Connected citizens A regulatory strategy for the networked society and information economy
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Connected citizens A regulatory strategy for the networked society and information economy JUNE 2013
Canberra Melbourne Sydney
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Published by the Australian Communications and Media Authority
Executive summary 1 Introduction 3 1. The changing networked society and information economy 4 Digital connection—old problems, new challenges or fresh opportunities? 4 Dynamic networks in the information economy 4 Influencers and influencing—the importance of digital citizen behaviours 8 2. Achieving public interest outcomes in the networked environment 12 Response strategies—deregulation, re-regulation and rebalancing 12 Principles for dynamic regulatory practice 13 Problem-solving approaches 15 Clarifying rights, responsibilities and obligations 16 Beyond licensing and licensees 16 Citizen and industry support 17 3. Different styles for different ‘problems’—graduated response strategies 19 A coherent unifying regulatory practice 19 4. Conclusion 23
Executive summary The Australian Communications and Media Authority (the ACMA) operates across a diverse, complex and rapidly changing media and communications landscape. Pervasive networking and the digitalisation of communications has expanded the scale, scope, speed and longevity of media content. Ubiquitous networks, complex connections and digital content bring exciting options for individuals as consumers and citizens, as well as many new business opportunities, but in this environment it has also become more challenging for individuals to manage their communications and content experience. The ACMA straddles two dimensions: administering existing legislation and regulation—26 Acts and 523 pieces of communications and media regulation working with industry and the community to solve new concerns arising in an evolving information economy and networked society. The ACMA also undertakes research to identify the dimensions and impacts of technological developments, and to understand changes in behaviours and expectations of digital citizens. An important aspect of this work is helping individual citizens to have a positive communications and media experience, and providing the foundations for ongoing business innovation. In a series of discussion papers about communications and media regulatory practice, the ACMA has combined its practical regulatory experience and research base to assess how tensions inherent in the current regulation framework affect industry, consumers and citizens. It has also considered what regulatory strategies will engage constructively with the developing networked society and information economy. In Broken concepts—The Australian communications legislative landscape, the ACMA identified the pressures arising from media and communications convergence on current regulatory and legislative settings. This analysis has been updated in 2013 and identifies an increasing strain on regulatory arrangements. In Enduring concepts—Communications and media in Australia, the ACMA considered the public interest outcomes providing a stable set of public values that inform and shape regulatory intervention in converged communications and media in Australia. This paper, the third in the series, builds on these previous papers and their analysis of existing regulatory pressures and public interest outcomes. It presents a strategy for rebalancing regulatory practice to keep addressing enduring matters of public interest, while dynamically solving contemporary issues. It draws on insights from changing industry structures, citizen behaviours and concerns to discuss how these can be incorporated into a more adaptive and active approach to regulatory practice. The paper suggests a single coherent regulatory framework that adopts a set of dynamic operational principles including: flexibility and the use of broad-ranging tools collaboration strategies harmonisation in an international context
problem-solving approaches alliance-building and relying on a mix of participants to develop solutions. Giving practical effect to these principles through the use of graduated response strategies allows different styles of regulatory practice—be it direct regulation, facilitation or communication strategies—to match the supporting strategy with the particular issue of concern. This approach draws on the ACMA’s intent—expressed in our corporate tag line of ‘Communicate, Facilitate, Regulate’—and offers a degree of both continuity and certainty for industry participants in how the regulator may respond to an issue. It also provides flexibility to adapt and rebalance regulatory effort while working within established legislative frameworks—and perhaps some guidelines to develop more flexible, enabling ones.
Introduction Traditionally, a regulator’s role is to mitigate risks or harms by imposing obligations or providing assistance. In the evolving networked economy and society, new risks, harms and innovations may require the ACMA to respond differently, using different tools and sometimes innovative solutions. This paper examines how regulatory practice approaches can be adapted in the face of ongoing change and continuing imperatives to develop fit-for-purpose responses to pressing citizen and industry issues. The first part of this paper examines the characteristics of Australia’s changing networked society and information economy, including features of the networked digital environment and the importance of digital citizen behaviours. These evolving characteristics are changing the profile of risks and problems in the contemporary communications and content environment, The second part of the paper considers how these characteristics and emerging issues provide insights into the way that regulatory practice can be rebalanced in a way that addresses enduring matters of public interest. This chapter also outlines principles for a more dynamic regulatory practice to inform the way the ACMA undertakes its analysis and to help it design fit-for-purpose responses in an evolving networked society and information economy. The third part of the paper examines a coherent multi-layered set of strategies and tools that a regulator can adopt, working in conjunction with digital citizens and industry, to develop solutions in a dynamic communications and content environment.
1. The changing networked
society and information
economy
Chapter one considers the defining characteristics of Australia’s changing networked
society and information economy. It considers network capabilities and changing
citizen behaviours, and asks whether these characteristics raise fresh issues and
different risks requiring the regulator’s attention.
Digital connection—old problems, new challenges or
fresh opportunities?
Are digital and IP-enabled communications raising new problems or just old problems
in new guises? It can be argued that IP-enabled services, applications and the forms
of digital content are new, but they are manifesting traditional regulatory problems—
such as privacy concerns, transparency of information disclosure, jurisdictional reach
and the application of dispute and redress mechanisms.
However, the scope, scale, speed and longevity of data that is created as a result of
Australians conducting business and interacting online arguably constitutes a step
change that signals the need for fresh and innovative regulatory responses. This
evolution is fundamentally altering the world of communications and content suppliers
and users, both the risks and harms they face and the balance of benefits that accrue.
There have been specific benefits from technologies such as mobile and smartphones,
and the promise of mobility connected to cloud computing resources—‘the most
advantageous aspect of cloud computing is the convenience of access anywhere,
1
anytime enabled from devices via wireless broadband networks.’ Another estimate
from McKinsey & Company suggested a substantial consumer surplus from the
internet of €100 billion a year in 2011, a total they projected to grow to €190 billion by
2015 as broadband becomes ubiquitous and new services and wireless devices come
to the fore.
Researchers have begun to investigate the positive benefits of how internet
technologies such as email and social media platforms such as Facebook can support
young people in crisis or adults suffering from depression, and encourage smartphone
users to be more mindful. While there is understandable public anxiety about the
negative impacts of using internet-based technologies, there is less awareness of their
benefits, which can help those suffering from mental health problems or to maintain
2
psychologically health and social connections. It is important to bear this balance in
mind as regulatory solutions to the various problematic elements are discussed in this
paper.
Dynamic networks in the information economy
The underlying capabilities of communication networks are the foundations supporting
an information economy. Observing the relevant dynamics at play can be instructive
for regulatory practice, and in designing effective regulatory or non-regulatory
interventions that address changing opportunities and risk profiles of industry or citizen
activities conducted using communication networks. Key observations about the
networked digital environment include:
1
www.ceet.unimelb.edu.au/pdfs/ceet_white_paper_wireless_cloud.pdf
2
https://theconversation.com/we-could-be-superheroes-the-era-of-positive-computing-126191. Complex connections
These connections can be physical (between infrastructure, devices and people);
virtual (between information and software); meshed (between users, machines and
data); and social (between individuals and communities of other users). They can
include connections of information or data unknown to the user, as well as self-
controlled and self-directed connections.
Existing consumer safeguards regulation often relies on a customer’s contractual
relationship with known service providers operating within finite supply chains and
national jurisdictions. Innovation in applications and service offers, often by third-party
providers with no direct contractual relationship with a user, means that use of
information or data may no longer be tied to a known entity or be subject to particular
protections or controls. This has implications for the way that any future regulatory
interventions are designed.
One response to this dilemma has been to adopt the notion of network layers as a
model for understanding the future of communications and media regulation. A
‘network layers’ regulatory model can help to identify the supply relationships covering
industry providers of infrastructure, devices, applications, services, content and digital
information. These relationships are still relevant; however, in the contemporary
networked, virtualised world, the paradox of layers is that the distinctions between
them are not ‘bright’ lines. The complexity of contemporary communications network
layers are not always clearly delineated functional constructs.
While network layers provide a useful conceptual map, in practice they are permeable,
interconnected and increasingly virtualised, such that much of what functions as
apparent infrastructure is software-defined and many content-layer applications deliver
an infrastructure-like connection or service.
2. Highly distributed and adaptive networks
Networks reach across many devices, platforms, places and people. Global supply
chains and self-organising routing of IP-based communications challenges linear
models of regulation that have been based on known entities at a known location and
jurisdiction.
Global reach poses particular problems for regulators working within the limits of
national frameworks where enforcement action needs to be taken against individuals
or companies. It often requires collaborative strategies by industry regulators and other
agencies such as law enforcement to identify relevant parties and control points within
a network to develop targeted responses.
A recent example of the highly distributed nature of risk in a networked economy is the
collaborative action taken by a range of jurisdictions, including Australia, to address
fraud risks arising from the Microsoft imposter scam operating globally.
3. Mobile
In the physical world, mobility relates to communications devices and people
connecting to them. More than 8.7 million Australians now use smartphones that roam
seamlessly between mobile data and WiFi networks. Nearly half of Australians (48 per
cent) regard their mobile phone as their most used communications device, while
fewer than a quarter (22 per cent) consider their fixed-line home service the most
3
important.
3
ACMA, Communications report 2011–12 series, Report 3—Smartphones and tablets: Take-up and use in
Australia, February 2013, p. 23.This trend is expected to increase. At a global level, Cisco forecasts that over the next
five years there will be a 13-times increase in the amount of mobile broadband
4
downloads alone.
Figure 1 Cisco—Global mobile traffic forecasts
The increasing use of and reliance on mobile devices to access communications
services provides opportunities for new forms of service distribution—for example,
delivering access to essential services such as mobile location information for
emergency services, and the convenience of the mobile wallet for micropayments.
Content and information also can become more mobile, not only because of device
mobility but because digitisation means that it can be reused, aggregated and mashed
into new forms.
4. Personalised and profiled
With the increased sophistication of sensing and monitoring applications,
communications and content can be more readily tailored to individual preferences. At
the same time, profiling of individual activity and information might lead to a narrowing
of experience and impede access to information that does not conform to particular
sets of user profiles.
Consumers have raised concerns about practices that collect personal or location
5
information when accessing particular services and applications. In a recent study
about the use of location applications, the sale and ownership of information and risk
associated with disclosure were key concerns for the majority of users—71 per cent
4
Cisco, 2012, http://newsroom.cisco.com/press-release-content?type=webcontent&articleId=1135354.
5
More than two-thirds of users (67 per cent) felt they should be informed if a location service was collecting
information about them, including location information, phone number, personal details or other personal
information. See Here, there and everywhere, p. 3.were concerned about information being sold to a third party and 59 per cent about the
6
lack of details on where the data goes and who owns it.
Figure 2 Types of concerns when using location services
C2—What are you concerned about when it comes to your information being shared?
Base: n=278 (all respondents who indicated some level of concern at C1).
One aspect of the increasing personalisation of communications experience is a
growing diversity in community expectations of digital content and communications,
including different appetites for assessing and mitigating risks. A recent study of
Australians’ media and content use showed that no single approach was thought to be
the most suitable for the current environment. Rather, a mixture of regulatory and non-
regulatory approaches was considered necessary to address different community
7
expectations for different types of content.
With the tailoring of experience and targeting of information to personal preferences,
an increasing sophistication will be required of citizens, industry and regulators to
address issues of community concern. One-size-fits-all regulatory responses are likely
to be of limited effectiveness in this environment.
5. Data-rich environment
Increases in computing processing power combined with high-speed network
connections have supported the growth in data analytics. In a networked information
economy, data about how content is used, distributed and created helps to provide
insights about user preferences and profiles. In the year to June 2012, 62 per cent of
8
Australians reported going online more than once a day.
6
ACMA, Here, there and everywhere—Consumer behaviour and location services, December 2012, p. 3.
7
ACMA, Digital Australians—Expectations about media content in a converging media environment,
October 2011, p. 5.
8
Roy Morgan Single Source, in ACMA, Communications report 2011–12, p.116.Figure 3 Frequency of internet use
Base: Australians with or without telecommunications services in the home.
Source: Roy Morgan Single Source, June 2012.
The volume, variety and flexibility of digital content have implications for how any
future content safeguards arrangements are structured. For example, in a digital
context, content can include an end product (such as audiovisual content like a film or
television program), an intermediate product (such as applications or software) or the
content of a communication that includes data about individuals and their activities. In
addition, the growth of machine-to-machine communications and the data about those
transactions poses challenges for business and individuals in how data collected,
including personal data, will be managed, stored and used.
Influencers and influencing—the importance of digital
citizen behaviours
Within the networked digital environment, individual citizens are placed squarely at the
centre of influence. Using the notion of public interest as a starting point, the ACMA
has for some time explicitly reflected on and incorporated citizen interests in its
9
regulatory decision-making.
Being a digital citizen in Australia encompasses how we participate online, and how
we express attitudes to rights and responsibilities, including responsibilities for risk
mitigation and education. Over the past five years, the ACMA’s research has looked
at:
relevant citizens’ behaviours and attitudes, including online access and
participation
digital media literacy, skills and confidence online
safety and security
the use of personal and location information
the protection of children online.
This work has developed a multi-dimensional view of digital citizens’ practices and
behaviours, with demographic differences evident and practices that change over time
(see Figure 4).
9
ACMA, ‘Citizens’ and the ACMA—Exploring the concepts within Australian media and communications
regulation, June 2010.Figure 4 Changing service and device use
Australian communications and media user profile
At June 2012 there were an estimated 30.2 million mobile voice and data services in
10
Australia—or four mobile services for every three people.
Fixed-line service numbers are slowly declining. In June 2012, there were
10.44 million services—a drop of one per cent from 2011.
Australians are increasingly identifying mobiles as their most used communications
11
device—48 per cent at May 2012, compared to 22 per cent for the fixed-line service.
12
42 per cent of Australians use internet telephony services such as Skype.
25 per cent of Australians use a tablet and approximately 20 per cent of adults
13
(3.65 million) use both a smartphone and a tablet to access services.
14
71 per cent of Australians used a cloud service in the six months to May 2012.
15
52 per cent of Australians use social networking services such as Facebook.
Traditional media activities continue to be popular with Australians, with television
16
viewing the most popular activity, followed by news online and listening to radio.
10
ACMA, Communications report 2011–12.
11
ACMA, Communications report 2011–12 series, Report 3.
12
ibid.
13
ibid.
14
ibid.
15
ACMA, Communications report 2011–12.
16
ibid.77 per cent of online Australians are multi-tasking—that is, using two or more
communications services at once. The most common combination is the internet and
17
television.
This research has also informed a nuanced view about the role and influence of
individuals in contributing to the overall security and stability of the digital networked
society. Individual behaviours relevant to a digital environment include:
1. Participative and collaborative behaviours
Social networking is a cornerstone of online participation and, with the majority of
18
Australians online, the internet is a key facilitator of daily social and economic life. In
2011 research, the ACMA identified three key factors driving this positive attitude to
online engagement—the capacity to choose how and when to communicate, the
convenience of consumption and opportunities available from using new technologies.
2. Personalised communications
I feel like I’m in the driver’s seat now.
19
People aren’t bound by schedules any more … we can watch the news whenever.
With personalisation comes the capacity to better target information and experiences
to individuals based on their preferences and usage patterns. The downside of
tailoring information and experience is that it may narrow information choices and limit
one of the perceived benefits of online engagement—opening up access to wider
information sources and views.
3. Risk-taking and risk mitigation
In a digital environment, there are important differences in how people assess and
respond to risk and responsibility. These reflect the following levels of engagement
and familiarity with the online world:
those immersed in the online world for socialising, entertainment, transacting and
information
those who transition to and from online and offline environments
those who see the internet as a tool rather than a way of life.
Although there are strong positive attitudes to online engagement, many Australians
who use the internet do not feel confident about using technology, managing the
security of personal information or taking measures to protect their computers from
malware. A significant number of research participants express interest in leaning
20
digital skills to address gaps in knowledge and technical proficiency.
17
Nielsen, The Australia Online Consumer Report, 2011, cited in ACMA, Digital Australians.
18
ACMA, Communications Report 2010–11, October 2011.
19
ACMA, Digital Australians. p .73
20
38 per cent of participants were interested in learning more about managing personal information online
and 36 per cent in learning to use the internet safely. See ACMA, Digital Australians.Figure 5 Skills or abilities online Australians would be interested learning more about
Managing my personal information online 38%
Using the internet safely 36%
Asking a website to remove content that breaches your privacy 32%
Setting security controls/filters to block access to certain websites 27%
Setting parental controls on mobile phones 15%
Setting security controls/PIN numbers on your TV or set-top-box 14%
Other 1%
None of these 36%
Source: ACMA, Digital Australians online survey, 2011.
I3 ASK ALL Which, if any, of the following, would you be interested in learning more about?
Base: Total sample, n=1,250.
Digital citizens also regard themselves as part of a wider environment where
individuals, industry and government have distinct roles to play:
Individuals should have primary responsibility for protecting their personal
information online.
Service providers and industry operators should be responsible for enabling a
secure environment.
Government should provide information and education services, raise awareness
and enforce safeguards if service providers fail to have these in place. There are
also strong positive perceptions of a trustworthy government ‘brand’ supporting
21
information provision.
With different individual capabilities and levels of confidence evident among the
community, solving problems in this environment may require highly nuanced solutions
that meet citizens’ expectations about the respective roles of individuals, industry
suppliers and government. They will also need to consider different attitudes to risk
and expectations about collaboration and consultation.
Insights from these changing citizen behaviours and concerns and digital network
characteristics can inform the design of effective regulatory and non-regulatory
interventions that are more finely calibrated to industry and citizen activities in a
networked society and information economy.
21
ACMA, Here, there and everywhere, p. 21.2. Achieving public interest
outcomes in the networked
environment
Chapter two considers how regulatory practice can be rebalanced within a dynamic
digital content and communications environment to address enduring matters of public
interest. It proposes principles for a more dynamic regulatory practice that can inform
how the ACMA undertakes its analysis and design of any regulatory or non-regulatory
interventions. It also considers how a responsive problem-solving approach can be
applied to answer important questions about who and what is the focus of regulatory
activity in a networked society and information economy.
Response strategies—deregulation, re-regulation and
rebalancing
A critical challenge for an industry regulator such as the ACMA is how to navigate the
need for regulatory predictability and certainty while accommodating change dynamics
whenever it assesses a need for intervention.
In their discussion of responsive regulation, Ayres and Braithwaite noted that:
An attitude of responsiveness does generate different policy ideas that do transcend
the divide between regulatory and deregulatory solutions. But for the responsive
regulator, there are no optimal or best regulatory solutions, just solutions that respond
better to the plural configurations of support and opposition that exist at any particular
22
moments in history.
One response to an environment of ongoing technology, industry and social change is
an expectation that regulation should wither to allow new forms of activity to develop
unconstrained. However, a practical consideration when adopting a strict deregulatory
response is that it may ignore the changing nature of risks faced by digital citizens,
who have expectations of business and government support to manage their
environment. This type of expectation is evident from current community concerns
about the treatment of personal information in an online environment. From an industry
perspective, positive intervention may be needed to facilitate new services and content
in the market, so that the application of existing regulation may need to be
strengthened, removed or clarified. However, both approaches—providing assistance
to citizens or reducing regulatory impediments to support innovation—do assume
positive intervention by a government or regulator.
Another response to change is to adjust each of the problematic concepts within
existing regulation to better reflect current industry structures and supply models. A
current consideration is how legislative or regulatory frameworks can make an
effective transition from an environment based on static information, known industry
participants and control points to a more dynamic environment where content can be
personalised and influence over the form and presentation of digital content is
exercised differently. One of the main disadvantages of such a re-regulatory approach
is that it risks an overall loss of legislative and regulatory coherence and potentially
further skews regulatory attention towards traditional communications and media
activity, where existing legislative constructs continue to be incrementally updated.
An alternative path would be to draw on these change elements to inform a coherent
regulatory practice. That is, identify a unifying regulatory practice approach that
22
Ayres and Braithwaite, Responsive Regulation: Transcending the Deregulation Debate, 1992, p. 5.explicitly accommodates the logic of ongoing change, next generation technologies
and individual participation at multiple points in the supply and exchange of digital
information and services. Such a rebalancing can accommodate two points of tension:
recognising and accommodating the uncertainty and apparent randomness of
internet-based communications and citizen participation
meeting the industry expectation of, and requirement for, certainty, regularity and
predictability.
Principles for dynamic regulatory practice
Public interest is a central and stable concept in regulatory theory and practice. It
offers the starting point for considering how regulatory practice can be developed and
applied coherently to benefit citizens and industry in a networked society and
information economy. An early discussion of public interest concepts for IP-enabled
communications and media was outlined in Enduring concepts—Communications and
media in Australia. But while the public interest rationale for intervention remains
stable, new methods of intervention are often needed to address emerging issues and
challenges.
In his discussion of regulatory practice, Sparrow emphasises the importance of using
the pressures from technological, social and market changes to inform regulatory
23
practice, with a strong emphasis on three elements:
adopting problem-solving approaches
breaking down problems to measurable tasks
using collaborative partnerships in the design and delivery of adaptive solutions.
Taking the public interest outcomes as expressed within existing legislation as the
basis for defining the need or otherwise for regulatory intervention, a more adaptive
approach can use operational principles to guide the administration of regulation and
accommodate change within the scope of powers conferred under existing legislation.
A single coherent regulatory framework could more explicitly recognise the role of a
regulator in problem-solving and building capacity for a more self-sustaining regulatory
environment. Such an approach would be responsive to evolving issues, changes in
industry structures and emerging citizen concerns.
A coherent framework could incorporate features such as:
1. Flexibility and use of broad ranging tools—legislative responses are more
likely to become out of date quickly in an environment characterised by the speed
of change, requiring a more iterative approach to regulatory policy development.
Such an approach draws on evidence and consultations with industry participants
and the community to identify issues of importance, test the design and practical
implementation of any proposed intervention and evaluate their effectiveness. It
also requires a flexible set of powers for proportionate responses. In the ACMA’s
experience, a combination of interrelated tools—legislation, technology and
education programs for citizens and industry can be a powerful agent of change.
2. Collaboration—the globally interconnected nature of digital communications
means that the behaviour of a user or entity in another jurisdiction can harm
Australians. So there is an increased imperative for collaboration between
government and industry operators, as well as between regulators in Australia and
other jurisdictions to provide effective responses to issues arising in global
communication flows. For example, global cooperative action by communications
regulators was instrumental in the recent prosecution of Microsoft spammers.
Collaboration with individual citizens to manage constant connections is expected
23
Malcolm K. Sparrow, The Regulatory Craft, 2000, pp. 28 and 100.to become a more important area of focus in addressing digital content and
transactions in the future.
3. Harmonisation—another effect of global digital content and data flows is the
relevance of international frameworks to the development of national regulatory
responses. As national differences on issues are inevitable, international
frameworks can be useful as a regulatory design template. Even with common
regulatory designs, there will inevitably be differences between national legislative
arrangements that can complicate cross-border regulatory responses. In these
cases, international collaborative effort is an important tool to promote cooperation
and encourage a productive outcome. A practical example of international
harmonisation is the London Action Plan (LAP), of which the ACMA is a signatory.
Formed in 2004, this was the first international forum to address spam
enforcement issues exclusively, by outlining cooperative ways for public and
24
private entities to fight international spam. The ACMA’s ongoing dialogue with its
international peers has ensured that the Australian approach to unsolicited
communications has been highly effective, despite the differences in national
legislative arrangements around the world.
4. Problem-solving approaches—the scope, scale, speed, duration and
persistence of change in digital communications and media means that an
effective regulatory response often requires finite resources to be directed to the
issues that either pose the most risk or have the most impact on digital citizens
and business. To address risks, the regulator must be able to respond quickly,
determine the best solution to the problem, and clear the path for industry and
citizens to manage their communications and content. In practice, this may require
innovative problem-solving approaches to address the changing profile of
traditional concerns like media ownership, control and influence that are exercised
differently in a networked society and information economy. It could, for example,
mean that the regulator addresses network behaviours at the physical level—with
a traditional supply-side focus—and recognises the influences and controls that
exist in virtual and social networks.
It may also mean a less prescriptive approach to devising solutions by legislation.
The emphasis should be on facilitating regulatory solutions through industry-based
approaches such as codes, or by non-regulatory interventions such as education
and information.
5. Alliance-building and relying on a mix of participants—the ACMA’s
community research has identified strong community understanding of distinct
roles for government, industry and citizens in managing digital communications
and content experience. The expectation is that responsibilities for solving content
25
and communications service issues are shared. . Problem-solving strategies that
explicitly build on industry and community expertise and feedback to design and
deliver solutions address these expectations. Such an approach also recognises
the growing role of connected citizens as an integral part of any solutions
development.
The balance of discussion in this chapter considers how a responsive problem-solving
approach can be applied to answer important questions about who and what is the
focus of regulatory activity in a networked society and information economy.
24
www.londonactionplan.org
25
ACMA, Digital Australians, p. 5.Figure 6 Regulatory problem-solving
Problem-solving approaches
At one level, the role of a regulator in a networked economy and society is no different
from traditional regulatory practice. That is, the regulator is working to achieve:
compliance outcomes
industry and community knowledge of rights and obligations, and how to exercise
them
where necessary, behaviour change either of industry participants or citizens that
mitigate risks in the environment.
Determining if an issue requires regulatory attention is informed by whether:
an issue is regarded as significant
an issue is clearly established
an issue may be solved by market-based solutions over time
interfering with market incentives may be potentially counterproductive
26
the costs of intervention outweigh potential benefits.
Having once established the case for intervention, a further relevant consideration is
whether the scope, speed and scale of change requires a different balance in the
response strategies designed to solve the particular problems arising in a networked
society and information economy. This is likely to mean doing some things differently.
For example, using particular forms of analysis to inform regulatory assessments,
such as:
understanding network structures—physical, virtual or social—and analysing all
three to identify and address modern digital communications and media problems
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ACMA, Optimal conditions for effective self- and co-regulatory arrangements, September 2011, p. 6.using social analysis tools to better understand connectivity issues—physical, virtual or social—and where influence and control is, so interventions can be targeted measuring risk and likely impact to help decision-making and prioritise any intervention, including identifying when traditional regulatory ‘problems’ become new problems because of changes in scale, scope or speed of risk and impact. It may also mean the ACMA puts less emphasis on particular forms of regulatory activity to focus on new concerns or issues that are changing in profile. For example, with a decline in the importance of the fixed telephone for Australian communications users, and a corresponding increase in the importance of mobiles, it could be argued that the level and intrusiveness of fixed telephone regulation should be minimised. However, for this sort of evolution to occur, flexibility within legislative frameworks is required. Clarifying rights, responsibilities and obligations Beyond licensing and licensees A key dimension of any problem-solving approach is clarifying who is the intended subject/s of any intervention. Traditionally, licensing has been the standard model in communications and media regulation to confer rights on identified industry participants (such as access to public resources) and obligations (such as service provision to audiences or geographic locations). In current regulation, these rights and obligations remain defined by integrated industry structures bound by delivery platform. These supply relationships have been the traditional way to identify who should be subject to regulation, using notions of network or infrastructure ownership or control, and ownership of a customer/subscriber relationship. At the simplest level, adapting this model to a dynamic and fragmented digital environment means reconsidering the basic rights, conditions and obligations of all participants in the communications and media environment, in the context of the IP-layered networks and supply chains of contemporary communications. This also includes the diverse and plural configurations of citizens interacting with various activities at each of the different layers in this service delivery model—that is, using devices, services and applications; accessing infrastructure; and consuming and creating content. Innovation and user participation in content creation and have both delivered whole new markets and service providers such as applications. This puts pressure on current arrangements and requires a more nuanced, multi-dimensional view of how relevant rights and obligations are exercised and, where necessary, enforced by the regulator. In an environment where a citizen’s experience may be defined by the transactions, applications and content used, elevating the commercial and contractual relationship between supplier and user rather than infrastructure ownership may help to identify and address risks or harm that can arise, as well as where intervention may be required. This could see a change in emphasis from licensing to the more fluid concept of service/application/content provider obligations as a way to adapt regulation in a dynamic networked environment. Traditionally, the ‘horizontal’ peer relationships between citizens have not been the focus of a technical industry regulator. But in an interconnected society where the activity of one person on a network can have consequences for the security of other network users, understanding these relationships and potential points of failure in the environment might help to develop and target a relevant intervention.
Figure 7 Peer-to-peer connections Different approaches, such as commercial and social network analysis, may prove useful in identifying the issues and potential influencers in this environment who can shape positive behaviours in other communications users. A practical example of this approach is the Australian Internet Security Initiative (AISI) administered by the ACMA. The AISI helps internet and communications providers to identify which customers on their networks have computers compromised by malware (malicious software) and to give customers information to address the problem. Other strategies like industry partnerships and education programs through known social and community networks can address the information and security needs of citizens participating in this environment. Communication strategies also provide an explicit feedback loop from citizens to help identify the emerging issues of concern and evaluate what is working. This would foster a more self-sustaining and adaptive regulatory system. Citizen and industry support Since current communications and media legislation was framed in the pre-internet age and the early 1990s, there has been a step change in this environment. However, there is a set of stable public interest values (or enduring concepts) that continue to provide the conditions for industry and citizen support in areas such as: access to public resources like telephone numbers and spectrum
complaints and redress mechanisms
safeguards like emergency service access to protect life, health and safety
protections from accessing harmful (for example, spam) or age-inappropriate
content.
But some recalibrating is needed to reflect changes in the balance of activity in the
market. These challenges include the growing contribution of individual citizens to the
overall confidence, safety and security of the digital environment, and managing digital
identities that are key to accessing and participating in a wide range of transactions
and social activity.
The most efficient or effective response may not be extending the scope of regulation
to a broader set of industry participants, but focusing more strongly on citizens’
individual and collective activities. A different mix of strategies, working with a range of
participants and recognising shared responsibilities, may be needed in this more
dynamic and highly connected network environment. A fresh approach may work in
the area of personal data protection, where increasing volumes of data are being
collected, stored and process by a diverse range of entities, and in a wide variety of
contexts. While fundamental legislative protections will continue to be of value,
regulators could also facilitate the adoption of data management practices that give
citizens greater control over their own data.
Such an approach is consistent with community expectations. Citizens expect to play a
central role in managing their content and communications, but also look to industry
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and government for support in navigating the digital environment.
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ACMA, Here, there and everywhere, p. 4.3. Different styles for different ‘problems’—graduated response strategies Chapter three discusses how a coherent regulatory practice approach can be implemented using graduated response strategies. Such strategies draw on the principles of flexibility, collaboration, harmonisation, problem-solving and relying on a mix of participants to develop solutions to contemporary communications and content issues. A coherent unifying regulatory practice An adaptable and efficient way of addressing emerging issues may be to tailor the graduated response model to the networked society, explicitly drawing on mixed strategies that incorporate regulation, as well as facilitate industry and citizen responses and communication programs. A key challenge is choosing the right tool for the right issue. The following discussion identifies conditions where direct regulation, facilitative strategies and communication activity may offer a more tailored, nuanced approach to regulatory problem-solving in a dynamic industry and user environment. Figure 8 Regulatory and non-regulatory strategies 1. Regulatory strategies Communications and media regulation has traditionally been weighted towards industry participants rather than citizen-focused interventions. This model has worked effectively where regulation aligns with the activities of recognisable entities operating within a jurisdiction, and the regulator’s role is clearly to monitor or enforce rights or obligations specified in legislation. Continuing to use and further develop a graduated compliance and enforcement approach (the compliance pyramid) is a flexible approach that allows compliance action to be applied proportionately to the severity of the impact or risk of a regulatory breach. Features inherent to the networked economy and society—complex connections and supply chains, global communications and content activity, and the rise of new forms
of communications activity like applications and machine-to-machine
communications—were not contemplated when current regulation and associated
compliance strategies were developed. The suite of existing regulatory strategies will
need to be refined in order to:
Clarify regulatory coverage for IP-delivered digital communications and
content. This could include explicitly highlighting where exclusions should apply
(for example, whether voice applications services are within the scope of existing
voice service regulation) and more consistently treating matters with similar issues
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and concerns.
Address consistency of regulatory strategies and penalties across
communications and content activity. This could benefit industry and the
regulator by streamlining compliance activity and reducing compliance costs that
arise from working with separate telecommunications, broadcasting,
radiocommunications and internet regulation.
Offer strong civil penalties that provide robust deterrents.
Include explicit recognition of global engagement strategies as part of the
regulator’s power to address harms arising from global communications or illegal
content activity. This is also necessary to support enforcement action taken in
cooperation with regulators in other jurisdictions and harmonisation activity that
provides certainty for industry on spectrum and device standards.
Achieving additional flexibility to match the regulatory action with the impact and extent
of risk or harm may also require revising some aspects of existing legislative and
regulatory settings. This could include:
Reviewing prescriptive ‘must’ requirements in legislation to ‘may’, to better target
limited resources to address the most pressing problems. For example, the
requirement that the regulator must investigate each broadcasting complaint
provides no discretion and incurs significant compliance costs for industry,
irrespective of the individual or community impact of the broadcast.
Revising legislative structures to focus more clearly on public interest outcomes
and the objects of regulatory intervention. This would remove prescriptive process
requirements from legislation and better align regulatory structures with a dynamic
digital environment.
However, to address emerging issues of concern around the management of digital
communications (identity, privacy, security and safety), strategies other than traditional
regulation may offer a more efficient way of solving digital citizen problems, particularly
where industry suppliers are outside national jurisdictions.
2. Facilitation strategies
With the need for intervention established, non-regulatory solutions may offer a more
flexible response to the market dynamics and citizen ‘problems’ emerging in the
dynamic digital environment. This is particularly so where the legislative framework
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remains unchanged or outdated. Facilitation strategies are particularly useful in
circumstances where the intended outcomes are to improve service standards,
understand obligations or provide incentives for behaviour change by industry
participants or individual citizens.
In current communications and content regulation, the explicit recognition given to
industry co- and self-regulatory arrangements is perhaps the most developed
expression of a facilitative non-regulatory strategy. Industry co- and self-regulation
often operates as an adjunct to direct regulation in aspects of telecommunications and
broadcast media. Self- and co-regulatory arrangements are also suited to addressing
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ACMA, Optimal conditions for effective self- and co-regulatory arrangements, p. 7.
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Sparrow, The Regulatory Craft, p. 25.issues in an environment of rapid change that may be hindered by static systems of
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direct regulation.
In addition to co- and self-regulatory arrangements, other facilitative strategies could
offer better targeted, more timely/responsive and less intrusive means of encouraging
particular behaviours or creating deterrents to risky or harmful behaviours. Where the
behaviour of an individual citizen can influence the safety and security of other
individuals and companies, such strategies provide a more integrated way of
addressing all participants operating within a networked economy and society.
Facilitation strategies also include:
Refraining from taking action—where the problem is considered short-lived or,
for reasons of fairness and proportionality, the costs of intervention outweigh any
potential benefits, this approach of forbearance is intended to allow the market to
provide a solution. The ACMA has used this approach for voice over internet
protocol service use of geographic (local) telephone numbers.
Market-based strategies—tools such as subsidies, user charges or taxes have
been used to date as part of the approach to public resource management in
spectrum and telephone numbering. Regulators in other industries and jurisdictions
are exploring incentive-based regulation to promote or deter particular forms of
industry or user behaviour, although this has not been widely developed in an
Australian context.
Collaborative partnerships—this strategy can be effective in developing new
approaches to solve community and consumer problems where there is a common
interest among industry and community groups to reinforce particular information
and behaviours. It can also help to build consensus on the form of an intervention,
where needed.
Programs—program-based strategies can effectively equip citizens with the tools
to solve their own communications or content problems. Program-based responses
have been useful in addressing aspects of citizens’ internet-based activity; for
example, the Australian Internet Security Initiative and spam reporting programs,
which help users to manage spam content and deal with infected computers.
Other facilitation strategies include removing impediments to achieving particular
legislative objectives. This may involve revising the regulator’s administrative
processes, providing advice to government on necessary legislative amendments or,
where the regulator has power to take action, implementing a deregulatory program to
remove or reduce redundant regulation. A recent example of a deregulatory program
is the numbering work program—the ACMA removed over 200 pages of redundant
numbering regulation.
3. Communication strategies
Other non-regulatory solutions, such as communication strategies, can help to address
issues where improvements in knowledge or industry/citizen behaviours are the
intended regulatory outcomes. Communication strategies also offer a flexible response
to addressing emerging issues in digital communications and content—such as digital
identity management, managing digital reputation and digital literacy and
participation—which were not areas of concern at the time existing legislative
arrangements were developed.
Such strategies can also help to recognise the role of citizens as problem-solvers in
the online environment. This is consistent with research findings that emphasise
citizens’ expectations of taking responsibility for their online experience, but looking to
industry and government for help particularly with managing communications devices,
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ACMA, Optimal conditions for effective self- and co-regulatory arrangements, p. 7controlling access to personal information, and ensuring physical and financial security. The other clear benefit of investing in communication strategies is the important real-time feedback loops that the community provides about emerging areas of concern and the effectiveness of individual interventions. This feedback provides an important evidence base for where regulatory or non-regulatory interventions need adapting or updating. An important characteristic of communications strategies is that they enable intervention to be targeted at specific segments of the community, through communication channels that are relevant to those groups. For example, internet safety education campaigns can be designed to address specific issues encountered by different demographic groups. Communication strategies include: Information disclosure—for example, the regulator can set guidelines about the type of information that needs to be disclosed by a service provider, or give product or service warnings as an incentive for compliance and positive behaviour. Information disclosure can also include statements by the regulator on matters of concern to act as a deterrent to a specific activity. The introduction of telecommunications service Critical Information Summaries covering price, product features and complaints mechanisms is a recent example of this approach. Public information campaigns—this strategy is useful when the problem to be addressed results from a lack of citizen or industry knowledge, and the objective is to change the quality of information available and allow actions to be taken. Consumer alerts to warn about particular service provider behaviours, such as scam marketing calls, is one example of this approach. Another recent use of this strategy is the 2012 DNS Changer campaign, which warned consumers of malware that would have disconnected internet access and provided a diagnostic tool for people to check their computers. Outreach programs—this strategy is useful for delivering information to targeted audiences where the objective is to change the level of knowledge and awareness and support positive behaviours in the wider community. A benefit of this strategy is direct and timely feedback from the community on emerging issues, as well as evaluating the effectiveness of existing interventions. An example of this approach is Cybersmart, the national cybersafety education program. Cybersmart uses a three-part strategy—information about cybersafety issues, education and provision of resources and practical advice, and empowering children and young people to take action to protect themselves online. Research into issues of significance—this strategy can include public inquiries to inform the development of regulatory or non-regulatory options. The Reconnecting the Customer inquiry into telecommunications service practices is a contemporary example of this approach. Conducting research to identify matters of concern to industry and citizen participants in the communications and content environment is another way to undertake an evidence-informed approach to regulatory practice.
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