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Networking Australia's Future - Terms of reference
Terms of reference
The inquiry will examine the technical, economic and commercial preconditions for the widespread delivery of broadband services to homes, businesses and schools in Australia, having regard to matters such as:
1. current and likely future broadband services and the customer demand for these services;
2. the relative costs/benefits of delivery by optic fibre compared to other means, drawing on local and overseas experience;
3. the extent to which broadband services may be delivered by technologies other than optical fibre or through a staged evolution of technologies;
4. the industry development and export opportunities including the potential for increased employment;
5. the degree to which industry will be able to take advantage of the opportunities presented; and
6. the potential benefits to and impact on the Australian community of the availability of new broadband services.
The inquiry will also examine:
7. the research and development effort required;
8. the educational and training requirements for economic use of the proposed services options
9. the funding mechanisms for investment in such services; and
10. the role of international standards.
The inquiry will identify:
11. options for cooperation among relevant interest groups; and
12. an appropriate role for government within the context of existing telecommunications policy.
Preface
The Broadband Services Expert Group was established by the Commonwealth Government on 8 December 1993 with the task of examining the technical, economic and commercial preconditions for widespread delivery of broadband services to homes, businesses and schools in Australia.
The Group's membership was
| Mr Brian Johns (Chair) | |
| Mr Duncan Black | Dr Laurie Mackechnie |
| Dr Dennis Cooper | Mr Brendan McManus |
| Mr Alf Forster | Mr Gerry Moriarty |
| Associate Professor Patricia Gillard | Mr Ross Ramsay |
| Mr Bruce Gyngell | Dr Ian Reinecke |
| Mr Allan Horsley | Mr Trevor Wisemantel |
Brendan McManus became a member of the Group in August 1994 following the resignation of Dr Laurie Mackechnie. The Group thanks Dr Mackechnie for his contribution whilst he was a member.
Much of what we have to say in this report results from the extensive public consultation program the Group undertook and the studies it commissioned. People with particular interests and expertise also attended five discussion sessions, covering the social impact of broadband services, universal service, the 'new creators', infrastructure funding, and funding of multimedia content.
In conjunction with Telstra, the Group held a series of public seminars in every State and Territory during October 1994, to give consumers and small business a chance to have a say on the issues and opportunities that new technologies present for them. We thank the Consumer Telecommunications Network, the Small Enterprise Telecommunications Centre and Telstra for their help in organising these seminars; we thank the participants, too, for sharing their ideas.
We also thank the many people and organisations who gave us submissions, assisted with the preparation of case studies, and responded to the interim report, published in July 1994. Their contributions have been invaluable, and they illustrate the wide degree of interest Australians have in their communications future. Appendix D contains a list of the people and organisations that made submissions and responded to the interim report.
The Group commissioned consultants to examine potential demand for new communications services across a range of sectors--education, health, domestic and entertainment services, business, government and telecommuting. The consultants' reports will be published shortly; we commend them to readers interested in finding out more about what services may be available and the prospects for demand. The Group also participated in a study of multimedia prospects by Cutler and Company, which was commissioned by the Department of Industry, Science and Technology. The report of that study, Commerce in Content, was published in September 1994.
The process of consultation and commissioning studies was in itself an important beneficial outcome of the Expert Group's work. We strongly commend to government the value of continued community consultation on these issues.
Electronic access
This report can be obtained electronically from the Department of Communications and the Arts' World Wide Web server at the following address: http://www.dcita.gov.au or by anonymous FTP from: www.dcita.gov.au (using your e-mail address for a password).
Copies of this report can be obtained through the Department, telephone (06) 279 1258.
Comments on the report can be e-mailed to: bseg@dca.gov.au
Summary and recommendations
This is the final report of the Broadband Services Expert Group. Before we begin it is necessary to recap what the Group said in its interim report.
The interim report of July 1994 expressed our excitement at the possibilities and challenges that lie ahead in Australia's communications future. We saw the key challenges as how to develop new interactive services; how to build the infrastructure to deliver the services; how to make access to the services equitable; and how to create our own content.
We argued that broadband services have the potential to transform the way we live, work and play. Australia's communications system provides a good basis for future broadband networks. These are already being developed, with carriers announcing plans for broadband hybrid fibre-coaxial cable networks - but to take advantage of opportunities available in content creation, infrastructure development and services provision, we need to build a 'creative infrastructure', an environment that will help develop a critical mass for the industry. Government could stimulate these developments by becoming a leading-edge user of networks.
We said that access for all Australians would be a challenge, because commercial funding may not be forthcoming for areas of lower population density. Access could be provided through institutions such as schools, libraries, medical facilities and community centres.
We noted too that there will be a range of delivery methods, each with an advantage in particular conditions - satellite; hybrid optical fibre-coaxial cable; MDS (microwave); and asymmetric digital subscriber line (video delivery using existing telephone lines) - but that all-fibre systems are unlikely to be viable for residential services for another 10 years. Digital switching and other elements needed for integrated broadband networks may not be widely available for at least five years.
The report said that evolution of broadband cable might be a staged process, from one-way analogue through digital and two-way systems to switched broadband services.
The interim report also raised some unresolved questions and concerns about the impact of broadband services, including privacy, copyright and censorship. Networks should be designed to enhance individuals' control over uses of information about themselves and, unless there is a strong case to do otherwise, current community standards should apply to broadband networks.
Our work since publication of the interim report has reinforced our earlier views, particularly our examination of a number of case studies which have demonstrated the potential benefits to the Australian community through the thoughtful planning and implementation of modern communications services.
The final report
The communications society
This report is about how Australia can take up the challenges posed in our earlier report and build new communications services for the future. Profound changes lie ahead, but meeting them is not just a matter of building infrastructure and technology. Rather, we need to build a platform that will underpin our future society - promote social interaction, enrich education, improve health services, enhance the delivery of government services, and improve competitiveness for businesses and the economy. We also need to manage change sensitively.
As a society we have choices to make. If we ignore the opportunities we run the risk of being left behind as other countries introduce new services and make themselves more competitive: we will become consumers of other countries' content, culture and technologies rather than our own. Or we could adopt new technologies at any cost, regardless of possible wasted investments, the creation of a class of 'information poor' who won't be able to use the technologies, or threats to our privacy that may follow.
This report puts forward a different approach, one based on developing a new, user-oriented strategy for communications. The emphasis will be on communication among people, with their access to networks and privacy protected. It is also a strategy based on an evolutionary approach to infrastructure, changing as services develop and the community needs them.
Evolving networks and services
The exact shape of future technologies is far from clear. What services will be sent down the 'pipes' - and be paid for by consumers - is even more unclear. Planning for change is vital, but in doing so we need to build on existing infrastructure and services and avoid locking ourselves into solutions that may prove inappropriate. All around the world countries seem to be facing a difficult choice: to wait and see which services are available before taking a technological plunge, or to make a bet on a particular technology now.
To steer a course through this dilemma, the Group believes that Australia needs a managed evolutionary approach to the development of infrastructure and services.
Many of the services people think of as forming part of the 'information superhighway' are already or will be available over the existing telecommunications network. Electronic mail and classified advertisements, booking services, retail and banking services, and access to databases around the world are some of these.
Recognising this forces us to confront the question of the kind of network needed for our future communications services: narrowband - to support voice, e-mail and other low data rate services - or broadband - to support high data rate services such as video.
Our answer to this question is 'both'. Thus this report is not just about 'broadband': it is about new interactive communications networks regardless of whether they fit a particular bandwidth definition. In many cases digital narrowband solutions will evolve to broadband ones.
The spectacular growth of the Internet and commercial on-line services is evidence of strong demand for new communications services. We can build on that demand now to create an on-line services industry that will enable creators, large or small, to make interactive content for the new medium, building on the initiatives outlined in Creative Nation, the Government's cultural policy statement. An interactive multimedia industry can develop using narrowband platforms and CD-ROM that will enable participants (creators, users and service providers) to develop their skills.
The next step should be to take advantage of the much greater capabilities offered by the Integrated Services Digital Network (ISDN) platform, for both business and home applications. This would certainly enhance the services available to people and the opportunities for creators and service providers, and it would provide the basis for building skills and experience for the future. More flexible tariffing options and increased availability of ISDN are needed for this (Telstra intends to make ISDN available right across its network as it digitises all its exchanges over the next five years).
Although pay television is currently driving the cable roll-out in Australia, in the long run the success of broadband services will not be dependent on what happens to that industry. It can provide some of the impetus in the short term for infrastructure development, but interactive broadband services which will deliver beneficial education, health and business services will require the development of fibre and cable technology capable of supporting high-bandwidth two-way services.
A culture of innovation
Just introducing new communications technologies and services is not enough. To take full advantage of the technologies and services, industry and society will need to integrate them into their activities - a complete re-engineering of processes rather than just using new technology to perform current tasks.
A real commitment to change will be necessary, in professional roles, organisational structures, and social and cultural attitudes. Perhaps the changes will be most intense in the business, health and education sectors. The education sector has a particular role to play: it can build on the talents and enthusiasm of young Australians, offering them a vast array of curriculum choices and enabling them to spread the benefits of new communications networks through the community.
Pilot projects will be necessary if we are to prepare ourselves for change. Such projects can encourage cooperation between individuals, the community, network operators, schools and service providers. They will also help to familiarise participants with some of the new services and technologies and provide a testbed for developing new communications services and applications. This report highlights a number of areas in which we believe pilot schemes could play a major role.
New communications services can make a great contribution to education in Australia. But more is involved than just providing connectivity and upgrading equipment: we need a national strategy for networking in education, to help integrate networked services into educational practices and structures.
In the health sector, patients will have access to a wider range of high-quality services regardless of where they are. A patient at a regional hospital or outback clinic will be able to have a highly skilled specialist located in a capital city hospital participate in their diagnosis using communications services.
Business will be able to operate more efficiently by sharing resources, reducing development and production times and increasing the productivity of skilled resources by reducing or eliminating travel and associated costs. A clear message from our work is that new communications services, for a relatively small incremental cost compared with what we spend on education, health or business systems overall, can produce dramatic improvements in the capability of these sectors.
Providing access
Access to the network for both users and service providers is fundamental. This access must be equitable if our society is to share the benefits of the emerging communications environment, but our geography means this will be no easy task. How can we provide for people living in rural and remote areas, or those with special needs, or poorer people, services equivalent to those available to people living in wealthy city areas?
It would be easy to recommend - but very difficult for government and network operators to implement - that everyone be provided with access to communications networks as soon as possible. The cost of providing broadband capacity to all Australians has been estimated at between $25 and 40 billion: how does the community judge whether such a sum would be better spent on communications at the expense of, say, roads and hospitals?
Questions such as these will not be easily resolved. Perhaps we shouldn't even expect them to be resolved now, in advance of better information about future services and how they will be delivered. We need to have a sustained debate about communications needs and how they should be met.
It is the Group's view, however, that we must begin the process of giving people access now. Encouraging digital narrowband access, including ISDN, will bring a great range of useful services to many people, including those in rural areas and those with special needs. While this is not as dramatic as immediate optical-fibre cabling of the entire country, it can play a major part in spreading the benefits of the communications age, and should not be overlooked.
We can help to spread access (and help people learn to use networks at the same time) by providing network connections to schools, libraries, hospitals and community centres - at first narrowband, and then broadband links as they become available. Developing new services on narrowband networks will help to build demand for broadband services.
We should not assume that providing community access points will solve all problems, though. Training for new users will be important in spreading benefits: this report has some suggestions for implementing a training program.
The other side of the access debate is about access for service providers - those people and companies wishing to deliver services over networks. In the interim report, we said access to the network should be open to content providers regardless of their size. Nothing since has persuaded us to change that view. This report discusses the pivotal role of open access arrangements following the period of transition from pay television to interactive broadband services.
Privacy concerns loom large for many people. Can we rely on the goodwill of those who will collect information about us, about our buying habits, about what we like to watch or who we like to communicate with? We examine these issues and put forward the view that the privacy of users needs to be protected by codes of practice under the Privacy Act.
Access to information on networks is affected by copyright laws. There must be a balance between the rights of intellectual property holders and facilitating access to material (on reasonable terms and conditions) for multimedia content creators. Part of the solution to the difficulties faced by the multimedia industry with copyright will evolve from negotiations in the market place, but there remain issues that need to be considered when developing a copyright regime for future communications networks.
The Copyright Convergence Group has recommended creating a new right of transmission to the public. We support that recommendation, and the Government's decision to ask the Copyright Law Review Committee to conduct a wide-ranging review of the Copyright Act. The review should look at outstanding copyright issues associated with multimedia.
There are also some practical questions about offensive material on new networks. In this report we note the difficulties associated with future censorship and suggest some broad principles to be followed. Network operators and service providers should be required to offer the capacity to restrict children's access to objectionable material.
Building industries and services
A positive approach to new communications networks is one thing; ensuring that industries are able to grasp the opportunities that accompany the building and use of these networks is another. In the interim report we introduced the notion of a 'creative infrastructure'. In this report we explore further the question of how we can develop it.
The pace at which content, services and applications, and communications networks develop should be closely linked. We advocate a coordinated approach to fostering these three elements and encourage industries and companies to increase their share of world markets by cooperating in pre-competitive activities such as export promotion.
We were impressed by the many innovative services and applications being developed in Australia. Examples are scattered throughout this report, including multimedia access to Film Australia's archives, the creation of virtual galleries and museums, delivery of educational and health services to people in various parts of the country, and business applications such as an electronic music ordering system for record stores.
Australia can develop a competitive advantage in services and applications ... but only if we provide the right environment and encouragement to build expertise in applications while networks roll out.
We need to have content to develop services, as well as to reinforce our cultural values. This was a central theme of the interim report - and it was endorsed by the Government in Creative Nation.
We are encouraged by the Creative Nation initiatives such as the Australian Multimedia Enterprise, the Multimedia Forums and the Cooperative Multimedia Centres - and we would like to build on them. We can do this by encouraging firms to invest in projects supported by the Australian Multimedia Enterprise, and by using Multimedia Forums to help target government programs more effectively and to find ways of improving access to audiovisual material by the multimedia industry. Cooperative Multimedia Centres and industry need to work closely in devising curricula and in funding.
Great opportunities exist for Australian manufacturing and construction to provide and install equipment for domestic networks and exports. Our industry has proven itself efficient, innovative, and among the best in the world in many areas. Australia's telecommunications equipment industry has become one of the fastest growing export industries in the manufacturing sector. The Government's industry development programs should be extended to all cable network operators, to provide a base for maximising those opportunities.
Australia's R&D base in the industries of convergence needs further development if it is to be vibrant, well balanced, and create competitive advantage. Small and medium-sized enterprises particularly should be encouraged to increase their investment in R&D. We need to keep up with international standards; a forum to address networking standards might help us do this.
In Creative Nation the Government said that the Australia Council would give high priority to content for the 'information superhighway'. It also recognised the need for an international marketing strategy. We strongly support this. In our view, however, we need an export strategy that brings together Australian expertise in communications networks, covering not only content but also hardware and services.
A strategy for development
We face a complex set of technical, social, economic and regulatory issues. Demand is uncertain, as are the precise nature of technological change and the social implications of new communications. Yet we cannot turn our backs on the new networks. So how do we move forward?
Australia needs a strategy for dealing with the dilemma. A central element of that strategy should be a managed evolutionary approach, building on opportunities offered by existing services and infrastructure. The strategy must also be based on an environment in which the participants can be brought together in the public interest and policy developed in response to changing technologies and services. Coordination between all participants will be vital to ensuring that Australia is prepared for the future.
The strategy must balance development of infrastructure with development of services. It needs to take advantage of the services and technologies available now, while at the same time building a platform for the future. The strategy would draw together several key elements: education and community access; industry development; and the role of government.
The most important part of the strategy is leadership. We need leadership at the highest levels, within government and the community. The Group has noted, and strongly supports, the announcement by the Prime Minister that he will chair a broadband services council. This announcement accords well with the Group's belief that responsibility for the national strategy be supported at the highest level by an advisory council comprising visionary and informed people from industry and the community.
We suggest that the council be called the National Information Services Council and be an advisory and consultative body that would bring together industry, carriers, service providers, consumers and researchers, under the chairmanship of the Prime Minister to pursue public objectives. Part of the reason for proposing such a body lies in our experience with the public consultation process we undertook. That process brought together people from across the country, from a very wide range of viewpoints and interests, and had them talking together, making connections and exchanging ideas.
The need for this interaction will not go away just because we have produced our final report. As we said in our interim report, there should be wide consultation with the community in planning broadband services.
But the Council would do more than promote consultation. It should also advise government and industry on future issues. And it would support the multimedia initiatives announced in Creative Nation by advising on how we as a nation should be proceeding with development of multimedia content.
An element of the strategy must be to promote the role of government as a leading-edge user of communications services. This role, which would encourage the spread of services and help create a market for local companies was one of the main findings of the interim report. Since that report was published, governments around Australia have continued to develop networks and make them accessible.
In this final report we argue that we need to take these initiatives further. Improved coordination of efforts, a 'whole-of-government' approach, and some further stimulus to agencies to improve service and reduce costs by adopting new communications methods are necessary to provide this focus. We support a Ministerial committee to coordinate policy in this area.
The Group has seen ample evidence of the talents and enthusiasm among Australians to take advantage of the opportunities arising from new communications services. We consulted widely and participated in some fascinating debates. In this final report, we make recommendations on how to bring visions to reality. But this is only the beginning: the whole community must pick up the challenge if we are to reap the benefits.
Recommendations
A national strategy for new communications networks
The Expert Group believes that new communications services will be fundamental to Australia's future. Communications industries themselves - whether producing equipment, content, or carrying services - are among the fastest growing industries, and are making a vital contribution to our exports. Even more importantly they are crucial to the competitiveness of virtually all other industries. Australia's future depends on its success as an information society.
Because our business competitiveness will be so dependent on the use of new communications services, the Expert Group believes that, while the following recommendations are largely directed to government, business also must be encouraged to take up the challenges offered and to play its part in the development of an information society.
Our success must be built on the talents and enthusiasm of Australians, particularly business and young people, and on widespread reach of new communications services. The Expert Group proposes that a National Strategy for New Communications Networks be implemented based on three key elements: education and community access; industry development; and the role of government.
The strategy would be underpinned by a commitment to education and equity of access. The new communications technologies have the potential to improve the quality of learning in schools, and to make a major contribution to equity in educational opportunity across the country:
Links to schools and other community centres
The Expert Group recommends that, with the spread of broadband infrastructure, broadband links be provided to all schools, libraries, medical and community centres by the year 2001. The Cooperative Multimedia Centres should also be linked to this network.
In the interim, the Group recommends that schools and libraries be connected to available narrowband digital links for access to information services such as the Internet.
The Group recommends that connections be funded on a dollar-for-dollar basis by the State/Territory and Commonwealth Governments.
National Strategy for Broadband Networking in Education
The Expert Group recommends the development of a National Strategy for Broadband Networking in Education in anticipation of the extension of high capacity links to educational institutions by 2001. The Group recommends that Open Net be funded to administer a program of pilot projects on broadband services such as the sharing of visual resources through, for example, image libraries.
Complementing the schools-based education elements, there needs to be an approach to training and use of services within the community:
Training
The Expert Group recommends that, as communications services evolve:
- Funding for extension of new infrastructure and technology to educational institutions (such as TAFEs) should include significant training and support components.
- Funds should be made available to community organisations for targeted training programs.
- Government funded support for training facilities and personnel should be made available at libraries and telecentres.
Community applications fund
The Expert Group recommends that the Department of Communications and the Arts administer a program to support innovative applications of communications services by the community sector. Initial funding of $10 million should be made available over three years.
The Group proposes action to stimulate the development of Australian industries as the second leg of the strategy:
Industry development plans
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.
Extension of networks
The Expert Group recommends that telecommunications carriers and broadband network operators be required to inform government annually of their strategies for upgrading their networks, including the expected level of digitisation of existing network services, and the expected extent of broadband network coverage. This requirement should be reviewed by the year 2000.
Services and applications
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.
Local content
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.
Business and government must play a role, both as major users of communications networks and by working together to develop an appropriate regulatory environment to support the introduction of new services. The Expert Group believes that the business sector is well placed to make use of new services, and must use its leverage within the Australian and international economies to lead the adoption of innovative and beneficial broadband services. The Government's role will be especially important in leading the development of services that have particular social benefits:
Government use of networks
The Expert Group recommends that the Commonwealth Government should establish a fund, to be allocated on a matching-funds basis, to projects for new networked information services put forward by agencies. Preference should be given to those projects with the greatest user benefits and widest applicability as a model for other government services. The Commonwealth should wherever possible participate in pilot projects such as those proposed by Telstra.
Open access to networks
The Expert Group recommends that, once interactive services develop, the communications regulatory regime should promote open and equitable access arrangements for users, service providers and broadband carriers (recognising the necessity of a period of transition from pay television to broadband services to ensure there is no delay in the roll-out of cable in Australia). This should be based on diverse and flexible pricing arrangements, pricing transparency in the provision of carriage and content, and commercially negotiated connection charges.
Privacy
The Expert Group recommends that the privacy of users of advanced networks be protected by developing a self-regulatory scheme for network participants within the framework of the Privacy Act.
Conditional access systems
The Expert Group recommends that existing classification systems be applied to equivalent material commercially available on the new networks.
The Expert Group recommends that network operators and service providers be obliged to offer facilities, such as personal identification numbers, through which parents can restrict access to particular types of material.
Implementation
To support the National Strategy, the Group believes that some continuing mechanisms for providing advice and for consultation with the community on future information and communications issues will be needed.
National Information Services Council
The Expert Group recommends that, to provide leadership for the national strategy, the Government establish a National Information Services Council, chaired by the Prime Minister, and in his absence the Minister for Communications and the Arts, and including visionary and informed people drawn from industry, creators, carriers, users, consumers and researchers.
Ministerial Committee on National Information Services
The Expert Group recommends that the Government establish a Ministerial Committee on National Information Services, to be chaired by the Minister for Communications and the Arts, with membership including the Ministers for Finance, Industry, Science and Technology, Consumer Affairs, and Employment, Education and Training. The Committee would have responsibility for coordination of policy across the relevant sectors, including government use of networks.
The involvement of the States is vital, so the Council of Australian Governments should be involved in the discussion of national information services issues.
The Group believes that there may be a need for other bodies to support the Council on particular issues. It recommends that the Council should review existing arrangements as well as look at the issues of how best to assess community needs for new communications services and develop standards, and consider the need for a sub-group on standards:
Broadband Standards Advisory Group
A Broadband Standards Advisory Group, chaired by industry, to address networking standards issues and to advise on standards development and implementation.
The Group also believes that there is a need for further research into the communications needs of consumers as services evolve in the future. The Group considers that a Commonwealth government research agency, such as the Bureau of Transport and Communications Economics, would be appropriately placed to conduct this research.
Research into Consumer Needs
The Group recommends that a Commonwealth government research agency, such as the Bureau of Transport and Communications Economics, should be funded to coordinate a program of social research to identify the needs of particular groups of telecommunications consumers that are not currently being met.