Smart Infrastructure & Water David Brown

Mob (Aust): +61 459584298, Email: dmcbeclipse@gmail.com

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Introduction The widespread shift to intelligent automation driven by the Internet of Things over the next 20-years will be followed by the next wave – artificial intelligence. This is an unstoppable trend and one that Australia has to get to grips with to avoid widening social inequality and to use this opportunity to build a regional competitive advantage. This article highlights three planning principles to achieve smarter infrastructure outcomes: a system-wide approach to unlocking the cross-sector potential of utilities with a focus on outcomes rather than cost minimisation; the introduction of a more flexible and adaptive 3rd-party access regime to allow access to infrastructure for non-prescribed purposes; the importance of telecoms whether wireless, or fixed as an enabler to optimise investment, which underscores the importance of a system-wide approach to identify new revenue streams that can be securitised and financed. Shared Infrastructure There is substantial unrecognised value in the form of new income and cost savings that could be un-locked across the utility sectors and industry from a broader use of existing infrastructure for non-prescribed purposes. Technological change has made it possible to exploit infrastructure in new ways not previously possible, or understood. The rising cost of deployment to meet marginal demand means that shared infrastructure is a more efficient use of resources. The certainty that 3rd–party access regimes have created need be to be extended to include access for non-prescribed purposes different to the purpose of the host infrastructure. This needs to accommodate rules governing maintenance, access and provider of last resort. For example, between $0.6bn and $2.2bn in annual revenues for dark fibre access could be released from the telecoms sector if the Water Industry were to make available an alternative passive fibre infrastructure to the facilities owned by Telstra. An additional $3.6bn of annual revenue could be released if it were to develop wholesale active services rather than simply leasing dark fibre. Widespread availability of fibre optics using a competing ducted infrastructure would help un-lock potential value from other sectors (electricity, water, transport, health)1. Other such opportunities include: Competing land transport being deployed on spare land alongside roads; fibre optics along rail corridors opening-up competition for long-distance telecom services; land assets owned by rail infrastructure operators to host battery storage and renewables enabling recharging facilities at rail station car parks. Telecoms the Enabler NBNCo has been designed for best-efforts and the mobile industry to date has steered away from guaranteeing latency given the challenge of doing so over a shared medium.

1 Estimates based on the extent to which the Water Industry make available sewage ducts for the installation of fibre

optics, the extent to which Telstra ducts are congested and make their use un-economic and the appetite by the Water Industry to invest in wholesale active services. Source: Fibre opportunity for the Water Industry Draft Discussion Paper, David Brown.

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At present, Australia does not have a low cost scalable approach to serving mission critical utilities that rely on ultra-fast low-latency connectivity. The ITU2 identifies ultra-fast low-latency services as one use case for 5G with a latency target of 1ms. The challenge is whether or not this can be achieved economically once in the field given the shared nature of spectrum. The main alternative is one of several fixed connectivity solutions, which can be designed to guarantee end-user performance more easily, albeit the cost of implementing the passive infrastructure. Alternative un-licensed wireless technologies exist, but these have their own challenges. In the case of mobile, to achieve the kind of reliability a substantial shift in regulation might be required if a market solution cannot be found: mandating minimum levels of latency under 5G; a shift to a wholesale network model to encourage greater discipline over costs; a re-allocation and designation of spectrum in addition to the 5MHz already earmarked for the Internet of Things. Such measures will take time to agree if indeed they can be. Alternatively, finding ways to lower the cost of installing fibre optic to build a common passive fibre infrastructure serving a wider range of utilities might be easier and desirable. Alternatives, to the Telstra and Optus ducts need to be considered. In this instance, new 3rd-party access regimes opening-up a wider use of exiting infrastructure for non-prescribed purposes would help lower the cost of fibre deployment. A common ICT platform to unlock cross-sector potential, whether wireless or fibre may have an important role to play, but this should not be taken to necessarily mean a single owner of a single network, but instead a common set of design parameters to achieve a minimum outcome. Conclusion A system-wide design approach to identify cross-sector value opportunities is needed. This likely means developing use cases to demonstrate the value of using infrastructure for non-prescribed purposes, or demonstrating the role of telecoms to unlock value in new industries that require services beyond best-efforts broadband. There needs to be a re-focus on outcomes rather than cost minimisation and a shift to a more adaptive and flexible regulatory environment to encourage innovation of existing assets. Regulation needs to enable the securitisation of new revenue models that can be applied against infrastructure. For example, financial models that securitise the savings from building energy efficient homes, or the savings from installing reliable broadband services into elderly residences that reduce the reliance on local council home visits can be applied against the cost of installing passive fibre infrastructure. Likewise, any new infrastructure serving brownfield areas such as light rail ought to be designed with pre-installed utilities (water, electricity, gas, telecoms).

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2 IMT-2020 and Beyond

Smart Infrastructure & Water David Brown

Mob (Aust): +61 459584298, Email: dmcbeclipse@gmail.com

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Author: David Brown, Mob (Aust): +61 459584298 Email: dmcbeclipse@gmail.com http: //www.linkedin.com/in/davidmcbrown David has over 20 years of experience in the telecoms sector spanning strategy, business case development, implementation, procurement and stakeholder management. He operates at C-level to present carefully crafted strategic narrative. His experience spans mobile and fixed operators, investors and consultancy firms in the UK, EMENA, North America and SE-Asia. He is now collaborating with Australian enterprise and government in developing their smart city strategy encompassing the Internet Of Things, smart utilities, as well as presenting new initiatives to monetise utility assets.