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February 21, 2012
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Is video surveillance worth the investment?

Editor’s Note: The below article first appeared on the Alcatel Lucent blog entitled LifeTalk, which is the result of a collaboration between individuals at Alcatel Lucent and PoliceOne Staff.

By Alcatel Lucent

High-capacity wireless data networks bring down the cost of video surveillance and other information-gathering utilities. That doesn’t mean the cost isn’t still significant. Organizations considering deployment or expansion of video and other sensor systems have to consider the price of the initial purchase, recurring costs for operation and maintenance, and return on investment. London-based Sheridan Nye studies these costs as Senior Analyst with the Enterprise Vertical Practice of Informa Telecoms and Media, and was gracious enough to provide her view on the economic issues associated with video surveillance and associated information networks.

“Video surveillance is not a huge investment and the returns can be substantial, whether economic or social.”

Nye sees the concern for countering terrorist attacks on critical infrastructure as a major motivator to expand the use of video surveillance. “Investment in homeland security in the US and Europe is driving investment in surveillance video, or CCTV. The UK is an enthusiastic adopter of this technology and probably has the most cameras per citizen of any country in the world. In the US energy market, for example, the NERC-CIP regulations [North American Electric Reliability Corporation-Critical Infrastructure Protection] require that utilities tightly control access to their most important infrastructure. You’re seeing this kind of regulation crop up in different areas, passing responsibility for homeland security from publicly-owned agencies such as the police and onto the owners of the infrastructure. If you’re an energy distribution company and you own substations that could potentially be the target of a terrorist attack, or which could be vulnerable to extreme weather power, then you have to ensure that it is adequately protected. It can mean access control to ensure that only the right people are getting in, or it can mean monitoring to ensure that everything is fine and that early warnings are received of any problems. That’s the kind of regulation that is driving wider interest in surveillance television.”

In this tight economy, any executive is concerned with return on investment, especially when the investment is one that produces no direct revenue. Return on investment in surveillance systems is indirect, but hails from multiple sources. “It’s a matter of looking at drivers and alternatives too ; so, for instance, by protecting assets, that has a direct impact on insurance premiums as well as meeting regulatory requirements. If an electric utility doesn’t meet its NERC-CIP requirements, for example, there are very high penalties for that. Potentially, they could face a serious fine if they don’t have the right protection for the infrastructure that is considered to be critical to the national interest.”

Nye cited several examples of ongoing crime problems that can be addressed with video surveillance solutions. “In the UK, we have a growing problem with metal theft. The price of copper is rising with demand in rapidly growing economies like China. Where an asset becomes valuable, it becomes a target. Road signs are being stolen, water pipes being stolen, it becomes a really big problem. The Energy Networks Association in the UK has estimated that electricity companies in the UK spend at least £12 million each year on security to prevent metal theft, but if they spent three times as much it wouldn’t be enough to prevent it. On the rail networks, the Transport Select Committee estimated the rail industry lost £43 million worth of metal in the last three years, and that figure is going up due to the price of metal on the market. Now, whether video is the best solution to that is a slightly different question, because what you can also do is ensure visible marking of pipes and cables, and so on, so when it’s stolen it can be traced. In the UK, there is proposal to better regulate scrap metal dealers, so people won’t be able to just offload a whole bunch of suspicious-looking cabling and get away with it. So video isn’t always the best solution, but when you look at the cost and the deterrent effect, there is often a return on investment there. There is a wide range of applications for video surveillance, for instance, environmental monitoring to prevent the dumping of rubbish, or monitoring occupancy of cars using car-sharing lanes, as well as lowering fear of crime generally among the public. I think the return on investment is clearer in these contexts.”

Public safety agencies in both the US and the UK are experiencing the leanest funding that their managers have seen in their entire careers. One way to leverage resources is to share them with other users. “Public safety agencies have to do more with less and they have to share resources. Video is an example of a service that can be shared between the transport service and the police or other agencies like the ambulance service. So that’s one area to be looking at, where the cost can be shared.”

Sometimes technology isn’t the best solution, or a different technology may have to be applied to achieve the most favorable outcome. “Video isn’t always the unique solution. Video is far more efficient when it’s being recorded or monitored by someone who’s trained to know what they’re looking at. Also in some contexts, end-to-end sensor networks might be more appropriate. Today, cameras are used extensively to monitor how traffic is flowing. Moving ahead five or ten years, sensors can take the place of video in some instances.”

Complementary technology can drive the return on investment on video surveillance. “Motion detection can help reduce bandwidth needs, as you’re not constantly feeding video, it’s only when something has been detected. But in some ways it’s simpler technologies like video compression that boost efficiency, alongside increasing capacity in wireless networks, such as LTE. It’s important that the customer chooses the quality of video that they need. For instance, for CCTV on public transport, you don’t really need super-high quality video and very rapid frame refresh rates. On the other hand, if you’re monitoring the condition of infrastructure for maintenance, it’s critical that you have very high resolution. For facial recognition in a crime context, you need high resolution. It’s a matter of having the right technology for the right context.”

Asked whether the expansion of video surveillance has peaked, Nye was optimistic for the prospects of expansion of this technology. “I wouldn’t say we’ve reached the peak, no. Not everyone is going to follow the UK’s camera-centric approach to public safety, but if you look at the safety implications of large events, clearly video has a huge role to play there. Also, investment in modern transport is another area that’s going to drive video. Also cities are looking at what can they do with their municipal networks and the fiber they may already have in the ground, all these things, they enable video surveillance. So I would say the market’s got a lot of growth ahead of it.”



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