Communications Alliance - Comms Essentials seminar, 25 July 2013
The co-regulatory and self-regulatory framework in a dynamically changing environment, and coming challenges
Speech by Chris Chapman, ACMA Chairman
A complex media and communications landscape
Most of you would/should appreciate that the Australian Communications and Media Authority operates across a diverse and complex media and communications landscape. And as a conscious, deliberate strategic decision by me, we are increasingly seeking to do so consistent with our corporate mantra to: ‘communicate, facilitate, and then (if all else fails) regulate’. I think we are working with much greater agility within the constraints and dictates of (1) our historic, circuit – switched / analogue legislative framework and (2) our materially decreasing annual funding. So, in a nutshell and against the background of those constraints, we’re seeking to prosecute and deliver flexible ‘hybrid’ outcomes with and for industry and our other stakeholders.
And just to underscore my observation about the diversity and complexity of the broad industry we interact with, it includes, relevantly to this audience:
- in excess of 170 licensed telecommunications carriers
- more than 600 internet service providers (ISPs); and
- over 200 VOIP providers.
And as you are all well aware, virtually all the different media and communications’ sectors and players confront unprecedented change, fundamentally Internet driven and IP-enabled, turbo-charged in their activities by the increasingly ubiquity of high capacity broadband.This unrelenting change and its consequent impact on the regulatory activities at the core of the ACMA fundamentally inform the essence of the narrative I intend to explore in my brief remarks this morning.
Now, 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. Indeed, about 2 years ago we had a ‘Convergence Review’. This Review and its examination of the current underpinning policy and regulatory frameworks was the most recent visitation to vital regulatory questions triggered by our environment of change, albeit mostly through a content-layer lens. This attempt to grapple with converged media and communications and its consequences in Australia washed through the system a few months ago. I should note that during and since that Review, while the so – called policy debates have taken place around us, the ACMA has been simply getting on with its ‘day job’.
As we sit here today, the challenge of digitalisation-fuelled convergence has not really even started to be addressed in our legislation … and remember the ACMA has responsibilities under four principal acts, while there are another 22 Acts which we also respond to and there are about 523 legislative instruments we have developed and/or administer.And as I just alluded to, this challenge appears to have been compounded by (in fact, it has been run over by) the emergence and dominance of IP networks in the last decade. This has meant people increasingly expect to connect and communicate seamlessly – anywhere, anyhow, anytime – while content has become increasingly non-linear, interlinked and ‘uncontained’.
A strategic narrative for regulatory reform
At the ACMA we have developed a strategic narrative for regulatory reform, which I articulated most fully last month in my speech at the Ericsson ‘Broadband for All’ Forum in Stockholm. Rather than recapitulate the 65 minute speech here, let me just cut straight to the chase.
Our view is that fragmented and piecemeal institutional responses to the contemporary pressures of convergence and network effects – which is essentially what is happening at the moment - are 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. 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, invoking from time to time regulatory discretion and the exercise of forbearance. This means regulation that is evidence-informed and that engages all stakeholders; industry, consumers, citizens, policy – developers, legislators, and ourselves as regulators.
The ACMA is not the government - thought leadership
However, the ACMA is not the government – we do not make the legislation. The Department has primary responsibility for policy development; policy overhaul.
But what we can do, and have done, is attempt to provide unremitting, relevant thought leadership to “nudge” that along. One important and relevant piece, which advances our considerations about a viable coherent regulatory framework for a networked society and information economy, is our recent paper Connected Citizens – Regulatory strategies for a networked economy and society [download PDF]. This paper, we believe, sketches a way forward.
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. We released in August 2011 another thought leadership paper, Broken Concepts: The Australian communications legislative landscape, and I released last month 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 – and our view is that it is a pretty good bet that the breakage count will have continued to grow by the time we make the next update (currently scheduled at the end of 2014). I also have to be frank with you – while there have been 10 “on’s”, we have not actually identified any “off’s” (which is to say that, collectively, we (the engaged ones with informed stakeholder interests) have not engaged with the elements which are not working on the framework governing communication and media.
‘Walking the talk’ of flexible and adaptive regulatory activity
The ACMA is not, however, just issuing thought leadership pieces and simply just waiting to see what impact the may have. Recognizing and acting on these necessities in today’s world, we are engaged, energetic and very much alive to the need to continuously re-invent ourselves.
We do our best to work around the various ‘breakages’ as they intrude on our day-to-day work, ‘walking the talk’ of flexible and adaptive regulatory activity as we seek to engage with industry and to operationalise the necessary agility and flexibility that I speak of, to craft hybrid working solutions within the current framework.
Numbering Work Program
A very good example of this approach, merging thought leadership with practical and necessary reform, has been the way the ACMA is continuing to evolve Australia’s telephone numbering arrangements consistent with the outcomes of our 2010-2012 Numbering Work Program.
The ACMA has already implemented the majority of the short term recommendations from the Numbering Work Program and we are now working towards implementing those which were identified for the medium term. Two examples are:
- Reforms to calls from mobile phones to freephone (1800) and local rate (13 & 1300) numbers. As most of you would be aware, we have worked closely with CA to find solutions which work both for industry and consumers….where we have led on some aspects and have been, and are, prepared to be ‘guided’ on other aspects.
- Secondly, and in the area of numbering allocation, the ACMA will soon announce plans to approach the market during the second half of 2013 for a package of numbering allocation services. The ACMA has successfully used outsourced arrangements for freephone and local rate numbering allocation services for over a decade and we think further efficiencies can be achieved by expanding the range of these services and the innovation and efficiencies that industry involvement will power.
Partnership principles and criteria
This latter is an example of us handing back to industry things that industry is probably best suited to do. Internally, and not readily appreciated, we use a set of Partnership Principles and Criteria to help us decide upon whether the ACMA is best placed to deliver a service or whether partnering to outsource the service might promote greater efficiencies in the Australian communications regulatory environment.
There are also some other prominent examples of such administrative services that are the responsibility of the ACMA, but which are currently provided by outsourced providers under contract:
- Marine and Amateur Radio Operator examination services (by the Australian Maritime College and the Wireless Institute of Australia, respectively);
- Frequency assignments by Accredited Persons;
- Private companies’ registrars to provide cabling provider registration services as part of the cabling regulatory arrangements;
- and on a more localised basis, domestic systems interference assistance in Perth by external contractors; and
- the Do Not Call Register and list washing.
Our view is that such partnerships give appropriate responsibility to industry for the provision of these administrative arrangements and mirror the way in which co and self-regulation places appropriate responsibility on industry for developing more insightfully and more expeditiously regulatory arrangements. In some contexts they are indeed closely intertwined, as found for example in the development of standards, which have administrative, regulatory and commercial dimensions, where we effectively partner both with Communications Alliance and Standards Australia.
Industry codes and co-regulation
This is another arena where the ACMA ‘walks the flexible adaptive talk’ -the arena of industry codes: seeking, sometime perhaps driving, change within the envelope of the co-regulatory system. The ACMA has a longstanding commitment to and engagement with sectoral co-regulatory codes – in my 2008 speech on The flexibility benefits of Australia’s co-regulatory approach to the 14th European Conference of Postal and Telecommunications Administrations (CEPT), Strasbourg I noted we have 25 telecommunications codes, 3 internet and 10 broadcasting ones (38 in total). And I spoke enthusiastically of the benefits such a construct provides.
I will speak to merely one of the codes by way of example.
You will all recall that in 2010, I challenged the industry to transform the way it deals with its customers, following significant rises in customer complaints to the Telecommunications Industry Ombudsman over several years, culminating in 230,000 complaints in 2008-09—an increase of 54 per cent on the previous year. At that time, the ACMA commenced an extensive public inquiry, Reconnecting the Customer, to get to the bottom of what was driving consumer dissatisfaction.
Consistent with our empirical findings in the RTC inquiry, we delivered a set of ambitious recommendations for industry. Following persistent and attentive (but I think as demonstrated by recent market movements, realistic) encouragement from the ACMA, industry commendably stepped up to the mark and developed many of these recommendations into a world-leading consumer protections package for telco customers in the form of a revised Telecommunications Consumer Protections Code—the TCP Code. The ACMA registered the code last September and we were pleased to have been able to adapt the inherent flexibility of the co-regulatory construct, with the outcome that an exemplary and indeed world-leading code was delivered and is being enacted; indeed, is being implemented with what seems to me to be genuine, substantive endeavour.
As a result, we note that suppliers are fundamentally changing the way interact with their customers at the key stages of the product life cycle—advertising, pre-purchase, during the life of the contract and when things go wrong.
However, from our perspective, it is never a ‘set and forget’!
As part of the RTC inquiry, the ACMA identified that better information to consumers, rather than more information, was a key requirement in navigating the complex communications marketplace. A major element of the RTC recommendations was about ensuring that consumers receive important information at the time and in the form that they need it.
We have therefore welcomed the industry’s successful introduction of the smartly – named Critical Information Summaries and look forward to the introduction of usage alerts at 50, 85 and 100 per cent of included value plans (noting that some suppliers have beaten our 1 September deadline for large mobile companies and internet providers).And Australians travelling overseas will also look forward to the international mobile roaming notifications, which will be rolled out from 27 September and roaming data usage alerts, which will come into effect next spring.
However, we acknowledge there is currently a collection of legacy information requirements upon industry whereby rules exist that require carriage service providers to make information available to consumers on a vast array of topics. These requirements often lack specificity about timing or method. As a result, it is not clear that they are effective consumer protection tools and are probably an unnecessary regulatory overhead.
I previously extended an invitation to industry to engage with the ACMA about these legacy information requirements and I can confirm today that we would be willing to include it in our work program for the back half of this calendar year.
The ACMA is also very much engaged with industry, consumer groups and the TIO about metrics for comparing supplier performance in customer service and complaint handling and we are planning a conversation in November about bridging the emerging gap between mobile network performance and consumer expectations of it. So if the evidence supports the proposition, it is likely that more effective and yet better targeted information provision will be a key part of both initiatives.
Given these conversations, it would be sensible to review those ‘legacy’ information requirements to ensure that while consumers receive timely information in an effective manner, they are are not suffering from information overload and that suppliers are not being burdened with unnecessary or duplicating regulation. That was, and remains, my undertaking.
On a cautionary note, I also noticed the report in Comms Day on Tuesday of a new KPMG report which gives a view that Australia is lagging well behind its global rivals when it comes to telco customer experience. I cannot speak to the veracity of that report—but, suffice it to say, it confirms to me that none of us can ever expect to rest on our laurels. The ACMA certainly won’t be this coming financial year and you’ll see that in our Operating Plan which we’ll be releasing in early October. We will continue to monitor and enforce the TCP Code where warranted, and our attention will soon turn to compliance with the new notifications that commence on September for both domestic mobile expenditure and data usage and under the international roaming standard.
A single coherent regulatory framework
I keep coming back to the juxtaposition between the traditional approach and ‘tool kits’ of the regulator and the one that the ACMA is increasingly manifesting. As online communications and digital content become more embedded in the experience of citizens and the community, it is also expected that an ever greater emphasis on communication and facilitation strategies will be needed. So we discern that a broader mix of strategies will be called for.
Over the last few weeks, we have further canvassed the need for a single coherent regulatory framework in contemporary communications and media with the release of a series of four occasional papers addressing various specific emerging issues:
In each of the four emerging issues papers we indicated that industry-led responses (such as co- and self-regulatory solutions and/or standards development) will become an increasingly important part of developing coherent responses for over the top (‘OTT’) services. We see that Communications Alliance members can usefully take a lead in many of these areas, hopefully within a coherent framework or, at worst, within meta understandings.
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 ‘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.
The ACMA, as regulator, has adapted existing tools to new purposes, extending our reach into the market using communication and facilitation techniques while starting to overtly use forbearance and exercising regulatory discretion where possible. We are increasingly operationalising, through organisational agility and flexibility, ‘fit for purpose’ regulatory interventions to suit the times. For later discussions, however, I’m predicting that these ‘work-around’ mechanisms will themselves come under strain, as the gap between the legacy legislative architecture and the complex networked environment that now characterizes media and communications continues to widen.