CHAIR —I welcome the officers from Communications Policy.

Senator MARK BISHOP —I have some follow[hyphen]up questions on the CDMA technology—these would probably be best directed to you, Mr Stevens—arising out of earlier discussion where the officers brought us up to date with the reception and planning. We also had a brief discussion at the last estimates.

If, with the conversion from analogue to digital, the research being carried out by the organisations has not been concluded, we will face a major problem with persons who are hearing impaired. I am advised that there is something of the order of one[hyphen]quarter of a million hearing impaired persons in Australia, and it would be fair to assume that a significant number of them use mobile phones, either for personal use or as part of their business—no different from ordinary members of the community. If the research being carried out solves the problem, then that is the end of the issue. If it does not, what plans does the government or the department have to allay concerns on this issue, Mr Stevens?

Mr Stevens —At this stage, at least we are monitoring the research very closely. There is some time to go before the phase[hyphen]out is due to occur. Our advice is that, as Telstra said this morning, they are confident about getting a solution at this point. So we are monitoring very closely at this point and are optimistic that there will be an outcome which is acceptable to the hearing impaired individuals that you have talked about earlier.

Senator MARK BISHOP —Yes, I am aware that you are monitoring the situation. When we met in May, officers advised us that they had a plan and they would know whether or not that plan, as to stats, might be effective in August or September this year. But they were unable to give any indication or guarantee at all that the work would be concluded by December or that hearing impaired people would not continue to be disadvantaged.

Mr Stevens —I think we were referring to the research being undertaken at the moment, which Telstra referred to earlier today. As you say, in August or September we are hopeful that we will have an outcome. If at that point it looks like there will not be a resolution, then clearly we will have to reassess the situation.

Senator MARK BISHOP —Would the government be considering some sort of public education campaign?

Mr Stevens —Certainly there is a range of options we could look at. As Telstra said earlier, there are a numbers of avenues available to hearing impaired people to enable them to use a CDMA handset in a slightly different way perhaps to the conventional way. Some form of public education along those sorts of lines might be very sensible.

Senator MARK BISHOP —So the government is aware of the problem.

Mr Stevens —We are aware of the problem. As I say, we are hopeful that the research, if it appears in August[hyphen]September, will solve the problem. If it does not, we will have to have a look at what we can do between then and December.

Senator MARK BISHOP —Can we talk about the RTIF funding for the Western Australian Department of Health project?

Mr Stevens —Certainly.

Senator MARK BISHOP —What will the $8 million RTIF grant to the Western Australian Department of Health be spent on?

Dr Williamson —I do not have the full details in my head, but it is related to telecentres and—if I have the right project—the extension of telecentre funding that has been given before; it is to extend that to outrider type of public access points. Can I check that?

Sorry, wrong project. This is a project that was approved some time back by the board, but I think it was contingent on matching funding from the state government. So it had not been announced up until the announcement that was made quite recently of the most recent round. It is to implement telehealth, so it would include video conferencing facilities between medical centres and outlying areas of the state.

Senator MARK BISHOP —In what proportion is the state government matching the Commonwealth?

Dr Williamson —I believe they are matching dollar for dollar, so it is an equal contribution.

Senator MARK BISHOP —So, in total, $16 million. Is that correct?

Dr Williamson —Yes, that is correct.

Senator MARK BISHOP —Is that $16 million for the pilot project or the entire project?

Dr Williamson —Again, let me check. A pilot of 20 sites.

Senator MARK BISHOP —In regional and remote areas.

Dr Williamson —There will be the linking of regional and remote areas with centres where the medical services can be delivered via the telehealth system.

Senator MARK BISHOP —Does this in any way fit in with the government's proposal for the rural call centres?

Dr Williamson —The rural transaction centres?

Senator MARK BISHOP —Yes.

Dr Williamson —The rural transaction centres, I think, focus more on the transactions done by people in their day to day business. They are focused around banking services, postal services and Medicare services. So I suppose it is somewhat distinct in that this telehealth project is delivering health services.

Senator MARK BISHOP —That is an odd comment. I have a press release from 3 June, under the name of Senator Campbell. It says that the $8 million plus the $8 million from the state government is for the telehealth pilot project to deliver telehealth services, including `consultations, medical imaging, data transfer and information accessing' and a wide range of other community activities encompassing `legal advice, banking and commerce, access to federal and state government agencies and services, meteorology, education and training'. That strikes me as the charter of the Rural Transaction Centres Program that has been established with the proceeds of the bust[hyphen]up of Telstra. But you are telling me that the $16 million for the telehealth pilot project in Western Australia is somehow different from that.

Dr Williamson —I think that refers to what is commonly built into Networking the Nation grants; that is to provide community access beyond the primary purpose of whatever infrastructure has been put in to deliver the benefits. I guess, if you look at this in an historical
context, that project was approved in that form before the Rural Transaction Centres Program was announced. So I would guess that is probably right.

Senator MARK BISHOP —That might be right historically. But what is the difference between these telehealth services costing $16 million—$8 million from the Commonwealth, and $8 million from the state in the west—delivering all the services I read out from Senator Campbell's press release and the services to be available and accessible from the network of rural transaction centres?

Dr Williamson —The rural transaction centres will not be providing the video conferencing, video linking type facilities that I think are essential for the telehealth function. The Rural Transaction Centres will be providing both face[hyphen]to[hyphen]face and electronic systems for banking and lodging bills or claims and that type of thing, and I do not think those video linking facilities will be a part them.

Senator MARK BISHOP —So we have video health services and direct contact by video, and they will not be part and parcel of the rural transaction centres. What are the other differences?

Dr Williamson —Telehealth centres will link primarily to health service providers in the major centres, whereas I guess the rural transaction centres will link back to the banks themselves, Medicare and post office services.

Senator MARK BISHOP —Do we have a bit of a spin going on here? Is the government not trying to claim two lots of credit: firstly, for establishing the Rural Transaction Centres Program; and then, secondly, sometime later for this telehealth pilot project—and, in fact, marrying the two? Is that not what is going on?

Dr Williamson —I think the telehealth centres project is one part of what is being funded under the Networking the Nation program. Certainly the two programs themselves in broad concept are quite distinct, I think. One is establishing infrastructure. In fact, the two fit in with and complement each other, in the sense that the Networking the Nation program is establishing infrastructure. Often, the telecentres—this is not telehealth centres, but telecentres—which have been funded would provide the point on the ground, if you like, for a rural transaction centre to be established within.

The rural transaction centres are looking at using existing infrastructure as the physical establishment, if you like; they are looking to use what is there on the ground, whether it is a telecentre, a newsagent, a post office or whatever might be already established. So telecentres established under the Networking the Nation program could be the physical point where a rural transaction centre transaction takes place. One is more the infrastructure and one is for service, if you like.

Senator MARK BISHOP —Are you telling me that we will have the establishment of the rural transaction centres in the west and that there will be an add[hyphen]on to that via the telehealth pilot project to deliver telehealth services, including consultations, medical imaging, data transfer, et cetera? Is that what you are telling me?

Dr Williamson —It could be the other way around in that there are no rural transaction centres established yet—I think I am right.

Senator MARK BISHOP —Perhaps Mr Stevens might be able to tell us the difference.

Mr Stevens —I think you are going to a degree of detail that I do not have. But I am aware that there has been close consultation between my department and Transport and Regional Services in regard to the establishment of both these programs. I think the important point that
Dr Williamson is making is that these are complementary programs to improve services to people in regional areas. I think it is very necessary that they do work together.

I think the point that Dr Williamson has made is that, in some cases, the Networking the Nation program might provide the necessary infrastructure from which a regional transaction centre could then be built upon. I do not really see any conflict here; I see a complementary program trying to build on the two initiatives to help regional services in these areas. I am not aware of a real conflict here at all.

Senator MARK BISHOP —I accept that explanation, Mr Stevens. It just intrigues me that the government has a program for rural transaction centres being funded out of the proceeds of Telstra. It is designed to compensate people in the bush for the withdrawal of a whole range of business and commerce facilities. We then have a different program established of telehealth to deliver a whole range of health services to people in the bush. And then there is an add[hyphen]on that seems to be doing all of the work that otherwise would be done by the rural transaction centre network.

Mr Stevens —I think, in so far as we can provide the services through one program or the other, that will be the objective of the government; there is no overlap here.

Senator MARK BISHOP —Presumably, the government will study this pilot project closely—some $16 million is being spent. Is there any possibility that this pilot project, if successful, could be integrated into the broader rural transaction centres network?

Mr Stevens —I certainly would not rule that out. I am aware that the Rural Transaction Centres Program development process has gained leverage off the experience of Networking the Nation in some important areas. In fact, a lot of the initial thinking in regard to the rural transaction centres was driven by some of the experiences that we have developed under the Networking the Nation programs. In so far as our relevant experiences are concerned, certainly we will be using those in the design of regional transaction centres. For example, some of the work done in Tasmania under Networking the Nation is quite relevant for some of these rural transaction centres as well.

Senator MARK BISHOP —Thank you, Mr Stevens. Dr Williamson, could you tell me a little more about the grants to the WA Health Department. There is $8 million from the feds, $8 million from the state. That is for the purpose of building infrastructure, essentially cable?

Dr Williamson —I do not have the detail with me, but I would think it more likely to be the infrastructure at either end of a connection and using existing infrastructure to transmit data.

Senator MARK BISHOP —Can you take on notice how, and for what purpose, the $16 million will be spent?

Dr Williamson —Yes.

Senator MARK BISHOP —Also, over what period of time, who the contracts will be issued to and the detail of any follow[hyphen]up or audit on those funds. Will you take those questions on notice?

Dr Williamson —Certainly, yes. We would not know at this stage anything about any contracting, given that the project is only just about to start.

Senator MARK BISHOP —When does it start?

Dr Williamson —It has just been announced. We still have to arrange a deed, a contract with the project. That will incorporate most of those things you have just outlined. So we will
have the detail of that. But it would then be the project's responsibility to contract with service providers for the set[hyphen]up. So that will be some time in the future.

Senator MARK BISHOP —How long has the department been in consultation with the government of Western Australia over this particular project?

Dr Williamson —I would have to go back and refer to that. But if this were approved 12 months ago, then it would have been some time before that.

Senator MARK BISHOP —Can you find out how long you were engaged in negotiations for?

Dr Williamson —Yes, but I would comment that perhaps `negotiations' is not the right word. The secretariat within the department which I head would have been in discussions at some stage with the Western Australian department on their proposal, looking at how it fitted or did not fit with the program.

Senator MARK BISHOP —Where did the proposal originate from?

Dr Williamson —I presume that it would have originated with the Western Australian Department of Health.

Senator MARK BISHOP —Can you confirm that for us?

Dr Williamson —Yes.

Senator MARK BISHOP —When it originated, who were the relevant officers of the Western Australian Department of Health involved in the discussions/negotiations with you; and how long have those negotiations or discussions taken? Was there any research undertaken by the department as to the need or justification for this particular project?

Dr Williamson —There would not have been any direct research done. We receive, say, 100 applications for each round. We do not research the needs and justifications for each project. The board judges project applications against certain criteria, and we expect that information to be brought in as part of those applications.

Senator MARK BISHOP —Has the department received any lobbying or approaches from ministers of the Western Australian government concerning funding of this issue?

Dr Williamson —I am not aware of any, but I would have to take that on notice to check.

Senator MARK BISHOP —Was there any lobbying engaged in by Senator Campbell?

Dr Williamson —Again, I am not aware of any.

Senator MARK BISHOP —On this issue?

Dr Williamson —Not that I am aware of.

Senator MARK BISHOP —Could you take that on notice?

Dr Williamson —I can take that on notice.

Senator MARK BISHOP —Also, on notice, could you provide us with any other communications that the department or the minister received in relation to this project.

Dr Williamson —Yes.

Senator MARK BISHOP —Turning to digital data, Dr Badger, what would the subscription fee be, in approximate terms, for subscribers to the proposed digital data service for the four per cent of Australian households outside of the current ISDN serviced areas?

Dr Badger —Basic pricing will depend on the commercial services that will be offered by the providers. Mr Neil might like to give you some more examples of where we are at with
the discussions. I think those particular amendments to the legislation have been passed in the committee stage.

Senator MARK BISHOP —I think that has gone through, yes.

Dr Badger —The next part of the process is to put in place a series of the detailed implementation regulations. To do that, we will need to have detailed discussions with the commercial providers who are likely to offer these services. We have had some initial contact with carriers who may well provide the service, but—for their own commercial reasons—they have not at this stage announced the services. The pricing structure will depend on what is associated with those services. We understand in broad terms that one might expect that the pricing for the four per cent service would be something of the level of the ISDN service that Telstra offers. I think that is about the broadest—

Senator MARK BISHOP —What pricing figures are we talking about there?

Dr Badger —I do not know.

Mr Neil —We have had some discussions with Telstra, and obviously their pricing plans and the offers they propose to make are commercial[hyphen]in[hyphen]confidence. In fact, you would probably be better placed asking those questions to them directly. I am not really in a position to give you a clear indication of what the numbers might be.

Senator MARK BISHOP —I think you are, Mr Neil. We had a lengthy discussion in the chamber on the cost of provision of the service, and the minister indicated then that it was somewhere between $1,100 and $1,800. The 50 per cent subsidy was part of the government's electoral platform, and they were quite keen to have their platform honoured in the legislation. The minister was quite open in those discussions. I am asking you stage two of that question: what is the subscription fee that those four per cent of consumers in outlying areas have to pay? I am not asking to be told the exact dollars and cents, but I am asking for a broad indication. It is not an unreasonable question.

Mr Neil —I am simply saying, Senator, that I am not in a position to answer that question with any particular confidence. I do not have specific information about the subscription fees. I have some general numbers of the sort that you mentioned were discussed in the debate about the rough amounts of money and the levels of subsidy the Commonwealth might provide and so on for equipment. I fear that I might be misleading if I tried to chance my hand on answering questions on the subscriptions issues. The questions can be taken on notice, if you would prefer us to, but I think they would probably be better directed to Telstra and the service providers.

Senator MARK BISHOP —No, I do not think they are better directed to Telstra, Mr Neil. I think they are best directed to you. This is part of the government's election commitment. It had a commitment in 1996 to cover 100 per cent of Australia. It went back on that commitment in 1998. A memo was circulated to all government departments that 1996 commitments, post[hyphen]1998, were no longer valid. We are talking about a 1998 election commitment. The government promised to fund 96 per cent of Australia. For the other four per cent that it was unable to fund, it has offered to provide 50 per cent of the cost by way of subsidy.

We are currently in discussion in the Senate on those particular clauses in the bills. There will be a subscription fee that has to be paid by consumers and business interests in rural and regional Australia. No[hyphen]one has suggested to date that any of that detail is commercial[hyphen]in[hyphen]confidence. It is not commercial[hyphen]in[hyphen]confidence—it will be out there in the public domain in
the very short term. I am asking you for an indication. That is not unreasonable. It is not commercial[hyphen]in[hyphen]confidence. We can do it now or we can do it when we go back in the chamber. We could do it for hours on end.

Mr Neil —I have some information from the digital data inquiry, under which Telstra gave an indication that the cost was going to be less than $130 a month. That is based on page 102 of the digital data inquiry report. That is the quality and the level of the information that I have ready access to.

Senator MARK BISHOP —Is that figure of less than $130 per month the same for all consumers, or does it differentiate between private consumers and business interests?

Mr Neil —This price, as it is indicated here, is for an Internet service. I assume that we are really talking about a residential type service, probably based on the asymmetric proposal. Without reading the detail of this page and going through it carefully, I would not swear to that, but I think that is what it is saying.

Senator MARK BISHOP —How long have those discussions been going on concerning the subscription fee? When did they commence?

Mr Neil —Discussions about the subscription fee?

Senator MARK BISHOP —Yes.

Mr Neil —I am not sure that I understand the question entirely. I am not sure that the subscription fee would be an adjunct to other discussions. I do not think the subscription fee has been the direct subject of particular discussions with others.

Senator MARK BISHOP —That is what we are discussing now, Mr Neil.

Mr Neil —Sorry, I have obviously missed the track of the question. We have been having continuing discussions with Telstra and others in the development of the proposals to implement the government's policy. What I am saying is that, to my knowledge, they have not focused particularly, or solely, or principally on the subscription fee.

Senator MARK BISHOP —Are they a part of those discussions?

Mr Neil —I think the issue of how much people are likely to pay is part of it, and we are interested in the issue and we have had information.

Senator MARK BISHOP —That is what we are talking about: how much end users are going to have to pay in addition to the subsidy costs. We are talking are about the same thing. What I am asking you is: when did those discussions commence?

Mr Neil —Earlier this year we started discussions on this broad issue in the development of the legislative package.

Senator MARK BISHOP —When earlier this year?

Mr Neil —January.

Senator MARK BISHOP —Do you know that, or did you just say it?

Mr Neil —I can take it on notice. I would not want to mislead you.

Senator MARK BISHOP —No, I would not want you to mislead me, either. Can you take on notice: when the discussions commenced; who has been involved in those discussions; the figures that are suggested as to the cost of the subscription fee; when those negotiations are expected to be concluded; and when a report will be delivered to the minister? I request answers to those questions prior to going back into the chamber on Monday week.

Mr Neil —Certainly.

CHAIR —There is a fixed time for the return of questions on notice.

Senator MARK BISHOP —I understand that, Chair, but if we do not get the information from the—

Mr Stevens —Senator, we are happy to do whatever we can to make sure we get the information for the debate. I think it is totally appropriate.

Senator MARK BISHOP —Thank you, Mr Stevens. Mr Stevens, is it correct to say that the asymmetric satellite data system being proposed as part of the process of making 64 kilobytes or equivalent data services available in remote areas is incapable of carrying outgoing data at ISDN or comparable speeds?

Mr Neil —As I understand the process, the outgoing loop on the thing will rely on the PSDN network. So it will operate at the normal telephone speed. So your mouse clicks to call up the Internet and whatever. The nature of asymmetric service is that if you want large material download you will use the satellite from the Internet, and the outgoing end will be fairly low volume request for data et cetera. As I understand it, that is the idea of the service.

Senator MARK BISHOP —And the outgoing will be at standard telephone slow speeds?

Mr Stevens —Yes.

Dr Badger —The network speed at that stage.

Mr Stevens —At the base.

Senator MARK BISHOP —The network speed at that point—I accept that. What mechanism is used in the new satellite system to carry outgoing data?

Mr Neil —It would be a connection to the public switch telephone network. I do not know if it is an ordinary modem or some sort of special adaptor. I am advised that it is just a normal phone modem.

Senator MARK BISHOP —Just a normal phone modem, there is nothing different. What is the likely speed that outgoing data would be transmitted at?

Mr Neil —It depends on where you happen to be in the Telstra network. I get 33.6 kilobytes per second on mine, but it varies. Presumably some people can actually get 56, but I have not been able to.

Senator MARGETTS —Chair, if someone answers from the back, would that appear on Hansard ?

CHAIR —If officers want to contribute answers, they must come to the table and identify themselves.

Senator MARGETTS —It is helpful, but think it will not actually go on the record if it does not reach a microphone.

Mr Stevens —We will try to make sure we relay them on.

Senator MARK BISHOP —Thank you, Senator Margetts. I am talking about the outgoings in rural and regional areas—the four per cent.

Mr Neil —As I understand from the report which was prepared by the ACA, those speeds vary. Some figures I have here show that 99 per cent of the network operates at least 2.4 kilobytes, which is the standard voice service and which is what Telstra guarantees. Of that, 70 per cent of subscribers can get 9.6 kilobytes per second, 45 per cent of the network gets 14.4 kilobytes per second and 30 per cent of the network gets 28.8 kilobytes per second. As I said, I can get 33.3 on a connection.

Senator MARK BISHOP —I am sure you can, and I am sure I can in Perth, but that is not the point. The point is that the four per cent we are talking about are receiving the service live in places with poor network access for PSTN access, don't they?

Mr Neil —More than likely.

Senator MARK BISHOP —So they will still have that poor service with very slow delivery times for sending out data. Is that correct?

Mr Neil —The idea of the asymmetric service is that you do not send much data out; you send out requests for data. You are pressing and locating sites, so the data volume going out on a normal Internet browsing session is fairly limited. The large amount of data comes back via the satellite link. Therefore, the idea is that you get better speeds and it should be closer to the sorts of services that we are more used to in metropolitan Australia, as I understand it.

Senator MARK BISHOP —No[hyphen]one is arguing that when people access a satellite and download data it is not going to be efficient and quick. No[hyphen]one is arguing about that; we all understand that. We are talking about those people who upload data—the other way: the four per cent in remote and regional Australia, the Kimberleys, the Pilbara, North Queensland and places like that. Presumably, if there are telephone connections, if there is a network and people want to engage in e[hyphen]commerce or business or make travel arrangements or do all of the myriad things that people do in business, they are going to be required to upload data. This is still going to take a long time, and this proposal of the government is not going to assist them.

Mr Neil —I think you are quite right in relation to the balance. If people want to send out large amounts of data for commercial or other purposes, we will have to consider something other than the PSTN as a metric service. They will have to buy the ISDN service or two[hyphen]way satellite or other services that may become available.

Senator MARK BISHOP —They will have to avail themselves of other facilities.

Mr Neil —That is right.

Senator MARK BISHOP —That is the purpose of programs like the rural transaction centres—to give people in the bush access to modern infrastructure. It is no secret what we are talking about. The problem we have with this new asymmetric satellite data system is that a lot of people—the four per cent that the government is trying to assist—are going to be met only 50 per cent of the way.

Mr Stevens —The point that Mr Neil made earlier is relevant. Depending upon the usage to which these people put the service, a great bulk of them may not wish to transmit very much data back. Your point is obviously valid in respect of those who do, but that is not the full amount of those four per cent. For a great bulk of those who use the Internet—and perhaps the way I use the Internet—they would get a very respectable service; far better than they have at the moment.

Senator MARK BISHOP —I take the point you make, Mr Stevens. It is correct. The problem that is going to happen is that, once the infrastructure is in place—the satellite system is established—people are going to want to use it for a whole range of reasons not anticipated or planned for by government. That is the way things develop. People are going to want to relocate to the bush for whatever reason and engage in normal business and commerce activities. So we are going to have to some degree an ongoing problem. That is all I am saying.

Mr Stevens —The extent of that problem would depend very much on how technology develops down the track. There are some pretty exciting developments on satellites, which are very rapidly changing that balance between city and country. Two or three years down the track, when we have discussion again, it may be that it is not always the case.

Senator MARK BISHOP —I hope you are right on that, Mr Stevens.

Mr Stevens —So do I.

Senator MARK BISHOP —Before I get onto costs and subsidies, would subscribers to the service be required to purchase service[hyphen]specific receiving equipment and other hardware?

Mr Neil —They will be required to buy the particular satellite equipment to receive the asymmetric satellite service—those sorts of issues. If they purchase ISDN, there is specific equipment that goes with ISDN services, I understand.

Senator MARK BISHOP —So what is the likely cost, including subsidies, of the necessary hardware to tap into the system?

Mr Neil —I think the numbers I have seen are the ones that you mentioned earlier—in the order of $1,000 to $1,200 for satellite reception equipment. We are looking at a 50 per cent subsidy which we estimate to be in the order of up to $600.

Senator MARGETTS —The figures I have heard are considerably higher. Around $1,000 is a very minimal service, isn't it?

Mr Neil —I was talking about the asymmetric one. We were talking about what we would describe, perhaps, as the residential basic service.

Senator MARGETTS —Were you still talking about the asymmetric one or the one where you could actually send it out?

Senator MARK BISHOP —No, the asymmetric one—the halfway house one. I thought the figures were somewhere between $1,200 and $1,800 for the hardware and a government subsidy of 50 per cent, up to $600.

Mr Neil —It is a 50 per cent subsidy and we estimated $1,200. It will be $600 a shot, yes.

Senator MARK BISHOP —The final questions on this: will the hardware be proprietary? Would it lock users into a single data service provider system? Who would that provider be?

Mr Neil —As I understand the situation at the moment—and I will check—there is a range of technologies that are being evaluated. I need to be a bit careful here about tendering and so on. Telstra as a provider is going to pick a particular technology, and that will be sold. I believe that people will not be required to access the service via BigPond or be necessarily BigPond subscribers.

Senator MARK BISHOP —But Telstra currently have the monopoly on service provision in all of these areas, don't they?

Mr Neil —They do not have a legislative monopoly. Others are able to provide service.

Senator MARK BISHOP —So what is the situation de facto then?

Mr Neil —As we understand it at the moment, we have had discussions with Telstra and Telstra are close to offering the service within, I think, the July to August period. We have been having some discussions with others, but I would not be able to give you any definitive dates on anyone else.

Senator MARK BISHOP —Remind me, Mr Stevens: will this new service be covered by the USO?

Mr Neil —The service provisions in the act, as have been debated to date, are a part of the USO provisions of the Telecommunications (Consumer Protection and Service Standards) Bill 1998 . Yes, it is within the USO but it has a specific provision.

Senator MARK BISHOP —So it has to be provided by Telstra?

Mr Neil —Because of a USO obligation, yes. I cannot remember the terminology, but the act does provide for others to become providers. So, yes, Telstra will have an obligation once the act is provided, but it is not a monopoly; it is an obligation. But others will be able to provide a service and become declared special providers and get the subsidy.

Senator MARK BISHOP —Subject to resolution of commercial negotiations with Telstra.

Mr Neil —No, other satellite service providers could provide a discrete service of their own, using similar or other technologies.

Senator MARK BISHOP —Will it be proprietary hardware that is going to be provided? Is Telstra going to gain a de facto access monopoly?

Mr Neil —My understanding is that people are not going to be obliged to take Telstra's Big Pond service, so they may be able to access the services via different service providers. Once you have bought a particular technology, if they buy the Telstra service, if they decided then they wanted an Optus offered service, Optus presumably would offer some sort of different technology. That might limit your ability, unless, for example, Optus becomes a reseller or a service provider rather than a technology provider.

Senator MARK BISHOP —I take the obvious point you are making. Would you take this on notice: would the hardware lock users into a single data service provider system? Would you give me a formal response to that question. The answer appears to be no, but could you just consider it and advise the committee for me?

Mr Neil —Sure.

Senator MARK BISHOP —I turn to the PBS. On page 37, table 2.2.2, Total resources for outcome, coming down to the heading `Price of departmental outputs' and output 2.5, the figure is $82 million. What projects or services are involved with respect to output 2.5 referred to in the PBS?

Mr Stevens —That figure was the cost of operating the National Transmission Agency last year. There is a nought this year because it has been sold.

Senator MARK BISHOP —Okay. Thank you very much.

CHAIR —We move to Australia Post. I now welcome Australia Post representatives.

[11.15 a.m.]