation on one side of the ledger (witness the decline of the US automobile industry, for example) and on the other side, industrial sustainability led by scientific innovation spurred on by a high concentration of well-funded, world-leading research institutions (Scripps, San Diego being one among many).

I said that we recognise the innovation success of marine, offshore oil and gas, structural engineering and asked about the relevance of system engineering in the context of of algorithm development and signal processing for acoustics applications, as applied to submarine detection and tracking, mapping and survey for the oil and gas industry. Nigel deferred this question to Dr Jim Klaker, the Director of the Centre, who spoke about their ongoing work in acoustics in the context of defense and our marine environment.

Questions and discussion raised several nefarious issues of government intervention where many seem to agree - with me being a vocal dissenter. For instance, government regulation, legislation and targets for emissions, carbon sequestration, auto and other industries. I see no place for governments to try and pick winners, throwing money at arbitrary areas of interest. Competition and motivation within an industry context are part of the solution whereby companies and individuals take responsibility for funding and risk sharing.

It was suggested by someone in small or medium enterprise, and supported by another, both in technology development companies, that universities tend to saddle commercial arrangements with bureaucracy and seek to capture a share of intellectual property. I suggest that a client can pay for a service if they wish to retain the intellectual property and to accept that research leading to publication is a reasonable outcome of publically-funded research. It is unreasonable to expect something for nothing and a contractual arrangement can guarantee exclusivity if required; however this is inappropriate for an open-ended research question.

Yours truly suggested that industry clusters are rare and this fact reflects poorly on outcomes from industry collaborations in general and cooperative research centres (CRCs) in particular. The review of CRCs is timely and complements the Cutler Report that grew from the National Innovation Review. The question here is one of scale whereby large-scale research and innovative development cannot occur in a piecemeal fashion through individuals and organisations acting alone.

Another issue related to scale is specialist training provided by universities and industry. The expected shortage in naval architects and engineers for Austal and defence projects, including the next-generation submarine, is a continuing concern which parallels the endemic shortage of systems and software engineers, especially those with solid backgrounds in acoustic signal processing.

Informal discussion afterwards over drinks and nibbles provided an enjoyable networking opportunity with a wide cross-section of workers primarily involved in naval architecture and marine engineering. Certainly it is of great benefit to us to have Nigel spend time in Perth to inject some enthusiasm and global perspective into our local environment. Dynamic it might be, with greater participation in science and engineering than elsewhere, but much more can be done to foster innovation in science and engineering applications.