Connected citizens-a regulatory strategy
Ericsson Broadband for All seminar, 24–25 June 2013, Stockholm
Speech by Chris Chapman, Chair, Australian Communications and Media Authority
Speech by Chris Chapman, Chair, Australian Communications and Media Authority [Word Document]
The regulatory agency I lead, the Australian Communications and Media Authority (ACMA), operates across a diverse and complex media and communications landscape, consistent with our corporate mantra to: ‘communicate, facilitate, and then (if all else fails) regulate.
We also conduct our various regulatory activities across a diverse and complex continent with a number of distinct characteristics. For example, we have a highly concentrated geographic distribution of population. Canada and Australia virtually level-peg as the countries with the most uneven population distribution in the world, with OECD figures confirming that about 65 per cent of the Australian population live in an area that is just 0.5 per cent of the large land mass of our continent.
The industry we interact with in Australia includes:
- over 270 commercial radio and 50 commercial television licences, 300 community radio and 80 community television licences, and 2,500 subscription television licences and two national radio and television broadcasters
- in excess of 170 licensed telecommunications carriers and more than 600 internet service providers (ISPs)
- 212 VOIP providers
- more than 155,000 holders of licences to use radiocommunications spectrum for a variety of purposes (including telecommunications, aeronautical aviation and maritime).
And virtually all these different media and communications’ sectors and players confront unprecedented change, fundamentally Internet driven and turbo-charged in their activities by the increasingly ubiquity of high capacity broadband. It is the nature of this unrelenting change and its consequent impact on the regulatory activities at the core of my organization which I intend to explore in this presentation.
Let me just tease out a little bit this unprecedented change: Thomas Friedman captured the global state of change well in his latest book, That Used to be Us, where he wrote about the ‘hyper-flattening’ of the world. In doing so, he extended the theme earlier explored in his international bestselling book The World Is Flat: A Brief History of the Twenty-First Century, published in 2005.
Tellingly, he recounts how many of the things that inform our current debates and considerations had not even been thought of when he wrote that earlier book:
- Facebook cannot be found under ‘F’ in the index of the first edition of The World Is Flat
- Twitter then was a sound
- Cloud was something found in the sky
- 4G was a parking space
- An Application was something you sent to college
- LinkedIn was a prison
- Skype was a typo!
All of these changes, he emphasises, have taken place in only the last seven or so years—and, in the face of such change, we must wonder what the next seven years will deliver! This period by coincidence is about the same time I have been Chair of the ACMA; an organisation that was initially thrown together, having to discover and then structure itself and then having to subsequently deconstruct and reconstruct itself as new mandates, as new developments, indeed new phenomena, have challenged us or sped across our landscape.
The technological changes leading us to this point have often been described as ‘convergence’.
The ACMA was specifically created to be a ‘converged’ regulator, bringing together the threads of the four converging ‘worlds’ of telecommunications, broadcasting, radiocommunications and the internet, albeit against the backdrop of siloed (non-convergent) legislation.
In fact, about two years ago the Australian Government conducted a ‘Convergence Review’. This review, and its examination of the current underpinning policy and regulatory frameworks, was the most recent visitation to vital questions in the content domain. The Australian Government’s attempt to grapple with converged media and communications in Australia washed through the system a few months ago. I should note that during and since that review, while the important and necessary policy debates have taken place around us, the ACMA has been simply getting on with its ‘day job’. This ‘Convergence Review’ alluded to (although it did not ultimately conclude with recommendations in those terms) an approach which focused on a 'converged structure' based on four layers; Infrastructure, Networks, Content and Applications, and Devices.
I certainly agree that using a ‘layers-based’ analysis is useful for the immediate future, something I noted over two years ago in a speech to the Communications and Media Lawyers Association, The ‘convergence phenomena’ from a regulator’s perspective. I suggested, for example, that it helps makes sense of the way in which voice telephony is increasingly being transformed into ‘just’ another user app on a smart device or within a social media context, alongside a myriad of other more or less useful apps. The vendor of the voice app can easily be substituted with another, or with another channel of communication altogether.
Such simple telephony apps could be seen as important but low value applications running on top of existing data infrastructures, rather than as a dedicated, premium value end-to-end service. Indeed, Ovum has recently estimated that ‘over-the-top’ voice and messaging applications cost traditional telecommunications operators worldwide 13.9 billion dollars (or nine per cent of their revenue in 2011).
The nature of voice application is also growing beyond simple 'calls' and now voice communication often sits in the context of other media and ways of messaging: for example, chat between players of an online game. ‘Telephone numbers’, as such, are slowly losing their special place, becoming part of the web of addressing that binds the various network layers together as a precursor of fully unified communications.
However, an important, but perhaps not always obvious element of the ongoing convergence debate has been that ‘convergence’ itself is not a stable concept. Many concur with Friedman’s opinion that we have moved on, to the extent that we have now begun to enter what could be termed a ‘hyper digital’ era, combining the power of ICT with ubiquitous high-speed broadband, enhanced by analytics, semantic systems, cognitive computing, agent technology and the like. The ACMA’s view is that there has been an important shift in focus on ‘convergence’ (as we have come to understand it) to the broader and more nuanced but all-consuming idea of a networked society, or as some express it, the ‘connected life’—as an insight that Ericsson itself has consistently offered up through its ‘Network Society’ research and publications.
I note that in the contemporary world of networks, the paradox is that the distinctions between layers are not ‘bright’ lines. Today’s network layers (let alone how those in the future seem to be shaping) are not, as the engineering origin of the concept might suggest, neat and clearly delineated functional constructs. As the ITU notes in the Conclusion of their 2013 edition of Trends in Telecommunication Reform:
'In the growing network environment, however, while a progressive policy framework to govern the physical infrastructure is necessary, it is not sufficient. Networks are ultimately set up to deliver services. Policy-makers and regulators will also have to face the challenges that these new services and applications bring.
… The new networks are breaking down the traditional categories of regulation and causing policy-makers to rethink their legal and regulatory frameworks. The advent of new services [is] also raising basic questions about how such services should be regulated; can old models be applied or is a new approach needed?'
While layers are useful to aid our navigation, they are not themselves new, inviolate touchstones - they are permeable, interconnected and increasingly virtualised, meaning that much of what functions as ‘infrastructure’ is software defined and many content layer applications can deliver an ‘infrastructure-like’ connection or service.
Original concepts of convergence stemmed from digitalization, which during the 90s broke the nexus between the shape of content and the container which carried it—for example, recorded music was no longer solely defined by being carried on a plain old vinyl disk or compact cassette (for those of you who can recall what these things are!). This meant that regulation (constructed on the premise that content can be controlled by how it is delivered, or that delivery systems are defined by the user service they carry) has increasingly lost its force, both in logic and in practice.
But by now, in fact, it would seem that markets have almost totally now digested digitalisation—for instance, a practical digitalisation project (the switchover to digital television) has been virtually completed in Australia, with the ACMA, as the regulatory facilitator, playing a critical role in completing important parts. However, the challenge of digitalisation-fuelled convergence has not been fully addressed in our legislation and indeed this challenge appears to have been compounded by (in fact, run over by) the emergence and dominance of IP networks in the last decade. This has meant content has become increasingly non-linear, interlinked and ‘uncontained’ while people increasingly expect to connect and communicate seamlessly—anywhere, anyhow, anytime.
We (and here I mean regulators and policy-makers) seem to have almost come to terms with the concept of ‘online’ media as opposed to the ‘offline’ traditional media. This is essentially the impact of digitalisation and the first wave of IP networking, aka the World Wide Web. But that is more than a decade-and-a-half old! The split is no longer binary—‘online’ has moved on through a number of iterations. Reform of the current arrangements can perhaps aim to bring the current system ‘up-to-date’ with digital, and maybe grapple with the early impacts of the web. However, as I have noted, things have changed quite radically just over the last seven or so years. And so I suggest we (all) must plan for further radical change over the indicative life span of any proposed regulatory reform process.
From where I sit, having a daily intimate acquaintance with the various influences and dynamics and their interplay with current Acts and regulatory constructs, reform processes will need to make use of a very broad concept of convergence and beyond, embracing concepts that acknowledge the apparently inevitable movement towards an ever more complex networked world. This world is becoming deeper, more dense and more intense at an unprecedented rate, driven by ever more intricate and subtle interconnection between networks, devices, services and content, virtualisation, semantic richness, responsive adaptive ‘intelligence' with contextual situational awareness from sensor-laden devices from which is evolving the ‘Internet of Everything’.
If this hypothesis has legs, it seems unlikely to me that we will settle into a new agreed order or commercial equilibrium in media and communications any time soon, any more than we will be able to maintain the creaking status quo of ‘industrial’ communications and media … even if we wanted to.
Australia is right now building out a national broadband network (the NBN) to engage with, and grasp the opportunities of, this future global digital world. In 2009, the government established NBN Co., as a government business enterprise, to design, build and rollout the NBN, as a national wholesale-only, open access, high speed broadband network. The total funding requirement is around 33 billion Euros over 12 years.
In May 2011, the Australian Government announced a National Digital Economy Strategy, which outlined how the NBN will help Australia become a leading global digital economy by 2020. This was updated this month to outline the progress made since 2011 and outline the next steps to realising the benefits of the NBN and to position Australia as a leading digital economy by 2020. The Australian Government’s vision for a high-speed National Broadband Network is a fibre-to-the-premises model for 93 per cent of premises, with the remainder provided with a broadband service through either fixed wireless or satellite. The optic fibre service is expected to be capable of providing wholesale broadband speeds of up to 100 megabits per second, with further upgrading to I Gigabit per second anticipated. The other services will provide peak wholesale speeds of up to 12 megabits per second initially.
This major infrastructure project is extraordinarily complex, not only because it would be available to every premise in Australia (around 13 million in total), but also because of the associated reforms including:
- the transition of the incumbent privatised provider Telstra into a retail service provider only;
- the implementation of a contractual basis for delivery of community service obligations such as universal service, payphones and emergency call services; and
- the establishment of equitable long term pricing and other conditions for the wholesale services.
NBN Co. currently expects to complete its rollout in 2021. As at 31 March 2013, NBN Co. has passed or covered around 360,000 premises, with almost 100,000 of these with fibre. The average take-up rate is around 34 per cent, in locations where the new fibre network has been operating for more than 12 months, with more than 30 per cent of these end users taking up the top speed tier (100 Megabits per second download and 40 download). Rollout and take-up numbers are expected to ramp up dramatically, with the various trial rollouts now completed and major contracts getting into full swing.
The ACMA’s remit involves us directly in the NBN; for example, by ensuring that consumers remain protected in the transition to the new environment. But our work is not confined to direct regulation. As we are seeing in so many of our other areas of responsibility, communication and facilitation are as much key elements of our work program in the NBN space, as they are more generally.
I see our role as working with all sectors of the communications industry to ensure all consumers can confidently transition to the new broadband environment. Part of that is ensuring the ‘nuts and bolts’ of the infrastructure will deliver the quality of service that Australians have come to expect from their communications network. From the consumer perspective, we want to ensure that Australians can make informed decisions about the migration of their communications services and have the knowledge and confidence to navigate the new service environment and that, in doing this, industry offers them appropriate information and protections.
The Australian regulatory framework has a heavy emphasis on self-regulation, but this is probably better described as co-regulation. Codes, rules and standards underpin the provision of services on the NBN and many of these are under review to assess their adequacy. For example, we are facilitating the debate on whether quality of service for the NBN requires ex ante regulatory consideration to ensure the best outcome for industry and consumers into the future.
I have felt it imperative that the ACMA be front-footed in engaging with this issue, since our regulatory remit involves us directly in the rollout of the NBN and the possible regulation of services delivered over it. A key responsibility in the NBN transition is our oversight of existing telecommunications consumer safeguards. While, in effect, these apply both to services delivered over copper and the NBN, government has been keen to ensure that during the transition there is no reduction in service levels over the copper network and, to this end, has strengthened the consumer safeguards framework.
The ACMA works closely across government, consumer bodies and industry to coordinate and collaborate—so that we can meet the risks and challenges arising from the NBN and harness opportunities for innovation.
To draw these threads together in a public-facing way, we recently expanded our coverage of the NBN on the new ACMA website. Our intention is to continually extend the suite of NBN information that will help both consumers and industry navigate the complexities of the burgeoning NBN environment.
The NBN represents a major change to the infrastructure layer in Australian communications landscape and more generically is the backbone of the transition to a broadband-enabled networked society. While the policy approach to a national broadband network is a matter for the government of the day, I expect the NBN will be a fundamental enabler for Australians to embrace the opportunities that offers.
The Australian Government also sees ICT as a fundamental enabler of change within its own direct operations – the Government ICT Strategy states that 'The Australian Public Service (APS) will use ICT to increase public sector and national productivity by enabling the delivery of better government services for the Australian people, communities and business, improving the efficiency of APS operations and supporting open engagement to better inform decisions.'
The strategy is built on a vision that the government’s interactions with people, businesses and the community will occur seamlessly as part of everyday life. Citizens will easily access and automatically receive a range of services streamlined from across government and tailored to their individual needs and preferences.
The goal is to have efficient government operations that deliver integrated, responsive and targeted information and services so that Individuals, communities and business spend less time and effort interacting with government.
In harmony with this Whole of Government (WoG) strategy, the ACMA has transformed its use of ICT and delivery of services over the past four years, with the driving objective to be ‘best in breed’ within the APS, and as such provides a useful lens though which to view government ICT use.
One of the early benefits of the ACMA ICT transformation has been staff’s ability to collaborate via a true Unified Communications platform. Together with the Agency’s mobility technology it has provided staff an “embedded” teleworking experience. In November 2012 the Prime Minister – Julia Gillard – announced that the WoG teleworking target is 12 percent of staff to be teleworking by 2015. ACMA staff can now work from home or any other remote location as if they were sitting at work. They can have a remote video conference or share their screen with any other staff enabling a teleworker to feel part of the team rather than remote and perhaps isolated. During the National Telework week in 2012 the ACMA had 10 percent of staff working from home or a remote location, very close to that 2015 number.
Recently, another major milestone was reached with the introduction of what we term the PACMAN (or Protected ACMA Network) system. The system handles complaints from concerned citizens about prohibited content (Child Pornography) on the internet. Prior to PACMAN, to review material and if required establish a case for further action was a very labour intensive process. Now the system will automatically gather a copy of the offending material, store it and enable the reviewer to make a thorough assessment in a fraction of the time previously taken. It also uses an innovative approach calle ‘photoDNA’ that provides a digital fingerprint of pictures, authenticating them in our records so they do not have to be repeatedly reviewed, and so that images can easily be identified even if they have been altered.
In line with the WoG strategy, the ACMA recently has also reconstructed its approach to interaction over the internet. With citizens connected 24/7 through powerful smartphones and tablets, consuming media and sharing content in chosen variety of environments, we found it critical to rethink our web presence to be effective in the networked society.
The result is an innovative new website at our usual address, ACMA.gov.au, which combines the best of modern digital thinking, public engagement and the latest online features.
The structure of the site has moved away from an information architecture that reflects the organisation but rather one that mirrors how the Agency’s stakeholders see issues. In the ‘industryacma’ zone users will identify with a particular sector—broadcast, telco, internet and spectrum. Citizens will come to the site with a particular kind of need, which has been broken down into three types—a need to take action, a need for protection and a need for information. In ‘theacma’ zone, was based more on the type of content, with publications in a library, media releases and speeches in a newsroom, and information about the organisation in an ‘About us’ segment.
Most importantly, the new site is set up to create community and engagement via visitors ability to provide comment and take part in consultations on issues that are important to them. I am hopeful that this will clearly badge the ACMA as a learning organization committed to engage with its stakeholders.
NBNCo., as custodian of the NBN rollout, also provides the ACMA with a major point of stakeholder contact through an important issue in our portfolio of activities and the Australian communications landscape today—spectrum. We specifically licence the spectrum and facilitate the filing and coordination of satellite networks that will provide NBN services to the seven per cent of Australians who will receive broadband services through fixed wireless or satellite services.
Our core work in the planning, allocation and management of spectrum is a terrific illustration that the ACMA is more than a ‘regulator’, showcasing our work as a facilitator.
As many of you know, a key area of spectrum work relates to a digital dividend of 126 MHz of spectrum from the UHF television broadcasting band. There have been three important tranches of work in Australia. The first has been the completion of the switchover to digital television, which results in the cessation of analog television services, the completion of which is scheduled for the end of this year.
The second is the process of clearing all digital television services from the identified digital dividend band (694–820 MHz)—which is commonly referred to as ‘the restack’.
The third is the re-configuration of the cleared spectrum and its allocation to new communications’ users via auction.
On 7 May this year, we in fact announced the outcomes from the digital dividend spectrum auction. All three bidders—Optus Mobile, Telstra and TPG Internet—secured spectrum in the auction, resulting in total revenues of nearly $2 billion. I am very pleased to say that auction process itself ran smoothly and resulted in the allocation of spectrum to the companies that valued it the most. This demand in Clock Round 1 of the auction led to three unsold lots in the 700 MHz band. In the 2.5 GHz band, demand exceeded supply in the first round but reached equilibrium at the end of Clock Round 3, at which point the clock rounds closed. This level of demand during the clock rounds meant prices paid by the bidders were only marginally above reserve prices.
In any event, the auction’s conclusion is another important step toward realising Australia’s digital dividend, which process will be complete when the new licences in the 700 MHz band become operational at the beginning of 2015. Making this spectrum previously required for analog television transmissions available will well position the Australian telecommunications industry to deliver fast, ubiquitous and symmetrical mobile broadband connectivity to consumers and industry to meet rising demand for high-speed wireless broadband.
We expect the digital dividend spectrum to create significant benefits for Australian mobile phone users. Beyond its simple availability, the ACMA has been working hard to further enhance the value of that spectrum to Australians. During the consultation process leading up to the auction, we received quite a bit of feedback about the importance of combining the digital dividend spectrum and the 2.5 GHz spectrum in the same auction. As I said in my introduction, Australia is a country with a distinct geography and population distribution mix, meaning that within the dense population clusters of our five major capitals the 2.5 GHz or other high frequencies do make a lot of sense, but that lower frequencies like the 700 MHz are very important once operators get outside those concentrations.
A particular nuance has been our involvement in development of the Asian Pacific Telecommunity Plan for 700 MHz (the APT 700 plan). Australia has taken the opportunity to fully participate with other countries in the Asia–Pacific region in the development, from the ground up, in a new, internationally harmonised plan optimised for mobile broadband, using the spectrum in the 700 MHz band freed by broadcasting’s digital switchover.
There has been keen interest throughout the region about the APT 700 plan. Many countries within the region have either committed to the plan, announced adoption of variants of the plan (that will retain much, if not all, of the plan’s harmonisation benefits) or are actively considering adoption of the plan. New Zealand and India have recently formally committed to its adoption, and I note Brunei, Indonesia, Malaysia and Singapore just last week jointly announced a commitment to align with the Asia Pacific Telecommunity 700 MHz band plan, adding to an already substantial list.
The success of the APT 700 plan in the region (Region 3) is also driving acceptance of the plan in other regions. I note recent reports that the UAE has become the first country in Europe, the Middle East and Africa (ITU region 1) to adopt the Asia Pacific Telecommunity (APT) frequency plan for its 700 MHz band and the European CEPT plan for the 800 MHz band.
In Latin America, part of ITU region 2, many countries have either committed or indicated their intention to commit, including Mexico, despite its long border with the US (which has its own but very different 700 MHz plan and which is also sub-optimal in terms of delivering mobile broadband spectrum). In fact I am told that the Mexican regulator has said that in Latin America, APT now stands for 'All Playing Together', a wonderful encapsulation of the internationally cooperative approach we are proud to have been associated with since the inception of the APT 700 plan.
While these technical benefits could have been realised even if Australia had ‘gone it alone’ on the APT 700 plan, harmonising with our Asia–Pacific neighbors means we have ensured that phone manufacturers will well cater to the Australian market. One of the key benefits from such spectrum harmonisation efforts is economic, and the wider the global spectrum organisation around the APT plan, the greater the commensurate economic benefits.
Collectively, the APT plan is now being adopted or seriously considered in markets with a combined population just over two billion people and growing. The potential, and increasingly the reality, is that the APT plan will become the foundation of a device ecosystem far greater than that possible with the only available alternative for the band—namely the sub-optimal US 700 MHz band plan.
It has been clear to us at the ACMA for quite some time that there is clearly a transformational need in the communications and media space more generally as broadband for all becomes a more general reality. We released in August 2011 our much thought-through and researched paper, Broken concepts—The Australian communications legislative landscape, and are releasing today an update of this work.
Since we last looked at the issue in 2011 and provided commentary on 55 stressed elements, we have identified an additional 10 concepts which we now also view as broken or under obvious strain. These are the notions of:
- Facilities installation permits
- PMTS jamming/boosting devices
- Mobile phone repeaters
- 'Controlled media groups' (in the Media Ownership and Control space)
- Boundary of a telecommunications network
—and our view is that it is a pretty good bet that the breakage count will have continued to grow by the time we further update Broken concepts (currently scheduled at the end of 2014).
This sense of strain is of course not unique to Australia—again, as the ITU note in their 2013 edition of Trends in Telecommunication Reform, this is a contemporary reality for all those charged as regulators of communications and media (whatever the precise configuration of their legislation and functions). The ITU said:
In such an era of transition, policy-makers and regulators need to consider carefully whether their legal and regulatory frameworks will be able to effectively address the changing ICT landscape and ensure non-discriminatory practices and transparency of information from network and service providers. As the character of the services carried over broadband networks becomes genuinely transnational, strengthening cross-border, regional and international cooperation will remain key to ensuring that all citizens of the world can benefit from affordable, secure and safe access anytime and anywhere.
This is a view broadly consistent with our analysis—the collection of now 65 problematic ‘broken concepts’ inherent in Australian communication and media regulation ongoingly confirms our strong suspicion that 'something' definitely needs fixing; more accurately and helpfully, still needs addressing.
We do our best to work around these as they intrude on our day-to-day work. For example, we have noticed that complaints about mobile broadband faults and coverage continue to increase in Australia. We are positing that consumers’ expectations about mobile data network performance are not being met. The gap between expectation and reality is particularly emphasised when we are encouraged and increasingly expect to live and work in an environment of almost ubiquitous connectivity and connectedness.
We have started a conversation across industry and among consumers about how to effectively inform and educate consumer expectations about the performance of mobile telecommunications services. Informed by these discussions, we will hold a Mobile Network Performance Summit later this year, bringing together industry and consumers to develop solutions which much better meet consumer needs and which, we anticipate, would also deliver further benefit to industry’s relationship with its customers.
The summit will be invited to consider what information about mobile data network performance should be available to consumers and how it should be made available. It would be premature to discuss further regulation at this stage, and I am confident industry will take the necessary steps in response to this invitation. It is my expectation that, as with our other initiatives, industry’s professionalism, competencies and self-interest will assist us in meeting our collective objectives. In any event, the ACMA has shown that it will not hesitate to take strong and decisive yet sensible and 'fit-for-purpose action in the interests of consumers.
So we clearly do not regard protection of the consumer interest as being among the collection of broken concepts. My attention was caught recently by a comment in a paper from two Australian academics who, in a vein consistent with our analysis (without citing it, I must note), make the point that:
'Australia has yet to fashion laws that fully amalgamate broadcasting and telecommunications with an understanding of the ways the internet is altering previous media models and changing the ways people communicate, produce and share content.
Changes in media policy have rarely appealed to an underlying set of rationales – the ‘why’ of regulation – and too often become a series patches sewn over existing regimes.'
In actual fact, the very establishment of ACMA is that rare significant exception to what is otherwise an entirely valid observation.
I want to however emphasise that, far from just reporting things that are broken, we are far more concerned with addressing the challenges from ‘First principles’ analysis and fixing things, and keeping them fixed—as our corporate tagline suggests, firstly by communicating, secondly by facilitating, but finally and, if necessary, regulating.
As a counterpart to our Broken concepts work, we also subsequently published as a companion piece a work identifying a number of enduring concepts which we believe will usefully play into ongoing development of regulatory responses to the development of the broadband-enabled ‘networked society’. These are ideas, or expectations of public interest outcomes, which we consider have been and will remain important to the shape of the media and communications environment and signal how it should be approached in a legislative and regulatory sense.
The internet has effectively created global reach for audio-visual material. I said earlier that we have almost come to terms with ‘online’ because developments in social networking are changing the game away from the ‘online’ website world as much as from the ‘offline’ world, with commercial content increasingly embedded within the extensive context of social network messages and user-generated content. As access to the internet becomes ubiquitous, and the broadband completes the internet transition to its fuller media distribution potential, the content regulation situation has become increasingly anomalous.
Clearly today, ‘industrial scale’ broadcasting remains highly significant and is likely to remain so into the immediate foreseeable future, notwithstanding the ‘convergence’ changes wrought by digitalisation, the internet, broadband networks and Web 2.0. However we (and I think all sensible media and communications business leaders) can anticipate that at some point radio, TV and print as we know them will ultimately surrender their pre-eminence as delivery platforms as their historical 'influence' wanes. How this media world will be shaped is unknown, except that it seems certain to be a world in which media forms change shape rapidly.
In the face of the essential uncertainty about regulation in such futures, we are relying increasingly on our capacity for First Principles thinking. For example, we have used the regulatory thinker Malcolm Sparrow’s concept of the ‘mitigation of harms’ in exploring the way in which a regulator might influence and potentially intervene in the behaviour of industry players. This thinking has influenced the development of regulatory actions from first principles, from our review of the Commercial Radio Advertising Standard to the Reconnecting the Customer inquiry with the subsequent work in guiding the review of the Telecommunications Consumer Protection Code. In this regard, I was interested to see the widely reported remarks made by Kevin Russell, the new CEO of Optus (the second largest telco in Australia) in a wide-ranging interview with the ABC’s ‘Inside Business’ program.
He said: 'I'm very clear about where the Optus brand needs to go. It needs to differentiate in terms of doing the right thing by Australian consumers. We’re not going to beat Telstra by outspending Telstra. We’re not going to beat Telstra in infrastructure. We can beat Telstra because we care about our customers more, day-in day-out.'
I also note that Telstra CEO David Thodey has repeatedly spoken over the last several years about making improving customer service a top priority. Establishing a competitive dynamic around customer service, initiating a virtuous rather vicious cycle in the marketplace, was a key aspiration for the ACMA when, way back in April 2010, I spoke of the need for a step change in the way the telecommunications industry in Australia interacted with their customers and suggested that there was a 'great opportunity for leaders in the Telco space to establish customer-centric approaches that are brand equity led'. I think that step change is underway.
It needs to be recalled that I launched our customer-service focused inquiry not only in response to an endemic poor customer care record and, frankly, poor reputation for industry, but also in anticipation by the ACMA (much better anticipation I must say than any of the Australian telcos at the time) of the impact of the internet and associated threat to them of OTT (Over The Top) services and the ever more complex value chain permutations that a post-NBN world would throw up. Russell is reported in a very recent address to the Australia-Israel Chamber of Commerce in Melbourne (around the time of the interview I cited previously) to have sounded a warning to his fellow telco competitors that the biggest threat to revenues could yet come from outside the industry. He believes that some of the big internet brands, including the likes of Google and Apple, have deep pockets and in many cases a better reputation with customers. I think he is strategically sound to assume that.
Our development of regulatory actions from first principles has been manifested most recently when, as a matter of immediate practicality, the ACMA embarked on a project to examine Contemporary Community Safeguards in the Australian broadcasting codes of conduct. Both radio and TV broadcasting codes have a history of incremental reviews. With further reviews now imminent, it has been our view that the industry and the ACMA have a tremendous opportunity for fresh thinking as to what protections the community really wants from those broadcasting codes.
Critically, broadcasting, under the premise embodied in the Broadcasting Services Act, is the embodiment of ‘influence’. It is our intuition that ‘influence’, a concept central to the current regulation of media in Australia, will remain pivotal—the touchstone for why a government regulator might have an interest and what such a regulator might seek to achieve with regard to communications and media. We are optimistic that this work in the specifics of broadcasting codes will deepen our understanding relevant to benchmarks for safeguarding the public interest and establish what is important in regulating influential media, whatever the platform it may be delivered on, or the form it takes in future.
Within the networked digital environment, individual citizens are increasingly at the centre of influence—probably, one day, they’ll be squarely at its centre. Using the notion of public interest as a starting point, the ACMA has explicitly reflected on and now incorporates 'citizen interests' in its regulatory decision-making. We have built a considerable body of research about the changing ways individuals interact with digital communications and media—but as citizens, not consumers. So being a digital citizen in Australia encompasses how we participate online, and how we express attitudes to rights and responsibilities, including responsibilities for risk mitigation and education. And with the ultimate ubiquity of true broadband, with the full suite of apps and as yet undreamt of applications, the trend is obvious.
And the regulator will simply have to work with the trend—not be sucked along in its wake. Over the past five years, the ACMA’s research developed a multi-dimensional view of digital citizens behavior and the influence of individuals in contributing to the overall security and stability of the digital networked economy and society. We understand emphatically from our research that many citizens see themselves as active participants in the digital world and they want to take responsibility for managing their digital content and communications. But they also look to business and government for guided support in managing the networked environment.
And I keep coming back to the juxtaposition between the traditional approach and ‘tool kits’ of the regulator and the one that the ACMA is manifesting. Crucially, from the traditional perspective of a public interest regulator, the network of citizens or commercial interests, freely pursuing their interests and expressing their views, does not have a single control point, such as a transmitter, should intervention be required. Networked media do not exert their ‘influence’ in a singular or directional way. Networks present a much greater regulatory challenge than linear situations such as broadcasting or simple phone calls, since the latter offer relatively easy ‘points of control’.
As the communications and media space continues to evolve we are overtly recognising that our regulatory response is simply going to need to evolve with it, including an ongoing re-assessment of the pros and cons, the societal good, of when intervention is required and how any intervention is put into place. At its core, these changes raise new questions about how we engage as citizens with digital communications and media—for example, digital identity, data and personal information management, and overall confidence to participate effectively with new technologies.
Within this complex networked economy and society, there is a broadening challenge for the regulator. Traditionally and alternatively expressed, a regulator’s role has been to mitigate risks or harms as citizens manage their communications and media experience, by imposing obligations or providing assistance. In the evolving networked economy and society, new risks, harms and innovations may require the regulator to respond differently in developing solutions.
I guess I should pause ... but only momentarily for fear of being run over by that reality’s unremitting force … to note that there is a common debate in regulation as to whether digital and IP-enabled communications are raising new problems or just old problems in new guises. It can be argued that IP-enabled services, applications and the forms of digital content are new, but they are manifesting traditional regulatory problems—such as privacy concerns, transparency of information disclosure, jurisdictional reach and the application of dispute and redress mechanisms.
However, one of the inherent differences is the scope, scale and speed, along with the longevity of data that is created as a result of Australians conducting business and interacting online—it constitutes a step change. This revolution is fundamentally altering the world of communications and content suppliers and users, both the risks and harms they face and the balance of benefits that accrue.
It is important to bear this 'balance of benefit' in mind as we set about crafting regulatory solutions to the various problematic elements. There have been specific benefits from technologies such as mobile and then smartphones, and promise of mobility connected to cloud computing resources. This translates into significant general economic benefit—for example, McKinsey & Company estimated a substantial consumer surplus from the internet of €100 billion a year in 2011, a total they projected to grow to €190 billion by 2015 as broadband becomes ubiquitous and as new services and wireless devices come to the fore.
While there is understandable public anxiety about the negative impacts of using internet-based technologies, there is less awareness of the positive benefits of these same technologies, which can be used to help those suffering from mental health problems, or to maintain psychologically health and social connections. Researchers have also begun to investigate the positive benefits at an individual level—how internet technologies such as email, and social media platforms such as Facebook, can support young people in crisis, adults suffering from depression, and encourage smartphone users to be more mindful.
Increasingly the regulator needs to be able to accommodate change within static regulatory frameworks that rely on known control points, identifiable industry participants and national jurisdictions.
In our view, the most useful response will be to adopt a more dynamic problem-solving approach to guide regulatory practice. I would suggest this might mean the regulator using different forms of analysis to inform its regulatory assessments and calibrate its interventions utilising such approaches as:
- understanding network structures (be they physical, virtual or social networks)
- using tools of social analysis to better assess the risks and impacts of connections
- working to understand the new forms of influence and control in a digital communications and content environment
- using risk assessment to prioritise possible action and to identify when problems might be changing in scale or type.
In some jurisdictions, regulatory structures have been reformed. Other responses maintain a separation between legacy regulations (‘silos’ if you will) and develop non-regulatory solutions such as education and program-based interventions to deal with emerging issues.
At the ACMA, we nonetheless sense that regulation will continue to be an integral vector in dealing with existing industry participants and known sectors of the communications and content industries where issues are clearly established. We also discern that a broader mix of strategies will be called for. A broad regulatory practice approach will provide a mechanism for rebalancing to occur, involving regulatory as well as non-regulatory interventions, to address the changing profile of risks and harms in a dynamic networked economy and society.
As online communications and digital content become more embedded in the experience of citizens and the community, it is also expected that a greater emphasis on communication and facilitation strategies will be needed. This will allow a better targeting of a response to address particular digital citizen issues in dealing with emerging areas of concern with managing digital content, identity and reputation—that is, one that is ‘fit for purpose’.
Over the last few weeks, we have released a series of four occasional papers addressing various emerging issues—four in this series—in contemporary communications and media. Each discusses the impact on industry, consumers and citizens of tensions inherent in the current regulation of the specific issue. Assessing these tensions has informed our consideration of regulatory strategies required to engage constructively with the developing networked society and information economy. From a regulatory point of view, the shifts in communications and media usage that these various elements represent and illustrate are not adequately reflected in existing legislative or regulatory concepts. We believe that consumers using apps would best be protected by a single coherent regulatory framework … but it is starting to dawn on government and policy-makers that this is going to be a pretty broad, potentially all-consuming framework
These papers have been:
- Mobile applications (‘apps’), where based on ACMA research, we discern that consumers are identifying possible areas of concern such as consent, personal and financial risk and privacy.
- Near Field Communication (NFC), which we perceive to be a key enabling technology, one where regulations and consumer protections codes need to be flexible enough to address new consumer risks as they emerge with the use of new technologies and different transactions involving personal information.
- Cloud computing, where we see the current increased emphasis on mobility is pushing adoption of cloud services but such rapid growth risks the emergence of regulatory gaps, potential consumer detriment and a weakening of confidence in digital economy.
- Privacy and personal data, where research shows citizens are increasingly unsure as to whether their information is subject to appropriate safeguards.
To coincide with my remarks this morning, I am releasing today a considered thought leadership piece, Connected citizens—Regulatory strategies for a networked economy and society, which sets out our considerations of a viable coherent regulatory framework for a networked society and information economy, which we see as the logical companion to our work on broken and enduring concepts which I discussed earlier, sketching as it does a way forward.
The outworking of the various papers confirm my intuitive view that fragmented and piecemeal institutional responses to the contemporary pressures of convergence and network effects is essentially misguided.
From our perspective, the evolution of the networked society is driving a need to empower the regulator to be flexible and rapidly adaptive to changing industry circumstances (which may involve more rapid ‘fit for purpose’ intervention and may equally, if not more so, involve regulatory discretion and the exercise of forbearance, which empowerment will be a crucial part of the way forward. The ACMA is not, however, just sitting and waiting for this to be done for us, or to us. Recognizing and acting on these necessities in today’s world, we are, as I’ve assured you, engaged, energetic and very much alive to the need to continuously re-invent ourselves.
My overriding proposition—what is, and will be needed, is regulation that is ‘fit for purpose’, intervention that is enough to do the job in a specific circumstance, and no more. This means regulation that is evidence-informed and that engages all stakeholders; industry, consumers, citizens, legislators, and ourselves as regulators.
The current, let alone emerging, communications and media environment does not allow a simple singular answer to how we should be regulating communications and media today—let alone in the hyper-connected, networked society world of tomorrow—the environment is too multi-dimensional, too heavily textured for that.
As I noted earlier, the notion of layers has been used widely as a model for understanding the future of communications and media regulation—however, I also noted the blurring of the boundaries of these layers in the world of virtualisation and software-defined technologies. To my mind, this dynamic echoes the notion originally expressed as ‘convergence’ in the nineties. In our continued thinking about convergence, the network society and how that may unfold, I am finding that our analysis reaffirms and re-invigorates the logic of bringing the various elements (not just the four world ‘silos’ but also the disparate and now blurring ‘layers’) together under the umbrella of a single regulatory agency—a single body with a broad remit, empowered with a scalable set of powers, with a culture that allows it to operate flexibly in a range of modes and pervasive relationships.
In future, I see an enhanced, strengthened and dramatically more agile ACMA playing an important, indeed pivotal role as a future regulatory centre point that is prolific, timely and cut-through in its communications; that is informed, proactive and pragmatic in its facilitation; and is reasoned, measured and proportional in its ‘fit for purpose’ regulatory determinations.
All simple enough and I can hardly wait to get on with it!
 The Economist 11 Aug 2012 P.57
 Crawford, K. and Lumby, C. (2013) ‘Networks of Governance: Users, Platforms, and the Challenges of
Networked Media Regulation,’ International Journal of Technology Policy and Law, Special Issue on
Legal and Policy Implications of Convergent Media, Vol 2, No. 1 P2
 The character of harms: Operational challenges in control, MK Sparrow, 2008