Australian Telecommunications Summit 2004—Keynote Address
Sydney, Monday, 26 July 2004

This is my first opportunity to speak to you as the Minister for Communications, Information Technology and the Arts. I hope it will be the first of many.

It is quite a change - tax to telecommunications, choice in superannuation to choice in telecommunications, insurance to innovation - but it is a fascinating change and the telecommunications industry is an exciting one to be involved with.

My last portfolio was, as you know, Minister for Revenue and Assistant Treasurer. In those days I would say I in charge of pulling it in rather than "dishing it out".

While it may be stretching it somewhat to say I am going to be "dishing it out", it is exciting to be in a portfolio where the Government is playing such an active role in such a vital area of the economy.

It is a portfolio where a lot of the talk is around technology, but the real issue is how it impacts on people. The Howard Government does not direct its resources and energy to promoting this sector simply because it is enamoured with technology.

The reason new and innovative technology captures the imaginations of both governments and individuals alike is its capacity to drive our economic growth, transform our businesses and improve services to our communities.

With all the technological advances I am familiarising myself with, and there are a few, the question I keep asking and the question I encourage all of you to ask is how can this new technology help our communities, drive our economy and improve our quality of life.

As someone who grew up in a rural community outside of Wagga, the daughter of a farming family, who had to leave home to go to school, I am particularly interested in how technology can assist rural and regional communities.

You would all be only too aware of the capacity technology has to bring services to communities and to keep them together. I remember my father spending a day of his week travelling to town to undertake business which could now largely be done online or over the phone.

The opportunities that abound in this portfolio, and in telecommunications in particular, are exciting.

The Howard Government is proud of its telecommunications record which has unquestionably brought real and tangible benefits to people.

One certainty with this industry is that nothing stands still. Technology changes and expectations change, continually creating new challenges for Government and new opportunities for industry.

HiBIS

Now I want to turn to one of the Government's key telecommunications initiatives, namely the $107.8 million Higher Bandwidth Incentive Scheme (HiBIS).

Today is a big day for HiBIS. I am extremely pleased to announce that we have approved Telstra and Wideband Networks as HiBIS providers and we hope to register them shortly so they can start delivering services.

I am also pleased to announce that we have completed the registration of RBBS, DCS Internet and e-wire and they are now in the process of offering services. RBBS has already signed up its first HiBIS customer.

This announcement is fantastic news for people in regional Australia. With three HiBIS providers registered and two more to be registered shortly, customers for the first time get the benefits of cheaper broadband as well as the benefits of competition.

The approval of a Telstra ADSL service as a HiBIS service means that immediately more than 90 towns will qualify for access to ADSL services and more than 130 towns will have the threshold for ADSL rollout reduced by up to 60 percent.

This is excellent news for regional Australia. And it is just the beginning. There are many more service providers that are going through the approval process as I speak.

Broadband

Of course the importance of this announcement is not the technology or the companies that are registered, but what broadband services can do for people and communities.

The importance of broadband to meeting the needs of people in remote areas and for scattered populations is obvious.

What must be remembered is that broadband technology is not important of itself. Broadband is important for what it allows people to do.

Broadband means different things to different users. But essentially, high-speed, always on access to the internet offers great opportunities and advantages to consumers, large and small businesses, and whole communities.

One of the most encouraging signs from the Government's perspective is that the level of investment in, and take-up of, new broadband services seems to be continuing at pace. And we hope that HiBIS will stimulate even more investment and takeup in regional areas.

Over the last 12 months the number of ADSL enabled telephone exchanges has increased from 860 in April 2003 to more than 1080 . In April, Telstra also extended the distance that ADSL is available from its telephone exchanges . Over the coming years Telstra has stated that its ADSL coverage is expected to increase to 90 percent of premises.

There has also been significant investment in broadband by Telstra's competitors, thanks to access arrangements for Telstra exchanges and access lines.

Companies such as Optus, RequestDSL, Primus, iiNet and AAPT are installing their own ADSL equipment into Telstra's exchanges to deliver competing broadband services. And wireless broadband is becoming a reality with companies like Unwired and Personal Broadband Australia and many local operators establishing affordable and competitive services.

I understand Dr Horton of the Australian Communications Authority will be announcing some further radiocommunications initiatives later today, which will provide additional opportunities for wireless broadband delivery.

While the Government is not in the business of picking favourites or crystal-ball gazing about what sorts of technologies will be around in the future, it seems clear that fibre optic networks will play an important role as was made clear by Telstra's recent announcements.

Trials of fibre optic networks are now taking place in a number of locations across Australia. For example, Telstra and Alcatel are running a Fibre to the Premises trial in South East Queensland and Bright Telecommunications is running a similar trial in Perth.

For Australian consumers and businesses this investment means new opportunities, new ways of doing business and new ways of getting access to services.

Broadband usage

What is really pleasing to see is evidence that Australians are embracing broadband services. Broadband take up rates in Australia are increasing. The most recent broadband take-up figures that the ACCC is going to release today-show that take-up has increased an impressive 95.8 per cent in the 12 months to March 2004. The effect of recent price reductions, is likely to lead to even faster take up over the next 12 months.

More importantly, the take up of broadband by those likely to benefit the most - the business sector - is very impressive. The latest Broadband Barometer report produced by Pacific Internet shows that of those small businesses with an Internet connection, more than 52 percent are on broadband connections. This is up from only 23 percent two years ago.

And these businesses are seeing real benefits. A case study available on my department's website shows how a small business employing 19 full time staff, Essential Utilities Corporation, was able to achieve cost savings of more than $60,000 in the first year after purchasing a broadband connection and developing an e-commerce system. Almost a third of these savings came from reduced travel between its Sydney and Melbourne offices.

New broadband services do bring real opportunities for people to change the way they do business or how they interact with each other. New high speed wireless networks allow people to have instant access to email and the internet while on the move - which will usher in the next boost in business productivity.

Government policy

Despite the investment and the take-up there is still a lot of work for Government to do. We need to make sure that policy settings continue to encourage rather than inhibit investment and innovation. We need to be certain that all Australians no matter where they live or carry on business are able to take advantage of the opportunities afforded by new technologies. And we need to make certain that basic minimum service standards are maintained now and into the future.

The core work of Government is to get the regulatory framework right - this means both consumer and the competition regulation - and to make appropriate and timely investment where necessary. Promoting competition is still considered to be one of the best ways of generating innovation and improving services over time. It will help carriers to innovate and lift their game.

As has been the case in the past, the Howard Government will be looking to adjust the regulatory framework where there is evidence that it could more effectively drive competitive outcomes.

As well as promoting competition, we have developed one of the world's strongest sets of telecommunications specific consumer safeguards. The Universal Service Obligation, the Customer Service Guarantee, price controls and the Ombudsman's scheme all work together to guarantee people access to basic lifeline services. The Government is absolutely committed to maintaining these safeguards, all of which are enshrined in legislation.

Government funding for broadband

Targeted Government investment is a tool that we have used successfully on many occasions to make sure that all Australians can benefit from improvements in technology.

The Government's National Broadband Strategy recognises and acknowledges the important role broadband can play in improving access to essential services and in overcoming the tyranny of distance experience by many communities in regional and remote Australia.

The vision spelt out in the Strategy makes clear the Government's focus - it states that "Australia will be a world leader in the availability and effective use of broadband, to deliver enhanced outcomes in health, education, community, commerce, and government and to capture the economic and social benefits of broadband connectivity."

The Government's broadband initiatives all tie neatly into this vision and the national strategy. One of the most recent initiatives announced last week by my colleague the Minister for Health and Aging was a $35 million program to give all general practitioners access to broadband services. And, as a result make it easier for doctors to get access to online information and to send and process patients claims with Medicare and the Health Insurance Commission.

Another excellent example was outlined in the Australian early last week, these initiatives are delivering benefits to the lives of people in regional communities.

The Australian ran a story about the benefits of the North West and New England Health and Education Network. This project was one of the eight funded from the Australian Government's National Communications Fund.

This project has had a remarkable effect on a number of communities at a number of levels.

There are immediate benefits for the delivery of health and education services with the New England Area Health Service indicating immediate savings of more than $600,000. This does not include the benefits to workers who can spend more time at home and less time driving long distances on country roads.

A meeting that may have meant a four hour drive for nursing staff can now be held virtually, using video conferencing.

Call costs, fuel costs, vehicle repairs, will all be slashed.

From an education perspective, this high speed network allows students to participate and interact with teachers via video conference thereby removing the need for travel and increasing the possible amount of direct student-teacher interaction.

But perhaps the most interesting benefits are those arising from the way broadband connectivity can bring the delivery services back into the local community. A multitude of opportunities have emerged as a result of extending the network to local community centres.

Broadband connectivity can be used to give communities easier access to a whole range of government services. For example, improved access to government information services such as weather maps from the Bureau of Meteorology an important tool for modern farming.

This can help relieve the sense of isolation in communities and remove the need for people to leave the community in order to get access to essential services.

Through HiBIS the Government is helping to make broadband more affordable and accessible to individuals and small businesses. HiBIS is designed to encourage infrastructure development in areas that have not normally been commercially attractive, by giving incentive payments to providers.

HiBIS is a good example of how the Howard Government is working with industry to improve services in regional Australia. Strategic development of our telecommunications sector requires strong working links between key players. This also means shared responsibilities and challenges.

Other initiatives

In addition to investing in services through initiatives such as HiBIS and the National Communications Fund the Government has also been engaged in strengthening both competition and consumer safeguards.

In April this year, my predecessor directed the ACCC to review Telstra's price controls. Among the issues that this review will examine are the impact on different groups, such as metropolitan and regional consumers, and residential and business consumers. Price controls will also be examined in relation to developing competition and consumer choice. These are key considerations for developing new arrangements, which will apply from 1 July next year.

The Government has also acted on concerns about unexpected high bills from telecommunications services. Evidence from the Telecommunications Industry Ombudsman shows that the nature of this problem has been changing.

In the past it was the practice of 'Internet dumping' to premium rate telephone numbers in Australia that was the problem. However a decision by Telstra in August last year effectively stopped this particular form of internet dumping. But the problem of unexpected high bills has not disappeared.

Based on advice from the Australian Communications Authority (ACA), the Government has focused on the broader issue of credit management. We have directed the ACA to report by October this year on how industry is progressing in setting up effective credit management strategies.

The increasing range and complexity of services offered by phone companies and the different business models underlying these services makes a simple solution to high bills unlikely. But, as the spirit of the direction to the ACA shows, we are willing to have industry demonstrate that they have arrangements in place to deal with credit management concerns of customers. However, if industry progress is too slow, the Government will consider more direct intervention.

We have already made a service provider rule in relation to premium rate services for 1900 and international numbers.

This rule comes into effect on 19 August 2004. It will require providers to give consumers information about the risks of premium rate services, as well as advice on how to protect themselves from unexpected high bills. The ACA was also directed to make a service provider rule for mobile carriers. This will require carriers to provide customers with information on the risks of high bills from new premium rate mobile, audio visual and text services.

Challenges for the Future

As I have indicated, we believe that the broad approach to telecommunications policy remains relevant and robust. However there are going to be some specific challenges for both Government and industry in the future.

One of the challenges for industry will be to maintain and enhance the framework for self-regulation. Although industry is often best placed to determine the rules for maximising the potential for new services, this must be done in a way that provides adequate protection for consumers.

The Australian Communications Industry Forum (ACIF) plays an important part in this process. It needs to encourage compliance with the codes it develops, for example through the new Compliance Mark Scheme. ACIF's Consumer Advisory Council also plays a key role as an effective forum for consumer participation. I encourage all consumer bodies to get active in ACIF and the consumer code process.

I know that ACIF is currently hard at work developing a consumer code and that this process involves unprecedented co-operation between consumer groups and industry representatives. I expect all major carriers to remain committed to the timely completion of an effective code and I will be monitoring this progress closely.

Another challenge for the future is associated with Next Generation Networks. It is an exciting time for these services, as we move from talking about potential benefits to experiencing their actual effects. This shift is due to a number of factors, including developments in providing new packet based voice services.

Until recently these services were largely confined to the corporate market. They are now being offered to residential consumers and small-to-medium enterprises. A good example is Neighbourhood Cable's Voice over Internet Protocol (VOIP) 'chat phone' service.

In addition to operational efficiencies, it is the functionality of VOIP services that distinguish them from traditional PSTN (Public Switched Telephone Network) voice services. In terms of functionality VOIP can do the traditional types of things better for example such as call waiting, handling multiple simultaneous calls over a shared line and conference calls. This improved functionality can offer great advantages to businesses.

However, these phone services may not have all the features that consumers have been used to from a traditional PSTN telephone service. And customers will need to understand these differences if widespread uptake is going to occur.

For example, the quality of service may not be of the same standard as traditional services - although I note progress continues to be made in this area.

The challenge with new services is to ensure that policy supports their development. The regulation of new voice services and the broader policy issues raised by Next Generation Networks is a key telecommunications issue.

The Howard Government is already acting on this. The Department of Communications, Information Technology and the Arts (DCITA) will consult closely with the ACA, the ACCC, and key stakeholders to develop a co-ordinated policy framework that will meet these requirements.

Getting the regulatory balance right

An important part of developing good policy is to make sure that the benefits of new devices and services are also balanced with the need to protect end users, especially children. This concern is particularly relevant to mobile technologies. Mobile phones play a big part in our youth culture and it is essential that we protect minors from exposure to potential harm, such as adult content.

The Australian Government is committed to achieving this goal and has directed the ACA to regulate access to adult content provided on mobile premium services. A service provider determination will be put in place to restrict children accessing adult content and to generally regulate this sort of content.

The ACA will also examine the industry's performance in setting up consumer protection arrangements for premium mobile services. If industry does not deliver, direct regulation will be introduced.

An added challenge in mobile telecommunications is how we effectively regulate such a dynamic industry into the future. To address this, a study of the types of services likely to be offered and to become popular on advanced mobile phones is being undertaken. The study is being commissioned by DCITA, the ACA and the Australian Broadcasting Authority (ABA).

The findings will feed into a policy review that was announced in May this year. The review will be conducted by DCITA and will examine the adequacy of existing regulatory frameworks to address issues of content management and child safety that may arise from new audio-visual and related services on new mobile devices.

The Merger

All of these challenges highlight the integral role of convergence in developing the industry. One of the key reforms set up by the Government is the establishment of a new media and communications regulator, the Australian Communications and Media Authority (ACMA).

ACMA will be formed through a merger of the ABA and the ACA, and will help Australia to meet the future challenges of the telecommunications industry. ACMA will enable a coordinated regulatory response to converging technologies and services. And subject to the passage of legislation, it will be established by 1 July next year.

It is important to note that this merger will not be accompanied by substantive regulatory changes. Our existing structures are robust and the current frameworks remain appropriate. The benefit of ACMA is that it will be better placed to address issues that arise where the broadcasting and telecommunications frameworks intersect. It will also be better placed to respond to policy challenges that may arise in the future.

Conclusion

It is clear that there is a lot going on in this portfolio both in terms of Government activity and industry activity. I am looking forward to working with industry to make sure Australia is best placed to take advantage of the new technologies and new services that will inevitably appear in the future.

I believe that to date the Howard Government has worked hard to provide a solid foundation for the Australian telecommunications market. Our commitment is strong and our directions are clear. We have set up a policy environment that is based on healthy competition, smart legislation, responsible regulation, and targeted funding. Personally, I am looking forward to contributing my energies, enthusiasm and momentum to the shaping of the next phase in the development of Australia's telecommunications industry.

Thank you.