Test tubes boiling over in mobile experiment
New Zealand is an ideal laboratory for social and economic experiments – a small, well-educated population, reasonable standard of living.
Unfortunately our politicians are poor students and their advisers not much better, failing to notice when the test tubes boil over or the promised elixir fails to materialise.
The launch of mobile phone company 2degrees is a great chance to observe economic phenomena and test some of hypotheses about competition and the state of the economy.
Telecommunications is an example of where the central planners and politicians and regulators have got things so wrong, bizarre behaviours have spring up.
People don’t talk on their phones, they write with them. They go to the hassle of getting another landline connection when they move, instead of switching to cellphone. They tell their mobile phone provider whom they are going to call most often, and then call no one else. They won’t call or text subscribers to another mobile network, even though the arithmetic of networks is 1+1=1.
If the country stuffs up the introduction of a third mobile phone company, forget any meaningful foreign investment – the only money coming in will be to pick up any remaining New Zealand-owned businesses with assets still to strip, or state monopolies the Key-English government flogs off in its second term.
Australian telecommunications analyst Paul Budde has already sounded a warning that because the Commerce Commission has still not made the changes which make competition possible, “there is very little opportunity for 2degrees to become a successful competitor in the New Zealand mobile market”.
“What nonsense,” you say. “There has been competition between Vodafone and Telecom, and 2degrees makes one more.”
What we’ve had until now is two huge trains steaming down separate tracks, hot cinders flying, swathed in steam so passengers can’t see where they’re going or how their pockets are being picked.
Vodafone is a mobile phone company which bought the network built by BellSouth and has since brilliantly worked the referee to maximise its return with minimal extra investment.
I don’t know where the millions Vodafone claims to be spending on network upgrades is going – my calls still drop out at the same spots on the ride between the airport and the city.
Telecom’s business model since the departure of its cash-guzzling initial shareholders has been to squeeze every last dollar from its copper landline network. Its management has extracted huge salaries while driving down shareholder value through this lack of vision.
Its mobile phones are there to prop up the landline business. They didn’t work anywhere else, so no global roaming.
High fixed to mobile rates suppressed traffic and provide a subsidy for mobile operators. Extrapolating from Commerce Commission estimates that fixed to mobile traffic rose from 900 million minutes in 2004 to a billion minutes last year, landline customers have handed more than $2.4 billion dollars to mobile operators over the past decade.
Factor that into Don Brash’s productivity review.
Telecom only built a proper mobile network when 2degrees emerged as a real prospect, because a new entrant can win market share either by winning another mobile network’s customers, or by encouraging customers to ditch their landline.
It’s all about the bundles. Get substandard broadband, mobile and landline services in one convenient package and you’re less likely to shop around for a better service in any individual area.
Throw in “free” SMS text and the customer is locked in. Since SMS and any cheap call offers take advantage of on-network pricing – made possible by poorly conceived regulation and high termination rates – shifting provider means cutting yourself off from friends and family.
The Commerce Commission says in 2008 on-net traffic accounted for more than 80 percent of all mobile to mobile voice traffic and a higher proportion of SMS traffic.
Young people in Auckland may pick up a 2degrees SIM card, but it remains to be seen how long they keep using them when their friends on Vodafone stop texting them (because it costs them money to do so).
The same applies in Dunedin, where the network of choice for scarfies and high schoolers is Telecom.
If New Zealand had an indigenous mobile phone manufacturing industry, it would be producing phones which took two SIMs. As it is, kids will just have to keep carrying one in each pocket.
There’s no sound economic reason for this, apart from anti-competitive behaviour by the incumbents. The arguments about the cost of an SMS message is what fraction of a cent it is – nothing like the 9.5 cents Vodafone and Telecom have been charging each other.
It’s a bit like the Auckland Harbour Bridge (one of whose supports was last week plastered with a huge 2degrees logo for the launch). By the time tolls were scrapped in 1984, they were costing more to collect than they were contributing to bridge repayments.
Most of the cost of SMS is in wrapping a billing system around it.
The Commerce Commission wants to regulate because it says current rates for provision mobile termination access services are well above cost and a barrier to efficient market entry and expansion.
That mean at least another two or three years of policymaking, politics and litigation, plus the ongoing bureaucratic effort of arguing with large multinationals about their real costs.
Better to do what they did on the Auckland harbour bridge – take away the toll booths, and let the companies compete on signal quality and innovative services.
Julian Dashper: A few words on a mate
NZ Herald Saturday Aug 08, 2009
Julian Dashper had a work called Curriculum Vitae. His biography and list of exhibitions would be pinned to a gallery wall, taking more space each time.
That vitae part ended on July 30, but the curriculum bit will continue being added to, as people assess the achievement of one of New Zealand's most consistent and challenging artists.
Entering Elam art school in 1978, Dashper cut a large figure with his khaki shirt, umber corduroy trousers and shaggy mop of golden hair.
He came with a dog, a van, every Bob Dylan record and a back story that was obviously improvising with the truth, but so amusing it did not need questioning. The joker's mask protected him from the pressures of the institution and allowed him to get on with his serious purpose of becoming an artist.
In finding a voice Dashper was not shy about working through the slim canon of New Zealand modernism, painting landscapes that referenced giants like Colin McCahon and Toss Woollaston as he assimilated their influence and moved on.
Through the 1980s, in tandem with John Reynolds, he made an art of markings, painterly effects and colour, often squeezing pigment straight from the tube.
Underneath the abstraction was an exploration of the city he traversed as a taxi driver. His father Dick, a former Ministry of Works architect, and mother Madeline, a potter, had developed his appreciation of architectural form and he knew every public artwork or sculptural relief in Auckland. The Tip Top factory, the Sheraton Hotel and other landmarks made their way into his paintings.
Dashper's abandoning of a painterly vocabulary in the early 1990s caught many by surprise, but the clues were there early. His first show while still at Elam, at Frank Stark's 100m2 Gallery, was Motorway Schools, two pairs of Polaroid photographs of Westlake Boys and Westlake Girls high schools, with a tape loop of motorway sounds running in the background.
Reassessing the hot abstract work in light of the cool conceptualism, it's clear the same concerns continued. This was an art about art, aware of its history, modes of production and distribution.
The readymade drum kit emblazoned with a name from the previous generation was an assertion by Dashper that those New Zealand artists were part of the wider stream of modernism, even if for New Zealand modernism was "a car we only get to drive secondhand".
Dashper set out to change that turning himself into an international artist based in New Zealand. That meant travel and residencies building up relationships with artists, galleries and collectors. He also took on limited teaching work, treating students as future colleagues and opening them up to the power of ideas. It meant ideas that could travel and not burn up the budget in freight costs.
Rather than wait for Artforum to notice him, Dashper mocked up a cover featuring himself and inserted it in the magazine as a paid advertisement, after negotiation.
His growing international recognition culminated in a retrospective which toured three state galleries in the American Midwest. There has been no similar attempt by any public gallery here to survey his achievement.
Julian Dashper is survived by his life partner and fellow artist Marie Shannon and their son Leo.
Music industry sounds like a broken record
NZ Herald Wednesday Aug 05, 2009
There's only a couple of days left to make submissions on proposed legislation governing how copyright affects your internet use.
It follows last year's debacle, in which former culture and heritage minister Judith Tizard and departmental officials used a supplementary order paper to jam a new section into the Copyright Act stuffed with provisions a select committee had already rejected. According to technology law specialist Rick Shera, the regime would have been even worse than that in the United States, where record industry enforcers are winning millions of dollars in damages against hapless downloaders.
Shera says the US Digital Millennium Copyright Act requires actual knowledge of infringement rather than the "reason to believe" in the New Zealand Act, and penalties for people making false or misleading takedown notices.
That's important, because as Judge David Harvey pointed out in a submission to the Telecommunications Carriers Forum, 30 per cent of New Zealand copyright litigation fails because of a failure to prove ownership of copyright, or due to the copyright in question not being governed by New Zealand law.
The new section 92A was not implemented because of public uproar, and officials were instructed to try again. At issue was wording which would have required internet service providers to cut off the accounts of customers suspected of downloading copyrighted material.
On one side are the rights holders, the music and film industries. On the other the ISPs. The two sides have been unable to come up with a voluntary code of practice on how section 92A would operate.
There are also other parties whose interests aren't being properly considered by the proposals - artists, who want to reach an audience and get fair recompense for their efforts, and the audience, which wants a constant diet of new sensation at a reasonable price in a convenient format.
The Ministry of Economic Development says its aim is "to provide a fair and efficient process for rights-holders to deal with repeat copyright infringement in the digital environment". Its current proposal is for an escalating process.
When a rights holder considers its copyright has been breached, it would send an infringement notice to the ISP to be forwarded to the subscriber. If the infringement continues, they will be sent a cease and desist notice, again via their ISP.
If they still won't stop, the rights holder can go to the Copyright Tribunal to demand their identity, and then force them into mediation.
The problem with all this is there is a huge amount of effort going in to fix a broken business model.
The recording and film industries are structured around distribution of physical items - getting bits of shellac or vinyl or plastic into shops, celluloid into cinemas.More
Unravelling bureaucracy's tangled web
From NZ Herald Wednesday Jul 29, 2009
Ever wondered what happens to all that information the Government collects? Think you can make better use of it than the bureaucrats? Need some facts to give your mash-up some muscle?
A new initiative by a group of digital activists aims to identify sources of public information, classify who "owns" it, what licence it is distributed under and if it is free or not. Open government ninja Glen Barnes says the Open Data Catalogue is from open.org.nz's practical manifesto.
"We have paid for that information, and I believe we have a right to it," says Barnes, whose day job involves turning property information into useful applications.
Some information must be kept behind departmental walls to protect individuals' privacy but there is a lot more which can quite safely be let loose.
To make it easier for local bodies and central agencies to let their data out, Barnes is working on an API (application programming interface) for data which is not available in easily digestible formats like Excel or CSV (comma separated values), such as information from websites written in HTML.
Alternate Ad Image Text Goes Here!
He'll take it along for discussion next month at the first open government data bar camp, a user-generated conference to be held at the National Library in Wellington on the weekend of August 29.
"I'm also taking down some work I'm doing on real-time transport information - some of the councils are interested in the concept of how things can happen from that.
"Local bodies often do not have the resources to build websites, but they might make data available for private enterprise to do it."
A typical example is mashing up Google Maps and crime statistics, giving people a visual impression of risk in their town.
Open data scares some agencies and politicians, as evidenced by Education Minister Anne Tolley's contortions when questioned about the league tables her national testing programme will inevitably generate.
It also raises questions about the way government agencies have treated data in the past.
Think of the Companies Office site, which is an excellent and free source of information, but was first designed with the aim of charging fees to offset its development and running costs. It's burdened with some clunky APIs - so for example it's not possible to search which files have been recently updated.
Laurence Millar spent the past five years as government chief information officer trying to streamline the Government's information systems and get better outcomes from its $1.9 billion IT spend.
In his last blog posting as a public servant, Millar wrote of a need to recognise the network effects of opening up government data in a form that means others can access it.