Metadata will Increase Internet Costs

Even with massive amounts being spent by the government to assist telecommunications companies with the costs of retaining metadata - a measure the government sees as a vital part of its efforts to strengthen intelligence capabilities and counter extremist messaging - it seems inevitable that internet costs will increase as a result of the implementation of metadata retention. Increased cost not only from the extra effort and expense that will be required to retain data for the two year period but also from what is likely to be an increasing range of legal cases arising out of privacy based issues and access to information litigation.

Budget Allocation for Metadata Not Enough

In its recent Budget the federal government announced that a further $131 million had been set aside for the purpose of assisting telecommunications companies with implementation of metadata retention. The Prime Minister is quoted as saying:

"The $131 million would assist the telecommunications industry to upgrade its systems to implement this policy, . . . The package will include $22 million to combat terrorist propaganda and counter violent extremism".

However, the amount provided for in the Budget of $131 million seems to be at odds with the $400 million being quoted by the government before the Budget as being required to implement the scheme. As the Financial Review points out:

"But the compensation might not be enough to appease business, given Mr Abbott said before the budget that the tougher new laws, which require telcos to hold on to metadata for much longer than they do now, would cost $400 million to implement".

As website Cyber Shack points out the money allocated to telecommunications companies is even at odds with PWCs' determination (which it prepared for the Attorney-General’s department). They determined that the upfront capital cost of the scheme to the telecommunications industry was as an estimate between $188.8 million and $319.1 million. Amounts far greater than the $131 million allocated for the metadata retention scheme in the Budget. Thus as Cyber Shack says:

"As a result, telecommunication industry bodies have raised concerns that the difference will be added to subscribers' monthly bills."

Criticism of the government's original estimates of cost has been that they were not based on widespread industry consultation. Cyber Shack quotes Laurie Patton, CEO of the Internet Society of Australia, as follows:

"The Internet Society is concerned that the costs have been significantly underestimated."

Further, there is a call from bodies like the Internet Society for the government to commit to top up significant shortfalls once final costs have been determined, otherwise the ISPs and telecommunications companies will have to ". . . underwrite the difference and this will be passed on to consumers through increased Internet fees."

Litigation Likely to Follow and Add to Cost

In the recent determination of Privacy Commissioner, Timothy Pilgrim in Ben Grubb and Telstra Corporation Limited [2015] AICmr 35 (1 May 2015) Telstra is reported as having said Commissioner Pilgrim's determination may force it ". . . to hand over more data than it is required to store under the mandatory data-retention law".

The basics of the matter are that two years ago, Fairfax journalist Ben Grubb had sought access to his own metadata relating to a mobile service he had with Telstra. The metadata he sought included matters such as which cell tower he was at at any given time, the phone numbers of both incoming and outgoing calls, and all SMS data.

In response Telstra indicated it could provide outbound call details and data usage session records, however, privacy laws precluded it from providing location and inbound call details.

As a result a complaint was made to the Privacy Commission which on 1 May 2015 ordered Telstra provide the data requested, namely; IP addresses, URL information, and cell tower information, but excluding the numbers for incoming calls. Further, Telstra was ordered to provide the data free of charge.

Telstra's reaction to the decision through the company's Chief Risk Officer Kate Hughes is reported by ZDNet as being:

"We already provide access to personal information, but this decision could extend this practice to every single piece of data in our networks, regardless of whether the data reveals the identity or anything else about someone, . . ."

ZDNet reports that Telstra intends take the matter further, something which if it proceeds will be of great interest to those concerned with the cost effects on an internet subscription of data retention laws.

The decision has been described as regulator over-reach by the Communications Alliance, the peak representative body for telecommunications companies.

In a report by ZDNet the Communications Alliance is quoted as follows:

"Applying the declaration that all metadata is personal information would layer additional costs and complexity on telecommunications service providers, without any tangible benefit in terms of protecting privacy, . . . Asserting that every single trace of network data - no matter how obscure, unintelligible, or remote it is, or whether it reveals anything about a person at all - is captured under the Privacy Act is impractical, unnecessary, and will be very costly for industry to manage. This is a stark example of regulatory over-reach."

Another result of the decision could be to force telecommunications companies to have to hand even more data to law enforcement agencies. This is because many elements of the information required by the Privacy Commissioner to be given to Mr Grubb the journalist in question were not provided to law enforcement and national security agencies currently because such data is very difficult to extract. However, if the trend is having to provide this much broader range of data to customers, then as the Communications Alliance indicates ". . . it is likely only a matter of time before [law enforcement] agencies will start asking for it as well."

Increased Cost is Certain

When the data retention laws were before Parliament for public discussion it was revealed that Telstra, for example, would need to draw data from more than a dozen different systems to one central system to comply with the mandatory scheme and that the company has already implemented a scheme where customers can apply to get their own limited amount of metadata for a fee starting at $25. Thus it seems that already data retention is costing consumers of Internet services and is only likely to cost them more, a lot more going forward.

Committee Reports on its IT Pricing Reference

The House of Representatives Standing Committee on Infrastructure and Communications has reported on its reference into IT Pricing. Its report was released on Tuesday (30 July 2013) and amongst other matters, confirmed that in product areas like the hardware and software Australians on average paid 50 to 100 percent more than consumers in the USA and recommended changes to copyright and consumer law to ensure this situation changes in future.

The Committee's Reference
The Committee was required to inquire:

• Whether a difference in prices exist between IT hardware and software products, including computer games and consoles, e-books and music and videos sold in Australia over the internet or in retail outlets as compared to markets in the US, UK and economies in the Asia-Pacific;


• Establish what these differences are;


• Determine why these differences exist;


• Establish what the impacts of these differences might be on Australian businesses, governments and households; and


• Determine what actions might be taken to help address any differences that operate to the disadvantage of Australian consumers.

The Committee's Findings
After a 12 month investigation the Committee found in the evidence presented to it that the inquiry was . . . "left [in] little doubt about the extent and depth of concern about IT pricing in Australia. Consumers are clearly perplexed, frustrated and angered by the experience of paying higher prices for IT products than consumers in comparable countries."

From the evidence received the Committee concluded that in many cases, the price differences for IT products could not be explained by the cost of doing business in Australia. This it found was particularly so when it came to digitally delivered content and the Committee concluded "that many IT products were more expensive in Australia because of regional pricing strategies implemented by major vendors and copyright holders"

In its report the Committe returned 10 recommendations, of particular interest are recommendations four to nine which deal with proposed changes to consumer and copyright law especially the control if not removal of techniques like "geoblocking" designed to lock content and/or software products to a geographical area of use.

Recommendations 
The recommendations are as follows:

With respect to price discrimination and its impact on consumer

1. That the ABS develop a comprehensive program to monitor and report expenditure on IT products, hardware and software, both domestically and overseas, as well as the size and volume of the online retail market.

2. Considering the importance of IT products to education, and in the interests of greater transparency in this area, the Committee recommends that the Australian Government, in consultation with Universities Australia and CAUDIT, conduct a comprehensive study of the future IT needs of and costs faced by Australian Universities, in order to provide clearer financial parameters for negotiations.

3. That the Australian Government consider a whole-of-government accessible IT procurement policy, to be developed by relevant agencies including AGIMO, and in consultation with relevant stakeholder groups including ACCAN.

With respect  Copyright, circumvention, competition, and remedies

4. That the parallel importation restrictions still found in the Copyright Act 1968 (Cth) be lifted, and that the parallel importation defence in the Trade Marks Act 1995 (Cth) be reviewed and broadened to ensure it is effective in allowing the importation of genuine goods.

5. That the Australian Government amend the Copyright Act’s section 10(1) anti-circumvention provisions to clarify and secure consumers’ rights to circumvent technological protection measures that control geographic market segmentation.

6. That the Australian Government investigate options to educate Australian consumers and businesses as to:

• the extent to which they may circumvent geoblocking mechanisms in order to access cheaper legitimate goods;


• the tools and techniques which they may use to do so; and


• the way in which their rights under the Australian Consumer Law (ACL) may be affected should they choose to do so.

7. That the Australian Government, in conjunction with relevant agencies, consider the creation of a ‘right of resale’ in relation to digitally distributed content, and clarification of ‘fair use’ rights for consumers, businesses, and educational institutions, including restrictions on vendors’ ability to ‘lock’ digital content into a particular ecosystem.

8. The repeal of section 51(3) of the Competition and Consumer Act 2010.

9. That the Australian Government consider enacting a ban on geoblocking as an option of last resort, should persistent market failure exist in spite of the changes to the Competition and Consumer Act and the Copyright Act recommended in this report.

10. That the Australian Government investigate the feasibility of amending the Competition and Consumer Act so that contracts or terms of service which seek to enforce geoblocking are considered void.

Sources:

• House of Representatives Standing Committee on Infrastructure and Communications inquire into IT Pricing


• Calls to cull internet geoblocks ‘naive’: Foxtel (Finacial Review)


• Australians pay 50 per cent more for tech goods, says IT pricing inquiry (The Australian)

Headlines the made the Tabloids Famous - Part 1

Having been sent a collection of quite amusing ill considered tabloid newspaper headlines its time to continue sharing them. Here are the first few.

Watch his space for more!

Daily Deal Website Scoopon Subject of ACCC Action

By media realease posted to its website on Friday 5 July 2013 the Australian Competition and Consumer Commission (the ACCC) advised that it had issued proceedings against the Daily Deals Website "Scoopon" in the Federal Court. In its meadia relaes the ACCC states that it "alleges that Scoopon engaged in misleading and deceptive conduct and made false and misleading representations to businesses and consumers".

What is Scoopon?

Australia has taken to online shopping in a big way and as the ABC News reported on 5 JUly 2013, Australians spent "more than $24 billion online in the 12 months to March" this year.

In this growth group buying sites have rapidly grown in popularity, offering shoppers everything from cut price holidays to discount clothing and cheap meals. Scoopon is one of those sites an is known as one of Australia’s largest online group buying sites. These sites are also referred to in online parlance as a "daily deals" or "deal of the day" site.

Scoopon sells vouchers for heavily discounted goods or services. Typically online group buying sites, like Scoopon, negotiate these deals with businesses and market the deals to their members and the public through various means the primary ones being online and through social media.

Reason for Action

The ACCC (along with other Australian Consumer Law (the ACL) regulators) is claimning to have received a significant number of complaints since the group buying industry emerged in Australia in 2010.

The ACCC Chairman Rod Sims is quoted in the release as saying:

“The ACCC has worked closely with other ACL regulators to address issues and improve practices in the sector to reduce consumer and business detriment,”

What the ACCC Alleges?

The ACCC's media release says that the ACCC alleges that Scoopon misled consumers regarding their ability to redeem vouchers, their refund rights, and the price of goods advertised in relation to some of its deals. Further, the ACCC also alleges that Scoopon represented to businesses that there was no cost or risk involved in running a deal with Scoopon, when a fee was payable to Scoopon. Finally, the ACCC alleges that Scoopon misled businesses by claiming that between 20 percent and 30 percent of vouchers would not be redeemed when there was no reasonable basis for this representation.

In the media release ACCC Chairman Rod Sims says:

“The ACCC has made online competition and consumer issues a compliance and enforcement priority. Ensuring that the digital revolution delivers competition benefits to consumers and small businesses is a focus for the ACCC ... Businesses must have reasonable grounds when making representations to consumers and to other businesses. The ACCC is working to ensure that consumers making purchases online are not misled and that online traders take adequate steps to meet their obligations under the Australian Consumer Law.”

Nature of the Court Proceedings

The matter has been filed in the Federal Court, Brisbane, and is listed for a scheduling conference on 25 July 2013 at 9.30am - the ACCC is seeking declarations, injunctions, community service orders, pecuniary penalties and costs.

Sources:

ACCC takes action against Scoopon alleging it misled both consumers and businesses (ACCC Website)

ACCC targets daily deal website Scoopon (ABC News)

Australia Attacks Scientific Basis of Japanese Whaling in International Court

As Australia's attempts to get whaling banned, Australia has mounted an attack on the scientific basis claimed for Japan's Antarctic whaling as it broadened its case for a ban by the International Court of Justice.

The 26-year-old Japanese program, conducted under a self-awarded special scientific permit, has taken upwards of 10,000 whales, the International Court of Justice has heard recently.

The Sydney Morning Herald reports that the counsel and witnesses for Australia have told the International Court in The Hague that the Japanese whaling research program (known as JARPA II)... "had made a negligible contribution to science".

Describing the program as a "parody of science" Professor James Crawford, QC is reported by SMH as saying:

''JARPA II is not a program of science, it is a parody of science,...It is designed to keep Japan in the whaling business, come what may.''

While Philippe Sands, QC, has according to SMH told the court that while Japanese whalers may have collected data on thousands of body parts, their program was nothing more than a collection of data: "a heap of stones, not a house."

Australia's case referenced the fact that a quarter of a century has passed with thousands of whales being killed and yet Japan is unable to offer any "discernible progress". The case was being prepared through written submissions because Japan had refused to respond to criticisms of its science taking the view that "if we say it's science its science".

Other criticism came from Australian Antarctic program chief scientist Nick Gales who is reported to have told the court that Japanese whalers' research had added nothing to what was already known about what Minke whales ate, or their age at death.

The case is being heard before a panel of 16 judges and is continuing.

Source: 'Science' of Japanese whaling attacked in court case (Sydney Morning Herald)

Metadata Warrants at What Point Should there be Control?

Recently the federal Attorney-General has declared that Australian law enforcement “would grind to a halt” if the police and other law enforcement authorities were compelled to apply for a search warrant every time they wanted or required access to the telecommunications data of Australians (see article published in delimeter.com.au).

Figures released in the federal Budget Estimates hearing sessions recently (Monday 27 May to Friday 7 June 2013) indicate that the Australian Federal Police made more than 40,000 internal requests for telecommunications ‘metadata’ (being defined as data pertaining to the numbers, email addresses, time, length and date involved in phone calls or emails, but not the content) in the past financial year. At present no warrant is required to support these requests.

Given this increasing access to metadata by Australian law enforcement it is no surprise that civil liberties groups and political groups have sought to have such activity controlled and called for he introduction of laws to control this.

Adding to the debate in recent times has been the fact that the US spy agency the NSA (National Security Agency) has been reported to have gained backdoor access to the data servers of major technology companies like Apple, Google and Microsoft - raising concerns among many of what might be made of such information and how it might be used. To this might also be added he use hat might be made of such information by media outlets who, if the News of the World scandal is any indication, seem to be able to obtain this information at will.

This issue of access to the mountains of collateral data produced by the Internet is one that has been attracting more attention and firing debate. It catches my attention because I constantly marvel at how all free societies argue vociferously against a "big brother" like totalitarianism yet seem uncannily to find ways to create it or empower it. The issue of law enforcement and metadata warrants seems to be yet another instance of where unintentionally, even unknowingly we could be delivering information to government which could easily be abused by a government minded to do so at some point in the future.

Modern Man Discovers Financial Gravity

When Sir Isaac Newton sat under his favourite apple tree, or so the conventional story goes, he dozed off only to be rudely woken by a maturing apple clonking down on his head. it is the sharp resulting pain that it is said led to his sudden realisation, simple though it may sound, that "what goes up must inevitably come down", from which the great man went on to contemplate that a force "magnetic like" was in the earth which attracted everything to it including man. Inevitably this force had the power to attract everything leaving the planet's surface back to it - the force we now call gravity.

This got me thinking that in recent times there have been some gravity defying events, for example, the  GFC which saw most of the world economies fall but in defiance saw most of the worlds wealthy escape unscathed, unlike the less wealthy who become even less wealthy, loosing jobs, getting less interest from banks. When it comes to the rich I think gravity is defied, wealth heads in an upward direction building on its self and seldom comes down as the rich are favoured by governments, banks and most institutions in society. Government of the conservative type has even been said to say that "we should favour the rich as wealth will trickle down"! Indeed and if one considers it right that some should drink from the glass while others, the majority, are forced to wait for a trickle then that theory works.

So if a modern equivalent of Newton sat under a fruiting money tree in a modern free market plutocracy such as exist in the modern world today the modern Newton story might look like this: