Q&A with Chris Chapman

This month Policy World interviews Chris Chapman, President of the IIC and the inaugural Chair of the ACMA – December 2018

Q. Earlier this year the IIC held a Telecommunications & Media Forum in Sydney, in partnership with its Australia Chapter and the University of Technology, Sydney. What do the priorities look like ‘Down Under’ for regulators and industry?

A. Australia has been focused on the rollout of its National Broadband Network (‘NBN’) and its 5G preparedness, as well as reform of the spectrum management framework (which reform remains ongoing, albeit at a very languid pace as the exposure drafts of the new legislation await release). Following some media law changes last year, a number of reviews into public broadcasting, Australian content rules and digital platforms have been initiated – however, disappointingly, the broader reform task of modernising the whole of the regulatory framework from first principles has not really commenced, despite the fact that both industry and regulators acknowledge the need to re-appraise the laws crafted in the analogue era. There is certainly renewed acknowledgement of the need for a Digital Economy Strategy (recently released), while there has been an ongoing focus on online safety, with the introduction of civil and criminal penalties for the non-consensual sharing of intimate images.

In 2018, as the rollout of the NBN has continued, and with over half the expected users now connected, the regulators have had a strong renewed focus on addressing consumer experience issues (as the migration moved into its busiest phase yet) and industry is now responding to accommodate the momentum created by the regulators.

The Australian Communications and Media Authority (ACMA) efficiently concluded its auction of 5G spectrum in the 3.6 GHz band (recognised internationally as a key band for delivery of next generation 5G services) and realised total revenue of AUD$853 million. This process followed an industry request for expedited release of spectrum for early deployment of 5G services in Australia, to which the ACMA responded by fast-tracking its processes.

In parallel, industry and government continued to work on streamlining arrangements to allow mobile carriers to deploy infrastructure more quickly and reviewing existing telecommunications regulatory arrangements to ensure they are ‘fit for purpose’ for the 5G era.
In 2018, Australian policy-makers, regulators and government-appointed panels have undertaken a supplementary range of reviews initiated as part of the abovementioned media law reforms (which reforms provided some liberalisation of the media ownership and control rules. This liberalisation has now given rise to the first major merger of heritage media organisations, the Nine Entertainment and Fairfax, bringing together free-to-air television and radio, subscription video on demand, national and metropolitan newspaper and digital real estate assets.

The media law changes also included the following:

• a review of local content settings, which still focus on free-to-air and subscription broadcasters, not OTTs (status: the Government is still to report);
• the Digital Platforms Inquiry of Australia’s competition regulator (the ACCC), looking at the market power of Facebook and Google, and associated impacts on public interest journalism and consumer privacy (status: the ACCC’s wide-ranging preliminary report has just been given to the Federal Treasurer); and
• some shortening of the anti-siphoning list, which restricts access to key sporting rights for subscription television licensees, but not OTTs.

Public broadcasters have also been under the microscope with:

• a Competitive Neutrality Review finding that Australia’s two public broadcasters are not taking advantage of their public ownership to gain advantage in the market for audiences, and in the case of the Special Broadcasting Service (SBS), advertisers; and
• a review of the efficiency of the public broadcasters, initiated after the Government froze indexation of the Australian Broadcasting Corporation’s funding, with an impact of more than $80 million over coming years (status: still being undertaken).

Q. Data use and privacy were on the agenda at the Sydney TMF, and IIC Australia Chapter held an event on the subject in November. Is the Oceania region approaching this topic in a similar way to other parts of the world, or is there a different approach?

A. In what is a real paradigm shift, the Australian Government has decided to legislate a Consumer Data Right to give Australians greater control over their data, empowering customers to choose to share their data with trusted recipients only for the purposes that they have authorised. The ‘Right’ will be implemented initially in the banking, energy and telecommunications sectors, and then rolled-out economy-wide on a sector-by-sector basis.

Also, Australian businesses with a presence in Europe are, like many around the world, keeping a watchful eye on their compliance with GDPR, but Australia’s domestic privacy law is yet to be evolved to catch-up.

The big change for Australian businesses in this area in 2018 has been the commencement of a mandatory data breach notification scheme, which requires notification to affected individuals and the regulator where a data breach involving personal information is likely to give rise to serious harm. The balance to be found is between notifying where there is a serious risk of harm (like identity theft) and notification fatigue (where businesses become overly-cautious and notify individuals of breaches of data that are not high risk). Another challenge will include coordinating notifications when more than one data holder is involved in the breach.

Q. The ACCC is starting to attract enormous attention with its Digital Platforms review. Why might this review be of interest in other jurisdictions?

A. The ACCC’s inquiry is very broad in scope and the preliminary report proposes recommendations for new regulation of digital platforms. These proposals have been premised on a finding that two of the leading platforms, Google and Facebook, both have substantial market power. The report will be of interest because of its multi-pronged approach to the subject. Although it’s only a draft report at this stage, if the recommendations are adopted by government, they would represent a concerted and expansive attempt to bring digital platforms more squarely within the regulatory framework.

More specifically and addressing concerns expressed to the ACCC about a lack of transparency on the part of these digital platforms, these is a proposal for them to report to a new regulator on the ranking and display or advertisements, including practices which might favour their own business interests. And in a move that links business models to content and recognises the ‘public good’ role of news and journalism, this new regulator would also have the power to require information on the ranking of news and journalistic content.

The ACCC also makes recommendations about strengthening the application of the competition test in merger scenarios or where platforms acquire smaller firms that could develop into competitors, measures to encourage more consumer choice on pre-installed browsers and search engines, new take-down procedures for copyright-infringing material, and some significant suggestions about the collection and use of data. Among ideas for further consideration is a digital platforms ombudsman who could consider disputes with businesses on advertising, as well as from media companies on news rankings and from consumers on scams.

And in a move that reflects the consistent thinking in the IIC over recent years on the need for the modernisation of communications regulation, the ACCC says is it proposing to recommend to government a sweeping review of current regulatory arrangements relating to the production and delivery of content. This would include the underlying principles for regulation as well as the enactment and enforcement of rules across a uniform, platform-neutral framework. Sounds like policy review from first principles!

Q. AI has been on the IIC’s programmes at several events this year, including the Sydney TMF. How is Australia approaching AI in terms of fostering innovation whilst retaining regulatory oversight?

A. With the dawn of intelligent robots, clouds and deep-learning machines, big data and algorithms, the Australian Human Rights Commission has consulted on the subject of ‘Human Rights & Technology’ to look at what technology means for our society and how we can harness it for good.

The BIG question – of how we use technology for good, how we protect human rights in the digital age and how we design and imbue software, algorithms and systems with values that promote our humanity, value inclusiveness and well as diversity – is a live one.

I’m drawn to the work and refreshing thinking of Australia’s Chief Scientist, Dr Alan Finkel, who is really invested in this project and who has called on Australia to be leaders in the field of ethics and human rights – for Australia to be human custodians in the era of Artificial Intelligence and has proposed what he calls a ‘Turing Stamp’ – a certification-based trust mark system to promote ethical AI.

Dr Finkel reminds us that Australia led the way in establishing an ethical approach to IVF (which was a radical notion 40 years ago and for which there was no rule-book) and he exhorts us to apply the same values-based approach to AI.

He suggests: “Every time we come to a decision point about the technologies we allow into our lives, we must ask ourselves: What kind of society do we want to be?”

Meanwhile, the government has committed funds to strengthen Australia’s AI capability and industry is forging ahead. Indeed, Australia’s ‘Australian of the Year’, Professor Michelle Simmons, is the Director of the Australian Research Council Centre of Excellence for Quantum Computation and Communication Technology, a Laureate Fellow and a Scientia Professor of Physics at the University of New South Wales in Sydney.

It is also worth noting that Standards Australia is working on standards development for AI, and is looking to work with the ISO to progress what is a fascinating and global project.

Q5. Do you have any predictions for 2019? (Other than who will win the Ashes in September!)

A. With a federal election almost certain in the first half of 2019, attention will be on the NBN, which is now well advanced in its roll-out of high-speed broadband across Australia. NBN was commenced under a Labor government in 2009, but when the conservative Coalition parties came back to power in 2013, there was a dramatic shift in policy to the current ‘multi-technology mix’ involving Hybrid Fibre Coaxial, Fibre to the Node, Fibre to the Building and now Fibre to the Curb – as well as technologies used in the original Labor model (Fibre to the Premises, fixed wireless and satellite). Australia’s communications and competition regulators have both been involved in recent attempts to solve headline-grabbing problems including consumer dissatisfaction with delays in connections and quality of service. But with around 4 million active services by June 2018 and completion scheduled for 2020, any significant departure from policy or current arrangements may be difficult.

In the shorter term, many will be watching with interest as the ACCC considers the proposed merger of Vodafone Hutchison Australia and TPG Telecom. The ACCC very recently issued a ‘statement of issues’ addressing the potential impact on Australia’s mobile and broadband markets. The ACCC identified TPG as being on track to compete with the existing three mobile network operators, with possible competition concerns arising from a merger with one of those existing players. It also raised the prospect of VHA being an active competitor in fixed broadband services. A decision is expected in late March 2019.