CHAIR —I declare open this third public hearing of the Senate Select Committee on Information Technologies inquiry into the Broadcasting Services Amendment (Online Services) Bill 1999. I welcome the witnesses and thank them for coming tonight.

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 any questions be given in camera and the committee will consider any such request that you might make. The committee has received your submission and agreed to its publication earlier today. We appreciate that you have appeared today to assist the committee to understand the government bill that is now before us but, of course, we understand that as public servants you will not be asked to comment on matters of government policy. I now invite Ms Holthuyzen to make an opening statement to the committee and we will then move to questions.

Ms Holthuyzen —We do not wish to make an opening statement. We are happy to go to questions.

Senator MARK BISHOP —I have a few issues to raise with you. Firstly, was it your organisation that recommended to the government that online services be treated as analogous to broadcasting?

Ms Holthuyzen —I am not sure that it is appropriate for us to say what advice we have given to the government in relation to that matter.

Senator MARK BISHOP —It is a live topic in this debate.

Ms Holthuyzen —We can tell you the government's position on that.

Senator MARK BISHOP —We understand the government's position on that. Can you explain to us what the reasoning is behind that?

Ms Holthuyzen —Yes. I think there are three main reasons the government has chosen to take the narrowcasting approach. Firstly, the government recognises the growing influence of online content and the greater ease of access to content at home and school particularly without some sort of supervision of children. Also, I think the access to online services is becoming less discretionary than, say, access to content and hard copy form. So that is another factor in the equation.

Also, as higher bandwidths become available and with greater technological convergence, online services will come more and more down the broadcasting route than the publications

route. On balance it is a judgment issue that the government has made but, looking at the position now and as we go into the future, it would appear that this area is going to start to look more down the broadcasting route than down the publications route.

Senator MARK BISHOP —Would you have a look at clause 37 of the draft bill, in particular, paragraph 1(c)? We had a discussion on the first evening, I think with the ABA, and then we had discussion with one of the industry organisations last evening—I do not know whether you have seen the Hansard .

Ms Holthuyzen —The Hansard has not been available. We have had some reports of the discussions but the Hansard has not been available.

Senator MARK BISHOP —If you look at paragraph (c) `directing the provider to take all reasonable steps to prevent end-users from accessing the content'—the last 20-odd words there—what do you understand the government to mean by those words `all reasonable steps'?

Ms Holthuyzen —I think `reasonable steps' means what it is: what is reasonable to a reasonable person. In a sense, that is where the concept of technical and commercial issues comes into it. Those particular provisions link back to the objectives of the act or provisions—

Mr Cheah —There is an interpretive provision, which is in clause 37(2), which goes on then to give some idea of what reasonable steps include. It says that when you look at reasonable steps you have to have regard to subsection 4(3). That is a new subsection which has been included which sets out what is effectively a statement of regulatory policy. That statement of regulatory policy mirrors the same sorts of requirements that apply to the broadcasting industry. If we look at that—it is on page 3 of the bill—it sets out a whole range of issues.

When you look at the issue of what is reasonable, if a court were asked that, the first thing the court would have to do is look at whether it was reasonable, having regard to those things. Then the court could also look at whether it was reasonable, having regard to any other matter. For example, if a particular matter was not technically or commercially feasible, it is highly unlikely that a court would ever regard a step as being reasonable.

Senator MARK BISHOP —What if it were technically feasible but at considerable cost to purchase, adapt or use the necessary technology?

Ms Holthuyzen —I think that is a matter of judgment that the ABA would have to make.

Mr Cheah —Or a court.

Ms Holthuyzen —Those provisions in clause 4 at the front talk about not imposing unnecessary financial and administrative burdens, so it would depend on what the level of cost was.

Senator MARK BISHOP —I am not so sure I am interested in what a court might decide some years hence. We have a draft bill and the ABA said that `reasonable steps' meant having regard to technical feasibility, cost, contractual obligations, commercial responsibilities, and a range of other matters. This is obviously a policy decision of the government to include this phrase. What I am asking you is to put on the record what is meant. The other organisations here last night said to us that to take all `reasonable steps' has the practical effect of denying access, that you have to do everything. That strikes me as an odd proposition but they put it quite seriously. That was their legal advice. I am asking you to advise us what is the government's intent.

Ms Holthuyzen —An important thing about this provision is that this is the default position in terms of access to international content. The idea is that this is a requirement that falls on the service providers if a code is not put in place by 1 January or the standard is not made by 31 March. If a code is developed and put in place, the code overrides this particular provision because the code itself in those areas would provide the steps, procedures and matters needed to be gone through which would then be endorsed by the ABA. This, in a sense, is a mechanism to ensure that no later than 1 January action would be taken to prevent certain access. But once a code or standard gets established, the provision in the code or standard would replace this particular provision.

Senator MARK BISHOP —Yes, we understand that it is a last gasp and a fall back, and we all hope that the industry has been able to develop an appropriate code by the end of this year. They have had many years to do so and been either unwilling or unable to do so. So, if that does not come to pass by the end of this year, the ABA in the immediate future is directed to determine its own code and implement the standards. In applying those standards I am asking you what are the reasonable steps that they or the government would anticipate directing to end users?

Ms Holthuyzen —It is a bit hard to say more than we have said. The policy at the end of the day is that, taking into account those objectives of commercial and technical feasibility within that framework, ISPs would be expected to work. There are technical means of filtering content or limiting access to content and they would have to work through those measures and put those in place. We cannot pin down precisely what it is that they would have to do because it depends on what is available and how they would go about doing it. But they would have to take all their best steps in that context of commercial and technical feasibility.

Senator MARK BISHOP —We can go around in circles for some time. Perhaps you can take the question on notice and give it some formal and proper consideration within the confines of your own organisation and give us a fairly urgent written response on that because it has become something of an issue with other witnesses.

Mr Cheah —Are you asking us to tell you what the steps would be that the ABA would actually be spelling out in the standard?

Senator MARK BISHOP —What is the government's understanding of what are reasonable steps.

Ms Holthuyzen —We think reasonable steps—

Senator MARK BISHOP —This strikes me as being so vague, so broad and so general that it can mean anything and everything to whoever the reader might be. I presume that the government has some policy directive in mind, otherwise it would not have included that particular phrase. I am asking you to give the committee formal advice as to what is meant by `all reasonable steps'.

Ms Holthuyzen —We will do that. The only further comment I would add is that I think we would see reasonable steps as being similar to what the industry will develop in their code. As I said, because this is a default provision which sits in place before the code comes into place, we would expect those reasonable steps to be similar to the sorts of things to go in the code and which would then be endorsed by the ABA.

Senator MARK BISHOP —If that is the government's view, I would appreciate being advised of that formally so we have it on the record.

Ms Holthuyzen —Yes.

Senator MARK BISHOP —A number of organisations have suggested to us that the 24-hour take-down short period of compliance is simply too short a period. Does the government have a view on that?

Ms Holthuyzen —This is a judgment issue. The issue, I guess, is the balance between finding out there is particularly nasty and objectionable content available and then the obligation to ask people to take it down. My understanding is that the actual task of taking down the content is not a complex or difficult task and does not take very long. So I guess the government thought that giving people 24 hours was a reasonable period, taking into account those countervailing arguments.

Senator MARK BISHOP —Clause 86 of the bill refers to the concurrent operation of state and territory laws. Did the government look at the relevant state laws in Victoria, Western Australia and the Northern Territory in considering this bill?

Ms Holthuyzen —Yes, we were certainly aware of those laws.

Senator MARK BISHOP —Are you satisfied that there is not any conflict between this bill and those laws?

Ms Holthuyzen —Part of the reason for this bill is to make sure that the areas where the Commonwealth is legislating and the states are legislating are quite distinct and that there is no overlap or problems in the sense that the Commonwealth law covers the application of the ISP and the Internet content hosts and the state laws cover the end users. There was some uncertainty there which is partly why these provisions have come into place. The idea is that the application of those state laws, to the extent that they do not impinge on the behaviour of ISPs and ICH, in terms of this act can concurrently apply.

CHAIR —I know that it is difficult for you because you have not seen the Hansard of the last two nights, although I understand that Tuesday night's Hansard has just become available and might be of some assistance. The point that has been raised time and again by witnesses is the extent to which the criminal law is satisfactory as it stands in dealing with issues related to material on the Net. Could you give your view about that, and could you tell us of any past prosecutions that you are aware of?

Ms Holthuyzen —Certainly. Our understanding is that in relation to the criminal law there is some uncertainty which exists in terms of whether material that is transmitted or published over the Internet is actually captured by the Crimes Act. It is pretty certain that material expressed in hard copy form is covered, but there is some uncertainty about the application of the published material and transmitting aspects of material on the Internet, so this bill actually puts that particular aspect beyond doubt. Our understanding is that there have been some court cases in this area but that in each case we understand the defendants pleaded guilty, so there has never been a contested case in this area.

CHAIR —That clarifies that issue a little bit. I wonder whether you can detail a little more the changes in the bill that relate to criminal law.

Ms Holthuyzen —Yes.

CHAIR —This has been an issue raised a number of times because the suggestion has been made that the existing laws are sufficient to cover the issue and clearly they would not cover the international aspects of it.

Ms Holthuyzen —Yes.

CHAIR —In relation to the domestic material, it has been suggested that the current provisions are satisfactory. Your first answer to my question has clarified that somewhat, but I would be grateful if you could go into more detail on this particular issue.

Mr Cheah —One of the features of the Crimes Act regime which Ms Holthuyzen did not comment on was the way section 85ZE of the Crimes Act works. The main way that the Commonwealth legislation at the moment regulates content is through 85ZE. Effectively, that makes it an offence for somebody to knowingly or recklessly transmit material over a communications network which a reasonable person would find offensive in all the circumstances. That is basically all it says. So in a sense, there is not a classification scheme; there are not any hard benchmarks you could refer things back to. There is a fair degree of vagueness about what would get covered and what `knowingly' and `recklessly' actually cover.

What the whole regime is attempting to do is spell out a much more detailed regime for regulating Internet content and to spell things out in a lot more depth and detail. To the extent that there are criminal law issues involved, it really comes in relation to the sanctions regime. At the end of the day, if there ends up being a breach of an online provider rule, which is the ultimate sanction in all of this sort of stuff, the penalties are criminal penalties. So that is one aspect of it.

The actual amendments to the criminal legislation are fairly simple. All they are trying to do is clarify the way in which 85ZE operates. That is schedule 2, the very last page of the bill. That simply makes a clarification as to the extent to which ISPs get found to be criminally liable.

The other interaction between the bill and the Crimes Act is in relation to the concurrent operation of the state laws issue by making it 100 per cent clear where the state and territory laws apply and where the Commonwealth law applies. As Ms Holthuyzen explained, the legislation effectively says that the Commonwealth regulates Internet content hosts and Internet service providers. It provides indemnities against breaches and potential breaches of criminal law arising from state and territory laws but at the end of the day it imposes criminal sanctions itself under the Commonwealth legislation. At the end of the day the criminal penalties which apply under state and territory legislation for either people who create content at one end or people using that content at the other end still apply within the relevant state and territory jurisdiction.

CHAIR —That is an important clarification. One of the other issues that I would like to clarify is the extent to which the ABA is able to initiate investigations itself. Will it rely on the result of a phone call, a written complaint, an electronically lodged complaint or will the ABA be able to initiate an investigation as part of something that the ABA itself might become aware of?

Ms Holthuyzen —Obviously both those apply. There is obviously a complaints driven mechanism which we can talk about in more detail if you want to. But the ABA has also been given the ability under the bill to initiate investigations of particular material. The reason that particular provision has been put into the legislation, particularly with the ABA in its procedures and contacts with a range of international bodies or police bodies—other hotlines internationally—is that it may well become aware of particular content which has not been brought to its attention through a complaints mechanism. If it thinks those particular issues are serious enough, clearly it can follow those up and initiate the investigation on its own.

Mr Cheah —I have one clarification: when somebody makes a complaint, the ABA more or less has to investigate the complaint. There are a few exclusions to that which are fairly well defined. But because the ABA has to investigate the complaint, we decided that it was a good idea to probably limit the complaints to people within Australia, so that you did not get people from all over the world being able to bombard the ABA with complaints in a way that was forcing the ABA to investigate them.

As a quid pro quo for that, you more or less have to give the ABA this ability to then initiate investigations. If you do not, there is no way they can deal with a complaint that has come from a foreign police force or a foreign hotline, as Ms Holthuyzen explained. That is part of the way in which the mandatory nature of them having to investigate complaints interacts with the rest of the regime.

CHAIR —My final question relates to the community industry group. Would you be able to explain to us how you would see that group working? I would be interested to know what

its primary focus would be. Is it a body that will look at a public education role? Does it have a liaison role? Are you able to spell the role of that body out in more detail?

Ms Holthuyzen —We are still working through how that body will exactly work and obviously that needs to be established before January 2000. The idea of the body is that it will certainly have both community and industry representation on it. In regard to its main functions, obviously it will take complaints and pass them on to the ABA as relevant. It will certainly be an education body to provide information to parents about filtering arrangements or how to control access of their children to services. It will also, I think, be doing some surfing to see whether it finds any particular sites as well. Basically, it is threefold.

Mr Cheah —And liaise with overseas.

Ms Holthuyzen —And also to liaise with overseas bodies in the sorts of information that they gather.

Mr Cheah —There has been a very successful hotline service in the UK, for example, so it will be liaising with them.

Senator HARRADINE —I do not have many questions at all. NOIE is the Australian government body responsible for developing strategies to address key issues arising from the convergence of the information technology. Is part of this measure that we are considering there to meet the problems that may arise in this area of illegal or offensive material?

Ms Holthuyzen —Yes.

Senator HARRADINE —In other words, as you said, it is not so much the analogy of broadcast but rather narrowcast. It has been put to us by one witness that the convergence of technologies would not be far away where, for example, you could get a similar picture through the Net to that which is now available through cable TV.

Ms Holthuyzen —I think that is correct. No doubt there is convergence so that I think one could predict that in a few years time the medium or how you get the information will not really make much difference. As I indicated before, part of the government's underlying philosophy with this was that the reason we thought it was more like narrowcasting really was that with the way the Internet is developing, particularly with much greater bandwidth—and the possibility therefore of greater video and those sorts of services—coming, this sort of service will tend to approach more down the broadcasting line than it will the publication line. There is no doubt that that is part of the philosophy behind where the government is coming from.

Mr Cheah —One of the things, too, with the act, in terms of the philosophy of the Broadcasting Services Act, is that it is very much premised on the idea of influence. At the end of the day, how influential is a medium likely to be? Effectively, what it does in the pure broadcasting sphere is set up a tiered approach which looks at the most public, most powerful and most widely available medium, which would probably be broadcast television, and then works its way through to subscription narrowcast, which would be regarded at the moment as having the least influence on that continuum. Effectively what we are doing is

saying that the government's current judgment is that, if we are going to try to figure out where the Internet sits in all of that, at the moment it is around the same sort of level of influence as subscription narrowcast television. That does not mean it will not necessarily change over time if the way in which the medium gets used fundamentally changes, but at the moment that is where it sits. There is a philosophical link there, I suppose.

Senator HARRADINE —I had in the back of my mind that that approach was narrower than the recommendation of the committee. In other words, I think our committee's regulation in November 1995 was that it should be an offence to use a computer service to transmit, obtain possession of, demonstrate, advertise or request the transmission of material equivalent to RC, R and X. Do you have any understanding of why the R-material was not—

Mr Cheah —R-material is covered.

Senator HARRADINE —I know it is covered, but it is not dealt with in the same way as X-material. You can get some extremely violent material on R.

Ms Holthuyzen —The R-material has to be subject to an access verification.

Senator HARRADINE —I understand that, but that was not envisaged by our report at that stage.

Mr Cheah —The only difference between R and X in relation to the domestic situation is that you do not have an interim take-down notice. You still have the final take-down notice. At the end of the day you can be forced to take down R-material if it does not have an adult verification mechanism. In relation to the international—

Senator HARRADINE —Why haven't you got an interim take-down notice?

Ms Holthuyzen —I think that is partly a workload issue. I guess, in a sense, we may be more likely to get more complaints because there is a greater range of material in the R area. Because it is not considered to be as serious as X or RC, I guess the administrative overload was a factor which came into saying that we will just have interim notices for RC and X and final notices only for R.

Senator HARRADINE —Leaving aside the observation that you mentioned about R and X—there is some extremely violent material on R which is every bit as damaging to my way of thinking as some material in the X category—how do you see the verification issue working? An ISP could be offering R-material for example to persons where there is no—

Ms Holthuyzen —The method there is that the ABA is responsible for authorising and approving the actual verification method so—

Senator HARRADINE —But what if that is ignored?

Ms Holthuyzen —If it is R material and not subject to a verification procedure and there is a complaint about it, then—

Senator HARRADINE —Who is going to complain?

Ms Holthuyzen —The whole regime is a complaints driven mechanism. Presuming there is a complaint about that, if the material is not subject to a verification procedure, then the ABA could give them a notice and they will be required to take down the material.

Senator HARRADINE —Going to the question of X-material, presumably there will be monitoring of various ISPs, won't there?

Ms Holthuyzen —No, this is genuinely a complaints driven mechanism, other than what we said before about the ABA. There are two things. The community groups will be doing monitoring of their material and the ABA, obviously, if it gets material from elsewhere and thinks it serious enough, can follow it up. But otherwise it is a complaints driven mechanism.

Senator HARRADINE —How are the community groups—what is proposed for them—going to operate? Will you have a central area where there will be some sort of—

Ms Holthuyzen —There will be a community body established which will have industry and community representatives on it. One of its functions clearly will be to monitor or look at some of this material. That is a body that the government will be helping to establish and to fund. Obviously there are other groups in the community who may of their own accord be looking at material and also finding material. If they found it they would make a complaint to the ABA which could then follow up the particular complaint.

Senator CALVERT —When I walked in I heard Senator Bishop talking about reasonable steps.

Ms Holthuyzen —Yes.

Senator CALVERT —In the legislation, and I refer to the Broadcasting Services Amendment (Online Services) Bill, it says:

. the ABA will be given powers to issue notices to service providers aimed at preventing access to prohibited material which is subject to a complaint if it is hosted in Australia or, if the material is sourced overseas, to take reasonable steps to prevent access if technically feasible;

It has been put to us that if what is technically feasible at the moment—blocking and filtering devices and the like—were put into force, it may have the effect of restricting e-commerce and normal electronic traffic that would be coming in on the Net. Do you see that happening and does the bill before us propose that ISPs will be required to purchase equipment such as proxy servers to filter equipment?

If that is not the case, how will offensive material be blocked in line with the aims of the bill to prevent particularly material from overseas coming in? I believe it is a lot easier to stop offensive material here in Australia. The problem seems to be stopping offensive material from overseas coming in.

Ms Holthuyzen —Obviously there have been a lot of issues raised about the technical feasibility of blocking material and the government has recognised that there are some difficulties there. But even the CSIRO has indicated that, while nothing is likely to be 100 per cent perfect, there are some mechanisms out there and a range of issues to be worked through. But some of these techniques are available and, if they are employed, we believe they could have an impact in terms of access to that material. The actual mechanisms in the bill or the effect of all that is again a matter for judgment.

What the government has tried to do in this bill is put in place provisions which—I guess it is trying to make a balance in judgment—on the one hand, are limiting and preventing access to highly objectionable material but, on the other hand, obviously are not placing entirely onerous and unjustifiable costs on the industry so as to inhibit its investment. That clearly at the end of the day is a balancing exercise.

That is one of the reasons why, in terms of the codes of practice which are to be developed by the industry and put into place, the government wants the industry to come up with the solutions about how some of these mechanisms are best delivered. Because technology in this area is changing rapidly all the time, it may well be that new methods and procedures come along that can be put in place and the flexibility is built in the codes to enable them to do that.

The government, let me say at the outset, is not mandating any particular technology. It is not mandating that people must have proxy servers or anything else. It is asking the industry to come up with what the best solutions are. For instance, many big ISPs already have proxy servers and use those sorts of things now. It may be that the code could come up with differential arrangements, depending on whether you were a very large ISP or a tiny ISP. The obligations might not be so great on the much smaller players in the market.

I think there is a range of flexible approaches in there that can be adopted by the industry. That is why the government wants the industry to come up with the solutions about how best to do that and to take that forward.

Senator CALVERT —Given the speed of this technology and how it snowballs and rolls along so quickly, do you think the legislation the government is putting in place is far enough in front that it can keep in front of what is happening, rather than being behind catching up all the time?

Ms Holthuyzen —Sure, we have certainly tried to do that. That is why we see the development of these codes as being important. In that way, if new technology comes along or new methods come along where things can be done better, cheaper or more efficiently, then the codes can be changed and developed to put those into place to make it happen. It is quite flexible and quite responsive to changes so they can be incorporated quickly without changing legislation.

Senator CALVERT —These small ISPs, if they were required to provide expensive proxy servers or other blocking equipment—I think it was evidence we had last night—could that have the effect, as one person said, of putting them out of business?

CHAIR —`Erode the Net' and `degrade the Net', I think, were the expressions used.

Ms Holthuyzen —The cost is clearly a consideration. That is really a balance that has to be built into the code. That is why I said it may be that for really tiny ISPs you might not make the obligations as great as for the larger ones. They are all sorts of issues that I think the industry needs to work through in the development of the code. Then the ABA has to be satisfied that the arrangements that are put in place are satisfactory, taking into account those two objectives.

Senator HARRADINE —I must have misunderstood what you said just then. Are you suggesting that there be one law for one set of ISPs and another law for another in respect of illegal, objectionable or offensive material?

Ms Holthuyzen —I am saying that, in terms of the development of the code which relates to those blocking sorts of techniques, that is a possibility; I am not saying that is an outcome because the ABA would need to be satisfied that the procedures were appropriate and proper. But that is a potential or a possible outcome.

Mr Cheah —There will be no difference at all for the domestic hosted stuff. For the Internet content host, there will be absolutely no difference in getting directions to take stuff off. The only area where there is the possibility of getting some differential outcome might be in relation to the blocking techniques which you use for internationally or overseas hosted sites. The reason for that is, as Ms Holthuyzen explained, that, recognising that you are never going to be 100 per cent successful, you are trying to prevent and limit access to this stuff while at the same time not placing undue burdens on the Internet industry and the development of the Internet industry.

The government has made it pretty clear that is the balance it is trying to strike. The mechanism it is trying to use to get that is a code of practice. It is saying to industry, `We are giving you the opportunity to think through, in a creative way, ways of preventing this access which try to strike that balance.' It has deliberately left some flexibility because you will have different horses for different courses. There might be different ways of approaching that issue which might be appropriate for different sizes of Internet service provider.

CHAIR —But still against the same framework?

Mr Cheah —Against the same framework, and using the same machinery; that is right.

Ms Holthuyzen —I do not know whether it is useful at this point to say that this is obviously not the only arm in the government's strategy here. The government's strategy is quite multifaceted. This bill provides one set of avenues. Clearly there are also procedures to try to encourage the education side in terms of ISPs educating their customers about sites and ISPs offering what are called clean sites, I guess, so that people have the possibility of actually subscribing to a clean site.

Then there is also the networking with international agencies, police agencies and regulatory agencies to try to further develop coordination and means of dealing with this

matter. This bill is obviously part of the scheme but not the whole scheme—I think that is what I was trying to say.

Senator HARRADINE —In the domestic area, the legislation deals with ISPs and ICHs. What about content creators?

Ms Holthuyzen —They are dealt with under state laws.

Mr Cheah —And section 85ZE.

Senator HARRADINE —I know the argument that is being used. But has any thought gone into the constitutionality of the Commonwealth parliament addressing the problem of content creators in respect of material that is regarded under this legislation as being offensive? It seems to me that they would be getting off scot-free and they are the ones that really are the problem in the first place in respect of the material we are talking about here.

Mr Cheah —In terms of the constitutionality question, I do not think there will be any constitutional problem at all with what we are trying to do in this bill. There might be if you were to try to extend the operation of the bill to cover content creators.

Ms Holthuyzen —It is the intention too that state laws will create similar offences for content creators, and they do now as well, so the idea is that the laws will be complementary.

CHAIR —Harmonised.

Ms Holthuyzen —Harmonised, yes.

Senator HARRADINE —It will be interesting to see what the ACT does.

Ms Holthuyzen —The intention certainly is to have a nationally consistent regime fairly uniform, so presumably the ACT would fall into line with that.

Mr Cheah —Effectively, what we are doing by this bill at the end of the day is to provide people in other states with nationally uniform legislation. If you get one state or territory which decides to adopt a different standard from all the others, they will not be able to. Other people in other states and territories will not be able, for example, to see material that is coming from a state which has a lower standard because, effectively, the material will not be able to be hosted.

For example, if there was material from the ACT that was being hosted here, this legislation would have the effect of allowing a complaint from it so a person in New South Wales could complain about that material. ABA would investigate the complaint and tell the content host in the ACT to take it off. That means it is not then available anywhere else in the country. That is the way that would operate. We would not then be able to go and try to find the person in the ACT who had put the material on or uploaded it onto the site, because there you are probably getting into the area of regulating stuff which the states and territories normally have done.

Part of the government's overall framework has also been to make sure that we do not try to push out the operation of the normal classification arrangements and the classification agreements that operate between the states' Attorneys-General in relation to those sorts of content issues.

Senator LUNDY —To follow up on that point about the federal laws being proposed being able to dictate to content providers within states and under state jurisdictions for content in other formats: what constitutional mechanism allows you to put that on?

Mr Cheah —It does not actually dictate to content providers but to the content hosts. If you are hosting content which is then to be used over a communications network, it comes under communications power.

Senator LUNDY —That is why the legislation as it currently stands does not provide for any remedy or any mechanism through which the web developer or content provider is contactable through the ABA or a mechanism under this legislation. Is that right?

Mr Cheah —I think it is also a more fundamental philosophical issue. The government basically took the view that it was going to regulate the communications part of the exercise. At the end of the day, the people who put the content on and the people who take the content off and use it get regulated under state and territory laws. But the Commonwealth will provide a uniform nationally consistent regime to deal with the carriage bit in between.

Senator LUNDY —I appreciate that but it was felt by a previous witness that a complete silence within this legislation about drawing content providers to show cause under the scope of this legislation was seen as a deficiency.

Mr Cheah —The Commonwealth has not normally got into regulating material that passes over the Net—other than 85ZE of the Crimes Act. We have not been known to do it over communications networks or postal systems or anywhere else. Basically it is consistent with all other forms of Commonwealth regulation of network services.

Senator LUNDY —I certainly understand the constitutional parameters within which the federal government can operate in this area. What I am exploring is, given the great emphasis placed on the various different classifications and how they are identified quite clearly within this legislation as being activators for a course of action, it is being perceived as stopping short of actually bringing it to bear—I cannot actually remember which witness raised that issue. I do not know whether any of the other committee members can trigger my memory. But it seemed to me to be one of the more interesting aspects of the constraints within which the federal government operates in this area. I will move on.

I know other committee members have traversed the convergence of technologies issues. Can you cite any particular documentation that provides you with substantive evidence of the advent or direction of the convergence of technologies, particularly in relation to web style services being available through a television set via what has been described as a narrowcast style service or indeed any other style of service? You made the comment earlier in your presentation that, in fact, you are convinced that that is where we are going with the

convergence of technologies. I am trying to ascertain what specific basis you attribute that assertion to.

Ms Holthuyzen —There is no one document. With the way I think technologies are developing and with much greater bandwidth which obviously allows video and interactive video and all those things to occur, just from general reading you certainly get a very clear impression that that is the way the world is developing.

Mr Cheah —There are any number of articles in the popular press and everywhere else which talk about convergence of web television from two directions, one being people looking at Internet stuff through their televisions and from the other end basically people using the Internet to get the equivalent of a potentially huge number of channels. Streaming audio is here now in a very big way. You can get the equivalent of virtual radio anywhere in the world already. It is not too hard a stretch of imagination to think that the same thing is to be here for video in a few years once some of the bandwidth issues get addressed.

Senator LUNDY —What relationship does this assessment of yours in the context of this legislation have with respect to the current datacasting inquiry and the HDTV allocation of spectrum and the HDTV digital television legislation?

Mr Cheah —I think we are going a bit outside the statement of the content as such.

Senator LUNDY —I am interested quite specifically, given the continuous mention of the relationship, with what is proposed in this legislation and the narrowcast in terms of ratings. I am particularly interested in the directions of the definitions of datacasting and the impact of that policy direction of government and the progression of those inquiries, and how those changing definitions will in fact impact upon what is currently cited as narrowcast within the context of this bill.

Ms Holthuyzen —I think that is clearly an ongoing matter. The question of datacasting—

Senator LUNDY —Perhaps you could start by telling us what the timetable is with respect to the datacasting inquiry and the definition of datacasting.

Ms Holthuyzen —I do not know what the timetable is.

Mr Cheah —That is not our area. The National Office for the Information Economy is not dealing with datacasting directly. We have got some interest.

Senator LUNDY —But you do have policy involvement, because we have heard that. Certainly what you have just told me about convergence of technology leads me to believe you would be fully au fait with the direction in which it is going.

Mr Cheah —In relation to the content issue and the narrowcasting link, we are not saying at the moment that the reason why the government has picked this is necessarily the vision of the future as such. It is more that when you are looking at the sorts of standards that you might apply to Internet regulation, what is the most analogous level of influence that you pick within the existing regulatory framework? At one end you have broadcast

television and at the other end telephony. The question is: within that spectrum where would be the most appropriate point to pick an appropriate regime for content control?

The government has basically made a judgment that at the moment, given the way the technologies are placed, the way the market is at the moment and the way that services have developed, the style of regime that is currently applying to narrowcasting would be the most appropriate for the current state of the market. It is not a direct link between the narrowcast service—we are not saying that Internet is the same as narrowcasting.

Senator LUNDY —But you are asking for the same classification regime to be applied to the content in both those two mediums.

Mr Cheah —We are saying that that is the scheme that applies. Telephony things do not get classified at all because it is an absolutely purely private—

Senator LUNDY —I understand that. Having some knowledge, as I am sure you do, about the direction of that, and in fact having had quite a hefty discussion around the definition of datacasting, given that that is currently reported on in the popular press as being the point at which television and Internet content will in fact converge, it seems to me to be highly relevant in how this bill attempts to identify an analogous situation to a current delivery mechanism, that is, narrowcast.

I am interested in the impact on those deliberations of the definition of narrowcast within the relevant legislation, the definition of broadcast within the relevant legislation and what will be the emerging definition, when it is determined, of datacasting within those definitions and where in fact that will leave the definition of narrowcasting and if it will have any relevance in the future, albeit locked up tight within the body of this legislation. It in fact may not in the future be reflected in that or related back to that original legislation.

Ms Holthuyzen —All those issues are being looked at and the final definitions in all those areas have not been determined. The ABA is still working on those. I think the essential answer is that the government has considered it is very important to bring this legislation forward now and to put these provisions in place. The government will have to see what happens in the future and if there are any implications which arise which it needs to consider.

Mr Cheah —As you are aware, there are a range of reviews which are happening. They are all looking at this issue and they are going to be tackling some of this. It is also worth pointing out that, as you would be aware, the Broadcasting Services Act has got six classifications already of different service types. Effectively what we are doing here is now adding a seventh type of Internet content which has got its own definition there. The ABA has the power in relation to the existing six services already to give opinions about whether or not particular services fall within particular definitions. For example, if the ABA wants to form a view now that a particular service is in fact a narrowcasting instead of broadcasting service, the ABA has got some of those tools to be able to do that sort of thing. I presume soon they will be having to start to make some of those judgments, so the ABA has got some tools at the moment. There are these other reviews which are happening which are looking at the issue and we are dealing with Internet content which is material which is

sitting there on the Internet which basically people can pull off, so that is a definition of Internet content for the purposes of this bill.

Senator LUNDY —But that is my point. In terms of the ABA's role and how the definitions are applied, can you tell the committee what the current definition of datacasting is under the digital television legislation?

Ms Holthuyzen —No, we cannot.

Senator LUNDY —To my understanding, it is basically anything that is delivered via that medium that does not qualify as broadcasting. It is a very open definition and hence that gave rise to the inquiry into what constitutes datacasting. From the openness of that definition and the subsequent definition of Internet content in this, I think the relationship between the two is quite critical particularly in that the definitions established for Internet content under this process could in fact predetermine some of the outcomes under the datacasting inquiry.

Ms Holthuyzen —I did not think the datacasting issue had been finally determined. I thought that was a matter still going through the process.

Senator LUNDY —No, it has not been, but the question I am raising is—and perhaps you could take it on notice—to provide this committee with an assessment as to the impact the formal establishment of the definition of Internet content under this legislation would have on the subsequent considerations and deliberations surrounding that inquiry.

Ms Holthuyzen —I presume the answer is that they will be taking into consideration the definition of Internet content that has been put forward in this bill, in terms of the decisions that are made on datacasting, so I think the influence is probably the other way.

CHAIR —I think the witnesses have probably tried as hard as they can to answer this question. Do you have any further questions?

Senator LUNDY —Yes, I do. To what degree has the National Office for the Information Economy explored the international environment of national censorship regimes relating to the Internet? What studies or investigations have you done?

Ms Holthuyzen —We are aware of a range of issues that have been occurring internationally and I guess they vary from country to country. The USA have had some attempts to put in place particular provisions to restrict online content. As you are probably aware, some of those were overruled by the Supreme Court on the basis that they violated the First Amendment. But I think the important issue that is interesting there is that the majority of people in those cases were not saying it was not a reasonable idea to regulate content in this area. It was really a matter of developing a proposal which actually fitted within the Constitution.

We understand that the EU is also examining and trying to harmonise ways to look at illegal and harmful content. They are also looking at some of the methods of industry self- regulation, encouraging filtering software and things like that. So there are some processes within the European Union where they are attempting to examine these issues as well.

Of course, in Australia, in terms of what we do internationally, the ABA obviously has a particular role in the range of the OECD committees and UNESCO committees as well. We are actually a participant in a range of those international forums to find out what is happening internationally and what developments are going on there, so that we can learn from those as well.

Senator LUNDY —Have you identified any particular country that has been able to serve as a case study for your deliberations on this particular bill?

Ms Holthuyzen —I think different countries have done different things. Some countries in Asia have attempted to do some regulation of this area as well. In particular, we look at what other people are doing but, in Australia itself, we look at the particular circumstances and the changes that are occurring here, the growth of the Internet and the particular community concerns that have arisen. The government has, I guess, tried to develop a policy which addresses those concerns and takes the issues forward. In a sense, we are not relying on what other countries do. I guess we are trying to find and put in place a proposition and a proposal that the government thinks is best for Australia.

Senator LUNDY —What I am extracting from your evidence is that you have not identified any specific group of countries or a country and really looked at that in depth and used that information to model your proposals here.

Ms Holthuyzen —No. What we can see though is that there are concerns in a range of countries around the world about these issues.

Mr Cheah —Everyone is struggling with it.

Ms Holthuyzen —Everybody is struggling with these issues—about how to deal with them and how to come to terms with them and how best to protect children and deal with this sort of content. I think it is partly a learning experience together, but the government has obviously made a specific decision on how it wishes to take it forward from here.

Senator LUNDY —In preparation of this bill have you engaged any consultants specifically for the purposes of investigating the relative merits?

Ms Holthuyzen —You will be aware of the CSIRO report. We have had that information from the CSIRO but from no-one else.

Senator LUNDY —Can you provide me with the details of when that was commissioned and the date it was delivered to you?

Mr Cheah —We will have to get back to you with the exact dates.

Senator LUNDY —Can you give me a rough idea?

Ms Holthuyzen —It reported in June 1998.

Mr Cheah —We can give you the exact dates of when it was commissioned and the exact date of the report as well, if you would like us to do that.

Senator LUNDY —That would be useful. Is that the only report that NOIE has commissioned specifically on this issue?

Ms Holthuyzen —Yes. We have had other discussions with the CSIRO, where they have given us some—

Senator LUNDY —What is the nature of those other discussions?

Ms Holthuyzen —It was just seeking more information on some of the technical aspects of how the Internet works.

Senator LUNDY —What is the current status of those continuing discussions?

Ms Holthuyzen —To a certain extent they are ongoing. As these particular issues come up, and obviously even during these hearings, people have raised issues about filtering and the implications for the Internet.

Senator LUNDY —Have you requested more information or a supplementary report from the CSIRO?

Ms Holthuyzen —Yes, we have asked them for some more information.

Senator LUNDY —What have you asked them for?

Ms Holthuyzen —We have asked for more information about some of the technical implications.

Senator LUNDY —What aspects?

Ms Holthuyzen —The implications of costs and network issues; how things affect the network.

Senator LUNDY —Could you provide the committee with the nature of that ongoing request and its motivation?

Ms Holthuyzen —Yes.

Senator LUNDY —I now turn to the conclusions cited in the report commissioned from the CSIRO, and authored by Philip McCrea, Bob Smart and Mark Andrews. In its conclusions it says:

Our conclusion is that content blocking implemented purely by technological means will be ineffective, and neither of the above approaches should be mandated.

The above approaches, for the benefit of the record, are packet-level blocking and application-level blocking. I continue my quote:

Work-arounds will quickly be devised for any technologically-based blocking system and distributed over the Internet itself.

Upon receipt of that report it seems that the government has, despite that advice, clearly embarked upon a path to seek to mandate a direction that certainly appears, in my mind, to be contradictory in that the legislation gives some indication that it has relevance where a solution is technologically feasible, yet this report clearly cites that both packet-level blocking and application-level blocking as applied to content hosted outside Australia are actually not feasible or, as the report says `will be ineffective'. Why was that approach persisted with by the government despite this advice?

CHAIR —That is clearly a policy question. These people are public servants. We have already advised them that they will not be asked to give answers on government policy.

Senator LUNDY —Perhaps I can put the question this way: prior to the preparation of drafting instructions for the bill was this report read?

Ms Holthuyzen —Yes, of course it was.

Senator LUNDY —That is a start, I suppose. With respect to the conclusions cited in this particular report, what weighting and what status were they given to the preparation of the bill?

Ms Holthuyzen —Clearly, the report was considered by the government in making its overall decision on this matter. It took account of the issues raised in this report as well as a whole range of other matters that came before it.

While you are correct in saying this report says there are difficulties, it does not say things are impossible. It says there are some difficulties with the approach and that, in their view, it is not the best way to go, but it does not say you cannot do it at all and it does not say that there are not mechanisms, ways and techniques available to try to do something.

At the end of the day, the government has understood what this report has said. The bottom line is that the government still believes that some benefits can be obtained by taking this approach and trying to get some technical solutions involved. It is better to do something than to do nothing. It is better to make an attempt and to raise the barriers.

Mr Cheah —The government accepts that no blocking technology is going to be 100 per cent effective, and that is what the bottom line of the CSIRO report is really saying—that it is not possible to come up with a blocking technology that is going to be 100 per cent effective 100 per cent of the time. It is true that some of the savvier users are going to figure out work-arounds around the thing, but if you use some of the techniques that are here, that will definitely have an effect in filtering out some of the users.

The report also made a number of recommendations about things which the government could practically do, which included fostering clean sites, encouraging an education campaign and encouraging the use of end user software. Those are all aspects of the government's overall—

Senator LUNDY —This is the differentiated services.

Mr Cheah —Yes, and those are all aspects of the government's strategy. The government's strategy in relation to international or overseas hosted sites has four major elements, as Ms Holthuyzen outlined before. The first rung of the strategy is to try to encourage cooperation and consultation between law enforcement agencies and hotlines; the second rung of it is education and the encouragement of the use of filtering software; the third rung is differentiated services; and the fourth rung is this legislative part. I think you need to look at the government's response to the overseas issue as being part of an overall strategy.

Senator LUNDY —Certainly, the minister has done his best to make that clear. With respect to the section of the conclusion of the report that is entitled `ISPs could offer differentiated services'—and you have just gone some way to describe the nature of those—could you advise the committee if any of those services as suggested in this document are currently not available? Or are they all available in some capacity within Australia currently?

Ms Holthuyzen —In terms of differentiated services, clearly ISPs already offer some differentiated services. There is advertising from OzEmail and I think there is a service provider by the Kidz.Net service, so there are some differentiated—

Mr Cheah —AOL provides a product as well.

Ms Holthuyzen —There are a range of service providers who offer those products. One of the things that the codes of practice has to put in place is mechanisms to encourage ISPs to offer those differentiated services, so that is a further aspect.

CHAIR —Senator Lundy, we have two other senators patiently waiting to ask questions. Do you have many more?

Senator LUNDY —Yes, I do. I have about three or four questions to go. I will try to make it quick.

CHAIR —You have now had half an hour of questions, which is far longer than any other senator has had on this committee. Could I ask that we go to Senator Tierney and Senator McGauran and take some questions from them and perhaps come back to you at the end.

Senator LUNDY —Could I please finish this line of questioning?

CHAIR —Please be aware that time is moving on and other people are waiting to ask questions.

Senator LUNDY —Thank you for reminding me. With regard to differentiated services, that is one of the four elements of the legislation, and looking at end user. Another is international cooperation. We know that that is happening—Australia is quite active in that respect. What were the other areas?

Mr Cheah —It was basically encouraging education for end users and in relation to end user filtering software.

Senator LUNDY —Does no-one have any initiative at the moment that is funding a public campaign or anything like that?

Mr Cheah —No, we are not doing that at the moment.

Senator LUNDY —That is one thing that is not being done at the moment?

Ms Holthuyzen —No. There will be the community hotline as well.

Mr Cheah —That will be part of the education strategy, in terms of setting that up. The fourth element was the regulation.

Senator LUNDY —So in terms of the multi-pronged approach, apart from a decent, publicly funded campaign and the regulation, the other things are happening, anyway?

Mr Cheah —There is an issue there with awareness about a lot of this sort of stuff. Those are things which could be more actively promoted.

Senator LUNDY —That was a fair statement that I just made, was it not?

Ms Holthuyzen —Yes, except that there is not a lot of awareness, and to get the ISPs to do that as well as the community hotline is raising the bar in getting those issues out into the community.

Senator LUNDY —So there could be scope for a corporate or business orientated awareness campaign?

Mr Cheah —And as the ISPs think a bit more about them as they develop their codes of practice, they are probably likely to concentrate a bit more in this area as well, I would have thought. There is scope for improving what they are doing even in the areas where they currently have activities to make them a bit more concerned and a bit more strategic.

Ms Holthuyzen —As this becomes much more mainstream, which it is becoming now, part of it is making sure that the ISPs, too, understand their responsibilities as good corporate citizens in pursuing these issues, which is also obviously in their commercial interest as well.

Senator LUNDY —And that area is untested at the moment because we have not had a public education campaign or a business education campaign or anything like that. We cannot actually assess what impact that would have at the moment, can we?

Ms Holthuyzen —No, I guess we cannot, in that sense. But we believe that the level of awareness is quite low in many areas.

Senator LUNDY —With respect to ISPs?

Ms Holthuyzen —No. I was talking more about the community, actually.

Senator LUNDY —What is your assessment of the level of awareness for ISPs and their capability, abilities and knowledge of this sort of thing?

Ms Holthuyzen —I suspect it varies enormously among the ISPs. You will probably find the very large ones are quite aware of a lot of these issues and the responsibilities, but perhaps some of the smaller ones are not.

Senator LUNDY —Can I suggest, Ms Holthuyzen, that if they were not aware before, they certainly are now.

Senator TIERNEY —Over the last two nights, we have received some rather unusual evidence. I would like to test some of this on you. In your submission, you state that what is happening is analogous to what happens in broadcasting. Yet there was one witness who appeared before the hearing who kept saying the Net was analogous to books and kept saying this right through the hearing, despite what people on the committee said. I would have thought it rather difficult to have interactive sexual material in colour and movement in books, which is possible on the Net. Would you care to comment on whether this is similar to books or whether it is more analogous to broadcasting?

Ms Holthuyzen —I guess that is similar to some of the comments we made before. As we said before, I think the government's judgment in this area is that it is more analogous to narrowcasting in the broadcasting field than it is to books. There are a number of reasons for that. One is that access to online services is fundamentally less discretionary than going to books. Kids can get onto the Internet and find the material. Secondly, there is a much more growing influence; the influence of online content is becoming much greater because of the ability of children to access it both at home and at school and often without parental supervision. Thirdly, there is the issue we talked about before, which is partly this convergence issue. As you get greater bandwidth and a greater variety of services coming down the Internet, then online services potentially start to look more and more like broadcasting rather than like books. So overall, the government has made the judgment that it is more analogous to narrowcasting than it is to publishing.

Senator TIERNEY —Another claim was made relating to converging technologies, which we all know are coming. The claim was made that we should not make it like broadcasting, because converging technologies are years away. I made the point that, in Britain last year—almost 16 months ago—I saw screens on BSkyB, which they were just about to market, that pulled up your television image, and the Net was then pulled up in a quarter of the screen. You could pull up a second image, and they were actually converged at that point. Could you provide us with your view on the pace of converging technologies in Australia, how far we are away from that and why it is therefore necessary to design legislation that covers that contingency?

Ms Holthuyzen —I think we would agree with you, Senator; technologies are converging very quickly. As we all know, web TV is already available and, with the greater bandwidth, there is no doubt that these services are looking much more like broadcasting.

Mr Cheah —It is also fair to say that the Internet is already a convergent technology in a sense. Computer mediated communications is a new medium that has arisen. It has come about because of the convergence of information technology with communications technology, which has given us this broad power to do things, and suddenly there is a whole lot of other material which you could use in the off-line world and which you can already see in the online world. Certainly, publications in text and pictures are already very widely available. We are already starting to see streaming audio in a big way. That is very easily available. It is very easy to download music over the Internet and to listen to the equivalent of radio programs. It is now also possible to download video files. It is not necessarily going to be too much longer before you will be able to see streaming video as well. Fundamentally it is a bandwidth question.

One of the problems, which everyone in the world is facing with this content issue, is how do you try to map what we do in the off-line world into what we do in the online world and what is the appropriate relationship between those. Nobody pretends that it is particularly easy. Basically, the government has made a decision that the best way of handling it for the present is to say that it is relatively early days but, in terms of its current influence, it is looking like the right sort of analogy is probably with subscription narrowcasting.

Senator TIERNEY —Another witness last night said that what we are doing with the bill is draconian and is analogous to what is happening in Iran and also mentioned other Muslim states. Is the bill different from what is happening in Iran?

Ms Holthuyzen —I do not know what is happening in Iran, Senator. We would certainly argue that the bill is not draconian. In the bill the government is trying to respond to what are genuine community concerns in an environment where the Internet is becoming much more mainstream. Certainly in past years the Internet was very much more technical and nerds—or whatever one calls them—used it, but now it is much more mainstream and the same sorts of values apply to the Internet as apply to other broadcasting and communication means. I think the government is taking what it considers to be a responsible position in how to deal with the objectionable content.

Mr Cheah —In 1997, as a lot of the people on this committee will be aware, when this issue was first looked at, the Internet industry had very big problems with some of the previous suggested solutions which were going to involve them having to make judgments about what material would be objectionable. That was actually a much bigger concern. The government has responded to that concern in a way that is trying not to be draconian. Basically, the government is saying that people can make complaints about material. Those complaints will get assessed against normal classification standards that apply to any other material that exists in the off-line environment. To the extent that there is anything draconian occurring here, then exactly the same sort of thing would apply in the off-line world. The worst that can happen to an ISP under this legislation is that they get told to take the material off the Internet; they are told to stop hosting it.

Senator TIERNEY —I think the reference to Iran related to the practice in some Muslim countries of using a proxy server to filter everything that comes into the country. When the comment was made about proxy serving, the claim was made that what we are doing is exactly the same as presumably a Muslim country setting up a proxy server. We thought the bill did not indicate that at all, but the claim kept being made.

Ms Holthuyzen —The bill specifically is quite technology neutral about what the particular mechanisms are. There is no mandating of proxy servers or any other particular methodology. Of course, many ISPs already use proxy servers for their own commercial reasons.

Mr Cheah —Almost all the big ISPs do because it makes commercial sense for them. It saves them costs in their communications traffic across the Pacific. So most of the big ISPs already have proxy servers in any case. As Ms Holthuyzen said, we are not mandating any technology. We are certainly not mandating proxy servers.

Senator TIERNEY —Now that there is an exposure draft to the bill, the industry can complete the development of the codes of practice. A number of witnesses expressed confidence that they could do that by 1 January next year. Do you share that confidence? Is that the sort of timetable you think the Internet industry will work to?

Ms Holthuyzen —The timetable is certainly set out in the bill.

Senator TIERNEY —The question is about whether you are confident, whether they will be in place, whether they will be ready. They have been developing it for some years.

Ms Holthuyzen —We certainly would hope they would. There has already been a draft code of practice put in place on a number of issues; that is in the marketplace already. Obviously, there needs to be some further development work, but I guess we hope that the industry would be able to be in a position to develop a code by then. The answer is that, if they are not, the legislation actually requires the ABA to try and get a standard in place by 1 March.

Mr Cheah —31 March.

Ms Holthuyzen —Yes, and in relation to the international activities, that default provision applies anyway in terms of them having to make reasonable attempts in terms of access to material.

Senator TIERNEY —You have proposed a regime of fines. Could you explain how that works?

Ms Holthuyzen —Yes. There is a whole range of sanctions, if we talk about the fines as being the ultimate sanction which will be imposed by a court system—

Senator TIERNEY —Could you run quickly through those sanctions for the Hansard record?

Ms Holthuyzen —I have the list here. There is a range of sanctions. The first one we would expect is that, within the codes themselves, there would probably be sanctions or incentives. Because the codes are voluntary in terms of getting compliance, you might be able to deal with that by withdrawing association privileges. The incentives of having compliance are perhaps being able to display compliance symbols so that you are an ISP that people will want to deal with more. The first level, I guess, is within the codes themselves.

The second level is that the ABA can actually give warnings in relation to breaches of codes, standards or rules. In fact, thirdly, the ABA can also direct ISPs to take particular action in terms of how to comply with the code of practice. Finally, we come to the fact that, if you fail to comply with the take-down notice, the ABA can actually apply to the courts for action. Fines are imposed on a daily basis for each day there is a continuing breach. Then the court would decide on the level of penalty if you got that far through the process, but I guess we would hope that ISPs and ICHs would take action prior to being taken to court.

Senator TIERNEY —And being fined. Why can't the ABA do that directly? You mentioned that it goes through the courts.

Ms Holthuyzen —My understanding is that it is not constitutional for the ABA to actually impose fines directly.

Mr Cheah —It is a Brandy decision issue.

Mr Holthuyzen —I think they would be considered to be exercising judicial power, which they are not permitted to do.

Mr Cheah —After Brandy, the regulators were not allowed to impose penalties themselves.

Senator TIERNEY —The other night, Senator Stott Despoja suggested that time has been wasted dealing with this issue and that there are numerous other policy matters in this field relating to the Internet that could be dealt with apart from criminal activity and offensive material. Could you explain what other issues NOIE is dealing with relating to Internet activity?

Ms Holthuyzen —The government obviously is dealing with the issue of privacy, which sits within the Attorney-General's portfolio but which they are consulting closely with us on. There is a detailed privacy process going on at the moment in the development of legislation and the industry consultation process. The government is also looking at the authentication issue. We would hope that in the next few weeks or couple of months there may well be a decision in relation to authentication.

Mr Cheah —There is also the Electronic Transactions Bill, which is already out.

Ms Holthuyzen —The attorneys-general have already got out the Electronic Transactions Bill, which basically puts online transactions in a similar vein as offline transactions in terms of their legality. We have also been working on a range of consumer protection issues. The

consumer affairs area in Treasury has direct responsibility but we have been working with them in relation to fact sheets, informing consumers and also looking at some of the jurisdictional issues in terms of what jurisdiction applies when you are purchasing products. That is a short list. The department is also working on intellectual property issues.

Senator McGAURAN —The ABA will be covering the growing and burgeoning interest in downloading music. Will the ABA be monitoring and overseeing the music that you can now get off the Internet? Is there a standard to that?

Mr Cheah —Technically, it is Internet content under this legislation. In theory, yes it could end up by being classified. It is possible.

Senator McGAURAN —So it comes under that umbrella. As you might or might not know—and I am no expert on the Internet, but it has been pointed out to me—this is the next wave of the Internet, getting music off the Internet and printing it onto CDs. Of course, within the music world, there is an industry code of practice. I just assume the legislation will cover that, too. Will it?

Ms Holthuyzen —Yes, in theory.

Mr Cheah —In theory, it will cover it. You would have to get complaints about it and exactly the same sort of machinery would have to govern it.

Senator MARK BISHOP —Ms Holthuyzen, you outlined earlier that the government had a four-pronged strategy involving a form of regulation of this online area. One of the areas I think you identified was community awareness, community education, which then leads into the role of parents and families for unsavoury material. I am receiving a lot of correspondence around this issue not only from people who are not online users but also from some who are online users, which goes to the fact that a lot of people, say, 40 plus or 45 plus are not competent to use online material—they have not been educated or trained in that, but their children are. Their children are taught now at school. Does the government have any view on the role of an education campaign to educate parents on ways of exercising appropriate degrees of control within their own home and family as to how this unsavoury material might not be exercised?

Ms Holthuyzen —There are two answers to that. One of the aims of this community body which is going to be established is to provide advice particularly to parents in relation to means and avenues for them to deal with their children's access to the Internet. Already, on its own web site, the ABA has quite a lot of information directed at parents in terms of children's access to the Internet. A key part of the strategy also is getting parents to understand and be aware of the options and possibilities available to them to be able to deal with this issue.

Senator MARK BISHOP —To some extent that response is preaching to the converted in that, if you know how to access the web of ABA, you have some technical competence and parents might be doing that. That is not really the issue: I am referring to those who are not familiar or competent. Secondly, Mr Grainger, the other night, outlined that the ABA was seeking an additional $1.9 million for the next 12 months through the budget process.

When he broke up that $1.9 million, over 60 per cent was going in fees to the film industry classification board and there was something in the order of $200,000 for this community education and focus.

If it is such an integral and important part of the government's strategy of community education, parent empowerment and control within the home, it strikes me that a figure of $200,000 or a quarter of a million is pretty miserable and is not going to achieve its purpose. If one of the four legs of the chair is not going to work, it strikes me that it will not work. Where the complaints are coming from is parents and families who are concerned about children accessing material they do not want them to. The response to date of government is: one, we acknowledge the problem; two, it is one of our four strategies to attend to it; three, and most importantly, we are not prepared to allocate sufficient funds to address that problem.

Ms Holthuyzen —I guess it is a question about whether people think however much money gets allocated in the budget is sufficient or not. The community body is obviously a telephone line as well; it is not just access to the Internet. Also, of course, part of the development of the codes of practice is for the industry to be actually putting in regimes, mechanisms and education programs to assist parents. I know, as you are saying, that is directed at people who actually use the Internet or have Internet access, but those particular methods are available. It is not just the government spending money to provide information about this; it is the industry doing so as well.

Mr Cheah —It is spelt out in the explanatory memorandum on page 3. The actual financial estimates for this body were $200,000 of establishment cost, but ongoing annual funding of half a million dollars a year. In fact, it is $200,000 in start up and then $500,000 in actual ongoing funding to the body. That is actually a significantly greater financial commitment.

I suppose one of the ways we would be envisaging this community body to work is that it would actually start to raise its profile as being the place people could go to get independent advice about the Internet. It is probably in a better position to provide advice and the right level of confidence to the sorts of people you are talking about. Those parents in the over-45 category are feeling a bit nervous about the Internet. They are asking questions and saying, `Before I get an Internet connection for our family, I want to have a reasonable degree of confidence that this is actually going to be controllable.'

Hopefully, this community body would have a hotline where people could get advice. They could ring that up. Once there was some confidence about that body, they would actually start to do that. They could then get advice as to what options they have. Those options could maybe include advice on some of these differentiated services we were talking about—they are the clean services. That might be one option some people might like. Other options might be about some of the filtering software that they could buy. They might be in a position to recommend particular products that they thought were appropriate. Part of the government's reasoning behind that too is that they actually do want to promote the take-up of the Internet. There is definitely a cluster out there that this sort of marketing will actually help improve access to, because they may be more inclined to get the Internet into their homes once they get that requisite degree of confidence.

CHAIR —It does seem that grandfathers and grandmothers are often more competent on the Net than parents. That may well be because of a time factor.

Senator Stott Despoja was not able to be here tonight. She has asked me if I could put on the record some questions that she would appreciate having answered by you in due course. These are the questions. They are actually typed up and I will give them to you. I understand that NOIE commissioned a report from the CSIRO about the technical feasibility of Internet blocking. Was that report published via the NOIE web site? Why was it removed from the NOIE web site? What is NOIE's view on the feasibility of blocking technologies? Has NOIE commissioned any studies which may help justify the government's insistence that this proposal is needed to satisfy the demands of the Australian public? Finally, has NOIE undertaken any study of the financial impact of the government's proposal? Could you answer those when you are able to?

Senator McGAURAN —Just for the sake of Hansard , when I was talking about the downloading of music and this new great interest in the industry, I hope you quite understood that I meant the music industry cum the lyrics. There is a code of practice within that industry itself. I was not talking about the music. I do not know how you would get R-rated music, but you do get R-rated lyrics.

Ms Holthuyzen —The lyrics, yes.

Senator McGAURAN —Just for the record.

CHAIR —If you play it backwards. Senator Harradine, I believe you had some final questions.

Senator HARRADINE —Yes. I will be very brief because we are over time with these witnesses. There is nobody from A-G's here.

CHAIR —Perhaps you might like to put a question on the Hansard that we can forward to A-G's.

Ms Holthuyzen —We certainly could forward it to them or you could ask us.

Senator HARRADINE —The witnesses may—

Ms Holthuyzen —You could ask us and see if we can make—

Mr Cheah —You could ask us the question and we can undertake to get an answer from Attorney-General's, if that would be useful.

Senator HARRADINE —At the present moment, in some states, the ISPs are held responsible; there is a degree of prima facie responsibility. This legislation actually removes that and I am just wondering why. It also uses certain words like `objectionable' as distinct from the word `offensive'. I say this because of my experience with A-G's. It just might be interesting to see whether, in the end result, the penalties are less than they are now in

respect of those particular states—not the penalties, but the bases for offences are rather less under this measure than they are in certain states.

Ms Holthuyzen —It actually depends on where the offence lies. This legislation clearly indicates that Internet service providers and Internet content hosts should not be prima facie responsible for the content on their sites. Once it has been brought to their attention and it has been deemed to be objectionable content, it needs to be taken down or they need to take action to prevent access to it. But they are not responsible.

Senator HARRADINE —Deemed to be offensive—you used the word `objectionable'.

Ms Holthuyzen —The language of the act is actually `prohibited content' and `potentially prohibited content'. That is what the bill talks about. I am using `objectionable' instead of those words.

Mr Cheah —`Objectionable content' is not a term which has any legal effect. It might get used in the objectives but it does not have any legal effect into the operative provisions. The actual operative provision is the concept of prohibited content and potential prohibited content, and that is basically material which is likely to be classified under the classification scheme as RC, X or R.

Ms Holthuyzen —Or R without verification.

Senator HARRADINE —Yes, I am aware of that.

Ms Holthuyzen —We can take that on notice, Senator, and get some advice.

Senator HARRADINE —Yes. What about recidivists? ISPs have been asked time and time again to take off material.

Ms Holthuyzen —In the Australian contents, if they have been given a notice to take down material and they do not take it down, then—

Senator HARRADINE —I know that. But then they do take it down and the next day they have got another notice and they take that down.

Ms Holthuyzen —Okay. One of the mechanisms we tried to build into the bill to help assist with, say, people getting a notice to take it down and then just changing it slightly is to talk about substantially similar content. So, if they have been given a notice about material and they change it in a way that is substantially similar, that notice still applies so the ABA does not have to keep on issuing notices. And there are some anti-avoidance provisions in the legislation to try to deal with those sorts of mechanisms.

Mr Cheah —There are basically two people who could be causing a problem here. One of them is the Internet content creator who keeps on putting stuff up even though the Internet service provider keeps on telling him to take that down. That is what the anti-avoidance provision Ms Holthuyzen was talking about is about.

You could also get a situation where an ISP might be a problem, where an ISP keeps on not complying with the code of practice or the rules or anything like that. Under those circumstances, it is possible for the ABA to apply to the Federal Court to give a direction that the ISP has to stop providing services. The Federal Court, at the end of the day, could actually shut an ISP down if the ISP were a genuine recidivist. Where the ISP is doing the right thing, where the ISP keeps on complying with the notices and doing what they are supposed to do, the ABA has a much more streamlined way of giving notices to the ISP.

Senator HARRADINE —If the ISP were trying to do the right thing but the content creator continued to use the ISP, what then?

Mr Cheah —The material would keep on getting taken down.

Ms Holthuyzen —I think the answer is that the ISP would presumably keep on getting notices to take down.

Mr Cheah —The other issue is that, if what they are doing is illegal under state and territory laws and the content creator keeps on putting it up there, it would become pretty obvious what is going on, and that person could be prosecuted under state and territory laws as having breached those.

Senator HARRADINE —I understand that, except that in here it says `objectionable material' so far as the states are concerned. That is the term used on page 3 of the second reading speech, which states:

It will introduce a regulatory framework for ISPs and ICHs and forms part of a two tiered approach to online content regulation in which it is anticipated that the States and Territories will enact complementary legislation creating offences for the publication and transmission of objectionable material by end-users.

There is a case history on that particular word `objectionable'. That is what I am raising with you now, because I do not think it would be complementary to this particular scheme if the word `objectionable' were used. I raise that matter for consideration by you and the Attorney-General's Department.

Mr Cheah —As far as we are aware, the exact nature of the complementary state legislation has not been settled yet. When the minister used the term `objectionable' in the second reading speech, he used it more as a catch-all phrase to cover the material which was going to be covered there. I think the minister has used that term on a few occasions now, as he did in the press releases.

Senator HARRADINE —He has generally used the word `offensive', as I understand it.

Ms Holthuyzen —We are saying that `objectionable' is not a locked-in concept because the legislation has not been finalised. It is meant to cover that type of material. Perhaps it is used a little loosely there, but the final terminology has not been determined. We have just been advised that the states have agreed in principle to complementary legislation, so there should be uniform complementary legislation.

Mr Cheah —I suppose we are saying, `Don't read too much into the term "objectionable".' When we were writing this speech, we would not necessarily have been aware of some of the nuances to which you are referring.

CHAIR —Mr Cheah and Ms Holthuyzen, thank you very much. My colleagues and I appreciate the time you have spent with us tonight to try to help us better understand this legislation, and I would like to thank you very much for the useful evidence you have been able to give us.

[

9.55 p.m.]