Friday, 21 November 2014

Traffic Congestion: An efficient solution to peak hour traffic...?

This week, I've been reviewing the literature on transport infrastructure policy. If there is one, big, wicked problem in transport infrastructure, it is traffic congestion. Nobody likes sitting in a car capable of travelling in excess of  100km/h only to crawl along at a snail's pace for a substantial portion of one's waking day.

But respected American economist Andrew Downs (1992: 6, see Holden 2010) suggests that "traffic congestion is the balancing mechanism that allows [people] to pursue certain goals they strongly desire - goals other than rapid movement during peak hours."
Traffic congestion is the balancing mechanism that allows [people] to pursue certain goals they strongly desire - goals other than rapid movement during peak hours (Downs 1992).
The fundamental problem is the "resulting disparity between the high demand for traveling during [peak] periods and the limited supply of roads." Downs (1992: 7) outlines four theoretical solutions to this fundamental problem: 
  1. Ration the use of roads through user charges when demand exceeds supply,
  2. Increase the capacity of roads,
  3. Increase public transport, or
  4. Put up with traffic congestion.
In effect, whether by default or design, congestion is the preferred solution to the current problem.

Realistic solutions to transport problems tend to focus on what Dr Dinesh Mohan of the Indian Institute of Technology suggests is unsustainable: "You just increase transport, you don't reduce congestion."
You just increase transport, you don't reduce congestion (Dr Dinesh Mohan).
The biggest problem with any of the solutions proposed by Downs is that people do not want to have road use rationed, whether through tolls or other user-pays methods, and until public transport is reliably faster than travel by car (such as Hong Kong's MTR, for example), then increasing road capacity is the only logical solution. Unless, of course, governments stop funding ever-increasing road capacity that, despite the best of intentions, ultimately ends in traffic congestion closer to the CBD. Clearly this is not sustainable.

As Downs stated two decades ago, the only way to reduce peak capacity is to reorganise the times we go to work and school. Until then, traffic congestion, which is effectively making people line up to use the road system, is the optimal solution to this wicked problem.


Dearnaley, M. (2014, September 17). Metro rail won’t fix congestion - expert. New Zealand Herald. Retrieved from

Downs, A. (2005). Still Stuck in Traffic: Coping with Peak-hour Traffic Congestion. Washington, DC: Brookings Institution Press.

Holden, M. (2010). The Rhetoric of Sustainability: Perversity, Futility, Jeopardy? Sustainability, 2(2), 645–659.


Friday, 7 November 2014

Canberra Transport Nightmare: Trapped in Palmerston!

Yesterday I thought I was trapped in a Freddy Kruger nightmare from which there was no escape. All roads led me back to Palmerston despite my best efforts to leave.

I had to be in the city and left Palmerston at 9:40am. When I arrived at 10am there was nowhere to park. Nothing. 20 minutes walk away there was a pay parking car park - I have no problem paying for parking - but it was for a 3 hour limit. I did not want to have to walk back to my car in the middle of the day just to feed the parking metre. If it had cost $20 I would have simply paid and got on with my day. But no, not in Canberra.

After driving around for 40 minutes I found that transport in Canberra is just like broadband. In many cases, it simply does not matter how much money you have, you just cannot get what you want. Here was a demand for something I desperately needed: a car park close enough to carry a few things to where I needed to be. In Jordan, I can find valet parking almost anywhere, yet in the capital of one of the richest countries in the world, nothing.

So, in the spirit of a mini-ethnography, I decided to test the alternatives to driving my car. I drove back to Palmerston, parked my car, and then checked the bus timetable. It was 11am and I had missed the No. 56 bus to Civic by about three minutes and the bus to Gungahlin by about ten minutes. The next bus out of Palmerston was in about another hour.

I quickly called a taxi. Because my hearing is not the best I asked for the "agent" and joined the cue. Then I heard the engaged signal - I had been cut off. This was not the customer service I was hoping for so I decided to exercise my freedom of choice. I would walk to Gungahlin and bus it to civic. I had to reconfigure what I was carrying, but my research fieldwork was now in full flow.

On the way to Gungahlin, I passed the Gungahlin High School. A woman leaving the car park was stopped across the footpath. I walked in front of the car to continue my journey while the woman looked at me and sped up to beat me across the footpath. But, knowing that "when leaving a private driveway or an off-street parking area [motorists must] give way to all traffic on the road and pedestrians and cyclists on the footpath" (see ACT Road Rules Handbook, page 73), I continued on my way.
When leaving a private driveway or an off-street parking area give way to all traffic on the road and pedestrians and cyclists on the footpath.
As a matter of course, the woman gave me a string of lip about getting in her way and impeding her journey across the footpath.

I arrived at Gungahlin at 11:40am. I know that Route 200 to Civic runs every 15 minutes. This excellent bus service follows the same route that the Capital Metro light rail project will duplicate at a cost of some $783 million (or more). But I was shocked to find that the next bus to Civic was actually the No. 56 which goes via - you guessed it - Palmerston. 

But as the 56 goes through Mitchell and Palmerston, it is quite a trip compared to the No. 200, so I resolutely waited for the 200.

Several bus numbers (the No. 250 and the No. 52) stopped at the Gungahlin Interchange that were not on the timetable. I had no idea where these buses came and went.

One minute after the No. 56 departed, the 200 arrived and off I set to Civic at 11:50am. By 12:15pm I was there and I went to the No. 5 platform to transfer to the No. 7. It was five minutes late but by 12:38pm I had arrived at my destination. To travel 17.4km took me 1 hour and 38 minutes.

There is no moral to this story but it is clear that unless you live on a major bus route, travelling in Canberra is a nightmare. The bus routes are good in some places, but not in Palmerston, the most densely-populated suburb with some 3,200 people per square km. This is 200 more people per square km than Braddon. Indeed, the bus service in Palmerston does not operate for a period of up to 80 minutes at one point in the day.

Unless the Capital Metro means more bus services will operate in Palmerston, it is difficult to see how increasing property returns for developers alone justifies the public investment. Duplicating the No. 200 bus service will certainly change the Northbourne corridor, most likely for the better, but let's not pretend that its purpose is to improve transport. Private investment in Capital Metro will end this problem but it is still not clear how the funding model will work.

Why does it take so long to travel in Canberra? Sure, the distances are vast, but there is not that much traffic outside of what I call 'peak moment'. But the combination of no parking and no bus services does not make sense. Surely there is a market for one or both of these services? Nevertheless, there are so many barriers to leaving the car at home. Today, I had thoughts of taking my bicycle and using the bike rack on the bus. This is a fine service but instead I car-pooled with a friend as I had scored a car park.

What of the attitude towards pedestrians? I suspect this indicates that there are many more institutional barriers to effective transport infrastructure in the ACT, if not Australia more generally. These barriers have long-term implications. According to the OECD, 'there is a shortfall of infrastructure, harming investment, and a lack of policies to ensure its efficient use'.
There is a shortfall of infrastructure, harming investment, and a lack of policies to ensure its efficient use.
Regrettably, Canberra is a case in point. While it may not be 'extreme commuting', if one is forced to use the bus from Palmerston to the outer areas of Civic, it would seem that the average commute time of 1.5 hours to travel 17.4km by public transport is rather disappointing. Nevertheless, I fail to see how Capital Metro will improve this situation any time soon.

Post script: The trip back to Palmerston
  • 2:44pm - Arrive at bus stop as per timetable
  • 2:51pm - Board No. 7 bus
  • 2:58pm - Arrive at Civic Interchange
  • 3:02pm - Board No. 200 bus
  • 3:27pm - Arrive at Gungahlin Interchange
  • 3:49pm - Board No. 56 for Palmerston
  • 4:04pm - Arrive my stop in Palmerston
Total commute time to travel 17.2km: 1 hour 20 minutes

(I won't add the time it takes to catch a bus to work from Fyshwick when I have to put my car in for a service. It is just too depressing).

Thursday, 2 October 2014

A Centralised Institution for Selecting and Appraising Infrastructure Investment?

One of the key findings from my comparison of communications technology policies in Canada and Australia was that there are so many varieties of particularism - that is, the various user requirements and preferences, technologies, types of infrastructure, geographical and cultural circumstances, and so on that require bespoke solutions - that a centrally-controlled, one size fits all solution will inevitably provide a suboptimal strategy in meeting infrastructure demand.

Yet when planning infrastructure, there may well be a case for a centralised body to independently vet project selection and the relevant cost-benefit analyses before government-led investment in infrastructure occurs.

An IMF staff study, released as "Chapter 3: Is it time for an infrastructure push? The macroeconomic effects of public investment" in the latest instalment of the 2014 World Economic Outlook, suggests that centralised institutions designed to appraise major infrastructure projects may improve the efficiency of public investment in infrastructure:
"project appraisal can be strengthened by instituting a centralized, independent review process to ensure robust estimates of the costs, benefits, and risks of potential projects, as has been done in Australia, Chile, Korea, and Norway" (IMF 2014: 31).
As I wrote in The Conversation earlier this year, the NBN was the last of the great romantic infrastructure projects. Indeed, the federal government's cost-benefit analysis signalled the end of an era in major infrastructure project selection and deployment.

It would appear that different types of infrastructure might benefit from different deployment strategies. However, it makes a good deal of sense for government-led investment in infrastructure to be appraised and selected by an independent body.

One of the major problems with transport infrastructure, for example, is that political incentives, specifically votes, may encourage a myopic planning approach that suits the election cycle. Surely long-term infrastructure planning should be beyond the control of short-term caretakers.

Of course, a centralised institution brings with it a whole raft of other problems for the practice of liberal democracy. But in the meantime, Australia is suffering from infrastructure bottlenecks that might be solved with some clever planning and investment. 

Whether Infrastructure Australia can gain the necessary political clout to fix Australia's infrastructure woes is another story. The biggest problem for any centralised institution in a federation is the constitutional legacies of responsibilities granted to the different levels of government. 

Indeed, it seems that, despite the federal government's apparent best practice in infrastructure policy, the states may just (pardon the pun) de-rail Infrastructure Australia's good work unless Mr Hockey's asset recycling policy begins to develop some traction.

Nonetheless, it is entirely regrettable that Rob Sitch's "Nation Building Authority" (see ABC's Utopia) provides a timely counter-point to such best practice.

Tuesday, 26 August 2014

My latest on "The Conversation"

NBN cost-benefit analysis signals the end of an era

By Michael de Percy, University of Canberra

The long-awaited cost-benefit analysis of the National Broadband Network suggests the days of politicians shooting from the hip with taxpayer dollars are numbered.

As Labor’s NBN unfolds amid reviews and revelations, it’s apparent the NBN was a political move based on romantic notions of policy-making ending in Labor’s electoral defeat in 2013.

In government, the Coalition called for a strategic review of the NBN, revealing a number of problems with the project’s implementation. Malcolm Turnbull also promised to deliver an independent cost-benefit analysis of the economic and social costs and benefits of the NBN.

The cost-benefit analysis (of the NBN as it is now, not the analysis that should have been provided back in 2007) reveals the multi-technology mix (MTM) model will provide the most bang for the taxpayer’s buck. In the absence of evidence to the contrary, the analysis also shows Labor’s NBN would have been nothing short of extravagant.

But the panel of experts who conducted the cost-benefit analysis are not alone in pointing out the shortcomings of Labor’s romantic ideas about deploying infrastructure.

A recent Productivity Commission report on public infrastructure criticised the NBN for its investment in infrastructure without the use of a cost-benefit analysis. Further, NBN Co’s failure to achieve key targets suggests a lack of detailed analysis in the original proposal.

Even the authors of Labor’s implementation study were at pains to make it clear the study did not “undertake a cost benefit analysis of the macroeconomic and social benefits that would result from the implementation of a superfast broadband network”.

But what about the legacy of Kevin07 and the NBN?

Broadband since Kevin07

The promise of faster broadband played a major role in the 2007 election. The Coalition was caught on the back foot with Australia at the wrong end of the high-speed broadband stakes. Rudd’s promise to deliver ubiquitous fast broadband was clearly a political winner at the time.

An implementation study was conducted to find the best way to meet the government’s policy specifications. A “Rolls-Royce” fibre-to-the-home (FTTH) model was selected as a clear technological winner. In the absence of a cost-benefit analysis, Labor over-confidently decided the NBN should be taxpayer funded and wholly government-owned.

But by the time of the 2013 federal election, the NBN was behind schedule and the costs were mounting. And despite several years of intense policy focus, Australia had not caught up with the rest of the world in access to (Figure 1) or speed of (Figure 2) broadband services.

Figure 1: Fixed-line access per 100 people (Source: OECD, December 2013)

Figure 2: Broadband speeds >15 mbps, (Source: Akamai, Q1 2014)

The move to NBN (lite)

What emerged from Communications Minister Malcolm Turnbull’s promise of a strategic review of the NBN became known as NBN (lite). Instead of FTTH, a fibre-to-the-node (FTTN) network would utilise the multi-technology model to provide consumers with fast broadband (at speeds somewhat slower than Labor’s NBN), but sooner.

The NBN cost-benefit analysis looked at three different scenarios for government action. Each scenario was tested against the net benefits of a base scenario of no further rollout of the NBN, which would result in a net cost of A$24 billion, as follows:
  1. Unsubsidised rollout of NBN. This would provide taxpayers with a net benefit of A$24 billion by avoiding the costs associated with no further rollout.
  2. Adopt the MTM model. This would provide a net cost of A$6 billion relative to the first scenario.
  3. Adopt a FTTP model. This would provide a net cost of A$22 billion relative to the first scenario.
A key finding of the cost-benefit analysis is that delivering broadband services sooner rather than later means benefits accrue while the rollout occurs. Assuming the network is upgraded at some later stage, the benefits continue to accrue while the network is developed. Yet the net benefits of the more expensive FTTH model are less likely to be realised and more likely to decline over time.

Countries such as Canada and the United States have MTM broadband networks and the figures indicate the approach is working. But what rarely appears in the debate about broadband in Australia is a simple fact: some broadband is better than no broadband.

The NBN cost-benefit analysis is long overdue. Although the net cost of the MTM model is some A$6 billion, most of this cost is to serve rural and remote regions with satellite and wireless services in place of fibre.

Taxpayers expect that government will support the bush, and A$6 billion in net costs is hardly a bitter pill to swallow. But taxpayers may well change their tune when ultimately they fund a net cost of A$22 billion for a FTTH model, which in most places won’t be operational for years to come.

Labor’s NBN was a big idea. But without a cost-benefit analysis, it was a reckless use of taxpayer funds made by politicians with no idea. Given the recent findings about how NBN was conceived and implemented, it would take a particularly brave (or foolhardy) politician to ever again implement infrastructure policy on the basis of romantic ideas of what can and cannot be achieved in politics.

While some may lament the end of Labor’s NBN, the cost-benefit analysis reveals the shortcomings of its romanticism. Economics may not be all that romantic, but taxpayers may well be glad the NBN romance is over.

The Conversation
Michael de Percy does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.
This article was originally published on The Conversation. Read the original article.

Saturday, 23 August 2014

Australia's Broadband Situation in Perspective

My formal research project comparing communications technology outcomes in Canada and Australia ended in September 2012. A great deal has happened since. The Coalition came to power and the NBN changed from a predominately FTTH model to a mix of technologies utilising FTTN. For several years, broadband has been firmly fixed on Australia's policy radar. But what difference has it made?

Here I broaden the comparison to include Australia, Canada, United States, United Kingdom, Germany, South Korea, Japan, New Zealand, Switzerland, Hong Kong and Singapore. I wanted to provide a mix of countries that share several characteristics. While I have always argued that you cannot make judgements about Australia's broadband when compared with countries such as Korea and Switzerland, these countries are proving to be some of the most wired jurisdictions on the planet. However, Figure 1 below demonstrates the significant differences in population density that must be taken into account when making global comparisons. These simply cannot be ignored in any comparison of the effectiveness of broadband policies.
Figure 1: Population per square km

As you can see, Australia and Canada with 3 people per square km cannot possibly achieve the same return on capital investment in broadband infrastructure as Singapore, Hong Kong and South Korea. Even New Zealand and the United States, with 17 and 32 people per square km respectively, are in a different league.

Next, we need to consider broadband penetration. Figure 2 shows the number of fixed-line broadband (classified as a minimum download speed of 256kbps - which is not really broadband anymore) connections per 100 people. A better measure is connections per household and while this figure is a more accurate measure of penetration, it is difficult to obtain and the information is not readily available for all countries.
Figure 2: Fixed-line broadband connections per 100 people
Of course, fixed-line broadband is only part of the story, although the usefulness of wireless devices for e-health and e-learning applications is somewhat limited. None of my students, for example, have ever managed to use their e-text successfully on their iPhone, but some broadband is better than no broadband. Figure 3 shows the number of wireless broadband connections per 100 people.
Figure 3: Wireless broadband connections per 100 people
Next, we need to consider broadband speeds. Measuring the highest speed or simply using advertised speeds is not enough: a friend of mine who is connected to NBN and pays for the 100mbps is lucky to get 25mbps, so relying on market information alone is insufficient. In my view, Akamai's use of servers to measure speeds across the globe seems to make a lot of sense. Two measures are useful for comparing cross-country outcomes: average speed and average highest (peak) speeds (based on highest speeds per individual IP address). Figures 4 and 5 below show these measures (respectively).
Figure 4: Average Broadband Speeds
Figure 5: Average Peak (highest) Speeds
Figures 6, 7 and 8 below show the increasingly sophisticated speed groupings based on >4mbps, >10mbps and >15mbps respectively. This tends to show a more robust picture of the speed of broadband services in a particular jurisdiction.
Figure 6: Broadband connections faster than 4mbps

Figure 7: Broadband connections faster than 10mbps
Figure 8: Broadband connections faster than 15mbps
As you can see from the above, Australia, despite some seven years of policy attention directed at broadband, is still at the wrong end of the league tables. Except in wireless broadband, which I believe is due to more competition and a lack of government interest (or perhaps less government intervention) in telecommunications where it is not hard-wired. Indeed, for many Australians who are unable to obtain fixed-line broadband services, wireless is in many cases the only alternative.

It is unfortunate that the tables above do not help to explain why Australia lags and continues to lag. In my PhD research, I compared Australia with Canada and I found that except for mobile telephony, in telegraph, telephone, radio, television, satellite, broadband - you name it - Canada was ahead of Australia in communications technology outcomes in every instance. So the problem is not just a matter of a broadband problem, it is much deeper. Look out for my book on this issue coming soon.

In the meantime, I have blogged about the comparative statistics of communications technologies in Canada and Australia before. As you can see from the comparisons above, despite NBN, Australia's broadband situation has not changed much at all.

Links to data used to develop the above graphs:
     Akamai State of the Internet Report Q1 2014
     Broadband Commission State of Broadband 2013
     OECD Broadband Portal
     World Bank Data 2013
     World Economic Forum Network Readiness Index 2014

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