Talk to Netizen seminar on the topic of the
Broadcasting Services (Internet Services) Amendment Act
Thursday, October 7th, 1999
The phrases which come most to mind in discussions I have had with members of the online community about the "Internet Censorship Act" -- as it is commonly known -- are phrases like "but it's so dumb", "how can they possibly think that?", "they clearly don't understand", "it's the wrong model" and so forth.
There seems to be this enormous gulf between what the online community understands to be the case and to be practicable and what the legislation and the Minister are committed to happening.
It is not for me to talk at this venue about why the broadcasting model is so inappropriate for regulation of ISPs (1), given that there are people much more expert than me in the technicalities, present and speaking. I will note, however, as I have in my forthcoming article in Agenda -- which has also been included in our Submission to the Productivity Commission Inquiry into Broadcasting Services -- that one is stuck with the broadcasting model if you are going to make imposing a censorship regime on ISPs have any plausibility at all. Any use of a telecommunications model would put up in stark relief what was wrong -- in terms of practicality, reasonable liability and free speech -- with the proposal.
What I want to talk about is how come such an inappropriate model could be adopted at all. After all, merely saying the broadcasting model was the only way to make a censorship regime on ISPs plausible is not enough. The question is, why then go ahead? Why not just either:
- abandon the exercise; or
- look at more practicable alternatives to keeping dubious and nasty things away from children?
THE PROBLEM OF KNOWLEDGE
Let us take it as read that the Government did want to protect children and did want to conciliate Senator Harradine and the sentiment he represents. Let us also take it as read that that then imposed on the Government a major time constraint, due to the change in the Senate numbers on the 30 June, hence the remarkable speed with which everything was done.
What does that major time constraint do? It means that the Government has to make major decisions very quickly and using resources readily at hand, including the stock of knowledge it has quick access to. This is an often greatly underrated virtue of lengthy policy development and inquiry processes: they can provide a means of educating policy makers and turning up information or, more specifically, making it available to policy-makers.
Now, I happen to know that the Internet censorship proposal was not driven by the Department, but by the Minister's office. So we are not even talking about the knowledge-stock on hand in the Department, but in the Minister's Office itself, though the expertise of Canberra Departments, especially in areas of rapid technological change, is not necessarily all that great either.
OK, so we are looking at the level of understanding of the Minister's Office and a few key bureaucrats. Immediately, we see how lack of knowledge can be a serious problem.
Then we have to consider the enormous range of Government activity. Even in the one portfolio of Communications, Information Technology and the Arts, we are dealing with media policy, telecommunications policy, information technology policy and arts policy. That is everything from Telstra, Australia Post, the ABC, commercial media (both radio and TV) through to the Arts Council and the National Museum.
True, any major proposal has to go via Cabinet and get Cabinet approval, but it is precisely in areas of new technology and dramatic technological change that that process can be expected to be at its weakest. Since other Ministers, their Staff and Departments are going to lack useful background knowledge, they are going to be in a very poor position to demur from anything the relevant Minister puts up -- every current member of Cabinet entered Parliament before the Internet entered general public consciousness.
If you want some idea of the scale of activity we are talking about, look at this.
Graph 1
Isn't it wonderful to live in an age of de-regulation? [You can see the effects of] photocopiers in the 1970s, word processors in the 1980s and PCs on every desk in the 1990s. Just to give you some idea of the ever-increasing scale of legislative activity, the Commonwealth Parliament passed in the first eight years of this decade more pages of legislation than it passed from 1901 to 1980 inclusive. That is, an eight-year period of no great national emergency apparently required more pages of legislation that establishing the Commonwealth jurisdiction, WWI, the Great Depression, WWII, postwar prosperity, the Whitlam reforms and beyond combined.
The enormously increased "productivity", in some sense, is obvious. Quality control, however, is clearly a bit of an issue. And, in case you were wondering, the Acts are getting longer as well.
Graph 2
So, more law and more complex law and a problem of quality control, particularly in areas of new technology and rapid technological change. It should becoming obvious how there is a serious issue about lack of knowledge and lack of time to access appropriate knowledge.
At this point we can see how the salient thing is not how much a person knows, but access to Ministerial attention, either directly or through the Minister's staff. One of the classic Canberra games is for a bureaucrat or staffer to ring up to get "Industry's opinion" where by "Industry" we typically mean the Executive Director of the relevant industry association -- that is, lobby group -- or one or two larger players who, for whatever reason, have become known to the bureaucrat or staffer. They themselves are generally fairly keen to retain their favoured position and/or gain advantage from it, so are perhaps not ideally placed to tell their inquirer that the Minister's pet project is a load of codswallop. The less time you have, the more such apologies for genuine information-gathering are going to be relied upon.
A friend of mine tells a great story about the person in charge of developing industry policy for an industry whose stock of knowledge consisted of occasional lunches with the head of the "Australian" lobby group that represented only about 40 per cent of the industry -- and only the big ones at that -- and ONE walk-through of a facility. Canberra Departments reward ability to play the policy game, more than genuine knowledge.
As an aside, I note that the Minister has informed the Senate that, when he visited Silicon Valley, nobody criticised him over his Internet censorship Act. A couple of fairly obvious points. First, Silicon Valley inhabitants must be pretty used to a never-ending parade of visiting foreign politicians all eager to touch the Silicon Valley magic and work out to replicate it back home. It must have become standard background noise, so why would you pay much attention?
Second, if they do pay attention, they are probably hoping to sell something or otherwise get the Australian Government to be helpful. What sort of strategy is it to start with, "oh, by the way Minister, your latest pet project is complete garbage?". One suspects that, even in Silicon Valley, it ain't going to happen. Which is why Ministers saying that no-one from the industry has complained to them to their face should never be taken terribly seriously: Ministers are potential walking cheque books for sums that start with six figures and work up; of course people in industry are going to be nice to them and not want to make them feel bad about themselves and their pet projects.
Now, I hope we can see how a really bad idea can get all the way into law. In fact, how it can happen quite frequently. How, for example, a Minister's Office, under a great deal of time pressure, dealing with a subject it really doesn't understand can look around and say "well, the Internet is a bit like narrowcast broadcasting -- that is, cable TV -- so we will regulate it as a tack-on to the Broadcasting Services Act and get the ABA (2) to do it and treat ISPs like broadcasters".
And when they talk to get "Industry's opinion" it is entirely possible that they may merely be a couple big players who may be quite happy to raise entry costs to the industry and so cull their competitors.
WHY REGULATION OFTEN FAILS
At this point, it should also be clear that there is nothing particularly mysterious about why government regulation in markets is often counter-productive -- it has been well, if not exhaustively, analysed. In practice, there is usually very little real quality control on regulatory provisions, either before or after the fact. Determining effects is often quite difficult -- since the effects of any particular provision tend to be very hard to pick out from a mass of government action (though that is not likely to be the problem in this case). The enormous increase in legislative activity militates further against effective quality control, few resources are put into systematically doing so and there is very limited feedback into the legislative process from such measurement as does occur. Worse, such feedback and measurement as does occur is often left to the regulators, who have a vested interests in the regulations they administer -- not least, in preserving the "human capital" of intimate knowledge of the regulatory structure, with future earning potential. This situation was much improved by the creation of the Industries Assistance Commission in 1975 (now the Productivity Commission) but, 29 years later, there is still far to go. There are also obvious conflicts of interest in government funding evaluation, since governments are not likely to want to be publicly and authoritatively told that their policies are not working.
Furthermore, interest in public policy itself is a "public good", subject to considerable "free-riding", so therefore tends to be under-provided. By contrast, those with concentrated special interests often have powerful incentives to be involved, leading to intrusive regulation tending to favour those with such interests (e.g. by raising market-entry costs in, say, law and medicine).
Unlike ordinary commercial exchanges -- where people only come together in expectation of benefit, where people have to know only their own situations and preferences -- regulatory action is the application of centralised coercion. The regulator cannot learn of the diversity of ever-changing personal preferences, aptitudes and resources. Even if they could, they must adopt a "one size fits all" approach, even though they know perfectly well that it does not. Were they to adopt the "flexible" approach, so often advocated by business, they would very soon find themselves accused of favouritism, of corruption. The provisions now in the Act which require action to be commercially feasible, and which the Minister has informed the Senate will indeed mean that different ISPs will have different legal obligations, create an enforcement minefield in this regard.
There is a place for judicious regulation (they can, for example, reduce what economists call "transactions costs; the expenses involved in making commercial exchanges) but there are also powerful reasons why there should be no presumption that extensive regulation is socially beneficial.
CURRENT CIRCUMSTANCES
The Minister's remarks on Silicon Valley were made during the Senate debate on a joint Democrat-Labor motion soundly criticising the Act which was passed by the Senate on the 30 September, confirming that the Act would not have passed if it had been voted on after 30 June. The Minister's comments in that debate centred quite heavily on the propositions that:
- something needed to be done; and
- there was a lot of community support for control of pornography and related material.
That is, he concentrated on the intention of the legislation. This is pretty normal in political debate, which tends to be very much based on the proposition that intention + effort = outcomes. So, for example, if someone claims that schools are not doing a good job of teaching literacy, the immediate cry is "more money!, more money!" rather than questioning whether there might be a quality control problem on the billions already spent on public education. People are what economists call "rationally ignorant" about many issues of public policy -- it is not in their interests to spend time becoming informed on issues that don't directly concern them. Intentions they can understand, crude measures of level of effort they can judge, so it just simplifies everything if outcomes are assumed to follow from them.
This is also very convenient for politicians and bureaucrats, because it makes life simpler for them. If you want some idea of why government delivery often isn't a great way to go, one needs to look no further than the banal level much public debate is carried on at.
Which is a real problem in this case, as in so many, because the devil is in the details. It is inside that glossed-over "black box" where, as is typical, the problems are. It is difficult to get debate focussed on the problems of the means, but it is not impossible to do so.
There is, of course, a very real free speech issue, but that is a contestable value, particularly regarding concern over children. If you want to restrict people's freedom, child-protection is one of the most powerful weapons for doing so, since it plays into parental fears. Moreover, children are not adults: there is not a presumption that they are able to look after themselves. Which is why parental responsibility and authority, and general respect for the family, is also a very basic freedom issue.
The advocacy advantage of focusing on impracticality and unnecessary damage is that it puts things on less value-contested grounds and plays directly to the widespread presumption (based, lets face it, on much experience) that politicians and governments do have some tendency to cock things up. The disadvantage of doing so is that you are working with poor background knowledge in the general public.
Clearly, the key thing is to convince people that, in the rush to conciliate Harradine and get it through the Senate, the Government chose the wrong model and that this will have serious consequences. That ISPs are not like TV and radio stations, but like phone companies, the post office and courier services. That the appropriate regulatory model is telecommunications, not broadcasting. The analogy probably makes immediate sense for e-mail users, but is probably less intuitive for lay people looking at websites, when the monitor does look at bit like a TV does, pictures and all: except, of course, the signal comes down a phone line, there tends to be a lot of text and not all that much movement.
To get people to look inside the "black box" of government activity, to look beyond intention and effort, is difficult, but not impossible. The Productivity Commission Inquiry into broadcasting legislation provides an unusually good opportunity to do so, even though TV and radio regulation will get most attention. The draft report comes out in mid-October, but the Commissioners are still accepting submissions and there will be a further round of comment and consultation before the final report comes out. If the Commission is critical, it certainly will make it harder for the Minister to dismiss critics as "fringe".
The main thing is to keep plugging away. In particular, to try and to develop ways of explaining to a lay audience -- which, after all, includes most journalists -- the fundamental impracticality of the legislation. The point is not to deny there is a free speech issue, because clearly there is, but because the most powerful argument possible against any policy is that it doesn't work, and/or that it imposes such high costs it is not worth it whatever you think of the intent.
And it helps in that explanation if people understand that it is by no means surprising that Ministers may not actually know what they are talking about.
Thank you.
ENDNOTES
1. Internet Service Providers
2. Australian Broadcasting Authority
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