State-funded space hub forced to redo business plan

A government-funded space agency established in Central Otago has had to rein in its plans, with the region’s internet connectivity too weak for its needs.

Regional research institute Centre for Space Science Technology (CSST) was set up in May last year to educate New Zealand industries on the benefits of using Earth observation data in their operations, research and development.

The institute, owned through related charitable trust The Space Science Technology Trust, says it’s “building an agile company that can handle the entire Earth observation data life-cycle, from system design, data capture, data management, dissemination, through to training and support.”

It was awarded $14.7 million by the Ministry of Business in November 2016, to be staggered over four years. It has received $3.5m of that amount so far.

But the institute has had to change its original business plans, including hiring fewer staff. It’s also had to adapt to the weak internet bandwidth in Central Otago, where it was set up despite this problem being highlighted in its business plan.

CSST was established under the Regional Research Institute initiative, which was set up by the National government in 2015 to build research and development intensity and lift innovation in regions outside of Auckland, Wellington and Christchurch.

CSST’s original business case was submitted in 2016. But it’s already had to submit a second plan, and some within New Zealand’s space sector are concerned investment is going to waste.

“The government invested $15m, knowing UFB was an issue – and 12 months later it is re-doing the business plan and maybe having to invest in fibre,” a source says.

“Too many of these government programmes are set up to fail from day one.”

CSST had planned to hire up to 40 fulltime equivalent staff, with half based in Alexandra and the others in Dunedin, Lincoln and New Plymouth.

The institute, which has former NASA scientist and Waikato-bred Delwyn Moller as its research director, has hired 11 staff (three of these are yet to start), with six based in Otago.

But the space hub has seen significant problems because of the region’s poor internet bandwidth, which has delayed its progress.

CSST submitted a revised business and research plan to MBIE last month, as required by its funding agreement. It would not provide a copy to NBR, citing commercial sensitivity.

“Since CSST was first conceived, much has changed in the fast-paced, ever-evolving commercial space industry.  This requires CSST to be agile and responsive to changes in the market, and the remodelled strategy reflects that,” says chief executive Steve Cotter, the former head of Research & Education Advanced Network NZ (Reannz).

“We are in direct communication with the team at MBIE and they are aware of the changes that have occurred in our industry.  MBIE will continue to work alongside us as we develop CSST into a commercially viable business.”

To be fully operational in the region, CSST initially needs a one Gbps (gigabits per second) connection into Reannz, the national research and education network that connects New Zealand to global science data repositories, Mr Cotter says.

“CSST will be consuming large amounts of Earth observation data stored in locations as far away as North America and Europe. Therefore, we need high-throughput bandwidth with minimal packet loss to all regions of the globe.”

He says CSST is exploring “all of our options” and working with local bandwidth providers on a solution to get the required internet connectivity. This could include laying its own fibre in some places at a cost, to connect into the Reannz network.

“Our goal, and we believe we will achieve it, is to get the needed connectivity into our offices in Alexandra ahead of the UFB rollout.”

MBIE strategic investments manager Danette Olsen says “We expect CSST to be agile and responsive to changing conditions.”

But he would not elaborate on what the options were, saying they are “commercially sensitive until a contract for the required bandwidth is signed by all parties.”

Crown Fibre Holdings, which is doing the nationwide ultra-fast broadband rollout, expects fibre to be laid in Alexandra in 2020.

Why set up before groundwork laid?
When asked why CSST was launched in Otago before the necessary internet connectivity was ready, MBIE strategic investments manager Danette Olsen says it was recognised fibre capacity was not yet in place when CSST was awarded funding.

“As an operational issue, CSST was aware of the connectivity challenges, and made it one of their top priorities to find an alternative solution to ensure the required bandwidth could be found within a timeframe that would not impact their activities.”

She says CSST has identified a “workable solution” to the weak connectivity.

“The timing and order of the national UFB rollout is based on workflow scheduling by the local fibre companies that have been contracted by Crown Infrastructure Partners. 

“CSST has been actively exploring a number of potential solutions that could support its large data requirements, including conversations with potential network providers about bringing fibre connectivity to its offices, outside of the UFB programme. 

“We understand CSST is close to agreeing a deal and expect fibre connectivity that meets its needs to be available within weeks.”

CSST will provide its first annual report to MBIE at the end of July when the ministry will evaluate its establishment and early operational activities, she says.

The funding the institute has received from MBIE is "devolved funding," meaning how CSST best meets the obligations of its contract are at its discretion.

“There have been significant market changes that mean some of the proposed methods of achieving CSST’s objectives no longer make sense. We expect CSST to be agile and responsive to changing conditions.”

Since CSST launched, it has signed satellite data partnership agreements with commercial companies Spire Global and Planet covering New Zealand and Australasia, and is in negotiations with other data suppliers, Mr Cotter says.

The institute has developed applied machine-learning techniques to remotely identify the maturation of crops such as wheat, which could be used in irrigation and fertiliser management, and has developed applied computer vision technology to estimate crop yield for a Central Otago vineyard, which could be applied to other fruit crops.

It has also used composite satellite imagery and cloud computing to identify toxic algal blooms in New Zealand’s lakes, and has provided satellite images to organisations to identify damage from natural events.

The government has thrown its support behind the country's fledgling space industry, after the success of Mahia-based Rocket Lab. Legislation is being developed to regulate activities and research grants are available.

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