CommsDay Congress
Speech by Richard Bean
Deputy Chair
Australian Communications and Media Authority
Wednesday 10 October 2012
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Introduction
Recently our staff put together a video distillation of the ACMA—what we are, what we stand for and what we do in media and communications in Australia.
It is about how the ACMA interacts with the diverse and complex Australian landscape today, but it does have a focus on the future too, a future in which we see an enhanced and strengthened ACMA playing an important, indeed a pivotal role.
So, before going any further, let me introduce The ACMA story.
I think it’s a great piece of work and I’ll be interested to hear any feedback.You can tweet it if you like.
Today I want to bring into focus a few chunky issues that stand out for their immediate impact and importance for you in the audience today.
So in turn I will talk about the ACMA’s work innumbering, the upcoming reallocation auctions for the digital dividend spectrum, the state of play for our Reconnecting the Customer strategy and the TCP Code, and I will conclude with this year’s comms report and the future shape of regulation in our sector.
The ACMA’s work in numbering
As many of you would well know, the ACMA has conducted an extensive review and consultation program on telephone numbering over the past two years and late last month we released a series of comprehensive changes to prepare Australia’s telephone numbers for a rapidly changing future.
The ACMA was prompted to start the numbering work program in response to issues raised with by consumers and industry through the ACMA’s Numbering Advisory Committee;and by reflecting on the deep changes in industry structures, service offers and consumer behaviour that have occurred since the Numbering Plan was established in 1991.
The reforms focus on medium and longer term changes to:
allow more flexible use of general numbers
provide more capacity for mobiles in the 05 number range in the medium term, while removing unnecessary technical limitations in the specification of those numbers
make numbering arrangements simpler and more transparent for consumers
introduce measures to improve number management and charging, including the removal of charges from carrier access codes, which will improve efficiency and may encourage development of new services
maintain existing arrangements for premium services so they can easily be identified by consumers
maintain existing directory and information services numbers in the medium term, reflecting ongoing development of online search engines and other market substitutes for these services.
These changes build on the ACMA’s earlier numbering reform work.
We have already made significant early progress in providing additional flexibility for the use of general (geographic) numbers within capital cities, and additional capacity for the ever-expanding demand for mobile numbers.
We have also streamlined the Numbering Plan, removing unused service types and over 200 pages of now-redundant regulation.
One issue that is still in play is the approach to provide for consistent charging arrangements for consumers calling 1800, 13, and 1300 numbers whether they use a fixed or a mobile phone.
In fact, it was at this gathering last year that I released our paper Numbering: Calls to freephone and local rate numbers—the way forward, which addressed the cost of calls to those .
I should acknowledge that the ACMA has recently received an industry proposal from Comms Alliance for a market-based solution to issues in this space.
We understand that the intent is to build a broad consensus around this proposed solution in discussion with key consumer and relevant industry representative organisations.
We would not like to get in the way of a viable market oriented solution, however the Authority has made the in principle decision to vary the Numbering Plan in relation to these calls.
We have, as we stated we would, continued with our work program to commence public consultation on a draft variation to the Numbering Plan so that:
‘free’ means free for calls from mobile phones to freephone numbers, and
mobile calls to local rate numbers are limited to the amount that a consumer would expect to pay for a fixed-line local call.
This variation, if made, would have a deferred commencement date of 1 January 2015.
As required by the Telecommunications Act, the ACMA will undertake a statutory consultation process before making any variation to the Numbering Plan.
At the same time, we have said we remain open to market based solutions that would have the same effect as a regulatory proposal and we are pleased that Comms Alliance has taken up the challenge to propose market based alternatives.
Our aim is to achieve these two objectives, and we will continue to work with all parties to explore the best way forward whether by regulation or other solutions that deliver this important outcome for consumers as soon as practicable.
Digital dividend spectrum
Over the past four years, the ACMA has reinvigorated its spectrum and radiocommunications work, manifested in industry engagement initiatives, greater transparency in planning and priority-setting and embarking on a transformational program in relation to its customer service delivery, involving amongst other initiatives:
the development and publication of the ACMA’s Spectrum Management Principles
our high profile annual conference, solely dedicated to spectrum matters
the development and annual updating of a five-year rolling spectrum strategy plan—the FYSO
the establishment of a new advisory group—the Radiocommunications Consultative Committee.
A high profile spectrum matter the ACMA has managed using this approach has been facilitating the transition from analog to digital television.
This has offered a major opportunity to re-farm and reallocate the resulting available spectrum for other uses, such as mobile broadband—the so-called ‘digital dividend’, which no doubt is a current interest for many of you in the room today.
In order to realise this dividend, Australia is progressing through three key and well-recognised steps:
- completion of the switchover to digital television through analog television
switch-off - clearance, or restack, of digital television services from the digital dividend band
- reallocation of the cleared spectrum to new users.
Switchover and restack are the foundations of the Digital Dividend.With digitisation well underway, formal work towards the restack of digital TV services, and the ultimate yielding of the digital dividend, started in July 2010.
Since then the ACMA (in conjunction with industry) has been developing the necessary restack channel plans. This work is now well progressed with restack channel plans now developed for essentially all of Australia addressing 1,300 services in approximately 380 different service areas.
Digital dividend spectrum auction update
Let me give you an update on what we’ve got planned for the digital dividend spectrum auction (which is the mechanism for the reallocation of this cleared spectrum) in the near future.
The ACMA will auction spectrum in the 700 MHz (‘digital dividend’) and the 2.5 GHz bands early in April 2013.The combinatorial clock auction (CCA) methodology will be used for the auction.
The CCA is the leading online auction format used to sell multiple items in a single process. The particular strengths of CCA include its ability to support package bidding. This will be the first time that the CCA has been used to auction spectrum in Australia.
In preparing for this auction, as we have developed auction rules and procedures, the ACMA has engaged closely with stakeholders.To date, we have conducted three rounds of formal consultation, ten informal consultations processes, four stakeholder workshops and we have held a number of bilateral meetings with stakeholders.
We are delighted with the high level of engagement with this important process. The valuable input that has been provided will help to ensure the efficiency of the auction process.
In November, the ACMA will publish the Applicant Information Package (AIP). This is an important milestone in our auction preparations.
The AIP is an information package which will give detailed information about the spectrum on offer, its uses, and how to go about participating in the forthcoming auction. Shortly after this will follow the application and registration stages for stakeholders who wish to participate in the auction.
The digital dividend auction will be an exciting moment for the industry and consumers.This is one of the biggest spectrum auctions that Australia has seen, and will offer to the market highly valuable ‘waterfront’ sub 1GHz spectrum.
When offered together with 2.5 GHz spectrum, the auction will provide a rare opportunity for prospective purchasers to secure highly complementary parcels of spectrum that are ideal for delivering advanced mobile telecommunications.
The auction will unleash the potential for new and innovative services.Companies around the world are investing in this spectrum to meet consumers’ voracious appetite for data-rich services delivered through mobile broadband.
Reconnecting the Customer
In the context of the ongoing complexity of the communications environment for consumers, the ACMA decision to register the Telecommunications Consumer Protections (TCP) Code, effective from 1 September this year, is a watershed event that we think will shift the telecommunications landscape.
At this point I would like to acknowledge the work of John Stanton at Comms Alliance and the input of industry representatives in the process and the Code’s working committees; and of course acknowledge ACCAN’s Michael Fraser and Teresa Corbin for their work on Communication Alliance’s TCP Code Steering Committee.
The strong new consumer safeguards in the code have come about following the ACMA’s public inquiry Reconnecting the Customer and the subsequent ground-breaking report.
The ACMA has had an unwavering insistence that the proposals of the inquiry be implemented, accepting, in the first instance, that this should be done through by industry though an industry code.We now have that industry code, and it has been registered.The industry’s mettle will now be tested.
The ACMA for its part will be stepping up the compliance and enforcement work necessary to make the TCP Code work in the interests of consumers.I am hopeful that most players have bought into the necessity to lift their game both individually and collectively—we are, and will be, watching and responding to non-compliance with the code.
We will continue to educate industry about the new rules in these first three months after the code has come into effect. However enforcement action can and will occur even during this period where there is flagrant or substantial non-compliance by a supplier.
The ACMA will undertake at least 100 audits of providers’ compliance with key code rules during 2012–13 and our staff are currently on the road, educating the top 40 providers who are not CA members about the new code and our expectations of compliance.
We will focus our interventions on key aspects of the consumer life cycle, where compliance will generate the greatest consumer benefit.
The first issue we will focus on is complaints-handling. We intend to ensure that providers deliver on the undertakings they make to customers when resolving complaints.
We will then move on to advertising, which will be a big area of focus in 2012–13. Our initial priority will be advertisements that use misleading or confusing language.After that we will target those that do not contain standard charge information for included value plans. This will be an important and very visible early test of the industry’s transformation.
Next year, the focus will be on the roll-out of Critical Information Summaries. Also at that time, the ACMA will expect to receive our first referrals from Communications Compliance.
The ACMA will be taking a much tougher and more directive stance. You will see more investigations, directions and if necessary court cases.
We will of course as always consider each matter on its merits but the following matters will guide our approach:
the size of the CSP
the compliance attitude of the CSP
the severity of the breach, and
the impact of the behaviour on consumers.
Now that the code has kicked off, if any providers breach the code, you can expect us to direct them to comply with it.If they don’t comply with our direction, then expect us to either:
a)issue an infringement notice
b)accept an enforceable undertaking, or
c)take the matters to court where the Federal Court can impose a penalty of up to $250,000.
You will have seen that our first direction under the new code was issued earlier this week to Telstra.
Thanks to the minister’s announcement in early September, the ACMA will also have the power to make service provider determinations on consumer protection matters.
This welcome new power will allow earlier regulatory intervention concerning the problem areas identified by the Reconnecting the Customer inquiry.
We certainly found that the ability to make service provider rules in the particular area of premium messaging services invaluable in buttressing industry code-making: complaints in that domain have dropped dramatically.
I believe the new TCP Code provides a comprehensive set of enforceable safeguards for Australia’s telecommunications consumers. All of the primary protections are contained in a single document and the protections are aimed at addressing key points in the customer/provider lifecycle.In other comparable markets around the world, such as the USA, the United Kingdom and New Zealand, there is no single telecommunications instrument of consumer protection or of such magnitude.
How the ACMA is meeting its standard
And on this theme of international comparison, early in his term as Chairman of the ACMA, Chris Chapman set an aspirational standard for the ACMA:
‘To be, and to be recognised as, the world’s best converged regulator’.
He adopted this goal to stretch the organization and to drive the ACMA towards world’s best practice.The standard has been part of ACMA internal transformation and business planning activities over the last five years.
Because assessing converged communication regulation performance in a globally valid way is inherently problematic, we chose to take a narrative approach using descriptive case studies rather than one of measurement.Last year, we exposed for further external assessment the first preliminary assessment of the ACMA performance against this standard on our beta website, engage.acma.gov.au.
Later this month we will be publishing a more definitive assessment, which will detail 37 case studies where we consider the ACMA is meeting or leading world’s best practice.
As a learning organization, we will be inviting any interested party to review this iteration of the ACMA Meeting Our Standard project, and join the conversation about our performance.
We also continue to scan the wider communications and media horizon.
As the Chairman noted when he delivered the Charles Todd Oration last month on the topic of ‘Regulation in a Converged Environment’, this space is continuing to evolve at a continuing and unprecedented rate, and our regulatory response is simply going to need to evolve with it.
Comms report
To inform that evolution and as part of being an evidence-based regulator, the ACMA undertakes a broad body of research and reporting, an important component of which is this year’s comms report, one of the ACMA’s flagship publications. This has a couple of key components:
- an annual almanac (the ACMA communications report) presenting latest ACMA intelligence, trend data and commentary on key issues relating to the communications and media market in Australia, produced in fulfilment of the ACMA’s reporting obligations under the Section 105 of the Telecommunications Act 1997
- a series of complementary reports designed to inform our diverse community of stakeholders about convergence and the digital economy and their impacts on communications and media services.
Today I am releasing the first of the suite of complementary reports for 2012, Report1—Online video content services in Australia.
This reflects the growing interest in new digital content services and their impacts on traditional broadcasting.
It presents an examination of the growth in the provision of online content services to consumers, key players and related business models, consumer use and attitudes towards these emerging services including willingness to pay.
For example:
5.2 million Australians, which represents 43 per cent of adult internet users, accessed online video content services in the six months to June 2012
full-length TV programs and movies were the most often reported accessed content