Coalition sticks it to public in internet policy

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By Leith van Onselen

The Australian’s Grace Collier has written an interesting article imploring the Abbott Government to tackle cost-of-living concerns, such as “The Australia Tax” on consumer goods, rather than pursuing policies that will drive-up costs, such as its internet policy:

THE government should not work to eliminate internet piracy without working to bring down the prices of downloads and other consumer goods.

In fact, now the carbon tax is gone, the most important tax Tony Abbott can axe is The Australia Tax.

TAT is the extra amount we all pay on consumer goods. It is a tax slapped on us by corporations, quite simply because we have a global reputation for tolerating higher prices. As consumers, we are regarded as chumps.

When it comes to digital content, Australians pay about 50 per cent more than market price…

TAT is the reason people go overseas with empty suitcases and buy goods online. Our politicians don’t have to worry about TAT, but if I were prime minister demolishing TAT would be a priority…

Collier makes a valid point. It is worth reminding readers that it is just over a year since the IT Pricing Inquiry – the Parliamentary Committee tasked with finding why Aussies pay so much for digital-related content – released its 150-page report to the Government on how to reduce The Australia Tax (i.e. price gouging). The report recommended, among other things, an end to geo-blocking of content and amendments to the Copyright Act to allow parallel imports and circumvention of technological protection measures that control geographic market segmentation (summary of report here).

As noted by freelance technology journalist, Adam Turner:

Just like region-coding on discs, geoblocking exists so movie studios can get away with offering Australians less and charging us more simply because we’re Australian. Rather than addressing this issue, it seems the government is happy to support a ban on circumventing “technological measures” – which might include geoblocking – as part of the secretive Trans Pacific Partnership trade agreement.

It is unfortunate that the Abbott Government has completely ignored the issues outlined by the IT Pricing Inquiry, and instead sided with rent-seeking copyright owners in implementing draconian measures that would task ISPs with playing the role of policeman, in turn pushing-up internet costs for end-users.

Indeed, Mark Gregory, Senior Lecturer in Electrical and Computer Engineering at RMIT University, contends that the Coalition’s internet policy could add around $100 million a year to the cost of providing broadband in Australia, which could translate into an increase in average internet costs of around 5%. Moreover, costs to business could be significant:

Telcos will be given the onerous task of ‘stopping the bytes’: identifying pirates and additional compliance costs. The rest of Australian business will have to bear the cost of monitoring corporate networks to prevent illegal file-sharing, and public Wi-Fi providers could be fined if their service is used for illegal file-sharing…

In effect, the Government is seeking to remove the burden of enforcement from the digital creators and the courts to ISPs, many of whom aren’t equipped to interpret copyright law, adjudicate on the facts, and impose appropriate penalties.

Moreover, the Government’s Online Copyright Infringement Discussion Paper dubiously cites Australia’s free trade agreement (FTA) obligations as an excuse to crack down on so-called internet piracy (see below extract).

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Accordingly, it is using these FTAs as an excuse to effectively overrule a decision by the High Court in 2012, which found that internet service providers could not be found liable for authorising an act by a subscriber that infringes copyright.

In refusing to address the underlying reasons why Australian “illegally” download – i.e. lack of content availability and extortionate pricing by copyright owners – the government has completely ignored the interests of consumers, who have become the forgotten voice in the Government’s “war on piracy”.

And to add insult to injury, consumers are facing even higher costs on the back of the Government’s data retention policy, which would require telecommunications companies to store detailed information about the calls and internet use of its customers for two years. iiNet claims that this could lead to customers paying an additional “internet tax” of $5 to $10 extra per month for their services.

If the Coalition wishes to win over voters, it should side with them, not against them on internet policy.

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    • I question the intelligence of government that can’t see that allowing corporations to sue governments is a stupendously dumb idea.

      Really, how could they be so thick as to miss that?
      (its a rhetorical question when its the Abbott government.)

  1. At the end of the day, the Government receives donations from “rent-seeking corporations”, not the tax payer (although you can say they get funding through votes received, but this is largely unknown / you could argue they will receive 40% regardless due to the two party system).

    Is this not capitalism?? A consumer (i.e. rent-seeker) pays the Government for a good (i.e. policy). The Government then completes the deal by providing the good paid for by the consumer.

    Rent-seeker > taxpayer

    Solution: among other ideas (I won’t list because the likelihood of them happening is remote – i.e. Direct/true democracy) immediately change political donation laws.

  2. Labor Government was all over the place with technology, only good thing was NBN policy (not the practice). Now this Government is driven by ideology and rent seekers not in Australia’s interest.
    The real horror story yet to unfold is the TPP.

  3. “In refusing to address the underlying reasons why Australian “illegally” download – i.e. lack of content availability and extortionate pricing by copyright owners – the government has completely ignored the interests of consumers, who have become the forgotten voice in the Government’s “war on piracy”.”

    I don’t for one minute want to trivialise price gouging.

    But to me an underlying reason to illegally download comes back to housing costs. I own my house outright. You’d be surprised how cheap everything looks when you don’t have a mortgage / don’t rent.

    Just like my arguments about high costs of living and doing business necessitate many to call for a lower dollar instead of cost containment….

    So too we hurt businesses by calling for (example) lower movie tickets so we can afford ridiculously over prices housing / property costs.

    Fix price gouging – Yes.
    Fix property also.

    It’s the high cost of living that makes us the thong (flip flop) wearing champs – cheap and nasty.

    Cathartic rant over

    • Crouching Tiger

      Could not agree more.

      We also need to look at how a Pay TV subscription in Australia is effecting crowds in the AFL and NRL.

      If you have a typical mortgage and also buy paytv.. You probably cannot afford to go to the footy!

  4. Crouching Tiger

    OK so for arguments sake lets say that we all agree that downloading fro torrent is illegal. (Humor me)

    Can we also accept that (this is from
    “Cartel conduct is now defined in s 44ZZRD as including four forms of activity: price fixing (defined in the same way as the former s 45A), market division, restricting outputs and bid rigging. This conduct is prohibited where made or given effect to in a ‘contract, arrangement or understanding’ and two or more of the parties involved are competitors (or would be but for the conduct). In relation to price fixing the provision must have the ‘purpose or effect’ of price fixing; in relation to the other forms of conduct the provision must have the requisite ‘purpose’. ”

    Given that we do not have any competition in the pay TV space and FOXTEL and charge what they want for access to content and also enter into non competitive lockouts on content…

    Or to put it in simple terms isn’t the deal FOXTEL does with companies like HBO for Game of Thrones the equivalent of Cartel behavior and therefore also stealing??

    • Its not stealing because Murdoch says it isn’t.
      And he should know because he is paying the liberal party’s bills.

    • I’ve made this argument many times before. The ACCC should be all over Foxtel for these anti-competitive activities such as ‘exclusivity’ agreements – paying content producers more in order to prevent competitors from getting the same access.

      Additionally, charging more for something like digital downloads, which require little to no extra overheads in order to ship here, should also be monopolistic behaviour.

      These days even the US DoJ is putting the ACCC to shame it seems.

  5. bolstroodMEMBER

    “The most important tax that Tony Abbott can axe is The Australia Tax”

    What about the near 3/4 $billion “Spy Tax” that he announced last week?

  6. Remove geo blocking – win over the younger voter.

    More affordable content = less piracy – wins over business and voters.

    Its an easy win/win that solves two problems at once. They are mad if they dont do it.

    • Napster.
      Begat iTunes.
      Did it reduce illegal downloading (I’ve no stats to hand). Personally, I stopped torrenting music and pay through itunes.

      I’ll bet you a uteload of my finest avocados and mangos the same thing will happen with TV/movies.

      Hands up who’d pay $19 for a whole season of DRM-free GOT. Or $2 for an episode.

      • itunes Oz is still a lot more expensive than itunes Canada.

        I just checked the price of Sia’s song Chandelier, now number 5 on the music charts. It’s $1.29 on the Canadian itunes store and $2.19 in the Australian itunes store.

        Adjusting for currency and the Canadians pay $1.27 AUD compared to our $2.19

        Nobody likes being ripped off and that’s why Aussies will to continue pirate content.

  7. Is there a change of mood at News Corp? Over at the headline story at the moment is ‘Buyers remorse: seven reasons we regret picking Tony’.

    • I think someone is making a case for a change of leadership. Seems like Mr Abbot has not lived up to the expectation of his pay masters therefore the powers that be are promoting the merits of Bishop and Morrison.

      But i also find it fascinating that costellos name popped up today to criticize the Hockey.

      The crows are circling.