Australia is witnessing the first major redesign of the payphone booth since 1983. But Telstra’s new vision is meeting resistance from some councils, and the matter is in the courts.
In an effort to make payphones relevant to the needs of modern Australians, Telstra’s revamped payphones feature mobile charging, Wi-Fi access through Telstra Air (free or via a Telstra broadband plan, depending on the area), and large digital advertising displays.
Sydney’s Lord Mayor Clover Moore described the new booths as “a craven attempt” to profit from “already crowded CBD footpaths”, and a “Trojan horse for advertising”.
Under existing Universal Service Obligation (USO) agreements, Telstra has to provide payphones as part of its standard telephone service. The USO is a consumer protection measure that ensures everyone has access to landline telephones and payphones, regardless of where they live or work. Telstra is the sole provider of USO services in Australia.
The USO is funded through an industry levy administered by the Australian Communications and Media Authority. This means registered carriers with revenues over A$25 million per year contribute to the levy, including Telstra.
The face of the new Aussie payphone
In a blog post last March, a Telstra employee said the new “smart payphones” provided emergency alerts, multilingual services, and content services including public transport information, city maps, weather, tourist advice, and information on cultural attractions.
The booths are 2.64m tall, 1.09m wide, and are fitted with 75-inch LCD screens on one side. In 2016, 40 payphones were approved by City of Melbourne planners and installed over the following year, marking the start of Telstra’s plans for a nationwide rollout.
Telstra’s submission to the city claimed the booths were “low-impact” infrastructure and therefore planning approval was not required, in accordance with the Telecommunications Act 1997 (Cth).
In 2017, Telstra and outdoor advertising company JC Decaux announced a partnership to “bring the phone box into the 21st century”.
It would initially have 1,860 payphones upgraded in Sydney, Melbourne, Brisbane, Adelaide and Perth. These five cities represent 64% of the country’s population and 77% of advertising spend.
Taking matters to court
Earlier this year, Telstra’s application for 81 new booths was blocked by the City of Melbourne, and the city commenced proceedings in the Victorian Civil and Administrative Tribunal to have the booths redefined as not being low-impact.
Given the council allowed 40 booths to be installed in 2017, it’s unclear why its position has since changed.
In May, Telstra hit back by starting federal court proceedings against the council in an effort to overturn prior proceedings. In June, the Brisbane and Sydney city councils joined the City of Melbourne as co-respondents.
Melbourne Councillor and Chair of Planning Nicholas Reece said the new payphones would create congestion on busy footpaths, describing them as “monstrous electric billboards masquerading as payphones”.
He said the booths were “part of a revenue strategy for Telstra”.
But Telstra claims the new payphones are only 15cm wider than previous ones. A company spokesperson said the extra size was necessary to accommodate fibre connections and other equipment needed to operate the booth’s services.
Who pays for, and profits from, payphones?
In 2017, a Productivity Commission inquiry into the USO reported an average annual subsidy of A$2,600-50,000 per payphone, funded through the industry levy.
But the levy doesn’t cover the cost of installing and providing advertising on booths. Also, Telstra’s advertising-generated revenue doesn’t directly offset the cost of installing and operating the payphones.
Telstra has advertised on its payphones for the past 30 years. But display screens for advertising on new booths are 60% larger than previous ones.
The City of Melbourne is concerned because commissioned research by SGS Economics and Planning estimates a 10% reduction in pedestrian flow because of the new booths. This would happen as a result of people getting distracted by the payphone advertising, and would cost the city A$2.1 billion in lost productivity.
That said, federal legislation doesn’t prevent Telstra from placing advertising on payphones. So the existing court case could hinge on Melbourne city council’s argument that by increasing the size of digital displays, Telstra’s new payphones are no longer low-impact.
The outcome should be known early next year.
Do we still need payphones?
The number of payphones in operation today is sharply down compared with the payphone’s heyday in the early 1990s, when more than 80,000 could be found across Australia.
But there’s strong evidence they continue to supply a vital public service.
Currently, Telstra provides more than 16,000 public payphones. Last year, these were used to make about 13 million phone calls, of which about 200,000 were emergency calls to 000.
So regardless of the verdict on the Telstra case, the public payphone is and will continue to be an iconic and integral part of our telecommunications landscape.
This week NBN Co announced pricing changes for the National Broadband Network.
It includes a new plan boasting a download speed of 1 gigabit per second and an upload speed of 50 megabits per second for $80 a month.
These are 20-fold improvements on the maximum NBN speeds now. Almost a decade since the first customers were connected, NBN Co is thinking about a genuinely 21st century offering in terms of speed and price.
The NBN is late, over budget and slow. Australia places 58th globally for fixed-line broadband speed. Not only do the NBN’s advertised speeds lag international standards but the actual speeds often don’t come close to what is promised.
Customer interest as a result has been unenthusiastic. NBN Co may well need to take a massive write-down on its assets because they don’t look like they’re worth A$50 billion.
All of this was entirely predictable, based on politicians failing to remember three basic lessons from Economics 101.
1: Technology often outstrips imagination
The history of innovation is littered with examples of remarkably important things being invented with no clear purpose in mind, or by accident, and then exceeding our wildest expectations.
Penicillin and vulcanised rubber (which led to the tyre for automobiles) were both invented by accident. The world wide web was developed as a means of communication among particle physicists. Most of us carry around in our pocket a computer (mobile phone) roughly as powerful than the world’s faster supercomputer circa 1985. Those have turned out to be pretty useful.
When the Coalition decided to scuttle Labor’s NBN plan for fibre-optic cable to every premises, on the basis that “fibre-to-the-node” and using existing copper telephone wires to the premises would be much cheaper, this is what the chief spruiker of the Coalition’s NBN plan, Malcolm Turnbull, said about broadband needs in 2010:
There isn’t much or anything you can do with 100 Mbps that you can’t do with 12 Mbps for residential customers.
The breathtaking lack of insight and imagination in this comment is responsible in no small part for the Flintstonian broadband infrastructure Australia now has.
Prioritising speed of roll-out (which hasn’t even happened) over speed of internet (which sure has happened) was a massive mistake.
2: Positives justify subsidies
You having fast internet is good for me when we connect. When consumers can connect quickly to a business’s website that’s good for the business. It makes it more profitable for businesses to invest in their internet operations. This has benefits for other consumers and even other businesses.
A great illustration of this is in Dunedin, New Zealand, where there have been all sorts of business-to-business spillovers from the city having the fastest internet speeds in Australasia. The ABC’s Four Corners program has highlighted how this has revolutionised New Zealand’s video-game development industry, among other things.
Economists call spillover effects to third parties externalities. Pollution is a negative externality, while the benefit of fast internet is a positive externality.
A sound business model for the NBN ought to recognise the positive externalities and ensure they are incorporated into the price mechanism, by offering a partial subsidy to encourage people to sign up. Like the reverse of a carbon price.
One of the NBN’s key problems is the way successive governments structured national investment in it. Setting up NBN Co as a quasi-corporate entity needing to make a commercial rate of return on the roughly A$50 billion investment in the network was a huge mistake. It was the opposite of providing a subsidy.
The telecommunications companies who retail the NBN have complained that NBN Co’s wholesale price points mean it is hard for resellers to make a profit. It’s a kind of quality death spiral: an unattractive product means fewer people buy it, leading to the product getting worse, leading to even fewer people buying it.
3: Uniform pricing doesn’t work
Finally, it’s never a good idea to charge everyone the same price when there are different costs to serve different people.
The idea was that higher returns from easy-to-service city homes would subsidise the higher costs of service homes in regional and remote areas. But city homes, precisely because they are cheaper to service, have other options. If not enough city customers signed up to the NBN, prices would be driven up, making the network even less attractive to city customers. It’s textbook adverse selection, just like in health-insurance markets.
The government tried to get around this by banning competition. But that’s never really possible, especially from technologies not yet invented. Like 5G. The 2010 business case assumed no more than 16% of households would go wireless. Oops.
As economic journalist Peter Martin wrote in 2011:
NBN will never make a return on the cost of its capital or meet its customer targets if it faces competition. Its corporate plan says so, at point 1: “The plan assumes effective regulatory protection to prevent opportunistic cherry picking […] the viability of the project is dependent upon this protection.”
What to do from here
Multiple governments have bungled the NBN. But there is a way to salvage things – a bit.
Holding constant the technology (fibre-to-the-node), the best thing the government could do is write down its investment massively – ideally so low that it can flog NBN Co off to someone who can be subject to access regulation – ensuring, like other utilities, ownership of infrastructure doesn’t stymie competition – and make a modest rate of return.
Our super funds are always sticking up their hands for infrastructure investment. This would be a good one.
Ideally, though, the technology should be fixed. Fibre-to-the-premises was always going to be expensive, but it was also going to be fast, and as future-proof as we could get.
Lack of imagination and inability to think past 12 Mbps less than ten years ago should not hold the nation back now.
Hype continues to surround the roll-out of 5G technology in Australia and across the world.
While there is promise of faster network speeds, and talk of exciting technologies like driverless cars, there’s also a growing movement to stop the implementation of 5G due to concerns about the effects it may have on our health.
But the scientific evidence we’ve got assures us there’s no reason to worry. The radio frequencies powering 5G will be well below the exposure limits known to cause harm.
What is 5G and how does it work?
5G is the 5th generation of mobile phone technology. All generations of mobile phones work using what’s called electromagnetic energy. The specific type of electromagnetic energy used by mobile phones is known as radiofrequency, sometimes called radio waves.
This type of radiation is non-ionising, so it doesn’t damage our DNA like ionising radiation can, such as that from the sun or x-rays. Ionising means there’s enough energy to remove electrons from the atoms they are attached to. This makes them unstable and is something non-ionising radiation, such as that used by mobile phones, lacks the power to do.
Initially, 5G will use the same type of radio waves as used in 4G. But in the future it will operate at higher frequencies. Higher frequencies allow for faster connections and response times, while also increasing capacity for more users to be connected.
The higher the frequency, the shorter the distance the radio waves travel. As the 5G frequencies will be higher than those used by previous mobile phone technologies, a lot more mobile phone base stations will be required.
Much of the public concern has centred around these two new elements – that the frequencies used will be higher, and that there will be more mobile phone base stations. While some people believe these two factors alone will lead to higher exposures, the reality is actually very different.
Can you be allergic to your Wi-Fi?
Higher frequencies don’t travel as far, meaning exposure is not as deep as previous generation technologies. This results in more superﬁcial exposures which are mostly absorbed by the skin rather than deeper in the body.
The idea that more base stations lead to higher exposures is also a common misconception. A larger number of base stations will actually provide a more efficient network. This means mobile phones can operate at a reduced power, which is likely to result in reduced overall personal exposure.
Research and regulation
Importantly, we have no evidence of any established health effects from the exposures related to mobile phones, despite extensive research. This consensus has been reiterated by independent international expert bodies.
We know a lot about how radiofrequency interacts with the human body. Health effects occur from exposure when there is a large rise in body temperature. But this will only be seen at power levels far higher than those used in telecommunications, like from a microwave oven.
Exposures from mobile phones and their base stations are tightly regulated. In Australia, safety standards are set by the Australian Radiation Protection and Nuclear Safety Agency (ARPANSA).
These standards are based on the current scientific evidence. They also cover the new frequencies that will be used by 5G. Importantly, the safety limits are set well below levels known to cause harm. And although technology can legally run at the safety limit, in reality, exposures are typically hundreds of times below these safety limits.
There is a lot of misinformation out there regarding 5G, and the electromagnetic energy associated with telecommunications more generally. While there’s no evidence of harm from such electromagnetic energy, there is evidence fear and anxiety can be harmful to our health and overall well-being.
While anti-5G sentiment and campaigning might be well-intentioned, without the scientific evidence to back these sentiments, it’s likely doing more harm than good. The challenge we now face is counteracting the misinformation out there.
Trade conflict between the US and China has accelerated towards the brink of trade war.
A recent Trump executive order preventing US companies from working with “adversaries” (China fits this description) was hammered home by a ban on selling US high-tech products to Chinese tech company Huawei.
Australia too has put a halt on 5G infrastructure coming from China.
But this is about more than just which company’s poles and wires will provide internet for your phone and movie downloads in the future.
Choices the US, Australia and other nations make around how they set up 5G will determine how we use technology for collaboration, innovation and global business.
Huawei’s 5G is becoming a global standard
5G is the fifth generation network for mobile connectivity. It has been described as “game changing” due to high speeds and high capacity, and provision of superior service to high numbers of users.
5G relies on standardisation – the technical specifications used in mobile networks – supported by patents and licensing agreements.
In mobile networks, standard essential patents (SEPs) are those patents that any company will have to license when implementing 5G. History suggests companies holding SEPs benefit significantly from royalties.
Data from April 2019 shows China, collectively, owns over one-third of the world’s SEPs for 5G.
China lost its opportunity in 1G and 2G, learned an expensive lesson from its failed 3G standard, and achieved substantial catch-up in 4G. It is determined to lead in 5G.
Chinese tech companies such as Huawei and ZTE understand that transition to 5G opens a window of opportunity for them to achieve this goal. To do this they need to build followers – and momentum is already moving in this regard.
By the end of March 2019, Huawei had reportedly been awarded 40 5G commercial contracts from carriers around the world (including 23 from Europe, six from the Asia Pacific, ten from the Middle East and one from Africa).
The battle of radio spectra
In addition to standardisation, radio spectrum is another critical factor in 5G. Radio spectrum is a limited resource that is used for communications from Earth to space.
Spectrum allocation is at the heart of 5G competition.
Huawei’s 5G technology has been developed for mid-band spectrums which are available for commercial use in many countries, including Australia.
The best plan for Australia is that mid-band solutions be used to cover the bulk of 5G networks, with high-band technologies to provide complementary coverage in densely populated areas.
The US has limited access to mid-band spectrums for commercial 5G, as most in this range are for defence use. So the US developed its 5G technologies for high-band spectrums – which presents that country with a dilemma.
It is not easy for the US to switch from high-band to mid-band 5G in a short time. And it’s not likely the rest of the world will give up using mid-band solutions, which provide wider coverage and require less investment in infrastructure.
A short-term answer is for the US to push its allies to jointly exclude Huawei from their 5G networks. This might be sought to protect the US from 5G “isolation”, and perhaps have other commercial or political implications – or a combination of these factors.
The consequence is that Australia, as one of those allies, would likely need to spend more money on base stations and the necessary infrastructure and wait a longer time for a fully operational 5G system.
For example, a Huawei 5G base station is only one-third the size of its 4G equivalents and weighs only 20 kilograms: it’s easier to install, and the technology is at least 18 months ahead of its competitors such as Nokia. This advantage is lost if Australia continues to block Huawei.
Australia’s fourth mobile telco, TPG, argues that there is “no credible case” to rollout its 5G as planned without Huawei.
5G will support many applications such as industry automation, self-driving cars, massive machine-to-machine communications, internet of things, smart cities and more.
This means the growth of 5G will accelerate development of an ecosystem in which different countries can co-exist and co-develop, supported by interconnected and interdependent supply chain networks.
Such ecosystems are built on mobile network infrastructures, upon which are layered technology platforms for manufacturing, medical treatments and payments (for example) and then applications for working, studying and living.
For example, in the future this sort of system might be used by Australian and Chinese academics and industry experts to work together on innovations related to health care, environmental protection or industrial automation.
But this may fall down if the involved countries build their 5G infrastructures differently.
Australia’s final 5G plan could have profound implications for Australia’s economic development into the future.
The United States and Australia are deliberately restricting the place of Chinese telco Huawei in their telecommunications landscapes.
We’re told these changes will be worth it from a security point of view.
But Huawei infrastructure is already ubiquitous in telecommunications networks, and we have other avenues available to us if we’re concerned about cybersecurity.
In the end, halting involvement of Huawei in Australia will be felt directly by customers. We will have to be satisfied with below-par 5G internet speeds and delayed service rollouts.
And we probably won’t be able to use Google Play on Huawei smart phones after 2020.
Huawei offers the best 5G
5G is a mobile phone network that promises top speeds, especially in highly populated areas. Australia has been expecting the network to be broadly up and running by around 2020 – there is limited availability in some central business districts right now.
Top 5G speeds can reach up to 10 gigabits per second, 20 times faster than 4G. This means movie downloads in a matter of seconds – as opposed to minutes with 4G. A mobile phone, gaming laptop or smart TV can communicate with a 5G network at a response speed of 1 millisecond, as opposed to 30 milliseconds with 4G.
Huawei, the world’s biggest manufacturer of telecommunications equipment, is leading the 5G race. The Chinese company is around 12 months ahead of its competitors Nokia and Ericsson.
Huawei has been involved in providing 3G and 4G services in Australia since 2004 – reportedly working with Vodafone and Optus, but not Telstra or NBN Co. Huawei built a private 4G network for mining company Santos, and digital voice and data communication systems for rail services in Western Australia and New South Wales. This includes radio masts, base stations and handheld radios, but not the core network.
This stems from apparent Australian and US government concerns that Huawei infrastructure could allow the Chinese government to collect foreign intelligence and sensitive information, and sabotage economic interests.
Costs passed on to consumers
Australia’s telecommunications networks have already felt the impact of the Coalition’s Telecommunications Sector Security Reforms announced in August 2018.
These reforms “place obligations on telecommunications companies to protect Australian networks from unauthorised interference or access that might prejudice our national security”.
The guidance effectively put the companies on notice, implying that use of Huawei could violate cybersecurity laws. No company wants to be in such a position. Continuing with Huawei after being informed that the company may pose a national security risk could bring legal and reputational risks.
The result is companies such as Optus and Vodafone were left scrambling to re-negotiate 5G testing and rollout plans that had been in the works since 2016. Optus has already delayed its 5G roll out.
Most operators do use additional manufacturers such as Nokia and Ericsson for networks and testing. But it’s already clear from cases in Europe that such companies have been slow to release equipment that is as advanced as Huawei’s.
Costs incurred by such changes and the delays in rolling out high-quality services are absorbed by mobile phone companies in the first instance, and eventually passed on to the consumer.
Given existing frustrations with the NBN, customers will continue to wait longer and may have to pay more for top 5G services.
Customers who prefer to use Huawei-made phones could be hit with a double whammy. Recent actions by Google to suspend business operations with Huawei could prevent these customers from having access to Google Play (the equivalent of Apple’s app store on Android devices) in the future.
Huawei is already here
But it’s doubtful Huawei has assisted such efforts. Technical flaws detected in Italy are reported to be normal in the sector and not due to a backdoor.
Germany has decided to introduce a broad regulatory regime that requires suppliers of 5G networks to be trustworthy, and provide assured protection of information under local laws.
A similar approach in Australia would require telecommunications equipment to be tested before installation, and at regular intervals after installation for the lifetime of the network, under a security capability plan the supplier is required to submit.
More broadly speaking, the Coalition has pledged A$156 million to cybersecurity, aimed at developing skills to defend against cyber intrusions and to improve the capabilities of the Australian Cyber Security Centre (ACSC). These plans could reasonably be timed with the expected launch of 5G at the end of 2020.
Added to this, the 2018 Assistance and Access Act – commonly referred to as the Encryption Bill – already requires all telecommunications manufacturers to protect their networks and assist national security and law enforcement agencies to share information. Huawei is subject to this legal obligation.
If there are security fears about 5G, those same fears would exist in respect of 4G that has been installed and is supported by Huawei in this country for more than a decade.
It’s not clear what we gain by blocking Huawei’s involvement in Australia’s 5G network.
The national broadband network (NBN) has been a major issue in federal election campaigns for close to a decade.
And the 2019 version of the NBN bears little resemblance to the futuristic, egalitarian earlier editions.
Despite years of controversy, cost over-runs, and delays, the coalition government says our $50 billion national network is finally nearing completion.
But Labor’s Shadow Communications Minister Michelle Rowland has set out some different priorities should her party achieve government in the coming election. One of these is a “digital inclusion drive”, aimed at improving access to the internet for older Australians and low-income households.
In addition, Labor is making no immediate commitment to replacing copper connections with fibre.
Instead, if elected, it will fund service and reliability fixes for those on the copper NBN, and impose service guarantees for small businesses and consumers. It will examine what has happened to the economics of the network, looking at its cash flow, pricing, capital structure, and future options for network upgrades.
Labor’s policy will disappoint those hoping for a fast-tracked return to that party’s original (2009) vision of high-speed fibre for (almost) everyone. But its 2019 plan is an important acknowledgement that network infrastructure is only one part of the NBN story.
Affordability and digital inclusion
The Australian Digital Inclusion Index (ADII) provides data on the affordability of internet services for Australians since 2014. It shows that recent, modest improvements seen by some households have been matched by declines in affordability for a number of Australia’s more digitally excluded groups.
The results for low-income households, single parents, people outside the labour force, Indigenous Australians, and people with a disability remain poor.
The good news for Australian consumers is that the pricing of mobile services has improved, reflecting competitive pressures and the reduced cost of delivery as a consequence of investment by network owners.
But when we look at fixed broadband services — the kinds of connections used by most households — recent price increases by NBN have led to a decline in the number of low-cost plans on the market. This change post-dates the most recent ADII report (2018), and the effects are beginning to work their way into the market.
Communications costs matter
Communications services have a knock-on effect in many other areas of life and work.
Access to high-speed broadband can reduce the costs of using other services considerably. This makes critical activities like banking, seeking government information, looking for work, or studying much easier.
But when we speak of the cost savings linked with online services, we need also to bear in mind the flip-side of those savings: the much higher costs borne by those, often less well-off, citizens who must access services offline.
If an individual on a low income lacks electronic access to banking or government information, the cost of commuting to do these things in person can be prohibitive — and especially so for Australians living in remote or regional areas.
For children at school and adults in education or training, a lack of access to the internet means many will fall behind their peers, as access to educational materials and online content becomes a core part of the modern education experience. This has implications for Australia’s ability to take advantage of the next wave of digital transformation.
Australia’s digital divide is not going away
Expensive for everyone
The costs of inequitable internet access are directly felt by many families, but the broader costs are borne by society.
And so digital exclusion now has the potential to be a drag on Australia’s economic growth and productive potential for decades to come.
For individuals, conducting activities offline may be time-consuming and expensive. But that’s also true for the government. It’s estimated that even taking half of government services online would save around A$20 billion.
Aside from the costs of lower productivity, economic growth and tax receipts, inequitable access means that the material savings from automated services may never be realised.
Affordable access to broadband also supports the cost effective delivery of core government and other services – such as health – to regional and remote locations.
Although addressing inequitable access will involve costs in the short term, effective policy measures to improve affordability are likely to generate considerable national benefits.
Infographic: Budget 2019 at a glance
How to improve affordability
At this stage Labor is not saying what it might do to improve internet affordability for low-income households.
The idea of writing down the NBN has been widely discussed. It does, however, have serious implications: it will be very costly to taxpayers.
It will also limit the ability of the NBN to invest in future network upgrades and threaten the economics of uniform national pricing, the NBN’s key promise of equity for regional and remote Australia.
That could mean a return to the pre-NBN communications landscape, with regional and remote Australia relying on increasingly obsolete communications infrastructure while metropolitan Australia moves ahead.
A direct increase in cash payments is likely to improve living standards materially for those in poverty, but more money for low income households doesn’t necessarily mean that broadband will be within their reach.
The creation of a concession at a retail level would make the telecommunications companies responsible for selling products at a cheaper rate, which in an era of reduced margins appears unlikely to occur.
Also, a series of retail concessions can lead to consumer confusion, as the scope of each scheme and the discounts on offer vary wildly. We’ve seen these problems in the energy sector.
Another option is to create a wholesale concession, a measure that has been promoted by consumer advocates. This would involve the government paying NBN to put a wholesale product into the market that retailers could purchase and retail to low income households.
A nationally uniform concessional service would allow retailers to compete in offering affordable services to low-income households, boost NBN take-up and consequently its revenue and financial viability.
Focus on inclusion
While the introduction of a concessional arrangement would involve government picking up a part of the tab for service delivery, it offers sizeable benefits.
By ensuring NBN access for low-income households, the government avoids forgoing a large proportion of the savings that should accrued from the digital transformation of government services (and the benefits to be gained from improving services).
It would also prevent a lower take-up of NBN services and revenues. Without such an arrangement, questions will continue to be raised about the financial viability of NBN, its repayment of outstanding debt to government and whether there needs to be a write-down.
The take up of broadband has historically seen improvements in average household income, productivity, and the creation of new kinds of work and services.
In order to maximise the benefits of the current wave of digital change, we’ll need a broader public debate, that goes beyond the relative merits of fibre and 5G.
Policy will need to address the challenge of affordability, invest in digital literacy, and ensure that all Australians can access the services that they need.
While there are many improvements that can and should be made to our national network infrastructure, a focus on the larger problem of digital inclusion is both welcome, and overdue.
According to the Department of Home Affairs, encryption already impacts 90% of Australian Security Intelligence Organisation’s (ASIO) priority cases, and 90% of data intercepted by the Australian Federal Police. The measures aim to counteract estimates that communications among terrorists and organised crime groups are expected to be entirely encrypted by 2020.
The Department of Home Affairs and ASIO can already access encrypted data with specialist decryption techniques – or at points where data are not encrypted. But this takes time. The new bill aims to speed up this process, but these broad and ill-defined new powers have significant scope for abuse.
The Department of Home Affairs argues this new framework will not compel communications providers to build systemic weaknesses or vulnerabilities into their systems. In other words, it is not a backdoor.
But it will require providers to offer up details about technical characteristics of their systems that could help agencies exploit weaknesses that have not been patched. It also includes installing software, and designing and building new systems.
Compelling assistance and access
The draft Assistance and Access Bill introduces three main reforms.
First, it increases the obligations of both domestic and offshore organisations to assist law enforcement and security agencies to access information. Second, it introduces new computer access warrants that enable law enforcement to covertly obtain evidence directly from a device (this occurs at the endpoints when information is not encrypted). Finally, it increases existing powers that law enforcement have to access data through search and seizure warrants.
The bill is modelled on the UK’s Investigatory Powers Act, which introduced mandatory decryption obligations. Under the UK Act, the UK government can order telecommunication providers to remove any form of electronic protection that is applied by, or on behalf of, an operator. Whether or not this is technically possible is another question.
Similar to the UK laws, the Australian bill puts the onus on telecommunication providers to give security agencies access to communications. That might mean providing access to information at points where it is not encrypted, but it’s not immediately clear what other requirements can or will be imposed.
For example, the bill allows the Director-General of Security or the chief officer of an interception agency to compel a provider to do an unlimited range of acts or things. That could mean anything from removing security measures to deleting messages or collecting extra data. Providers will also be required to conceal any action taken covertly by law enforcement.
Further, the Attorney-General may issue a “technical capability notice” directed towards ensuring that the provider is capable of giving certain types of help to ASIO or an interception agency.
This means providers will be required to develop new ways for law enforcement to collect information. As in the UK, it’s not clear whether a provider will be able to offer true end-to-end encryption and still be able to comply with the notices. Providers that breach the law risk facing $10 million fines.
Cause for concern
The bill puts few limits or constraints on the assistance that telecommunication providers may be ordered to offer. There are also concerns about transparency. The bill would make it an offence to disclose information about government agency activities without authorisation. Anyone leaking information about data collection by the government – as Edward Snowden did in the US – could go to jail for five years.
There are limited oversight and accountability structures and processes in place. The Director-General of Security, the chief officer of an interception agency and the Attorney-General can issue notices without judicial oversight. This differs from how it works in the UK, where a specific judicial oversight regime was established, in addition to the introduction of an Investigatory Powers Commissioner.
Notices can be issued to enforce domestic laws and assist the enforcement of the criminal laws of foreign countries. They can also be issued in the broader interests of national security, or to protect the public revenue. These are vague and unclear limits on these exceptional powers.
The range of services providers is also extremely broad. It might include telecommunication companies, internet service providers, email providers, social media platforms and a range of other “over-the-top” services. It also covers those who develop, supply or update software, and manufacture, supply, install or maintain data processing devices.
The enforcement of criminal laws in other countries may mean international requests for data will be funnelled through Australia as the “weakest-link” of our Five Eyes allies. This is because Australia has no enforceable human rights protections at the federal level.
It’s not clear how the government would enforce these laws on transnational technology companies. For example, if Facebook was issued a fine under the laws, it could simply withdraw operations or refuse to pay. Also, $10 million is a drop in the ocean for companies such as Facebook whose total revenue last year exceeded US$40 billion.
Australia is a surveillance state
As I have argued elsewhere, the broad powers outlined in the bill are neither necessary nor proportionate. Police already have existing broad powers, which are further strengthened by this bill, such as their ability to covertly hack devices at the endpoints when information is not encrypted.
Australia has limited human rights and privacy protections. This has enabled a constant and steady expansion of the powers and capabilities of the surveillance state. If we want to protect the privacy of our communications we must demand it.
The Telecommunications and Other Legislation Amendment (Assistance and Access) Bill 2018 (Cth) is still in a draft stage and the Department of Home Affairs invites public comment up until 10th of September 2018. Submit any comments to firstname.lastname@example.org.
The federal government today announced its proposed legislation to give law enforcement agencies yet more avenues to reach into our private lives through access to our personal communications and data. This never-ending story of parliamentary bills defies logic, and is not offering the necessary oversight and protections.
The trend has been led by Prime Minister Malcolm Turnbull, with help from an ever-growing number of security ministers and senior officials. Could it be that the proliferation of government security roles is a self-perpetuating industry leading to ever more government powers for privacy encroachment?
That definitely appears to be the case.
Striking the right balance between data access and privacy is a tricky problem, but the government’s current approach is doing little to solve it. We need better oversight of law enforcement access to our data to ensure it complies with privacy principles and actually results in convictions. That might require setting up an independent judicial review mechanism to report outcomes on an annual basis.
Where is the accountability?
The succession of data access legislation in the Australian parliament is fast becoming a Mad Hatter’s tea party – a characterisation justified by the increasingly unproductive public conversations between the government on one hand, and legal specialists and rights advocates on the other.
If the government says it needs new laws to tackle “terrorism and paedophilia”, then the rule seems to be that other side will be criticised for bringing up “privacy protection”. The federal opposition has surrendered any meaningful resistance to this parade of legislation.
Rights advocates have been backed into a corner by being forced to repeat their concerns over each new piece of legislation while neither they nor the government, nor our Privacy Commissioner, and all the other “commissioners”, are called to account on fundamental matters of principle.
The post has three purposes:
- to promote greater use of data,
- to drive economic benefits and innovation from greater use of data, and
- to build trust with the Australian community about the government’s use of data.
The problem with this logic is that purposes one and two can only be distinguished by the seemingly catch-all character of the first: that if data exists it must be used.
Leaving aside that minor point, the notion that the government needs to build trust with the Australian community on data policy speaks for itself.
National Privacy Principles fall short
There is near universal agreement that the government is managing this issue badly, from the census data management issue to the “My Health Record” debacle. The growing commissioner class has not been much help.
Australia does have personal data protection principles, you may be surprised to learn. They are called “Privacy Principles”. You may be even more surprised to learn that the rights offered in these principles exist only up to the point where any enforcement arm of government wants the data.
So it seems that Australians have to rely on the leadership of the Productivity Commission (for economic policy) to guarantee our rights in cyber space, at least when it comes to our personal data.
Better oversight is required
There is another approach to reconciling citizens’ interests in privacy protection with legitimate and important enforcement needs against terrorists and paedophiles: that is judicial review.
The government argues, unconvincingly according to police sources, that this process adequately protects citizens by requiring law enforcement to obtain court-ordered warrants to access information. The record in some other countries suggests otherwise, with judges almost always waving through any application from enforcement authorities, according to official US data.
There is a second level of judicial review open to the government. This is to set up an independent judicial review mechanism that is obliged to annually review all instances of government access to personal data under warrant, and to report on the virtues or shortcomings of that access against enforcement outcomes and privacy principles.
There are two essential features of this proposal. First, the reviewing officer is a judge and not a public servant (the “commissioner class”). Second, the scope of the function is review of the daily operation of the intrusive laws, not just the post-facto examination of notorious cases of data breaches.
It would take a lengthy academic volume to make the case for judicial review of this kind. But it can be defended simply on economic grounds: such a review process would shine light on the efficiency of police investigations.
According to data released by the UK government, the overwhelming share of arrests for terrorist offences in the UK (many based on court-approved warrants for access to private data) do not result in convictions. There were 37 convictions out of 441 arrests for terrorist-related offences in the 12 months up to March 2018.
The Turnbull government deserves credit for its recognition of the values of legal review. Its continuing commitment to posts such as the National Security Legislation Monitor – and the appointment of a high-profile barrister to such a post – is evidence of that.
But somewhere along the way, the administration of data privacy is falling foul of a growing bureaucratic mess.
The only way to bring order to the chaos is through robust accountability; and the only people with the authority or legitimacy in our political system to do that are probably judges who are independent of the government.