Networked nation

1 April 2000

Small business in rural and remote areas of Australia are embracing electronic commerce as a part of a broader fight for survival in the 'new economy.' The development of a number of online community projects in Australia's rural and regional areas is enabling local businesses and community groups to flourish. Among the problems facing these communities are technology and access issues.

Getting online is an important step for these geographically disadvantaged businesses as the Internet is a prime example of technology breaking down distance and time barriers. Australian Bureau of Statistics data shows 25 percent of Australian households were connected to the Internet in November 1999 - a 31 percent increase since November 1998. Federal Communications and Information technology Minister Senator Richard Alston said these growth rates underline the importance and necessity of government-assisted access schemes. "An estimated 6 million adults, or 44 percent of the nation's adult population, accessed the Internet in the 12 months to November 1999," Alston said. This rapid growth has been credited, in part, by Alston to an increasing awareness of the educational, entertainment and employment opportunities available online. The federal government recognised the Internet as an important tool for regional businesses and established the Networking the Nation program (under the Regional Telecommunications Infrastructure Fund (RTIF)) in June 1997 to improve telecommunication services, access and costs in rural Australia.

The government originally set aside $250 million for the program and in June last year a further $214 million was added, funded from the proceeds of the sale of 16.6 percent of Telstra. "It provides funds for telecommunications projects identified by local communities to meet their own local needs - including local-call Internet access, community access centres for online services, increased mobile phone coverage and access to online services in remote communities," Alston said.

By the end of March this year, Networking the Nation had approved 306 projects worth $132.2 million. Telecommunications analyst Paul Budde said it was important these regional initiatives were funded and backed by a co-ordinated link into national and international infrastructure. He was somewhat critical of the government's current strategies and believed Australia only had room for about 90 regional projects.

"The government operates in a hap- hazard way, providing small, welfare-based subsidies to those who know how to use the political system through lobbying and political manipulation," Budde said. "An example of this was the way the RTIF was handled. Rather then using the fund to stimulate the development of regional infrastructure, small subsidies were provided without any larger plan being in place." "Before money is allocated for regional projects the government should develop a regional strategy which should be supported by regulatory changes." "Having said this, the RTIF is a very strong and very positive move for those projects that will succeed, estimated at less than 25 percent of all initiatives under this program." Budde pointed out that in rural areas personal computer (PC) and modern penetration was higher than the Australian average, making the market an interesting target for many of the new services that carriers and service providers are planning to introduce over the next few years.

He accepted that businesses may have difficulties in rural Australia because of the additional problems of distance, but that was exactly why businesses should make an effort to utilise a tool that disposes of geographical disadvantages. "The Outback, in particular, is well below international standards (in telecommunications infrastructure), but if more people get e-commerce sites that are important to their business and jump up and down, things will happen," he said.
For example, poor telecommunications infrastructure in regional Victoria led a group of four councils to apply for funding under the Networking the Nation program.

The receipt of $50,000 facilitated an innovative project that may result in the replacement of Telstra as the region's monopoly supplier of telecommunications services. The Connect2000 FoodBowl project is calling for tenders for a licensed carrier/service provider to provide a solution to identified regional telecommunications needs. Phillip Milbourne, business liaison manager at Shepparton City Council, said the joint initiative of Shepparton Campaspe, Moira and Strathbogie councils began two years ago and was born out of a perceived dissatisfaction with communications availability in the 'foodbowl' region.

The area is one of Australia's largest food producing and processing areas. Following a major community exercise, which involved interviewing more than 100 different groups, a number of problems were identified.

"Surprisingly, one of the biggest areas of concern was the lack of independent advice on what communications services were available," Milbourne said.

An example of a site established to address this problem is FoodBowl's NetWorking Dog. This site was developed by Monash University and is based around a cartoon dog that symbolizes a country person. "It means you can give a command to the Internet via your computer and make it work for you and make your life easier - just like a working farm dog," he said, "It is demystifying technology." The site provides such things as a fact file with "down-to-earth answers to questions country people ask about the Internet, e- mail, the World Wide Web and other online services." "Businesses need to make sure they're not left behind in this era of e-commerce," Milbourne said. Other issues raised included lack of mobile phone coverage, dependability of the system, and the high costs of mobile and STD phone calls.

Milbourne said in some areas, for example Strathbogie at the foothills of the Great Dividing Range where a number of major international horse studs were based, they often could not receive faxes because of poor infrastructure.

"We prioritised the issues and released expressions of interest calls to telecommunications companies; many replied and, interestingly, Telstra wasn't one of them," he said. "But it was in the last couple of months Telstra has started to realize we're serious and have enough interest to take their business away." The project is expected to go to tender later this month and, soon after, the region will have some major improvements in infrastructure. Infrastructure improvements have not been an immediate focus for the GrowZone project in Queensland's southern inland region, but are an additional benefit.

GrowZone is a community-based project delivering Internet access to everyone in the region for a set fee plus the cost of a local untimed call. It also is supported by funding through NetWorking the Nation, with a recent grant of up to $695,000 allowing $15,000 to be provided to assist around 40 communities in the establishment of public access-facilities and services.

Chief executive Ed Sims said GrowZone was formed four years ago when representatives of 29 local governments decided to adopt a co- ordinated approach to growth in the region.

"Although geographically widespread, we have an economic community of interest and wanted to establish a common regional branding system - the GrowZone trademark," he said. "Our major focuses are industry attraction, investment attraction and telecommunications. To underpin business growth you've got to communicate." By developing Internet services in these areas, inevitably infrastructure improves.

For example, in Taroom the increased lines installed to cope with rising Internet use resulted in better phone connections. GrowZone has 19 Internet towns online and expects about 20 more to be up and running by mid-May. These towns provide public access points in libraries, post offices and community halls for people without computers at home or work. The infrastructure will be available to both private and commercial users, including existing Internet Service Providers (ISP). GrowZone itself operates as an ISP, which creates a flow back in funds to the community. With more than 40 points of presence, GrowZone OnLine will be one of the largest private networks (Intranets) and ISP's in Australia, offering all the services of a professional ISP network to everyone who lives in the region.

A similar project in Victoria is aiming to get businesses online by developing a regional electronic portal to service the Golden West Region

Mainstreet.au is being established as the region's first point of electronic contact, providing an "umbrella" for the individual websites and pages of business, community, government and other participants.

The Chamber of Electronic Commerce and Communications applied for funding under Networking the Nation and received $274,000. Project leader Helen Thompson said there was a lot of interest throughout the entire region in participating in the project, from community to business to government groups.

"A case study was done to see if it was economically sustainable to build an e-commerce portal and Networking the Nation gave the project the kick-start it needed," she said.

The services the portal provides are expected to provide on-going funding, in a similar fashion to GrowZone's payments for ISP use. With Mainstreet.au, businesses will pay a fee depending on their level of participation. Thompson said infrastructure in her region was not too bad, with businesses predominantly concerned about the high costs of IT advice and accessing the Internet. "The great thing about this project is that people drive this themselves, they can build and maintain sites themselves," she said. "Part of the Chamber and Mainstreet's goal is to work with businesses across the region and find ways to deliver products and services electronically, expand traditional markets and develop efficiencies with existing customers." While Mainstreet's focus is on delivering an electronic portal for established businesses, Thompson said other projects in the region do focus on improving infrastructure.

"While Ballarat and Bendigo may have no problems with telecommunications, Minyip, a community of 400, have Internet access but haven't got substantial bandwidth and there's a lot of room for improvement," she said. The University of Ballarat's Centre for Regional and Rural Information is one group looking at this issue. Budde agreed that lack of access to high-speed networks was a problem, but he said the major problem was that businesses do not have the strategies in place to deal with the new technologies. He said it could take a company anywhere between six to 18 months to prepare for an entry into e- commerce.

"Re-engineering your company is required, you need to change the business model you have to fit the Internet. That's the most important and difficult element of e-commerce," he said. "The only reason why things go wrong is that businesses are not prepared. Internal problems, for example accounting on the back of cigarette box stuff, will make it difficult.

"If the business is not currently using computers or databases, for example, it's going to be very difficult - the internal preparation is far more important than anything else."