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Self-regulation and the challenge of new technologies: keynote address to the AMTA Annual General Meeting Luncheon, Sydney.



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Senator the Hon Helen Coonan

Minister for Communications, Information Technology and the Arts

Self-regulation and the challenge of new technologies

Keynote Address to the AMTA Annual General Meeting Luncheon

Sheraton on the Park

Sydney

Thursday 24 November 2005

INTRODUCTION

Thank you Keir [Preedy, Chair]

Graham Chalker [AMTA CEO], members of the AMTA Board, ladies and gentlemen.

Thank you for the opportunity to speak with you today.

GRAHAM CHALKER

I would like to begin by acknowledging outgoing AMTA CEO, Graham Chalker, for his outstanding performance over the past three years.

AMTA has come a long way since Graham took the helm in 2002, and under his leadership AMTA has become a highly credible and effective association.

AMTA was originally formed in 1995 to deal with essentially one issue - the possibility that mobile phones could cause health effects in humans.

That issue is still around, but today AMTA also manages a multitude of other issues including: credit management, contracts, battery recycling, mobile phone etiquette, mobile phone bullying, lost and stolen phones…. - The list goes on!

Graham is leaving AMTA to travel with his wife Bev, including a trip to Borneo to retrace the wartime footsteps of Bev’s father, who was a doctor captured by the Japanese in World War II.

Graham, I wish you well and thank you for your important contribution to the industry.

ROSE READ

I would also like to congratulate Rose Read for her recent appointment to AMTA as Manager of the Mobile Phone Industry Recycling Program.

The recycling program has had some considerable success to date, but the challenge for Rose will be to find new and innovative ways to increase collections of disused mobile phones for recycling.

And with more than 20 years experience in environmental management, Rose is very qualified to meet this challenge.

I look forward to seeing the details of AMTA’s new recycling program when it is launched next month.

RECENT DEVELOPMENTS

There have been a lot of developments in Australia’s telecommunications sector since I last spoke to you at the 2004 AMTA Congress.

Parliament has passed legislation authorising the Government to sell its remaining 51% shareholding in Telstra;

The ACA has merged with the ABA;

And there has been much debate over the Government’s regulatory regime, particularly in relation to Telstra and competition.

These regulatory issues have even recently generated new and unprecedented collective industry advertising!

GROWTH IN MOBILES

Meanwhile, the mobile phone industry continues to innovate and grow such that it is a major driver of activity and innovation in the Australian economy.

Mobile phone penetration now exceeds 90 per cent of the Australian population with close to 19 million mobile phone subscriptions.

So there’s now almost as many mobile phones as there are people in this country.

And the mobile phone industry continues to make impressive contributions to the economy, with revenues at $10.6 billion this year - up more than 12% on last year.

Amidst this rapid growth and evolving technological development, the key challenge for industry and regulators is to realise the full potential of mobile technology, while also protecting consumers.

WHY WE REGULATE?

As I’ve just mentioned, there are many telecommunications issues on the agenda and I won’t have time to discuss them all today.

But one topic that never seems to leave the news these days is ‘regulation’.

We have made some decisions in this area over the past few months, including introducing regulatory changes to tighten consumer safeguards and requiring Telstra to treat its wholesale customers fairly, through operational separation.

While the regulatory regime might not be to everyone’s liking, we believe it is about right.

We have set the rules, the regulator is focused on enforcing the rules, as required, and we are now looking to the industry to get on and operate within the rules. However the debate seems to continue.

I understand that investors want confidence that they will achieve a reasonable return on new investment.

And I appreciate Telstra’s concern that regulation should apply, as far as possible, to all companies equally.

However I also believe that these features largely already exist in our regulatory framework.

There is capacity for companies to obtain regulatory certainty before making an investment.

Most of the regulatory rules, particularly the all important access regime, do apply to all companies - not just to Telstra.

I sympathise with the industry’s need for regulatory certainty.

But I think there is an important distinction between uncertainty created by the Government changing the rules, and uncertainty arising from the regulator doing its job and applying the rules.

SELF REGULATION

While we need strong ground rules for competition, there is also a big role for the industry to play in self-regulation.

Self-regulation remains a cornerstone of the Government’s strategy because it is a flexible, responsive and transparent approach.

One area in which self-regulation has been particularly successful to date has been in relation to mobile telephony consumer matters.

I congratulate the industry on the work that it has done thus far in addressing genuine areas of community concern through the development of codes for issues such as contracts and high bills.

Compliance with industry codes of practice is an important issue which the Government has recently moved to address by amending the Telecommunications Act 1997.

The changes make it clear that ACMA can exercise powers for breaches under earlier codes.

The Government will continue to encourage industry bodies like ACIF to monitor compliance with its industry codes and put in place appropriate compliance measures.

CONSUMER CODE FUNDING

To further encourage code development, the Government has recently amended the Telecommunications Act to enable industry bodies to recover code development costs.

ACMA may determine that certain costs are not refundable, and may also make determinations about exactly what is needed to make a claim.

I understand that ACMA is currently developing a strategy to put the Determinations in place, which will include appropriate public consultation.

CONSUMER CONTRACTS

The commencement in full of the Consumer Contracts Code earlier this month is an ideal example of how effective self-regulation can be.

I thank AMTA for bringing stakeholders together to ensure that consumer contracts are simpler, fairer and more transparent.

DETERMINATION FOR CONTRACTS

As most of you would be aware, ACMA is currently consulting with

stakeholders on potential amendments to the Standard Form of Agreement Determination that may be required to ensure consistency with the Consumer Contracts Code.

These proposed amendments relate in particular to whether direct notification of changes to contract terms and conditions should be given to customers and, if so, the form of such notification.

I wrote to the ACA in June this year to ensure that any costs to the industry as a result of the determination are minimised and that the benefits to consumers are balanced against these costs.

Following its creation in July, ACMA’s response to this issue appears to be balanced and I encourage AMTA to continue working co-operatively with the regulator to achieve amendments that represent a fair outcome for all stakeholders.

CREDIT MANAGEMENT

Another issue of importance to mobile phone customers and the industry is credit management.

The draft Credit Management Code was released for public comment last month.

The code covers the issue of youth debt, which continues to be a general community concern and something the Government has a keen interest in.

There is also growing consumer concern about the promotion of some premium services and the difficulty in unsubscribing from them.

I understand that the code is now being finalised for registration by ACMA.

The consumer education activities that AMTA has undertaken, such as AMTA’s tips on managing mobile spending, will be a useful platform of support for this code.

MOBILE PREMIUM SERVICES

The developing premium services sector is another area of consumer concern and one in which the Government is taking an active interest.

In June this year the ACA introduced the Mobile Premium Services Determination, which requires providers to introduce consumer protection measures when offering premium mobile services.

I applaud AMTA’s efforts in assisting the development of this Determination.

I also welcome moves by the industry to develop the Mobile Premium Services Industry Scheme to give practical effect to the Determination.

A number of measures have been included in the scheme such as safety provisions for young people, clear information about costs, and access controls for age-restricted premium content.

Importantly, the Government will ensure that age-restricted premium messaging services are not offered to the public until appropriate consumer protection measures are in place.

These measures will remain in place until the Government has implemented the findings of the review into content on convergent devices.

I expect to receive the final report of this review early next year.

FUTURE REGULATORY DEVELOPMENTS

The challenge for industry going forward will be how to adapt and refine the self-regulatory arrangements to meet the requirements of emerging new technologies.

For the regulator, the challenges will be to continue harnessing the goodwill and co-operation of industry, while ensuring that consumers have appropriate representation.

For its part, the Government will seek to promote the maximum practicable use of self-regulation, in line with the statutory objectives.

MOBILE PHONE TOWERS

I would like to move on to the issue of mobile phone tower deployment - an issue which AMTA and the Mobile Carriers Forum (MCF) have done a lot of work on.

In this environment of rapid change, it is inevitable that some individuals and communities will have concerns about the rollout of mobile phone and wireless broadband towers.

The current regulatory framework is a balance between a carrier’s ability to meet consumer needs in a timely manner, and a community’s interest in their environment and amenity.

There is always scope to fine-tune current practices and that is why I recently announced initiatives to improve the way mobile phone towers are deployed.

These initiatives were developed through close collaboration among community groups, government and industry.

They include improvements to community notification requirements, informing the public of their rights and responsibilities, improving tower design, and independent EME audits.

I have asked the MCF to consider a further initiative in relation to residential building owner consent and I am seeking similar undertakings from the wireless broadband providers.

I thank Tanya Stoianoff from the MCF and her team for assisting my Department in developing these initiatives.

ANNOUNCEMENT: TOWER DESIGN TASKFORCE

I am also pleased to make an announcement about one of these initiatives - the creation of the MCF ‘Design and Innovation Taskforce’.

The Taskforce will address community concerns about the visual impact of

mobile phone towers.

It will build on work already undertaken by the MCF in producing ‘Guidelines for Better Visual Outcomes’.

The Taskforce is expected to commence work soon and I look forward to hearing about its progress.

TRANSITION FROM CDMA TO 3GSM

Before concluding, I would like to briefly discuss Telstra’s recent decision to replace its CDMA network with a new third generation network.

In an increasingly competitive market, all carriers need to look to new services and new networks to keep up with demand for faster and more innovative services.

So the Government welcomes Telstra’s decision to support the delivery of high speed integrated services across the country.

It’s a bold decision and one that will ultimately benefit consumers, particularly people living in rural areas who will soon enjoy improved mobile phone and broadband services.

Telstra has given a commitment that it will continue to operate the existing CDMA network until this new network provides equivalent or better coverage.

I am also pleased that Telstra has stated that the new network will utilise around 80 per cent of the existing network infrastructure including those towers built with Government assistance.

Importantly, Telstra has advised that the new network will have the same coverage footprint as CDMA.

The Government will be discussing this new network with Telstra to ensure that it meets its licence condition obligations to replicate the coverage of the old analogue network in rural Australia.

These existing legal obligations will remain and we will be watching closely to make sure these commitments are met.

CONCLUSION

In conclusion, I would like to thank you for your cooperation in ensuring that this very important industry continues its remarkable development in a way that recognises both consumer needs and its community obligations.

Emerging technologies and the pace of change in mobile telecommunications will continue to offer industry exciting new business development opportunities.

And I’m sure the industry and government will continue to work well together to tackle the regulatory challenges.

It is a priority for the Howard Government to ensure that Australia has a responsive telecommunications regulatory regime that advances the long-term interests of consumers and promotes business innovation, competition and growth.

We are all well aware that lack of competition ultimately hurts consumers.

We have worked hard to provide a solid foundation for the telecommunications market and as your Minister, I will continue our strong commitment and clear direction.

Thank you for the opportunity to address you today and I look forward to continuing to work closely with AMTA on these issues.