Google and other search engines help, and tag clouds and other social tools can make it easier to follow other people's recommendations, but wouldn't life be easier if someone was out there on the web scouting for the stuff that you really wanted to see?

Topikality is trying to fill that role. The brainchild of entrepreneurs Phillip Scott and Richard Heycock, Topikality is designed to learn what a user is interested in, and then scour the internet for matching articles that are delivered to the user on a regular basis.

Scott says the key difference is that Topikality presents what you have told it you are interested in, rather than just showing what is popular.

"It looks at everything to do with the articles you are reading, not just specific words — so phrases, words and the context of those words and phrases," he says.

Rather than searching the entire internet, Topikality is restricted to specific sources such as media outlets, blogs, governments and well-regarded organisations. Users can also nominate additional sources.

The value is in the artificial intelligence techniques used — in this case machine learning — which means that the more the system is used, the better it becomes at delivering the right information.

Search tends to be a once-off activity and does not record whether you were satisfied with the result, and hence the search engine does not learn your preferences.

"Once you've done a little training on the system, it delivers results to you ever day," Scott says. "So the net result and return for you increases over time."

Hence if you want to keep up to date on topics such as treatments for specific diseases, it can over time narrow down your interests.

Commentary

There is a lot to like about Topikality. The service, which has entered a public beta, has a clean interface, and the technology appears to do what it is supposed to in terms of dragging back information that you might be interested in.

The company was founded in December 2007 and has been in development ever since. While the technology is not patented, Scott says the sheer hard work and complexity behind Topikality is a series barrier for competitors.

Heycock has a background in mathematics, while Scott has been the co-founder and CEO of Australian customer management company, Prosper Business Solutions, which sold to a US company in 2006.

But it looks like a good idea in search of a business model, and faces two significant hurdles.

Firstly, the founders are uncertain as to how they will make money out of it.

The company is not currently charging for the public beta service, but may look at subscription models for corporate users. The so-called free-mium model is a very difficult one to translate into dollars however, and will require Topikality to find a lot of extra functionality to make it worth companies paying money for it. Just ask the folk at Twitter about that one.

Scott also wants Topikality wants to sell the software as an appliance to companies with large information repositories, and is currently in an unpaid trial with a large media services company that processes hundreds of thousands of documents each day, and has another lined up. The other opportunity is in enterprise search, for information retrieving from the web or intranets.

But herein lies Topikality's other major hurdle. It is playing in a competitive market, against competitors including Google, and there is a good chance that its service can become quickly commoditised (another Aussie company, Isys, has had stored search for years). And with limited sales and marketing resources it will be difficult for the company to make its voice heard amongst the noise.

Scott says he isn't worried about the competition.

"If everyone in the IT industry worried about those things nothing would ever get developed," Scott says. "This is something worthwhile that's worth having a crack at. Who knows that the potential might be and where it will end up."

So while the opportunity is potentially big, until Topikality can batten down a reliable business model, its chances of being a boom company are slim. Thankfully the company is funded by its founders and has a very low burn rate, but at this point the question mark over its potential to generate revenue is a big issue.

• Does it address customer pain? TICK
• Does the technology work? TICK
• Is the business model robust? CROSS
• Does the company have sufficient resources to compete? CROSS
• Is it under threat from competitive pressure? CROSS

bootstrappr opinion: BUST

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Despite Senator Nick Minchin's claim that it's all legislative blackmail, the report concluded that "while further examination of issues raised above is warranted, the committee believes that the passage of the Bill should not be delayed".

So hang on, why the rush? As you'll hear in today's Twisted Wire, which eavesdrops on the committee's public hearing in Melbourne last month, Telstra says it is close to having an IT system capable of providing an equivalent service to its wholesale customers as it does to its own retail division.

There's also the question as to why, if we separate Telstra, do we need public investment into the NBN? Wouldn't a structurally (or functionally) separated Telstra invest more in infrastructure and manage the build themselves? I ask if it isn't all a bit "arse about"?

You'll hear from the witnesses at the public inquiry held in Melbourne on 13 October:

• Geoff Booth, group managing director, NBN Engagement, Telstra
• Tony Warren, executive director, Regulatory Affairs, Telstra
• Andrew Sheridan, general manager, Interconnect and Economic Regulation, Optus
• David Havyatt, manager, Regulatory and Corporate Affairs, Unwired
• Matt Healy, national executive, Regulatory & Government, Macquarie Telecom
• John Horan, general manager, Legal and Regulatory, Primus Telecom
• Dale Clapperton, legal counsel, Pipe Networks

Be sure to let us have your thoughts too, in the Talkback section at the end of this post.

You can also read the transcript of the full day's hearing (PDF) or read the Senate inquiry report on the Bill.

See transcript here.

Phil Dobbie (ZDNET): This week on Twisted Wire, we hear how Telstra is talking to the government about a way forward without the proposed legislative change.

Geoff Booth (Telstra): ... these negotiations commenced before this Bill was introduced.

Dobbie: They say issues with wholesaler customers are often exaggerated:

Dr Tony Warren (Telstra): We do not believe it is anywhere near as bad as people make out.

Dobbie: But Optus, naturally, like it — and they like repeated quotes from Senator Conroy — they like him, too.

Andrew Sheridan (Optus): ... so that the wrongs of the past 12 years can be addressed.

Dobbie: We'll also hear from Pipe Networks, Unwired, Macquarie Telecom and Primus Telecom, as we hear the arguments for and against the proposed telecommunications reform. That's all today on Twisted Wire.

While the senate inquiry into the NBN has been going on for some time, and is yet to produce its report, the Senate Standing Committee on the Telecommunications Legislation Amendment Bill 2009 — that contentious one that will threaten Telstra with a functional separation, divesting itself of its share of Foxtel and denying access to 4G spectrum — yes, that one — this inquiry has been relatively quick.

It was called for by the senate on 17 September, submissions were in by the 7th of last month, they held a couple of public inquiries and the report was produced on 26 October. This week and next, we'll hear the views from those public inquiries, today from Melbourne on 13 October and from Canberra on the 14th.

By now you'll know that the report recommended that the Bill be passed. The committee said it will be to the benefit of providers and consumers and, while further examination of some of the issues raised is warranted, they say that shouldn't hold back the passing of the legislation.

First up in Melbourne, the case for the negative from (who else?) Telstra. Well, actually probably no one else, or very few, in the Telco sector — but a lot of shareholders probably support their views. Although, to be fair, Telstra do say that, although they oppose the passage of the Bill in its current form, they're looking for a win-win outcome in all this, but the win for Telstra has to be an acceptable outcome for their shareholders, of course. And Telstra is talking to the government, but:

Booth: Given the commercial sensitivity of these discussions it would not be useful for us to comment on the details of those discussions at this point. What we can say, however, is that these negotiations commenced before this Bill was introduced. We strongly believe that the way to realise a mutually acceptable outcome on the National Broadband Network is via commercial negotiations and not via legislation.

Dobbie: They're going to have to get a bend on then if they want to stop the new legislation being passed, which is why Telstra want to see the passing of the Bill deferred. That was Geoff Booth, by the way, who used to run Telstra Countrywide at one stage, but today he is Telstra's Group MD for NBN Engagement. There's another job the NBN has created already! And as for that legislation, it will ...

Booth: ... impede the achievement of the National Broadband Network vision; it will reduce competition, especially in the mobile and media markets; it will harm consumers, particularly those in rural and regional Australia; it will not necessarily result in industry reform; it will provide the ACCC with expanded powers unparalleled in any other industry; and it could destroy value for the 1.4 million shareholders who have purchased Telstra shares from the government over the past 12 years.

Dobbie: But then there are these secret discussions, positive ones we're told, that are looking at how Telstra can be involved in the NBN, and achieve the government's vision without resorting to all this legislative change. One of the issues Telstra raises is if they are forced to functionally separate and then buy access from the NBN, that's a massive two-stage migration process.

Booth: The time taken to implement functional separation would create at least a double migration for customers from the current Telstra legacy systems to the functionally separated legacy systems; indeed, if Telstra were then to buy from a National Broadband Network it would require a third set of IT changes. So this multiple migration does significantly add to the risk of customer service and billing programs with millions of customers involved. It really magnifies the potential for some chaos.

Dobbie: Can't fault the logic of that one, can you? And he says having people working on the separation would take the focus away from developing new systems to access the NBN. Plus, of course, separation doesn't come cheap. In Britain, BT put the cost at around $300 million or so. Telstra reckon it will be closer to around $1 billion. Why the difference? Well Telstra say, over and above the system changes at the wholesale level, there's all the retail products that need to change as well to meet the new wholesale structure — something that other retailers have had to live with — moulding their products according to Telstra's wholesale offerings.

Warren: The billion dollars that we have put in there we think is a serious estimate having spoken at length with both BT, Telecom New Zealand and, to some extent, Telecom Italia as well.

Dobbie: Telstra's Dr Tony Warren, executive director of Regulatory Affairs — who has something to say on the hotly debated topic of equivalence — asks does a wholesale customer get the same prices and services and access as Telstra retail? Well, of course they do — there may have been issues, but ...

Warren: We do not believe it is anywhere near as bad as people make out and so it therefore in no way justifies the massive cost of the solution.

Dobbie: He says they have just been through a massive IT transformation and their new systems are ...

Warren: ... absolutely customer agnostic and are completely blind.

Dobbie: These new systems, costing hundreds of millions of dollars, will be available very soon and should fix up the issues they say. And as for fixing up disputes, that's simple — don't leave it with the lawyers, get an engineer.

Booth: We basically suggested in our previous submission that you could sit such a person within the ACCC as a specialist adviser, but essentially what we are saying is that you need an engineer to deal with some of these problems rather than trying to have economists and lawyers (much as I am sure we would all agree that they are fantastic at these things). You really do sometimes need specialists to sit down and say: "That's rubbish; this is rubbish. Why don't you try this?"

Dobbie: Now that makes sense — but just going back a moment, if Telstra can provide equivalence with their new IT systems, why will it cost a billion dollars extra if they are separated — hasn't the work already been done?

Booth: Just to be clear, functional separation BT-style would require retro-fitting of the systems. The BT-style model is "chop it up and duplicate it". We are saying that with our new systems much of the manual processes, if not all, have been taken out and equivalence has been hard-wired in there, not because of functional or operational separation or accounting separation. As you know, under the standard access obligations under part 11C we have to have that equivalence. That has been there from the very beginning of the regime.

Dobbie: Although many would say, it's not been totally adhered to — hence the call for this new legislation. And if the new law is passed, how long will Telstra have to split itself apart? Quite some time is the answer.

Booth: The legislation as it currently stands means that, three months from royal assent, the minister must give a direction to ACCC on what any minister would expect from functional separation. We then have three months to put an undertaking in, and then the ACCC has to assess that. As to the timing of how long we would have to implement separation, that really depends upon what we put in our undertaking and what is acceptable to the ACCC. You can see from our submission that the experience from overseas is that how long it will take really depends on the flavour of separation imposed upon us.

Dobbie: So it could be years before the changes are even started, let alone implemented. By which time the NBN might well exist, or at least only be a couple of years away. In the meantime it defocuses a lot of time and effort from Telstra, providing no long-term benefit to its shareholders — or anyone really. And as for those two threats hanging over Telstra's heads with this new legislation: are they in the public interest?

Warren: We believe that taking us out of the upgrade path, the 4G market, would basically reduce competition in that market, particularly for rural and regional consumers, for whom we are the only network. Secondly, in the Foxtel space, clearly if we were forced to divest Foxtel it is most likely that a media player would acquire that, and we have not seen a good argument for how a greater concentration of media can be in the consumer interest.

Dobbie: All interesting points from the Big T. Next came the not-quite-as-big Big O. Andrew Sheridan is the general manager, Interconnect and Economic Regulation at Optus — so there! They love the proposed changes — that's why he toadied up to the panel.

Sheridan: I would, thanks. Firstly, thank you for the opportunity to appear before the committee today.

Dobbie: And they seem to think it will do the trick.

Sheridan: It addresses problems that exist in the market today and impact all users of telecommunications services. It is important therefore that the reforms are enacted in full and quickly, so that the wrongs of the past 12 years can be addressed.

Dobbie: Of course it's only wrongs from the past 12 years of telecommunications — if you had an affair, or said something awful to your mother — this law does nothing for that. But as for fixing up the telco industry, well Optus would say that wouldn't they? Being a Pom he was inevitably asked about the UK experience with the split of BT which he says has been ...

Sheridan: ... an undoubted success. I will just draw your attention to some comments from Ofcom, which very recently undertook one of its annual assessments of the undertakings that were given by BT, saying that the separation arrangements in the UK had led to "greater choice and take-up of services, choice of suppliers, products and packages and increased value for money" for customers.

Dobbie: Not a view that Telstra follows, although they seem to be at odds even with BT over that one. Andrew Sheridan says that the changes need to be enacted quickly because right now, we're paying too much for our telecommunications services. As far as the OECD is concerned ...

Sheridan: We are the fifth-most expensive country for both small and home office and small and medium-sized enterprises for fixed-line voice prices.

Dobbie: But is a break-up necessary when the government is already putting $43 billion into building another, competing network? As Senator Nick Minchin puts it ...

Senator Minchin: Why go through all the hassle of breaking up Telstra?

Dobbie: Well?

Sheridan: Whether the National Broadband Network happens or not, the need for reform of the existing market structure is quite clear. The full implementation and roll-out of the National Broadband Network is some way off. I think there has been talk of an eight-year period. I do not think consumers should have to wait for eight years to benefit from some fairly standard rights that they should have today — that is, to have a choice of provider and access to affordable services.

Dobbie: But isn't there a bit of self interest here — the proposed Bill could deprive Telstra of access to mobile spectrum that could be bought instead by — oh, yes, Optus! Isn't that less competition and how is that good for the customer?

Sheridan: In terms of the broad package, the government has very clearly articulated what its primary objective is, which is to achieve improved equivalence of access through the separation of Telstra's fixed-line network and retail business. That is clearly the primary objective, and it has done that to deliver outcomes — as I keep talking about — for the 22 million Australians.

Dobbie: Actually 23 million — that's a million Optus don't know about.

Sheridan: Putting forward that vision has given Telstra some options. If Telstra buys into that vision, then it will be able to access spectrum, it will be able to keep hold of its HFC cable network and it will be able to keep its investment in Foxtel. But, if it decides that it does not want to embrace that vision, then it effectively has a choice: does it want to retain its dominant position in the fixed-line market? If that is the case, then the government is basically saying: "Because of your dominance in this market, we think we need to take something away from you in some of the other markets", the key one there being the wireless market. We do not want a carrier taking a dominant position in every single platform. From my perspective, that is the underlying rationale.

Dobbie: Although as Nick Minchin is quick to point out:

Minchin: It does not have a dominant position in mobile, does it? It is less than 50 per cent.

Dobbie: And this?

Minchin: So you think it is reasonable for the parliament to sign up to legislative blackmail?

Sheridan: They are not the words that I would use to describe this, but Optus is certainly supportive of the whole package of reforms.

Dobbie: Although Andrew Sheridan is quick to point out the approach of threatening to remove the ability to compete on spectrum auctions was not something Optus had put forward to the government — they had asked that Telstra be forced to divest itself of its stake in Foxtel. The wireless spectrum was all just an added bonus for them, really! And as for threatening Telstra to rid itself of its share of Foxtel, is that just another piece of corporate blackmail?

Sheridan: In many jurisdictions HFC cable and pay TV operations have been used essentially as a means to bring competition to the incumbent operator, particularly in the provision of voice and broadband services. Clearly, if you enable the incumbent telco to take a dominant position in that market then you are not going to get infrastructure-based competition, and that is exactly what we have seen in the Australian context. If you look at other jurisdictions such as the US, incumbent telcos face strong competition from cable operators. There are examples of that around Europe as well, where cable companies offer very strong competition to incumbent telcos through voice and broadband services.

Dobbie: Of course Optus had a go at their own pay TV infrastructure — they just didn't do it very well. So what about the need for Telstra to provide equivalent services to its wholesale customers to those it provides its own retail division. Interestingly, Telstra had argued that they already provided that, and could do even better soon, but the man from Optus says no.

Sheridan: We are strongly of the view that we do not get equivalence of access. Perhaps the best example of that is an issue that we raised with Telstra three years ago when were activating customer lines in an apartment building. We felt that we were not being given equivalent treatment because we were required to send out a Telstra technician and an Optus technician and it took eight to 10 days to provision the line. And the customer has to be home during that period — so it is very inconvenient. But Telstra Retail could do it remotely, and that would have taken a day. So we raised this issue with Telstra, and they said, "We don't have to provide equivalence because we are taking a different service."

Dobbie: A different service that Telstra retail clearly has access to. It gets very messy, doesn't it, when you start looking at all the operational support and management systems. Just how much should Telstra be providing for what is considered an equivalent service? It's part of the mess that has seen Optus spend $200 million or so in legal fees over recent years. Speaking of money, what about the cost to Telstra have splitting itself functionally ...

Sheridan: We have some problems with Telstra's claim that it would cost Telstra over $1 billion when BT — which is a company at least twice the size of Telstra in terms of revenue and three times the size in terms of its workforce — only spent $153 million. And I do not understand why it would be in BT's interests to under-cook this figure in its financial statements.

Dobbie: Unwired's David Havyatt as always had some interesting observations including:

David Havyatt (Unwired): Telstra still represents 90 per cent of the profit pool of this industry and only represents 70 per cent of the investment, which actually means it has been under-investing. That is an indication of the market power that exists in this industry. Only if there is market power in a firm can you afford to survive in an industry by not investing; only people with market power can withhold investments.

Dobbie: And he refers to Telstra's claim in its submission to the inquiry that it can provide transparency and equivalence without being split up.

Havyatt: I do not know how you can reconcile those two views: that you can get equivalency and transparency in a wholesale structure with a vertically integrated firm, yet the vertically integrated firm has a lower cost structure and a greater ability to innovate than any other firm in the market. Quite frankly, if the first statement is true, that vertical integration reduces costs and facilitates innovation, then we should not attempt to have a competitive telco regime.

Dobbie: Yes, let's just call it Telecom, renationalise it and I'll pay 50 cents a minute to call my mum over in England. And a final point from Mr Havyatt:

Havyatt: Finally, on competition: Telstra continues to identify the number of new carrier licences and ongoing price reductions as indicators of a vibrant, competitive marketplace, completely ignoring the figures included in the explanatory memorandum which show the extraordinarily high figures for the HHI, the Herfindahl-Hirschman Index, for this industry. That is a standard measure of concentration in industry that shows this industry is basically as concentrated as a dysfunctional duopoly. So we have got those characteristics that have been ignored.

Dobbie: So he's a fan of the Bill then. Strange how all Telstra's competitors seem to love it. Like Matt Healy from Macquarie Telecom.

Matt Healy (Macquarie Telecom): It is clear that Australian consumers are not well served by the level of competition in our sector, and the primary constraint in relation to that competition is Telstra's market power.

Dobbie: Yep, I think that's a point we keep hearing. He says at each stage of the sale of Telstra there were opportunities for reform but they were held back to see how competition unfolded.

Healy: There have been many regulatory reviews but in each instance when a decision was to be made we have really gone for the light-handed option of tweaking around the edges of competition.

Dobbie: But this new Bill — this is the real deal.

Healy: Here we have it well set out in a coherent and coordinated manner. We urge the Senate to take this forward.

Dobbie: Pleeease. Well, it looks like they might get their way. John Horan from Primus was another voice at the hearing saying reform was needed because Telstra really has no incentive to provide services to other carriers. Every wholesale customer is a retail opportunity lost, I guess.

John Horan (Primus): We continually face price and non-price discrimination. Telstra grudgingly says, we'll carry your services; the High Court has told us we have to, but things just do not get delivered to customers when they should and they arrive battered and broken.

Dobbie: A bit like shopping on eBay really. And thank god John Horan said it because no one has so far this week. The proposed regulatory reforms will deliver a ...

Horan: ... a level playing field.

Dobbie: And he says that the whole industry, including Telstra will grow under the new scenario. Really, Telstra too? We'll see on that one. He says it'll come from innovative services — David Havyatt says most of the innovation so far has not come from Telstra.

Havyatt: Firstly, ADSL2+, the higher-speed ADSL, first introduced to the marketplace by the people who were accessing Telstra's copper network, not by Telstra; and, secondly, the 3G mobile network. The first 3G mobile network in Australia came, in fact, from Hutchison, not from Telstra. Telstra, in its submission, tries to claim that innovation is an important thing driven by vertical integration, yet the two biggest innovations in recent times came from non-Telstra firms.

Dobbie: So would it have been different with the split of Telstra? Matt Healy says yes, it would. And it would get over that issue where Telstra retail has a service that is not available to wholesale customers because it has not been "productised" for wholesale.

Healy: We do not think that the incentive to fail to meet wholesale customers' needs will prevail in a structurally separated and effectively functionally separated market in Australia.

Dobbie: But there is an option — David Havyatt says Telstra can separate, voluntarily, without divesting itself of any of its assets. It's all in the timing.

Havyatt: Telstra agrees to let NBN Co use its ducts, wires, poles and exchanges for building the NBN — and have to spend thriftily. At the same time Telstra gives an undertaking to NBN Co that as it builds the NBN Telstra it will migrate its customers onto the NBN. At the end point of the NBN being built, Telstra would be structurally separated within the meaning of the act and would never have actually divested itself of a single asset. So, Telstra can structurally separate without any of this fear mongering of its need to break itself up etcetera. In fact, the greater risk for Telstra and its shareholders is to decide that it does not want to pursue that route and decides it wants to fight.

Dobbie: That means ultimately, of course, one network which all end users ultimately end up on. No room for infrastructure competition here, says David Havyatt:

Havyatt: It is as economically inefficient to have duplication on fixed-line networks as it would be to have duplication of electricity distribution networks, especially when you move to the point of an all-fibre network that can perfectly perform the functions of both telephony and pay TV.

Dobbie: And he says the only reason Telstra argue for the opposite is because they don't like the idea of not controlling the access network. He thinks they're control freaks, in other words! Of course when Telstra has been found to be anti-competitive, the ACCC is after them flapping a copy of the Trade Practises Act in their face. Telstra has every incentive to move slowly on any arbitration — the "negotiate-arbitrate" model is slow and allows for delays. It needs to be fixed says Pipe Networks' Dale Clapperton, but the new legislation might actually make things worse.

Dale Clapperton (Pipe Networks): Virtually all of Telstra's competitive carriers have a contractual framework with Telstra called a CRA, customer relationship agreement, under which they obtain access to eligible facilities and declared services. At the moment it is very difficult to negotiate substantive amendments to the CRA with Telstra. Telstra has a significant advantage in bargaining power over the competitive carriers. Because there is no alternative source for many of these services, the only real constraint on that is that the competitive carriers go through the currently broken negotiate-arbitrate process resulting in a more reasonable outcome on the terms that they have agreed to under protest. Under the new regime as it is currently drafted the terms of a negotiated agreement between the parties, and I use the term "negotiated" loosely — remembering that we are dealing here with Telstra who have no incentive to negotiate better terms, especially in relation to aspects such as pricing — will trump any access determinations or rules of conduct that the ACCC might make.

Dobbie: Which does sound like a step backwards for everyone except Telstra. And, of course, you can change the Telco legislation or make changes to the Trade Practises Act — but when you have a vertically integrated Telco, you'll always have difficulty proving anti-competitive conduct — and you'll always have suspicion. Here's Macquarie's Matt Healy again.

Healy: The most recent example that hopefully illustrates the sort of conduct that we have to deal with but also illustrates the opportunity, if we restructure the market, to remove that kind of conduct concerns the Deakin Exchange in Canberra. That Telstra exchange is in a building that a third party owns, so Telstra obviously has a lease with that third party to use the basement as a telephone exchange. That lease had lapsed and indeed the building owner had decided to redevelop. We, as an access seeker who has equipment in that exchange and have customers that we service from that exchange, were given weeks of notice that we needed to be out of there and we were not offered any real comparable service to move to on the shutting down of that exchange. You could just imagine that, for the weeks that we and other access seekers were given notice of when we needed to be out, how do you think that would stack up against the actual lease terms in terms of how long Telstra knew that it would be able to be in that exchange, and what sort of changes it needed to make to its investments to move to another operation and set it up so that it could transition all its customers onto another exchange? We got weeks but we suspect they probably got years. They certainly had a lease that allowed them to run to a certain point and they would have been given notification by the landlord that they were repossessing it in order to redevelop the building. All of that notice would have been absorbed within the integrated Telstra and made its way through to the retail arm so that it could deal with its customers to migrate them to the other building that would replace the Deakin Exchange.

Dobbie: And every telecommunications company has their own examples — we could talk about case studies for hours, maybe years — and not be any nearer proving the accusations as true or otherwise. Imagine, if Telstra did split, and all these allegations disappeared — what would their lawyers do? I still think they are the ones at most risk from this proposed legislation. Let's just have a moment's sympathetic pause for telecommunications lawyers.

Very sad. So, is the new legislation essential to the delivery of the NBN. Pipe networks won't say, Primus says it's more to do with the short term and David Havyatt from Unwired says there is the issue about whether, without it, Telstra would frustrate the progress of the NBN. Senator Birmingham raised the very real question of what if the Bill isn't passed — couldn't Telstra ramp up its investment only in the most profitable areas. If the NBN is built, isn't that fair enough. For example, competing ISPs obviously place their DSLAMs where they'll make the most money. And another great question from Senator Birmingham — if Telstra is separated, wouldn't they invest in infrastructure and would you, in fact, need the NBN? David Havyatt.

Havyatt: The chance for answering that hypothetical question was passed by Telstra in December 2007 when they chose not to bid for NBN version 1.0. They chose not to bid for NBN version 1.0 at the time on the basis that they could not get any guarantees from the government about structural separation notwithstanding the fact that the government had been clear from the day it announced the NBN process that the intention was that that network would be a structurally separated, wholesale-only network. So the short answer is that Telstra had the chance to go down that route and said no.

Dobbie: Although that was the politics of a vertically integrated telco. Split them up and see what happens. As Senator Birmingham points out:

Seantor Birmingham: Perhaps the government went about it in the wrong order. Regulatory reform before throwing out different NBN models might have been a more sensible approach.

Dobbie: Yes. Has it all been done a bit arse about? Maybe a separated Telstra could have done it cheaper — at one stage they were saying they could do it all for $5 billion, although that was, of course fibre to the node, and not for regional Australia. But it would be interesting to see if Telstra had been separated, for example, before Sol Trujillo got here, would its wholesale and network services arm have been investing in an open access fibre network without the need for government money — or perhaps a bit of government money for those hard to reach places. Why, if the restructuring of the industry will cure all known ills, does the government need to step in with public money for the NBN? And is there a risk that by rushing through the Bill, with such far reaching consequences, there's a chance that all the detail hasn't been thought through? Surely not!

Leave us your comments on ZDNet alongside this week's podcast. Next week more of the same, with disgruntled shareholders, the newly founded Australian Communications Consumer Action Network, the Competitive Carriers Coalition, ATUG and the folks in the suits from the Department of Broadband, Communications and the Digital Economy.

Join me for that — and for my daily podcasts on BNET too — for ZDNet.com.au. I'm Phil Dobbie — thanks for sitting through another Senate hearing — you did well. I'll see you next week.

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• Does Thodey have a deal in the CAN?

Yes, there have been budget run-overs to the extent that the new Change Program spend is expected to be around double the planned costs from 2004. Yes, it should have been finished in 2008 not 2011. But the office has also had to deal with the government changing the taxation rules every single year, which has had the agency bouncing on its toes trying to keep up-to-date — with quite legitimate funding increases to pay for it.

Of course, there were also budget increases where there were no direct lines to the legislation costs, which is easy to criticise. Yet to really be able to stick it to the agency for these increases, there needs to be some horrendous error on its part which occasioned the budget inflation. I can't see what that is.

Some might suspect a bad relationship with key program partner Accenture for the increases. However, Second Commissioner of Taxation David Butler said that the relationship was positive and responsibilities were clear when they needed to be.

Others might say it was the fault of bad governance. But I don't get the feeling there's a lack of oversight on the project. The Change Program's steering committee was scheduled to meet today and will meet again later this month, all to make sure the next release — set to be the income tax upgrade, the big one — won't go ahead unless the office is ready for it.

David Butler
(Credit: ATO)

The agency is also very aware that everything it is doing on the Business Activity Statements release might be changed by the government's response to the Ken Henry review and not rushing the design so as to try and minimise what it has to do twice.

I'd say the problem causing the delays and cost hikes is more likely the scope of what the office has been doing and the myriad of other jobs it has on its plate, as mentioned in the ATO's annual report for 2007-2008:

Post-budget assessments indicate that we will continue to experience considerable pressure on the delivery of our information technology systems in 2008/2009. This reflects our significant work program, including implementing the government's tax policy changes, our own internal business process improvement program (the Change Program) and our contribution to whole-of-government improvement initiatives... Software developers face similar pressures to update products that support taxpayers and their agents to meet their obligations or to access benefits.

If the Australian Taxation Office has been guilty of anything, it's been a surfeit of optimism. Certainly when it set its original timetable and costing it was "ambitious" as the audit office said in its recently released review of the program.

Yet the auditors seemed to find it a tough ask to find things to criticise about the program, only releasing four fairly general recommendations, most of which, if you listen to the ATO, were either already implemented or weren't really applicable. The audit office has also admitted that although delayed, benefits had been realised from the part of the Change Program which has been done.

Maybe, as the audit office says, the ATO does need to count its costs more carefully and make sure the lines are clearly drawn where Accenture is concerned. But my opinion is that the ATO's transgressions are fairly minor and that, despite the costs, the Change Program will have been worth it.

The ATO employed 22,429 people at 30 June 2009. It had an operating expenditure of $3 billion. It collected $264.5 billion in net cash, provided over $17 billion in transfers and payments, and collected around $41 billion in GST for state and territory governments.

All this was being put at risk by out-of-date IT systems. An excerpt from the audit report said:

By 2000 it was clear to the Tax Office its ICT systems were unsustainable. It was taking too long to respond to government policy initiatives, the community was getting less efficient service and Tax Office staff were finding reduced capability in the Information Technology (IT) platform. In addition, the Tax Office had been aware for some time of inefficiencies in the ICT systems on which the administration of Australia's taxation and superannuation systems depended.

If the ATO's tax systems fall in a legacy heap, the whole country will stumble. Yes, the project being late will cost us money and delay benefits. But, considering that it doesn't seem the ATO has been guilty of gross incompetence, how much would it have cost Australia's tax system if it had done nothing?

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• ATO refreshes ABN system
• ATO's $879m 'worst-case scenario'
• ATO Change Program budget now $879m
• ATO sets key Change Program date

When Ubuntu 9.04 arrived, ZDNet.com.au news editor Renai LeMay hailed it "as slick and beautiful as Mac OS X or Windows 7" and the distro has certainly not gone backwards since then.

In the following video is a CNET TV prizefight between Snow Leopard and Windows 7:

After watching this video, I believe that Ubuntu would be a contender if not the winner in this prizefight. It would certainly hold its own in interface stakes. Compiz (Ubuntu's enhanced graphical interface, which allows opaque windows) is the equal to Aero for Windows or Aqua for the Mac. In fact, making Compiz look and behave like either Aqua or Aero is a cinch. Ubuntu would hold its ground in stability too (it is a Linux distro after all) and would win in performance and compatibility — Ubuntu goes on hardware where Windows 7 and OS X fear to tread. It might suffer in unique features but would gain full points for value.

But if you follow the Ubuntu release trail, you are not going to be blown away by 9.10. It's a lot of 9.04 with another coat of varnish.

In a response to the photo gallery of Ubuntu 9.10 we did earlier in the week, one Twitter user wrote: "Ubuntu 9.10 Karmic Koala: 'Highlights ... include the addition of a new boot screen, an updated default theme...' Uhm, these are highlights?"

That is the reality of this release. It is not bursting with desktop transforming killer new features and applications, it's a release that has expanded to the cloud and the netbook, while focusing on fixing pain points for the desktop.

The One Hundred Paper Cuts project focused on "trivially fixable usability bugs that the average user would encounter on his/her first day of using a brand new installation", and although around only 50 bugs have been fixed, it does improve the desktop experience.

On the gloriously gushing side of improvements in this distribution is kernel mode-setting (KMS); if you have an Intel graphics chip then KMS is great. To have no more screen blinking on boot is fantastic, but this is how it should work. Non-Linux users though won't be converted with the "KMS means the boot to log-in to desktop sequence is seamless" argument.

When it comes to the new Ubuntu One service though, users of DropBox will feel that they have seen it all before; and at this time, they have a point. Beyond the integration with Tomboy, it behaves as a cloud storage service that is riddled with web server errors. The Ubuntu One site may say that it is beta — it is truly worthy of that status — but rolling it in with Ubuntu when it is clearly incomplete leaves a sour taste. Ubuntu One is not ready for prime-time and needs improvements now. To be fair I do expect that in the coming weeks it will come up to par.

However, the loop-jumping needed to set up synchronisation between Tomboy and Ubuntu One, getting contacts in Evolution, and synchronising Firefox bookmarks should not need tutorials that intense. Ubuntu controls the cloud service and the desktop clients, therefore it should be possible to have a Ubuntu One control panel with check-box selection to enable these services which would make it much easier for users.

Ubuntu One is but the first reason why I believe Ubuntu continues to fail the "my grandma can use Ubuntu" test. A lack of comprehensive testing of graphics drivers is another reason why grandma could not use Ubuntu without a Linux-using grandson on speed dial.

In the past week I've had the distinctly unpleasant experience of having to downgrade an Intel driver package. A Ubuntu 9.04 laptop had its Intel graphics drivers updated by Synaptic to a version that did not work with my laptop's chip — it simply made the screen black — no prompts, no errors, no feedback.

In this instance, downgrading the updated packages was all that was needed to fix the problems, but it highlights two cases of inadequate testing of critical parts of the distributions.

If Ubuntu truly wishes to take the Linux desktop to the masses, then it must be cautious in preserving the environment that it wishes for mainstream users to use. I'm certain that if I presented my Ubuntu laptop with an X server crashing to "technically-savvy" non-Ubuntu users, then they would have a hard time working out how to downgrade the driver, let alone the regular "ma and pa" users that Ubuntu wants.

Having the ability to revert the X server back to a VGA driver "safe mode" so that users could fix package errors in the familiar graphical environment would be preferential to having the X server spewing errors or simply making the screen black, forcing novice users onto the command line.

Until the computer shop down the road is able to fix these types of problems — which is unlikely — then grandma, mum, dad, and the entire family are still going to need to have a Ubuntu support umbilical cord to the nearest Linux guru.

Cut that umbilical cord and Ubuntu will be ready to go mainstream, and even though I think it could very well be better than Windows and OS X, the problems encountered when things go wrong still prevents Ubuntu from reaching its potential.

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• Ubuntu 9.10 Karmic Koala: Photo gallery
• Ubuntu chases the Lynx factor
• No thanks Google, we've got Ubuntu
• Ubuntu as slick as Win7, Mac OS X

(Laying cable image by Library of Congress, No known copyright)

Churchill's bon mot seemed apt as Telstra CEO David Thodey and CFO John Stanhope fronted a mob of concerned investors at the company's Investor Day this week. Over the course of the morning, it became clear just how far removed the Telstra of today is compared to the Telstra of a year ago.

Among the revelations at the event: Telstra concedes its pricing is too high and is set to lower broadband prices, uncharacteristically conceding the need to compete on price and value in a market it has so far ruled by sheer size alone.

Also significant: apart from a few choice ADSL2+ upgrades, Telstra is refusing to invest more than the minimum necessary to keep its customer access network (CAN, aka the copper loop or PSTN) ticking over. "We won't be doing anything we don't have to," Thodey said.

Thodey was reiterating a position that more and more seems to suggest Telstra is distancing itself from the contentious network. Indeed, the Thodey-Stanhope show confirmed that Telstra is indeed ready to sell off the CAN if it's offered the right price — and if the government backs down on its demands that Telstra divest itself of its Foxtel stake and HFC network, and lift the ban on Telstra eventually acquiring wireless spectrum to support next-generation LTE mobile services.

The Telstra Thodey presented to investors at the meeting seemed stalwart yet humbled

"If those conditions are met, structural separation appears to be a win-win for shareholders, the government, NBN Co and the nation," Stanhope said with the clarity and confidence of someone who had been saying this sort of thing all along.

But, of course, Telstra has been saying no such thing all along: it has remained vehemently opposed to the idea of separation in any form. Even Stanhope has been party to the FUD campaign against separation, warning in August of the risks of "extreme" forms of separation. This is the same John Stanhope that sat alongside Sol Trujillo at countless events as he railed against separation "stupidity" and said "shareholders should shoot management if they ever agree to something like that".

Draw your weapons, shareholders. A year later, Trujillo is out of the picture and the Thodey-led company is taking a much more conciliatory, realistic posture than ever. The Telstra Thodey presented to investors at the meeting seemed stalwart yet humbled, somehow, as it fights to preserve its dignity and interests while seemingly losing ground in its knock-down, drag-out battle with the government.

It has no other choice: debate over the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009 now seems certain to happen before the year's end, and stonewalling is only going to dilute Telstra's ability to walk away with something it wants. Instead, it seems Telstra now considers the sale of the CAN inevitable; its main concern, in Churchillian style, is how much the network goes for — and how the consideration is structured.

That the dialogue has moved past questions of whether Telstra will part with the CAN, reflects a major shift in posture that Conroy must be credited with extracting, especially given Telstra's previously-staunch determination to fight the current legislation.

Just how things are going to change, however, is still up in the air. There has been rampant discussion about NBN Co buying the CAN — which would give the government access to the infrastructure it needs to make the NBN work — but an investor's question to Thodey made clear that the government and Telstra may still be poles apart on the acceptable terms of such an exchange.

Does the government understand that equity in the NBN is completely unacceptable for [Telstra] shareholders?

"It's very clear that if you do vend assets into NBN Co to enable the build, that you cannot accept equity in NBN Co as consideration," the question went. "Does the government understand that equity in the NBN is completely unacceptable for your shareholders?"

Thodey's answer was measured but firm: "Does the government understand that? Yes, I think they do. But have they accepted that? I'm not sure they've accepted that. I could not come to the board or to the shareholders with anything unless it's very clearly defined in terms of what returns we would get. We've made that point to the government and will just have to see how that plays out."

This puts Conroy in an uncomfortable position: Telstra is willing to negotiate, but is drawing Conroy into a contentious argument about fair compensation for the CAN — in cash, not empty promises about the NBN's theoretical potential revenues. If Conroy refuses to give ground, Telstra will look like the gentle giant and Conroy like the tyrant; if NBN Co pays vast sums to acquire the CAN, Conroy will face the politically unpalatable situation of having paid handsomely to buy a major Telstra asset from its shareholders. Such a move would only compound the NBN's tenuous financial situation, especially if the government can't dangle NBN Co equity to offset the cash outlay.

And that, as anybody can guess, is a far from ideal outcome — especially since by Thodey's own admission the CAN is not being actively updated at any great pace. Such a deal would add a major cost to the NBN's price tag, although just how much that cost would be is up in the air after Conroy's claimed-to-be-accidental-but-nobody-believes-it leaking of Telstra-confidential information finally put the disputed figures into the public forum.

There's a big gap between $8 billion and $40 billion, although Telstra has naturally distanced itself from both numbers. Figures aside, it seems the wheels are now well and truly in motion: despite its initial defiant stance, Telstra is coming to grips with reality and steeling itself — and its investors — for major changes ahead.

Does Telstra's new pragmatism suggest Conroy has won the battle? Or has Telstra just secured the upper hand and cut straight to the chase?

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• Conroy wins battle for Telco Bill debate
• Telstra CEO: Hands off my backhaul
• Thodey defends $200m IT blowout
• Telstra: broadband price cuts "imminent"

Visitors carrying an iPhone 3GS or an Android phone will be able to see additional information about the sculptures thanks to augmented reality (AR), a technology which is transitioning from being a novelty for marketers to a useful tool for delivering location-based information.

The Sculpture application is one of a flood of new AR applications. According to a report by ABI Research, revenue associated with augmented reality is predicted to grow from about US$6 million in 2008 to more than US$350 million in 2014.

Early AR was PC-based and required a user to hold up a special symbol (called a marker or glyph, such as a 2D barcode) in front of a computer's camera, which would interpret the signal and download related information. This would be displayed along with the image from the camera on the computer screen. Typically the AR was some form of animation, such as a 3D character walking around on top of the marker.

Recently, developers have been utilising the power of smartphones to combine AR with location-based information, with new services including Layar, Wikitude and NearestWiki. The technology utilises the smartphone's GPS and compass capabilities to determine the users' location and direction, and presents information such as what buildings of note are in a particular direction.

The Sculpture implementation has been created by Sydney-based mobile developer MOB using the Layar AR browser. Managing director Rob Manson says visitors will receive an enhanced experience at the exhibition.

"It will help them navigate around the exhibition, they will be able to see the key sculptures and find out more about those, and link through to the mobile site," Manson says.

Layar is also adding 3D capabilities, which will enable developers to insert 3D objects into the augmented vision. Manson believes the technology will be of particular interest to museums and art galleries.

"We looked at Wikitude and some of the other applications, but with those you have to build your own application and distribute it," he says. "Layar is more like a browser, so it will be installed on a lot of phones."

Brisbane-based My247 is also preparing an iPhone-based AR version, created by Sydney developer TigerSpike, of its guide to 23,000 restaurants, bars and entertainment venues around Australia. The new My247 application should be available through the iTunes store before Christmas.

TigerSpike co-founder Oliver Palmer says AR enhances what consumers do with the application.

"AR is in its infancy," Palmer says. "Where we see it adding value is in using the hyper-local content that My247 has in its database."

Quick response code company Insqribe has also created a service that enables businesses to create their own AR tags for their physical locations.

"We believe that the opportunity lies in actually bringing to life a platform that is an enabler of AR tagging — presenting tracking and measuring AR experiences," says commercial consultant Nick Gonios. "Insqribe wants to be a platform in terms of delivering the AR experience to existing or upcoming mobile apps."

The company hopes to have its application in the iTunes store by early 2010.

One of the dangers of a proliferation of AR technologies is that the market will fragment into multiple non-compatible technologies, although a proposal exists for the creation of a standardised Augmented Reality Mark-up Language.

"Unfortunately there will be this fragmentation, and then there will be some form of consolidation down the track," Gonios says. "But there are over 100,000 iPhone apps that all do their own thing, so our view is that if your app is designed for a specific function and target audience, that has merit to stay the same, and then in addition you can add AR to it to create a rich experience."

PC-based AR has a much longer history, based on technologies such as Papervision3D, and has primarily been used for online marketing campaigns.

Co-founder of the New Zealand-based digital marketing agency The Hyperfactory, Geoffrey Handley, says his firm has been working with AR almost four years.

Last year it created an AR application for Coca-Cola in Europe that enabled users to play "tennis" with another user. A new project will see The Hyperfactory implement AR in a site for Toyota around the Baja 5000 off-road racing series, using feeds from cameras within the cars.

"We are constantly trying to find a balance between utility and entertainment, and I think AR, if we use it well, is able to strike that balance," Handley says.

Much of what is happening on PCs has been developed in the Flare toolkit, based on Adobe's Flash. Adobe Flash product manager Richard Galvan says that while the technology has been available for some time, developers are becoming more creative.

"For a long time people have been using AR to do some pretty cool marketing campaigns, because there was a wow factor and you could get people to look at it — but once you have seen three or four, they all kind of look the same," Galvan says.

But he points to an application from the US Postal Service to help people determine what size box they needed for posting bulky items as a sign of things to come. The user places an item within the field of view of a camera, with the computer then projecting different size boxes until the user selects one that the item fits within.

At its Max Conference held in Los Angeles in early October Adobe demonstrated numerous Flash-based AR projects, including one from the Australian creative technology business Boffswana (a part of the Omnilab media group), featuring an animated Sasquatch.

Business development manager Paul Curtain says Boffswana has also created AR-based karaoke application for Sony, and a music-mixing application for Wriggly 5 chewing gum in Europe.

"You could print out multiple glyphs and place them in front of a webcam, and each of those glyphs would trigger a 3D asset and a music asset that related to each of the flavours of the gum," Curtain says. "By positioning those glyphs you could ramp up the volume, or adjust the pitch."

Developers have also been experimenting with different media rather than simple markers. At Microsoft's Imagine Cup student develop contest held in Cairo in July a team from Israel demonstrated an interface involving computer-recognisable symbols pasted on the sides of a Rubik's cube. A game was then overlaid, involving an animated character walking across the Cube's surface, which the player could interact with by twisting the sides.

Palmer says future generations of the technology will incorporate image recognition from the handset, so that it need not rely on the GPS and compass features which can be inaccurate in built environments.

"The next release (of the My247 application), when some of the additional functionality is around, will give that interpretation of the images coming through the camera," he says.

But despite the enthusiasm of developers, it may be some time before AR becomes mainstream. According to Adobe's chief technology officer Kevin Lynch, there are still technical issues to be overcome.

"It's pushing the edges of performance of the computing devices right now, like rendering the 3D model and having streaming audio and trying to do the camera detection to find the object on the paper," Lynch says. "That's a lot of computing, and it's just at the point where it is possible to do.

"It's emerging and it's new, and people are still figuring out what to do with it. We will see a lot more of it in our daily life, the blending of physical reality with online reality."

Brad Howarth travelled to Max as a guest of Adobe.

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• Adobe Max 2009: Photo gallery
• Adobe snaps up Business Catalyst
• Adobe's licensing needs an overhaul
• Motorola Droid to run Android 2.0?

Today on Twisted Wire the views from Tasmania in the final public hearing held in Hobart on 8 October. You'll hear from:

• Andrew Connor from Digital Tasmania who suggests the NBN should be funded by the taxpayer;
• Darren Alexander, the president of TasICT who is concerned about the lack of public consultation in the whole process;
• Andrew Scobie from the Tasmanian Chamber of Commerce and Industry who seems to confuse everyone on whether he is for or against the NBN;
• Allan Garcia from the Local Government Association of Tasmania who suggests that overhead cables might not be a bad thing;
• David Ball from Intelsat, who says satellites have a lot to offer, as long as it's not raining; and
• Bill Costen and Sue Charles from Sorell Council, who seem to be in the dark about plans for the NBN in their area, even though they're included as a pilot area.

Read the full transcript of the day here.

For more on the NBN in Tasmania listen to the past editions of Twisted Wire on 13 August and 23 July.

Next week on Twisted Wire, we delve into that leaked document from the ACCC on legislative change in the telco industry. We'll also look into this week's report from the Senate Standing Committee Inquiry on the Telecommunications Legislation Amendment Bill 2009 — you know, the law that would see Telstra split in half.

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• Conroy calls ACCC doc release "regrettable"
• Conroy reveals ACCC's value of Telstra network
• Nats to vote for deferral of Telstra vote
• ASIC to investigate Future's Telstra sell off

Earlier this year the government said it intended on adopting Cisco TelePresence to save time and some of its around $300 million annual bill on domestic flights. These telepresence units are gradually coming on line with the full network at 20 sites to be operational by mid next year.

But according to Finance Minister Lindsay Tanner speaking last Friday, we shouldn't be expecting massive savings straight away. He said that people wouldn't use the units immediately since in many cases it would be a "reflex reaction" to book flights.

"You are dealing with the in ground habits of thousands of thousands of people," he said. "That's not something that the finance minister can simply mandate and suddenly everyone changes what they do... This could be a number of years away."

I was deeply shocked by that statement. We have a finance minister who is quite willing to tell Telstra where to go, but doesn't want to put in policies to make sure that government employees start making use of its new $13.8 million telepresence investment? Ridiculous.

If you think about how many loud-voiced shareholders are screaming about having their investments risked because of Tanner and Communications Minister Stephen Conroy's determination to force Telstra to the negotiation table and create a broadband connected Australia, you'd think Tanner would blanch at nothing to achieve savings on flights. He certainly doesn't seem to be listening to the shareholder's woes or Telstra's vigorous complaints.

He also didn't seem concerned about agency sensibilities when he asked them to drop their IT spending by 7 per cent for small agencies and 15 per cent for large agencies as mandated by the Gershon report. Understandably, some agencies weren't happy about the need to make those savings. Did Tanner budge? No.

At the same event last week he said those agencies were pushed to achieve the savings. "Once you put people under pressure they surprise themselves," Tanner said. This doesn't seem to be the actions of someone who panders to "reflex reactions".

The agencies have managed to achieve $109 million in the first phase of the project.

Tanner is also wielding an iron hand with the portion of those savings intended to be reinvested in innovative IT projects for the agencies. This was to be in some ways a reward for those agencies for saving money. But Tanner isn't frightened of withholding the goodies if the projects aren't good enough.

"We won't be automatically spending that money," Tanner said severely. "We want quality propositions."

So on the one hand, we have Tanner saying he pushed agencies to scrimp and save when they didn't want to. He is also holding money just out of their reach to achieve great proposals for innovative projects. He has put Telstra in a headlock so that it will go along with government wishes. Yet on the other hand, he cannot force public servants to use telepresence.

I think the minister needs to man up on the telepresence issue and say that flights are no longer alright.

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• Westfield to deploy 40 TelePresence units
• Internode installs Cisco TelePresence
• Federal Govt rolls out TelePresence
• HSBC begins TelePresence rollout

When the Federal Government cancelled its Commercial Ready grants scheme without notice in May 2008 it cast into jeopardy the future of dozens of Australian technology start-ups. Many were midway through their applications — a lengthy and costly process — and cancellation without notice left them in a worse position than if they had never bothered in the first place.

However, the bigger crime was to cancel Commercial Ready with no viable alternative, and at a time when Australian venture capital markets had slumped. Commercial Ready had provided around $200 million each year to small and medium businesses, which were left to enter the global financial crisis with no clear alternative source of funding.

With one of the reasons for cancelling Commercial Ready being that many of the applications would have proceeded without public funding assistance, it was a slap in the face to companies that would witness private funding options close.

Though this week saw the announcement of a new grant scheme dubbed Commercialisation Australia. The scheme was first mooted in the May budget, and will provide $196.1 million over four years and $82 million each year thereafter. That's a long way short of the $1 billion that Commercial Ready injected into potential high-growth Australian companies.

The new grant scheme will open in early 2010, and will enable companies to access $250,000 for proof-of-concept activity, or up to $2 million in repayable grants for early-stage commercialisation activities. Under Commercial Ready, companies could apply for funding up to $5 million, but only two applications ever received the maximum amount.

Successful applicants will be assigned case managers to assist in the development of their business.

But many entrepreneurs are scratching their heads as to what the new program will actually deliver, and who will comprise the panel of case managers.

"They say they are going to appoint a seven-person board that is comprised of people experienced in growing early stage companies," says entertainment and technology entrepreneur Chris Gilbey. "So that seems promising. But the truth is that it still isn't enough."

The new scheme is important in filling the gap that was left by Commercial Ready — albeit later than most companies would have liked, and in a limited form.

But the fact that it is necessary however simply shines a spotlight on the elephant in the room — Australia's weak venture capital and angel funding capacity. The government has failed to provide any greater stimulus for the private sector (or superannuation funds) to direct funding towards the high growth start-up sector — although in fairness the higher risk in these investments has not been made any more attractive by the financial crisis.

But if any part of the funding process needs stimulation it is the private capital sector. Australia's early stage venture capital investors have shrunk to a handful of battle-hardened investors, groups such as Sydney Angels, Capital Angels and IPitch are working to create stronger linkages between angel investors in the hope of encouraging larger and more frequent investments.

But more needs to be done to encourage funding into the early-stage sector.

Those companies that are capable will raise their funds overseas, such as the Australian online fraud control specialists ThreatMetrix, which this month raised US$6.1 million from a Silicon Valley VC. President and CEO Reed Taussig says the money will be used for operating capital and expansion purposes.

"It's been a difficult financing environment in the United States, but our business has been doubling quarter over quarter, and so as a result we were able to attract a US VC who is a top tier venture firm in Silicon Valley," Taussig says.

ThreatMetrix launched in the US in January and will end this year with around 70 customers, a number that Taussig is confident of coming close to tripling that next year, and move to being cash flow positive in the third quarter of 2010.

Companies like ThreatMetrix demonstrate the sort of growth path that is possible for Aussie tech start-ups. But a lot more needs to be done to stimulate private sector investment — and now is the time.

The story of Australia's venture community is one of investors that have only been able to raise money — and hence invest it — at the peak of the market. The way to generate real returns is to invest now — when valuations are low and market rebound means that returns will be stronger off a low base.

Without an injection of funding now Australia stands little chance of either creating effective solutions to climate change or capitalising on the government's investment in broadband infrastructure. Unless the government can find new ways of unlocking private sector funding, Australia will miss another opportunity to step up as a player in the global technology sector.

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• Start-up funding still frozen solid
• Kaz founder: Dumped grants needed for marketing
• Rudd awakening: Govt's plans for ICT
• Innovation grants slashed to save $707m: Budget 08

When opening a link in a new tab, by default the tab will appear next to or near the tab in which the link was selected. Think Internet Explorer or Chrome tab behaviour.

Since IE, Chrome and now Firefox do this, it'll probably become de facto for browsers, but if you wish to remain a new-tab Luddite like me and restore Firefox's previous tab behaviour (where all new tabs appear on the far right of the tab bar), follow the following steps:

1. Type into the address bar about:config and hit enter.
   

   The about:config page should look something like this.

2. Once there, enter into the filter browser.tabs.insertRelatedAfterCurrent
   
3. When you see the browser.tabs.insertRelatedAfterCurrent entry, double click on it to toggle the entry from true to false.

And you're done. Enjoy your new browser experience of knowing where to find the tabs you opened.

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• Microsoft unveils web Office preview
• What is Google Wave good for?
• Chrome, Safari taking browser share
• Mozilla releases Firefox 3.5

If a cowering Microsoft presents its bottom for you to spank, it will likely enjoy the experience more than you will.

The software giant's new operating system Windows 7 has come at a time where change is being demanded, not just in the realm of desktop computers but also in government procurement. Federal and state governments want to now make more use of their buying power to whip suppliers into shape. They are big and they want to flex their muscles on new submissive suppliers looking to claw their way out of the crisis.

But when I think about Microsoft cowering on the floor, its butt in the air saying "no, please don't hit me anymore", I see a gleam in its eye.

Because even if it had to give massive concessions on support and price to get the NSW Department of Education to change its mind from rolling out XP to putting Windows 7 on its digital education revolution laptops, which I suspect might have happened, another generation of children is going to be exposed to the joys of the Microsoft way of thinking.

It's a case of give a little, get a lot. Each swipe of the price cut whip hurts so good.

A similar idea works with the non-education public sector. How many companies are on Windows XP at the moment? A lot. Change takes time, effort and money. Microsoft knows that if it can swing another XP scale roll-out, it's going to be set for another 10 years or so. So what does it have to lose by signing lean margin agreements for three years?

Not much. After Windows 7 has been implemented, and the contract runs out, there'll be time for Microsoft to negotiate a better price.

So watch out government. If a cowering Microsoft presents its bottom for you to spank, it will likely enjoy the experience more than you will.

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• BIG is butt ugly
• The big 27,000: Win7 ensnares Centrelink
• Windows 8: Dying gasp or next big thing?
• Aussie Windows 7 Launch: Photos

As the incremental cost of carrying a networked bit trends towards zero, carriers could feasibly move towards unlimited, uncapped services and still benefit from ever-healthier profit margins.

So why aren't your stock-standard batteries getting any cheaper? I'd say we've been paying around $1 per AA for well over the past decade, and probably longer.

It may seem like a random point, but in a cosy duopoly where there is a mutual disinterest to lower prices, it seems interesting at the very least to note that batteries are a market where increases in both demand and supply have failed to lower prices appreciably. This result is inconsistent with basic tenets of supply and demand, which assume that increased supply naturally pushes prices lower (as long as demand doesn't outstrip supply, of course). These tenets follow the same basic model as the lottery: if you suddenly won millions in the lottery, after all, wouldn't you share some with friends and family?

Competition and the abundance of cheap wholesale minutes have driven the price of phone calls through the floor, and the same philosophy has been evident in recent data plan changes by Internode — which recently dropped its prices after getting access to loads and loads of bandwidth when Pipe Networks' PPC-1 undersea cable finally went live this month. Internode celebrated by boosting many data plans' quotas by 66 per cent and cutting $10 off the entry price for its SOHO Extreme and SOHO NakedExtreme plans. There's also a plan providing up to 200GB of data per month — generous by most measures.

Behind the changes were a fundamental realisation: major jumps in bandwidth provide cost savings that can be passed on to customers and improve competitiveness. Other ISPs do the same: iiNet, for example, recently boosted its broadband business plan quotas while competition and economies of scale drove 3 Mobile to halve the price of its mobile broadband plans some time back. Just this week, Optus followed suit by rejigging its wireless broadband plans with plans starting at 1GB for $15.

This is how pricing is supposed to work. Wouldn't it thus seem logical that a major infrastructure expansion would drive down the per-bit cost of data carriage, and that those lower costs would push prices down at least a little bit? Heck, as the incremental cost of carrying a networked bit trends towards zero, carriers could feasibly move towards unlimited, uncapped services and still benefit from ever-healthier profit margins.

You might think so, but Telstra doesn't. Some weeks ago, a contingent of journalists met with several key Telstra executives to trumpet the near-completion of Telstra's Next IP network. "Given that your new data core has a substantially expanded aggregate capacity, and that your costs are much lower and trending towards nil, can we expect data pricing to drop?" I asked after a long presentation in which we were repeatedly told how Next IP had opened the floodgates of bandwidth on Telstra's network.

"The unit cost of data will decline," Telstra CTO Hugh Bradlow responded, "but not to nil. Carriers that have uncapped plans are busy bleeding at the moment, and they'll either die or change their methodology. I envision the rest of the world falling in line behind us."

There's truth in that statement, and subterfuge: truth, because previously-uncapped US carriers such as Time Warner Cable and Comcast have indeed introduced capped plans to rein in unchecked data siphoning; and subterfuge, because those caps are so generous — 250GB in Comcast's case — so as to be mainly symbolic.

Time Warner Cable, whose CEO Glenn Britt almost apologetically admitted to BusinessWeek that "we made a mistake early on by not defining our business based on the consumption dimension", charges just $US1 ($A1.10) for each GB customers download past their cap. Telstra charges $150 per extra GB. (To be entirely accurate, customers on Telstra's high-end plans are simply speed-limited; of course, Comcast customers that exceed their quota just get a warning phone call).

Given that Telstra would by all presumption have one of the region's fastest core networks, can its costs really be 150 times of Time Warner Cable's?

Given that Telstra would by all presumption have one of the region's fastest core networks, can its costs really be 150 times of Time Warner Cable's? Of course not. And herein lies the truth of Australian broadband: regardless of supply, bits are worth whatever carriers want them to be worth. This is plainly true because Telstra is more than capable of allowing customers to guzzle unmetered Foxtel content by the gigabyte over its networks.

There's cost recovery, there's justifiable profit margin, and then there's just plain ripping off your customers. When carriage costs drop, some ISPs are rewarding customers with lower pricing and more generous plans; others change their bundles only when their pricing is so out of step with general trends that even their less discerning customers are starting to complain. Others simply charge whatever they need to meet profit objectives, and tell customers to take it or leave it.

As the NBN slowly comes online, these dynamics will be revisited as part of a discussion that is currently manifesting itself in the spurious claims that the NBN will push broadband pricing to $200 a month. While that's as unlikely as claims the NBN should be free, one would hope that the wide range of pricing claims will at least get people thinking about the real value of the NBN's bandwidth – and appropriate costs for accessing it.

What do you think? Will NBN pricing follow the battery model or the phone call model?

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• NBN should be free, says economist
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The answer, it turns out, is not as simple as that. But then, it never is for people like me who tinker with their hardware too much.

My ZDNet.com.au workstation is a Dell Optiplex 755, which in general terms I'm happy with, as it has a nippy Core 2 Duo CPU and 2GB of RAM. Those of you who have worked in publishing houses will know this is a bounty of processing power not normally found on journalists' desks.

However, the one problem with my slimline Dell is that its graphics card doesn't come with two monitor outputs ... in fact it doesn't even come with a DVI output. Instead, it has but a solitary VGA plug to make do with.

Consequently, the only ways I can get a second monitor working is to buy a half-height video card and do some delicate surgery on my Optiplex, or to simply buy one of these new-fangled external USB video cards people have told me about.

An external USB video card (Credit: Winstar)

You can pick one up from Aus PC-Market for slightly over $110, or more if you want a really fancy one. A cursory look at the specifications shows that most of the units can provide resolutions of up to 1600x1200 or even more, and work on a variety of operating systems.

I'm still slightly suspicious of such a solution though, as I'm not sure of the extent to which the USB 2.0 specification is geared to support extra displays (especially when it comes to 3D acceleration), and whether there would be an impact on my CPU from the extra gear.

What has your experience been with external USB cards? Good, bad or ugly?

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• Do you suffer from phantom monitor pain?
• HP Compaq t5730w Thin Client
• Dell OptiPlex 960
• Lenovo M57e

He says the social benefits are the real story, no one is going to make money from selling access, so it should be given away from the start. Independent consultant Kevin Morgan has a different view. He says the whole project lives in the realm of fantasy and secrecy.

These are just a couple of the views expressed at the Senate Select Committee on the NBN's public hearing in Melbourne earlier this month (7 October). In this half hour summary of the one day talkfest you'll also hear from:

• Greg Wyler from 03b Networks says low orbit satellites can provide the backhaul


• Elizabeth Barnet from Vernet doesn't want the NBN to be built without considering the high bandwidth needs of the education and research sector


• Folks from Ballarat ICT Limited tell us what a great place it is to live in — did I miss something?


• John Dubois & John Weston from Senatas ask for encryption to be built into the network


• David Ryan and Sharon Tonkin from the Grampians Rural Health alliance talk about the benefits they're seeing from their own regional fibre network


• Brad Wynter from Whittlesea Council had the foresight to put conduits in greenfield sites, but the carriers still wanted a subsidy to build.

See the full line-up of the day and transcripts of all sessions here.

You can listen to our other podcasts of the Senate Select Committee on the NBN: Sydney 3 March, Canberra 4 March, Canberra 1 October. Got something to add? Be sure to leave your comments, and be nice to each other please.

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• Conroy on Minchin's 'Luddite' delays
• NZ Govt calls for NBN partners
• Tassie NBN expands to 10 towns
• NZ Govt details NZ$1.5Bn NBN roll-out

Kyte is the man behind Oracle's long-running Ask Tom help desk — starting out as a magazine column and now an online forum.

In this video interview with ZDNet.com.au, Kyte explains how many questions he receives equate to "my car won't start".

"I'm going to do it to you — my car won't start, why? Give me the solution. I'm not going to tell you what errors I see on the dashboard; I'm not going to tell you if I filled the car up with gas recently; I'm not going to tell you if it's making a noise or not making a noise; but my car won't start, why not? There's insufficient data to even begin to answer a question like that."

Kyte also explains how the internet has changed how questions are asked, and how he doesn't reply with RTFM.

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• A video chat with Oracle Australia's chief
• Oracle OpenWorld 2009: Photo gallery
• What kind of company is Oracle?
• Jovial Ellison cracks IBM jokes

It's not the same database company from a decade ago. The company has clearly moved on and diversified beyond its core product. As witnessed by Ellison being able to deliver a multiple hour keynote without once mentioning the Oracle database product.

It could be a hardware company — once the Sun merger is approved. Ellison continued to take great delight in making jokes at IBM's expense, and reinforced many times the fact that he is willing to part with $10 million should anyone fail to double their performance on the new Sun/Oracle Exadata hardware.

Ellison humorously pointed that Big Blue has challenged his claim that Exadata is 16 times faster than its hardware — IBM says it is only six times faster, according to Ellison. "They might be right," said the Oracle CEO, and proceeded to take further delight in reiterating IBM's greater power consumption.

Oracle could easily be an enterprise resource planning/supply chain management company after Ellison dedicated the second half of his keynote to unveiling the company's new Fusion product. After a long wait, it's the result of a combination of technologies gained through acquisitions such as PeopleSoft, BEA and Siebel was on display. Even though Oracle will support legacy applications in this space for a decade, it is clear that Fusion is the path that Oracle wants its customers to traverse.

It could be that Oracle is partially a Linux company. According to a HP survey, 65 per cent of respondents said that they are running Oracle Enterprise Linux as their distribution for running Oracle Database (37 per cent said Red Hat with 15 per cent responding with Novell's SuSE Linux). BT has chosen to standardise on Oracle Enterprise Linux.

After years of acquisition action, Oracle has a software portfolio that few companies can match — and that is the power the company is starting to bring to the fore.

The Sun acquisition and new Fusion products allow Oracle to offer a complete stack for many enterprise needs. One of the themes for this conference was integration; however, what was not said was that while integration was possible with third-party products, it was naturally going to be easier and run better with Oracle products. Or to put it another way: all product integrations are equal, but some product integrations are more equal than others.

It's increasingly going to be hard to pigeonhole Oracle in any category as it now has so many fingers in so many pies. Had the Oracle and Sun merger been approved by regulators, it would have been interesting to see what McNealy and Ellison would have unveiled.

McNealy said in the opening keynote "I think Larry will like his new toy", and I think it is the observation to take from this conference. Oracle's database appears to have taken a back seat, with the excitement and attention of the company now focussed elsewhere, and is unlikely to ever return to the levels it once did.

Chris Duckett travelled to OpenWorld as a guest of Oracle.

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• Jovial Ellison cracks IBM jokes
• Video: Aussies talk Oracle OpenWorld
• Non-professional Oracle wrestling
• Defence kicks off massive Oracle refresh

The Senate Select Committee on the National Broadband Network started a series of 14 public hearings well before the April announcement on a fibre-to-the-node network. We covered a couple of them back in March on Twisted Wire.

This week we head back to Canberra to summarise the public hearing held by the Committee on 1 October. Surprisingly, there's some interesting discussion.

In a star-studded line up you'll hear from:

• Richard Murray, Department of Treasury
• Bernard Wonder, Productivity Commission
• Peter Downey, Cables Downunder
• Henry Ergas, economist
• Anthony Doonan, YLess4U
• Mike Quigley, NBN Co
• Robin Eckermann, talking about Smart Grids
• Simon Lewis, Department of Finance and Deregulation

Next week, the hearings from Melbourne (7 October) and Hobart (8 October).

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• Broadband hearing unplugged (day 2)
• Broadband hearing unplugged (day 1)
• NBN: Like giving candy to babies
• NBN build limited to two network vendors

By next year's election, one assumes Conroy will want to be able to showcase his many achievements as minister — and the taming of Telstra would have to be high on his list.

Not only will Telstra not come quietly, it turns out, but the company seems set to throw its weight around in an ever-fiercer wrestling match that could easily drag into next year and taint Rudd's plans for a smooth re-election.

That is not to say Rudd faces much real competition from the Opposition as it is currently operating; Nick Minchin's hollow opposition to the NBN will be as irrelevant during the election campaign as it is now.

However, by next year's election, one assumes Conroy will want to be able to showcase his many achievements as minister for Communications — and the taming of Telstra would have to be high on his list. The Rudd Government has shown itself able to be big on vision when unlimited budgets seem to be suddenly available, but if it cannot deliver a legislative outcome to match, it will face some very real problems next year.

Widely-perceived nice guy David Thodey can only be laughing from his executive chair. Although he has shied away from the belligerent defiance that marked his predecessor's tenure, there was no way Thodey was simply going to hand over the keys to Telstra's empire. The company's submission to the government's legislative inquiry minced no words in proving that Conroy has a long, difficult fight ahead of him in his effort to become a lion tamer — and that Thodey is quite happy to join him in centre ring as the government's nemesis.

The irony: even though Conroy was quick to work the media with his claims that Telstra was welcome to stay the way it is now, he was agitating for change in no uncertain terms — and change of which Telstra was a part. After all, the market may be able to work around Telstra, but it's expensive and time-consuming. Now that Conroy clearly won't get the compliance from Telstra he seemed to think he would, he faces some difficult choices.

Foremost among these, of course, is drafting legislation that will actually freeze Telstra out of new wireless spectrum offerings and divest it of its Foxtel holdings. Although Conroy positioned these two Telstra businesses as tools for forcing Telstra to the table over separation, the reality of the wireless market is that Telstra is just about the only telco with the capital-raising capabilities necessary to buy large blocks of expensive wireless spectrum for nationwide service coverage.

Sure, smaller telcos or consortia may cherry-pick key markets like they did in the 3G auction, but the real-world interest in LTE and the so-called "digital dividend" to be available in 2014 is still anybody's guess. Excluding Telstra from the process may serve political objectives, but it's also likely to hamper competition during spectrum auctions and deliver lower overall licensing revenues to the government once the sale of that spectrum is complete. This is hardly ideal.

Ditto Foxtel: Telstra's warning that divesting the company of its share in Foxtel will see the content provider snapped up (and, by implication, muzzled) by media conglomerates is hardly far from the realm of possibility. Foxtel's ongoing success would make it an attractive target, and the government will have to consider how this scenario would affect its media ownership policies.

Furthermore, and correct me if I'm wrong, but there would seem to be little precedent for mandatorily divesting companies of their assets or shares in joint ventures when there have been no allegations of impropriety. This really is blue-sky territory for Conroy, with ponderous litigation and blown-out time frames a near certainty as Telstra resumes its official policy of foot-dragging and Conroy tries to find the right balance of kindly coercion and hard-nosed legislation.

Conroy can't back down now ... to flat-out cave to Telstra's demands would reposition Conroy as a toothless tiger beholden to Thodey's [whim].

The big problem is that Conroy can't back down now, although as I have already suggested he seems to already be treading that line. However, to flat-out cave to Telstra's demands — even its rather presumptuous attempts to influence the timetable by which government legislation is decided — would reposition Conroy as a toothless tiger beholden to Thodey's lion-hearted resolve.

This outcome would serve nobody but Telstra, perpetuating the status quo and forcing Rudd and Conroy back to the crisis table as they continue to try to deliver their NBN vision without bankrupting the country. Unfortunately, however, as always Telstra retains the power that inertia provides: it is Conroy's job to change the situation, and quick. If anything is actually going to change, it needs to be Conroy with the whip in hand.

Staring down a wild beast always carries risks, and Conroy certainly has his hands full. How well he handles this new challenge will determine whether we're hurtling towards a great new era in telecommunications — or fated to even more years stuck in the grip of Telstra's well-entrenched market position.

Were Conroy's separation terms just empty threats? Could an unshackled Telstra become a key election issue? What should Conroy's next step be?

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• Telstra to fight separation Bill
• Thodey: Disappointed but resigned
• Separation: The UK experience
• It's official: 'NBN Co. Ltd' is the name

Air New Zealand's check-in systems went down yesterday morning, leaving thousands of passengers and airports in chaos for hours and the airline's CEO Rob Fyfe seething with anger over what he termed "being left high and dry" and "amateur results" in an internal email. Fyfe's anger at inconveniencing over 10,000 customers and losing millions in bookings will come to a head in meetings with IBM, which may end up losing Air New Zealand as a result.

Incredibly enough, what appears to have caused the issue was power failing to reach a mainframe, and the back-up generator not starting up in time. As excuses go, it probably won't fly with Air New Zealand. If a nuclear strike had annihilated the mainframe hosting site, or a huge earthquake caused the city to slide out into the sea, sure. But a power failure? That's what "mission-critical systems" are supposed to handle, right?

What's curious here is how little IBM is saying on what happened. Obviously, the whole thing is hugely embarrassing for a company that prides itself on being able to run big systems reliably but will it help if IBM clams up about it? Wouldn't it be better to be open here, and explain what actually happened? And, of course, to learn from the mistakes so that they're not repeated but that's a given, one hopes.

This isn't the first time IBM has been embroiled in controversy over a big IT system in New Zealand. In 2007 Computerworld reported that Project Sam, a combined billing and CRM system for Vodafone's Australia, New Zealand and Pacific operations had overrun its budget by hundreds of millions of dollars and was delivered late. The project started in late 2003 and again, IBM's response to the media reports about budget overruns, delays and customer dissatisfaction was ... silence. Instead, Vodafone had to front up with the answers and that can't have been enjoyable.

But wait, there's more: this year, the New Zealand Government Shared Network or GSN was deemed a failure, and canned. Reports released under the Official Information Act slam IBM's role in the GSN fiasco saying the IT giant's "performance has been characterised by non-delivery and high staff turnover of resources that did not appear to have the promised skills." IBM didn't have anything to say about the GSN fiasco either.

It looks like IBM has some work cut out to repair a dented reputation in the region, in other words.

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• Emergency IBM meeting for Air NZ
• Horror story: Qld Health datacentre disaster
• Bank of Qld suffers EFTPOS outage
• NetBank outage hit CIO's pay

If there'd been a focused project of a smaller scope, it would have been like the brief pick of many tiny needles instead of the invasive prod of the Gershon colonoscopy

Second to being the reviews government, I'd say the Rudd Government could be classified as the government of BIG. Broad sweeping changes that are all going to change our lives for the better. "Don't you worry, Howard's gone now. Everything's going to be all right. We're going to DO THINGS."

So the government has industriously gone about doing things. We have the BIG National Broadband Network. The BIG stimulus package. The BIG hospital reform agenda. The BIG Gershon review.

In our BIG, hire a Brit to fix us, Gershon review there were many changes suggested including governance, skilling, contractors versus in-house employees — a BIG broad master plan. This made for a complex map of a timetable of things to do.

I had a peek at that timetable recently. Did you know that September 2009 was the due date for the government to optimise the number of ICT panel arrangements? Or that this month was the date to have the datacentre strategy handed in?

We've had some update on those two initiatives within the last month. Finance Minister Lindsey Tanner said with a flourish last week that the government was going to have whole-of-government telecommunications and desktop panels.

Got that? It announced it was going to have them. By the end of 2009/2010 financial year. Panels for some services even as late as the 2010/2011 financial year. Until then there was a stopgap panel for desktop services. I wouldn't exactly call that the completion of "optimis[ing] the number of ICT panel arrangements established". (Although according to Intermedium, the number of contracts for the government has reduced, which would suggest some progress is being made.)

Then the datacentre strategy. According to the Gershon report, September 2009 was the deadline to "develop a whole-of-government datacentre strategy". The end of September saw Tanner announce an interim panel to breach the gap until the datacentre strategy could be implemented.

So far there has been a great industry consultation love-fest, but the strategy itself hasn't been developed. A report detailing options for the strategy will be finished by the end of the year according to AGIMO, after which it will be put to a secretary's ICT governance board which will put recommendations forward to the government. We're probably looking at another six months until we see a strategy.

The great thing about BIG for governments in power is that everyone gets so lost in the multitude of goals and deadlines that the amount of slippage and cost climb while benefits slip under the radar until some auditor general's report surfaces like the one last week on the NSW Government project that was $23 million over budget and nine years late. Hopefully by that time it's not that government's problem anymore.

The Queensland Government's into BIG too. It's been doing identity management programs, datacentre consolidation programs, transformation programs, consolidating all agencies onto one version of payroll and financials. It works about as well for the state as it does in the federal arena. After spending millions, Queensland recently admitted defeat on the payroll and financials consolidation, saying that there would be four or five versions of payroll and two to three versions of financials.

Quite apart from the well-known rule that states the bigger a project is, the greater the possibility it will go really pear-shaped, the BIG bang way also often alienates people. For instance, as the Gershon report came out in the middle of the financial crisis, the Australian Information Industry Association got itself into a huff about saving $400 million when the IT industry needed the money. I think if there'd been a focused project of a smaller scope, it would have been like the brief pick of many tiny needles instead of the invasive prod of the Gershon colonoscopy.

BIG also makes everyone in the industry dither while they wait for what's going to happen. It happened with infrastructure decisions while everyone waited on the National Broadband Network and it happened with government spending in the lead up to the Gershon review.

BIG does mean sexy PR. BIG does mean fanfare at the announcement. BIG does mean everyone staring at the headlights of change like stunned rabbits. But while you're looking at the headlights of BIG, you never know what's going to happen.

And after all, what's wrong with having a smaller scope but making stronger more closely watched priorities? We'll fix these now, then see how we go, so we can fix the next thing? Things that will maybe not make a sweeping difference, but that might actually get done on time, on budget and deliver what they promise?

Small steps. Kaizen. Think about it.

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• Governments: Just like lemmings
• Separation: The UK experience
• Land of the long white cloud computing
• Non-professional Oracle wrestling