On 21 November 2011, the Australian Communications and Media Authority ("ACMA") released a report entitled Six Emerging Trends in Media and Communications, which looks at changes in the media and communications field that are likely to put pressure on existing regulatory settings. The report highlights over-the-top communications services ("OTTs") as posing a particular challenge in the current regulatory context, foreshadowing that a major regulatory change may be needed to address this issue.

The report notes that globally OTT services have increased in volume to the point that they have overtaken short message services ("SMS") traffic, and that within Australia, Voice over Internet Protocol ("VoIP") users have grown to reach nearly 50% of the number of fixed line telephone services. In this regard, the report makes specific reference to the popularity of KakaoTalk and WhatsApp. The decline in voice communications delivered over the copper network and rise in usage of OTT services is one which the report suggests the current regulatory framework is not well equipped to address, as 'misplaced regulatory emphasis' on declining traditional communication services is misaligned with market reality.

According to the report, incremental regulatory changes may not be sufficient to alleviate ACMA's concerns over the capacity of the current regulatory framework in the context of the OTT industry, as such incremental changes would "increase the risk of creating a fragmented rather than a coherent regulatory framework." To achieve better alignment with emerging OTT consumer behaviour, the report recommends:

  • reducing regulation or identifying alternative means of achieving policy objectives (where practical);
  • removing regulation that is no longer relevant or effective (where possible); and otherwise
  • updating existing regulation to reflect environmental realities.

As such, OTT service providers should be on notice of ACMA's intent to overhaul the current regulatory framework in future reforms to addresses issues relating to OTT services.