Technology and online rights

Coalition won’t privatize the ABC, but it should allow opt-outs


Australia’s communications minister has ruled out privatising the ABC. But that doesn’t mean reform can’t be achieved.

Speaking to ABC Radio’s RN Drive, on his first full day in the job, Senator Mitch Fifield stated that he was not seeking to change the ownership arrangements of the ABC.

I was, about seven or eight years ago, a frisky backbencher who sought to give a provocative speech… the key point I was making was that, although people talk about different ownership arrangements, ultimately the Australian public have a settled view on these matters. So changing the ownership arrangements of the ABC is not something that I am seeking to do.

Fifield was attempting to downplay a speech he gave to the Australian Adam Smith Club in 2008.  The wide ranging speech, available on Fifield’s website, included a few brief lines about the merits of privatising the ABC:

Conservatives have often floated the prospect of privatising the ABC and Australia Post. There is merit in such proposals.

But the likely strong public opposition means that any government prepared to go down that path would need to prepare the ground and make the case for the change.

This is hardly a radical statement. If anything Fifield was being overly cautious.

Nevertheless, he is essentially correct. Privatising the ABC is not politically possible with the current climate of opinion.

When the Coalition announced that ABC funding would be “slashed”, as The Conversation described it—yes, I mean the 4.6 per cent cut to their $1.1 billion budget—the proposal was met with outrage.

Simply put, the ABC is too powerful, and too popular, for a government to risk openly confronting it. Any privatisation proposal would bring down the wrath of a well resourced media company with, large audiences across radio, television, and online platforms. The damage done would be made worse by the fact that the ABC has the single largest contingent of journalists in the Canberra press gallery.

Forget about Rudd vs Gillard, or the Whitlam dismissal, fighting ABC privatization, without a change in public opinion, would be the greatest political battle since federation. In inner Melbourne and Sydney, there would be riots on the street.

None of this discounts the many principled arguments for privatising the ABC. The case for privatisation has never been greater, as the IPA’s James Paterson wrote in The Age last year:

Australians have at their fingertips access to more news from more varied sources than ever before.

Unfortunately, the politics don’t yet add up.

But that doesn’t mean the government should avoid all reform. There is at least one principled and politically feasible reform Minister Fifield could pursue. As I outlined in July’s Herald Sun:

The Abbott Government should make funding the ABC an option provided on tax returns.

That would allow Australia’s 11.5 million taxpayers to choose whether the ABC provides value. It wouldn’t require the introduction of commercial advertising and, at the current funding levels, funding the ABC would cost taxpayers less than $2 per week. If support is as strong as the ABC claims, then such a move wouldn’t have any significant impact on its budget. But it will create a level of accountability that doesn’t currently exist.

This proposal, which would be a similar (although voluntary) system to the BBC’s license fee, would keep ownership and funding in public hands. But it would allow people to decide for themselves whether the ABC is a service worth supporting. It would also help increase public accountability and make the ABC more conscious of public demands.


What taxi strikes teach us about economic growth


Next week, Victorian taxi drivers will strike in a futile protest against their likely demise due to the rapid uptake of the revolutionary ridesharing company Uber.

Maybe they should have checked out the similar taxi strike in the United Kingdom last year that increased Uber signups by 850 per cent.

But what this messy innovation process reveals is the engine of economic growth: creative destruction.

Entrepreneurship is about replacing the old with the new. And in the process innovation makes our economy more productive, our people more prosperous, and our lives more free.

But as new industries replace the old, it is inevitable that someone somewhere will be hurt.

The hurt is often felt by well established, visible, and cashed-up constituencies. Fearing their imminent loss, they begin (or continue) rent seeking — striking, lobbying, protesting.

Unfortunately, while this process is predictable, governments too often use a ‘precautionary principle‘ and side with the lobbyists. The IPA’s Jason Potts and I argued precisely this in a submission to the Productivity Commission inquiry into set-up, transfer and closure:

Precautionary regulation leads to slowing business entry and exit. Fewer businesses enter the market for fear of being regulated against; while incumbents sit idle behind barriers of regulations … this precautionary principle may continually creep into public policy.

When incumbents fear they may be out-competed on the market, their lobbying efforts begin. Their demands – largely based around hypothetical harms, or maintaining the status quo – generate more political pull than the potential benefits of small new business entries.

Just because there is friction does not mean quelling the tensions is good public policy. I pointed this out in The West Australian recently:

Unfortunately the transition from old rules to new rules will not be a frictionless. Traditional industries will continue to put up a fight. We are seeing this in real time with the Taxi Services Commission. And while these industries – which will be inevitably be destroyed – have every incentive to pay to protect their artificially high prices this does not make good policy.

If the Victorian government understands what economic growth is and how it comes about, they would do best to ignore the current taxi strikes and deregulate the industry.

You can read Darcy Allen and Chris Berg’s report, The sharing economy: how over-regulation could destroy an economic revolution, here. You can also read Darcy Allen’s OECD Insights piece on regulation design principles around the sharing economy, What is a taxi? Regulation and the sharing economy, here.


Netflix highlights the futility of internet filters


Internet piracy is declining, and it’s a direct result of new streaming services like Netflix.

That is the finding of a new report from consumer group CHOICE. The Australian reports:

Since Netflix launched in March, the number of Australians regularly pirating has dropped by a quarter, say consumer advocacy group CHOICE, which conducted the research.

This will come as no surprise to Netflix. As head of content and acquisition Ted Sarandos explained in 2013, similar falls in piracy have occurred all around the world:

One of the things is we get ISPs to publicise their connection speeds – and when we launch in a territory the Bittorrent traffic drops as the Netflix traffic grows. So I think people do want a great experience and they want access – people are mostly honest. The best way to combat piracy isn’t legislatively or criminally but by giving good options.

Netflix has become so confident in its ability to combat privacy that it has become part of their business strategy.

But this effect is not limited to Netflix. By making content cheap and easily accessible to consumer, online streaming services are only doing what Spotify has done for music, and what Steam has done for gaming.

This validates what the tech industry has been telling governments, and traditional media companies, for years: The best way to combat piracy is by making it it easier to access products legally. The one approach that has failed to have any significant impact is increased law enforcement.

Continue Reading →


The ATO is a national security organisation?


Remember when Chris Berg argued mandatory data retention was not about national security?

The IPA has been warning for years that some of the most virulent supporters of data retention aren’t security and law enforcement agencies, but economic regulators. (As we said in this press release from September 2012…) But if the scope of data retention wasn’t clear before, it ought to be now. This is not a targeted national security measure, and it appears the government has no intention of ensuring that it is one.

As reported in The Australian, the Parliamentary Joint Committee on Law Enforcement has recommended that the tax office be made a “criminal law enforcement agency”, meaning:

The Australian Taxation Office would have tough new powers to access intercepted telecommunications information under a proposal to help better track down major tax fraud that threatens public finances.

As the government wrestles with restoring the budget, a powerful parliamentary joint committee yesterday said it was persuaded the ATO should be able to access stored phone calls, emails and SMS to protect the public purse from “serious criminal activities”.

The committee pointed to ­Australia’s largest tax-evasion ­investigation, Project Wickenby, to argue the ATO should have some of the same powers as police, corruption commissions and the Australian Crime Commission under the Telecommunications (Interception and Access) Act.

The proposal, if adopted, would effectively see the controversial data-retention scheme ­expanded to include the ATO.

Of course, this is true to form. FreedomWatch was concerned when, more than three years ago, the ATO argued – to a parliamentary committee on intelligence and security which was examining the relationship between technology and counter-terrorism – it needed ‘tough new powers to access phone taps, text messages and other communications’ to combat tax fraud.

The parallels between then and now are eerie.


Sinclair Davidson highlighted another problem with this over at Catallaxy Files:

As I keep saying to people: You have no effective right of privacy against the government. When it comes to things such as the income tax, this is a feature of the system not a bug.

Know too that the Australian government is a strong advocate for tax information sharing – that means that any government in the G20 could be able to hear your phone conversations if it could be construed to relate to taxation. So you shouldn’t be saying anything on the phone that you wouldn’t want the Russian Mafia, or any other criminal organisation (not including government – they know already), to know.


Cater: Small tech is proving to be the enemy of big government


An excellent article from Nick Cater in The Australian today, on the natural instinct of progressives to resort to government regulation, and how this is under threat from new innovative markets, such as the ‘sharing economy’:

By any reasonable judgment, more red tape would be a disproportionate response to the assault of a police officer by [a street performer dresed as] Spider-Man on the corner of West 42nd Street and Broadway nine days ago.

The disgraced superhero appeared in court the next morning under the name of Junior Bishop and was duly charged with assault, resisting arrest and criminal mischief. No need for any further laws, surely.

Yet the instinct to make the authorities responsible for practically everything unpleasant in modern life is woven deep into the progressive psyche… Encouragingly, however, the state’s anti-competitive stranglehold is being loosened, thanks to technology.

Small technology is proving to be the enemy of big government.

Continue reading here.



Better late than never?

Months after it gave the government its support, the ALP has agreed to review it’s position on mandatory data retention legislation. As The Age reported from the party’s national conference:

However a growing list of non-criminal government agencies is authorised to access ordinary citizens’ metadata without obtaining a warrant, including local councils, Australia Post, the RSPCA, racing bodies and more.

“Labor wants to ensure that the types of agencies with access to the data and purposes for which the data is available are appropriate,” the amendment reads.

“We want to ensure that the current warrants scheme and the threshold conditions on warrantless access are appropriate and that freedom of the press is protected.”

That access to retained telecommunications data is not restricted to security agencies is no surprise as the IPA’s Chris Berg made very clear on FreedomWatch before the passage of the bill.


Anti-Uber vigilante served with court injunction


Russell Howarth

The Supreme Court of New South Wales has issued an injunction against Russell Howarth, a self-appointed vigilante, known for placing Uber drivers under citizen’s arrest.

CNET Australia reports:

A former British police officer has been hit with a NSW Supreme Court order preventing him from making citizen’s arrests of UberX drivers, after his extended campaign against the ride-sharing service.

The injunction is the result of legal action launched by Uber, following a nine month long campaign against Sydney’s Uber drivers.

Howarth—a genuine Travis Bickle wannabe—is by what he claims to be ‘unfair competition’ from the UberX service. However, as I wrote at Reason last October:

Perhaps if he put as much effort into serving his customers, he wouldn’t feel the need to act out crime fighting fantasies. Then again, this is a reminder of how far people will go to protect their monopoly privileges.

It is far too early to predict how this legal action will turn out, but at least Sydney’s Uber drivers will be spared Howarth’s harassment whilst the case proceeds.

The legal action follows the announcement, on Monday, of a NSW government task force to examine issues in the point-to-point transport market. The taskforce has been welcomed by Uber, and will hopefully lead to a dismantling of the government’s taxi industry protectionism.


New Zealand’s “anti-trolling” bill parallels our own e-Safety legislation


I’ve just returned from a speaking tour with the excellent free market think tank the New Zealand Initiative. Many of those I met in that country expressed their concern about a new “anti-trolling” bill, which passed the New Zealand parliament earlier this week.

I can understand why. The Harmful Digital Communications Bill, like our Enhancing Online Safety for Children Act which passed earlier this year, is dangerous state over-reach. The New Zealand bill creates a new offence of sending harmful messages or posting offensive material – on any website, not just major social media sites – with a penalty of up to two years jail.

A new dedicated government agency will investigate complaints about digital communications that violates ten “communications principles”. You can see the list of ten here. They include everything from ensuring that material posted is not denigrating on the grounds of race, religion, sexual orientation and so forth, to not making false allegations. As an editorial at points out:

As those with experience of defamation law know, that can be an area of endless argument, and the new statute has none of the safeguards provided by two centuries of development of defamation law. A similar risk arises from the prohibition on a communication that may be “grossly offensive to a reasonable person in the position of the affected individual”. It does not take much imagination to see how that provision could be used by a deeply religious person to resurrect blasphemy laws that have largely (and properly in a secular society) fallen into disuse.

The problem that the New Zealand parliament wishes to tackle is the same as that in Australia: bullying can cause real harm. But as David Seymour, the ACT MP for the Auckland electorate of Epsom, said last Friday, “we can’t judge policies and programs by their intentions. It is results that matters. Bad legislation with good intentions is still bad legislation.”

Unsurprisingly, anti-cyberbullying activists in New Zealand have echoed the concerns the IPA raised when the Australian bill was passed: without proper educational support, “what we are doing is criminalising children as young as 14 rather than enabling them to understand the impact their actions and words have in an online environment”.


NSW opposition leader supports Uber


New South Wales opposition leader, Luke Foley, has announced his support for the Uber ridesharing platform.

In contrast to his Queensland colleagues—who instructed Uber to leave their state—the Labor leader has recognised the enormous potential of the sharing economy. Writing in the Sydney Morning Herald, Foley argued that ridesharing ‘could dramatically ease congestion on NSW roads’, and announced he would introduce a private member’s bill to regulate the service.

This follows the statements of support from Victoria’s Liberal opposition leader, Matthew Guy.

It’s great to see that political leaders (and potential Premiers), from both sides of politics, are able to defy the taxi industry’s rent-seeking, and oppose the absurd regulatory barriers that have stifled innovation in the sector.

But regulating Uber as suggested is not the answer. The sharing economy only developed because it was free from burdensome government regulation.

In Uber’s case, they have created a service that is cleaner, cheaper, more convenient, and—as I argued in the Herald Sun—safer than traditional taxi services. Government regulation will reduce these benefits, and make it harder for new innovation in the future.

Australian governments should remove barriers to the sharing economy, not impose new systems of regulation.

For more on the sharing economy, check out the IPA’s paper by Chris Berg and Darcy Allen: The sharing economy: How over-regulation could destroy an economic revolution.


King John would have supported net neutrality


Chris Berg and John Roskam wrote Magna Carta: The Tax Revolt that Gave us Liberty in part to explain the Magna Carta’s significance and why it still matters. Obviously the ABC are yet to receive their copy. Yesterday it nominated ‘net neutrality’ as one of the eight ways the Magna Carta still affects life in 2015:

Much as the original charter limited the power of the king, a charter for the internet age would put limits on the power of governments and businesses to control access to the internet via censorship, surveillance and excessive costs.


As I wrote in the latest edition of the IPA Review net neutrality advocates fear a ‘fast lane-slow lane’ internet. In this scenario Internet Service Providers (ISPs) offer their wealthy clients – such as major media companies – the opportunity to pay for priority service meaning their websites receive quicker download speeds than everyone else. At the extreme, companies could even pay ISPs to block the websites of their rivals all together.

Net neutrality proponents believe consumers will eschew smaller websites for those that have quicker download speeds betraying the net’s egalitarian spirit and putting it in the thrall of big corporations.

This is like saying major supermarkets shouldn’t be able to undercut the local butcher. Or that airlines shouldn’t sell first class tickets.

In reality, unscrupulous corporations undertaking this behaviour will be sorted out by consumer choice (most people would take a pretty dim view to ISPs dictating what sites they can view) and, to a lesser extent, a vibrant and dynamic internet-focused civil society monitoring the situation and alerting consumers if and when it occurs.

The irony of the call for an internet Magna Carta is that in encouraging governments to unduly interfere in the business affairs of the citizens, net neutrality supporters resemble King John more than the barons.

(N.B. The ABC is right in saying we need a Magna Carta to stop governments from censoring the internet. But we’ve already got one. It’s called the Magna Carta.)


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