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Environment and Communications Legislation Committee
27/02/2018
Estimates
COMMUNICATIONS AND THE ARTS PORTFOLIO
Australian Communications and Media Authority

Australian Communications and Media Authority

[17:13]

CHAIR: Welcome, Ms O'Loughlin and the rest of the team from ACMA. Is there an opening statement or are you happy to proceed to questions?

Ms O'Loughlin : No opening statement, thank you.

Senator CHISHOLM: Minister, I think it's two years this month that ACMA has been without a permanent CEO since Chris Chapman's term expired. Where is that at?

Ms O'Loughlin : That's me.

Senator Fifield: Ms O'Loughlin is chair and CEO.

Senator CHISHOLM: Is that a permanent arrangement?

Ms O'Loughlin : Yes.

Senator CHISHOLM: And when was that announced?

Ms O'Loughlin : I commenced in October last year.

Senator CHISHOLM: That's a change in structure from how it was previously?

Ms O'Loughlin : I think what you're referring to is: under the ACMA review that was conducted, there was a recommendation coming out of that that there should be a separation between the chair position and the agency head or CEO position. That hasn't occurred as yet, as the government is going through the process of appointing new deputy chair and members—or permanent deputy chair and permanent members, sorry.

Senator CHISHOLM: What were the other recommendations from the final report?

Ms O'Loughlin : There were 27 or so recommendations from the final report. Some of those came to the remit of the organisation; some of them came to the structure of the authority and how it goes about its decision-making. Probably one of the key changes in terms of the authority would be more full-time members, similar to the model that's used by the ACCC where there are full-time members who have particular areas of responsibility across the agency, and that allows decision-making to be done in a speedier, more transparent fashion, and was also supported by the stakeholders who submitted to the review. So there is a range with that. There is a range with: what is our remit? Obviously we've traditionally looked at broadcasting, radiocommunications, telecommunications and online content, and what the government wanted to do was to make sure that our remit was broad enough to look at the entire communications sector. Even if we don't intervene, at least we would be able to look at issues arising right across this rapidly changing sector. There were a number of recommendations which were consistent with other regulator arrangements, such as the provision of a statement of expectations from the government, responded to by a statement of intent from the organisation. We're working on that with the department at the moment. There were some further recommendations, into the agency, around increased transparency as to what we were doing, how we were going about it and particularly authority decision-making. Those were some of the ones that fall into the agency. Then there were some recommendations to the government about changes to the legislation of the ACMA to embed those changes into it, around roles and responsibilities, remit and the skill set of the authority, and that is still being worked on at this stage.

Senator CHISHOLM: So does that mean that, at some stage, a new chair will be appointed?

Ms O'Loughlin : No. I'm the new chair.

Senator Fifield: As of 14 October last year, to be precise.

Ms O'Loughlin : What will happen is: once a permanent deputy chair has been appointed then, under the PGPA Act, I, as the agency head, will delegate some of my responsibilities to the deputy chair, who will then also be the CEO.

Senator CHISHOLM: Moving on to the media law changes and media diversity, Minister: since the Turnbull government's changes to Australia's media laws passed the parliament last year, there've been a number of closures of media operations, including the Crinkling News and the Blacktown Sun, that I'm aware of. Doesn't this just prove that the interventions by the government in terms of media laws have been inadequate?

Senator Fifield: No.

Senator CHISHOLM: But all that's led to is actually—there've been no other changes, other than—

Senator Fifield: I don't think you can draw cause and effect. I don't think the Crinkling News and their decisions to cease operations can, in any way, shape or form, be related to the government's media reform legislation that passed the parliament.

Senator CHISHOLM: So the fact that it has actually led to less media—

Senator Fifield: I'm not accepting the premise of your question that there's a causal link between the passage of that legislation and that. I can't, for instance, see how the 75-per-cent-audience-reach rule or the abolition of the two-out-of-three rule was relevant to the Crinkling News, for instance.

Senator CHISHOLM: So you're saying that, even though the evidence so far has been that there has been less media, you're saying that this is isn't the fault of the legislation that was passed?

Senator Fifield: Absolutely I'm saying that, because the Crinkling News was not subject to the two-out-of-three rule or the 75-per-cent-audience-reach rule. They certainly wouldn't have been paying licence fees. Just because an event has happened after another event, you can't say that one has caused the other.

Senator CHISHOLM: I specifically want to ask about public interest journalism. What policy announcements did the Liberal government take to the 2013 election to support public interest journalism?

Senator Fifield: Senator, the coalition had going into the last election—

Senator CHISHOLM: Sorry: 2013.

Senator Fifield: The 2013 election—I was thinking of my time as minister. I wasn't the shadow minister in 2013, so I can't be of assistance there.

Senator CHISHOLM: What announcements did the government make in 2014 and 2015 to support public interest journalism?

Senator Fifield: In 2015, when I became the minister, I think, fairly early in my tenure, I indicated that I was keen to progress media reform to address—

Senator CHISHOLM: I'm just trying to be specific about—

Senator Fifield: I am going to be specific, Senator—to address media reform, to deal with some of the outdated media ownership laws in the country because, if you provide media organisations with more options in terms of their dance partners and how they configure themselves, you give those organisations the opportunity to get scale and be in a better position to pursue journalism. When you're more viable, you have a greater capacity to employ journalists and support the important work that they do.

Senator CHISHOLM: And what about the 2016 election? Was anything specific taken to that election with regard to supporting public interest journalism?

Senator Fifield: Again, by 2016, we had a fully formed proposition which had not been supported previously by the parliament, so it remained a policy, as opposed to a reality, at that time. Again, the focus was on assisting Australian media organisations to be in a better position to compete and, if you're more viable, you're in a better position to employ journalists. I should also add that, of course, there is the government's ongoing commitment of more than $1 billion a year to the ABC and also a couple of hundred millions dollars a year to SBS. That funding to those public broadcasters is a very important underpinning of public interest journalism in Australia.

Senator CHISHOLM: Leaving aside media reform, which I understand your argument to be that that does assist public interest journalism, there was nothing specific proposed before the 2016 election?

Senator Fifield: I think what we proposed was very specific, very practical, and I'm not aware that any other party had a concrete proposition other than ours to do something that would put media organisations in a position to be stronger and better placed to employ journalists.

Senator CHISHOLM: From a government point of view, do you think you have done all you can to support public interest journalism and news media in Australia and, now that the media reform is in place, you can say, 'Job done?'

Senator Fifield: I've never said that. What I've said is that we had some concrete propositions that we wanted to progress, and we have progressed those against some strong resistance from some parts of the parliament—namely, those who sit opposite the chamber to us. We were, with the support of members of the crossbench, able to secure the passage of those.

Senator CHISHOLM: What role do you expect ACMA to play in public interest journalism?

Senator Fifield: ACMA has an administrative role in relation to some of the measures that we announced as part of our negotiations for media reform, which Ms O'Loughlin will talk to.

Ms O'Loughlin : As part of the media reform package, there are a number of new programs to support particularly small publishers and regional media organisations. There's a Regional and Small Publishers Innovation Fund, which is $50 million over the forward estimates, which is a competitive grants program for initiatives that support the availability of Australian civic journalism. The ACMA will be responsible for the administration of that program. We'll also be setting up an advisory committee to advise us on making decisions around those grants. There are two other programs: the Regional and Small Publishers Cadetships Program, which is $8 million, to support 200 cadetships, and the regional journalism scholarships, which is $2.4 million, to support 60 regional journalism scholarships. Those two latter programs are being run by the department, and I'm sure they could add to any comments that I've made. We'll be responsible for the innovation fund package, and we're hoping to announce—open the first grant funding round of that grant program in the coming months and the government has nominated June 2018 as the date when the first successful applicants should be announced.

Senator CHISHOLM: I think it would be hard to claim the Regional and Small Publishers Innovation Fund is some sort of great achievement of the government, given it was something cobbled together to convince the crossbenchers to support your media rules.

Senator Fifield: It is an achievement of the government, because the government will be legislating for it where necessary, the government will be appropriating money for it and the government will be administering it. If the government wasn't doing those things, and hadn't agreed to it, it wouldn't happen. But let me just very briefly, Senator Chisholm, take you through what I think our contribution to public interest journalism has been, in summary: ongoing funding for the ABC, a critical underpinning of public interest journalism; ongoing funding for SBS, a critical underpinning for public interest journalism; abolition of the two-out-of-three rule, which will provide a wider range of options for Australian media organisations; abolition of the 75 per cent audience reach rule, which will provide a wider range of options for Australian media organisations; abolition of broadcast licence fees, and the replacement with a lower and more rationale spectrum charge, and that is for both TV and radio; also the regional journalism scholarship scheme, the regional and small publishers scheme and the Regional and Small Publishers Innovation Fund. These are all concrete practical, real and—with the exception of ABC and SBS funding—things that were not supported by those who sit opposite us in the parliament.

Senator CHISHOLM: Are you aware that the Crinkling News was broadly understood to be eligible for support under the Regional and Small Publishers Innovation Fund but couldn't hold out long enough for the funds to flow?

Senator Fifield: It's up to each individual media organisation to determine for themselves whether they meet the criteria to be eligible for those programs I mentioned. And obviously, being eligible does not necessarily guarantee that an applicant would be successful. Can I say that our whole package would've passed the parliament much sooner had it enjoyed the support of the opposition.

Senator CHISHOLM: Was it your understanding that the Crinkling News would've been available—would've been eligible, minister?

Senator Fifield: I don't know, because as I say, it's up to individual media organisations to determine for themselves if they are eligible to apply.

Senator CHISHOLM: The ACMA's annual report 2016-17 states on page 17:

Our Local content in regional Australia—2017 report found that television and print media are the most preferred sources regionally …

However, only last week, Fairfax announced that delivery of newspapers in Far North Queensland is to halt from next month because of the need to find further efficiencies. This is a marked reduction in media diversity in Far North Queensland, an area with substandard broadband connectivity. Does this concern you at all, minister?

Senator Fifield: I stand to be corrected, but I think that decision you referred to was the distribution of southern mastheads in those states. You'll correct me if I'm wrong.

Senator CHISHOLM: My understanding was that it was The Age and The Sydney Morning Herald

Senator Fifield: That's right: southern mastheads, not publications indigenous to northern Australia. That's my understanding.

Senator CHISHOLM: Yes, but it was read up there and was delivered and adds to media diversity, because there's only one type of newspaper up there now.

Senator Fifield: I make the observation that online access to publications remains and it is a matter for media organisations as to how they choose to distribute their product.

Senator CHISHOLM: So it doesn't concern you at all?

Senator Fifield: That is a commercial decision for those media organisations. I observe it hasn't always been the case that you can get southern papers in the north and northern papers in the south. Over time, distribution arrangements of media organisations will change.

Senator CHISHOLM: Queenslanders often have a national view of things, as I'm sure you'd be aware.

Senator Fifield: I take what you say at face value, Senator Chisholm.

Senator CHISHOLM: On the Regional and Small Publishers Innovation Fund, would you agree that this is direct financial support from government for journalism?

Senator Fifield: It's to assist media organisations that are eligible in the regions, and small publishers, to improve and enhance their business processes in what, for them, is a challenging environment, and it is a time limited program.

Senator CHISHOLM: Is it government support for more journalism?

Senator Fifield: It is a mechanism by which we are seeking to support public interest journalism.

Senator CHISHOLM: I want to draw your attention to some additional comments that Liberal senators made in the final report to the public interest journalism inquiry. They said:

Some of the ideas considered in the report, such as a new and vaguely defined Commonwealth body to offer direct financial support for journalism, are fraught with danger and could radically change the relationship between government and independent media.

Senator Fifield: I don't think that describes what we're doing. Just repeat the quote, if you wouldn't mind.

Senator CHISHOLM: It said:

Some of the ideas considered in the report, such as a new and vaguely defined Commonwealth body to offer direct financial support for journalism, are fraught with danger and could radically change the relationship between government and independent media.

Senator Fifield: We haven't set up a new and vaguely defined body.

Senator CHISHOLM: You would argue that there's no inconsistency with what the Liberal senators have said with regard to the future of public interest journalism inquiry and what the government have set up?

Senator Fifield: Correct.

Senator CHISHOLM: Given where we are at with public interest journalism in Australia, will the Turnbull government respond to the report of the future of public interest journalism inquiry—

Senator Fifield: Yes.

Senator CHISHOLM: and, if so, when can we expect that?

Senator Fifield: We will reply in the ordinary course of events.

Senator CHISHOLM: We know when we get 'ordinary course of events' from you that it can often mean a long time. I think we have had some examples of different reports waiting hundreds of days.

Senator Fifield: The parliament is prodigious in its production of committee reports.

Senator CHISHOLM: Yes, but, Minister, you're not prodigious in your response.

Senator Fifield: We respond to all parliamentary committee reports as required.

Senator CHISHOLM: Minister, yesterday the ACCC released an issues paper for public comment as part of the digital platforms inquiry. Are you aware of that?

Senator Fifield: I certainly am, because it was the government, through the Treasurer, who gave the ACCC the reference to undertake this body of work.

Senator CHISHOLM: The consultation includes a link to a very brief ACCC consumer questionnaire to collect information on how Australians use digital platforms; what news they access through digital platforms; why they use digital platforms instead of other sources like media companies' websites, newspapers, TV or radio; and whether digital platforms impact the quality or diversity of views and news. Do you have any insight as to why the ACCC is conducting a survey in this manner using this methodology?

Senator Fifield: That is a question that should be directed to the ACCC, who operate independently and conduct their inquiries as they see appropriate.

Senator CHISHOLM: So you don't see that this type of research questions that the ACCC are exploring, are those one might expect the Communications and Art Research to undertake or ACMA to undertake?

Senator Fifield: The ACCC have been given a reference by the Treasurer and they are executing that reference.

Senator CHISHOLM: Ms O'Loughlin, would ACMA confirm if the ACCC have approached them to inform the digital platform inquiry in any way, or are the two agencies going to collaborate on the conduct of that inquiry?

Ms O'Loughlin : We've seconded somebody from the ACMA across to that inquiry, because of the information that the ACMA holds, which may be very useful to the ACCC to inform their inquiry. We're working quite closely with the ACCC. We also of course would be providing submissions into their process but we've got a lot of internal information that may be helpful for them. It's quite a broad reference around digital platforms, including things like advertising, which has a competition element to it, as well as the focus they've described in the issues paper about data and the issue raised around news reporting. So it's a very broad reference. We're feeding in the information we can from outside.

Senator CHISHOLM: Does ACMA currently undertake research on media diversity in Australia in the context of the contemporary media environment that includes digital platforms that would be relevant? Or is this going to be new additional work?

Ms O'Loughlin : I think you'll find that it will be some new insights. We certainly undertake analysis of the changes in media ownership and diversity within our regulatory remit. The ACCC has a slightly broader view given through this reference to look right across digital platforms which of course we don't regulate as well as the existing media landscape.

Senator CHISHOLM: Does ACMA have any plans to undertake research to access the reach, consumption and influence of various sources of news in Australia?

Ms McNeill : No specific research projects of that kind are planned at the moment.

Senator CHISHOLM: Ms O'Loughlin, given the degree of influence approach continues to be the regulatory policy under the Broadcasting Services Act and given there is a bill before parliament extending the operation of that regulatory policy to online content services in relation to gambling promotions during live sport, how will ACMA assess the relative degree of influence of various media platforms in Australia?

Ms O'Loughlin : As Ms McNeill mentioned, we're not actually undertaking active research in those areas. I think the online gambling bill has got a different policy intent behind it, which is to provide protection of children from online gambling between 5 am and 8.30 pm. I think there is a strong community concern about gambling advertising. We are undertaking two pieces of work in that regard. We're working with the broadcasters around updating their codes of practice around advertising on free-to-air television and subscription television. Plus we will also be working with the department around the online gambling legislation once it's introduced and passed.

Senator CHISHOLM: I just wanted to move on to the 3.5 gigahertz spectrum licences held by the NBN. What is ACMA's position on those spectrum licences held by the NBN, and does ACMA have a view about whether the spectrum is being put towards its highest value use?

Ms O'Loughlin : We did listen in to your questions earlier with the department, both on this aspect and also the wireless internet services provider issues.

Senator CHISHOLM: I was going to come to that one.

Ms O'Loughlin : Yes. So perhaps it might be helpful if I give a bit of context and insight from our side about what's happening in spectrum at this point in time, which I hope will come to give you some insights for your questions. Over the last four or five years, we've actually seen a significant change in demand for spectrum. It's an increasingly fast-paced area of our remit. For many years, spectrum has been relatively quiet, I'd have to say, but, with the increasing use of mobile phones and the introduction of the internet of things, we're seeing a significant shift in what industry wants spectrum-wise to deliver new services. So 3.6 became the focus of specific attention through the International Telecommunication Union harmonisation processes, and we found that the local mobile operators really want to get into the 3.6-gigahertz spectrum and they want to get into it as fast as possible so they can start offering 5G services to regional and metropolitan areas of Australia. So that's really ramped up the demand in that area.

The ACMA started a process over 18 months ago to look at moving that 3.6 spectrum to its highest value use and working with the incumbents in that spectrum to make sure that they were aware of where we were heading and make sure that we could attempt to mitigate the impact on them, which is what we've been doing for the last 18 months. We did a highest value use analysis, we did consultation processes and we've been working with the WISPs and developing our thinking about other areas of spectrum that they could potentially use, which we're working hard on at the moment. We also looked at giving them a long term of remaining in the spectrum so that they had time to adjust their business models.

That's what we've done with 3.6. I would expect that, once we get through that 3.6 process, which is the highest priority for the local market, we will turn our attention to other spectrum bands where, similarly, the demand for that spectrum may have evolved rapidly over the last four or five years, including 3.5 and 3.4. I'll ask Mr Tanner if he wants to add anything to those comments.

Mr Tanner : I just make the comment that NBN actually holds a fair bit of spectrum in the range 3.4 to 3.5. Most of its 3.4 holdings are actually in the form of spectrum licences. Those are 15-year licences that are paid for up-front. They were last renewed in 2015. NBN holds those—it effectively owns a lease on those for 15 years. NBN also holds apparatus licences over, I think, about 75 megahertz of spectrum in 3.5. Those are much shorter durations. If you were going to pursue that line, I just wanted to tease out that NBN has two kinds of licences and a fair amount of spectrum in that range.

Senator CHISHOLM: Coming back to your response, Ms O'Loughlin, the question I put was around the NBN licences in particular and ACMA's view about whether the spectrum is being put towards its highest value use. Thank you for your explanation, but effectively you said it's not something that you're focused on at the moment but it's something that you will look at.

Ms O'Loughlin : We're aware of some concerns in the industry that NBN have spectrum which they feel would be better placed onto the market. We're aware of those issues. We haven't come to a view on aspects of that at this point in time, but I think, in a general sense, we look at any number of bands of spectrum each year and we report on it through our five-year spectrum outlook around what we might be doing and what we might be looking at.

Senator CHISHOLM: So, particularly on the NBN spectrum, there's been no cost-benefit analysis or opportunity cost analysis, like you've done on the other—

Ms O'Loughlin : We haven't undertaken a formal cost-benefit analysis at the moment. We've been focused on the 3.6-gigahertz band, where we did do a full cost-benefit analysis, which has led us to our conclusions.

Senator CHISHOLM: Regarding the NBN 3.5-gigahertz licences, their duration, I think, was up to two years.

Mr Tanner : The spectrum licences in 3.4 run for a long time, another 13 years or so. The apparatus licences I'd have to take on notice. I recall that they may come up again this year, but I'd have to check that.

Senator CHISHOLM: On that, I'd also be interested in when payment for the spectrum was received, and when any future payments would be received.

Mr Tanner : Yes, I can answer that question for both the apparatus and the spectrum licence holdings.

Senator CHISHOLM: Can you answer when the licences are due to expire as well?

Mr Tanner : Yes.

Senator CHISHOLM: Can ACMA confirm how many sites the NBN Co has registered in metropolitan licence areas using the 3.5 gigahertz spectrum? And do you have visibility into whether the frequency is being transmitted?

Ms O'Loughlin : I think that's probably a matter for NBN.

Mr Tanner : We'd have to check our records.

Senator CHISHOLM: Could you take it on notice?

Mr Tanner : Yes, certainly.

Senator CHISHOLM: I understand that back in 2014, it was ACMA who identified that area-wide apparatus licences with the 3.5 gigahertz frequency band may be suitable to assist NBN achieve its objectives, and that this arose because there was a spectrum gap for premises in areas surrounding major capital cities, due to Optus owning 2.3 and 3.4 gigahertz licences in the fringe areas. What other bands did ACMA identify as potentially suitable at the time?

Mr Tanner : I wasn't closely involved in that work, but my recollection is that the ACMA was asked to find a band where suitable spectrum for NBN, up to about 80 megahertz, was substantially available. The ACMA identified that some largely vacant allocations in 3.5 were the candidate. I wasn't aware that there were others, but I should make clear that I think the criteria were that we were looking for spectrum which was of utility for fixed wireless broadband, which is the application NBN wants to put it to. And that tends to direct you to spectrum which is also of utility for mobile wireless broadband—so it tends to be the spectrum which has a high value, potentially, for mobile network operators as well. I'd have to take on notice what other bands we may have looked at, but we did not—that I'm aware of—find any close-second bands or other potential candidates where there were such large blocks of largely vacant spectrum potentially available in metro areas. There were particular historical reasons why, with the 3.5, there were two large blocks vacant there. But that didn't apply in other bands that were potentially of value for NBN's application.

Senator CHISHOLM: Ms O'Loughlin, with regard to the spectrum issue, I think you touched on the World Radiocommunication Conference. Based on recent deliberations with the ITU and the WRC, does ACMA have any perspective on when 3.5 gigahertz will be commercially deployed internationally?

Mr Tanner : What's occurred since the 2015 world radio conference has been that global interest has focused on the spectrum 3.4 to 3.8, that range, as the first band for the rollout of 5G wireless broadband services. That is a development that, as I think Ms O'Loughlin made clear, has happened fairly quickly. My recollection is we became aware of it, really, in 2016 after the world radio conference. In fact, in 2016 we were canvassing with the industry when we would begin the reviews of the uses of certain bands that we were seeing as candidates for mobile broadband. We received strong submissions in 2016 that we should elevate the priority of 3.6, because it was in that range of 3.4 to 3.8. I would say that it was really in 2016 that we became aware of widespread global harmonisation. And, as Ms O'Loughlin explained, the upshot of that, or one consequence, has been very strong interest from some of the carriers—including, I should say, NBN—in 3.6 having priority.

Senator CHISHOLM: What alternative bands could be used to deliver fixed wireless that are not globally aligned for 5G?

Mr Tanner : I might see if my—

Ms O'Loughlin : It might be quite a technical question.

Mr Tanner : senior engineer might have something to say on that. My understanding is that, in general, bands that are planned for or are internationally harmonised for mobile broadband, wireless broadband, are going to be useful potentially for fixed broadband as well. It is similar equipment; it is a similar use; it is just that the mobile broadband is hitting moving rather than simply fixed targets, which somewhat changes the cell size and things like that. He seems to think that's an adequate start. So there are quite a few bands internationally. Typically though, those bands in Australia have been allocated for what are spectrum licenses quite often, not always, for wireless broadband use. They are the bands but they are tightly held.

Senator CHISHOLM: If there is more information, maybe it could be provided on notice.

Mr Tanner : I would be happy to do that.

Senator STEELE-JOHN: The first question will continue in the tradition of going to the minister. Would you be able to advise when the new consumer protections in relation to the NBN announced by yourself on 21 December will be implemented? Do you have got a copy of the media release there?

Senator Fifield: I thought I had it here but I don't. I will ask officers to speak to that.

Ms O'Loughlin : What the minister announced on 21 December was a suite of new rules that the ACMA would be putting into place to improve the experience of customers at they move to services provided over the NBN. That came out of some research that the ACMA had done last year and some information gathering that we did from the industry which pointed to us that there were a considerable number of complaints around things like connection issues, service quality and faults.

We have developed a suite of rules and there are five of them. The first one is for when people are thinking about what they need as an NBN service. So what we are developing is what we call a consumer information industry standard that is going to specify the minimum information that the telcos have to provide about their services, provided on the network before people sign up, so we hope that that will solve that problem of not having the right information to make a decision about your service.

The second one is really around what happens when you get onto that service. We are looking at a line testing determination so when people get their NBN service, the telcos test that line to make sure it is working effectively before they exit the field. We are also putting in place a connection assurance industry standard so that if consumers lose their NBN service, they can be reconnected to their legacy service or to another service so they are put back with into service as quickly as possible.

We will also have a complaints handling industry standard. What we found in our research was that people were very concerned about how complaints were being handled. That standard will specify minimum standards for telcos' complaints handling processes. We are also putting in place some record keeping rules so that telcos need to report all their complaint numbers that they receive to the ACMA so we can monitor those. The intention is that we will be consulting on a number of these pieces in March or April and we will have all those rules in place by the end of June this year.

Senator STEELE-JOHN: Fantastic. I am not sure if this should be to you or the minister. Can you provide an update regarding the review of the telecommunications consumer protection code of practice review.

Ms O'Loughlin : The TCP code is currently being reviewed. We are working quite closely with comms alliance on that code. As at January this year, there were about seven meetings of the TCP code working committee, which started last year. Comms alliance, who are developing that code, are expecting a draft code will be released for public consultation later in 2018. What we are doing is working quite closely with comms alliance because there is a complaints-handing chapter in the TCP code, and we're working with comms alliance about what stays in the code but also what will now be elevated into the standard so it's directly regulated by the ACMA. I might just ask Ms McNeill if she wanted to add anything else on the TCP code.

Ms McNeill : If you're interested in the issues that are being considered in the working committee, I'm happy to take you through those.

Senator STEELE-JOHN: I would like to know what are the priorities with respect to the review, if that is possible.

Ms McNeill : To date, the committee has identified issues and has considered them, including initiatives to improve customer service, credit management and financial hardship protections, improving safeguards for third-party mobile charges, and ensuring that the TCP code provides appropriate safeguards for services supplied over the National Broadband Network. So most of the TCP code provisions were put in place back in 2012, in effect—the substantive provisions. At that time, a lot of the provisions were directed to particular issues in the sale of mobile products in the mobile market. There is a need to test that it is well adapted to deal with the contemporary environment and in particular services provided on the National Broadband Network.

Senator STEELE-JOHN: Lovely. Would you be able to provide that list to my office or to the committee more generally?

Ms McNeill : Certainly.

Senator STEELE-JOHN: And would I be able to ask how you formulated that list?

Ms McNeill : These are the issues that different people have brought into the committee so far. The working committee comprises four industry representatives and two consumer representatives. It has an independent chair, and there are three government organisations who are observers; the ACMA is one of those. Some of these issues are issues the ACMA has been keen to see pursued, but others have been brought into the committee by other participants.

Senator STEELE-JOHN: Thank you. While we are on questions around time frames, would you be able to give me some clarity around the time frame with respect to the foreshadowed review of safeguards in consumer protection, or are we talking about the same thing?

Ms O'Loughlin : The review of telecommunications consumer protections per se is a matter for the department.

Senator STEELE-JOHN: Right.

Mr Mrdak : Work is underway in relation to the consumer safeguards review. We are scoping that work inside the department. We anticipate that over the next few months we will have an initial piece of scoping work which we will make available to minister and staff in discussing more broadly with the industry.

Senator STEELE-JOHN: Within the next few months. Do you have a ballpark month in mind?

Mr Mrdak : Not at this stage. It's a piece of work we are trying to do at the moment with another piece of work, a universal service guarantee. They're intertwined. We're in those early stages of the government's announcements of the principles around the universal service guarantee. We want to do the consumer safeguards planning work in the lead-up to that work.

Senator STEELE-JOHN: Thank you. Will the review examine the weaknesses of consumer protection frameworks that rely on self-regulation?

Mr Mrdak : Yes, we will. We're also looking at the interrelationship with the Australian consumer law.

Senator STEELE-JOHN: All right. Fantastic. That is very useful. I have just two more. Would you agree that the provisions relating to credit assessment need to better protect vulnerable consumers?

Mr Mrdak : I don't think I'm in a position to give you a view on that.

Senator STEELE-JOHN: No, it may well be the minister or ACMA.

Ms McNeill : Senator, I suspect that this is a reference to an issue which has arisen in the TCP code review committee. I know that there are some members of the committee and others who take the view that the current provision in the TCP code, which really requires a credit assessment to be undertaken by providers, is focused on protecting the providers' own interests—will it be able to collect its money? There is a view that there should be more of a focus on the consumer's capacity to pay and that some consideration should be given to whether a consumer who subscribes to multiple services is in a position to service the obligation that they're taking on. That is a live issue in the TCP code review process.

Senator STEELE-JOHN: And that has been an issue that has been raised with me personally via stakeholders as well—the lack of those kinds of assessments of somebody's capability mixed with heavy-handed sales tactics, resulting in people being stuck with contracts they can't afford to pay, and a very lopsided approach in relation to that. It is good to know that that's on your radar anyway. I think that's it. Thank you very much for your time.

CHAIR: Senator Patrick.

Senator PATRICK: Thank you, Chair. I have just a couple of questions relating to section 123 of the Broadcasting Services Act, around codes of practice. Subsection (4) of that act says that, 'if a group representing a particular section of the broadcasting industry develops a code of practice', the ACMA has to be satisfied that 'members of the public have been given an adequate opportunity to comment on the code'. I would like to know what constitutes 'adequate opportunity to comment on the code', in your view?

Ms O'Loughlin : I think that's almost a case-by-case basis. But, in most cases, we look to the industry associations—for example, advertising widely that the code is being reviewed, and looking at how they have provided that code to people who may be interested in the code. We would look to those types of arrangements. We would look at how they have dealt with people who may have complained previously to them about issues around the code. We would take all of those issues into account when the code came back to us for registration.

Senator PATRICK: But do you ask that question, such that you can be satisfied that, as you approve a code, you're satisfied that adequate public consultation or comment has been obtained?

Ms O'Loughlin : Most of the industry associations tell us up-front what they're going to do, and then we look at what they have done at the back end.

Senator PATRICK: Is it possible to give some examples—perhaps on notice—of how that has been done in the last couple of years with a code that has been approved?

Ms McNeill : Are you after information about steps that industry bodies have taken to publicly consult?

Senator PATRICK: Yes.

Ms McNeill : Or are you after information about how the authority assures itself that consultation has been adequate? I might say, it is only a requirement for 'adequate consultation', not 'optimal' or 'perfect' or 'the way we would have done it'.

Senator PATRICK: Sure. I understand. And often these things are open to 'beauty is in the eye of the beholder'. That is in some sense the origin of the question: how do you determine that? Maybe you could give a couple of examples of the last few times that you have approved a code, and what was done by industry and how you examined that to make sure it crossed that threshold.

Ms O'Loughlin : We can take that on notice for you.

Senator PATRICK: Thank you very much. I have one further question. In that same section of the code, it states that 'films classified M may not be broadcast before 8.30 pm, and MA before 9 pm on commercial television'. There are some other rules around school days. However, when you go to the commercial television industry code of practice, they allow M rated programs from 7.30 and MA from 8.30, but still subject to the act. I don't know whether that's a hangover from the fact that the code has perhaps been published before a change in the provisions of the act, so they have given themselves some wiggle room. But I just wonder why they're different. One says 8.30 pm for MA—and that's in the law—and the code says 9 pm for MA 15+.

Ms O'Loughlin : Ms McNeill has reminded me that one refers to films, and the other refers to television programs.

Ms McNeill : Senator, the fact is that the act will override the code—

Senator PATRICK: I understand that. Yes.

Ms McNeill : to the extent of any inconsistency. But the act is about films. That is a particular subcategory of content, and that's the way we've approached those two sets of obligations.

Senator PATRICK: Okay, in some sense one is about film. But wouldn't you expect any material, if it's a film, broadcast on television to hit the same time frame?

Ms McNeill : That's not the way that those two rules currently interact.

Senator PATRICK: I might, with your permission, Minister, just get a background brief on this to help me through that?

Senator Fifield: Absolutely.

Ms McNeill : Certainly.

Senator CHISHOLM: The minister didn't want to leave before talking about WISPs, I'm sure! Turning to ACMA's work on the 3.6 gigahertz spectrum and with regard to the WISPs: did ACMA do any analysis of the number of customers currently receiving a broadband service from these businesses?

Ms O'Loughlin : I might just check with Mr Tanner on that.

Mr Tanner : We did look at and model costs to WISPs if they were forced to do their business in a different way owing to the loss of the band. But I don't have top of my mind how deep we drilled down into issues about the numbers of their customers. I'd have to take that on notice.

Senator CHISHOLM: Okay. So—

Ms O'Loughlin : If I could just add to that? The cost-benefit analysis we did looked at both quantifiable and unquantifiable costs and benefits. We did look at the benefits of changing the use of the band. That ranged from $86 million to $1.8 billion, and the quantifiable costs ranged from about $47 million to $144 million. So there was a significant additional benefit of changing the use of the band.

But in that regard, we also looked at the unquantifiable costs which would occur if the WISPs were unable to continue providing the services, and at benefits, including access to news services, that were not quantifiable. As I mentioned, we proposed that WISPs can continue providing services during the transition phase. We have given them a uniquely long reallocation period, giving existing services a seven-year right of access. And early allocation of spectrum licences to any purchasers at auction are conditional on not causing interference to existing services—that is, the WISPs. So we have given the WISPs a very strong bargaining chip to negotiate with spectrum licencees, either for compensation for early clearance or for ongoing access to the band beyond those seven years.

We are also undertaking identification of alternative spectrum auctions in both existing and future apparatus licence—point-to-point-multipoint. That's around the 5.6 gigahertz band, and also looking at where there might be other spectrum available. We have also indicated to the WISPs that we'll have our planning work done by the auction so that they have some certainty about their transition pathway.

We have taken their concerns extremely seriously over the last 18 months, and we've put in place measures to mitigate the impact on them—and, of course, on their customers.

Senator CHISHOLM: I think the thing that concerns me is that you don't know how many hundreds of thousands of Australians are potentially going to be impacted by this.

Ms O'Loughlin : I think that we have some information from the WISPs around that. It's around 200,000, I think? About that?

Mr Tanner : Sorry, I don't recall the number. I certainly believe that we've done some modelling and estimates, which we have tested publicly, but I'm not sure whether that's a categorical census of all the customers of WISPs. It's more likely to be modelling and estimates which we've tested and sought comment from WISPs on.

Ms O'Loughlin : But I think, Senator, that we have certainly taken the concerns of the WISPs very seriously, and the impact of this change on both the WISPs and their customers, in coming up with what we think are a range of mitigation strategies to help them through this transition process.

Unfortunately, if we do not clear the band we can't allow 5G services to be introduced in those bands. We think that those 5G services are potentially for the benefit of significant numbers of customers in the future.

Senator CHISHOLM: Just for my own knowledge: why are WISPs unhappy with the move from the 3.6 to the 5.6? You touched on a little of what you're doing to try to address their concerns, but are there any further consultations that will take place regarding this?

Ms O'Loughlin : Absolutely. We've got to move through a process now. We have provided advice to the minister; it's his decision as to how this reallocation process will occur. Once the minister has made his decision, if he's made the decision in line with some of the recommendations we give to him, we'll move into an implementation process where there's extensive consultation done with the WISPs and other affected incumbents. There is also developing the 'product', as we call it, to go to auction.

Senator CHISHOLM: And the first part of that was: why are the WISPs unhappy with the move from the 3.6 to the 5.6?

Ms O'Loughlin : In our experience, incumbents always find it challenging to move. But as I said at the beginning of my remarks, the demand for that spectrum has changed significantly since the WISPs were allowed to commence services in those areas. But we do find that incumbent transition takes time and takes a lot of effort on our side to make it as smooth as possible. We'll continue to work with the WISPs to make that occur. Of course, it will involve cost to them and uncertainty about whether they will be going in terms of spectrum. That's the stuff that we'll be working with them on in the coming months.

Senator CHISHOLM: Okay—

Mr Tanner : I was just going to add that we've had a number of issues raised by the WISPs. There was certainly a keenness from parts of the sector to continue to have access to 3.6 and to be able to get additional licences in 3.6. There was, I think, a request for us to remove the embargo so that they could get 3.6 licences in metro areas. There are concerns that the 5.6 allocation has some deficiencies, that maybe there is insufficient spectrum in individual areas if they wish to migrate. It's quite difficult for us to model what the impact is because they have such a long—seven years—guaranteed reallocation period, and a lot can change in that time. So there are actually a number of concerns.

I think that the complaint was made that 5.6 has a certain number of unlicenced services cluttering it. That's an assertion which we're keen to test, and we certainly have the powers to rectify that if it is a problem. They have raised a number of issues, both in favour of their continued access to 3.6 or even its extension. And they have reservations about 5.6, which we're taking into account. I should add that in the same time frame we're looking at another band, 28 gigahertz, that we think may be another fruitful area to give WISPs, or point-to-multipoint businesses—a technical solution for some of their problems. That 28 is not a solution for all WISP problems, by any means, but we think it's a very valuable, globally harmonised 5G band, where some small- to medium-enterprise applications can be profitably accommodated as well.

Senator CHISHOLM: Ms O'Loughlin, what are the options for and feasibility of ACMA putting a licence condition of sale of the 3.6 gigahertz spectrum in regional areas—I think it's area 3—to enable WISPs to continue to use the spectrum until a mobile network operator is ready to introduce 5G into regional Australia?

Ms O'Loughlin : We haven't thought through the auction parameters at this point in time. One of the reasons that we have agreed to such a long reallocation period is to see whether those arrangements between potential auction bidders and the WISPs would emerge naturally anyway. We are aware that there are some negotiations going on between potential bidders and incumbent WISPs.

Senator CHISHOLM: Minister, just in regard to these WISPs: they basically only exist because the broadband service from the NBN satellite isn't meeting the needs in these regional parts of Australia?

Senator Fifield: The satellite that NBN has is the one that was commissioned by the previous government. So I'm surprised to hear you reflecting on it in that way. But, obviously, where there are operators who see that they can provide a service that is complementary or an alternative then that occurs.

Senator CHISHOLM: Sorry, I missed the last bit.

Senator Fifield: Obviously, if there are independent providers who see an opportunity to provide a service that is complementary or which is an alternative to others then that will occur.

Senator CHISHOLM: Given the government stands to raise tens of millions of dollars from selling the spectrum, has any consideration been given to creating a fund to assist WISPs to purchase new equipment to operate in a new spectrum band? If not, why not?

Senator Fifield: The government hasn't yet made any decisions about spectrum, as the chair has indicated.

Senator CHISHOLM: Is that something the government would be willing to consider?

Senator Fifield: I want to consult and check as to whether there are precedents or not. If there is changed spectrum use over time, notice is given to enable operators to transition, but if the chair has anything to add, I'm sure she would.

Ms O'Loughlin : It's not normal that we do compensation for incumbents, particularly where they have been in spectrum which has been relatively unencumbered and relatively cheap for them to operate in. I think that would be the way I'd put it, Giles: we don't normally do compensation arrangements.

Mr Tanner : The apparatus licences are from one to five years. The only guarantees beyond that are some around law—we cannot have a reallocation period for spectrum licences of shorter than two years—and a lot around practice. The ACMA has always been very scrupulous, when it investigates changing arrangements in a band, to look for alternatives for services already that are already there, to consider their cases and look at mitigation, which is exactly what we've done with the 3.6 gigahertz band. Over time that has fostered a certain amount of confidence in our apparatus licensing arrangements, but I have to emphasise that apparatus licences run from one to five years and come with no guarantee of renewal or of compensation. The 15-year spectrum licences can be resumed only following compensation, and I'm not aware that, in the history of regulation of spectrum, we have ever resumed and compensated a spectrum licence.

Senator CHISHOLM: Minister, does the fact that a couple of hundred thousand regional and rural Australians would potentially be affected by this have any impact at all on you?

Senator Fifield: You're presuming that there won't be a transitioning of these operators to a different part of the spectrum and that there will automatically be a cessation of those services. I don't think premise is the case.

CHAIR: We will conclude the examination of ACMA there. Thank you very much.

Proceedings suspended from 18:17 to 19 : 20