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Environment and Communications Legislation Committee
23/05/2018
Estimates
COMMUNICATIONS AND THE ARTS PORTFOLIO
Australian Communications and Media Authority

Australian Communications and Media Authority

CHAIR: Welcome to the Australian Communications and Media Authority. Welcome, Ms O'Loughlin. Do you have an opening statement you would like to make?

Ms O'Loughlin : No. Thank you, Chair.

CHAIR: Excellent. We'll go straight to questions.

Senator O'NEILL: Ms O'Loughlin, I will go straight to the chapter on the ACMA in the portfolio budget statement that contains the strategic directions statement. It says:

This year the ACMA is focussed on delivering results and new capabilities in the following priority areas:

Interactive gambling

Spectrum reform and allocation of radiofrequency spectrum in line with our five-year spectrum outlook

Stronger regulatory protections for consumers migrating to the National Broadband Network.

Could you please describe what new capabilities the ACMA is delivering in those key priority areas that were identified?

Ms O'Loughlin : I think under the portfolio statement rules that we're to give a bit of an indication of what our priorities will be for the following year. So they were the three that we identified that were top of mind. So we have new responsibilities and need to build new capability in the area of interactive gambling. We have a significant spectrum management and planning workload, including things like the 3.6 gigahertz spectrum option, plus we are increasing our capability to advise the department on the whole broad spectrum reform agenda. In terms of the regulatory protections, it's really as we've discussed here before—a series of new standards applying to retail service providers to improve the customer experience in migrating to the NBN.

Senator O'NEILL: Perhaps I need to understand a little better what you mean by capabilities in that sentence. It says delivering results and new capabilities in the following priority areas. Your response to me so far, as I understand it, is a further articulation of the reason these are priority areas. You said that it came from top of mind. What are the capabilities that the ACMA is delivering in those priority areas?

Ms O'Loughlin : Take interactive gambling. We've built up a new capability in how we approach the international regulatory environment of new approaches to get better results out of the legislation and the new responsibilities that we have been given under the Interactive Gambling Act. So we've increased certainly our capability in understanding the international regulatory environment and talking to the international regulators—these are regulators of gambling, not communications regulators—so we've needed to build up our capability in some of those areas. I think in spectrum probably our core business has always been spectrum management. But there is a bigger workload in spectrum at the moment both in spectrum planning and looking at what the reform agenda the government and department are working on in spectrum. It is more, I suppose, capability in both the engineering and regulatory policy settings.

Senator O'NEILL: The regulatory settings? The engineering? Is that what you're talking about? Is that what you're saying there? You are improving capabilities around the engineering advice or engineering—

Ms O'Loughlin : Engineering and regulatory policy advice.

Senator O'NEILL: What pressure or challenges does the ACMA face in delivering those capabilities?

Ms O'Loughlin : We don't face any problems with that at the moment, Senator.

Senator O'NEILL: You indicated that there was a bigger workload in dealing with the spectrum. Is there a financial implication of that bigger workload and bigger workforce?

Ms O'Loughlin : No. We've been able to manage the increased responsibilities we've been given within our own resources. I would mention, though, that in terms of the NBN work that we have taken on, we did get some additional ASL for that. But that is not funded from direct appropriations. It's actually funded under the carrier licence charge, which applies to the telco sector.

Senator O'NEILL: Increasing capabilities can't always be done without additional resources. If you had greater resources, what would you be doing in addition to what you've already indicated?

Ms O'Loughlin : Well, I think, Senator, those three priorities are not the only thing we are doing. We have sufficient resources to move those around to match our priorities. That's part of the reason for actually expressing those priorities of giving certainty to the sector and internally about where we're going to focus our attention for the next 12 months. It doesn't mean we don't get on with everything else we do.

Senator O'NEILL: How have you been effectively provisioned for the activities you've just outlined to me?

Ms O'Loughlin : Interactive gambling predates me. I think we've just moved some resources into that area.

Ms McNeill : The interactive gambling space is an area where we have not been given additional resources, but we have been able to stand up a team dedicated to the work. We've done that by shifting resources from other areas, including our corporate area and within our content safeguards team. We think that we are managing well. There is a different approach that could be taken to that work, but the approach that we're taking at the moment is delivering real outcomes. We're in fact very pleased with how that has been going.

Senator O'NEILL: Do you have resources that match your desire for the work that needs to be done in the area to actually deliver good outcomes?

Ms McNeill : We do at the moment because of the strategies we are adopting, particularly, as Ms O'Loughlin indicated, our approach to engaging in the international space; that includes engaging with regulators in countries where there might be businesses unlawfully offering interactive gambling services to Australians. We engage not only with the business but with the regulator in that place. We've engaged with software providers, so we've found a way in to influence the software capacity and the offerings that are made to Australians online. So those sorts of approaches are new for us, hence the capability enhancement that Ms O'Loughlin talked about, and we're finding them very effective. If a point in time comes where we find that those approaches stop being so effective, we'll obviously look at revisiting how we resource that work. But, at the moment, it's working well.

Ms O'Loughlin : Senator, just for your information, we are also going through the process, as recommended in the ACMA review, of doing a full cost funding based review for the organisation internally to make sure that we've got the funding we have applied to the priority areas and we are assuring ourselves that we are as efficient as possible with the use of government funds.

Senator O'NEILL: You've called it a full cost review.

Ms O'Loughlin : A funding review. It's actually called a cost based review; I apologise.

Senator O'NEILL: And has it commenced?

Ms O'Loughlin : Yes, it has.

Senator O'NEILL: And when did that happen?

Ms O'Loughlin : I think it commenced before I came on board. It commenced in February. We are working through it. It will probably be finalised in the next month or so.

Senator O'NEILL: So by the end of June you think you would have that work undertaken?

Ms O'Loughlin : I would expect so, yes.

Senator O'NEILL: I will go back to you, Ms McNeill. You indicated that you are balancing things at the moment with the requirements that have been put upon you in the interactive gambling space. You're talking about different approaches that could be taken. I don't understand that.

Ms McNeill : So our new responsibilities in this space commenced—I'm just looking for the start date—in September last year. We assumed responsibility for a civil penalty regime and the whole of the end-to-end process around unlawful interactive gambling services. Previously, responsibilities under the act were distributed between the AFP, ourselves and the department. Now we've got the whole gamut of responsibilities with the option of referring things to the police if we think that criminal prosecution is the best way to go. That regime could potentially involve us taking people to court and seeking penalties, but so far in the investigations we have pursued, where we have found breaches, we've engaged with the providers and they've been very responsive. They've immediately modified their behaviours. From memory, there might be two where there hasn't been a complete turnaround, and we're still working with those. So we haven't needed to go to that pointy end, which is obviously a very costly regulatory approach. If that turns out to be the approach that must be taken, we will take it and we will manage the resource implications. But at the moment, the approach that we're working with is delivering real outcomes, and we're quite satisfied.

There are some other new responsibilities only came to us only very recently, which was a prohibition on credit betting, for example. So there are some new things that might come to us, and we'll keep adjusting our resourcing in a dynamic way to see that we can deliver on expectations of us in that space.

Senator O'NEILL: So it sounds to me like you're getting to do more and more work but you're just balancing what you've got without any additional resourcing?

Ms O'Loughlin : Well, I think it's a combination, I have to say, Senator. We have a lot of discretion with our budget and we can move resourcing around. For example, as I mentioned with the National Broadband Network work, we did receive additional resourcing. That was funded by the increase in the carrier licence charge rather than direct budget funding.

Senator O'NEILL: I want to go to the spectrum reform. Have you received any particular funding for that?

Ms O'Loughlin : Not at this stage.

Senator O'NEILL: So no particular funding for the interactive gambling and no particular funding for the spectrum review?

Ms O'Loughlin : In terms of the spectrum reform, I think we're looking very closely at what resources we will need not this year but into the future. That will be a matter that we'll be discussing with the department once we've got a clearer idea of our roles and responsibilities and the timing of that reform. At this stage, we're able to manage it within our existing budget.

Senator O'NEILL: And the same story for the regulatory protections migrating?

Ms O'Loughlin : That's the one that I mentioned was funded by industry.

Senator O'NEILL: Could I ask you perhaps to take on notice what funding, if any, the ACMA has received for each of those priority areas in the last three years?

Ms O'Loughlin : Yes, certainly.

Senator O'NEILL: Thank you very much. The ACMA 2018-19 budget measures include capital measures relating to property divestment in 2019-20. What ACMA property does that relate to? What is the planned divestment for?

Ms O'Loughlin : We have owned about 62 hectares of land in Birkdale-Capalaba, Queensland. It has formed part of our spectrum monitoring facilities for any number of years. We have not needed that property for some time now and so it's surplus to our needs. In the 2018-19 budget, the Treasurer announced that there will be a planned divestment for that land. That will be handled now by the Department of Finance.

Senator O'NEILL: Is that the sole divestment that that amount relates to?

Ms O'Loughlin : I understand it is, yes.

Senator O'NEILL: What is the quantum you expect there?

Ms O'Loughlin : We don't have a quantum in mind at the moment. That will depend on the divestment strategy being managed by the Department of Finance and what the future use of the land will be, which will form part of that divestment strategy.

Senator O'NEILL: And the purpose for which it was held is no longer required?

Ms O'Loughlin : That's right.

Senator O'NEILL: What are the ACMA's most resource intensive activities planned for the 2018-19 financial year?

Ms O'Loughlin : Well, as our priorities have set out, I think there's a huge amount of work going on at the moment around the customer experience in the migration to the National Broadband Network. We're hoping that the various legislative instruments and standards that we're working on in that will be in place by the end of this financial year. Of course, next year we will move into the monitoring and compliance work that we will need to do. I think that will be a key focus for us next year. As you've already identified, I think the spectrum reform process has significant opportunities for us and a significant workload for our engineering and regulatory policy people. So in terms of looking forward, and continuing the work that we do around consumer safeguards and advice and information, I think they are probably the priorities for next year. There's also quite a lot of thinking to be done. We've been given a broader remit through the ACMA review. It is about what sort of research and information gathering we want to do given that broader remit. So they would be my three priorities.

Senator O'NEILL: Do you envisage an NPP in the next cycle?

Ms O'Loughlin : No. Not at this stage. I think we would wait until we've satisfied ourselves through the cost base review that we're using our existing funding efficiently. We would also look at doing quite a bit of work based on what would be our future resourcing required, particularly around the spectrum reform stuff.

Senator O'NEILL: The ACMA's draft five-year spectrum outlook for 2018-22 mentions a number of consultations following the release of the ED2 package—the second exposure draft of the Radiocommunications Bill and package. Is the ACMA adequately provisioned for this work?

Ms O'Loughlin : For the current work, yes.

Senator O'NEILL: You specify for the current work.

Ms O'Loughlin : Yes. But, as I mentioned, we will be looking at our resources for future years given the implications of the Radiocommunications Bill and what that will mean for the ACMA—what sort of legislative drafting et cetera we need to do. We will be discussing any resource needs with the department.

Senator O'NEILL: So have you got any idea of the quantum of what you're talking about there?

Ms O'Loughlin : Not at this stage.

Senator O'NEILL: Roughly? A ballpark?

Ms O'Loughlin : No, I don't know.

Senator O'NEILL: Nothing?

Ms O'Loughlin : No.

Senator O'NEILL: What size workforce are you talking about?

Ms O'Loughlin : At this stage, that's not determined. We've had some internal discussions but we haven't come to a landing on the size of the additional workforce we would require. It's fair to say that we've probably—Giles will correct me—got about 25 or so people working on some aspects of that at the current time.

Mr Tanner : That's our best estimate, yes.

Senator O'NEILL: Sorry, that's your?

Mr Tanner : We have about 25 people working on various dimensions of the spectrum review implementation process at the moment. They are the resources that will take care of the response to the second exposure draft that was mentioned in the FYSO. So, yes, we have that work covered and we certainly hope to be coming out with a fair bit of material about the details of what we would do with the powers once the exposure draft appears.

Senator O'NEILL: Right. Clearly, it's been quite a significant amount of work to get 25 people in on that. My question is: has the ACMA's need to focus on this work meant that other activities, such as consultation on LPON services, been delayed?

Mr Tanner : A bit like the account you heard around the interactive gambling, initially we drew resources probably more out of the corporate area than out of the spectrum area. But what's happened over the last 12 months is that we've progressively moved a lot of the implementation work into the spectrum line area so it's become our business as usual work. So I would say that significant contributions are coming from our legal team, our corporate area and from within the spectrum team itself.

Senator O'NEILL: Mr Tanner, are you confident that the ACMA is adequately provisioned to do the work? Is there pressure building on you and your team and other work that is being overlooked because of a failure to actually provision the ACMA properly given its expanding role?

Mr Tanner : I would stand by the account you've heard from the chair. We have redirected resources from other work we might have done. We've put that to this work because it's the highest priority, and that's what the ACMA has a lot of flexibility to do. To date, we've found adequate resources for the work that we have to do, which is very considerable, as you can infer from that number of 25, in order to assist the department in the development of the legislation, work with industry and position ourselves to implement. In terms of what's going forward, I think the chair has referred to ongoing discussions. There's a lot of information we don't have yet that would give us a better fix on the size of the implementation task. The timing of when the legislation goes through, the content of the transition provisions and some of the details of the legislation are all still not clear yet. A huge amount of program and project planning and scoping work is going into modelling that. But we really do have a number of variables that affect when and how many resources might be required for particular implementation tasks that are still moving about a bit.

Senator O'NEILL: Minister, are you able to provide an update on the timing of the release of the ED2 package?

Senator Fifield: Timing of the?

Senator O'NEILL: ED2 package.

Senator Fifield: ED2?

Senator O'NEILL: Yes.

Ms O'Loughlin : The rad comms bill.

Senator Fifield: The rad comms bill?

Mr Tanner : The exposure draft.

Senator Fifield: The exposure draft? Sorry. I thought you were using an acronym for something else. I will ask relevant officers to come to the table.

Mr Mrdak : We're awaiting the next draft of the bill from the Office of Parliamentary Counsel. We don't anticipate that being available for at least another month or so.

Senator O'NEILL: Sorry, Mr Mrdak, I was a little distracted. You said that you're expecting the exposure draft—

Mr Mrdak : We're expecting a revised draft from the Office of Parliamentary Counsel. That's underway. We don't expect anything inside the next month or so.

Senator O'NEILL: So when are we talking—June or July?

Mr Mrdak : It would be July at the earliest.

Senator O'NEILL: In the draft five-year spectrum outlook, ACMA acknowledges the concerns of the narrowcasting industry about certainty of access to spectrum for LPON services. It states that the ACMA will endeavour to make its decision about extension of the determination of the LPON sub-band during 2018 and that that's well before the expiry of the current determination in 2020. Currently, LPON licences can't be extended beyond 31 December 2020. Is that correct?

Ms O'Loughlin : I will defer to Mr Tanner.

Mr Tanner : Yes. Given the type of licences these are, you require two instruments. You require an apparatus licence, which they hold. We also need to make a decision under section 34 of the Broadcasting Services Act, which is named a drop-through decision, that actually makes the spectrum available for open narrowcasting in the first place. We tend to make those in five-year increments for the part of the radio spectrum that is used for LPONs. As you say, there has been an issue that we cut that too fine for the sector last time. They put a very persuasive case to us that it was very difficult to run their businesses with the lack of certainty. So, yes, we are intending in the course of this year to consider the issue of the next extension of the drop-through.

Senator O'NEILL: Thank you for your answer, Mr Tanner.

CHAIR: Senator O'Neill, we might do a rotation. I will come back to you later.

Senator GRIFF: I have a handful of questions. I wish to seek some clarity on the regional and small publishers innovation fund. What division does this fall under?

Ms McNeill : That's my area.

Senator GRIFF: What date would this legislation need to pass by for to you meet the intended 1 July start date?

Ms McNeill : Well, Senator, I was watching the proceedings this morning when you were asking the department questions about the timing. Obviously there have been some delays associated with the establishment of the scheme. The legislation has not passed as swiftly as had originally been anticipated. Having said that, we have been undertaking some preparatory work in anticipation of the legislation passing. We are well-positioned to begin administering the scheme as soon as the legislation takes effect. At the moment, as you probably know, the ACMA does not have power to administer a grants scheme like this, so we are waiting on the legislation before we can progress it.

Senator Fifield: On that, while it has now passed through the Senate, it's listed on the agenda for the House today.

Senator GRIFF: So you think it will get through today?

Senator Fifield: I wouldn't presume to speak for the other place, Senator, but it is listed for today.

Senator GRIFF: I somewhat agree with you, Minister. Once it is through the other place, do you think it will take two, three or four weeks before you will be able to start calling for applications as such?

Ms McNeill : We have prepared guidelines. We've prepared a communication plan. We're well-positioned to begin. Once the legislation takes effect, there will be a process, obviously. The legislation contemplates a ministerial committee being appointed to advise the ACMA. So those procedures can go on. But we will be well-positioned to move quite swiftly to promote and call for grant applications.

Senator GRIFF: So swiftly—

Ms McNeill : Swiftly as in a matter of weeks.

Senator GRIFF: A matter of weeks; okay. Has the advisory committee met—that is, the Australian Press Council, Walkley Foundation and Country Press Association—as a group?

Ms O'Loughlin : The establishment of that committee is being handled by the department.

Senator Fifield: I think, from memory, letters of invitation have gone out to the people to be members of that group.

Mr Mrdak : It is yet to convene.

Senator Fifield: But it's yet to convene.

Senator GRIFF: Given your expertise is primarily electronic, or radio and TV, have you brought anybody else in with expertise in print to review?

Ms O'Loughlin : We commissioned some research work from Amanda Wilson, who is an ex-editor of the Sydney Morning Herald, to do a piece of work to, I suppose, build up the capability of the authority in its understanding of regional press. We considered that at our last authority strategy meeting, which was a very useful input into getting us up to speed. We also think, of course, the advisory committee will be extremely valuable in giving us a better picture of the regional publishing landscape for news.

Senator HANSON-YOUNG: I have some follow-up questions in relation to the content review. Is ACMA still doing work in relation to that?

Ms O'Loughlin : Not at this stage, no.

Senator HANSON-YOUNG: So you've seen the findings from the report given to the government in December?

Ms O'Loughlin : We've seen various drafts of that report throughout the process.

Senator HANSON-YOUNG: Have you seen what you believe to be a final report?

Ms O'Loughlin : I think we have, yes.

Senator HANSON-YOUNG: But you haven't been given any direction or you don't have to do any work on the findings as such?

Ms O'Loughlin : Not at this stage.

Senator HANSON-YOUNG: Are you preparing at all in relation to changes that might come out of these findings?

Ms O'Loughlin : Not at this stage. Obviously the report was a report to the government. We would wait until the government made its response to that report known before we would move on anything, so we're not doing any work at the moment on it.

Senator HANSON-YOUNG: What consultation did you do with stakeholders in relation to your role in that review?

Ms McNeill : We didn't consult directly with stakeholders on the review. Our role was largely to offer expert insights based on our regulatory experience. It's true that about the time the review was announced we had convened a public forum, the Australian content conversation, but that's probably the only thing that you might characterise as an external stakeholder engaging input to the review.

Senator HANSON-YOUNG: And so there was, from that process, though, some input into what you fed into the review itself? Is that what you're saying?

Ms McNeill : In fact, the forum, the Australian content conversation, was run in conjunction with the department and Screen Australia, so there were senior members of departmental staff in attendance involved in sessions. So everyone was able to listen to the conversation that occurred around Australian content at that forum.

Senator HANSON-YOUNG: What is ACMA's view in relation to regulations for children's content on free-to-air broadcasters?

Ms O'Loughlin : We're not in a position to give you an opinion. The settling of what those requirements are is a matter of government policy, which we then implement through our regulatory powers.

Senator HANSON-YOUNG: So you haven't done any work in relation to whether they need to be changed or amended?

Ms O'Loughlin : I think we've certainly done it over time but not through this process. It's fair to say that the consultation process that the department undertook would have exposed that there are differing views about the continued requirement for quotas for the delivery of children’s programming on television given the shift of the child audience significantly to online services and catch-up services and to ABC2 from the commercial broadcasters. So I think those observations are part of the consultation process that the department undertook on the broader issue.

Senator HANSON-YOUNG: Have you done any work in relation to whether there should be requirements on streaming services, such as Netflix, Stan or Amazon?

Ms O'Loughlin : I think, again, that would be a policy decision. We haven't done any work in that area.

Senator HANSON-YOUNG: Have you been asked to participate or do you have any role in the competitive neutrality review?

Ms O'Loughlin : No.

Senator HANSON-YOUNG: You haven't been asked to submit anything?

Ms O'Loughlin : We haven't been asked to submit, no.

Senator HANSON-YOUNG: Would you expect that you would be at some point?

Ms O'Loughlin : I expect that we'll be consulted by that committee at some point, yes.

Senator HANSON-YOUNG: But that hasn't happened as yet, even though it's meant to report in September?

Ms O'Loughlin : Not as yet.

Senator HANSON-YOUNG: Would that be a formal submission that could then be released?

Ms O'Loughlin : We haven't intended to put a formal submission into that inquiry.

Senator HANSON-YOUNG: And how about anything in relation to the ABC efficiency review? I suspect it doesn't have anything to do with you, but would you expect that you might be asked?

Ms O'Loughlin : No.

Senator HANSON-YOUNG: Thank you. I want to ask about changes made to ban gambling advertising on television. I assume you're aware of the debate that happened in the Senate chamber at the time that that legislation passed?

Ms O'Loughlin : Yes.

Senator HANSON-YOUNG: What is ACMA's response to the criticism that it allows for subscription television to continue to show gambling ads despite promises from the government that gambling ads on television would be banned?

Ms O'Loughlin : I might ask Mr Cameron to respond to you.

Mr Cameron : The code of practice that the subscription television association had registered with us provides for the prohibition of gambling ads in accordance with the government's policy positions. It does provide for some limited exceptions in relation to services that have low shares of audience, but the broad rules are closely consistent with those which also apply in relation to commercial television and the commercial radio services.

Senator HANSON-YOUNG: What is the justification for allowing some channels to show ads and not others? You are saying it is because they have smaller audience share. If gambling ads are damaging to the public, it doesn't really matter whether the audience is small or large.

Mr Cameron : The ACMA, in considering codes of practice that are presented towards us, must consider whether the code as a whole provides adequate community safeguards. In this context, we need to take into account a whole range of considerations. There was clearly a set of original policy principles determined or announced by the government when these new code arrangements were foreshadowed. We are conscious that the new arrangements applying to online or streaming services contemplated exemption arrangements and explicitly contemplated exemption arrangements for smaller operators, recognising that in some circumstances the commercial viability or sustainability of those businesses might be affected by those restrictions. There were proposals put to the community in a public consultation process by ASTRA, the subscription television association, when they put forward a draft code. We were not satisfied with those arrangements and negotiated with ASTRA a set of amendments which tightly constrained those exemptions to truly small operators and only in the circumstances where they are appropriately identified.

Senator HANSON-YOUNG: So Foxtel effectively has been arguing that they couldn't afford to not run these gambling ads in order to keep these smaller channels afloat. Is that what you are saying to me? It's a commercial decision?

Mr Cameron : The subscription television association presented a set of proposals that recognise that some smaller operators with quite niche audiences have more limited commercial circumstances than others. I think it's important to note that the arrangements in place aggregate the size of the audience of cobranded channels. For example, for the group of sports channels generally known by the Fox name—Fox Sports—their audience share is aggregated for determining whether they are a small or not small operation. So none of the sports channels directly provided by Fox Sports or what will become Foxtel are covered by that exemption.

Senator HANSON-YOUNG: Who did you hear from in relation to allowing this exemption to be put in place? Aside from Foxtel and ASTRA, was there anybody else that appealed to ACMA to allow this exemption to take place?

Mr Cameron : The way codes of practice are established is that the industry associations themselves are obliged to consult publicly on draft codes. The ACMA must be satisfied that that consultation process is adequate before we can approve the codes. So it was through that public consultation process and ASTRA that we received a range of submissions from quite a variety of groups. That was both industry associations and organisations that have an interest in the gambling sector more generally.

Senator HANSON-YOUNG: Did anybody from the government ask you to look at making sure that the guidelines had exemptions that suited what the subscription television channels wanted?

Mr Cameron : The government made some announcements early in 2017 establishing its expectation in relation to the gambling restrictions.

Senator HANSON-YOUNG: I remember the Prime Minister said that we weren't going to have gambling ads on television, but it turns out we still do.

Mr Cameron : And those policy principles were also communicated directly to the ACMA. We took account of them, as we also took account of other submissions and the views expressed to us.

Senator HANSON-YOUNG: So beyond those initial statements from the government, the Prime Minister and the minister, are you telling me that no-one from the government appealed or contacted ACMA in relation to the exemptions that are now in place?

Mr Cameron : The government made some public announcements. The minister also directly wrote to the ACMA in relation to them.

Senator HANSON-YOUNG: Did that include a request for these exemptions for subscription television?

Mr Cameron : That communication did include an indication of an in-principle position in that regard, yes.

Senator HANSON-YOUNG: So the government asked for the exemption?

Mr Cameron : The government indicated that it was aware of the request from the industry and indicated an in-principle position in regard to it.

Senator HANSON-YOUNG: Minister, doing Foxtel's bidding again?

Senator Fifield: Communicating the government's policy. As Mr Cameron indicated, we did convey an in-principle view in relation to some matters. Ultimately, however, as Mr Cameron has indicated, the ACMA has well-established processes for determining codes. Mr Cameron also indicated an area where the ACMA was not satisfied with the proposition from ASTRA. I think it related to the proposed methodology to identify low audience share channels. So ACMA pursued their statutory obligations.

Senator HANSON-YOUNG: How regularly will you review these guidelines now that they've been put in place?

Mr Cameron : We have indicated to each of the industry groups—the CRA, Free TV and ASTRA—that we will closely monitor the operation of the code provisions over the next 12 months and make a decision at the end of that period about whether a review is appropriate or whether they appear to be operating as intended.

Senator HANSON-YOUNG: Thank you.

Senator Fifield: I should add for the sake of completeness that there were some proposals by ASTRA that the government did not support, such as a proposal that there be exemptions in codes for lottery betting. So there were a number of matters where the government indicated that it was not in agreement.

Senator HANSON-YOUNG: I have a follow-up question. Mr Cameron, do you have any role in making sure that the $30 million given to Foxtel for women's sport is actually spent on women's sport?

Mr Cameron : We don't have a role in that process.

Senator HANSON-YOUNG: How would we make sure that actually happened?

Mr Cameron : I think that would be a question you should direct to the department.

Mr Mrdak : The contract with the entity provides milestone reporting against objectives. We can provide some information on that.

Senator HANSON-YOUNG: The money has been given and handed to Foxtel, yes?

Mr Mrdak : An initial payment has been made.

Senator HANSON-YOUNG: How much is that worth?

Mr Mrdak : I will get that detail for you. Mr Eccles will take you through that. The first payment has been made, but there are other payments made by milestone.

Mr Eccles : An amount of $7.5 million has been provided, which is the first payment. A broadcast plan, if you like, has been submitted and agreed to. We expect the first report to be provided at the end of the financial year. So at the end of June we should get the first report.

Senator HANSON-YOUNG: Thank you. When will the next instalment be made?

Mr Eccles : Upon us being satisfied that the first report is appropriate.

Senator HANSON-YOUNG: So some time post July?

Mr Eccles : Early in the financial year.

Senator HANSON-YOUNG: Is it evenly split, the $7.5 million up to $30 million?

Mr Eccles : That's right, yes.

Senator HANSON-YOUNG: Thank you.

Senator STEELE-JOHN: Ms O'Loughlin, in February, I put some questions, I believe, to you or perhaps to the minister or maybe even Ms McNeill, so whoever is the most appropriate can take it. They relate to the telecommunications protections code review. I would like to take the opportunity to, first of all, check in on the progress of this review. I wonder particularly if you can provide me with an update on what has happened with the review so far. What are the next steps in particular relating to any information you might have around the potential code provisions for sales incentives and mis-selling?

Ms O'Loughlin : Thank you. I am just checking my notes. We may have said some of this before to you, so I apologise. To date, there have been 10 meetings of the TCP code review working committee, the first of which occurred on 31 August 2017. The most recent one was on 2 May, so just a few weeks ago. It's still anticipated that the draft code will be released for public consultation later in 2018. I will check with my colleagues whether we have any update on the specifics.

Ms McNeill : The only matter that I would add is to say that in the working group there has been a focus on credit assessment processes rather than mis-selling. Tackling credit assessment processes and improving those, though, is expected to address some of the problems that mis-selling can also create.

Senator STEELE-JOHN: All right. But you don't at this stage envisage specific provisions in relation to sales incentives or mis-selling?

Ms O'Loughlin : No. I don't think so.

Ms McNeill : Not at this stage. But there's still a way to go before the code is released for public consultation.

Ms O'Loughlin : And we would take very seriously what came out of that public consultation process in terms of whether the TCP code was adequate for us to register it.

Senator STEELE-JOHN: Thank you. On 27 April, Minister Fifield announced the telecommunications safeguards review. The review appears to be focusing on consumer redress and complaints handling, at least in the first instance. Could you provide me with information on if and when the review will consider whether self-regulation is contributing to poor practices in the recent increases in complaint numbers?

Ms O'Loughlin : The consumer safeguards review will be undertaken by the department.

Senator STEELE-JOHN: So that would be Mr Mrdak?

Mr Mrdak : That's correct.

Senator Fifield: It's in three parts. Mr Mrdak can take you through each of them.

Mr Mrdak : The initial stage of work is looking at consumer redress and complaints handling. At this stage, you are asking about the deregulation, effectively?

Senator STEELE-JOHN: Whether self—

Mr Mrdak : Self-regulation?

Senator STEELE-JOHN: Would you like me to repeat it?

Mr Mrdak : Yes, please.

Senator STEELE-JOHN: Could you provide me with information on if and when the review will consider whether self-regulation is contributing to poor practices in the recent increases in complaint numbers?

Mr Mrdak : The first aspect is consumer redress complaints handling. The second aspect is reliability of services, and then there is choice and fairness. All will look at the current co-regulatory model to a certain extent in all three phases, so it's not quite as clear-cut that that will be an identified part. That is the way I would probably describe it. I will ask Ms Williams if there is anything further we can add. There's not a clear point in looking at that. Right across those aspects we will look at those issues of the current coregulatory model and whether it is adequate.

Ms Williams : I think it's useful to look at the consumer safeguards review as essentially a first principles review. So it will go back and look at the all of the current elements of the regulatory framework and I guess look forward in terms of what sort of regulation and regulatory arrangements are required in a modern telecommunications environment. So it will consider all of those issues that you are raising.

Senator STEELE-JOHN: Wonderful. That is good to hear.

Ms O'Loughlin : I will just add to that. Obviously, the complaints handling standard that the ACMA has consulted on and is intending to put in place by the end of June lifts up some of the requirements in the code out of that co-regulation arrangement into a standard which is directly enforcement by the ACMA.

Senator STEELE-JOHN: Wonderful. I know I am stealing time off Senator O'Neill. I think you will have to take this question on notice. With regard to complaint numbers, would you be able to provide me with year-to-date, month by month an update on the number of complaints received by the TIO?

Ms O'Loughlin : We could take that on notice.

Senator STEELE-JOHN: The last figures we have are in the months of July to December 2017. I'm interested in a month-to-month update on the same metric between December and where we are presently.

Ms O'Loughlin : They haven't been published as yet by the TIO. We can certainly make inquiries for you about the expected date that they will be published.

Senator STEELE-JOHN: Thank you.

Senator O'NEILL: Mr Tanner, you gave me a response with regard to the 31 December 2020 date for the current licences. You articulated concern that had been raised in previous iterations of this process that went to uncertainty in the market. Currently, LPON licences cannot be extended beyond 31 December 2020 because the ACMA has not yet decided under section 34 of the BSA to make spectrum for LPONs beyond this date. Is that a correct statement?

Mr Tanner : Yes.

Senator O'NEILL: Thank you. How many LPON licensees stand to be affected by the ACMA's decision?

Mr Tanner : I would have to take that question on notice. It would be quite a large number. These are low powered licences, so you get quite a dense pattern of them across the country. I will have to take the exact number on notice.

Senator O'NEILL: I'm very happy if you take on notice the exact number. Can you give me a bit of a scale?

Mr Tanner : Hundreds.

Senator O'NEILL: Thank you very much. When will the ACMA make a decision about the extension of spectrum allocations for LPONs?

Mr Tanner : Beyond doing it this year, I don't have a date. I should make the point that this is not a particularly big deal. We weren't making a huge meal out of it, so I'm pretty confident we can do it in that timeframe. But if you want to know when we've actually slated to make that move, I'm afraid I will have to take that off line.

Senator O'NEILL: Does that mean you can take it on notice?

Mr Tanner : Yes.

Senator O'NEILL: And get back to me with a date?

Mr Tanner : I can do that.

Senator O'NEILL: Wonderful. If I heard you correctly, you indicated certainly before the end of the year?

Mr Tanner : Yes.

Senator O'NEILL: What would be a reasonable practical time to give notice to those in the community who need this information?

Mr Tanner : I'm not sure of the question. How long do you think is reasonable notice for an extension of the five-year period?

Senator O'NEILL: Yes.

Mr Tanner : I would suggest that we think what we are proposing to give them is reasonable and addresses their concern, but I am happy to be told otherwise by the LPONs or their representative organisation.

Senator O'NEILL: So how much notice do you think you will give them, roughly?

Mr Tanner : Well, it's still 2020, so they're going to get about two or two and a half years notice.

Senator O'NEILL: If you deliver by the end of the year?

Mr Tanner : Yes.

Senator O'NEILL: What process, including public consultation, will be taken to inform the ACMA's decision?

Mr Tanner : I would expect a fairly low-key process. But, beyond that, I haven't given a lot of thought recently to what sort of process we would use. I should make the point that it's not particularly contentious, to my knowledge, that the drop-through would be extended. That's possibly one of the reasons why we allowed it to go past what was helpful for the LPONs. We have certainly learned a lesson from that. The point about doing it in five-year increments is it keeps all our long-term planning options open, but I'm not aware any pressure on the part of the spectrum we're talking about, which is down the bottom of the FM radio dial, is emerging. So, in those circumstances, I'm not sure why it would be contentious.

Senator O'NEILL: Thank you, Mr Tanner. What factors or criteria will guide the ACMA's decision?

Mr Tanner : I think I've begun to answer that. Section 34 itself points out a range of criteria. But, in essence, the way section 34 is designed, there is an assumption that the primary purpose of spectrum that had been designated as broadcasting services band spectrum was to carry broadcasting services, be they national, commercial or community. They are highly influential and relatively unfettered mass audience services that are seen as the major broadcasting services. Section 34 was designed so that, to the extent that spectrum wasn't needed for those mainstream services, it could be made available for other niche services or for non-broadcasting use. We've used that, I think, over 20 years quite creatively to allow a quite large open narrowcasting sector to develop, both high powered and, in the case of LPONs, a very low powered sector. A lot of types of radio have proliferated in that space that didn't previously exist. They are typically niche services. The spirit of section 34 is really to consider whether or not the BSB spectrum in question is needed for mainstream broadcasting or whether it could be made available for other uses rather than just left fallow. That would be my high-level account of what it's about. But there are some specific heads where we're required to have regard, if you look at part 3 of the Broadcasting Services Act.

Senator O'NEILL: Would it be fair to take from what you said that one of the factors would be innovation and capacity for innovation?

Mr Tanner : If by innovation and capacity for innovation you mean that we can take into account how useful the alternative is, then the answer is yes.

Senator O'NEILL: I will go to Mr Mrdak. Would you be able to confirm when you expect the second exposure draft of the rad comms bill to be released for consultation?

Mr Mrdak : I will get you a more specific date. I will check with my officers and come back to you.

Senator O'NEILL: This afternoon?

Mr Mrdak : Yes.

Senator O'NEILL: Thank you very much. How long will the consultation run for?

Mr Mrdak : That is yet to be determined. Again, I will come back to you with the plan in terms of dates.

Senator O'NEILL: Okay. When does the government anticipate the bill will be introduced into parliament?

Senator Fifield: I think later this year will be the objective.

Mr Mrdak : It really will be dependent on when we can complete the drafting. It is a priority piece of legislation for government, but it really now depends on the drafting process being completed.

Senator O'NEILL: Again, the end of year is the timeline, roughly?

Senator Fifield: That would be good, but we've got to look at issues such as drafting resources. So I don't want to absolutely commit, but that's the thinking.

Senator O'NEILL: Minister, I want to ask you a bit about community TV. Could you give us an update on the outcome of the CTV roundtable?

Senator Fifield: Certainly. A number of weeks ago, I met with representatives of community TV from Perth, Adelaide and Melbourne. Senator Griff joined me for that roundtable in Melbourne. There was the opportunity for community TV to outline the steps that they had taken to look to operating in the online environment in recognition that the spectrum is a valuable community resource and the government's stated position, which had been accepted by community TV, is that they should transition to an online environment. As you are probably aware, I have given a number of extensions to community TV and their access to spectrum. Community TV requested further extension, which I said I would consider. That's what I'm currently doing.

Senator O'NEILL: So it's still pretty live and the conversation has been around the capacity to offer a further extension?

Senator Fifield: Community TV put that proposition to me, and I undertook to examine it.

Senator O'NEILL: I notice that your head is nodding. So is that a reasonably good sign, Minister?

Senator Fifield: What I guess informed the government's position—this goes back to before my tenure in this portfolio—was that there are likely to be new uses for spectrum identified. The government wanted to give the opportunity to community TV to transition. But in doing so and in giving extensions, by the same token, we don't want to preclude or cut off future uses of spectrum. So they are the things that are being balanced in the conversation.

Senator O'NEILL: Community TV stations have been making progress in creating this new revenue stream from online, but I think we would all agree that they would benefit from the period of certainty with the free-to-air platform to support it. Is the minister able to provide a period of stability for the CTV sector to assist remaining stations in their efforts to transition to an over-the-top delivery model?

Senator Fifield: Well, that's what we will be examining.

Senator O'NEILL: What is the timeline around that examination?

Senator Fifield: A short timeline, because I think it is 30 June.

Senator O'NEILL: Thirty-seven days?

Senator Fifield: Yes.

Senator O'NEILL: Has it been given consideration before this date? It's happening quite close to the closure.

Senator Fifield: Well, I undertook in the context of maybe a reform, with Senator Griff and his colleagues, that we would have a roundtable with community TV to discuss with them their efforts to transition. They put a proposition to me which I'm considering.

Senator O'NEILL: Just to put everybody out of their misery, when will the stations be updated on the outcome, given that looming 30 June deadline, Minister?

Senator Fifield: Very shortly.

Senator O'NEILL: Later this afternoon?

Senator Fifield: Very shortly, Senator.

Senator O'NEILL: Not that shortly? I'm just remembering your oracle-like tendencies in the Senate in recent debates. I thought you might be able to foretell the future and just let us in on the secret this afternoon.

Senator Fifield: We did have an interesting discussion recently in the Senate about the characterisation of my mode of delivery; that's true.

Senator O'NEILL: I think that's it from me.

Ms O'Loughlin : Senator O'Neill, I will add a bit more information. It struck me, when we were talking about the innovation fund earlier, that the regional publishers innovation fund is another new capability for us. Senator Griff mentioned getting ourselves much more familiar with the regional publishing landscape. We did receive additional funding for that in the additional estimates process of around $2 million over three years.

Senator O'NEILL: For the administration?

Ms O'Loughlin : Yes.

Senator Fifield: I want to make a correction. Earlier, I did say that ASTRA had sought an exemption in terms of the gambling ad restrictions for betting advertising. It was actually Free TV that sought that, not ASTRA.

CHAIR: Thank you.

Mr Mrdak : I will add to that. Senator O'Neill just asked about the rad comms bill. I am advised that given the complexity of the drafting and the clearance process, it is unlikely to be until at least late July before we have a draft. We are looking at a minimum six-week consultation period. So that takes us into later in the year before we are in a position to bring that legislation forward.

Senator O'NEILL: Would you be able to provide on notice the details of the consultation process?

Mr Mrdak : Certainly.

Senator Fifield: When I said betting advertising, I meant lottery betting advertising just then.

CHAIR: Thank you for the clarification.

Senator O'NEILL: Minister, I think earlier you said today that you sent a letter to ACMA earlier this year on the issue of gambling ad promotion during live sport?

Senator Fifield: Yes.

Senator O'NEILL: Could you table that?

Senator Fifield: Yes. We will take that on notice. It was a letter to ACMA.

Senator O'NEILL: If your office could table it today in the course of the hearing, that would be very helpful. Thank you.

Senator Fifield: I want to further your point about being oracle like. I think I said I was being professionally Delphic on occasion as opposed to being oracle like.

Senator O'NEILL: I would just like to know the date that the sector is going to find out. Let's just make it plain.

Senator URQUHART: I have some questions about the NBN spectrum. In previous estimates hearings, we've discussed the 3.5 gigahertz licence issue to NBN in the metropolitan licence area. Has NBN briefed ACMA on the 5G trials it subsequently announced?

Mr Tanner : I am aware of the trials for 5G, but I'm not aware that we've been briefed on them.

Senator URQUHART: So what is ACMA's understanding of the purpose of these trials?

Senator Fifield: I think from memory, just while officers are consulting, it refers to a speech by Ray Owen at NBN. I don't think it was about NBN trialling the 5G as a mobile telco, as it were. I would have to refresh myself as to the context of Dr Owen's speech.

Mr Tanner : I have just spoken to one of our engineers who is closer to the 5G issue. To the best of our knowledge, it's simply a technical trial. They are testing some of the features of 5G, such as massive MIMO. I guess they're working out how it performs for the particular business model they have, but that's speculation on my part.

Senator URQUHART: Thank you. ACMA has advised this committee that it reviewed various spectrum options back in 2014 and provided advice to the department on a number of bands. These bands included the 700 megahertz, 850, 1.5 gigahertz, two gigahertz and 3.6 gigahertz. Can you tell me how much spectrum was available in the 700 megahertz band?

Mr Tanner : At present, none. That's the so-called digital dividend spectrum, which is now held by four mobile carriers as spectrum licences after auctions in 2013 and last year.

Senator URQUHART: So who was the incumbent user?

Ms O'Loughlin : So the incumbent users were the commercial free-to-air and national broadcasters. Through the process of digital switchover and then, following that, the restack, 700 megahertz spectrum was freed up. It was sold at auction to originally two of the telcos and an additional telco further down the track.

Senator URQUHART: So all the free-to-air broadcasters in the 700?

Mr Tanner : Broadcasting has quite different technical characteristics to telecommunications. Basically, individual broadcasters used seven megahertz channels in different areas that were scattered throughout a block of spectrum between, from memory, 430 or 450 megahertz and 820. Digital television was introduced in the gaps between analogue channels. When analog was turned off, the department, in particular Nerida, organised work with industry to restack the remaining digital channels to take up a smaller amount of space. Basically, the result of that was to free up a block of spectrum from, I think, 698 megahertz to 820. Most of that spectrum has formed part of a globally widely taken up allocation called the 700 megahertz APT mobile broadband allocation. That's what we've allocated here in Australia. It's now in the hands of carriers except for a bit at the top, which wasn't internationally harmonised in that process.

Senator URQUHART: But didn't the ACMA provide the advice on the 700 megahertz in 2014 after those auctions had occurred?

Mr Tanner : In 2014, one of the auctions had occurred. We allocated six out of the nine paired spectrum licences that were on offer. So there was still two times 15 megahertz available at that time. That was on the counter with a direction from the government saying that the price was $1.36 per megahertz pop, which is a very high price. At that time, there was not much evidence of further demand for that. But that picture has changed progressively over the last three years, as you may be aware.

Senator URQUHART: So did ACMA make a recommendation to the department on the most appropriate band to meet NBN requirements or presented options?

Mr Tanner : I recall that it did. I wasn't closely involved. But it did canvass options. Certainly 3.5 was the one that ticked all the criteria.

Senator URQUHART: What trends has ACMA observed in candidate bands for fixed wireless over the past five to 10 years?

Mr Tanner : I guess two relevant trends here are that fixed wireless tends to want to use the same or similar technologies and, therefore, the same and similar globally harmonised bands as wireless mobile broadband. So that's quite a striking characteristic because it means that the spectrum that fixed wireless requires is typically highly valued by mobile network operators across many countries and is consequently very expensive. A lot of it is actually in the hands already of mobile network operators or, in one or two cases, fixed operators. So that's one trend. I guess in the last 10 years, another striking one has been that as we've moved up through the generations of mobile technology, typically new bands have become harmonised internationally for fixed or mobile wireless broadband such that their value in Australia to Australian players begins to rise. So most recently, since 2016, really we've seen the emergence of bands which are seen as the starting point for 5G services. That has caused a rapid revaluation, if you like, worldwide of certain bands. But that pattern you can see playing out over the last 10 years, with the overall pattern being most countries or all countries in the developed world have been seeking ever more spectrum internationally harmonised for mobile and fixed wireless broadband.

Senator URQUHART: Thank you. So it's fair to say that there has always been a strong alignment with mobile bands, but that has become more pronounced in recent years?

Mr Tanner : I would just leave it that it's a strong alignment. I'm not sure if it has become more pronounced.

Senator URQUHART: What relatively low-value potentially fixed wireless bands currently exist that are not 5G aligned?

Mr Tanner : A lot of potential fixed wireless bands are not 5G aligned. That is normally because they are in use for 3G or 4G. As to which ones are low value, that's quite a complex question. I would have to take it on notice. But the valuations of different bands vary depending on a range of factors.

Senator URQUHART: So some of those bands could include bands which are currently licensed and held in private hands or bands which are being investigated for refarming?

Mr Tanner : Yes. That's true.

Senator URQUHART: What ones are they that currently exist? Are there any others apart from those?

Ms O'Loughlin : Probably the five-year spectrum outlook—

Senator URQUHART: Sorry?

Ms O'Loughlin : The five-year spectrum outlook that we released last week I think will give you quite a lot of that information. It is a draft, so we're putting it out for public consultation. We expect that LPONs and other people in the market will come back to us about what their priorities are in terms of those spectrum arrangements. So I think that's probably where you'll get a lot of that flavour of what these various bands can be used for and by whom.

Mr Tanner : I might underscore that. In fact, the FYSO contains a quite comprehensive list of bands, even out to what we are monitoring as very possible long-term refarming candidates, not just for mobile and fixed broadband, although that's probably the major driver of refarming pressure. So you will find every band that is really under any likelihood of being considered there, including the handful of them where consideration is becoming a bit more pressing or where we are actually progressing to auction.

Senator URQUHART: Thanks, Mr Tanner. Has the government sought ACMA's advice on alternative bands that could be used by NBN to deliver fixed wireless in metropolitan areas?

Mr Tanner : We have certainly discussed this issue informally with the department from time to time over the last year or more.

Senator URQUHART: So it has been more an informal discussion rather than the government seeking advice?

Mr Tanner : I don't believe we've been formally approached for advice, no. But we've certainly discussed it informally on a number of occasions.

Senator URQUHART: I understand there are some alternative bands that are not currently 5G aligned but for which fixed wireless equipment is available. These include the 1.8 gigahertz, 2 gigahertz, 2.3 gigahertz and 2.5 gigahertz, which are currently in private hands. I understand that they're being investigated for refarming. Is that correct?

Mr Tanner : I would say it is correct that they are in private hands but wrong that they be investigated for refarming by us. They are spectrum licence bands, which means that in most parts of Australia they are held as spectrum licences. Those are very long duration, fully tradable licences. They are most commonly held by existing mobile network operators. Because they are wide area broadband licences with a great deal of flexibility, it is possible for the private owners to refarm them themselves within certain technical parameters. For example, if one of those bands is being used at present for 3G, then it is possible at their own discretion any time for the owners to refarm them for 4G, which is sufficiently compatible that it can use the same spectrum. So, yes, they are refarming candidates, but not for the kind of refarming that we do.

Senator URQUHART: You just said that they could be refarmed for 4G. Are there any other provisions that they could be refarmed for?

Mr Tanner : Technological neutrality is not possible with spectrum for various reasons, but technological flexibility is, and we plan to maximise technological flexibility. So of the bands we allocate, we don't allocate for Gs. We don't allocate a band for 5G even if that's how we hype it. We allocate it for mobile broadband, and we expect that in 12 years it will be used for 6G, whatever that looks like. So I'm not quite sure if I've moved on from your question.

Senator URQUHART: That's fine. Is the ACMA aware of any technical trials in Australia to explore spectrum sharing?

Mr Tanner : Spectrum sharing is such a broad topic that it's probably a good way of describing everything we do. Everything we do is look for ways to share spectrum. There are traditional ways. There are novel and new ways.

Senator URQUHART: So what are the different types of spectrum sharing models that are available?

Mr Tanner : A traditional way that we share spectrum is at a very high level, dividing it into bands with different but compatible uses so that you have a noisy application in this band and one which requires silence next to it rather than mixing them all up. That's at the very highest level. That is usually coordinated internationally. When you go down and look at what is going on in a band, quite often there's no clear single use that has the highest net public benefit attached to it. There might be multiple uses and a lot of entities that want to get access. The traditional way that we've shared that is through the coordination of individual licences. At present, in the 21st century, when a lot of this work is done by the private sector, the ACMA, rather than assigning all those licences itself, basically publishes rules that says that in 400 megahertz you can use it for land mobile, point to point, but these are the rules. If you want to use it, you've got to find a quiet bit of spectrum. It has to be within this distance of any other service. It's got to comply with various rules that we've designed to ensure that you don't get too much mutual interference between the wanted service and existing services. So that's the traditional way in which we share spectrum. I guess I would call that coordinated apparatus licence bands. There are an awful lot of them. It's a model which I see continuing on into the future as well.

Senator URQUHART: Is there sometimes uncoordinated sharing?

Mr Tanner : Yes. There are applications where the devices can do all the work for you. All you have to do is allocate that band for the purpose. They are typically bands that we issue class licences for. For example, around 5.9 gigahertz, from memory, we have opened the doors to intelligent transport systems, which are going to allow in the future a whole lot of applications in which cars are able to communicate with the telecommunications system, with each other or with bollards attached to electricity poles or whatever. All we've done there is we have determined a class licence that says that if you import and use a device that complies with ETSI standard number blah de blah de blah de blah, you may operate in these bands in Australia. What we're assuming there is that the devices don't need individual coordination. So we don't even need to know the names and addresses of the people who are using them. The devices are designed to work it out for themselves. That's a more modern and also very common way in which spectrum is shared.

Senator URQUHART: Are you aware of any trials involving dynamic spectrum sharing where two users are potentially sharing the same frequencies to better utilise the capacity?

Mr Tanner : Yes. A lot of work is being done internationally on dynamic spectrum access. I'm particularly aware of work that has gone on in the United States and in Great Britain. I will ask my team in a second if we are aware of any work in Australia. I will give you some examples. There has been work over now many years to look at what are basically dynamic spectrum access models in what is called TV white space. More recently, the United States has used a dynamic spectrum access approach in a band called the 3.5 gigahertz band. That's certainly a model that was argued to us while we were reviewing arrangements in the 3.6 gigahertz. What I have just described with coordinated sharing is fairly static. I assume that you two already have your licences in the Sydney area. You come to me and you want a third licence. My rules make sure that your service won't interfere with theirs. I can fit you in and maybe I can fit in somebody else. But it's very static and it assumes everybody has got a licence for a year or two years or however long they need.

I think the idea of dynamic spectrum access at root was to look at a situation where you have multiple potentially compatible uses of a band and you look to technology to dynamic systems, like databases of who is using it, to work out whether there is spectrum available in this area this day. You say, 'Great. Okay, I'll use it. I'll interrogate this database and I'll check if there's a band. If there is not, maybe I'll a go to another band.' It works if the technology and the markets come together.

I should make two points about it. One is that this is an incredibly exciting idea. We in government are always very keen to see technology and third party actors do things that we've traditionally had to have bureaucrats do. So, in principle, dynamic spectrum access is a tremendous idea, and we will back it as it becomes viable in this country. The other point I make, though, is that despite work over several years, there's not yet a lot of obvious success stories for dynamic spectrum access approaches that we're aware of. We have apparently had TV white space related trials in the past. There are none current. So we're really waiting for the applications. Typically, what it requires enough in it for everyone for it to work.

With TV, what you have is a primary service that can't be interfered with, which is television. You need to have Channel Seven in Houston. You need to have Channel Six in Miami or wherever. America is where they've done the most work on this. There's a lot of spectrum in between that, provided you do not turn up the power too high, you can use. The question is: who is that going to be useful to? You can't use it in Houston. Maybe there's not much spectrum in the big areas. It's mainly in the bush. I think the US was hoping that this was an alternative source of broadband for wi-fi type applications. A lot of energy and entrepreneurial pressure has been put into that to try to make that pay. Having said that, there's not yet much commercial interest here in Australia.

Senator URQUHART: Is it working well in America?

Ms O'Loughlin : My notes indicate that the Federal Communications Commission, the FCC, is currently reviewing the arrangements because of concerns that have emerged. As Mr Tanner said, the difficulty with the current DSA is that you've got to have tiers, such as tier 1. Look at, say, the 3.6 gigahertz spectrum in Australia; it is being proposed that we might be able to use dynamic spectrum access for it. If you have a mobile phone provider in that, they are going to want always to have that spectrum in use. So you can't then have, say, the wireless Internet service providers, who also want to have ongoing services. They just can't share. So that has been our concern. We have been really interested in the United States model, but we don't see that as an option in the 3.6 gigahertz at this stage. Therefore, we're using a more traditional toolkit to allocate spectrum in the 3.6 band.

Senator URQUHART: What are the reasons that the ACMA has rejected the dynamic spectrum leasing methodology for the 3.6 gigahertz band as proposed by WISPA?

Ms O'Loughlin : That is precisely what I was coming to in my last answer. It's the issue of tiering.

Senator URQUHART: Of not being able to share?

Ms O'Loughlin : Yes.

Mr Tanner : Another way of putting that is that supply simply exceeds demand here.

Senator URQUHART: Sorry?

Mr Tanner : Supply simply exceeds demand. What the existing point-to-multipoint services want is not some temporary service which turns on when spectrum is not needed. It wants to provide a service 24 hours a day, 365 days a year, which is a ubiquitous service. There isn't room in its coverage area for other services to be operating at any power. That is the same thing that the proponents of 5G fixed and mobile broadband want, only they want it across the same areas but even bigger. So you can't just say, 'Okay, well, look, we'll have some tiers.' You've got to establish who's going to come first. The obvious way to do that, when demand exceeds supply and you're not sure what the valuation is to the parties, is to put it to the market. That's what we've felt we have had no choice but to do. But I should make it clear that, in addition to putting it to the market, we've gone a step further. Our work established that we believe that the strongest net public benefit lay in the use of the spectrum for very wide area broadband wireless services. We are going to the market on those terms—with very large, wide area spectrum licences.

Senator URQUHART: So is ACMA aware of the concerns of the Communications Alliance and the Satellite Services Working Group around the lack of interest in the ACMA in sharing spectrum?

Ms O'Loughlin : Yes. I would have to say that we were reasonably disappointed with the working group. The ACMA has a very strong interest in sharing spectrum. It has always had that interest. I think we were somewhat taken aback by the claims of the satellite sector that we did not. I also thought it was interesting that what the satellite operators were asking for was not really for spectrum sharing and that they would be the priority—that only they would have use of the band. So we will work through with the comms alliance working group. We have a very strong interest in the satellite sector. We think there's real innovation in that sector and we'll continue to work with them. I don't know whether Giles or James want to add anything to that.

Mr Tanner : I think the chair has focused on some aspects that were critical of us and that I would strongly reject. I would also reject the criticism that we have a bias towards one particular spectrum use here. I think we approach the issue of using spectrum and who uses it without fear or favour. So I was offended by that. But there's a lot of information in that and there's a lot of requests, because the satellite sector is very diverse. I think that the submission is timely from that point of view. We've just put out the draft five-year spectrum outlook. We will be treating that submission, to the extent that it does identify a series of issues and priorities for the sector, as an early submission to that five-year spectrum outlook. Some of those priorities we've already got in hand, and they are reflected in the five-year spectrum outlook. Others we can weigh up against other submissions we receive. So certainly the timing is good.

I will come back to that issue. As I read the submission, the concerns seemed to be that we were against sharing because we were getting rid of those kinds of coordinated apparatus licence bands that I was describing to you and replacing them with single owner spectrum licences, such as we described for 700 megahertz. That is something that we have done from time to time and we will probably continue to do. We have certainly done that in 3.4 in the past and we're doing it now with 3.6. That is an issue which rankles with parts of the satellite sector who were previously much bigger users of those parts of the spectrum.

Senator URQUHART: Aren't they being disadvantaged by the planned option of the 3.6 spectrum?

Mr Tanner : I will come to that. I will make the point before I come to that that this isn't the same thing as getting rid of all coordinated bands. It is simply a decision that the time for coordination has passed. In this band, the highest net public benefit lies with allocation for a particular use. The satellite sector itself in the submission seeks allocation of some bands for sole satellite use. We are happy to do that. We are opening up new coordinated bands and we are evolving our coordination arrangements often to suit the satellite industry. We will continue to do that. So just because the ACMA has on occasion decided, and will on occasion in future decide, that a band should move out of coordinated apparatus licence arrangements because of a change in where the net public benefit lies in its use does not mean that we are against that let alone hostile to a very important industry such as the satellite industry.

I think you asked me about 3.4 and 3.6 and whether the satellite sector was disadvantaged. I will put aside 3.4 because that is pretty ancient history now. That occurred under the Australian Communication Authority. In 3.6, major city satellite earth stations were a significant group of incumbents in the band when we started our review. There are major city satellite earth stations in Sydney. There's one in Perth. Optus and Telstra have facilities. I think Intelsat has a facility. In the course of our review of 3.6, we determined that the spectrum in those areas should become available over time for fixed or mobile wireless broadband in the manner that we're now doing it. But we did give very careful thought to the arrangements that should continue to be the case for satellite. Where satellite is using expensive and valuable bands that are also needed for terrestrial applications in major cities, we are very keen to see as far as possible satellite not expelled from those bands if it can move its business out to remoter areas where the spectrum is less valuable.

To that end, if you look at the detail of the recommendation that we made to the minister on 3.6, and which has now been embedded in a reallocation declaration, you'll see, first of all, that we have a two-year reallocation period in Sydney and Melbourne. That's a short one, but that only followed advice from the satellite operators there that they could get out of the band in two years and they were happy to do so. We've got a five-year one in Perth. That reflects our best understanding of how long Intelsat will take to move its facility out of the area. We talked at great length to Intelsat about what time it needed. In that band, we already have what we call a satellite park up on the north coast of Western Australia, where we have been able to allow satellite operations to continue across a series of very high value bands that are also designed for terrestrial use. They take advantage of the fact that Australia has lots of relatively remote land.

What we've proposed to the satellite industry and what we've had a fairly constructive response to as well, I should say, is that we should set up a similar park or parks in the eastern side of the country. If you look at the detail of our 3.6 allocation process, you will see that we have three sites located where we have carved big holes in the proposed spectrum licences. Those three sites are to keep three options open for an eventual significant location of satellite earth stations in 3.6 but well away from settled areas where people also need terrestrial 5G. So what we've done in 3.6, I think, was very disappointing for at least one satellite operator and has been vehemently opposed. But I would say to you that we've found a new way to share 3.6. We've proposed geographical sharing and we've taken very, very careful account of the needs of those incumbents in crafting the reallocation periods.

Senator URQUHART: Thank you.

Ms O'Loughlin : I might add to that, which is possibly why we are a little taken aback by the submission, that over the last 15 years, the only bands that have been refarmed from satellite are 3.4 and 3.6. There are many other incumbents, including the aforementioned commercial broadcasters and commercial broadcasters who used additional spectrum for their outside broadcasting. They have all needed to move. I think it's fair to say that the professional team of our engineers has played a very even hand in technological developments. I think satellite, aside from mobile, is probably where we've spent the most attention over the last many years, and we will continue to do so.

Senator URQUHART: Thank you.

Mr Tanner : I need to apologise to you and to Intelsat. The company is Inmarsat. The company in Perth that we've been in discussions with is not Intelsat. It's Inmarsat. I apologise to both you and Intelsat for that.

Senator URQUHART: Very similar.

CHAIR: They are okay.

Senator URQUHART: I might go to the minister. The Bureau of Meteorology has said that moving wireless Internet providers to the 5.6 gigahertz spectrum could interfere with existing radars and that wi-fi emissions can damage the range, resolution and measurement of the weather radars. Knowing this, are you still confident about ACMA's advice about the 3.6 gigahertz spectrum option?

Senator Fifield: Part of the purpose of ACMA's earlier period of consultation was so that spectrum stakeholders could raise with them issues that they wanted reassurance on or advice. Obviously, as a function of the auction, it may be the case that those who are known as the WISP operators will need to move to other spectrum. I say they may need to because it's quite possible that they may enter into their own arrangements with those who are successful at the auction. They may indeed themselves be in the auction; who knows? So it's not necessarily the case that they will have to go to where the Bureau of Meteorology currently operates. But ACMA have experience in appropriate arrangements to mitigate interference issues. They are probably better placed to talk about what those particular contingencies are.

Senator URQUHART: Before I do that, I want to follow on from that. Were you aware of the concerns when you gave the go-ahead for ACMA's planned spectrum auction on 8 March this year?

Senator Fifield: ACMA would have flagged a range of issues with me. I would have to check whether that was one that specifically was.

Mr Tanner : I want to interrupt here. I want to address a premise in that question that I think should not stand. It's certainly the case that a point to multipoint service such as a WISP could cause interference to an existing weather radar, but it was certainly never our intention to allow point to multipoint services to be introduced anywhere that would cause interference to an existing weather radar. We hadn't selected 5.6 because we wanted to push radar out. We selected 5.6 because we don't see radar going anywhere for a long time here or internationally. We accept the band is going to be primarily an important radar band for a long time. So the rules that we promulgated last week in draft form to start the formal discussion with both BOM and with the WISPs are rules for setting up what I was describing earlier—a coordinated apparatus licence sharing regime where the assignment rules mean that if there's weather radar nearby that you would cause interference to, you can't have a licence there. So I just wanted to make that clear. I know there are concerns. I know the bureau will be very interested in this process. They will naturally come to it with concerns. But one of those concerns isn't or should not be that radar is being pushed out of the band or that existing radars will suffer interference. Coordinated apparatus licence sharing arrangements is the old traditional and very, very effective way of preventing interference to existing services.

Senator Fifield: I will pick up on what Mr Tanner is saying. In some interviews I have done there did seem to be a persistent misunderstanding that there was a proposal for radar to move. There is no proposition for that.

Senator URQUHART: All right. Mr Tanner, you said that you wouldn't grant licences. Is that one of the options that the ACMA is exploring with BOM to manage any potential interference?

Mr Tanner : What we are discussing is, in fact, the coordination rules. There are a couple of things we are discussing which are more WISP specific. But the key thing that affects the bureau is that they are coordination rules using the best of our technical understanding of where the radars are designed to say, 'Okay. The rules have to work such that you can assign a point to multipoint licence anywhere where it won't cause interference to a weather radar.' We want to test that. We want to test the assumptions we have made on the best information we can obtain from the bureau. We are working closely with them to get all the information that we need to do that.

Senator URQUHART: You sound very positive about that. Given that, why is BOM so concerned about the ACMA's proposal?

Mr Tanner : BOM, like a number of federal government agencies, has an important need to use 5.6 gigahertz spectrum and 2.7, which is another band used for its weather radar. It actually doesn't need all of that spectrum. It needs the parts which it's using in the areas where it's using it. We are proposing to make the parts that are not used available. We are proposing to hold back the central 10 megahertz of the 40-megahertz block. That is to give the BOM the opportunity in the future to put in additional weather radars. But BOM has said—and it's true—that nevertheless if WISPs go into areas where there are no radars at present, that may constrain our ability in future to put radars at that spot. So it is the case that whenever the Commonwealth, which is easily the biggest user of spectrum in Australia, shares bands that it has a primary use for, it may constrain its future choices.

So I think you'll find if you probe that the BOM is more concerned about potential constraints on its future choices. There is other spectrum it can use. It can put weather radars in using 2.7. In some ways, I understand that's even better for weather radar. But there may be a cost differential between the radars. So BOM is concerned about its future flexibility being compromised. That's where its interest is coming from. We respect that interest and will work closely with them. But, as a starting point, we try and take a Commonwealth-wide view. The Commonwealth is the biggest user of spectrum. We don't like it to be too greedy. We are keen that the Commonwealth do the many essential functions and discharge them effectively, but there has to be some compromise about future flexibility or you end up with actually very little spectrum available for the civilian economy. So I think that's the underlying issue there. But there may also perhaps be other things that I'm not aware of or that are misunderstandings. I hope we can clarify them. We are working closely with them.

Ms O'Loughlin : In support of Mr Tanner, I think possibly there has been a bit of misreporting in the press, which BOM have reacted to. There has been not as much information out there on what our plans were for 5.6 until really last Friday. So now we have that 5.6 consultation paper out there. It clearly goes through how we're going to approach the task in a coordinated way. It clearly spells out that existing BOM radar services, which are really important to BOM and to consumers, will be protected.

Senator URQUHART: Does the ACMA agree with BOM that wi-fi emissions can damage the range, resolution and measurement accuracy of weather radar?

Ms O'Loughlin : I think we will—

Mr Tanner : Wi-fi emissions?

Senator URQUHART: Yes.

Mr Tanner : My understanding is that they can. I should make the point here that in some other parts of the world, moves have been made to allow sharing of 5.6 band with wi-fi type services. You are probably aware that wi-fi is a class licence service so it's not coordinated. Wi-fi can be a class licence service. We don't know where it actually is. My understanding is that in those other countries, the wi-fi like systems are designed to turn off in the presence of radar. The concern the bureau has expressed to us very forcefully is that they do not believe that international experience shows that those systems work effectively. They are worried that in fact there's a lot of interference caused to radar. They were very concerned that Australia should not go down the class licence wi-fi path. We've certainly heeded that. Coordinated apparatus licence is a much more certain and secure way of protecting weather radar than throwing the band over to a class licence use. I suspect that the concern here that the bureau may have is that, notwithstanding we have turned away from that approach, there may still be a trickle of internationally compliant devices coming into the Australian market which will cause interference. That's a risk, but that's not a risk caused by any licensing decision we make. That might be more an issue that we look at under our compliance and enforcement program. But I am perhaps at risk here of speaking for the bureau, which I'm keen not to do.

Senator URQUHART: Can the department clarify the nature of the negotiations between the ACMA and the bureau?

Ms O'Loughlin : I think we've been working very closely with the bureau and we will continue to work closely with the bureau. As I said, the release of the 5.6 consultation paper has been informed by those initial discussions, and we'll be informed by the consultation process that we're going through.

Senator URQUHART: Have any other government agencies raised any concerns with the ACMA about the spectrum option?

Ms O'Loughlin : Not at this stage, I don't believe. Again, the reason why we've put the consultation paper out is to flesh out any concerns from government agencies or, indeed, industry players.

Senator URQUHART: But you haven't had any come back in?

Ms O'Loughlin : I'm not aware of them.

Mr Tanner : I'm not aware that the current option has been of concern to any government spectrum user.

Senator URQUHART: Specifically, is there an aim to establish separate frequency bands for each other?

Ms O'Loughlin : For each?

Senator URQUHART: Organisation?

Ms O'Loughlin : Government organisation?

Senator URQUHART: Well, I'm going back to the bureau now.

Ms O'Loughlin : I'm not quite sure I understand the question. I'm sorry, Senator.

Senator URQUHART: In the negotiations between ACMA and the bureau, is there an aim to establish separate frequency bands for each one?

Ms O'Loughlin : No. As Mr Tanner has indicated, what we would be looking at is radar continuing in the 5.6 and then looking at very strongly coordinated approaches to allow other services provided, for example, by the WISPs to operate in the same spectrum, protecting the radars from interference as well.

CHAIR: We have three minutes until we break. Do we intend to keep going with ACMA, or are we almost done?

Senator URQUHART: We still have some.

CHAIR: That's less than satisfactory.

Senator URQUHART: I've got a couple more. Maybe over the break we will determine what we need to do and what we can do.

CHAIR: We will keep going for three minutes.

Senator URQUHART: Okay. ACMA has just opened the consultation on the draft instrument, which we have talked about. Can you give the committee an overview of what is being sold and how the auction will be conducted? What are the planned timeframes?

Ms O'Loughlin : The auction is currently planned for October this year. There's quite a significant amount of work to be done between now and then. We have undertaken quite a significant amount of work to date. Really this whole process of refarming the 3.6 band is, I think, probably a nine- to 10-year process. We started in 2015, when internationally 3.6 was determined as a leading band for IMT. The ACMA released its mobile broadband strategy and full-work plan in February 2016. We had a consultation package on the future use in 2017. Obviously, as part of that, we had things like our analysis of highest value use. We recommended the approach to the minister in December last year.

On 18 May, we released the point to multipoint apparatus licensing consultation paper in the 5.6 band and the 3.6 gig band allocation legislative instruments, which includes the marketing plan and the draft five-year spectrum outlook. So we have quite a lot more work to do over 2018. We need to finalise arrangements for the 5.6 band and the transitional arrangements for interested WISPs in the 3.6 band. We are also going to consult publicly later this year on coordinated point to multipoint licensing in the 28-gig band, which is also possibly a potential migration path for the WISPs, so we are keen to get that out and discuss that with them.

We are also going to be looking at the application period for the auction in about August. Of course, following the auction planned for October, we will be looking at taking forward those other pieces of work in terms of the 3.6 band. We will be looking at the negotiations, which will potentially take place between the WISPs and the incumbent providers once they are settled through the auction, on whether or not those new carriers who have bought the spectrum can accommodate the WISPs in the 3.6 band. With regard to implementing those changes, we've given the WISPs a fairly unprecedented reallocation period of seven years. So once we get through the auction, we've still got another six years of working with these organisations to, as much as possible, find them a place.

CHAIR: We might break now for 15 minutes. We'll come back with ACMA at 4.05 pm.

Proceedings suspended from 15 : 50 to 16 : 05

Senator URQUHART: What is the realistic time frame for the introduction of 5G in regional Australia?

Ms O'Loughlin : Senator, I think that's probably a matter for the carriers. We're making the spectrum available at auction later this year.

Senator URQUHART: Later this year, yes.

Ms O'Loughlin : And then it will be a matter for the carriers to work out their own rollout schedule.

Senator URQUHART: Sure. Because the spectrum will be available from later this year for carriers?

Ms O'Loughlin : There are reallocation notices in place, so they won't be available from later this year.

Mr Tanner : The reallocation declaration sets the period after which existing apparatus licences expire. We've got quite complex ones in this case—two years in four of the five biggest cities. It is five years in Perth for the reason I explained earlier around the Inmarsat and seven years in regional areas. There will be a lot of spectrum vacant and available even now because there are not point to multipoint services everywhere in regional Australia but there are a lot of them. So the spectrum won't be available completely empty before about six and three quarter years from now unless there are commercial negotiations between an incoming spectrum licence owner and the local apparatus licensees. But certainly the vacant and available parts of their spectrum licences can be used from whenever their licences are issued, which is one of the issues we are consulting on.

Senator URQUHART: Thank you. Is that later this year for the licences that Ms O'Loughlin was talking about?

Ms O'Loughlin : So the auction, as we've said, is in October. We are consulting on when the licences may commence.

Senator URQUHART: What sort of timeframe is that likely to be?

Ms O'Loughlin : Remind me of the options, Giles.

Mr Tanner : The preferred option—the option built into the allocation declaration—would see full payment for the licences soon after the auction. I think we notify them of a 20-day period within which the remainder of the payment has to be paid. They will have already lodged a deposit. We issue the licences soon after that. Let's say indicatively under that option maybe February or March, depending on how long the auction takes. We've also, though, consulted on a second option, if you look at the discussion paper. We've looked at an option under which the spectrum licences wouldn't commence for two years until the end of the reallocation period in those big four cities that I mentioned. Under that option, we could postpone full payment until shortly before the end of the reallocation period. So, under that option, indicatively there would be full payment about January or February 2020. The licences would commence then. For any licensee that wanted to begin sooner, we would give temporary access to the spectrum, as we've done with some other bands. So they are the two options on when the licences would start. They run until 2030.

Ms O'Loughlin : And obviously we're consulting on those to get a better sense of what the industry's plans are.

Senator URQUHART: Great. Thank you. Last estimates, in answer to question on notice No. 104, you told us that you relied on the evidence of WISPA. Why did the ACMA themselves not do any modelling or estimates on the number of regional customers affected by the impact on the WISPs?

Mr Tanner : I don't believe we modelled the numbers. There is a figure given to us by WISPA, which is 200,000. I understand that figure is intended to be not just those that use 3.6 but all customers of the wireless Internet service providers. That was as far as we took it.

Senator URQUHART: Right. So you didn't do any modelling on the number of regional customers that were affected by the impact of the WISPs?

Ms O'Loughlin : What we have done—and as I mentioned last time—is we've certainly taken into account the services provided by WISPs in coming to a landing on the 3.6, the auction timing, the reallocation period and the additional work we are doing on the 5.6 gigahertz spectrum as a possible pathway for some of the WISPs. As I mentioned earlier, we are going to proceed with consultation on the 28-gig spectrum, which also may be. So I think we've done an enormous amount of work, and we'll continue to, up to and beyond the auction, to address the concerns as much as we can of the WISPs and BOM and anybody else we need to deal with.

Senator URQUHART: So why didn't ACMA do any work on modelling the impact on regional Australia?

Ms O'Loughlin : We did extensive modelling on what we call the highest value use for that spectrum. As Giles has mentioned previously, we came down to very wide mobile as being the highest value use. We quantified the benefits of changing the use of the band. The benefits to the Australian economy range from around $86 million to $1.8 billion. The costs ranged from about $47 million to $144 million. So there were significant benefits in us refarming and reallocating for different services in those bands. We also, as part of that, took into account quantifiable costs and unquantifiable costs and benefits and considered the WISPs in that context as well. So we believe that we have very thoughtfully over the last two to three years and for the rest of the reallocation period taken into account any number of concerns of the WISPs. Very soon I will be writing to each of the individual WISPs so we can get a better understanding from each of them what their future plans are, what their preferences are and what their business models are. That will commence the process of individually working with the WISPs as we take them through this process of refarming.

Senator URQUHART: So why do regional Australians feel that they have been overlooked by ACMA with their proposed auction of 3.6 gigahertz?

Ms O'Loughlin : I'm not aware that they do, but I will take your word for it. I know that the WISPs continue to remain concerned. We certainly have regional Australia front and centre in our planning. But, as I said, we are balancing the rolling out. We don't want 5G to be delayed in regional areas. But we do have to deal with the incumbents in a refarming exercise, and that's what we're trying to balance. As Giles said, we want regional 5G services in those places where it can start as early as possible. But we do have to accommodate existing services, and they will take a bit longer to move out. Otherwise the option was to turn them off, and we're not going to do that.

Senator URQUHART: So has the Minister for Regional Communications had a briefing from the ACMA on the regional impact of the auction of the 3.6 gigahertz spectrum?

Ms O'Loughlin : Not at this stage, Senator. Obviously, the Minister for Communications has been briefed extensively.

Senator URQUHART: The minister has, but the Minister for Regional Communications hasn't?

Ms O'Loughlin : All I would say is we haven't briefed the regional communications minister directly, but it may have come through the department or minister himself.

Senator URQUHART: Minister, did this matter go to cabinet?

Senator Fifield: Which matter?

Senator URQUHART: The auction of the 3.6 gigahertz spectrum?

Senator Fifield: I would have to check.

Senator URQUHART: You don't know?

Senator Fifield: Sometimes things are done by exchange of letters. Sometimes things will be in the cabinet. It is just the actual mechanism I can't tell you.

Senator URQUHART: Can ACMA advise me whether they prepared a regional impact statement for cabinet to consider the spectrum auction?

Ms O'Loughlin : I think if there were a regional impact statement, it would have been part of the RIS, which would have been prepared by the department. But I will take that on notice and come back to you in case I'm in error.

Senator URQUHART: Mr Mrdak, do you know?

Mr Mrdak : I'm not aware that this matter has been dealt with by cabinet at this stage.

Senator URQUHART: Did you prepare a regional impact statement?

Mr Mrdak : Not to my knowledge, but I'll take that on notice.

Ms O'Loughlin : And we'll take it on notice as well.

Senator URQUHART: I will leave it at that. You are not able to find out during the course of the hearing today?

Mr Mrdak : We will check that for you.

Senator Fifield: I am pretty sure it's not a matter that would have required it to go to cabinet.

Senator URQUHART: Thanks.

Senator PATRICK: I want to follow up on some questions that I asked at the wrong time relating to exemptions for low share audiences in relation to gambling advertising. Can someone help me with that?

Mr Cameron : That would be me.

Senator PATRICK: Mr Cameron, thank you. Subscription channels that are deemed to have a low audience share are excluded from the new gambling advertising restrictions, meaning that they can broadcast gambling advertisements around the clock. Can you explain the reason for the exclusion?

Mr Cameron : I will clarify. The exemption applies only to the additional rules which were put in place in the code, which relates to the prohibition on gambling ads during live sport between 5.00 am and 8.30 pm. The existing rules that had previously been in place, which also applies restrictions in relation to gambling material, live odds and the commentators making a reference to gambling matter, continue to apply for those smaller operators. As I indicated in answer to an earlier question today, the ACMA considered a draft code of practice amending the ASTRA code—the subscription television code—to give effect to the government's announced policy commitment. At the time, ASTRA proposed an exemption for smaller operators. They indicated that such an obligation would have commercial impacts that would potentially damage the viability of those operators. The ACMA took into account a range of considerations, including the government's policy commitments and statements in this regard and a series of submissions that were provided during the course of the ASTRA consultation process. We worked with ASTRA because of some concerns about the methodological arrangements that they had proposed regarding identifying smaller low audience share channels. We came to a set of arrangements that we felt, in the context of the code itself, as a whole adequately protected and addressed community safeguards.

Senator PATRICK: So within that context—and that's consistent and more detailed than the answer I got before, so thank you—what qualifies as a low audience share? Is it five per cent that was mentioned before?

Mr Cameron : A low audience share channel is a channel where it or in combination with a cobranded channel—for example, the group of Fox sports channels are collectively considered to be one—have an average audience share of less than 0.5 per cent.

Senator PATRICK: So 0.5 per cent?

Mr Cameron : It is 0.5 per cent as measured as by the appropriate OzTAM measurement arrangements over the course of a three-year period.

Senator PATRICK: So 0.5 per cent of what?

Mr Cameron : Essentially total television audience.

Senator PATRICK: So the three-year average is taken. And if you're under 0.5 per cent, then you fall within the exemption category?

Mr Cameron : That's correct. As I said before, if an individual channel within a branded group falls under but the branded group as a total is above 0.5 per cent, then none of those channels are considered low audience share.

Senator PATRICK: That three-year number is a rolling number?

Mr Cameron : That's correct.

Senator PATRICK: So the previous three years give the previous three-year average?

Mr Cameron : That's correct.

Senator PATRICK: Do you ever conduct a review? I presume that if someone falls within that category, you are saying they sit within that category for the entire year until the next determination is made?

Mr Cameron : That's correct, yes. It's measured on a financial year basis, if I recall correctly.

Senator PATRICK: If a subscription channel, such as ESPN, increased their audience share, what happens then? If for some reason there's a spike and you are detecting a spike or they understand they've moved above the 0.5 per cent, do they signal you in some way? How does that work?

Mr Cameron : We ourselves will be monitoring the rating shares of these channels. In fact, there is an obligation for those channels to advise audiences of whether they fall within the exemption. So should they no longer be covered by the exemption, then not only would they have an obligation to communicate that to us; they would have an obligation to communicate to their audiences that they are no longer subject to those exemptions.

Senator PATRICK: Just to be clear, you build the numbers over three years. That allows you to integrate the numbers. You then make a determination, and then you make a determination on the next three-year block and the next three-year block. So every year you make a determination, but within the year, if someone pops above the 0.5 per cent mark, they would then be subject to exemption?

Mr Cameron : There isn't a formal determination in terms of an instrument, but, yes, there is a measure made on an annual basis, taking into account the three-year previous ratings periods. I should mention also that there is an additional protection, which is that that exemption does not apply to any content which is listed on the anti-siphoning list. So for those events that are of national significance, as determined by the anti-siphoning list, even if that channel is a low audience share channel, should they broadcast that content, the exemption does not apply in relation to that material. That is one protection against a short-term spike, for example, if ESPN got the Olympics, for example.

Senator PATRICK: Sure. Okay. Thank you for that.

Senator O'NEILL: My questions go to the service provider rules. On 15 March this year, the ACMA published a snapshot of earlier insights from the residential households that were surveyed. I understand the full research report, including outputs from the small business survey, will be published in June this year. Is this still on track?

Ms O'Loughlin : Yes.

Senator O'NEILL: What date should we expect it, Ms O'Loughlin?

Ms O'Loughlin : I don't think we have got a settle date. We are still finalising some of that research. I think from memory it's expected to go to a late June authority meeting.

Senator O'NEILL: Late June?

Ms O'Loughlin : Yes.

Senator O'NEILL: Thank you. What period does the full research report survey cover these experiences of consumers? Over what period?

Ms McNeill : The field work for the research was conducted over November, December and January, so November and December 2017 and January 2018. It surveyed the experience of consumers who had moved to the NBN in the preceding 12 months.

Senator O'NEILL: So potentially it's considering—

Ms McNeill : It is considering consumers as far back as November 2016 right through to people who had only moved across in the previous few weeks.

Senator O'NEILL: Does this rely on data from industry information gathering exercises across the 21 retail providers that participated?

Ms McNeill : It does not. That exercise was focused on a particular quarter. It saw information from industry for the quarter ending 30 June 2017.

Senator O'NEILL: Help me understand this clearly. We are talking about two separate bits of research?

Ms O'Loughlin : Two separate exercises, yes.

Senator O'NEILL: So one particular part of the research was relying on data from the industry information gathering exercise. Did it cut across the 21 retail providers that participated in it? Were there only 21?

Ms McNeill : There were 21. Not all of them were retail providers. There were some wholesale providers, for example.

Senator O'NEILL: And that period again was?

Ms McNeill : For the three months to 30 June 2017.

Senator O'NEILL: From March?

Ms McNeill : Yes.

Senator O'NEILL: I will go back to—

Ms McNeill : Pardon me. It would be April to June—April, May and June.

Senator O'NEILL: I just want to touch on the recently announced rules to address problems on the NBN. You have given evidence to the committee that the minister issued a direction to the ACMA on 20 December 2017. The rules were subsequently announced on 21 December. My question is: when did the ACMA receive a first draft of the ministerial direction?

Ms O'Loughlin : I think we would have to take that on notice. We were quite comfortable with receiving a ministerial direction. It allowed us to in fact move very quickly.

Senator O'NEILL: Within 24 hours?

Ms O'Loughlin : Yes. We had had discussions—

Senator O'NEILL: Because that seems to me an extraordinary timeline. You get the direction from the minister on 20 December and the next day you announced—

Ms O'Loughlin : I will give a bit of background. The ACMA had been looking at this issue starting off from when the minister had his first CEO forum, when us, the ACCC, the TIO and a number of RSPs and the NBN were brought together. From that date, we were looking at the material that came from the recordkeeping exercise that we undertook. We were looking at where we thought the major consumer pain points were in the process and then developing our thinking about what us as the regulator should do about it. We had some discussions with the department and the minister. We were ready to move very quickly. It facilitated us moving quickly to get a ministerial direction. That's what happened. That came in on the 20th and we were ready to go on the 21st.

Senator O'NEILL: So you were ready, but the minister was pretty late in giving you the notification?

Ms O'Loughlin : No. I think we had been in discussions over the last two or three months prior to that briefing the department about what we intended to do.

Senator O'NEILL: How frequently does the minister give you a direction and you respond within 24 hours? Is that common practice?

Ms McNeill : I'm not sure whether it's helpful to talk about what compromised our response. I would have characterised the announcement that was made on the 21st as an announcement of our intention—how we were going to execute against the minister's direction and what additional steps the ACMA proposed to take to buttress the minister's direction. So it's not the case that the rules contemplated in the minister's direction were made on the 21st. Indeed, they have not been made yet. They are still the subject of consultation. In accordance with the minister's direction, the standards contemplated in the direction need to be in place before the end of June. So we are getting very close. We have been through consultative processes. But we didn't deliver what the minister's direction contemplated on the 21st. We're still in the process of delivering what the direction contemplates.

Ms O'Loughlin : In response to the minister's direction, the minister's direction asked us to make three industry standards dealing with the provision of information to consumers about retail services supplied over the NBN, the handling of complaints made by consumers to retail CSPs and promoting the continuity of voice and broadband services. As Ms McNeill mentioned, we also announced on the 21st that we would proceed with making those standards but that we would also do a service provider determination which mandated retail CSP line testing and recordkeeping rules about complaints. So part of it was a reflection of the direction, but there were other things that we were going to move forward on which didn't require a formal ministerial direction for us to move on.

Senator O'NEILL: I haven't seen that document. Is it a public document you that were just reading from?

Ms O'Loughlin : I think it's included. The direction is public and our media response would be public as well.

Senator O'NEILL: Thank you. Who did the ACMA consult? I think you just ran through a list briefly. To be clear, who did you consult prior to the announcement in December last year?

Ms O'Loughlin : We would have consulted the department and the minister's office.

Senator O'NEILL: When you made the announcement. But who did you consult in the sector? Who were your consultations with?

Ms O'Loughlin : I think there were some quite rapid consultations before the announcement. But we are now going through the process of an extensive consultation process on each of the standards and the determination. So this has proceeded in two tranches. Tranche one, which deals with complaint handling, is—

Senator O'NEILL: I want to come back to that. I am interested in hearing it. I just want to be clear that I am understanding what you are saying. When you say rapid consultation, are you indicating that you got the ministerial direction and, within the space of 24 hours, you undertook consultation in that 24-hour period prior to announcement, or are you talking about consultation that you undertook prior to that day or both?

Ms McNeill : Again, I don't know, Senator, whether it's a matter of semantics. I would say that particularly through the exercise where we had gathered information from across those entities in the NBN supply chain, we were engaging with industry. We were giving them visibility of our findings. We published an account of our findings, in fact. Then when it was at the point that a decision had been taken that we would move to make instruments, we informed industry rather than consulting industry. So we're consulting on the detail of the instruments but with a very clear intent about what the instruments should achieve.

Senator O'NEILL: Okay. I understand what you're saying. But—for me to be clear—you did a rapid consultation in the 24 hours between the direction—

Ms O'Loughlin : No. I am sorry. I think I have confused things. As Ms McNeill mentioned, once we had finished our record-keeping rules process, released our findings from that, we advised industry that we would be commencing action to develop these standards and determinations. So I think it's fair to say that we advised them rather than we consulted with them at that point. We are now in the two-stage process I mentioned earlier of in-depth consultation with industry.

Senator O'NEILL: Do you have a long list of people who you are engaged in consultation with, or is it short?

Ms McNeill : Our consultation is public.

Ms O'Loughlin : That's correct. So we have had a program of engagement not only with industry but also with consumer organisations around the development of the instruments. That has comprised variously bilateral meetings with particular telecommunication companies—any number of them. We have had—

Senator O'NEILL: Do you want to take this on notice and just give me an outline—

Ms McNeill : We have had workshops with the Communications Alliance. I can give you dates, if it would be helpful. There have been both targeted engagements and industry workshops and a public consultation process where draft instruments have been released and submissions have been invited and received.

Senator O'NEILL: If you could give me a summary document of all of that on notice, that would be quite helpful.

Ms McNeill : Sure. Certainly.

Ms O'Loughlin : I just note that of the first tranche, which was complaints handling and record-keeping rules, we received a number of submissions. It doesn't tell me which number. They are all available on our website. But we'll give you a—

Senator O'NEILL: Can you see?

Ms O'Loughlin : It doesn't actually say here.

Senator O'NEILL: I will let you give that detail, if you can.

Ms O'Loughlin : I think there were 13 submissions, and they are available on our website. But we can give on notice a rundown of the consultation process.

Senator O'NEILL: Thank you. Prior to the announcement, were the results of the consumer research shared with the retail providers who participated and with the NBN Co?

Ms McNeill : Yes is the answer.

Senator O'NEILL: When did that happen?

Ms McNeill : My memory is that the findings from the analysis of industry information was published on 21 December. But immediately prior to that publication, we shared an embargoed copy with the providers from whom we had sought information.

Senator O'NEILL: So when did the embargoed copy leave your office?

Ms O'Loughlin : We will take that on notice. I do not think we have the date in our briefing papers.

Senator O'NEILL: Well, it's common practice that it's the day before when people get information. Did you give them more notice than that before the announcement?

Ms McNeill : Certainly NBN Co, for example, had a few days notice.

Senator O'NEILL: So you staggered the embargoed copies? So NBN Co got it first is what you're telling me?

Ms McNeill : No. I can't recall whether NBN Co did get it first. I just recall that there were some entities who had a keener interest and had a more immediate and pressing need to be familiar with the content of it before it was released and others who were less directly impacted. You might remember that the data in that report is anonymised so it's not clear, for example, that a particular telco has performed at a particular level or has particular problems. That notwithstanding, it's clear, for example, that the Communications Alliance might be called upon to comment on it in a way that an anonymised small provider who is not identified won't be. So there was some regard given to the need of people potentially to engage with the content and to comment on it.

Ms O'Loughlin : We'll take that on notice.

Senator O'NEILL: I'm just trying to figure out the time line. You've got the ministerial direction on the 20th. The announcement happened on 21 December as everybody is preparing for Christmas. There's embargoed copies going out in different tranches to the NBN Co and other key players. When did they get their embargoed copies—before the ministerial direction?

Ms O'Loughlin : Senator, as I mentioned, I think it might be best for us to take it on notice. I think my memory is a bit hazy on that.

Senator O'NEILL: It either was a few days ahead of the ministerial direction that you gave this information to the sector or it wasn't.

Ms O'Loughlin : As I said, I would prefer to take it on notice so that we can accurately provide it.

Senator O'NEILL: Well, I would appreciate it if you could actually provide it today rather than I have to wait for a month for an answer to that question.

Ms O'Loughlin : Certainly. We'll try and do that this afternoon for you. Perhaps it may take us until tomorrow—

Senator O'NEILL: We'll be here.

Ms O'Loughlin : You'll be here.

Senator O'NEILL: We'll be here.

Ms O'Loughlin : Yes.

Senator O'NEILL: When did the ACMA finish its information-gathering exercise and analysis of that information?

Ms O'Loughlin : Again, I think I would have to take that on notice. We can include that in the information we provide to you tomorrow.

Senator O'NEILL: Around the detail of the time lines with this?

Ms O'Loughlin : Yes.

Senator O'NEILL: I understand that the direction requires the ACMA to determine the rules by 2018 and have them commence no later than three months after that.

Ms O'Loughlin : That's correct.

Senator O'NEILL: That remains correct?

Ms O'Loughlin : Yes.

Senator O'NEILL: So you expect the rules to be announced at the end of June?

Ms O'Loughlin : At the end of June.

Senator O'NEILL: And to come into effect on what date?

Ms McNeill : That is a matter on which we have been consulting. The authority has not yet reached a position on that. Obviously given the pace of the rollout, the sooner rules intended to improve consumers' experience come into effect, the better. But we need to be cognisant of the imposition on industry, so it's a matter that the authority needs to balance and make a final landing on.

Senator O'NEILL: So the direction requires it to commence no later than three months after that. Are you talking about within that time frame or an extension of that time frame?

Ms McNeill : I'm not talking about an extension of that time frame. I'm talking about within that time frame. So if the rules, for example, are made on 20 June, they could start at any time from 20 June, really, or 21 June.

Senator O'NEILL: Until?

Ms O'Loughlin : August, three months later.

Senator O'NEILL: On the surface, these rules appear to impose a regulatory cost burden on retail providers which industry has signalled could actually be a multimillion-dollar impact. Is there any risk that these regulations will put upward pressure on retail prices?

Ms O'Loughlin : I think where we view this activity is through the lens of the consumers. Let's take complaints handling. Complaints have been rising exponentially over time, before the NBN reached even its peak rollout, which it's about to reach. So our concern was that the complaints-handling function being undertaken by the industry, by the retail service providers, is not serving consumers. We are looking at improving the regulation in that area on industry so that they lift their game and deliver better for the consumers who are migrating to the NBN. Of course, regulation always has a cost impact for industry. If industry had been performing its function well enough in the complaints-handling area, we wouldn't be having this discussion.

Senator O'NEILL: Yes. But who's going to pay the price? Is the industry going to pay it or is it going to be absorbed on their bottom line, or could it be transferred into costs to consumers?

Ms O'Loughlin : That will be a matter for industry.

Senator O'NEILL: Given the fact that the inquiry is because the industry has not been meeting standards, it's very concerning to me that it's going to be a matter for the industry whether they take the hit on their own business bottom line or whether they transfer costs on to those that they've already greatly inconvenienced in the transition to this NBN model that we're stuck with.

Ms O'Loughlin : Those questions are probably best placed to industry. Of course we would be concerned if they just on-flow the cost to consumers. They should take it on their bottom line. Complaints handling should be a core function for them. But that will be a matter for them.

Senator O'NEILL: I'm glad that you've put it on the record. I hope that they are listening. You would have to say they haven't been listening a lot through this whole process. There doesn't appear to be a regulatory impact statement on the rules that were announced. Has the ACMA published a regulation impact statement?

Ms McNeill : A regulation impact statement was prepared by the department. The activity the ACMA has undertaken is part of a package of responses to dealing with the difficulties that consumers were encountering as they moved to the NBN. So the department undertook that, including in support of the direction that the minister gave us. So that was a process undertaken within the department.

Senator O'NEILL: Has it been published?

Ms McNeill : I understand that it was a shorter form regulation impact statement. I can't tell you whether it has been published, regrettably.

Senator O'NEILL: Would you be able to find that out?

Ms O'Loughlin : I think it's a matter for the department. We'll let the department know that you are interested in the question. I'm sure they will be able to let you know.

Senator O'NEILL: You mention that you went to a short form.

Ms O'Loughlin : The department went to a short form.

Senator O'NEILL: My understanding is that the guidance by the Office of Best Practice Regulation states that a short form RIS can be prepared in three particular situations. Which of these categories do you think—

Ms O'Loughlin : That would be a questions for the department. I apologise.

Senator O'NEILL: When will we be able to get these questions answered?

Ms O'Loughlin : I would expect tomorrow morning.

Mr Mrdak : We will get you information on that as quickly as possible.

Senator O'NEILL: Can you help me out now, Mr Mrdak?

Mr Mrdak : I will seek that information through the course of this.

Senator O'NEILL: Because my understanding is that short form RIS—we haven't been able to find a publication of the RIS—is only available if there's a non-regulatory or administrative machinery change in nature or it is expected to have only minor regulatory impact on individuals, business and community organisations. So that's one. Another is that the policy is a matter of national security, public safety, a natural disaster or a pressing event. The other short form RIS that is acceptable is a RIS recently completed and signed off by OBPR and only minor modifications have been made to the original policy options under consideration. So it would be in one of those extraordinary situations that a short form RIS would be prepared. Which one is the department claiming applies?

Mr Mrdak : I will get that advice for you. I need to get the right officers. We don't have them here at the moment. I'm sure we'll get that information up to you as quickly as possible.

Senator O'NEILL: Is there a better time I can come back and ask that question?

Mr Mrdak : I will get it through the course of today.

Senator O'NEILL: Thank you. Is it common for regulators to announce new regulation without having done a regulatory impact statement assessment?

Mr Mrdak : It very much depends on the circumstances involved as to the extent of the regulatory change involved. I think that's a rather broad question.

Senator O'NEILL: Is it considered best practice?

Mr Mrdak : Again, it would depend on the regulatory change involved and the extent of change involved. You may have relatively modest changes which don't require such a process. But in terms of this process, we'll get you that information.

Senator O'NEILL: Who prepared the short form regulatory impact statement? Was it the department, not ACMA?

Ms O'Loughlin : It was the department.

Mr Mrdak : And I'll get the details on that for you.

Senator O'NEILL: The rules will require telcos to line test new services on the NBN. Can you run through the information-gathering process you went through and specifically what issues were identified that the post-activation line test will hopefully address?

Ms McNeill : Through the industry information-gathering exercise, we identified the high prevalence of faults. We identified—

Ms O'Loughlin : We identified an issue where our response was to ensure that lines are working and faults are identified early and to enable consumers to request a test of the speed achieved on their new broadband service. So coming out of the record-keeping rule process, we identified a problem, and our consumer research showed that this was an area of strong concern. We're currently consulting on that determination at this point. We're aware that industry has some concerns about it, so we're in discussion with them coming out of that consultation process. Again, these are rules that we haven't settled and we'll settle by the end of June. It's a very tight time frame, but we're working very closely with industry on their views of the determinations and standards.

Senator O'NEILL: So the post-activation line test was the best methodology that you think answered the questions and concerns around faults and lines? Is that why you chose that methodology?

Ms McNeill : It was directed to addressing the situation that a high number of consumers found themselves in. I've just found the figures in the industry information exercise, if you would like them. It was where they were reporting faults on their line. We had seen already that some providers had themselves moved, even in the absence of regulation, to conducting line tests once a service was moved across to the NBN. It seemed to us a very sensible step to take to ensure that a service is actually up and working when people are moved across to an NBN service.

Senator O'NEILL: My next question is: is the activation line test a measure that the ACMA identified internally? Your answer indicates that no, this was one you achieved with consultation with the sector?

Ms McNeill : I would not say it's something that came out of consultation. But we saw that some providers were undertaking testing of this kind voluntarily. We thought that it was testing which should be undertaken potentially universally. It should indicate whether a consumer has a working line. If a consumer doesn't have a working line immediately when their service is meant to have been shifted across to an NBN service, steps can be taken to address that problem swiftly.

CHAIR: Senator O'Neill, can I just get an indication of how long you think you have remaining with ACMA? A couple of your colleagues have questions of the next agency.

Senator O'NEILL: I have some too. There's a bit more to go here, I think.

CHAIR: A rough indication of time so the officers can plan?

Senator O'NEILL: It depends on how long the answers are.

CHAIR: You'll make a great minister one day.

Senator O'NEILL: I'm working on it. Has the study into the quality of modems commenced?

Ms McNeill : Yes.

Senator O'NEILL: That was quick.

CHAIR: I like it.

Senator O'NEILL: Where did the suggestion for the modem testing originate?

Ms McNeill : It is well known that the experience of a consumer can be impacted by the quality of the modem that they have. We had some industry players raising concerns with us about the possibility that there were substandard modems and that was one of the reasons why consumers were having a negative experience. So it seemed to us sensible to take a closer look at that. From memory, NBN in particular raised concerns about the potential role that modems were playing in a negative consumer experience.

Senator O'NEILL: Which aspects of your consumer research highlighted the need for additional elements of the information standard?

Ms McNeill : Again, it's difficult to point to a single thing. If you look at the consumer experience research that we undertook, there were indications that consumers didn't—there are percentages, and I can take you to them—weren't aware of some limitations with services on the NBN. They weren't universally aware of whether their medical alarms would or wouldn't work. They weren't universally aware of the need for some technologies to have an electricity supply in order for their telephones to work. While they were aware that there were different speed tiers available on the NBN, they didn't understand what the significance of that was. So it seemed to us that there was a likelihood that if people better understood what they were going to get from the NBN and were better able to make choices of products that suited them, their experience was likely to be more positive.

Senator O'NEILL: With regard to the consumer information standard, what material changes will this introduce relative to what is currently in the TCP code?

Ms McNeill : As proposed—of course, it hasn't been settled at the moment—it will require the provision of information about use cases, if I can put it that way. So that is what uses you can put a particular plan to. If you have a household with a dozen gaming children, your requirements will be different from elderly individuals who just check their emails or just want a voice service. So there will be information about use cases. There will be information about particular features of NBN services that constrain its suitability for some purposes. As I indicated, for people who have medical alarms, it will have information about medical alarms, power supply and so on. There will also be better information around speeds.

Senator O'NEILL: Are the consumer information standards something that the ACMA recommended to the government, or was the determination of the information standards something that was recommended to the ACMA?

Ms McNeill : My memory is that we recommended it to the government.

Senator O'NEILL: Why wouldn't this aspect be delivered through the code? What makes service provider rules more appropriate for this initiative?

Ms McNeill : I would say two things make it more appropriate. Firstly, is the level or layer of regulation in which it sits. As Ms O'Loughlin mentioned, industry codes have an attenuated enforcement mechanism. If someone doesn't comply with an industry code and we investigate and we find that they haven't complied, the strongest regulatory response available to us is to direct them to comply next time. In a different regulatory layer, with a standard, it's immediately enforceable by us. So if the provider falls foul of the rules, we can take much stronger and more immediate action. Our experience is that obligations that reside in those higher regulatory layers tend to be given more close attention by industry players. So that's the first thing. The second thing is that industry codes are developed by industry. There's a process at the moment where the TCP code—the Telecommunications Consumer Protections Code—is being reviewed. But that code is not likely to come into effect until well into the second half of this year. We feel it's important to move more swiftly and to control the content of the obligation more directly. Making a standard allows both those things to occur.

Ms O'Loughlin : I would only add to that the urgency of the matter. Some of these information gaps haven't been addressed by industry. We are now moving into peak rollout period for the NBN and we felt that it was critical that there be more active regulation to ensure that those consumer safeguards were put in place by industry quickly.

Senator O'NEILL: I don't think any of the staff in our offices would disagree with that. I would like to ask about the service continuity rule. Where did this proposal originate? Did the ACMA recommend it to government or did the government direct ACMA to implement such an arrangement?

Ms O'Loughlin : I think we know what you are describing as the legacy systems. I think it was the combination of some of our thinking and a concern expressed through the department and the government. I will go back. Our information-gathering exercise had a quite alarming figure in it, from memory. It was the consumer research. It talked about a significant proportion of people who were being left without a service at all in the migration period. So that was a very strong outcome of that. I think it was really something we had to turn our mind to. It was also of strong concern to the government. So we have developed an approach to that which we're consulting on at the moment about what is the best outcome for consumers in that migration pathway if their service is not able to be connected effectively within a reasonable period of time.

Senator O'NEILL: I've called it the service continuity rule. You've called it legacy systems.

Ms McNeill : There's a reference in the minister's direction to a reconnection to legacy. That's the way we have explained it. That's the ultimate safety net.

Senator O'NEILL: But it's basically keeping the service alive?

Ms McNeill : If you can't get the NBN service working for an extended period of time, the direction contemplates that you will be able to fall back into a legacy service. But we are exploring the role that interim services should play or alternative services should play if they can be offered to consumers more promptly. The consumer will have a better outcome overall by having some kind of a bridging service before you either get the NBN service working or the fallback to legacy.

Ms O'Loughlin : So that might involve a mobile broadband service being provided to the consumer while the issues with the NBN connection are being sorted out by NBN Co and the RSPs. I think it's fair to say that it's really quite a technical one and we're working very closely with industry to understand how that actually works in practice—how practical it is—and looking at what those options are. But the intent is that people are not left without a service and are migrated across to the NBN successfully.

Senator O'NEILL: Thank you for that. To be clear, did you recommend this rule to the government, or did the government direct ACMA to implement an arrangement?

Ms O'Loughlin : It was through conversations we were having with the department.

Senator O'NEILL: So it originated with ACMA?

Ms O'Loughlin : With the department.

Senator O'NEILL: With the department?

Ms O'Loughlin : Yes.

Senator O'NEILL: There have been reports that the industry has labelled the proposed rules relating to reconnecting to legacy networks as unworkable and not in step with operational realities, which you alluded to in your commentary. Is there a prospect the service continuity standard rule could in some circumstances end up creating more complexity and frustration for consumers?

Ms O'Loughlin : That is exactly what we're looking at through the consultation process. As I said, our intent is to solve the issue where our research has shown that people are being left without not just Internet but Internet and phone services for considerable periods of time. So that's what we're trying to achieve. We understand that industry has some strong concerns about it. We're open to their suggestions about how they might want to solve the problem. We will be working with them on that over the next few months. I think the consultation on that process closed on 11 May. So we are now going through those submissions and getting to understand the industry concerns. As I said to you, I do think it's technically quite difficult in certain circumstances. We have been told that by industry. We'll certainly work through the issues with them.

Senator O'NEILL: So what happens if the new ISP acquiring the customer is different to the ISP that the customer was with on the legacy network?

Ms McNeill : It's contemplated that the obligation will be placed on the new ISP. We don't want to have a situation where consumers are sent from pillar to post to try to get their concerns resolved. So the idea with the standard is that the CSP or the ISP you signed up with is the one with whom you will deal to resolve all your concerns. You will not be shunted off to the NBN. You won't be shunted back to your old legacy provider. That's the ISP or the CSP with whom you deal.

Senator O'NEILL: You made an announcement around this rule in December last year.

Ms McNeill : Yes.

Senator O'NEILL: Who did the ACMA consult prior to making that announcement?

Ms McNeill : This falls into that same tranche of notifications that occurred on or about 21 December, so this was part of that package.

Ms O'Loughlin : We will put that into the issues we have taken on notice for you.

Senator O'NEILL: Fantastic. How would you restore a service to the legacy copper network after the cross-connect at a pillar or at the pit has been cut over to electronic and NBN Co's networks? Is it actually possible to reverse that process?

Ms O'Loughlin : That is a point that has been put to us by industry. We're trying to work with them to understand the technical limitations. Again, what we're balancing here is the need for people to continue to have a broadband service or a phone service as they migrate and to make sure that the focus is actually completing the migration successfully for customers. So that's what we're trying to achieve. We're happy to talk to the industry about how they think they could best achieve those outcomes. We do recognise that there are really deeply technical issues. Some of them will not be able to be resolved between the various parties and may cause further delays. We're very cognisant of that.

Senator O'NEILL: I'd like to ask more about that, but we're running out of time. I will go to some content matters. In the history of the ACMA established in 2005, how many times has the Minister for Communications referred a complaint about the ABC content to the ACMA?

Ms O'Loughlin : Obviously, the current minister has referred a complaint to us. I don't think any of us at the table have been around since 2005. I seem to remember it may predate the ACMA at least. There would have been complaints from Senator Richard Alston.

Mr Tanner : Yes.

Ms O'Loughlin : There would have been complaints from him. We have, of course, received complaints from senators and other ministers over time on various issues. We take those complaints and deal with them as we would deal with all the other complaints we receive.

Senator O'NEILL: My colleague Senator Keneally asked some questions around this morning. So you can verify that the last time this occurred was with Senator Alston in what year?

Ms O'Loughlin : I can't verify that, Senator.

Senator O'NEILL: I'll go to Ms McNeill. You might have an answer on this.

Ms O'Loughlin : No. I think we're both aligned that we don't actually have the detail.

Senator O'NEILL: To the best of your knowledge.

Ms O'Loughlin : To the best of our knowledge, that would be the last time.

Senator O'NEILL: And that's quite some time ago?

Ms O'Loughlin : It's quite some time ago.

Senator O'NEILL: Is Minister Fifield the first Minister for Communications to complain to the ACMA about ABC content? Do we have to go back to Alston before we get anything else?

Ms McNeill : That's my recollection, but we will certainly take it on notice, and if there are any additional ones, we will let you know.

Senator O'NEILL: So what was the ABC content that the minister complained about to the ACMA?

Ms O'Loughlin : The minister wrote to us around the investigation into Tonightly with Tom Ballard. We actually received a complaint prior to the minister writing to us around it breaching the ABC code of practice because it referred to Mr Kevin Bailey, a candidate in the Batman by-election, using offensive language, which I would prefer not to repeat here. We opened an investigation on 24 April. We received a complaint from the minister on 26 April asking us to investigate. There was one additional issue that the minister's complaint had raised that we hadn't started looking into, so we have incorporated that into our investigation. The investigation is currently ongoing.

Senator O'NEILL: And how many complaints from the minister do you have? Just that one?

Ms O'Loughlin : No. We've received five complaints.

Senator O'NEILL: So he is making up for lost time.

Ms McNeill : No. Five complaints in all about the segment, not five complaints from the minister.

Senator O'NEILL: Only one complaint by the minister?

Ms McNeill : About the segment. Apologies.

Senator O'NEILL: So what stage are they up to in terms of your investigations?

Ms O'Loughlin : I think we have sought, as we normally do, submissions from the broadcasters. We are working our way through the process. That's where we are at.

Senator O'NEILL: Have we got any time line around this?

Ms McNeill : No. But I can say that our average time to complete a broadcasting investigation is in the order of a month these days. This is likely to be a matter which the authority itself considers rather than it being dealt with by staff as delegates. That may add a little to the time frame. But my expectation is that it is likely to be completed at about the end of the financial year.

Ms O'Loughlin : I would like to add that the broadcast was 15 March, but we received a complaint on 11 April because complainants are required to go to the ABC directly before they come to us. It's only if they are not satisfied with the response from the ABC that we are enlivened to investigate the matter.

Senator O'NEILL: So did the minister complain about the ABC content on Facebook?

Ms O'Loughlin : The minister asked us to note the content on Facebook.

Senator O'NEILL: Are you able to investigate a complaint about ABC content on Facebook?

Ms O'Loughlin : It's not covered by the ABC code, but I do—and Jennifer will correct me—think it was also a skit that looked towards a broadcast program in the future potentially. We would investigate that program if it were broadcast.

Senator O'NEILL: To be clear, you don't investigate Facebook postings. That's not your remit, is it?

Ms O'Loughlin : Not in this area, no.

Senator O'NEILL: So does it surprise you that the minister asked you to look at Facebook when it's not within your remit?

Ms O'Loughlin : The minister just asked us to note the Facebook content, which we did.

Ms McNeill : Senator, I don't know whether you've seen the Facebook content, but it basically raised similar sorts of issues around the offensive language. So we took it to be drawn to our attention in that context.

Senator O'NEILL: So how did the ACMA respond to the minister's complaint about ABC indigenous content?

Ms O'Loughlin : We wrote to the minister. I advised the minister that we were looking at the additional code provision of which he had concerns alongside the broader investigation that we are already undertaking into Tonightly with Tom Ballard. I also advised that we had noted the Facebook content but that it didn't fall within the ABC code so we weren't going to look at it further.

Senator O'NEILL: Thank you.

CHAIR: Are you done, Senator O'Neill? Without tempting fate, I think that is a yes.

Senator O'NEILL: I think I have two final questions on the regional and small publishers. Thanks, Chair. One of the matters that was considered with the regional and small publishers innovation fund this morning was raised by Senator Griff regarding tweaks to the program. Minister, it wouldn't be surprising to you from our conversations in the Senate that really there was insufficient consultation and evidence to inform the eligibility criteria. We know that the key architect of this fund was Senator Xenophon, who is not here any more. There are concerns about the organisation and the consultation and the state of the regulation around this. So do you concede that you had to make some tweaks given there was insufficient consultation and evidence available to inform the fund at the time that this deal was pulled together?

Senator Fifield: No.

Senator O'NEILL: So what were the tweaks that you were talking about this morning, Minister?

Senator Fifield: Well, there are some minor changes that we're looking at. But we haven't made any decisions on them in the light of feedback from some regional media organisations.

Senator O'NEILL: So it's still being tweaked. If you can tweak one thing for Senator Griff or other members of the cross bench, who I think you referred to as stakeholders this morning, are you going to permit the Guardian Australia to apply? Is that another tweak you might be able to implement at this stage?

Senator Fifield: There are a range of eligibility criteria that organisations need to satisfy in order to be eligible to make application. Being eligible to make application doesn't guarantee the success. It's up to individual media organisations to assess those criteria to see if they are eligible to submit an application.

Senator O'NEILL: So they are still excluded and they are in a tweak free zone, are they?

Senator Fifield: As I say, it's up to individual media organisations to assess themselves against the criteria.

Senator O'NEILL: Thank you.

CHAIR: Thank you very much to the ACMA. We will now move on to the Special Broadcasting Service.

Mr Mrdak : While we are changing, I will provide some answers to Senator Urquhart and Senator O'Neill.

CHAIR: Please do.

Mr Mrdak : While we're doing the transition.

CHAIR: A good use of time.

Mr Mrdak : Senator Urquhart asked if the Minister for Regional Communications was briefed on the 3.6 gigahertz spectrum option. Yes. While the matter is the responsibility of the Minister for Communications and the Arts, a briefing was provided.

Senator URQUHART: Do you have a date for that, Mr Mrdak?

Mr Mrdak : I don't, I'm sorry, but I will ascertain that.

Senator URQUHART: Great. Thank you.

Mr Mrdak : In relation to the question about the spectrum option, no RIS was prepared based on advice from the Office of Best Practice Regulation. One was not required.

Senator O'NEILL: No RIS was prepared at all? There was not even a short form RIS?

Mr Mrdak : Not on the 3.6 auction. That is the advice. You asked earlier today about staffing and agencies.

Senator O'NEILL: Yes.

Mr Mrdak : I will give you that information while we are transitioning. You asked for a number. I will give you the 2017 ASL and then the 2018-19 ASL, so you'll have both years.

Senator O'NEILL: Thank you.

Mr Mrdak : The National Film and Sound Archive in 2017 was 164. In 2018-19, it is 164. The National Gallery of Australia in 2017 was 217. In 2018-19, it is 217. The National Library in 2017-18 was 383. The National Library in 2018-19 is 371. The National Museum is 226 in 2017-18. In 2018-19, it is 226. The National Portrait Gallery was 49 in 2017-18. The National Portrait Gallery is 49 in 2018-19. Old Parliament House in 2017-18 was 72.5. Old Parliament House in 2018-19 is 74. The Australian Film Television and Radio School in 2017-18 was 149. In 2018-19, it is 145. The National Maritime Museum in 2017-18 was 125. In 2018-19, it is 125.

Senator O'NEILL: Thank you very much, Mr Mrdak. When you were referring to the RIS, you were not talking about the regulatory impact statement with regard to the ACMA?

Mr Mrdak : No. I was referring to the 3.6 spectrum auction.

Senator O'NEILL: So we're still waiting for that answer.

Mr Mrdak : I'm getting that information for you.

Senator O'NEILL: Thank you.

CHAIR: Thank you very much.