Communications Regulation Is A Dog’s Breakfast

The way we regulate media and communications is a dog’s breakfast. That judgment has been blindingly obvious for more than a decade now.

But it has now been confirmed by no greater authority than the dog.

A paper by the Australian Communications and Media Authority (ACMA), Broken Concepts, was released on Monday to coincide with the Government’s media convergence review. In it the communications regulator details the complexity and contradictions of laws which regulate everything from phones to emails to subscription television.

For instance: Australian content requirements apply to television, but not to the television-like services broadcast via the internet. Subscription TV and free-to-air TV have totally different content standards. Spam faxes and spam emails and telemarketing are regulated differently. The universal service obligation seems incongruous in a world where most Australians have mobile phones and many people are going home-phone-free.

It goes on. In the regulations and regulatory frameworks they studied, ACMA found the “majority” were broken or have been severely challenged.

This is not a surprise. Regulation and technological change just don’t go well together.

Telecommunications and broadcasting policy has long been characterised by rent-seeking and paternalism.

Indeed, we got off to a terrible start. In 1905, the Commonwealth decided to take control of the radiofrequency spectrum with the Wireless Telegraphy Act. But the Act had been delayed by the Barton government’s worries that the new technology would challenge the existing telegraph companies.

For a century, governments have conspired with politically-protected firms to hold back or cripple new technologies at the expense of consumers.

It’s that century of regulatory perfidy that has gifted us the inconsistency and confusion of the 23 Acts and 523 pieces of regulation ACMA oversees in 2011.

In 2000, the Productivity Commission described a history of “quid pro quos” which “created a policy framework that is inward-looking, anti-competitive and restrictive.” And the Howard and Rudd governments only prolonged this sad tale.

Communications regulation is worth cleaning up for its own sake. Inconsistent regulation distorts investment and consumption. It impairs innovation.

But it’s doubly worth cleaning up considering the pace of technological change will only increase. Governments will forever have to figure out how new technologies fit in.

The ACMA suggests we reframe our views about communications regulation according to a ‘network layers’ model. This model was developed in the early 2000s by communications academics who took the internet challenge to legacy media seriously.

Communications technologies have traditionally been regulated separately and distinctly – in “silos”. But treating technologies like silos doesn’t make sense any more. The copper wire network is no longer the only way you can make a phone call. Free to air television isn’t the only place you can watch a television show.

Instead of silos, the layers model views all communications networks as consisting of a number of layers, from infrastructure (copper wire, for example, or mobile phone networks) up to content (television programs or phone calls).

ACMA suggests a model with four layers. There are other options. The original theorists talked about seven, others talk about five, or three.

But the idea is the same. All infrastructure should be regulated consistently, no matter what technology that infrastructure is made of. All content should be regulated consistently, no matter how it is delivered.

The layers model is elegant. It’s probably the only model which will accurately and flexibly describe the communications of the future.

However, ACMA may not be aware the network layers model implies something more than moderate reform.

In a regulatory environment governed by such a model, the communications regulator would probably have nothing to do. Adopting a layers model would bring radical deregulation.

After all, if a regulator treated internet and free to air exactly the same, how would they enforce Australian content requirements on both? ACMA would be unable to insist that a certain percentage of all websites were Australian even if they wanted to. Same for the broadcasting standards and codes of practice – how could a regulator insist on “balance” on the internet?

That’s content. If the Government wanted to regulate infrastructure consistently, would it insist every owner open its network to competitors – as Telstra’s copper lines were treated? Or would it leave infrastructure to the market – like mobile phone networks? The economic logic of infrastructure investment suggests less regulation would be imposed, not more.

Of course, regulation being regulation, the current dog’s breakfast has supporters. Industries have grown up relying on this regulatory mess. Any change is a threat to the commercial status quo.

And the hysteria we saw from the actors’ union after a minor change to the Foreign Actors Certification Scheme earlier this year will be nothing compared to the outcry when the Government concludes, rightly, that Australian content requirements are anachronistic and impossible in a digital world.

Furthermore, as hostilities between News Limited and the Government increase, there’s no political appetite for media deregulation. No matter how obvious or necessary.

But credit for ACMA where it’s due. It’s a rare regulator which recommends such radical change. Especially change which could, if done properly, close that regulator down.