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Thursday, 14 November 2013
Page: 283


Mr TURNBULL (WentworthMinister for Communications) (11:18): I move:

That this bill be now read a second time.

Submarine cables are a vital part of Australia's telecommunications infrastructure. They carry almost all of the international internet traffic in and out of Australia. They are a vital link for Australia to the global telecommunications network and the global digital economy.

Submarine cables have been in use for telephonic and telegraphic purposes for over 150 years, beginning with submarine telegraph cables laid across the English Channel in 1851 and then, after several failed attempts, across the Atlantic Ocean in 1866. The first connection between Australia and the rest of the world by submarine cable was the Java to Port Darwin telegraph link in 1872. This in turn was connected to the southern capitals by the iconic Overland Telegraph Line built by Charles Todd.

These first submarine cables carried telegraph messages only. The signal attenuation over the long cable runs would not permit voice traffic, let alone the transmission of images. The early cables did not have the technical ability to amplify their signals, so it was not until the introduction and development of coaxial cable and in-cable amplifiers and repeaters in 1956 that voice traffic over submarine cables was possible. Until then, from the 1920s, international voice traffic was carried over radio.

I should note, by way of reflection, that the cost of transmission on the first transatlantic submarine cable in 1866—when a dollar was really worth a dollar—was $5 a word. It is interesting to reflect on the vast amounts of data that are transmitted from one end of the worth to the other at no cost or very negligible cost to the consumer, particularly relative to the past.

In the 20th century, submarine cable technology evolved—first, as I said, with the repeaters and coaxial cable technology in the fifties and then, most significantly and momentously, in the late eighties when fibre optic cables became available and enabled the transmission of vast quantities of information. Modern submarine cables typically provide multiple terabits per second of capacity when deployed and can be further upgraded, positioning them to meet future traffic demands.

As an island nation, Australia and its economy is especially dependent on submarine cables. As such, damage to submarine cables can have a significant impact. There are currently seven international submarine cables connecting to Australia that are in operation. The main players are Southern Cross Cable Ltd which operates the Southern Cross Cable, PIPE International which operates PPC-1, Telstra which operates APNG-2 and Telstra Endeavour, and Singtel and Reach which operate the SEA-ME-WE 3 cable.

It is worth noting that prior to the late 1990s, globally, cables were constructed by consortia of carriers. They typically were called club cables. It was first in the late 1990s that private cables started to be built by companies like Level 3, Global Crossing, Tyco and others—PSInet, for example. Indeed, there was a boom in the cable construction business in the late 1990s, and it is worth reflecting that it was said at the time that many of these cable proposals had business plans estimating that they would get 60 per cent of the market share. Given that so many were being constructed at the same time, that was obviously not achievable. Many of them went into bankruptcy, but the assets remained. Creditors lost most of their money, but the assets remained, and, over time, demand has caught up with the extraordinary increase in capacity. I remember this period very well, because I was a director of the Telstra/PCCW cable company called Reach, which was operating the merged international cable assets of Telstra and Hong Kong Telecom.

In Australia, all of the cables were consortia cables, or club cables, until 2008. Beginning then, a number of private cables, including PIPE International's, for example—at that time it was headed by Bevan Slattery—started to be built, and there are more in the pipeline, if you will forgive the pun, in the future.

There are very considerable risks associated with submarine cables. When you consider that it is estimated that 99 per cent of the world's international internet traffic is carried on these cables, the House can see the dependence we have on them. Their breakage, their interruption, can have enormous consequences. This is why the physical placement of these cables is of considerable importance. There is a single-point-of-failure issue if too many cables are located in the same pathway and go to the same access points. The most notorious example of this was in December 2008 when the cable station off Alexandria in Egypt saw an anchor cut three of the four cables connecting Europe to the Middle East. Those three cables carried over 90 per cent of all of the internet traffic between Europe and the Middle East, and, for example, India lost up to 80 per cent of its connectivity, the Maldives lost 100 per cent, and the impact on all of the countries of the Middle East and further east was very considerable. So, protecting the security of submarine cables is a very serious issue.

Most cable breakages are accidental. This is also true, by the way, of fixed-line terrestrial networks. The engineers talk about the dangers of shovel strike—over-zealous gardeners and backhoes cutting through cables. But with these very important subsea cables there is also the risk of deliberate attack. Cables were cut by the combatants in the Second World War—the British cut the German cables and the Royal Australian Navy cut Japanese telegram cables off Indochina during the Second World War. There is a vulnerability, not just in times of war, but to terrorist attack. It is a point of vulnerability that the House should be very conscious of.

Fortunately, the previous coalition government was very well aware of this and, in 2005, it established a regime for the protection of international submarine cables landing in Australia, in the form of schedule 3A of the Telecommunications Act 1997.

The regime gives the industry regulator, the Australian Communications and Media Authority, or the ACMA, the power to establish protection zones around international submarine cables of national significance. In protection zones, certain activities are prohibited or restricted from taking place including some kinds of fishing, trawling and mining.

The regime also establishes an installation permit system. Carriers seeking to install an international submarine cable that will land in Australia must apply for a permit to install the cable.

To date, the ACMA has declared three protection zones—the north and south Sydney protection zones and the Perth Protection Zone. Since the introduction of the regime, there have been no reported incidents of cable damage in Australian waters.

Australia's regime has been praised by both the International Cable Protection Committee and the Asia-Pacific Economic Cooperation as a global best practice regulatory example for the protection of submarine cables.

In 2010, the ACMA undertook a statutory review of schedule 3A. Based on feedback received from industry, the ACMA made several recommendations to improve the operation of the regime.

These recommendations form the basis of the amendments proposed in the bill, along with other proposals that have been identified by the government and stakeholders that will further enhance the regime.

The amendments fall into five categories.

First, the bill will ensure consistency between our cable protection regime and the United Nations Convention on the Law of the Sea, also known as UNCLOS. UNCLOS sets out coastal nations' rights and obligations in relation to the seas and oceans, including Australia's right to regulate foreign ships and persons beyond its territorial sea.

While it has not been a practical issue to date because the ACMA is required to consider UNCLOS when it exercises its powers, some concerns have been expressed that the regime may seek to regulate foreign nationals for certain actions in waters of the exclusive economic zone or continental shelf in a manner inconsistent with international law, including UNCLOS. To the extent that the regime is used as a model by other jurisdictions, this carries the risk that other jurisdictions may replicate this model.

The bill addresses this by modifying the regime's application, including criminal and civil enforcement options, to foreign ships and nationals in the waters beyond Australia's territorial sea.

Second, the bill will provide a structured process for the consideration of matters within the Attorney-General's portfolio in relation to submarine cable installation permit applications by:

requiring the ACMA to consult with the Secretary of the Attorney-General's Department on installation permit applications; and

giving the Attorney-General power, after consultation with the Minister for Communications and the Prime Minister, to direct the ACMA to refuse a permit on security grounds.

During the consultation period, the Secretary of the Attorney-General's Department may make a submission on the permit application, which may include a recommendation about the conditions that should be specified in the permit.

These are mechanisms to enable matters including security, international law and native title that may affect submarine cable installations to be considered.

The changes formalise existing practice. The proposed provisions are based on the current carrier licence application provisions under the Telecommunications Act and are familiar to industry.

Third, the bill will enable significant domestic submarine cables—that is, cables that connect two places in Australia—to be brought under the regime and be suitably protected under the regime if appropriate. The bill will give the Governor-General power to specify in regulations that a domestic cable or route warrants protection. The ACMA would then have discretion to decide whether a protection zone should be declared around that cable or route. Consultation would be required before any regulations were made and any new protection zones specified. Carriers will also be able to install domestic submarine cables in protection zones by applying for a permit to do so. This is something not currently possible under the regime as currently in force.

Fourth, the bill will streamline the installation permit process so that:

carriers only need to apply for and obtain one type of permit to land a cable in Australia (whereas now they could require two applications, one for a permit zone and one for outside it);

the default timeframe for processing a non-protection zone permit application will be reduced from 180 days to 60 business days; and

processes under the regime that duplicate existing processes under the Environment Protection and Biodiversity Conservation Act 1999 are removed.

These amendments will reduce red and green tape—a key focus of our new government and something I will have a lot more to say about in the coming months with regards to the telecommunications sector.

Fifth, the bill will make several administrative and technical amendments to enhance the overall operation of the bill. This includes:

expanding the list of authorities the ACMA must notify when it declares, varies or revokes a protection zone to include relevant authorities involved in sea monitoring, offshore law enforcement and management activities; for example the Australian Customs and Border Protection Service;

permitting minor deviations to the routes of submarine cables;

requiring permit applicants to notify the ACMA of any changes to their application;

permitting the ACMA to publish a summary of a proposal to declare, vary or revoke a protection zone in the newspapers and the electronic Commonwealth Gazette, while ensuring the full proposal to be published on its website;

requiring the ACMA to provide reasons if it declares a protection zone that is different to the original request; and

clarifying that prohibited or restricted activities in a protection zone do not include activities associated with maintenance or repair of a submarine cable.

To support the legislative framework, the government continues to work with stakeholders both domestically and internationally to increase the resilience of submarine cables to disruption. Australia is the first government member of the International Cable Protection Committee, a peak international body that brings together submarine cable owners and operators and national governments to discuss issues associated with submarine cables.

Australia is one of only a handful of nations that has a dedicated regime for the protection of submarine cables. The bill will ensure that Australia's regime continues to be a best practice regime and the protection the regime affords to this vital infrastructure is maintained.

Submarine cables ensure our connectedness to the rest of the world. They are vital components of our telecommunications infrastructure.

The private sector has responded well to growth in the demand for international submarine cable capacity, and is well aware of the potential for future traffic growth. Further investments in cables, especially on the Perth to Singapore route, have been announced by the Nextgen Group, SubPartners and Trident. The SubPartners proposal, I notice, involves a plan to also have a connection through to Jakarta. Several cables off the east coast of Australia have also been announced. SubPartners and Hawaiki Pty Ltd have announced proposals to construct cables connecting Australia and the United States. Telstra, Vodafone NZ and Telecom NZ have recently announced a joint venture to build an additional cable between Australia and New Zealand.

But connectedness is not just about ensuring our submarine cables or satellite links or even backhaul fibre are of a high standard—it is just as much about ensuring that Australian mums and dads, school kids or small business people can take advantage of the resources and opportunities of the internet.

That is why the government is delivering a better NBN. Our NBN will deliver fast internet sooner to Australians at less cost to taxpayers and at a more affordable price for consumers.

Unlike Labor, we have committed to prioritising the NBN rollout in areas with the poorest services so that those who currently cannot connect, or have the poorest speeds, get fast broadband sooner. Under Labor many areas with poor broadband services would have been waiting for 10 or more years—and we will learn more about that when the strategic review is completed—before being connected while many with access to fast broadband received further upgrades ahead of those in need.

I note that only last week I inspected an area in Blacktown where the NBN fibre rollout is proceeding. In those streets where the fibre was being deployed there was available not only Telstra HFC cable but Optus HFC cable. So the residents of those streets are able to acquire, without the NBN, a 100-megabit service from Telstra or indeed from Optus; but no doubt for reasons of electoral rather than telecommunications priorities the NBN was being rolled out in that street.

By rolling out a more affordable NBN with greater potential for competition we will also ensure that more families will be able to afford a home internet connection. We have to recognise that the biggest barrier to accessing the internet in Australia is not actually poor technical facilities. That is a factor for many households, I grant you, but the biggest single barrier is affordability. So ensuring that a broadband network is built speedily and cost effectively will ensure that it is affordable. An overexpensed, overcapitalised National Broadband Network will only result in more Australians on low incomes being locked out of access to the digital economy. That is something we will not countenance.

The coalition's approach to broadband and to the internet is absolutely embracing the whole excitement of global connectedness, whether it is in Australian households, schools and businesses or under the oceans. I am delighted that this bill will strengthen the laws related to the submarine cables that connect us to the world, just as I am excited about our plan for a better NBN which will mean that more Australians will be able to connect to and take part in the digital economy than ever before. I commend the bill to the House.

Debate adjourned.