Senator the Hon Stephen Conroy

Minister for Broadband, Communications and the Digital Economy

DEPUTY LEADER OF THE GOVERNMENT IN THE SENATE

Address to APEC meeting, Bangkok, Thailand

Wednesday, 23 April 2008

1. Introduction

New Government with new ideas

In November last year, the Australian people elected a new government with a new approach for a prosperous digital future.

A key component of our election campaign was a commitment to make Australia competitive in the digital world.

We outlined a plan to do this with a National Broadband Network and a Digital Education Revolution.

Commitment to engagement with Asia–Pacific

As we go about strengthening our links to the digital world,

the Australian Government is also determined to broaden and deepen our links in the Asia–Pacific region.

More than 70 per cent of our trade is with APEC member economies, and so it is crucial we continue to engage on issues such as the further development of the digital economy.

Common problems/sharing lessons learned

As I look around the room, and around the region, I see many economies that have taken initiatives or are wrestling with issues that are relevant to Australia.

Singapore ’s broadband tender is of great interest as we consider a similar process to develop our National Broadband Network.

Like us, Canada, has to tackle the problem of large distances and remote communities that can really benefit from advanced services.

Hong Kong is facing up very positively to the issue of convergence and the challenges this presents to their regulatory framework.

Japan is dealing with the challenges that occur when very fast broadband is widely available and services begin to fill capacity to the point where congestion and ‘net neutrality’ issues emerge.

I am very interested in sharing information on these issues, and that is why this forum is so important.

It will be increasingly important as the global network of economic and social activities enabled by the internet—the digital economy—continues to expand.

2. Welcome to the digital economy

The digital economy already includes commercial transactions, personal communication, entertainment, exchange of information, and the delivery of services.

Research consistently shows that broadband-enabled communities experience more rapid growth in employment, numbers of businesses overall and businesses in IT-intensive sectors.

In Australia, the digital economy continues to provide a basis for productivity and efficiency gains across every sector.

Internet income for Australian businesses increased from AU$24 billion in 2002–03 to AU$57 billion in 2005–06.

And this will only grow as new and improved applications arise and new ways of creating efficiencies are developed.

Case study: Smart Transport and Roads (STaR)

Let me give you an Australian example of how ICT is solving problems and leading to economic efficiencies and improved social outcomes.

Around the world, transport authorities are trying to improve traffic flow and reduce congestion, travel times and environmental impact.

A few years ago, Australia pioneered a system that adjusts traffic light cycles according to real-time traffic flow rather than simple adjustments according to the time of day.

This system has been used in more than 130 cities across the world including in China, Malaysia, the Philippines, and Singapore.

Now, National ICT Australia, which is a Government‑funded research institute, is using advanced technologies to build on this project.

The Smart Transport and Roads, or STaR, project uses a wireless network to link city traffic signals and improves traffic flow by using intelligent traffic sensors and ‘machine learning.’

This is a form of artificial intelligence that adjusts the traffic system based on learning accumulated over days, weeks and months.

The result will be more efficient operation of roads, more reliable travel times, and fuel savings for drivers and more reliable, and therefore more attractive, public transport which will help the environment.

Environmental impact will be further reduced through lower emissions.

There will also be good health outcomes through fewer accidents, less pollution, less stress, and more efficient emergency services.

The project has already improved traffic flow and eased congestion in areas where research trials have taken place (see zdnet article here).

This is just one example of how the digital economy is leading to social and economic benefits.

These are occurring across every sector and the Australian Government is making sure the conditions exist for more and more efficiencies to emerge from the digital economy.

3. The point of the pyramid

Description of the National Broadband Network

The digital economy relies on high-end infrastructure, a network of services, and a sound legal and commercial framework providing confidence and protection.

This is why Australia, like other economies, has been working on developing a high-speed broadband infrastructure.

National Broadband Network

As I mentioned, before the 2007 election, the Prime Minister, Kevin Rudd, announced a plan to dramatically increase the availability of broadband and revolutionise telecommunications in Australia.

He announced up to $4.7 billion in funding—and consideration of necessary legislative and regulatory changes—to facilitate the roll-out of a fibre network.

$4.7 billion is not the total cost of the network as we expect a significant contribution from the successful proponent, or proponents.

The National Broadband Network will provide 98 per cent of Australian homes and businesses with access to downlink speeds of at least 12 Megabits per second.

The Government has also called for public submissions on policy and funding initiatives to provide affordable access to broadband services to remote and isolated areas that may be outside the network coverage area.

We have recently called for proposals from those interested in building and operating the network.

A Panel of Experts will assess these proposals and will give me recommendations so, by the end of the year, the Government can announce who will build the network.

As you are all very well aware, new services and applications are constantly emerging and these require ever-increasing amounts of bandwidth.

That is why proposals will need to show how the network can be upgraded to offer higher performance to enable the supply of these new services and applications as they emerge.

The Government is expecting forward-looking proposals to support next generation broadband services such as high‑definition videoconferencing.

There are already indications that bids may offer higher speeds than the minimum of 12 Megabits per second.

Competition/open access

Infrastructure is, of course, vital, but so is a competitive telecommunications industry so people can access innovative, high‑quality, low‑cost communications services.

As considerable market power could be gained from the new network, the Government is ensuring arrangements are in place to promote competition in the market for delivering services over the network.

Proposals will need to show open access arrangements which should apply to wholesale services to be provided over the network, including upgrades of services.

This includes measures or models to ensure that access is provided on equivalent price and non-price terms and conditions.

It also includes arrangements for allowing access seekers to differentiate their product offerings.

Digital education revolution

The National Broadband Network will ensure that Australians have the infrastructure they need to participate effectively in the digital economy.

The Government is also ensuring Australian students are prepared for further education, training, jobs of the future and to live and work in a digital world.

We are doing this with new funding of $1 billion over four years to provide sustainable and meaningful change to teaching and learning in Australian schools.

This will include grants of up to $1 million for schools to assist them in providing new or upgraded ICT for secondary students.

There is also a contribution of up to $100 million for the provision of high-speed, fibre-to-the-premises broadband connections to schools.

These initiatives will be accompanied by the development of online curriculum content and conferencing facilities for specialist subjects such as languages.

Teachers will also have access to training in the use of ICT that enables them to enrich student learning.

And to take advantage of the opportunities for collaboration that new technology allows, web portals will be developed so parents can participate in their child’s education.

User protection and confidence building

In the digital world, issues of security and safety cannot be completely solved within each separate economy; they require cross-border cooperation.

Cyber-safety is a priority issue and we want to work with like-minded economies to share experience and good practice in dealing with child exploitation and building a safer environment for children in the digital world.

We are focusing our efforts on a number of areas.

For example, we are educating parents, children, teachers and business on the risk of online engagement.

And we are engaging with industry to set priorities for action.

We are also making sure we are informed of emerging issues and solutions.

The Government is also focusing on managing current threats through technical mechanisms such as filtering and enhanced blacklists of illegal material such as child pornography.

APEC TEL has set a fine example that is recognised around the world for leading collaboration in dealing with issues of spam and cyber security.

There is a great deal that can be done in a way that focuses on sharing experience and good practice.

Activities between APEC members could include getting like-minded agencies working together and highlighting the need for cross-border approaches to protecting children online.

We are also keen to share information on cybersafety, including ‘blacklists’ of extreme material such as child pornography.

International forums such as INHOPE—which Australia and some other APEC economies are involved in—are good examples of a global solution to the global problem of illegal content online.

There may be an opportunity for greater collaboration through INHOPE and similar cybersafety organisations on internet safety.

Sharing resources and acting together in this way will assist the appropriate organisations in our economies to take practical action to make the internet a safer place for children.

The Australian delegation would like to hear from others who are interested in developing mutual assistance in this area.

I would like to send a clear signal that we will support cooperation in our region to build a safe environment for everyone participating in the digital economy—and the Asia Pacific Information Society.

E-security awareness-raising

E-security is important in maintaining trust and confidence not only in the internet, but within the wider digital economy.

The protection of home users and small businesses has been a key priority in formulating Australia’s national e-security policy.

The Government has identified three priorities to provide an integrated approach to Australia’s e-security.

The first of these priorities is reducing the e-security risk to Australian Government information and communications systems.

The second is reducing the e-security risk to Australia’s national critical infrastructure.

And the third is enhancing the protection of home users and small and medium sized businesses from elect ronic attacks and fraud.

A range of initiatives are currently being implemented to help improve the online security of Australian consumers, school children and small businesses.

These include a National E-Security Awareness Week which is being held in June this year.

This awareness week aims to inform consumers and small businesses of the simple steps they can take to be secure online.

A Stay Smart Online website has also been developed to help consumers and small businesses to conduct safe and secure transactions online.

A free subscription-based National E-Security Alert Service is also being developed to provide consumers and small businesses with information on e-security threats to protect themselves and their computers.

This service will be in non-technical language, so consumers and small businesses can easily take action.

In addition, an education module is being developed to help teachers and students understand the importance of e-security and encourage them to adopt a “culture of security” from the start.

As I said earlier, the internet is ‘borderless’ and therefore e-security must be recognised and addressed internationally.

We want to share our e-security experiences and, of course, we want to learn from your experiences.

Australia , in partnership with United States, is currently leading an APEC TEL initiative on awareness-raising across the region.

The initiative will develop a coordinated activity to raise the level of cyber-security awareness for critical infrastructure owners and operators, small and medium businesses, and end users across APEC economies.

I encourage all APEC Members to participate in this initiative.

The importance of good e-security awareness is a common issue within APEC economies, and I support APEC’s continued focus on this important issue.

Submarine cable protection

I am encouraged that APEC economies are continuing to look at sharing best practices approaches to disaster management.

We find ourselves on the ‘Rim of Fire’, where we have to contend with earthquakes and tsunamis, not to mention cyclones, hurricanes, and typhoons—depending on which name you prefer.

With this in mind, submarine cable protection is an issue of growing importance that has the potential to affect all APEC economies in this digital age.

In Australia, the Australian Communications and Media Authority or ACMA has recently declared submarine cable protection zones.

I am pleased that APEC TEL has begun to explore best practice approaches to submarine cable protection and to share information on this important issue.

Simulation exercises

Telecommunications are vital for effective disaster and emergency management.

I commend Peru, Mexico and Chile on the work they have initiated in APEC TEL in this important area.

Australia looks forward to participating in this work and sharing some our domestic experiences with other economies.

An important part of improving preparedness for disasters is carrying out simulation exercises.

In the near future, an exercise will be held in Australia to investigate the role of the Broadcast Sector in emergency management.

The exercise will test how well the Broadcast Sector can works with emergency services, other critical infrastructure sectors, and government agencies to ensure information is distributed to the public in an accurate and timely manner.

Australia also held a national exercise as part of Cyberstorm II, an international cyber exercise hosted by the United States.

The exercise was designed to simulate a significant incident caused by cyber attacks on critical information infrastructure including communications systems.

These exercises are important part of preparing for emergencies and remind us that we must remain vigilant when it comes to cyber security.

Collaboration with other international fora

I would like to take this opportunity to commend APEC TEL’s outreach efforts to other international organisations.

Working regionally to share knowledge and experiences is fundamental if we are to make the internet a more secure and safe place for consumers and businesses.

APEC’s collaborative work with the OECD on malware has been extremely beneficial, and I encourage this relationship on cyber-security issues to continue.

4. The importance of regional cooperation

The TEL Working Group has supported APEC members in implementing commitments to regulatory reform made in the WTO and the reforms that go beyond those commitments as markets have opened up to competition.

In the APEC region, there is a clear recognition of the benefits that flow to users when suppliers are competing strongly to provide the most attractive services and prices.

In this group, there is also a clear recognition of the importance of trade commitments.

These need, however, to be followed up with capacity building to assist policy makers and regulatory staff to establishing a trusted and effective regulatory framework needed for robust competition.

Even when the focus was on competition in basic telephone services, developing the necessary skills and institutions was a challenge.

Now, with the convergence of services around the Internet Protocol in a ‘next generation’ environment, the complexity of the task is much greater.

APEC is an excellent forum to work through these issues in a way that benefits all economies.

Some issues for consideration by APEC members

APEC leaders recently called for a report on telecommunications work that can support regional economic integration.

There are many positive initiatives and developments that can go into this report, but there are also some issues that warrant attention.

Barriers to cross-border business services

There has been much focus on the issue of consumer access to telecommunications, for example.

At the higher end of the market, less attention has been given to the problems of businesses that operate across borders, and their particular need for seamless connectivity within trusted private networks.

As part of the regional integration agenda, it is important that major users have access to corporate networks from their desktop, and can consolidate their business applications on a common platform for cross-border collaboration.

In many cases they will also want to use the same service supplier in different economies.

Barriers that prevent these efficiencies can have an adverse impact on business costs and can also lead to corporations choosing to minimise their presence where costs and inconveniences are too great.

International roaming charges

For individuals and small businesses, international roaming charges are the subject of growing complaints where prices are so high as to discourage the use of mobile phones by people roaming in the APEC region.

There is some evidence of market response, but prices remain high for many users.

This issue deserves attention particularly as mobile data services grow and businesses come to rely even more on cross-border access.

APEC has a strong emphasis on facilitating business, so cross-border communication services should play an important part in the telecommunications sector’s contribution to the regional economic integration agenda.

This is even more important as we move into a ‘next generation’ network environment, which will greatly expand the potential of specialised business services.

5. Conclusion

Thank you very much for this opportunity to share with you some of Australia’s experiences and to emphasise our commitment to this forum.

The Australian Government is making sure our citizens have access to fast, affordable broadband and have the skills, knowledge and confidence needed to participate in the digital economy.

There are many challenging issues before us, but I am impressed by the commitment to cooperation that I have already seen at this meeting.

I look forward to discussing these issues with you further and building a prosperous future for the region in the months and years ahead.