Developments in the TMT Sector - Current trends & emerging legal issues

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  • Developments in the TMT Sector

    Current trends & emerging legal issues

    Dr Martyn Taylor

    Partner

    March 2017

  • Overview

    Software eats the world: global disruption caused by digital platforms

    Technology: Big Data - legal issues in data security and sovereignty

    Media: disruption to content business models and recent law reforms

    Telecoms: The outlook to 5G mobile and the future of the NBN

    Emerging issues in particular sectors: fintech, energy, transport

    2

  • Software eats the world: global disruption

    caused by digital platforms

    3

  • The confluence of enabling technologies

    4

    Broadband

    High-speed Internet access

    ADVANCED DEVICES AND COMMUNICATIONS

    Smartphones

    Affordable pocket

    supercomputer

    Digitalisation

    Digital encoding

    algorithms

    SOPHISTICATED OPERATING SOFTWARE

    iOS / Android

    Operating system

    software

    E-commerce

    Transactions via digital platforms

    SIMPLE AND USER-FRIENDLY INTERFACE

    Apps

    User-friendly application

    software

  • The digital platform as a driver of disruption

    5

    Software

    Telecoms

    Software

    Content

  • Software eats the world

    6

  • Technology: Big Data legal issues in data

    security and sovereignty

    7

  • 8

    Big Data is

    (i) the capture of information on a large scale,

    (ii) the application of powerful analytical computing to that information, then

    (iii) the use of that analysis to generate value.

    What is Big Data ?

  • Big Data as the fuel for innovation

    9

    "Now we stand facing a new industrial revolution: a digital one. With cloud computing its new engine, big data its new fuel. Transporting the amazing innovations of the internet, and the internet of things. Running on broadband rails: fast, reliable, pervasive

    Take all the information of humanity from the dawn of civilisation until 2003 - nowadays that is produced in just two days.

    That is the magic to find value amid the mass of data. The right infrastructure, the right networks, the right computing capacity and, last but not least, the right analysis methods and algorithms help us break through the mountains of rock to find the gold within.

  • Capture of information on a large scale

    10

    Data privacy

    Data privacy laws focus on the collection, storage, use, disclosure and retention of personal information.

    Australias Privacy Act 1988 (Cth) regulates the handling of personal information about individuals.

    Personal information is information or an opinion about an identified individual, or an individual who is reasonably identifiable.

    Examples: name, signature, address, phone number, date of birth, medical records, bank account details, commentary or opinion about a person.

    Requires compliance with Australian Privacy Principles.

  • Storage of that information

    11

    Data security

    Ensuring the security of information is a key legal issue, raising issues of responsibility and risk allocation.

    Consequences of a data breach can extend well beyond legal liability to include reputational damage, cost in management time, loss of business.

    A new Australian law was enacted in February 2017, known as the Privacy Amendment (Notifiable Data Breaches) Act 2017 (Cth).

    Under the Privacy Act, affected individuals and the Australian Information Commissioner must be notified of a data breach.

    Applies to entities regulated by the Privacy Act (>$3m turnover).

    Applies to data breaches affecting personal information that are likely to result in serious harm to an individual

  • Processing of that information.

    12

    Data sovereignty

    The export of personal data from one country to another country can present unique challenges.

    In an environment of cloud computing, the export of data to offshore data processing centres is a reality of 21st

    century commerce.

    Integrated telecoms products and services may have a cloud computing or data processing component

    Export of data can be affected by employment laws, healthcare legislation, banking laws, and laws specifically passed to block the transfer of information for certain purposes.

    Location of information is also relevant to the operation of statutory notices in regulatory investigations.

  • Generation of value.

    13

    Information secrecy

    Contract: contractual protections to maintain confidentiality and prevent misuse of information.

    Secrecy: IP can be practically protected by maintaining secrecy

    Databases

    Copyright: is a database a literary work and therefore subject to copyright protection ?

    Software and algorithms

    Copyright: source codes and object codes; sometimes algorithms

    Patents: software and algorithms normally cannot be patented

    Protecting IP rights

  • Media: disruption to content business models

    and recent law reforms

    14

  • Disruption - any platform can deliver any content

    Device can

    accept all

    forms of

    digital content

    and deliver to

    consumer

    Content

    Consumer

    Internet historically enabled a decoupling of platforms and content services

    The media market has moved from local markets comprising bundled

    content, platforms and delivery to a global market for the supply of

    unbundled digital content that may be accessed over the Internet

  • Media sector is experiencing dramatic reform

    Historically, advertising supported the delivery of subsidised media content. Now, a proliferation of business models exist. The following diagram from 2010 is already well out of date in 2017 (eg Netflix).

  • Media law reforms addressing cross-ownership

    17

    Australian media ownership is currently subject to four key controls:

    Merger rules

    Foreign investment rules

    Media diversity rules

    Suitability rules

    The media diversity laws were amended in 2016 to remove two key tests:

    The 75 percent reach rule that prevents individuals or companies from controlling a total license area that exceeds 75% of the Australian population capital city networks already reach much more than 75% of the population.

    The 2 out of 3 rule that prevents mergers that involve more than two of three regulated media platforms in any commercial broadcast license area.

    The Convergence Review under the Labor Government in 2012 had proposed more radical reforms:

    Broadcasting licences replaced by content licensing

    Media diversity based on minimum number of owners

    ACMA replaced by new Communications Regulator

    Refinements to minimum standards for content

    Remove content quotas and instead provide subsidies

  • Telecoms: The outlook for mobile and the future

    of the NBN

    18

  • M2M and Internet of Things (IoT)

    19

    Internet of Things

    Moores law is unleashing low cost, high processing, tiny chips that can go in anything from power outlet to water pipe.

    Things can be controlled by an Internet-activated micro-chip with IP address.

    Wireless technology is lowering the cost of telecoms to the point where things can be connected inexpensively.

    Big data enables low cost storage and rapid processing of large-scale data.

    Now economic to integrate things with processors and connect to the Internet, enabling real-time data and control.

    Significant potential for innovation across a diverse range of sectors in the economy see next slide.

    Machine to Machine (M2M)

    M2M are a range of technologies that permit information to be exchanged automatically between machines or devices, without human intervention.

    M2M has existed for many years (eg SCADA). However, growth of IoT is driving innovation and rapid M2M market growth.

    Emerging legal issues in telecoms

    Permanent international roaming SIMs

    Embedded/programmable mobile SIMs

    Spectrum management for IoT

    Cross-border device certification

    Anachronistic laws in a dynamic world (eg sale of a car with integrated telecoms services is a telecoms licence required)

  • IOT provides huge potential for innovation

    MVNOs and M2M Mobile telecommunications in 201520

  • Australias National Broadband Network

    21

    Fibre to the premises (FTTP)

    Fibre to the node (FTTN)

    Fibre to the building (FTTB)

    Hybrid Fibre Coaxial cable

    (HFC)

    Fixed wireless services

    Sky Muster satellite services

    2016 Statement of

    Expectations

    The Government

    expects the network

    will provide peak

    wholesale download

    data rates (and

    proportionate upload

    rates) of at least 25

    Mbps to all premises,

    and at least 50

    Mbps to 90% of fixed

    line premises

  • Increasing speeds driving different applications

    500kbit/s to 1Mbit/s

    VoIP

    SMS

    Basic e-mail

    Simple web browsing

    Low-quality video

    1 to 5 Mbit/s

    Complex web browsing

    Email with attachments

    Remote surveillance

    IPTV SD (1-3 channels)

    Simple telecommuting

    Digital broadcast (1 ch)

    Streaming music

    5 to 10 Mbit/s

    Complex telecommuting

    Large file-sharing

    IPTV SD (many channels)

    Switched digital video

    Video on demand SD

    Broadcast video SD

    Video streaming (2-3 ch)

    Video d

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