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Achievement of Outcome

Development of services and provision of a regulatory environment which encourages a sustainable and effective communications sector for the benefit of all Australians and an internationally competitive information economy and information and communications technology industry

The Department contributes to Outcome 3 by providing strategic advice on policy and regulatory frameworks, and by developing and administering relevant programs.

During the 2005–06 financial year, there was a further significant increase in broadband service take-up across Australia, including in regional areas where the Broadband Connect program operated. By June 2006 there were, according to Australian Consumer and Competition Commission figures, 3.2 million broadband services in Australia. Broadband adoption across Australia rose by 108.3 per cent since July 2005.

Broadband take-up also continued to grow in the small business and education sectors with an estimated 63 per cent of Internet-enabled small businesses using broadband to increase efficiency and productivity, and government schools reporting increased access to high-speed 2–10Mbps broadband connections.

Meanwhile, telecommunications prices continued to fall, while new 3G services were introduced and telephone service providers offered an increasingly diverse range of pricing plans for consumers. In the broadcasting area, more than 85 per cent of the Australian population now has access to local free-to-air digital terrestrial television access and over 96 per cent has access to Australian Broadcasting Corporation (ABC) digital services.

Exports in the information and communications technology (ICT) sector totalled $4.3 billion, evenly split between goods and services.

In 2005–06, a major priority for the Department was to review and adjust the regulatory framework for telecommunications in advance of the sale of the Government's remaining equity in Telstra. In addition to the legislation, which enabled the Government to sell its remaining shares, the Department also prepared amendments to the competition regime to enhance certainty for investors. The legislation also reinforced competition through the introduction of operational separation of Telstra. An effective pro-competitive regulatory framework is not only fundamental to ensuring consumers can enjoy the benefits of competition, but also encouraging next generation broadband services, another strong theme in 2005–06.

The Department gave considerable attention to the needs of consumers, including through the development of legislation for a Do Not Call Register and advising the Government on the continuation of revised price controls on Telstra. The Department improved access to telecommunications for the deaf, hearing impaired and speech impaired by mandating better service standards in the contract for the management of the National Relay Service.

The Department continued to provide strong program assistance, particularly for regional areas. Communities in Western Australia and the Northern Territory are benefitting from better access to telecommunications services under the Community Phones program. The Broadband Connect program continued the work of the Higher Bandwidth Incentive Scheme and supported the connection of more than 150 000 customers to broadband services across Australia. The Department also commenced an evaluation of the Broadband Connect program to determine whether an alternative approach focussed on a small number of significant projects would deliver the greatest benefit to consumers at this stage of the program roll-out.

During 2005–06, the Department promoted the interests of Australia's communications and ICT sectors through active involvement in a range of international negotiations and organisations. The Department was engaged in multilateral and bilateral trade negotiations, participated in the United Nations World Summit on the Information Society process, advanced telecommunications trade facilitation and liberalisation in Asia–Pacific Economic Cooperation (APEC), supported telecommunications and ICT regulatory and governance activities in the Asia–Pacific, and focussed international attention on spam and cyber security issues.

The Department directly supported the export activities of Australian ICT companies through facilitating trade missions, notably one to India led by the Minister for Communications, Information Technology and the Arts (see case study, page 99).

Significant progress was made in relation to conversion frameworks for digital television and radio, and on media ownership reforms.

The Department continued work on a series of statutory reviews into aspects of the digital television conversion framework, which culminated in the release of the Government's media policy discussion paper Meeting the digital challenge: reforming Australia's media in the digital age in March 2006. The discussion paper also included proposals to implement the Government's commitment to reform of the foreign and cross-media ownership regulatory frameworks.

The financial year 2005–06 was the first year of operation of the Australian Communications and Media Authority (ACMA), which replaced the former Australian Communications Authority and Australian Broadcasting Authority following passage of the necessary legislation in 2004–05. As part of the media reform considerations, the Government proposed to provide ACMA with a more flexible range of enforcement powers in relation to its broadcasting functions. Options were included in the media policy discussion paper.

In October 2005, the Government agreed to develop the necessary legislative and planning structures to implement digital radio. This was followed by a further announcement in 2006 on the next steps in the implementation process to allow services to commence in the six state capital cities by 1 January 2009.

The Department managed a consultancy conducted by KPMG which considered the adequacy of the ABC's funding and the efficiency of its use of that funding. The Government provided substantial new funding for the ABC following its consideration of the broadcaster's triennial funding submission and the KPMG review.

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Competitively priced and reasonably accessible telecommunications services

Market developments

A significant development during 2005–06 was the expansion of 3G mobile services across major urban areas. Telstra, Optus and Vodafone joined Hutchison as providers of 3G services, supported by a greater range of mobile handsets. 3G services are now available to users in all mainland capital cities and a number of large regional centres. In November 2005, Telstra announced its intention to replace its CDMA network with a national 3G network over three years.

The growth in broadband take-up was accompanied by growing investment in second generation broadband infrastructure, particularly ADSL 2+ which makes use of unconditioned local loop services (ULLS) and wireless. High-profile operators included iiNet, Internode, PBA, Unwired, BigAir and Austar. Interest in voice over Internet protocol (VOIP) services also increased, with a number of new providers entering the market and strong take-up in services.

Providers of fixed line telephone services introduced a range of new and competitively priced capped, bundled and subscription plans for residential consumers. The new plans, some of which include local calls at no additional charge and capped STD calls, were in part a response to an increasing trend of consumers choosing to give up their fixed line service and rely solely on a mobile phone service or to use cheaper VOIP calls on broadband.

Prices for telecommunications services fell by one per cent between June 2005 and June 2006 (see figure 2.26).

Figure 2.26 Comparison between overall Consumer Price Index movements and telecommunications price movements

Legislation and regulation

The Department was closely involved in a range of legislative and regulatory measures relating to the telecommunications sector during the year.

The Government introduced a comprehensive package of legislation related to the sale of its remaining shares in Telstra, enhancement of competition in the telecommunications market and improving access to services in regional Australia. This package of legislation was passed by the Parliament on 15 September 2005.

The Telstra (Transition to Full Private Ownership) Act 2005 (passed in September 2005) provides authority for the full sale of the Government's shareholding in Telstra. The timing of the sale remains open and flexibility is retained for the Australian Government to develop detailed arrangements for the sale process, so as to provide an appropriate return. The Act also:

• reaffirms the Government's commitment to safeguarding consumers through the Universal Service Obligation, the Digital Data Service Obligation and the Customer Service Guarantee; and
• puts in place transitional arrangements relating to the accrued entitlements of Telstra's employees.

During 2005, the Department completed its evaluation of the telecommunications competition regime and made recommendations to the Government for legislative adjustments which promote a sustainable and competitive telecommunications market. In August 2005, Parliament amended Parts XIB and XIC of the Trade Practices Act 1974 to strengthen the operation of the telecommunications competition regime, increase penalties for anti-competitive conduct and provide increased certainty for investment in major telecommunications infrastructure.

As part of the adjustments to the competition regime, the Government established a statutory framework for the operational separation of Telstra which will reinforce transparency and equivalence in the supply of wholesale services to other telecommunications companies. As well as developing relevant amendments to the Telecommunications Act 1997, the Department advised the Minister on two key Ministerial Determinations required to give effect to the operational separation framework. In June 2006, the Minister approved Telstra's Operational Separation Plan.

Regional

A strong emphasis was placed on regional telecommunications issues throughout the year.

As part of the Government's future proofing of regional telecommunications, the September 2005 amendments to the Telecommunications (Consumer Protection and Service Standards) Act 1999 provide for a Regional Telecommunications Independent Review Committee (RTIRC). The RTIRC will conduct regular reviews into the adequacy of telecommunications services in regional, rural and remote Australia. The first review will commence before the end of 2008, and there will be no more than three and a half years between subsequent reviews. The RTIRC reviews were established so that regional Australia continues to benefit from advances in telecommunications technology and services.

Further amendments provided for the establishment of the Communications Fund, which provides an income stream to implement the Government's response to future RTIRC reports. Two billion dollars from the Fund was placed in a term deposit with the Reserve Bank of Australia in September 2005 and the Department, in consultation with the Department of Finance and Administration and the Treasury, developed an investment strategy and arrangements for the longer-term management of the Fund.

A further future-proofing initiative developed and implemented by the Department was a licence condition on Telstra requiring it to maintain a local presence in regional, rural and remote Australia. Telstra's local presence plan for the period to June 2009, developed in accordance with this condition, was later approved by the Minister on 1 July 2006. Telstra must report annually on its progress in meeting the plan, which it must also revise and re-submit to the Minister for approval every three years.

The Department contributed to ACMA reporting of regional service availability, which will provide information for consideration by RTIRC. In December 2005, the Department briefed the Minister on ACMA's first report Telecommunications services available in Australia 2004–05: A report on the availability of fixed voice, mobile and data services in regional Australia.

The Department, in consultation with ACMA and Telstra, developed a package of payphone initiatives to improve Telstra's consultation processes on payphone removals, relocations and complaints mechanisms. The Minister announced this package on 8 June 2006.

The negotiated improvements to Telstra's payphone processes include:

• Telstra undertaking stricter consultation processes, identifying unprofitable payphones provided as part of its Universal Service Obligation in regional and rural areas, and inserting a plain English description of the payphone obligation into its Standard Marketing Plan (SMP) for payphones;
• Telstra making available, on request, to Federal and State members of Parliament the location of proposed local payphone installations, relocations and removals in their electorates; and
• strengthening ACMA's role in actively monitoring compliance with the SMP, and establishing a process for considering customer complaints, including outlining clear consultation procedures and developing a plain language account of how Telstra sites its payphones under its Universal Service Obligation.

Consumer protection

The Department continued to be very active in progressing consumer protection measures, particularly through supporting the self-regulatory framework embodied in industry codes of practice. The Department prepared amendments to the Telecommunications (Consumer Protection and Service Standards) Act 1999 to enable code-making bodies to claim their code development costs from ACMA. The amendments were passed by Parliament in September 2005.

The Minister also wrote to mobile phone providers to encourage the finalisation and registration of the Credit Management Code to provide consumers with information and guidance on the credit management policies of telecommunications providers.

The Department advised the Government about the price control arrangements that should apply to Telstra's charges for basic retail services from 2006 to 2009, taking into consideration the ACCC's report of February 2005. The Department prepared the Ministerial Determinations to give effect to the Government's decision. The price controls require that an averaged basket of Telstra's line rentals, local, trunk and international calls will not rise. Telstra is also required to offer a basic retail line rental service at the same price nationally.

Following a process of public consultation, the Department developed a proposal for a Do Not Call Register to protect the public from unwanted telemarketing, and prepared legislative amendments to give effect to the scheme. The Do Not Call Register Act 2006 and Do Not Call Register (Consequential Amendments) Act 2006 were passed by Parliament in the winter 2006 sittings and received Royal Assent on 30 June 2006. The legislation provides for the national Do Not Call Register to be established and administered by the ACMA.

Submarine telecommunications protection zone

The Telecommunications and Other Legislation Amendment (Protection of Submarine Cables and Other Measures) Act 2005 received Royal Assent on 23 August 2005. The Act provides increased protection for submarine telecommunications cables of national significance that link Australia to international networks and which carry the majority of Australia's voice and data traffic.

Voice over Internet protocol (VOIP) services

Following an election commitment by the Government to examine policy and regulation relating to next-generation network services, the Department's report Examination of policy and regulation relating to Voice over Internet Protocol (VOIP) services was released in November 2005. The Government accepted the report's recommendations which will facilitate the deployment of VOIP services, provide appropriate protection to consumers and pave the way for other next generation network services. The Department is working closely with the ACMA, the ACCC and the Australian Communications Industry Forum to implement the recommendations.

Online and Communications Council

The Online and Communications Council (formerly the Online Council) is a Commonwealth–state ministerial council operating under the umbrella of the Council of Australian Governments.

At the twelfth meeting of the then Online Council held on 24 August 2005, Council issued a joint media statement outlining areas of cooperation in key fields including broadband policy, the response to the Regional Telecommunications Inquiry, communications services for Indigenous communities, ICT capability, online access centres, collaborative government and the review of the council itself.

Council endorsed the recommendations of the Online Council Review 2005 and agreed to re-structure its membership to include the Australian Government Special Minister of State and state and territory ministers who have portfolio responsibility for e-government matters. Ministers agreed to a range of strategic priorities for the Council and determined that in future it would be known as the Online and Communications Council (OCC).

The Council is supported by three standing committees, the OCC Standing Committee, the Cross Jurisdictional Chief Information Officers Committee and the National Broadband Strategy Implementation Group.

The next meeting of the OCC is due to be held in September 2006. The OCC Standing Committee met in May 2006 to organise details of the meeting.

National Broadband Strategy Implementation Group

The implementation of the National Broadband Strategy, released in March 2004, is being overseen by the National Broadband Strategy Implementation Group (NBSIG).

The NBISG, a standing committee of the OCC, includes representation from all levels of government and is a focal point for coordinating government broadband activities. It is supported by three working groups, the Measurement Working Group, the Digital Content Working Group and the Next Generation Networks Working Group.

The NBSIG met four times in 2005–06 and was a key forum through which the Department consulted states, territories and local government on the design and planned implementation of Connect Australia programs and on taking forward a range of broadband policy issues.

The second NBSIG Yearly Update from the group, covering its activities and progress against the key performance indicators, was released in early 2006 and published on the Department's website at www.dcita.gov.au/ie/broadband/NBSIG. Section 4 of the Yearly Update, which measures and reports against the 11 key performance indicators of the National Broadband Strategy, was published as a stand-alone document.

Program initiatives

Connect Australia

The Department provided advice to Government and developed the $1.1 billion Connect Australia package of initiatives which is focussed on improving telecommunications in regional, rural and remote Australia. The package comprises:

• Broadband Connect, which is focussed on improving broadband availability for people living in regional, rural and remote areas;
• Mobile Connect, which is directed to extending mobile phone coverage and access;
• Clever Networks, which supports applications and high-bandwidth networks that promote innovative use of broadband technologies; and
• Backing Indigenous Ability (BIA), which sets up vital telecommunications services and improved radio and television infrastructure for remote Indigenous communities.

Broadband Connect

Broadband Connect is an $878 million program to improve regional Australian's access to broadband services over the next four years. It expands on the $158 million Higher Bandwidth Incentive Scheme (HiBIS) to provide subsidies to Internet providers to connect homes, small businesses and not-for-profit organisations to fast, reliable and more affordable broadband services. Broadband Connect continued to provide significant support for broadband users in regional areas, building on the HiBIS scheme.

At the same time, it was becoming increasingly apparent that the incentive-based model might not be the most effective and efficient way to enable sustainable metro-comparable broadband access to remaining under-served areas and premises. The Department began to test the feasibility of achieving the Broadband Connect objectives through an alternative approach, focusing on a small number of projects delivering substantial coverage of under-served premises with high-quality wholesale broadband services. A request for expressions of interest was published in June 2006, seeking industry comment and possible programs that could be undertaken if the Government was to adopt this approach.

Mobile Connect

Mobile Connect is an extension of the Australian Government's previous terrestrial and satellite mobile phone initiatives. Under this program, terrestrial mobile phone coverage would be extended in smaller regional communities and along highways where a case for strategic location or economic importance can be established, and where services will have ongoing commercial viability.

A discussion paper was published in November 2005, seeking comments to guide the development of the terrestrial element of Mobile Connect. Twenty-one submissions were received in response and work continued during the year on planning for the terrestrial element. Development of Mobile Connect is also being informed by responses to the Broadband Connect expressions of interest process, which sought proposals that include a mobile telephony element that could be supported under the program.

On 15 May 2006, the Minister announced the detail of a series of changes to the satellite component of the Mobile Connect Scheme to apply from 1 July 2006. Key elements of the announcement were:

• extending the Scheme until June 2009;
• establishing a maximum subsidy level of $1200 for the 2006–07 year;
• setting the level of subsidy based on the applicant's location rather than the chosen call plan, thereby making it easier for the customer and dealer to calculate the subsidy amount;
• extending eligibility to educational institutions; and
• providing scope for Indigenous corporations servicing a number of remote communities to receive more than two subsidies.

Clever Networks

The Clever Networks part of the Connect Australia package, which has funding of $113 million over four years, will have two elements.

• The Innovative Services Delivery element will co-fund projects to support the delivery of improved and innovative Government services such as interactive remote education or real-time medical diagnosis on high-bandwidth networks.
• The Broadband Development element will co-fund the engagement of project managers (for each state/territory) and project officers (for specific projects). The outcomes of the Broadband Development element will help improve skills and capabilities, enhance business practices and aggregate demand in under-served communities. Broadband project managers and broadband project officers will work with and for regional communities to enhance understanding, use of and access to broadband.

A discussion paper on the Connect Australia package was published on 17 November 2005 and nationwide consultation forums were held in late November and early December 2005. In January 2006, more than 100 submissions were received in response to the discussion paper.

On 11 May 2006, the Minister agreed to the proposed structure of the Clever Networks program and approved circulation of the draft program guidelines to Online and Communications Council officials. Program design issues were discussed at the four National Broadband Strategy Implementation Group meetings that have occurred since the August announcement and at the Online and Communications Council Officials meeting on 11 May 2006. The first funding allocation will become available from 1 July 2006.

Backing Indigenous Ability

Backing Indigenous Ability (BIA) is a $90 million program over four years. BIA includes the development of a National Indigenous Television Service, restoration of ageing radio infrastructure in remote Indigenous communities and an Indigenous telecommunications program.

The telecommunications program aims to improve access to phones, Internet and videoconferencing in remote Indigenous communities and to improve the capacity of these communities to use telecommunications to achieve their goals. The program will include elements addressing training and the development of culturally appropriate online content.

Metro Broadband Connect

In March 2006, the Department released the program guidelines for the Metro Broadband Connect program, which signaled the commencement of the program. Metro Broadband Connect is a $50 million, three-year program aimed at providing broadband services in areas in and adjacent to state and territory capital cities where there are impediments to broadband service delivery or where services are otherwise not available. The Department sought expressions of interest in the program from customers and service providers and considered applications for registration from interested service providers. The Department also promoted the program to consumers in relevant areas in June through press advertising and a targeted mail-out.

Community Phones

The Department implemented the Community Phones Program, which up to 30 June 2006 has provided 187 community phones to remote communities in the Northern Territory and Western Australia. A number of communities in Western Australia are also benefiting from mobile phone access as a result of this initiative. The scheme also facilitates the introduction of new pre-paid products to address ongoing access and credit management issues that have acted as a barrier for Indigenous communities.

National Relay Service

The Department continued to promote improved access to telecommunications for the deaf, hearing impaired and speech impaired through its management of the National Relay Service (NRS). The Department conducted a competitive tender process for the provision of the NRS during the year, following an evaluation which determined that there should be separate contracts for the call centre function and the outreach service, which provides training and information to target users. The Department also introduced improved service standards for the NRS and an Internet Relay service will be added to the suite of services available to users during 2007.

International

The Department conducted a telecommunications policy dialogue with key Chinese Government agencies in Beijing during May 2006, with representatives of the ACMA, the ACCC, the Department of Foreign Affairs and Trade, Telstra and Macquarie Telecom. The dialogue comprised a series of meetings with high-level Chinese officials, providing an opportunity for discussion of a range of policy and regulatory issues and for the Australian delegation to advocate further liberalisation of China's telecommunications sector.

The Department participated in a successful Regulatory Skills Training Project, which was funded jointly by APEC and AusAID and targeted to the needs of new regulators in developing economies. In all, five workshops were held in Indonesia, Thailand, Vietnam, Malaysia and the Philippines.

In its participation in the activities of the International Telecommunication Union (ITU), the Australian Government has helped shape and develop the ITU's future priorities. Australia's focus has been to support uniform international telecommunication standards and encourage other countries to adopt open and modern policy frameworks and regulatory arrangements.

The ITU's World Telecommunication Development Conference in March 2006 set the development agenda for the ITU, a key element of the UN System's growing interest in ICT issues. The Department led the Australian delegation which played an important role both regionally, by assisting in shaping the Asia–Pacific agenda, and internationally, by negotiating priority attention to spam and cyber security issues.

A delegation led by the Department and including the Department of Foreign Affairs and Trade, participated in negotiations on Internet governance issues in the lead up to the second United Nations World Summit on the Information Society held in Tunisia in November 2005. The summit resolved that Internet Corporation for Domain Names and Numbering (ICANN) will continue to host and manage technical Internet addressing issues. ICANN will undertake to enhance its cooperation with the Internet community, including through the United Nations.

The Department actively engages in communications capacity-building initiatives in the Pacific through a variety of multilateral forums.

Reflecting wider Government priorities in the Pacific region, the Department has been engaged in telecommunications and ICT issues in the Pacific to provide support in areas including regulatory reform, e-commerce, standards for mobile roaming, legislation to combat spam, and a number of training and capacity-building projects.

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Competitively priced and reasonably accessible postal services

The postal services market remained sound during 2005–06. Australia Post continued to be an innovative and well-performing business with significant growth in its parcels and logistics services.

At the same time, Australia Post continued to address the challenges facing its letters business. Electronic substitution and changing business practices have affected letter volumes, while the reserved services segment of the market—broadly, the carriage of letters within Australia weighing less than 250 grams and for less than four times the standard letter rate and the issue of postage stamps—is making a declining contribution to profits.

The Government's aim is for a postal service that responds to competitive forces while complying with obligations that benefit consumers. With the exception of reserved services to Australia Post, the postal services market is open to full competition.

Australia Post is required to provide a letter service that is reasonably accessible to all Australians, and a standard letter service at a single rate throughout Australia. Consistent with the Government's social and economic objectives, Australia Post is required to meet minimum performance standards relating to the frequency, speed and accuracy of mail delivery, the number of street posting boxes, and the number and broad distribution of its postal outlets.

The Department provided advice on a range of postal policy and regulatory issues. The Postal Industry Ombudsman Act 2006, passed by parliament on 29 March 2006, establishes a dedicated and independent entity, the Postal Industry Ombudsman, within the office of the Commonwealth Ombudsman. The Postal Industry Ombudsman will investigate consumer complaints about the delivery of postal services by Australia Post and any private postal operator that voluntarily registers with the scheme.

Given Australia Post's status as a government business enterprise, the Department continued to oversee Australia Post jointly with the Department of Finance and Administration. The Department also participated in the activities of the Universal Postal Union, a United Nations agency that is progressing the 2004 Bucharest World Postal Strategy. The strategy aims to increase the effectiveness and quality of international postal services.

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Accessible and high-quality broadcasting services

Australia 's television and radio broadcasting sectors broadcast a range of high-quality programs. More than 90 per cent of households have access to local free-to-air television services through terrestrial transmissions. The rest of the population has access by satellite.

The rollout of free-to-air digital television services has continued throughout the year. More than 85 per cent of the Australian population had access to the local free-to-air digital terrestrial television services provided by all broadcasters in their licence area during 2005–06. More than 96 per cent of population had access to the digital transmissions of at least the ABC by the end of 2005.

According to industry estimates, more than 1.5 million digital television receivers had been supplied to retailers and installers by the end of March 2006. The growth in the number of digital television receivers is shown at figure 2.27.

Figure 2.27 Number of digital receivers in the market

On 14 March 2006, a discussion paper on media reform options, Meeting the digital challenge reforming Australia's media in the digital age, was released for public comment. More than 200 submissions were received.

The paper included proposals to develop and put in place a digital action plan with a strong focus on driving take-up of and conversion to digital services. Other elements of the paper related to the Government's longstanding commitment to media ownership reform, the digital television framework, reforms to ACMA's powers and proposals to allocate spare broadcasting spectrum for new services.

Digital television

The Department undertook a series of statutory reviews into aspects of the digital television conversion framework during 2005. The reviews covered:

• the restrictions on additional programming provided by free-to-air broadcasters, including multi-channelling and whether the prohibition on free-to-air broadcasters offering other types of services, such as pay TV channels, should be modified;
• matters relating to the end of the moratorium on the issue of new commercial television broadcasting licences, which concludes on 31 December 2006;
• the efficient allocation of spectrum for digital television;
• legislative provisions relating to under-served markets; and
• high-definition digital TV requirements.

The reports of these reviews were tabled in Parliament in March 2006. The reviews fed into the formulation of the Minister's media reform discussion paper. The discussion paper proposed a range of changes to the digital television framework, and the development of a digital action plan to drive the take-up of digital television and assist the transition from analogue to digital services.

A statutory review of the duration of the analogue/digital simulcast period was also undertaken, commencing in September 2005. The report has yet to be finalised.

The Broadcasting Legislation Amendment Bill (No.1) 2005 was introduced into Parliament on 23 June 2005. The Bill amends the Broadcasting Services Act 1992 and the Radiocommunications Act 1992 to provide a framework for the conversion of commercial television broadcasting services in remote Western Australia (designated as all areas outside Perth) from analogue to digital.

Australia 's three major pay television networks are in the process of converting to digital form. The provision of digital subscription television services has increased the choice of channels available to subscribers, as well as enabled the introduction of new interactive services. The pay television networks have announced that they will become digital-only in 2007.

Anti-siphoning

A revised list of events subject to the anti-siphoning regime came into effect on 1 January 2006. On 21 September 2005, the Minister directed ACMA to monitor the free-to-air coverage of events on the list. ACMA will monitor free-to-air coverage of events on the anti-siphoning list from 1 January 2006 until 31 December 2010, when the current list is due to expire. Information from ACMA's monitoring will be considered in the context of the ‘use it or lose it' approach to anti-siphoning announced by the Government, and intended to commence from 1 January 2007.

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Broadcasting regulatory powers of the Australian Communications and Media Authority

On 8 November 2005, the Minister released a discussion paper on possible reforms to ACMA's broadcasting regulatory powers, which proposed a number of reforms to the Broadcasting Services Act 1992 relating to powers to seek civil penalties, accept enforceable undertakings, issue infringement notices and seek injunctions.

Online content regulation

The report of the Department's Review of the regulation of content delivered over convergent devices was released in June 2006. It was part of an announcement by the Government that it intended to put new safeguards in place to protect consumers from inappropriate or harmful material on emerging content services such as 3G mobile phones and subscription-based Internet portals.

Legislative measures to provide safeguards comparable to those in place for content delivered over the Internet or television are expected to be enacted in 2006–07.

Policy framework to guide the introduction of digital radio

Analogue radio services are available throughout Australia, with terrestrial transmissions supplemented by satellite coverage for remote areas. There are 261 licensed commercial radio services operating AM and FM services, and 361 permanent community radio services.

A policy framework to guide the introduction of digital radio in Australia, representing the culmination of an extensive process of research, industry consultation and policy formulation, was announced by the Minister on 14 October 2005. The Department is preparing legislation to implement that framework in order to provide for services to commence in the six capital cities on 1 January 2009.

Subscription television drama

The subscription television drama expenditure scheme requires that subscription television broadcasting licensees spend at least 10 per cent of total program expenditure on new Australian (and New Zealand) drama programs in each financial year. This requirement reflects the role of drama in shaping a sense of Australian identity, character and cultural diversity, and underpins a range of drama projects for cinema, subscription and free-to-air television release.

Following a report to the Minister in early 2005 on the Department's review of Australian and New Zealand content on subscription television broadcasting services, the Broadcasting Services Amendment (Subscription Television Drama and Community Broadcasting Licences) Act 2006 amended the Broadcasting Services Act 1992 to increase flexibility in the operation of the 10 per cent requirement for new spending on drama on subscription television. The bill also provided increased flexibility for ACMA in relation to the re-allocation of community broadcasting licences in certain circumstances.

National broadcasters

In conjunction with the ABC, the Department facilitated the conduct of the ABC Funding Adequacy and Efficiency Review by consultants KPMG Australia and subsequently provided advice on the implications of the review and the ABC's triennial funding submission for consideration in the context of the 2006–07 Budget.

The Department also undertook a lapsing program review of Special Broadcasting Service (SBS) funding to inform consideration of SBS triennial funding in the 2006–07 Budget context.

The Department facilitated the expansion of digital television services by the national broadcasters by processing digital implementation plans associated with the rollout of 204 ABC services and 178 SBS services.

The Department also provided advice on proposed new digital television transmission and distribution contracts for SBS.

Program initiatives

The Department administers a number of programs designed to improve access to broadcasting services.

The Government's Regional Equalisation Plan assists digital television rollout in regional and remote areas by funding 50 per cent of both the capital cost and eight years operating costs of digital conversion by regional and remote commercial broadcasters. Funding is primarily provided through rebates of licence fees and grants to smaller broadcasters.

Funding was provided under the Television Black Spots—Alternative Technical Solutions program to improve television reception in areas of poor analogue television reception. A significant achievement under the program was the commencement of digital television services at Springbrook and Port Stephens (see case study, page 112), significantly improving television services in these areas.

A vibrant Indigenous broadcasting sector provides radio services in metropolitan, regional and remote areas, and an Indigenous community TV service

delivered via satellite. Twenty-four capital city and regional radio broadcasters were operating in 2005–06. At least 80 communities were receiving remote Indigenous broadcasting services provided under community broadcasting licences and many more remote communities received other broadcasting services.

The Department has been working with the Indigenous community to implement the Indigenous Television (ITV) Service which will receive $48.5 million over four years, commencing 2006–07, under the Backing Indigenous Ability component of the Connect Australia initiative.

The Government decided that the most appropriate model to pursue was to build on the Indigenous community television narrowcast service currently transmitted by Imparja Television ( Australia's only Indigenous-controlled commercial television licensee).

The Department has been working with and supporting a sub-committee of the Australian Indigenous Communication Association—the National Indigenous Television Committee—to develop the proposal.

Ninety-nine grants were supported under the Indigenous Broadcasting Program which provides grants to Indigenous broadcasting services, media organisations, communities and Imparja Television.

The Government provided $7.5 million to the Community Broadcasting Foundation to support this important part of the broadcasting sector. The Department conducted a review of targeted funding for the sector which supports ethnic community broadcasting, information technology initiatives and satellite services. The Government agreed to renew this commitment to the community broadcasting sector in the 2006–07 Budget.

The Protecting Australian Families Online package, announced on 21 June 2006 and to be established in 2006–07, includes a range of measures to protect Australian families from inappropriate and offensive material on the Internet (see case study, page 114).

The $116.5 million package includes:

• a national filters scheme, which will provide free PC based content filters or a free filtered service to Australian families and libraries to provide at least one ‘child safe' Internet terminal; and
• $5 million over three years from 2006–07 to the Internet advisory body, NetAlert, to restructure and strengthen the organisation, co-locate with ACMA in Melbourne, continue its free 1800 advisory number service and provide greater Internet safety information.

ACMA, in co-operation with NetAlert, is to commence a further trial of ISP-level filtering in Tasmania by June 2007. It will also monitor and report on Internet filtering technologies and options to protect Australian families online.

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Development of an innovative, internationally competitive information and communications technology sector

The Australian information and communications technology (ICT) sector is a substantial industry with nearly $80 billion in annual revenue from nearly 24 000 firms 1. It promotes innovation across the economy and is a major contributor to national productivity growth.

A sustainable and internationally competitive capability in ICT will help achieve outcomes in areas such as the environment, water management, health, education and national security.

Exports in the sector totalled $4.3 billion in 2004–05, evenly split between goods and services. There are at least 353 000 ICT professionals, 40 per cent of whom are employed in companies whose main business is not ICT.

According to analysis conducted for the Department by Sensis in 2006, about 83 per cent of the small and medium enterprises producing ICT are not in the traditional ICT industry.

The Department supports the development of the ICT sector through a range of activities. These involve ongoing policy development, administering ICT programs including those established as part of the Government's Backing Australia's Ability science and innovation package, and developing and implementing measures to support small and medium enterprises in the sector.

The ICT Advisory Board provided an independent source of strategic advice to the Minister on issues likely to affect the sector's development. During the year the board surveyed domestic and international experience with priority setting. It also examined the range of policies across government which impact on ICT development, with a view to establishing priority issues for government attention.

Information and communication technologies are constantly evolving. The continuous process of technology migration and the emergence of new solutions require frequent renewal of technical skills. As part of the process of understanding the ICT skills capability needed for the ongoing development of the ICT industry and the broader economy, the Department established a joint government/industry/education ICT Skills Foresighting Working Group in February 2005.

The working group's report Building Australian ICT skills was released by the Minister on 21 June 2006.

The working group reviewed trends and future developments in Australia's ICT sector and their implications for ICT skills development. This included a review to forecast future ICT skills demand, the fit between industry skill needs and existing training and possible options for better meeting the future skill needs of industry.

The key findings and recommendations of the report focus on three main areas, improved ICT skills research and access to information, re-focussed promotion of ICT careers, and increased and more effective industry leadership and coordination.

The Department will continue to work with industry and the education sector on the report's recommendations.

To raise awareness of the importance of ICT skills issues to the economy, the Minister convened the ‘partICipaTion Summit' on 22 September 2005 (see case study, page 116). The summit brought together for the first time about 80 Australian leaders from industry, education and government bodies with an interest in the area to identify creative, yet practical, ways to address barriers to participation in the ICT sector.

A key theme of the summit was that Australia's future ICT capability will be determined by the availability of an adequate pool of skilled ICT professionals. There is, therefore, a particular need to attract ‘Generation Y' (people born between 1978 and 1994) to the profession, as well as to encourage professionals, particularly women, to return to ICT.

A number of approaches were examined, including the need for a more accurate and contemporary portrayal of the ICT

profession and career opportunities, for fostering a more attractive ICT work environment and for a greater focus on curriculum design and careers advice on ICT.

The Department also continued initiatives directed at building competitiveness in small and medium enterprises by:

• helping to enhance market access for local ICT small and medium enterprises to key domestic and international markets:
• • in October 2005, the Minister led a delegation of 23 Australian business and research leaders in the ICT sector to India, visiting New Delhi, Mumbai and Bangalore. During the visit a memorandum of understanding on cooperation in ICT between Australia and India over the next four years was signed; and
  • in late April and early May 2006, the Minister met major ICT companies in Silicon Valley and Austin, Texas, in the United States of America, and addressed the World Congress on Information Technology, one of the premiere events for the global ICT industry;

• publishing Australian Government support for the ICT sector (July 2005) which provides information about a range of Australian Government programs to assist ICT companies to create, innovate, grow and compete globally;
• publishing Buying ICT for your agency—a guide for Australian government officials (September 2005) on procurement policies and practices for ICT goods and services;
• publishing the industry development progress report for 2004–05 on the IT outsourcing cluster contracts tendered between 1997 and 2000 (April 2006);
• tabling the Telecommunications carrier industry development plans—final report July 2004 to September 2005 in the Australian Parliament (March 2006);
• releasing for public consultation a draft guide Limiting supplier liability in ICT contracts for Australian government agencies (November 2005). The guide will provide practical assistance to procurement officers in applying a new policy, which is currently being finalised, to cap liability in government ICT contracts;
• supporting, for the fourth consecutive year, the Secrets of ICT Innovation competition, where Australia's leading innovative companies have the opportunity to promote their innovations to domestic and overseas markets; and
• publishing a major analysis, commissioned by the Department, of the Australian software industry The Australian software industry and vertical applications markets—globally competitive, domestically undervalued.

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

The Attorney-General had responsibility for copyright policy during the reporting period with the exception of legal deposit for which responsibility was shared between the Minister for Justice and Customs and the Minister for the Arts and Sport. The Department's role was primarily to contribute to various government processes, reflecting advice on issues that had a high priority for the portfolio.

From 1–5 May 2006, the Department attended a meeting in Geneva on the World Intellectual Property Organisation's draft broadcasters treaty. The main issue for the portfolio was the conditions of international application of copyright protection to broadcasts.

The Department provided input to the Government's consideration of the issue of resale royalty. On 9 May 2006, the Attorney-General and the Minister for the Arts and Sport jointly announced that they would not support a resale royalty right as it would not provide a meaningful source of income for the majority of Australian artists.

In addition, the Department provided input to the Fair Use and the Digital Agenda review. On 14 May 2006, the Government announced copyright reforms resulting from the review. The reforms included private copying exceptions (for format-shifting and time-shifting) and a new flexible, extended dealing exception with certain conditions. This will benefit libraries and archives, educational institutions and people with disabilities, and will also allow uses for parody and satire.

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Transformation of the Australian economy into an information economy leading to enhanced efficiency and productivity

The information economy embodies the transformation of economic and social activities through the application of information and communications technology. An information economy is one where information, knowledge and education are major inputs to business, social and community activities.

The Department is playing a role in this transformation by:

• demonstrating the productivity benefits of ICT throughout the economy and improving the understanding of those benefits;
• encouraging the business use of information and communications technology, particularly e-business;
• addressing impediments to the take-up of information and communications technology, including particularly matters related to the secure use of systems;
• monitoring and evaluating the impact of information and communications technology on economic performance at both the firm and aggregate level; and
• examining the social and community uses and impacts of information and communications technology.

During the year, the Department continued its work on assessing the impact that ICT has on productivity growth. It is increasingly apparent that traditional measures of productivity continue to underestimate the importance of the ICT sector to our economic wellbeing, as well as its impact on productivity growth.

The Information Technology Online (ITOL) program encourages the adoption of e-business solutions with a particular focus on small and medium enterprises. A number of significant, innovative collaborative e-business projects were supported through this program. Since ITOL's inception, the Australian Government has allocated more than $15.4 million to 131 innovative projects across a wide range of industry sectors.

The development of national and international e-business standards remains important because of the potential to strengthen business efficiency through greater interoperability across supply chains. Further progress was made on this issue during the year in collaboration with Standards Australia and e-business practitioners.

Ongoing monitoring and analysis work on the information economy which was conducted during the year included the production of the Current state of play, Information economy index and Pocket statistics publications.

e-Security

The information economy has expanded rapidly, driven primarily by the accelerating growth in the scale, ubiquity and complexity of the Internet. At the same time, online threats continue to grow in complexity and sophistication and represent genuine risks for business productivity.

The Department, in conjunction with the Attorney-General's Department, the Defence Signals Directorate and the Australian Government Information Management Office, is undertaking a review of the E-Security National Agenda. The Minister, together with the Attorney-General, the Minister for Defence and the Special Minister for State, publicly announced the review on 30 March 2006 and called for public submissions.

The e-Security National Agenda was first announced in 2001 and addresses the integrity and security of the online environment for both the public and private sectors. The review is being undertaken to ensure that Australia's policy and operational framework continues to be responsive to the changing e-security environment now and into the future.

The key areas that the review addresses include current threats and vulnerabilities, collaboration between industry and government, awareness-raising particularly for home users and small to medium sized enterprises, and Australia's e-security research and development capabilities and requirements.

The Department will continue its focus on building trust and confidence in the online environment by raising awareness of e-security issues for home users and small businesses.

Online threats continue to grow in complexity and sophistication. Many small and medium enterprises lack the sophisticated information technology needed to deal with security issues and threats such as a denial of service attack, viruses, hacking or theft of confidential or business information. Internet security essentials for small business, an online security guide for small businesses which was first made available by the Department in August 2004, remains a useful tool for small business on developing and implementing appropriate responses to their threat environment.

Departmental officials chaired the e-Security Task Group of the APEC Telecommunications Working Group and served as vice-chair of the OECD Working Party on Information Security and Privacy. In May 2006, a Departmental official was elected chair of this working party.

The Department is also represented on the International Steering Committee of the International Organisation for Knowledge Economy and Enterprise Development's global trust centre project. Support was provided to the steering committee for a feasibility study into the market for authentication in international digital transactions.

With the rapid growth in online transactions, it is vital that consumers and businesses maintain trust in the security of online information and services. During the year, the Department continued to refine online trust indicators that can be added to existing public and private surveys on Internet use, as well as monitoring and analysing online activity, particularly transaction-based activities by Australians.

Critical infrastructure protection

The Department has continued to work closely with the critical infrastructure sector to raise awareness about security aspects of critical infrastructure protection and has facilitated networking and information sharing between owners and operators of critical infrastructure. This has included providing advice within the Trusted Information Sharing Network (TISN) sector groups (including energy, water, transport and communications) with an interest in supervisory control and data acquisition (SCADA) issues (see case study, page 121). The Department also contributed to the development of a business information kit for owners and operators of critical infrastructure.

The IT Security Expert Advisory Group, chaired by the Department, completed projects on a number of key e-security issues including:

• the supervisory control and data acquisition (SCADA) risk management framework;
• a distributed/denial of service study;
• a review of IT security governance issues; and
• updating the wireless security report and associated information for chief executive officers and chief information officers.

The Department also provides secretariat support for the Communications Sector Infrastructure Advisory Group which:

• developed a generic risk management framework for the sector;
• tested the framework in a cross-sector scenario-based desktop exercise; and
• developed a risk management framework addressing risks arising from all hazards in the telecommunications, postal and broadcasting sectors.

The Department has continued to work closely with other relevant agencies, particularly the Attorney-General's Department, to examine the risks and issues involved such as those associated with the global positioning system, infrastructure information in the public domain and whole-of-government avian pandemic flu planning.

e-Business

The Department continued to provide support for small to medium sized entities in their consideration and adoption of e-business and the transformational benefits it can provide. It also provided practical assistance in dealing with the unfamiliar issues it can raise, such as online security issues.

Spam—international activities

The Department has continued to encourage other countries to establish and actively enforce spam laws. In April 2006, the Department co-chaired a spam symposium during a meeting of the Asia–Pacific Economic Cooperation (APEC) Telecommunications and Information Working Group. The symposium brought together APEC, the Asia–Pacific Telecommunity, the International Telecommunication Union and the Organisation for Economic Co-operation and Development (OECD).

The Department has continued to be a significant contributor to the OECD's Spam Task Force including development of the task force's ‘anti-spam toolkit' and chairing the task force.

Teleworking

In accordance with a 2004 election commitment by the Government, a teleworking taskforce, the Australian Telework Advisory Committee (ATAC), was established consisting of Government agencies and industry and small business representatives. The taskforce advised on the development of telework for employees and businesses and options for action.

The committee held four meetings and the committee's secretariat conducted nationwide public consultations, conducted stakeholder interviews and considered feedback from a public submissions process conducted from April to May 2005.

ATAC delivered a final report to the Australian Government in February 2006. It included an analysis of the drivers of and impediments to the uptake of telework, set out six recommendations and commented on the potential role of Government.

e-Strategy guide for non-profit organisations

The Australian Government launched the e-Strategy Guide website in May 2006. The website is designed to help non-profit organisations make better use of the Internet and other information communications technologies (ICT) to improve their work practices.

The e-Strategy Guide consists of 13 sections providing information on getting and staying online and assists non-profit organisations to make more informed choices concerning online technologies and tools for communicating with members.

The guide details best practice on how to use ICT to communicate with the community and to raise funds online, and how to create and maintain their own websites. The guide can be found at www.e-strategyguide.gov.au

National Non-profit ICT Coalition (NNIC)

The Department engaged a consultancy consortium involving Community Information Strategies Australia (CISA), Monash University's Centre for Community Networking Research (CCNR), the Nonprofit Roundtable (represented by ACOSS), WorkVentures Australia, Albany Consulting and Energetica to deliver a potential model and business plan for building a National Non-profit ICT Coalition (NNIC).

The NNIC's role could include raising awareness and understanding of the strategic benefits of ICT, especially with chief executive officers, and improving the effective use of ICT by non-profit organisations and the sector. The consortium is due to provide a final report to the Government in October 2006.

Document ID: 52614 | Last modified: 6 February 2008, 1:09pm