Issue: 10/08

ATUG 2008 Opening Speech

March 19, 2008

Rosemary Sinclair, Managing Director, ATUG, Opening Address ATUG 2008 - for a copy of the slides please Click Here

Welcome to ATUG 2008 – ATUG’s annual 2 day update on the issues of the moment and the directions for the next 12 months.

PACT Campaign

At last year’s ATUG 2007 conference I spoke to you about ATUG’s PACT Campaign, a campaign to stop a determined, directed, targeted (one could say DDT) effort to roll-back the regulations supporting competition and choice for end users on the promise of a fast, fibre future.

Our campaign, PACT, was about Protecting Australia’s Competitive Telecommunications sector – and ATUG Directors supported the campaign on behalf of all end users - including personal meetings and discussions in Canberra.

We’re still watching competition, and the access and pricing issues, which underpin it, with hawk like vigilance

BUT this year we have an additional crusade in mind – more of that later!

Future Forums

I also spoke to you about ATUG’s Future Forums which we announced as a year-long dialogue to really talk about

• what sort of broadband future Australia needs,
• the technologies which could support this,
• business models and investment and lastly
• the policy and regulatory approaches to support a massive infrastructure upgrade for Australia –

BUT without doing away with competition.

I will come back to what we learned from those forums and where to next a little later.

HIGH COURT DECISION

Let me make a few remarks about last week’s the High Court decision

I have to say no-one was more surprised than I was by the notice the High Court is obviously taking notice of ATUG’s Annual Conference,

coming out as they did last week to reassure us about competition in telecommunications and the rightful place for regulation in regard to essential infrastructure.

The High Court’s judgment is short and to the point and contains some very significant reminders about the core objective of telecommunications legislation which has remained consistent through the history of changes

• from 1981 when ATUG was formed
• to the 1991 Telecommunications Act
• to the 1997 Telecommunications Act
• and the 1997 telecommunications specific amendments to the Trade Practices Act which provided an access regime and rules to deal with anti-competitive conduct.

The Access Part of the 1991 Telecommunications Act was intended:

To promote the long-term interests of consumers of telecommunications services by:

(a) promoting and protecting competition …; and
(b) enabling carriers to compete with each other on an equal basis …

Under the Trade Practices Act, 1997, Declarations of Access to services, may only be made if:

…the Commission is satisfied that the making of the declaration will promote the long-term interests of end-users ….

A number of ACCC decisions about telecommunications matters must have regard to the long-term interests of end users.

The 1997 Telecommunications Act’s main object is to provide:

A regulatory framework that promotes:

(a) the long-term interests of end-users …and
(b) the efficiency and international competitiveness of the Australian telecommunications industry

So what did the High Court make of all this?

The High Court in para 33 of its judgment says:

The objects thus identified in the 1997 Telecommunications Act and in Part XIC of the Trade Practices Act are wider than and different from that narrow self-interest which, statue apart, is all that one participant in a market would ordinarily consult when striking a bargain with another participant in that market.”In regard to the particular argument proposed by Telstra, the High Court concludes in para 52,

“Telstra’s bundle of rights in respect of the PSTN has always been subject to the rights of its competitors to require access to and use of the assets.”

The importance of this decision cannot be underestimated: It reminds us that the core policy objective is the long-term interests of end users and that competition and thus choice for end users is legitimately preserved through the telecommunications Access Regime in the Trade Practices Act.

And believe me we didn’t send one of our PACT campaign badges to the High Court – they just used their commonsense!

Future Forums

During 2007 as well as campaigning for competition, ATUG was very focused on the future ahead for end users and the communications industry.

We held four forums focused on the Future and I would like to publicly express my appreciation to the many people who participated in those discussions.

Today I would like to report back what we found:

The Demand Forum highlighted the need for a range of broadband speeds and pricing plans “fit for purpose”.

Many end users are on a journey with broadband building their understanding of value.

They do not want to be presented with very high speed but unaffordable broadband services, which have more bang than their wallets have bucks.

Just as important for end users right now are proper plans where what you see in the ad is actually what you get;

A market where switching broadband providers is as seamless as switching mobile providers

And for business users, a market where broadband availability is ubiquitous and quality is consistent.

End user confidence emerged as a key issue as the economy in all sectors looks to transform just about all transactions and processes based on the new connectivity.

“Any to any connectivity” and “always on” are shared visions BUT the need for speed and the ability to pay is specific to each user.

The Technology Forum came to the conclusion that fibre to the home/farm/business is the future for the fixed network

BUT to meet market demands for affordable, ubiquitous, high and (sometimes low speed) broadband

and to deal with the distance/density issues in Australia, wireless services have an important role to play.

AND over time, just as voice services have become mobile, so will broadband services – for that segment of the market which is happy to pay the mobile premium for convenience.

The geography of Australia will mean satellites will also be an important part of the future technology landscape.

End users are really not interested in the technical specification of the underlying platforms and don’t approach this debate with any ideological predisposition to one platform or another.

The new world is an “Internet of Things”

And the need for IPv6 and the migration issues associated with such a huge change were highlighted.

The role of the SMART GRID rather than just the Smart Meter may provide the basis for increased infrastructure competition,

but will require co-operation at unprecedented levels between Federal and State Governments through COAG and such processes, and with the private sector.

And the Forum felt access to competitive backhaul capacity within Australia and internationally will become more urgent
in the next few years as content becomes richer and information flows more symmetrical.

The Investment Forum came at a point in the cycle of Forums, when Australia had just had an election with broadband a key issue.

The forum discussion focused on the rise and rise of social networking, better online content, smarter personal devices and the thinking by business and government about forms of Enterprise 2.0 or Agency 2.0 based on Web 2.0 technologies.

Businesses are seeing the move to digital business “net” based working as critical to mission and hence on the investment radar.

ATUG itself is exploring Web 2.0 working as a way of meeting members’ needs for information including direct international updates from experts.

Telco land is exploring new models of investment – including public/private partnerships and how these can be effectively structured to achieve the multiple objectives that underpin them.

PPPs are about risk management – an issue exercising the minds of many in Canberra no doubt.

New business models in the construction, operation end of the market are being matched with new business models in the content, applications end of the market.

And all this innovation is taking place in a privately funded market where shareholder expectations are an important consideration – albeit not the only consideration as the High Court has reminded us.

Broadband has to be affordable as well as available for end users and Australia as a whole to reap the benefits of this new economic and community infrastructure.

The Policy and Regulation Forum was more focused on FTTH developments and supporting regulatory frameworks.

Around the world two sets of issues are emerging –

• where incumbents build the FTTH networks, the issues are access to the switching network and fibre plant unbundling and the pricing of access;

• where competitors build the FTTH networks, the issues crystallize around over-build.

The characteristics of countries that are successfully deploying fibre include

• Government regulatory commitment;
• strong user demand and
• a competitive broadband market.

A number of countries are exploring “functional separation” as a way of dealing more efficiently and effectively with bottleneck infrastructure meaning effectively competitive sectors can be left to market forces.

Beyond the “fibre build” debate, there remain some big policy questions arising from:

• the merging of the telephony and internet worlds;

• the development of behavioural economics as a way of understanding the role of consumers as effective market participants;

• the need to reduce unnecessary regulation on economic activity;

• scarce resources such as spectrum becoming more abundant because of technology developments;

• the need to re-think Universal Service from an Obligation on industry to a Safety Net Guarantee from Government.

ATUG – Next Steps

So ATUG has decided to continue our Future Forums during 2008 –

holding a series of discussions about Whether Australia needs a New Communications Act?

and if we do, what end users would like to see in it?

We will be advising dates and venues shortly and hope to use Web 2.0 technologies to involve our members all over Australia directly in the discussion.

Campaign Issue for 2008

And now to the Crusade Issue for 2008

The issue that ATUG will be campaigning on in 2008 is that of prices for international mobile roaming services – both voice and internet roaming.

When the ATUG Board discussed this issue a couple of weeks ago, the energy level in the room rose dramatically as example after example was given of staff traveling overseas coming home with bills for mobile services in the hundreds and thousands for just using the services they use at home.

Industry’s promise is anywhere, anytime,

ATUG’s response is Yes! But not at any price!

Australia is actively engaged in international fora and agreements, World Trade, APECTEL, Closer Economic Relationship with NZ, bilaterals, Free Trade Agreements.

We are encouraging all businesses to develop export markets.

Overseas travel is more and more an option for work, education, holidays.

The current options for end users are to STOP using their services when they leave Australia or FACE big bills when they come home.

For consumers, local SIM cards and phone cards might be an answer but they’re not an answer for business

and the Europeans have recently decided they’re no answer for European consumers.

The time has come to stop the excess pricing for mobile services while traveling.

We now know the cost of terminating mobile calls – in Australia, in Europe through recent decisions from the European Commission,

in the US prices are now .07 of 1 US cent and minutes of use have skyrocketed - unsurprisingly,

even in China and Indonesia regulators have taken action in the absence of market led outcomes to get cost based pricing for domestic roaming calls on mobiles.

The time has come for action to be taken in the international arena – ATUG’s campaign is the Roam Fair campaign and I am pleased to launch it here at ATUG 2008.

For more information come to ATUG’s stand and collect one of our ATUG Opinions which will outline for you the full extent of the pricing excesses. And collect your ATUG Roam Fair badge!

Join with us in making your voice heard in the places that matter – Roam Fair!