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Performance of the Australian telecommunications regulatory regime

CHAIR —Welcome. Thanks for your time today; it is much appreciated by the committee. The committee has received your submission as No. 7. Do you wish to make any amendments or additions to your submission?

Mr Knox —Not at this time.

CHAIR —You are reminded that evidence given to the committee is protected by parliamentary privilege and that the giving of false or misleading evidence to the committee may constitute a contempt of the Senate. I now invite you to make an opening statement before we move to questions.

Mr Knox —The Australian Communication Exchange thanks the committee for the opportunity to speak at today’s hearing. I would like to take a moment to introduce my colleague Ms Tracey Annear, who has been an executive officer of ACE for some 16 years. She represents us in most of our regulatory affairs and sits on a number of working groups or committees such as the ACIF group, the emergency services advisory body and so on.

As some of the committee members may be aware, ACE is a not-for-profit organisation and we are community based. Our comments today most directly address paragraph 1(g) and paragraph 2 of the committee’s terms of reference and go to the effectiveness of the universal service obligation in delivering reasonable—and I stress ‘reasonable’—telecommunication services to all Australians, and the need for change to reflect change in technology.

Since 1995 ACE has provided the National Relay Service under contract to the Department of Communications, Information Technology and the Arts, DCITA. We have been determined by the ACA to be an emergency call person for the emergency number 106. The 106 number is equivalent to 000 and provides equivalent services for deaf, hearing impaired and speech impaired Australians. Requirements of the NRS are legislated and the performance of the NRS provider is tabled annually in parliament by the minister.

We provide a service through the NRS which enables deaf, hearing impaired and speech impaired Australians to access a telephone service. I will illustrate how it works. A deaf caller calls the NRS using a TTY—a keyboard-like device attached to their telephone network—using something called baudot code, which is a very ancient, slow and somewhat outmoded code. It is one of the few applications of baudot left in the world. The deaf caller types the NRS number and one of our relay agents answers the call and then places a voice call to the destination that is the ultimate receiver of the call—usually a hearing person. The hearing person’s words are then retyped by the relay officer and the deaf person’s typed response is then voiced to the hearing person. There are some variations on this theme but, in general, that is how we provide our service. The conversation goes backwards and forwards. I hope you can see how the service works and what a great boon it is to the people we serve.

This service is delivered to all Australians. Each month we handle more than 50,000 calls. We operate 24/7, every day of the year, and the service is highly reliable and strictly confidential. We maintain extremely high standards of confidentiality and restrict physical access to our call centres to ensure privacy and confidentially to the people we serve and the calls they make, as they are often dealing with quite private information. We play a vital role in allowing a large number of deaf, hearing impaired and speech impaired people to play a full role in society and reach their full potential.

The NRS allows its users to successfully hold down high-skill, high-value professional jobs. Without the NRS many deaf people would find it much more difficult to obtain employment and provide for their families—in other words, they would be on social security. They can reach emergency services when required. Before the NRS, if your house was on fire and you were deaf, what did you do? You had to run next door and find a neighbour or a friend, or you ran out into the street and hoped you could get your message across. With the NRS you dial 106—not 000—and you are passed through to the emergency service relevant to the crisis. You can maintain contact with your family and loved ones—a most important benefit.

That means we assist people to continue to lead independent lives well into their senior years. I draw senators’ attention to the recent studies and comments by the Treasurer, Mr Costello, regarding what is happening to our ageing population. More and more, our market is in the hearing impaired group of older Australians and we are providing a valuable service that can allow them to maintain their communication and live independently, lowering the burden on the Commonwealth.

We also allow hearing Australians to make contact with the deaf, hearing impaired and speech impaired, so it works the other way as well. It is not simply about deaf people calling out; it is about hearing Australians calling in and being able to make contact. Certainly the Keating government is to be congratulated for introducing the NRS, and there is no doubt that the Howard government is similarly to be congratulated for maintaining the NRS. It has been an outstanding success.

However, what the NRS does not do—and this is really why we are here today—is allow deaf users to communicate in their first language. For the deaf, their language is Auslan—Australian sign language. It is a rich and expressive language that uses a combination of signing, facial expression and body posture to communicate. Its syntax and semantics are different to many spoken languages—for example, English. That is often why, when you are in conversation with a deaf person who may have some language skills, it appears to be such a difficult procedure. They are translating not from their native or natural language, English, but from Auslan.

So not having access to Auslan for a deaf person is like telling a hearing person, ‘Yes, you can use the telephone, but you can only speak Swahili.’ It means that when conducting a conversation via the teletypewriter, TTY, you only get half the story. You do not get a good idea of pace, tone, volume, a sense of irony or humour, the emotional content of a conversation—and it is very slow. It can be a longwinded, tedious procedure to undertake, for example, a detailed technical conversation with a deaf person, using the NRS.

As it is difficult and not practical to interface teletype equipment with the mobile network, effectively deaf people do not have access to the mobile phone network at all for the purpose of conducting a conversation. I distinguish between what is happening with SMS and what is happening with conversation. SMS has been embraced by the deaf community in a major way. But it is not conversation, and it is extremely expensive. For example, every time there is an interchange between Tracey and me we pay for an SMS message. To have a conversation there may be 50 switches backwards and forwards. It is very expensive. So SMS has been embraced by the deaf community but, otherwise, they do not have access to mobility. Unlike we hearing Australians, they cannot move and communicate; they are restricted to their home or their professional work environment where there may be a TTY.

So does the current operating format of the NRS provide a truly equivalent service to that available to hearing Australians? No, it does not. Does it do the best job possible given the available technologies? Not by a long way. So how can these shortcomings be addressed? Fortunately, there are some stable and well-understood internet protocol based technologies which can be harnessed to rapidly growing broadband networks to provide many of the answers—for example, video relay, text servers, internet relay or other IP based or mobile devices.

A good example is video relay. It works like conventional relay except the relay officer and the deaf person can see each other. It is much like a video conference. The deaf person makes contact with the relay officer visually and then can use Auslan. The relay officer, who sits in one of our call centres, places the call with the hearing Australian and the voice leg translation occurs. But instead of typing a response back they use Auslan. The advantages of that are that it is much closer to being equivalent to that available to two hearing persons. It is much more like a conversation. It is much more free flowing. There is much greater informational content and emotional content, and it places the deaf person on a much more equal footing to that of the hearing person. I am sure we are all aware that when chasing a bill or—dare I say it—any other public service you need to be on an equal footing, and rarely is a deaf person on the same footing and able to have their case heard properly.

These technologies are proven and they are readily available. They have been in operation throughout a number of countries and regions, such as the US, the UK and Scandinavia, with great success. In the US, video relay is revolutionising the way deaf people interact with the wider community to the benefit of all—not just the deaf. However, we, in our estimation, believe the Australian NRS is at a level of functionality provided by world leaders some eight to 10 years ago. In other words, we are roughly 10 years off the pace. Why aren’t we providing the best possible service? The technology is there and it is proven; we have got the bandwidth. A big part of the answer lies with the definition of the standard telephone service as defined under section 6 of the Telecommunications (Consumer Protection and Service Standards) Act 1999. This definition is constructed with only the PSTN in mind—the public subscriber telephone network—and is really about copper in the ground. It is about an old-style analog network—I think the definition actually goes back to about 1995 and, as such, is very outmoded. It does not explicitly provide for the new, effective and cost efficient technologies that I have already spoken about; it does not allow them to be included within the STS, or standard telephone service. The administering department, DCITA, does not allow the NRS to support these technologies, putting the view that they only administer the bill and rely on legal advice which supports their interpretation.

So what can be done about it? We believe that this committee can play a very valuable role by recommending legislative change to the definition and supporting interpretations of the standard telephone service that brings these new services within the NRS and allows for a flexible, forward-looking and technology neutral definition and interpretation of the STS. The committee can bring great and lasting benefits to deaf, hearing impaired and speech impaired Australians. This single initiative will go a long way to ensuring telecommunications services are truly accessible by all on a comparable basis. This is a great opportunity to demonstrate the power of the internet and broadband to make a real improvement to people’s lives. This is about empowerment. Consider a distributed video relay service that reaches all parts of the country; that is accessible by all, just like the phone; that is highly cost efficient, very effective and is low risk. It is a great good-news story. It is about delivering the promise of technology. It is about overcoming disability. It is about overcoming the tyranny of distance in regional and rural Australia and it can be easily understood by all who see it. In other words, it is a great demonstration product, apart from the fact of the real benefits you can bring. I urge the committee to do it now; the committee should recommend changes to the STS now and get that legislation changed.

The NRS contract goes out for tender shortly. The draft statement of requirements, which is really an indication of what the final version of the tender may look like, does not include as part of the mandatory services the very technologies I have spoken about today. Instead, it indicates a quite limited change and the new technologies may be provided on a commercial basis as premium services; that is, if the deaf can pay the full cost of it then that is okay—they can carry the cost, even though they are not the full beneficiary. The benefit is shared by both parties to a call; that is, the person placing the call and the person receiving the call both share the benefits equally, but only one party is being asked to carry the cost and that is the deaf person making the call, in most cases. We do not ask a farmer to pay the full cost of stringing a bit of wire from the main road down to the house so he can get his phone on. Nor do we ask remote telecommunications users to pay for the full cost of their satellite service. Why should deaf Australians have to pay the full cost of these highly beneficial services?

Finally, I would point out that the deaf, on average, sit at the lower end of the socioeconomic scale. They do not have full and fair access to education, nor do they have the opportunity to pursue a career in the same way as a hearing person. Thank you for the opportunity to speak today. We have appreciated and enjoyed it. Tracey and I are happy to answer any questions the committee may have.

Senator CONROY —How does the service offered under the NRS compare with similar services offered overseas—say, in the US or the UK?

Mr Knox —In terms of reliability, quality service and availability, it compares very well indeed. We compare by any measure very strongly in those terms. However, in terms of the functionality we offer and the benefits that flow from that, we are quite some way behind. We do not offer video relay, text services and internet relay, and there is no access from mobile phones and so on. I would think that we are at the point that they were at eight to 10 years ago.

Senator CONROY —Are those things defined as premium services—from the picture that you described earlier?

Mr Knox —No, they are not. They are included under the equivalent funding bases. For example, in the US, the video relay service, the SMS, the text relay and the internet relay is all part and falls in under what they, in broad terms, call a standard telephone service. They have a slightly different legislative environment, but that is what it amounts to.

Senator CONROY —So they are part of the standard?

Mr Knox —They are funded services; hence, the great take-up.

Senator CONROY —I would like you to emphasise for the committee how important the take-up of broadband is to the quality services that you can offer.

Mr Knox —It is a major enabler. Video relay services and video interpreting services, which are closely related, rely on the penetration of broadband to be able to act effectively. You need close to full motion video, simply because the way Auslan works you need to be able to read body posture, facial expression and clear hand movements to be able to interpret correctly. The key determinant here is not so much the downspeed link: for example, most of the ADSL products on the market might be 256K or 128K or 256/64K. So the down link is okay but on the way back up that link of 64K, 128K or even 256K tends to be a bit inadequate and you get jumpy motion. That detracts from the quality.

Senator CONROY —That would be hard.

Mr Knox —Current thinking seems to be that you need about 384K per second to have really good quality. If you look at what is happening now, more and more of the broadband that is actually being taken up is well within that, and we see that broadband take-up of acceptable bandwidth to enable video relay is with us now and will become pervasive over the next couple of years.

Senator CONROY —Are there any specific programs to assist the hearing or speech impaired to access broadband?

Mr Knox —I am not aware of any government funded programs that are specifically for the hearing and speech impaired. There may be some that are designed to assist Australians in rural and regional Australia, but that is simply because of where they live.

Ms Annear —From the point of view of the submission, we are aware of the recommendations of previous inquiries and welcome those recommendations. My point is about how those recommendations can be implemented, because some of the recommendations are still very valid. What would be the steps required to ensure that they are implemented? I do not know the answer to that question.

Senator CONROY —We try not to take it personally when we are ignored.

Ms Annear —It may get back to the definition of the standard telephone service or the USO or identifying the gaps, because a lot of what Peter has highlighted is really all about gaps. If we go back to about 1995, when the NRS was first introduced, the service was quite adequate because it seemed to be keeping up with technology. Now technology is leaping ahead and we are identifying more and more gaps as technology changes. It is a matter of making sure that the service is current and effective. That is our point about the definitions. If they are limiting that equivalence in terms of interpretation, then that is difficult.

Senator CONROY —You noted in your submission—and you discussed the bandwidth issue here a minute ago—the requirements for sign language over video are a minimum of 384 upstream and downstream and need to be consistent throughout the communication. What is the price and availability of this sort of bandwidth at the moment?

Mr Knox —I go back to my days when I was running an ISP, so I am a little bit out of it, but you should be able to achieve that for somewhere around $60 per month. For example, I subscribe to a cable service from Telstra—‘All you can eat’. The speed on that is more than 380 and I pay around $60 a month. I would think that that would be upper limit. I know that already that has come down in price.

Senator CONROY —We looked at Telstra’s Big Pond web site and it indicates that it does not offer any ADSL products that have 384 uploading capacity.

Mr Knox —That may well be true. Some of the other providers do. That is happening now with providers such as iiNet. Netspace is also rolling out DSLAMs. Those products are providing quite solid uplink speeds. With ADSL 2, which is not far away, that will certainly be provided for. I would also point out that the cable may not be ADSL, but if you take your broadband through cable you do achieve symmetric speeds in general. Of course, that is subject to some degradation, because effectively everybody is sharing a set amount of bandwidth and in peak periods that can degrade a little bit. But in theory it is symmetrical.

Senator CONROY —Your submission raises concerns about the NRS being tied to the definition of a standard telephone service. What changes need to be made to the NRS to cope with the development of new technologies such as VOIP? Do these changes need to be in the legislation or can they be done in a contract to provide the service—or is it almost a chicken and an egg?

Mr Knox —The key change that has to be made is to the standard telephone service to allow those new technologies to fall under the funding arrangements of the NRS. The funding arrangements then are arranged contractually between DCITA and the holder of the contract.

Senator CONROY —Have you raised your concerns with the government and the need for these changes?

Mr Knox —Many times.

Senator CONROY —My next question was, ‘What response have you got so far?’ but I think you have probably already answered that.

Mr Knox —Yes.

Senator CONROY —Thank you. That is all the questions I have.

ACTING CHAIR (Senator Tchen) —Firstly, I have a point of clarification. This inquiry is actually an initiative of the Senate rather than the government.

Mr Knox —I am sorry, I do apologise.

ACTING CHAIR —I am surprised that Senator Conroy did not pick that up.

Mr Knox —Let the record show.

ACTING CHAIR —What is the actual funding amount for the NRS at the moment?

Mr Knox —The funding amount is linked to the call minutes. We receive a set amount for each call minute that we relay. That is of the order of $15 million a year.

ACTING CHAIR —That is the amount you actually received?

Mr Knox —Yes.

ACTING CHAIR —Do you know whether there is any capping on this?

Mr Knox —I do not believe it is capped, no.

ACTING CHAIR —It seems to me that there are actually two issues with your concerns. The first is more of an equal opportunity issue about whether people who have a disability should receive the same benefits as everyone else. One of the problems is that, when we are talking about services, there is an underlying assumption for people that, if we can get these services provided to people with disabilities somewhat to the same level as ordinary citizens receive, we will have achieved something. That is the aim. I wonder whether there should be a far more proactive aim that they should receive the same level of service as a right and not just as a substitute. For example, the National Relay Service provides this video communications service. It is actually really still second best, isn’t it?

Mr Knox —Yes, that is right.

ACTING CHAIR —It should be a national aim for everyone to have voice conversion.

Mr Knox —That would be thoroughly admirable. We would support that 100 per cent.

ACTING CHAIR —I raised that because, in your submission, you have more or less nailed your flag to the mast on the broadband provision. There are other issues involved as well, so your concerns become secondary to the availability of broadband.

Mr Knox —In the sense that the service we offer is controlled by the availability of broadband. The practicalities of it are that that is the case.

ACTING CHAIR —I think everyone has goodwill towards your needs, but the problem is that it is one of those areas that costs too much to deal with. So whether we can is a secondary issue.

Mr Knox —It does not necessarily cost that much at all. The capital expenditure on service and technology to provide access, using those broadband technologies, is quite small. The real expense is continuing operating expenses in that you have to provide people who are skilled in Auslan to be able to video interpret, if we were to look at a video relay example. The concern is that there is extra cost there, and there may be extra call minutes, but what I expect to see happen is some translation of the service, some displacement activity. Many people would displace away from the conventional TTY based service and move towards a video service. So it is not simply that you would be adding extra minutes and it is an extra cost. Secondly, there is a very substantial productivity improvement there. It takes a long time to communicate a small amount of information using a conventional TTY relay service. You can achieve the same information exchange in a much shorter time using video relay, and we get paid by call minutes.

ACTING CHAIR —So, at the moment, the main hindrance to your client receiving the service is a legislative shortcoming. The department has said to you that you cannot have this link because there is no provision in the legislation, whereas it is prepared to pay you an extra million dollars uncapped to provide the service yourself.

Mr Knox —Yes, that is correct.

ACTING CHAIR —But it is not prepared to provide a fraction of the amount to make the connection?

Mr Knox —You are right.

ACTING CHAIR —How can we eliminate this problem? What sort of legislative changes do we require?

Mr Knox —Make the legislative change that rewrites the definition of a standard telephone service within the universal service obligation.

ACTING CHAIR —So there is a special clause for disability service?

Mr Knox —Yes, for a definition of the standard telephone service. That is the key gatekeeper that controls access to the NRS and the services and functions and benefits that flow from that. If the Senate or the parliament were to rewrite that definition in such a way that it was technology neutral but specified the benefits and level of service to be provided to disabled or hearing impaired Australians or deaf Australians, then the newer technology can be brought in as it evolves. What is key is that it is about comparable service provided on equal, fair and equitable terms rather than trying to specify technologies that the service can be delivered on. As soon as you do that you lock yourself into copper. Technology moves on and, if it arrived via an IP based network over optic fibre, ‘No, we can’t fund that.’ It is the same thing; it just arrived under a different format. Because the definition is written in technology determinant way, you are locked out. You are locked into that; you are frozen. What I am suggesting is that the cost may be maximised rather than minimised by that definition.

ACTING CHAIR —Can you make an estimate, from your experience of providing NRS, of how many connections would be required nationally? How many people need to be connected onto broadband?

Mr Knox —Before the service would take off? We are at that stage now. We are at a tipping point now.

ACTING CHAIR —No. For example, if this broadband service—

Mr Knox —How many people would use it?

ACTING CHAIR —Yes, how many people would be using it.

Mr Knox —Potentially 50,000 Australians. The latest statistics from the ABS indicate that there are just over 47,000 Australians who classify themselves as deaf. Of course, not all of those have access to broadband, but that is what you are looking at in terms of the market size—50,000 Australians.

ACTING CHAIR —How many people actually use the NRS at the moment?

Mr Knox —At the moment we handle 50,000 calls a month, so roughly 600,000 calls a year. I could not say exactly how many different people use the service.

ACTING CHAIR —Thank you very much.

[4.26 p.m.]