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Lessons From the NBN Deal

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With the ZTE-NBN (National Broadband Network) hogging news headlines, some may wonder: What went wrong? Why was it canceled? Was it all just about kick-backs?

Politics aside, even the average businessman can pick up some useful tips from the often obscure technical details of the ZTE-NBN affair.

What comments would the person responsible for shepherding the NBN project through the Commission on Information and Communications Technology (CICT) and the Department of Transportation and Communications (DoTC) have elicited had he taken the trouble to consult with technical experts or industry organizations?

Let’s take a brief look at some points, many of which are also applicable to business.

Is a “turnkey” system good?

Generally speaking, yes, it is far less troublesome and promises a “holistic” solution. But one should weigh the benefits carefully. Technology is evolving so quickly that by the time your “new” system is in place, it may already be obsolete. It would be very disappointing to find the system doesn’t do what you expected it to, after having already committed and borrowed money to pay for it.

A thorough review of practical requirements — and, possibly, phased implementation — would be prudent. Also bear in mind that, with this fast change, even today’s cutting-edge technology will be old hat in two or three years. Consider whether it would make sense to borrow and amortize over 20 years for systems that will be outmoded in a tenth of that time.

Can my people maintain and use the new system productively?

The government’s Telecommunications Office (TelOf) was an agency closely associated with operating the NBN project. TelOf had previously been moved from DoTC to CICT, and then back to DoTC.

Long ago, in the pre-Internet and GSM text era, TelOf was responsible for the government’s telegraph network. If you had a workforce consisting of former telegraph operators, you would certainly consider whether they could operate and maintain the new system. If not, you would have to factor in the costs of retraining and ongoing maintenance, possibly outsourced.

But isn’t high-speed broadband the way to go?

Yes, it’s getting there. The benefits are many and prices are dropping. The question is whether you
should get it right away. If your main Internet use is still e-mail, it doesn’t make sense to invest in a system that will simply provide for convenient chatting and MP3 downloads (always a major source of viruses and other malware).

What exactly does your Internet Service Provider (ISP) do for you?

For most people, it’s obvious that an ISP provides Internet connectivity. An ISP can also provide e-mail accounts and e-mail handling, but this is a distinct service — and comes free from various Web-based outfits such as Gmail.

Effectively, NBN would have been the government’s own ISP. Does this mean that Internet access
would have been, effectively, free?
No. NBN’s proponents failed to mention the continuing cost of paying for connectivity to the rest of the Internet world. There is a cost associated with transporting those bits and bytes across the ocean. Government, like any other ISP, would have had to pay for this long-distance transit as part of the cost of maintaining its Internet connections.

Won’t Voice over Internet Protocol (VoIP) solve all our communications problems?

Not quite. NBN, like a large internal corporate network (or intranet), may allow you to make “free” calls to your provincial offices. But, mobile calls to cellphones aside, what about calls to and from people outside the intranet? Most of the clients you deal with use ordinary landlines, so you will still have to pay monthly service fees for each line that connects to them through the Public Switched Telephone Network (PSTN).

Should I believe my contractor when he assures me the new system will be complete and trouble-free?

Well, any contractor or supplier should have confidence in their product or service. Still, it doesn’t hurt to get a second or third opinion, and many industry organizations are willing to help. Also, make sure to consult those who will actually be using the new system. The contractor’s package should address and closely match the needs of the end-users — not the other way around.

It’s never productive to justify an expensive undertaking by force-fitting purported benefits to suit the proposed project specifications, soft loan or otherwise.

If you roll up your sleeves and go through proper paperwork, you may find that the glamor and glitz of new technology fades very quickly under close scrutiny.

Be as open (and inclusive) as possible with your procurement system, else you find yourself with egg on your face. And don’t lose your copy of the contract!

print ed: 11/07


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