The Internet Society of Australia gratefully acknowledges the support of its Premier Sponsors, Telstra and Cisco Systems, Major Sponsors connect.com.au, Perth Internet and Siemens Ltd, and Sponsor, Melbourne IT.
The year to November 2000 has been the most successful for the Australian chapter of ISOC, the Internet Society of Australia (ISOC-AU) as well as being frustrating in some policy areas. During these twelve months, we have faced the frustration of policy making that appeared ignorant of key features of the Internet. At the same time we have been able to place ISOC-AU on a much more solid basis.
As a result of our activities this year, ISOC-AU is now respected as an independent voice on a range of Internet related issues with a strong technical understanding and a users perspective. In short, we have taken up the position of being the 'Friends of the Internet' in Australia.
We have been strongly helped in this regard by aligning ourselves with the ISOC vision that 'The Internet is for Everyone!' In the face of intense speculation in Internet markets and stock prices, the establishment of this respected position of sound understanding has
not been easy. Even so, we have proved this year that there are many people in Australia who strongly support our cause and vision.
I would like to extend my appreciation to all the people inside and outside ISOC-AU who have made these successes possible. I have already mentioned the critical support of our sponsors. The volunteers of ISOC-AU have also made a substantial contribution to our success. Our enthusiastic directors and the volunteers who have contributed to our policy submissions deserve special mention.
I would also like to give special mention to Antony Healy who retired as a director this year. Antony is a founding member of ISOC-AU and has contributed significant time and resources to support the work of ISOC-AU.
I commend the following report of our activity to you.
regards,
Tony Hill
Executive Director
November 2000
Hot Issues
- Internet Censorship
- Bandwidth
- Domain Names
- Age Access Verification
- Privacy
- Digital Television
Internet Growth in Australia
- personal use
- business use
Organisational Achievements
- Sponsorship
- Executive Director
- Membership
Finances
- Annual Companies Report
- Exchange Rate and GST
Outcomes from Strategic Plan
- communities of interest:
- solid operational based for auDA:
- repeal of BSA or changes:
- access to full Internet without censorship:
- forum for Australian businesses:
- monitor and advise on technical and social matters:
- assist government to improve their internet policy:
- enhance business use:
- unbiased info for new users:
- untimed local calls:
- research on international bandwidth:
- support all uses of the Internet without restrictions:
Major Initiatives
Performance Indicators
- ISOC-AU Reputation
- Overall Funding Level
- Membership
- Secretariat
- External funds
- Internet Censorship
One of our main focus issues for the last 12 months has been new legislation for Internet censorship in Australia. Indeed, Australia was one of the first countries to establish such legislation and its apparent conflict with an existing Internet culture of free expression
raised concerns around the world. For many in the Australian Internet community, this was the issue that we did not need! There are many more important issues that could have been addressed in encouraging development and use of the Internet here.
ISOC-AU was one of the organizations that raised its voice in opposition to the policy directions that have been embodied in Australia's new legislation: the Broadcasting Services Amendment Act 1999. As debate continued through the whole of 1999, ISOC-AU can claim credit for injecting some realism into the thinking of decision makers. We made submissions to Parliamentary Committees, wrote to politicians, issued news releases and debated the Minister on national radio. The history of our efforts is available on the ISOC-AU web site:
www.isoc-au.org.au. Unfortunately, the final political solution still embodies key difficulties for the Internet community and industry here.
In cooperation with others concerned about the issue, we managed to achieve the following alterations to policy:
- no central filtering of Internet content in Australia
- adjustment of wording to avoid the majority of Australian businesses being affected
- improved awareness of the technical problems with filtering of content
- a better appreciation of approaches to protection of children from undesirable content
Unfortunately, the political dimensions of the debate about Internet censorship meant that we were not fully successful in avoiding the worst provisions of our legislation. We are still concerned that ISPs can be subject to major penalties if they are not seen as complying with the endorsed Internet Industries Association Code of Practice. Our view is
that the industry would be in a much better position if the provisions relating to ISPs were removed from the legislation. Regular reviews of operation of the legislation are planned and we look forward to pressing this issue in future.
What has been the result of all the controversial debate on this subject? The Australian Broadcasting Authority has issued 62 take down notices over the first six months of the legislation that require Internet content hosts to remove content from the web. Much content has been transferred to web sites outside Australia. The ABA has also referred some content to the makers of content filtering software and some to police. Australians now have access to a complaints mechanism for classification under Australia's censorship regime. ISPs are required to comply with an Industry code of practice if they are to
avoid the provisions of the legislation; a part of which requires them to make available filtering software.
Given that no one has yet been able to guarantee that software will filter out all content that any particular person may consider undesirable, we consider that the best approach for parents is to place computer equipment in a public room in the house and take an interest in
the material that their children are accessing.
- Bandwidth
The Australian government established a national inquiry into the provision of 'backbone' bandwidth that reported early in 2000. The inquiry was established because of concerns that Australia may be short of bandwidth as it tries to participate in the global online world.
ISOC-AU made a submission commenting on the Inquiry's discussion paper. We pointed to the importance of gaining universal access to high bandwidth Internet in order to participate fully in the information society. At the same time, we highlighted ongoing difficulties for the majority of users in obtaining affordable access to such bandwidth in Australia. A copy of our submission is available at
www.isoc-au.org.au.
In a potentially misleading conclusion, the inquiry found that Australia has an abundance of installed bandwidth for its backbone communications network. This finding was principally based on the view that there is substantial installed fibre optic cable between major cities and that new technologies, principally Dense Wave Division Multiplexing (DWDM), would allow vastly increased data transmission rates through this installed cable. An additional point was that efficiencies of 20 to 1 could be achieved by eliminating some elements of the telecommunications stack, such as ATM and SDH (or SONET). Undoubtedly, major efficiency
gains can be made from using emerging technologies in combination with currently installed cables, however the conclusion of the inquiry is misleading because it implies that there is affordable access to high bandwidth Internet. The Inquiry's report can be found at
on the Department of Communications, Information Technology and the Arts web
site at http://www.dcita.gov.au.
The Inquiry also identified two key challenges to accessing bandwidth in Australia. It correctly identified difficulties for regional, rural and remote areas as well as challenges for Australia's international connections. Australia's major international fibre optic cables point to Europe, the Middle East and America. The government has introduced new rules for investments in international cables and there are now major investments in cables pointing to Asia. Nevertheless, Australia will continue to face the challenge of long hauls between here and major northern hemisphere countries. Interconnect charges on the North
American routes continue to be a problem.
Rural and remote access to bandwidth continues to be a policy challenge for Australia. Decision makers in government and companies still do not fully understand the needs of these lower population density areas of Australia. Carriers are still treating these regions as more challenging markets. As physical services are reduced in these areas, Internet access is critical for rural and remote citizens.
Two key policy changes were made by the Australian government during the year that were designed to address rural and remote access to bandwidth. One was inclusion of a data component in the Universal Service Obligation. The other was beginning to implement contestability for provision of USO services. These two initiatives have been
supported by additional funding programs supported by money from the sale of portions of the national government telecommunications carrier, Telstra. A key funding program is being used to fund additional equipment that will support untimed local call cost of Internet access for all areas of Australia. These policies will help build regional access to some extent, but in certain areas the action is too little too late. The data capability included in the USO is only a 64k data rate and is not subject to the price caps applying to other USO services. Australia needs to move quickly to low cost access to megabit date
rates.
- Domain Names
Administration and policy for domain name management have provided to be a continuing challenge for Australia. Initial attempts to establish a more broadly based industry self regulation environment in 1996 were not successful. Late in 1999 a breakthrough was made with establishment of the new body, .au Domain Administration (auDA).
ISOC-AU has been a strong supporter of the establishment of auDA as a membership based administrator for the .au domain space. auDA's first general meeting was held in November last year and provided a smooth establishment of the new organization in contrast to the sometimes heated previous debates. The successful initial general meeting was a
considerable tribute to auDA's interim board. The new board moved quickly to establish an operational base and appointed a Chief Executive Officer in December. Unfortunately, difficulties with initial appointments have delayed a permanent appointment until September.
A key challenge for auDA has been to establish its financial base. auDA's board and CEO have been working with each of the .au domains to put in place agreements for delegating administration and provide funding arrangements for auDA. A key turning point was the decision by Robert Elz to delegate administration of .com.au to auDA in December.
Agreements have been reached with .com.au, .net.au, .asn.au, .gov.au and .csiro.au. Negotiations are proceeding with .edu.au and .org.au.
The next challenge for auDA is to use a public consultation process to review administration policies where justified for each of the second level domains. Two panels have been established to review policies in the areas of Naming and of Competition. ISOC-AU is represented on both panels and their work is planned for completion by June 2001.
- Age Access Verification
Following introduction of Internet censorship, there was a need to establish agreed age verification systems for access to particular classified material. In Australia, the 'R' rated classification is designed to be accessed only by people who are more than 18 years old.
The Australian Broadcasting Authority circulated guidelines for comment during December 1999. ISOC-AU was critical of the draft guidelines because they demanded too high a level of personal disclosure including name and address information. Collection of this information presented unnecessary privacy risks in keeping this information confidential.
The final guidelines were much more consistent with the approach proposed by ISOC-AU - see
www.isoc-au.org.au for a copy of our submission. They had moved much closer to age verification for other contentious areas such as alcohol and tobacco. Now, age verification
depends only on provision of credit card numbers and a statement that the user is over 18 years of age.
- e-Commerce
It should no longer be a surprise that e-Commerce has been the major growth area for Internet use over the last 12 months. The so called 'new economy' is now a regular topic of discussion for many commentators and some policy makers. Business to Business (B2B) and Business to Consumer (B2C) markets are key areas of focus. But the question still
remains who is making money from any of this activity? It appears that few businesses are making money from building e-Commerce markets at this stage. Advertising is still the major source of revenue for on-line B2C businesses. Even so, the potential for change in markets and marketing is huge. Watch out for events in this space commencing around 12 to 36
months from now.
On the B2B front, much more substantial changes are taking place. Management and procurement are emerging as areas of fundamental change. Business management is being revolutionized by the real time information collection made possible by the Internet. Stock levels can be slashed and redundant production can be eliminated. In short, business risk is being massively reduced. A key proponent of these views is Alan Greenspan, Chairman of the US Federal Reserve. He has been speaking in detail about the impact of computers and the Internet on the record levels of productivity growth in the US. Australian developments are also proceeding apace and we are seeing similar productivity gains although policy makers here are yet to take the new economy influences seriously. ISOC-AU has been active in this area through media interviews and by writing letters to the Australian Financial Review and politicians.
The B2C area is challenging while Australians continue to be wary of online purchasing. Only 6% of Australian adults made purchases over the Internet in the year to May 2000 according to the Australian Bureau of Statistics. Key issues still confront would be online customers including affordability, access, useability, privacy, security, authenticity, copyright and censorship. In summary, consumers need to develop trust with online businesses before they are prepared to enter seriously into online purchases. For the Australian Federal Government, these issues range across a multitude of portfolios, so that despite the establishment of the National Office of the Information Economy (NOIE)
under Senator Alston, Minister for Communications, Information Technology and the Arts, he is only one voice among many. The multi-portfolio situation also makes coordination difficult even when there is a base of goodwill between Departments. ISOC-AU was
disappointed that continuing coordination efforts through NOIE have been weakened because it was not provided with additional funding in the 2000 Federal Budget. We have made these comments publicly. We welcome the subsequent announcement of a strengthened status of NOIE both through amalgamation with the Office of Government Online and its establishment
as an Executive Agency reporting direct to the Minister.
- Privacy
Privacy is one of the key drivers of personal activity on the Internet whether for business or personal interests. During 1999-2000, a number of companies overstepped the mark on privacy, including establishment of large scale databases of consumer profile information.
In Australia, the need for action on privacy protection has been recognized by the Federal Privacy Commissioner and the Commonwealth Government. The Commissioner, in particular, speaks eloquently on the difficulties that can emerge if privacy concerns are ignored. This
realization has prompted the Commonwealth to introduce legislation to extend privacy protection from the public to the private sector. Unfortunately, lack of acceptance of the need for privacy protection from industry has led to significant exemptions in the legislation that will leave Internet users doubtful about their protection. For
instance, there are exemptions for pre-existing collections of information, for businesses with turnover of less than $3 million a year and potentially differing arrangements for different industries. Even the Commissioner has been critical of an exemption for political
parties. ISOC-AU has expressed concerns about these exemptions publicly.
Following its introduction, the draft legislation has been considered by Parliamentary Committees in the Senate and House of
Representatives. Organizations and individuals with long experience in analysis of privacy issues are closely watching this process and have provided evidence to the Committees. The Government has introduced amendments to
the legislation for instance to reverse the exemption for all small businesses so that only those not dealing with private information will be exempt. Following these amendments the legislation is quite complex and is likely to still leave Internet users uncertain about their privacy protection. ISOC-AU is continuing to keep a close watch on the privacy issue.
- Digital Television
In December, the Commonwealth Government announced its policy for implementation of digital television in Australia. The decision allowed for both standard and high definition digital broadcasting but continued the previous government policy that there should be no new free to air television stations in Australia. Thus the position of the existing commercial networks was preserved. Hopeful new entrants to digital broadcasting, including the Fairfax and Murdoch media organizations, were limited to the role of datacasting, which has been defined as carrying no more that 10 minutes of full motion video per hour. A subsequent announcement by Minister Alston has wireless delivery of Internet content provided that it is not through the broadcast frequencies. ISOC-AU will continue to closely watch convergence of Internet and broadcasting technologies to ensure that people can gain maximum access to the Internet.
INTERNET GROWTH IN AUSTRALIA
- personal use
The number of people using the Internet continued to increase substantially in 2000. While the proportion of adults accessing the Internet in Australia may be comparable with overseas countries, our absolute number of users at 6.4 million or 46% of the adult population
is low due to our small population.
Australia is facing the issues of the digital divide more seriously in 2000. The high growth rates in numbers of people accessing the Internet in the mid 1990s are falling away and use by some age groups may be saturating. For instance, use by young adults aged 18 to 24 years has remained just above 70% for the last year and half. Similar trends are
appearing for all other age groups. The levelling off in growth rates shows that the Internet is yet to appeal to a significant proportion of our population. As much information, commerce and government services moves online, these groups risk being excluded from some services and efficient means of access. This challenge will affect more than half of the adult population, particularly in older age groups.
Similar challenges face other groups. In Australia, a lower proportion of women access the Internet. In regional areas, there are lower rates of household connection and this is likely to be associated with poorer service outside of the major centres.
- business use
The most recent official statistics show that businesses are yet to make full use of the Internet. These statistics produced by the Australian Bureau of Statistics are now likely to be well out of date. They show that in June 1998 only 29% of businesses were using the Internet and around 6% had web sites or home pages. These low rates of use were primarily due to small business where only 24% were connected. For large businesses the rate was nearly 90%. We will probably have to wait until October 2001 for these statistics to be updated.
A more recent survey by Yellow Pages and NOIE shows that around 60% of small businesses and around 80% of medium businesses were connected to the Internet in June 2000. These figures show the level of increase in business use of the over the last two years. As an indicator of the take up rate for e-commerce, NOIE has pointed out that Australia is third in the world behind Iceland and the United States in the number of secure servers per million inhabitants. As discussed above, Australia's take up rate for B2B e-commerce is critical to maintain international competitiveness among our businesses.
ORGANISATIONAL ACHIEVEMENTS
- Sponsorship
Major new sponsorships in the last 18 months have allowed ISOC-AU to increase substantially its range of activities. Our Premier sponsors are Telstra, Cisco Systems, connect.com.au and the Australian National University. Perth Internet. Our major sponsors are Perth Internet and Siemens Ltd. Melbourne IT is a sponsor. The provision of sponsorship
by these organizations demonstrates a commitment by all of these organizations to development of the Internet and the interests of Internet users. We commend these companies for their commitment and look forward to working with them and others to maximize Australian
participation in the Internet.
- Executive Director
In September 1999, ISOC-AU achieved a major milestone in the appointment of its first Executive Director, Mr Tony Hill. Mr Hill's appointment has been made possible by the generous support of sponsors of ISOC-AU. In the time since his appointment, Mr Hill has contributed substantially to enhancement of ISOC-AU's role in fostering development of the Internet in Australia, particularly through:
- improving our financial base
- increasing membership
- improving our contribution to policy debates
- giving ISOC-AU a stronger role in relation to Internet research
- improving internal administration and our links to the Internet
Society
- Membership
Membership of ISOC-AU has increase substantially over the last 12 months as more and more Australians are using the Internet. In particular, Australian Internet users are coming to understand the importance of participating in discussion of Internet regulation. Continued
involvement of members in the activities of ISOC-AU and delivery of benefits from being involved in the international Internet Society are essential to maintaining the interest and commitment of our members. We are increasingly looking to attracting new users and people involved with small business and other organizations as members.
FINANCES
- Annual Companies Report
ISOC-AU is likely to bring in its most successful year ever in terms of finances during 1999-2000. Full details are available in our audited financial report.
- Exchange Rate and GST
During the past 12 months, we have seen the Australian dollar decline by nearly 30% in value against the US dollar. Our financial relationship with the Internet Society is written in US dollars. This decline has placed increasing pressure on our finances. Implementation of the GST in Australia on 1 July 2000 caused all organisations providing services to review their tax and pricing arrangements. Despite the cost increased faced by ISOC-AU we managed to hold our membership fees to just the increase due to GST. There has been no change in the base membership rate since our establishment in 1996.
OUTCOMES FROM STRATEGIC PLAN
- communities of interest:
During the past twelve months ISOC-AU has initiated organizational membership that provides a base for various communities of interest to form. We have attracted new organizational members from Internet specialist businesses and from Internet Associations and PC Users Groups around Australia.
- solid operational based for
auDA:
A solid organizational base has been established for auDA in the past twelve months. The organization now has a stable governance, management and financial structure and has commenced its first policy processes.
- repeal of BSA or changes:
As discussed above ISOC-AU is disappointed that not all of our objectives have been achieved in relation to Internet censorship in Australia. We will continue to press on these matters.
- access to full Internet without censorship:
As for the previous entry.
- forum for Australian businesses:
ISOC-AU has established our sponsorships and organizational membership as the opportunity for Australian businesses to build links between each other and with the international Internet community. We have held our first successful Industry Advisory Council meeting.
- monitor and advise on technical and social matters:
ISOC-AU has been able to maintain a close monitoring role on emerging issues related to development of the Internet as documented in the hot issues section above. On a number of occasions this has provided a base for public comment for instance in relation to the Federal Budget, introduction of ADSL and privacy.
- assist government to improve their internet policy:
Our monitoring role and strong user and technical knowledge base has allowed us to support government policy development in relation to the Internet particularly, this year, in relation to privacy, tax, bandwidth, age access verification and domain name policy.
- enhance business use:
For this twelve months, we established ambitious goals in relation to enhancing business use of the Internet. There has been substantial growth of business use of the Internet over this period. ISOC-AU has contributed to this base by fostering a stable policy base and providing a respected and independent voice for Internet users.
- unbiased info for new users:
We established a new link from the ISOC-AU web site that allows anyone to ask questions about the Internet. Through this service we have been providing regular responses to inquiries for Internet related information.
- untimed local calls:
The Federal Government has continued its policy of maintaining untimed local calls for access to the Internet in Australia. This policy has been extended to rural and remote areas through application of funds from the sale of Telstra. ISOC-AU congratulates the government for this initiative.
- research on international bandwidth:
In the past year, we have worked hard to foster an Internet Cooperative Research Centre proposal for the 2000 selection round. A strong proposal has been submitted to the selection round and successful applications will be announced towards the end of 2000. As a result of our efforts the proposal includes a focus on user needs as a central part of the research activities. If successful, this proposal will provide Australia with a strong critical mass for research on new Internet technology.
- support all uses of the Internet without restrictions:
We continue to work on various issues to foster this objective, particularly including our work opposing Internet censorship.
MAJOR INITIATIVES
- involving Australians with the international standards and decision making process, including by attracting the Internet Corporation for Assigned Names and Numbers (ICANN) to meet in Australia in March 2001
- working to increase membership and member benefits for individuals and organizations
- being invited to give presentations at Australian conferences
- highest ever media profile for ISOC-AU
- fostering an Internet Cooperative Research Centre proposal
- developing tangible political connections, and providing influential advice
- regional access initiatives through participation with DCITA conference, Country Towns Conference and regional ISPs
- significant improvement in our relationship with ISOC
PERFORMANCE INDICATORS
The following performance indicators represent ISOC-AU performance between February (when the new Executive Director was appointed) and November.
ISOC-AU Reputation
- the number of media and other meetings and activities has increased from two per month to around 10 per month
Overall Funding Level
- Sponsorship has increased by 137% over the period
- 75% of sponsorship is untied
Membership
- Membership has increased 41%.
- Corporate members have increased from 0 to 6.
Secretariat
- support has been provided to Directors meetings
- regular monitoring of action items
- promotion activities have included 2 domestic conferences and 2 international conferences
- 8 member events have been held around Australia
- ISOC-AU membership administration has been put onto a stable basis
- Relationship with ISOC has been stabilised
External funds
- substantial project specific funding has been obtained.
--
Tony Hill
Executive Director
Internet Society of Australia (ISOC-AU)
PO Box 152 Civic Square
ACT 2608 Australia
ed@isoc-au.org.au
Tel +61 2 6257 5544
Mobile 041 212 8755
Fax +61 2 6262 9938
www.isoc-au.org.au
The Internet is for Everyone!