Government Must Restore Sense to the Digital Divide Debate

The release of the third Australian Digital Inclusion Index (ADII) earlier this week adds weight to the Keep Me Posted campaign who are advocating for a ban on paper billing fees. Multinationals profit on the back of struggling Australians and Keep Me Posted is calling on Government to restore sense to the digital divide debate.

Keep Me Posted is heading to Canberra in October to once again call on the Government to protect vulnerable Australians by implementing legislation banning paper bill fees. The campaign is demanding answers, despite being promised answers in April 2018 following Treasury’s Consultation into paper billing fees conducted in December 2017.

Kellie Northwood, Campaign Director, Keep Me Posted commented, “Our most vulnerable Australians can no longer wait as the least able to afford these charges in our community are being impacted the most.”

Whilst some states are improving, there’s still work to be done to ensure all Australians are receiving important communications the way they wish to receive. As the digital divide widens, and while internet connectivity prices are not decreasing, struggling families who can least afford it are being hit the hardest.

The campaign supports Lead Researcher, Professor Julian Thomas’ comments stating there are more than 2.5 million Australians who are not online and therefore missing out on benefits that come with connection. “What we’ve found is that nationally, digital inclusion is improving, but there is much more work to be done. Poorer and more vulnerable communities are more likely to be digitally excluded and are not enjoying all the benefits of being online. As an increasing number of essential services and essential communications move online, the divide is getting deeper.” From this, paper-based alternatives are essential to a large portion of vulnerable communities.

“There are still several Australian communities who like, want and, more importantly, need paper-based communications. All homes come with a letterbox, not everyone has internet connectivity,” Northwood furthered.

“It is unfair for Australians to succumb to everything digital when there are alternatives still available, and the paper bill is a favourable alternative that should be provided free of charge. As companies continue to push Australians online, a greater burden is put on those not connected.”

Keep Me Posted applauded New South Wales earlier this year when premier Gladys Berejiklian announced the end of paper bill charges from energy retailers as part of a series of measures included in the Energy bill relief package and the campaign is now calling on other states to show the same leadership.

The campaign is also calling on new Energy Minister, Angus Taylor, to show similar leadership and implement legislation at a Federal level.

The 2018 ADII is based on data from more than 16,000 Australians captured in the annual cycle of the Roy Morgan Single Source Survey.

Australia’s digital divide is not going away

From The Conversation.

Despite large investments in the National Broadband Network, the “digital divide” in Australia remains largely unchanged, according to a new report from the Australian Bureau of Statistics.

The Australian Household Use of Information Technology report says we are doing more online, and we are using an increasing number of connected devices. Our homes are more connected.

However, the number of people using the internet is not growing, and the basic parameters of digital inequality in Australia – age, geography, education and income – continue to define access to and uses of online resources.

Almost 2.6 million Australians, according to these ABS figures, do not use the internet. Nearly 1.3 million households are not connected. So what is going on? The ABS data points to the complexity of the social and economic issues involved, but it also helps us identify the key areas of concern.

Who’s missing out

Age is a critical factor. While more than nine in ten people aged between 15 to 54 are internet users, the number drops to eight in ten of those aged 55-64 years, and to under six in ten of those over 65 years.

Most people with jobs (95.1%) are online, compared to just 72.5% of those not employed. Migrants from non-English speaking countries are less connected (81.6%) than those Australian born (87.6%). Those already at a disadvantage – the very people who have the most to gain from all the extraordinary resources of the internet – are missing out.

This is not to say that it is only individuals that will benefit from greater digital inclusion. Raising the level of digital inclusion yields direct benefits for the community, government and business. There are, for instance, clear efficiency gains for government moving services online.

Raising the level of online health engagement for those over 65 years of age (the heaviest users of health care) would provide such a benefit. Currently, just over one in five people in this age category access online health services, substantially below the national average of two in five.

But nor should we focus only on the economic and efficiency gains of inclusion: the social benefits of connection and access to entertainment and information are considerable for most internet users, and especially so for those who are isolated and lonely, as older people may be.

Income and affordability matter

Australians with higher incomes are substantially more likely to have internet access at home than those with lower incomes – 96.9% of the highest quintile (bracket representing one fifth of the sample) income households have access, whereas only 67.4% of the lowest quintile have access.

And better-off Australians appear to be doing more online. Compared to the general population their uses of online banking and shopping, education and health services are higher. They are connected to the internet with multiple devices, with an average of 7.2 devices at home, compared to 4.4 in the lowest income quintile.

The gap between the major cities and the bush has not narrowed over time – 87.9% of those living in major cities have internet access at home, 82.7% in inner regional, 80.7% in outer regional and 77.1% in remote areas. It’s important to note that this survey did not include remote Indigenous communities, where the evidence suggests that internet access is usually very poor.

Among those who are connected, geographical differences in the means of access and modes of engagement with online services suggest a further gap among those who are already disadvantaged. People in remote areas use the internet much less for entertainment and formal education compared to their urban counterparts, which are services that require more bandwidth and better quality connections.

Unfortunately, the ABS did not ask why households do not have home internet access, as it did in 2014-15. That data revealed cost was a factor keeping 198,600 households offline. Unsurprisingly, 148,200 of these households were from the two lowest income quintiles. Cost was the major factor in keeping more than 30,000 of the 76,000 family households (with children under 15) offline.

Given the increasingly central role of the internet in educational activities, the fact that the number of family households without access has not fallen since 2014-15 is concerning.

Affordability will continue to be a problem as more data-intensive services are offered online and the demand for data increases, and as mobile services become increasingly important.

However, cost was not the only reason people gave for non-use. Around 200,000 of the two lowest income households lacked knowledge or confidence to use the internet. Digital ability, and our readiness to make use of the internet, are clearly areas for continuing attention. We know that interventions there can make a difference.

The final survey on household use of IT

This ABS survey is the last of its kind. We hope the Bureau will be able to undertake further surveys in this area. The end of this data series does not signal its lack of relevance, at a time when digital inclusion is more important than ever. On the contrary, it points to a pressing new challenge for governments, the community, and business.

As our service economy increasingly moves online — in education, health, work, and government services — we need to ensure that all Australians, particularly those already disadvantaged, have affordable access to the online world. A reliable evidence base to inform our work in this area is essential.

But the information we have should be enough to spark action in some critical areas. The affordability of broadband is clearly one of these. When we consider, for example, the situation of families with children — where cost is clearly an issue for a significant number of them — we need to recognise that existing policy settings and market mechanisms are not working.

The digital divide is likely to grow

The ABS findings correspond to other recent work in the area. Australian policy has long had the aim of making communications widely accessible across our huge country and dispersed, fairly small population.

But the Australian Digital Inclusion Index has highlighted the problem of affordability and unequal access across economic, social and spatial lines. Australia’s performance also compares poorly to other countries.

The Inclusive Internet Index, produced by The Economist’s Intelligence Unit, rates Australia at 25 out of 86 countries, behind Russia and Hungary.

So despite the egalitarian aspirations embodied in the policy language of the National Broadband Network, the evidence suggests that the Australian internet remains unusually unequal in terms of access and affordability.

Instead of a digital economy designed for everyone, we appear to have created a highly stratified internet, where the distribution of resources and opportunities online reflects Australia’s larger social and economic inequalities. The risk is that over time the digital divide will amplify these. Unfortunately there is little indication in the ABS data that any of the key indicators will change soon.

Authors: Julian Thomas, Director, Social Change Enabling Capability Platform, RMIT University; Chris K Wilson, Research Fellow, Technology, Communication and Policy Lab – Digital Ethnography Research Centre, RMIT University; Sora Park, Director, News & Media Research Centre, University of Canberra

Where Australia Sits On The Digital Trust Scale

Interesting article from the World Economic Forum and Harvard Business Review, comparing Digital Trust across 42 countries, based on four key dimensions. We lag on momentum it seems, well below UK, New Zealand, and USA, as well as many of the Asian and Scandinavian countries!

Australia rates quite highly on the experience and environment dimension, but low on the speed dimension.

Why Paper Statements Must Be Free

The Treasury released a request for submission relating to the thorny issue of digital exclusion, and specifically the fact that some companies, in a drive to digital first, are starting to charge consumers to continue to receive paper bills, for services such as utilities. There is already legislation in some other countries to protect consumers from this.

The Treasury suggest a range of options:

  • Option 1 — the status quo, with an industry led consumer education campaign;
  • Option 2 — prohibition (ban) on paper billing fees;
  • Option 3 — prohibiting essential service providers from charging consumers to receive paper bills;
  • Option 4 — limiting paper billing fees to a cost recovery basis;
  • Option 5 – promoting exemptions through behavioural approaches.

As we discussed last week, they suggest 1.2 million households are digitally excluded by not having access to the internet.

The Keep Me Posted Lobby Group (who contacted me after last week’s post)  advocates there should a ban on paper billing fees.

“We clearly stated Keep Me Posted’s position to support a total ban on all billing fees, which is option 2 of the consultation paper,” said Kellie Northwood, Executive Director, Keep Me Posted.

To add weight to be debate we wanted to make two points.

FIRST – the Treasury estimate understates the number of households who are digitally excluded and so more would be potentially hit by excess bill charges.

SECOND – we believe option 2 – ban fees is the right option.

How Many Households Are Digitally Excluded?

We use data from out rolling 52,000 household surveys across Australia.

The result suggests that it is not just access to the internet which is an issue, but there are some households who just are unwilling or unable to use the internet. In fact the Treasury’s estimate of the number of households impacted is understated.

We segment households, digitally speaking into three group.

  • DIGITAL NATIVES: Households who are naturally digital, using mobile devices, constantly online and using social media, often using multiple devices including tablets and smart phones.
  • DIGITAL MIGRANTS: Households who are moving from terrestrial services to digital, taking up smart devices and learning to access social media and other online services.
  • DIGITAL LUDDITES: Households who prefer terrestrial services, but who are now starting to migrate online and are reluctantly adopting the new paradigm. In many cases they are unwilling or unable to migrate.

We also use our master household segmentation, which is based on multi-factorial geo-demographic and behaviourial  analysis, though based on our rolling 52,000 household survey.

The results show that Digital Luddites are predominately in the older and  less wealthy households, including Stressed Seniors, those living in the disadvantaged fringe areas around our major cities, those in a rural setting, and those from non-English speaking ethnic backgrounds.  Count up all the Digital Luddites and it comes to 27% or 2.6 million households.

We can examine the splits by age bands, and confirm that older households are more likely to be in this group.

Analysis by income band highlights that significantly more are in the lowest income range, including many on pensions and Government support.

We were able to examine the barriers which were driving households into the Luddite group.  We found that whilst 7% (around 170,000) are likely to migrate to digital channels, if slowly; 36% (around 911,000) households did not have access to the internet, or usable device; 17% (around 430,000) had no inclination to go digital, even if they could; 22% did not have the technical capability – could not operate a smart phone, did not know how to get to connect to the internet – (around 557,000); and 18% (around 463,000) did not have the physical capability (thanks to disability or other factors).

Stripping back the analysis to a financial capability (did they have the funds to purchase a device, internet access etc), then we estimate 54% of Luddites were impacted by these economic factors, or 1.36 million households.

We believe therefore the Treasury estimate of the number of households impacted by digital exclusion is understated.  This adds more weight for intervention.

The Right Choice Is: Option 2 – Fees Should Be Banned

Companies are clearly able to save money if they can stop sending out paper versions of statements, and rely on customers to receive online notification and then retrieve their statements. This economic driver is understood, though most often the initiate will be dressed up as “environmentally friendly”, or  “more convenient”.  It appears though that savings are not passed back to consumers directly, but flow into general funds.

Our research suggests that a considerable number of households are unable to go digital. Thus they risk having additional fees and charges imposed on them, with no mitigating option. This is in effect a price rise. Whilst education, and communication to households may assist some, many are not able to migrate. These are the least wealthy, older and more exposed households. This is not equitable.

In some cases it appears charges for bills are significantly higher than the incremental charge based on an estimate of what the incremental cost should be, and in any case, experience from the banking sector highlights suggests it is difficult to get a definitive incremental estimate of the cost of a bill.  We think restricting the acceptable charge to cost to recovery, is complex, cannot be audited, and offers too much wriggle room.

We cannot support the differentiation between essential and non-essential services, not least because the threshold would potentially vary by household circumstance, and we cannot see a justification for charging for paper billing in some circumstances, but not others.

Therefore charges for paper billing should be banned.

Companies would be welcome to offer discounts to those receiving electronic delivery (although the ACCC may have to ensure that overall costs of service are not lifted to facilitate the subsequent discounting!)

We will be making this submission to Treasury.

 

 

 

 

 

 

 

 

 

Distracted: Is Digital To Blame For Low Productivity?

From Bank Underground.

Smartphone apps and newsfeeds are designed to constantly grab our attention. And research suggests we’re distracted nearly 50% of the time. Could this be weighing down on productivity? And why is the crisis of attention particularly concerning in the context of the rise of AI and the need, therefore, to cultivate distinctively human qualities?

Are we losing our attention?

In a world of information overload, what do we pay attention to?

This question has become increasingly relevant in the digital age. With the rise of smartphones in particular, the amount of stimuli competing for our attention throughout the day has exploded. A survey from 2013 found that we check our phones 150 times per day, or roughly once every 6½ mins; a more recent study found that the average smartphone user spends around 2½ hours each day on his or her phone, spread across 76 sessions.

In the context of this huge cultural shift, our attention emerges as a scarce and valuable resource and the ‘attention economy’ has become a growing area of study. Some models seek to explain how we allocate our attention online. The theory of rational inattention, meanwhile, starts with the assumption that information is costly to acquire, hence decision-makers may rationally take decisions based on incomplete information.

Another line of enquiry, and the focus for this post, stems from the claim that we are more distracted than ever as a result of the battle for our attention. One study, for example, finds that we are distracted nearly 50% of the time. This ‘crisis of attention’ is seen as one of the greatest problems of our time: after all, as the American philosopher William James noted, our life experience ultimately amounts to whatever we had paid attention to.

Might the crisis of attention be affecting the economy? The most obvious place to look would be in productivity growth, which has been persistently weak across advanced economies over the past decade (during which time, as it happens, global shipments of smartphones have risen roughly ten-fold).

How might distractions be weighing down on productivity?

The intuition is simple enough: our minds comprise the bulk of our human capital and what we direct our attention towards is integral to the ‘output’ of our mental activity. You would therefore expect the ability to pay attention to be a key input into productivity.

In the vast literature on the determinants of strong performance in the workplace, some studies consider the role of attention. But there is little linking these to productivity in the economy as a whole. Partly this is because observing inner states (attention) and mapping these to outcomes (productivity), taking account of other relevant factors, is inherently tricky.

Yet there is mounting research that can help us start to address this question. My aim here, rather than giving a definitive answer, is to set out a framework for thinking about this issue. My contention is that distractions at work – whether from work emails, smartphone notifications or office noise – might cause weaker productivity via two main channels.

Channel 1: The direct impact of distractions on the amount of effective time spent working

Surveys offer estimates of the time workers spend ‘cyberslacking’ – using the Internet and mobile technology during work hours for personal purposes. The US Chamber of Commerce Foundation finds that people typically spend one hour of their workday on social media – rising to 1.8 hours for millennials. Another survey, meanwhile, found that traffic to shopping sites surged between 2pm to 6pm on weekday afternoons.

The total lost time will likely be greater than the time spent slacking off, however, since office workers typically take around 25 minutes to recover from interruptions before returning to their original task. What’s more, distractions can directly reduce the quality of our work . An influx of emails and phone calls, for example, is estimated to reduce workers’ IQ by 10 points – equivalent to losing a night’s sleep.

Channel 2: Persistently lower productivity caused by habitually distracted minds

The idea here is that frequent distractions might lead to a persistently lower capacity to work, over and above the direct effects. What is the argument for this being the case?

First, there’s habit formation. As James Williams notes, distracted moments can quickly lead to distracted days. And our habits are shaped by the way that consumer technologies, such as smartphone apps, are designed to be as addictive as possible – to ‘hijack the mind’, as Tristan Harris puts it. Harris gives examples like the bottomless scrolling newsfeed, which is designed to make you want to scroll further in case something good turns up. The psychological mechanism at play here – “intermittent variable rewards” – is the same as the one that gets people hooked on slot machines.

In the workplace, there’s some evidence that distractions cause more distractions. Mark (2015) finds that workers who get interrupted by external stimuli (eg message notifications) are significantly more likely to later go on to ‘self-interrupt’ – stop what they’re doing and switch to something else before reaching a break point. In other words, if you keep getting distracted by external stimuli, your mind’s more likely to wander off on its own accord.

Second, the more we have different sources of notifications in the workplace competing for our attention, the more we’ll constantly scan different channels in an attempt to stay on top of things. The problem is that this mode of working – termed “continuous partial attention” – serves to fragment our attention, reducing our focus on the task at hand. In effect, this is a variation on multitasking – which is widely discredited as an effective mode of working. Cal Newport goes so far as saying that media like email, far from enhancing our productivity, serve to ultimately deskill the labour force.

How should we respond to the crisis of attention?

Individuals and organisations are exploring ways to counter the fall in attention spans. Some companies embrace single-tasking as a mode of working. Some experiment with doing away with email all together. Others help staff to train the mind, for instance offering courses in mindfulness, the practise of paying attention to the present moment, which has been shown to improve people’s focus.

In terms of avenues for future research, further empirical work could shed light on the size of the channels mentioned above to get an estimate of the drag on productivity. Ideally we would want to observe directly how ‘attention capital’ and productivity vary across firms and over time (and how this affects wages). Failing that, perhaps datasets exist that allow us measure the gains to productivity of firms that make use of strategies to enhance employees’ attention, compared to other firms in the same industry that don’t?

Note that the focus here is on understanding the link from attention to productivity. This may include noting the role that (the design of) digital technologies play in causing shrinking attention spans. But of course the overall impact of digital technologies on productivity is a much wider issue (they will likely boost productivity, for instance, by reducing search costs).

Deeper issues: attention, choice and artificial intelligence

The crisis of attention also poses some deeper problems for society. To conclude this post, I note two of these because they have profound implications for the economy (and economics), even if they fall into the domains of political economy, philosophy and sociology.

The first issue is that the more our attention is ‘captured’ by the algorithms that underpin consumer technologies, the less our decisions – what to click on, what to buy – can be said to reveal our true, underlying preferences. Of course, adverts have been around for a long time but the argument is that the use of Big Data to exploit psychological vulnerabilities in a targeted way, using the latest insights from neuroscience, changes the game: it prevents us from “wanting what we want to want”. This should concern economists because models of consumer behaviour rest largely on the assumption of ‘revealed preferences’.

The second concerns the rise of artificial intelligence and machines that will be capable of an increasingly wide set of tasks. Views differ on what this will mean for future unemployment (see eg here and here). But most agree on the need to cultivate our distinctively human skills in order to differentiate ourselves from machines. And the human ability to empathise – central to the work of social workers, performers and nurses, among others – is cited in this regard by the likes of Klaus Schwab, Andy Haldane and Jim Kim.

How is the crisis of attention relevant here? Being able to pay attention (to tasks, to people) is a crucial input in the cultivation of empathy. Studies on mindfulness are instructive here: mindfulness practise gives explicit focus to cultivating attention, but research suggests that it also boosts individuals’ empathy – making it a potentially important part of a response to the impending wave of technological change.

 

Bank Underground is a blog for Bank of England staff to share views that challenge – or support – prevailing policy orthodoxies. The views expressed here are those of the authors, and are not necessarily those of the Bank of England, or its policy committees.

People with disability at risk of financial and digital exclusion – ANZ

People living with disability are at particular risk of exploitation and financial abuse, and financial education may be a key to addressing the issue, a new ANZ study released today has found.

The ANZ-commissioned 2017 MoneyMinded Impact Report from RMIT University is one of the first in Australia to explore the issues related to financial wellbeing for people with disability and their carers.

The report found people with disability may miss out on opportunities to develop their financial capability and wellbeing because of lower levels of digital inclusion, lower participation rates in education and the workforce, and lower levels of socialisation.

It also highlighted a concern that people living with disability may face additional financial challenges under the National Insurance Disability Scheme (NDIS), including a potentially higher risk of financial exploitation by unscrupulous service providers.

Commenting on the findings in the report, ANZ Chief Executive Officer Shayne Elliott said: “This is an important study that helps us understand the nature and scale of the challenges some people with disability face in our community.

“Through community programs like MoneyMinded we can help provide access to financial education so people with disability and their carers can make better financial decisions and have confidence with everyday transactions that many of us take for granted

“We will continue to invest in improving the financial literacy of communities in which we operate; in 2017 we’re happy to have reached more than 76,000 people in Australia, New Zealand, Asia and the Pacific with MoneyMinded,” Mr Elliott said.

ANZ also supported a companion study from RMIT University and Autism CRC that provided additional focus on issues for autistic individuals who account for 29 per cent of current NDIS clients.

Principal Research Fellow at RMIT Professor Roslyn Russell said the financial capabilities and education needs of people with disability were varied and diverse, depending on the nature and extent of their disability.

“Those with cognitive and intellectual difficulties may have more complex challenges in using and understanding money. But everyone, regardless of their ability, should be given support to learn and participate in financial decisions that are appropriate to their goals,” Professor Russell said.

CEO of Autism CRC Andrew Davis said the companion report built on understanding of the financial experiences, attitudes, behaviours and needs of autistic adults, about which there is currently little knowledge.

“We need to have a stronger understanding of the financial barriers faced by autistic individuals, including how neurodiversity affects their financial wellbeing,” said Mr Davis.

“What we do know is that if autistic individuals are not given the opportunity to develop their financial skills and confidence, they are less likely to be able to live as independent consumers and develop the capability to identify financial opportunities and risks.”

 

Should You Pay For A Paper Bill?

Interesting consultation from the Treasury of the impact of digital migration of consumer bills, and the emerging trend to charge for a paper version, which may adversely be impacting those unable or unwilling to go digital.  They suggest 1.2 million households are digitally excluded.

NBN Co forecasts that 94 per cent of households will have internet access by 2020, and 100 per cent by 2030. However, there is still a sizeable minority – 1.3 million households as of 2015 – who do not have access to the internet. These consumers currently have no practical way to transition to digital billing.

Individuals surveyed provided a variety of reasons for not accessing the internet. Many of the reasons provided do not suggest that the individuals fall into disadvantaged groups. However many cite a lack confidence or knowledge to access the internet or cost as the main reason for not accessing the internet. Based on the number of households who indicated cost or knowledge as their reason for not accessing the internet, Treasury estimates there are approximately 1.2 million Australians who do not have internet access at home because they either cannot afford it or because they believe they do not have sufficient technical skills. Given the relatively low cost and large benefits associated with having internet access, Treasury assumes a majority of the consumers who indicated cost as coming from one of the disadvantaged groups described. Additionally, in digital inclusion suggest many consumers who indicated lack of knowledge as a reason not to access the internet also likely come from one of the disadvantaged groups identified above.

In addition to those with no internet access there are also many Australians who lack the technical skills or appropriate technology to enable them to pay bills online. Digital inclusion is a measure of groups and individuals ability to access and use information and provides some insight into the makeup of this group.

Digital inclusion tends to decline with age and is lower among Australians with a disability and Indigenous Australians. Additionally, one in five Australians only has access to the internet through a mobile device. Modern mobile devices allow users to complete a majority of tasks that previously required a laptop or desktop, however some users may have difficulty reviewing their bills on a three to five inch screen. Mobile only internet access has been linked with socioeconomic factors including low income and low education levels.

Consumers who elect to receive paper bills and pay fees due to fear of online scams are an important subset of this group, although paper bills may also lead to identity fraud through mailbox theft. Unfamiliarity with the internet has been raised by many stakeholders as key reason why consumers do not want to transition to digital billing and justification for opposing paper billing fees.

Some consumers with lower levels of digital inclusion will still chose to receive digital bills. However a subset of this group will face significant barriers that may prevent them from accessing bills online and will instead pay paper billing fees. This suggests that there are likely disadvantaged consumers who have access to the internet, but still have no choice but to pay paper billing fees.

The provision of bills in a digital format, when compared to paper billing is often seen as a simpler, lower-cost and more environmentally friendly option for businesses and a more convenient option for consumers. Digital bills can also be integrated with other digital services and information such as electronic reminders or notifications, access to previous billing information, and online changes to personal details. For these reasons, it is viewed by some as being in the interest of business and the broader community to transition customers to digital bills. Paper billing fees – a charge for customers who elect to receive a paper bill – are a common mechanism used to encourage consumers to make the change to digital bills.

While many consumers may have the option to transition to digital bills, but choose to pay paper billing fees due to personal preference, there is a concern that this is not the case for all consumers. These consumers may pay paper billing fees out of necessity, because they do not have the ability to access digital bills.

There may be scope for the Government to take action to protect these consumers.

The policy options analysed in this RIS are:

  • Option 1 — the status quo, with an industry led consumer education campaign;
  • Option 2 — prohibition (ban) on paper billing fees;
  • Option 3 — prohibiting essential service providers from charging consumers to receive paper bills;
  • Option 4 — limiting paper billing fees to a cost recovery basis;
  • Option 5 – promoting exemptions through behavioural approaches.

Further evidence on the likely impact of all options is required to conduct an informed evaluation of the options and to determine which approach should be pursued. The views of stakeholders will inform a final, Decision Making Council of Australian Governments (COAG) RIS.

 

Will Australia’s digital divide – fast for the city, slow in the country – ever be bridged?

From The Conversation.

This week the Productivity Commission released an issues paper as part of an inquiry into the adequacy of Australia’s Universal Service Obligation (USO) for telecommunications, in light of changes in technology and demand.

The USO was formulated in a different age when the internet was in its infancy. Today, its requirement to provide access to standard telephone services and payphones to all Australians is akin to mandating the availability of horse and buggies by carmakers operating in the age of the Tesla.

Indeed, Australia’s USO probably needs to be considered in the light of a largely converged and complex telecommunications environment.

The issue is shaping up as a sleeper in the current federal election, especially in the bush. During Tuesday night’s episode of Q&A, telecast from regional Tamworth (400 km north of Sydney), the issue featured prominently. Tony Windsor, who is running as an independent candidate against deputy prime minister Barnaby Joyce in the seat of New England, received the biggest cheer of the night when he said of telecommunications infrastructure: “do it once, do it right and do it with fibre”.

City dwellers might be forgiven for thinking that this is the latest, high-tech version of the “whingeing farmer” syndrome. They would be wrong. Rural Australia has very real and legitimate concerns regarding the growth and probable permanency of the digital divide.

For many years regional Australians have had to contend with demonstrably inferior internet speed and reliability than their fellow Australians. This problem is compounded by the fact that their need for broadband services is greater than their urban cousins due to the importance of broadband for education, healthcare and business.

These additional connectivity requirements are increasing exponentially as technologies like Smart Farming, remote sensing and genomics create vast amounts of data. These are agricultural examples of the Internet of Things – an emerging paradigm that promises huge improvements in agricultural efficiency and environmental management, but requires constant and unconstrained internet access.

Like most public policy dilemmas, it’s all about money. Labor’s initial policy was full Fibre to the Premises (FTTP – the Rolls Royce option) but its policy these days is looking increasingly similar to the Coalition’s – with both looking quite different from Tony Windsor’s “do it with fibre” admonishment.

It has been estimated that the full FTTP option to all (or the vast majority) of Australian homes and businesses would cost an additional $30 billion. In the context of Australia’s current and likely future fiscal situation, this has been seen in Canberra as too much to spend.

The reality on the ground (or in fact in orbit) is the NBN’s Sky Muster satellite (launched in 2013 and switched on this month, with another launch soon to follow). According to an NBN spokesperson, there are 600 technicians connecting homes as fast as they can and by mid-year 2017 around 85,000 premises will be connected.

This multi-billion dollar investment certainly improves internet access for rural and remote Australians but it also sets a constraint as to what regional Australians should expect in the future.

Sky Muster is decidedly akin to a Holden Commodore (but at least not a Kingswood) in comparison to the FTTP’s Rolls Royce. It’s fair to say rural users are generally much happier with these new services than the historical interim arrangements. However it is also clear that what Sky Muster offers will be inferior to what is being offered in the cities, potentially cementing for the foreseeable future regional Australia’s “second class” status.

The essential problem with Sky Muster and similar satellites are their innate physical limitations. While this is true of all network technologies, there is real concern that user demand, especially at peak times, will quickly overwhelm the satellites’ capacities creating the need for ISPs to shape user download speeds.

One consequence of this will be downtime for important synchronous activities like e-conferencing and the like, but also a lack of functionality in the emerging IOT systems that require an unconstrained, always-connected network state.

Another problem relates to cost. Urban consumers are used to paying around $100 per month for unlimited and relatively reliable broadband complementing fast 4G cellular when they are away from home. Early Sky Muster plans are slower and offer far less data, especially during peak times when people are actually awake.

Rural communities are rightly concerned that the launch of Sky Muster may well be as good as it gets. While this is clearly better than what the country people have had, the divide between the bush and the cities in this and other areas is seemingly becoming wider and more permanent.

So, as the Productivity Commission grapples with the question of what the USO should look like in 2016 it will really need to consider what it should look like in a decade or two. This question will challenge the Commission’s rationalist economic predilections.

The answer relates not so much to the current and future economics of accessing the internet but more so the nature of fairness in Australia. The key question is how willing we are as a nation to see rural Australia fall further behind the cities in this fundamental aspect of our national infrastructure.

Authors: John Rice, Professor of Management, University of New England; Nigel Martin, Lecturer, College of Business and Economics, Australian National University