*
Connecting the Country Telecommunications, media, electronic commerce and information services in rural & regional Australia
A conference organised by the Communications Law Centre and the National Farmers’ Federation
Albury, 28–29 September 1998
Gil Appleton Editor
October 2000
RIRDC Publication No 00/147 RIRDC Project No WS978-15
© 2000 Rural Industries Research and Development Corporation. All rights reserved.
ISBN 0 642 58177 0 ISSN 1440-6845
Connecting the Country Publication No. 00/147 Project No. WS978-15
The views expressed and the conclusions reached in this publication are those of the conference participants. RIRDC shall not be responsible in any way whatsoever to any person who relies in whole or in part on the contents of this report.
The panel discussions, comments, and the question and answer sessions are transcribed from tape recordings of the conference proceedings. Any errors which may have occurred in transcription or editing are the responsibility of the Communications Law Centre. Recordings were not available for all participants as indicated in the papers.
This publication is copyright. However, RIRDC encourages wide dissemination of its research, providing the Corporation is clearly acknowledged. For any other enquiries concerning reproduction, contact the Publications Manager on phone 02 6272 3186.
Researcher Contact Details Communications Law Centre The White House University of New South Wales UNSW SYDNEY NSW 2052
Phone: 02 9663 0551 Fax: 02 9662 6839 Email: [email protected] Web site: http://www.comslaw.org.au
RIRDC Contact Details Rural Industries Research and Development Corporation Level 1, AMA House 42 Macquarie Street BARTON ACT 2600 PO Box 4776 KINGSTON ACT 2604
Phone: 02 6272 4539 Fax: 02 6272 5877 Email: [email protected] Web site: http://www.rirdc.gov.au
Published in October 2000 Printed on environmentally friendly paper by Canprint Foreword
This report is an edited summary of the proceedings of a two-day conference Connecting the Country: Telecommunications, Media, Electronic Commerce and Information Services in Rural and Regional Australia, held in Albury in September 1998.
National Farmers’ Federation (NFF) and the Communications Law Centre (CLC) were represented on the 1996 Review of the Standard Telephone Service. This review concluded that Australia should establish a new goal in communications policy: that an enhanced level of telecommunications service, a ‘digital data capability’, should be accessible to all Australians by 2000. The Government accepted that recommendation and it was enshrined in the Telecommunications Act 1997. In mid–1999 the Parliament passed an amendment to the Act incorporating a ‘digital data capability’ into Australia’s universal service arrangements.
The Rural Industries Research and Development Corporation (RIRDC), NFF and the CLC are committed to the social and economic importance of making high quality, affordable communications services available to all Australians.
This goal provides a number of challenges. First, there is the technological and economic challenge of making adequate levels of service available throughout the country. But secondly, there is the business, social, cultural and educational challenge of exploring and explaining the possibilities of new media and communications services. These challenges need to be confronted in an environment of constant uncertainty about technical capabilities, costs and consumer demands.
Connecting the Country was planned as an event to address these challenges and their implications for rural, regional and remote Australia.
It provided an opportunity both to discuss major policy issues and to find practical solutions to real problems of direct relevance to the people of the Murray region and beyond.
This project follows on from substantial research carried out by RIRDC on electronic communications systems. Funds were provided from RIRDC Core Funds which are provided by the Federal Government.
This report, a new addition to RIRDC’s diverse range of over 600 research publications, forms part of our Human Capital, Communications and Information Systems R&D program, which aims to enhance human capital and facilitate innovation in rural industries and communities..
Most of our publications are available for viewing, downloading or purchasing online through our website:
• downloads at www.rirdc.gov.au/reports/Index.htm • purchases at www.rirdc.gov.au/eshop
Peter Core Jock Given Wendy Craik Managing Director Director Executive Director Rural Industries Research Communications Law Centre National Farmers Federation & Development Corporation
iii Acknowledgments
We would like to thank all the sponsors of thus giving the event national and international Connecting the Country for their generous reach. support. The event was held as part of a major collaborative research project being undertaken Session Sponsors in 1998 and 1999 by the CLC, in conjunction • Wesfarmers Dalgety – Telecommunications with industry partners Cable & Wireless Optus service quality in rural & regional Australia and the NFF, on ‘Mapping Future Directions for • Farmwide – What’s on the Web for Farmers? Rural Communications in Australia’. The project • Bendigo Bank – Financial Services is supported by the Australian Research Council • La Trobe University – Making electronic under its Strategic Partnerships with Industry commerce work for my business Research and Training (SPIRT) program. • Rural Press – What is electronic commerce and how do you do it? Major Sponsors • Charles Sturt University – Education and • Rural Industries Research and Development Health Corporation (RIRDC) – which committed • Office of Information Technology (OIT) – support immediately and published this Electronic Delivery of Government Services volume • Cinemedia – Community Initiatives Cable & Wireless Optus (then Optus
Communications) Special thanks to Melissa Hankinson at the CLC, • Telstra Corporation Rosie Simpson at Farmwide and Bradley Hayden • Austar—which sponsored the Debate and Dot Browne at Countrywide Conference Management for their huge roles in making it all ABC radio and multimedia made a major happen. commitment to the event. Outside broadcast facilities were established at the venue as a base Thanks finally to Gil Appleton for turning the for some rural affairs radio programs for the two multimedia fragments of audio-tapes, slide days, the sessions were ‘audio-streamed’ and presentations and speeches into this report. regular text-summaries of presentations and other information were placed on the ABC web site,
List of Abbreviations ABS Australian Bureau of Statistics ISP Internet Service Provider ACA Australian Communications Authority Kbps Kilobits per second ACCC Australian Competition and Consumer LAN Local Area Network Commission LEO Low Earth Orbit (satellite) ACIF Australian Communications Industry Forum MDS Multipoint Distribution System ADSL Asymmetric Digital Subscriber Line MHz Megahertz AMPS Advanced Mobile Phone System MMDS Microwave Multipoint Distribution System APEC Asia Pacific Economic Cooperation NFF National Farmers’ Federation AQIS Australian Quarantine Inspection Service OECD Organisation for Economic Cooperation and CLC Communications Law Centre Development CND Calling Number Display POP (Internet) Point of Presence CDMA Code Division Multiple Access PSTN Public Switched Telephone Network CSG Customer Service Guarantee RCTS Remote Commercial Television Services DRCS Digital Radio Concentrator System RIRDC Rural Industries Research & Development FRAN Farmwide Regional Access Network Corporation GEO Geostationary Earth Orbit (satellite) RTIF Regional Telecommunications Infrastructure GSM Global System for Mobile Fund GST Goods and Services Tax STD Subscriber Trunk Dialling HCRC High Capacity Radio Concentrator STS Standard Telephone Service HDTV High Definition Television TDMA Time Division Multiple Access IDD International Direct Dialling TIO Telecommunications Industry Ombudsman ISD International Subscriber Dialling USO Universal Service Obligation ISDN Integrated Services Digital Network
iv Contents Foreword...... iii Acknowledgments ...... iv List of Abbreviations ...... iv Contents ...... v Executive Summary...... vii Key Themes of Connecting the Country...... vii Connecting the Country: Business and Social Strategies...... 1 Chair: Ian Donges, President, National Farmers’ Federation...... 1 Speakers:...... 1 Keynote Address ...... 6 Senator the Hon Richard Alston ...... 6 Minister for Communications, the Information Economy and the Arts...... 6 Chair: Jock Given, Director, Communications Law Centre ...... 6 Rural and Regional Communications: The Debate...... 9 Moderator: Robyn McConchie, ‘The Country Hour’, ABC Radio...... 9 A Comment on the Debate...... 15 Jock Given, Director, Communications Law Centre ...... 15 Infrastructure: The Foundations for Communications ...... 17 Chair: Alan Horsley, Managing Director, ATUG ...... 17 Speakers:...... 17 Respondents: ...... 17 Media: Old and New ...... 23 Chair: Michael Gordon-Smith, Member, Australian Broadcasting Authority...... 23 Speakers:...... 23 From Party Line to On-Line ...... 27 Lindsay McDonald ...... 27 Board Member, Regional Telecommunications Infrastructure Fund ...... 27 Agricultural and Rural Services ...... 31 What’s on the Web for Farmers? ...... 31 Chair: Rosie Simpson, Director, Projects, Farmwide ...... 31 Speakers:...... 31 Agricultural and Rural Services ...... 35 Telecommunications service quality in rural and regional Australia...... 35 Chair: Mark Needham, Director, Infrastructure Development, Farmwide ...... 35 Speakers:...... 35 Agricultural and Rural Services ...... 41 Emerging Access Technologies – Future Voice and Internet Services ...... 41 Chair: Rob Seekamp, Telstra Consumer Consultative Council...... 41 Speakers:...... 41 Commercial Services...... 47 Financial Services ...... 47 Chair: Chris Connolly, Financial Services Consumer Policy Centre ...... 47 Speakers:...... 47 Commercial Services...... 49 Employment and Legal Services...... 49 Chair: Vic Marles, Melbourne Coordinator, Communications Law Centre ...... 49 Speakers:...... 49 Commercial Services...... 54 Entertainment, Learning and Culture ...... 54 Chair: Robert Knight, Director, Riverina Regional Library ...... 54 Speakers:...... 54 Electronic Commerce ...... 56 Decentralising Australian Business – Call Centres and Teleworking ...... 56
v Chair: Leo Reilly, La Trobe University ...... 56 Speakers:...... 56 Making electronic commerce work for my business...... 60 Chair: Peter Lamb, Head of School of Business, La Trobe University, Albury-Wodonga...... 60 Speakers:...... 60 Electronic Commerce ...... 62 What is electronic commerce and how do you do it?...... 62 Chair: Rosie Simpson, Director, Projects, Farmwide ...... 62 Speakers:...... 62 Launch of National Landcare Information Service ...... 67 The Hon Tim Fischer ...... 67 Deputy Prime Minister and Minister for Trade, MHR Farrer ...... 67 The Future: Key Questions for Rural & Regional Communications...... 68 How should we judge success in providing communications services for rural and regional Australia? ...... 68 Chair: Peter Core, Managing Director, RIRDC...... 68 Speakers:...... 68 Concluding Remarks ...... 71 Wendy Craik, Executive Director, National Farmers’ Federation ...... 71
vi Executive Summary
Key Themes of Connecting the Country
A number of major themes emerged from this event as key elements in any national strategy for communications in regional, rural and remote Australia:
• The provision of digital data capability to at least 64kbps for all Australians at a reasonable price. • A set of carrier performance standards covering connection, repair, reliability and technical performance. • A requirement, or at least an encouragement, for a carrier to lodge a Customer Service Charter each year. • A requirement for a carrier to lodge a Network Rollout Plan for each type of service offered, so that customers can assess the quality of the service and the carrier’s intention. It may be worth considering this concept as a licence condition. • Provision of a telephone service quickly – eg within 6 days – by satellite. Such a service might have limited data capability and might not offer call diversion, call waiting and itemised billing, but could be provided as a temporary service until a full service can be implemented. • The USO should be reviewed and upgraded to cover new services which are becoming the norm. As an example, ISDN should allow two 64kbps information channels plus 16 kbps signalling channels. This would allow 128 kbps, if required. Or another service which could be included could be a mobile service to defined coverage areas and possibly a LEO satellite service. • Flexible pricing packages for fixed services, varying the relationships between line rentals and call charges as is the case with mobiles. In other words, customers should be able to select a pricing plan to suit their needs. • A commitment to network economics, that is acceptance of a tolerable degree of network cross subsidies to offset a tendency to unit profit and loss statements, as a means of ensuring reasonable pricing in non-metropolitan Australia. • A focus on network costs based on cost-based pricing so that rural development is not hampered. • The Customer Service Guarantee to be the same for everyone, regardless of location.
vii
Connecting the Country: Business and Social Strategies
Chair: Ian Donges, President, National Farmers’ Federation
Speakers:
John Mackenzie Chairman, Farmwide Bernie O’Donnell Pro Vice Chancellor (Planning and Development), Charles Sturt University Chris Williams Director Library and Information Services, State Library of NSW
John Mackenzie
John Mackenzie noted that in the past decade, rural communities have been under enormous pressure from the combined impact of economic and social change, caused by both domestic factors and global market developments. He said that the Information Age offered a real opportunity to reverse past trends and revitalise local communities.
Farmwide is a company owned by the State organisations of the National Farmers’ Federation (NFF), which is developing initiatives with a clear commercial focus to improve farmers’ profitability and viability.
Farmwide has received a grant from the Regional Telecommunications Infrastructure Fund (RTIF) to implement the Farmwide Regional Access Network (FRAN), which will extend quality, affordable online services to Australians in non-metropolitan areas. This initiative grew out of a two-year pilot project which identified a number of conditions that must be met in order to ensure equity in telecommunications. These included:
• Local call access to the Internet. • Internet Service Provider (ISP) costs of less than $5.00 an hour and ideally closer to metropolitan rates of between $1 and $3.30 an hour. • Connection speeds of at least 28.8kbps, allowing full use of the web and removing reliance on poor wire-based or bandwidth-constrained radio connections.
Potential solutions to these problems were identified as:
• More points of presence (POPs). • A special rural modem designed to overcome problems with rural phone lines. • Trials of new technologies such as satellites and ADSL (Asymmetric Digital Subscriber Line) which offer access to higher bandwidth.
In addition, users should have available to them a range of locally-produced innovative goods, services and information rather than having to rely on foreign-based online information.
Farmwide’s POPs will be developed with local communities and will be managed by an appropriate ISP, Mr Mackenzie said. There are to be 15 initially, allowing Internet access for the cost of a local call.
1 Special software configurations and a modem developed in conjunction with Australian modem manufacturer Maestro will ensure maximum speed on a copper access line or Digital Radio Concentrator System (DRCS) connection.
Mr Mackenzie said that Farmwide was also trialling high bandwidth satellite data delivery technologies for all States, and though the setting of appropriate tariffs and the construction of network operation centres caused some delays, he expected all participants in the trials to be online by November 1998. The majority of participants are people in the more remote areas serviced by the DRCS, and the locations selected will enable monitoring over a wide geographic range as well as covering the spectrum of the satellite footprint. The trial will allow up to 400kbps to all subscribers, though the full bandwidth opportunity will depend on the speed of the participant’s existing service.
The FRAN project will provide training and support for over 2500 online users all over the country, and this will be supplemented by online training and help lines.
In addition to Maestro, other industry partners are involved in the project: Telstra and Big Pond, Gilat Satellite Services, Hughes Network Systems, Ericsson, AAPT Sat-Tel and ACESAT, IBM through their supplier OPC and IPEX Information Technology, a leading local manufacturer of Intel-based PCs.
Another trial, involving high bandwidth ADSL and allowing for 6MB per second or more using existing copper wire, is under preparation. While this technology is limited by distance from the exchange, it offers great potential for hundreds of small rural communities around Australia. Moreover, research on the quality and gauge of copper wire in rural Australia has suggested that there may be possibilities for ADSL technology to run further than a typical metropolitan installation, and a trial is to be conducted in Cobham, Victoria.
Farmwide has undertaken considerable work to develop specialised content for rural, regional and remote users, based on regular consultation and feedback from users. Existing services include news, weather, education, training, health, electronic commerce and government information, and there are plans to develop electronic commerce, online banking, remote education and health services via video or videoconferencing. Farmwide is also developing an agricultural search engine to assist farmers through the labyrinth of information available on the Internet.
Rural, regional and remote Australians deserve high quality telecommunications services and products at affordable prices, Mr Mackenzie said. The days when they were expected to tolerate second class or non-existent communications are gone. They need to communicate effectively in order to:
• enhance their farm business profitability and viability; • ensure that their families can maintain an acceptable lifestyle; and • become market leaders in a global marketplace that is increasingly hostile and unforgiving.
Mr Mackenzie also referred to the need for more equity in the time it takes to connect, repair and maintain services for all Australians.
Bernie O’Donnell
Professor O’Donnell began by stating his view that we are in the midst of a digital revolution which is critically important economically and educationally; and that connecting the country is also critically important if rural and regional Australia is to share in the benefits of the digital revolution.
There are strong parallels between the industrial and digital revolutions, and the digital revolution poses similar issues and potentially similar inequities for rural Australia that existed with provision and the cost of provision of electricity.
2
But the speed of the digital revolution is difficult to comprehend, with enormous leaps forward since the world's first programmable computer in 1946, notably the microchip, fibre optics, and the Internet.
Professor O’Donnell posed the questions of what is the significance of the digital revolution for Australia – and rural Australia in particular – and how do we need to respond to it?
He referred to the use of the Internet to buy and sell goods and services and said that over time, the sale and transmission of goods and services electronically is likely to be the largest and most visible driver of the new digital economy. The use of the Internet by businesses for commercial transactions with their business partners, which began about two years ago, has already seen users reporting significant productivity improvements from using electronic networks to create, buy, distribute, sell, and service products and services.
Few people either currently in, or entering, the workforce will spend their entire working lives within the same occupation, and technology is changing at such a rate that one’s occupational preparation can become obsolete in a matter of years. The rate of growth in knowledge and the consequent need most people have for regular reskilling and upgrading skills throughout their lives, will be on such a scale that national budgets will not meet this need if only traditional approaches to education are used.
Professor O’Donnell noted the emergence in the USA, and to a lesser extent in Australia, of the use of the Internet as a delivery mechanism, particularly for people upgrading qualifications and skills, with the added advantage that the location of the university is largely irrelevant to the student.
He then described the distance education activities of his own university, Charles Sturt (CSU), Australia’s largest distance education provider, which in 1999 offered over 800 subjects with online support.
CSU Online supports subjects allowing students to use the Internet to talk to each other in asynchronous forums; use email to communicate individually and privately with a lecturer or fellow student; get access to the library; order books; download materials from an electronic reserve in the library; do online self assessment tests; search the Internet for information; and submit their assignments online.
Charles Sturt University, as a regional Australian university, is addressing the substantial educational disadvantage suffered by students in rural areas compared with their metropolitan city counterparts, by means of a web site that provides a rich educational resource for Higher School Certificate (HSC) students and teachers. The NSW HSC On-Line web site was established in 1997 and has grown to the largest educational web site in Australia, with over a million hits per month. The web site is a model of how Internet technologies can be used to reach isolated students and break down the tyranny of distance and disadvantage.
The Australian Bureau of Statistics (ABS) household survey in February 1998 showed that there were three million adult users of the Internet in Australia at February 1998. Of these about one third reported that they had used the Internet for finding information relating to their studies.
In the 1996 Census of Population and Housing, 1.2 million Australians 18 years and over reported undertaking studies of some kind. Thus about 80% of adult Australians who were undertaking some form of study accessed the Internet as part of that study.
The Internet is an integral part of adult education in Australia. The disconcerting fact for rural and regional Australia is that the Internet is an integral part of adult education for people living in the capital cities. The survey showed that 80% of users of the Internet live in Australia’s capital cities.
3 Professor O’Donnell concluded by stating that unless rural and regional Australia have access to digital networks with bandwidths and charging regimes that are reasonably comparable to metropolitan Australia, the economic, educational and social benefits of the Internet will largely flow to Australia’s city dwellers.
[E]ven in our supposedly highly competitive world of telecommunications, the major carriers have little interest in providing Internet services to regional and rural Australia on a basis remotely comparable with what they are doing in Sydney or Melbourne. There may emerge specialist carriers to service larger business and government agencies located in rural Australia. However, it seems highly probable that the only way individuals, small businesses, schools, and so on, will gain reasonable Internet access is through legislative requirements placed on the major carriers. Whether such requirements will be legal and effective, even with a partially privatised Telstra, is open to doubt. Professor Bernie O’Donnell
Chris Williams
Chris Williams spoke of the astonishing rate of increase in Internet usage, expected to rise to one billion users worldwide by 2005, but noted that not everybody has access to it.
He said that NSW.net is part of the solution to this lack of access. NSW Government policy emphasises the use of information technology to connect people around the State through:
• connect.nsw, using the Internet to position NSW for the information society; and • Networked Communities Strategy, enhancing the quality of community life in NSW.
The objective is to use NSW public libraries as the central element in a network involving the libraries, local government and communities.
The strategy represents a partnership between city and country, and between the private and public sectors. It is funded by the NSW Government ($1m) and Online Public Access Initiative (OPAI) ($190,000).
What are the characteristics of NSW.net?
• Council-wide Internet solution. • permanent high bandwidth connection. • Virtual Private Network. • consortium. • local information. • equity and participation. • whole of State solution.
Fundamental to the establishment of the network is the involvement of partners from the private sector: Ozemail, Telstra and Southmark Solutions.
The design goals are that it should be simple, fast, scalable, secure, and equitable and should present a cost-competitive statewide solution.
The approach offers a number of important benefits, including cost-free set-up and untimed connection costs. Internet access is unlimited, and there is potential for ‘free’ and discounted services as well as telephony. Issues to be resolved are the spread of POPs and the extent to which these need
4 to be subsidised. Sixty five councils and libraries are committed to the scheme, with 40 already connected and operating.
NSW.net is more than just a connection to the Internet. It offers a value-added layer, involving equity, participation and co-operation, and uses the global network for local community benefit.
Recent research on the NSW public library market showed that it is the most used local government service, with 49% of the population registered members. It handles 1.8 million inquiries a year and receives more than 3 million visits; women are heavier users than men (59% to 41%).
Sixty-six percent of public libraries offer Internet access, and 41% of users have no other access; 26% are new patrons. Among users, 80% consider access in public libraries is very important. Among libraries, 28% are publishing local content.
NSW.net offers significant opportunities for public libraries, including:
• fast access to worldwide electronic publications, databases and catalogues of other NSW members; • the collection and publication of local information and directories; and • training and supporting local residents to use the Internet.
For local government too, there are opportunities, notably they:
• can join regional and statewide intranet at minimum cost; • can undertake joint ventures with neighbouring councils to deliver online local government services; • can obtain cost effective access to reporting services; and • can become an ISP for rural communities.
NSW.net guarantees equitable access to Internet services, via the local public library, for local communities. They can learn to use the Internet with the support of trained library professionals, and they can use it for chat sessions and email.
5 Keynote Address
Senator the Hon Richard Alston Minister for Communications, the Information Economy and the Arts
Chair: Jock Given, Director, Communications Law Centre
Senator Alston said that we were in a period of ‘frenetic’ activity. A decade ago competition was still being merely talked about; now 23 new carrier licences have been issued since 1 July 1997.
He outlined the key points of the Coalition’s telecommunications policy. He emphasised that the bottom line of the policy is that consumers should not be disadvantaged. To this end the Government has built in safeguards, including:
• Universal Service Obligations (USOs).
• Price cap system, which is unaffected by the GST.
• The Customer Service Guarantee (CSG) scheme, introduced on 1 Jan 1998, which provides for rebates in certain circumstances for business and residential consumers, and holds carriers to strict deadlines for the installation of new services and repairs to existing services.
• Legal right to untimed local calls, which has been extended to business voice calls and residential data calls.
• Telecommunications Industry Ombudsman.
• Assistance to low income consumers and those with special needs.
In the area of quality of service, the Minister acknowledged that more needs to be done – something also conceded by Telstra.
The Government will legislate to provide the Minister with the legal power to direct Telstra to comply with legislated service standards. The Government does not believe in a general, across-the-board power to intervene irrespective of commercial realities, simply in order to impose the political priorities on a carrier; but it is important to ensure that it has the direct capacity to maintain and improve service standards, which will be set by the Federal Parliament.
The Government does not resile from its view that Telstra would be better off in the hands of shareholders, Senator Alston said. Indeed, Australia lags behind most other comparable countries in this regard. Privatisation frees up scarce resources that can be better applied to capital upgrade works, which is one of the main bugbears in rural and regional Australia; business plans do not provide for significant expenditure on capital works because it is not economic.
The interests of rural and regional Australia are paramount, and this will be one of the first elements of any new legislation. The Government will not contemplate going beyond any selldown of over 49% unless and until it is satisfied by the findings of an independent inquiry that Telstra is meeting the specified standards for consumer service.
The Government will provide up to $150 million on a tender basis to ensure that people within the extended zones have access to untimed local calls. These funds will be earmarked out of proceeds of the sale of Telstra. Their political opponents would simply give directions to Telstra to do it
6 irrespective of cost, but the Government’s advice is that this would not be legal, and would strip hundreds of millions of dollars off shareholder value. The Government will also replace the pastoral call rate with a new preferential call rate.
They will spend:
• $26 million to install local Internet POPs so that people will have access at local call rates.
• $25 million to fill in mobile phone blackspots on major highways.
• $120 million on a new television fund, extending SBS to all transmission areas of more than 10,000 people (currently it is only available in areas of 120,000 people). Thus SBS will be available to another 1.3 million Australians outside the metropolitan areas. The fund will also be used to eliminate TV reception blackspots, to upgrade both ABC and commercial networks, and to meet the needs of isolated island communities.
The Minister congratulated the NFF for its Farmwide program extending Internet access for rural Australians and providing additional services such as weather reports and crop information. Farmwide received $5.5 million from the Regional Telecommunications Infrastructure Fund (RTIF) for this work. Senator Alston criticised the ALP’s stated intention to review the operations of this fund, and implied that the fund could be threatened.
At the Government’s behest, Telstra has made ISDN services available to all but 4% of the population. Covering the remainder is a difficult problem. The Australian Communications Authority (ACA) reported that the costs of upgrading Telstra’s entire network would far outweigh the benefits. Telstra estimated the cost at $26 billion. At this level the effects on carriers would be catastrophic. In the Government’s view, the ACA case was compelling. No-one, even in the cities, has 64kbps as a standard service; Telstra has always regarded it as a premium product.
The Government will legislate to make ISDN (or its equivalent using satellite downlink technology) available to all Australians as part of the USO. This represents an historic breakthrough for people in rural and regional Australia after years of being second class citizens.
Competition will be a key driver of such developments as service pricing. Telstra’s competitors are to be given access to its ISDN network on terms and prices which will be arbitrated by the Australian Competition and Consumer Commission (ACCC).
Competition has resulted in significant price reductions. Before 1996, STD calls cost an average of 22c a minute; now customers pay an average of 16c – a 26% reduction.
International calls have dropped from an average $1.20 to $1.04 a minute. Other phone companies have done even better, and these services are available to country as well as city subscribers.
Senator Alston noted that the local call market has still seen no significant price reduction, and said this will remain the case as long as there is no competition on the local loop. Competition will come from resellers or service providers rather than competing infrastructure providers. The ACCC is currently investigating pricing structure of the local loop. If necessary, the Government will legislate to ensure that Telstra’s competitors are able to gain access to the local loop.
People who choose to live outside the major cities, even in remote areas, will be guaranteed a wait of no more than six months for a service under Telstra's Universal Service Plan, twelve months the absolute maximum for the most remote areas.
On the issue of the analogue AMPS (Advanced Mobile Phone System) network phaseout, Senator Alston said that Telstra is unlikely to be able to upgrade its network to the new CDMA (Code Division
7 Multiple Access) digital network by 1 Jan 2000. The Government will introduce a staged phaseout of AMPS to be completed by 31 Dec 2000, and this has been agreed by all carriers, to minimise the harm which could potentially have flowed from the phaseout.
$70 million from the Telstra sell-off will be allocated to establish a network of 500 Rural Transaction Centres (RTCs), initially in towns of between 500 and 3000 people. The Government recognises that it has a role in restoring some of the lost services from country towns and helping to revitalise them. RTCs will provide banking, phone and fax, Medicare claims, and postal services. They will be run by the local community or a local small business. Capital costs will be provided, and some running costs in early years.
The ALP’s claim that Government is planning to close down Australia Post is simply nonsense, Senator Alston said. They have increased Australia Post retail outlets. They will reduce the cost of postage for business, and the basic stamp charge will remain fixed until at least 2003.
Their policy in all these areas will lead to a stronger Australia, the Government claims.
8 Rural and Regional Communications: The Debate
Senator the Hon Richard Alston Minister for Communications, the Information Economy and the Arts Senator the Hon Kate Lundy Assistant to the Shadow Ministers for Science & Information Technology, Youth Affairs & the Arts Senator the Hon Vicki Bourne Australian Democrats, Spokesperson on Communications
Moderator: Robyn McConchie, ‘The Country Hour’, ABC Radio
Provision of Services Robyn McConchie opened the debate by referring to the USO, required of all carriers by legislation. Currently Telstra is the sole national USO provider, though the legislation provides for multiple carriers to be given this responsibility at national or regional level. The services that comprise the USO are voice telephony, pay telephones and such other services as are specified by the Minister. The Coalition has promised to provide at least 96% of Australia with 64kbps ISDN on demand by the end of 1998; also from July 1999, its equivalent must be available to anyone not able to obtain a 64kbps service on demand. McConchie asked what are the implications for rural and regional telephony and online users.
Senator Alston said that people will continue to have access to the speed they have at the moment, but there will be a minimum standard in terms of access to high level services such as high speed faxes, videoconferencing. The Government believes that satellite downlink technology with a telephone dial- up service is the way to ensure access for 100% of Australia.
Senator Alston agreed that including the 64kbps in the CSG with the current install and repair time frames, that is within three days as opposed to the current arrangements where they have to wait 90 days, was ‘a sensible approach’.
Senator Lundy said that the Coalition was ‘chasing ALP policy’. The ALP has recognised the provision of ISDN or equivalent digital data services at an affordable and uniform price as a realistic option for all customers – residential, business, metropolitan or non-metropolitan. It should be provided. Currently the cost depends on distance from the exchange, and the Coalition has not addressed the question of cost at all. It has said that the ALP’s policies are structured to address the issue of cost, not simply capability. She said it was ‘illusory’ to hold out the sale of Telstra as being the only means by which we could deliver this service to Australia.
Senator Alston denied that all the Coalition’s policy undertakings were contingent upon the sale of Telstra.
Senator Bourne said that the Democrats supported the upgrade to 64kbps, though they are concerned about cost. Everyone should have access to it at a comparable cost. If a satellite link was significantly more expensive, it should be cross-subsidised.
Senator Alston said the Government would tender for the USO. It is the only way to achieve high quality services at a reasonable price.
Robyn McConchie asked how we should define words like ‘adequate’, ‘reasonable’ and ‘affordable’.
Senator Lundy said that Telstra’s and the Government’s unwillingness to release the report into Telstra’s pricing practices raised serious issues about what they are charging and for what service, and
9 these issues related specifically to defining how many bits per second are available down the line when you purchase a connection product from an ISP or Telstra.
She said that Labor was committed to universal ISDN or equivalent service. She said it was odd that the Government had incorporated the use of satellite technology because this technology is not new; it has been available for a long time and has always been an option for carriers to provide digital data services.
Lindsay McDonald, speaking as a remote telephone subscriber, said that when Telstra was a public monopoly, people had to pay upwards of $16,000 to $20,000 for an upgraded service in remote areas. It was also under the public monopoly that people in remote areas lost their right to make any untimed calls. She claimed that many people saw the issue not as one of ownership, but of enforceable regulation.
Senator Alston concurred. The issue is to legislate for minimum standards of service regardless of ownership, he said.
Senator Lundy said she was always concerned when the success or failure of a CSG was dependent on Telstra’s benevolence. For rural and regional people, there is now a political imperative on delivering decent services, which the ALP believes cannot be delivered through legislative means. Public ownership would provide additional leverage to ensure that the carrier acts in the public interest.
Alan Horsley of ATUG (Australian Telecommunications Users Group) asked whether any of the speakers had any objection to keeping the USO away from the budget and allowing the industry and the consumers to pay. Given that currently everyone pays $20 a year to support the USO, why should we not expand the USO to cover new and enhanced services, so that one part of Australia supports the other?
Senator Alston said the USO currently costs $252 million a year and is funded 80% by Telstra, 10% by Optus and 10% by the balance of the carriers. To double it, which is essentially the Democrats’ approach, raises significant cost implications. Increasing minimum capability levels should be a function of demand and would not necessarily cost anything. But if Optus, for example, had to find another $20-30 million to meet a doubling of the USO, this would have significant implications for competition by penalising Telstra’s competitors in rural and regional areas.
The 64kbps requirement was included in Telstra’s licence condition and was never quantified. Increased volume might mean greater revenue in any event, Senator Alston said.
Robyn McConchie said that the ACA report1 had estimated a cost of $26 billion to upgrade. Senator Alston responded that to include ISDN as standard in the USO would have that sort of cost implication, which is why it should not simply be imposed but made available on demand.
Senator Lundy said that this meant the availability of such services would be dependent on people’s capacity to pay. For many people this would be financially prohibitive. The answers to many of the issues under discussion are contained within the unreleased pricing report. Until there is public knowledge of how Telstra conducts its pricing regimes and how this bears on the application of the USO, we are flying blind. If Telstra is privatised we will never know what degree of cross- subsidisation occurs or have any policy guidance on how the public can best be served.
Senator Alston disputed this, claiming the ACA already monitors pricing and has costed the USO at $252 million; it can continue to do this into the future.
1 Australian Communications Authority Digital Data Inquiry: Public Inquiry under Section 486(1) of the Telecommunications Act 1997–Report to the Minister for Communications, the Information Economy and the Arts 15 August 1998.
10
Senator Bourne said the Democrats supported an increase in the USO at a level which would go a considerable way towards funding what should be funded.
Brian King (Department of Natural Resources and Environment, Victoria) said that the panel was talking about two year old technology. In North America they are now working on a project involving 100 times the bandwidth that was being discussed at this conference.
Senator Lundy said that this point was fundamental. Governments had a history of being three to five years behind the times, she said, and reacting retrospectively in policy terms to technological development. Labor in its policies will be looking much further than simply mandating a 64kbps service.
Senator Bourne said that in considering the digitisation of the various services, it was clear that there would be a great deal more spectrum available in coming years. We have to look long term.
Senator Alston said that to hear Senator Lundy talking about ‘mandating’ high speed access to the Internet was just repeating the same old mistakes – just as Labor wanted to mandate pay TV by satellite, and to phase out analogue mobile phones.
‘The purpose of Government is not to get ahead of the technology curve’, he said, ‘and somehow decide what is in your best interests. It’s to make sure that people aren’t left behind. That’s the whole purpose of the USO and the STS: you come in after the event when you see how it’s playing out there.
‘Certainly we very much encourage this sort of research; it’s going to happen anyway. The question is whether there are any legal or regulatory impediments to its being applied here. That’s why it’s a very important decision to have ISDN as a declared service by the ACCC, because it allows other carriers, service providers, to get access to these bottleneck services. But that’s a helluva different thing from saying, whatever the latest backbone technology is we are going to somehow force the carriers to adopt it. That is a recipe for absolute disaster’, Senator Alston concluded.
Mobile Phones Robyn McConchie said that coverage was the major issue with mobile phones, and referred to Coalition policy on removing blackspots on major highways and phasing out the AMPS system. She pointed out that there was no firm commitment to CDMA on the part of Telstra, and the Coalition policy stated only that it was the ‘most likely’ format.
Senator Alston said he believed Telstra was playing for time to get the best outcome in purchasing, and he could understand why Telstra would want to give itself some room to breathe. But the fact is that Telstra is committed to a new generation technology, most likely to be CDMA, though it could in theory be digital AMPS. It will have all the functionality of digital so that users end up with the best of all possible worlds.
The Government has set the ground rules, which are that analogue services have to be replaced by reasonably equivalent coverage and service, and it is now up to Telstra to decide which particular technology delivers the goods.
In answer to a question from Robyn McConchie about how confident he was that CDMA or its equivalent would be available by the end of 1999, the Minister responded that he had ‘absolutely total confidence’.
Robyn McConchie asked Senator Lundy if Labor’s decision to close down the AMPS network at the end of 2000 was responsible for the ‘whole mobile phone fiasco’. Senator Lundy said that Labor’s current position was that they did not want to see anyone in rural and regional Australia disadvantaged
11 by a shutdown of their services, and that they were looking at solutions. The overall lesson was how to apply competition policy in the rural and regional sectors when there is no profit in it for the carriers.
Asked whether the ALP would sell off Mobilenet if elected, Senator Lundy said ‘structural separation is something we are not prepared to entertain at this time’. The important thing was to get Telstra to work in the public interest, she said.
Senator Alston said this was an ‘interesting’ response. He claimed that the ALP intended to sell off non-core areas such as Mobilenet, Big Pond and White Pages, which were expendable because Labor would not get further privatisation of Telstra past the union movement.
The Coalition had to negotiate with the carriers because their advice was that it would be illegal to break the binding commitment to phase out analogue by the end of 2000. The Government had ‘one hand tied behind our backs’, and had to seek the advice of the carriers.
Senator Bourne said mobile telephony should be included in the USO. She reminded Senator Alston that the Coalition voted for the AMPS phaseout, though the Democrats opposed setting a rigid date.
Quality of Service Robyn McConchie referred to the ACA’s Carrier Performance Monitoring Bulletin for the March 1998 quarter which saw new connections made by the due dates in country areas decline from 82% in December 1996 to 64% in March 1998. Privatisation and the CSG were supposed to improve service quality but they have not done so, she said.
Senator Alston rejected this claim. The Government proposed a CSG before the last election, before any privatisation happened. Quality of service was inferior prior to 1996.
Senator Lundy said that actions like closing regional centres and the outsourcing of Telstra services were all about improving the bottom line for privatisation. Privatisation was impacting directly on the quality of services right across the country, she said.
Robyn McConchie questioned this and asked whether it was in fact the competition introduced by Labor in 1992 that was driving Telstra’s tougher policy approach to staffing levels and the resulting lower service quality in regional areas, rather than privatisation.
Lundy rejected this proposition. The minute Telstra was out of public hands, there would be no control, she said, and the Government will be relying on ‘glorious $10 million fines’. She could not see Telstra letting the Government get away with proposing that kind of sanction. Sanctions have proved ineffectual in other areas.
The Minister said it was ‘preposterous’ to suggest that Telstra was above the law. The reason that Telstra has shed staff was that on OECD findings it was 30% off world’s best practice and was ‘very very inefficient’ on any measure such as revenue per employee, or lines per employee.
Since Telstra has put efficiency first, there have been reductions in STD and ISD in the order of 50- 60%. He said that the ALP had enthusiastically endorsed privatisation and it was now ‘suddenly convenient to pander to the unions’ in this area.
Robyn McConchie said it was all very well to have cheap phonecalls, but if your phone was not working it would not be of much benefit.
Senator Alston referred to reductions in waiting times for repairs and installation, and the policy of giving people a free satellite phone if they faced a long wait for installation. In all countries where
12 they have privatised or are about to, they have instituted legislative requirements. He said that of 29 members states of OECD, 25 are committed to privatisation, as are 15 or 16 members of APEC.
‘This is simply old-style Labor suddenly deciding in opposition that it does not like something that it embraced fervently in government... It is a convenient, opportunistic approach’, Senator Alston said. As Finance Minister, current Opposition leader Kim Beazley had privatised everything in sight, he claimed.
Senator Bourne conceded that it is not possible to turn the clock back, but it is possible to ensure that the Minister has the power to direct.
Senator Alston distinguished between a general power of direction ‘in the public interest (undefined)’ which he said Labor was supporting, as opposed to a power of direction on service performance. He defended the RTIF as an arm’s length fund, which is not used to direct funds to marginal seats.
Senator Bourne said that the power to direct – both general and specific – should remain. Directors of Telstra should be required to act in the public interest before the interests of their shareholders, given that Telstra remains a virtual monopoly, especially in terms of infrastructure.
Pricing Robyn McConchie noted that Labor has promised untimed local calls regardless of where people live, at no cost to budget. The Coalition has promised up to $150 million over three years, funded out of the proceeds of the Telstra sale, to provide untimed calls in extended zones. The Democrats are calling for a $1 billion Rural Infrastructure Fund to be funded from an industry levy.
Given that the take-up of ISDN to date suggests that it is too expensive for residential and small business customers, Ms McConchie asked what the Government would do to make it affordable, and whether it would be included in the basket of services.
Senator Alston said the critical thing was to ensure competition, and the decision of the ACCC to make ISDN a declared service meant that any other carrier could now demand access for ISDN and resell it. The notion of an undefined right to decide what is in the public interest is ‘banana republic stuff’. He pointed out that Telstra is obliged by law to act commercially; directors have a statutory obligation to act in the interests of shareholders and can go to jail if they don’t. The way you marry the two obligations, he said, is to spell out what you mean by the ‘public interest’. If it means minimum levels of service, you legislate for it so that the shareholders know what the obligation will be.
Senator Lundy said that the ability to provide untimed local calls was a function of public ownership. She questioned the reliance on competition proposed by Senator Alston, when in some markets there was no chance to make a profit. Such an approach was completely inadequate in rural and regional Australia. Comparisons with other OECD countries do not take into account how dispersed Australia is geographically.
Australia is different; we have to come up with a set of policies that addresses our specific circumstances, and we need to utilise public ownership to do this, Senator Lundy said.
Senator Alston said the critical issue is whether government pays for untimed local calls or requires Telstra to absorb the cost. The Coalition would pay for this out of proceeds of the sale of Telstra; the ALP would simply tell Telstra to do it. Labor is promising special deals in marginal seats and in Tasmania. This is discriminatory and unfair, especially to people in other parts of rural and regional Australia.
Robyn McConchie said it appears that only local calls and standard letters will be exempt from the GST. The Minister said public payphones were also exempt. There might be a modest increase in
13 other charges such as STD and IDD, but Treasury figures suggest that the overall cost of services in communications will reduce by 4.9%.
On the question of pricing – such as why there was not a standard call rate over the whole country – the Minister said it was not an arbitrary process. Governments should not be running a business, rather they should be setting a legal and regulatory framework that protects consumers.
Privatisation The Government has said that it will not proceed with the sale of Telstra until an independent inquiry establishes that its performance standards are adequate, Robyn McConchie said. But the Government’s tax and budget forecasts incorporate the proceeds of the sale of Telstra.
Senator Alston said the Government believed ‘that in due course, that is the position we should be in’. Substantial sums now tied up in Telstra could be used in the public interest for upgrades in communications services or social bonus initiatives. He asked why taxpayers should have to take multi-million dollar bets on new technology; the risks should be taken by shareholders.
Robyn McConchie asked whether, if the sale didn’t go through, the Government’s whole budget and tax package would be undeliverable? Senator Alston replied that the Government ‘would be confident that Telstra will raise its standards voluntarily’, but in the event that it did not, they would be legislating to set minimum standards.
Robyn McConchie asked Senator Lundy whether, given that the ALP has said it will not proceed with a further sell-off, this left Telstra with the worst of all possible worlds – part private and part public. Senator Lundy denied this, and added that Labor’s proposals placed Telstra in the best position for the future. The independent inquiry would be a farce; the Government is working on the basis that it will give a nod and a wink to the full privatisation of Telstra. The proposed inquiry was simply a political exercise to satisfy their Coalition partners, Senator Lundy said.
Senator Bourne repeated her earlier statement that the RTIF should be funded from an industry levy. It is preferable, she said, for funds to come from Telstra rather than from taxes. Telstra is a natural monopoly and as such will continue to generate significant cash flow.
14 A Comment on the Debate
Jock Given, Director, Communications Law Centre
(The following article appeared in the October 1998 issue of the Communications Law Centre journal, Communications Update)
Common ground on universal service There was a moment in the debate when it became clear that the major Australian political parties – the Liberal/National Coalition, Labor and the Australian Democrats – all, broadly supported upgrading the statutory universal service obligation to ensure universal availability of a so-called ‘digital data capability’.
It represented a significant rebuff to those who have argued that the whole concept of universal service was a product of, and relevant only to, voice telephony. Universal service, so the argument went, was about ensuring that the basic tool of electronic communications, the telephone, was accessible to everyone, regardless of where they lived or carried on business. In an era when people’s requirements for communications were becoming less homogeneous – some want the web, some want call waiting, some want email and some want their Foxtel – the idea of a uniform standard of communications service to which everyone should be entitled was said to have had its day.
When the Standard Telephone Service Review Group released its report in early 1997, most of its members (including the three major carriers) agreed that the government should set, as a goal, the universal availability of an enhanced level of telecommunications service by 2000. That recommendation was accepted by the government and the Parliament and incorporated into the Telecommunications Act 1997.
But this enhanced level of service was not formally incorporated into the statutory universal service obligation itself. That would have meant the costs of providing it were shared among the carriers. What the government chose to do was require it to be made available to 96% of Australians by Telstra, as a condition of its licence. That meant Telstra alone (or rather, its customers) paid the cost.
The recent ACA report2 which again investigated whether the universal service obligation should be upgraded concluded that the costs of doing so outweighed the benefits. So it came as something of a surprise when the Minister for Communications, the Information Economy and the Arts announced in the Coalition’s Communications: Making Australia Stronger policy statement about 10 days before the election that the Coalition, if returned, would upgrade the universal service obligation.
It’s not a simple commitment to upgrade the obligation by making a regulation to include ‘digital data capability’ as a ‘prescribed carriage service’ – the most obvious legal mechanism which the legislation provides. Instead, the Coalition is looking to use the universal service arrangements to subsidise the cost of the satellite receiving equipment needed to make use of ISDN services.
The argument seems to run like this. By the end of 1998, Telstra says, it will have a satellite ISDN service available to the 4% of households in rural and remote Australia who will not have access to a non-satellite ISDN service by that time. (The service was demonstrated at the conference.) That means ISDN will be universally ‘available’ – but not necessarily affordable. The call charges will be more expensive than voice telephony and there will be new equipment to buy (typically a satellite-receiving dish, a card for the user’s computer, a CD-ROM and associated wiring).
2 Australian Communications Authority Digital Data Inquiry: Public Inquiry under Section 486(1) of the Telecommunications Act 1997–Report to the Minister for Communications, the Information Economy and the Arts 15 August 1998.
15 The Coalition says 50% of the cost of the gear will be funded through the universal service obligation. This promise seems intended to ensure, firstly, that other carriers are not paying for Telstra’s infrastructure roll-out, and secondly, that ISDN call charges are not subsidised under the universal service obligation. This is a significantly new way to use the statutory universal service funding arrangements although it’s not unlike the way some would like to see it working to fund the cost of customer equipment for people with disabilities.
The commitment will go some way towards assisting the affordability of ISDN services, but it will also increase the pressure on the level of call charges for these services. Effectively, ISDN is being confirmed as the kind of service you should upgrade to if you’re not satisfied with data speeds obtained using your existing telephone connection. But for most home users, ISDN is a Rolls Royce system that comes at a Rolls Royce price. The only way it will get thought of as a basic service is if it gets priced like one.
This issue of the pricing of enhanced services is likely to be one of the major policy challenges of the Coalition’s second term if the earlier challenge of getting the infrastructure itself can be met. The government will be constantly reminded of its 1996 election commitment to ‘bring ISDN into the price cap regime from July 1, 1996. Prices will be brought down to ensure Australia’s competitive parity with overseas online markets’.
But if the government thought it was getting to the end of the policy challenge of making the next generation of ‘basic’ communications services universally accessible, it got a sharp wake-up call immediately after the election. Telstra greeted the new government with the news that the universal service obligation was a little more expensive than had been previously thought. Currently, it’s estimated at around $250 million. Having recalculated the figures using the new universal service obligation costing model which carriers and the ACA have been working on for some years, Telstra announced that it actually cost $1.8 billion.
A company like Optus, which will pay around $25 million of the roughly $250 million universal service cost for 1997/98, would pay about $180 million of the $1.8 billion. AAPT, a carrier and universal service contributor only since July 1997, would expect to pay some $30-35 million. Both would pay more than enough to wipe out their expected profits of around $65 million (Optus, profit after tax and abnormals, 1998/99) and $13 million (AAPT, profit after tax, calendar 1998) respectively.
Curiously, of the major carriers only Telstra itself, with a profit of roughly $3 billion for the last financial year, would cope with its share of the net universal cost without going into loss.
It’s hard to know what’s happened in the provision of standard voice telephony and payphones since 1989 when Telecom estimated that its community service obligations cost it $800 million. That was using ‘Fully Distributed Cost’ methodology widely interpreted as giving the highest possible cost for this kind of analysis, and hence requiring the largest possible subsidy from other carriers to Telstra. It also defined community service obligations to include not just unprofitable standard telephony and public payphones (which became the statutory universal service obligation), but losses made on services provided at concessional rates to specific groups, including hospitals, fire brigades and other community service organisations and concessional services provided to the disabled.
At the time, the Bureau of Transport and Communications Economics assessed the cost of Telecom’s then community service obligations at $240 million (at an estimated cost of capital of 13.6%) using an ‘avoidable cost’ methodology.
According to Telecom/Telstra’s numbers, the cost of providing the unprofitable services, after nearly a decade of technological improvements including the multi-billion dollar digitisation of the entire Telstra network, has more than doubled over the decade, from $800 million to $1.8 billion. Add to that the government’s proposal to supplement the universal service obligation with a new element – half the cost of satellite equipment for ISDN for the most remote customers.
The politicians in Albury may have found common ground on universal service, but in the industry, it’s still shifting sands.
16 Infrastructure: The Foundations for Communications
Chair: Alan Horsley, Managing Director, ATUG
Speakers:
Laurie Eakin Director, Western Murray Regional Development Inc. Mark Needham Director, Infrastructure Development, Farmwide
Respondents:
Peter Shore Telstra Mark Harwood Optus Brian Louey-Gung Director, Strategic Development, Iridium South Pacific Michael Ward [no recording available] Ozemail Maureen Murphy [no recording available] AAPT Russell Wheeler [no recording available] Albury Local Internet
Laurie Eakin
Laurie Eakin spoke about the findings of recent studies of telecommunications needs conducted in the Murray, Riverina, mid-Murray and Western Murray and Northern Victoria regions.
Mr Eakin described the process by which these studies were carried out, including a series of community based and organisation-sponsored workshops and consultations.
He said that community expressions of needs and issues varied significantly. There were disputes about the availability of mobile coverage. There was considerably less interest in telecommunications issues in the larger centres. The smaller centres were ‘hungry’ for services, but service levels were said to be decreasing; local call zones were limited, as was effective bandwidth; and the USO was inadequate to meet suppressed demand in areas like safety, health, education, commercial opportunities, and ‘living and communicating’.
Mr Eakin said that the city-country divide has become more apparent. Country people want more because they have seen that more is possible.
Planning is essential; the current piecemeal approach leaves substantial gaps that cannot be adequately filled by existing services. Infrastructure is inadequate for the 21st century, and this is impeding Australia’s growth and export potential.
The RTIF is important but its scope is limited – $250 million is not enough to put adequate infrastructure in place. Mr Eakin also questioned whether the legislation would be adequate to ensure effective competition.
17
Regions can collaborate. Information is power, and informed communities will demand more. Resources can be spread effectively, rather than stretched to the limit.
We are talking about people, not just wires and waves and satellites, Mr Eakin said. Australians are innovative, especially where there is a challenge. Given half a chance, they will work with what they’ve got and work it to the limit.
Mark Needham
Mark Needham said that there are widespread misconceptions about the rural and regional marketplace: eg that there is no market, or that it is hard to define.
ABS figures state that there are 7 million households in Australia, split 3.8 metropolitan and 3.2 non- metropolitan, of which 1.2 are provincial, 1.5 rural, and 0.5 remote. Telstra has 9.5 million PSTN lines split 5 metropolitan, 4.5 non-metropolitan. There are 1.2 million non-metropolitan business lines.
Contrary to opinion, therefore, there is a sizeable marketplace in country Australia.
ABS statistics released in September revealed that 45% of farms have a computer, compared with the figure for households in capital cities of 45.9%. This shows that there is great potential if the marketplace is served correctly.
Asked the reason for not having Internet access, 36% of farms with a computer said it was ‘too costly’; 20% said they had phoneline problems. Among those farms with Internet access, 39% said they had phoneline problems such as noisy lines, drop-outs, slow speeds.
There are 3.7% or approximately 350,000 customers without access to enhanced services. The asymmetric satellite solution which has been proposed will probably involve considerable congestion and this needs to be addressed. People must be able to participate in the global economy. There is still inequity between city and rural and regional services. City people have almost unlimited access to information.
Mr Needham commented that it was good to hear all parties endorsing 64kbps connection.
The definition of STS should include optional untimed access to digital data services. People need to have a simplified range of pricing options; some people may see an advantage in a timed option. More location-independent pricing, as used for mobile services, is desirable.
We need to review new technology options rather than throwing money at existing technologies. Satellite costs (estimated at $1.9 billion in the ACA report) could come down if the volume of units were to be increased. For example, 100,000 units could mean a price of $200 million rather than nearly $2 billion. Competition will be a big part of the answer.
Alan Horsley asked whether having the State as a local call zone would be advantageous. Mark Needham said that we need to know more about how call zones are defined and how community call locations are established, so we can work out what equitable prices might be. Cost of transmission is small; access to service is the issue.
18
Peter Shore, Telstra, on Pricing In every market segment you tend to have high and medium and low spenders, and in the Australian marketplace there are some distinct patterns that emerge. One of these is that most of the IDD calling in Australia comes out of Sydney and Melbourne. Maybe there was a lot of ethnic migration to those cities and they have stayed there. But amongst these customers there is very little STD dialling, whereas over half of Australia’s long distance calling comes out of rural and remote areas. Mobile phone coverage is different. Internet usage is different, whether you are a kid or whether you’ve just mortgaged the house and you’re having your first child or you’re in your late 50s and you’ve decided to retire on the NSW south coast: you’ve really got to get down to a pattern of what sort of behaviour takes place in each of those segments. On average, I don’t think that country customers of Telstra are as a rule among the best-spending. And it is probably because there is not a high pattern of IDD usage in rural Australia.
Peter Shore
The Farmwide online services trial gave a useful indication of how people in rural Australia are using the Internet to improve their lifestyle and that of their families, Mr Shore said Telstra is ‘absolutely committed to rural Australia, for a whole range of reasons’. It employs 20,000 people outside the cities, and urges its employees to be involved in their communities.
He acknowledged there is a gap between rural Australia and the cities, and gave a quotation from Henry Lawson supporting this view, suggesting the attitudes expressed there carry over to today. Failure to grasp the opportunities of the new communications technology will come at an awesome price; but if we do it right, a whole new world of possibilities will open up. Telstra believes that ‘communications is the key to life and business in the bush’, Mr Shore said.
He referred to feedback gained from a program of country visits undertaken by Telstra, to hear what rural communities want. More than 50 such visits had been undertaken in last few months. Key issues raised were:
• Mobile coverage and concern about closure of the AMPS network. • Service – the number of people needed to build and maintain services. • Charges and time zones. • Internet access speed, noisy lines, drop-outs etc.
In the last 13 years Telstra has spent $10 billion installing communications infrastructure for the whole of Australia. No single answer is available to meet all requirements. The Future Mode of Operation (FMO) project has resulted in change to 5000 exchange sites, and the replacement of more than 50% of the existing network.
Mr Shore conceded that service is not always as quick as either customers or Telstra would like. But expenditure to date has been equivalent to that on the Snowy scheme – and as a result, there is near parity between metro and country levels of digitisation, with the prospect of 100% of the network digitised by December 1998. Digitisation provides enhanced services plus detailed billing. Also by December, there would be 92% access to ISDN in country areas. Mr Shore said that subscribers pay the same charges in city and country areas, and this is unusual – in Canada, NZ, and the US country people pay more. Mr Shore said it was inevitable that costs would fall further.
19 ABS figures show that the take-up of services outside the capital cities is higher than in the cities: 93% of city households are connected compared with 94% in the rest of Australia. In the US, only 83% of rural households have a phone. Even if it costs $50,000 to put the phone on, which is often the case, Telstra will do it. Unlike those other countries, rental will be the same as in the city, making Australia’s one of the cheapest access costs in the developed world. A recent study showed that, taking into account all components including access and rental charges, Telstra has the cheapest phone service after Singapore.
The zoning and charging system is the product of history, based in the economics of 1960s and earlier phone systems, rather than the age of the Internet and other recent developments. Mr Shore said that there will be tremendous upheaval and change, and that the current period is one of transition. Extended calling zones and special pastoral rates have lightened the burden for many people, and a relatively small number of customers without untimed local calls have the first $160 of pastoral calls provided free.
There are 100 POPs across Australia for local Internet access and Telstra will continue to expand access to the Internet for a local call charge. Australians, including many in rural communities, are enjoying the cheapest Internet access prices in the developed world. The current network does not satisfy people’s requirement for higher speed access, but Mr Shore pointed out that use of the satellite delivery system (outlined earlier by John Mackenzie) means that Internet data can be downloaded to a satellite dish at much faster speeds – 3-400kbps, comparable to ISDN – than the normal 2.4kbps phoneline. Pricing is not yet determined but Telstra believes it will be affordable.
There have been proposals for a large scale upgrade of the fixed network, but this would cost between $4billion-$20billion. Telstra believes it makes more sense to provide direct assistance to users where there is an unmet need, and allow them to use their supplier of choice. This would also avoid entrenching a low price but high cost obsolete technology.
On the issue of mobile phones, Mr Shore noted that Australia has 5 million mobile customers compared with 10 million fixed line subscribers – one of the highest rates of mobile take-up in the world. The CDMA system is to be trialled soon, and the transition from analogue is expected to be ‘fairly painless’.
Service is better today than it was on the day Telstra was privatised, Mr Shore claimed. It is nonsense to say that service will go to hell after privatisation: service levels are linked to competition, not privatisation. Work practice changes and weather problems caused a glitch late 1997 and early 1998 but new work practices are essential to change.
Mr Shore announced two new initiatives aimed at rural and regional areas:
• 100 new traineeships in these areas to allow young people to live and work in their home communities.
• The use of a fleet of aircraft and helicopters to increase flexibility and response times.
Mr Shore finished by showing a slide indicating the fall in prices for STD and IDD over the recent period.
20 Mark Harwood
Optus has been active in the rural market for some time, principally through provision of broadcasting services.
Telecommunications needs are changing rapidly, and the existing infrastructure is inadequate to meet new demands. It is inherently asymmetrical and has limited capacity. The cost of terrestrial infrastructure is distance-dependent.
It is time for a new approach, Dr Harwood said, and satellite is a cost-effective alternative technology. Its advantages include: • national coverage with weighted beam, giving instantaneous services across Australia; • roll-out independent of existing network; • distance-independent cost structure; • ideally suited to broadcast applications; • configurable for voice, fax and data, with user-definable asymmetric data rates; and • connection set up for call duration, giving better satellite utilisation and lower usage charges.
Optus has four operational satellites, carrying broadcast free-to-air and pay TV, radio and data. It offers mobile voice and low speed data via Mobilesat. Its service is optimised for Australia to provide communication, entertainment and information, and can be integrated with terrestrial network services. Optus can provide a multimedia service delivery platform with the consumer providing terminal equipment.
A major project is Optus’s ‘Hotbird’, a high powered satellite with high signal levels on the ground. It will offer two-way access with a single small antenna, and will provide a complete range of services. It will deliver a multimedia signal – television, radio, voice, data, Internet – with each new service at incremental cost. Dr Harwood claimed this would give content providers the most cost-effective access to the rural market.
The USO needs reviewing, and a fresh approach is needed. The regulatory framework should promote competitive service provision and facilitate access to services, and should not fund uneconomic infrastructure, Dr Harwood said.
The Government should subsidise access facilities rather than network build. The objective should be maximum benefit for the consumer.
The cost of antenna and TV set-top box today is $1200, and the cost of an antenna and communications unit is $5000 or $2000 in quantity. When it is possible to combine all three, the cost will be less than $3000. Standardisation should ensure network interworkability and avoid a multiplicity of set-top boxes. Open architecture will guarantee competitive supply and low cost to consumers.
In summing up, Dr Harwood said that satellite is an ideal technology for rural Australia, and that Optus, which is already providing video, audio, data and voice services to rural Australia, is committed to providing enhanced services.
He referred to the huge investment in the various satellite alternatives, and said that GEOs and LEOs have unique and distinct advantages and issues. He said that Optus’s GEO system was designed for cost-effective delivery of a service ‘bouquet’ to every Australian household and business.
21 Brian Louey-Gung
Iridium can provide a wireless service virtually anywhere, with satellite voice and data, cellular roaming and global paging. The system is optimised for handhelds, and involves one number, one phone and one bill.
Coverage of Australia is total, either as Iridium coverage or as an extension to Optus or Telstra GSM, giving a choice between Iridium-homed and GSM-homed.
With the former, the service provider is Iridium and users can roam into Optus and Telstra GSM, with one number access to the Iridium service and two international country codes. The single phone can be satellite-only or dual-mode Iridium /GSM.
With the latter, Optus or Telstra are the service provider, and the user can roam into Iridium. The existing GSM number gives access to the Iridium service, and the phone is dual-mode Iridium/GSM.
In both cases, users receive only one bill.
Satellite and dual-mode handsets offer single mode or multi-mode GSM, AMPS, TDMA, CDMA. Talk time, standby and power are similar to cellular phones.
Mr Louey-Gung also described a lightweight, belt-worn paging system which can be linked to an Iridium phone to provide ‘follow me’ service.
Costs for an Iridium-homed service are $3.68 per minute, with $80 per month access fee and a $200 connection fee.
Summing up, Mr Louey-Gung emphasised the major advantages of the Iridium service, including one number accessibility world-wide, with global customer care, a single bill, and a single ubiquitous wireless service.
22 Media: Old and New
Chair: Michael Gordon-Smith, Member, Australian Broadcasting Authority
Speakers:
Tony Bell Managing Director, Southern Cross Broadcasting John Porter Managing Director, Austar Lucy Broad National Rural Editor, ABC Radio
[Note: Most of the report on this session, written by Karen Winton, appeared in the October 1998 issue of Communications Update]
The media session saw speakers from all sectors of the media attempt to make sense of the recent and rapid changes, particularly in broadcast media delivery systems, and estimate their effect in years to come.
Speakers included Lucy Broad, national rural editor of ABC Radio, John Porter, the managing director of Austar pay TV and Tony Bell, the managing director of Southern Cross Broadcasting. Between them they covered a range of subjects but all paid heed to the increasing importance of convergent digital technologies and their implications for each medium.
Tony Bell
Tony Bell spent much of his time discussing radio’s path toward digitisation. He underlined its requirement for government, industry and consumer cooperation and examined what system should be adopted in order to provide digital radio. The one favoured by government to date is the Eureka 147 system used by much of European radio. But also under review is IBOC, an American system. Mr Bell stressed the need to acquire spectrum to run these various systems upon: if Eureka is chosen then networks will need an allocation of spectrum in the L-band and, in regional areas, VHF frequencies. The IBOC system will require AM or FM frequencies.
‘We also have to deal with multiplex ownership and management’, said Mr Bell. ‘At the moment, radio stations simply manufacture their product. It goes through a line straight out to the transmitter from where it is broadcast. Under a digital system, it would have to go through a multiplex that takes five signals from different broadcasters and allows these five to be transmitted simultaneously. Obviously, there will be ownership problems relating to the multiplexer. This may be more complex in regional markets than in metropolitan markets.
‘It is not difficult to find five broadcasters in a metropolitan market who are happy to get together and form a syndicate to own the multiplex unit in that market. But in regional areas it is far more complex. Particularly in smaller markets where there might be two commercial broadcasters sharing a multiplex with the ABC and perhaps SBS. It is something we as broadcasters are thinking about right now.’
Mr Bell also said that broadcasters wanted a phase-in period before digital radio broadcasting commenced, preferably in 2001 to coincide with digital television broadcasting. ‘But whether that is realistic or not at this stage because of the complexities involved with digital radio we are not sure. I doubt whether we’d all start at the same date. Metropolitan markets may go first, then regional markets will be allowed a little grace to install or introduce digital, over, say a three year
23 period. We also need to look at the simulcast period where we offer both digital and analogue services. It would appear that this should carry on for about 15 years – it would take that long to get the maximum total penetration of digital receivers into the market.’
Foreign ownership of Australian radio networks was another consideration that needed to be taken into account in future, said Mr Bell. He highlighted what he saw as problems in the media ownership rules which allowed foreigners to own 100% of a radio station but not a television station, and also forbid an Australian who owns more than 15% of a television station to own a radio station in the same market.
As far as market dominance was concerned, Mr Bell advocated leaving the ACCC in charge of investigating the influence of media in a particular market. He said that such a system would allow an operator to own a newspaper and a radio station, or a television service and a radio station in the same market providing its level of influence was not considered too great. ‘Perhaps that would be a better system than limiting the number of radio, television or newspaper services to single owners’, he said.
Mr Bell also said that one of the problems associated with digital broadcasting would be if the government tried to extract licence fees out of the additional services offered through digitalisation. ‘Operators should still be encouraged to provide additional services, such as news and community information, or racing results, all that sort of thing which no doubt would be sponsored’, he said. ‘But the broadcaster should be encouraged to provide those services without having to see them paid for with a license fee. The broadcasters will also of course rely heavily on consumer acceptance so it is important that consumers look at the benefits of digital broadcasting and take up the service as quickly as possible.’
John Porter
John Porter, the managing director of Austar, concentrated on the move toward convergence. He said a lot of companies were talking about bringing in an interactive, digital high speed universe to rural and regional Australia through a myriad of delivery technologies.
‘If they own pipes they are going to do it through their pipes. If they own satellites they are going to do it that way. If they are a phone company they are going to know how to do it. If they are in politics they know how to legislate for it. If they are Telstra, they can do whatever they want’, he said. ‘But I am telling you that there is only one company in this country that is providing a broadband digital service to rural and regional Australia, and only one company that spent half a billion dollars bringing this platform to regional and rural Australia, and that is Austar.’
Mr Porter informed conference participants about Austar, its position as a distributor of pay television to regional Australia, its satellite, broadband cable and MMDS technologies, its 50-50 joint venture with Optus and its 250,000 subscribers. ‘You ignore regional and rural Australia at your peril’, he said. ‘It is a very dynamic marketplace. People here are consumers of technologies the same way those in the cities are. They are consumers of entertainment, they are as sophisticated in those areas as anyone else in this country and we have been very successful in building a business for them which is now the second largest to Foxtel.
‘The challenge for us is to lever this existing infrastructure and to do more with it. Let me illustrate for you the kind of growth that we have experienced in the pay television industry in our company. From the start, a lot of people sort of poo-poohed the business, saying consumers are not taking it up, it is not that interesting, the programming is not that great. Well, we are consistently gaining 100,000 customers a year and we will continue to gain 100,000 customers, if not more, per year. We will probably gain another 40,000 between now and the end of this year which will bring our total subscriptions to about 290,000 by year-end 1998. That is on the basis of the 2.1 million homes passed
24 to the end of September 1998. Only a month before, our number of homes passed was only 1.6 million so the penetration of the market is also quite acceptable and on target.’
Mr Porter painted a picture of what is next for Austar. ‘We see ourselves adding value to the platform that we already have installed and we have to lever the existing infrastructure which is a broadband digital technology capable of doing all the things that any other broadband service can do’, he said.
‘We see ourselves launching into areas of not just pay television but also extending the brand of Austar into data services and other types of services which we think are critical for our continual growth and stability. For our future growth, it is crucial that we are able to bundle additional services with our pay TV product to improve customer retention and to firm up our franchise with consumers’, he said.
Lucy Broad
With the impact of a global economy the ABC needs to reinterpret its charter, especially in rural and regional Australia, Ms Broad said. The ABC reaches 99% of Australians, providing them with a sense of identity and giving them a voice.
The One ABC project is based on cross-media convergence. There is potential for a revitalisation of state-based and regional programs, and the issue would be how to provide adequate content in information, education, arts and entertainment.
In radio, digitisation is well under way, though television has further to go. The ABC model in planning involves three standard TV channels simulcast, with HDTV in prime time only. At other times the signal could be split for multiple channels, or split further for data and audio streams.
Ms Broad said that the ABC regional station of the future could be a multimedia centre. The use of small digital cameras would allow collection of local images and information which could feed into the Internet as well as into interstate and national programming. It could also provide material for a local breakout program when the TV signal was in multi-channel mode. A link on the TV screen could allow access to local information on the ABC web site.
ABC coverage of this conference was the first time they had done an online outside broadcast, with a web site set up specifically for the conference. Digital images were being displayed for people in rural and regional areas who could not attend. Ms Broad also mentioned the Rural Department’s Bush Telegraph site, and the Haywire site for young people in regional areas.
Distinctions between media will become increasingly blurred and the ABC will be looking at a cross- media approach in everything it does, Ms Broad said. The upgrade to digital TV could have the greatest potential impact but a lot more work is needed to find ways of ensuring new local services and better representation of rural and regional issues. The new technology is very costly and negotiation with the Federal Government on this issue is still continuing.
There has been a heavy focus in the conference so far on access to services and infrastructure development, both of which are critical for regional areas. But we also need to focus on content, Ms Broad said: what services do people want, and how will we ensure their quality? The ABC is very committed to rural and regional Australia, and few organisations are better placed than the ABC to provide high quality content.
During question time, Ross Ramsay commented that with digitisation, broadcasters will be able to offer a range of services currently offered by non-broadcasters; but the playing field could be tilted if the regulatory system remains as it is.
25 John Porter responded that regulators and legislators need to create an environment where new entrants are accorded a reasonably level playing field. Incumbent major broadcasters and media owners have had a good ride from the regulators and legislators. Newer entrants such as ISPs and pay TV operators will be able to provide services if the focus is not on protecting incumbent, quasi- monopoly and oligopoly positions. He referred to broadcasters being given digital spectrum free, whereas new entrants such as pay TV have purchased their spectrum.
Tony Bell said that spectrum will be taken back at some time in the future, and that broadcasters have paid for it anyway with licence fees each year. It is not correct to say they have been ‘given’ spectrum; it will be taken from them once the analogue service becomes redundant.
Michael Gordon-Smith, chair of the session, said it was important to distinguish between the regulator and the legislator. The former simply implements the rules. He said he had been interested in the emphasis over the day about the need for all of Australia to have access to the same kinds of services. Radio broadcasters often claim that the inevitable result of the sort of competition being talked about will be a reduction in the level of coverage of matters of local significance. He asked the two broadcasters on the panel to comment on what people in non-metropolitan Australia care most about in terms of programming.
John Porter said that Austar conducts some market research, but the issue of what people want presents a big challenge for pay TV industry. Austar is essentially delivering the same service to the whole country. But because they are focused exclusively on rural and regional areas, they are about to develop a product targeted to these areas: a channel driven off interest in weather and the economic and social challenges of living in non-metropolitan Australia. The ABC’s TV coverage has declined, he said, and Austar can fill the gap.
Tony Bell said that it is important to be local to every area. Albury-Wodonga is fortunate to have a daily paper. In areas which do not, the TV and radio stations become sources of important community information. The greatest litmus test of localism is to see what happens in markets where a generic item is provided all over Australia – it simply will not beat the local product.
Mr Bell said that he had spent years in regional radio markets before working in news/talk formats in Melbourne. If you take the talk format and try to do a national program, it simply won’t rate anywhere near as well as the local product. Even a music-type program without local content will not rate nearly as well as the local program.
‘Radio and TV stations need to be in touch with the local community; they need to react to the community's wants and needs, they need to be there when disasters take place, and a national-type product is not going to do that’, he said.
26 From Party Line to On-Line
Lindsay McDonald Board Member, Regional Telecommunications Infrastructure Fund
[This speech is published in full.]
I am a board member of the Regional Telecommunications Infrastructure Fund, which oversees the Networking the Nation program. I am told that the caretaker provisions applying during an election campaign mean that I should be cautious about appearing to promote a particular policy, which means that I can’t talk too much about the wonderful benefits Networking the Nation is delivering to rural communities. So of course, I won’t. Tonight I am speaking as a remote telecommunications user.
Back in the early days of the Royal Flying Doctor Service, some of you will realise that out on isolated properties, generating power to run a two-way wireless was a problem. A simple solution was found through a pedal generator, which, if pedalled fast enough, could run the radio. It was hard work, that pedalling. But atmospheric conditions often made reception difficult. In the RFDS base, a radio officer was straining to hear a distant station through the static and interference. Try as he might, he could not make any sense of it, but he persevered. Suddenly, the ether cleared as it sometimes does, and for all the world to hear, a voice boomed, ‘Pedal faster, you silly woman!’
Thankfully, technology and attitudes to women have changed dramatically since those early years!
But sometimes I wonder if the wheel hasn’t turned the full cycle, or the worm has turned, whatever metaphor you prefer, when I hear women today express their exasperation with husbands who need their help to deal with email.
I think it’s true to say that the bush has always appreciated just what telecommunications could deliver, and has a deep yearning not to be left behind. The fears that bush families have in this regard are well founded, when you consider that the first telephone line in my district was built by a local grazier in the early 1890s from his property 12 miles from town to one of the local pubs. It pre-dated any local exchange by at least 10 years. But it was to be almost 100 years before that property was finally upgraded to an automatic service, in 1990.
Of course, we valued the old part-privately erected, manual party line system, because it was all we had. We really felt for the people who were so remote that even that system was not possible, and whose only means of communications was by way of the Royal Flying Doctor Service, press-to-talk two-way radio.
The fact is that by the 1970s, these systems simply no longer met the business, education, health, community and social needs of people in the bush as the rest of the network surged ahead. The replacement of these systems with the Digital Radio Concentrator System, not completed until 1992, did at least give remote families a world-class voice service. But by then, it was obvious that data transmission was going to be an invaluable tool for people who only got one mail service a week, or a month, or perhaps none at all.
Current DRCS services are simply not designed for data. At best, they are only guaranteed to deliver 2.4kbps: very much slower, and therefore more expensive to use than the average of the rest of the Network. At first, we all thought even this slow speed was quite wonderful. We felt absolutely liberated that we could fax a page from a motor parts manual with an order, and do it out of office hours, knowing it would be waiting for attention next morning. Previously, for example, it would have meant my husband waiting around until he could phone in office hours, or try to convey through me all that a distant supplier might need to know about the item required – difficult when I have always
27 regarded mechanical knowledge as surplus to my requirements, and actively resist acquiring more than absolutely essential.
There is no doubt that wherever we live, we are all subject to the law of rising expectations. Where once we thought that all we wanted was 100% use of a telephone that worked all the time, now we know that so much more is possible. While we may not ever achieve face-to-face access to so many government and private sector services, there are now feasible alternatives through the telecommunications networks.
Two years ago, some in our community became aware of the Internet and were also aware of its potential. Our community was determined to be part of it, but at that stage we faced some enormous hurdles. Our small population, 1400 in the town, and another 400 in the surrounding district, would not normally have been sufficient to attract an Internet provider. Yet we could not afford the $20-$26 per hour STD charges to get to the nearest place with an ISP. Another disadvantage was the lack of ISDN access in the town.
As a community group, we began to explore alternatives, contacting Queensland Government Departments for information. All of this resulted in a very rewarding and productive partnership involving our local community and representatives of Office of Rural Communities and Queensland On-Line, all now part of the Department of Communications and Information, Local Government and Planning. This cross-agency group, in effect, became our consultants. They helped us with information and guidance, while allowing us the decision-making role. Our timing was impeccable, as the Queensland Government, like governments around Australia, was investigating ways to implement on-line strategies which could benefit rural communities.
The result has been that between us all, we found sufficient local customers to have ISDN services made available. Expressions of interest were called for from ISPs, and one, AccessOne-Ozemail was selected. This meant that the Standard Zone Blackall subscribers have had untimed local call access to the Internet for nearly 12 months now. But those of us more than 32km from the exchange still face a time charge of $3.75 per hour plus provider charges for access, plus the very slow speed disadvantages of the DRCS.
Our community believed that in developing a public access point to the Internet, the location should be one in which no group or individual would feel uncomfortable. The Government cross-agency committee listened to us, and responded. So the idea of the Blackall Bushlink Internet Café was born. Again, ‘expressions of interest’ documents were circulated to local businesses, so that the project could enhance, rather than compete with, an existing business. In January this year, the world’s first Outback Internet Café was launched. It is co-located in the foyer of the Blackall Cinema, where the young proprietors, Brian and Clair Arnold, have established an ice creamery. AccessOne-Ozemail gave the project three months free use of the Internet, which is accessed on seven computers via an ISDN connection.
At this stage the Internet Café is in a process of transition from full State Government support to community ownership and management, with the project being nurtured by Brian and Clair. So how has the Blackall community responded to it? During its first three months of free use, it experienced over 1000 person visits per month. Over 400 people took advantage of free two-hour training sessions. One night a week, it stayed open until three in the morning to allow dedicated chat participants access to a wider international audience. That became known as Internet Party night, where young off-duty policemen sat side-by-side with local youth. The young people still make plenty of use of the relay chats to talk to people from all over the world. Women who ran the Uniting Church Thrift Shop would close for three hours in the middle of the day and spend the time surfing the web. Local women who have families in the Philippines were able to listen to Philippines radio live, and email requests to be played for their families.
28 Since the end of the free period, usage has of course dropped. But it is still a very popular venue in a small town which previously offered little other than sport as leisure activity. Many people have registered an email address and regularly call in to use that facility. Tourists call in, can have their photo taken with the digital camera donated by Kodak, and email it home, wherever on the earth that is. Local Arts and Craft groups have specialty days at the Internet Café; the local writers’ group and the patchwork quilters are just two who feel they have benefited from using the facility. The Mir Space Station shuttle docking could be viewed as it happened. And still, we get people calling in who have never previously even sat at a computer. The sceptics, too, have come to scorn, but have left converted.
The Internet Café is an ideal regional training venue, and has had regular use for that purpose. Work is continuing on web page development for local community groups and businesses, such as the local kangaroo skin products business, and soft drinks made from local pure artesian water. Local artists such as silversmiths are featured on the regional Arts West web site.
The Blackall Bushlink Internet Café has been a wonderful morale booster for the Blackall community. It was particularly exciting to have the ABC’s Haywire Youth Awards national launch from there last week. The town’s residents now have a valuable facility offering high speed, reasonable cost access to the Internet.
But what of the more distant district residents? Distance is still a barrier for them, and others like them elsewhere in Australia. Use on property is still problematic because of the DRCS data speed disadvantage which necessitates turning off features such as graphics and audio. Even then, there is a big cost disadvantage. For many, these barriers are still insurmountable. Yet in spite of this, use is increasing. Parents educating children at home delight in the fact that they can take an on-line subscription to the most up-to-date reference material such as Encyclopedia Britannica. Most of us are still at the stage of wallowing in the wealth of information now so readily available: weather movies showing cloud movements over the last 24 hours, market information, news services, product information. Hansard is readily accessible so we can follow parliamentary debates on the issues that concern us. But we are starting to evolve from being passive receivers of information, into the active participation stage. We are discovering that that is the joy of the Internet – that it can be interactive. So not only can we follow debates, we can also be part of them.
Rural Australians have often felt unheard in the life of the nation.
Pre-1990, I have been at conferences where city women have expressed shock and concern that we were still at that stage on manual party-line services. ‘Why didn’t you tell us?’ they would ask. ‘Why didn’t we know?’ The truth is, we thought we were shouting on these issues, but it is clear we were only being heard in whispers, if at all. The interactivity of the Internet is going to allow us a voice which is equal to all others on the Internet: in some things, geographic location and the tyranny of distance will be genuinely overcome.
We will be able to build some bridges between city and country, to grow our understanding of each other. This is something which we ourselves can initiate, in our homes, on our properties.
I find that a satisfying thought – that concept of being ‘plugged in’ to the same switchboard as everybody else.
At a personal level, I have delighted in being able to communicate via email almost on a daily basis with a sister who lives in England. And I admit to the ultimate in Granny Brag Books, having a two- year-old grandson with his own web site. Since he lives several thousand kilometres away, being able to see a recent photo as soon as his parents scan it into the site has been wonderful. Even if it takes five minutes to download a photo!
29 As many of us in remote areas face disastrous commodity prices yet again, telecommunications services become even more important. It’s one of the few tools we have to gain access to information and support services to try to enhance our own efficiency. In times past, we asked, ‘How can we diversify our land use?’ as a way of coping with market collapses. Recently, I have been hearing geographically isolated but well-qualified younger women asking, ‘How can I use my tertiary education to diversify my own skills to help generate alternative income?’ And whether that qualification is in nursing, journalism, whatever, they are realising that they now have a tool which can help subsidise their primary production operations, through the potential of teleworking. Older women who are less likely to have a tertiary qualification, but who have other skills, are realising that for them, too, teleworking can be an option. There are some excellent Federal Government-supported projects aimed at developing these opportunities.
During the terrible droughts experienced a few years ago through Southern Queensland and into NSW, a DroughtAid concert was staged by Bob Geldof to assist those most affected. You know, of course, what they say – you know you’re part of the third world when Bob Geldof comes and does an Aid concert for you! With all the initiatives and commitments given by political parties to rural Australia over the last few weeks, perhaps we really are on the verge of joining the first world, after all!
It seems incomprehensible that it was only eight years ago that I was still using a manual party line telephone with all of its inadequacies and frustrations. When I think about how my family and others like ours are using telecommunications services today, it is clear that both the need and demand for on-line access in the bush is there and will not go away.
We put the nation on notice that the bush has seen the future, and will not go back to the past.
30 Agricultural and Rural Services What’s on the Web for Farmers?
Chair: Rosie Simpson, Director, Projects, Farmwide
Speakers:
Judy Barraclough Manager, Online Marketing Strategy, Wesfarmers Dalgety Janet Campbell Grain Farmer, Queensland Tony Eyres Kondinin Group
Judy Barraclough
Wesfarmers Dalgety believes the Internet offers real benefits for the rural sector. While there is a lot of hype about its implications, the statistics on rapidly increasing usage, and the extent to which the younger generation are being exposed to it at school, offer a compelling case for the future role of the Net in people’s lives.
For farmers the Internet represents ‘the death of distance’, a phrase used by a writer in The Economist who predicted that falling communication costs would be the single most important economic force shaping society in the first half of the next century. This is particularly true of the rural sector, Ms Barraclough said.
The Kondinin Agricultural Survey (December 1997) showed that 22% of farmers are using the Internet, up from a mere one per cent in 1995 and 13% in 1996.
Wesfarmers Dalgety launched one of the first rural web sites in Australia nearly two years ago (www.wesfarmersdalgety.com.au). Their experience is that farmers are already using the Internet in a variety of ways, of which the four main uses are information, contact, shopping and entertainment.
Information: much of the available information such as details of products and services, online newspapers and journals, and sites maintained by organisations for their members, are free. Farmers make much use of the weather site (www.bom.gov.au) and Farmwide’s Eureka news service focusing on commodity markets (www.farmwide.com.au).
Wesfarmers Dalgety’s own site provides up to date market information about wool, livestock and grain. It is the only site to publish a complete range of daily wool futures prices. Other useful local sites are the Australian Wheat Board and the Rural Press web site.
Internationally, farmers can tap into information about US cattle supply, for example (www.usda.gov/nass) or into US Agriculture Online for the latest predictions on world markets (www.agriculture.com).
Contact: email is an increasingly popular way for people to communicate quickly and cheaply, and is particularly valuable for the rural sector. Farmers in Australia can communicate with their counterparts in other countries, or participate in chat sessions, such as the Farmwide chat session, allowing farmers to share their views on a particular issue.
31
Shopping: a growing range of products and services are available over the Internet, ranging from cars to insurance, CDs and books. Sites such as Travel.com allow users to book and pay for all components of a holiday entirely over the Net.
Wesfarmers Dalgety’s real estate section on their web site allows potential buyers to search a large database of rural properties in various categories, and has proved very popular – with Americans seeking property here, as well as with locals.
Entertainment: one of the most popular uses of the Internet.
Another major growth area is ‘business to business’, where the Internet can be used to make businesses more efficient. Ms Barraclough illustrated this by an example of a farmer in Texas running a beef feedlot who has set up a Net-based system to send orders to his suppliers by email and manages inventory online, effectively creating a paperless administration. This saves a tremendous amount of time and resources for a small operation.
In a number of Australian rural towns people are exploiting this potential by offering Internet services for other businesses through telecentres, making it increasingly possible for rural-based business to compete with metropolitan business.
Janet Campbell
Ms Campbell began by crediting the work of the Farmwide program for the rapidly growing uptake of the Internet to which Judy Barraclough referred.
In Queensland alone, agriculture produces $5.8 billion of commodity value. Farming is one of the toughest businesses to be in, and the questions she and her husband asked about the application of the Internet were: will this save us money and will it save us time?
Smart farming today requires the adoption of sustainable farming practices and conservation farming techniques.
Ms Campbell identified six main uses of the Internet from her viewpoint.
1. Email: to obtain estimates, locate parts and equipment, and communicate with their agricultural advisors.
2. Agricultural databases for information on pests and diseases. Ms Campbell gave an example of a problem on a soya bean crop, where she was able to take an infected leaf, log on to an excellent US site, identify the moth, and discover how long the generation time was. She and her husband were then able to make a decision not to spray, because their harvest time was earlier than the time it would have taken the pest to mature. The result was a saving of money and time, and an avoidance of chemical application on their farm.
3. Resource and technical information: to source new crops and farming techniques.
4. Marketing information, both local and international.
5. Weather recording and predicting. Every aspect of their production is weather-controlled, so they use it for short-term decisions such as planting and harvest start times, and long-term decisions such as drought and flood planning.
6. A communication tool – conferencing and chat facilities.
32
In the future, the Internet will continue to support farmers’ decision-making on farm management, resource management and production. It will also be a key communication tool for all primary producers.
What is needed is high quality, searchable agricultural databases available in Australia, equal to what is available overseas, and also site-specific natural resource information. Another need identified in an informal survey she conducted online, was typified by one of the replies she received and quoted.
[N]othing but untimed local calls will give us equal access to the Internet. $5 or $7 an hour with a similar amount for additional hours is just not the same as 20 hours for $35 or unlimited hours for $44 like Big Pond is offering its city customers. Getting a similar deal is equal treatment. A respondent to Janet Campbell’s informal survey
In answer to a question, Ms Campbell said she would like to be able to key in the location of her property, and immediately have access to all available resource data on that property – eg soil types, rainfall incidence, weather and climatic information, the water and any other relevant information such as salinity, erosion – in fact, all the data that governments have stored somewhere. Armed with this information she could make a management decision about her next move for both sustainable agricultural purposes and economic production purposes.
Tony Eyres
Kondinin Group is a non-profit organisation with 20,000 members nationally, whose core business is information for agriculture, in the traditional form of books and publications but also in the newer forms of information services delivery. It is targeted information for a specific inquiry and people pay for the information, which must be credible and independent.
The organisation began with a group of farmers in Western Australia who got together to exchange information – essentially consumer information – and in 1977 published their first research report.
Mode of delivery of information is not as important as the information itself. Delivery must be tailored to the demand, whether online, phone/fax service.
Mr Eyres showed figures to indicate growth: in 1988 Kondinin had one fulltime staff and 1500 members (805 in WA); in 1998, 40 fulltime staff and three offices, in WA, NSW and Qld, with 20,000 members. Today, only 20% of members are in WA, and others are spread across all States.
Kondinin’s activities include:
• research reports and equipment evaluations • National Agricultural Survey • ongoing survey of farmers’ use of the Internet • commodity newsletter • risk management workshops, delivered by satellite • children’s books • information services Farmline and LandcareLink
33 Farmline was established in 1995. A database tracks inquiries and this information is fed to research bodies. There have been 11,000 inquiries since 1995 from all over the country, and people use the service again and again.
At the moment, a 1-800 number is the main source of information but the intention is to make the databases available as a search interface enabling farmers to do their own searches on the Net. An updated thesaurus and classification system will allow people to search on keywords.
LandcareLink networks Landcare groups across Australia, so that a group in NSW can find out what a group in Tasmania has been doing, thus avoiding any reinvention of the wheel. Information that is locked up in various State departments of agriculture can be made more available to members or anyone else who wants to utilise the services.
All money made is reinvested in the organisation to provide services for members. Farmline is just beginning to cover costs. Landcare is different because of its community nature and will be harder to fund.
People will use the Net more as information becomes better, more available, more accessible and easier to digest.
In response to a question, Mr Eyres said that the group carries advertising in its publications but their policy is that people cannot advertise in an issue which contains an evaluation of their product. Advertising is a major source of revenue, along with research grants and sales of publications.
34 Agricultural and Rural Services Telecommunications service quality in rural and regional Australia
Chair: Mark Needham, Director, Infrastructure Development, Farmwide
Speakers:
John Pinnock Telecommunications Industry Ombudsman Dr Roslyn Kelleher Executive Manager Consumer Affairs, Australian Communications Authority Roger Bamber Managing Director, Commercial and Consumer Service, Telstra
John Pinnock
Quality of service
John Pinnock began by saying that it is not the role of the TIO to advocate particular solutions, but it can report on the types of complaints it receives from non-metropolitan users, and on the adequacy of the current regulatory and legislative framework for protecting these consumers.
AREAS OF COMPLAINT THAT THE TIO CAN INVESTIGATE
• The standard telephone service • Internet access • Mobile services • Billing • Customer transfer (‘churn’) • Privacy • Land access • Industry standards and codes
The TIO does not deal with policy issues such as the closure of the AMPS network or changes to the USO, the setting of tariffs and charges, or the content of a content service.
35 Complaint issues Mr Pinnock said that the four key areas of complaint among rural users are billing, provision of service, fault rectification and Internet access services.
Billing is the major cause of concern for both metropolitan and non-metropolitan telephone customers, accounting for 33% of all telephone service complaints. Backbilling had increased from 9% to 20% of billing cases over the last financial year.
However, as a result of the availability of itemised accounts, complaints about disputed metered calls had dropped from 20% to 9% of telephone billing cases.
Provision of Service: Complaints about provision of service had almost doubled in the last 12 months, Mr Pinnock said. Complaints on this issue were significantly higher for non-metropolitan users.
Comparison of Complaints About Provision of Service 1997/98 (% of all complaints about telephone services in relevant areas)
NSW Qld Vic Urban areas 12.15 7.23 7.14 Rural areas 22.23 10.58 12.03
Fault rectification: Complaints about faults had also risen nationally, rising from 4% to more than 7% of all TIO cases. Once again, complaints are higher from rural areas.
Comparison of Complaints About Faults 1997/98 (% of all complaints about telephone services in relevant areas)
NSW Qld Vic Urban areas 8.59 4.28 5.88 Rural areas 15.45 7.61 8.08
The TIO regards provision of service and faults as the touchstones of quality of service, Mr Pinnock said. He noted that figures are to some extent affected by weather patterns across Australia, especially in the area of fault rectification.
In answer to a question Mr Pinnock said that these figures captured recurrent and ongoing faults, which Telstra calls ‘escalated service difficulties’.
Internet Access Services: Mr Pinnock referred to recent ACA figures on the costs of Internet access at both 14.4kbps and 28.8kpbs. Comparing the call cost and the cost of using an ISP, when you have local call access and speed of access, your costs are at the lowest end of the scale. Without local call access, roughly half the costs will be call costs, compared with less than one quarter for those with local call access.
Survey work (which has been done mostly by www.consult) shows that privacy and security issues are one of the largest areas of concern to Internet users. Yet this does not feature in complaints coming to the TIO; they represent only about 3% of complaints in the telephony area. The ACA report showed that in both city and country privacy concerns, lack of access to an ISP and telecommunications issues are three of the major reasons why potential users are not using the Internet at this time.
36 Complaints about Internet access services made up 3.2% of the TIO’s total caseload of 1662 cases in 1997/1998. Of these, complaints about access issues like congestion and slow download speeds made up 19%. There was no significant difference between urban and rural users at this stage.
Billing was the main cause of complaint about Internet services, accounting for 52% of all such complaints. They included disputes about log-on durations, POPs and unauthorised direct calls.
The Regulatory Environment The current system involves co-regulation by the industry and government. The Telecommunications Act is supposedly technology-neutral, which means that it should be flexible enough to deal with changes in available technology, Mr Pinnock said, though he believes this remains to be tested. It is designed to promote competition within the industry.
The TIO cannot handle complaints about content of services and this can raise difficulties. To take an example: if someone downloads software from the ISP which allows them to use the ISP’s service, that is content, not carriage, but in fact the distinction has broken down. On convergence issues of this kind, the Act is somewhat inadequate.
While the TIO can investigate individual consumer complaints, the ACCC can look at breaches of the Trade Practices Act.
The USO is there to ensure equitable access to services, and the CSG is to ensure minimum service levels. But the CSG does not offer comprehensive consumer protection, Mr Pinnock said. It only applies to the Standard Telephone Service, and not to the provision of service by an ISP. This flows through to the USO. The USO will not of itself guarantee sufficient POPs to allow people access at local call rates, and this issue needs to be dealt with.
Industry codes are being developed by the Australian Communications Industry Forum to set minimum standards for prices, terms and conditions, billing, privacy, churning and credit management, and complaint handling. It will be some time before those codes come into existence and affect the conduct of the companies in this area.
Success in providing communications to rural and regional Australia must be judged by the degree to which services in rural areas match those in metropolitan areas. The expectations of rural users have been heightened. The issue now, Mr Pinnock said, is whether the new legislative and regulatory regime, combined with competition and technology, can close the gap.
Responding to a question, Mr Pinnock said that there are systemic or management problems within Telstra affecting provision of service, and the TIO has asked Telstra to identify what these might be. There has been a fall-off in the level of service, which is confirmed by Telstra’s own figures, and he does not believe that it is due to inclement weather, he said.
Dr Roslyn Kelleher
Dr Kelleher began by noting that the ACA continues to monitor quality of service (QOS) against the original parameters set by AUSTEL in 1991, namely: • number of access lines installed • percentage of lines with access to itemised billing • provision of in-place services, on or before ACD [agreed commitment date] • provision of new services, on or before ACD • faults cleared within one working day
37 • faults cleared within two working days • fault reporting • operator-assisted service performance • directory assistance services • local call network loss • national long distance call network loss • international call network loss • average hours to clear a payphone fault • percentage of public payphones operating at any one time • trouble reports per public payphone per month • AMPS call drop-out rates
Recently, new measures relating to GSM mobile services and monitoring against the CSG have been added.
When reporting focused primarily on Telstra, it reflected what was meaningful for Telstra, and the constraints of their reporting system. The introduction of reporting by Optus was largely on the same basis. This was acceptable because of the significant differences in the operation of the two carriers. With the introduction of a larger number of new carriers it is now becoming important to ensure the capacity for comparative reporting between carriers.
The CSG is having an impact on quality of service monitoring, in that it has different, population- based definitions of parameters which broadly equate to urban, rural and remote areas. The urban category picks up all of the previous metropolitan category used by Telstra and parts of the previous country category. For example, Albury was part of the country category previously but will now be included in the urban category. Direct comparison of old measures and new measures is therefore not possible.
Fixed line services The measure used for evaluating QOS against connection of new services is whether the service was connected on or before the date agreed with the customer. On this measure there has been a more significant decline in performance over the 12 months to end March 1998 in country (ie rural and remote) areas than there has been nationally or in metropolitan areas. The figure nationally was 82% in March 1997 dropping to 74% in March 1998, whereas the decline in country areas was more marked: 81% in March 1997 dropping to 64% in March 1998.
CSG reporting will have more clearly defined categories – urban, rural and remote – larger regional centres will be included in the urban category.
Faults cleared within one working day also showed a greater decline in country performance than nationally, with metropolitan performance declining from 69% to 63%, and country performance declining from 69% to 59%. It is not possible to discern a trend from these figures as a longer period of monitoring is required than the lapse of time since full competition, Dr Kelleher said.
At the moment QOS reporting on mobile services does not differentiate between metropolitan and country users, although the ACA does report separately on a State basis. The only criteria are drop-out and congestion, but voice quality and coverage are expected to be included soon.
38 Dr Kelleher showed a table comparing GSM call drop-out rates for each mobile phone company between the quarters ending March 1997 and March 1998, for each State and Territory. These ranged from a high of 2.87% to a low of 1.23%. It was difficult to discern any patterns as the incidence of drop-out appears to fluctuate, but in general, Dr Kelleher said, performance is improving.
A similar table showing GSM call congestion also covered a wide range, from a high of 0.87% to a low of 0.03%, with some States showing an improvement over the period covered but again, no discernible patterns.
Over the course of the next 12 months the ACA intends to introduce reporting on voice quality and coverage, and discussions are currently under way with carriers to determine appropriate and comparable measures.
Figures for call drop-out for the AMPS network over the same period showed a higher overall rate of incidence of drop-out than for the GSM networks, ranging as high as 4.1%, with 2.6% the lowest drop-out rate recorded. AMPS call congestion was also generally higher than the figure for GSM, ranging as high as 2.2%. Dr Kelleher said the situation in the AMPS network was ‘pretty steady’.
Turning to data services, the ACA’s digital data inquiry report showed that the average data rate in rural and remote areas is anywhere between 2.4kbps and 9.6kbps whereas urban rates average 14.4kbps to 28.8kbps. A data rate of 2.4kbps is generally considered inadequate for accessing online and other Internet applications, Dr Kelleher said.
Affordability emerged as the most significant barrier to data access in rural areas, due to the operation of timed/distance tariffs in accessing ISPs. QOS issues raised included difficulties in providing robust infrastructure and timely maintenance in the event of failure.
A customer satisfaction survey of residential and small business customers commissioned by the ACA in July 1998 measured such factors as customer satisfaction with choice for local, long distance and international calls; billing; connections; fault repair; and mobile services. In some cases rural and remote customers were more satisfied with the services they receive than were their urban counterparts.
Full results of this survey were to be published in the ACA’s February 1999 Performance Report.
In answer to a question, Dr Kelleher said that consultations with carriers suggested that it was not going to be easy to obtain comparable figures. Reporting systems have already been built differently, and a number of agreed criteria need to be put in place which will require some significant changes in reporting arrangements for all carriers.
Roger Bamber
Mr Bamber said that Telstra accepted a tender from a Japanese company some years ago for a replacement of the DRCS service which offered some hope for providing ISDN. The company had fallen behind schedule, and Telstra put in an interim service called HCRC which is costing about twice what they had originally planned, per customer. This service is providing excellent data rates, as high as 38kbps, which is higher than the manufacturer’s guarantee.
We should be aiming to get competition in the mobile sector for rural and remote Australians, and this will happen in three to five years when there are more satellites.
Rob Seekamp asked whether, once the area now covered by the analogue service was covered by a digital service, would Telstra extend this into areas where coverage was now poor?
39 Mr Bamber said that it was a question of competition bringing down installation costs, and that some places presented particular problems: for example, the town of Cobar, where the surrounding country is very flat and a very high tower would be required to give coverage between Cobar and Nyngan and Wilcannia. The solution in this kind of area was competition in the satellite arena.
Another questioner commented on the difficulty of getting information out of Telstra about what its problems were; her own district suffered from significant congestion but it was hard to find out what the causes and possible solutions were. If Telstra was more communicative, people would be better able to make choices.
Mr Bamber said Telstra needed to do more ‘area planning’. It plans to hold more regional and area meetings with consumers in order to communicate better.
Another questioner asked about the possibility of subsidising satellite phones, to which Mr Bamber replied it was a matter of government policy. On their estimates, Australia-wide ISDN would cost $22 billion, and not everyone wants it or needs it. The cost of providing rural services is on average $20,000, and it makes good business sense for them to keep upgrading and providing better service. Telstra also has a sound business reason to lower the fault rate, as repairs will become increasingly costly.
The chair asked John Pinnock how much consumer awareness there is of the TIO program and the processes needed to access it. Mr Pinnock said they had recently funded a consumer awareness survey following a fairly large carrier-funded campaign. Results show that there is an unaided awareness level of around 25%, compared with about 9% two years ago. The campaign focused on newspapers and radio, but it was expensive and the TIO’s budget for promotion is only around 7%-8% of their total budget of around $3 million. They have also experimented with tapes for rural and regional Australia.
The chair asked Roslyn Kelleher whether section 105 reporting could have any bearing on public confidence in a particular service provider and could affect share value in any way. [Section 105 Telecommunications Act 1997 requires the ACA to monitor, and report each financial year to the Minister on, all significant matters relating to the performance of carriers and carriage service providers.]
She responded that section 105 reporting was ‘fairly broad’, and was very much performance against historical parameters. She reiterated that there was little comparability between carriers, and said that this was the challenge for the ACA.
Ann Lewis asked about duet lines for rural areas. Bamber replied that any upgraded exchange should be able to support faxstream duet.
Dale Perkins commented that the issue of ISP presence is not a primary access issue, it is a secondary one. The ISPs clearly know where the marketplace is and what the carriers can deliver, and until the carriers can deliver what they want, they will not be there.
John Pinnock said he would not disagree, though there are some ISPs that focus on rural and regional Australia.
40 Agricultural and Rural Services Emerging Access Technologies – Future Voice and Internet Services
Chair: Rob Seekamp, Telstra Consumer Consultative Council
Speakers:
Luigi Sorbello Telstra Neil Patulny Optus Communications
Rob Seekamp introduced himself as the representative of Isolated Children’s Parents Association (ICPA) on the Telstra Consumer Consultative Council of NSW. The Councils exist in each State and Federally, made up of a cross-section of the community, youth, elderly, Aboriginal people, people of non-English speaking background, people with disabilities, rural and remote people. While these groups are not big profit-driven areas, they are a core business area for Telstra.
Rural and remote people these days need far more than a functioning phone, as yesterday’s sessions highlighted. The motions on telecommunications at the Federal Conference of ICPA used to average 10 a year, this year there were 45-50.
Volunteers for Isolated Students Education, with which Mr Seekamp is also involved, takes retired teachers into the bush to help children with learning difficulties. They are also operating a program through Ballarat University to train people in use of the Internet.
Luigi Sorbello
Telephony developed over 100 years ago, but not a great deal has changed in that time. The original phone devices would still work. Copper wire was the main technology, and voice was the main use. This model remained for a long time; in Australia copper is almost ubiquitous.
Between 1988-92, DRCS was delivered to customers. Digital voice compression techniques and telex were the genesis of that technology. It cost $400-$500 million, and has served up to 22,000 customers.
There is no longer a single universal solution to meet all the different requirements. Carriers must have a range of technologies to extend the connectivity of customers. Telstra has around 38 technologies in its network. The normal extent of copper wire is 6km-7km, and Telstra has extended that for rural and regional customers to up to 35km-40km. But these solutions will not work for data.
Earlier in the day, Mr Sorbello said, some conference participants had pointed out that it was not necessarily vital to have a high data rate, and that it was possible to work with lower rates. Thus it may not be necessary to upgrade every single copper cable in order to get a higher data rate. Such a program would cost billions and take years. Instead, Telstra has to develop technology solutions and make information accessible, with a return path for information to be delivered back to the user.
A number of factors determine data rates. For example, there is no international standard for an end- to-end service that describes data rate transmission, only one for ISDN. What modem the ISP has or how it is connected to the network are factors. Factors exist also within the PSTN, some of which are
41 within Telstra’s control. But some are not, for example noise, cross-talk, group delay, impedance mismatches.
TV is high bandwidth transmission and digital even higher, offering a lot of information/content which people can hear, see, absorb, respond, and react to. At the other end of the spectrum, voice communication involves narrow bandwidth and immediate processing of the information. More, and more interactive data is available, but we have to consider its use and value – the social aspects, Mr Sorbello said. Email only requires low bandwidth, but it offers high value in terms of its utility to the user.
In the PSTN days, all features were in the phone; these days, easycall features come out of the exchange, or the network nodes. The handset is a relatively dumb device. Even the numbers displayed for CND come from the exchange.
The Internet is only the first paradigm in the data age. It is quite basic and can work over a simple network; information is transmitted in packets compared with the dedicated channel in a phonecall connecting two parties.
Information that people need to know as users to configure their PC, their modem, their software, and the browser technology inside the software, adds a degree of complexity. We need to understand how to train ourselves to keep up to date with the capability that we are subscribing to in the Information Age. There are costs both personally and in the way we run our systems.
Satellite Technologies What is happening now is that we are using satellite more in the access network. First generation LEOs had low voice and data bit rates, but did offer mobility. GEOs, the most applicable systems now, have brought important changes in how we access and receive information. It is no longer important to have a high speed physical link in both directions. Eventually people will not need to be connected to an ISP, or even to the PSTN, but will be able to subscribe to download information (eg magazines) directly on a regular basis, and also to download web pages on to the hard drive and browse them at leisure, at very high speed.
Telstra is investigating Gilat Space Systems’ interactive data product whereby a mining company, a school or a small business can have access to a complete satellite bi-directional data link when there are some holes in the terrestrial network. This is just one of several ways in which Telstra will be improving services to rural and remote customers, Mr Sorbello said.
Neil Patulny
The satellite industry is in the middle of a period of unprecedented optimism and growth. Investment is occurring at unprecedented levels; for geostationary satellites, for satellites in medium earth orbit, and satellites in low earth orbit. New and innovative services are being delivered by satellite to new markets in many regions of the world.
In the Australian context, satellite technology has a part to play in conquering isolation and remoteness and delivering enhanced services to a population that wants to benefit from the Internet and the information era. Developments in Satellite Technology Since the first satellites, development has continued apace with more and more capacity and power being packed into the same physical dimensions. For example, the Space Systems Loral satellites of the 70s had a power bus limited to 500 watts; 30 years later, satellites under construction and soon to be placed in service have a power bus approaching 20,000 watts.
42 Each of Optus’ B-series satellites is more than twice the mass, and three times the power of the previous A-series satellites (launched some seven years earlier) and, Optus’ new C-series satellite will have about twice the mass and three times the power of the B-series satellites (launches separated by eight years).
The picture of Loral’s spacecraft family shows that more powerful satellites require larger power supplies sustained by bigger and bigger solar arrays. Power supplies have been a focal point for satellite designers and, largely, have determined the size of the spacecraft that could be operated.
Today, the challenge has moved from solar absorbers and power generation capabilities to packing more mass into the same physical space and being able to dissipate the heat generated by the on-board amplifiers.
The result is that significant economy of scale is realisable, with a two-fold benefit:
1. More powerful signals from the satellite mean smaller antennas for consumers (75cm diameter in urban areas).
2. Increasing capacity on each satellite means reducing costs for transmission bandwidth.
By way of comparison, the price for 1MHz of capacity on Optus’ C-series satellite will be around $115 whereas the price for the same capacity on an A-series satellite was around $130. In real terms this represents a reduction of around 48%.
Developments in Satellite Launching Systems A significant element of the cost of placing a satellite in geostationary orbit is the cost of the launch vehicle itself – typically around 30% of the total cost.
There is considerable ongoing research by launch organisations into improving their ability to keep pace with manufacturers producing ever bigger satellites, while reducing the cost component and risk element of the launch.
Now that NASA’s shuttle is no longer cost competitive for commercial applications, there is quite a range of expendable launch vehicles. Each has specific advantages for differently sized satellites, with varying performance in terms of the accuracy with which satellites are placed in orbit. Across the board, each has a long-established track record of success.
The most recent large-scale innovation addresses the issue of saving fuel by launching directly into equatorial orbit from the equator. A large consortium led by Boeing is implementing SeaLaunch – a mobile launch platform based on an independently-powered converted oil rig that can be positioned on the equator.
Why Use Satellites? The motivation for use of satellite technology today, when so many other technologies are available, is largely a result of lower cost structures and the ability to deliver wideband services everywhere within the satellite footprint.
Whereas in the early days satellite capacity was expensive, relatively cost-inefficient (because of custom-built access hardware for individual national systems and the delivery technology used), and operationally inelegant (because of the need for big antennas), this has now changed:
43 • More powerful satellites have resulted in smaller antennas, varying from 65cm diameter in urban areas to 1.2 meter diameter in rural areas.
• Digital technology has resulted in the ability to incorporate a wider set of consumer-usable features into standard television signal formats.
• Pay television has provided a marketing breakthrough for delivery of services to consumers throughout national footprints.
• A world market for access technology has been created which, in turn, has resulted in larger manufacturing volumes and lower cost consumer equipment.
• Cost-effective two-way communications is now possible using the same small antennas.
From a network viewpoint, there is no need for roll-out of costly infrastructure, no delay in service provision while it becomes available, and there are no dependencies in terms of service delivery.
When a satellite service is switched on, everyone in the footprint can receive the service from that instant. In the case of Optus’ satellite system, a national footprint covers every Australian household and business.
Developments in Service-Related Infrastructure Today, there is considerable work going into implementing new cable systems for delivery of enhanced services to corporates, small business and the home. Optus, for one, is developing an ever- increasing range of cable-based services. Converging technologies will see assembly of multiple services into a combined multimedia signal and a great deal of work is being done to develop low cost cable modems capable of delivering these services.
The thing to remember is that while everyone is working at providing services to the relatively small population who happen to live in a location served by cable, the same technology can be used with the satellite system to provide exactly the same services to the 5 million households and businesses with no access to cable-based services.
Market Drivers Since 1985 television into remote Australia has been provided by satellite. Around 15,000 very remote homesteads take their television service directly off the satellite and another 285,000 take their service from terrestrial retransmitters that are fed directly from the satellite.
This service is now being upgraded with rollout of Optus’ digital Aurora platform. While the consumer will experience no change in the existing services, the range of services receivable with a small antenna will be much wider. In addition to today’s ABC, SBS and RCTS services, the viewer will have access to subscription television, educational, ethnic and special interest programming.
As the technology develops, a variety of information services will be added to the signal.
The challenge now is to provide two-way communications by satellite, accessed by small antennas so that every homestead can have a return path by satellite. This means that voice, facsimile and data connections can be set up, end to end, totally independently of the terrestrial network when directed to other satellite users or, when directed to non-satellite users, by satellite to a terrestrial network interface point closest to the desired destination.
Manufacturers the world over are turning their minds to developing systems and hardware to provide just this type of service – their motivation is to develop a ‘standardised’ system suitable for the under-
44 served regions of the world. The benefit to Australia will be that items developed for the large regional and world markets will ensure lowest cost for Australian consumers.
Satellite Applications Two-way services are already available for larger corporate applications. So-called VSAT systems have been used in many countries for voice and data between head office and regional branch offices (known as a ‘hub and spoke’ configuration). They are ideally suited to applications where communication is not required between the branch offices.
Increasingly, such systems are being upgraded to provide access to various Intranets, with the advantage of being able to download data at up to 512kbps.
Applications exist in the distribution, retail, and banking industries, to name a few. The economics are such that these systems are most cost-effective when the application requires connection to more than 50 branch office sites. While a number of factors contribute to the overall design, generally network topography and the high capital cost of the remote VSAT rule the approach out for non-corporate applications.
A second scenario that is more appropriate to this conference is characterised by a remote community lacking high speed access to the public network. A satellite link provides high-speed access from a Community Access Centre to the public network. Such a Centre could become the focal point within the community for a range of services. For example:
• At the lower end of the spectrum, private and payphone voice services (including a facsimile service).
• At a higher level, a 64kbps symmetric data service for PC and LAN interconnection.
• High speed asymmetric access to the Internet using any one of a number of available systems (typical download speeds around 400kbps).
• High speed symmetric data services up to 384kbps for teleconferencing for a range of rural applications.
The equipment required to provide network access is under development today. Our market research tells us that we need to get the capital cost of a consumer unit down to around $1,500 per home for the equipment to be regarded as affordable. Our dealings with manufacturers indicate that the objective is realistic and achievable in quantity. (Of course, the application-specific terminal equipment required to provide these services is not included in this estimate). A more powerful unit for businesses and shared community applications will be incrementally more expensive.
The point to be made here is that satellite technology will soon be able to deliver a complete range of multimedia services directly to homes with small dishes, at affordable cost. Where it makes economic sense to share infrastructure within a community, a single antenna with an enhanced communications unit will provide the capability to drive the applications that today are not available due to lack of network infrastructure.
Distribution of the services within the community is possible using any one of a number of relatively low cost technologies. [Mr Patulny here showed a diagram demonstrating a combination of transmission over copper for households or businesses within a 4km-5km radius, and Wireless Local Loop for locations beyond 5km and within a radius of 35km-40km.]
45 Summary Satellite technology is fundamentally sound and ideally suited to bridging vast distances. It provides a cost-effective alternative for rural Australia, eliminating most of the logistical difficulties with terrestrial networks while promising a complete solution for enhanced and multimedia services.
While other technologies are being developed to provide better transmission performance and the results are impressive, satellite remains the most versatile, flexible and cost-effective solution for the entire range of services the rural community has a right to expect today.
As good as satellite is, there is no universal solution for rural Australia.
While able to deliver every service to all Australians within a national footprint, it makes sense to exploit satellite’s specific advantages where appropriate, and integrate it with other technologies where an existing investment has already been made, or where the remote location or community is able to generate a more cost-effective hybrid solution.
But the reverse also applies: no rural solution that does not exploit the unique advantages of satellite technology can be assumed to be watertight.
Neil Patulny on Integration The question of integrating services, making them work together, is absolutely critical to getting a good deal for the consumer, and we have gone to great lengths with Foxtel and the now-defunct Galaxy to ensure the conditional access management system is transportable, that Optus can access Galaxy boxes, that Galaxy can access Optus boxes. The objective of course is to use the same piece of infrastructure to provide the whole range of services. That’s the best deal for the consumer.
During question time, Mr Patulny said that developing equipment that is robust enough to work in the Australian environment is no trivial task. You have to develop a system that can weather the extremes of temperature, it’s got to have dust proofing, it’s got to be able to work on solar cells or diesel generators that generate all sorts of noise into the power supply.
Nevertheless, manufacturers seem happy to address these problems because of the benefits they can derive from selling these boxes into other parts of the world.
Mr Sorbello said that in moving to satellites, particularly in the bi-directional mode in receiving, power is not really an issue because the receiver uses very little power. In bi-directional applications for data or telephone, one of the greatest advantages of satellites is flexibility and scalability – ie picking up demand wherever it occurs. On the telephony side, Telstra has spent considerable time with Scientific Atlanta in trying to make sure that they have a life-cycle product that does not require frequent servicing, particularly a fully sealed cooler system that does not suck in dust. They have also concentrated on developing units that can operate on very low power, with maximum opportunities for battery conservation.
A questioner asked whether there is any limitation on extra lines in the copper network, to get added data capacity; for example, could he run two modems and two lines?
Mr Sorbello replied that in metro areas Telstra has large copper cables with many pairs; in rural networks, the cables tend to be thinner with fewer pairs, and to go a lot further. If a cable goes out 10km and you want a second line, and there is not spare cable up to that point, they may be able to extend some of the cable or take a cable from somewhere else in the area. But in many areas there is not a lot of spare copper. Adding modems depends on the type of modem and whether the bandwidth can be combined over the two copper pairs.
46 Commercial Services Financial Services
Chair: Chris Connolly, Financial Services Consumer Policy Centre
Speakers:
Cassandra Williams Manager, Research Services, Cannex Australia Collette McInerney Field Officer, CreditCare Russell Jenkins Project Leader, Community and Alternative Banking, Bendigo Bank
[Note: this report by Chris Connolly is reprinted from the October 1998 issue of Communications Update]
Bank closures in rural Australia are a topical issue, and the conference took up the debate in a session designed to examine the future of banking. The conference had earlier heard from Farmwide about efforts to connect remote farms to the Internet so that they could have access to services like online banking. This session concentrated on the provision of general banking services to small communities.
Cassandra Williams, manager of Research Services at Cannex Australia, described the potential for delivering information about different bank products online. Cannex provides independent comparative information about home loans, small business loans and other financial products through a wide range of media, including commercial web sites like NineMSN. She predicted that, over time, methods would be developed to provide true comparisons between all bank products, thus allowing consumers to make informed decisions, free from the advertising and marketing hype of the banks themselves.
Cannex is an example of a new trend in online services – an information provider which can assist consumers in choosing products without receiving commissions or kickbacks.
Collette McInerney, a field officer with CreditCare, travels the country assisting small communities to restore banking services through community partnerships with Credit Unions. CreditCare works by responding to community requests to re-establish banking services when the community learns that ‘the last bank is leaving town’.
She discussed the massive impact that bank closures have on small rural communities. CreditCare commissioned research which showed that bank closures quickly lead to a general downturn in small business custom (as consumers do their shopping and other tasks at their new bank – usually in a distant town), a drop in employment and even a rise in crime.
CreditCare enters these communities, describes its scheme at a public meeting, and asks for a vote on whether or not to proceed to a survey stage. The vote is usually unanimous in support of a survey. A survey of every member of the community indicates how much banking business (and what type) will be needed, and subsequently a business plan is developed. CreditCare then finds a suitable Credit Union partner and, if the community agrees, proceeds to establish a new Credit Union office – often in one of the old bank buildings.
47 The success of the scheme depends to a large degree on the attitudes of the people in the community. Schemes have failed in some communities due to apathy. CreditCare is a Commonwealth Government-funded initiative.
Russell Jenkins, project Leader of Community and Alternative Banking at Bendigo Bank, spoke about its operations. Bendigo Bank is a small regional bank with about 70 branches. It has been exploring new ways to provide banking services to rural communities.
The concept, titled Bendigo Community Bank, involves a small community making a commitment to retaining banking services, and then investing in a Bendigo Bank franchise. Like CreditCare, the Bendigo Bank conducts an extensive survey of a community’s business needs before proceeding. A recent example is a community near Albury – Henty – which decided to follow this path after the last big bank closed its branch. It was successful in garnering the necessary commitment from the local people and the new bank franchise will open in November 1998.
All the speakers agreed that the situation facing small communities was going to get worse before it got better. Bank closures often happened with little warning, and even with the support of CreditCare or community banking, it took a long time and a lot of hard work for communities to get back on their feet. The presenters were concerned that when big banks left country towns, they often ‘cherry- picked’ the most profitable customers and offered them special deals and incentives to move their banking business to a new branch in a different location. This made it difficult for the remaining consumers to meet the threshold requirements to establish a replacement service.
The presenters were fairly circumspect about the potential benefits of the Internet or electronic commerce for rural communities. Problems with access, affordability and education still need to be addressed, and they believed that some basic banking services still required a physical presence.
They also highlighted the fact that there was a great deal of fear in the community about the impact of any mergers between the big four banks.
The presenters painted a picture of great hope and potential in the face of big business and government lack of interest. Not for the first time, Australia's rural communities are digging deep to solve the problem themselves.
48 Commercial Services Employment and Legal Services
Chair: Vic Marles, Melbourne Coordinator, Communications Law Centre
Speakers:
Michael Lane Albury Manager, Drake International Simon Rice Director, Law Foundation of NSW
Michael Lane
Employment, or the lack of it, is a political hot issue in rural and regional areas, Michael Lane said.
Technological advances offer great opportunities, particularly for employers. Communication is critical in an employment context. Traditional or formal methods such as print or media advertising incur substantial costs and have long lead times for successful placement. Informal networks – eg associates, word of mouth, schools, posters in the local shop – are low cost and quick response, but have limited exposure.
The Internet bridges the gap between these two methods.
Newspaper classifieds, the most popular method, need to grab people’s attention amid pages with hundreds of other ads, and others in the same industry specialisation. Cost is high, especially for small regional rural enterprises; a reasonable campaign in one major newspaper could incur costs of $6000- $7000. In order to attract good candidates to an area, employers have to cast a very wide net. On the eastern seaboard, it would be easy to spend $15,000 recruiting for a single position, with no guarantee of success.
The Internet offers the opportunity to reduce that cost and cast the net further. Response time to newspaper advertising is normally around three weeks – to receive applications, vet them, interview candidates and refer them on. Alternative methods can involve a much quicker response, and in a form more palatable to employers.
Employment web sites can carry a lot of industry material, as well as tips for job seekers on matters like how to build a resumé. They also offer tools to gather market information, by surveying people on salaries, turnover rates, industry preferences, and put it into usable form.
Chat rooms and discussion groups with a particular industry focus, or for people in rural Australia facing similar problems, allow jobseekers to communicate with others in a similar situation.
By comparison with print advertising, the Internet is a very time-efficient and cost-efficient way for people to find the kinds of jobs, in locations in Australia or overseas, that they are seeking, within a suitable timeframe.
Web sites need to be regularly maintained and carry material which is ‘real’ and up to date. People expect immediate response from an Internet vacancy application; this can be done in an automated way more quickly and efficiently than traditional methods. Having access to online help is also
49 critical, as not all candidates are computer literate. Links to other sites are also important in order to maximise traffic flow.
Via the Internet, Drake can be available 24 hours a day, seven days a week throughout the world without the need for call centres, overtime and other labour costs.
In terms of costs, bulletin board-style providers offer rates as low as $60 per advertisement. More often it would be in the range $100-$200 per ad. Contracts with web sites offering several opportunities a year could run into several thousand dollars. At an employment service agency, the service is likely be provided at no cost.
Michael Lane said that successful recruitment web sites are those that give users what they want by tailoring their content to users’ requirements and focusing on customer service. His prerequisites for a successful web site included:
• an extensive database of human resources-related topics; • a variety of relevant surveys; • the opportunity to take part in discussion forums; and • the provision by the recruitment company of networking.
Lane said that in his experience, jobseekers had particular expectations from web sites. They wanted a site to:
• provide a comprehensive and industry-specific jobs database; • be regularly updated – preferably daily; • include a provision for receiving a resume immediately; • have some useful job tips to help find the right job; and • focus on regular and ongoing customer service.
‘There are several advantages in using online recruitment services’, Mr Lane said. ‘Firstly, the Internet gives flexibility in terms of communication. For example, you can put up a job listing one morning, build an appropriate database of candidates, then replace it with another listing after a week. And all the employer has to provide is a form asking for candidates to fill in pertinent information.
‘Secondly, most of the preliminary interaction between the employer and potential employee is via email which means that administrative costs are reduced and communication is unrestricted by working hours’.
Job seekers on the web can stay current about what is available, as well as getting their details out to a large number of agencies and potential employers at low cost; this is very important for people in rural and regional marketplace. Regional business must be Internet-aware to maintain competitive advantage.
There has been a dramatic increase in recruitment web sites over the last couple of years, to about 5,000 globally. Tools like videoconferencing can have a major impact on recruitment from outside the major cities and overseas, with significant cost savings.
50 Simon Rice
[Note: this paper also appeared in the October 1998 issue of Communications Update]
To best understand the issues around legal services online, it is useful to separate the types of ‘legal services’. The first of two subsets is ‘legal information’; the second is ‘legal expertise’ or, more accurately, ‘the exercise of legal judgement’.
Legal Information Legal information is highly amenable to online delivery:
• it is most commonly conveyed in writing, ie, text; • all of the primary legal information is (or should be) in the public domain; • as plain text it can be very useful, without the need for other resources or media; • text is easily transferred from existing print format to the online environment. It is easily marked up, delivered and read across all platforms, software and generations of hardware.
I have just mentioned an important distinction in legal information, between primary and secondary material. Primary material commonly refers to legislation and cases. It is the source material for law. Secondary material is explanatory, created to describe, comment on, analyse and make clear selected primary material. The Dog Act is primary material; a booklet called ‘Your Dog and You’ is secondary.
There is a rapidly growing amount of legal information available online, both primary and secondary.
The largest sites for primary materials in Australia, and perhaps the most comprehensive of their type in the world, are AustLII at www.austlii.edu.au and ScalePlus at http://scaleplus.law.gov.au
A variation on this ‘primary’ legal information is primary data – records and information which are generated for a particular purpose, usually by a government agency: for example, land title records or company records, etc. An analogy in daily life would be the online availability of telephone numbers. The Australian Securities and Investments Commission is an example at http://www.asic.gov.au/
There are numerous sites for secondary legal materials in Australia, including:
• Law4u at www.law4u.com.au; • LawLink at www.lawlink.nsw.gov.au; • the Legal Information Access Centre at http://www.slnsw.gov.au/liac/; and • various community legal centres and Legal Aid Commissions.
What is most useful is a signpost – contrary to early expectations of disintermediation in consumers’ access to services, the Internet is actually increasing the need for intermediaries that sort and signpost the massive amount of online material. The Law Foundation of NSW operates one of the longest standing and most comprehensive Australian legal signpost sites, Foundation Law at, www.fl.asn.au
Legal ‘expertise’ I said above that I would prefer to call ‘legal expertise’ in this context ‘the exercise of legal judgement’. In doing so I want to distinguish legal expert systems and put them to one side; the issue for online delivery is the personal contribution that a legal adviser, or indeed any professional adviser, brings to a client relationship. This professional judgement, and the ability to bring spontaneous expert
51 reason and analysis to an issue, is the very opposite of legal information on the criteria for online amenability:
• it is not text; • it is not in the public domain; • it is not easily conveyed without sight and sound; • it does not already exist in print; • it is not easily conveyed in the online environment.
We are in danger of being misled by a syllogism: legal information is easy to put online. But legal expertise is not the same as legal information. Therefore legal expertise is not easy to put online. The danger is in trying always to replicate the real in the virtual. While it can be done easily with information and not with expertise, the possibilities lie in alternative ways of using online technology to give access to expertise.
The question for online legal expertise is not ‘can we do the same thing virtually?’ But ‘how can the virtual be effective?’ The discussion is about alternatives, not substitutes.
‘Expert systems’ are smart legal information services. They enable a user to find information that closely fits their particular needs or circumstances, by asking questions of complex databases.
Some of these are used in government as support for public servants in, for example, Social Security or Veterans’ Affairs. The Law Foundation developed a prototype for use in relation to the Administrative Appeals Tribunal, elaps©. The prototype is at http://elaps.fl.asn.au/elaps.html. It was developed on a software platform designed by Softlaw at www.softlaw.com.au.
A different type of expert system is a simple mail list or bulletin board, allowing a question to be posed to an expert audience, perhaps worldwide. These are question and answer sessions, in delayed, not real, time.
These means of conveying expertise are clearly not a complete substitute for the rapport, spontaneity and trust of a personal relationship. But for different audiences at different times they will be a very useful alternative; an alternative to the otherwise unproductive use of time and money until, through personal inquiry of such online expertise, you establish the need to go to the next step and secure personal expertise.
Conceptually it is a big leap for both user and provider to entrust expertise to any non-personal medium, whether in print or online. Where it is being promoted by providers, it is in the name of efficiency, much to the annoyance of users who feel that a problem that requires expertise is sufficiently important to merit personal expertise.
But for users, over time, sophisticated expert systems will be embraced as a powerful means of empowering the users. Not as a substitute for expertise, but as a means of better understanding and making judgements before or concerning the expertise. Expert systems will more closely circumscribe the limits of expertise that is special to personal intervention, and put in the public domain much ‘expertise’ that has been little more than trade jargon, historical knowledge and accumulated facts.
It is the same phenomenon that occurred recently in publishing primary legal materials online – the old limits of what was ‘owned’ and what was in the public domain were redefined.
52 Lawyer-client online A final point about legal services online: after legal information and after expert systems comes the personal service. As I made clear above, I do not see online services ever wholly substituting for personal services. But the form of delivery of those personal services will certainly alter, only in as much as all personal communication now has the online medium available to it.
The Law Foundation’s experience in developing online communications strategies for lawyers has been very instructive in this regard, and with Sandra Davey I have described them in more detail in ‘The Potential of the Internet for Law and Legal Services’ (1996), Communications Law Bulletin Vol 15, No 4, pp7-11.
In short, lawyers and clients will find in electronic communications the same speed and efficiency in communicating that characterises such technology, with no greater threat to confidentiality (probably less) than that posed by the near profligate use of faxes.
53 Commercial Services Entertainment, Learning and Culture
Chair: Robert Knight, Director, Riverina Regional Library
Speakers:
Jenifer Hooks Executive Director, Cinemedia Faye Shortal Access Collection Manager, Cinemedia
Jenifer Hooks
Jenifer Hooks began by saying that coming to the conference had made her realise that there was little time in the life of rural people for films, because of their very long working day.
Cinemedia’s vision is to create one of the world’s great centres for the moving image, recognised both nationally and internationally. They acknowledge the link between the television screen, the movie screen and the computer screen, and whatever they merge to become in due course. Their goal is to provide access to the moving image for all Australians. Access is the key word, as they are primarily a lending collection. There will be both the physical Cinemedia and the online version.
Faye Shortal
For more than 50 years under its old name of the State Film Centre library, the Access Collection division of Cinemedia has provided films to users all over Victoria. The service has been well used by both individuals and schools outside Melbourne, especially those in rural communities whose access to a variety of film and video titles may be otherwise limited.
Although we loosely refer to it as ‘the Access Collection’, it is more reasonably described as a series of collections, each available to different groups under different arrangements.
The State collection at this stage is only lent within Victoria (with some exceptions), to any individuals over the age of 18, and also to organisations and schools. As well as this original collection, Cinemedia has taken on the management of several other collections.
The national collection, formerly housed at the Australian National Library in Canberra, was handed over to Cinemedia to manage in August 1997. This is available to educational institutions and film societies anywhere in Australia. The Embassy Collections (German, French, Chinese) are also available to the same user group. The film and video collection of the Department of Conservation, Natural Resources and Environment is also housed at Cinemedia, and it is lent via their officers.
To borrow from any of the collections, you must first be registered as a member. Currently the Access Collection users number about 2200, and the National Collection about 1500. Members are a mix of institutions and individuals. Our dispatch department lends between 300-400 items each day, about half of which would be sent to remote users.
It is the largest public lending collection of film and video in Australia, containing more than 10,000 video titles, 40,000 16mm film titles, and 274 digitised titles available for online transmission. These
54 are constantly being added to. The collection is not format-specific. It grew out of a base of 16mm documentary film, and added older video formats such as Umatic and Beta tapes, VHS videos, laser disks and CD ROMS. Collection of 35mm may be an option for the future, and digitised titles will continue to be added. As the technology changes, we are prepared to look at whichever formats are appropriate to delivering improved service to members.
Under its collection development policy Cinemedia’s long term policy is to build up a core of cinema representing the work of the best film directors both within Australia and around the world. Each year specific areas are targeted for special development. Last year, Italian feature films were a special focus, and this year one of the aims is to begin building an Indonesian film collection.
There is an ongoing commitment to purchase Australian film – features, documentaries, shorts, animations and works by young and emerging film makers.
Material to support the schools curriculum is also regularly purchased and updated, including teacher requests, and particularly titles which support Victorian Certificate of Education (VCE) subjects being studied.
As well as all this, members are encouraged to suggest titles suitable for the collection.
Borrowers access our service in diverse ways. We provide facilities for viewing all formats on site, including a 16mm projection room. Borrowers may personally select and take away videos from our premises in South Melbourne, and items are delivered to remote users (mainly schools) by post and courier.
Under a special co-operative partnership we have with the Victorian Public Library network, your film and video orders can be sent to your nearest public library anywhere in Victoria for pick-up and return, at no extra cost to the borrower.
Our catalogue is available for browsing on the web site at http://www.cinemedia.net. If you are a member, you can select and store personalised wish lists of titles, and book them directly for the date that suit you. Cinemedia staff will ensure that your choices are despatched to you by that date.
At the same time as we continue to operate this traditional service, our vision for the future is the direct digital delivery of film to the viewer. We are currently trialling this method.
Jenifer Hooks
Ms Hooks talked about the trial of digital delivery and gave a demonstration. Cinemedia began by putting the catalogue online for booking purposes. There are 274 titles being used in the trial – mostly Australian material. The digital video service will eventually allow Cinemedia to distribute directly via any of the distribution networks available for video technology to schools, homes, offices. There is potential for national and international delivery, with multiple simultaneous users of any item that is on the server. New systems can overcome problems of print degradation and storage space. Cinemedia will have an opportunity to mediate between copyright owner and copyright user by means of electronic copyright administration.
Film Australia, the National Film and Sound Archive (NFSA) and Cinemedia are the three major Australian collections, which have been largely funded by the taxpayer. NFSA’s core function is preservation, Film Australia uses its collection of 80 years of Australian filmmaking very largely for stock footage; and Cinemedia is the lending collection.
In answer to a question from Jock Given about whether digital delivery would reduce the likelihood of small groups in country areas getting together to view films and discuss them, Ms Hooks said she did not envisage any one system totally replacing any other. Indeed Cinemedia and the archives may end up being the last repository of celluloid, she said.
55 Electronic Commerce Decentralising Australian Business – Call Centres and Teleworking
Chair: Leo Reilly, La Trobe University
Speakers:
Bruce Winzar Manager IT&T, Call Centre Business, City of Greater Bendigo Andrew Hunter Chief Executive, Teletask Armidale
Bruce Winzar
Councils and regions should be looking to counter high unemployment by utilising labour pool technologies to get jobs for people in the bush.
The Bendigo Calling campaign, which began in August 1997, was intended to leverage off a high unemployment base and to position the city as a strategic node within regional Australia for telecommunications. The call centre industry is a growth industry in both dollars and numbers employed.
‘Infotronics’ (a combination of electronics and information) means that by the use of smart technologies and available information it is possible to become involved in new projects such as computer telephony and data integration, which is what call centres are all about.
The regional development focus in the past has been on bricks and mortar, road and rail, but there is now a move across to telecommunications and ensuring that both the infrastructure and the content/information are there.
There are 56,000 jobs in the call centre industry at the moment. In Burnie, in Tasmania, a pulp mill would require the investment of a massive $2.8 billion to create 300 jobs. Westpac will generate the same number of jobs in a location in Tasmania for the investment of only $10 million. There is to be a new call centre in Bendigo with 400 jobs on an $8 million investment.
Bendigo Council is an entirely network-driven organisation, and part of its strategy was looking at where it wanted Bendigo to be in the future: a ‘smart community’. With telcos, carriers and integrators as partners the Council can work with to achieve its vision.
Bendigo’s advantages include:
• An existing Telstra call centre with about 330 people working on customer service and complaints.
• La Trobe University and the regional TAFE with about 14,000 students, as well as about 1700 students enrolled in the HSC. Possibility of Internet in-service courses, videoconferencing.
56 • Largest hospital outside Melbourne (aged care, psychiatry and normal services) interested in remote consultation and diagnosis for smaller regional communities.
• Bendigo is the only regional town in Australia with its own bank based in the city – Bendigo Bank – a very good platform to develop electronic commerce. In community banking, the Bendigo Bank has stolen the march on providing banks services to small rural communities.
• Bendigo has GIS (geographical information systems), the biggest technical group of GIS experts outside a capital city, with around 120 workers at the Australian Topographic Survey Establishment.
All these elements provide the basis for approaching the industry about infrastructure for Bendigo, and implementing the vision of a very smart city.
An important consideration is that Bendigo is a heritage town and potentially invasive infrastructure such as cables must be used sensitively.
There is huge growth in the 1-800 and 1-300 numbers, all of which are handled by call centres. Americans dialled 2.6 billion toll-free numbers in 1996, generating $10 billion in annual revenue. US volumes have tripled in last five years.
Mr Winzar said that there is a lack of understanding of what call centres are. On the most basic definition they are simply a ‘telephone farm’ providing customer service. It is only when you walk through these centres that you see the kind of stress people work under, and what is the technology behind the system.
The international trend is to have 24-hour centres, and here Australia has an advantage. Large companies are creating ‘follow the sun’ call centres, and there will be significant growth in the Asia- Pacific call centre market.
Australia has shifted to a service economy. Call centres are already a $3 billion industry in Australia, and growing at 25% a year. There is potential for many jobs. Bendigo has 500 currently, most being added in the last 12 months and will have another 400 on 1 Jan 1999 (Postel). The Gold Coast has 700, Newcastle 600. Victoria and NSW have the most centres.
Mr Winzar then instanced a selection of companies from airlines to telcos, pay TV and banks, credit cards, all using large numbers of people in call centres in various parts of Australia. In a call centre, 60-65% of the cost is labour, and centres like Bendigo can offer a stable and loyal workforce, with low rates of churn and absenteeism. Churn rates in cities can be as high as 20%. In country areas, the churn is around 1-2%. Other advantages are lower rents, and the availability of former government buildings in rural areas. Salary costs are cheaper – $26,000 approx in the country cf $28-30,000 in the city, and this can represent a major cost saving over a year. With 400 employees, for example, up to $1 million could be saved.
Call centres thrive where unemployment is high. There is a limit, however. In Bendigo they believe the limit is about 1500 – about 2-4% of the workforce. A higher level of employment will increase the churn rate, and the competitive advantages will be lost. Companies are preferring to move out of capital cities, so the potential is there for regional centres. Call centres also offer the prospect of greatly improved infrastructure in rural areas.
57 Andrew Hunter
Teleworking is working in a location remote from your employer, utilising the telecommunications network, whether by telephone, fax, computer/modem.
The concept has evolved with evolving telecommunications. Experts will say that teleworking works best when people split their time between their corporate office and their home office, because of such factors as the need for social interaction with colleagues, or getting a feel for where they stand in the promotion stakes.
There are two distinct types of teleworker: the corporate teleworker and the freelance teleworker.
For the corporate teleworker, flexibility of lifestyle and work practice is the great benefit, and for the employer, a more satisfied and more productive employee, and reduced costs of office space if teleworkers are rostered.
Freelance teleworkers include journalists, writers, graphic and web site designers, draughtsmen – anyone who does not require extended face-to-face contact.
Andrew Hunter was involved in the establishment of Walcha Telecottage, Australia’s first telecentre. Telecentres are essentially community-owned, often in small rural communities with computers to provide initial training, and later access. There are now somewhere between 100-150 telecentres. When they started, there were no models to work from. Scandinavian countries were the first to use the concept, primarily to overcome drift away from their rural areas.
In Walcha, they were able to provide work on a project basis though it proved difficult to maintain the flow of work. However, they did manage to become self-supporting and remove dependence on funding. They decided to help other areas to set up telecentres, and Teletask was established as a non- profit company, funded through the Federal Government. The aim was to provide a base of teleworkers by recruiting from the enormous resources in rural and remote Australia, where computer ownership is remarkably high and there are many women, particularly, with highly developed skills.
Overheads in the bush are almost non-existent, which means Teletask can be extremely competitive. While rural communications costs are high, it is worth noting that expenditure of $40 a week on Internet access is roughly equivalent to what a city commuter spends on getting to work, or parking.
We must change the superhighway from being a one way street, harness it to make it information plus opportunity.
The kinds of services Teletask can offer include data processing for corporations, government, and charities; cataloguing, list management, telemarketing, secretarial, overflow for legal firms, help desks, page layout, graphic design, desktop publishing, web page design and layout, application programming, software development, surveys. They envisage up to 700 people nationally working on this project. Opportunities for collaboration are substantial, for creative as well as administrative work. They offer a ‘virtual personal assistant’ for people who cannot afford a PA. The response has been overwhelming from people seeking work, often people who were already teleworking. The aim is to become self-sustaining by charging clients a small brokerage fee.
Rural people are different: resourceful, independent, tenacious and productive. Mr Hunter told an anecdote about a woman outside Longreach working for a large corporation who is regarded as more productive than workers in the CBD. Though she has access only to low speeds and poor service, her performance proves that teleworking can be successful even on low bandwidth.
The Office of Rural Communities would eventually like Government appointments at all levels to be assessed for suitability for teleworking, and if there are no significant problems, offered completely open to all geographic locations. Unfortunately this attitude is not universal.
58
It is time that Australian management stopped measuring performance by attendance, and instead measured it by productivity.
In answer to a question about workers compensation and other insurance matters for teleworkers, Andrew Hunter said that people were employed as contractors, using their own hardware, software and office facilities, and as such were responsible for their own arrangements.
59
Electronic Commerce Making electronic commerce work for my business
Chair: Peter Lamb, Head of School of Business, La Trobe University, Albury-Wodonga
Speakers:
Jim Groves Baradel Consulting Bryan King Manager, IT Strategy, Department of National Resources and Environment George Warne [no recording available] Murray Irrigation
Jim Groves
Jim Groves emphasised that his work focused particularly on farmers, not other rural sectors. He said he defined electronic commerce as actual transactions over the Internet.
Expert predictions are for spectacular growth in electronic commerce. Business-to-business is seen as the big growth area, while growth will be less in consumer and small business. In Australia, the prediction is that 20% of all household expenditure will be over the Internet.
Advantages of electronic commerce:
• A basic web site is cheap. • It can operate 24 hours a day, 365 days a year. • The market is global. • Electronic systems can be used to automate such functions as ordering, inquiries etc. • Closer relations with customers, ease and convenience for customers.
Electronic commerce is however not suitable for every purpose. The costs of delivery can present problems in a global system; products still have to be delivered; for example, amazon.com has to transport its products at prohibitively expensive international parcel rates. There are opportunities to evade tax: the waiving of tax on imports of less than $50 amounts to a taxpayer-driven subsidy on purchases from overseas. There are concerns over security which Mr Groves said are greatly exaggerated, but which are nevertheless inhibiting the growth of electronic commerce.
Goods which are most suitable are products like consumer software which can be downloaded directly, information services, financial services, travel reservations, many government transactions, books and CDs, and time-sensitive services such as travel. The Internet can support the purchase if not the direct sale of almost anything, cars, real estate, groceries.
If there are more buyers and sellers there is an equalisation of the terms of trade, a reduction in information asymmetry. Trade should occur more at true market prices, rather than at false prices representing asymmetries in information. The advent of ‘shopping bots’ which will return all the offers and prices to be found on the Internet is a very significant development, in that all businesses may find themselves operating in commodity markets.
60
In the regions, the winners will be those with the telecommunications infrastructure, offering lifestyle advantages and a sense of community. Any loss of business will be offset by expanded markets, off- farm income possibilities, and new industries such as call centres, teleworkers and other service providers.
The Australian Farmer’s Guide to the Internet contains sections relevant to electronic commerce on both the buying and selling side for farmers. The web site version lists 95 web sites relevant to farmers, 12 of which are commerce-enabled. This represents a ‘trivial share’ of all purchases by farmers. Moreover, finding information is not easy among the mass of information available, and better directories are needed.
Electronic commerce has enormous promise and we are at a very early stage. What is needed is more, and easier-to-find opportunities to buy and to sell, and more infrastructure solutions.
Bryan King
Australia is behind the crest of the new technology wave; the US is ahead, but we have the opportunity to learn from mistakes made elsewhere.
Mr King said he constantly advises managers in his Department not to let the technology tail wag the business dog: ie technology can be wonderful, but you need to ask why use it? Sometimes it’s better to put your head over a partition to tell your workmates something simple like a changed meeting venue instead of sending an email.
Technology is changing. For example, there is a new local area wireless protocol allowing small devices to communicate with one another; there are telephones with LCD screens allowing access to the web; the set-top box that will do everything is in prospect.
We need to project ourselves backwards and remind ourselves that few current technologies were in daily use only a couple of years ago. The winners will be people who can change, adapt, evolve.
Mr King said he saw electronic commerce having three aspects:
• The ‘sell side’: an advertising/communication medium, projecting outward to customers.
• The ‘buy/procurement side’: potential for major change. Web-enabled system within his department allows him to order new equipment directly, with all the data entry and processing done instantly.
• Internal processing: accounting systems, transaction processes etc.
Mr King gave an example of Nike setting up a system whereby their suppliers could be aware when they were running low on a certain shoe and could produce more of it. Nike has extended its thinking about its business to embrace suppliers, to encourage just-in-time supply at the coalface, and very efficiently. Competitors have been left behind because they have to have the warehouse, the stock, and money tied up.
Technology is nothing in and of itself; it is an enabler. To know where you are going you have to know where you have been, Mr King said.
61 Electronic Commerce What is electronic commerce and how do you do it?
Chair: Rosie Simpson, Director, Projects, Farmwide
Speakers:
Dr Supriya Singh Senior Research Fellow, CIRCIT (Centre for International Research on Communication and Information Technologies) Brian Johnstone Projects Director, Supermarket to Asia Rob Connell Bit Players
Supriya Singh
Electronic commerce is a way of business communication. CIRCIT (Centre for International Research on Communication and Information Technologies) has put the small business at the centre, which means the issue of e-commerce is more than how much you use it, rather how you use it to communicate with different audiences: the customers, the suppliers, other small businesses, and the Government.
To find out how small businesses are using e-commerce across different activities to communicate with different audiences, CIRCIT took a three-pronged approach:
• qualitative studies (open-ended interviews with 27 small businesses in SA and Vic); • industry workshops in manufacturing, retail/wholesale, business and property services; and • a random representative survey of 675 small businesses in Australia in April/May 1998.
[Note: the results of these studies are available through CIRCIT, http://www.circit.rmit.edu.au].
Small businesses, like everyone else, use a mix of communication channels. Face-to-face interaction remains crucial, as do the phone, the fax and mail, and these are seen as the most important, though email and the home page are increasingly cited.
But rapid adoption in one activity does not guarantee the rapid adoption of electronic channels in another activity. CIRCIT found that just because a person has a home page does not mean they are going to use email all the time or do banking on the Internet.
Dr Singh told an anecdote about a man called Brendan with a farm supply business in regional Victoria, a small family business established over 50 years. It was the only business in their qualitative sample that had the facility to do online banking; Brendan had computerised his business 13 years ago and had a LAN; he was using Quicken; he was one of the first adopters of the fax and the mobile phone, which he gave to his field staff as soon as they were available. Yet he goes once a week to his local bank branch and does everything by cheque, because he does not feel comfortable with direct debit; and he uses an outdated PABX system because it fills his needs. On the other hand he is fully informed about the uses and potential of satellites in business. He did not use email much because many of his customers do not have email.
62
There is no point in using the fastest and cheapest means of communication if you are going to deliver the wrong meaning, Dr Singh said. CIRCIT found that a small business that was a consultant in IT to other businesses found it preferable to fax their newsletter rather than email it, and invoices were mailed rather than emailed. The most effective use of a channel is not always they cheapest and fastest. While this is recognised in business, it perhaps need to be more recognised in policy.
CIRCIT’s major survey found that the phone, face-to-face, post and fax were nearly always seen as the most important, though sometimes there were changes in the order of importance. Home page or email never came to the fore. Small business needs all the options. The very fact that everyone is at this conference for two days shows that participants thought they would be getting something by attending that they would not get by email or the home page.
E-commerce is often seen as a way of transacting and paying online, but in fact the cheque by mail or in rural areas, handed personally, remains the most important instrument of payment. The cheque butt is part of the money trail. Until all the bits in the loop of money management are effectively answered by electronic channels, we are not going to see consumers or small business give up that money trail, Dr Singh said.
Trust is critical. People will not use a service if they don’t trust it. Everyone uses the ATM to withdraw money; only 2% of Australians use the ATM to deposit.
E-commerce has to become an effective part of the way business is done. We have to be aware of how it is going to change the way we communicate and redefine activities; that is the challenge.
In answer to a question, Dr Singh said that while the cost of the technology was a disincentive, the two main barriers to email take-up which emerged in the survey were that customers did not use it, and that people could not see how it would fit into their business. The cost factor came lower down in importance.
Brian Johnstone
Supermarket to Asia (STA) is a council chaired by the Prime Minister, the focus of which is to improve the export efficiency of our food industries, primarily but not exclusively in Asia. It has been operating nearly two years, and has developed an action plan covering such matters as food quality, export clearance, and a food marketing program.
One of the five priority projects for the Council is to provide an electronic commerce system for trading in food products that will provide a competitive advantage for our food exporters.
The system – called FINE (Food Australia On-line) – is currently under development by Supermarket to Asia Ltd in partnership with Telstra.
The term ‘e-commerce’ is being used in all sorts of ways. Mr Johnstone said that he uses it to describe the way businesses use information technology to streamline their business operations and deliver better value to their customers.
STA did some research on emerging food markets in Asia. This produced a mixed report on the operations of Australian agri-food companies at all levels of the chain, farm to customer. A number of leading Australian agri-food companies had a strong customer focus, and had in place established food quality and safety systems. Smaller companies were giving much patchier service, and in the fruit, vegetable and meat areas quality was often variable.
63 One of STA’s working groups suggested e-commerce might help deliver product to Asian buyers with more reliability, regularity and better communications.
Australia is exporting about $18 billion of food products to world markets a year, of which about $12 billion were going to Asia. The agri-food industry is a vital part of the Australian economy, with turnover of approximately $65 billion and employment of 500,000. It covers from the farm to the ship. Food presents a great opportunity and some interesting challenges for Internet trading. It is often perishable and needs to be handled with care. Food diversity is enormous, providing many opportunities for product differentiation.
To remain competitive in a global economy which is undergoing rapid change and where trade barriers are generally falling, the Australian agri-food industry needs to have an efficient supply chain from farm to overseas customer. STA identified over 40 individual business steps in moving product from a producer through to processed food products. It looked at how an Internet-based service could streamline those processes.
FINE is to be a business-to-business system, for the electronic ordering and supply of food products using web-based technology. The system will allow electronic communication and business transactions between the customer and all relevant parties in the supply chain (farmer, processor, AQIS/Customs, transporter, bank, insurance, shipper, importer).
The first thing a buyer overseas wants to know is what products are available in Australia. The Food Australia Online project is therefore developing a food product catalogue with an efficient search engine. A customer (eg Asian supermarket chain) will search the catalogue on the Internet for the type of Australian food product they wish to purchase. The catalogue will identify the Australian suppliers of that category of product and provide access for the customer to the companies’ product description, packaging and minimum ordering requirements. The customer can then send an email requesting such information as a price quotation, delivery times, credit terms.
Once a purchase order is placed and confirmed, an invoice is sent, and the supplier can access services needed to complete the transaction on-line. These include:
• AQIS/Customs clearance • Domestic transport • International transport • Export insurance • Freight forwarder • Finance • Import authority (if possible)
Users will pay a small transaction fee for each service used, and the cost of entry into the system will be modest. Appropriate security fields and passwords will ensure information and transactions remains confidential to the users.
The system will be as open as possible so that everyone in the chain will have the opportunity to participate. It will incorporate electronic links to other agri-food stakeholders such as business chambers, which are often servicing small to medium-sized companies, and State food agencies which are already in the process of supplying information about food.
Telstra is a major partner in the project, and it commissioned work on the business system needed to support FINE as well as undertaking market research on likely agri-food industry pilot partners.
64
A pilot program with six Australian agri-food companies (November 1998 to May 1999), will involve the setting up of a web site so that people can see what the scheme might be able to offer them. Results will be evaluated, and in June 1999 the commercial vehicle to take FINE forward will be established.
The FINE service will be progressively rolled out across all agri-food companies. Development of the service will continue to add value to company operations and progressively extend the commercial operation of the system into overseas markets
In response to a question, Dr Johnstone said that originally they had believed they could capture the whole export process through a series of web screens. In practice, the detailed business processes, the software and the connections that need to be made cannot effectively be done off the web. The process would slow down and ultimately clog up. The strategy now is how to link the web page and the FINE site to value-added services that others can provide, for example in streamlining export clearance or shipping services. It will be more of a partnership model, and consultation is occurring to achieve this.
The pilot process is intended to connect the whole chain, and one of the conditions of coming into the pilot is that companies are prepared to open up part of their business directly to the food importer, and to use the site for part of the trade that takes place between that company and the exporter. The importer can learn about how this technology might help facilitate business between those two partners, and potentially between many other partners.
The catalogue on the site will allow food companies in particular sectors to list their product, so there will be for example dairy, grains, vegetable, and fruit components.
It is not possible to standardise quality. There has to be adequate product description, but in the end the buyer and the seller have to decide what they are buying and the appropriate price. There is a huge range of quality in the agri-food business, and some low quality produce may be well suited to a particular end use in an Asian market.
Rob Connell
E-commerce is still business, Mr Connell said. Complex networks already exist in regional Australia, and over the years people have adapted well to change. For the small business community, the starting point is the same as it has been in previous periods of change. We need to look to our business, our existing customer base, and our goals for the maintenance of service and growth. These are tried and tested principles and should be applied to use of the Internet as to anything else.
Yet we seem to be approaching it slightly back to front, Mr Connell said. There are some valiant efforts by regional Australia to be on the web without any real purpose for being there. The phrase ‘brochure on line’ has been used to describe many sites which are the same as when they were first published – because the goals were not clearly defined or established beforehand.
There is a gap between the realities of small business and enormously complex environmental change. We need to start to develop models that can streamline small business into e-commerce in steps that equate with their goals. It is fine to talk about international and extra-regional markets but for many small businesses, their survival is affected by contractions in the local economic base.
Many of the appropriate solutions are not of a high-tech, high-end nature. Many people in regional Australia are not yet using e-commerce models such as email catalogues, which are cheap and effective. When the activity base is small, the take-up by clients will be low.
65 Other speakers have identified three major areas of benefit for business: a bulwark against intrusion into local economic structures; a way of strengthening these structures; and a way of developing growth markets outside our own regions. Emphasis has been on the potential for lower business costs and improved efficiencies, but in the small to medium term business sector costs and efficiency are not the main barriers; rather, it is a sense that their markets are being eroded.
The focus should be on showing people how to bridge between their own business goals and the technology, at a local level and a regional level, and to develop a critical mass of business users who can see that adoption of e-commerce processes is going to enhance their profitability and increase their chances of survival in a period of massive change.
66 Launch of National Landcare Information Service
The Hon Tim Fischer Deputy Prime Minister and Minister for Trade, MHR Farrer
Mr Fischer said that the LandcareLink Information Service embodies a further extension of the transfer of information, transforming the concepts of distance and remoteness that are so often associated with rural life. It successfully marries the highly successful Landcare program with the wider access and availability of information that efficient telecommunications can bring.
LandcareLink means more people will be able to access Landcare’s up-to-date information from anywhere in Australia. It will be easier to find relevant information and to save time in the process.
There are now over 4000 Landcare groups operating in all States and Territories. This is evidence of the changing culture, the changing attitudes of farmers of all ages – even the more mature ones – and a growing commitment to sustainable agriculture. A recent government survey showed that one in three farms had a member of a Landcare group.
Landcare programs will support an expansion of property management planning to give farmers improved natural resource and business management skills. LandcareLink is an exciting new initiative. Country people have always been innovative in their use of technology in communications. We have come a long way from the party line at Boree Creek to the new age of the Internet, E- commerce being the bonus factor.
Mr Fischer announced several new initiatives from the Coalition’s communications policy. He congratulated Kondinin and Landcare for their support for the LandcareLink project. He mentioned several successful export projects, including a Melbourne company which is exporting pita bread to the United Arab Emirates.
With LandcareLink, we will have a sustainable basis to see this kind of effort further expanded, Mr Fischer said.
67 The Future: Key Questions for Rural & Regional Communications How should we judge success in providing communications services for rural and regional Australia?
Chair: Peter Core, Managing Director, RIRDC
Speakers:
Tony Shaw Chair, Australian Communications Authority John Pinnock Telecommunications Industry Ombudsman Celie Moar Director, Telstra Corporation; Grain Producer, Swan Hill Mark Arandale [no recording available] Director of Government and Strategy, Nortel Australia
Tony Shaw
Mr Shaw said that the message he had got from the conference were that people feel that
• they don’t have a satisfactory quality of service; • the don’t have access to services that they think they should have access to; and • they pay too much.
Three questions that flow from this are whether these beliefs are right; what might change the situation; and how might success in doing that be judged.
The ACA has done some work which might help unravel these problems, for its quarterly report and its section 105 report. He mentioned the recent survey of 1500 people (also referred to earlier in the day by Roslyn Kelleher) but said that the detailed results were not yet public.
Mr Shaw said that the survey had showed overall satisfaction levels were quite high, and both urban and rural respondents were equally satisfied with in-place service connections. However, on new service connections, the level of satisfaction among country consumers in the last two quarters was significantly lower than for urban consumers (66% and 64% compared with 86% and 88%).
Satisfaction with Telstra’s performance on fault repair showed country customers slightly more satisfied than their city counterparts on clearance of faults within one day, though in both cases the satisfaction rate for metropolitan business was significantly higher, by around 20%.
Fault repair clearance against CSG standards showed rural highest at 81%, followed by urban 71% and remote 64%.
68 The level of satisfaction with mobile phone services across urban regional and rural areas was ‘extremely high’ at 77%, Mr Shaw said. He conceded however that rural customers may be less satisfied and that coverage would be a key issue.
PSTN Data Transmission rates show that transmission speeds are much lower in rural than in urban areas, with only 45% having access to 14.4kbps or better, compared with 85% in urban/provincial areas.
PSTN Data Transmission Rates (% network coverage)
Rate (kbps) 2.4 9.6 14.4 28.8
Urban/provincial 99.0 95.0 85.0 60.0
Rural 99.0 70.0 45.0 30.0
On the issue of prices, rural and urban customers were equally satisfied, Mr Shaw said. It was ‘striking’ that over 50% of customers in all geographic areas think that long distance and local call charges are about right.
In summary, Mr Shaw said that compared with urban customers, rural/regional customers:
• appear satisfied with general service levels though he conceded that some ‘get a poor deal’; • face longer service times for some services; • have access at lower data transmission speeds; • in some areas, may be at a disadvantage price-wise because of the lack of untimed local calls and of access to an ISP.
Mr Shaw posed the question whether competition and technological developments would improve service levels and lower prices in rural and remote areas. He believed that the answer is a clear ‘yes’.
The reasons include:
• developments in cellular mobile, with several new entrants and replacement of the AMPS network;
• the ACA to embark on the sale of spectrum for wireless local loop services; • existing and new satellite-based services; • developments with the radioconcentrator system and ADSL techniques. The full suite of services are or will soon be available in rural Australia ‘for those who are prepared to pay the price’, Mr Shaw said. Price will be the key to access.
Mr Shaw listed existing Government policies and programs which will help to improve service levels and lower prices, including the USO, licence conditions, the CSG and RTIF, the review of price caps, digital television and datacasting.
In terms of judging success, benchmarking has already played a significant role in Australia in areas like television equalisation, the USO and the CSG. Benchmarking will continue to be important but it is necessary to know comparative prices and performances to indicate differences, and because of cost, the reality is that the gap may not always be bridged rapidly.
69
No single mechanism will be sufficient. We need a combination of competition, adoption of new technology, self-help schemes, and all levels of government to become involved especially in educating rural and remote dwellers about new technology and how to use it.
John Pinnock
Mr Pinnock began by quoting a statement made 40 years ago by a country MP, which showed that the issues are much the same today as they were then: in essence, whether we can close the gap between the quality, standard and range of services provided in the capital cities and those that are provided in rural Australia.
He reiterated much of what he said at a session earlier in the day (see ‘Telecommunications Service Quality in Rural and Regional Australia’).
He agreed with Tony Shaw that the key question was not whether the services would ultimately be delivered, but what the cost will be. This is as much an equity issue as anything else. If you live in rural Australia, it’s not much use being able to access the full suite of services if you have to pay such a premium for those services that it’s not worth it in commercial or even in social terms, Mr Pinnock said.
The CSG at the moment does not offer a comprehensive level of consumer protection. Small business is not protected because as it stands, the CSG relates to lines that end in a non-switching handset. There is great debate about how one works the exemptions under the CSG in relation to mass service disruptions which are caused by factors beyond the control of a carriage service provider. From the provision and fault statistics, Telstra is not currently meeting CSG standards; but there is no enforcement mechanism in place to deal with that.
The gap can be closed but can it be done at a price that makes it worthwhile for consumers in rural and regional Australia, Mr Pinnock asked.
Celie Moar
Celie Moar said that in her view, success will be when all the available tools are fully utilised, and when rural people who want more see that more is possible. She had been ‘amazed and delighted’ by the technological possibilities described to conference participants over the last two days.
She said that as a recent appointee to the Telstra board, she hoped to meet people from all over Australia and gain an understanding of their needs.
Ms Moar agreed with Lucy Broad that content is crucial. It is our increased understanding after receiving quality content that will assist in our collective gaining of wisdom. Without good content, the tools become meaningless.
Rural Australia is a significant consumer and will continue to become more powerful. Applying the sharing of information, along the lines demonstrated at this conference, to the spread of service provision into rural areas would guarantee success.
70 Concluding Remarks
Wendy Craik, Executive Director, National Farmers’ Federation
Ms Craik said that in an exhibition at the National Archives, she had seen a display of a country post office and telephone exchange – an exchange which remained manual until 1994. She said she was amazed that we had a manual exchange in NSW as recently as 1994, and in 1998 people are complaining because they don’t have digital data capability on their phones.
It is the issue of increased expectations: as you achieve one thing, you want to move on to the next. This is a good thing if we are to keep up with the rest of the world.
The conference has been a fantastic event, especially the timing, with the focus on rural issues in the election campaign. It has put the issue of rural communications firmly on the national agenda.
Ms Craik then presented the main issues that had emerged from the conference, distilled with the help of Alan Horsley and Mark Needham.
The issues were:
• The provision of digital data capability to at least 64kbps for all Australians at a reasonable price. • A set of carrier performance standards covering connection, repair, reliability and technical performance. • A requirement, or at least an encouragement, for a carrier to lodge a Customer Service Charter each year. • A requirement for a carrier to lodge a Network Rollout Plan for each type of service offered, so that customers can assess the quality of the service and the carrier’s intention. It may be worth considering this concept as a licence condition. • Provision of a telephone service quickly – eg within 6 days – by satellite. Such a service might have limited data capability and might not offer call diversion, call waiting and itemised billing, but could be provided as a temporary service until a full service can be implemented. • The USO should be reviewed and upgraded to cover new services which are becoming the norm. As an example, ISDN should allow two 64kbps information channels plus 16 kbps signalling channels. This would allow 128 kbps, if required. Or another service which could be included could be a mobile service to defined coverage areas and possibly a LEO satellite service. • Flexible pricing packages for fixed services, varying the relationships between line rentals and call charges as is the case with mobiles. In other words, customers should be able to select a pricing plan to suit their needs. • A commitment to network economics, that is acceptance of a tolerable degree of network cross subsidies to offset a tendency to unit profit and loss statements, as a means of ensuring reasonable pricing in non-metropolitan Australia. • A focus on network costs based on cost-based pricing so that rural development is not hampered. • The Customer Service Guarantee to be the same for everyone, regardless of location.
Ms Craik closed by thanking all those who had helped to make the conference such a success.
71