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Thursday, 15 December 2011 11:49

Convergence Review calls for new digital economy regulator

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The Converge Review Committee has released its interim report calling for the creation of a new content and communications regulator with the flexibility to make rules and decisions within clearly stated regulatory objectives and with sufficient powers to encourage competition and compliance.

The 27 page report makes no specific comments on any perceived shortfall in the performance of the current regulator, the ACMA, but says the new regulator should operate at arms length from government and from industry and should have "the capacity to address technical, social and economic issues."

"Given the pace of change in the digital economy, the regulator needs to have broad powers to make rules within the policy frameworks determined by parliament...[and] should have scope to adopt flexible, managed regulation and to apply self'‘regulation, co'‘regulation or direct regulation as the circumstances require." It should also have a range of appropriate sanctions to encourage compliance.

It should also have the power to be very proactive in promoting competition. The interim report says it should be given "broad and flexible powers to issue directions and make rules in order to promote fair and effective competition in content and communications markets. These powers, "should focus on content'‘related competition issues, and should be exercised in coordination with the economy'‘wide competition powers of the ACCC."

The interim report lists a number of other ancillary roles for the proposed body, many of which are undertaken by the ACMA to day. They include: promote the development of the sector; engage with industry in developing solutions to problems; report on the state of the market and the performance of market participants; protect consumers, including supervising complaints processes; inform consumers through education programs; provide advice and propose initiatives to government.

The ACMA also came up against the limits of its mandate in its recent 'Reconnecting the Customer' enquiry into telco customer service. For most of the year long enquiry, chairman Chris Chapman had been dropping hints that the ACMA was unhappy with the industry's attempts to lift its game through self regulation and was looking at imposing regulation.

However when the final report was released, in September the industry was given another chance to get its house in order. Under the legislation the ACMA cannot impose a standard without first giving the industry the opportunity to develop a code, and the ACMA issued the industry representative body, Communications Alliance, with formal notice under section 125 of the Telecommunications Act saying it believed the current code to be deficient and giving it five months to deliver a code (the Telecommunications Consumer Protection Code) that addressed the issues identified in the final report. If the ACMA considers the code is not adequate, it will move immediately to imposing a customer service standard.

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The principal author of the report, Clare O'Reilly, told ExchangeDaily at the time: "We have asked for legislative amendment that would enable us to make a standard without having to go through this process."

The ACMA also independently identified a need for reform. In August it published a paper, 'Broken Concepts: The Australian communications legislative landscape' in which it said: "Of the 55 legislative concepts analysed in the paper, the majority are either 'broken' or under significant pressure from the effects of convergence. These 'broken concepts' are symptoms of the deeper change of digitalisation breaking those now outdated propositions, including that content can be controlled by how it is delivered."

'Broken Concepts' offered no recommendations for reform, rather it concluded by saying: "This examination of converged legislative frameworks aims to provide background for current discussions about future regulatory models. In particular, this paper provides a discussion of experiences of other jurisdictions in bringing together the previously distinct regulatory traditions of telecommunications, media and the Internet. These experiences provide ideas and insights that could inform discussions about the Australian approach."

Those discussions are likely to be ongoing for quite some time. The Convergence Committee promises that: "Our final report will expand on the role of the regulator and will take into account the reports of the Independent Media Inquiry and the Australian Law Reform Commission's review of the National Classification Scheme."

It received 280 submissions to the five detailed discussion papers released last September, and invites more, by 10 February, on its interim report. Its final report is due in March.

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