Geoblocks. How Netflix, Apple et al take us for a ride

How's this for rewarding loyalty?

Netflix is about to come to Australia and as a thank you to the 200,000 Australians who've been devotedly buying its content for years it's reportedly about to pull the plug.

Until now $US8.99 per month has bought unlimited access to as many 100,000 movies and TV shows for any Australian able to trick the Netflix computer into thinking they're in the US. It's been easy, and it's been legal.

The High Court declared in 2005 that it was legal to circumvent geoblocks. A geoblock is a technological device designed to limit someone's access to a product or service depending on where they live.

The region codes on DVDs are geoblocks. They are intended to stop viewers in some parts of the world watching DVDs intended for viewers in other parts. They cause heartbreak for travellers returning from overseas attempting to play what they've bought, bemusement on the part of workers who move between countries and are required to nominate a single region code and embarrassment for international figures such President Obama who once gave his British counterpart a gift of 25 classic American movies that were unwatchable in Britain.

Sony PlayStations were designed so that PlayStation games bought in some parts of the globe weren't playable on PlayStations sold in others, an absurd restriction that encouraged a Sydney engineer named Eddy Stevens to develop a $45 computer chip that turned any PlayStation into a device that could play any PlayStation game. Sony took him all the way to the High Court where it lost in a unanimous judgement that held that it was legal for Australians to circumvent attempts to prevent them accessing products they had bought.

He was backed by the Australian Competition and Consumer Commission and later by the Howard government, which took care in implementing the Australia-US Free Trade Agreement to ensure Australians remained free to jump around geoblocks.

The Howard government had an excellent record in fighting geoblocks, in whatever form they took. Until 2008 record companies misused the copyright law to prevent retailers from sourcing legally produced CDs from overseas. They had to buy them from the Australian distributor at the Australian price regardless of how cheaply they could be bought elsewhere. Howard made imports legal fending off claims from Labor and musicians such as Peter Garrett that Australian music wouldn't survive if Australians were able to buy it cheaply.

Now the draft report of Abbott's competition review wants to go further...

At the moment in many circumstances it is still illegal for retailers to source books from overseas without the permission of the local distributors. They divide the world into regions giving each a local monopoly and the right to charge monopoly prices. The Australian Digital Alliance says on average Australian libraries pay 58 per cent more for print books than they would in the US.

The Harper review wants this remaining restriction removed unless it can be shown it is in the public interest. And it backs a recommendation of a parliamentary inquiry that the government educate Australians about the extent to which they can get around geoblocks and the tools they can use to do it.

It sees geoblocks as a restraint on trade, a block on competition, artificially imposed red tape. While companies such as Apple are quite rightly able to shop around the world for cheapest parts and labour they design their products to make sure that we can't.

The Apple website prices the latest Taylor Swift single at $US1.29 on iTunes. But use an Australian credit card to buy it and you'll be told its $2.19. That's a surcharge of more than one third at the current exchange rate.

Submissions to the parliament's 2013 information technology inquiry found music was typically 67 per cent more expensive than for customers in the US, games 61 per cent more expensive and e-books 13 per cent more expensive. Professional software was 49 per cent more expensive and hardware 26 per cent more expensive.

Apple, Adobe and Microsoft refused to take part in the inquiry, and so were summonsed, forced to appear. They tried to muddy the waters, talking about the GST, which can only explain a portion of the differences and isn't applied to many internet purchases in any event.

The unacknowledged reason they charge Australians more is because they can. It's called price discrimination and it's one of the most effective ways of turning a profit. The method is to find a group of customers not particularly resistant to high prices (in this case Australians), isolate them, and charge them a premium.

The inquiry went further than the Harper review proposes and recommended that the government consider banning geoblocking if other measures didn't bring prices into line. Adobe warned it the move would hit business confidence, but Canada has just announced plans to prohibit unjustified cross-border price discrimination and New Zealand has embraced a new internet service provider that disables geoblocks by default.

Even Australia Post is getting into the act, setting up ShopMate, a service that gives Australian customers a US address they can use with a prepaid credit card to buy whatever is offer overseas at the price charged overseas.

It's why Netflix's existing Australian customers are keen to hang on to their US subscriptions even after the local service launches in March - not necessarily because the local service will be more expensive (the price hasn't been announced) but because it'll offer many fewer movies than the one in the US. The film industry divides the world into regions, doling out rights as if by decree. It's a practice that goes back a century, and for books much longer. It's time it stopped.

In The Age and Sydney Morning Herald


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One day we'll laugh about how we used to use notes and coins...

Australia Post was always going to wind back mail deliveries. Think about the absurdity of it... thousands of trucks and bikes traversing the country in order to move something slowly that can be delivered quickly and cheaply by computer.

It’s the same for the newspaper you’re reading right now. Printing it and delivering it by trucks is enormously expensive compared to sending the text by computer.

And it’s the same for video, music and book stores. Why set up a network of trucks and warehouses to deliver something slowly that can be delivered instantly and near costlessly?

The only reason we’ve set up these hideously expensive systems in the past is that we didn’t have computers to do it for us.

But they are not the dated technologies facing obliteration at the hands of computers.

The next big one is so obvious it’s hard to see. It’s under your nose, or in our pockets.

It’s money itself, represented by cash.

If you think cash is costless you haven’t thought about it. It gets to bank branches and ATMs via trucks, warehouses and guards with guns. You might not notice that you’re paying for it because banks burying the costs in fees and retailers bury them in their prices. One of the reasons it’s rare to see a discount for cash is that cash itself is expensive, even compared to credit card fees which are exorbitant.

We ought to be able to do to cash what we are in the midst of doing to printed newspapers and record stores.

But we mightn’t be able to rely on the banks themselves to do it. In the early days of the internet Telstra resisted embracing DSL technology because it wanted to keep making money by renting out extra dial-up phone lines. It and the other phone companies are continuing to overcharge us for text messages when anyone who has ever used a smartphone knows that the real cost of sending a short message through the air is close to zero.

The solution might have come from outside. As unlikely as it seems, it might come from Africa...

Kenya has leapfrogged much of the so-called developed world because it never got too bogged down in banking. With only 6 bank branches per 100,000 adults (Australia has 32) cash is hard to come by in Kenya. It can involves travelling long distances and often getting mugged.

So Vodafone set up m-Pesa. The M stands for mobile, and “pesa” means “money” in Swahili. Villagers pay real money to an agent at a store, get their phone topped up and then hundreds of kilometres away use it to buy and sell produce with neighbours who also have m-Pesa on their phones. About half of Kenya’s population are said to have used it.

It has since spread to Tanzania, South Africa, the Democratic Republic of the Congo, Mozambique, Lesotho and beyond Africa to India, Fiji, Egypt and Romania.

Its anonymous, requiring no bank account, no identity documents and no permanent address.

We’ve already made our big transactions cashless, unless we’ve something to hide.

I confess to being not particularly squeamish about the privacy concerns of the Australians who use briefcases full of high denomination notes to buy houses and cars. And there must be a lot of them. An astounding 92 per cent of all the cash on issue is in the form of $50 and $100 notes. They are not often used for transactions by people I know and I have a feeling I am paying more tax than I should because the people use them are pay less.

In a submission to the financial system inquiry former Reserve Bank official Peter Mair suggests doing away with high denomination notes altogether. They would be given a use-by date. Anyone who didn’t hand them in within, say, five years would get nothing in return.

After that it would pretty easy to abolish small change. Many of us already top up parking meters or buy drinks from vending machines with a wave of our phones. It’s where privacy does matter. I’m not keen the bank or the police knowing where I’ve been minute by minute. But there’s no reason they should. Kenya has shown us how to keep mobile transactions anonymous.

Axing cash ain’t radical. A leading United States conservative economist Kenneth Rogoff has argued the case twice in recent months producing one study entitled Costs and Benefits to Phasing Out Paper Currency and another entitled Paper Money is Unfit for a World of High Crime and Low Inflation.

In The Age and Sydney Morning Herald


Of course it's been said before...



HT: @Don Arthur


Reading:

. Izabella Kaminska, Negative interest in cash, or goodbye banknotes, FT Alphaville, May 20 2014

. Kenneth Rogoff, Costs and Benefits to Phasing Out Paper Currency, NBER Working Paper 20126, May 2014

. Kenneth Rogoff, Paper money is unfit for a world of high crime and low inflation, Financial Times May 28, 2014

. Chartered Alternative Investment Analyst Association, The End of Paper Money, June 8, 2014

. Ken Banks, The Invisible Bank: How Kenya Has Beaten the World in Mobile Money, National Geographic, July 4, 2012 

Related Posts

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Read more >>

About that trade balance. It's been wrong and getting wronger

Suddenly it's been fixed up, and it's worse

Suddenly Australia’s trade balance has turned nasty - not because of anything we’ve done, but because of what we’re now counting.

Until this week the official count for the past financial year showed four of the twelve months in surplus. A massive series of revisions means none are now in surplus and the total deficit is approaching $18 billion rather than the previously-believed $11 billion.

Its both a warning not to take too seriously talk of a deficit or a surplus (something some of our politicians are cottoning on to when discussing the budget) and also an insight into how thoroughly the Australian Bureau of Statistics is attempting to do its job.

The fine print at the end of Wednesday’s trade figures explains that until now the Bureau has only taken account of imports worth more than $1000. That’s the threshold above which it’s compulsory to complete a Customs declaration. It’s also the threshold above which parcels delivered by the post are subject to goods and services tax.

Work done by the Productivity Commission on the value and volume and under-the-radar imports has enabled it to include a guestimate of monthly totals for the first time. And its done it right back to 1998. Those early revisions don’t amount to much. Amazon and eBay were in their infancy. But since 2010 the total has been climbing rapidly, from around $4 billion per year to close to $8 billion.

Retailers are certain to jump on the figure and say it shows how much they are being undermined by untaxed and unchecked parcels from overseas...

Tweet

The Bureau believes around around 90 per cent of the newly-included low value imports are consumption items.

But $8 billion still isn’t much out of total retail sales of $260 billion. And many of the items would still be imported even if the parcels were opened and taxed.

More disturbingly for tax collectors the ABS hints that many of these physical imports are about to vanish. The next frontier will be “intangible” imports - ebooks, music, software, online subscriptions, gambling - all delivered without a single parcel crossing the oceans. It’ll be hard for the ABS. It’ll be hard for the Tax Office too.

In The Sydney Morning Herald and The Age


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5368.0

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Memo Reserve Bank. Read Twitter, it's underrated

Wednesday column

Tweets are about to take their place alongside other economic indicators as a way influencing the Reserve Bank.

Not Australia’s Reserve Bank, at least not yet. The Federal Reserve Bank of New York is putting up money for firms to provide a “sentiment analysis and social media monitoring solution” that will allow it to read the mood of the economy through Twitter, Facebook, Youtube, and blogs.

Playing around with a basic free version of the software has convinced me they’re on to something. Before Tuesday’s financial statement tweets about Wayne Swan were twice as negative as they were positive. (I should acknowledge that the machine has a problem with sarcasm. When a Twitter comment thanked Wayne Swan for clearly explaining that ALP policy was no good, the machine scored it as a compliment). After the midday statement the comments become more negative still.

Whether or not the balance of Twitter comments accurately reflects the public mood, changes in the balance of comments probably do reflect changes in the public mood. And the number of comments available is massive.

Australia’s Reserve Bank already makes use of the Melbourne Institute consumer sentiment index, compiled each month by asking just 1200 people how they feel about the economy and their personal finances.

How much better would it be to aggregate in real time one hundred times as many responses, each given freely in moments of frustration or elation where the words used and the frequency with which they are used convey not just the numerical balance of optimists and pessimists but also the intensity of emotions.

Statisticians have a rule, the more observations the better... James Surowiecki takes it to its logical conclusion in his book The Wisdom of Crowds: When the number of observations gets very big and is aggregated it tends to be more accurate than any individual observation, even those of experts.

He says one of the early successes in harnessing the wisdom of crowds came in locating the missing US submarine Scorpion in May 1968. It could have been sunk anywhere in a region 32 kilometres wide.

Instead of asking one or two experts to describe where they thought it was, the chief naval officer assembled a very large group of specialists in all sorts of fields and asked each to guess the location. The prize was a bottle of Scotch.

Aggregating the guesses he came up with a spot just metres from where the submarine was found. It was a location none of the individual experts had come up with.

The outcomes of Twitter sentiment ratings are hard to rig. Right now the ratings for Qantas are running two to one against (about the same as for Wayne Swan before the yesterday’s statement made things worse).

A week ago Qantas attempted to re-engineer the balance by offering a gift pack “including the famous Qantas pajamas” as a prize for tweets that included the hashtag #QantasLuxury and described a good Qantas experience. (“Be creative!”, it added in parentheses.)

The responses were indeed creative, and a good deal more representative of the public mood than the airline had hoped.

“#QantasLuxury is a plane that actually flies,” said one. “#QantasLuxury is chartering a Greyhound bus and arriving at your destination days before your grounded flight,” said another. “#Virginluxury: Getting an exit row, #Tigerluxury: Getting a biscuit, #Qantasluxury: getting a pilot, a plane, engineers and baggage handlers, said one of my favourites.

Some 16,000 tweets followed. An analysis by the social media firm iGo2 found many of them were from the US and Europe where Qantas had stranded passengers.

The airline had created a buzz alright, but it had tapped into rather than altered the balance of feelings.

Southern Cross Austereo boasts on its website it can “connect brands with 95 per cent of Australians”. In the same week Qantas blew itself up on Twitter Southern Cross was humbled when the Australians it connects with used Twitter to connect with it and with its advertisers.

Its Sydney FM radio star Kyle Sandilands had had a less than impressive TV show debut on the Monday night. Angry at reaction the next morning he lashed out at a “fat slag” on a newspaper site who had labelled it a disaster.

“What a fat bitter thing you are. You’ve got a nothing job anyway. You are a piece of shit. Your hair is very nineties, and your blouse. You haven’t got that much titty to be having that low-cut blouse. Watch your mouth or I’ll hunt you down,” and so on.

ABC radio journalist Mark Colvin heard the outburst, tweeted about it, the Mumbrella website copied the audio and posted it on its own site before Southern Cross could remove it and thousands of tweets directly implored sponsors to remove their ads.

One by one Holden, Ford, Lexus, Telstra, American Express, Blackberry, Olympus, Beaurepaires, CUA financial services, Harvey Norman, Coles, Toys R Us and Fantastic Furniture withdrew their ads. Some removed their ads not just from the Kyle Sandilands show but from the entire network.

One advertising agency fired its client after it refused to remove its ads. “We have decided to disassociate ourselves from this client after a disagreement in regards to what we believe to be an appropriate response,” said the Girl PR agency in statement. The client, Goldmark Jewellers, then withdrew its ads anyway.

What is powerful invites manipulation. But the geeks are on that possibility. Fake comments, posted by so-called “sockpuppets” read differently to real ones.

Researchers at Cornell University say they have developed software they say can detect fake hotel reviews 90 per cent of the time. Humans can detect fake reviews only half the time. Apparently fake reviews use more verbs, real ones more punctuation. Amazon is trialing the technology.

Twitter may not be a prefect tool for assessing the mood of the times, but it is shaping up to be better than any we have ever had before. It’s not just the Reserve Bank. Everyone should be taking its pulse.

Published in today's Age






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Steve Jobs, you've helped

Read more >>

Read this. The wireless paper that changes everything.

Just occasionally something comes along that makes the previously "impossible" suddenly possible.

Noise-cancelling headphones are one example.

"Distributed-Input-Distributed-Output (DIDO) wireless technology is a breakthrough approach that allows each wireless user to use the full data rate of shared spectrum simultaneously with all other users, by eliminating interference between users sharing the same spectrum...

The potential of DIDO is to have unlimited number of simultaneous users, all streaming high-definition video, utilizing the same spectrum that a single user would use with conventional wireless technology, with no degradation in performance, no dead zones, no interference between users, and no reduction in data rate as more users are added...

The latency would be so low and the wireless reliability so high, it would be creating a ubiquitous entertainment and computing resource that is available wirelessly everywhere to any device. User devices would not even require local computing resources because they’d always be connected everywhere (even in rural areas or on airplanes)..."


The NBN would be a waste of space, but so would so much more...

Distributed Input Distributed Output Wireless Technology



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Extraordinary. We now have more active mobile phone connections than people

Paul Budde:

Australia’s $17bn mobile industry hits 125% penetration

There are around six million more mobile subscribers than people in Australia. As smartphone uptake increases growth is likely to continue in the foreseeable future, even though subscriber penetration rates are about 125% of the population.

Growth is being driven by population increases and a rise in the number of people using two mobile subscriptions – one for personal use and one for business use. Australian operators are likely to have more than 28 million mobile subscribers by late 2011 as more and more users migrate to a mobile-only environment. Telstra is still the market leader, with more than eleven million subscribers; Optus has around nine million subscribers; and VHA still has roughly seven million subscribers.

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Now Google is posting at-a-glance daily tracking of what China is blocking

Updated here.


Related Posts

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Read more >>

Watch, day by day, as China turns off Google:

 

Watch here.

Margaret Simons writes:

This is huge. Surely the biggest media story in the year, if not the decade. And it is not only a media story. It is also about culture, censorship, dictatorship and, well, the future of the world.

Google has decided to stop censoring search results in China, putting it on a collision course with the Government. Chinese searchers will be routed through the UK and Hong Kong. This follows last December’s announcement that Google (and other companies) had been subjected to cyber-attacks from inside China, and that the Gmail accounts of human rights activists had been accessed.

As Google’s chief legal officer makes clear in this blog post the likely result of Google’s decision is instant blocking of its services in China, and the company has set up this site so the whole world can see what China is blocking.

More in the Crikey email today.



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Read more >>

How can you tell things are getting more better here than there? Our iPods cost more.

What a difference an improving economy makes. Before Christmas heavy discounting made Australia the cheapest place in the world in which to buy iPods.

Now we've slipped to just the 14th cheapest, and have become about the most pricey nation in the English-speaking world, out pricing the US, Canada, and the UK.

All iPods are made in China, and in theory should all be sold at the same price at prevailing exchange rates after taking into account transport costs. But discounting and price gouging can change that.

Like the Economist magazine's Big Mac Index before it the Commonwealth Securities iPod index compares worldwide prices in order to get an idea of which economies are weak enough to need discounting and which are so strong retailers can afford to gouge.

The updated index suggests Australia has moved from weak to neutral territory with retailers in the US, Canada and the UK remaining positively frail.

"Just before Christmas, Myer slashed the price of the top-selling 8 gigabite iPod nano from $199 to $159. When converted to US dollars it meant Australian consumers could buy here $10 cheaper than in the US and $11 cheaper than in Hong Kong," said CommSec economist Craig James. "But right now Australian tourists could save $21 shopping in Singapore, $35 in Hong Kong."

The less-generous approach to discounting reflects improved retail fortunes... The Bureau of Statistics found consumers shunned department stores in the lead-up to Christmas spending an extraordinary 3 per cent less than the December before, the first time in almost two decades one December hadn't improved on another. In January department store sales rebounded a seasonally-adjusted 7 per cent.

Like the Big Mac Index, the iPod index can also be used to indicate whether a currency is over or under valued. With the iPod selling for only US$149 in the United States but US$175 in China, the index suggests the US dollar is 15 per cent undervalued against the Chinese yuan. Put another way, it suggests points to pressure for China to devalue the yuan.

But Australia is one of the countries least out of whack against the yuan. The iPod index suggests we are only 4 per cent overvalued.

"Looking at the index it is hard to conclude that the Aussie dollar is either significantly under or over-valued against China," said Mr James. "We have relatively high interest rates and a strong economy while benefiting from strong Chinese demand for our resources."


Published in today's SMH and Age


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A computer will help your child get ahead. Well...

The centrepiece of Kevin Rudd's education revolution may not only be useless, it may actually be worse than that, according to a visiting United States researcher.

In the leadup to the 2007 election Mr Rudd undertook to spend 2.3 billion rewarding parents who installed or spent money on home computers.

"When it comes to investing the nation’s future I can’t think of a better, more important way than to provide an education tax refund which helps mums and dads help their kids engage in a digital economy," he said.

"If you’re a kid today, let’s face it, if you’re not wired at home and if you don’t have access to laptops and computers and software, you start to fall behind."

He later said his decisions would be "evidence-based"...

Professor Jacob Vigdor, from Duke University has conducted what's probably the worlds biggest study on the the effect of gaining a home computer on maths and reading scores. He finds "statistically significant" evidence it sends them backwards.

"In total, children in homes with computers tend to do better than those in homes without, there's no doubt about that." Professor Vigdor told The Age. "But there could be other reasons. Those homes also have a lot of other things other homes don't have, and often have more educated parents."

"I wanted to examine the performance of individual students before and after their home gained a computer."

Of necessity this meant examining the performance of students from less well-off homes. The better-off homes already had computers. But Professor Vigdor does not think this was an important limitation.

"These are the children that laptop and home computer policies are meant to help," he told an Australian National University seminar.

When Year 3 to Year 8 students in North Carolina take end-of-year tests they are also asked a number of other questions including whether they have a computer at home and what they use it for.

Using five years of answers to compare the average performance of each student before and after their home acquired a computer Professor Vigdor found it made their results "significantly worse" in both reading and mathematics.

"The bad effects fade somewhat over time, but even after 5 years they are still negative," he said.

He found similar results for the penetration of broadband (using postcode data) and even similar results for the amount of time the students reported using the computer for homework.

"The point is that playing games, using email and social networking sites and homework - they are all easier if you have a computer," he said.

"I am not saying go out and burn all the computers. If you want to buy junior a computer with your own dollars, that's fine. If you make this decision that junior's momentary pleasure is worth a small loss in knowledge - go ahead."

"But it's another thing when we talk about spending public dollars. The justification for these polices when they are proposed is not to allow students to have a good time, it's to improve the way they perform at school. It's expensive, and it's not working."

Other studies had found that even computers in schools did little to improve outcomes.

"They should be able to help, but good old fahsioned non-computerised instruction appears to have some advantages. Perhaps we haven't figured out how to get computers as good," said Professor Vigdor.

But the evidence isn't all bleak for the Prime Minister. He can take heart from a different study published on the weekend in the Economics of Education Review. In it University of Technology Sydney academic Mario Fiorini finds that for younger children, aged 5 to 7, time spent on the computer actually improves cognitive skills - partly by cutting the time they spend watching television and playing video games.


Published in today's SMH and Age

Read more >>

Comments Policy

I don't have one. Apart from the obvious. I delete spam and abusive comments (of anyone).

But the Prime Minister does, and how!

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I love the bit about nothing "overtly party political"

Read more >>

Want to get things done?

Try printing this:



Oh, and here's how to use it.

HT: LifeHacker

Read more >>

Happy birthday internet! Australia has been connected for 20 years

[AusNOG] Happy 20th Birthday Australian Internet

Geoff Huston gih at apnic.net
Tue Jun 23 20:27:03 EST 2009
Previous message: [AusNOG] [Fwd: [dnsbl-users] [sorbs-announce] Imminent closure of SORBS.]]
Next message: [AusNOG] Happy 20th Birthday Australian Internet
Messages sorted by: [ date ] [ thread ] [ subject ] [ author ]

On the night of the 23rd June 1989 Robert Elz of the University of
Melbourne and Torben Neilsen of the University of Hawaii completed the
connection work that bought the Internet to Australia.

It was a 56kbps satellite circuit, and the Australian end used a Proteon P4100 router.

Since that day we've evidently connected some 56.8% of the population,
or 12,073,852 Australians, to the Internet (according to user
statistics published by the ITU-T)

I think thats a pretty impressive record, and worth noting!

Geoff

Geoff is a top guy - one of the fathers of Australia's internet. I hung around with him when he was in the ANU Maths department during those pre-internet days when I worked for the Treasury.

HT: Troppo

Read more >>

Can't yet see the point of Government 2.0?

Here's the NSW Baby Names Explorer.

Click on, and have fun!


Oh, and here's the story:

Declaring the fight for Freedom of Information laws largely over the Finance Minister Lindsay Tanner has held open the prospect of a new system of government in which Australians not only have access to legislation as it is being drafted, but also take part in the drafting process through blogs and wikkis.

Mr Tanner has appointed Melbourne economist Nicholas Gruen to head a 15-member task force to draw up a blueprint for what he is calling Government 2.0, reporting end of this year.

And in a sign that the task force is serious it's opened a blog at gov2.net.au staffed by volunteers.

"I can see why some people might feel uneasy about using volunteers," says Dr Gruen. "But volunteers hand out meals on wheels and no-one complains...

I've got four experienced bloggers saying they want to do it already, and I am having a competition to design the banner and logo."

"There's no prize, just bragging rights."

Two years ago New Zealand redesigned its Police Act by putting the draft legislation on a wikki and inviting comments on each paragraph.

Mr Tanner told the Age that he would be interested in doing that from next year, but for legislation involving things such as sudden tax changes or national security measures it would probably never be possible.

"But if we engage with people who have views and knowledge, and take advantage of the so-called wisdom of crowds, we can get a better result."

Dr Gruen points to a UK website entitled fixmystreet.com saying it has enabled ordinary citizens to point out and discuss the condition potholes in their streets without the government needing to send out inspectors.

"It's also about moving in a parallel track to Freedom of Information laws," says Mr Tanner.

"While they are important for controversial issues, for other issues there is every reason to make the mass of non-controversial information the government holds freely available."

"During the Victorian bush fires a private company created a mashup – a website that combined data from a range of sources – to track the location of fires on a map in real time, reducing the demand on emergency information services. That's the kind of thing I want to flourish."

But Dr Gruen says it won't be easy. "When you sign up to the public service you are warned you're liable for two years in prison if you hand out Commonwealth information. Lawyers stop government departments putting video clips on YouTube. The NSW railways doesn't want web developers to have access to its timetables" he says.

Among Dr Gruen's favourite sites already making government information freely available is one in which the NSW Registry of Births, Deaths and Marriages enables intending parents to check the popularity of childrens names in each year from 1900.

Published in today's SMH

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Tuesday Column: Why Senator Conroy should take a look at Canberra's Black Mountain Tower

Black Mountain Tower is a monument - but not of the type its creators intended.

Do you ever think about why it’s there? There’s not much reason now.

But back in the early 1970s microwave transmission towers were vital. They were the main means by which telephone calls and television programs were relayed between Sydney and Melbourne. Canberra was an essential stop along the way.

The planners at what is now Telecom could see the need for microwave transmission facilities increasing rapidly and so, thinking big, they planned a monster tower – a design statement that would rise high above the national capital and provide for all of the intercity links that Australia would need.

It was an expensive bet on what seemed at the time to be the technology of the future. (So expensive that a restaurant and viewing platform were included to help fund it.)

Within years of its opening in 1980 it was out of date. Telecom Australia and its predecessors in the Post Master General’s Department had made the wrong bet...

All of Australia’s television operators began sending their programs around the country by satellite. The iconic tower, which was designed to be an essential part of the process of distributing television programs, instead suffered the indignity of having a small satellite-receiving dish placed next to it so that it could receive them for rebroadcasting to a local audience.

And then the laying of huge amounts of optical fibre cable between Sydney and Melbourne made the telephone transmission part of its role irrelevant as well.

Black Mountain Tower stands as a monument to the futility of building really big for the future - one the present Communications Minister Steven Conroy would be well advised to ponder.

The “richest” of the Rudd government Ministers, Senator Conroy has been given the right to spend $4.7 billion of our money building a national fibre-to-the-node broadband network, something he cheerfully says will “rival the Snowy Mountains Scheme in its scale and significance”.

Submissions from companies wanting to help build the network are due by the middle of next week.

Although the Minister has set up a panel of experts to help him assess the submissions he has been quite specific about the technology he wants.

It has to be fibre-to-the-node or fibre-to-the-premises. This means that an optical fibre has to go to within a few hundred metres of each house or office, with the remaining metres able to be covered by the existing copper phone lines.

He has specified a minimum download speed of 12 megabits per second, which is about 12 times what most of us could get a year ago, and said he wants 98 per cent of Australian homes and businesses reached.

Oh, and it all has to be done within five years.

What could possibly go wrong?

A lot.

For a start the ground could move from under him, just as if did from under the planners of Telecom’s Black Mountain Tower.

In fact it is almost certain to. Back in the 1970s and 1980s technological developments weren’t happening that quickly. Right now they are raining down upon us at lightening pace.

Anyone who specifies a particular technology, as the Minister did when he launched Labor’s $4.7 billion fibre-to-the-node promise in March last year, is highly likely to find that it is superceded or made redundant by the time it is built.

Oddly, it looks as if the main competitor to fibre-to-the-node will be copper itself.

The existing wires that connect most of our houses to the exchanges are proving far more useful than ever would have been thought. Three or so years ago they could only carry half a megabit per second (which we used to call broadband). Now they are easily doing 2 megabits and up to 12, and there is talk of them soon carrying 50 – which is far more than is needed for television. It is happening because ever more ingenious ways are being thought up to use radio waves to send vast amounts of data from one end of a copper wire to another and to correctly decode them at the other end.

The technology isn’t a new type of cable. (Copper is turning out to be incredibly versatile.) It is a new way of using the cables we have.

And by comparison with Conroy’s $4.7 billion spending plans it is cheap.

It may be that one day we will reach the limits on the use of the copper that already connects our homes and that one day we will seriously need something faster.

But neither has happened yet. And with technology evolving as quickly it is there is an excellent case for waiting. Anyone considering buying any piece of equipment right now is well advised to wait if they can. It is sound financial advice.

In a report for the Committee for the Economic Development of Australia last year Professor Joshua Gans referred to it as the “late adopter” strategy.

By contrast, the Communications Minister has a “build it and they will come” strategy. His speeches continually refer to future uses for the planned $4.7 billion high-speed broadband network that he says will evolve after it is in place.

Are the Senator’s plans making you feel uneasy? They might if you had heard the Governor of the Reserve Bank Glenn Stevens speak in Melbourne on Friday.

He told a business audience that in order to make room for some of the big infrastructure investments on the horizon he might have to push up interest rates.

As he put it, “in most economies, it is usually not possible, and certainly not prudent, to try to have a consumption boom at the same time as an investment boom”.

The Senator’s $4.7 billion spending program - to be matched or more than matched by a private partner - could be worse than redundant. It could push up inflation and interest rates.

Think of what’s involved. Rewiring the cables going into nine million houses would require enough skilled workers to disconnect and reconnect cables at footpath pillar boxes at the rate of 5,000 per day - every day for five years.

And that’s only part of it. In terms of the strain it would put on our resources it would indeed rival the Snowy Mountains Scheme. But the result might be a more dangerous version of the Black Mountain Tower.


Andrew Leigh writes:

Public policy by revolving restaurant

Peter Martin has a lovely column in today’s Canberra Times, using a metaphor that will appeal most to his local audience. Pointing out that the Telstra Tower was rendered unnecessary within a few years of its construction, he asks whether Labor’s plan of fibre to the node really is smart public policy.

This reminds me of the Woodrow Wilson School at Princeton, which spent hundreds of thousands of dollars in 2000 outfitting each seat in its classrooms with an ethernet port. A year later, wireless took over, and they issued all their students with a free wireless card. A year after that, all new laptops were wireless capable, and they stopped issuing cards. So far as I know, the ethernet outlets were utilised for about nine months.

Joshua Gans writes:

Unplanned obsolescence

Peter Martin has a terrific piece about Canberra’s Black Mountain Tower — an expensive piece of infrastructure found technologically obsolete within a couple of years as satellite killed the microwave star. It now pretty much a glorified lookout. Martin was drawing an analogy with current broadband plans. The whole example really resonated and towards the end of the article I realised why:

In a report for the Committee for the Economic Development of Australia last year Professor Joshua Gans referred to it as the “late adopter” strategy.

By contrast, the Communications Minister has a “build it and they will come” strategy. His speeches continually refer to future uses for the planned $4.7 billion high-speed broadband network that he says will evolve after the network is in place.

One little correction, believe it or not my report was written and released in 2006. Somewhat amazingly it still doesn’t seem to be obsolete.

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2020: The washup

Commenter Willowtree is unkind enough to observe:

"Australia will maximise its wealth, excellence and equity by driving up productivity growth to the leading edge of developed countries, by:

•Equipping all Australians through an education and training system that leads the world in excellence and inclusion

•Deploying Australia’s human capital efficiently and fairly including by overcoming the barriers that lock individuals and communities out of real opportunities

•Connecting through new collaborations across our education, business and innovation systems."

And here I was thinking it was just going to be a bunch of motherhood statements."

Ouch! That was pretty much what the processes adopted were bound to achieve: to weed out ideas that didn't already have wide support.

Except for the Health stream, which used a different process. It actually came up with some great suggestions.

Nonetheless the networking, and the informal nature in which it took place really was really useful.

The Summit wasn't a waste of time.

Below, I write about what the Economy stream came up with:



Kevin Rudd has been challenged to set up a national inquiry into Australia’s tax system - the first in more than 30 years.

Put forward by a group of delegates to the economics stream of the 2020 Summit including Lachlan Murdoch, Bernie Fraser and Fred Hilmer, the inquiry would examine both business and personal taxation at the state, local and federal levels.

It would be the first such comprehensive inquiry since the one set up by Prime Minister William McMahon and his Treasurer Billy Sneddon in 1972 and conducted by a retired NSW Supreme Court judge Justice Kenneth Asprey.

More recent inquiries, such as the one that paved the way for Australia’s Goods and Services Tax were limited to considering only a part of the tax system – in that case personal taxes at the Commonwealth level.

The inquiry would be asked to come up with a new tax system that was fair, simple, efficient, non-discriminatory and interacted constructively with the welfare system.

It was to have also been asked to ensure that its recommendations were “fiscally responsible”, but the group dropped that suggestion at the prompting of the business figure Lachlan Murdoch who said it would be too restrictive.

The inquiry would have only two years in which to report and would be asked to present interim reports before then.

Specific suggestions to be put before the inquiry would include cutting the reliance on income tax, eliminating transaction taxes such as payroll and stamp duties, and ensuring that the tax system is genuinely as opposed to merely theoretically progressive.

The inquiry would also be asked to hunt out and remove perverse incentives such as the one that encourages Australians using company provided cars to “drive to Cairns and back” in order to cut their rate of Fringe Benefits Tax.

The economy steam also called for a recasting of federation in which a new body - modeled on the Productivity Commission – would recast the roles of the state, local and federal governments in order to create a “seamless truly-national economy.”

The former NSW Premier Bob Carr, a delegate at the Summit, made it clear that he would only support such a recasting if the body in charge or it was not “as dopey as the Grants Commission”.

Bob Katter, the independent member for Kennedy in outback Queensland argued for the creation of two new Australian states, North Queensland and North West Australia in which to house a booming population and new primary producers.

“If you took out the capitals and coastal towns in the golden boomerang around the south and south east of the country you would still have 90 per cent of Australia left and hardly any people in it,” he said.

“It is immoral that we are not using that land and putting people in it. About 80 million of our neighbours go to bed hungry and yet we sink their boats when they try to come here. We need the put people into northern Australia.”

A group of delegates to the economics stream including the tucking magnate Lindsay Fox pushed for what they called a “ramrod” approach developing infrastructure, charging a single national entity with the job of “making it happen”.

“It takes nine months to have a baby, but to get approval from government can take four years,” he said.

A group organised by a former Treasury head Ted Evans suggested that the Prime Minister be required to set out long-term priorities with each annual each budget, something that he said would be needed as Australia moved to a more presidential system of government.

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Information Technology - use it, don't make it

Noël Coward is said to have observed that TV is for appearing on, not for looking at.

The Wall Street Journal is now saying something similar about IT. It's for importing, not making.

And it cites Australia as the success story.

"...one of the biggest beneficiaries from information technology is Australia, which hasn't any high-tech industry at all. Yet it is one of the few economies to have enjoyed a 1990s surge in productivity (or output for each hour of work) as impressive as the one the U.S. has seen. Its secret: import high-tech gear that others make. As in the U.S., the spread of bar-coding, scanning and inventory-management systems is making Australian wholesalers much more efficient, and that is paying economywide dividends. Compared to its population, Australia has more secure servers, the sort used in e-commerce, than anyone else besides the U.S. and Iceland (that is another story)."

In 1997 our own Information Industries Taskforce produced a report entitled The Global Information Economy: The Way Ahead in which it advised the government quite differently. We had to make, not just use.

"Australia’s future as an advanced economy will depend on the extent to which it participates in the evolving global information industries as a provider of products and systems; not just a taker. Full participation in the digital economy will require a significant increase in current exports by the information industries based on a much more focused and cohesive export strategy."

Perhaps it is just as well the report lay largely unread...

As did many reports commissioned by the new government. What about the one by Charlie Bell advising the government to cut the burden of red tape on small business?

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