Good morning.
I would like to begin by acknowledging the Traditional Owners of the land on which we all meet today. I pay my respects to Elders past, present and emerging and to Aboriginal and Torres Strait Islander peoples attending the Summit today.
Thank you to CommsDay for again providing this important forum which is being held at a crucial time for the telecommunications sector and, indeed, the entire Australian economy.
COVID-19 has highlighted that, more than ever, reliable communications and media services are critical to consumers, businesses and governments.
Telecommunications networks have kept Australians connected during COVID-19, particularly as social distancing, isolation and quarantine arrangements completely disrupted many of our usual ways of interaction.
These networks have also been at the centre of Australia’s ability to move to home-based work and schooling arrangements while continuing to support economic activity across the country.
Recent ACMA research – conducted in the first half of 2020 - showed some interesting, although not necessarily unexpected, trends about how Australians are increasingly using telecommunications services, for example:
- 99% of Australian adults had accessed the internet—up from 90% in 2019;
- 77% of Australians adults had used an app to communicate via messages, voice or video calls in the past six months, up from 67% in 2019;
- 72% had used an app for social networking, up from 63% in 2019; and
- 42% of Australians used the internet to work from home, and 36% engaged in telehealth consultations.
COVID-19 has, in effect, put to rest any question about telecommunications being an essential service that plays a vital role in Australia’s economic and society. So, if telecommunications is now an essential service, what does that mean in terms of demand and supply-side expectations?
Today, I would like to touch of two key issues related to these expectations – supply-side demand for spectrum and consumer expectations of telco services.
In the context of the 2020-21 Budget, the Prime Minister announced the government’s ambition that Australia become one of the world’s leading digital economies within the next 10 years.
The Prime Minister announced funding of nearly $30 million over the next two years to support investment in 5G technologies, alongside a focus on digital regulations and cyber security, among other initiatives, to bring this ambition to life.
The Prime Minister highlighted a particular challenge for all of us in the communications industry to “keep our foot on the digital accelerator.”
For the ACMA, this in particularly relevant to our role in facilitating a broad range of innovative services through making spectrum available for 5G and other innovative technologies. This also involves managing heightened supply-side expectations about the timing and allocation of such spectrum.
As we look to Australia’s post COVID economic recovery, we are keenly attuned to the role that the communications sector and spectrum in particular can play in delivering additional benefits for Australia’s digital transformation.
For this reason, the ACMA has supported the Radiocommunications Bill, currently before Parliament. The package of amendments will provide important improvements to the spectrum management regulatory framework, in particular by
- adding flexibility to licensing arrangements to allow for speedier release of spectrum so that we can respond more quickly to changes in spectrum demand; and
- by providing more certainty to licensees about key licence conditions such as licence duration and renewal terms, which underpin investment predictability
The Government’s digital business funding will also further support the ACMA’s 5G spectrum allocations and the updating of our licensing system to support digital business.
In our Five Year Spectrum Outlook or FYSO, the ACMA sets out the ways we are planning for 5G spectrum allocations and to support trials and licensing options for a wide range of new commercial and industrial 5G uses.
The FYSO and annual work program is an important transparency and accountability measure as the ACMA sets out it work priorities and reports regularly to the industry on how we are delivering on these priorities.
The importance of the FYSO has been further heightened this year as it has enabled us to continue to engage with stakeholders even while having to cancel our RadComms Conference due to the pandemic.
Engagement with our spectrum users on the annual work program is one of the most valuable ways we get contemporary advice about the technology environment and international harmonisation activity. It also gives us insights into the ongoing market changes that are affecting current and future demand for spectrum.
Addressing 5G spectrum needs is an important priority in our work program. The ACMA is committed to Australia being well placed to take advantage of opportunities offered by 5G developments, consistent with the government’s aspirations.
Australia seeks to be an informed fast follower and get the right spectrum out at the right time. We have a full work program of planning and allocations looking at high, mid and low band spectrum suitable for 5G.
In the millimetre wave bands we are well progressed with planning for the allocation of the 26 GHz and 28 GHz bands.
These bands will support faster broadband communications, a much greater number of connected devices and enable more revolutionary uses in sectors such as manufacturing, transport, mining and healthcare.
Compared to many other jurisdictions, we are making a significant amount of millimetre wave 5G spectrum available and doing so via a mix of spectrum, apparatus and class licensing. This mix of licences is intended to support many different use types in these bands.
We will have 2400 MHz of spectrum available in 26 GHz via spectrum licensing for auction commencing after Easter in 2021.
This week we have also made information available about the application process for apparatus licensing, where we are making some 5300 MHz of spectrum available.
We have deliberately chosen apparatus licensing as a means for the continued allocation and use of mmWave spectrum so that emerging 5G uses can be addressed over time.
This will also be the first allocation using the innovative area wide licence for these apparatus licences in the 26 GHz and 28 GHz bands.
Users can “build their own licences” applying for as little or as much spectrum as they want, in the location of their choosing. We consider these licences will provide a very flexible and scalable option to support multi-device deployments in an area. This form of licensing is also intended to support a wide range of 5G uses including:
- private networks operating over limited areas, such as rail corridors, a hospital, an education precinct, mine or an industrial facility;
- Internet of Things applications;
- fixed and mobile broadband; and
- fixed satellite services.
If you are interested in this spectrum, please come and talk to us about your requirements and look for the Applicant information pack on our website.
We continue to work on mid and low band allocations as well. We are working towards making additional mid-band spectrum available as a result of the work underway to restack and reconfigure the 3.4–3.5 GHz band. We have also completed recent planning consultations on other mid-bands including 2 GHz and 3.7-4.2 GHz bands.
In low band spectrum, an allocation of the 850 MHz expansion band and 900 MHz band is anticipated for late in 2021.
In each of these processes, we often see strong and competing claims to the spectrum and it is evident that not all demand can be satisfied. But we will seek to maximise the public benefit from the use of the spectrum as we balance these multiple, and often competing, interests.
Moving from supply to demand side expectations, I would like to touch on the ACMA’s response to the Department’s Consumer Safeguard’s Part C consultation.
I’m sure we would all agree that the telco landscape looks very different today than when the current consumer protection framework was introduced in 1997.
The primary focus of regulation at that time was on facilitating greater competition in the Australian market, with an expectation that competition would drive positive consumer outcomes.
And it’s true that, 23 years later, competition has delivered greater choice of services and providers and has led to services falling in price in real terms.
Today we have a highly competitive market, with approximately 1400 retail providers of diverse size offering a wide range of products and services.
And, it fair to say, that the majority of Australians are generally happy with many aspects of their telco services.
But their expectations of telecommunications as an essential service means that they want to be happy with all aspects of that service.
And they are not, they expect more.
Consumers don’t always find it easy to find services that meet their needs, are sometimes not treated fairly at time of sale or subsequently during the life cycle of their service. They experience frequent faults and interruptions to their services, and suffer from mediocre customer service.
We think a strong case for change to the telco consumer framework has been made by the Department it its consultation paper. This will be essential to both meet reasonable consumer expectations into the future and support the transformation of the economy to be a world leader.
Such change is also supported by new research we will soon release – research which reflects importantly the pre-COVID experiences or perceptions of individuals and small businesses in Australia. That research shows:
- for individuals and households – price factors in their telco services are important but non-price factors rate as more important overall
- 92% of research participants rated issues and faults being fixed as important to them (noting over half of the households surveys reported experiencing issues and faults):
- 86% referred to receiving good customer service as important to them - and yet, 35% of households who made a complaint to their telco report were dissatisfied with the way it was handled.
Interestingly, in a competitive market, levels of churn between providers are relatively low. Many report they had been unable to find a cheaper or better deal or that it was too much effort to do so. Is a lack of available non-price related provider-specific performance information limiting the effectiveness of a competitive market to deliver for consumers?
For businesses, the statistics are more alarming when we consider their role in our post-covid economic recovery and their contribution to the government’s digital business agenda.
We found that two thirds of businesses had at least one type of issue or fault across any services in the period, mostly commonly their internet services. Given it is hard to imagine how to be in business without a reliable internet service these days, these numbers are especially worrying.
Against this, of those that complained to their telco, 24% reported it took their telco between three days to three weeks to resolve, and 21% reported it took more than three weeks. Not surprisingly, the number of businesses dissatisfied with the way their complaint was handled was similarly high.
And the perennial complaints handling issues have not gone away. Stats from the largest telcos collected by the ACMA show that last year, they received over 1.3 million complaints. That’s certainly better than the 1.7 million received in 2018-19, but still, in our view, incredibly high.
Another concerning indicator is a seeming trend, started before COVID, for a greater proportion of complaints ending up with the TIO, rather than being resolved by the relevant telco. Indeed, the proportion of these complaints going to the TIO was at its highest level for 2 years in the June 2020 quarter.
Given the ongoing concerns of consumers, our submission to the Department’s review, strongly supports a shift away from co-regulation to direct regulation for essential consumer protections. That would include matters such as complaints handling, transparency in performance matters (both price and non-price matters), accuracy and timeliness of billing, and clarity on what happens when faults and issues occur.
We support a set of clear, simple, effective, outcomes-based and enforceable rules targeted at consistent and clear outcomes for consumers.
This is certainly not our experience in administering the co-regulatory framework in relation to consumer protections. Commitments in these Codes are designed by a diverse industry players and are often framed less clearly than might be of benefit to consumers or even understood by the entire industry, particularly smaller players.
Our experience raises questions about the extent to which telcos actually understand the regulatory obligations they are required to meet. It also raises questions about the limitations on protections provided to consumers when Code provisions are framed as “reasonable efforts” or “best endeavours”.
The ACMA has very limited scope to refuse to register a code and far more limited enforcement powers for breaches of the Code, with consequential lengthier timeframes to remedy non-compliant practices for the benefit of consumers.
While legislative change to reduce the number of steps involved in registering the Code could be done, in our view, it is unlikely to drive a shift in focus towards improved consumer protections for essential matters given its inherent reliance on a “lowest common denominator” approach.
As a consequence, we do not consider current co-regulatory arrangements are delivering for consumers and it is time for change.
In that regard, we strongly support the Government’s deregulation agenda – as outlined in the recent address to the Business Council of Australia by the Hon Ben Morton MP, Assistant Minister to the Prime Minister.
Replacing detailed, cumbersome, contested and often confusing Code provisions with a clear set of rules about what is essential for consumers will, in our view, deliver savings for industry, freeing up valuable resources to deliver better outcomes for consumers and drive innovation in our economy into the future.
In our submission, the ACMA is also advocating for a registration process to be implemented for all retail service providers.
This would enable us to have greater visibility of entities operating in the market for the benefit of industry, government and consumers. It would also improve the quality of service to consumers by, for example, requiring prospective providers to meet basic market entry criteria and support better targeting of regulatory compliance activities.
Importantly, de-registration would also be a powerful tool to force irresponsible providers that cause considerable ongoing consumer harms to exit the market. This is in contrast to the very limited, lengthy and expensive processes available under the current framework. That said, we recognise the bar for de-registration will need to be set at very high level and used sparingly.
As I said earlier, we support a deregulatory approach to telco specific regulation. Our view is that the path forward is a combination of removing legacy or clearly outdated regulation and reshaping the framework to deliver clear statements to consumers and industry about what they can expect from their telcos and from us as the regulator.
In closing, the ACMA recognises that Australia continues to transition to a globally connected, internet-enabled communications economy and society.
The events of this year have highlighted just how important it is that communications services are accessible, affordable and that issues and complaints are dealt with fairly.
Telecommunications services should now be considered as essential services for consumers and businesses.
As a result the telco industry will have higher expectations of ACMA’s spectrum management role to support their future investment and aspirations.
And consumers and business will expect more from their telcos, right across all aspects of their service.
We look forward to working with government, industry and consumer groups as new regulatory frameworks are developed to deliver on Australia’s digital transformation.
Thank you to CommsDay for the opportunity to talk to you today.