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Self[hyphen]regulation in the information and communication industries

CHAIR —I welcome Mr Ramin Marzbani from www.consult. The committee prefers all evidence to be given in public, but you may at any time request that your evidence, part of your evidence or answers to specific questions be given in camera, which means in private, and the committee will consider any such request. As you have no written submission, I now invite you to speak to the committee. At the conclusion of your remarks we will ask you questions.

Mr Marzbani —That is perfect. There is a number of issues that we would like to raise for consideration by the committee with regards to the Internet and the whole concept of self-regulation, particularly in the area of privacy in general. Firstly, I guess you have probably heard this a million times, but it is likely that the problems and issues that we have associated with privacy are not just associated with information technology but they are associated primarily with procedural and educational issues of how information is handled as well as accidents.

Information technologies generally tend to increase the speed of replication and of removal. They improve the ability to match disparate pieces of information that may deal with personal or confidential data. They tend to increase the ability to archive and retrieve the data components and so on. The evolution of the Internet into a reasonably large-scale communication and transaction environments creates additional opportunities for the collection of data and for the association of personal data with behavioural data and it increases matching of data across different databases. Telecommunications costs being lower actually allow faster and cheaper transmission of data. Finally, we also have the hacking or unlawful removal, replication or alteration of data affecting personal data and private data. That is the first point.

The second point we would like to make is that, with regards to industry codes of conduct, it is obvious that different industries are better suited to the application of self-regulation. Whilst this does not imply that regulation may be better suited for certain industries, a brief analysis of the current Internet industry and codes may shed some insight. We put forward that there is currently no such thing as the Internet industry. The Internet itself and the various applications within the Internet touch nearly every existing industry, but do so in different ways. There is, however, a clearly defined Internet service provision or Internet access provision industry in Australia, currently consisting of some 632 organisations, which is actually a very large number that keeps increasing. Most of them are very small organisations.

Very few of Internet service providers are represented by the Internet Industry Association, the IIA, which was previously known as the Internet Industry Association of Australia, INTIA. I would like to state that we are members of both of these. We were one of the first members of the Internet Industry Association, which subsequently merged with the Australian Internet Alliance, which may or may not have been formally set up as an association. This is relevant because, although the IIA represents most but not all of the larger Internet

service providers, it really does not represent any or many of the smaller providers out there at all. It is not a representative industry body even for Internet service providers.

The IIA has extended its political reach significantly over the past year and is now looking to potentially represent a broader range of constituents, although it has been on many occasions criticised for being slow, for being a closed shop, for not communicating with its members and for carrying out too many government discussions without soliciting input from, or providing feedback to, its members. It is a little like a very small club that started. A few people have been there and they are basically going to be perpetually there more or less.

So the issue becomes one of which industry association should it be for a code of conduct and, if we have a code of conduct, which issues should it cover. The current code of conduct within the IIA that has been put forward—and it has now basically been two years in the development, which actually tells you something about the organisation itself—does not really cater to business issues and business privacy. For example, it is my understanding of the current code of conduct that I as a business get no protection. So people could be looking at my Internet and e-mail without my having any protection under the proposed code of conduct. I put to you that that is a deficiency.

Would this approach effectively force companies to become members of one particular industry association? If basically we go forward and we say, `This is the industry code and everyone has to be a member', does that mean that we have to have 600 of these Internet service providers, who have chosen not to become members of the IIA, become members? I put to you that that may or may not be appropriate and that may or may not reflect the sentiments within the marketplace.

Thirdly, with regards to concerns over privacy and the Internet, our last research report was based on 10,500 Australian Internet users—this is not households, this is actual users—in November to December 1997. What it indicated was that concerns over privacy have always been a major issue. Thirteen per cent of Internet users out there in Australia today have said that privacy is their biggest issue. This is a little bit behind response times at 21 per cent and the cost of Internet access, also around 21 per cent. Those are the first two issues.

Security of financial transactions and privacy are pretty much on par. Security of financial transactions sits at 16 per cent. Things like junk e-mail are a much smaller concern at about six per cent. Concern with indecent material is regarded as an even smaller concern at about four per cent. So, when you ask them, `What are your concerns?', they are saying it is response times, it is the cost of Internet access, it is privacy and security. Security certainly has always been in there. In fact, it is one of the top three or four concerns for enterprises as well.

We are effectively going through the same issues we went through with the introduction of call monitoring on telephones, where management chooses to monitor telephone calls, for example, to see that people are not abusing the system. I would put to you that there is currently a significant amount of abuse of corporate resources with the use of Internet for e-mail and other types of activity. Privacy protection is likely to become an even greater

concern for the more experienced users as information about them and what they have done becomes more widely distributed.

Finally, with regard to views on censorship from the same survey, seven per cent of Internet users said that they felt the government should be censoring the Internet, but the majority, 63 per cent, believe that parents should be responsible for the monitoring and management of their children's access to the Internet, and 26 per cent believe that no-one should censor the Internet. Also, three per cent did not care about the issue at all. There is currently a great deal of danger associated with government censorship of the Internet, because the nature of the technologies is changing rapidly. Whilst it may appear simple to say that we will put in place the same laws that protect and provide standards for the community in other types of content, it may actually be unworkable because of the technological issues associated with this.

There is also some concern over various suppliers of blocking software with hidden political and social agendas who may actually be blocking sites other than, let us say, sexually explicit sites. They may be political sites, they may be human rights sites and so on. Also, there are currently several suppliers of commercial services who are competing in the market place for `safe children's access', who continue to innovate and develop services. They are competing in the marketplace for the attention of consumers and parents for the provision of these services. It is possible that government intervention may in fact hinder the development of competitive services which different parents may associate with or want to be associated with in terms of values and blocking. That is my written statement, so I am open to questions.

Senator HARRADINE —I was interested in your last comments. Do you think public policy should be determined by the business users of Internet?

Mr Marzbani —Policy with regard to?

Senator HARRADINE —With regard to the question of extremely violent or pornographic material coming across the Internet. Do you think that should be determined by business interests?

Mr Marzbani —No.

Senator HARRADINE —It is business interests, isn't it, that are the content providers?

Mr Marzbani —Yes. I would put to you that a lot of the content providers are commercial business interests.

Senator HARRADINE —And the server that you were talking about included business interests?

Mr Marzbani —This was actually a survey of Internet users at large. It was people primarily accessing the Internet from home as consumers not as business people or as representatives of content providers.

Senator HARRADINE —How many of those had actually found that children were accessing material of the nature that I described?

Mr Marzbani —We did not ask that question. However, we can give you the age profile of the people who answered the survey. The bulk of the users were aged around 30. The median age was around 35 and the bulk of them were between 20 and 40 years of age. They were a little older than you would have expected. However, that is a representation of current Internet users in Australia.

Senator HARRADINE —Does your organisation maintain there should be no regulation which covers the Internet so far as material of the nature that I have mentioned is concerned?

Mr Marzbani —There are two things here. One was what our research found, and our research is highly independent. We provide about 102 different streams of research out there. We are not affiliated with any content providers or other businesses out there.

In the issue of policy, with regard to the censorship of material on the Internet, what we have put forward as an organisation is that practically speaking the technologies are going to continue to change. It will be very difficult to put in place a technologically robust framework for censorship. We also have a survey of people who are not using the Internet, and the bulk of them are saying that parents should be responsible for this activity.

We also carried out a survey amongst the non-users of the Internet in June of last year and we are carrying one out again in June of this year. Of 1,400 households, less than 15 per cent believed that the government should be censoring the Internet for them. The bulk of them, which is 85 per cent, believed that either the parent should censor or no-one should censor or they did not care enough about the issue to comment. All I am putting forward is the views that we have found from research. This is research that is primarily aimed at understanding other types of behaviour, such as shopping amongst Internet users, their favourite web sites, their age, their income and so on. It is actually not targeted research at determining this issue, but we did ask these questions.

Senator HARRADINE —I imagine a large number of Internet users would be probably against the establishment of some technological response to the avoidance of sales tax, for example, on e-commerce.

Mr Marzbani —We did not ask that question, so I cannot really comment.

Senator HARRADINE —That is a type of censorship, is it not?

Mr Marzbani —Let me tell you what I do know. There are a lot of people who buy books on the Internet not because they want to avoid paying a higher price in Australia but because they get a broader selection of books and they find it more convenient to order from overseas, even though in many cases it is more expensive to order from overseas. I also know that there are a lot of people who order CD music over the Internet primarily because it is cheaper to do that than to buy it locally.

Senator HARRADINE —Do you believe that trend will continue?

Mr Marzbani —Yes, I believe that trend will continue.

Senator HARRADINE —Have you made any submission to the Senate Legal and Constitutional Legislation Committee that is considering the question of CDs?

Mr Marzbani —We did not make any submissions to that committee. However, we did make a submission to the Joint Committee of Public Accounts and Audit.

Senator HARRADINE —On the taxation matter.

Mr Marzbani —Correct. We provided them with some feedback. The numbers are still very small. All in all, last calendar year, there were only 500,000 transactions carried out on-line by Australians, representing about $55 million worth of goods.

Senator QUIRKE —It would make a GST rather less than attractive, would it not?

Mr Marzbani —It would depend on how it was implemented and where it was charged. Whilst the Internet does provide for some leakage, you would probably find that the Tax Office would regard that leakage—and I am not speaking on their behalf but I have heard comments to this effect—to be relatively small in terms of people ordering products from overseas.

Senator HARRADINE —You mentioned that the problem with a technological response is that it could affect certain sites which contain important human rights information and political opinion. How would that happen?

Mr Marzbani —For example, there is a documented case of one of Cyber Patrol or Nanny Sitter or whatever—one of the blocking products in the US—which does block out a large quantity of political sites in terms of the American way of doing it, democratic sites. It is a very pro-republican type of software. If schools and other organisations were to implement that software that could always have some impact on the educational processes of people trying to use the Internet. I think we would regard that as being a bad thing.

Senator HARRADINE —Even though material such as hard-core porn or extremely violent material from a particular source was thereby made available to persons in educational institutions, schools and the home environment?

Mr Marzbani —I would put to you that, today, there is no software that completely blocks out the content that you may describe as undesirable. It may block out some or a lot of it but it will not block all of it out. I would also put to you that blocking software does not in and of itself—and I do not mean to sound cynical—create this undesirable product, content, material, photograph or whatever it may be. This product exists out there both on the Internet and off the Internet. In fact, nearly all of this product is created off the Internet and also as a secondary application posted onto the Internet.

All we are saying is that you can have a technological response; it will not be perfect and it will not be complete. It may have some impact. But you have to be careful to make sure you are not blocking out other things and you have to understand that it will not be complete. We have an office in Singapore. Singapore has had a reasonably strong policy for a long time with regard to censorship and I can tell you for sure that it does not work. It is very possible to get access to pornographic material from the Internet in Singapore. In fact, the policy only extends to consumers and not to businesses looking to connect themselves to the Internet. Even then, access to this content is there all the time.

Senator HARRADINE —There is a matter of public policy though, is there not, for example for computer games? Computer games are unavailable for sale or hire in Australia if they are the equivalent of R or X material, which are the extremes of violence and hard-core porn. They are unavailable for use on a computer, but if you go into the Internet they are available there. Is there not some discrepancy in the area of public policy there if some attempt is not made to deal with that new challenge, as it were?

Mr Marzbani —I will put to you again two things. One is in terms of ordering of the product. You can certainly order them over the Internet, just as you could order them from mail order or catalogues.

Senator HARRADINE —You can download them.

Mr Marzbani —But you can also purchase them while you are overseas on a trip or you can telephone your friends and ask them to send it over. I am not sure, and I guess this is my question: can you buy similar product in the Australian Capital Territory or in the Northern Territory?

Senator HARRADINE —No. It is quite certain that this material is not available for hire. We are talking about interactive computer games.

Mr Marzbani —Would pornographic and X-rated videos be available for purchase from the Australian Capital Territory?

Senator HARRADINE —I am not talking about videos I am talking about computer games. That is why I used the example.

Mr Marzbani —You were probing for a consistency. My understanding is yes, there are computer games that are pornographic in nature which can be accessed over the Internet. At the same time, most of these things are extremely slow and most users would probably regard them as a waste of time. Do they exist? Yes, but in the same way I am sure that they exist in CD format in the black market right here in Sydney. In terms of availability, the real issue is you are not fundamentally changing the availability of content or people's access to it. You might be changing the degree of ease with which someone could see this or order it, but I think that is about all. You can always order seemingly benign catalogues that would contain some of these products you just mentioned amongst the 10,000 titles they may have, and you can write away for magazines and newspapers and similarly get access to them. This issue is very difficult.

I go back to the main point we were trying to make, that a technological response is unlikely to be completely successful and will be open to ridicule by people saying this has not worked. It is too early right now for a technological response because the standards and formats and everything is changing as we speak. This is one of the most rapidly changing industries we have ever seen. What we were pointing out was that the danger with the timing of a decision is tough. We were pointing out that there is no real industry association that is representing the Internet industry because the Internet industry fundamentally does not exist. Even within the ISP industry, the industry association is going to have a tough time convincing 600 ISPs that it is representing their interests because it is not.

Senator HARRADINE —So you are not likely to get a voluntary code of practice from the Internet industry?

Mr Marzbani —No. I will put one thing forward to you. At the Joint Committee of Public Accounts the issue was raised. One of the largest on-line publishers in Australia, which is Village Roadshow—again, I am not speaking on their behalf, merely commenting on things I have heard them say—has not been involved in any of the discussions in relation to the tagging or the classification of content. They are one of the absolute largest organisations out there doing this stuff today. The process that we have gone through within the `industry' has been highly flawed, has not been representative. It has been exclusionary and, as such, it is destined to fail as we move forward to try and build consensus.

The only way it has a chance of coming near to success is if people are bullied into it through joining an industry association through the threat of, `Join this or you will be sued' type of thing, or `You will not be covered by any of this legislation.' That may have been the intent of the legislation—I am not sure—but I do not think it was the intent of the legislation to promote one industry association over another. The publishers industry association has a lot of work to do because fundamentally they are Australian publishers. The Internet service provider industry also has a lot of work to do.

Senator CALVERT —I think you indicated that it is not possible to regulate the industry, so anything has to be done by self-regulation?

Mr Marzbani —I believe that, with the rapid change in technology today, it will have to be reputational effects and the larger industry players or the more reputable industry players trying to actually stake out their positions that will drive most of the activity. It is far too early for regulation in this arena.

Senator CALVERT —With the rapid increase in technology, do you believe it will be possible to have censoring the Internet? In other words, if people are over a certain age, will they be able to access programs by using PIN numbers and the like?

Mr Marzbani —It will never be perfect. However, we have heard of certain companies introducing services which are replicas or components of the Internet or the World Wide Web and which can be accessed. Almost everything within that network is known to certain people and has passed a certain degree of certification. The only real way to block it is to actually block universal access.

Senator CALVERT —So you cannot block specific areas?

Mr Marzbani —You can block specific areas by blocking certain IP addresses or certain telephone numbers, but you can always call another number and be forwarded to another number. Telephone numbers can change very quickly on the Internet.

Senator CALVERT —Do you think there will be self-regulation or, as the Chair called it, icons where people will have a standard? To be a reputable provider of services, they would have this particular icon or stamp that appears on their programs that guarantees to you, when you are using it, that it is of high quality?

CHAIR —That it is family friendly.

Mr Marzbani —I am sure there will be several versions of that, just as there are in terms of electronic commerce. There are trustee and e-trust types of marks. If you are a young, under-age person looking for violent pornographic material, you may not be interested in any programs that have that mark. If you have your parents looking over your shoulder, however, and you are really leaving the censorship up to them, they might be able to say, `As long as every page has one of these marks, I am happy. You can keep looking.'

CHAIR —But my point is that that would be a marketing tool of a service provider. A service provider would advertise their wares at a computer shop, say, and the parents would have that software loaded onto their system so that only the programs that that particular service provider make available would be available to that family's database.

Mr Marzbani —That is correct. That is available today. For example, there are service providers in Western Australia that aggressively market that service. That is different to the question that Senator Harradine asked earlier. I understood it to be slightly different. I think it will come up to the service providers who are going to compete with each other and companies that develop blocking software and technologies and marking systems and rating systems to compete with each other. I think there is still a lot of competition to be had until we get good solutions being developed and being commercialised for use.

CHAIR —How far away do you think that is?

Mr Marzbani —I think we are about two years away from that.

Senator CALVERT —Currently, there is no way that anybody could censor Internet programs.

Mr Marzbani —There is. Currently, there are at least 12 manufacturers of blocking software that can be installed on a personal computer on a browser that will block the common pornographic sites. That is available today. For example, they may be blocking Playboy in the US, but they are not blocking the new Playboy site in Hungary, or they may not be blocking the Playboy mirror site created by a 16-year-old, a 35-year-old or an 80-year-old somewhere else.

Senator CALVERT —Somebody might be blocking how to make a bomb.

Mr Marzbani —Correct.

CHAIR —In America, but not in Great Britain.

Mr Marzbani —Yes.

CHAIR —It all moves so fast, doesn't it?

Mr Marzbani —Yes. Trying to coordinate this across boundaries and across different jurisdictions is, again, a very difficult issue. I understand that the United States Constitution is very active in terms of freedom of speech, although there is no similar provision in the Australian Constitution. It becomes a very tough call if, at the end of the day, you have to go along with what is happening in the US which is the centre of development of all technologies and the bulk of the content.

Senator CALVERT —In the survey that you did, what was the major concern that surfaced?

Mr Marzbani —The major concerns were actually response times and the cost of Internet access. What we are finding is that, if you break out the different subgroups and you segment the database to look at different groups, there are several groups. We have people, for example, who have not done any on-line shopping and thought they were unlikely to do so. Privacy was almost the No. 1 concern for them, at about 20 per cent. People who had done on-line shopping several times were still concerned about privacy, but it was not as big a deal because they were more experienced and they had done more of that.

Internet users are still saying this is too slow and it is too expensive. One almost automatic safeguard is that, if parents see the telephone bills and the Internet bills are very high, then obviously they know that something is going on. If they see their kids awake at 4 o'clock in the morning they might also figure out there is something going on.

There is no question that, for example, adolescent males will use the Internet to search pornography. Pornography is an extremely popular type of content. However, I will put to you that it is actually more content with 35-year-olds than it is with 15-year-olds today. There are more 35-year-olds looking at pornography on the Internet today than 15-year-olds. That is a fact.

Senator HARRADINE —How do you know?

Mr Marzbani —We know that from the research we do.

Senator HARRADINE —Have you got the details of that research?

Mr Marzbani —Yes, I do. I have in fact brought some of that with me today.

Senator HARRADINE —I would be grateful for that. Thank you.

CHAIR —Perhaps if you could make that available to the committee.

Mr Marzbani —I would be happy to make it available to the committee as long as it is not published without our permission, if that if okay.

CHAIR —That would be acceptable to the committee.

Senator CALVERT —May I ask you how you collect that information. Do you collect that information by survey?

Mr Marzbani —Yes.

Senator CALVERT —How do you know they are telling the truth? Are 15-year-olds likely to say that they access the Internet for pornography? I would not have thought so.

Mr Marzbani —True. I will give you the full answer. We do 40 different streams of research. One of them is the on-line survey, and we do that in Australia, New Zealand, Singapore, Malaysia, Thailand and Indonesia, and China will be launched soon as well. We have been doing it in Australia for 2[half ] years. We get very large numbers of responses and then we check for a consistency within the answers that we get. There are questions we ask in slightly different ways. There are questions that we ask so we can cross-check with the electronic information we get about the user. Typically in the last survey, as an example, from 12,000-odd responses we only ended up with 10,500 what we considered clean responses. These are people who have been consistent across the survey. We ask a broad range of questions. We make it easy for people to answer and we guarantee their confidentiality and privacy totally. We have developed a reputation in Australia for doing this objective research. We have the support of more than 100 Internet service providers who actually advertise our survey through banners on their pages as well as every single major on-line newspaper, including all the Fairfax, News, APN, Village and Yahoo publications out there—all the different mastheads.

Senator CALVERT —So your survey would show you what the most popular materials are on the Internet.

Mr Marzbani —It would show you a number of things, including the most popular material. However, to follow on from that, because we do a broad range of other Internet related research, we can tell you—I would probably like this to be off the record, if that is okay.

CHAIR —Is it the wish of the committee that we take this answer as a private comment? That being the case, we will go into camera for this particular comment.

Evidence was then taken in camera, but later resumed in public —

CHAIR —We will now return to the public hearing. Are there any other questions?

Senator QUIRKE —Yes, I have a couple. What do you think the take-up rate is going to be over the next four to five years of the Internet?

Mr Marzbani —I can tell you what it is right now. It has gone from around 12 per cent per month a year-and-a-half ago to around two to three per cent per month in the number of users from home. Business take-up is growing a little faster—three to four per cent per month. However the content, or the bandwidth being downloaded, is growing at a much more rapid rate—between 20 and 30 per cent a month. So even though the percentage of users coming on is not as high, the amount of traffic that people are demanding and the amount of pages that keep coming down are growing much faster.

Senator QUIRKE —What is the total number now?

Mr Marzbani —It is over 1.6 million. It breaks out roughly as follows: there are about 600,000 academic users out there of which about 100,000 have dial-up access from home; there are about 800,000 dial-up users in total of which 400,000 are home consumers, about 300,000 are businesses and 100,000 are academic students; and the rest have permanent connections from work. This excludes people with email access to the Internet or the ability to participate in newsgroups and other types of email related communications with the Web.

CHAIR —Thank you very much, Mr Marzbani. Your evidence has been very helpful and very useful, and we appreciate very much the time you have taken to come and talk so frankly with us today.

Mr Marzbani —I have for the committee copies of what I said, a diskette of what I said, and a copy of the Internet user report for Internet users in Australia.

CHAIR —Thank you very much indeed.

Committee adjourned at 4.30 p.m.