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A thriving digital economy requires world-class infrastructure that can adapt to support future demands. The rapidly changing nature of technology makes it difficult to predict the 'killer' applications that will dominate in five years. However, it is clear that bandwidth demands are increasing. YouTube, a video sharing site launched a mere four years ago, reportedly served over five billion video streams in April 200916 and in 2008 generated more traffic than the entire US internet backbone did in 2000.17 The online auction house eBay holds more than five petabytes of data, rising from 20 terabytes five years ago.18 One industry reports predicts the coming age of the zettabyte because "today's bandwidth hog is tomorrow's average user."19
Technology can also change our infrastructure requirements in unexpected ways. The growth of handheld devices and the potential of sensors and smart meters alter our demands, as well as our habits. For example, using sensor networks to improve our water productivity requires reliable and effective infrastructure that connects the farms where this smart technology will be deployed.
Case study: Water Information Networks—improving water efficiency
In many regions, water allocations for irrigation need to be ordered one or more weeks in advance and with limited guarantee that orders will be fulfilled. Whilst waiting for the water to be delivered farm requirements may change. But the water that has been ordered cannot be returned to storage and is often 'lost' to production. It has been estimated that the total losses across the Goulburn-Murray Irrigation District due to system inefficiencies have typically been 900GL per annum.20
A Water Information Networks (WIN) project developed by NICTA21 has developed methods for controlling and integrating canal networks with on-farm irrigation systems so that they themselves can become water reserves and make an 'on-demand' water supply available to the farmer. Crop water requirements are measured in real time and this data is used to control canal gates and pumps and deliver the right volume of water to the plant when it requires it. Using this technology, dairy trials employing flood irrigation for dairy pasture production used 26 per cent less water and experienced a 27 per cent improvement in water productivity. In addition, the farms in the trial enjoyed a 38 per cent improvement in gross margins measured in dollars earned per hectare.
For more information about NICTA's Water Information Network, please see the complete case study on National ICT Centre of Excellence: improving water use efficiency.
To prepare for our increasing bandwidth demands and enable the applications and devices of the future, the Australian Government has made a number of key commitments to develop Australia's physical capacity to participate in the digital economy. These include establishing a company to build a fibre network across the country and switching existing television services to digital-only.
The Australian Government has established a new company to build and operate a new superfast National Broadband Network. The company will be partly owned by the Government and the private sector and will invest up to $43 billion over eight years. It is expected that the new network will be rolled out simultaneously in urban, regional and rural areas with the final rollout schedule to be decided following an implementation study to be completed in early 2010.
The Government's objective is to connect 90 per cent of all homes, schools and workplaces with optical fibre (fibre-to-the-premises or 'FTTP'), providing broadband services to Australians with speeds of up to 100 megabits per second in urban and regional towns. The network will connect all other premises with next generation wireless and satellite technologies that will be able to deliver 12 megabits per second or better. The rollout, network coverage and mix of technology will be finalised following the implementation study.
The Australian Government is also considering wide ranging regulatory reform that will address longstanding problems in the Australian telecommunications sector which have deterred competition. Paying more for broadband than most other OECD economies has hampered Australia's performance as a successful digital economy. International statistics indicate that Australia is trailing other developed economies on a range of key telecommunications indicators. The most recent OECD statistics indicate that Australia is:22
- 16th in terms of broadband penetration
- 20th in terms of the average monthly subscription price for broadband
- 3rd most expensive for fixed line services for SMEs.
The World Economic Forum ranks Australia:23
- 14th for network readiness
- 16th for the total number of broadband internet subscribers per 100 population
- 20th for monthly high speed broadband subscription charges
- 25th for accessibility of digital content
- 35th for the quality of competition in the internet service provider sector
- 29th for the lowest cost of broadband.
The way to address the challenges with Australia's telecommunications sector is to move immediately to introduce superfast broadband and to fix long-standing problems with the telecommunications regulatory regime.
By creating a largely FTTP network, Australia will join other leading nations in terms of capacity and enjoy truly high-speed carrier grade video, data and voice services. It will be vital that industry utilises the opportunities created.
The Australian Government will also invest up to $250 million to address regional backbone blackspots through the timely rollout of fibre optic transmission links connecting cities, major regional centres and rural towns. Negotiations are also taking place with the Tasmanian Government to build upon its National Broadband Network proposal to begin the rollout of a FTTP network and next generation wireless services in Tasmania in mid 2009.
In addition to fibre rollout, the Government has announced key spectrum initiatives designed to enable Australia to make more productive use of this finite resource.
The switchover to digital television will potentially allow the spectrum freed up from the switchover—the 'digital dividend'—to be used by industry to develop a range of new communications services including high-speed wireless broadband. Digital dividend spectrum is highly valued due to its combination of superior signal distance capability, its ability to penetrate buildings and its data carrying capacity. In April 2009, the Australian Government announced that a green paper will be released to seek views from industry and consumers on the digital dividend.
Digital television will also deliver vastly improved service quality and a wider diversity of content for Australian audiences. It is a Government priority to inform the public about how they can prepare for the staggered switchover from 2010 to 2013. The Australian Government recently launched the national awareness campaign to get Australians ready for digital television. The campaign included television, radio and online advertisements as well as television equipment labelling, point-of-sale information and training and accreditation for retail staff. The Government has also announced a pilot package of measures to further assist Australians accessing digital television.
During the period 2013–2017, current 15 year spectrum licences for various spectrum bands24 that are primarily used to provide mobile phone and mobile broadband services will expire. Reallocation and/or renewal of the 15 year spectrum licenses will involve major policy decisions for Government that will have implications for the structure of the communications market well past 2020.
Spectrum is critical for future mobile communications. The Government recognises the importance of the expiring spectrum licences and industry's need for certainty to plan for and develop future services. The reallocation and/or renewal process is also important for consumers and the competitiveness of the communications sector as a whole, and will play an important role in the future of the digital economy.
The Australian Government has been consulting with key industry stakeholders and sought advice on international experience from experts based in the United Kingdom. A discussion paper has been released seeking comment on possible public interest criteria that might form the basis for consideration of any decision to reallocate and/or renew spectrum licences. Specifically, public comment was sought on proposed criteria:
- promoting the highest value use for spectrum
- investment and innovation
- consumer convenience
- rate of return to the community.
Government: lays foundations for Australia's digital infrastructure
- has established a company to invest up to $43 billion over eight years to build a new superfast National Broadband Network
- is progressively switching over Australia's television services to digital-only
- will consult on the potential use of the digital dividend and the reallocation and/or renewal of spectrum licenses.
To maximise the digital economy benefit from these commitments, it is vital that industry uses the opportunities created to deliver consumer benefit and develop new services and applications via these 21st Century networks.
The internet is now the most common way Australians last made contact with government.25 Thirty-eight per cent of people used the internet for their last contact with government in 2008, which is double the number from 2004. In fact, more people would prefer to use the internet to contact government than by any other means. In addition, those who used the internet to contact the government reported a higher level of satisfaction than those who used other means, such as postal services. The relationship between Australia's citizens and its Government is well suited to transition to the digital economy.
Effective and more widespread use of technology by government can assist in achieving broader digital economy participation by the Australian community because it can address areas identified in this paper, such as digital skills and confidence by encouraging online engagement by individuals and businesses who find it more efficient to deal with government online. In addition to promoting public sector innovation, government can also facilitate private sector innovation for digital economy benefit through more open information strategies and an innovation agenda designed to promote a strong culture of commercialising digital innovation.
The Australian Government recognises the digital economy and innovation benefits generated by open access to public sector information, subject to issues such as privacy, national security and confidentiality. Public sector information can include Government-produced data, such as Australian Bureau of Statistics (ABS) and geospatial data, and copyright protected materials, such as reports and other documentation. It can also include materials resulting from publicly-funded cultural, educational and scientific activities.
The Australian Government already publishes and makes freely available to the public a large amount of information. However, networked digital technologies empower individuals, private companies and researchers to use and re-use government information in novel ways that can produce economic benefits and promote social wellbeing. Without open access to appropriate categories of information, Australia may not enjoy the potential innovation in the digital economy and the resultant economic and social welfare benefits that come from improved access to information and the resulting improved decision making by individuals, research agencies and private sector organisations.
The popularity of online mapping tools is one example of an application that revolutionises how public sector information—in this case, data—can be viewed, studied and cross-correlated. This can be for something as simple as planning a trip around Perth or Adelaide using Google Transit26, a feature of Google Maps that incorporates timetable information about the Perth and Adelaide metropolitan public transport systems. Online mapping can also be used for more serious information gathering and planning in emergencies, such as via the Sentinel Bushfire Monitoring System.27 Geoscience Australia operates the Sentinel System to provide timely spatial information to emergency service managers across Australia about the location of bushfires around the country.
The combination of public sector information with mapping technology can also increase our understanding of important public policy issues, such as health. Diabetes Australia28 administers the Australian Diabetes Map29, hosted on Microsoft's Virtual Earth platform. This map combines Australian population data with details about the number of Australians diagnosed with diabetes, their age, gender, location and the type of diabetes that they have. Technology can also assist in compiling and representing large amounts of data to improve our understanding of health issues.
The Western Australian Data Linkage System30 links Western Australia's core population health data sets and provides de-identified, trend data to research, planning and evaluation projects which aim to improve the health of Western Australians.
In addition to online mapping applications, various websites provide anyone with the tools to cross-correlate and mash-up data in new and interesting ways. These include sites such as Swivel31 (known as 'YouTube for Data'), ManyEyes32 and PolicyMap33.
An open access approach to the release of public sector information is a logical response to the digital economy and innovation benefits that can result from new and emerging digital use and re-use, subject to privacy, national security or confidentiality concerns. In this context, 'open access' means access on terms and in formats that clearly permit and enable such use and re-use by any member of the public. This allows anyone with an innovative idea to add value to existing public sector information for the common good, often in initially unforeseen or unanticipated ways.
As one commentator has argued, "[n]o one supplier, public or private, can design all information products required to meet the needs of all users in a modern information-based economy."34 By opening access to appropriate categories of government information to all members of the public, those best placed to innovate can do so and the market can decide which product is most useful.
Precisely quantifying the economic benefits from open access policies is challenging. However, various international studies35 suggest that the benefit derived from corporate and individual taxes on secondary publishing and service activities stimulated by an open access policy outweighs any direct cost recovery charged for access to data. The 2007 UK Power of Information Report estimates the amount of money generated by direct sales of information by trading funds36 to be much smaller than the wider value of public sector information to the economy.37
In Australia, there has been economic modelling on the contribution that spatial data, an essential input to online mapping tools, can make to productivity. Industry reports38 estimate that the use of spatial data and high precision positioning systems can increase productivity across a range of industry sectors, such as agriculture (grains and cattle); forestry; fisheries; property and business services; construction; transport; electricity, gas and water; mining and resources; resource exploration; communications and government.
While open access may have a net economic benefit for Australia, the development of open access policies at an individual government agency level may need to be determined through more specific cost-benefit analysis that factors in reduced administration costs, increased public or program benefit and any ongoing cost of updating data.
Already, there are several examples of Australian public sector organisations that have adopted an open access approach. The ABS now releases most of the data on its website under a Creative Commons Attribution 2.5 Australia license.39 The Australian Broadcasting Corporation's Radio National offers open access licensing as part of its collaborative, social media project Pool.40
Hawkesbury Bridge from Tunnel, Tyrrell Photographic Collection, Powerhouse Museum (Flickr Commons, No known copyright restrictions)
Three Australian cultural institutions—the Powerhouse Museum, the New South Wales State Library and the Australian War Memorial—have joined the Flickr Commons project41, which consists of museums and libraries from around the world publishing their images under a 'no known copyright restrictions' tag to increase access to publicly-held collections and provide a way for the general public to contribute information and knowledge.
The Powerhouse Museum, one of the first members of Flickr Commons, has analysed its experience of adopting an open access approach for the release of high-value images from the Tyrrell photographic collection42. The open access approach lead to a four-fold increase in visitation, no detrimental effect on income produced from the image sales and user-generated tagging and comments that have been incorporated back into the Museum's website to enhance search capabilities.43 The Museum concluded that "a new business model for licensing images is essential."44
In response to this growing evidence base, there is recognition both internationally and nationally of the need to develop policies for open access to public sector information. Within Australia, both industry and the public have clearly voiced their support for open access to public sector information, particularly data. A majority of submissions received as part of the consultation phase for the development of this paper added their voice to this support. Consistent with this, the Australian Government will explore policy initiatives, and work with state and territory governments, to provide more open access to appropriate categories of public sector information, which do not raise issues such as privacy, national security or confidentiality. The Government 2.0 Taskforce45 has been established to advise and assist the Australian Government in making public sector information more accessible and usable.
Victory Theatre by Sam Hood, Sydney, Mitchell Library collections, State Library of New South Wales (Flickr Commons, No known copyright restrictions)
The use of technology, such as the internet, computers and mobiles, by government is referred to as e-government.46 Online delivery of government services can, on the client side, improve access to information and government transparency. On the government side, it can improve efficiencies. As the Organisation for Economic Co-operation and Development (OECD) notes, e-government activities are a part of government strategies to boost public-sector efficiencies.47
The Australian Government is addressing the issue of more efficient and effective internal use of technology through its ICT Reform Program. This resulted from the 2008 Review of the Australian Government's use of ICT (the Gershon Report),48 which identified ways the Government could maximise the benefits of ICT to drive greater efficiency and deliver better services through strengthening the whole-of-Government management of ICT. Implementation of the Gershon Report's recommendations will deliver a strategic vision for ICT in support of government policies and programs and a new model for the effective and efficient use of ICT within the Australian Government.
Many examples exist of how the Australian Government can lead by example in the digital economy, such as the Department of Immigration and Citizenship's award-winning49 Citizenship Wizard50 and eVisa program51 and the Department of Infrastructure Transport, Regional Development and Local Government's Green Vehicle Guide.52
The Australian Taxation Office has also been at the forefront of devising new online service delivery solutions, such as its e-Tax service, and has recently piloted a project to promote the online lodgement of Business Activity Statements by small businesses. In 2007–08, the Small Business Assistance Program directly assisted 73 876 small businesses and has, in 2008–09 to date, assisted 89 174. The pilot project, undertaken with the Pharmacy Guild of Australia, assists pharmacy owners in registering, installing and lodging using the business portal.53 The benefits of electronic lodgement include avoiding simple arithmetic errors and enable quicker processing of refunds, which assists business cash flow.
The Government has also demonstrated how key services such as education and health can be delivered to regional, rural and remote communities of Australia through innovative uses of broadband. For example, the Enhancement of Telehealth in Western Australia project includes remote patient assessments, virtual mental health clinics and virtual health clinics that allow health workers, medical professionals and specialists to consult with and advise patients across the state. Doctors are also able to send electronic x-rays, MRIs and patient records to where the patient is being treated.54 Through the ConnectCare project, the installation of new software and of broadband capabilities has allowed small to medium sized aged care facilities to digitise large amounts of their day-to-day operations. Patient records are now held digitally and networked throughout the facility, allowing staff to check and update patient information anywhere in the facility at any time. The broadband capability allows residents to use videoconferencing to make contact with relatives and families regardless of their location.55
Despite the popularity of engaging with government online, feedback from industry and the public suggests that the Australian Government can do more to improve its online service delivery. For example, many people indicate that government websites are too complicated unless you knew exactly what you are looking for and site searches do not always return relevant information.56 In addition, at least 20 per cent of people cited at least one usability issue as a reason for being dissatisfied with their use of a government service.57 Examples included the formal language used by some websites and the need for easier navigation of websites.
These sentiments were also reflected in a number of submissions received as part of the consultation phase for the development of this paper. Many emphasised the need for government sites to improve their search ability and accessibility, and also to maximise the amount of public services and information available online.
Other areas of e-Government can also be enhanced. For example, Australia's health ministers in November 2008 endorsed a National e-Health Strategy prepared by consulting firm Deloitte, which sets out a plan for e-health over the next three, six and ten years in order to deliver a range of effective e-health solutions to Australians. The strategy recognises that "[t]here is a widespread recognition within the sector that better use of information technology should play a critical role in implementing national health care reform and policy agendas and improving the efficiency, safety and ultimately the sustainability of the Australian health care industry."58
The Australian Government is continuing to review and revise its internal and external-facing use of technology, both at an individual agency level and a whole-of-Government level. For example, the website Australia.gov.au59 provides a gateway to information and a connection with government in Australia, linking to information and services on around 900 Australian Government websites. The Australia.gov.au website is currently undergoing enhancements to provide simpler, more convenient access to government information, messages and services. These include a single sign-on service that will allow people to visit multiple government websites and conduct secure online transactions with participating agencies (initially Centrelink, Medicare Australia and the Child Support Agency) without having to sign on to each agency. It also includes an advanced online forms capability to make it easier to find, fill, track and submit forms to the Government.
As part of its Innovation Agenda, the Government has committed to increase the use of ICT to improve policy development and service delivery.60
It is important that Australia has a strong digital innovation research and commercialisation base. Research and development, particularly in ICT, drives skills development and attracts investment, which can promote knowledge transfer. It can also increase Australia's innovation capacity.
The importance of innovation and ensuring it is utilised in all aspects of the economy was highlighted in the Government's recently released innovation agenda for the 21st Century, Powering Ideas. As that reports notes:
"Too many Australian inventions and discoveries end up being commercialised overseas, where the value they create is captured by others. This costs Australia jobs and wealth, and denies us the chance to build new industries."61
The pace of technological change means that Australia must ensure a strong innovation system that gives us the capacity to match and adapt to the innovation of others. A strong innovation system will ensure we produce internationally competitive products and services of high demand. The growth of an innovation-driven digital economy has the potential to transform existing industries and drive efficiency and productivity, and give rise to entirely new industries, from carbon capture to online retailing.62 It will also create new opportunities for Australian businesses to export its innovation overseas. For this reason, the Government has adopted seven National Innovation Priorities to strengthen the innovation system to focus on the production, diffusion and application of new knowledge including, "more effective dissemination of new technologies, processes and ideas [to increase] innovation across the economy, with a particular focus on small and medium-sized enterprises."
Key initiatives to achieve the innovation priorities include a range of measures to renew and expand Australia's publicly-funded research workforce, research infrastructure and machinery for sharing research results, such as the Sustainable Research Excellence in Universities Initiative, the Collaborative Networks Scheme and the investment guided by the Strategic Roadmap for Australian Research Infrastructure.
The Government's Innovation Agenda also aims to support innovative businesses and increase the proportion of businesses engaging in innovation by 25 per cent over the next decade. This will be through initiatives such as Enterprise Connect and an increase in the number of businesses investing in research and development (R&D) over time by introducing a new R&D Tax Credit. The new tax credit will double the tax incentive for small business R&D and lift the base tax incentive for R&D by larger firms.
In addition to building the innovative capacity of Australian firms, the Government will establish a new Commonwealth Commercialisation Institute to bring research, business and finance together to help commercialise new ideas and technologies. The Institute will support the best ideas developed by our universities, publicly funded research organisations and innovative firms. Bringing an innovative product or service to market is always challenging and involves high technical and market risks. The new Commonwealth Commercialisation Institute will help to bridge the gap between research and the successful commercialisation of new products and services.
Case study: ViCCU and ECHONET—technology improving rural health
Technology can help deliver cost-effective access to specialist services for those Australians who live far from our major hospitals. Pilot demonstrations of the Virtual Critical Care Unit (ViCCU) and Echocardiographic Healthcare Online Networking Expertise in Tasmania (ECHONET) have shown how telemedicine systems, running over high speed broadband networks, can provide support for specialist services in regional hospitals.
The CSIRO funded the Centre for Networking Technologies and Information Economy (CeNTIE63) project to develop specialised health conferencing technologies assuming high bandwidth broadband infrastructure. ViCCU and ECHONET were developed as a result of this project.
During the pilot phase of ECHONET, for example, the system was used to manage 16 critically-ill patients and reduce the number of times patients need to be transferred. This saved the high transport costs associated with transferring intensive care patients between hospitals. The system has also provided teaching opportunities for junior staff and improved collegial relations between the staff of the connected hospitals who are able to share expertise and common experience as well as provide support to each other.
CSIRO commercialised the technology and Oxyoptia now provides support for the existing units.
For more information about ViCCU and ECHONET, please see the complete case study on ViCCU and ECHONET: technology improving rural health.
To build Australia's innovative capacity, the Government is also supporting research and training carried out by organisations such as NICTA and the CSIRO. NICTA and the CSIRO, through its ICT Centre, are producing the skilled researchers and trained graduates that industry and the broader community needs to take advantage of the innovative opportunities presented by the digital economy. For example, CSIRO offers extensive summer vacation scholarships for undergraduate students, sponsors honours thesis work and supports PhD programs across the Australian University scheme.
In addition, these research institutes are transferring their expertise to the economy more broadly through collaborations, spin-offs, licensing and technology transfer. For example, NICTA has established four start-ups that have already generated 60 new jobs in Australia and are providing Australia with world-leading digital economy solutions.
Case study: The Bionic Eye—how technology can reduce vision impairment
Retinitis Pimentosa (RP) and Age-related Macular Degeneration (AMD) are major causes of vision impairment in Australia. Retinitis Pigmentosa (RP) is a congenital eye disease that progressively worsens with age and leads to total blindness. One out of every 3500 children are born with RP and it affects 1.5 million people worldwide.64 Patients with advanced forms of AMD have difficulty recognising faces and have reduced mobility and quality of life. It is estimated that AMD alone currently costs the Australian economy $2.6 billion and this is projected to increase to $6.5 billion by 2025.
The development of a bionic eye by 2020 was identified in the Australia 2020 Summit as an example of an innovative health technology that could improve the lives and wellbeing of all Australians. It is being developed in partnership with National ICT Australia Limited, the University of Melbourne (UoM), the University of New South Wales (UNSW), the Bionic Ear Institute (BEI) and the Centre for Eye Research Australia (CERA).
Some of the core technology that enables the bionic eye to function is provided by NICTA. NICTA's technology contributes to a new retinal implant that provides very dense electrical stimulation of the retina. This allows high resolution vision. NICTA's technology also involves the use of a world–leading, extremely small, ultra low power wireless communication system that can be implanted into an eye. This system facilitates the efficient transfer of information between the implanted retinal prosthesis and an external camera. It eliminates the need for wires to pass through the eye and greatly reduces potential complications, trauma to the eye and the possibility of future infection.
For more information about NICTA's technology and the Bionic Eye, please see the complete case study on National ICT Centre of Excellence: the Bionic Eye.
As the Government's innovation report, Powering Ideas, acknowledged:
"The government is mindful that advances in ICT accounted for a quarter of Australia's output growth and a third of our labour productivity growth in the 1990s. It is determined to harness the power of ICT to boost productivity in the new century […] through […] initiatives such as the Information Technology Industry Innovation Council, National ICT Australia, Small Business Online, and the Digital Education Revolution. The centrepiece of the Commonwealth's information technology strategy is the National Broadband Network. It will inspire new solutions and capabilities, not only in fibre-optics and wireless, but also in satellite technology."
To harness the power of ICT to boost productivity and champion IT-enabled innovation for economic, social and environmental benefits, the Australian Government has established the Information Technology Industry Innovation Council. The Council will create links with stakeholders to identify opportunities for innovation, wealth creation, IT capability and entrepreneurialism. The Council will also work closely across Government on issues of common interest to ensure we realise the benefits that will flow from Australia's new National Broadband Network.65
Government: facilitates innovation
The Government will:
- work with the independent Government 2.0 Taskforce on a range of issues that relate to the emerging government 2.0 agenda
- explore practical strategies to showcase the digital economy and innovation benefits that open access to public sector information can produce, which may include conducting contests similar to the Show Us A Better Way competition in the UK and Apps for Democracy contest in Washington DC
- conduct information awareness raising throughout Government to highlight digital economy trends
- implement its Innovation Agenda, as laid out in Powering Ideas
- support NICTA and CSIRO to promote a strong culture of commercialising digital innovations
- promote IT-enabled innovation within the wider community through the Information Technology Industry Innovation Council.
It is important that industry responds by taking up the opportunities for innovation and commercialisation that these Government initiatives present.
Regulatory restructures are important to provide business certainty, address market failures and protect the interests of consumers. If not carefully constructed, however, regulation can stifle innovation and investment, particularly in dynamic areas. The digitisation of commerce means that Australian companies are also increasingly competing directly with foreign businesses, even if those same businesses are based off-shore and operating under different regulatory structures. Governments must continue to review regulatory structures as technology and markets evolve. Ongoing review allows these frameworks to continue to provide an environment in which businesses can grow and consumers can act with confidence.
In addition, Australia's legislative settings must be considered in an international context and must reflect the standards agreed to by Australia in relevant international treaties. The digital economy is global and transcends jurisdictional barriers. As one commentator notes:
"[T]he movement of atoms that had been the core of world trade since the dawn of human history gave way to the transmission of electrons, or bits, that do not comply with the economic geography we learn in school and through travel. By this view, this is not the end of history but the end of distance."66
This means that Australian companies are increasingly competing directly with foreign businesses, even if those same businesses are based off-shore and operating under different regulatory structures. In addition, some innovative companies that originate overseas and are seeking to establish a presence in the Asia-Pacific region may compare, inter alia, the legal requirements of countries in the region to identify a suitable location that best meets their interests. Consequently, it is important to compare Australia's laws with international counterparts to ensure that Australia represents an attractive value proposition for digital economy companies.
The Government will continue to consider those aspects of Australia's regulatory framework that are most pertinent to the digital economy to identify whether reforms are necessary to promote and enable Australia's development as a knowledge economy. For example, the Standing Committee of Attorneys-General recently agreed to amend state and territory Electronic Transactions Acts to reflect technological advances since the laws were enacted and to allow Australia to implement the UN Convention on Electronic Communications in International Contracts.67
The nature of the digital economy is such that certain regulatory frameworks presently face greater pressures than others. Two examples of such pressure relate to:
- copyright law—the rapid emergence of new platforms for social engagement, content distribution and political communications is putting pressure on, for example, copyright laws
- convergence—where devices and platforms which originally had distinct functionalities converge or overlap and, as a result, put pressure to legislative schemes that were originally designed to deal with distinct devices and platforms.
In recognition of the key role that internet service providers (ISPs) play in providing access to the internet, Australia's copyright law provides a so-called 'safe harbour scheme' that limits the liability of some online service providers for copyright infringements that occur in the course of carrying out certain activities. The scheme was first introduced in 2004 as a result of the Australia-United States Free Trade Agreement (AUSFTA). The safe harbour scheme provides legal incentives for 'carriage service providers', including includes telecommunications carriers and ISPs, to cooperate with copyright owners to deter unauthorised infringement of copyright material. The scheme applies to four categories of online activities. Broadly, these online activities include providing facilities or services for transmitting, caching, or storing at the direction of the user, and referring users to an online location using hyperlinks.
If a carriage service provider complies with the conditions of the scheme, the remedies that can be awarded against it for the infringing activities of its customers are limited (i.e. no monetary damages and a restriction on court orders). The conditions to be satisfied differ for each online activity. For some, there is a condition that the carriage service provider takes down infringing material.
The issue is that it is unclear whether the present scheme works effectively for some types of online service providers that have subsequently grown in popularity as new platforms for social engagement, content distribution and political communications since the scheme's introduction. Uncertainty about whether newer digital economy platforms are covered by the safe harbour may interfere with the ability providers of these platforms to effectively develop business models in Australia. Examples of some of the types of platforms that may not be carriage service providers and, consequently, may not come within the present scheme include social networking and user-generated content sites.
The terms 'user-generated content' and 'Web 2.0' are first considered to have entered the popular consciousness in 2005.68 Social networking sites like MySpace, Bebo and Facebook were launched in 2003–05. The online photo sharing site Flickr was launched in November 2004, video sharing sites like YouTube and Vimeo were all launched in 2004–05, and the micro-blogging site Twitter was launched in 2006.
Available data suggests that Australians are making active use of these platforms. ACMA's recent Telecommunications Today report69 confirms that an increasing number of Australians use the internet for social networking. Sites such as Facebook, YouTube and MySpace are in the top 10 most popular websites for Australians.
While all of these sites are used by individuals to engage in various forms of self-expression and creativity, they are also being used by a large number of corporate, nonprofit and political entities to reach new audiences.
The purpose of the safe harbour scheme is to ensure that entities who come within it and take reasonable measures to deter unauthorised instances of copyright infringement, have the benefit of reduced potential copyright liability. In short, the remedies available against those online service providers are limited if they have complied with the conditions of the scheme which protect against infringement of copyright.
The consultation draft of this paper queried whether an examination of the scope of Australia's safe harbour scheme would be beneficial, in particular whether its scope, consistent with international obligations under the AUSFTA, should be expanded to encompass a larger range of online services that are important to the digital economy. A number of submissions addressed this issue. Overall, slightly more submissions were in favour of an expansion of the present scheme. Of those who favoured expansion, reasons given included that the expansion would:
- remove a barrier to the next Flickr/Facebook/YouTube being developed in Australia (proponents noted that these sites had all developed in the US which enjoys a more expansive scheme)
- provide greater certainty to digital economy platforms and attract their investment into Australia
- increase the global competitiveness of Australia's online businesses
- position Australia on par with leading trading partners in the Asia–Pacific region, thereby maintaining the attractiveness of Australia as a regional hub
- promote innovative and collaborative uses of technology that fulfil user demands and help Australia realise its potential to become a global centre for innovation.
Of those who opposed the expansion, the reasons given included that:
- the existing scheme had failed to encourage ISPs to cooperate with copyright owners and, consequently, it was not appropriate to broaden them
- digital economy platforms should be developed through licensing arrangements instead of safe harbours
- expansion would not harmonise Australia's law with the US but would secure a windfall benefit without imposing the corresponding obligations on service providers to disclose details of alleged infringers
- there is a lack of evidence that the existing scheme discourages the proliferation of localised versions of these digital economy platforms in Australia
- the safe harbour scheme may be judicially considered in the current litigation between the Australian Federation Against Copyright Theft and iiNet.70
The Australian Government will consider these submissions and whether the scope of the safe harbour scheme should be expanded to include additional types of online service providers.
Technological developments can also challenge other regulatory structures. With the increased offerings of both fixed line and mobile broadband services throughout the world, applications and services that blur the distinctions that previously existed between devices and services are growing in popularity. For example, the general purpose nature of computers allows them to be used for more than just information processing. They are increasingly used for telecommunications services via Voice over Internet Protocol applications or for entertainment via Internet Protocol television, streaming or downloadable media.
As devices and platforms, which originated having distinct functionalities, converge to overlap so that the end user experience is similar regardless of the platform or device, new regulatory challenges emerge. The Seoul Declaration issued by the OECD Ministerial Meeting on the Future of the Internet Economy recognised:
"That our challenges are, through an appropriate balance of laws, policies, self-regulation, and consumer empowerment, to[…] [c]reate a market-friendly environment for convergence that encourages infrastructure investment, higher levels of connectivity and innovative services and applications."71
Convergence has been a topic of discussion for many years. However, technological drivers and rapidly changing business models render this issue particularly pressing now. In addition, convergence offers significant potential benefits for both consumers and service providers. A recent World Bank report found that:
"Convergence is a positive development for the communications industry because it allows greater diffusion of communications services. This is first because different services can now use a variety of facilities to reach customers. Convergence…also helps bring down costs of service provision […] [and] […] will reduce the costs of managing networks."72
The current regulatory frameworks have not always kept pace with convergence and in some cases are challenged by it. As with our approach to copyright law, if Australia is to enjoy the benefits of the digital economy, we must provide a framework that nurtures, not stifles, innovation and investment.
As outlined in the National Broadband Network: Regulatory Reform for 21st Century Broadband Discussion Paper,73 the Government will continue to work with industry bodies to tackle many of the regulatory challenges. However, the regulatory reform process that is currently underway in connection with the National Broadband Network will likely have significant implications for regulatory structures that are relevant to a converged world. It is logical to wait until the new arrangements are further advanced before launching a full-scale review of convergence-related issues. This will enable consideration be given to the implications of the new structural arrangements resulting from the roll-out of the new network. The Government therefore intends to consider whether to look again at its overall approach to regulation in a convergent environment.
Government: sets conducive regulatory frameworks
The Australian Government will:
- consider whether the scope of the safe harbour scheme should be expanded to include additional types of online service providers
- consider its overall approach to regulation in a convergent environment.
The Government will continue to monitor the regulatory environment to respond appropriately to instances that may arise in future where it may be limiting growth of the digital economy and an effective regulatory response is available.
 Nielson, 'YouTube Leads Video Streams as Hulu Grows 490% from Last Year', 14 May 2009 (last accessed: 25 June 2009).
 Ben Woodhead, 'eBay maintains a watching brief', Australian Financial Review 9 June 2009
 Supra n 14, p. 12.
 Department of Sustainability and Environment and Department of Innovation, Industry and Regional Development, Modernising Victoria's Food Bowl: Irrigation Modernisation, June 2007.
 NICTA is the National ICT Australia Limited (NICTA), established through the ICT Centre of Excellence program. NICTA undertakes ICT research at the highest international standard as well as associated research training, industry development and commercialisation.
 National Broadband Network: Regulatory Reform for 21st Century Broadband—discussion paper, April 2009 (p. v)
 Specifically the 800MHz, 1.8GHz, 2.1GHz, 2.3GHz, 3.4GHz, 20GHz, 27GHz, 28GH, 30GHz and 31GHz bands.
 Department of Finance and Deregulation, Interacting with Government: Australians' use and satisfaction with e-government services (2008) p. 1 & 4. (last accessed: 25 June 2009).
 Diabetes Australia is the national peak body for diabetes in Australia. The body works in partnership with diabetes health professionals, educators and researchers to minimise the impact of diabetes.
 Peter Weiss, Borders in Cyberspace: Conflicting Public Sector Information Policies and their Economic Impacts, p. 2. (last accessed 22 April 2009).
 Supra note 20, pp. 13–15; see also, 'Power of Information Review: an independent review by Ed Mayo and Tom Steinberg' (June 2007), p. 34–35 (last accessed: 25 June 2009).
 UK Government trading funds are semi-commercial entities which collect most of the useful and economically valuable UK public sector information, and operate on a cost recovery model.
 The CRC for Spatial Information (CRCSI) with support from the Victorian Government commissioned the Allen Consulting Group to develop a report on the economic benefits of high precision positioning. The draft report, with minor editorial issues to resolve was released in October 2008. Other reports: ASIBA's submission of 15 October 2008 to Infrastructure Australia, The Value of Spatial Information, Prepared for the CRCSI & ANZLIC—the Spatial Information Council, March 2008, ACIL Tasman
 Bray, P., Open Licensing and the future for Collections. In j. Trant and D. Bearman (eds). Museums and the Web 2009: Proceedings. Toronto: Archives & Museum Informatics. Published 31 March 2009 (last accessed: 25 June 2009
 Sir Peter Gershon, Review of the Australian Government's Use of Information and Communications Technology (August 2008) (last accessed: 25 June 2009).
 Department of Finance and Deregulation, Interacting with Government: Australians' use and satisfaction with e-government services (2008) p 34, 47.
 Ibid., pp. 73-74.
 Department of Innovation, Industry, Science and Research, Powering Ideas (May 2009) p. 53 (last accessed: 25 June 2009).
 Ibid., p. 3.
 Ibid., p. 13
 CeNTIE provided a high capacity (up to 10 Gbps) experimental optic network linking Perth, Adelaide, Melbourne, Canberra, Sydney and Brisbane. This network enabled research into and commercialisation of network technologies, virtual environments, trusted systems and the developing and testing of leading edge broadband applications. CeNTIE demonstrated that providing networking research engineers and scientists access to leading edge infrastructure and some support can lead to the development, trialling, demonstrating and commercialisation of innovative and leading edge technologies and broadband applications and services in health, media and finance. These technologies and applications enable people to use modern information technology and broadband networks to interact with a real sense of security and presence when geographically distributed.
 CERA / Access Economics, Centrally Focused, The Impact of Age Related Macular Degeneration (2006).
 Senator the Hon Kim Carr, 'Information Technology Industry Innovation Council', Media Release, 5 May 2009 (last accessed: 25 June 2009).
 Kogut, B. (ed.), The Global Internet Economy, 2004 (MIT Press), p. 1–2.
 The terms has been identified as first being used in 1999 (see: http://gov2.net.au/2009/06/22/launch-speech/#comments) but the first Web 2.0 conference, held in San Francisco in October 2004, is believed to be the point at which the term entered popular usage.
 See e.g., AFACT Media Release, 'Film industry launches legal action against iiNet to prevent online peer-to-peer copyright infringement', 20 November 2008; iiNet Media Release, 'iiNet to Vigorously Defend Federal Court Action', 20 November 2008.
 World Bank, Regulatory Trends in Service Convergence, 29 June 2007, p. 36
 Department of Broadband, Communications and the Digital Economy, National Broadband Network; Regulatory Reform for 21st Century Broadband discussion Paper, p. 48-49 (available at: www.dbcde.gov.au/__data/assets/pdf_file/0006/110013/NBN_Regulatory_
Reform_for_the_21st_Century_Broadband_low_res_web.pdf; last accessed: 25 June 2009.