The content on this page and other DCITA document archive pages is provided to assist research and may contain references to activities or policies that have no current application. See the full archive disclaimer.

Networking Australia's Future - Chapter 5

Overview

The Broadband Services Expert Group advocates a creative infrastructure - 'an environment conducive to developing broadband networks, related services and creating content'. Cooperation between players will foster the competitiveness of Australian industry and encourage it to seek a share of the world market.

To enhance the international competitiveness of Australian industry, the Group proposes that all cable network operators involved in broadband services be required to implement industry development plans.

We signal the need to accelerate the development, demonstration and use of networked services and applications as a priority under a national strategy for new communications networks. This will help to build the experience and skills base needed to develop new commercial services.

Creative Nation is a major stimulus to the content creation industry. We build on a number of its initiatives and we call for teamwork in content creation.

The Group believes that Australia's needs are not being fully met by existing standards bodies: there may be a need for a single new mechanism to address broadband standards development and implementation.

There are activities in which companies and industries can cooperate to improve their competitiveness and their share of the world market; for example, export promotion is pre-competitive and lends itself to such cooperation.

Creative infrastructure: A cooperative endeavour

We noted in our interim report that Australia has a sound base from which to develop content for future communications services - a base including talent, our education system, sophisticated telecommunications, and industries relevant to content creation. We advocated a creative infrastructure, which we described as 'an environment conducive to developing broadband networks, related services and creating content'.

A creative infrastructure is more than teams creating content supported by financiers, educational institutions, providers of software tools, and so on. It is the close working relationship between many participants - broadcasters, telecommunications carriers, distributors, publishers, service providers, hardware suppliers, cultural agencies such as galleries, libraries and museums, the film and television industries and many others. The resulting cross-fertilisation between disciplines can develop ideas into internationally successful products. The development of networks, content and services would be continuous, efficient and self-sustaining. A critical mass would be generated.

Creative Nation is a major step towards developing this creative infrastructure. It provides leadership by forging links between sectors, recognising the convergence of technologies, of media, of industries and of disciplines.

These links should strengthen into cooperation. This need not diminish competition in Australia - just as fiercely competitive record companies have jointly developed a common ordering platform (see 'Name that tune') there are many pre-competitive activities where cooperation will benefit all participants. Promoting Australia's capabilities overseas is another opportunity for cooperation. The result will be more competitive Australian companies better able to concentrate on the 'main game' of capturing a share of the world market rather than being limited to the Australian market.

Our focus remains on content creation. But content needs efficient, economical, wide-spread communications networks for delivery to consumers and it needs services and applications that package and manage it attractively for consumers. This chapter addresses the need for the pace of developments in these three sectors to be closely linked to maximise the benefits each can reap.

Name that tune

Imagine being able to walk into a record store, ask for an obscure recording featuring, say, The Seekers and David Bowie, and being told on the spot whether such a thing is available locally or overseas. Imagine then being able to place an order for it. And, for good measure, you decide to pick up the latest information on the Top 100.

At the moment, there is only one country in the world where you don't have to use your imagination to experience such convenience. The Australian Electronic Retail Ordering System (AEROS) provides a total music industry network that includes all the major record companies - BMG Arista/Ariola, EMI, PolyGram, Sony and Warners - and 415 music retailers. The system also includes a full list of international titles from the five major recording companies that produce more than 80 per cent of the world's music titles. Nationally, AEROS covers more than 95 per cent of locally available recordings.

The catalogues are updated weekly, and the cost of the system is balanced against the original annual fee paid for the hard copy catalogue of four volumes that was updated quarterly. (AEROS costs retailers who have their own computer equipment a $500 establishment fee and a $300 annual administration fee.) It lists over 110 000 music titles and 210 000 individual tracks.

Administered by GE Information Services, the system's major advantage is that it helps business to increase sales while reducing costs. It is also able to be adapted to other retail applications and has enormous potential for generating export revenue, having already been sold to the French music industry.

And it doesn't end there. Extensions being considered include:

multimedia, bringing sound and video to the work station;
a touch screen module to be used by customers;
e-mail and bulletin boards;
EDI transactions, including electronic funds transfer.

Network infrastructure

From an industry, trade and employment viewpoint it is important that Australian firms design, manufacture and install a high proportion of the broadband infrastructure that will be developed in the rest of this decade. Investments in this area will amount to many billions of dollars.

Australia has many world-class firms. For example, the young Australian company Jtec designs, produces and exports equipment that enables voice, text, image and data services to be integrated and transmitted very efficiently over the public telephone network. Other local companies, among them Datacraft, AWA and JNA Telecommunications, are also well positioned to meet growing demand for networked services and are exporting strongly.

A number of major communications companies are located in Australia. For example, Alcatel has invested more than $100 million in the past three years to make network products here for both overseas and domestic markets. It has an agreement with the Australian advanced product manufacturer QPSX Communications to manufacture and export its systems for wide area networking.

NEC Australia is seeking to establish a niche for itself in world markets by working with Telstra on ADSL. The company has a mandate from head office as a centre of excellence for ADSL developments and exclusive rights within NEC to market this product worldwide.

Key to the growth of the communications industry will be the relationships between hardware suppliers, content creators and network operators. Operators' demand for leading-edge products will stimulate investment in research and development and in advanced manufacturing plants. Purchasing these products from domestic suppliers generates local competence in development, systems engineering and manufacturing. It also develops competencies needed for export success. Australian companies will direct much of their effort to fields such as network architecture, systems integration, customer and network management systems, and networked services and applications for the broadband environment.

The Group agrees with the Australian Telecommunications Industry Association that Australia should be a provider of advanced technology and not just a technology taker. The Association considers that the telecommunications equipment industry can satisfy the bulk of domestic requirements and respond to global opportunities. At present, around 70 per cent of Australia's telecommunications expenditure on equipment and services is with local companies. The industry employs 12 000 people directly and more than 20 000 indirectly, most of them skilled and professional people. Exports were $550 million in 1993.

Much of this success can be traced to government industry policies, including the Partnerships for Development program and the telecommunications industry development arrangements. The Group considers that similar goals and industry policies should be extended to the broadband era to encourage high levels of Australian content, consistent with what is currently achieved for the domestic and overseas networks.

The Australian telecommunications equipment and construction industry is acknowledged as world competitive and has the capability to provide the major part of the foreseeable requirements for broadband services. Telstra subsidiary VisionStream expects that about 70 per cent of its announced initial investment in broadband networks (including construction) will be locally supplied.

Cable network operators providing broadband services will be major investors in broadband infrastructure, so a requirement to implement industry development plans for the telecommunications supply industry, similar to the requirement applying to the carriers, should apply to them too.

The Expert Group recommends that the Government require all cable network operators involved in broadband service provision to implement industry development plans for the telecommunications supply industry.

Who's who on the superhighway

Some of the first Australians to hit the highway may be some of the best known. In a demonstration that could provide the foundation for a national cultural database, film-makers, historians, journalists, students and the general public will be able to search for information about well-known Australians over an electronic network. CSIRO, the Australian National University, Film Australia and other service providers are collaborating to demonstrate an Australian biographical information network.

The initial content will be based on interviews conducted by Film Australia as part of its Australian Biographies series. Based on three to seven hours of interviews, where subjects recount their own life stories, 21 half-hour programs have been made already with a further seven in pre-production. Film Australia plans to continue the series until the year 2000.

Transcripts of the full interviews, photographs and other relevant material are archived, forming a valuable collection of memoirs and observations of twentieth century Australia. It is this that forms the core of a database that can then be used to produce film, television, CD-ROMs and on-line information services.

The biographical information network is the initial application focus of the Distributed Interactive Multimedia Information Service project which aims to demonstrate interactive navigation of multimedia data over high speed networks. Involving scientists, producers, librarians, historians and other professionals, the Distributed Interactive Multimedia Information Service project will require more than two years to set up at a cost of over $1 million per annum. It is being established under the auspices of the Research Data Networks Cooperative Research Centre, which began its five-year program in mid-1994. The pay off is not just the establishment of a valuable cultural resource, it will also increase Australian expertise in making such a resource available in a high-technology environment.

Services and applications

If Australia is to make a flying start in using broadband networks, it needs the experience and skills to bring new commercial services and applications to the market-place.

The Expert Group established a sub-group to develop an understanding of the processes by which networked services and applications are implemented. It examined 22 case studies that encompassed health, education, business and government services. The sub-group's conclusions are summarised in Appendix E.

Earlier in this report we referred to the large capital outlays required to establish broadband network infrastructure. Major investments will also be necessary to develop new services and applications for the networks. We have been unable to arrive at an estimate of the aggregate expenditures required to develop broadband services and applications because these are at an early stage. The case studies did, however, provide some indication of the cost of putting in place some applications. For example, the 'Dial M for medicine' (see Chapter 3) pilot would cost $1.25 million over two years, while the development of the 'Information at your fingertips' (see Chapter 2) project will exceed $10 million over several years.

A clear message from the case studies is that new communications services, for a relatively small incremental cost compared with what we spend on, say, education, health or business systems overall, can produce dramatic improvements in capabilities.

We concluded from the case studies that Australia needs experimental broadband facilities similar to those in some competitor countries to trial services and applications. In the interim, to develop skills and experience there should be much more use of the narrowband facilities we now have. Further, the overall level of effort directed towards the development of new services and applications needs to be increased.

The Group was surprised at how few of the projects it could identify were developing interactive applications for future broadband networks. This might be partly explained by the tendency of transnational firms to carry out strategic developments in their home countries and the relatively shorter time horizons of the small and medium-sized local companies. However, transnational companies are tending to outsource more and more of their research and development.

Without doubt, there are opportunities for Australia to exploit. If we do not accept the challenge, we will be captive to overseas interests.

The prospect of economic gains from the innovative use of communications is driving national initiatives in a number of countries. The United States' National Information Infrastructure Testbed is an industry-led consortium of more than 50 members that includes academic institutions and government agencies. Its mission is to accelerate acceptance of market-driven network applications. The European Union's Advanced Communications Technologies and Services Program supports collaborative development of network applications in health, business, education and government services.

A broad range of networked services and applications projects is needed to develop Australia's technology base and demonstrate prototype applications. There are opportunities in health, education, electronic commerce, transport, publishing, government services and many others. Developing new applications typically requires collaboration between service providers, carriers, content creators and users, and careful attention to management, social and human factors. Some projects would be of short duration and involve single companies testing on-line services. Others could run for two to three years and involve cross-disciplinary teams of five to 10 people drawn from industry, research and government. The snapshots on 'Dial M for medicine' and 'Who's who on the superhighway' illustrate the types of project we have in mind.

Broadband systems, or testbeds, are essential for developing not only the networks but also the applications and services that use them. By a testbed we mean a flexible network facility using open standards and allowing a range of experimental systems and pilot projects to be evaluated. Testbeds help provide the experience and skills needed to bring new commercial services to the marketplace.

Telstra's Experimental Broadband Network project is critical in this context. The project aims to provide a platform to develop broadband applications and demonstrations in order to foster demand for networked services. The initial network will consist of four large ATM switches providing access to a network covering Melbourne, Canberra, Sydney, Brisbane and Adelaide. The first participants are expected to be connected to the network in the second quarter of 1995.

It is also hoped that Optus, with its established services in central business districts of capital cities, will also be able to offer a platform for broadband service development.

Telstra is also running a pilot project in 1995 providing video-on-demand services to 300 homes using ADSL technology, as well as increasing the availability of ISDN and rolling out the hybrid fibre - coaxial cable broadband network. The ADSL pilot is primarily intended for trials of residential applications, in contrast to the Experimental Broadband Network which is primarily intended for business applications.

Telstra's initial Experimental Broadband Network, along with the ADSL pilot, ISDN service and the broadband cable network, provide the basic public infrastructure to support testbeds and trials, but additional facilities will be required to support a rich broadband development environment. Telstra has indicated that it invites interaction with service developers, content providers and equipment vendors to work towards such an environment. Nevertheless, decisions regarding network access and expansion will ultimately be set by Telstra's business considerations. Accordingly, there is a need for a national approach to testbeds and applications to ensure that pilot programs adequately serve the national interest. The national approach should be under the guidance of a consortium of organisations with a strong involvement.

International linkages can help to ensure that Australian developments take advantage of overseas advances. There are many avenues through which alliances may be formed, such as the European Union's Fourth Framework Program, and programs in North America, Japan, South Korea, New Zealand as well as through the APEC forum. We should aim to link major Australian activities with complementary programs overseas and commercial involvement should be encouraged.

Current technical information, particularly in relation to emerging and de facto standards, is very important to Australia's many innovative small and medium-sized enterprises in the industries of convergence. These enterprises will have difficulty competing in global markets if they lack good access to information that enables them to decide on which areas to concentrate. The Technology Access Program administered by the Department of Industry, Science and Technology is one possible source of assistance.

Many ingredients are needed to create an environment in which Australian industry can become an internationally competitive supplier of broadband services and applications. Some such as a strong industry base, a competitive communications infrastructure and a range of government programs, are already in place, but some are missing.

The Expert Group considers that there is a need for specific support for testbeds and the development of services and applications. The aims should be:

to accelerate the development, demonstration and use of networked services and applications with a national as well as an international focus;
to provide a pre-competitive forum for companies and industry to cooperate on the acquisition and exchange of technical and practical experience;
to ensure the availability of applications-oriented testbeds.

It is likely that this support would involve the establishment of a consortium of interested organisations, including industry, carriers, users and research organisations. It could be a key initiative under the national strategy for new communications networks proposed in Chapter 6.

The Expert Group recommends that a priority element of a national strategy for new communications networks be acceleration of the development, demonstration and use of networked services and applications.

Switch on, tune in and learn

Universities around Australia are reaching out to their students using teleteaching between campuses to address the increasing popularity of distance and part-time education.

Edith Cowan University in Perth commissioned a video conference network in 1991. The network enables live both-way lectures, meetings and other material to be delivered between its campuses, four of which are roughly 30 kms apart and another 180 kms to the south. About 2000 hours of transmissions have taken place from thirteen live interactive sites, including lecture theatres, conference rooms, studios and other specialist areas. Over 70 courses have been delivered, ranging from marketing to media studies and from law to nursing.

The university has direct access to the Golden West Network. Three hours a week of broadcast to non-metropolitan areas of the State - including regular live talk-back television programs - teaching computer applications, mathematics and science have become extremely popular with viewers of all ages. These programs have also been delivered live into private homes for the past 18 months via Telstra's Centennial Park pay television project.

In 1994, video conference links were made to Singapore, Hong Kong, New Zealand and the United Kingdom.

Teleteaching is being used by the Australian Information Technology Engineering Centre in Adelaide to offer courses that combine information technology and telecommunications with a demanding management program for small groups of students at the University of Adelaide, the University of South Australia and Flinders University.

At Melbourne's Monash University, innovative uses of teleteaching are being planned for its five existing sites and a sixth to be located at Berwick, some 30 kms away from the main campus. The Berwick campus is being designed to make extensive use of information technology for classes of up to 150 students. This will involve more than just video conferencing between remote sites: text, diagrams and images will be exchanged and discussed. As well, the whole class can be recorded and played later to allow students to attend prerecorded classes at their most convenient time. Such arrangements reduce the need for travel and make university resources more accessible.

Content creation

Content creators are often small companies or even individuals. The range of products they offer is of value to all sectors of Australian life, including business, community services, health and education.

A central message of the interim report was the importance of content and the opportunity to build a significant content creation industry. We have been heartened by the initiatives announced in Creative Nation that take up challenges we identified in the interim report. Almost a quarter of the funds released under Creative Nation are to promote multimedia content development, showing the Government's commitment to the success of the new industry. But the Government is only one of many players involved in developing content. Against this background, we want to build on initiatives in Creative Nation to promote a vibrant Australian content creation industry.

Teamwork

Commerce in Content identified the wide range of skills and responsibilities needed in a content development team: executive producer, financier, marketeer, experts in audio, video, computing and telecommunications, systems integrator, quality assurance controller, language specialist, project manager, librarian, creative director, graphic designer, script writers, musicians, animators and film crew ... that's about half the list.

There may be debate about the composition of an effective team and the relative importance of the team members, but what is clear is that it is a multi-disciplinary team. As we said in the interim report, bringing together and making the most of the diverse cultures of the team members will be one of the greatest challenges in creating content.

Multimedia forums

We found 'brainstorming' sessions were effective to gather information and initiate cross-fertilisation between organisations. The Multimedia Forums announced in Creative Nation could play a similar role by providing the atmosphere and neutral ground to promote cooperation between companies and industries. As well as the areas set out in Creative Nation, the following are areas the Forums could examine:

finance - promoting a closer working relationship between financiers and content creators by improving the mutual understanding of priorities and an awareness of financing mechanisms and sources of funds;
pre-competitive cooperation - identifying areas for cooperation, especially for export opportunities, skills development, shared facilities such as testbeds, and contributions to Cooperative Multimedia Centres or media laboratories;
experimental work - advising the Cooperative Multimedia Centres, the Australian Film Commission (for developmental multimedia projects) and the Australian Film, Television and Radio School (for the multimedia laboratory) on the types of projects and facilities that will be most beneficial;
intellectual property - providing input to the Copyright Law Review Committee, promoting cooperation between copyright holders and multimedia producers and disseminating advice to content creators on questions of intellectual property.

Finance

A participant in a 'brainstorming' session noted that countries with well-developed venture capital industries will have a competitive edge in content creation. With funding of $45 million over four years, the Australian Multimedia Enterprise is an important initiative in this regard. Its focus on start-up companies is commendable, as are the decisions to leverage private sector funding, to facilitate the development of consortia, and to attract investment from companies involved in Partnerships for Development.

Submissions, 'brainstorming' sessions and discussions with industry highlighted the content creators' financing problems and suggested a number of ways to improve access by content creators to programs and incentives, among them the following:

The 150 per cent tax concession for research and development could be extended to the total content creation process and made easier for start-up and small companies to benefit from the syndication provisions.
There could be easier access to sections 10B and 10BA of the Income Tax Assessment Act 1936.
Withholding tax on royalties, especially between Australia and the United States, could be eliminated (as is the case between the United States and the United Kingdom).

Ways such as these to improve the lot of content creators without adversely affecting others should be explored. Creative Nation announced an examination of the extent to which the design industry can use industry development assistance and this should be extended to content creation. Multimedia Forums could also help to explore options.

Australian content creators would be more competitive if they could use the holdings of national broadcasters and cultural agencies such as museums, libraries and galleries for a reasonable up-front fee. The Multimedia Forums could explore ways of achieving this, including limiting the duration of the licence to a creator, its extension to other titles and whether the income should be substantially repatriated to Australia because the holdings are taxpayer funded.

Skills

The number of people with multimedia skills needs to grow rapidly: Commerce in Content suggested a tenfold increase over the number now being trained. Many students will come with skills from related disciplines such as the visual arts or film and television. The education and training available should enable their skills to be 'topped up' as well as meeting the quite different needs of school-leavers or others without related skills.

Creative Nation committed up to $56.5 million over nine years to establish up to six Cooperative Multimedia Centres. The charter for these Centres is wide and well tailored to the needs of the emerging multimedia sector. The Centres should become a focus of collaboration between multimedia industry players - between departments within an institution and between institutions, and across sectors, for example, between the community, the education sector, industry and governments.

Collaboration between education institutions and the private sector is vital to ensure not only that people graduating have relevant work skills but also that firms are exposed to new developments and innovative ideas. Placing students with companies regularly during courses would promote work-related skills. The Centres and industry should work together to devise curricula suited to the needs of industry.

In its response to the interim report, the Australasian Interactive Multimedia Industry Association noted that a major opportunity for export earnings lies in education and training, for which '... most of the content material is resident in the education system and the production and marketing expertise in the private sector. A process that stimulates joint venture projects between the private sector and the education system is vital.'

The Association also recommended that educational institutions be required to include the full commercial costs of development in their tenders when quoting contracts. We understand that this is based on a concern that the institutions could undercut company bids by using taxpayer-subsidised wages and equipment. If this occurs, it could deter companies from using educational institutions' facilities and advice, Cooperative Multimedia Centres could be adversely affected, and the growth of the content creation industry could be stymied.

Large companies should be encouraged to contribute to the Centres. For example, such contributions are already eligible to meet participants' commitments under Partnerships for Development and telecommunications industry development arrangements but they could be given a greater weighting when targets are set or renegotiated.

Picture this!

A gallery that becomes whatever you want it to be at the press of a button - movies one moment, artworks the next, pitched at a student, then an adult, depending on the audience. This is the kind of virtual gallery that the State Film Centre of Victoria envisages in its plan to build a bold new concept in public information.

Currently, the State Film Centre operates a video-on-demand service for subscribers, who are able to make bookings by phone, fax or mail. In 1995, 3500 subscribers will borrow about 100 000 videos. But the Centre also has plans to establish a centre for new media arts, taking advantage of new technology to extend the reach and versatility of a range of information media. Two of the proposed services of the new centre are a curriculum resources facility, which will maintain up-to-date materials that students and teachers can access electronically, and the Future Realities Gallery, that will digitally store objects and artefacts that can then be accessed through new communications services 24 hours a day.

The curriculum resources facility would allow students to work on projects and make the results available to other students, while teachers could access the latest information, monitor students' work and provide special assistance where needed.

The Future Realities Gallery is an opportunity to use digital storage and multimedia to create a multitude of virtual galleries, with any number of interconnections to cater to the audience's interest. At its most ambitious level, artists and producers could create a three-dimensional animated space that visitors could then travel through, viewing the audio and video contents. The beauty of the concept is that it would cost less than a conventional gallery due to savings in ongoing capital maintenance, acquisition and ancillary staff costs. Up to 3 million 'visitors' a year could have access to the entire collection, as there would be no physical limitation on the exhibition space. This compares with perhaps half a million visitors seeing only 20 per cent of a gallery's holdings.

Developing these applications will require access to some of the most sophisticated of the emerging technologies and the formation of partnerships between government and private sector organisations. The Future Realities Gallery is already involving local and international companies in the areas of computer graphics, telecommunications and movie production. It will also develop high-technology expertise in multimedia in the local market, with potential for development of educational and other resources for export.

Regulation

It is important to ensure a high level of Australian content on the networks of the future.

The role of film and television in meeting cultural policy objectives has long been recognised through the creation of a comprehensive regulatory and support framework. Regulation of Australian content on television has underwritten the growth of a strong content industry with a healthy presence on global markets.

Australian broadband service providers have an obligation to provide the same kind of support to the next generation of Australian content creators.

Ultimately, as the network becomes a truly global and borderless system of communications, it will become increasingly difficult to regulate for local content in networked information and entertainment services. However, the Group is of the view that local content provisions can play a role during the transition to this borderless market.

Quotas are inappropriate for on-demand and interactive services. The regulatory model for drama services provided by subscription broadcasting licensees - in which a licensee must spend a proportion of its overall program expenditure on new Australian content - is more appropriate.

The Group believes that broadband entertainment and information service providers (excluding broadcasters as defined in the Broadcasting Services Act) should commit a proportion of their expenditure to new Australian content.

The Group notes the difficulties in defining the class of service providers who would be under this obligation, given the variety in delivery systems and service types that will be available. A workable definition can, however, be developed to provide certainty to the industry. This approach would be consistent with Australia's current obligations under multilateral trade agreements.

The Expert Group recommends that providers of broadband entertainment and information services be obliged to commit at least 10 per cent of their expenditure on content to new Australian content. The obligation should be reviewed by the year 2000.

Research and development

The Group's terms of reference require it to examine the research and development required for future broadband services. R&D is extremely important in bringing new products to market, and is also essential in developing the skills and knowledge needed by our organisations if they are to introduce and adapt foreign technologies and products intelligently. Further, Australia's strengths in R&D provide important pointers to areas of opportunity.

Investment in technology is very large, and vital to success in the convergent industries. Even the largest companies, such as AT&T and IBM, cannot undertake all their R&D in-house, and the result is an extensive network of alliances involving companies and research institutions and global technology acquisition. If it is to have internationally competitive telecommunications and multimedia industries, Australia needs an R&D environment that draws on overseas developments and excels in selected areas.

Telecommunications R&D, for both equipment and services, is an area of strength in Australia. There is significant effort across the full spectrum, from universities through to industry, and with good balance between the various sectors. (Universities and CSIRO spend around $40 million annually in this area while business enterprises spend more than 10 times as much - about $450 million annually.)

Multinationals in Australia have established strong R&D programs in recent years. This has been matched by the growth of indigenous companies, such as Jtec, QPSX Communications, Datacraft, Stanilite, ERG and NetComm, whose success can be linked to their levels of R&D.

Software R&D is especially important in the rapidly expanding area of networked services and management. Many opportunities are open to independent software firms not traditionally categorised as part of the telecommunications sector. There is considerable software development capacity among Australian firms, where 23 per cent ($635 million) of all R&D in 1992-93 was directed toward computer software products. A number of the major multinational companies have recognised this. For example, Ericsson, IBM, Siemens, Hewlett Packard and Northern Telecom have all funded the establishment of software-based development centres, or 'centres of excellence', in Australia.

An important trend is the increasing degree to which business is linked with research organisations. One of the newer mechanisms contributing to this is the Cooperative Research Centres Program, which supports eight centres conducting collaborative research in networking technology, services and multimedia.

Submissions revealed a growing recognition that R&D must incorporate a knowledge of how services might be used in both business and domestic sectors. A submission from the Consumers' Telecommunications Network made the point that '... social and consumer requirements need to be explicitly considered in the development of new technologies'. The Cooperative Research Centres program could be a vehicle to address this by combining social, business and technological development with consumer research.

While Australia has a broad and vibrant R&D base in the industries of convergence, there is no room for complacency. As reflected in the earlier section on Services and Applications, the Group considers intensive efforts are needed to apply R&D to our national competitive advantage in network technologies, content creation and applications. Small and medium-sized enterprises particularly should be encouraged to increase their investment in R&D by fuller use of government policies and programs.

Standards

The interim report emphasised that the main role of standards is to enhance the accessibility of services to the consumer and encourage the development of industry. It stressed the importance of interconnectivity, portability and service provision at a competitive cost in achieving these ends.

Because broadband services span several industry sectors, suppliers currently face a wide variety of rules and regulations incorporated in legislation. This can frustrate industry development. The difficulties are exacerbated by rapidly changing technologies and the increasingly blurred boundaries between the various sectors.

Standards Australia and AUSTEL are responsible for most standards activity related to networks. Australia participates in developing international standards where it has particular requirements to be represented and where there is commercial advantage in doing so. Experience shows that Australia can influence international standards if the effort is focussed and thereby advantage our industry development.

In Europe and the United States committees of manufacturers are working to set standards for digital services. The European Digital Video Group, for example, with over 130 industry members, is working on an open standards system for digital services. In the United States, the Interactive Multimedia Association deals with similar matters. It will take many years for the full range of interactive services to evolve, and even longer before all controls and interactive standards are incorporated in video, audio and data services. It will also take many years to develop the standards for home terminals.

The Group received advice from industry associations and others on the role of standards in developing networks and services. They said that standards should play a role in ensuring a global information infrastructure provides open access to users and does not impede industry development or the take-up of new technology.

The following objectives should be met as Australia's broadband environment evolves:

Standards need to be international, open and produced by consensus in a timely and transparent manner.
There is a need for decisions on the standards to achieve open access and inter-operability between broadband services, service providers and users.
The supply of broadband services should be independent of underlying transport mechanisms, thus allowing a mix of technologies to be used, from CD-ROM to high-speed multimedia delivery networks.
Where industry-specific controls beyond existing business regulations need to be considered, industry consensus should be favoured over regulation.
The large number of regulations confronting product and service developers needs to be consolidated.
All stakeholders, including industry, regulatory and standards bodies, consumers, technology users and the research community, should have the opportunity to participate in standards setting.

The Group considers that these objectives are not being met fully by the existing authorities, which include Standards Australia, the Department of Communications and the Arts, AUSTEL and others. There may be a need for a single new mechanism to address broadband standards development and implementation. This matter should be further considered by the National Information Services Council proposed in Chapter 6, taking account of the Committee of Review of the Standards and Conformance Infrastructure, which is expected to report in 1995.

The Expert Group recommends consideration of the need to form a Broadband Standards Advisory Group, chaired by industry, to address networking standards issues and to advise on standards development and implementation.

Export promotion

There will be few international borders for the industries of convergence. Australian companies should aim at the global market if they wish to remain viable and grow.

An integrated export strategy is needed, embracing the interests of network providers, hardware suppliers, service providers and content creators. Increasing access to the resources and experience of relevant government agencies will be an important element. A number of other groups and agencies should be involved in the strategy:

industry associations such as the Australian Telecommunications Industry Association, the Australian Information Industries Association, the Service Providers Action Network and Australasian Interactive Multimedia Industry Association;
Market Australia, a unit of the Department of Foreign Affairs and Trade, which promotes Australia as a supplier of sophisticated manufactures and services;
Austrade, which promotes exports of Australian goods and services;
the Department of Industry, Science and Technology, which is working with the Australasian Interactive Multimedia Industry Association and Austrade on an international marketing and investment strategy;
the Department of Communications and the Arts, which has responsibility for implementing the Government's Australian Multimedia Enterprise and Australia on CD initiatives, both of which include export promotion elements. It also has a role in promoting telecommunications services exports.

Distribution constrains the development of content creation in Australia. Local creators often find it difficult to get their products to the market. As well, distribution accounts for a large proportion of the retail dollar, reducing returns to creators. In time, on-line delivery systems will provide alternatives to existing distribution systems. Until then, though, better distribution of Australian content will encourage more creators to enter the market, make the industry more competitive, and prepare it for the broadband era.

The export strategy should address these distribution issues as a high priority.

Document ID: 7888 | Last modified: 6 February 2008, 2:02pm