ICT Applications Powering the Digital Society – Protecting Consumers (Citizens)
Speech by Chris Chapman to the ITU APac Regulatory Roundtable, Seoul
This morning I am speaking about the necessary protection of consumers and citizens as we transition to the Digital Society, or as we have come to refer to it at the ACMA, to the Networked Society.
I will talk about recent ACMA work focussed on the citizen interest in broadcast media and also review our substantial (and still current) consumer protection intervention in telecommunications, launched in 2010. In doing so, I will traverse some of our research in the area of digital citizenship and a series of current emerging communications issues.
This will lead me to my concluding discussion of the need for a single, coherent regulatory framework for media and communications, as detailed in our recently published occasional paper, Connected Citizens – Regulatory strategies for a networked economy and society.
But by way of background introduction, let me note that the regulatory agency I lead, the Australian Communications and Media Authority (ACMA), operates across a diverse and complex media and communications landscape, consistent with our corporate mantra to: ‘communicate, facilitate, and then (if all else fails) regulate’. We also conduct our various regulatory activities across an equally diverse and complex continent with a number of distinct characteristics. For example, we have a highly concentrated geographic distribution of population. Canada and Australia virtually level-peg as the countries with the most uneven population distribution in the world, with OECD figures confirming that about 65 per cent of the Australian population live in an area that is just 0.5 per cent of the large land mass of our continent.
We administer some 26 Acts and 523 pieces of communications and media regulation. At the same time we work with the television and radio industries, telecommunications companies and internet service providers, device manufacturers and the telemarketing industry. The industry we interact with across this geographic space includes:
- over 270 commercial radio and 50 commercial television licences, 300 community radio and 80 community television licences, and 2,500 subscription television licences and two national radio and television broadcasters;
- in excess of 170 licensed telecommunications carriers and more than 600 internet service providers (ISPs);
- 212 VOIP providers; and
- more than 155,000 holders of licences to use radiocommunications spectrum for a variety of purposes (including telecommunications, aeronautical aviation and maritime).
And virtually all of the different industry players we interact with confront unprecedented change – a change that is fundamentally internet-driven and turbo-charged by the increasing ubiquity of high capacity broadband, and an exponential growth in digital content.
ACMA’s work has many touch points in the everyday life of citizens and consumers in Australia—as people use television, radio and the internet for entertainment and to obtain news and information, as they create social network communities, upload mobile phone photographs to the web and message one another using SMS or instant messaging services. We also interact directly with the community, for example through our Cybersmart programs providing information and resources for individuals to solve new issues as they arise from relentless technology innovation in this space. Amongst these issues is the necessity for citizens to navigate their way through apps and related cloud services in Australia’s growing information economy – I will return to this and other such emerging issues below.
It has been clear to us at the ACMA for quite some time that there is a transformational need in the communications and media space. We released in August 2011 a thought leadership paper, Broken Concepts: The Australian communications legislative landscape, to which I released an update in May this year. Since we 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).
This sense of strain is of course not unique to Australia: as the ITU has noted in your 2013 edition of Trends in Telecommunication Reform, this is a contemporary reality for all those charged as regulators of communications and media (whatever the precise configuration of their legislation and functions). Those publication notes, in a view that is broadly consistent with our analysis, that:
“In such an era of transition, policy-makers and regulators need to consider carefully whether their legal and regulatory frameworks will be able to effectively address the changing ICT landscape and ensure non-discriminatory practices and transparency of information from network and service providers. As the character of the services carried over broadband networks becomes genuinely transnational, strengthening cross-border, regional and international cooperation will remain key to ensuring that all citizens of the world can benefit from affordable, secure and safe access anytime and anywhere”.
I also have to be frank with you – while there have been 10 “on’s”, we (collectively the engaged ones with informed stakeholder interests) have not actually identified any “off’s” and so we (again collectively) have not effectively engaged with the elements which are not working on the governing framework for communication and media in Australia.
However among the essential concepts which we do not regard as ‘broken’ are the protection of the consumer and defence of citizen interests in communications and media. The ACMA noted early the need to understand and adapt to the changing dynamics around various roles such as consumer, citizen, user and viewer in the context of media and communications and the lives of individuals in contemporary society, and the links and potential tensions between these in the regulatory domain.
We have engaged over recent years with the notion of citizen obligations and responsibilities, initially documenting that initiative in a 2010 occasional paper ‘Citizens’ and the ACMA— Exploring the concepts within Australian media and communications regulation. This paper discussed public policy developments relating to ‘citizens’ and their relevance to the regulatory activities of the ACMA. In this paper, we considered the application of citizen concepts to our role as a regulator of media and communications and, in the course of doing so, explored general concepts relating to ‘the citizen’ in recent public policy discussions. It explored how the ACMA, as a media and communications regulator, can develop its citizen-centric approach to its activities and functions, within the context of public sector-wide initiatives to place the citizen at the centre of public services. It provided a starting point and has set a direction for the incorporation of the ‘citizen’ concept into the heart of everything we do in our service delivery and regulatory activities.
The ACMA has considered the role of the citizen carefully during our transformation thinking, particularly in determining our strategic purpose as being ‘to make communications and media work in Australia’s public interest’. Central to this purpose is the notion of the ‘citizen interest’. While not explicitly referenced in the legislative framework of the ACMA in the same direct fashion as for Ofcom in the UK, the concept of ‘citizen’ in the view of the agency aligns well with the current concept of ‘Public Interest’.
It has been my longstanding intuition that the ‘citizen’ perspective will be invaluable in meeting the regulatory imperatives of the emerging digital economy, particularly as the necessary work on reconstructing ‘communications and media regulation’ eventually comes to pass. A foundational exploration of first principles for media and communications can be found in our pivotal work identifying Enduring Concepts which we published as a companion piece to that Broken Concepts work in November 2011.
Of the 16 enduring concepts identified in the paper, 3 are identified as ‘convergence’ concepts which expose issues of concern—and opportunities—not envisaged or anticipated by, or clearly articulated in, current frameworks…and they apply equally to citizen and consumers.
- Confidence by citizens and consumers in using new communications and media services, coupled with the recognition of shared responsibility for making these work in the public interest.
- Digital information management since the appropriate treatment of personal data is emerging as a key issue in the digital economy.
- Digital citizenship which recognises that to participate fully with today’s new services and devices, a much greater degree of understanding and expertise is required. Digital literacy and an understanding of individual rights and obligations are of growing importance to effective engagement in social, economic and civic life.
You will note that each of these embodies a significant intersection with the role and circumstances of the citizen in the networked society. As such we have embedded significant activity at the ACMA aligned with that imperative – indeed we crafted the remit of one of our 5 Divisions – the Content, Consumer and Citizen Division - to bring into one place the bulk of the ACMA’s work related to the interests of individuals as citizens, as consumers and as audiences for content.
On the content side of our regulatory ‘business’ we currently have underway a project to examine Contemporary Community Safeguards in the broadcasting codes of conduct. Both radio and TV broadcasting codes have a history of incremental reviews.
Notwithstanding the ‘convergence’ changes wrought by digitalisation, the internet and Web 2.0, clearly broadcasting remains highly significant today and is likely to remain so into the foreseeable future. However we (and I think all sensible media and communications business leaders) can anticipate that at some point radio, TV and print (as we know them) will ultimately surrender their pre-eminence as delivery platforms as their historical “influence” wanes. How this media world will ultimately manifest itself is unknown, except that it seems certain to be a world in which media forms change shape rapidly.
Critically, broadcasting is the current embodiment of “influence”. It is our intuition that influence, a concept central to the current regulation of media in Australia, will remain pivotal – the touchstone for why a government regulator might have an interest and what such a regulator might seek to achieve. In our view, with further reviews of current industry code imminent, The industry and the ACMA now have a tremendous opportunity for fresh, ‘first principles’ thinking as to what protections the citizens who constitute our community really want out of such codes. We are optimistic that this work on deepening our understanding relevant to benchmarks for safeguarding the public interest in broadcasting codes will also establish what is important in regulating influential media, whatever the platform it is delivered on or the form it takes in future for consumption by citizens (viewers and listeners) and consumers.
The ACMA has also demonstrated that we will not hesitate to take strong, decisive, yet sensible and “fit for purpose” action in the interests of consumers, while also acting in a pragmatic and flexible way, seeking to include industry in the solution.
In 2010, I challenged the Australian telco industry to transform the way it deals with its customers in generally, 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% on the previous year. At that time the ACMA therefore commenced an extensive public inquiry, Reconnecting the Customer, to get to the bottom of what was driving consumer dissatisfaction.
That was an evidence informed inquiry: we heard stakeholders and we undertook research. We examined the complex market that had come to characterise the Australian telecommunications industry, where consumer complaint levels had been far too high and poor customer care (both directly and indirectly) were driving many consumers to complain. We observed great complexity in the packages or bundles offered by service providers, as well as their pricing. Even from a single service provider, the task of deciding the bundle that best matched a consumer’s individual preferences for type of service, quality, speed, handset and volume of usage was complex. Comparing packages across service providers became concomitantly more complicated—not only did a number of packages from each of a number of service providers have to be compared, but the information about essentially the same service is provided in different ways.
Although this complexity was generated by service providers, it partly responded to consumers’ wants (for example, access to different services on one device), and provided potentially attractive benefits for consumers, along with uncertainties and risks. It had profound impacts on the behaviour of both consumers and service providers. We found work in the field of behavioural economics to be particularly useful in considering ways to assist consumers navigate this complexity. We noted that consumers:
- can only take so much product information into account and are susceptible to advertising;
- are likely to copy the decisions of friends, rather than make time consuming independent enquiries;
- unlikely to dig deeper into fine print; and
- can be short-sighted in their purchasing decisions.
As a consequence, each of these factors increases the likelihood that a consumer will make a choice that turns out to be a poor one in hindsight and our resultant conclusions have been designed to drive product offerings in this particular domain that are more comprehensible and help consumers avoid these and other behavioural traps. It is an aspect of human behaviour by people both as consumers and citizens that will need to inform possible interventions in other complex areas of media and communication as the networked society continues to evolve.
Consistent with our empirical findings in our Reconnecting the Customer 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. 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.
We were pleased to have been able to adapt the inherent flexibility of the Australian 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.
Indeed I note the statistics reported just the other day by Communications Alliance being results of ‘Wave 3’ polling undertaken by Roy Morgan Research for them from July to September 2013. These showed overall encouragingly high levels of satisfaction with customer service and an improvement in the percentage of ‘very satisfied’ customers (31% for this third wave of polling compared to 25% in Wave 2). The leading source of this improvement was customer satisfaction with the ease of contacting providers, with improvements also apparent across a range of other indicators, such as the information on products and ease of understanding information on the bill.
However, from our perspective, it is never a ‘set and forget’!
I do not have time for an extensive overview of the ACMA’s activity in ensuring compliance with the new code. But just to provide a summary of our results to date.
- examined advertisements from providers to check if industry stopped using confusing advertising terms such as “capped”, “free” and “unlimited” where the offers are not capped, free or unlimited;
- checked advertisements of eight larger providers for standard charge information;
- audited provider Critical Information Summaries (CIS); and
- reviewed complaint handling policies, obtaining improvements to ensure all are compliant where necessary.
When a provider’s response to the ACMA’s identified non-compliance was not satisfactory, we have gone on to take the following necessary enforcement action:
- Formal warnings for non-compliance with CIS requirements;
- A formal warning for a provider failing to prominently display standard charges in a mobile phone offer;
- A direction to comply with the privacy requirements of the Code, following a failure to protect the privacy of its customer’s personal information; and
- A formal warning for deficiencies in a financial hardship policy.
Those necessary actions aside, our assessment is that the new TCP Code has bedded down well. With a few exceptions, we have found industry is genuinely making the effort to meet the new rules and willing to take prompt steps to comply where we have been found them short of the mark.
More broadly we are observing a cultural change in the sector, with a greater focus on customer care. I note that Telstra CEO David Thodey has repeatedly spoken over the last several years about making improving customer service a top priority and his commitment to rollout the Net Promoter Score with the aim of turning their customers into advocates. Establishing a competitive dynamic around customer service, initiating a virtuous rather vicious cycle in the marketplace, was a key aspiration for the ACMA when, way back in April 2010, I spoke of the need for a step change in the way the telecommunications industry in Australia interacted with their customers and suggested that there was a “great opportunity for leaders in the Telco space to establish customer-centric approaches that are brand equity led”.
I think that step change is underway, and competition on the basis of customer care was a key strategic dynamic we sought to foster through our RTC intervention. I was also interested to see widely reported remarks made by Kevin Russell, the new CEO of Optus, who said: “I'm very clear about where the Optus brand needs to go. It needs to differentiate in terms of doing the right thing by Australian consumers. We’re not going to beat Telstra by outspending Telstra. We’re not going to beat Telstra in infrastructure. We can beat Telstra because we care about our customers more, day-in day-out.”
So in summary, in a concerted program of action, in 2010 and 2011 the ACMA firstly conducted the Reconnecting the Customer inquiry, publishing its final report in September 2011. Registration of the new TCP code followed in September 2012. A key focus of both was improving the information available to customers, empowering them to make wise choices of carrier and service.
Secondly, in June this year the ACMA made the new International Mobile Roaming standard, so that customers might be fully informed of the facts about using their mobile devices while overseas, before getting any nasty surprises.
Thirdly, and on the other side of the coin and also this year, the ACMA publicly committed to a review of legacy – and possibly no longer useful - information requirements with which providers are obliged to comply.
For instance a couple of weeks ago, I signed the Telecommunications Service Provider (Premium Services) Revocation Determination, removing the requirement for providers to give information to their customers every two years about the financial risks associated with the use of premium voice services.
There has been a decline in the market for 190 services, with the demand for such services having largely migrated to mobile and online. At the same time, there has also been a significant reduction in consumer complaints and detriment arising from premium voice services. The Authority determined that the correct balance lay in the removal of these requirements. Of course, the Mobile Premium Services protections remain in place.
Fourthly, we have an information-focused mobile network performance forum coming up in November in advance of which we released two weeks ago an ACMA discussion paper about Mobile network performance, which is intended to provide thought provoking information about the consumer experience of mobile broadband to stakeholders.
It poses a number of questions to help identify areas of focus for discussion that can be more fully explored at the forum.
The paper explores:
- The factors that shape consumer perceptions of good and bad mobile network performance;
- Key technical aspects of mobile performance and network management; and
- The information currently available to Australian consumers about the performance of mobile networks.
This ongoing program of work is all about the quality and timeliness of meaningful information for Australian telecommunications users. This program will continue.
I launched our customer-service focused inquiry not only in response to an endemic poor customer care record and, frankly, poor reputation for industry, but also in anticipation by the ACMA (much better anticipation I must say than any of the Australian telcos at the time) of the impact of the internet and associated threat to them of OTT (Over The Top) services and the ever more complex value chain permutations that a broadband-enabled world will throw up. Russell also reportedly sounded a warning in a very recent address to the Australia-Israel Chamber of Commerce to his fellow telco competitors that the biggest threat to revenues could yet come from outside the industry. He believes that some of the big Internet brands, including the likes of Google and Apple, have deep pockets and in many cases a better reputation with customers. I think he is strategically sound to assume that. With the ultimate ubiquity of true broadband, with the full suite of apps and as yet undreamt of applications, the trend is obvious; individual citizens on their smart devices and with seamless global reach are increasingly at the centre of influence – (probably, one day, they’ll be squarely at its centre). And consumers, as individuals, can drop overnight the current “big thing” and make or break the next “big thing”. In large part, it all depends on the ‘trust’ thing…
Using the notion of public interest as a starting point, the ACMA has explicitly reflected on and now incorporates “citizen interests” in its regulatory decision-making. We have built a considerable body of research about the changing ways individuals interact with digital communications and media – but as citizens, not just as consumers. Being a digital citizen in Australia encompasses how we participate online, and how we express attitudes to rights and responsibilities, including responsibilities for risk mitigation and education.
Over the past five years, the ACMA’s research developed a multi-dimensional view of digital citizens behaviour and the influence of individuals in contributing to the overall security and stability of the digital networked economy and society. We understand emphatically from our research that many citizens see themselves as active participants in the digital world and they want to take responsibility for managing their digital content and communications. But they also look to business and government for guided support in managing the networked environment.
We recognise that there are strong commercial, economic and social benefits that stem from access to information and its free flow. There have also been specific benefits from information economy technologies such as mobile and then smart phones, as well as the promise of mobility connected to cloud computing resources. This is translating into significant general economic benefit – for example, McKinsey & Company estimated a substantial consumer surplus from the internet of €100 billion euros a year in 2011, a total they projected to grow to €190 billion euros by 2015 as broadband becomes ubiquitous and as new services and wireless devices come to the fore.
But there are strong countervailing concerns related to how we protect and manage commercial and personal digital interests and associated data. Getting these elements right will help to protect the equally obvious benefits we observe. 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.
Generally, we engage from a perspective of what I term ‘first principles thinking’, which we believed and continue to believe will usefully play into ongoing development of regulatory responses to the development of the broadband-enabled ‘networked society’. These are ideas, or expectations of public interest outcomes, which we consider have been and will remain important to the shape of the media and communications environment and signal how it should be approached in a legislative and regulatory sense.
An important element of this and our citizen-centric approach is the understanding that the ‘active citizen’ is a key element in the shift from a predominantly rights- and entitlements-based approach to citizens looking after their own and their families’ wellbeing. Implicit in this is the need to educate citizens about how to do so. This was the basis of our research evidence informed initiative to recently publish a Digital Citizens Guide, which pursues the theme of helping citizens be positive about digital engagement rather than being a wary internet user. The message in the Guide is coming up to speed with digital technologies and making informed choices rather than about being wary online. The Digital Citizens Guide will help Australians stay safe, and reflect positive values while participating in everyday online activities like socialising, shopping and accessing information. Our research, coupled with our long experience in the cybersafety world tells us that a positive approach to the use of the internet is what’s really needed and that Australians will welcome advice on such clearly actionable steps.
The Guide is part of the ACMA’s multifaceted and flexible response to the challenges, and an important illustration of one of the ways forward, in Australia’s increasingly networked society. Australian citizens are indeed citizens of a digital world, and the guide is aimed to help facilitate Australians’ confident online engagement through identifying three principles which reflect the requisite values, skills and knowledge for confident online engagement by citizens:
- Engage positively: exercise your rights and responsibilities as a digital citizen;
- Know your online world: learn new skills and digital technologies; and
- Choose consciously: take charge of how you interact online.
As online communications and digital content become more embedded in the experience of citizens, I expect that a greater emphasis on the ACMA’s communication and facilitation strategies, such as this Guide, will be both needed and welcomed. In an important endorsement of such a networked way of working, the new Digital Citizens Guide was indeed welcomed by a wide range of industry and community partners, including: Google, Facebook, Telstra, Microsoft, the Commonwealth Bank, The Alannah and Madeline Foundation, Yahoo!7, the Interactive Games and Entertainment Association, the Internet Industry Association, the Australian Mobile Telecommunications Association, the Family Online Safety Institute, Bravehearts, and the Centre for Internet Safety.
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. We just recently completed the set of three papers that began with our review of firstly of Broken, and then Enduring, Concepts, when we released our paper about a viable coherent regulatory framework for a networked society and information economy which sketches a way forward - Connected Citizens – Regulatory strategies for a networked economy and society.
In it we discern that as we move to the realisation of the networked society, a broader mix of strategies will be called for and describe a broad regulatory practice approach will provide an explicit mechanism for rebalancing of regulatory and non-regulatory interventions to allow a better targeting of responses to particular digital citizen and consumer issues in emerging areas of concern such as managing digital content, identity and reputation, i.e. one that is ‘fit for purpose’.
In June of this year, the ACMA released a series of 4 occasional papers consistent with that approach and aspiration, examining different aspects of current emerging communications issues. This body of work looked at developments in mobile apps, near field communications and privacy, the digital data environment and cloud services. Each paper considered the implications from these developments on current regulatory settings.
Mobile applications (apps) represent one of the most significant developments in media and communications in the past five years. Apps are software programs that may be installed on smartphones and other communication devices. At the heart of this evolution is the transformation of mobile telephony from a voice- and text-based platform, into one where a diverse range of media and communications activities is available from a single device. Developments in software applications have turned these devices and networks into productivity tools, communication channels and sources of information and entertainment.
The apps environment brings together a number of previously distinct sectors—telecommunications, radiocommunications, broadcasting, computing, publishing and financial services. These were traditionally separate service markets, which are now available on one device, on one platform.
In Australia’s networked society and information economy, these innovations bring significant benefits. They also challenge traditional approaches to regulation where apps, and the shift in communications and media usage they represent, are not reflected in existing legislative or regulatory concepts. The widespread take-up and use of apps is also raising new issues in the protection of digital citizens.
Within this changing environment there are ongoing points of public interest that can inform discussion about the design of any regulatory responses. The particular matters of ongoing interest in the apps context concern:
- market standards and redress mechanisms;
- management of personal information in a digital environment;
- content safeguards which protect children and reflect community values; and
- access to emergency services to protect individuals and communities.
Addressing these matters of public interest may well require the regulator to respond differently to traditional regulatory approaches when developing solutions to assist citizens in managing their digital content, identity and reputation associated with the use of apps.
To date, a combination of industry self-regulatory measures, technical tools, economy-wide safeguards and other sector-specific measures appears to have been effective in managing emerging risks associated with the apps environment. However, existing regulatory frameworks did not anticipate the surge in mobile data availability, the capabilities of apps and the business models through which they are distributed. With the ongoing development of separate responses to emerging apps practices there is the risk of an overall loss of regulatory coherence with consequences for industry participants in terms of increased compliance costs. For consumers, increased complexity can make it more difficult to manage their apps experience.
Consequently, there is potential for citizens to be dissatisfied or disadvantaged where market responses are not adequate or safeguards are not in place.
Near-field communications (NFC)
Near-field communications (NFC) is a technology development that allows communications devices like smartphones to transfer data from one device to another, securely and at short range. Smartphone take-up in Australia and the rise of apps are facilitating growth in the use of NFC. Early commercial uses of NFC support mobile financial transactions and this area of activity expected to grow rapidly in the next five to 10 years. Other expanding uses of NFC include loyalty cards stored on mobile phones, electronic locks, accessing advertising and marketing information and sharing social information by holding or ‘bumping’ two phones together.
NFC is an example of a converged communications activity that combines smartphone device functionality, access to spectrum and the downloading of software applications (apps) to deliver a service. Traditionally, devices, spectrum and communications services were regulated separately. NFC challenges this regulatory model. While electronic payments one of the early applications of NFC, it is also driving a convergence of communications and the financial services sector.
NFC developments are of interest to the ACMA because of the insights they offer into the conditions that encourage the widespread adoption of new technologies and because of the role that NFC can play in Australia’s networked society and information economy. We acknowledge that future adoption rates for NFC in Australia will be subject to a range of conditions, which include the availability of NFC-enabled smartphones and devices, apps to drive take-up and use, consumer confidence in the protections that apply, particularly to personal and financial transactions, and continued investment in NFC payments systems.
Within this changing environment, there are ongoing points of public interest that remain relevant to NFC developments. This includes the ACMA’s traditional regulatory roles in encouraging competitive and efficient markets by allocating public resources such as spectrum, determining technical standards and telecommunications consumer protection. Privacy and personal data protections remain another important area of regulatory focus in an environment where increasing amounts of personal and financial information can be exchanged using NFC-enabled phones.
Existing regulatory arrangements only partially address the various aspects of NFC-enabled activities. The main consequence of the current ad-hoc arrangements is complexity for Both industry participants and consumers. Each is required to navigate a complex and fragmented regulatory environment spread across industry-specific regulation and economy-wide measures with associated compliance costs and uncertainty. As NFC-enabled data exchanges become a more mainstream method for social activity and financial transactions, there are potential benefits where NFC communications issues are addressed within a single, coherent regulatory framework.
The digital data environment
Developments in consumer and industrial devices and the networks that connect them have enabled this near-continuous collection of personal and behavioural data. A variety of software applications, including social networking sites, mobile device apps and online behaviour tracking ‘cookies’, are exploiting these device capabilities and generating substantial volumes of rich data about the social and economic activities of individuals—both online and offline. Organisations are increasingly looking to personal and behavioural data for insights that will drive more effective marketing practices and improve service delivery efficiency. In combination, these developments have created a personal data environment that is vastly different from that which characterised the pre-digital economy.
Personal information has a particular meaning for privacy and communications data protection. A steady increase in the number and range of activities being undertaken in the digital environment is resulting in citizens disclosing increasing amounts of personal information. Much of this information is disclosed voluntarily, however, many popular e-commerce and social networking applications are coded to enable detailed records of online behaviour to be recorded and analysed. Many users are unaware of the scale of such practices.
This information also has a growing financial value. Personal data has been referred to as the ‘new oil’, with value moving towards organisations that automate and mine personal data. More than US$2 billion a year is spent on acquiring third-party personal data in the United States. The collection and analysis of anonymised location and behavioural information to develop user profiles and personalised marketing material is broadening the meaning attached to personal information.
Citizens have expressed particular concerns about how they can manage risks to personal information in the digital data environment, particularly risks focusing on financial loss, reputation and managing their digital identities. Despite having particular concerns, our research shows that citizens also consider the protection of personal information is a responsibility shared equally by users, service providers and governments and are looking for assistance in operating in a complex digital data environment.
The consequences of these developments are that issues previously confined to one sector may span a range of different services. Moreover, new issues are emerging that do not neatly fit within existing regulatory frameworks. A substantial amount of communications activity is occurring in environments that were not envisioned when the confidentiality safeguards in the privacy legislation and communications regulation were designed.
Apps, smartphones and the demand for access to content and media, anywhere and on any device, means that now around 71 per cent of Australians are using a cloud service - whether they know it or not. Australia has a high consumer use of cloud-enabled webmail, picture-sharing sites and social networking sites. However, we also found that only eight per cent of internet users are currently paying to have data stored online.
From the ACMA’s work we have found that there is currently a limited understanding by Australia’s digital citizens about how cloud computing works, and importantly a lesser understanding about the relevant protections that apply to personal data creation, storage and use.
Current community concerns we have identified include:
- Security, privacy and the management of users’ data;
- Vendor lock-in, specifically concerns about interoperability and portability between cloud computing services. At present, the absence of common agreed technical standards between cloud computing services means that users may risk losing their content and media where they change service providers. For some business and consumers, this is an increasingly high barrier as social and professional lives move online; and
- Data sovereignty—the ownership of data and access to data stored in countries, other than the one where the end user resides, including relevant redress mechanisms and the capacity of citizens of Australia to take action or seek redress against cloud providers in other jurisdictions.
Recent ACMA research identified that 52 per cent of Australians have a low level of confidence in the privacy settings of online providers. A further 35 per cent of Australians said they would withhold personal information where a site is not based in Australia. This particularly relates to the issue of data sovereignty – the ownership and control of digital data and the protections that apply to it in a particular jurisdiction. It illustrates a response to but one of the difficulties facing users operating in a globalised market.
These are pointers to a number of challenges for the cloud services industry in Australia.
From a regulatory viewpoint, the ACMA sees that there is a clear and present need to address concerns about personal data protections and the ability for users to switch data and service providers in the cloud. We also understand that these issues arise in a complex environment that spans national and international law. So the ACMA has suggested that there is an increased need for these issues to be considered within a unified coherent regulatory framework. I suggest our observations identify some early areas for action within a single coherent regulatory framework that would then assist and underpin a stable and confident environment for cloud services.
As the ACMA identifies various concerns and problems and works as a regulator with industry to develop possible solutions, we keep front of mind the “balance of benefit” offered by innovations such as cloud services – we think this concept of balance very important.
Getting the balance right will be essential to address some of the obvious and current barriers to the wider development of cloud services in Australia. This is likely to require a nuanced, multi-layered strategy of communications and facilitation as well as regulation, involving industry, citizens and gathering support where needed from updated, coherent regulatory settings.
I see the ACMA’s role as working with all sectors of the communications industry to ensure that all Australians can confidently transition to the new networked information economy. We want to ensure that Australians consumers and citizen can make informed decisions as and when their communications services and information migrate to the cloud, and as this happens, that industry offers them appropriate information and protections. This means having informed supply-side industry participants.
The developing nature of cloud services has brought many new service providers to the Australian market. Many are not traditional communications market players, as they are currently defined in existing legislation - such as internet providers, telecommunications companies or device manufacturers. As with other developing industries, many of these new industry participants may not be familiar with existing regulatory obligations, such as consumer safeguards and protections. There is some risk that particular providers and users of cloud services are uncertain about whether specific obligations apply, or do not apply, to their activities.
Many of the existing personal data protections were developed in a pre-internet age and before the development of the contemporary information economy. From the ACMA’s perspective the evolution of the information economy will of necessity drive Australia’s cloud industry to be more active in managing this transition.
This exciting networked world of media and communications is never a static environment. This state of constant change means that there is unlikely to be any simple, singular solution to problems of the hyper-connected cloud environment of emerging and future communications technologies and tools. It is likely to require a more nuanced use of mixed strategies within a coherent unifying regulatory framework. It is also confirms the ACMA, as the regulator, in our stance of being flexible and adaptive to changing industry circumstances. Our responses are likely to involve the exercise of regulatory discretion and in certain instances of regulatory forbearance with the aim of empowering industry and citizens to play their crucial part in finding the balanced way forward.
However, we also see that direct regulation will remain an important tool in dealing with established industry participants and known sectors of communications and content industries. But in future, the ACMA expects to see an increased emphasis on communication programs to assist citizens in managing the cloud services environment, as well as facilitating industry-led responses to emerging communications issues.
In the cloud space I see the ACMA’s role as working with all sectors of the communications industry to ensure that in the transition to the new networked information economy we have informed supply-side industry participants.
A single coherent regulatory framework
Assessing these tensions exposed in these 4 specific areas has again informed and sharpened our consideration of regulatory strategies required to engage constructively with the developing networked society and information economy. From a regulatory point of view, the shifts in communications and media usage that these various elements represent and illustrate are not adequately reflected in existing legislative or regulatory concepts. We believe that consumers using apps, NFC, and cloud services data stores would best be protected by a single coherent regulatory framework … but it is starting to dawn on government and policy-makers that this is going to be a pretty broad, potentially all - consuming consumer and digital citizen framework.
In framing the question of the future of regulation in communications and media, the ACMA uses the three ‘tent-pole’ thought leadership pieces I have canvassed above:
- Broken Concepts;
- Enduring Concepts; and
- Connected Citizens.
Taken together they frame our view that it is time to consider the development of a single coherent regulatory framework for media and communications and implicitly a legislative structure to support it. Together they articulate and support our proposition that the current arrangement media and communications legislation and regulation in Australia are under strain and increasingly ‘unfit for purpose’, often unsuited to the goal of promoting the public interest.
The current, let alone emerging, communications and media environment does not allow a simple singular answer to how (and indeed who) we should be regulating in communications and media today –let alone in the hyper-connected, networked society world of tomorrow – the environment is too multi-dimensional, too heavily textured for that.
The idea of layers has been used widely as a model for understanding the future of communications and media regulation – however, I have noted the blurring of the boundaries of these layers with the increased dominance of virtualisation and software-defined technologies. To my mind, this change echoes that originally expressed as ‘convergence’ in the nineties. 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 and now blurring ‘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.
In summary, the ACMA since its inception (slowly at first) has acted as a ‘bridge’ between ‘broken concepts’; what continues to matter on an enduring basis; and the connections of the rapidly evolving networked society. We have adapted existing tools to new purposes, extending our reach into the market using communication and facilitation techniques while extending forbearance and exercising regulatory discretion where possible. We have operationalised, through organizational agility and flexibility, ‘fit for purpose’ regulatory interventions to suit the times. 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.
In future, I see the need for enhanced, strengthened and dramatically more agile regulators (such as ACMA aims to be) playing an important, indeed pivotal role as a future regulatory centre point, regulators that are prolific, timely and cut-through in their communications; that are informed, pro-active and pragmatic in their facilitation; and reasoned, measured and proportional in their ‘fit for purpose’ regulatory determinations. I will be very interested in discussing with you all how we can operationalise that vision to achieve appropriate citizen outcomes in the app-centric, cloud enabled networked society emerging around us.