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Outcome 3

Development of services and provision of a regulatory environment which encourages an efficient and effective communications sector for the benefit of all Australians

RESOURCES FOR OUTCOME

	(1) Budget 2003-048 $'000	(2) Actual 2003-04 $'000	Variation (column 2 minus column 1) $'000	Budget 2004-059 $'000
Administered expenses (including third party outputs)	312 409	431 044	118 635	260 376
Total administered expenses	312 409	431 044	118 635	260 376
Price of departmental outputs
Output 3.1 Policy advice and program management which encourages competitively priced and reasonably accessible telecommunications and postal services	30 122	30 885	763	25 473
Output 3.2 Policy advice and program management which promote accessible high quality broadcasting services	16 649	16 255	(394)	15 807
Output 3.3 Policy advice and program management that assist the development of the Information and Communications Technology Industry	9 724	12 439	2 715	10 115
Output 3.4 Policy and program management of copyright issues that encourage the production of content and promote reasonable access to research and cultural materials	2 161	1 943	(218)	2 342
Output 3.5 Strategic advice, activities and representation relating to Australia's development as an information economy, nationally and internationally10	0	0	0	14 784
Revenue from Government (Appropriation) for departmental outputs	55 888	59 144	3 256	66 924
Revenue from other sources	2 768	2 378	(390)	1 597
Total price of outputs	58 656	61 522	2 866	68 521
TOTAL FOR OUTCOME 3 (Total price of outputs and administered expenses)	371 065	492 566	12 1 501	328 897
			2003-04	2004-05
Average staffing level11			326	426

8 Budget estimates as at 2003-04 Portfolio Supplementary Additional Estimates Statements.
9 Budget estimates are as at 2004-05 Portfolio Budget Statements.
10 Outcome 3 has been revised to incorporate the acquired functions from the former NOIE on the creation of AGIMO,
with effect from 8 April 2004, as reported in the 2004-05 Portfolio Budget Statements. Output 3.5 has been added to
incorporate the new functions as reported in the 2004-05 Portfolio Budget Statements.
11 The increase in ASL for 2004-05 reflects the transfer of functions to the Department from the former NOIE.

PERFORMANCE INFORMATION INDEX

	Annual report page reference	PBS page reference
Outcome 3 Development of services and provision of a regulatory environment which encourages an efficient and effective communications sector for the benefit of all Australians.	78	65
Administered items
Australia Post - Australia's response to foot and mouth disease and other quarantine risks	89	65
Telecommunications Action Plan for Remote Indigenous Communities (TAPRIC)	89	66
Untimed Local Calls	90	66
National Relay Service	91	66
Universal Service Levy	92	66
Regional Telecommunications Infrastructure Account (RTIA)	92	66
Telstra Social Bonus	94	67
Telecommunications Service Inquiry Response	95	68
Regional Telecommunications Inquiry - Government Response	101 and 153	69 and 392 (PAES)
Television Black Spots and Television Black Spots - Alternative Technical Solutions	104	69
ABC and SBS Digital Interference Scheme	107	69
National Transmission Network Residual Funding Pool	107	69
Commercial Radio Black Spots Program	107	69
Regional Equalisation Plan	108	69
ICT Centre of Excellence Program	109	69
Building on IT Strengths (BITS)	110	70
Commonwealth Technology Port (Comtechport)	115	71
Compensation to Societe Internationale de Telecommunications Aeronautiques (SITA)	115	71
International organisations contributions	116	69
Output 3.1 Policy advice and program management which encourage competitively priced and reasonably accessible telecommunications and postal services	117	71
Output 3.2 Policy advice and program management which promote accessible, high-quality broadcasting services	125	72
Output 3.3 Policy advice and program management that assist the development of the Information and Communications Technology Industry	133	74
Output 3.4 Policy and program management of copyright issues that encourage the production of content and promote reasonable access to research and cultural materials	137	75
Evaluations
Evaluation of the Networking the Nation Program	139	76

ACHIEVEMENT OF OUTCOME
Development of services and provision of a regulatory environment which encourages an efficient and effective communications sector for the benefit of all Australians

There was a noticeable revitalisation across the communications sector during 2003-04 as it continued to emerge from a period of consolidation following the 'dot-com' crash of 2000.

The year saw telecommunications industry revenue growth return to Gross Domestic Product (GDP) growth levels, as well as new investments, product launches, price changes and competitive initiatives. Advertising revenue across the broadcasting sector grew strongly and there was an increased focus on digitisation with the launch of new digital subscription services, interactive services on both subscription and free-to-air platforms and increased consumer take-up.

For the information and communications technology sector (ICT) as a whole, there has been renewed optimism about the industry's prospects, with significant improvements in exports of computer and information services, lower unemployment rates and increased demand in several skill areas. The year also saw a flattening out of the ICT deficit, and increased domestic and international demand for ICT goods and services.

Members of the Indigenous Telecommunications Section. Left to right: Karen Flick, Porsche Herbert-Funk, Simon Coulson and Lachlan Habgood.

Convergence of communications technologies and markets continues to shape sector developments. Policy and regulatory arrangements need to keep pace with these changes.

The Department's contribution to Outcome 3 is primarily through the provision of strategic advice on the policy and regulatory frameworks and the development and administration of relevant programs. The effects of this contribution evolve over time as the industries respond to these and other influencing factors.

Two significant initiatives pursued by Government during 2003-04 had implications across the breadth of the communications outcome area: the Government's decision to create a new communications regulatory authority and the finalisation of the Australia-United States Free Trade Agreement (AUSFTA).

The Government announced in the 2004-05 Budget that it would merge the Australian Communications Authority (ACA) and the Australian Broadcasting Authority (ABA) to establish a new media and communications regulator, the Australian Communications and Media Authority (ACMA), by 1 July 2005. This merger will position the regulators well for the future development of quality communications and media services.

The Department and portfolio agencies were involved in the extensive consultative process that underpinned the AUSFTA negotiations in the areas of telecommunications, e-commerce, audiovisual and broadcasting services, intellectual property and government procurement.

Two additional initiatives during the year also had far-reaching implications for the communications sector. The first was the release by the Government of the National Broadband Strategy which is a joint effort between all levels of government and which outlines the collective vision for broadband development and implementation across the community. Further information on the Strategy is at Information Economy, Output 1.1 on page 153.

In June 2004, Australia's Strategic Framework for the Information Economy 2004-06: Opportunities and Challenges for the Information Age was finalised for release in July. This document, which replaces an earlier framework first published in 1998, sets out the Government's vision and action program to enable Australia to maintain its position as one of the world's leading information economies.

Competitively priced and reasonably accessible telecommunications services

The key outcomes in the telecommunications market during 2003-04 were:

• continuing industry revenue growth, particularly among the third tier and smaller telecommunications carriers and service providers;
  
• increasing availability of wireless broadband and Asymmetric Digital Subscriber Line (ADSL) broadband services; and
• introduction of new broadband and telephony products to the market, with signs of an accelerating shift to the delivery of voice telephony services on 'next generation' networks.

The year also saw the expansion of Australia's first third generation (3G) mobile network outside of Sydney and Melbourne and the provision of new audiovisual content to customers as enhanced mobile phones became available.

Telecommunications prices continued to fall below the Consumer Price Index during the year. Graph 2.8 shows that this has been a consistent trend since the telecommunications market was opened up to competition in 1997.

Graph 2.8 Comparison of total CPI and CPI for Telecommunications sector

Source: ABS 6401.0 Consumer Price Index.

Broadband take-up in Australia has been steadily growing in recent years. However, as a result of price reductions in February 2004, broadband take-up increased markedly, with an estimated one million active subscribers at 30 June 2004. Graph 2.9 shows the increased take-up of broadband services from March 2002 to March 2004.

Graph 2.9 Quantity of broadband services in Australia

Source: ACCC Broadband Snapshot June 2004.

These results occurred within a regulatory and policy framework which:

• encourages open competition between service providers;
  
• supports fair access by service providers to telecommunications networks;
  
• gives the ACCC strong powers to investigate and address complaints about anti-competitive conduct;
  
• provides specific consumer safeguards, including the Customer Service Guarantee (CSG) and price controls on Telstra's telephone services; and
  
• provides targeted funding to provide more equitable and affordable access to telecommunications services, particularly in regional and remote areas.
  

On the regulatory front, 2003-04 saw the bedding-down of major reforms to the telecommunications competition regime which were introduced in December 2002. The Department also worked with the ACCC to achieve greater transparency in Telstra's wholesale and retail pricing under the accounting separation regime, legislated as part of the 2002 reforms. Accounting separation provides the market with better information and reduces the potential for anti-competitive pricing conduct.

As part of the price control regime, Telstra is subject to a licence condition requiring it to put in place measures to protect low-income customers. The Department continued to oversee the operation of the Low Income Measures Assessment Committee (LIMAC). LIMAC's report to the Minister of 29 April 2004 found that Telstra had responded comprehensively to its licence requirement to provide a low-income package. Also, following advice from the Department, the Minister directed the ACCC to conduct a public inquiry into the nature of price control arrangements that should apply after the expiry on 30 June 2005 of theTelstra Carrier Charges - Price Control Arrangements, Notifications and Disallowance Determination No.1 of 2002.

The Department provided ongoing advice to the Minister on consumer concerns regarding telecommunications services. This resulted in Ministerial Directions to the ACA requiring provision of more information to customers, comprehensive credit management reform by the telecommunications industry and appropriate access controls for adult content on mobile phones.

A departmental review of the Universal Service Obligation (USO), a key regulatory safeguard ensuring that the standard telephone service and payphones are reasonably accessible to all people in Australia, found that the USO is meeting legislative objectives. On 17 June 2004, the Government announced that there would be no change in the broad legislative framework for the USO.

National security was a major Government priority in 2003-04 and the Department took a leading role in establishing and supporting a communications advisory group to the Trusted Information Sharing Network (TISN). This national network aims to focus industry and improve co-operation on measures to protect, mitigate and respond to potential threats to critical telecommunications infrastructure.

The Department administered a range of programs to improve telecommunications access in Australia, particularly in rural, regional and remote Australia. These included conclusion of the Networking the Nation (NTN) program, which provided for the roll-out or upgrade of telecommunications infrastructure in many communities, the National Communications Fund (NCF), which is supporting improved access to health and education services through broadband connections, and the Coordinated Communications Infrastructure Fund (CCIF), which is funding the roll-out of broadband infrastructure. The Higher Bandwidth Incentive Scheme (HiBIS) was established and is expected to play a key role in improving broadband take-up in regional Australia. Mobile access was improved, with more than 170 locations receiving better coverage and more than 1900 km of highways receiving coverage in 2003-04.

Improving access to phone and Internet services for Indigenous communities was a priority in 2003-04 with the Department implementing the Telecommunications Action Plan for Remote Indigenous Communities (TAPRIC). The Department also extended the National Relay Service (NRS) contract for the supply of the National Relay Service to the deaf, hearing impaired and speech impaired communities.

Competitively priced and reasonably accessible postal services

The postal services market continued to evolve rapidly during 2003-04. Australia Post's basic letter volumes were stable, with an expectation that they will decline in the future as a result of electronic substitution. At the same time Australia Post's parcel services and express services continued to grow reflecting the strength of this competitive sector. Another important market feature was the strength of Australia Post's retail network. In 1994-95, Australia Post's revenue from non-reserved services was $1227 million and around 44 per cent of total revenue. By 2003-04, revenue from non reserved services had grown to $2185 million and comprised 55.5 per cent of total revenue.

The focus of the Government is to achieve a regulatory system that harnesses competitive forces while imposing targeted obligations for the benefit of consumers. Accordingly, Australia Post is required to provide a letter service which is reasonably accessible to all Australians and a standard letter service at a single rate throughout Australia. The Department has continued to provide advice on these regulatory issues.

The Department prepared legislation to clarify the framework for the provision of document exchange and aggregation services and to extend the role of the ACCC in overseeing the operations of Australia Post. These measures were included in the Postal Services Legislation Amendment Act 2004 which received Royal Assent on 22 June 2004. The Department also prepared legislation to establish a Postal Industry Ombudsman within the Office of the Commonwealth Ombudsman.

The Department has addressed a number of important issues associated with the security of mail over the past few years, including the potential for the mail system to be used for the carriage of dangerous or harmful goods. The Department continued to oversee Government funding to Australia Post to increase the screening of incoming international mail for the detection of diseases such as foot and mouth to 100 per cent. During 2003-04, the Department also provided advice to the Government about the possible need for legislation to enable state and territory quarantine officials to screen mail entering their territories for materials that may be harmful to agriculture.

Accessible and high-quality broadcasting services

Australians enjoy access to a range of broadcasting services offering a diversity of high quality programs. Well over 90 per cent of households can access local free-to-air television services through terrestrial transmissions, with the remainder of the population having access to a range of free-to-air television services via satellite.

Members of Digital Broadcasting and Spectrum Management Branch. Left to right: David Jordan, Craig Wilkes, Martin Hiscutt, Andrew Purtell and Stephanie Jolly.

The rollout of digital television services has continued throughout the year. Industry estimates indicate that in June 2004 around 80 per cent of Australians had access to the digital transmissions of all their local television services, and more than 90 per cent had access to the digital transmissions of at least the Australian Broadcasting Corporation (ABC) and the Special Broadcasting Service (SBS). By June 2004, more than 409 000 digital television receivers had been supplied to retailers and installers.

Graph 2.10 reflects the gradual take-up in digital receivers since the introduction of digital television services.

During 2003-04, community television services in Perth and Sydney were issued long-term licences by the ABA, while licensing processes were under way in Brisbane and Melbourne.

Graph 2.10 Quantity of digital television receivers in the market

Source: Digital Broadcasting Australia.

Radio services are available throughout Australia with terrestrial transmissions supplemented by satellite coverage for remote areas. Three new commercial FM licences were allocated in Adelaide, Sydney and Brisbane and the number of licensed community radio services increased from 334 to 341 in 2003-04.

The launch of new digital subscription television services in early 2004 has increased the choice of channels available to subscribers as well as enabled the introduction of new interactive services.

The Department administers three programs designed to improve access to broadcasting services. By June 2004, the Television Black Spots program had achieved its original target of addressing at least 200 television black spots. During the year, two communities became the first to benefit from solutions under the Television Black Spots - Alternative Technical Solutions programs. Substantial cooperative efforts were coordinated by the Department to identify solutions for black spots around Port Stephens and the Gold Coast where terrain issues are particularly difficult. Financial assistance was provided under the Commercial Radio Black Spots program to extend commercial radio coverage to 68 communities, bringing to 104 the total number of communities to benefit from the program.

The Broadcasting Services Amendment (Media Ownership) Bill 2002 was re-introduced into Parliament on 5 November 2003. The Bill, prepared by the Department, implements the Government's media ownership reforms which are intended to improve the ability of media companies to deliver high quality services through improved economies of scale and scope, better access to capital and new technologies, and the entry of international companies into the Australian market.

During 2003-04, the Department, in consultation with the ABC and the Department of Finance and Administration (Finance), reviewed the ABC's regional and local programming initiatives. Having considered the findings of that review, the Government announced in the 2004-05 Budget its decision to continue funding for the program for three years from 2005-06 (at a cost of $54.4 million). Following departmental analysis, the Government provided the ABC with additional funding of $17.4 million over four years from 2004-05 to assist the ABC to maintain its current level of quality television programming in the face of increased acquisition costs.

The continued availability of sporting events of national significance on free-to-air television is a priority for Government and an important policy issue on which the Department provides advice. The continuation of the anti-siphoning scheme, announced on 7 April 2004, provides forprotection of a revised list of events occurring between 1 January 2006 and 31 December 2010.

The Department chaired the Digital Radio Study which examined issues relating to the implementation of digital radio. The Study Group released two information papers and hosted a public forum in September 2003 before reporting to Government in early 2004.

The Department completed two significant reviews into regulatory arrangements regarding online content and services. The review of the Online Content Co-regulatory scheme (contained in Schedule 5 to the Broadcasting Services Act 1992), released on 13 May 2004, found that the scheme has worked effectively but recommended a number of enhancements to be incorporated into industry codes of practice. The review of the Interactive Gambling Act 2001 was completed during the year and the Government is expected to release the report early in 2004-05.

Development of an Information and Communications Technology (ICT) sector, having regard to the importance of an innovative ICT sector in delivering broader economic and social outcomes

The Australian ICT industry is both a substantial industry in its own right and a major contributor to national productivity growth. Australian Bureau of Statistics data shows that the value of ICT production by ICT specialist firms was $48.8 billion in 2002-03. In the calendar year 2003, Australian ICT exports were valued at $4.5 billion with ICT goods exports accounting for $2.3 billion and ICT services for the remaining $2.2 billion. Anecdotal evidence suggests that the industry is continuing to strengthen.

The Department contributes to the development of the ICT industry and the achievement of broader national goals through a range of activities, including establishing and implementing strategic policy frameworks, contributing to the Government's science and innovation package of initiatives, supporting the development of advanced infrastructure and applications, and developing measures to support ICT small to medium sized enterprises (SMEs).

The Government's major policy framework for the ongoing development of the Australian ICT industry is Enabling our Future, the April 2003 report of the ICT Framework for the Future Committee. This provided Government, industry and the education and research sectors with a structure for the development of the ICT industry over the medium term.

Key implementation outcomes from the Framework facilitated or supported by the Department in 2003-04 were:

• the Online Council agreed to take a leading role, particularly in assisting national coordination of the Framework implementation;
  
• the ICT Industry Alliance convened an ICT Industry Leaders Forum on 28 August 2003 to discuss ways for industry to take the Framework forward;
  
• the first annual ICT Outlook Forum which brought together the ICT Centre of Excellence (NICTA), CSIRO, the Defence Science and Technology Organisation (DSTO) and the ICT Council of CRCs to advance coordinated ICT research activities was held on 3-4 September 2003; and
  
• the MultiPLIERS group of Chief Executive Officers (CEOs) of Multinational Corporations (MNCs) in Australia was established to work with the Government in identifying investment opportunities and promoting Australia's ICT capabilities internationally.
  

In June 2004, the Department brought together key members of the ICT industry, research and educational communities for an ICT Priorities Review Forum which reviewed progress in implementing recommendations in the Enabling Our Future report. The Review Forum also identified ongoing priorities in ICT skills, SME development and investment attraction.

The ICT innovation base is a key ingredient for future industry development. The Department contributed to the development of the Government's $5.3 billion science and innovation plan, Backing Australia's Ability - Building our Future through Science and Innovation, which was announced just prior to the 2004-05 Budget. The Department provided the ICT chapter of the Science and Innovation Mapping report and was represented on the Steering Committee of the Research Infrastructure Taskforce.

Innovation measures funded in the plan were funding for NICTA to enable it to build critical mass, an extension of the Advanced Networks Program (ANP) to enable the three ANP projects to continue their participation in research activities and develop leading edge broadband applications, and the extension of the ICT Incubators program, to provide continuing support for innovative young ICT companies and an opportunity for the incubators to achieve sustainability.

As a member of the Australian Research and Education Network (AREN) Advisory Committee, the Department contributed to the establishment of a high-capacity communications network connecting Australia's key higher education institutions.

To support the development of ICT SMEs, the Department continued to facilitate a Joint Industry-Government Working Party to enhance SME access to the Australian Government procurement markets. The Working Party's publication, Selling ICT to Government - A Guide for SMEs, was launched in July 2003. The Department also maintained an ICT SME Information Unit, together with a website and email facility.

The Department worked with the Department of Foreign Affairs and Trade (DFAT) and the Department of Finance and Administration on the Government Procurement Chapter of the AUSFTA. The Agreement gives Australian ICT companies greater access to the significant US Government procurement market. At the same time, it maintains SME development measures associated with major Australian Government ICT contracts.

Production of copyright content encouraged, and reasonable access to research and cultural materials promoted

The 2003-04 reporting period was an important year for copyright policy. The year was dominated by the AUSFTA and the resulting legislation introduced on 23 June 2004.

In working with the Attorney-General's Department (AGD) and DFAT to implement the AUSFTA, the Department had regard to the rights of creators, investors, users and distributors under the Copyright Act 1968. The US Free Trade Agreement Act 2004 (the Act) contains measures to expand the rights of copyright owners and the introduction of exceptions, principles of procedural fairness and transitional arrangements to offset the impact on users and distributors.

The Act fulfils the Government's election commitments to introduce workable rights for audio performers and extend the duration of copyright in photographs to equal that provided for other artistic works. The Act assists Australia's content sector by providing a longer term of protection for copyright material, an improved liability scheme for Internet service providers, and a substantially strengthened copyright enforcement regime.

The Act also assists the communications sector by introducing new provisions to deter subscription broadcast piracy, and new provisions that limit the liability of Internet service providers for infringements that occur on their systems and networks where they assist copyright owners in combating online piracy.

The Department, together with AGD, released a consultation package on Indigenous communal moral rights in early 2004. The proposed amendments balance Indigenous community, artist and copyright user considerations through a workable model that provides important recognition of communal aspects of Indigenous creativity.

The Commonwealth Copyright Administration (CCA) function continued its important role in facilitating the use of Commonwealth copyright materials by the Australian community.

Members of the Intellectual Property Branch. Left to right: Jane Hyden, Simon Cordina, Jessica Coates, Peter Lunn and David Jansen.

Administered items

Australia Post - Australia's response to foot and mouth disease and other quarantine risks

Compliance with screening standard

In 2001, the Australian Government made a decision that 100 per cent of inbound mail would be screened for the presence of possible sources of contamination by exotic animal diseases, particularly foot and mouth disease. Australia Post was provided with $49.4 million for major infrastructure changes in Sydney and Melbourne, minor capital improvements in Brisbane, Adelaide, Perth and Darwin and the costs of employing additional Australia Post staff to open and close mail.

The Department's role is to administer the allocation of funds to Australia Post in accordance with a grant deed. One hundred per cent screening was achieved despite delays in the completion of new buildings in Sydney and Melbourne to house the necessary screening equipment.

Telecommunications Action Plan for Remote Indigenous Communities (TAPRIC)

Increased number of computers with Internet access in remote Indigenous communities

TAPRIC's Internet access program is a $550 000, three-year program to improve access to Internet-based services for remote Indigenous communities.

The program has two key components:

• a two-way satellite Internet (2-wsi) service offer, with Telstra supplying the Internet service and the Department the computer packages (Phase 1); and
  
• a proposed offer to establish public Internet access facilities in remote Indigenous communities in conjunction with the Higher Bandwidth Incentive Scheme (HiBIS) (Phase 2).

Under the 2-wsi offer, completed in May 2004, 149 computer packages were provided to 135 remote Indigenous communities that took up Telstra's revised 2-wsi service offer to support the establishment of public Internet access facilities.

Under the Phase 2 offer, TAPRIC will provide additional financial support and computer equipment to remote Indigenous communities that establish public Internet access services under HiBIS.

A telephone survey was carried out with participating communities to gain feedback about the Phase 1 project. More than 75 per cent of participating communities have responded to the survey and feedback received is positive in a majority of cases, indicating support for services provided through the project.

Increased access to a working phone by remote Indigenous communities

The TAPRIC community phones program provides $3 million over three years to develop improved and culturally appropriate telephone services for remote Indigenous communities. It comprises two elements: the Subsidy Scheme and the Demonstration Project.

The subsidy scheme offers financial support to enable communities to have access to more affordable and effective phones. In January 2004, telecommunications carriers and service providers were invited to register their interest in this scheme and nominate products that are suitable for use within remote Indigenous communities. No responses had been received by 30 June 2004 for the subsidy scheme, although negotiations are proceeding with Telstra to develop and offer a suitable product.

The demonstration project provides financial assistance to communities to partner with carriers and/or service providers to conduct a small number of demonstration projects of innovative products and systems to improve telephone accessibility and affordability for remote Indigenous communities. As at 30 June 2004, eight applications for demonstration projects had been received. These will be assessed in early 2004-05.

Increased awareness of consumer rights and obligations, and ways of accessing telecommunications services

In 2002-03, the Government allocated $1.2 million over three years for a Mobile Telecommunications Education and Training Service (MTETS). The MTETS is travelling to remote Indigenous communities between July 2003 and May 2005. It is providing information on how to access telephone services, consumer rights and the benefits and availability of the Internet. Training is being offered to community members on how to use the Internet and on the basics of web publishing.

The first round of training visits was completed in 2003-04, providing training to communities in five regions: Murdi Paaki (New South Wales), Wadeye (Northern Territory), Tennant Creek (Northern Territory), Tjurabalan (Western Australia) and Lower Gulf (Queensland).

The first round of visits had mixed success. The initial project team recruited by the contractor did not deliver the service in the manner anticipated, and training and reporting was below standard in the first three regions. A second team, recruited after consultation with the Department, delivered much improved training to the remaining two regions. A new tender for delivery of the second round of training visits was in development at the end of 2003-04. The proposed second round will have a more strategic regional focus with a number of information and training sessions in communities.

Untimed Local Calls

Infrastructure upgraded

The Department continued to administer a $150 million contract with Telstra to provide Australians living in extended zones (the most remote parts of regional Australia) with access to untimed calls and connection to the Internet via an Internet Service Provider (ISP) at the untimed local call rate.

In 2003-04, 5785 Digital Radio Concentrators Systems (DRCS) in extended zones were upgraded to a range of new technologies providing additional call features and improved capacity. By the end of the reporting year, the upgrade had been completed in all 102 extended zones and the final payment was made to Telstra under the contract.

National Relay Service (NRS)

Access to the service by target audience

The NRS is a call relay centre that provides people who are deaf, or have a hearing and/or speech impairment, with access to the standard telephone service by relaying text messages to voice and vice versa. It also provides a text-based emergency service and a community outreach program to raise awareness. The NRS is funded through a levy on telecommunications carriers. The service is provided by the Australian Communication Exchange Ltd under a contract that is administered by the Department. Graph 2.11 outlines NRS call traffic since 1998.

While there continues to be a steady use of the NRS, alternative technologies such as email and Short Messaging Service (SMS) have had an impact on usage. However, the NRS remains a valued service for the deaf, hearing impaired and speech impaired communities.

Graph 2.11 NRS call traffic 1998-2004

Source: 2003-04 estimate from ACA telecommunications performance reports.

Universal Service Levy

Timely payments to universal service provider

The Universal Service Obligation (USO) and Special Digital Data Service Obligation (SDDSO) are legislated safeguards under the Telecommunications (Consumer Protection and Service Standards) Act 1999. The USO ensures a standard telephone service and payphones are reasonably accessible to all Australians wherever they live or do business. The SDDSO ensures that a one-way satellite data service, equivalent to 64 kilobits per second (kbps) Integrated Services Digital Network (ISDN) service, is reasonably accessible to those people unable to access an ISDN service.

All telecommunications carriers contribute to the funding of the USO and SDDSO services by way of the Universal Service Levy. Carriers contribute in proportion to their relative market share. The Department facilitates timely payment of levy amounts received from carriers to USO and SDDSO providers. Payment was made to the USO provider early in January 2004.

Regional Telecommunications Infrastructure Account (RTIA)

The RTIA is a special account established in 1997 through which the Government provided funding for the following programs:

• $250 million general fund (concluded 30 June 2004);
  
• $20 million Telecommunications for Remote and Isolated Island Communities (concluded 30 June 2003); and
  
• $6.1 million Internet Access for Regional and Remote Communities (concluded 30 June 2003).
  

All these programs operated under the broad umbrella of the Networking the Nation (NTN) program. Their objective was to assist the economic and social development of regional, rural and remote Australia by funding projects which enhance telecommunications infrastructure and services, increase access to and use of services available through telecommunications networks, and reduce disparities between metropolitan and country communities in access to such services and facilities.

The following information reflects the results of surveys conducted in 2003-04 of the infrastructure and service outputs of projects funded over the previous seven years.

Improved infrastructure facilities

Projects to develop and enhance telecommunications infrastructure were a significant component of the NTN program. They covered a wide range of technologies, highlighting the range of needs and issues which applicants were seeking to address.

Infrastructure projects were concentrated in remote and very remote areas.

Since 1997, NTN has improved access to telecommunications infrastructure by funding:

• more than 20 projects providing links to telecommunications networks, or seeking to develop, trial or test telecommunications equipment;
  
• almost 30 projects providing Internet infrastructure and/or services enabling Internet service provider customers to connect to the Internet at the cost of a local call, resulting in the establishment of 153 Internet points of presence to provide Internet access at local call rates;
  
• 35 projects providing access to videoconferencing facilities to the public or specific groups. Of these, 15 were specific telehealth projects in which videoconferencing technology was installed; and
  
• 212 projects to develop new public Internet facilities.

Improved access to telecommunications services

NTN has addressed a wide range of barriers to the take-up of telecommunications services, including availability, affordability, skills and applications. The program has supported projects involving the provision of public Internet access, IT training and awareness raising, and the development of online services.

Since 1997, NTN has improved access to telecommunications services in Australia by funding:

• 19 projects specifically designed to increase awareness of the benefits of online services;
  
• 42 projects providing facilities to allow e-commerce or e-business to be provided to end users by service providers, including secure electronic trading facilities, regional portals or gateways; and
  
• 22 websites (telehealth, education online) directly to end users.

Increased terrestrial mobile phone coverage

A total of 45 mobile phone services (including base stations and repeaters) were commissioned during 2003-04 under the programs administered through NTN (including Building Additional Rural Networks). This significantly increased total mobile phone coverage in regional Australia.

Map 2.1 on page 96 identifies the total mobile phone sites that have been commissioned as a result of the various Government mobile phone funding initiatives.

Telstra Social Bonus - Building Additional Rural Networks (BARN) program

The BARN program was established in June 1999 to support the development of new networks and new network services and products, with an emphasis on the adoption of innovative solutions and leading edge technologies, and strong participation of new telecommunications carriers and service providers. The Government funding of $70 million was allocated over five years. In June 2003, $35 million of BARN program funds was incorporated into funding for the National Broadband Strategy.

A total of 44 projects were funded in-part or wholly by the BARN program, with $29.7 million in BARN funding allocated. A large number of these projects were planning and demand aggregation studies.

The program has been extended to 30 June 2005 to allow all projects to conclude in an orderly manner.

Improved infrastructure facilities

BARN funding has contributed to the provision of 11 new and enhanced broadband infrastructure networks in regional Australia since 2000. Regional solutions have been based on a range of network technologies and architectures, including the use of wireless local loop, cable, satellite and ISDN.

Improved access to telecommunications services

The 11 BARN infrastructure projects have delivered a range of telecommunications services to communities in regional, rural and remote Australia, including basic telephony for Indigenous communities, public Internet access, videoconferencing and satellite mobile telephony, as well as terrestrial mobile telephone services.

Increased terrestrial mobile phone coverage

Of the 45 mobile services funded through the NTN program, 14 were established through projects receiving funding or part funding from BARN. This included new services at Circular Head, Dorset and Waratah Savage River regions in Tasmania and a new service on Fraser Island.

Telstra Social Bonus - Local Government Fund

Improved access to local government services

The fund supports local government authorities in regional and rural areas to improve services and benefits for their communities through the use of advanced telecommunications technologies. A total of $43.3 million is being provided for 42 projects. Projects with a national scope are being coordinated by the Australian Local Government Association. Local government bodies have also been active drivers of many of the projects.

Of the 42 projects, 26 have been completed and have delivered significant improvements in access to local government services.

In Tasmania, all 29 regional councils now participate in the Council Connect website and offer ten of their basic services online 24 hours a day, seven days a week. It is expected that the initial ten online services will be expanded to a further 40 to 50 services during 2004-05. Data from South Australia indicates that the number of online transactions has increased by more than 25 per cent from 17 092 during 2002-03 to 21 476 during 2003-04. The project managed by the Local Government Association of Queensland has confirmed that significant savings can be realised if core local government services are delivered online.

Telstra Social Bonus - Launceston Broadband Project

Improved access to telecommunications services

The Launceston Broadband Project (LBP) is a $30 million joint initiative between Telstra and the Government, established in 2000. The LBP consists of the Broadband eLab and ADSL testbed administered by Telstra, and the Business Development Fund (BDF), a grants program for applications (software) development, administered by the Tasmanian Electronic Commerce Centre (TECC).

The number of Launceston subscribers on the ADSL testbed grew by 38 per cent in 2003-04 to 2111 including residential, business and test lines. Twelve software applications were trialled on the ADSL testbed in 2003-04. This included five applications developed by the BDF grantees, bringing to eight the total of BDF applications trialled since the LBP began. The Broadband e-Lab continued to develop a variety of online applications, employing an average of 22.8 staff throughout the year.

In 2003-04, two new innovative interactive multimedia projects, by Blue Rocket and Roar, received BDF funding through TECC, bringing the total number of BDF projects to 16. Both projects also received funding support from the joint Australian Broadcasting Authority - Australian Film Commission Broadband Production Initiative. The Blue Rocket project received an additional contribution from Telstra.

During 2003-04, the Department negotiated an agreement with Telstra to extend the LBP to 30 June 2006 and to broaden it to include: wireless platforms (1xRTT and WiFi), applications development and trials, use of the LBP testbed for Internet content filtering trials, and greater engagement with the Tasmanian IT industry. The Department also commenced negotiations with TECC to extend its administration of the BDF, to enable full delivery of the Government's original funding commitment.

Telecommunications Service Inquiry response - regional mobile phone programs

The Telecommunications Service Inquiry was established on 9 March 2000 to independently assess the adequacy of telecommunications services in metropolitan, regional, rural and remote Australia. The following administered items are a response to the Inquiry's recommendations.

Map 2.1 Location of mobile phone infrastructure supported by Government funding

Improved access to telecommunications services

The Satellite Phone Subsidy Scheme aims to make mobile phone communications more affordable for people living or working in areas where terrestrial mobile phone coverage is not available.

A total of 1788 applications were approved during 2003-04. This figure is up slightly from 2002-03, when 1554 applications were approved. Since commencement of the scheme in August 2002, 3342 applications for the subsidy have been approved overall, with a total value of $2.9 million.

Increased terrestrial mobile phone coverage

The Towns over 500 program, subsidises the extension of terrestrial mobile phone coverage to 132 regional towns with 500 or more residents. An amount of $23.9 million is being provided to the program over the years 2001-02 to 2004-05.

In 2003-04, coverage was extended in 52 towns adding approximately 28 240 square km of mobile phone coverage. In 2002-03, 59 towns received enhanced coverage.

Around 120 000 people in 2003-04 will have benefited from this expansion in coverage. This represents 0.6 per cent of the Australian population (based on 2001 census data) and 0.3 per cent of the land mass of Australia.

Telstra was unable to meet the final contract milestone by 30 June 2004 as it experienced delays in gaining planning approvals to install the infrastructure in some towns. Coverage to the remaining towns will be completed in 2004-05.

The Towns under 500 initiative subsidises the extension of terrestrial mobile phone coverage to 55 regional towns with fewer than 500 residents. An amount of $18.8 million is being provided for the program over the years 2001-02 to 2004-05.

In this financial year, coverage was extended in 37 towns adding approximately 13 000 square km of mobile phone coverage. In 2002-03, 11 towns received enhanced coverage.

Around 12 000 people will have benefited from this expansion in coverage in 2003-04. This represents 0.07 per cent of the Australian population (based on 2001 census data) and 0.1 per cent of the land mass of Australia.

Again, Telstra experienced some delays in planning approvals and did not meet the final contract milestone by 30 June 2004. Extended coverage to the remaining seven towns will be completed in 2004-05.

The Wireless West initiative was jointly funded by the Australian and Western Australian Governments and Telstra, with each contributing equal funding of $7 million. Under this initiative, 45 new base stations were constructed to improve mobile phone coverage in the South West Land Division of Western Australia. The first ten locations were commissioned by 30 June 2002, with a further 26 locations commissioned by 30 June 2003. Roll-out of the infrastructure was completed in May 2004, with the final nine locations commissioned.

Improved mobile phone coverage along regional highways

Through the $19.1 million Selected Regional Highways initiative, the Government is subsidising the extension of mobile phone coverage to 62 lengths along 34 regional highways over 2001-02 to 2004-05.

In this financial year, 28 lengths were completed providing a further 1911 km of highway coverage. In 2002-03, 22 lengths were completed providing 1340 km of coverage. In total, 3251 km of new highway coverage has been provided. This exceeds the 2621 km required under the agreement with Telstra.

Telecommunications Service Inquiry response - Internet Assistance Program (IAP)

The IAP commenced on 1 July 2001 and was a joint initiative between the Australian Government and Telstra, with the Government contributing $10 million over three years. The IAP comprises an Online Help Service and a Technical Support Service run by Telstra to assist Internet users achieve the minimum equivalent dial-up Internet throughput of 19.2 kbps over Telstra's fixed line network.

Correction of line problems

The Technical Support Service undertakes remote line testing, on-site inspections, line conditioning and minor works, and provides network-based solutions to correct Internet speed problems.

In 2003-04, 2803 technical solutions were provided by Telstra. At 30 June 2004, 8111 line problems had been corrected by the Technical Support Service since the program's inception in 2001-02. Graph 2.12 shows the number of technical solutions provided over the life of the program. Generally, increases in the number of technical solutions provided were associated with increased program promotion.

Access to the IAP service

The IAP Online Help Service comprises a self-help website, an ISP website and freecall 1800 number. The Online Help Service provides self-help solutions and resources for users, including advice to configure correctly their computer, modem or other equipment, to assist in improving their dial-up Internet speed.

Graph 2.12 Number of technical solutions provided by quarter (Q) in each year of the IAP

Source: IAP Quarterly performance reports.

During 2003-04, there were 52 701 Online Help Service contacts. Between 1 July 2001 and 30 June 2004, the service received 173 989 contacts for assistance, the majority of which were through the self-help website. The service has resolved 95 per cent of program contacts since inception. Graph 2.13 shows the level of utilisation of the Online Help Service in each year of program operation. Generally, increases in the number of people accessing the service have coincided with increased promotional activity.

Graph 2.13 Utilisation of the Online Help Service in each year of IAP operation by quarter (Q)

Source: IAP Quarterly performance reports.

Telecommunications Service Inquiry response - National Communications Fund (NCF)

The NCF is a $52.2 million program to support significant telecommunications projects in the education and health sectors in regional Australia. Funding is available over three years from 2002-03. Eight projects are being funded across all states and the Northern Territory.

Improved access to telecommunications

The NCF is providing high-speed bandwidth to health and educational institutions in regional areas which has flow-on benefits to local government, business and community groups. The improved access is delivering high-speed Internet for schools, specialist teachers and telehealth consultants through videoconferencing along with access to online education and training.

Improvements in telecommunication infrastructure

In 2003-04, six of the eight NCF projects rolled out broadband infrastructure across regional New South Wales, the Northern Territory, Tasmania, Victoria and Western Australia. More than 250 schools, many of them in remote communities, and more than 200 School of the Air students now have access to broadband communications as a result of NCF funding. Nearly 50 health facilities, such as regional hospitals and community health centres, have been connected. Eighty-nine regional towns now have new or improved broadband connections.

Interactive Distance eLearning, one of eight projects funded under the NCF, allows School of the Air student Johnno Hoggers to attend school from his living room, 110 km from Alice Springs. Photograph: courtesy of Optus.

Telecommunications Service Inquiry response - Consumer representation

Appropriate activities by consumer representatives

Under subsection 593(1) of the Telecommunications Act 1997, grants may be made by the Minister to assist the representation of the interests of consumers in relation to telecommunications issues. Among other things, grants are intended to support consumer representation in the development of industry codes and standards.

The Australian Communications Industry Forum's (ACIF) Consumer Advisory Council (CAC) and Disability Advisory Board (DAB) were established by ACIF to ensure that the views of consumers, including consumers with disabilities, are appropriately represented.

Advice from ACIF indicated that, collectively, 18 members of the CAC and DAB received sitting fees under the consumer representation grants program in 2003-04 and that in total, they attended 98 per cent of committee or board meetings.

Reports provided to the Department by recipients of grants in 2003-04 indicate that funding assisted participation in 218 meetings, including meetings of the CAC and DAB and other working groups, conferences or other forums, preparation of 20 discussion papers or submissions, publication of 13 journal articles or newsletters, and the conduct of three conferences held to increase consumers' awareness of their rights and the telecommunications services available as well as obtaining consumers' views on telecommunications issues. Grants also assisted consumer representation on a number of other government and industry bodies.

Telecommunications Service Inquiry response - telecommunications research

Research published

Under subsection 593(2) of the Telecommunications Act 1997 (the Act), the Minister may make grants to persons or bodies for purposes of research into the social, economic, environmental or technological implications of developments relating to telecommunications.

In 2003-04, two organisations were awarded a total of $162 563 in grants under the Act for telecommunications research. The Australian National University (ANU) e-commerce group was funded to research the factors affecting take-up and usage of broadband services in Australian households and businesses, and Clear Advantage received funding to research the costs of alternative broadband technologies available domestically and internationally. It is anticipated that both research reports will be released to the public early in 2004-05.

Regional Telecommunications Inquiry - Government response

The Regional Telecommunications Inquiry (RTI) was established to report on telecommunications services in the regional, rural and remote areas of Australia and arrangements that might be put in place to ensure that all Australians continue to share in the benefits of further service improvements and developments in technology. It reported on 6 November 2002.

The Government's response to the RTI included the development of the National Broadband Strategy which was a key recommendation of the Broadband Advisory Group (BAG) and provided the following funding and initiatives:

• $107.8 million for the Higher Bandwidth Incentive Scheme (HiBIS);
  
• $23.7 million for the Coordinated Communications Infrastructure Fund (CCIF);
  
• $8.4 million for the Demand Aggregation Brokers Program (DABP);
  
• $19.9 million for improved mobile phone access in regional areas;
  
• $10.1 million for IT training and supporting services; and
  
• improved monitoring and reporting on regional telecommunications services.

Improved access to higher bandwidth services in regional areas

HiBIS is a four-year program that aims to provide regional Australians with access to higher bandwidth services at prices comparable to those prevailing in metropolitan Australia.

The HiBIS guidelines were released on 8 April 2004 and the registration forms were released on 16 April 2004. This was several months behind the original schedule because of the extensive public consultation undertaken, including the circulation and analysis of responses of two exposure drafts of the HiBIS guidelines, as well as the complexities involved in establishing the administrative arrangements for the scheme.

Among the outputs achieved during the establishment of the HiBIS program are the online spatial mapping facility and online HiBIS Customer Demand Register for eligible customers.

On 18 June 2004, the Minister announced the approval of the first two HiBIS providers, subject to their formal registration. Another outcome was Telstra's announcement in May 2004 that, as a result of HiBIS, it anticipates being able to reduce the trigger thresholds on the demand registers it uses to determine broadband enablement of its infrastructure in rural areas of about 40 to 60 per cent.

The CCIF aims to increase roll-out of new broadband infrastructure and services in regional areas with an emphasis on improved outcomes in health, education and government services, by awarding competitive grants. On 20 April 2004, the Minister announced seven successful projects from the first funding round to the value of $13.880 million. This funding was more than matched by project partners as is shown in table 2.24.

Roll-out of infrastructure and services for these seven projects will occur during 2004-05 and 2005-06.

The DABP involves a network of national, state and territory and community brokers to undertake demand aggregation initiatives resulting in the provision of new broadband infrastructure and services.

A National Broadband Adviser for the education sector was announced by the Minister on 3 March 2004.

Community-based demand aggregation broker grants are awarded via competitive funding rounds. Following the first round, 13 successful communities were advised in late May 2004 that their projects would receive funding totalling $2.8 million. Business plans for the provision of infrastructure and services will be developed by brokers in those communities during 2004-05 and 2005-06.

Improved access to mobile phone services in regional areas

In response to two specific findings of the RTI, the Government allocated funding of $15.9 million for the provision of new and improved terrestrial mobile phone coverage in rural and regional Australia and funding of $4 million for an extension of the Telecommunications Services Inquiry (TSI) Satellite Phone Subsidy Scheme. These allocations are to be expended by 2006-07.

Table 2.24 Total Government and other funding for CCIF projects

Government funding	Other funding	Total value of projects
$13.880 million	$25.2 million	$39 million

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	Case Study Higher Bandwidth Incentive Scheme (HiBIS) - a case study in program development The Higher Bandwidth Incentive Scheme (HiBIS) is an innovative Government program to provide more equitable access to higher bandwidth services in regional, rural and remote Australia. HiBIS is a key element of the Government's August 2003 response to the Regional Telecommunications Inquiry. HiBIS has been designed to: maximise equity of access to higher bandwidth services for regional, rural and remote consumers, relative to metropolitan consumers; promote the competitive supply of higher bandwidth services in regional, rural and remote Australia on a sustainable, ongoing basis; and ensure public funds are used effectively, efficiently, transparently and accountably. HiBIS covers all residences, small businesses and small organisations in regional, rural and remote Australia that do not already have affordable access, by providing for access at specified pricing points and minimum performance levels. The Scheme is open to service providers that, through the use of incentive payments, provide a service that meets minimum price and quality requirements. HiBIS providers are subject to comprehensive reporting and monitoring. Some of the challenges for the Department in developing HiBIS are to achieve outcomes for consumers while not stifling innovation and choice, establish incentive levels that attract provider participation but do not unduly distort market outcomes, and introduce HiBIS without disadvantaging existing providers or discouraging private investment and service roll-out. The scheme was developed through an iterative consultation process with industry and regional stakeholders. The final program guidelines were issued on 8 April. On 18 June 2004, the Minister for Communications, Information Technology and the Arts announced the approval of Regional Broadband Services and Broadcasting Engineering Services as the first two HiBIS providers. The Department congratulates Regional Broadband Services on being the first registered provider under HiBIS. Simon Bryant (left) and David Croft (right).

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In April 2004, a restricted tender process was initiated to select a carrier to provide new and improved mobile phone coverage in regional, rural and remote areas. The tender process was still under way at 30 June 2004, and is due to be finalised in August 2004. Roll-out of the new mobile phone services is expected to be completed by November 2006.

The Satellite Phone Subsidy Scheme, discussed at page 95, was extended for a further three years following the RTI. The scheme now covers maritime and aviation users, as well as terrestrial users. Under the new arrangements, applications are open until 31 January 2007, and the maximum amount of subsidy has been increased from $1100 to $1500, dependent on the monthly access plan selected.

Improved access to IT training and support services in very remote areas

The IT Training and Technical Support Program, with funding of $10.1 million over four years from 2003-04, aims to make basic ICT training and technical support more accessible in the very remote parts of Australia.

The program was launched on 6 May 2004 with a closing date for applications of 15 July 2004.

Improved monitoring and reporting on regional telecommunications services

As part of the Government's response to the RTI, the ACA was made responsible for implementing an integrated framework for the collection of data on telecommunications services and service performance, with a particular emphasis on more effective data collection and monitoring of service levels in regional areas and in remote Indigenous communities (RTI recommendations 5.3, 7.2 and 9.6).

During 2003-04, the Department worked closely with the ACA on the development of the framework and will continue to monitor the ACA's progress.

Television Black Spots and Television Black Spots - Alternative Technical Solutions

Removal of TV black spots

The Television Black Spots program is designed to improve access to analog television services in areas of poor television reception. The program's target is to fix between 200 and 250 black spots. The program has also funded the replacement of obsolete equipment at existing self-help retransmission sites. The Television Black Spots - Alternative Technical Solutions program seeks to provide alternative solutions, such as digital services or satellite reception. There are currently 24 candidates under the latter program.

A combined total of 48 black spot projects, totalling $6.357 million, were funded in 2003-04 under the programs, bringing the total number of projects funded to 244. By 30 June 2004, the two Television Black Spots programs had provided solutions for 202 black spots. In 2003-04, 91 new services commenced in black spot areas compared to 83 in 2002-03. Obsolete equipment has been replaced at 182 existing self-help retransmission sites to maintain adequate television coverage in regional and remote communities.

Graph 2.14 reflects the number of television (TV) black spots fixed on a yearly and cumulative basis for both programs.

Graph 2.14 Number of TV black spots fixed

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	Case Study Improving television reception in Healesville The Shire of Yarra Ranges in Victoria lodged an expression of interest in October 2000 for funding for five new television services to be broadcast from Mt St Leonard to service Healesville. Like many other projects assisted by the program, the Department worked closely with the applicant and other stakeholders to work through a number of complex implementation issues. The Shire of Yarra Ranges delegated an officer who had both good technical knowledge and a strong commitment to achieve positive outcomes for his community to work with the Department. The Mt St Leonard facility was identified as the only suitable site in the area from which broadcasting could take place. It is a very large and complex communications infrastructure site which also houses fire and emergency services, Telstra and Melbourne Water equipment. The tower is jointly owned by Telstra and Melbourne Water. The Council was required to undertake a structural design for a tower extension to obtain sufficient space above the existing Fire Watch cabin to mount the new retransmission equipment. Negotiations with Telstra and Melbourne Water to access the site and share facilities needed to take account of the interests of all parties. The hilly terrain of the Healesville region around the foothills of the Dandenong Ranges means that the area already had a large number of small transmission facilities servicing small communities. While initial broadcast modelling was completed by August 2001, the potential for the new Healesville service to cause interference with existing services meant that actual test transmissions were required to ensure that no interference problems would be encountered. The Television Black Spots program provides funding assistance of up to $150 000. Given the range of technical issues that arose in developing a solution for the Healesville community, the Shire made substantial efforts in identifying appropriate alternative solutions to ensure the total project costs remained within the funding cap. On 19 December 2003, the service was turned on and at least 450 households in the Healesville area are now enjoying good quality television services - most for the first time. Launch of the self-help transmission facility. Photograph: courtesy of Theo Knol, Senior Development Engineer, Shire of Yarra Ranges.

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ABC and SBS Digital Interference Scheme

Timely payments to ABC and SBS under the Digital Interference Scheme

The ABC and SBS Digital Interference Scheme reimburses the costs the national broadcasters incur in contributing to the Interference Management Strategy. The Strategy assists consumers to overcome any interference problems associated with the introduction of new digital television services. Free TV Australia administers the Strategy on behalf of all participating broadcasters, including the ABC and SBS.

The Department transfers funds to the national broadcasters when their Strategy related costs are confirmed. The Department transferred $92 284 in 2003-04.

The average period between receipt of invoices (or relevant supporting information) and payment approval was 17 days. This was a slight decrease on the 2002-03 equivalent average of 18.6 days.

National Transmission Network Residual Funding Pool

Access to broadcasting services by specific target group audiences

The National Transmission Network Residual Funding Pool was created as part of the post-network sale arrangements to ensure that a number of Government commitments in relation to transmission arrangements for national, community and remote commercial broadcasters and radio for the print handicapped were met. These commitments have now been discharged or, where appropriate, funding agreements have been put in place to ensure they are met on an ongoing basis to provide continued access to broadcasting services.

In 2003-04, there were five grants totalling $639 580. This included additional funding of $63 000 approved by the Minister for community broadcasters to mitigate the NTN-related site access charges they incur for three years. The merits of continuing this funding are to be reviewed before 2006-07.

Commercial Radio Black Spots Program (CRBP)

Removal of commercial radio black spots

The $5 million, three-year CRBP commenced in 2002-03, giving effect to a 2001 Government commitment to provide assistance to commercial radio broadcasters to establish or improve services in areas where it has not been commercially viable for them to do so.

Funding rounds totalling $1.857 million were announced in 2003-04 for a further 69 black spot projects for 68 communities in all states and the Northern Territory. All projects are expected to be completed in 2004-05. Funding for a satellite distribution system to serve a number of the Queensland projects was also provided. By 30 June 2004, assistance totalling $2.9 million had been approved for 108 projects (including two satellite uplinks) which will serve 104 communities.

Graph 2.15 reflects the number of projects funded under the CRBP since its inception.

Graph 2.15 Number of commercial radio black spot projects

 

Regional Equalisation Plan (REP)

Assistance to regional and remote commercial television broadcasters for digital broadcasting

The REP announced by the Government in the 2000-01 Budget provides assistance of up to $260 million to assist regional and remote commercial broadcasters with the introduction of digital terrestrial television services. The REP meets half of each of the capital costs and eight years' operating costs of the digital transmission of existing broadcasting services, as assessed by an independent consultant.

The REP primarily comprises licence fee rebates administered by the ABA. In 2003-04, these totalled $22.5 million. In smaller markets (with less revenue and hence lower licence fees) the licence fee rebates are supplemented by cash grants administered by the Department to enable licensees in these markets to achieve the level of annual REP assistance agreed by the Government. As scheduled, the Department paid the first of these cash grants totalling $300 000 in 2003-04. These cash grants significantly helped the smaller markets to establish digital transmission facilities.

NetAlert

NetAlert was established by the Government in 1999 as part of the online content co-regulatory scheme to provide Internet safety advice and undertake community education campaigns on Internet safety issues. In 2003-04, NetAlert received funding of $822 000 through a funding agreement with the Department.

In 2003-04, NetAlert undertook a national promotion campaign which included the broadcast of television and radio community service announcements and launched a national schools project aimed at assisting teachers in all Australian schools to educate students about safe and responsible use of the Internet.

NetAlert produces its own annual report.

ICT Centre of Excellence Program

The Department, in collaboration with the Australian Research Council (ARC), administers the funding deed for the ICT Centre of Excellence, National ICT Australia (NICTA). NICTA will receive $124.8 million from 2001-02 to 2005­-06 under the first tranche of the Backing Australia's Ability Program. The NICTA's mission is to undertake ICT research at the highest international standard and scale, conduct research training through an enhanced PhD program, facilitate the commercialisation of research, and forge mutually beneficial linkages with private sector research organisations, major corporations, SMEs and public sector agencies. Further funding of $249.5 million will be provided for the Centre's operation from 2006-07 to 2010-11 as part of Backing Australia's Ability - Building Our Future through Science and Innovation, the Government's second package of science and innovation initiatives announced in May 2004.

Quantity and quality of research output

The Centre's research program commenced in 2003, based on the contributions of staff from the University of NSW and the ANU, with 11 programs. On 4 July 2003, the University of Sydney became an alliance member of NICTA. As at 31 December, after one full year of operation, NICTA had published 35 research papers in peer-reviewed journals. A further 100 papers were presented at major international conferences related to NICTA's main disciplines and published in related conference proceedings over the 2003 calendar year. During 2003-04, 38 international researchers visited NICTA to collaborate on research.

Researchers trained

In 2002-03, 37 students were endorsed under the NICTA program and a further 30 students were endorsed in 2003-04.

Good collaboration with external stakeholders

NICTA builds linkages with business, major research organisations and universities in Australia and overseas. It is establishing an outreach program to SMEs and has appointed two SME liaison officers. It has established collaborative research projects with the Defence Science and Technology Organisation (DSTO) and organised the first of the Annual ICT Research Forums jointly with CSIRO, DSTO and the Council of ICT CRCs in September 2003.

It has signed major collaboration agreements with Sydney and Melbourne Universities and an agreement with Queensland universities and the Queensland Government is expected in 2004-05. Collaborative research and development projects have been established with IBM and ST Microelectronics (Germany), as well as universities in New Zealand, Germany, Holland, Israel, the United Kingdom, the United States of America and Portugal, and research institutes in Germany, Japan, France and India.

Commercialisation of research

NICTA has implemented an intellectual property (IP) management policy to handle background IP transferred from partner universities, IP created by students and visiting researchers, maintenance of an IP register and the internal and external evaluation of potentially commercially valuable IP.

As part of the implementation of this IP policy, NICTA conducted an internal review to identify existing IP with early commercial potential.

Building on IT Strengths (BITS) - Advanced Networks Program

The Advanced Networks Program (ANP) was established in 2000-01 as part of the $158 million BITS Program funded from the proceeds of the partial sale of Telstra. The ANP's objective is to contribute to the development of advanced network infrastructure that will deliver long-term economic benefits. The program supports the development, trialling and demonstration of advanced networks, experimental networks and testbeds. Funding for the ANP was $39 million over three years to support three projects, CeNTIE, GrangeNet and m.Net. The program will receive an additional $21 million under Backing Australia's Ability - Building our Future through Science and Innovation to extend it to 2006-07. In 2003-04 the three project networks became fully functional and started to deliver results.

High use of facilities

The facilities established have been used extensively in research and applications development. CeNTIE's four focus groups have been able to experiment with a range of new business systems covering telehealth, media, information brokering and telecollaboration. GrangeNet has carried hundreds of terabytes of research and education traffic across its network and has been used to provide network services to a number of national and international scientific events. Twenty-six application development companies are working with m.Net to support development and commercialisation activities using its network. It also operates a premium SMS gateway to 13 companies providing 18 SMS-only applications.

Facilities have had positive impact on work of researchers

The three projects have facilitated a significant amount of new research activity. CeNTIE's focus groups have researched a number of complex issues. For example, the Telehealth focus group has been developing three new systems - surgical training using haptic technologies, paediatric echocardiography and the Virtual Critical Care Unit (ViCCUTM). A Virtual Classroom initiative has been jointly developed by the University of New South Wales, the University of Melbourne and the University of Western Australia. Collaboration with Nortel Networks and the film post-production industry has led to the Extranet on Demand product which allows post-production companies to collaborate using secure, high-capacity common network facilities created for the duration of the project.

GrangeNet supports a number of Australia's research communities that depend on a high bandwidth and low latency network. Through GrangeNet, Australian researchers and scientists can now remotely access resources such as supercomputers, distributed data sets and nationally significant scientific instruments and infrastructure.

m.Net has linkages with university research and with the research arms of major corporations to conduct activities such as behaviour research, the development of mobile applications by university students, mobile Internet application development, Telstra's funding of the HealthSpring e-health application development, and m.Net's collaborative agreements with DSTO and the ABC.

Leveraging of non-Commonwealth external funding

Over the three years of the ANP, the Government's initial investment of $39 million has been supplemented by over $75 million in cash and in-kind contributions by the consortium members of the three projects. This represents more than $2 million in other contributions for each $1 million of Government funding, resulting in total investment of about $115 million.

Contribution to national backbone network for research and education

CeNTIE has built gigabit-capacity Metropolitan Area Networks (MANs) in Sydney and Perth, with CeNTIE's Sydney MAN linking to the Sydney Basin Fibre Project. CeNTIE also accesses a ten gbps wavelength between Perth and Melbourne. Individual institutions are connected with one gbps tails. GrangeNet has built a ten gbps backbone network between Melbourne, Canberra, Sydney and Brisbane. As with CeNTIE, individual institutions are connected with one gbps tails.

CeNTIE and GrangeNet interconnected in June 2003, providing institutions with gigabit capacity between Perth and Brisbane. Both networks also interconnect to the Australian Research and Education Network currently being implemented to link Australian tertiary institutions. The CeNTIE/GrangeNet backbone is linked to overseas networks, opening opportunities for Australian researchers to participate in significant international projects.

The CeNTIE/GrangeNet ten gbps backbone is world-class in terms of bandwidth and reliability. GrangeNet operates to the same standards as research and education networks around the world. CeNTIE is recognised internationally as a major testbed for network research.

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	Case Study Advanced Networks deliver virtual critical care Many smaller regional hospitals cannot provide the same level of round-the-clock availability of medical expertise found in metropolitan or major regional hospitals, even though the need to provide critical care services can arise without warning. The Centre for Networking Technologies for the Information Economy (CeNTIE) project, a CSIRO-led consortium funded by the Government's Advanced Networks Program, has developed new technology that makes long distance emergency medical care possible. The Virtual Critical Care Unit (ViCCU™) allows a specialist located at Nepean Hospital in Penrith in Sydney's west to use a dedicated workstation that transmits high quality audio, video and vital signs data to be virtually present to direct and interact with emergency staff at Blue Mountains District Hospital in Katoomba. The specialist is an involved member of the emergency team, able to request and access information, suggest courses of action and see the results immediately. A dedicated fibre-optic link is used to connect the two hospitals, and the ViCCU™ system is designed for ease of use and high reliability. The high quality is achieved through Digital Video over IP technology developed by CeNTIE. The ViCCU™ allows 24-hour monitoring of a patient and greatly improves the services available to regional areas. It has a wide variety of applications including heart attacks, car accidents, and burns. A second unit has been installed in the obstetrics unit at Katoomba Hospital so that the telepresence of an obstetrician can assist with deliveries. Dr Patrick Cregan of Nepean Hospital said the most important innovation of the system was that the specialist can now help trauma patients directly and can more effectively communicate with remote hospital staff. Overall, Dr Cregan said he could not be happier with the pilot program: 'It has been incredibly successful. We have a queue of hospitals lining up saying "where can we buy one?" ' In May 2004 the ViCCU™ system won the Australian Information Industry Association iAIIA award for Implementation - Telecommunications. These awards recognise the best development and deployment of information and communications technology in Australia. A specialist at Nepean monitors a patient at Katoomba. Photograph: courtesy of CeNTIE.

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Building on IT Strengths (BITS) - Incubators

The Department administers ten funding agreements under the BITS Incubator program, which aims to improve the rate of commercialisation of ICT ideas and research and development by establishing incubators to increase the success rate of new business formation in the Australian ICT industries sector. An amount of $78 million was provided for the program over the years 2000-01 to 2003-04. Ten incubators were funded in all states and territories except Tasmania (where a separate incubator was funded under the BITS Intelligent Island program). On 6 May 2004, the Government announced a $36 million extension of the program until 2007-08 as part of the second package of Backing Australia's Ability initiatives.

ICT start up companies assisted

In 2003-04, incubators received a total of 607 applications for incubatee support, from which 78 companies were selected for support. During 2003-04, 33 companies graduated from the program. Since the program's commencement, 4165 applications for incubatee support have been received by the incubators, 337 companies have been accepted as incubatees (179 investment, 158 non-investment), and 148 incubatees have graduated from the program.

Stronger ICT commercialisation

In 2003-04, private co-investment in the program was about $80.0 million bringing the total co-investment over the four years of the program to $160.0 million. This was in addition to the $83.9 million BITS funding for the incubators (including the Intelligent Island Incubator) over the four years to 2003-04¹².

12 Co-investment has not been audited.

Table 2.25 Applications, acceptances and graduates from the BITS Incubators Program

	1999-00	2000-01	2001-02	2002-03	2003-04	Total
Applications	81	1445	1107	925	607	4165
Acceptances	1	61	97	100	78	337
Graduates	0	4	27	84	33	148

Impact of funding

BITS incubator funding has seen the establishment of ten incubators across Australia that are providing start-up business assistance and capital not previously available to ICT SMEs. This has seen accelerated growth opportunities for innovative ICT SMEs.

The BITS Incubator program underwent an independent evaluation in 2003. The evaluation found that the incubators had generally performed well by international standards and had contributed to exports, jobs and revenue growth. The report also found that most of the incubators would not be sustainable without further government support.

Building on IT Strengths (BITS) - Intelligent Island

The Intelligent Island program was funded from the second part-sale of Telstra to assist the Tasmanian ICT sector. The program was supported to the level of $40 million over the years 1999-2000 to 2001-02 under a Memorandum of Understanding (MOU) between the Australian and Tasmanian governments.

The funds are held in trust by the Tasmanian Government and are allocated by an independent board to a range of new initiatives to build on the existing Tasmanian ICT industry, government initiatives and the research capacity of Tasmania's education sector. A second MOU signed on 7 April 2004 extended the program to 30 June 2008. The Department and the Tasmanian Department of Economic Development oversee the implementation of the MOU.

Reasonable number of projects funded

By 30 June 2004, the Intelligent Island program had funded the following:

• ICT incubator, In-tellinc, expended $7.4 million on 18 start-up companies;
  
• $4.2 million in enterprise development grants was awarded for 16 projects and a $3 million commercialisation fund was established;
  
• 13 skills development projects amounting to $2.2 million were supported;
  
• a $600 000 investment attraction initiative leveraged a $4.9 million business investment and 20 new jobs over three years;
  
• a $300 000 telecommunications study was completed;
  
• nine marketing initiatives, costing $30 000; and
  
• a $20 million Centre of Excellence expected to commence in late 2004.
  

Impact of funding

The initial impacts of Intelligent Island funding have been in skills development, industry consolidation and marketing. Notable successes have been in the development of e-learning, e-health and marine ICT clusters. Such clusters have created the scale necessary for Tasmania's small ICT companies to engage in major projects under the enterprise development initiative and, downstream, to develop new products from potential research outcomes from the planned Centre of Excellence.

Commonwealth Technology Port (Comtechport)

In September 1998, the Government announced a $22.5 million Federation Fund grant, administered by the Department, as 'seed capital' for the Commonwealth Technology Port (Comtechport) premises at the 4.4 hectare Technology Park Precinct of the Melbourne Docklands. Comtechport will be a business precinct housing high-technology companies, a business incubator and education and research institutions.

Comtechport is progressing according to plan

The grant deed with the Docklands Authority, on behalf of the Victorian Government, was signed in May 2000. In December 2000, Digital Harbour Holdings Pty Ltd (DHH) was appointed as the project developer. An initial $7.3 million was spent on site remediation and infrastructure, but building was slow to start due to adverse market conditions.

Construction commenced in March 2003 and all funds have been transferred to the Victorian Government's Docklands Authority under the deed that expired on 30 June 2003. The first phase of Comtechport, the 5800 square metre Innovation Building, was completed in June 2004. An amount of $5.3 million has been placed in a trust administered by the Victorian Government, to be released in two stages to the developer, subject to performance targets on building construction, by 30 June 2007.

The launch of Digital Harbour's Innovation Building, the first stage of the Commonwealth Technology Port precinct in the Docklands, Melbourne. Left to right: Group Managing Director, Telstra Technology, Innovation and Products, Ted Pretty; Prime Minister, the Hon John Howard; and Chairman of precinct developer, Digital Harbour Holdings, Leon Kempler OAM. Photographer: Sam D'Agostino.

Compensation to Societe Internationale de Telecommunications Aeronautiques (SITA)

SITA activities in Australia

SITA is a not-for-profit international cooperative organisation that provides a range of telecommunications and information processing services to the air transport industry and government.

The Department provided support for continued investment by SITA in Australia, particularly through the location of its regional headquarters in Australia. Over the period 1998-99 to 2003-04, a total of $9.389 million was spent on the program, which has now concluded.

The SITA regional headquarters was maintained in Australia during the period of funding support with average annual employment of 189 staff.

International organisations contributions

Appropriate issues raised at ITU and APT meetings

The International Telecommunication Union (ITU) is the specialised agency of the United Nations (UN), responsible for the regulation, standardisation and development of telecommunications worldwide, including international management of the radiofrequency spectrum and satellite orbits. Australia, through the Department, contributed a total of $5.173 million to the ITU in 2003-04.

Within the Telecommunication Standardization Sector of the ITU, Study Group 3 (SG3) has been investigating the charging arrangements for international Internet connection, which have been claimed to disadvantage smaller networks and developing countries and, specifically, to disadvantage Australian industry. The Department has played an active role in SG3, helping to bring together widely divergent viewpoints and develop acceptable guidelines. In June 2004, agreement was reached on introducing guidelines for international Internet connection which will result in greater flexibility in negotiations for such agreements. This will bring benefits to the Australian Internet industry and consumers.

In June 2004, the Department, on behalf of the Government, provided $670 555 to the ITU to assist the Government of East Timor to establish an operational structure for a communications regulatory authority. Among the major outputs will be a Telecommunications Act, a Radiocommunications Act and a Broadcasting Act. The ITU will also assist in the elaboration of the national frequency plan, national radio regulation, and a guide for spectrum monitoring.

The Asia-Pacific Telecommunity (APT) is a regional communications development and cooperation organisation established by treaty. Australia, through the Department, paid $346 732 to the APT in 2003-04. In representing Australia in this forum, the Department aims to promote adoption of policies and regulatory approaches that enhance the development of open and competitive telecommunications markets and the spread of online services within those markets. The Department has been actively involved in developing and supporting capacity-building projects, which aim to improve access and security in the region through good governance of the communications sector, with particular attention to the provision of affordable telecommunications services.

OUTPUTS

Output 3.1 Policy advice and program management which encourage competitively priced and reasonably accessible telecommunications and postal services

High quality program funding and grant administration

Broadly speaking, there are four types of programs administered by the Department under Output 3.1. These are contracts, multiple funding recipient programs, single funding recipient programs, and hybrid/subsidy programs. The nature of the monitoring and administration undertaken by the Department varies according to the category of program. More information on these programs is provided under Administered items.

National Relay Service (NRS) contract

The Department consults the Australian Communications Authority (ACA) in the administration of the contract. Australian Communication Exchange provided the NRS during 2003-04. Following a substantial renegotiation of the contract, Australian Communication Exchange will continue as the NRS provider until 30 June 2006.

Mobile Phone Coverage contracts

The Department administers three major contracts that provide financial support for enhancing or upgrading mobile phone infrastructure in regional Australia. These contracts are the result of tender processes undertaken by the Department in revious reporting periods. Telstra was the successful tenderer for all three contracts.

In 2003-04, the Department met monthly with Telstra to assess progress against milestones in the contracts. The Department also assessed requests from Telstra to vary sites for the mobile phone infrastructure, judged the adequacy of the service delivered relative to the contracts' requirements, and made payments as contractual milestones were achieved. The final milestone was not achieved as required under the contract and the Department worked with Telstra to resolve the practical and budgetary issues that resulted.

Untimed Local Calls contract

The Department also administered the contract with Telstra in relation to the upgrade of infrastructure in the extended zones to ensure untimed local calls were possible within each such zone. The administrative tasks undertaken with respect to this contract were very similar to those with the mobile phone contracts. In addition, the verification processes were supported by independent experts and the ACA. All the obligations under the contract were successfully concluded in the reporting period and the Department made the final payment to Telstra.

Table 2.26 Section 593 consumer and research grants

	2002-03			2003-04
	Applications processed	Funded projects	Grants administered	Applications processed	Funded projects	Grants administered
Consumer grants	26	14	14	19	24	24
Research grants	28	0	0	0	2	2

Consumer representation and research grants

The fall in the number of applications from 26 to 19 shown in table 2.26 was partly due to the fact that, in 2003-04, consumer bodies were not required to apply formally through the program to be eligible to be paid sitting fees to attend meetings of Australian Communications Industry Forum (ACIF) committees. Grants were not made in 2002-03 for telecommunications research and the available funding was combined with the 2003-04 allocation to fund two research projects in 2003-04.

Milestones for consumer representation grants included attendance by grant recipients at meetings of the ACIF committees, participation in other relevant forums and publication of journals. These milestones were considered to be met only where substantiation was provided, such as a progress report from the recipient. Consumer grants acquitted in 2003-04 relate to grants allocated in 2002-03. For telecommunications research grants, one of the two grants made in 2003-04 was acquitted in that year.

Table 2.27 Section 593 consumer grants - 2003-04 milestones met and grants acquitted

	Milestones met		Grants acquitted
	%	no.	%	no.
Consumer grants	96	105	100	14
Research grants	100	10	50	1

Coordinated Communications Infrastructure Fund (CCIF) and Demand Aggregation Brokers Program (DABP)

The CCIF and DABP commenced in 2003-04. Under the first CCIF funding round, seven projects (totalling $13.880 million) were selected for funding. One project commenced in 2003-04 and six were still in negotiation at the end of the reporting period. Delays in negotiating funding agreements necessitated re-phasing some program funds to the 2004-05 year.

Under the first round of the community-based brokers component of the DABP, 13 projects (totalling $2.8 million) were selected for funding. No grants were administered during 2003-04, but most projects are expected to commence early in 2004-05. Grants were administered for the South Australian and Western Australian state brokers and the Education National Broadband Adviser. Again, delays in negotiating funding agreements necessitated re-phasing some program funds to the 2004-05 year.

Table 2.28 CCIF/DABF grants 2003-04

	Applications processed	Funded projects	Grants administered
Coordinated Communications Infrastructure Fund	153	7	1
Demand Aggregation Brokers Program (community brokers)	50	13	0

Table 2.29 CCIF/DABF 2003-04 milestones met and grants acquitted

	Milestones met
	%	no.
Coordinated Communications Infrastructure Fund	100	1
Demand Aggregation Brokers Program	100	1

Networking the Nation (NTN)

The NTN program largely concluded on 30 June 2004 (only a small number of projects which are receiving funds from the more recent Social Bonus BARN and Local Government Fund programs are continuing, 43 in total). The administration, therefore, focused heavily on assessing final reports from individual projects and ensuring proper acquittal of the funding received. At 1 July 2003, 390 projects had been acquitted and, by 30 June 2004, this had risen to 575 projects. Hence, a total of 185 funding agreements were acquitted in 2003-04.

National Communications Fund (NCF)

The NCF projects are at an early stage of implementation with progress against the milestones in the eight funding agreements being monitored.

Launceston Broadband Project (LBP) and Business Development Fund (BDF)

The LBP funding deed was renegotiated during 2003-04 to extend the project in scope and time to June 2006. Lower than expected demand for the program resulted in Telstra under-spending on the project and no payments were made to it in 2003-04. One acquittal was received in 2003-04 with the second expected in early 2004-05.

No payments were made in 2003-04 to the Tasmanian Electronic Commerce Centre (TECC) under the BDF funding deed, due to lower than scheduled spending by TECC in previous years. TECC nevertheless continued to administer the BDF in compliance with the funding deed. To fulfil the Government's commitment to the BDF, $1 million was carried over to 2004-05 and 2005-06. The Department began negotiations with TECC at the end of 2003-04 for a variation to the deed to reflect this funding extension. TECC is required to acquit funds biannually. Both acquittals for the 2003-04 reporting period were received.

Internet Assistance Program (IAP)

The final year of funding of this program was 2003-04 (a carrier licence condition requiring Telstra to provide the IAP replaces the three-year funding program and guarantees the benefits of the IAP into the future). Confirmation of the number of 2003-04 milestones met was not obtained by the end of 2003-04. As a result, final milestone payments totalling $2.35 million were held over until 2004-05. Three of the four 2003-04 acquittals were received during the reporting period with the final acquittal expected in early 2004-05.

Telecommunications Action Plan for Remote Indigenous Communities (TAPRIC) and the Higher Bandwidth Incentive Scheme (HiBIS)

Expenditure of administered funds on both the HiBIS and TAPRIC programs was well below budget allocation. In the case of HiBIS, the complexity of developing the administrative elements of the program and delays in receiving expert advice on key program components meant that full implementation of the program and commencement of funds expenditure did not take place during 2003-04. In the case of TAPRIC, the delay by industry to take up the offer of Government funding under the Community Phones program limited the expenditure of funds during the year. The Department is seeking to re-phase funds into the 2004-05 financial year. It is expected that re-phased funds will be fully expended in this period.

Satellite Phone Subsidy Scheme

Under this scheme the Department must assess whether applicants meet the relevant eligibility criteria and, if so, calculate the appropriate subsidy and process payments to registered handset providers. These tasks were undertaken efficiently, and all timeframes were met.

Table 2.30 HiBIS/TAPRIC grants 2003-04

	Applications processed	Funded projects	Grants administered
Higher Bandwidth Incentive Scheme	2 (ISP applications)	0	0
Telecommunications Action Plan for Remote Indigenous Communities (Internet computer package)	158	149	149

High-quality and timely policy advice and Ministerial services

The Department provided significant direct support to the Minister on telecommunications and postal services.

Timeliness figures are quite low in some instances. This is due to the complexities involved in developing responses and the need to consult with portfolio agencies and government business enterprises. The Department will be monitoring response times more actively in future in order to address this timeliness issue and is upgrading its processes to assist that monitoring.

This is the first year that performance information has been collected in this way and trends will be available from 2004-05.

Key communications issues raised in Ministerial correspondence during the reporting period included the availability of broadband services and a range of consumer issues such as Internet dumping, unexpected high bills, customer service from call centres, service quality, and Telstra's line rental increases. Other common issues were Telstra shareholder issues, management and employment issues, the location of mobile phone towers and related facilities, and the quality of postal services.

The Department also provided a significant number of Ministerial briefings on a range of policy issues and market developments.

The Department provided advice to the Minister on the sale of the remaining Government shareholding in Telstra. The privatisation legislation twice failed to pass the Senate during 2003-04.

The Department briefed the Minister on improving the availability of broadband across a range of technologies and environments. Briefings were also provided on implementation of the 2002 competition reforms such as the accounting separation regime to achieve greater transparency in Telstra's wholesale and retail pricing, and on consumer contract issues.

Table 2.31 Advice provided within agreed timeframes

Type of advice	Number	Provided within agreed timeframe (%)
Ministerial correspondence	1796	39
Briefings
- initiated by the Department	296	not applicable
- meeting briefs	79	63
Question time briefs	313	74
Parliamentary Questions on Notice	82	22

Note: The figures in this table include some figures relating to Output 3.3 due to organisational arrangements within the Department. These figures cannot be disaggregated.

In terms of international telecommunications, the Department provided advice to the Minister on work within the ITU to achieve a consensus on international Internet charging arrangements, a joint statement on cooperation in the fields of telecommunications and information technology with Thailand, and change in the management of contributions to the ITU and APT to support projects in the Asia-Pacific.

Advice was also provided on trade issues, including multi-lateral negotiations at the World Trade Organisation (WTO) with the aim of achieving more liberal trade commitments, and bi-lateral negotiations for the AUSFTA and the Australia-Thailand Free Trade Agreement. The Department provided briefings to the Minister on policy issues relating to the Asia Pacific Economic Cooperation (APEC) which included matters at the intersection of APEC and the AUSFTA. These issues have included digital economy, e-commerce, and cultural products in a trade context. Australia has taken a leading role in the active and successful APEC Telecommunications Working Group, chairing several groups and initiating a number of programs.

During the year, the Department represented Australia at two meetings of the Organisation for Economic Cooperation and Development (OECD) Working Party on Telecommunications and Information Services Policies. The sharing of information and discussion of papers at these meetings provided an important input into advice to the Minister on a range of telecommunications competition issues.

Effective client service and consultation

The Department engaged in ongoing consultation with stakeholders on a range of telecommunications policy and programs in 2003-04. It responded to queries from individual members of the public on the availability of telecommunications services and existing telecommunications regulation and programs.

According to the Department's client survey, overall satisfaction with the Department from within the telecommunications sector was high, with 91 per cent of 54 respondents surveyed rating service as satisfactory or better. This result is slightly lower than other clients of the Department and may be explained by the wide range of views and interests represented within the sector. Within the telecommunications sector, 82 per cent of clients expressed satisfaction that the Department was contributing appropriately to the objective of competitively priced and reasonably accessible telecommunications services.

The Department's clients expressed a high level of satisfaction with consultation in the context of policy and legislation development, particularly from those likely to be affected by changes (92 per cent satisfied). Clients were less satisfied with the timeliness of consultation, with only 87 per cent of clients rating the Department as satisfactory or better.

The Department consulted with 300 stakeholders from industry, regional communities and different tiers of government in the context of the Radio Communications Forum in September 2003. This forum included presentations on major government programs and strategies, discussion on key issues, and updates on latest technology and industry developments. As noted in the case study at page 103, the Department also engaged in extensive consultation with regional stakeholders and industry representatives in developing guidelines for the HiBIS scheme.

Compliance with accountability standards

The Australian National Audit Office (ANAO) Audit Report No. 24, Agency Management of Special Accounts, found that the National Relay Service Special Account had reported negative balances in 2002-03 because payments had been made out of the Account immediately before carrier NRS levy payments had been transferred from the ACA to the Department. Systems and procedures were put in place during the year to address this situation.

ANAO Report No. 12, The Administration of Telecommunications Grants, was tabled in the Parliament on 5 November 2003. The Report examined the administration of telecommunications programs, primarily Networking the Nation (NTN). The audit confirmed that most aspects of the Department's administration of the NTN Program were consistent with better practice. A small number of areas where the Department's performance could have been better were also identified. The Department agreed to implement the ANAO's recommendations.

All audits in which the Department participated are listed in section 3.

The Department renegotiated a number of contracts during the year and on two occasions took the opportunity to introduce specific measures to enhance accountability, including:

• improved reporting and contract management mechanisms in the National Relay Service contract; and
  
• rigorous payment milestones and reporting requirements in the Launceston Broadband Project contract that are more closely aligned to each of the activities funded.

Research and analysis activities contribute to policy development

In-house and commissioned research, through the Department's Research, Statistics and Technology Unit (RSTU), focused on monitoring trends in the availability and take-up of communications services and their costs and prices. Models of the telecommunications market and of broadband roll-out costs were refined and updated. A major new database acquisition enabled detailed analysis to be undertaken on the socioeconomic and demographic characteristics of households respectively taking up and missing out on new services, particularly in regional areas. Research also assisted in identifying and evaluating policy and program options, base-lining and benchmarking programs and identifying information gaps. Some of these were subsequently addressed in research funded under the s593 research grants.

The Department cooperated with other agencies, including the Australian Bureau of Statistics (ABS), the OECD and the ITU, to develop and improve statistical and other indicators for the post and telecommunications sectors, and to improve the evidence base available to policy and program analysts.

The Department also commissioned a number of significant consultancy projects during the reporting period that will inform future policy development. Consultancies examined issues such as the:

• international market for Internet connection and its impact on Australia;
  
• costs associated with alternative technology broadband roll-outs (such as xDSL, Hybrid Fibre Coaxial, powerline communications, Fibre to the Home, wireless and satellite);
  
• current supply of high bandwidth transmission links operated by both dedicated and non-dedicated telecommunications operators in Australia;
  
• state of powerline communication technologies, their limitations and applicability to deliver broadband services over Australian electricity distribution networks; and
  
• demand drivers for broadband take-up by households and businesses.

Targets for processing times met

The Department complied with the timeframes in its telecommunications grant deeds for making payments. Once progress reports were approved and satisfactory progress against all requirements of the funding agreement had been demonstrated, including a satisfactory financial acquittal, all associated payments were made.

In 2003, the Department established a target of seven days for paying the NRS provider the NRS levy once levy funds were received from the ACA. The Department has consistently met this target during the financial year and this has contributed to a more efficient and streamlined process for the payment of the quarterly NRS levy.

In relation to the 2004-05 consumer grants program:

• advertising of applications was planned for March 2003 and applications were invited in April 2003; and
  
• the target date for recommendations on the outcome of the funding round was May 2004 and recommendations were made in June 2004.

Highly effective budget management

As identified in the resources for outcome table on page 76, the overall price of Output 3.1 was $763 000 above budget, predominantly due to unbudgeted functions transferred from the former NOIE on 8 April 2004.

Some Output 3.1 administered funding programs were underspent in 2003-04 as funding recipients did not trigger milestone payments. In most cases, this was due to external factors beyond the control of the Department and the funding recipient. This slippage will be rectified in the coming financial year.

Managers conduct a regular evaluation of budget outcomes, and commentary on variations between budget and expenditure is provided to EMG on a monthly basis. The commentary also includes forecasting of budget issues where possible.

Output 3.2 Policy advice and program management which promote accessible high quality broadcasting services

High-quality program funding and grant administration

Television Black Spots Program (TVBSP) and Television Black Spots-Alternative Technical Solutions Program (ATS)

There were fewer applications processed for the TVBSP this year because the program is nearing the end of its life and is due to cease at 30 June 2005.

The ATS had two grants administered during the year.

As shown in table 2.33, required milestones in 2003-04 were met for all new services projects, but six of the 27 milestones for the replacement of obsolete equipment projects were not achieved. The Department works actively with the coordinating bodies to encourage them to meet milestones and acquit projects, but delays are sometimes difficult to avoid, particularly where the projects are in isolated regions.

Commercial Radio Black Spots Program (CRBP)

An invitation was extended to broadcasters in July 2003 to nominate additional communities for consideration under the program. The majority of the 275 nominated proposals received and assessed in 2003-04 were judged to be of low priority and not supported.

Table 2.32 TVBSP/ATS grants 2003-04

	Applications processed	Funded projects	Grants administered
TVBSP new services	46	46	187
TVBSP replacement of obsolete equipment	0	0	56
ATS	2	2	2

Table 2.33 TVBSP/ATS 2003-04 milestones met and grants acquitted

	Milestones met		Grants acquitted
	%	no.	%	no.
TVBSP new services	100	96	92	77
TVBSP replacement of obsolete equipment	77	21	95	53
ATS	100	1	n/a	n/a

Table 2.34 CRBP grants

	2002-03				2003-04
	Applications processed		Funded projects	Grants administered	Applications processed	Funded projects	Grants administered
Commercial Radio Black Spots Program	185		38	38	275	70	108

The program is due to end on 30 June 2005.

The program commenced in 2002-03 with 38 projects approved. No milestones fell due in 2002-03 and no projects were required to be completed in that period.

Table 2.35 shows that ten per cent of milestones were not met in 2003-04. The Department continues to work actively with recipients to encourage them to meet milestones and acquit projects but, as with the TVBSP, there can be delays particularly where the projects are in more remote areas. One project approved in 2002-03 was cancelled by the broadcaster in 2003-04.

ABC and SBS Digital Interference Scheme

In 2003-04, the Department transferred funds from the Scheme to the ABC and SBS following receipt of six invoices validating the costs the national broadcasters had incurred in relation to the Interference Management Strategy and some related GST information. The average period for processing these invoices and payments in 2003-04 was 17 days, a slight decrease from the 18.6 days taken in 2002-03. All invoices or payment requests received by the Department in 2003-04 were approved by 30 June 2004.

National Transmission Network Residual Funding Pool

Five grants were provided for community and remote commercial broadcasters and Radio for the Print Handicapped. No application is required as the grants reflect arrangements agreed at the time of the sale.

Funding milestones that were late were met on average within 14 days of their due date in 2002-03 and within 26 days of their due date in 2003-04. The slippage in the achievement of milestones in 2003-04 was primarily due to delays resulting from the provision by funding recipients of partially complete activity reports which needed to be followed up by the Department. All outstanding grant acquittals were provided in both years.

Table 2.35 CRBP 2003-04 milestones met and grants acquitted

	Milestones met		Grants acquitted
	%	no.	%	no.
Commercial Radio Black Spots Program	90	29	90	28

Table 2.36 Pool grants - milestones met and grants acquitted

	2002-03				2003-04
	Milestones met		Grants acquitted		Milestones met		Grants acquitted
	%	no.	%	no.	%	no.	%	no.
National Transmission Network Residual Funding Pool	33	3	100	8	17	2	100	5

Community Broadcasting

Community Broadcasting is not an application-based program. Funding of $5.4 million for community broadcasting was provided in 2003-04 through the Community Broadcasting Foundation (CBF) which is the independent, non-profit funding agency for the sector. As shown in table 2.37, two projects were funded to assist community stations and broadcasters across Australia to produce media by and for their communities.

In 2003-04 there were ten milestones, seven of which met the target date and a further three met the target date within two days. In 2002-03, there were three community broadcasting milestones, and while no milestones were met, they were met within five days of the target date.

Table 2.37 Community Broadcasting grants

	2002-03			2003-04
	Applications processed	Funded projects	Grants administered	Applications processed	Funded projects	Grants administered
Community Broadcasting	N/A	2	2	N/A	2	2

Table 2.38 Community Broadcasting - milestones met and grants acquitted

	2002-03				2003-04
	Milestones met		Grants acquitted		Milestones met		Grants acquitted
	%	no.	%	no.	%	no.	%	no.
Community Broadcasting	0	0	100	1	70	7	100	1

Regional Equalisation Plan (REP)

The Department paid the first grants, totalling $300 000 in 2003-04, as scheduled. These grants in smaller markets supplement the larger licence fee rebates administered by the ABA which totalled $22.5 million in 2003-04.

High quality and timely policy advice and Ministerial services

While the Department strives to provide correspondence and briefings within agreed timeframes, fluctuations in the volume of correspondence and briefing requests coupled with tight deadlines, particularly during parliamentary sitting periods, often makes this difficult. The Department is also dependent, in many cases, on receiving comment or input from portfolio agencies before briefings or answers to Parliamentary Questions on Notice can be finalised.

This is the first year that performance information has been collected in this way and trends will be available from 2004-05.

The majority of correspondence received by the Minister on broadcasting issues related to the programming decisions, funding and independence of the national broadcasters and matters regarding the programming of commercial television broadcasters, including captioning and sports coverage.

In addition to the matters discussed under the performance indicator for Outcome 3, the Department provided advice to Ministers on a wide range of policy, program and operational matters.

Ongoing advice was provided on issues relating to the accountability and governance of the national broadcasters, the ABC and the SBS. The Department facilitated the expansion of digital television services by the national broadcasters by processing digital implementation plans associated with the roll-out of 35 ABC services and 27 SBS services, and by providing advice on proposed new digital television transmission and distribution contracts for SBS.

Table 2.39 Advice provided within agreed timeframes

Type of advice	Number	Provided within agreed timeframes (%)
Ministerial correspondence	1 940	56
Briefings
- initiated by the Department	251	not applicable
- meeting briefs	98	83
Question time briefs	205	57
Parliamentary Questions on Notice	64	27

The Department provided advice on possible options for the future of the anti-siphoning scheme. A new instrument was made by the Minister on 11 June 2004 which extended the operation of the anti-siphoning scheme to protect a revised list of sporting events occurring between 1 January 2006 and 31 December 2010. The Minister introduced the Broadcasting Services Amendment (Anti-siphoning) Bill 2004 into the Parliament on 24 June 2004. The Bill extends the automatic de-listing period for events from six to 12 weeks before their commencement.

A program of statutory reviews into the digital television regulatory framework was commenced by the Department with the release of consultation papers for two reviews in May 2004.

The Department coordinated the development of advice for consideration by the Government on a number of other issues including:

• a proposal to merge the ACA and the ABA. The Government's decision to merge the authorities to form the Australian Communications and Media Authority was announced in the 2004-05 Budget;
  
• a model to enable the commercial television broadcasters in the remote Western Australia licence area to convert to digital. Discussions also commenced with broadcasters in the Central and Eastern Australia remote market; and
  
• a range of radiocommunications matters, including legislative changes needed to implement recent reviews of the radiocommunications regulatory framework.

Effective client service and consultation

The Department receives numerous public queries about aspects of the broadcasting regulatory regime, ways to redress poor television and radio reception, digital broadcasting technology, products and services. The Department's annual client survey revealed that 98 per cent of the 90 broadcasting clients surveyed are satisfied with the services provided.

The Department is also responsible for the administration of a number of grant programs which require a high level of client focus and cooperation to ensure that these programs in the broadcasting sector achieve their objectives. Initial findings of an evaluation of the Television Black Spots program commenced by Research, Statistics and Technology Unit (RSTU) reveal a high level of responsiveness to applicants by the TV Fund Unit staff. The highly facilitative approach to project application and management by the TV Fund Unit was important, as most applicants had no expertise or experience in television broadcasting technology.

The Department has conducted a number of consultative exercises during the year to assist with the analysis of various sectoral policy issues. These consultative processes took various forms including seeking comment on discussion papers, liaising with key stakeholders and hosting public meetings or forums. Calls for submissions in response to information or discussion papers were publicised widely including through advertising in print media, direct invitations to key stakeholders, media releases and provision of information on the Department's website. The following highlight the different consultation processes.

The Digital Radio Study Group was established to develop a fact base for the Government on international experience and developments in digital radio. Given the wide-ranging interest in digital radio, it was considered important to provide the opportunity for open discussion and accordingly a Digital Radio Consultative Forum was held in Sydney in September 2003. The two information papers on digital radio were released before the forum to facilitate discussion with the radio industry and other interested parties. The forum featured presentations by the Study Group members and representatives of 12 industry stakeholder groups, and was attended by around 100 participants. The forum process was also supplemented by meetings with some of the major stakeholders.

On 10 May 2004, a discussion paper was released in conjunction with the review of the viability of creating an Indigenous television broadcasting service. Public consultation meetings were held before 30 June 2004 in Alice Springs, Cairns, Townsville, Brisbane, Broome and Sydney at which departmental officers discussed the review and listened to ideas and concerns raised. Further consultations are scheduled for 2004-05. The time and place of these consultations was advertised in newspapers such as the Koori Mail and the National Indigenous Times and capital city and regional newspapers, as well as on local Indigenous community radio stations and community TV stations.

Compliance with accountability standards

ANAO Audit Report No. 24, Agency Management of Special Accounts referred to a transfer of $500 000 from the Television Fund Special Account to departmental funds in 2001. The payment was to meet the costs of ABA consultants undertaking spectrum planning for black spots and should have been paid directly to the ABA from the special account, rather than by reimbursing departmental funds paid for that purpose. Arrangements are now in place to ensure future payments are made directly from the special account. All audits in which the Department participated are listed in Section 3.

During the year, the first funding approvals under the Television Black Spots - Alternative Technical Solutions Program took place. New model funding agreements were developed to reflect the different projects supported under the program.

The RSTU commenced an evaluation of the Television Black Spots Program. The initial findings reveal that key stages in designing the program met better practice standards including the identification of needs, consideration of the technical options in a scoping study and consultation with key stakeholders. Frequent contact is maintained with all grant recipients to ensure reporting and other accountability requirements are met.

During 2003-04, new measures were introduced to improve accountability standards in the Community Broadcasting Program and in the administration of funds from the National Transmission Network Residual Funding Pool. In particular, structured evaluations of activity reports were introduced to assist in monitoring and evaluating the performance of funding recipients.

Research and analysis activities contribute to policy development

Internal research activities benefit from subscriptions to relevant printed and online journals and from participation in industry forums which build a strong understanding of domestic and international developments. For example, the Department's representation on the Electromagnetic Energy Reference Group, the International Radio Communications Advisory Committee and the Australian Government Space Forum, assists in ensuring that it is well-placed to develop policy advice on radiocommunications issues.

Where appropriate, expert consultants are engaged to undertake specialised research projects. During the year, these included the provision of advice on the costs associated with implementing an Indigenous digital television broadcasting service, and on the economic impacts of allowing free-to-air television broadcasters to offer additional services such as multichannels.

In both 2002-03 and 2003-04, the Department provided the Community Broadcasting Foundation with funding for multi-year national audience research projects to produce the first comprehensive picture of community radio and television audiences in Australia. The Department's RSTU provided technical advice in relation to these projects. The results will assist the sector to determine future audience needs and the Department and the Government to formulate, implement and evaluate community broadcasting policy.

Members of the Research, Statistics and Technology Unit. Left to right: George Chan, Nilofer Mannan, Andrew Scarvell, Christina Holden and Cara Stafford.

Targets for processing times met

In accordance with funding agreements, grant payments are to be made within 30 days of signing an agreement, or within 30 days of progress reports being accepted by the Department.

During 2003-04, 183 payments were processed, and on average these payments were made within 15 days. Processing times ranged from two to 43 days, with 15 payments (8.2 per cent) not being made within the 30-day timeframe nominated in the funding agreements.

Highly effective budget management

As identified in the resources for outcome table on page 76, the overall price of Output 3.2 was $394 000 below budget. The major underspent item was consultancies relating to statutory reviews under the Broadcasting Services Act 1992 that were postponed to 2004-05 to accommodate policy approval processes.

Managers conduct a regular evaluation of budget outcomes, and commentary on variations between budget and expenditure is provided to EMG on a monthly basis. The commentary also includes forecasting of budget issues where possible.

Output 3.3 Policy advice and program management which promote accessible high quality broadcasting services

High-quality program funding and grant administration

The Department administered a range of ICT programs in an efficient and accountable manner. Effective administration was based on ongoing monitoring and reporting, appropriate evaluation, alignment with Government policy objectives and coordination across programs to ensure whole-of-government outcomes. As none of these programs commenced in 2003-04, the focus of activity was on grants administration rather than processing new applications or the development of new funding agreements.

There is one grant agreement for each of the ICT Centre of Excellence, the Intelligent Island Program, Commonwealth Technology Port (Comtechport) and Société Internationale de Telecommunications Aeronautiques (SITA). All these programs achieved their required milestones. All monies under the Intelligent Island and Comtechport programs had been paid to the Tasmanian and Victorian Governments respectively by June 2003, but the projects are continuing to be monitored by the Department.

Under the BITS Incubators program ten funding deeds were administered in 2003-04. These were multi-year deeds originally signed in 1999-00. In 2003-04, 43 milestones were met, representing 91 per cent of the originally agreed milestones. Under the BITS Advanced Networks Program (ANP) three funding deeds were administered. In 2003-04, 32 of the 36 milestones contained in these deeds were met.

Table 2.40 Administered expenditure 2003-04

Program	Expenditure $m
ICT Centre of Excellence	11.300
BITS Advanced Networks Program	6.580
BITS Incubators	11.582
BITS Intelligent Island	0*
Commonwealth Technology Port	0**
SITA	0.281

* Funding concluded 2001-02.
** Funding concluded 2002-03.

High quality and timely policy advice and Ministerial services

The Department provided significant direct support to the Minister on ICT related matters.

Timeliness figures are quite low in some instances due to the complexities involved in developing responses and the need to consult with portfolio agencies and government business enterprises. The Department will be monitoring response times more actively in future in order to address this timeliness issue and is upgrading its processes to assist that monitoring.

This is the first year that performance information has been collected in this way and trends will be available from 2004-05.

The key issues raised through Ministerial correspondence included program implementation matters and general ICT industry development policy and assistance.

The Department supported a large number of meetings between the Minister and stakeholders, and provided advice on a range of policy issues. In 2003-04 these issues included:

• negotiation of the Government procurement chapter of the AUSFTA, particularly as it pertained to ICT SME access to the United States market;
  
• development of ICT initiatives as part of the Backing Australia's Ability innovation package;
  
• advice on areas of industry concern such as skills demand/supply and employment; and
  
• background on key trends in the domestic ICT industry.
  

Table 2.41 Advice provided within agreed timeframes

Type of advice	Number	Provided within agreed timeframes (%)
Ministerial correspondence	193	24
Briefings
- initiated by the Department	84	not applicable
- meeting briefs	62	87
Question time briefs	79	62
Parliamentary Questions on Notice	1	0

Note: The figures in this table include some figures relating to Output 3.1 due to organisational arrangements within the Department. These figures cannot be disaggregated.

Effective client service and consultation

The annual client satisfaction survey conducted by the Department found that 98 per cent of the 115 people who responded to the survey and had dealt with the Department on ICT matters were satisfied with the services provided.

The Department undertook consultations with many stakeholders in 2003-04 to ensure that they were engaged in relevant policy and program initiatives. Stakeholders included industry participants and associations, user groups, government agencies and all levels of government.

Consultations took the form of seeking comments on discussion papers, formal and informal committee discussions, ongoing liaison, meetings and briefings. Throughout these processes, the Department was responsive to stakeholder needs and views.

Other consultative processes included an ICT Priorities Review Forum to review the progress of Framework for the Future implementation and industry liaison through the Joint Industry Government ICT SME Working Party. As part of the ANP mid-term review, more than 70 stakeholders were interviewed.

Compliance with accountability standards

A range of funding programs is administered through Output 3.3. In all cases, the Department builds on the better practice administration principles published by the ANAO for the administration of programs. For example, it is standard practice to receive independently audited statements from grant recipients.

Reviews of the effectiveness of the BITS Incubators and the Advanced Networks Programs were conducted in 2003-04 and the review reports have been made public.

Research and analysis activities contribute to policy development

To ensure that the Department's policy advice is based on sound analysis and understanding of the ICT sector, the Department has a dedicated ICT research team and utilises the general research skills of its RSTU. In addition, it commissions external research as required to address specific issues.

In 2003-04, ICT-related research and analysis focused particularly on an improved understanding of the ICT innovation system, and ICT's broader economic contribution to innovation policy. It also supported program initiatives by the Government such as Backing Australia's Ability. In addition, key trends in ICT employment and the demand for skills were tracked to monitor and advise on areas of concern.

External research was commissioned in the second half of 2003-04 to examine links between public sector research and development organisations and ICT SMEs and the utilisation of ICT by other manufacturing sectors.

Targets for processing times met

For administered items, targets for responses to reporting requirements and payment deadlines were met.

The Department is also responsible for assessing the industry development component of the endorsed supplier arrangement administered by the Department of Finance and Administration. In 2003-04, the Department received a total of 520 applications for assessment.

Of these, 88.5 per cent were processed by the Department within four weeks of receipt, rising to 95.2 per cent within the target processing time of six weeks.

Highly effective budget management

As identified in the resources for outcome table on page 76, the overall price of Output 3.3 was $2.715 million above budget, predominantly due to unbudgeted functions transferred from the former NOIE on 8 April 2004.

Managers conduct a regular evaluation of budget outcomes, and commentary on variations between budget and expenditure is provided to EMG on a monthly basis. The commentary also includes forecasting of budget issues where possible.

Output 3.4 Policy advice and program management of copyright issues that encourage the production of content and promote reasonable access to research and cultural materials

Effective Commonwealth copyright administration

In 2003-04 the Department responded to approximately 1600 requests to use copyright materials published by the Commonwealth. This is above the annual average of 1450 requests per year.

Permissions totalling 1517 and 16 licences for the reproduction of Commonwealth copyright material were granted.

The processing times for the handling of requests to use copyright materials published by the Commonwealth in 2003-04 were consistent with past performance and met the client service standards.

High quality and timely policy advice and Ministerial services

The 2003-04 reporting period involved an unusually high level of copyright policy development activities and support to the Minister, largely related to issues arising in the negotiation and implementation of the AUSFTA.

Timeliness figures are quite low in some instances. This is due in part to the short timeframe for the implementation of the AUSFTA, which reduced the capacity to respond to Ministerial correspondence within agreed periods.

This is the first year that performance information has been collected this way and trends will be available from 2004-05.

AUSFTA harmonises aspects of Australia's copyright regime with that of the United States. The resulting US Free Trade Agreement Act 2004 makes significant changes to Australia's copyright laws, including an extension of the copyright term, new rights for performers, stronger enforcement measures, and a new scheme which limits the liability of Internet service providers in return for assisting copyright owners in combating online piracy.

Table 2.42 Advice provided within agreed timeframes

Type of advice	Number	Provided within agreed timeframes (%)
Ministerial correspondence	103	48
Briefings
- initiated by the Department	28	not applicable
- meeting briefs	12	60
Question time briefs	22	22
Parliamentary Questions on Notice	2	50

Policy documents prepared by the Department, together with AGD, formed the basis of the amending legislation. Preparation of these documents was characterised by the need to implement the complex provisions of the AUSFTA whilst recognising the wide range of policy concerns put forward by copyright owners, users and distributors.

The Department also prepared policy documents for the Government in relation to election commitments contained in Arts for All, including the Indigenous communal moral rights consultation package released in early 2004.

Further copyright policy documents have been prepared, including the Government's response to the recommendations of the Report of the Contemporary Visual Arts and Craft Inquiry (the Myer Report) released in September 2002. This included briefing on a possible Australian Resale Royalty Arrangement for the payment of royalties to artists when their works are resold.

Effective client service and consultation

The Department's annual client satisfaction survey found that 97 per cent of the 32 people who responded and had dealt with the Department on IP matters were satisfied with the services provided.

Over the year, the Department has actively consulted with key creator, investor and consumer stakeholders in relation to a number of IP issues. These include consultations with:

• industry representatives;
  
• portfolio agencies; and
  
• other Government departments and bodies.

Departmental representatives have coordinated or participated in public consultation forums and received submissions in relation to a number of current issues. In particular, extensive public consultation was undertaken in relation to the negotiation and implementation of the AUSFTA. The Department also consulted with the Attorney-General's Department in relation to the work of law firm Phillips Fox which undertook extensive public consultations as part of the current review of the Copyright Amendment (Digital Agenda) Act 2000.

During 2003-04, the Department released a draft of the Copyright Amendment (Indigenous Communal Moral Rights) Bill to key stakeholders.

Compliance with accountability standards

The Commonwealth Copyright Administration (CCA) is based in the Department and manages Commonwealth copyright in publications on behalf of Australian Government Agencies. In performing the CCA function, the Department was mindful of better practice administration principles, including established client service standards based on response times for requests for the use of Commonwealth copyright materials.

While Government agencies are responsible for their own IP management, the Department provides policy advice which assists agencies to implement their arrangements. During the year, in consultation with key agencies, the Department developed a Copyright Better Practice Manual, to assist agencies to manage copyright material created and acquired by the Australian Government. The manual is expected to be published in the first half of 2004-05.

The Department has also started work with IP Australia and AGD to progress the development of a whole-of-government approach to IP management. The work responds to the recommendations of ANAO Report No. 25, Intellectual Property Policies & Practices in Commonwealth Agencies, which found that, in contrast to most states and territories, the Australian Government does not have a whole-of-government approach to management of IP and that 70 per cent of Government agencies do not have IP management arrangements in place.

The report made two recommendations:

• that each Commonwealth agency should have an intellectual property policy appropriate for its circumstances and functions; and
  
• that DCITA, AGD, IP Australia and other relevant agencies should work together to develop a whole-of-government approach to IP management.

The Department indicated its support for the recommendations.

Research and analysis activities contribute to policy development

The Department has undertaken extensive research in relation to intellectual property issues over the course of the year. Background research and analysis has been undertaken in relation to all relevant policy initiatives, including research into international resale royalty models, analysis of US legislation, and the nature and amount of copyright royalties paid by radio stations for broadcast music in Australia and internationally.

The Department has also, where appropriate, worked with AGD to obtain necessary information and analysis. This includes the engagement of the law firm Phillips Fox to research and analyse industry experiences and attitudes to the digital agenda reforms.

Targets for processing times met

The CCA responded to 1600 inquiries and requests for permission to use copyright materials published by the Commonwealth. Of these requests, approximately 50 per cent were finalised within 24 hours of receipt and 99 per cent received a final response within four weeks. This met the Department's client service standards.

Highly effective budget management

As identified in the resources for outcome table on page 76, the overall price of Output 3.4 was $218 000 below budget. The main areas underspent at year end were consultancies and staffing, principally due to changes in the staffing profile throughout the year.

Managers conduct a regular evaluation of budget outcomes, and commentary on variations between budget and expenditure is provided to EMG on a monthly basis. The commentary also includes forecasting of budget issues where possible.

Evaluations

Evaluation of the Networking the Nation (NTN) program

The NTN evaluation is well advanced and is expected to be completed by the end of 2004. Details on the evaluation methodology and progress of the various elements of the evaluation are available in the NTN annual report at Appendix 9.

Document ID: 15904 | Last modified: 6 February 2008, 9:59am