ZDNet Australia: Can you briefly describe the state of the Australian IT industry as you see it?
Alston: It's going through tough times. There are signs of life. Certainly, what we've been trying to do is to create a lot more activity through our Innovation Action Plan. That's really designed to get a lot more SMEs coming through.
Why isn't there a single successful Australian IT company competing and shining on the world stage? Can you name one?
I think that's a bit misleading in some ways. I don't know if you should put all your eggs in one basket. In many ways it's better to have a series of smaller companies coming through. It is true to say that we haven't had a single company that has really dominated this landscape, but I suppose companies like ResMed have done pretty well and consistently in biotech, if you'd like to count them.
What is the Government doing to rectify this?
We're really in the business of letting one hundred flowers bloom rather than trying to build a national champion. That tends to be an artificial construct and unless they come through and prosper in a way that reflects their competitive success, then they're probably going to lose it all when they get on the big stage anyway.
How would you describe the state of broadband in Australia?
The Brits released a survey the other day that had us in the top three in terms of broadband improvements over the last 12 months. If you look at the stats, then overall we're up to about ten percent of households with the Internet having broadband connections. I think business improved by about 170 percent. So, from a low base, broadband is starting to take off.
We'll know more when we release our Broadband Advisory Group report, but generally it's a bit misleading to have a single metric because broadband take up for entertainment purposes might be interesting, but does it really prove you're a clever country? Probably not. If the SME take up rate was higher, that might be more indicative. If broadband for say, research and national security purposes was world best practice you might say 'well, that's making a big difference'. I think it's a targeted approach. If you put Korea to one side as a special case, we're in the middle of the pack, but it's a very early stage of the race.
Do you regret making the comments that broadband in Korea is being driven primarily by demand for porn and games?
I said that was a number of reasons given to me by senior players here and there. I'm not expressing any personal judgement, I'm just reporting what people say to me. These were not the drunks on the street corner, these were people who have a sophisticated understanding of what's going on.
There are a range of other factors. It's a very densely populated country. More than half the population lives in Seoul, more than half the population of Seoul lives in highrise buildings, cyber apartments are very easy to wire up, they don't rely much on the English language so they don't have trans-Pacific costs of accessing US databases. I think it is probably true to say ... that if you've been to Korea a few times, there isn't a great deal to do and a lot of kids do come home early and a lot of parents do encourage their kids to get onto broadband services. Given the Government has always seen it as an industry strategy, there's been a fair bit of subsidisation in terms of cost. I think because ISDN prices were high, it made it attractive to go to the next stage to ADSL. You put all those things together and Korea is different from anywhere else.
Have you been unfairly targeted because of those comments?
It's the same sort of response we got to Internet content regulation. There was a time when Electronic Frontiers were running around lampooning all that we ever tried to do. I think the Council of Civil Liberties in the US came out and said we were village idiots. The fact is our Internet content model is now regarded as one of the best. In fact, it was held up at a conference in Asia last year as an example of how governments can get the balance right. The simplistic notion that because you can't achieve 100 percent success in closing off any particular Internet site is a reason for not doing anything is not an acceptable explanation and I think everyone does expect us to do everything we can to control paedophile lists and bomb recipes and the like and most of the take down notices that have been issued have been of paedophile lists.
What are your thoughts about a licence condition being imposed on Telstra requiring the provision of a certain quality of Internet services to Australians?
It's difficult for us to assume that somehow Telstra is acting maliciously when you have outages. If you found that the rest of the world wasn't having problems but Telstra was, then you might be a bit suspicious. But I don't think we're the only country that's had service level problems. I think Telstra has lifted its game in recent times. We said we expected them to get serious about DSL. We didn't want, for example, to find that they were concentrating on their interests in the Foxtel cable to the detriment of DSL. I think take up rate has generally reflected that.
The predictions are that Telstra says there'll be 1.5 million connections by 2005. I think it is picking up in the same way it's picking up in other countries. Britain is much further behind than we are.
How about pricing. Any thoughts of stepping in there?
I'm not sure that's right. AT Kearney's the most recent word on this and they say we're cheaper than the US and UK. You can't just convert currencies. You've got to look at purchasing power here. I don't think price has been a significant impediment here, other than the capital installation costs for satellite [broadband] in regional areas. The Estens report has identified that as a particular challenge but I think pricing levels have come down.
The problem is that if there's only one player, they can set their own price levels. You can go out there and say 'half the price, double the volume what are you waiting for?'. But that's not what happens. People often price new services at a higher level and they'll soak up the early adopters who'll pay anything.
Unless you're in the business of a command economy, it doesn't really make sense to try to orchestrate a particular price. What you ought to be doing is ensuring that you get competition in there, either head-to-head facilities-based or speedy access so people can be resellers of the product. We unbundled the local loop three years ago, we brought in line sharing last year and we'd be well up on world's best practice on those fronts. That should provide the opportunity for other players to come into the market and offer alternative packages. From then on, I don't know you can do much more. If the demand is there, we can move forward, but you shouldn't assume it's just a price issue anyway because it could be a content issue.
To what do you ascribe the level of animosity in the community towards Telstra?
I suppose you need to look at it as a proportion of the total. Telstra has 11 million lines and there are about 11 billion calls a year and it receives about 2,200 customer service guarantee-related complaints a day. So you need to know how many complaints there are as a proportion of the total before it becomes a problem. What happens is you get some guy who's just moved from the city to a holiday resort, he can't get the broadband speed he wanted and he says it's an outrage. All of a sudden it's a big problem.
So it's a vocal minority?
I'm not dismissing it. I'm just saying I don't think we should assume that somehow Telstra's service levels are woefully inadequate. They've certainly made very significant and consistent improvements on ordinary telephony in recent years and I think consumers will expect high standards from broadband. If we see evidence of systematic mediocrity we'll be doing something about that. At this stage though, I think it's a bit premature that Telstra is not up to scratch.
I understand that the Government will soon announce some anti cyber-terrorism measures. Can you elaborate on what these measures will include?
No I can't.
Do you believe Australia's IT infrastructure is at risk?
Well that's an absolute question. I suppose all you can do is try to minimise risk but you can't guarantee that people are immune.
Do you believe Australia is a target of cyber-terrorists?
Is our infrastructure a target more than anyone else? Every country around the world could probably ask itself the same question. In theory, I suppose everyone should assume that they might be and then do whatever they can to mimimise the risk. But certainly, the conventional wisdom that 80 percent of hackers were internal is now overwhelmed by the possibility of terrorists deliberately targeting whole networks, and that certainly raises the stakes dramatically for government.
Has the government identified any specific threats in this regard?
I can't give you an answer to that. I don't know. Certainly, I haven't been told anything.
Would the threats likely be internal or external?
Its sort of Boy Scout stuff isn't it, you know "be prepared". You should assume the worst, so you should be prepared for both. I mean, I am not aware that anyone in particular is targeting us, but as we know, these cells of terrorists are pretty diffusive and by definition aren't coordinated or orchestrated out of one location, so you don't know. It's very difficult to identify where the threat might emerge. It might be just one social isolate with terrorist inclinations or it might be a whole campaign.
In the last Federal Budget, there was almost AU$25 million earmarked for IT infrastructure security. What sorts of policy initiatives can we expect to see as a result of that money? Where is that money going to go?
I don't know if I can really tell you that. In many ways, it's not probably something that you'd want to canvas publicly anyway.
Just as it has banned Australian-hosted pornographic content on the Internet, would the Government consider extending the ban to religious extremist groups' Web sites or known terrorist Web sites?
Well the current regime caters for the possibility of these things being regarded as highly offensive, I mean if they're criminal then they qualify automatically - it's really then a complaints-driven regime. If someone wants to say that a particular Web site is offensive or illegal, they bring it to the attention of the ABA and things start to happen. I think we'd be reluctant to go down the path of trying to introduce some specific regime for racial intolerance, simply because things vary so much depending on the individual content.
Have you identified any sites or have you received any complaints about particular sites?
They don't complain to me, they complain to the ABA (Australian Broadcasting Authority).
Are you aware then, of any complaints being made to the ABA?
I haven't read of any.
ZDNet Australia has found one site linked to Jemaah Islamiyah, for instance, which is even asking for donations. Is that the sort of site which could be on the Government's hit list?
If it is now a proscribed organisation then it is presumably illegal to contribute funds, so that's a criminal offence then it would qualify under the existing proposal.
Check out the second part of this interview, in which Senator Alston discusses anti-spam legislation, Australia's Internet censorship regime and his future in the IT and Communications portfolio.
Can’t we hit Alston back? To a troglodyte paradise where he belongs?