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"The changing telecommunications landscape: fear of the future?

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'The Changing Telecommunications Landscape: Fear of the Future?


WARWICK SMITH MR Shadow Minsiter for Communications

May 1992

ATUG '92 Telecommunications Conference



Warwick smith

Shadow Minister for Communications


Warwick Smith has taken an active interest in communications since his election to the Federal Parliament in 1983, having served on the Coalition's Communications Policy Committee as secretary. He was appointed Shadow Minister for Communications in February 1991. He was deputy chair of the recent Select committee on The Print Media Inquiry. Hailing from the electorate of Bass in Tasmania, he has held the

shadow Ministries of science, Energy, Aboriginal Affairs and Privatisation. A former commercial solicitor, he has an interest in legal matters. He has been deputy chairman of the House of Representatives Standing Committee on the Legal and Constitutional Affairs completing inquiries into Mergers, Takeovers and Monopolies, Insider Trading, Corporate Practices, and the Rights of shareholders. He has been a member of the Privileges committee, the Parliamentary Bicentennial Publication, the Parliamentary Library and Legislative Research, the House of Representatives

Expenditure Committee, the Joint Select committee on Corporations Legislation, and the Standing Committee on Aboriginal Affairs. Warwick is currently National Patron of the Young Liberals of Australia.

* * * * * * * * * * * * * *


Pay TV is an example of technologies breaking down the barriers between

telecommunication, broadcasting and computing and between carriage and content. Converging technologies and markets require a re-consideration of current ministries, legislation and regulation. The Coalition is committed to putting the public interest and consumer choice first. Our policies are technology neutral,

facilitate the introduction of new technologies and look beyond the year 2000. They emphasise deregulation, competition, and private ownership and control. There will be no legislative limit on the entry of further general carriers or cellular mobile operators. However, until 1997 we will not vary the current duopoly arrangements without negotiation with the carriers. we are supportive of AUSTEL's pro-

competitive charter until such time telecommunications is regulated by the TPC and PSA. The privatisation of AOTC will begin in the second year of a Coalition government. The carriers and local equipment industry will be encouraged to explore measures to maximise the potential for exports of telecommunications services and locally manufactured products.


ATUG '92 Telecommunications conference




Shadow Minister for Communications


Pay TV is one example of technologies which are breaking down the barriers between telecommunications, broadcasting and computing, and the convergence between carriage and content. Such convergence makes increasingly irrelevant separate telecommunications, broadcasting, information and print media policies.

Technology Neutral

The Coalition is committed to putting the public interest and consumer choice first. Our policies are technology neutral. They will look beyond the year 2000 and emphasise deregulation, competition, and private ownership and control.


The Coalition’s objective in telecommunications is to achieve more efficient and wider choice of services, speedy access to "new" technologies, and lower prices; new knowledge and skills, work generation and wider choice of employment;

creative opportunities for investment; reduced Government demand for national savings associated with public ownership, a greater contribution to export income, and improved quality of life for the community as a whole.

Telecommunications Duopoly

In seeking a competitive telecommunications industry, there will be no legislative limit on the entry of further general carriers or cellular mobile operators. We have said we may vary the duopoly arrangements but that this would only be effected by negotiation with the carriers.

Regulatory Policy changes

Given the existence of a duopoly, AUSTEL's role will be vital in the emergence of a competitive telecommunications industry. In the longer term, telecom­ munications will be regulated by the Trade Practices Commission and the Prices Surveillance Authority.


In the second year of government the Coalition will begin the privatisation of AOTC. How AOTC will be privatised will depend on the situation in the industry at the time and the prevailing condition of national equity markets.


In assessing future foreign investment proposals the rules now governing the Foreign Investment Review Board will apply. It is inappropriate to maintain rigid foreign investment controls that could limit the viability of Australian Telcos and the telecommunications equipment industry to participate in global markets.


An export-oriented partnership between our telecommunications carriers and their suppliers must be supported by a Government willing to tackle the macro and micro reforms necessary to improve our competitiveness. The global trading environment is not a "level playing field". However, tariff and blatant non­

tariff barriers are not practical in an economy as small and as dependent on trade flows as Australia.





- Shadow Minister for Communications

The Changing Telecommunications Landscapes Fear of the Future?

It is indeed ironic to me that our home-grown futurologist, Barry Jones, was chosen to open this conference. It is ironic in two senses.

Firstly, to have witnessed his demise as a most notable Minister for science was a national disgrace. His replacement, you will recall, was a union leader - capable and no doubt a future leader but, never-the-less, a proponent of status quo entrenched privilege who took Jones' ideas, but sold them better to his own

Party. The 'Clever Country' was always Barry’s concept. But his concerns were much deeper than the slogan suggests. Sleepers, Wake! told a story of frustration - that public policy makers would not recognise science in al.l its manifestations as a key determinant of national and international growth and well-being. His demise marks the triumph of politics over the future. To

rehabilitate and to recognise his contribution at the foremost communications conference in this country marks you as a group that recognises the quality of the man and his intellectual endeavours on behalf of better public policy outcomes. The Long Term Strategies Committee that Barry Jones won as a

consolation prize after losing his Ministry is, for thinking Australians, a very worthwhile committee and one to watch closely.

The second irony is that, for quite some period, I was opposition spokesman for Science and Energy with direct responsibility to 'shadow' Barry Jones. A daunting task I can assure you. Ritual calls for his sacking for his failure to recognise the value of innovation science, information technology, and so on, were kindly received by Jones MP with the oft rejoinder - well, what are you

doing? True enough. Not once did my leadership executive permit me a question in Question Time! But as fate had it I was sacked just prior to Barry Jones! Politics you see is very much a revolving door - you must try to stay in it and stay on your feet. As was reported at the time, my sacking was because my then Leader 'rang the wrong number'. It is a fact I have long had an interest in telecommunications but especially so since that particular incident. It does, however, illustrate the point that you should make sure you get and give the right number and ensure your message gets delivered.

‘ ATUG '92 Telecommunications conference

Today I thank you for the opportunity to speak. ATUG has been a promoter of change in telecommunications for many years and can, in 1991-92, be self- congratulatory as much of what it has long sought has begun to come to pass.

Fear of change This is one of the themes of my speech today.

The glib rhetorical calls to address the future are well known to each of you here. The globalisation trends of your industry are all too apparent so it ill serves to address here what you already know. But, what is important is to address the fundamental problem that exists for public policy makers such as myself. It is the fear of change and the maintenance of entrenched privilege

that is the greatest fetter on reaching a future of global telecommunications. We simply must be more flexible in our policy outcomes, and market better the need for change.

It must be made apparent that the future should not be feared and, in public policy terms, to cave-in to the fears of those privileged under existing regimes is to limit the full potential of our future. In telecommunications we are, as we move to an election, starting to witness 'fear of change· triumph over the

benefits change will bring. We must reject outright the continued grasp for privileged positions supported by the Federal Government. Those within the telecommunications unions who had victories at the Privatisation Conference - and delivered to Australia a sub-optimal competition arrangement - are now

holding the line, forcing the Minister to intervene in the commercial operations of Australia's next-to-largest business. The Government cannot have it both


ways. It cannot ask for greater commerciality and, at the same time, intervene on a day to day basis to get preferred outcomes to prop up the privilege of its base support - the unions.

in outlining my Party's approach I want to start by saying that, conscious though we are of existing interests, it is the future interests of the broader community that is our basic preoccupation. Privilege must come to an end. The customer must come first. AOTC must be driven by responding to market needs nationally and internationally. Competition, choice, efficiency and productivity are priorities in telecommunications.

I wish to be provocative on some issues where I perceive privileged positions are being sought.

AOTC Headquarters: The debate over its siting in political terms was a nonsense. AOTC has been given a commercial charter. It must pursue it. For Mrs Kirner to expect, almost on day one, for AOTC to pander to her wishes after having, with her colleagues, delivered the worst economic circumstance in

Victorian history is ludicrous. The blatant sectoral intervention of the Victorian Labor Government is a disgrace - VEDC and budget management ill equips it to determine outcomes of a commercial nature for Australia's next-to-largest company. AOTC must redefine its commercial role in a competitive environment, which it is charged under legislation to meet. No one can expect AOTC to meet

its national and international commercial obligations if it is to be continually subverted by political considerations. To do so will completely undermine the basis upon which it is supposed to proceed. Should its commercial focus continually be subject to interventions its customer focus and market growth potential will never be realised.

Telecom Paper Contract: why, it was asked, did Telecom buy paper from Finland instead of good Tasmanian paper? The issue is emotive and the Minister blatantly intervened to accede to union concerns about jobs. A most legitimate concern. But, the crux of the problem was the supplier. It was APPM's failure

to realise that AOTC has a commercial charter and is required to pursue it. The Interim Board, at the time (January 1992) made a decision against APPM after APPM was given an opportunity to revise its pricing. Well over $1 million penalty would have been carried by AOTC if APPM, the traditional supplier, had been accepted. But for political intervention by an activist shareholder, Senator Richardson, the original decision would have stood. APPM is now to address work practices in Tasmania - some would say belatedly - to make it a more competitive operation.

The message must be clear to suppliers. Price, quality, and performance must matter. Traditional, comfortable supply arrangements will be challenged, especially where the 'comfort zone' mentality prevails - ie. 'they always buy from us therefore they always will'. This is not on. Senator Richardson's

intervention is but a manifestation of the changing environment. It is not going to be easy. Removing privilege never is. I suspect the intervention was difficult for the new Board to abide.

Telecom Industries: To sell or not to sell? Len Cooper of the telecom union and others have flagged that industrial action will flow from any decision to sell this asset of AOTC. Doubtless they are emboldened by the intervention of

Senator Richardson on the paper supply issue. But, as with the paper issue, it is a much broader matter. AOTC's, new chief executive has pointed out that the single most striking characteristic of the global telco industry in the 90s is change. New technologies, new alliances, new markets, new directions. To be

flexible is to be competitive. A manufacturing arm may not complement the strategic goals of a new (and that is what AOTC is) emerging global telco. Customer focus - not jobs maintenance and engineering - is and must be the goal of AOTC.

The process of change must not lack its human dimension: putting people first, both customer and employee is, and ought be a goal of management. One cannot be achieved without the other. Support to staff, both continuing and departing, will be a necessary feature of readjustment.

It should be remembered by unionists that this is a market of real growth. Not only Optus and value-added service providers will be seeking skilled services personnel. Options for developing ones own business have emerged. The mix of

skills in the industry and the shape of the market cannot be predicated on

today's landscape. One's fears ought not close one's mind to real opportunities.

Telecommunications Industry Development Authority (TIDA): I have said this Authority would not go ahead under a Coalition Government. The idea for an authority was forced on a reluctant Minister by the Labor Left at the National conference of the Labor Party in June last year. It is blatant sectoral

intervention and an attempt to protect local manufacturing industry from change and to entrench the privileges it has enjoyed to date. Indeed, the Industry Development Plan announced by AOTC on Thursday last week makes it abundantly clear that an Authority is absolutely unnecessary. As the plan states:

"It would be inappropriate that TIDA become involved in AOTC’s commercial decisions or review AOTC’s contracts or arrangements with its suppliers, and AOTC assumes TIDA will no be empowered to do so."

So what is TIDA going to do?

Enormous changes are mooted for AOTC. Senior management is very aware that time is of the essence, that world best practice must be achieved quickly and that much higher standards of customer service must also be quickly achieved. If those tasks are not accomplished within the space of two years the consequences

are dire. We will have a declining asset, unable to compete at home and abroad. AOTC will not even be viable after three years of no change! The nation as a whole will have missed the bus of opportunity. This is a frightening thought but it will be real if political interference continues to skew commercial decisions. Managers will not continue to make right - but politically difficult

- commercial decisions and the reform process will be wrecked.

Last week, the former Trade Practices Commissioner, Professor Baxt, slammed the Labor Government for its all-talk-and-no-action on competition policy. In particular, he singled out broadcasting reform and telecommunications. "All the economic and quasi economic ministers talk of the importance of

competition we still have no clear direction in any of these areas."

The process of change, with all its inherent fears, are documented in studies of previous monopolies. Evidence worldwide suggests that changing a monopoly culture generally takes a decade - five years to decide what to do and another three years to do it. AOTC, with all the hallmarks of a government-owned monopoly telco, does not have this time. It recognises the gap between it and world best practice is large. We have in Optus a determined and experienced

competitor which, as AOTC well knows, has the capacity to offer better service and lower prices. ,

Competition will require of AOTC greater customer responsiveness, shorter lead times for all key activities and more efficient use of human and physical resources. The latter will involve decisions about under-utilised assets, re­ valuation of over valued assets and divestiture of non-revenue producing assets. Given Frank Blount's realistic assessment - outlined in his 15 April speech to the Press Club - of the need for cultural change in management, customer focus, improved productivity and efficiency, and the pursuit of a growth market, one is hopeful that Australians will see the benefits of change quite quickly.

we have, of course, come more latterly and enter change more cautiously than other countries, but in that we should be able to chart a clear course to earlier benefits of such fundamentals as lower call charges and a greater variety of cost-effective add-on services. This will not be achieved if, in its

eagerness to get optic fibre to almost every doorstep, AOTC forgets it is no longer an engineering outfit, driven to provide the very best now but found to be wrong years from now when the optimal, that is the least-cost/lower price solution, was actually a combination of optic and wireless. i

The general theme of AOTC's Industry Development Plan is to pursue market growth and to do so in a market manner. Prescriptive elements are to a minimum. The political pressure to a fixed local content requirement has, happily, been nipped in the bud. The plan reveals spending of $40 billion on all goods and services in Australia over the first five years of competition. It will commit some $10 billion in equipment from local suppliers if those suppliers meet world's best standards. All very well and good. However, there is nothing new in all this. The document is what one would expect of a commercial organisation. The only really concrete result is:


(a) an elaborate PR exercise whereby AOTC and Optus re-package as a 'new ' industry plan' what they are doing anyway; and (b) the establishment of TIDA as yet another bureaucratic appendage with absolutely no substantive role to play.

While insisting the carriers publish an industry plan the Government has not declared its own industry policy. For example, what happens when the Industry Development Arrangements for Telecommunications Customer Premises Equipment expires in June 1993? This is a key area where the whole industry need some certainty. The Government's rhetoric about its commitment to industry development is a farce. It is, as I have said, to satisfy the unions.

The plan does have one fatal flaw. It is predicated on an enlarged and additional capital base. simply, this is not achievable with further Commonwealth debt for equity swaps. It is not achievable just out of cash flow and it is not achievable just from new borrowing programs. This Government has gone half way to commercialising AOTC. It will be 'mugged by reality* and knows now that private capital injection is necessary for AOTC to meet its goals. Privatisation of AOTC is inevitable and will happen, in my view, within five years regardless of which Party governs. With us it will happen sooner. We are not constrained by the fears and privilege sectors that dictate to Labor. It is our intention to begin the privatisation of AOTC in the second year of

government. A further tranche will be sold in the third year. How this might be done depends upon many issues not the least of which is the valuation of AOTC. A basic price-earning ratio is difficult to assess given the dramatic

changes now taking place. We are, of course, not keen to see AOTC diminished in value prior to privatisation although we realise that current asset values are overstated in a competitive environment. It is in no one's interest to allow AOTC to become a carrier of last resort or for the 'electronic highway' to be under-funded and thus not able to utilise optimum technology. The debt ratio of AOTC is high by world standards at 47% (Telecom NZ is 32 per cent and Cable & Wireless 23%). The proportion of debt must be reduced if it is to become

competitive internationally. Also, it will be vital for AOTC to demonstrate to Rating agencies that it can withstand the winds of change and competition in order that the cost of capital be kept to a minimum.

Whether we pursue an initial public offering in combination with a strategic placement, perhaps with a foreign carrier as is in contemplation with Qantas, remains to be seen. We do however seek to maximise service and value and, given the global nature of telecommunications, a BT, Cable & Wireless, Hutchison, Pacific Bell or some such investment in AOTC would, in my view, have strong attractions. The prospect of some 300 000 Australian citizens and employees

(special ESOPs to apply) being stake-holders in our number one growth industry along with our leading national institutions such as AMP and National Mutual and a strategic global Telco operator or operators is a most attractive prospect and one I am committed to see achieved. I note here that Syntec has forecast an average annual growth rate of 4.25% over the next five years for the communications industry (compared to 2.25 per cent for growth for national GDP), thus maintaining it as Australia's fastest growing industry group.

In the meantime there is the board of AOTC to consider. While charged to act commercially it has a board which is too large and is a cobbling together of political interests. I would review the board.

Convergence On the broader issue of convergence - the new buzz word that begs for public policy recognition in many countries must be confronted in Australia.

The Information Age is challenging accepted institutional government structures. Communications policy, formerly a political backwater, is now a raging torrent of activity. Senator Richardson's mere presence must tell the cynics 'there gotta be something in it for us, mate!·.

There is a need for a new direction and thinking in communications. We must not become overly focussed on transport/carriage of the message. Privacy, science, the arts, literacy, language are all affected by the emergence of multiple carriage capacity the development of which we are only just beginning to see. Concentration of information power is also a matter of concern. It will be an

international issue rather than a purely national one. How we deal with this will be a challenge. My concern is that, in public policy formulation, we have not even reached the point of recognising these broader impacts.


Pay TV will be one of the first real telco-broadcast issues for Australia. The current debate illustrates well the convergence of telecommunications and broadcasting technologies - "the worlds of television and telephones collide" is one telling description.

. it illustrates the increasing irrelevance of separate 'broadcasting' and telecommunications' policies and legislation. . It illuminates the extent of entrenched interests wanting to maintain their privileged position and thus deny consumers the wider choice that new

technologies and new players could provide.

The fact that Optus, via Aussat, has a proposed legislated monopoly on the carriage of Pay TV until 1997 demonstrates Labor's preparedness to mandate technology. In Australia the carriage of communications services is proscribed and communications monopolies, duopolies and oligopolies are created by

legislation. The upshot is a heavy reliance on government regulation to 'deliver the goods'. The Aussat debacle that cost the nation some $740 million illustrates the inability of government to deliver.

What is happening in America? The contrast is enormous. There, the competition is mounting between the cable and telecos to deliver to ones fingertips a vast array of communications services, at greatly reduced prices. An experiment in Cerritos, California enables its participants to experience the future. '

. Cable (fibre optics and coaxial lines) delivers voice, computer data and video signals. . One can pay-per-view and have within seconds video-on-demand. . Interactive television enables shopping from home. . One can dip into an on-line encyclopedia. . Schools are able to order educational videos, and stage video conferences.

It is no wonder telephone companies are trying to break open the shackles which prohibit them entering the cable business while the cable companies try to get into telephones. it is surely in the interest of the consumer - which will be virtually everyone going through the education system, if not immediately those

at home - to grasp the future.

It is how small children are nurtured that shapes the story of the future and history.

It is my view that Australian schools, colleges and universities should have priority over homes. If we really want to be clever, let's be smart about who gets what first. There are too few computer/information systems in schools now, and remote areas are poorly served by micro-wave/wireless. We need an aggressive 'information-to-learning-centres' in Australia just as we had a

'science labs in schools' push by Prime Minister John Gorton in the late 1960s.

We will grasp the future by putting consumer choice first, by having policies which are technology neutral, by having policies that look beyond the year 2000, by having policies that emphasise deregulation, competition, and private ownership and control.

The new reality is that technologies have little respect for national borders and that telecommunications industries - indeed all communications industries - are being driven into a world of global, highly competitive and increasingly liberalised communications markets. In Australia the process began in the mid­ 70s with the creation of Telecom Australia as a Statutory Authority. It has

been a painful process for Labor elements of which remain anti-competition, anti-privatisation and pro-interventionist. However, the die is cast. A duopoly has been chosen, AOTC has been born out of Telecom and OTC, Aussat has been sold to Optus, and AUSTEL is to regulate the competition between them.

The Government's stated commitment to deregulation and competition is compromised by its political need to retain a significant degree of Government control over telecommunications. Certainly, the introduction of one network competitor may improve the performance of the Government carrier, however efficiency gains would be more certain if AOTC was free to respond to the incentives competition creates. Markets need to be truly competitive, carriers need the freedom and resources to compete. Until that happens, real efficiency and consumer interests will be secondary and the opportunity to penetrate the rapidly expanding overseas markets will remain elusive.

What is happening in New Zealand is salutary. The new competitor to the privatised Telecom Corp of New Zealand has announced charging by the second for international phone calls from May 1 instead of rounding up to the next minute. Telecom NZ has had to follow suit meaning that call costs will fall by an

average of 10 per cent. Clearly the introduction of competition, allied with privatisation, is beginning to benefit the consumer.

The Coalition's objectives in telecommunications are to achieves . for consumers - more efficient and wider choice of services, speedy access to "new" technologies, and lower prices, . for employees - new knowledge and skills, work generation and wider choice of

employment, . for the entrepreneur - creative opportunities for investment, . for the nation - reduced Government demand for national savings associated with public ownership, lower telecommunications costs, a greater contribution

to export income, and improved quality of life for the community as a whole.

We will achieve these objectives by: . promoting vigorous competition, . facilitating the introduction of new technologies, . privatising AOTC, allowing it access to private capital, . evolving from special industry regulation to general, economy-wide protections

of competition policy, '

. ensuring the continuity of universal service obligations, established by the Telecommunication Act 1991, to those groups who will not immediately benefit from greater liberalisation of telecommunications.

We will have no legislative limit on the entry of further general carriers or cellular mobile operators. During the passage of the Telecommunications Bills in 1991, we gave notice that a Coalition Government may vary the duopoly arrangements but that this would be effected by negotiation with the carriers.

The local telecommunications equipment industry has benefited from decades of Government local purchasing policies. The need now is to build skills in global marketing and technological intelligence. The Government has, quite rightly,

resisted compulsorily requiring the carriers to purchase from local companies and other types of sectoral assistance to what is a highly diverse industry. Labor's March 1991 Industry Statement which proposed lowering the protective tariff barriers has bi-partisan support, current industry development

arrangements in the industry and Partnerships in Development are not appropriate to a long-term industry plan. However, there are measures that could be implemented to maximise the potential for exports of locally manufactured products. ATUG cite the example of radio frequency assignments for Australian equipment which they believe should conform as far as possible with international usage.

The Coalition's approach is to create an economic environment conducive to the development of more competitive firms. The tax take of government will be reduced by $20 billion ($9.4B in wholesale tax, $6.6B in petroleum excise, $5.9B in payroll tax). Employers and their employees will have the freedom to negotiate directly within a proper contractual legal framework if they so choose, and the size of government will be reduced to release resources for

private investment.

Telecommunications is a world industry with a world market. By the mid-90s it will be the largest industry sector in the world. The long-term potential of our industry depends upon the capacity of Australian firms to capture that market. In Asia alone forecast expenditure for just 13 countries to the year

2010 is estimated at $515 billion. We must recognise the fact that many developing country markets depend upon incentives such as soft loan financing and that Australia is disadvantaged by the comparative wealth of schemes operated by competitor countries. The Export Finance Insurance Corporation and the Development Import Finance Facility scheme, I believe, must be supported while other OECD countries use similar schemes to their advantage. Many companies must now orient and compete internationally. An export-oriented partnership between our telecommunications carriers and their suppliers must be

supported by a Government willing to: • tackle the macro and micro reforms necessary to improve competitiveness, . stimulate job creation, . reverse declining living standards, and . improve our quality of life.


The global trading environment is not a 'level playing field'. However, tariff .ahd blatant non-tariff barriers are not practical in an economy as small and as dependent on trade flows as Australia.

I come back to Pay TV and my theme 'fear of the future'. What is to be the future of 'pay' in this country? The questions of how is it to be carried and what will be the content demonstrate another type of communications convergence. The answers to these questions will depend to a very large extent on who is in

government during the course of the 90s. our 1988 communications Policy stated t t l c l t W© ·

”... will allow for the establishment of licensed operators using available technologies for pay and cable television, where suitable..." and that "Programs will be subject to standards laid down by the Parliament and administered by the ABT."

We do not resile from those principals. 'Technology neutral' means we will allow subscription television to be carried by satellite and cable. The Draft Broadcasting Services Bill 1992, however, limits Pay TV to satellite and limits the number of channels initially to four with six by the end of 1994.

Conclusion I have sought in these remarks to illustrate two themes.

First, that the fear of change must be faced.

We all, at time, see ourselves living at the edge of the future. This is certainly the situation now in communications. We all are ancestors to heirs whose admiration we wish to earn. The judgments and decisions of today will be judged by others but the enormity of today's decisions on the rules of

communicating information will have a profound impact on the future. We do sit on the threshold of a new era. We should recognise this fact, not fear it, not hold to the known nor defend the privileges of today. We must foster innovation and not mandate - by proscriptive narrow sectionally driven interests - our future.

Secondly, that the convergence policy dilemmas are various and global in impact.

Communications is central in political terms now. it is of great economic significant to our industry - $4 billion investment by Optus which will have 12% of the market within one year and 6000 employees in ten years; and a $40 billion investment by AOTC which is no small commitment.

My colleagues and I wish to respond to the challenge of change, not by injecting ourselves into a greater government role but instead seeking to divest government interest, to step back from regulation but yet establish a new approach which is conducive to growth, technology up-take, consumer need and

national development.

The mass communication markets of yesterday have gone. The market is now focusing on individual needs and target 'audiences'. Insofar as required, regulation will, of necessity, need to be flexible and different for each of the myriad of services that will develop. Perhaps the US example is a model to examine. It has avoided hard-and-fast formulas and instead set up a standard

for flexible regulation which includes the standards of 'public interest, convenience and necessity'.