Mr LEE(10.01 a.m.) —The Labor Party opposition will not be opposing either of the two bills. I understand that they have been split to comply with various elements of section 55 of the constitution. These bills empower the Australian Communications Authority to tax the spectrum licensees for cost recovery purposes in the maintenance and management of the spectrum. Members will be aware that there is to be a new system for auctioning and licensing radiocommunications. The fact that this is to be done within the spectrum itself rather than tied to the receivers and the transmitters, as was the case in the past, is a change which I think is a step forward. In many ways, these bills try to harmonise the taxing of the spectrum and, therefore, the Labor Party will not be seeking to oppose them.

Of course, we continue to support strong regulation for the spectrum to ensure that the public interest is protected—that, first of all, the public and commercial users of the spectrum know what their rights are—and that the interests of community broadcasters also are not ignored in making sure that people continue to have access to Australia's electromagnetic spectrum.

I want to make a few comments about some of the consequences of this bill and some of the consequences of the proposed auctions that are mentioned in the bill. Firstly, I understand that the Australian Communications Authority is planning to run the auctions by using an on-line computer database with real-time bidding. The applicants will bid for packages of spectrum which fit into a particular plan. Applicants will also be issued with software and receive training on how to use the on-line computer bidding.

One or two communications ministers have got into difficulty in the past in working out ways to allocate licences in communications, and pay TV of course is the obvious example. During the two years that I had the honour of being communications minister, we introduced an open auction system—an English auction system, I think, was the definition that was often used.

Mr Hardgrave —Was it the New Zealand model?

Mr LEE —No, it was not the New Zealand model. It was a system like an auction for real estate. People would apply for the right to be bidders in the auction and they would have to meet certain criteria before they were given a paddle, allowing them to be bidders in the open auction system. Everyone knew what licence, what part of the spectrum, was being sold off and people could bid openly. I think the public got as close as possible to the fair market price for that spectrum. That is always the difficulty, making sure that the public do get a fair return from the sale of certain rights or access to spectrum.

The department has been keen for a while to introduce on-line computer bidding, and I understand that it might have been trialled in the United States. I do not know how they judge the success of the auction in the United States, given that it is very hard to know how you measure the real value of something through different types of auction systems. I did have some concerns about how successful the on-line computer auction system would be and I have to say that, at the moment, my inclination would be to stick to the open auction system. But it will be interesting to watch how this government and this minister go in taking the courageous decision to move to the new system for allocating this part of the spectrum. Of course, we will be watching with interest how those auctions go.

One of the bands to be auctioned includes the 800 megahertz and 1.8 gigahertz spectrum. In debates in the past I have raised my concerns about what that might mean for the community. It is my understanding—and it has been confirmed by the Minister for Communications and the Arts, Senator Alston, in a letter to me—that the signal for these higher frequency communications devices will only travel a short distance before there are difficulties with signal strength. As a result, the next generation of mobile phones—some people call them PCS—will be using the 800 megahertz and 1.8 gigahertz system. But, as the signal will only travel half the distance, when companies purchase the rights to use this spectrum and introduce the next generation of mobile phone towers, to make that system work they will have to install twice as many mobile telephone towers as we have today.

Given how much opposition there has been to date to the existing mobile telephone tower network, imagine the effect of the number of mobile telephone transponders doubling: that has to be the inevitable result of the government proceeding down the path outlined here. I am not sure if the minister has explained that to his backbench, who I understand have raised a few questions in the party room about mobile telephone towers, but perhaps at next Tuesday's meeting they might ask whether the minister has written to the opposition and told us that, in fact, there will be many more mobile telephone towers as a result of the auction for the 800 megahertz and 1.8 gigahertz system going ahead. He has certainly told us; I hope he has told you.

Mr Hardgrave —That's a bit rich, coming from the king of towers: you put them all up!

Mr LEE —I was the first minister to actually give local councils the power to refer proposals off to the independent arbitrator—the Commonwealth Environment Protection Agency—which I thought would be pretty tough on any proposals that generated controversy. I am not sure that the current system has solved some of the problems that have been raised in many communities right around Australia—in your own electorate, no doubt, as well as in mine. The simple point I am trying to make is this: imagine having twice as many towers as we have today! That will be the inevitable result of the next part of the plan going ahead.

The other point I would like to make briefly is that we all know that the analog mobile telephone network is scheduled to shut down in the year 2000—at the moment I think the date will be 1 January 2000. I know that the minister has publicly stated that he intends to keep some of that spectrum active to allow people in the bush the ability to continue to use their analog mobile phones after the year 2000. That is a commendable step. One of the reasons it is commendable is that, despite the three mobile telephone companies spending a lot of money on building the digital telephone network, the quality of the digital network still does not match the quality of the analog network—despite what some people say and despite Telstra's glossy advertisements on television. Especially for people who move around on the outskirts of capital cities—let alone for people in the bush—the digital system is not as good as the analog system is.

Mr Hardgrave —It does not work as well in my electorate.

Mr LEE —It does not work as well in your electorate, nor in mine. It gets very infuriating for users, I am sure, to have frequent drop-outs so that people have to re-call. Frankly, if the telephone companies are not meeting the promises they made to the public to provide a service of equal quality to that of the analog system, some tough questions have to be asked. If the digital network cannot match the quality of the analog network, maybe the minister has to consider whether he puts back that date of 1 January 2000.

A division having been called in the House of Representatives—

Sitting suspended from 10.10 a.m. to 10.19 a.m.

Mr LEE —The other issue that I think is worthy of consideration is the demand for mobile telecommunications services that will be generated by the Sydney 2000 Olympics, especially around the Homebush stadium and other parts of Sydney where Olympic events will be taking place.

I am not sure if people realise it, but the Olympics in Barcelona were probably before large numbers of people were using digital mobile telephones with the ability to be used in other countries. As far as the last Olympics, in Atlanta, were concerned the Americans had, and still have, a system that is completely incompatible with every other country. That means, of course, the Sydney Olympics will be the first occasion on which the Olympics will be held in a country when people can bring their own mobile telephones from most other countries. People will be coming to Australia as part of the Olympic family, as I think it is becoming known—people who are brought along by sponsors, people who are involved in international sporting organisations or people who are coming to the Olympics just because they love to see the Olympics—from countries where, I am sure, they have mobile telephones that are compatible with the Australian system.

Since we will be the first country that is holding an Olympics with a mobile telephone system which is compatible with other countries, there is going to be a real risk that our digital telephone system will collapse because of the massive demand. There is going to be so much demand for the use of those systems that the system will clog up and, if it does not collapse, certainly it will be very difficult not just for ordinary Australian citizens who live in those areas but for the visitors to our country to ensure that they do have a proper service.

I seem to recall that there are some technical limitations to how many base stations and how much additional capacity you can build into a network such as the digital network we have in Australia. I would expect and hope that Telstra, Vodafone and Optus are doing all they can to boost the capacity of the network around the areas where many of the people will be.

Of course, it is not just a matter of the people who are coming to watch the games. I think 30,000 journalists alone are coming to cover the Olympics. We certainly need to make sure that we are providing as good a service as possible.

If the government is allowing the analog system in the bush to survive a bit longer, one option is that we might ask whether the government should also consider allowing the analog system to remain up and running in Sydney for an extra year to get us through the peak in the demand at the time of the 2000 Olympics. That would mean that many Sydneysiders, who otherwise would be forced to convert from analog to digital by 1 January 2000, might keep their analog phones that extra year and there would be less pressure and less demand on the digital system. I hope the government might consider that suggestion and perhaps get some advice on it. There might be reasons why that is not practical and not an idea worthy of further consideration, but it is worth exploring.

Following those suggestions, I repeat that the opposition will not be opposing either of these bills. We think that they further advance the reform in the communications area.