Minister Paul Fletcher on the ACCC’s Proposed Code, NBN, 5G and Cyber Abuse

Interview with Paul Fletcher


Douglas Nicol:   Hello, I’m Douglas Nicol and welcome to Smart Dust, the podcast that likes to look at the tech and innovation trends and people that are changing our world. Sometimes big mega trends and sometimes, well, the ideas that sit at the fringes of science and technology. As always, I’m joined by digital and innovation pulpiteer, Mr. Nick Abrahams.

Nick Abrahams:               Pulpiteer? What are we, in the 1800s Douglas? It’s like an evangelist. Occasionally my enthusiasm becomes infectious, but that’s the only thing that’s infectious about me right at the moment. In COVID, that’s important.

Douglas Nicol:   Nick, it was a big word, pulpiteer in the 1800s. But for me, you’re a pulpiteer, but you’re never preachy.

Nick Abrahams:               Thank you very much. That’s very kind.

Douglas Nicol:   In this episode, we are delighted to be joined by Paul Fletcher [inaudible] who is the minister for communications, cyber safety and arts in the Australian government. Paul has a very interesting background as a management consultant, a corporate lawyer and a corporate strategist. Then he had a change of career and entered parliament in December 2009 as the member for [Brandfield] in New South Wales in Australia. He was appointed very early on as parliamentary secretary for the communications minister in September 2013. Today Paul is involved in some of the biggest technology and content debates and conversations of our times. Minister, you’re very welcome to Smart Dust.

Paul Fletcher:     Very pleased to be with you.

Nick Abrahams:               Minister Fletcher, I think what Douglas did leave out in the introduction was, of course your book Wired Brown Land. So you’ve been deep in the telco world for a very long time and congratulations on getting NBN rolled out just in time for a global pandemic. We’ll talk a little bit about NBN in a moment, but I guess also congratulations on last week’s announcement on the $3 billion NorthConnex motorway completion. Another fantastic achievement with infrastructure around Australia. But maybe just to dig straight into it, one thing that’s really caught the world’s attention is the impact of the ACCC code to require the big tech companies to pay media companies for the content that they use. So potentially a global precedent, news outlets believing their content is valuable for users of Google and Facebook, and a key reason why people use these platforms. And that the tech giants don’t pay enough for using them. Tech giants have a bit of another view on it. Could you give us some background to this and why you felt it was important to take on this challenge?

Paul Fletcher:     Well the background to this is that then treasurer Scott Morrison in 2017, asked the ACCC to do a very thorough piece of work looking at the position of the digital platforms, Facebook and Google, and what impact they were having on Australian media. That report, which was several hundred pages, came to the government mid 2019. It had a series of recommendations, one of which was that there ought to be a code governing the commercial relationship between on the one hand, Facebook and Google. On the other hand, Australian news media businesses like Seven West Media, News Corp, Nine Entertainment and so on. We accepted the recommendation that there ought to be a code. It was initially going to be a voluntary code that by April this year, became clear that the progress on a voluntary code was rather glycal.

At the same time, the impact of the pandemic was putting even more pressure on Australian news media businesses. Consequently, we directed the ACCC to instead work on a mandatory code. A draft of that mandatory code was released on the 31st of July. Right now we’re at a point where the ACCC has gone through extensive consultation on the draft. Its final advice will come to government very shortly. What we’ve committed to do is introduce legislation by the end of the year. The code will be given effect through legislative amendments to the Competition and Consumer Act. So our commitment is that the legislation will be introduced before the end of this year.

Douglas Nicol:   Minister, some of the tech players like Facebook are saying they’ll drop all local, national and international news from its Australian platform if the code becomes law. There’s been a lot of saber rattling. Obviously this would have major implications for the way that many Australians stay informed. I believe a third of Australians read news content on Facebook. Should we be concerned about this?

Paul Fletcher:     Well, as the prime minister has observed when he was treasurer and changing the law in relation to GST on E-commerce, there was previously an exemption from GST for purchases of less than a thousand dollars. That was changed. Amazon threatened to leave Australia. They did briefly shut down operations, but they recommenced within two or three months. These kinds of threats are not new from these global digital platforms. There are enormous businesses with enormous market power, but at the same time, the provision of news over the platforms does give them value. It gives an element to their offering, which is of use to many people who use the platforms, Facebook and Google. So while this threat has been made, we’re not letting it distract us from the work we’re doing to establish a legal and regulatory framework, governing the terms on which the digital platforms use content generated and paid for by Australian news media businesses.

Nick Abrahams:               We’ve seen certainly in other industries music, for example. Conceptually if you use someone else’s content, then it’s appropriate to pay for it. It’s a fascinating development and we look forward to seeing how that rolls out. Staying with media, but moving to this concept of fake news, we’ve obviously got an election about to happen in the US; lots of talk about fake news. Recently in Australia, we had Australian associated press, a wonderful journalistic institution for decades and decades, but really struggling to have people find value in it and retain that service. Could you talk maybe a little bit about, what is the government’s view on, how do we help people find truth online? Also, your views on AAP and perhaps what the big tech players are also doing around taking more responsibility for the content on their platform?

Paul Fletcher:     Well, I think there’s a couple of strands to it. First is, we want to continue to have a vigorous media sector in Australia with businesses that have editorial processes, editorial standards, fact-checking, professional journalists, all of these things generating content that people can trust and have a degree of assurance about the processes that have been worked through, that have been carried out in generating that content. So I think one part of the puzzle is policy settings to support traditional media businesses. It was in that light that we announced recently some funding for AAP, $5 million under our well known or well established funding program, which is designed to support funding for media, particularly in areas where there is significant threat to media businesses. We know that regional and remote businesses have faced greater threats than metropolitan. That’s why we committed $50 million under our public interest news gathering program for regional media businesses.

We subsequently committed five million also under paying public interest news gathering for AAP. So one strand of this is continuing to have a vigorous news media sector. Another strand is regulatory measures directed at content on the platforms, which is misinformation, disinformation, not true malicious … There’s quite a wide range of kinds of content and reasons for that content being produced. One of the other recommendations of the ACCC’s digital platforms inquiry was that there ought to be a code developed by the digital platforms governing these matters. The Australian communications and media authority has been taking forward discussions with the digital platforms on this. A draft of that code was released only two weeks ago by what’s called Digi, the peak body for the digital platforms. That’s now presently out for public comment. That does deal with these issues of disinformation and misinformation.

Douglas Nicol:   The pandemic, obviously no one could have predicted it. Fortunately the nation invested heavily in the NBN over the last few years, $57 billion investment. How do you feel the NBN has performed, especially with the huge wave of additional traffic as a result of people working from home during the pandemic?

Paul Fletcher:     Well really, it has been a very big test for the NBN. Overnight, several million Australians moved to working and studying from home. That meant that you needed good broadband. Particularly for example, for video conferencing. Many of the applications we use for broadband at home need good speeds down. It doesn’t matter so much what the speed is up. But for video conferencing, you need good speeds in both directions. Now thanks to our focus since 2013 on rolling out the NBN as quickly as possible, by the time the pandemic hit in March 2020, 98% of Australian premises were able to connect to the NBN. It’s now 99% or 11.8 million premises. Now that compares to 51,000 premises connected to the fixed line network when we came to government in 2013. So that focus we’ve had on really driving the roll out fast has been very important.

If we stuck with the original plan, there’d be around five million fewer premises right now able to connect. That would have meant people would have been relying on the previous generation of broadband DSL, which has much lower average speeds, average speed of about eight megabits per second, but many people are getting much lower. Quite a few people are not able to get a fixed line broadband at all in the DSL era. Of course, the upload speed’s very, very low. By contrast, NBN has been there when Australians have needed it. It’s held up very well. We’ve seen big jumps in the volume of traffic at night, up 20 to 30% during the day, up around 70%. But the network has really just kept on operating. There’ve been the occasional localized instances of some challenges, but in the main, the network has operated very well.

We’ve seen large numbers of people connecting. It’s been at some point during the pandemic, we were getting between 30 and 40,000 premises a week connecting to the NBN. What we’re also seeing is a continuing rise in the amount of data people are downloading every month. For comparison, in 2010 across fixed line networks in Australia, on average people downloaded 10 gigabytes a month. At the end of last year, that number was around 298 gigabytes. By June this year, it was about 330 gigabytes. So we’ve seen a strong and steady rise in the volumes that people are downloading.

Douglas Nicol:   That’s superb. One of the things I know NBN is doing is rolling out a further four and a half billion upgrades happening. Obviously your critics say, this is evidence that the NBN is not good enough. Is this to meet these additional requirements of the pandemic era or was it just always in the plan?

Paul Fletcher:     Well, it’s very much about continuing with the plan that we set out in 2013. We said that our priority first was to get the network rolled out as quickly as possible. One of the great merits of fiber to the node, which we used extensively as part of the rollout, was that it can be rolled out much more quickly than fiber to the premises. We’ve also made extensive use of the HFC hybrid fiber co-ax networks. Again, that meant we could get the network rolled out much more quickly than under labor’s plan. But we also said that when demand conditions justified it, we would look to upgrade NBN. So just a few weeks ago, we announced this $4.5 billion investment to upgrade the NBN. This will mean that eight million premises, around 75% of the fixed line network will be able to order a speed of up to one gigabit per second by 2023.

So what that means is that for a very large number of people, if you want to use it, you’ll have the option to order blazing fast broadband. Now of course, what we’ve also done, is we’ve done this in a more capital efficient manner than the plan we inherited. In particular, as part of the footprint of those eight million, around two million will be in the existing fiber to the node footprint. What we’ll do is we’ll roll the fiber optic cable down the street, we’ll only connect the fiber lead in from the street to your home. If you order a service, which is fast enough that it needs fiber all the way and by doing that, we can be much more efficient in the investment of capital. This is the approach that’s been very successfully used in New Zealand with Chorus, and we’re going to replicate it here in Australia.

Nick Abrahams:               I think it must be a success because now if you look at NBN, it was on the front page for it seemed like years. NBN this, NBN that. Yet since it’s Ziggy Switowski, the chair of NBN, announced that mission was accomplished in July, we haven’t heard the media so much about it. So obviously the upgrade is relevant and important. I guess, what next for NBN? Because obviously we’ve now come through rollout largely, and then what’s the next stage? There’s obviously media speculation about privatization and so forth.

Paul Fletcher:     First of all, to pick up your previous point, I think one of the reasons why the NBN is off the front page is because it has performed well during the pandemic. Millions of Australians have been using it every day. It’s caused people to have a new look at it. People can see it’s doing just what it said it would do and it’s been there in Australian’s hour of need. So I think there has been an assessment of the NBN over the past few months, by many Australians who previously hadn’t given it much thought. Now in terms of next steps, we want to carry out this next stage of the rollout. As I say, eight million premises will be able to order a speed of up to one gigabit per second. There’s also an important emphasis on business services. So we’re investing $700 million in 240, what we’re calling business fiber zones.

85 of them in regional areas, places like Port Macquarie, Coffs Harbor, Rockhampton, Mount Gambia, and so on. Ballarat Bendigo. If you’re in a business fiber zone, you’ll be able to order a speed of up to one gigabit per second, symmetrical over optical fiber; the business grade service. There’ll be no upfront connection charge, whereas up until now, businesses ordering optical fiber for the first time have often had to bear a charge related to the cost of rolling out that fiber. That could be a few thousand. It could be several tens of thousands. At the same time also, if you’re in a business fiber zone, you’ll get the same pricing as in CBDs in terms of NBN’s wholesale price. That’s important because until now, wholesale pricing for business grade broadband has been in geographic zones with CBD’s the cheapest and then three successively more expensive zones.

So in some areas, this will mean a price reduction of up to 67%. So there’s a lot to do over the next few years. In terms of what happens beyond that, we’ve been very clear that first of all, it’s our policy as it was the policy of the previous labor government. That at the appropriate time, NBN will transfer to private ownership, but we’re sometime away from that. I’ve been very clear that that is not something that’s a priority for us in this term of government. Our focus is to complete the rollout and to leverage the NBN for social and economic benefit. We’ve been doing things like setting up the Australian broadband Advisory Council chaired by Dennis Schiff, formerly a very senior executive of Telstra amongst other things. Which is looking at how best we leverage broadband, both NBN, but also 5G and other broadband networks. To achieve our objective of being one of the world’s leading digital economies by 2030, that’s an objective the prime minister has set out. So our focus, certainly for the foreseeable future, is on the next stage of NBN’s rollout or the upgrade that we announced just a few weeks ago, and on leveraging the capability to the NBN and another broadband networks for social and economic advantage.

Douglas Nicol:   And specifically, what innovations are you excited about in the world of 5G? You mentioned 5G there and there’s a lot of promise attached to it. What are you excited about in terms of what it could lead to?

Paul Fletcher:     Well, 5G will be important for several reasons. The first is higher speeds and some tests recently done in different parts of Australia on the 5G networks already operating, have found average speeds in Australian cities as high as 374 megabits per second, and have a maximum speed as high as 944 megabits per second. So first of all, 5G is very fast and an order of magnitude faster than 4G. Secondly, high device density. That means lots and lots of devices can connect to one base station. That’ll be very important for the internet of things where we’re going to have sensors everywhere, feeding back data into the network. In turn that data being used to make management and business decisions. That might be things like soil moisture monitors on farms. It might be things like monitors of the strength of concrete in roads or in buildings; all kinds of sensor devices.

Then the other great advantage of 5G is it has very low latency. The time taken for the signal to go from the device, into the network for processing to occur and for it to come back, that’ll be very important for things like automated transport. Where if you’ve got a driverless car or truck connected to the central processing power over 5G, it will be able to receive the signal, process it, and send a signal back quickly enough for all that to work. You think about a sensor on a vehicle, seeing that there’s an object in front of it, needing to break. That signal will go back and forth very, very quickly. So the kinds of applications, I think will be very exciting for 5G. Smart manufacturing, again, with very intensive use of sensors. High-tech agriculture, Australia of course has a large scale world competitive ag sector, but we need to be using technology more to stay up to date with our competitors. 5G will be important there.

It will be very important in the resources sector where already Australia is a world leader in automation, but I think we’ll see a new generation of possibilities with remote vehicles and remote operation of minds. I think to take something very topical with last year’s very serious bush fires, I think we’ll see remotely operated firefighting devices, vehicles, automated vehicles, drones. I think we’re going to see a new wave of technology to help us deal with the challenge of bush fires and other natural disasters. Then I think in entertainment, I think there’s exciting new possibilities with multiple camera angles, immersion experiences for a viewer. So you can feel like you’re not just in the front row of the stadium, but you’re actually on the field, facing a ball from a fastball or whatever it might be. Facing up to a serve from [inaudible] or another a world-class tennis player.

So I think again, the capacity to have very, very rich data coming from multiple sources in real time, I think we’re going to see some really exciting entertainment applications. Gaming, gamers are very keen on low latency. So I think 5G will be critical there. Of course, we also know low latency is very important in financial markets and trading. So again, I think 5G will make a big difference there. I think also, we’re used today to the idea that high bandwidth connections need physical wiring. I think 5G will be important for things like trade shows, exhibitions. Wherever you’re setting up something very quickly, you’ll be able to have very high speed connectivity immediately or just about immediately, because you won’t have to go and string hundreds of thousands of meters of cable before the super high speed connectivity is there.

Nick Abrahams:               Fantastic vision for the future. Although that idea of perhaps a state of origin and being able to run on and take the first tackle, I’m not sure that would be for everyone, but it’s a great vision. Minister, I know that you’ve been very focused, not only on delivering a grand vision for what technology can do for Australia and Australians, but also the potential downsides. So you were the first in the world to appoint an eSafety commissioner in Julie Inman-Grant. She’s just gone past her five years now. Her mandate has expanded a little bit. Could you give us a sense of the eSafety commissioner’s role and what you see for that role into the future?

Paul Fletcher:     Well, the eSafety commissioner, as you say, was a bit of a world first when we established it in 2015. She has powers in relation to cyber bullying against Australian children, to require the social media platforms to take down material that’s found to be cyber bullying. The powers have been expanded into areas like unauthorized sharing of intimate images, otherwise known as revenge porn. Also, abhorrent violent material, things like the atrocious video of the murder of over 50 people in the Christchurch Mosque attack. We’ve committed to a new Online Safety Act, which we aim to have introduced into Parliament before the end of this year. This will build on the existing powers that the eSafety commissioner has. We’re going to add a new regulatory regime dealing with cyber abuse against adults. It’ll have a higher threshold because adults are more resilient than children, and we need to properly balance freedom of speech issues. But this will be again, world leading. So the eSafety commissioner has been an effective tool to help keep Australians safe online and there is more to do, and we’ve got a clear plan to do it.

Douglas Nicol:   I think this is really good news because with the increasingly toxic nature of a lot of the content on the internet, I think it’s great to see us in a world-leading position. Minister, thank you so much for your time. This has been certainly a wide ranging and very insightful chat. I reckon you’ve got by far the most interesting portfolio in the federal government. Thank you for your time and joining us on Smart Dust. That wraps it up for this episode Smart Dusters. As usual, there are some links and notes to peruse for this episode in the iTunes program notes. Thank you to the wonderful content creators at Daresay who produced this podcast. If you enjoyed today’s chat, you might enjoy hearing from another leader in the tech space in our upcoming chat with David Thodey, who as many of you will know, is chairman of the CSI [inaudible 00:00:26:59]. So make sure you subscribe to Smart Dust so you don’t miss this episode. It will give you some amazing tech trends insights. It was a great chat, but from me, Douglas Nicol, until next time.

Nick Abrahams:               And from me, Nick Abrahams, goodbye.

Douglas Nicol:   Goodbye.

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