Available as a new tab in the standard Gmail interface, the service will share links, Gmail status updates, YouTube videos and Picasa photos. Other users can leave comments on each others shared data. Users to share Buzz can be automatically added from contacts, suggested by Google through frequency of correspondence, or selected individually. Buzz updates can be sent to Twitter, but as yet there is no automatic importation of tweets.

The service includes a recommendation engine that will try to suggest Buzz content users may find interesting, and will attempt to refine those recommendations over time by having users click "not interested" on recommended status updates if they don't want to see that sort of update again.

"Buzz also weeds out uninteresting posts from the people you follow — collapsing inactive posts and short status messages like "brb". These early versions of ranking and recommendations are just a start; we're working on improvements that will help you automatically sort through all the social data being produced to find the most relevant conversations that matter to you," the company said in a blog post.

"It has become a core belief of ours that organising the social information on the web is a Google-scale problem," said Todd Jackson, Gmail product manager, demonstrating Google Buzz at the company's headquarters a day before Tuesday's event. An astounding amount of social-media content is produced every day, across Facebook, Twitter, Flickr, YouTube and personal blogs, and Google's faith that it could one day index and organise the entire internet has been shaken by this explosion in web content.

Google Buzz' location-based features will use GPS and various algorithms to identify where users are by place name; once users agree with its choice, they can leave Buzz updates that will appear on a new layer of Google Maps to friends, as well as being part of a general Buzz stream.

"A lot of the world's information is what's happening with my friends," said Bradley Horowitz, vice president of product management at the company. "We can't achieve [Google's] mission unless we solve these parts of that problem."

Google executives said that they intended Buzz to be open, that it will respect users' privacy decisions, will not lock up data and will have an open application programming interface. An Enterprise Buzz, linked to Google Apps, will be made available later: meanwhile, Google Buzz is being rolled out to its first users now and will become available to all Gmail users over the next week.

Via CNET News.com and ZDNet.co.uk

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It surfaced yesterday in Estimates that Communications Minister Stephen Conroy had referred former Queensland Labor MP Mike Kaiser for the government relations role with NBN Co — the company that will build and operate the $43 billion network.

The position was never advertised and Kaiser, who was Queensland Premier Anna Bligh's chief of staff, was the only applicant interviewed for the $450,000-a-year job. Conroy had been the only person to refer him to the company.

In 2001, Kaiser was forced to quit the Queensland Parliament in disgrace after it emerged he had been involved in electoral rorting.

However, Rudd was satisfied the appointment was fair. "Both myself and the government have full confidence in NBN Co and full confidence in the minister," Rudd said.

"It was [NBN Co's] independent decision and as I understand it they undertook three sets of interviews before reaching that decision."

But the opposition's legal affairs spokesperson, George Brandis, said Kaiser, who was a close, personal friend of the minister and had no previous corporate experience, was appointed through a corrupted process.

"I'm accusing him [Senator Conroy] of interfering in the process to secure this job for one of his mates," Senator Brandis said.

"The manner in which this was done is plainly, plainly a corrupted process."

Rudd said his office had been aware of Kaiser's imminent appointment but that he had no personal knowledge prior to its public announcement.

"My office were apprised by NBN Co and/or the minister's office, I can't recall which, between the decision being taken by NBN Co and the public announcement," he said.

"This was an independent decision by NBN Co."

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• Kaiser's appointment corrupt: opposition
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Maha Krishnapillai
(Credit: Slattery IT)

Speaking on a conference call discussing Optus' third quarter financial results, Krishnapillai said the company would not "go telling our customers directly what they can and can't run across our network".

Meanwhile, competing internet service provider Exetel has said it will inform its users when it has received alleged infringement notices pertaining to their accounts.

Krishnapillai did, however, say that Optus was "quite happy" to work with the government on preventing piracy.

"We'd also like to work with other content providers, because ultimately getting that content availability to all customers easily and in the right format is probably the ultimate goal of ourselves as well as the content providers," he said. "So we're keen to work with the government but we're very much of the view that there is quite a long way to go and we want to make that as cooperative as possible."

Krishnapillai's comments follow Federal Court Judge Justice Dennis Cowdroy's decision that internet service providers are not responsible for piracy that occurs over their network. The day after the case, the minister for Communications said he wanted the film and internet industries to develop a code of conduct.

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The logos in question
(Credit: Woolworths and Apple)

Woolworths lodged the new trademark in August 2008: the letter W, formed in the shape of a peeled apple with a leaf on top. Although IP Australia made public in December that it had accepted Woolworths' application for the trademark (for the supermarket to be able to keep it), the application for the logo still needed to withstand any opposition it might encounter.

Unfortunately for Woolworths, Apple didn't like the similarity of the revamped brand to its own carefully guarded stamp and filed opposition to the registration, which also covered product categories such as computers, in March.

Since then, Apple has filed the evidence in support of its opposition to the trademark application. Woolworths now has to respond to that evidence. The supermarket had been due to file a response on 27 January, but on that date, the company's trademark attorney, Spurson and Ferguson Fang, lodged an extension which would give it an additional three months to do so.

Even though Woolworths had asked for an extension of time, it may, in a few months time, ask for a further extension, a spokesperson for IP Australia told ZDNet.com.au. Once evidence is submitted, Apple will then need to supply its evidence in reply.

"Evidence in reply [from Apple] was due approximately six months after Woolworths lodges their reply to Apple's claims. That time may also be extended by Apple," the spokesperson said.

Once all material had been received, IP Australia would ask the parties if they wanted a hearing to be held, or whether they were happy for the administrator to make a decision based on the information it had.

"We'll ask the parties if they want to be heard, and set a hearing date," the spokesperson said. "Each party may present some legal argument or otherwise go through the evidence they have submitted and clarify."

A decision would then be made by IP Australia's trademark office once these processes had been completed.

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Liberal Senator Scott Ryan told a Senate Estimates Committee yesterday that the parliamentary web filter had blocked some "odd things" over the past few months, including News Ltd's commentary website The Punch in February.

"You may know that for those of us who live in Melbourne, it is relatively common that our trains do not seem to work in late January, once it gets over 32 degrees," he added. "At that time the filter was blocking the train timetable website," he said.

Ryan added the rogue filter had also blocked a travel website, an article about Apple's new iPad tablet device, and another "commonly used website across Melbourne".

Ryan said he had started a folder of "printouts" when a website had been blocked, adding the problem "does not fill us with a great deal of faith in a proposed national internet filter".

Department of Parliamentary Services deputy secretary David Kenny told Ryan the filter had been replaced in 2009 and that it blocked a list of sites. If members of parliament had complaints, he said, they should contact parliamentary official the Usher of the Black Rod as a first step.

"Getting individual sites unblocked is a particularly laborious process. If you need to use a website, you often do not have time to do that," Ryan said. "How do you oversee what this thing is picking up?"

Kenny said he was "not suggesting" that The Punch should or shouldn't be on the list. "I have not heard, prior to your comments just now, anybody having concerns," he said, but noted the department would look into the issue.

The Federal Government is planning to introduce legislation regarding its controversial internet filtering scheme in late February or early March. The legislation will introduce mandatory filtering of the internet for Australians at the internet service provider level, with the aim of screening out objectionable content that has been refused classification on our shores.

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The ombudsman's office found out about the problem when it was sent a notification by Google informing it of the infection.

"We thought it was only a limited intrusion. On examination, it turned out to be more involved," TIO spokesperson John Dubois told ZDNet.com.au. To protect users, the office decided to take the site down yesterday morning, bringing it back in the afternoon when the malware had been identified and removed.

The TIO was still investigating what kind of malware had infected the site. The organisation would take further security measures to stop future occurrences, Dubois said. However, he would not say whether the office had hired external security providers to help with the problem.

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The 1000-square-metre facility will have connectivity to all major carriers such as Telstra, TransACT, Optus, AAPT, Nextgen and the ICON network.

"This significant increase to TransACT's datacentre hosting capacity ensures customers get the best of both worlds when they choose to host their critical business systems with TransACT, as well as bundling hosting with our high-speed IP network," said TransACT chief Ivan Slavich in a statement released yesterday.

The telco's first datacentre has been operational since 2001 and the second since 2005.

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• TransACT tech chief quits
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• Sept launch for TransACT's 100Mbps
• TransACT wants NBN bid costs back

Microsoft Surface table (Credit: Suzanne Tindal/ZDNet.com.au)

The platform is a computer screen as large as a small table that acts as a touchscreen that users can interact with. It was first announced in May 2007 and has been available internationally for some time, but has only officially gone on sale in Australia today.

Curtin chief information officer Peter Nikoletatos said in a Microsoft statement that the platform would foster new collaboration opportunities and provide "an engaging educational tool", although he did not reveal exactly how the university would use the technology.

Australia and New Zealand Banking Group general manager of innovation and former chief information officer, Peter Dalton, said the bank would use experience gained from using Surface to work out how it could use touch and surface-based technologies to make managing money simpler and more exciting. The bank had already showed off two Surface units at the Australian Open tennis in Melbourne last month.

Four Australian partners have signed up build applications and solutions on top of Surface. They are local digital marketing agency Amnesia Razorfish, IT services outfit Object Consulting, software firm nsquared and digital product design agency Automatic Studio.

Microsoft Australia managing director Tracey Fellows said the software giant had received "strong interest" from Australian organisations in Surface, including from developers that wanted to create applications "not possible with other technologies".

At the launch, Microsoft said a retail Surface unit would sell for AU$21,000, (compared to US$12,500 in the United States), with the developer unit selling for A$24,000 (which goes for US$15,000 in the US).

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• Has fast throughput speeds
• A large capacity
• A portable and sleek design at an affordable price
• The bus-powered device is backward compatible with USB 2.0
• Comes bundled with backup software
• A generous five-year warranty

• Doesn't have FireWire or eSATA connections
• The included backup software only works with PCs

The Seagate BlackArmor PS 110 is the first USB 3.0 external hard drive we've reviewed and it proved itself to be an excellent storage device. The drive is bus-powered and works with USB 3.0 and USB 2.0 connections. Externally, the Black Armor PS110 USB 3.0 looks the same as the USB 2.0-based BlackArmor PS110 — that is to say it's very sleek and portable. The only difference is its USB 3.0 mini-USB port on its back. On the inside, the new BlackArmor PS110 USB 3.0 has a 7200rpm hard drive (as opposed to a 5400rpm drive in the USB 2.0 version).

Design and features

The Seagate BlackArmor PS 110 USB 3.0 looks great and feels sturdy. The drive is thin and compact enough to be easily tucked in your pocket to carry on the go. Unlike many other sleek-looking devices we've seen, the BlackArmor's cover doesn't attract fingerprints, which while not really important, affords the drive a clean look all the time.

As USB 3.0 is new technology that officially debuted during CES 2010, most existing computers don't have the technology built-in. However, the Seagate BlackArmor PS 110 USB 3.0 comes in a kit that includes a USB 3.0 add-in card for laptop users. This card uses the laptop's PC Express slot to add a USB 3.0 port to the computer. However, the BlackArmor PS 110 USB 3.0 is fully compatible with USB 2.0 and you can use it like any other external hard drive. Since the drive is bus-powered, you need only to plug it into the computer via a USB port to start using it.

The Seagate BlackArmor PS 110 USB 3.0 comes with one mini-USB 3.0 port on the back. This port isn't compatible with USB 2.0 and you will need to use the included mini-USB 3.0 cable that comes with the drive. The drive doesn't offer any other connection options such as FireWire or eSATA; however, since USB 3.0 is faster than any other connection on the market — up to 5Gbps — this lack of connection options makes sense.

Out of the box, the drive is formatted using the NTFS file system and is intended to be used with Windows computers; however, it can be easily reformatted for Macs. Unfortunately, the included PC Express card only has drivers for Windows.

Like the USB 2.0 version, the Seagate BlackArmor PS 110 USB 3.0 comes with Acronis-based backup software that allows for easy backing up and restoring of data. You can choose to back up the computer's main hard drive and restore the whole system to the point when the backup was created, or you can restore a few single files by mounting a backup as a virtual drive. The software also allows for encrypting the backups with AES 256-bit encryption to keep your data safe in case the drive is lost or stolen. Unfortunately, the backup software only works for Windows. If you have a Mac, you'll need to get another third-party backup software or use Time Machine, Apple's proprietary backup solution available in OS X 10.5 or later.

Cost per gigabyte

With the price tag of AU$180, the BlackArmor PS 110 USB 3.0 has a capacity of 500GB and costs about 36 cents per gigabyte. This is slightly more expensive than the 30-32 cents per gigabyte average of many other external drives on the market. Nonetheless, considering its speed, great design and the added laptop PC card, we find that BlackArmor PS 110 USB 3.0 offers very good value for the money.

Performance

When connected to a computer via a USB 3.0 port, the Seagate BlackArmor PS 110 USB 3.0 is by far the fastest external hard drive we've tested with scores more than double those of even the fastest USB 2.0 external hard drives.

In the USB 3.0 write test, the drive scored 72 megabytes per second compared to 24.7 megabytes per second of the Iomega eGo, which is the second fastest. In the USB 3.0 read test, the BlackArmor PS 110 USB 3.0, interestingly, did worse than its write test at 59.4 megabytes per second. Still, this is about twice the read speed of even the fastest USB 2.0 hard drives. With USB 2.0 hard drives, generally the write speed tends to be slower than the read speed. This is reversed in the case of the BlackArmor PS 110 USB 3.0.

When connected to a computer via a USB 2.0 port, the BlackArmor PS 110 was still among the fastest USB 2.0 external hard drives with a write test speed of 25 megabytes per second and the read test speed of 29.6 megabytes per second.

There will be more USB 3.0-based external hard drives coming out in the near future and we can't wait to see how the BlackArmor PS 110 USB 3.0 will stack up to them. For now, it's by far the fastest USB external hard drive we've seen.

Performance tests (in megabytes per second)
(Longer bars indicate better performance)

Read

Write

Seagate BlackArmor PS 110 USB 3.0

59.4 

72.6 

Seagate BlackArmor PS 110 USB 3.0 (via USB 2.0 port)

29.6 

25 

Iomega eGo Portable

29.5 

24.7 

Seagate BlackArmor PS 110

30 

24.6 

Transcend Storjet 25F

27.5 

24.3 

Clickfree Portable Backup drive

26.4 

23.3 

Fujitsu HandyDrive

27.9 

22.5 

Service and support

When it comes to external hard drives, nothing is more important than its warranty, and nobody can beat Seagate in this regard. The company backs the BlackArmor PS 110 USB 3.0 with a generous five-year limited warranty. Seagate will replace any defective drives under warranty, and you can even choose to upgrade to a larger/newer drive for a discounted price. The company's telephone support is available 8am to 6pm, Monday through Sunday, and you can find a comprehensive list of FAQs and an external hard-drive knowledge base at its website.

Via CNET.com

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Patrick Conlon
(Credit: Government of
South Australia)

"Our current ticketing system has been in place for nearly 24 years — it has served us well but it is time to replace it as we continue our massive public transport revitalisation," Conlon said in a release. "We expect to see the new smart card ticketing system in operation by 2013 in time for the commencement of electric rail services in Adelaide."

ACS, a subsidiary of the Xerox corporation, would be responsible for the manufacturing, testing, installation, technical support and maintenance of the ticketing and fare collecting system, which it has called ATLAS.

The company has already supplied Adelaide with its existing Crouzet ticketing system.

"We are taking advantage of proven technology, with this system and equipment already in operation in cities overseas such as Montreal, Houston and Toulouse," the transport minister said. "Adelaide also has the advantage of an existing integrated fare and ticketing system supported by the smart card system."

Adelaide will be following Melbourne, Canberra, Perth, Brisbane and Sydney in adopting an e-ticketing system for its public transport.

However, Sydney's push to introduce a ticketing system has encountered issues, with the cancellation of the signed contract with vendor ITSL and the start of a new tendering process in the works.

Melbourne has just rolled out its ticketing system on trains, but has yet to implement the system on buses or trams. Perth and Brisbane have working systems.

Current Adelaide public transport tickets will remain valid after the introduction of the new system.

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Optus CEO Paul O'Sullivan
(Credit: Optus)

The news came as part of the management discussion included with Optus' financial results for the third quarter of its financial year, ended 31 December 2009.

The speed upgrade — which Optus first flagged on 20 November — will put Optus neck and neck with Telstra's cable network, which is also in the process of being upgraded.

The upgrade, which involves pushing the network to the DoCSIS 3.0 standard, will also put Optus' cable network on par with the planned speeds of the National Broadband Network roll-out. However, the NBN will not be available to retail customers for several years.

Optus' operating revenue grew 4.8 per cent in the quarter to $2.3 billion, while revenue from mobile services grew 11 per cent year on year. The company said mobile growth was led by "robust customer acquisitions and increased penetration of smartphones". Optus is believed to have taken a solid share of the Australian market for Apple iPhones.

The company added 164,000 net post-paid mobile services in the quarter, with total post-paid subscribers growing to 4 million. Total 3G customers increased by 8.7 per cent from last quarter to 3.34 million. This included 799,000 wireless broadband customers.

The company's Business and Wholesale Fixed segments saw declining revenue of 2.9 per cent year on year, impacted by what the telco said was "weaker corporate telecom spending and lower wholesale international voice revenue".

"Optus continues to deliver impressive results in a competitive market with five consecutive quarters of double digit mobile service revenue growth," Optus chief executive Paul O'Sullivan said in a statement. "The record-breaking increase in new mobile post-paid customers reflects confidence in Optus as a leading provider of mobile and wireless broadband solutions."

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Melbourne's Federation Square
(Federation Square, Melbourne image by Rob Young, CC2.0)

"I do expect that we will end up with many more people in Melbourne than we do in Sydney. Simply because that's where the technical base is growing and that's where also our construction base is growing," said Quigley in a Senate Estimates yesterday.

"We have our head of construction, our [chief technology officer] are both located in Melbourne. So we are finding now we are on quite a rapid growth curve in Melbourne," added Quigley.

However, the NBN chief stressed that there was no "headquarters" as such. "We have always had known we would have two locations, one Melbourne, one Sydney," he said.

When asked if he would commute down to Melbourne from his current base in Sydney, Quigley said he expected he would definitely have to see a lot more of the southern city. "I will be wherever I need to be to get the job done, and I expect to spend an increasing amount of time in Melbourne," he said.

Quigley had received proposals from states offering incentives to establish headquarters in their geographies, but said it didn't make any sense to have a publicly owned company receiving incentives from state governments.

At the same hearing, Quigley also said that certain mainland areas will be NBN ready by the second half of this year.

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Prime Minister Kevin Rudd
(Credit: Commonwealth Government)

Last night, Rudd was asked by an audience member on ABC TV's Q&A program what the government's position was on young people's desire to access affordable entertainment versus an artist's right to protect their creative output.

"It's a hard one," Rudd said. "What is intellectual copyright? What is the rights of artists who own their property? And what are the laws which prevent the sort of free dissemination of that?

"I can't say ... where [there] is a dividing line up the middle."

He did, however, say that he would look at the laws.

"If the laws aren't, through the courts, being interpreted in a particular way ... then we'll have a look at the decision and see what we can do," he said.

"Getting this balance right is important."

His comments came following a recent court case between internet service provider iiNet and the film industry. The film industry alleged iiNet had "authorised" illegal downloads on its network. Last week, Federal Court Judge Justice Dennis Cowdroy ruled that was not the case.

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Mike Kaiser took up the role with the NBN Co — which will build and operate the $43 billion network — after quitting as Queensland Premier Anna Bligh's chief of staff last year.

The appointment of Mr Kaiser, who will earn more than the prime minister, has prompted allegations of political interference on the part of Communications Minister Stephen Conroy, who recommended the former state MP for the job.

The opposition's legal affairs spokesman George Brandis said Kaiser was a close, personal friend of the minister and had no previous corporate experience.

"I'm accusing him [Senator Conroy] of interfering in the process to secure this job for one of his mates," he told Sky News.

"The manner in which this was done is plainly, plainly a corrupted process."

Labor frontbencher Craig Emerson dismissed the claim, saying it was not a reasonable or decent thing to say.

"It's an outrageous assertion to accuse the minister of being involved in corruption," he told Sky News.

Brandis countered by saying his accusation related to the appointment process, prompting Emerson to reply that that was "a fine legal point".

Liberal backbencher Jamie Briggs said the appointment was offensive to working Australians, but his Labor counterpart Amanda Rishworth said it was a matter for the NBN Co, which was a private entity.

"The details of the appointees are obviously done under a process and the National Broadbank Network [Co] made that appointment," she said.

Her colleague Yvette D'Ath said people were often referred to jobs for which they might be suitable.

"We shouldn't begrudge someone for having a referee who may be a minister," she said.

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Internet service provider Exetel announced yesterday it would change the way it forwarded alleged copyright infringement notices to customers.

In an email seen by ZDNet.com.au, Exetel said the practice it had used for the past five years was to be changed. Up until now, when the ISP received an alleged copyright infringement notice it forwarded it automatically onto the relevant customer.

According to Exetel CEO John Linton's blog, it allowed customers to either deny or apologise to the rights holders, but did not cut users off. Access was temporarily blocked until the customer acknowledged that they had received the notice and either complied with it or denied the allegation.

But this has been scheduled to change at the end of February.

"We will modify this practice in the near future," Exetel said in an email to customers yesterday. "We will continue to send any infringement notices we receive in the future, but before the end of February we will not require the user to acknowledge receipt of it nor will we temporarily block the customer's internet access.

"Subject to final legal advice, and re-coding time and testing, we will in future simply send the infringement notice to the registered 'owner' of the service."

It would be accompanied by the following email:

Dear [ ],

A copyright infringement notice has been sent to Exetel that states that your Exetel IP (internet connection) has been used to acquire material that breaches copyright.

You do not need to take any action except to be aware that, if you or some member of your household are in fact using your internet connection to infringe another party's copyright, they have been able to detect that action and could, at some time in the future should they wish to do so, involve themselves in the legal and other costs of taking some action against you.

Again, you are not required to take any action regarding this infringement notice and it is sent to you as a courtesy in case usage of the internet connection in your name is being used in ways unknown to you.

Exetel Provisioning

Exetel CEO told ZDNet.com.au last week that there was "no doubt" that copyright was being infringed "in almost every case".

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To prepare for the volume roll-out across the country, NBN Co has been choosing certain "first-release sites" to validate the network design. The sites tested were to represent the different environments which the network would have to operate across.

"We need to understand the different locations and be prepared to use different construction techniques," Quigley said. It involved "getting down and designing exactly where things go".

Locations would range from suburban — with semi-detached houses, detached houses and multi-dwelling units — to rural towns.

NBN Co could, with these location tests, determine issues such as the actual cost difference between deploying fibre underground and overground and having terminations outside or inside homes. "This testing will provide critical information about the practical applications of our designs," Quigley said.

This would follow full testing in integration labs, but there was no substitute for testing in a live environment, Quigley said.

The company would soon issue a request for tender for companies to participate in this "detailed design phase" and a further request for tender for the construction phase.

The first part of the selected roll-out — the passive components of the network — is expected to start early in the second half of the year, Quigley said. The second stage involves implementing the active sections of the network equipment in fibre access nodes and customers' premises. The third stage of the roll-out involves working with retail service providers to give access to the network.

Quigley said the company had already started the procurement process for active network equipment and had formed a shortlist of suppliers.

NBN Co is also preparing to release information on facilities central to the network. "We'll soon be announcing the establishment of facilities to house our network operations, integration labs and datacentres," Quigley said.

The network operations centre will be built to do the surveillance and management of the operational network. The datacentre is to house business and operational support systems needed to provision, monitor and manage services on the network. The integration labs will validate and prove the technical design of the network as well as provide a test environment where vendors can do network and systems integration and test releases and functions before deploying them to the network.

Quigley expected 250 people to be employed in these facilities. The NBN Co has 112 people at this point and would increase to 300 by June.

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The Croydon (Vic) exchange area
(Credit: Telstra)

"Despite the global financial crisis in 2009, our ISP customers found it necessary to keep up with demand," said Ericsson Australia's broadband strategy manager Colin Goodwin in a statement. "Overall, ISPs actually spent around 10 per cent more on access equipment in 2009 than in 2008."

Ericsson counts iiNet, Internode, TransACT, Primus, TSN, Netspace and Adam Internet among its Australian ISP customers.

The construction of the NBN has the potential to undercut the investments in the long term, as it will see optical fibre cables laid down on the streets of the customers' premises; the current ADSL (Asymmetric Digital Subscriber Line) infrastructure is based on copper cables.

But Goodwin said ISPs saw a strong business case for continued investments in ADSL. "In the drive for customer acquisition, there is ample time to earn a return on today's DSL networks," he said.

Some ISPs, the Ericsson executive added, were also investing in edge routing equipment which would support their own DSL networks, as well as connections to wholesale fibre to the premises networks — such as the NBN. iiNet, Optus, M2 Telecommunications and TransACT, for example, have all deployed Ericsson's SmartEdge router.

Communications Minister Senator Conroy has previously advised ISPs to continue to invest in ADSL infrastructure, despite the formation of NBN Co's mission to lay fibre to the home for 90 per cent of Australians.

He pointed out that the roll-out was happening over an eight-year time frame and that prices for the equipment had reduced while depreciation time frames were getting faster.

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Telecom's brand has been extensively damaged by the recent outages with its new XT network. Even its legacy CDMA system failed. In my opinion, this stems from the company following that time-honoured Kiwi tradition of doing things on the cheap, and finding it backfires in the process.

Already, analysts blame the Alcatel-Lucent kit for the troubles faced with XT, although the truth will only come out when Telecom produces its official report.

Cost cutting in the form of offshoring for placing directory inquiries and other services abroad have also damaged the Telecom brand as service standards slump, with foreign telephone operators not always understanding Kiwi English and place names, never mind Maori.

Outsourcing engineering work, another Telecom example of doing things on the cheap, also created problems, and after living in provincial Northland, I can vouch for some unreliable landline services.

New Zealand's ICT minister, Steven Joyce, is reluctant to intervene in the affairs of a private company, and the Crown Fibre Holdings company set up to manage the government's $1.5 billion broadband investment is meant to be independent.

However, a populist and sometimes poll-driven government may not want to reward a major entity looking to dump up to 1500 highly skilled technicians at a time of high and rising unemployment. Even if it did, it might not think dumping all these people will leave Telecom with the capability to carry out broadband tenders.

Labour's ICT spokesperson Clare Curran still regards the former state-owned telco as government property, the staff of which possess essential skills for the nation.

While the days of politicians running telcos may be over, at least in New Zealand, Telecom remains an iconic Kiwi company. Plus Curran's economic nationalism, as shown by an online Fairfax poll, is once more in tune with public opinion than appears the hands off approach of Steven Joyce.

Telecom needs to look at how earlier attempts at cost-cutting may have actually cost it money rather than saved it. It needs to see how further offshoring and outsourcing will be fraught with problems, risking further loss of custom, not just from government. Existing false economies have cost the company and its customers more than enough already.

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Mike Quigley
(Credit: Alcatel-Lucent)

The revelation was made in Senate Estimates today when Liberal Senator Mary Jo Fisher quizzed NBN Co and the communications minister on the appointment of Kaiser, who was revealed to have been given remuneration worth $450,000 a year.

"I suggested [Kaiser] as a possible person with the relevant experience," Conroy said. Kaiser began work 1 December.

CEO of NBN Co Mike Quigley also said that no advertisements had been placed, and no candidates were shortlisted for the position.

"We made an assessment against what we think the job needed to have," Quigley said. He said that over 40 per cent of permanent employees of the company had come by way of referral.

Conroy was the only one to have referred Kaiser to Quigley, which surfaced under cross questioning by Fisher.

Senator Fisher: Did anyone else suggest Mr Kaiser to you?

Mike Quigley: Not that I recall.

Senator Fisher: So the minister was the only person to raise Mr Kaiser to you?

Mike Quigley: As far as I recall.

"The process was not dissimilar to what we've used for many other employees," Quigley said defending the hire.

When the name was raised, Quigley passed it on to human resources who organised two interviews and some reference checking.

"I think then I interviewed Mr Kaiser and the conclusion was he would be a good person for the job."

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The beginning of last year had seen the company lay off 100 workers as the financial crisis sank in its claws.

"Coming into 2009 with the financial crisis looming just like every sensible software firm in the world, we trimmed some headcount," Clark said. "There's a substantial amount of our revenue from the mining sector and the commodities prices were obliterated at that period of time. So we had some restructuring activities."

A smaller number had also been shown the door later in the year. The company had also "booked some efficiencies" over the last few months.

"Mincom has delivered some efficiencies through process improvement in the software development area of Mincom and this results in a small amount of headcount reduction," Clark told ZDNet.com.au.

New management with experience in software development had been put into the company, according to Clark. This had resulted in purchases of systems from vendors such as IBM to help with testing automation among other tasks.

"We definitely have had some efficiencies on how we develop our products. We've brought in some different product development processes. We've brought in a substantial investment in tools. For some of the laborious parts like testing and testing validation," Clark said.

Efficiencies meant working better, which meant angling for big deals were definitely on the cards, according to Clark. "We're very focussed now on our mining products, our asset management products and our field worker enablement mobility products. We have tried to streamline everything at Mincom against those missions for the industries that we serve," he said. Mincom has recently done very well in utilities and resources, the exec said. It had also just won what he dubbed a "substantial" deal with Defence.

Offshore resources were used for low tech functions, he said, explaining that the company had moved from an outsourced model to an in-sourced model. This had meant movement of jobs from the outsourcer in India to in-sourced positions in Kuala Lumpur. However, he stressed that the number of offshore jobs in low cost geographies had not increased under his aegis. There had been around 100 jobs in India and there were less than that in Kuala Lumpur now, he said.

Not having some of the labour force overseas was competitive disadvantage, Clark said. In tenders, Mincom was asked how much of the help desk work was overseas and given that, what savings would be passed on.

"It's a fact of life that you have to have an element of low cost labour. Australia is a first-world cost basis, especially with a 92 cents exchange rate," he said.

However, that did not mean that all jobs would be done overseas. He doused fears that the company's Brisbane research and development centre would be drained of people.

"Mincom is still committed to the same set of products from the Brisbane development centre as it used to be," he said. "We are extremely committed to Brisbane as one of our centres of competency and a substantial amount of the intellectual property built up in the employee base in Brisbane."

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