13.16 The Australian Government Best Practice Regulation Handbook states that direct government regulation should be considered when, among other things: the problem is high-risk, of high impact or significance; the community requires the certainty provided by legal sanctions; or there is a systemic compliance problem with a history of intractable disputes and repeated or flagrant breaches of fair trading principles, with no possibility of effective sanctions.
13.17 On the other hand, self-regulation—or by extension, more co-regulation—may be a feasible option if: there is no strong public interest concern, in particular no major public health and safety concerns; the problem is a low-risk event, of low impact or significance; and the problem can be fixed by the market itself—for example, if there are market incentives for individuals and groups to develop and comply with self-regulatory arrangements. Practical factors may also favour more self- or co-regulation if the time, effort or cost of government regulation outweighs its benefits.
13.18 In the communications and media context, the ACMA has identified 10 ‘optimal conditions’ for co-regulatory arrangements, including ‘environmental’ conditions and features of the regulatory scheme. Briefly, the factors favouring co-regulation can be summarised as follows:
- a small number of market players with wide coverage of the industry;
- a competitive market with few barriers to entry;
- homogeneity of products—that is, products are essentially alike or comparable; and
- common industry interest—that is, collective will or genuine industry incentive to co-regulate.
13.19 When used in the right circumstances, it is said that self-regulation and co-regulation can offer a number of advantages over direct regulation. These include:
- greater flexibility and adaptability;
- potentially lower compliance and administrative costs;
- an ability to harness industry knowledge and expertise to address industry-specific and consumer issues directly; and
- quick and low-cost complaints-handling and dispute resolution mechanisms.
 Ibid, 35.
 Ibid, 34.
 For more detailed discussion of the optimal conditions for self- and co-regulatory arrangements, see Australian Communications and Media Authority, Optimal Conditions for Effective Self- and Co-regulatory Arrangements (2010). See also Australian Public Service Commission, Smarter Policy: Choosing Policy Instruments and Working with Others to Influence Behaviour (2009).
 Australian Communications and Media Authority, Optimal Conditions for Effective Self- and Co-regulatory Arrangements (2010), 10–11.
 Ibid, 5 citing an OECD study: Centre for Regulated Industries, Self-regulation and the Regulatory State—A Survey of Policy and Practice (2002).