The Cyber City
How
to Launch a
Cyber City
*
The
Blacksburg
Cyber City Model
*
Internet Diffusion & Telecommunications Infrastructure
Taipei, Taiwan (ROC)
STATS & FACTS
- 57% of government uses computers
- 78% households own computers
- 84% use e-mail
- Infrastructure in trunks, hi-speed networks, WANS, etc.
- Agencies, schools, businesses being integrated on broadband ADSL.
- Metropolitan Area Network scheduled for year-end 2000 completion.
Hong Kong, PRC
STATS & FACTS
- 78% mobile phone penetration
- 50% household & business computer penetration
- 36% Internet penetration
- External connectivity is 44.1 gbps.
- 2.6 million Internet accounts.
- 95% broadband household rate.
- 7 million smart cards in use.
Blacksburg, Virginia USA
STATS & FACTS
- 60% of residents have 10MB Ethernet access
- 87% of residents on line
Singapore
STATS & FACTS
- 98% connected by broadband access, 622Mbps
- 50% of homes have PCs
- Nationwide access by ADSL using ATM switching technology
- Service delivered through existing phone lines or HFC cable network
- Over 125 applications offered through Singapore ONE broadband service
Modalen, Norway
STATS & FACTS
- Approximately 98% are connected by wireless broadband network, using plate-sized antenna, 2% use phone line for access
- 100% have Homepilot boxes to access the broadband network
- Modems run at 2 Mbps
- Network is a VLAN with fiber optic or ISDN connection
- The school computer to student ratio is 1:1
World Mobile Penetration - 2000
Country Mobile penetration Iceland 76% Finland 74% Hong Kong 71% Singapore 69% Sweden 66% Austria 66% Norway 65% Taiwan 65% Italy 64% South Korea 62% Denmark 61% The Netherlands 57% Switzerland 54% United Kingdom 54% Spain 53% Japan 50% Australia 47% Germany 44% France 43% New Zealand 41% U.S.A. 38% Source: PricewaterhouseCoopers, October 2000
While the cybercities we examined vary considerably, all agree that the physical infrastructure that most promotes high tech usage is broadband. After arranging upon installation, either through fiber optic or wireless, each city achieved broadband coverage for its citizens and businesses. The town of Blacksburg, Virginia chose to install Ethernet technology to take advantage of the latest high- speed technology. The Blacksburg Electronic Village (BEV) claims that its county schools were the first in the nation to have broadband access in every classroom.1
Across the Pacific in China, Hong Kong has developed its information infrastructure with the help of mobile wireless technology. Its IT services director Cheng Yan-Chee boasts that their "broadband networks cover all commercial buildings and over 95% of households in Hong Kong."2 While America is still laying fiber optic cable, many parts of Asia and Europe are viewing mobile infrastructure development as a ticket to faster, cheaper high tech parity with the US. Computerworld's Gillmore notes that mobile technology is so commonplace that "it's routine to bank, trade stocks and learn about sales in nearby shops" by cell phone.3
Across the Formosa Strait in Taipei, ADSL broadband links citizens, government, and industry. Their goal is to connect every agency, school, community hospital, and home into a single metropolitan area network. Taipei has gone even further by establishing an Internet emergency response team to maintain and secure its networks.4
Behind these infrastructure successes is a well-conceived plan to manage the physical conduits, routing, and collection points and other network architecture between government and private firms. Blacksburg's BEV suggests an excellent model for this relationship on their website. Locations with different telecommunications partnerships may wish to adapt it to their circumstances.5
The key to the IT2000 plan in Singapore was the building of a world-class national information infrastructure (NII), to support the applications the government wanted for the citizens.6 This required the establishment of high-speed nationwide broadband network. In order to accomplish this goal, the government formed Singapore ONE in 1996, as the group in charge of connecting Singapore by broadband. There are two parts to this initiative. The first part is to establish the national broadband infrastructure. The second part is to deploy the interactive multimedia applications and services to all Singaporeans. These functions also include a research and development function for new technologies to enhance the online experience of the citizens.
The core of the Singapore ONE broadband network infrastructure is based on Asynchronous Transfer Mode (ATM) switching technology, which runs at speeds up to 622 Mbps, and is operated by the industry consortium, 1-Net. The 1-Net customers include local access networks that operate Asymmetrical Digital Subscriber Lines (ADSL) and cable modem access to connect users, as well as content, service and Internet access service providers.7 Singaporeans broadband access to the internet through is at least 100 times faster than the 56.6 kbps of dial-up modems. The islanders access the internet using a 5.5 Mbps ADSL connection on the world's only nationwide broadband network.8 The local access networks are operated by Singapore Telecom and Singapore Cable Vision, among others. The ADSL technology delivers ATM services through existing telephone wires (copper twisted-paired), and cable providers use the existing Hybrid Fiber Coaxial (HFC) cable network in combination with cable modems to carry broadband multimedia services to end-users.9 As of 1999, approximately 50 percent of homes had a personal computer, and 98 percent of homes had broadband access.10
The town of Modalen is situated in a fjord on the western part of Norway, and is best accessed by sea. Modalen has 360 residents, which are scattered over 385 sq km. This in combination with the rugged, mountainous terrain makes wiring with traditional copper or fiber-optic cable would be too pricey. The small number of residents also makes for a less than attractive market for a telecommunications industry. If Modalen was going to wire its community, it would need help.
Nera Telecommunications agreed to build the wireless trunk and access broadband network in the town, and PCTVnet agreed to supply the Homepilot. Nera established the wireless connection in 7 weeks. Nera supplied each house with the plate-sized antennas that allow families to link to the Internet by a radio linkup. Modalen's 2 megabits per second is roughly 35 times as fast as conventional modems.11 The network is based on VLAN-technology with fiber optic or ISDN connection. Broadband connections are up to 50 times faster than conventional dial-up access. A few citizens have resisted the wireless option, though, and have opted for telephone lines for the internet, instead.12 Some of the elderly citizens are resisting the wireless move, and are sticking to the phone link to dial-up with their television sets.13
The plan was for all local media, public services, local businesses and schools to be linked digitally. Currently, all city employees have e-mail addresses and access to the Internet from their workplaces. The project has already provided broadband connection to every household in Modalen, and now aims to provide workers with access to their work-applications from home.14
Homepilot is the little box that is the key to this project. The Homepilot is a set-top box that is connected to the Internet and is controlled by a wireless keyboard. It allows the Modalen citizens to use their televisions to access the internet, email, videophone, and video, and automatically regulate their electricity use, from the Net.15
Each of the cities we studied has advanced telecommunications infrastructure and significant Internet penetration. All have some form of broadband access.
Singapore is a 600 sq km island with no other natural resource but 3 million people. It has been a global trading hub for over 200 years, and intends to remain a major global hub in the future. The country plans to do so through technology. The government's dedication to technology did not start with the cybercity initiative. This national computerization actually started 20 years ago. The government has made serious investments in developing IT on the island through government programs, encouraging businesses, and education of its citizens. The cybercity initiative is one phase in the perpetual process of keeping Singapore trying to stay at the foreground of international business. The cybercity initiative itself is dedicated to "transforming the country into an Intelligent Island where information technology (IT) is exploited to the fullest to enhance the quality of life of the population at home, work and play."16
The first phase began in 1981, with the Civil Service Computerization Programme, a plan to computerize the civil service. During this phase, the government invested heavily in computerizing the public sector, and improving the efficiency of the Civil Service. At this time, the national policy of developing an IT-focused education system started.17
The second phase began in 1986, with the National IT Plan. The goal of this phase was to develop the national IT industry, which it did successfully. Singapore primarily targeted the disk drive and semiconductor industries in this phase. Over the past decade, the Singaporean IT industry has had a compound average growth of roughly 30% per year.18 In 1997, the Singapore IT industry was worth $7.3 billion. The World Competitiveness Report consistently ranks Singapore among the top countries in the world for strategic exploitation of IT by companies, IT literacy, computer density and telecom infrastructure.19
The third phase in 1992, and the one of particular relevance in this paper, was IT2000, the goal of which was to transform Singapore into the "Intelligent Island." The population is concentrated in a compact city-state with an excellent infrastructure and an affluent technology literate society.20 The IT2000 plan included:
- Formal education initiatives in schools
- Mass training programs for the workforce
- IT cultural promotion programs - to put IT facilities in public libraries and community centers 21
The government wanted to reach all sectors of the population to "ensure that no one is left out in the information age."22 This meant that not only would Singapore have to make sure that all public and private businesses and homes have the wires in place to access the internet, but also that those without PCs at home would be able to connect. To do this, the government plan was to provide a place to connect to Singapore ONE at community clubs, schools, libraries and other public areas. The government connected the schools first. Then, in 1997, it opened the first of several public access community clubs where people could get online, called the Singapore ONE Club. The club provides a good example of the partnership involved in this IT2000. IBM and IPC provided Singapore ONE with preconfigured computers. ADC provided security access system using smart cards. Imagine Interactive Inc. Pte Ltd. developed the multimedia sequence for the Launch. Unicorn Technologies provided the security camera for the center.23 In September of that year, a Singapore ONE Club was launched at a student services center. In March 1998, Singapore ONE access was rolled-out at the public libraries.24 One milestone for the IT2000 program was that by this year (2001), Singapore will have realized the concept of an e-Citizen and e-Government, with most public services offered over the internet in a one-stop, non-stop ease.25
In order to accomplish the technical side of these goals, the government established Singapore ONE, which is in charge of "wiring" all Singapore citizens, government and businesses. Singapore ONE is a joint effort of the National Computer Board, National Science and Technology Board, Telecommunication Authority of Singapore, Economic Development Board and Singapore Broadcasting Authority.26 Not only did the government invest financially in the project, they also coordinated technical support programs for their business partners developing services and applications for this plan. This "Fast Track Programme" (FTP) helped business partners with rapid development and service and application deployment.27 The IT education programs are also a way that the government develops the market for the business partners. The investments that the Singapore government is making currently in developing an IT-literate society and in high-tech infrastructure will continue into the future.
The government's plan addressed this project as a national effort, requiring the involvement of public and private sectors, as well as the citizens. The government sees itself as a facilitator, whose role it was to establish the vision and then provide the framework in which industry and the private sector could implement the initiatives. The Singaporean government officially recognizes this "extensive consultation" between public and private groups as the key factor to the success of their cybercity initiative.28
The most recent phase is the ICT21 Masterplan, the goal of which is to encourage the development of Information and Communication Technologies in Singapore over the next ten years. Singapore believes that ICT is the future of the e-world, and wants to be the capital of that world, with a strong Internet economy.29
Modalen had several objectives in this project. One, it wished to keep the population it had, and perhaps to grow it. This meant that the city needed to make itself more attractive. It would accomplish this by establishing an environment that businesses could grow in, and by providing a means for its citizens to further their education locally. Two, the city wanted to connect all of its public and private functions. This would not only increase the efficiency of public services, but would reduce the amount of paper used.
Modalen wanted to use this connectivity to grow its economy, but not just for money's sake. Currently, the village survives on water. The main source of income is supplied from the hydroelectric power facility, power by the waterfalls and heavy rain.30 This is a good business, but not enough to keep the interest of the young people, or to sustain generations if they stayed. Modalen needed to attract more businesses, and grow the local ones.
One of the most important things that a city can do today to attract business is to provide a strong technology environment in which businesses can operate. The city of Modalen is not a stranger to technology innovations. Prior to the current project, Modalen embraced new information technology as a city policy. In 1991, each pupil in the Modalen school had his/her own computer, when the nation-wide in-school usage average was 2-3 students per computer. "By 1993, the "Modalen Project" ensured that all teachers and pupils got their own computer, and later, the whole community."31 In 1999, the city of Modalen purchased new computers and established a network connecting all municipal buildings. In these policies, Modalen had already established an IT-literate environment for businesses. But it still lacked the infrastructure necessary for business operations.
That is why the citizens, city leaders, and local businesses decided to collaborate with several leading communications technology and e-business companies in "Project Modalen". The city wanted to make sure that everyone in the county would be a part of the service, by ensuring that every citizen received the appropriate equipment to be connected. Modalen even offered several services, such as netbanking, for free.32 The first phase of the project, Multimedia@Modalen, succeeded in connecting the entire community. It gave companies, inhabitants, government and schools two megabits of broadband access via radio signals, and opening the door to community wireless connection.
Leif Egil NAmdal, Modalen's mayor, sees the project as a way of keeping people from moving to commercial centers like Bergen, a 90-minute drive away. Modalen can scarcely afford to lose any citizens. "This is good for the future," NAmdal says, "an investment in young people."33 The city also lacks upper secondary learning institutions, which means that students have to travel outside the city for higher education. With no secondary school in town, the older students currently face a daily two-hour bus commute. The city wanted to use this project to open up distance learning opportunities for the inhabitants to take upper secondary and higher education locally. Modalen has already seen the positive effects previous education IT-projects had in the local IT-industry, and hopes that this project will have a similar effect on local industry.34 Under the new system, kids will be able to retrieve assignments and hand in homework via the school's Web pages.
As another means of holding the attention of the youth, Modalen has enlisted a technical team of early adopters to help Modalen's residents get their connections working. This "technical team" is a squad of teenage schoolboys who go door-to-door to answer questions."35
The goal of this project was to completely digitize the community through a wireless broadband network. Every house would be connected to each other, public services, and the world. The scope of this initiative is clearly demonstrated in this statement on the Modalen Web site: "Online elections will be a possibility as soon as the election law allows it."36 Hogne Haktorson is the chief executive of Modalen's local council, and one of the driving forces behind the technology initiative in the town. Though Haktorson and other local officials want the citizens to be able to use the wireless technology to vote on community issues, they first must change the laws regarding this matter.37
Harald Kjensli, Modalen's official computer manager, is counting on technology to succeed in evolving the town. Kjensli expects residents will apply for building permits online and eventually hold virtual town meetings. Utilities will read meters over the Net, simplifying billing. Businesses will be able to submit electronic invoices and receive payments directly at a local branch of Spare Bank 1. And there will be ready access to Internet telephony, which offers long-distance phone calls at almost no cost (except for the $1,100 handsets). "This is the future, and it's all free," says Jarle Neset, a local computer salesman who owns one of the five such phones in the town.38
Other, unexpected innovations are sure to follow. Opinion pollster Norsk Gallup is participating in the experiment to gauge the effect of high-speed Internet access. As Jostein Eck, project manager for the group of companies contributing to this effort, puts it: "We want to see how broadband changes people's lives."39
Because Asia's Tigers view the Internet and e-commerce as a way to rival Silicon Valley, their governments are pouring billions to create IT industries. The government of Hong Kong plans to erect a $1.7 billion Cyberport in its harbor to attract high tech firms in addition to the millions it has spent on its broadband infrastructure. Some of the IT investment funds come from its real estate tycoons. Private partners such as banks and venture capital funds are also contributing to its e-transformation.
In Taipei, funding is more muted and low key. Few examples of private funding could be found, so we conclude that the lion's share is government provided-a common trait among Asian economies. Whether this is through taxes or bond issues could not be determined as of this writing.
However, Asian economies are not the only ones to advocate public financing of cyber-efforts. In Blacksburg, the BEV promotes "community investment" to create its 'networked community' for the purpose of promoting entrepreneurial activity. Its director, Andrew Cohill implies that this is best achieved through local taxation.40 In all cases however, some mixture of public and private financing seems to be required.
The Singapore government has invested S$300 million in national infrastructure, as well as fiscal and financial programs.41 In order to attract foreign investment, the government provides grants, land, and favorable tax treatment. Though the use of Singapore ONE at community centers was initially free, the plan was to charge a fee for the service eventually; the consortium simply needs to determine how much to charge.
Singapore left the ownership and deployment of the systems and services to private industry. Though it established Singapore ONE as the body in charge of connecting Singapore, this body could not do this alone. In order to accomplish this major project, Singapore established 1-Net in September 1996. 1-Net is an industry consortium to build, own and operate the broadband backbone needed in Singapore. In January 1997, 14 multinational companies signed up to be service and application providers for Singapore ONE. In April of that year, 17 more companies, multinational and local, signed up to develop broadband enabling technologies for the government body.42
The government's plan addressed this project as a national effort, requiring the involvement of public and private sectors, as well as the citizens. The government sees itself as a facilitator, whose role it was to establish the vision and then provide the framework in which industry and the private sector could implement the initiatives. The Singaporean government officially recognizes this "extensive consultation" between public and private groups as the key factor to the success of their cybercity initiative.43
Each customer pays $18 a month for the service. The main industry in Modalen is hydroelectric power. From the $2 million per year that it earns from this industry, the city covered the installation costs of nearly $345,000.44 The rest of the funding for this project comes from the consortium and public finance.45
The consortium consists of local businesses and several large companies that agreed to assist Modalen in this initiative. The wireless broadband communication company, Nera Telecommunications of Norway agreed to build a complete wireless trunk and access broadband network in Modalen, while the Norwegian PC-TV company PCTVnet provided Modalen with Homepilots.46 U.S. networking hardware manufacturer Cisco Systems is also sponsoring the village. The question is: why would a company agree to work on a project in such a small, remote, Norwegian village?
One benefit for the companies involved in the Modalen Project is the opportunity to set a new standard in interactive communication. This project would establish Modalen as the world's only entirely broadband community. The corporate sponsors see the Modalen Project as an opportunity to showcase their latest technologies and see how well they work in a real-world setting. In a way, the remoteness of the village this is a blessing to the Modalen citizens. It is precisely the remoteness of the village that attracted some of its partners. The benefit that the sponsor companies see in Modalen is that if this project succeeds in this small, fairly isolated village, it can succeed anywhere.47 "I was looking for a town in the middle of nowhere to serve as a pilot for broadband testing," says Jostein Eck, marketing manager for the Norwegian telecommunications firm Nera. "We see [Modalen] as a model for communities outside urban areas."48
The next question is: what incentive does a local business have to participate in such a project? There is a clear potential payoff for the town's few businesses. The general manager of financial software firm Uni Micro, Otto Moe, believes that broadband access will cut Uni Micro's costs. The company has 7,000 clients, most of them in Oslo, which is an hour away by plane. "Customers can now connect to our servers in Modalen for support or access to our databases," Moe says. Before broadband, the company had to maintain offices in Oslo and Bergen to handle customer relations. Now the company is expanding its office in Modalen, adding a new building and more staff.49
