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Section 2 - Performance review

This section reports on the Departments performance:

• in achieving its Infrastructure, Digital Economy and Services, and Broadcasting and Digital Switchover program objectives against the success measures published in the Departments 200809 Portfolio Budget Statements and Portfolio Additional Estimates Statements
• against service standards set out in its Service Charter
• in managing its finances.

Infrastructure

The Departments Infrastructure Group and program support efficient investment in fast and reliable broadband and communications infrastructure across Australia by:

• implementing the National Broadband Network initiative
• providing strategic advice on reform of current regulation regarding infrastructure to make it work more effectively, particularly during the roll-out of the National Broadband Network
• supporting efficient management and allocation of radio frequency spectrum through continued development of policy advice to address changing consumer and industry demand for spectrum, including reallocation where appropriate of radiofrequency spectrum to highest value use to the community
• working with other agencies and industry to protect Australias critical infrastructure.

National Broadband Network

During 200809, the Department focused on delivering the Australian Governments commitment to the roll-out of a National Broadband Network.

Progress towards meeting the performance targets set out in the 200809 Portfolio Budget Statements was initially made through an open Request for Proposals (RFP) process. Following the Governments termination of the RFP process, the Department focused on implementing the Governments policy direction and commitments announced on 7 April 2009.

Under the National Broadband Network initiative the Government will seek to roll-out high speed broadband to 100 per cent of homes and workplaces using fibre-to-the-premises (FTTP) supplemented by next generation wireless and satellite technology.

To achieve the Governments objectives, a new company has been established, that will invest up to $43 billion to build and operate the National Broadband Network. The following milestones were also achieved:

• commenced negotiations with the Tasmanian Government to expedite the roll-out of the National Broadband Network in Tasmania
• issued a tender to build, operate and maintain fibre backbone infrastructure in six priority regional locations
• commenced the implementation study process, and engaged lead advisers to prepare a report to Government in early 2010, considering among other things, the operating arrangements for the NBN Co, and options to attract private sector investment in the company
• commenced consultation on legislative amendments to implement the commitment to require greenfield developments to use FTTP technology from 1 July 2010
• progressed legislative reforms to make the existing regulatory framework work more effectively, particularly during the roll-out of the National Broadband Network.

Significant progress on the roll-out of the National Broadband Network has been made since the end of the reporting period including the announcement of the first stage of the roll-out of the National Broadband Network to three towns in Tasmania with wholesale access services expected to be provided in the second quarter of the 2010 calendar year.

Infrastructure regulation

As part of the National Broadband Network initiative, the Government has committed to ensuring an appropriate and effective telecommunications regulatory framework is in place, including in the transition to the National Broadband Network.

On 7 April 2009, the Minister released the discussion paper titled National Broadband Network: Regulatory Reform for 21st Century Broadband which canvassed possible legislative reforms to make the existing regulatory framework work more effectively, particularly during the roll-out of the National Broadband Network. Submissions to the discussion paper closed on 3 June 2009, and more than 130 submissions were received. On 15 September 2009, the Government introduced the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009 to deliver fundamental reforms to existing telecommunications regulations in the interests of Australian consumers and businesses.

As well as seeking views on reforms to the existing regulatory regime, the Government set out in the discussion paper its intention to establish in legislation the governance, ownership and operating arrangements for the NBN Co and the access regime to apply to the network. Views on the detail of these arrangements were invited on 3 July 2009, and by 30 July more than 30 submissions had been received. The discussion paper also referred to the Governments intention to introduce legislation to expedite the deployment of fibre optic networks, including requiring the use of fibre optic infrastructure in greenfield estates from 1 July 2010. On 29 May 2009 the Department released a consultation paper on how to implement the fibre in greenfield estates initiative. Submissions closed on 12 June 2009, and more than 90 submissions were received.

A first tranche of legislation was introduced into the Parliament during the Winter 2009 sittings to enable network information to be provided to the Commonwealth by telecommunications carriers and other utilities for purposes related to the planning and roll-out of the National Broadband Network in accordance with the Governments announcement of 7 April 2009.

Spectrum policy

Access to radiofrequency spectrum is critical to the provision of communications services which play a central role in everyday life. These include broadcast services, mobile telephony and wireless broadband. These services are an integral part of social and business activity, making spectrum a key piece of the economys infrastructure. The rapidly increasing demand for finite spectrum resources for more wireless services, broadcast space and increased mobility is placing pressure on incumbent users and raises policy issues regarding industry and consumer access to this scarce resource.

The Department administers Australias membership of the International Telecommunication Union (ITU) and the associated member state contribution as part of Australias international efforts to manage spectrum resources and to progress other policy issues outlined in the consumer representation and protection, cyber-safety and e-security subsections of this performance review. An amount of 4.725 million Swiss Francs (or $6.1 million) was appropriated for membership of the ITU in 200809 under the International Organisations Contributions item of the Departments Budget papers. Under Australias treaty-level obligations to the ITU, the Department also ratified the Final Acts of the World Radiocommunication Conference which was held from 22 October to 16 November 2007. During 200809, the Department supported 10 workshops and 21 direct country assistance telecommunications projects in the AsiaPacific region.

During 200809, the Department provided advice to the Minister on a wide range of spectrum-related issues, including developments locally and overseas. The Department also consulted regularly with ACMA and industry, and commissioned technical work. The two major spectrum policy issues progressed by the Department in 200809 concerned the digital dividend and the 15-year mobile spectrum licences.

Digital dividend

The digital dividend refers to the radiofrequency spectrum, currently used for analog television, which is freed-up by the switchover from analog to digital-only television. Digital dividend spectrum is highly sought after for its excellent propagation characteristics and can potentially be used to provide a range of new communications services including super-fast mobile broadband.

The Department worked on digital dividend policy issues relating to the amount of spectrum that can be released, the impact on incumbent users, implications for reallocation and international harmonisation and alignment issues.

In April 2009, the Minister announced that a Government green paper will be released seeking comments on the costs and benefits of realising the digital dividend. In 200809, the Department commissioned technical studies assessing the impact of releasing the dividend on current users of the spectrum, drafted the green paper and provided policy advice to Government on digital dividend issues.

15-year mobile spectrum licences

The Department provided policy advice to assist the Governments consideration of the re-issue of 15-year spectrum licences. The licences are used primarily to provide mobile and wireless broadband services and expire between 2013 and 2017.

In late 2008, the Department engaged consultants to provide an independent report to identify and discuss issues and options available to the Government on the expiry of the 15-year spectrum licences. In April 2009, the Department released a discussion paperPublic Interest Criteria for re-issue of Spectrum Licences that focused on public interest provisions that the Minister may wish to consider during any decision to reallocate or renew the 15-year spectrum licences. The Department is now considering submissions to the discussion paper to enable advice to the Minister on the re-issue of the spectrum licences.

Critical infrastructure protection

The Department provided secretariat and program support to three communications and information technology security groups under the Trusted Information Sharing Network, a collaboration between Government and industry for the protection of critical infrastructure.

Government Advisory Committee of the Internet Corporation for Assigned Names and Numbers (ICANN)

Internet domain names provide the address links that allow emails and other digital content to be sent and received. A carefully structured domain addressing system is a key requirement to the effective and reliable operation of the internet.

The Internet Corporation for Assigned Names and Numbers (ICANN) is the not-for-profit organisation responsible for the global coordination of the naming and numbering systems that underpin the stable operation of the internet. The Government Advisory Committee provides public policy advice to ICANN. In 200809, the Department participated in several meetings of the Government Advisory Committee, including participating in the ICANN meeting held in Sydney in June 2009.

Significant issues addressed in 200809 included the development of frameworks for the introduction of new Internet Top-Level Domains (such as .sport) and Internationalised Domain Names (names that use non-Latin scripts).

The Department also progressed the Governments broader commitment to global internet governance arrangements through its contribution to international discussion and agreements by way of its participation in the Internet Governance Forum and the International Telecommunication Union.

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Digital economy and services

The Digital Economy and Services Group and program assists Australians to make best use of broadband and communications infrastructure through:

• promoting the digital economy
• activities to improve communication services for those living and working in regional, rural and remote Australia, including
  • supporting and responding to the report of the Regional Telecommunications Independent Review Committee
  • subsidising the purchase of satellite phone handsets
  • providing and maintaining community phones for remote Indigenous communities
  • improving public access internet services in remote Indigenous communities
  • subsidising broadband connections particularly in regional and remote parts of Australia through the Australian Broadband Guarantee
• activities that support more innovative delivery of online services, including
  • the Information and Communication Technology Centre of Excellence program which develops and commercialises applications that support the innovative use of Australias broadband, information and communications infrastructure
  • Clever Networks and the Digital Regions Initiative which support cross-regional deployment of successful innovative broadband and communications applications
• activities that support and protect the interests of consumers, including
  • supporting the Australian Communications Consumer Action Network (ACCAN) to represent telecommunications consumers and undertake research
  • programs and regulation of the sector to support availability of essential and reliable services and the protection of consumer interests
  • implementation of the Governments Cyber-Safety Plan and E-security awareness initiatives
• supporting the ongoing operation of an efficient and effective postal service.

Promoting the digital economy

The digital economy is the global network of economic and social activities that are enabled by platforms such as the internet, mobile and sensor networks. The digital economy is accessed through devices most of us use each day such as computers, phones and game consoles. It includes such things as the online maps that we consult, the web searches that we do to find information and our electronic banking.

A successful digital economy is essential for Australias economic growth and productivity as well as to the way we interact socially. It offers new opportunities for businesses to access a larger, potentially global, audience and for individuals to connect and collaborate.

In 200809, the Government worked with industry to develop a paper titled Australias Digital Economy: Future Directions. The paper, released on 14 July 2009, outlines a vision for the digital economy and a framework for maximising Australias online participation including roles for government, industry and the community. Key areas of focus to maximise the benefits of the digital economy are:

• for government to lay the foundations for Australias digital infrastructure, facilitate innovation and set conducive regulatory frameworks
• for industry to demonstrate digital confidence and build digital skills, adopt smart technology and develop sustainable online content models
• for the community to enjoy digital confidence and digital media literacy skills, experience inclusive digital participation and benefit through online engagement.

The paper also announced that the Government will host a forum titled National Broadband Network: Realising the Vision to assist Australias research community and commercial sector to map the applications and business models which will thrive in Australias high-speed future.

The development of the paper during 200809, involved an extensive consultation process, including three workshops, a high level-forum, and a blog which attracted 2456 comments from the public. The Department also received more than 110 submissions in response to its consultation paper.

The paper aligns with other important Government initiatives to enable Australia to become a more innovative nation. Building on the vision underlying the National Broadband Network and the digital switchover of television services, the paper complements the Governments Powering Ideas paper which outlines an agenda for innovation in the 21st century.

Consumer and business engagement in the digital economy

Australian households and businesses continue to adopt the internet and broadband both at home and in business. In 200708, approximately 75 per cent of Australian households had a computer and, of those, 90 per cent were connected to the internet (that is 67 per cent of all households). Of the 67 per cent with internet (refer to Figure 2.1), close to 78 per cent had broadband (that is 52 per cent of all households). This compares to 29 per cent with broadband (that is 16 per cent of all households) in 200405, and illustrates the rapid take-up of broadband by Australians.

Figure 2.1 Household take-up of computers, internet and broadband 1999 to 200708

Notes: Broadband data was not collected prior to 200405. Broadband refers to an always on internet connection with an access speed equal to or greater than 256 kilobits per second.
Source: ABS Household Use of Information Technology 200708 (Cat. No 8146.0)

Figure 2.1 Household take-up of computers, internet and broadband 1999 to 200708 - text version

Businesses experienced an even greater take-up of the internet and broadband. Figure 2.2 demonstrates that in 200708, 87 per cent of businesses had internet access and 93.5 per cent of these (that is 81 per cent of all businesses) had broadband. But the data also suggests there is significant potential for businessparticularly small businessto further engage with the digital economy. Of all businesses using the internet in 200708, only 42 per cent had a web presence, and only 27 per cent took orders online.

Figure 2.2 Business use of internet, broadband and eCommerce 200203 to 200708

Notes: ABS advise that the 200607 and 200708 data points are not strictly comparable with the previous years because of minimal differences in coverage associated with the revised ANZSIC industry classification. Broadband refers to an always on internet connection with an access speed equal to or greater than 256 kilobits per second.
Source: Based on ABS Summary of ICT and Innovation in Australian Business, 200506 and 200708 (Cat. No. 8166.0)

Figure 2.2 Business use of internet, broadband and eCommerce 200203 to 200708 - text version

International statistics provide an indication of Australias comparative position as a digital economy. In December 2009, the Organisation for Economic Co-operation and Development (OECD) statistics indicated Australia was 16th in terms of broadband penetration[1]. In September 2008, the OECD ranked Australian broadband prices[2] as being on average fourth most expensive for very low speed connections and fifth most expensive for medium speed connections within the OECD group of 30 countries, while the World Economic Forum ranks Australia 29th for the lowest cost of broadband.[3] The Australian Governments communications initiatives, including the National Broadband Network, are focused on improving access by all Australians to high quality broadband services.

Improving services in regional, rural and remote Australia

Regional telecommunications review

The Regional Telecommunications Independent Review Committee was established under the Telecommunications (Consumer Protection and Service Standards) Act 1999. It conducted a review into the adequacy of telecommunications services in regional, rural and remote parts of Australia.

Chaired by Dr Bill Glasson AO, the Committee provided its report to Government on 5 September 2008, and made 45 recommendations relating to the need for improved telecommunications in regional areas that support:

• access to health, education and emergency services
• growth of business opportunities and regional economies
• improved social inclusion and consumer opportunities and choice
• collaboration across all levels of government, and with industry and consumer groups.

Table 2.1 Regional Telecommunications Inquiry response

Key Performance Indicator	Improved communication services to those living and working in regional, rural and remote Australia.
200809 Target	Result
Develop the Australian Governments response to the report of the Regional Telecommunications Independent Review Committee into the adequacy of telecommunications services in regional, rural and remote parts of Australia.	The Governments response was tabled in Parliament on 5 March 2009, within the legislated timeframe.

 

The Governments response funded activity under three initiatives: the Satellite Phone Subsidy Scheme; Indigenous Communications Program and Digital Regions Initiative.[4]

Satellite Phone Subsidy Scheme

As part of the Governments response package to the Regional Telecommunications Review, $11.4 million has been allocated over four years to June 2013 to continue and enhance the Satellite Phone Subsidy Scheme.

The aim of the scheme is to make mobile satellite telephony more affordable for people living or working in areas that do not have mobile phone coverage from terrestrial networks. Around 75 per cent of Australias landmass does not have any terrestrial mobile phone coverage.

Enhancements to the scheme, effective from 5 March 2009 include:

• a subsidy increase to 85 per cent of the handset cost, up from the previous 60 per cent, including for the replacement of handsets purchased more than three years ago
• additional handset subsidies for health and emergency service organisations, up from the current limit of two.

In 200809, 1401 subsidies were provided for the purchase of satellite phones and administered expenses of around $700 000 were incurred[5].

Indigenous Communications Program/Backing Indigenous Ability

As part of its response package to the Regional Telecommunications Review, the Government announced that it would contribute an additional $3.7 million to a $30 million refocused and enhanced Indigenous Communications Program.

The objective of the Indigenous Communications Program is to improve essential telecommunications services, basic public internet access facilities and computer training for remote Indigenous communities. The program will build upon existing programs to deliver remote Indigenous communities greater access to enhanced and more flexible solutions to address their telecommunications needs.

The Indigenous Communications Program will:

• provide a fixed or mobile community phone to around 300 remote Indigenous communities that do not currently have access to a public phone
• monitor and maintain these 300 new phones and 260 existing community phones
• in collaboration with state and territory governments, provide public internet access facilities and delivery of computer training in up to 120 remote Indigenous communities that have limited or no public access internet facilities.

For 200809, approximately $5.5 million in administered expenses were incurred under the Backing Indigenous Ability Program. Key outcomes of the program were:

• 20 additional fixed community phones and 24 mobile satellite handsets were provided to a total of 44 remote Indigenous communities.
• 260 existing phones were monitored monthly and serviced every six months to help ensure they were available when needed. On average, throughout the year, 90 per cent of all fixed community phones were operational. Of the phones found not to be operational, 44 per cent were phone handset related faults and the remaining related to phone line faults. These faults were addressed as a matter of priority.
• Four service providers were contracted to provide additional fixed community phones and mobile satellite handsets as well as phone monitoring and maintenance services.
• A total of 1046 people attended initial training in basic computer skills in 74 locations, with a total of 1019 people attending refresher training, also in basic computer skills, at 73 locations.
• A total of 32 remote Indigenous communities received financial assistance for improved internet services, while 16 computers were provided to remote Indigenous communities.
• Four Indigenous online content projects were completed within budget. These included completion of locally designed and produced websites containing cultural stories, language, radio streaming and photographs.
• Eight communities had videoconferencing equipment installed and maintained.

For 200809, approximately $300 000 in administered expenses were incurred under the Telecommunications Action Plan for Remote Indigenous Communities scheme. This was the final expenditure under the scheme.

Australian Broadband Guarantee

The Australian Broadband Guarantee provides Australian residential and small business premises with access to metro-comparable broadband services in locations where such services are unavailable commercially. A metro-comparable broadband service is defined as any service that offers a minimum 512kbps download and 128kbps upload data speed and 3GB per month data allowance at a maximum total cost of $2500, GST inclusive, over three years (including installation and connection fees).

The program offers financial assistance in the form of incentive payments to registered Internet Service Providers to supply metro-comparable broadband services to eligible residential and small business premises.

Registered Internet Service Providers must offer broadband service plans comparable to those commonly taken up in metropolitan areas. Under the Australian Broadband Guarantee, providers are encouraged to register additional added value service plans with greater functionality, including higher data speeds and data usage allowances. From August 2008, providers have been required to register:

• at least one threshold service with minimum speeds of 512/128kbps and a minimum data usage limit of 3GB per month
• at least one added value service with minimum speeds of 1024/512/kbps and a minimum data usage limit of 5GB per month.

The Australian Bureau of Statistics Internet Activity Survey for the December 2008 quarter shows that the speed and download standards for Australian Broadband Guarantee services are broadly comparable to the most widely taken up broadband services across Australia. A significant number of broadband subscribers generally are connecting to services with speeds between 256kbps and 1500kbps (clearly trending towards higher speed services), with the average monthly data usage per subscriber being 4GB per month.

During 200809, the Department introduced high cost incentive payments of up to $6000 per connection, to enable equitable broadband access in very remote and difficult-to-serve areas.

The Department commissioned ORIMA Research Pty Ltd (ORIMA) to conduct an independent survey to test the awareness of, and demand for, the Australian Broadband Guarantee program in regional, rural and remote Australia. The survey found that take-up of internet services was very strong throughout regional and remote Australia. Of these internet connections, a large majority were broadband connections.

The Australian Government has allocated $250.8 million over the four years to 2012 to fund the Australian Broadband Guarantee. In 200809 the Australian Broadband Guarantee incurred administered expenses of $84.2 million and subsidised 36 671 connections to broadband services.

Table 2.2 Australian Broadband Guarantee

Key Performance Indicator	Equitable broadband coverage through the Australian Broadband Guarantee to areas not serviced by the National Broadband Network.
200809 Target	Result
Multiple service providers registered offering competitive services to underserved areas.	Sixteen Internet Service Providers have registered under the Australian Broadband Guarantee program. More than 90 per cent of eligible customers under the Australian Broadband Guarantee had access to a satellite service from 11 competing registered providers. The average number of internet service plans available to Australian Broadband Guarantee customers is 12.25 per provider.
Services offered are comparable to metropolitan areas in Australia.	The program guidelines specify minimum guaranteed service levels that all providers registered under the program are required to meet. These requirements exceed the standard defined for a metro-comparable service under the program, and the Department regularly tests providers services to ensure they meet the specified requirements. On average, each provider offers 6.5 added value services and 91.6 per cent of registered providers services passed independent data-speed testing against the programs standards. The ORIMA survey found that 81 per cent of households and 83 per cent of small businesses were satisfied with the quality of their broadband services received under the program.
Consumers across rural and remote Australia are broadly aware of the Australian Broadband Guarantee services.	The ORIMA survey found that 49 per cent of non-metropolitan households and 44 per cent of small businesses were broadly aware of the Australian Broadband Guarantee services. The Broadband Consumer Support helpline received 36 505 calls. The Department mailed 60 906 information packs to residential and small business customers across Australia.
Take-up of services is consistent with general consumer demand for broadband.	ORIMA found that about 55 per cent of non-metropolitan households had a broadband service, broadly consistent with metropolitan take-up. This level of take-up was distributed evenly across non-metropolitan areas, including remote areas.

 

Supporting Innovative Delivery of Online Services

Through programs such as the National ICT Centre of Excellence, Clever Networks and the Digital Regions Initiative, the Department is strengthening Australias capacity to fully exploit the digital economy. These programs invest in the development and deployment of innovative communication technologies and broadband enabled applications.

National ICT Australia Limited (NICTA)

The ICT Centre of Excellence Program funds National ICT Australia Limited (NICTA) which is a major information and communications technology (ICT) research, training and commercialisation institution. It involves the cooperation of four state and territory governments and seven universities. With five research laboratories, more than 250 research staff and 300 supported PhD students, NICTA is a key contributor to Australias ICT and digital economy capabilities in areas such as transport, broadband, safety and security, the environment, water management and health.

The Department and the Australian Research Council (ARC), which jointly fund the program, undertook an independent review of NICTA in 200809. This review found that NICTA is a national asset and a key component of Australias innovation infrastructure that has a growing international reputation for world-class research and commercialisation. The creation of start-up companies by NICTA has generated more than 60 new jobs in Australia so far. NICTA also collaborates in research with a number of ICT multinationals and Australian small-to-medium enterprises.

In 200809 a total of $52.3 million, of which $27.3 million provided by the Department and $24.9 million provided by the ARC, was expended in supporting NICTAs outcomes including: accelerating research into the bionic eye; demonstrations of ultra-high speed wireless chip technology, and working with international research programs to advance test beds for new technologies relating to large networks such as the internet.

NICTAs funding has been extended for a further four years to 201415 with new funding of $185.5 million announced in the 200910 Budget (jointly between the Department and the ARC).

Digital Regions Initiative

As part of its response package to the Regional Telecommunications Review, the Government announced the $46 million Digital Regions Initiative. An additional $14 million, as part of the Governments Rural and Regional Broadband Network initiative, was allocated in the 200910 Budget to boost the funding to $60 million over four years. Through the Digital Regions Initiative the Australian Government will partner with state, territory and local governments to fund innovative digital enablement projects supporting improved education, health and emergency services in regional areas.

Projects will be selected through a competitive selection process. Draft program guidelines were released for comment on 15 June 2009 and expressions of interest will be invited in the second half of 2009 with projects expected to commence in early 2010.

Clever Networks

The objective of the $118.6 million Clever Networks[6] program is to fund innovative broadband applications and leverage investment in broadband infrastructure to improve service delivery in regional, rural and remote communities.

The program funded 52 projects nationally, comprising three distinct elements:

• The Innovative Services Delivery element of the program co-funded 26 projects that apply broadband technologies and applications to improve service delivery in health (14 projects), education (six projects), government and community (four projects) and emergency services (two projects).
• The Broadband Development element funded a national network of six Broadband Project Managers (one for each state) and co-funded 16 Broadband Project Officers to work within designated regions to enhance the understanding, access and use of broadband.
• The Building on Broadband element was included in May 2008 to fund the expansion of four existing projects into other jurisdictions or sectors from unallocated program funds.

Clever Networks expended $38.4 million across all elements of the program in 200809.

The Clever Networks program continues to assist Australias transition to a digital economy. The programs 52 projects remain on track to be completed in 200910. In 200809, five projects were launched:

• Livewire is a secure online interactive networking and information platform that supports young Australians with a serious or chronic illness or disability. The first of its major elements was launched on 27 November 2008 aiming to have 20 000 members using the service by December 2009 (see case study).
• Loddon Mallee Virtual Trauma Care Unit project was launched on 23 March 2009 and is nearing completion with sites in Bendigo, Echuca, Mildura and Swan Hill connected to the Loddon Mallee Health Alliance network and to the Alfred, Austin, St Vincents and Royal Childrens Hospitals in Melbourne. This new network aims to reduce the number of unnecessary patient transfers by 25 per cent.
• Connecting Victorian Rural Independent Schools was launched on 20 August 2008. It is a virtual private network powered by broadband that enables remote learning and provides a wealth of education resources to 90 independent schools in rural Victoria.
• Connecting the Coast, a combination of the Cooroy Knowledge Precinct Project and the Maroochy Project, was launched on 31 October 2008. As a result of this project, new broadband services are now available to 4000 secondary school students, universities, 33 000 local businesses, and half the Sunshine Coast population.
• The Broadband Development Network of six managers and 16 project officers continue to promote awareness of better practice of broadband use within the government, community and business sectors. The network is also playing a facilitating role, improving market outcomes for people in under-served regional areas.

Figure 2.3 Clever NetworksInnovative services delivery projects (by sector and percentage of funding) 200809

Figure 2.3 Clever NetworksInnovative services delivery projects (by sector and percentage of funding) 200809 - text version

Figure 2.4 Geographical spread of the Clever Networks program innovative services delivery projects

Figure 2.4 Geographical spread of the Clever Networks program innovative services delivery projects - text version

Geographical spread of the Clever Networks program (PDF, 91kb)

Consumer Representation and Protection

While online services and associated technologies have been of enormous benefit to Australians, they have also raised new issues of concern. These include:

• a rising level of complaints to the Telecommunications Industry Ombudsman reflecting both unsatisfactory services to consumers as well as incomplete consumer understanding of the details of the services they may have (sometimes inadvertently) contracted to purchase
• cyber-safety risks to children such as cyber-bullying, grooming of children, privacy, exposure to inappropriate content and internet addiction
• e-security risks to home users and small businesses.

Consumer complaints

In its 200708 annual report, the Telecommunications Industry Ombudsman reported a 41.6 per cent increase in consumer complaints from the previous year. Furthermore, the increase in consumer complaints was across all complaint categories.

Of particular concern has been the sharp increase in complaints relating to customer service, which has now overtaken billing as the leading complaint issue for consumers following a 94.2 per cent increase in complaints from the previous year.

The increasing level of complaints to the Telecommunications Industry Ombudsman is a clear indicator of the need for improvement in the service provider/consumer interface.

The Government has made it clear that industry needs to do more in order to restore consumer confidence in the telecommunications sector, including through industry-driven initiatives.

The Department is implementing the Governments commitment through the following strategies:

• support for effective consumer representation and research
• reviewing the telecommunications regulatory regime to ensure it is efficient and responsive to consumer concerns
• working closely with industry to foster industry-driven solutions to specific consumer issues
• supporting consumers to opt-out of receiving telemarketing calls.

The Department also participated in major meetings of the International Telecommunication Union to progress a broad range of issues related to telecommunications. In particular, the Departments participation in the World Policy Forum supported fair and reasonable telecommunications charging arrangements for consumers and businesses.

Support for effective consumer representation and research

Section 593 of the Telecommunications Act 1997 empowers the Minister for Broadband, Communications and the Digital Economy to make grants of financial assistance to consumer bodies for telecommunications representation activities and research.

Following the Telecommunications Consumer Representation Stakeholder Forum on 1 May 2008, a working group comprising representatives of a range of interested consumer organisations was established to assist in the development of a new telecommunications consumer peak body independent of industry and government. The Department liaised closely with the working group during June and July 2008. The Consumers Telecommunications Network (CTN) received an $87 000 grant to assist in conducting this work.

The working group presented its recommendations to the Minister on 1 August 2008.

In December 2008, the Minister announced a $700 000[7] grant to the new peak body, the Australian Communications Consumer Action Network (ACCAN), for establishment, recruitment, legal and research activities. In April 2009, Mr Allan Asher was appointed as ACCANs Chief Executive Officer and Ms Teresa Corbin was appointed as Deputy Chief Executive Officer.

ACCAN is responsible for advocating robust, evidence-based consumer policy positions to government and industry. It will develop its positions through Expert Advisory Committees comprising interested consumer groups that will examine emerging issues in depth and conduct research. It will administer a grants scheme for research projects on topical communications issues. ACCAN will also provide information to help consumers to make informed product and service choices, and pursue their rights when service providers do not provide appropriate standards of service.

The Government has allocated ongoing funding of $2 million (indexed) to the Consumer Representation Grants Program under section 593 of the Telecommunications Act. ACCAN will receive support from that program.

Table 2.3 Telecommunications consumer representation and research

Key Performance Indicator	Consumer representation in policy decisions is encouraged.
200809 Target	Result
Progress opportunities for enhanced consumer representation.	During 200809 the program assisted 17 consumer representation organisations input to government and industry processes. ACCAN was established to coordinate and strengthen consumer representation in policy making and industry initiatives.

 

Three research projects from previous financial years funding rounds were completed during the 200809 financial year:

• Griffith UniversityTelco fees and chargestrends and implications for consumers
• La Trobe UniversityAssessing the current and potential role of broadband infrastructure and access in community strengthening of drought-affected small towns and communities
• Griffith UniversityThe impact of high-speed broadband developments on youth consumption of internet (online) interactive services and consumer wellbeing.

Two reports arising from projects completed by Novita Childrens Services Inc in previous years were published on the Departments website in 200809. These reports, dealing with aspects of telecommunications for older people and those with a disability, have been used as source material for further work by the Department in developing policy.

Review of the telecommunications regulatory regime

The telecommunications co-regulatory regime allows for industry bodies or associations to develop telecommunications industry codes. Over recent years, criticisms have been made that the system of code development and associated processes, including monitoring, review and enforcement, is not operating effectively, in particular, with regard to consumer-related codes.

On 31 March 2009, the Minister announced a review of the processes associated with the development of consumer-related industry codes, as specified under Part 6 of the Telecommunications Act. An issues paper was released to solicit views from all interested parties including industry and consumer representative groups. Submissions for this review closed on 15 May 2009.

Fostering effective industry-driven solutions to consumer issues

The Department continues to work closely with industry, consumer groups and the Telecommunications Industry Ombudsman to ensure industry-driven solutions to consumer issues are effective. In 200809, the Department supported the development of the new Mobile Premium Services Code, the Telecommunications Industry Ombudsmans connect.resolve campaign and efforts by the Communications Alliance to improve customer service.

Mobile premium services

Despite the establishment of the Mobile Premium Services Industry Scheme (MPSIS) in October 2006, mobile premium services continue to be a growing source of consumer complaint to the Telecommunications Industry Ombudsman, the Australian Competition and Consumer Commission and the Minister. Following a review of the MPSIS, which commenced in October 2007, industry announced in 2008 it would develop an industry code under Part 6 of the Telecommunications Act to provide improved protections for consumers.

The Department played a strong supporting role in working with industry and consumer groups to develop options to help the code development process come to a successful conclusion. The new Mobile Premium Services Code came into effect on 1 July 2009. It includes enhanced provisions that aim to provide greater protection for consumers such as improved complaint handling procedures, advertising requirements, and greater clarity for the consumer during subscription processes.

Customer service

In the first six months of 2009, the Telecommunications Industry Ombudsman conducted the connect.resolve campaign aimed at encouraging industry to improve its performance in relation to customer service issues. The Minister launched the campaign in November 2008 and released the campaigns final report in August 2009.

The Minister also supported the decision by the industry body, Communications Alliance, to hold a customer service summit in August 2009, which brought together key stakeholders to share ideas and strategies to improve customer service outcomes for consumers.

The Department continues to work closely with the Telecommunications Industry Ombudsman and Communications Alliance on customer service issues and will continue to provide advice to the Government which builds on the outcomes of the connect.resolve campaign and draws on the key findings of the customer service summit.

Supporting customers to opt-out of receiving telemarketing calls

The Do Not Call Register[8] (the Register) enables Australians to opt-out of receiving unsolicited telemarketing calls by listing their fixed line and mobile telephone numbers in the Register.

In August 2008, the Department released a discussion paper seeking community views on whether the eligibility requirements of the Register should be expanded to allow the registration of all telephone and fax numbers.

In response to the discussion paper, as part of the 200910 Budget, the Government announced funding of $4.7 million over four years to expand the Register to allow the registration of all telephone and fax numbers, including the numbers used by businesses and emergency service operators.

Cyber-safety

During 200809, the Department continued to work with relevant agencies including ACMA and the Australian Federal Police (AFP) to deliver the Australian Governments $125.8 million Cyber-Safety Plan. The Plan consists of a comprehensive range of cyber-safety measures to combat online threats and help parents and educators protect children from inappropriate material on the internet. These measures encompass education, international cooperation, research, law enforcement and internet service provider (ISP) filtering. A Consultative Working Group (CWG) and Youth Advisory Group on cyber-safety are also part of the Plan.

The CWG is made up of members from the community, industry, business and government. It was established to provide cyber-safety advice to the Government on priorities for action by government and industry. In its first year, the CWG considered a range of cyber-safety issues and provided advice on, among other things, commissioned research projects and the establishment of the Youth Advisory Group. The CWGs program of work for the next 12 months will concentrate on the cyber-safety issues of cyber-bullying, contact (for example grooming), privacy and exposure to inappropriate content. The Department provides secretariat support for the CWG which met four times in 200809. The Group will continue to fulfil an important role in providing advice to Government on cyber-safety issues.

The CWG also advised on suitable research projects to be funded under the Cyber-Safety Plan. Two research projects have been initiated to date. The first, a review of cyber-safety research, was undertaken by Edith Cowan University following an open tender process. The review provided valuable information on current trends in relation to cyber-safety.

The second research project involves the development of a repeatable survey instrument and methodology for data collection over time on cyber-safety and e-security issues, solutions and priorities for action. The data collected will cover matters relating to Australian children and will allow the measurement of changes in behaviour. The Government commenced an open tender process for this project in May 2009. The first survey is expected to be completed in 200910.

The Youth Advisory Group was launched by the Minister on 4 May 2009, to provide advice to Government on cyber-safety from the perspective of young people. Advice from the Youth Advisory Group will assist the Government to develop programs and policies that are relevant to the experience of young people. The Department performs a secretariat role for the group and also manages the Youth Advisory Group online forum.

Measures to inform young Australians about how to stay safe online are a critical part of the Cyber-Safety Plan. ACMA is implementing a comprehensive range of education and school outreach activities including the professional development of school teachers. Funding has been provided for a new cyber-safety websitewww.cybersmart.gov.auto provide parents, students and other key stakeholders with up-to-date cyber-safety advice, information and resources. The website was launched in July 2009.

A national helpline (1800 880 176) and a website www.netalert.gov.au established in August 2007, continued to provide advice about protecting children online and access to technical support for existing National Filter Scheme PC filter users. Responsibility for the management of the helpline was transferred from the Department to ACMA in October 2008. Online safety information is now contained on the new www.cybersmart.gov.au website.

Internet service provider filtering is a further component of the Cyber-Safety Plan. The Department undertook a live pilot to test ISP filtering solutions, with the cooperation of ISPs and their customers. The pilot is testing potential impacts of filtering solutions on internet speeds, accuracy, circumvention and costs and sought customer views.

Administered expenses of $3.4 million were incurred on the Departments cyber-safety activities in 200809, including provision of free PC filters, running of the ISP filtering pilot, and implementation and management of the Youth Advisory Group on cyber-safety.

E-security

Australians are increasingly using the internet in their everyday livesfrom doing their banking and shopping or running a business online, to communicating with family and friends via email, chat-rooms and social networking sites. With increased use of the internet comes increased exposure to e-security risks such as malicious software leading to theft of personal, financial or business information.

The Department is responsible for implementing a package of e-security awareness raising initiatives targeted at home users, students and small businesses to help them adopt secure online practices and be aware of the simple steps they need to take to remain secure online. Given the integrated nature of the online environment this will also enhance the protection of government networks and critical national infrastructure against online threats.

E-security is a dynamic, constantly changing area and raising awareness and protecting users against online threats is an ongoing and increasingly important task. The Departments initiatives are aimed at increasing Australians trust and confidence in the online environment, enabling them and Australia to take full advantage of the benefits offered by the digital economy. Activities undertaken during 200809 included:

• The annual National E-security Awareness Week which was held from 5 to 12 June 2009. During the week, more than 45 industry, community and state and territory government partners held more than 70 events around Australia. E-security messages promoted during the week included asking people to change their password regularly and not clicking on links or attachments from unknown sources. More than 170 media articles appeared in print, TV, radio and online about the initiative. These articles reached a total potential audience of more than four million Australians.
• The E-security Education Packagea free, online interactive self-learning package for year 3 and year 9 students was launched on 5 June 2009. The Package is available on the Governments E-security website, www.staysmartonline.gov.au or via CD-ROM.
• The Stay Smart Online website which provides information on the simple steps that Australians can take to be secure and confident online was enhanced. The website received more than 8.6 million hits during 200809. The website includes a regularly updated plain English Alert Service, which provides information on the latest e-security threats and vulnerabilities.

Administered expenses of $1.2 million were incurred on the E-security program in 200809.

Internationally, the Department has been successful in extending the AsiaPacific Economic Co-operation (APEC) e-security agenda to the wider region. Australia organised APEC workshops and publications on e-security awareness and other matters.

The Department also played a strong role within the OECD through its chairmanship of the OECDs Working Party on Information Security and Privacy (WPISP) which produced workshops and reports on e-security threats in areas such as identity theft, malware and sensor networks. The WPISP also conducted collaborative projects with APEC TEL on malware and the protection of children online.

The Department administers Australias membership of the AsiaPacific Telecommunity (APT) and the associated member state contribution. The APT provides a forum for Australia to build e-security awareness and capacity within the AsiaPacific region and in 200809, the Department contributed to international discussions, agreements and services on e-security, including anti-spam legislation activities.

An amount of $300 000 was appropriated for membership of the APT in 200809 under the International Organisations Contributions item of our Budget papers. In December 2008, the Department paid $63 419, representing Australias annual commitment to the operation of the APT. The remaining funds were paid to the APT as an Extra Budgetary Contribution to assist with targeted capacity building exercises in key AsiaPacific states, with a focus on Pacific Island countries.

Emergency services

In July 2008, the Council of Australian Governments agreed that a nationally consistent emergency warning system should be developed as a matter of priority. Following proposals developed by the Attorney-General in consultation with state and territory governments, amendments were made to the Telecommunications Act to allow information contained in the Integrated Public Number Database to be disclosed to authorised emergency management persons for use in telephony-based emergency warnings. The Telecommunications Amendment (Integrated Public Number Database) Act 2009 received Royal Assent on 26 March 2009. The Attorney-Generals Department is now assisting state and territory governments to implement a national telephone-based emergency warning system.

Postal services

The Department has a shareholder role in Australia Post, which is a fully Government-owned Business Enterprise. It shares this role jointly with the Department of Finance and Deregulation. During the year, the Department provided advice to the Minister on corporate and governance issues for Australia Post such as the price increase of stamps in September 2008, appointment of directors to the Board, the corporate plan and the ongoing financial and non-financial performance of the enterprise.

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Broadcasting and digital switchover

The Broadcasting and Digital Switchover group and program supports access to high-quality and diverse broadcasting services that deliver content consistent with community expectations and needs through:

• coordinating the switchover to digital television through the Digital Switchover Taskforce, with the switchover completed by the end of 2013
• providing advice on ABC and SBS funding matters including triennial funding and assisting in the processes of ABC and SBS board appointments
• provision of advice on the broadcasting regulatory environment, including the operation of media ownership laws, broadcasting content issues, anti-siphoning and captioning
• administering initiatives to improve television reception and support community, regional and remote broadcasters.

Transition to digital television

The switchover to digital television offers benefits to viewers such as improved picture and sound quality and greater program choice. The digital dividend of spectrum freed-up by switching off the analog transmission network can also be made available for alternate uses such as new mobile services, additional television services and wireless broadband services.

In December 2007, the Minister confirmed the Governments commitment to complete the switchover to digital television by the end of 2013 and established the Digital Switchover Taskforce within the Department. The Minister subsequently announced, on 19 October 2008, the digital television switchover timetable which adopts a region-by-region approach to switchover. As at 30 June 2009, 93 per cent of Australian households have heard of the Governments plan to switch Australia over to digital television, however less than one per cent knew when the analog television signal will be switched off in their area.

To receive digital television, households will need to attach a digital set top box or digital television recorder to their existing analog receiver or purchase a television with an integrated digital receiver. Free-to-air digital television services are also available as part of some subscription television packages. Digital services are now available to the majority of Australian households and, as at 30 June 2009, 53 per cent of Australian households had converted to free-to-air digital television broadcasts. Of those households that have digital television, 82 per cent are satisfied with digital television.

Additional funding of almost $140 million over three years was announced in the 200910 Budget for core digital switchover activities to be undertaken in regional South Australia, Victoria and Queensland including in-home assistance, information campaigns and working with industry.

Administered expenses of $7.3 million were incurred on digital switchover activities in 200809. Departmental expenditure on the digital tracker and research into multi-dwelling units totalled $1 million.

Table 2.4 Digital Switchover

Key Performance Indicator	Complete the region by region transition to digital-only television by the end of December 2013.
200809 Target	200809 Result
Develop a digital switchover timetable and strategy.	A region-by-region digital switchover timetable was developed in consultation with industry and announced by the Minister on 19 October 2008. Legislation has been enacted to enable a phased approach to analog switch-off.
Launch a labelling information campaign to raise community awareness.	On 30 March 2009, the Minister launched a campaign designed to raise awareness of the switchover to digital television. A key element was a labelling scheme to inform consumers about digital ready television equipment. As at 30 June 2009, 23 suppliers and retailers had signed up to the labelling scheme.
Assist ACMA to undertake technical surveys of digital television and transmission.	The Department has worked with ACMA in determining priorities and the content of field survey measurements which resulted in a recent study undertaken for the Mildura/Sunraysia television licence area.
Commission an evaluation of reception difficulties in multi-unit dwellings.	On 24 September 2008, the Minister announced a $1 million technical survey to address the special digital TV reception issues in multiple-dwelling units. Site inspections are complete in Canberra, Sydney, Melbourne, Perth and the Gold Coast. The research project will be finalised in December 2009 and outcomes are expected to be made public by March 2010.
Establish the Digital Tracker quarterly surveys.	On 24 September 2008, the Minister announced a $4.8 million contract for Newspoll to launch the Digital Tracker research program. The program will report quarterly on regional switchover trends. The research will measure and report on six summary indicators: awareness of switchover, understanding, attitudes to switchover, intentions to convert, actual conversion to digital, and satisfaction with digital television. The first quarterly report of the Digital Tracker was released in May 2009.

Regional Equalisation Plan

The Regional Equalisation Plan was introduced in 200001 to assist regional and remote commercial television broadcasters with their conversion to digital broadcasting. Assistance is provided by licence area as capped annual rebates against broadcasters licence fees supplemented by a grants component, where necessary, to achieve total agreed assistance under the Plan.

Administered expenses of $300 000 were incurred in 200809 in the form of grants to broadcasters operating in two small regional marketsBroken Hill, NSWtotalling $70 000 and Riverland, South Australiatotalling $230 000.

Digital radio

Significant progress was made towards the establishment of digital radio services during 200809. In October 2008, the Parliament amended digital radio legislative provisions to smooth the transition to digital radio. The changes:

• extended the deadline for broadcasters to commence digital radio services in the mainland capital cities by six months to 1 July 2009
• removed the requirement for digital radio services to commence in Hobart by the extended deadline of 1 July 2009. Broadcasters in Hobart will have the opportunity to commence digital radio services at the same time as other markets of comparable size, such as Geelong, Newcastle and Wollongong
• retained an option for community radio to take up shares in the joint venture companies managing the transmission of digital radio services.

Digital radio services commenced in the five mainland state capitalsAdelaide, Brisbane, Melbourne, Perth and Sydneyfrom May 2009. They are operating alongside existing analog AM and FM radio services.

Strong and independent national broadcasters

The Department provides policy advice about the national broadcasters, particularly in regard to funding, accountability and transmission issues. Departmental staff work closely with the national broadcasters and deal with correspondence and queries from Parliament regarding their activities.

A key priority for the Department during 200809 was the review of the triennial funding for the national broadcasters leading up to the 200910 Budget.

The review involved a public consultation process (see case study) which ran parallel to a detailed assessment by the Department of the national broadcasters performance over the previous triennium and their future funding requirements for 200910 to 201112. The Department provided advice to Government on the outcomes of the consultation process and the triennial funding review to inform funding decisions.

In the 200910 Budget, the Government announced that the ABC and SBS would receive more than $2.5 billion in indexed base funding over three years (excluding analog and digital transmission). As a part of this, the Government provided $185.3 million in new funding for the ABC and SBS over three years to develop an ABC Digital Childrens Television Channel, deliver more than 50 enhanced ABC local broadband hubs in regional Australia, and to significantly enhance the provision of Australian programming on the ABC and SBS. In May 2009, the Minister released a policy response to the review Strengthening our National Broadcasters highlighting the funding and future directions for the ABC and SBS.

A key focus for the Department in 200809, was developing and implementing an open and transparent appointment process for ABC and SBS Board members in accordance with Government commitments. Under the Governments new merit-based system, all current and future non-executive Board vacancies will be advertised, and all candidates subjected to a merit-based assessment of their suitability by an independent nomination panel. On 1 April 2009, the Minister announced the outcome of the first round of appointments comprising two new members for each of the ABC and SBS Boards. These appointments were made in accordance with the guidelines issued by the Minister on 18 October 2008.

In 200809, the Department facilitated approval of a $15 million loan for the SBS in relation to sports rights payments and minor capital items.

ABC and SBS Digital Interference Scheme

The Digital Interference Scheme was established to reimburse the ABC and SBS for the cost of their contribution to the Digital Interference Management Strategy administered by the commercial television industry representative body, Free TV Australia, on behalf of all participating free-to-air broadcasters. The strategy was primarily established to help consumers overcome interference problems associated with the introduction of new digital television services.

The contribution on behalf of ABC and SBS is 20 per cent of the actual costs incurred by free-to-air-broadcasters, and is paid on the basis of receipts. Administered expenses of $2188 were incurred against this program in 200809.

Policy advice and regulation

Australias commercial free-to-air, subscription, national and community broadcasters fulfil an important role in Australias social, political and cultural life.

During 200809, the Department provided advice to the Minister on a wide range of broadcasting issues, including developments in the commercial, national and community television and radio sectors and the broadcasters compliance with relevant codes and standards that protect consumers from inappropriate content. The Department also provided advice on the operation of the anti-siphoning scheme which is intended to maximise the opportunities for key sports and other events to be available on free-to-air television.

The Department also provided advice to the Minister on ownership and control changes arising from media transactions, the introduction of new digital broadcasting technologies and the general operation of the regulatory frameworks applicable to broadcasting.

In framing its advice to Government, the Department consults regularly with the broadcasting industry. In addition to the broadcasters, the Departments key stakeholders include peak bodies representing the commercial television industry, the commercial radio industry, the pay television industry and the community radio and television sectors.

Captioning

The Department is leading an investigation into access to electronic media by people with a hearing or vision impairment. The investigation covers captioning and audio description on free-to-air and subscription television, films in cinemas, DVDs and audio-visual content on the internet. The Governments 2008 public discussion paper on media access attracted 167 submissions from representatives of the television, film and internet industries, as well as people with a hearing or vision impairment.

The Department has reviewed the issues raised in submissions and met with relevant stakeholders to further discuss their issues. The Government is considering the complex policy and regulatory issues involved and will respond in 200910.

Table 2.5 Public review of captioning standards

Key Performance Indicator	Access to high quality radio and television for all Australians.
200809 Target	Result
Complete the public review of captioning standards.	167 submissions received to Access to Electronic Media for the Hearing and Vision Impaired discussion paper. Government is considering this matter in consultation with stakeholders.

Television towers

Funding of $850 000 was provided in the 200809 Budget to meet three election commitments to improve television reception in:

• Broadford in Victoria
• Currie on King Island, Tasmania (the Currie commitment also involved improving reception of the ABCs Local Radio service)
• the Ingle Farm to Craigmore area along the Para Escarpment in outer metropolitan Adelaide, South Australia.

The Mitchell Shire Council and the King Island Council both agreed to establish and operate digital retransmission facilities at Broadford and Currie respectively. Under these arrangements, the Australian Government makes a contribution towards the establishment costs for these facilities and the councils meet any establishment costs in excess of the Commonwealths contribution as well as the facilities ongoing operations and maintenance costs.

The Broadford digital retransmission facility went to air in late June 2009 and the King Island Council is expected to complete the Currie project in the first half of 200910. The Government has agreed that funds to cover the second and final payments for the Broadford and Currie projects will be available in 200910.

In order to gain a better understanding of the digital television reception problems in the Para Escarpment area, the Department engaged a consultant to assess digital television reception deficiencies and possible solutions using field surveys and transmission testing.

The Para Escarpment commitment is now expected to be implemented in 200910 and funding for this purpose has been provided in the 200910 Budget.

Administered expenses of approximately $300 000 were incurred against this program in 200809.

Television black spotsalternative technical solutions

This program provided alternative solutions for television black spots that could not be rectified under the analog Television Black Spots Program. The analog Television Black Spots Program, which closed on 30 June 2005, funded terrestrial delivery of analog services to signal-deficient areas.

The new program provided capital funding for eligible analog television black spots for either:

• digital retransmission equipment, or
• direct-to-home equipment for affected households (comprising a satellite dish, decoder and smart card), or
• cabling to individual households.

The two remaining outstanding projects, proposed by the Shire of Yarra Ranges, did not proceed as a result of the applicants decision. The program closed on 30 June 2009.

There was no expenditure for this program in 200809.

Community broadcasting

The Department provides policy advice and administers funding via funding deeds to the Community Broadcasting Foundation and Radio for the Print Handicapped Australia to support Australias diverse and extensive community broadcasting sector.

The Community Broadcasting Foundation is an independent non-profit funding agency that distributes funds for the maintenance and development of community broadcasting in Australia.

In 200809, the Government provided the foundation with $8.8 million[9] to:

• support community broadcasting for the benefit of the general community, Indigenous Australians, the print handicapped and ethnic audiences
• assist in the national, state and regional development of community broadcasting, including support for national associations of community broadcasters
• provide infrastructure investment, training and transmission support
• support the Australian Music Radio Airplay Project.

In order to provide best practice management for community sector funding, the Department engaged McGrathNicol to review the existing monitoring and reporting arrangements of its funding agreement with the foundation, to ensure the best possible outcomes would be achieved for the benefit of the community broadcasting sector.

McGrathNicol finalised its review in May 2009. Recommendations to improve the current program are being incorporated into the 200910 Community Broadcasting Foundation funding agreement.

The Department advised the Minister regarding support for community broadcasting, including the commencement of digital television and radio services.

The Department also provided advice to continue support for the National Training Program in 200809. A commitment of ongoing and indexed funding, totalling $2.5 million over four years from 200910 to 201213, was announced in the 200910 Budget to better enable the sector to plan and deliver accredited management and broadcasting skills training, particularly in regional, rural and remote Australia.

National Transmission Network Residual Funding Pool

The National Transmission Network Residual Funding Pool provides funding assistance towards transmission costs incurred by community broadcasters, Radio for the Print Handicapped, and three remote commercial broadcasters (Golden West Network, Imparja TV and North West Radio). These grants ensured that users of Radio for the Print Handicapped and community broadcasting services continued to receive access to these services, and that commercial broadcasting services, provided through Golden West Network, continued to be made available for households in certain remote areas of Western Australia.

Administered expenses of approximately $700 000[10] were incurred against this program in 200809. The Department did not provide funding to Imparja TV in 200809 as it was unable to satisfy all reporting requirements. The services which Imparja TV provides have continued throughout the period.

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Service Charter and client satisfaction

The service standards the Department aspires to are published in its Service Charter 200810. The Service Charter is available on the Departments website at www.dbcde.gov.au/department.

The Department measures client satisfaction with its services and service standards through an annual client satisfaction survey. In early May 2009, 2148 clients were sent a survey questionnaire requesting feedback on the Departments performance in areas such as publicising its Service Charter, communication, general customer service, management of funding programs, consultation on policy and legislation, its website, overall satisfaction, achievement of objectives and provision of services.

The survey mail-out was complemented by telephone follow-up calls which ended on 22 June 2009. The 2009 survey achieved a response rate of 48.7 per cent compared with a 45.8 per cent response rate in 2008.

Overall, 95 per cent of respondents found the Departments overall service satisfactory or better. This result was slightly lower than the 97 per cent achieved in 2008. There was, however, an increase in the percentage of clients who rated the Departments overall service good to excellentit increased from 72 per cent in 2008 to 75 per cent in 2009.

Table 2.6 outlines areas where changes in client satisfaction level between the 2008 and 2009 surveys were statistically significant. The Department has achieved significant improvement in the level of client service including: the fair administration of funding programs and speed of decision making, our website, courtesy, competence, and providing direct contact details when responding to written correspondence.

Table 2.6 Statistically significant changes in client ratings of the Departments service

Service	2008 Result (%)	2009 Result (%)
Overall website	53	60
Access to and information about funding programs	53	72
Clarity of guidelines and applications	54	78
Fair administration of funding programs	65	81
Speed of decision making regarding funding programs	62	77
Overall administration of funding programs	63	81
Providing further contact details in written correspondence	70	82
Courtesy and politeness	81	88
Competence	72	77

In its 200708 Annual Report, the Department identified time provided for consultation, publicising funding programs and how to apply for funding as target areas for service improvement. The 2009 survey demonstrated that the Department has improved on these targeted areas with a strong improvement in time provided for consultation with 53 per cent of clients rating the Department as good to excellent on this item compared with 43 per cent in 2008. Improvements in publicising funding programs and how to apply for funding were statistically significant.

Table 2.7 outlines trends in the Departments performance over three years against the service standards outlined in the Service Charter. The results highlight significant improvements in the administration of funding programs and the development and review of policy and legislation, with an improvement in client satisfaction for telephone interactions with the Department. The table presents a slight decline in satisfaction levels with overall customer service, quality of communication with clients, response to emails, written enquiries and service delivery. These will be a focus of attention in 200910.

Table 2.7 Outcomes of the 2007, 2008 and 2009 Client Service Satisfaction Surveys

Survey Category	Satisfaction level of clients
	2007 %	2008 %	2009 %
Overall customer service	94	97	95
Communication with clientsquality	96	97	95
Telephone dealings with clients	96	95	96
Email dealings with clients	95	95	94
Written enquiries	92	93	92
Administration of funding programs	89	92	96
Service delivery	N/A	93	91
Development and review of policy and legislation	80	82	88

 

The Departments Service Charter provides a contact point for clients to escalate resolution of complaints from within the Department. Three clients contacted the Manager, Corporate Strategy and Performance Reporting regarding a service complaint during 200809. As each contact was an initial contact with the Department they were referred on to the relevant program manager for action. On each occasion the complaints were resolved to the satisfaction of the client.

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Financial performance

This review of financial performance should be read in conjunction with the Departments audited financial statements for 200809, in the Financial Statements section of this report.

Changes to the Departments Finances

In 200809, there were a number of changes which impacted on the Departments finances.

From the 200809 Budgets, changes were implemented to the arrangements by which Commonwealth Authorities and Companies (under the Commonwealth Authorities and Companies Act 1997) received funding from the Commonwealth. As these bodies are legally separate from the Australian Government, they are unable to be appropriated directly. As a result, the Department is appropriated on behalf of ABC and SBS, and makes payments to each entity. The Department also administers a loan with SBS under these new arrangements.

On 1 January 2009, the Nation-building Funds (Consequential Amendments) Act 2008 repealed the section of legislation which established the Communications Fund. Upon its closing, the investments of the Communications Fund were transferred to the Building Australia Fund. The legislation establishing the Building Australia Fund (BAF), also established the BAF Communications Portfolio Special Account, for which the Department is responsible. Payments are channelled through the Building Australia Fund to the BAF Communications Portfolio Special Account for the purpose of making payments in relation to the creation or development of communications infrastructure and in relation to eligible national broadband network matters.

Overview of the Departments Finances

Parliament provides the Department with two types of funding: departmental and administered. Departmental funds are used to produce goods and services (outputs) at a quantity, quality and price endorsed by the Government. Administered funds are the funds, assets and liabilities administered by the Department on behalf of the Australian Government, which controls how the Department uses them and requires the Department to account for them separately.

Departmental Finances

The Departments income for 200809 was $119.0 million, with departmental expenses totalling $115.0 million, resulting in an operating surplus of $4.0 million.

Total income increased by $2.8 million in 200809, reflecting the provision of additional funding by the Australian Government to the Department for activities associated with the National Broadband Network and the Digital Switchover Taskforce offset, in part, by the full-year impact of the transfer of functions from the former Department of Communications, Information Technology and the Arts, as part of the Administrative Arrangements Order of 3 December 2007.

The movement in the Departments net assets largely reflects the moderate operating profit and a downward revaluation of the Departments make-good assets.

Table 2.8 below provides a summary of the Departments income statement and net asset position.

Table 2.8 Summary of departmental financial performance and position

	200405 $m	200506 $m	200607 $m	200708 $m	200809 $m	Change last year
Revenue from Government	114.2	119.8	145.6	111.2	117.1	5.3%
Other Revenue	7.6	8.9	8.8	4.4	1.4	65.4%
Gains	0.5	0.4	0.4	0.6	0.5	23.9%
Total Income	122.3	129.1	154.7	116.2	119.0	2.4%
Employee and supplier expenses	102.1	108.2	125.2	123.4	108.7	11.9%
Depreciation	2.6	3.4	3.8	4.2	5.9	40.0%
Other Expenses	9.0	2.9	1.4	0.7	0.5	30.3%
Total Expenses	113.8	114.6	130.4	128.3	115.0	10.3%
Operating Result (Loss)	8.5	14.5	24.4	(12.1)	4.0	na
Financial Assets	61.2	73.8	103.4	77.2	86.5	12.0%
Non-financial assets	53.1	56.4	64.2	16.9	13.3	21.4%
Liabilities	28.8	27.5	32.7	26.7	26.8	0.4%
Net assets	85.6	102.6	134.9	67.5	73.0	8.2%

Note: Figures in Table 2.8 and associated text have been rounded. Discrepencies in the above table between totals, sums of components and percentages are due to this rounding.

Administered Finances

Administered income increased by $38.5 million compared to 200708, reflecting:

• an increase of $121.5 million in dividends received from Australia Post
• a decrease in interest revenue of $76.9 million, reflecting the closure of the Communications Fund, and consequent transfer of investments to the Building Australia Fund.

Administered expenses increased by $876.7 million compared to 200708, due largely to:

• appropriation payments of $1049.9 million to entities under the Commonwealth Authorities and Companies Act 1997 (ABC and SBS) now processed through the Department
• a decrease in grants of $162.2 million, in the main, due to the 200708 financial year including expenses relating to functions transferred as part of the Administrative Arrangements Order of 3 December 2007.

Administered financial assets decreased by $3478.8 million compared to 200708, due to:

• the transfer of the Communications Fund investments to the Building Australia Fund, resulting in a decrease of $2381.4 million
• a decrease of $1119.4 million in administered investments in portfolio bodies, predominantly reflecting the decrease in the value of Australia Post
• the provision of a loan to SBS ($15.0 million).

Table 2.9 Summary of administered financial performance and position

	200405 $m	200506 $m	200607 $m	200708 $m	200809 $m	Change last year
Interest	0.5	86.3	131.8	163.3	86.4	47.1%
Dividends	2 368.9	2 861.0	1 181.9	306.3	427.8	39.7%
Other revenue	275.7	18.5	6.6	7.1	0.3	95.1%
Gains			16 778.8	0.4	1.0	163.0%
Total Income	2 645.1	2 965.7	18 099.1	477.1	515.6	8.1%
Grants	265.0	358.4	271.9	245.3	83.1	66.1%
Subsidies	286.8	225.9	168.7	86.1	84.8	1.5%
Other expenses	48.4	52.8	31.1	27.5	17.8	35.2%
Payments to CAC Bodies					1 049.9	N/A
Total expenses	600.2	637.2	471.7	358.8	1 235.5	244.3%
Financial Assets	7 256.1	34 132.7	11 758.6	7 116.2	3 637.4	48.9%
Non-financial assets	86.5	134.0	144.0	2.5	3.1	24.9%
Liabilities	15.5	64.1	23.0	21.5	22.6	5.2%
Net assets	7 327.1	34 202.6	11 879.6	7 097.1	3 617.9	49.0%

Note: Figures in Table 2.9 and associated text have been rounded. Discrepencies in the above table between totals, sums of components and percentages are due to this rounding.

 

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[1] OECD Broadband Portal, comparative broadband penetration rankings for December 2008, www.oecd.org/sti/ict/broadband Table 1d.

[2] OECD Communications Outlook 2009, p282, www.oecd.org/sti/telecom/outlook

[3] World Economic Forum, The Global Information Technology Report 20082009. Measurement used for ranking is lowest sampled cost ($US) per 100 kilobits per second (kbps) as a percentage of Gross National Income (GNI).

[4] Digital Regions Initiative is reported under Supporting innovative delivery of online services.

[5] An amount of $100 000 was reallocated from the Connect AustraliaMobile Connect program (Satellite Phone Subsidy Scheme) to the Community Broadcasting Foundation program.

[6]The 200809 PBS refers to Connect Australia which comprised Backing Indigenous Ability (now referred to as Indigenous Communications Program), Satellite Phone Subsidy Scheme and the Clever Networks program.

[7] Funding of $700 000 in 200809 has been reallocated from Connect Australia to the Telecommunications Consumer Representation and Research administered item for the establishment of ACCAN.

[8] The Do Not Call Register is administered by the Australian Communications and Media Authority

[9] This figure includes amounts of $100 000 reallocated from the Connect AustraliaMobile Connect program (Satellite Phone Subsidy Scheme) to the Community Broadcasting Foundation program and $101 119 paid from the National Transmission Network Residual Funding Pool program.

[10] This figure includes administered expenses of $101 119 paid to the Community Broadcasting Foundation.

The 200809 Portfolio Budget Statements refers to Connect Australia which comprised Backing Indigenous Ability (now referred to as Indigenous Communications Program), Mobile Connect (now referred to as Satellite Phone Subsidy Scheme) and the Clever Networks program.

 

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Document ID: 121593 | Last modified: 22 September 2010, 2:58pm