Over recent times we’ve been hearing increasingly strident demands to legislate and regulate telecommunications as an essential service, coupled with the claim that current regulation has failed.
One of the reasons given for this failure is the assertion that telecommunications is currently “self-regulated” and that industry “wrote its own rules”. Neither of these assertions is true. The Australian system of telecommunications regulation is a co-regulatory one, meaning that the relevant regulators, industry and consumer representatives determine and write the rules. Any code is subject to extensive stakeholder consultation, and only registered – if seen fit – by the sector regulator, the ACMA. It is not industry deciding what it can and can’t do for itself.
However, the benefit of co-regulation has always been that regulation has been developed by people who have the technical and operational expertise in telecommunications networks to ensure safeguards are feasible and practicable. Whether it be co-regulation or direct regulation, at the end of the day, it needs to be actually possible for the rules to be implemented. This system is not perfect, but it has meant over its lifetime that rules for selling, credit management, number portability, equipment labelling, and more, have been debated, rules agreed and penalties applied.
Now, however, a key component of that system has been abandoned and the most prominent regulator of the sector – the ACMA – is writing a new set of rules to apply. But believing we can regulate our way out of the problem doesn’t reflect reality.
If telecommunications is essential, we need to have a serious discussion about what that actually means. “Essential services”, under Australian law, include water, gas and electricity and are legislated for by State governments. Telecommunications falls under Federal law, a system which currently has no clear essential services legislation.
Telecommunications is also merely a conduit for communication – it isn’t the actual services people miss when networks go down. Enforceable performance guarantees for telecommunications networks won’t guarantee you can make that bank payment online, order your restaurant meal, or lodge your tax return. These latter services are provided independently of the networks – whether they be fixed, mobile or satellite – and if it is those services which are the genuinely essential components, then those enforceable performance standards need to be applied end to end.
When we try to compare telecommunications and internet services provision to the supply of gas, water and electricity we face a range of difficulties. These three systems have an excellent set of basic physical properties, coupled with standardised plugs and outlets which are far less complex than the suite of software applications, internet protocols, network technologies and the array of handsets, laptops and devices that connect across them. If my household water fails due to the plumbing in my kitchen, I don’t blame the water provider, yet the “telco” is almost always seen as to blame when people can’t search online.
Legislation cannot change physics.
We also know roughly how much water needs to be supplied to an average sized human to keep them alive, and can mandate that provision, and bring a tank of it when pipes fail. Even at the most basic level, were we to consider regulating mobile network performance, this would be akin to legislating that the lightbulbs on streetlights make everything visible no matter what the terrain, weather conditions, time of day, or dust and smoke levels are. Legislation cannot change physics. Even more absurd is the estimation of how much internet is required to keep the average human functioning. Is it 10 megabytes of Facebook, 20 megabytes of myGov, 2 megabytes of a bank and 8 megabytes of the ABC per day? Plus an allowance for telehealth and education? We certainly can’t bring you a disk drive full of content in lieu of a water tank.
It is also claimed that more regulation and heavier fines are needed because “people don’t trust telcos”. The significant number of Australians walking around without any hard cash or physical credit cards, would indicate they actually do trust the networks, despite the evidence that technological services are inherently imperfect.
Telecommunications and internet access have never been cheaper to buy nor more reliable than they are today. Perhaps what is needed is more clarity in how and who is responsible for its delivery, and better incentives to do this well. More regulation, particularly that codified by bureaucrats and politicians, no matter how well intended, is likely only to add to the cost and complexity of delivering these services.
by Narelle Clark
