John Stanton – iStart keeping business informed on technology

Raft of regulation = increased cost to Aussie internet

Jennene Kelly — Tue, 07 Jul 2015 01:29:58 +0000

The Australian telecommunications sector has probably never felt closer to the Federal Attorney-General than it does in 2015 – but that proximity is not entirely enjoyable.

Amidst a rush of Government initiatives, the industry faces simultaneous policy and implementation challenges concerning data retention, telecommunications infrastructure security, the planned Copyright Notice Scheme industry code of practice, and proposed websiteblocking legislation.

The Data Retention legislation, requiring retention of a broad set of customer usage data by service providers for a two year period, passed the Senate on 26th March. Royal Assent was received on 13th April and the majority of the Act takes effect on 13th October.

Service providers unable to immediately comply with the complex retention requirements must, by that date, have their compliance implementation plans (outlining when and how they will be able to appropriately modify their systems) approved by Government.

The industry is waiting on word from the Government on the size of the financial contribution that it has promised to make towards the capital expenses that service providers will incur to comply (estimated at up to A$319 million). The Government is also yet to explain how it intends to share this cash among the many affected service providers; expect vigorous debate on this issue.

A service provider Experts Working Group is working with Government on implementation details, but without yet knowing the cost implications for providers and, more importantly, their customers.

Now, the Government has indicated it will introduce yet more legislation this year as it seeks to create a regime to monitor the ability of key telecommunications infrastructure to resist external cyber attacks. Known as the Telecommunications Sector Security Reform (TSSR) package, Government is proposing that this new framework be paid for by the industry – a further slug of around A$2-million per annum on providers and, by extension, their customers.

Things are no less busy on the copyright front. The Government directed in December 2014 that the Communications Alliance and our members work with rights holders and other stakeholders to draft a Copyright Notice Scheme Code to combat so-called internet piracy. After frenzied efforts, the Code was submitted to the Australian Communications and Media Authority on 8th April for registration.

The Code provides for up to three notices to be sent within a year to fixed residential broadband customers in response to allegations from rights holders that their copyright has been infringed though improper downloading of content. The Code does not provide for sanctions against customers, but does include a facilitated preliminary discovery process whereby persistent alleged infringers may (pursuant to a court order) have their details provided to rights holders, which may choose to pursue legal action.

The commercial agreement between rights holders and Internet Service Providers (ISPs), which will underlie the Code and funds its operation, is still under negotiation.

The Code provides for up to 200,000 notices per annum to be sent to customers, starting on or before 1st September 2015.
In more copyright-related news, the Government introduced legislation in April 2015 to create a website blocking regime, whereby rights holders (movie owners, music rights holders and others) would be able to seek court injunctions requiring ISPs to block access to offshore websites that are primarily designed to facilitate the infringement of online copyright through peer-to-peer file sharing technology such as ‘BitTorrent’.

Again, some of the costs associated with this new requirement look likely to fall at the feet of internet users.
Service providers support efforts to combat online piracy and, of course, to protect national security. Assisting these worthy objectives is, however, looking like a potentially expensive proposition for Australia’s ISPs and, by extension, its internet users.

ABOUT JOHN STANTON//

CEO of the Communications Alliance, John Stanton is a seasoned communications industry executive with over 18 years of experience. He served as CEO of ASX and NZX-listed telecommunications carrier, People Telecom and was also an executive with Intelsat, the largest provider of fixed satellite services worldwide.

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Data retention – the latest holiday spoiler

Jennene Kelly — Tue, 11 Nov 2014 03:52:29 +0000

Communications Minister Malcolm Turnbull introduced the much-anticipated legislation on 30 October. As has happened several times in this debate already, Mr Turnbull immediately found himself having to quell political fires lit by others. This time it was the recently-appointed Australian Federal Police Commissioner Andrew Colvin, who enthusiastically declared that “absolutely” the data that the Government want telecommunications Service Providers to retain about their customers’ communications could be used to track down the so-called “pirates” who infringe online copyright by illegally downloading movies, music, software and more.

Malcolm and the good Commissioner were both standing at a press conference when the unfortunate remarks were made, so a sharp kick under the table wasn’t an option available to the Minister.

Within 24 hours the position had been hurriedly clarified – no, in fact, the Government and its agencies would not be using the retained metadata to chase pirates. But if that’s the case, industry wondered – why is the Government asking for the upload and download volumes of Australian internet users to be retained and made available to security agencies?

High volumes can be a telling sign of a user engaging in illegal file-sharing, but can equally well indicate that the user is a graphic designer sending big files, a harried parent with many children surfing the web, a porn addict, a gaming nut or a small business. But are high volumes a secret sign that the user is a crook or a potential terrorist?

This is one of the myriad of issues that a new industry/Government working group will be tasked with examining as it seeks to put meat on the bones of the dataset that is described in higher-level terms in the legislation. The working group also faces the complex task of determining how much additional cost the telecommunications internet industry faces in order to design new systems to capture data that they don’t presently collect for business purposes. Industry estimates have ranged into the hundreds of millions of dollars, sparking fears that consumers will face the inevitability of higher prices for their internet service if a data retention regime is introduced.

The Government has said it will make a substantial contribution to up-front capital costs and to the ongoing operating expenses of the scheme. The focus will undoubtedly be on what that commitment translates into in hard cash – and whether the shortfall will place a burden on ordinary (and mostly law-abiding) internet users.

The working group will be expected to make recommendations to the Parliamentary Joint Committee on Intelligence and Security (PJCIS), which has been asked to review the legislation and make recommendations back to Government.

But the push is on to have the PJCIS complete its work (including calling for public submissions and holding public hearings) by late January – begging the question as to how the difficult and sequential tasks of the working group and PJCIS can all be squeezed into the Government’s desired schedule. The ALP members of the Committee can be expected to push back on the Government pressure, arguing instead for a reporting deadline sometime in February at the very earliest.

It sets the scene for plenty of cancelled vacation and long hours of work for both groups, at a time when most of the rest of the nation will be reaching under the tree, popping a cork or two and recovering from a game of backyard cricket.

*Information for this column was correct as of 7 November 2014

ABOUT JOHN STANTON//

John Stanton is the CEO of the industry umbrella group, the Communications Alliance, and is a seasoned communications industry executive with over 18 years of senior management experience. He is a former CEO of People Telecom, a former President of Intelsat, and former senior executive at Telstra.

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How to sink online pirates

Jennene Kelly — Fri, 22 Aug 2014 00:12:44 +0000

The Attorney-General, Senator George Brandis has generated a deal of excitement with his public statements about the urgent need to find ways to better protect the rights of creative content producers – writers, musicians and filmmakers among them – who all too often see their output made available for free via improper file sharing on the internet.

It’s a fair point and a big problem. Australia’s internet service providers ISPs (on whose networks the infringements typically occur, but without the ISPs’ involvement), do not in any way condone or authorise online copyright infringement and support the need for rights holders to enforce their copyright.

There have been concerted attempts in many countries around the globe to address the ‘online piracy’ issue. It is a complex dilemma: how to balance the rights of content producers against the rights of consumers, while maintaining the freedom of the internet. How do we also ensure that people can have easy access to affordable and legally available content when they want it?

The latter is a crucial consideration, because online infringement is very often prompted by the fact that consumers are frustrated by the lack of a legal way to get hold of the content they want, and therefore turn to less noble ways of obtaining it.

Rights holders claim that availability and pricing of content is not the problem. If so, why is piracy falling in the US where content is more widely available and better priced – but not falling in countries such as Australia that still suffer the barriers of geo-blocking? Interesting evidence comes from the music industry’s soaring revenues for music streaming businesses such as Pandora and Spotify that – guess what – make the music available and affordable.

None of the so-called ‘graduated response’ schemes created overseas has proved particularly successful. Some have been very costly – such as the scheme implemented in France – and have been substantially wound back. A definitive recent study by Monash University’s Prof Rebecca Giblin, examined such schemes in place in seven countries and found no correlation between the graduated response schemes and the level of infringing activity.

Communications Alliance and Australia’s major ISPs spent 18 months negotiating with rights holders (in discussions facilitated by the Attorney-General’s Department) to attempt to reach agreement to launch a trial graduated response scheme, to run over an 18 month period. It was designed to test the effectiveness of such a scheme in Australia and hopefully to build evidence for a business case to create automated systems to track down infringers.

The talks foundered on one basic issue – the insistence of the rights holders that ISPs should wear the costs of running the scheme – i.e. the internet companies should pay to enforce the rights of Hollywood studios and the like (costs that would ultimately be borne by law-abiding Australian broadband customers). The rights holders claim that online piracy costs them $1.4 billion per annum in lost sales in Australia alone, yet were unwilling to contribute even $1 million to address the problem.

Australia’s ISPs remain willing to negotiate for a fair solution, and indeed the CEOs of Australia’s biggest internet companies wrote to Senator Brandis very recently to underline that desire.

What is needed for that to move forward is:

Agreement by rights holders to reimburse the reasonable costs that ISPs will incur in helping to protect copyright.
Agreement to jointly engage in a public education programme to warn consumers that their activity may be illegal and where they can legally access content.
An assurance from Government that Australian consumers won’t have their rights or privacy compromised, and won’t be placed at risk of being disconnected from the internet as a result of an allegation – and that ISPs legal rights are protected.
A recognition that infringing technologies are evolving rapidly and that any ‘solution’ must be designed so that it is not rendered obsolete by technological change.
An ongoing commitment to continue growing the digital content market, including concrete steps to break down content-availability barriers that still exist.

ABOUT JOHN STANTON//

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Telco complaints laid bare

Jennene Kelly — Sun, 20 Jul 2014 21:23:50 +0000

At dinner parties across Australia these days conversation almost invariably turns to the injustice of skyrocketing electricity bills.

But a few years ago the more common topic of collective post-prandial outrage was the poor customer service performance of the nation’s telecommunications companies.

Not that it was universally bad – many Australian telcos have built their business success on the strength of their customer service. Nonetheless, almost everyone, it seemed, had a story – or knew someone who had a story – about an unexpectedly high phone bill or the difficulty of getting a problem resolved with their telecommunications provider. Complaints to the telecommunications industry ombudsman (TIO) had reached record volumes and the Government and regulators were on the brink of implementing harsh new standards and regulations.

The introduction of a stronger new Telecommunications Consumer Protections (TCP) code in 2012, combined with a genuine change of mindset within the industry and a shift to make customer service excellence the new competitive battleground, has seen marked improvements during the past two years.

Complaints to the TIO fell to a six-year low in the last quarter of 2013 and a swathe of new products have hit the market, designed to prevent so-called ‘bill-shock’ – particularly that stemming from mobile data and international roaming charges. Mobile customers now receive mandatory spend alerts as they near their monthly data allowance and have access to other tools to help them manage their spend.

A quarterly survey of telco customer satisfaction, conducted by Roy Morgan Research on behalf of Communications Alliance, is showing a slow but steady rise in satisfaction levels. Telcos are no longer as unpopular as banks (OK, it’s perhaps a pretty low bar, I concede, but progress is progress…).

Research recently conducted by the industry regulator (the ACMA) found that consumers are finding it easier to compare the different plans and products on offer in the market, thanks to the stronger and more standardised requirements for product-summary information to be given to consumers pre-sale.

The ACMA research revealed that 82 percent of consumers had found helpful the new Critical Information Summaries (a standard format description of all the key attributes of a product plan, including price, inclusions and exclusions, performance characteristics and termination conditions) that service providers are making available to prospective customers in their shopfronts and on their websites.

Many consumers believe, however, that it is still difficult to reliably compare the customer service performance of telecommunications companies before deciding with which provider to sign up.

Help is on its way. The Communications Alliance is with working with the TIO to create a regime that will track, over time, the comparative customer service performance of individual communications service providers.

Under the planned scheme, the complaints lodged with the TIO against individual service providers during each quarter will be converted into a ratio of complaints in relation to the total relevant services that the provider has in operation at that time.

In this way consumers will be able to see a graph tracking the comparative customer service performance of individual telcos, their competitors, and whether the achievement of each is trending in a positive or negative direction over time.

Already seven service providers – representing collectively a large majority of the total market – have volunteered to be part of the programme, which will initially operate for 12 months before having its effectiveness reviewed.

It’s up-Kimono time in a way that has never before been seen in the sector. It certainly risks bringing telcos back into the dinner party conversation, but hopefully on a more informed and positive note.

ABOUT JOHN STANTON//

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