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Monday, 14 September 2009
Page: 9429


Ms LEY (5:00 PM) —I am pleased to speak on the Telecommunications Legislation Amendment (National Broadband Network Measures—Network Information) Bill 2009. This bill amends part 27A of the Telecommunications Act. Part 27A enables the Minister for Broadband, Communication and the Digital Economy to require telecommunications carriers to give information to the Commonwealth about their telecommunications networks. This bill before the House removes the sunset clause which made most of part 27A inoperative after 26 May 2009, expands the class of firms that have to provide information to include utilities and changes the purpose to which the information can be put. So we are, if you like, reheating the old part 27A because time has lapsed. And, really, that is the story of the National Broadband Network—time has lapsed.

I would like to go back over a bit of history now. The National Broadband Network fibre-to-the-node was an ALP election promise. It would have involved significant modification of Telstra’s network rather than a whole new network. The main changes were the linking of residential and business premises with the local exchange. The proposal would have seen the bundled copper wire that runs from the exchange to the node, which is the access point near the premises, replaced with optic fibre—thus enabling much faster access speeds. In order for proponents to submit costed proposals, they needed information about existing telecommunications infrastructure. They were asked to provide this voluntarily, which of course they were reluctant to do. The original Telecommunications Legislation Amendment Bill was the mechanism by which they were forced to do this.

Six proposals were received by the government’s extended deadline of 26 November 2008. In December, Telstra announced that it had been excluded from the process, because its proposal did not explain how it would involve small and medium enterprises in building the NBN. In January 2009, the minister announced he had received the report from his expert panel. He declined to publish the full report, but the extract that he did publish said the proposals were underdeveloped and did not provide value for money. On 7 April this year the government terminated the request for proposal process and announced that it would establish a company that would build, own and operate a wholesale fibre-to-the-home network. Ninety per cent of homes, schools and workplaces would be connected with either land based or satellite wireless services.

The story loses coherence at this point, courtesy of the bumbling minister, who is now, I feel, caught in a trap entirely of his own making. The minister is not sure of the legal arrangements through which the company that he has announced will either acquire assets or operate the business. We know that the Commonwealth will make the initial investment in the company and might issue retail bonds, but the extent of public and private equity is not known. The Commonwealth will be a majority shareholder but only for five years after the network is built and fully operational. A plan of action was set out by the minister in April when the company, NBN Co Ltd, was established—though it may of course change its name. Three months later the executive chairman was announced and a few weeks later the board was announced. In April 2009, the minister released a discussion paper on proposals for regulatory reform, including the separation of Telstra’s retail and network arms. In July the minister sought more views on a number of matters, including how the new network should be regulated. An implementation study is needed but a lead adviser is required to provide the government with information around network design and operating arrangements. A five-month tender process to appoint the lead adviser resulted in McKinseys and KPMG being appointed in August. The tender process was secret.

In this timeline we have a long and tedious history. It is now 12 months since the network was supposed to be built and well and truly on its way to being up and running in the interests particularly of rural and regional constituents. With every step that the minister takes, he seems to have to ask and pay for advice from consultants. He needs to ask what regulatory environment his company should be operating in. He needs to ask about the terms, about the equity and about what the arrangements that should surround the new network would look like. And every step of the way is resulting in more and more delays. Meanwhile, the issue of regional black spots has meant that the government has issued a consultation paper and another request for tender. Responses to this have just closed.

The minister has found a friend, though, in the Tasmanian government, whose proposal to the 2008 request for proposal process the expert panel apparently approved of—even though we cannot see the advice from that expert panel. Tasmanian NBN, a subsidiary of NBN Co, has been established and will manage the rollout of the network in Tasmania, using Aurora Energy—a company wholly owned by the Tasmanian government. The legislative environment in which NBN Co will operate has not been set. The issues of how fibre networks should be set out to greenfields developments has not been resolved, though the minister has established yet another stakeholder group to advise on policy development on this issue.

I have seen estimates, probably some 12 months ago, that the tab for the minister’s professional advice alone has hit $10 million. Questions remain. Who will actually own the NBN? Will it be the government or third parties? If we want those third parties to invest, they need information, They need to know how long the government will stay on board as an investor. Five years after the completed rollout? But how is that defined? Can the government confiscate Telstra’s network without compensation? How much might such compensation cost? Investors need certainty, reliability and information—and they do not have any of those things from this government.

The disappointing thing to me is that the appalling way in which the government has handled the NBN has detracted from the genuinely good news story about what it actually promises and how it could change lives, improve the way we work and live and, importantly for my constituents, bring opportunities to regional Australia that did not previously exist—for example, high-definition teleconferencing. Telepresence systems mean state-of-the-art teleconference from home, without sacrificing the productivity or personal interaction. Satellite communities built far away from city centres have been talked about for a long time but there has never really been the technology to truly support them. This could now become a reality. There are far-reaching implications for rural and regional Australia, struggling as we are with the drought. Our farming systems are changing and we need diversification of our economic base. For example, we have agricultural experts who have hands-on experience and an observatory, if you like, built all around them. With the interactive technology and tools that new technology such as internet protocol TV would bring, we could overcome the disadvantages of distance and bring the jobs we need to a very smart rural sector.

Elderly people in their own homes would benefit from a health-monitoring system that would spare precious resources for local hospitals—and God knows we need that in the state of New South Wales. I know the minister is an ardent fan of e-health, but we have to get the system built and we have to get it built all over Australia and not leave out vital towns just because they have a population of 1,000 or less according to the arbitrary criteria that this government has set. The announcement sounded great in April earlier this year, until you looked at the fine print. In my electorate alone, there are 17 towns that would miss out entirely and, really, they figured nowhere in the government’s announcement. They just did not count.

The other factor, of course, is cost. The Rudd government treats this exercise like it does all others—a huge price tag, poorly calculated. It is carried away with its own sense of self-importance, so an extra few million dollars is just a bump in the road. After the grand announcement that the NBN was costed at $43 billion, we saw in slightly smaller print that the government contribution was just $4.7 billion, about 11 per cent. The government should know that, while it willingly writes out cheques for multimillion dollar sums, the private sector follows the normal rules of probity, value for money and return on investment. Without those things, it is reluctant to invest. Hence the problem the minister now faces, which is the unenthusiastic response to his announcement. So, at the moment, we are in a state of limbo where, unfortunately, we are set to remain.

According to the government, it will take eight years to build the network to 90 per cent of homes at speeds up to 100 megabytes per second. But this is not an ironclad guarantee or even a rock-solid commitment; it is little more than an ambitious goal, something we are just aiming for. Contrast this with a recent report, Navigating the path to Australia’s NBN, by telecommunications analyst Christian Guerra, which predicted that the rollout would not begin until 2011 and would cover just 50 per cent of homes by 2017—it might get to 90 per cent by 2025. There is little hope for regional Australia in that sad time line.

I want to mention cybersecurity risks associated with the NBN, because awareness of cybercrime is severely lacking around the country. The government, as I have said, plans to start the NBN in Tasmania; however, there has been little talk about security risks that might be associated with the network. The National Manager, Australian Federal Police High Tech Crime Centre, Neil Gaughan, spoke to the House of Representatives Standing Committee on Communications last week in a public hearing on cybercrime. Mr Gaughan pointed out that we need to ensure that the security and the resilience of the NBN is quite strong. He warned that there have been ‘incidents in the recent past’ when it comes to large Australian companies being targeted for cyberespionage.

ASIO, in their submission to the inquiry into cybercrime, also noted:

Terrorists use the Internet for a variety of purposes —including communications, propaganda, recruitment and reconnaissance of targets. (t is also feasible that terrorists or extremists may engage in malicious cyber activity that would exploit Australia’s reliance on Information Communications Technology to significantly disrupt services, cause casualties and/or inflict economic harm.

This is a concerning feature of the interconnected cyberenvironment that we live and work in today. The Australian Institute of Criminology noted in their submission to the committee:

The next wave of technology-enabled security threats will be targeted attacks aimed at specific organisations or individuals within enterprises. Organisations in the financial services industries and their top executives will be targeted more heavily than others … with financial gain being the ultimate goal.

The percentage of Australians targeted by cybercrime is quite large and is on the increase. According to the Australian Bureau of Statistics, over 5.8 million Australians were exposed to cyberscams in the 12 months prior to the Personal fraud 2007 survey. That information is slightly dated but it is the most up-to-date that we have. Personal fraud as measured by the ABS involved people receiving and viewing or reading an unsolicited invitation, request, notification or offer designed to obtain their personal information or money or otherwise obtain a financial benefit by deceptive means. Of those who received a fraudulent request, 5.7 per cent—329,000 people—became victims by responding to the scam, by supplying personal information, money or both or by seeking more information. This equates to a victimisation rate of two per cent, which has been rising rapidly since that study was conducted. The coalition strongly supports the AFP’s concern that security must be at the centre of the NBN initiative as cybercrime rises. That involves two aspects: the location of the assets, the physical infrastructure under this network, where they will be located, who will know where they are located and who should know; and the obvious interruption to traffic on the network were such cybercrime to take place and the security of the use of that network for government agencies, individuals, industry and business.

Back to the specifics of this bill: the main changes are, as I said earlier, to expand the class of firms that can be required to give information to include utilities and to change the purpose for which they are used. The changes sought by this bill were originally introduced into the Senate on 25 June 2009 and were referred to a Senate committee. The coalition has a problem with the government’s approach, in that it was done without consultation with stakeholders. I am told that some had no idea of its content when they were contacted by the media for comment. Thankfully, the Senate inquiry gave stakeholders the opportunity to comment, and they declared concerns about consultation time lines in the bill. The information utilities were obliged to supply, even if they do not hold records, the costs these utilities would incur. Further concerns were expressed about provisions permitting disclosure of information to the NBN for 10 years, unlike provisions relating to the implementation study which sunset in June 2010.

There are, therefore, serious questions about why the minister has been given such broad long-term powers in this bill and whether they are really needed, given that we are only at the implementation study stage and beyond that there may be no need for commercially sensitive information relating to the operation of the final NBN to be disclosed. I therefore support the amendments moved in this place by the member for Dunkley in connection with this bill and I commend the comments that he has made regarding those amendments.

I also express my grave reservations about the way this government is managing the National Broadband Network. It will cost $43 billion to build the network, but the network has not been costed. The expert panel apparently was never asked to make a return-on-investment calculation. It reported in secret. The government will not release the panel’s deliberations. The government itself is putting in just $4.7 billion, but the option of putting in more is hinted at. After all, we are in tough times. We have to spend our way out. It is just money. Everything will work out down the track. Do not bother justifying expenditure other than relying on the feel-good factor. The NBN is good, the Liberals are bad, faster internet delivered to more people is the right thing to do and anyone who stands in the way are a bunch of spoilsports!

That is the impression I have from this government about the National Broadband Network, underlined by their appalling disregard for the effect that that network will not be able to take in rural and regional Australia—because the 10 per cent of constituents who I represent would all be in that excluded 10 per cent. There have been some vague promises of wireless satellite but nothing definite has been said—no costings, no allocation, no commitment in terms of time line. The point will come where this government’s approach and rationale will be proved incompetent. Every Australian who waits and hopes for a better broadband network to service their needs deserves so much better.