 Background:
In June 2006, Chris Chapman, inaugural chairman of the Australian Communications and Media Authority (ACMA) was in Washington, D.C. where he met with TIA members and generously granted TIA an interview. Chapman was appointed on February 27, 2006. He is a seasoned executive with experience in the world of media, broadcasting, Internet, telecommunications, film, entertainment, and infrastructure and finance development.
Before joining ACMA, Chapman was chief operating officer, specialist funds management for Babcock and Brown Limited and, prior to that, managing director and chief executive, Babcock and Brown Infrastructure (formerly Prime Infrastructure Management Limited). He has held a number of senior management positions including CEO, Optus Ltd. joint venture – Excite@Home Australia Pty Limited; CEO, Stadium Australia Management Limited; Managing Director, Channel 7 Sydney; COO and Acting CEO, Seven Network; Chairman, SportsVision Australia; and Chairman, Film Australia Limited. Chapman commenced his career as associate to the chief justice of Australia and then as a senior associate with Malleson Stephen Jacques, which included a posting to New York. He has a Bachelor of Laws and a Bachelor of Commerce from the University of New South Wales, and he has completed the Harvard Business School’s AMP Program.
The Australian Communications and Media Authority (ACMA) has central offices in Canberra, Melbourne and Sydney, plus regional offices and operational centres throughout all states and territories of Australia.
ACMA’s responsibilities include:
- Promoting self-regulation and competition in the telecommunications industry while protecting consumers and other users;
- Fostering an environment in which electronic media respects community standards and responds to audience and user needs;
- Managing access to the radiofrequency spectrum, including the broadcasting services bands; and
- Representing Australia’s communications and broadcasting interests internationally. ACMA’s Web site is www.acma.gov.au.
Interview:
TIA: Mr. Chairman, thank you very much for talking with us today and to your staff for helping us arrange some time with you. What brings you to Washington, D.C.?
Chapman: I’ve been in my role as chairman of the Authority for a few months now and I wanted to meet face-to-face with a number of my regulatory colleagues in North America. I’ve had meetings with several government organizations, both here and in Canada and have enjoyed open and useful dialogues on a range of ongoing and emerging issues. Not surprisingly, I’ve found that the same issues are common across all our organizations. I’ve also met with a number of industry representatives and, although time has not permitted me to meet as many as I would have liked, the discussions I have had have been very useful, highly corroborative.
TIA: In the United States, we tend to look at the first 100 days a person is in office to project the tone and drive of the agency—what successes have you had in the first 100 days, and would you mention any challenges? Because ACMA is a relatively new agency, please tell us about your role as the inaugural chairman of ACMA and how you would like the Authority to distinguish itself?
Chapman: Today marks my 115th day as chairman. Whereas the U.S. Federal Communications Commission (FCC) comprises five full-time members, our authority has three full-time members (including me) and four part-time members. ACMA employs just on 500 people right around Australia, although most of our staff work in our three central offices, in Canberra, Melbourne and Sydney. All are employees of the Australian government.
As a converged regulator, we have responsibility for regulating broadcasting, radiocommunications, telecommunications and the Internet. Our telecommunications responsibilities relate to technical matters and consumer protection, including a universal service obligation. Competition issues are handled by the Australian Competition and Consumer Commission (ACCC).
Since my appointment, an important part of my focus has been on the assessment and then development of structures and activities that support our operation as a converged regulator. We have been looking at our decision-making frameworks and processes and our governance arrangements. An early indication of the type of organization I want the authority to be is evident from our refined consultation efforts. I’ll highlight just some of these initiatives.
The first is to move toward the use of public seminars and briefings as adjuncts to the publication of ACMA discussion papers. A successful example of this was the Wireless Spectrum Strategies 2006 seminar we held in March. The seminar afforded the opportunity for informed stakeholders to engage in a robust and useful discussion with ACMA and other stakeholders. And, as you well know, there are few shrinking violets in the communications sector. My intention is to make these seminars and briefings more iterative.
The second initiative, which is also work in progress, is our commitment to developing a research and data framework to build knowledge management and information-sharing arrangements. This initiative is designed to ensure that ACMA keeps abreast of the regulatory curve—I would not be so bold as to say ahead of it—by identifying and sharing information with stakeholders about emerging technologies and regulatory thinking and by facilitating discussion on a more informed playing field. My initial discussions with Australian stakeholders leave me with the strong impression that we should play an increasing role as a “source of truth” for much of the data that informs debate about regulatory issues.
In terms of the issues of the day, we have recently made a number of important decisions against the backdrop of ACMA’s commitment to ensure that Australians have access to efficient communications services and an effective information standards and safeguards regime. For instance, we are looking at the totality of our investigation processes to identify improvements we can make, particularly in relation to the time frames that have traditionally applied, without unwittingly complicating matters by failing to pay appropriate regard to administrative law constraints. A converged regulator allows you to do this—from first principles.
We have taken steps to expand the scope of digital broadcasting, including extending digital radio trials in Sydney and Melbourne, changing TV plans in certain regions of Australia, revamping digital radio trials policy and gauging the level of interest in unassigned TV channels. We have made a number of decisions relating to consumer advice and protection, including registering a new credit code to deal with telecommunications debt and an Internet industry code for spam, and we have participated in an extensive campaign to warn people about phishing. Very interestingly for you, we have implemented a scheme to enable telecommunications industry bodies and associations to apply for reimbursement of certain costs they incur in developing consumer-related telecommunications industry codes.
After 115 days, I sense that the initiatives and activities contained in ACMA’s multiple work plans, combined with the experience, expertise and genuine capacity and dedication of the authority’s members and staff, should enable us to meet the expectations of stakeholders as well as the challenges that will arise in the converging world of communications.
TIA: Clearly, one of the issues many are watching is the privatization of Telstra. What are the key roles that the authority will play, and what top priorities does ACMA have in this privatization?
Chapman: ACMA is only peripherally involved in the privatization of Telstra. The sale process is being dealt with by other areas in the Australian government. Essentially, ACMA’s regulatory stance is unaffected by issues of ownership.
The Minister for Communications, Information Technology and the Arts and the Minister for Finance and Administration have joint responsibility for the government's shareholder role in Telstra. The Australian government currently holds around 51.8 percent equity in Telstra, with the remainder held by private shareholders. The Department of Communications, Information Technology and the Arts provides advice to the Minister for Communications, Information Technology and the Arts about Telstra shareholder issues.
It may help if I tell you a little about the view the government has expressed on this issue. It has been the government’s longstanding policy to sell its remaining shareholding in Telstra. The government considers the sale of Telstra to be in the interests of the company itself, its shareholders, the wider telecommunications industry and, most important, all Australians.
The government believes the sale of Telstra will be beneficial for the following reasons:
• the private sector is better placed than the government to make judgments about the risks of share ownership, especially in the rapidly developing telecommunications market;
• it should allow Telstra to realize its full potential as one of Australia’s most important companies in the information age and to make operational and investment decisions on the same basis as its competitors; and
• it will remove the inherent conflict of interest that exists when the government sets the rules for all phone companies and at the same time has a direct financial interest in Telstra’s commercial success.
The government has not set any specific timetable for the privatization of Telstra, but it is expected to make a decision very soon. The final decision to sell will be subject to market conditions being conducive to achieving an appropriate return from the sale for Australian taxpayers.
TIA: The privatization of Telstra should create a competitive environment for new players, which makes established companies like BT, Vodafone and Hutchison the competitors. How does ACMA create an environment that encourages new entrants and technologies to the Australian market, and what is your role in ensuring competition?
Chapman: Australia’s telecommunications industry has been open to competition since 1997. Since July 1, 1997, ACMA (and one of its predecessor organizations, the Australian Communications Authority) has issued 209 carrier licences.
As we say in our Corporate Plan, we want to be known as an integrated, forward-looking, proactive and flexible organization recognized as a leading communications
regulator that supports and encourages an innovative and vibrant communications sector.
One of the objects of the Telecommunications Act is to promote the development of a competitive Australian telecommunications sector. So in going about our daily business we are mindful of the potential for regulation to act as a barrier to entry.
One of the ways ACMA creates an environment that encourages new entrants and competition is by facilitating trials of new technologies; for example, we have facilitated current trials of DVB-H technology, broadband-over-powerlines and digital radio in VHF Band III. We have also reduced the price of some unsold spectrum originally offered for auction five years ago to encourage its take-up for new services.
However, it is worth making the point that the regulation of competition in Australia is the purview of the ACCC, which promotes competition and fair trade in the Australian marketplace to benefit consumers, business and the community. The ACCC’s primary responsibility is to ensure that individuals and businesses comply with the Australian government’s competition, fair trading and consumer protection laws.
TIA: Australia’s geography makes deployment of broadband a challenge, In your opinion, what factors will drive broadband deployment, and does regulation assist in any way?
Chapman: Australia has a range of challenges when it comes to broadband deployment, not the least of which is the physical size of the country and the variations in its population density.
The government’s approach to these challenges is illustrated by the June 8, 2006, call by the Minister for Communications, Information Technology and the Arts, Senator Helen Coonan, for expressions of industry interest in larger scale infrastructure projects under the Australian Government's AUS$878 million Broadband Connect program.
This is seen by the minister as a unique opportunity to leverage private investment in Australia's regional broadband networks and improve access to broadband services across the country. The Minister sees the program as building on Australia’s investment in rural, regional and remote areas to roll out sustainable networks to connect our country.
This latest announcement follows a number of earlier initiatives by the government to promote the availability and adoption of broadband across the country. These initiatives clearly recognize the economic and social benefits that can arise from the widespread adoption of broadband applications across business and society.
Figures I have from the ACCC about Australian broadband usage show that there were some 2,785,000 active services in Australia in December 2005. This is up an impressive 85 percent from 1,504,900 in December 2004. These services are spread across a range of delivery technologies, with ADSL being the dominant form (about 70 percent). Australia’s population is just over 20 million.
ACMA’s roles in relation to broadband are:
• to facilitate access to radiofrequency spectrum for those wishing to use that medium to deliver services (and we certainly anticipate that this medium will have an increasingly important role to play); and
• to undertake an integrated broadband research strategy comprising three key modules: service choice and network coverage; quality of service; and consumer attitudinal research.
Speaking of the former, on February 6, 2006, ACMA released a comprehensive discussion paper entitled “Strategies for Wireless Access Services.” The purpose of the paper was to stimulate discussion and solicit information from stakeholders to allow ACMA to gauge the demand for future wireless access services (WAS) and the associated spectrum support requirements. In response, we received 47 submissions. (Non-confidential submissions can be viewed on ACMA’s Web site.) In March, ACMA hosted the Wireless Spectrum Strategies 2006 seminar.
ACMA will use stakeholder views to inform the development of near-, medium- and longer-term spectrum strategies to support the development and deployment of WAS across Australia.
In relation to the latter role, ACMA has conducted two studies of the quality of Internet service. This assessed Australian consumers’ experience in using Internet services, including download and upload data rates across major cities and regional areas and network availability and latency. The first report was released in November 2004 and the second in March 2006. We will shortly commence a wireless broadband quality of service assessment and expect to release our report in October this year.
TIA: Could you talk about ACMA’s organizational structure and how the authority consults with industry? What does ACMA hope to accomplish when it comes to convergence, content and competition and how will the organizational structure of ACMA facilitate those ends?
Chapman: ACMA created a new internal structure in late January 2006 that better reflects the converging nature of our environment and is designed to provide stakeholders with access to a more cohesive arrangement of responsibilities. We have taken what were effectively three silos (telecommunications, radiocommunications and broadcasting) and moved away from the straight up and down paradigm to an organization that is based not on addressing a specific platform, but on multiple platforms (Inputs to Industry), and on ensuring services and applications (Industry Outputs).
We have become a more broadly-based organization that needs to manifest, empathize with (and prosecute) a more sophisticated and insightful view of the communications world and respond in a more targeted way. Our structure better reflects the realities of an increasingly convergent communications industry, as opposed to the historically separate worlds of telecommunications, radiocommunications and broadcasting.
TIA: How does ACMA balance regulation when considering social and cultural interests, business realities and security concerns?
Chapman: This is a critical challenge facing all regulators -- and our discussions over the last week or so have re-affirmed this to me. It is rare we come across an issue that is straightforward enough that we don’t need to address competing interests.
Across our broadcasting, radiocommunications, Internet and telecommunications activities, ACMA endeavors to apply a consistent approach that best balances competing interests. How well we deliver against this objective will be one of the tests that will be applied to us as a converged regulator.
In our first 12 months as a new Authority, we have committed to being transparent and evidence-based when we consider issues. James Shaw, as our head of Strategy, Analysis and Coordination Division, and who joined me on this trip, has been given the task of looking at how we do this and also how we best engage with our many external stakeholders. I am committed to testing our performance in finding this balance, and more fundamentally in assessing our performance against the expectations of our external stakeholders. This scorecard will remind us if we are on the right track.
In our telecommunications activities, we look at striking a balance by applying the objectives of the Australian Telecommunications Act, which requires us to promote:
• the long-term interests of end users of carriage services or of services provided by means of carriage services; and
• the efficiency and international competitiveness of the Australian telecommunications industry.
Our approach is to regulate telecommunications in a manner that promotes the greatest practicable use of industry self-regulation and does not impose undue financial and administrative burdens on participants in the Australian telecommunications industry. In this regard, when we consider whether and how we impose regulation, we assess the impact on the Australian community as a whole.
In terms of our modus operandi, we consult widely, inside and outside ACMA, before we move on any issue. We use public discussion papers, calls for submissions and detailed
discussions with submitters (when required), and we sometimes arrange workshops or working groups to further investigate and discuss issues raised in submissions. By the time a detailed paper is before the Authority for consideration, the implications of a course of action are generally well known.
We are also committed to working with our external stakeholders in the telecommunications space, including other arms of government (in particular the Department of Communications, Information Technology and the Arts, the central portfolio body), the Australian Communications Industry Forum (the industry’s self-regulatory body), consumer groups and individual telecommunications companies.
The last issue to touch on briefly is the various “standing committees” we lead (in areas such as law enforcement, emergency call services, consumer consultation). While such committees need to be rigorously tested for effectiveness, we do find that bringing the various stakeholders together to share their views, constraints and imperatives is enormously useful in establishing a far more informal landscape and achieving greater acquiescence (if not always 100 percent support!).
Recognizing the risk that the question implies, we clearly cannot please all stakeholders on every issue—but we are seeking to establish a reputation as competent, forward-looking and consistent. The regulator’s lot is about delivering a balanced approach, and this is an ongoing challenge. ACMA is committed to doing this and, accordingly, to continuously improving our skills and processes.
TIA: Would you please expand on ACMA’s emphasis on public safety and coordination with law enforcement? Why is this important and how do you expect these requirements to affect companies?
Chapman: Unfortunately Australia is not immune to escalated international tensions, and the Australian government has established a number of processes and safeguards aimed at protecting both our citizens and our communications infrastructure. These are delivered on a whole-of-government basis, and ACMA has a role in several related aspects.
The identification of critical infrastructure includes telecommunications facilities and services, both in protecting the infrastructure and in handling the immediate aftermath of any incident.
Our objective is to provide subject matter expertise to assist others, rather than to seek an operational role in incident management. For example, we regulate the first answering point, which receives calls on the Australian emergency number (triple zero, 000) and passes the calls to the relevant police, fire or ambulance agency. The incumbent telecommunications carrier (Telstra) is required to operate this first answering point as a license condition, at no cost to government. ACMA monitors its performance and may investigate incidents.
In addition, ACMA convenes a standing committee of interested parties (Telstra, other telecommunications carriers and emergency agencies) as a means of continuously improving how the overall call-handling process works. The number of calls to triple zero is increasing annually, as is the number of accidental or hoax calls. This committee has been very successful in developing initiatives to reduce the number of non-genuine calls. For example, there are now introductory recorded voice announcements designed to prevent callers hanging up and re-dialing (especially in times of peak demand); recorded voice announcements to deal with some misdials and misdirected calls; and prosecutions for non-genuine calling.
Even more important, the standing committee allows the various players to meet and develop agreed-upon solutions to both systemic and ad hoc problems as they arise.
For law enforcement and national security issues (particularly related to interception and providing data to police, anti-corruption and intelligence agencies), Australia has a strong regulatory structure and a close relationship with the relevant central agencies (including the Attorney General’s Department). Again, we have found that a standing committee bringing together the various agencies, major telecommunications carriers and central agencies is an important and effective way to share issues and develop solutions. With representation from state and national agencies and telecommunications carriers, members attending the committee meetings can number more than 40 at times, which, inevitably, tests the effectiveness of the committee. However, from my observations, participants greatly value the opportunity to explore issues together around the table.
In order to provide “reasonable necessary assistance” to law enforcement and national security agencies, telecommunications carriers are required to develop their
capability in a number of areas (for example, to provide interception and call charge records) as part of their regulatory responsibilities, but they are able to recover their transaction costs. This seems a sensible approach, although I’m advised that it is sometimes tested when transaction costs differ markedly among telecommunications carriers.
More generally, licensed telecommunications carriers are required to develop an Interception Capability Plan (which is considered currently by ACMA and the Attorney-General’s Department). This is an important part of the overall service we make available for national security and law enforcement agencies.
Perhaps I won’t go too much further. ACMA does have an ongoing role and commitment to public safety and coordination with law enforcement and engages with the various stakeholders to develop joint solutions.
TIA: In telecommunications, how does Australia see itself expanding into Asian countries such as China, India, Japan, Korea and Vietnam, to name a few? From your vantage point, what distinguishes Australia and makes it more competitive? Does regulation enable companies to compete in the home market and overseas?
Chapman: Our regulatory focus is, overwhelmingly, on how companies operate in Australia under Australian laws. However, ACMA’s strong and well-regarded international engagement strategy emphasizes our desire for harmonization and standardization wherever possible. So we are active in international forums to try to influence that outcome.
It means that Australian companies, using harmonized equipment and under internationally-agreed standards, are likely to be more flexible than a company using
proprietary equipment or operating under domestic standards. It also means that foreign companies, using harmonized equipment and operating under international standards, are more likely to be able to operate in Australia.
In turn, that paves the way for Australian consumers to have access to and choose from the broadest range of competing products and services.
TIA: What messages and regulatory themes would ACMA like to convey to overseas organizations like TIA and to foreign government officials going to Australia?
Chapman: Developments in technology are relentlessly driving change and convergence, and contributing to the requirement for a strong regulator with
• the capacity and flexibility to respond quickly to a rapidly converging communications environment;
• a willingness to fully enforce the rules and yet have the confidence and smarts to do so in a meaningfully-targeted way; and
• a broader cross-organization perspective that can deliver an efficient and effective communications market and ensure that consumers are well-informed and well-served.
Our clear and formally-articulated vision, is, in essence, that ACMA:
“… wants to be known as an integrated, forward-looking, proactive and flexible organization that is recognized as a leading communications regulator that supports and encourages an innovative and vibrant communications sector.”
We are also conscious of the vital need to maintain the integrity of the regulatory framework for current services -- that’s a given. That’s our current day job, our principal focus. But it is also important for us not to stifle innovation through an approach that says “that’s the way it’s always been done” because we, too, were afraid to paradigm-bust. Indeed, we’re mandated in part to do just the opposite: to be responsive to industry and consumer needs. And responsiveness is premised on the capacity for change, on freshness and eternal preparedness.
That’s why we must continually scan the horizon for new technologies and phenomena and emerging issues and start developing potential responses for vigorous “workshopping” with stakeholders and like-minded regulators—before issues and opportunities become problems and we lose the confidence and trust of those same stakeholders.
We see a number of issues on the horizon that are likely to occupy our thinking in the near future—in fact a very recent review within our own organization generated about 60 emerging issues. While I don’t for a moment suggest that I have responses or solutions to these issues, I simply want to flag that our strategic planning and subsequent regulatory philosophy and approach is going to need to accommodate a mature consideration of them. The issues can be categorized into a number of themes, including:
media literacy;
• regulatory convergence (will regulation move to a converged model in the same way technology has?);
• conversion to digital television;
• technology and services innovation across the entire communications sector;
• network security and integrity;
• allocation and spectrum management; and
• increasing industry responsibility.
TIA: Thank you Mr. Chapman for your time today, and to your staff for helping arrange this interview. We hope to see you again soon.
Chapman: It has been a pleasure, and many thanks for your hospitality.
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