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Wednesday, 21 March 2012
Page: 3835

Mr FLETCHER (Bradfield) (19:52): Five years ago precisely, on 21 March 2007, the then Labor opposition announced its broadband policy. Five years later, Australia's broadband penetration ranking has dropped and Labor's policy has made zero difference to the broadband service received by 99.9 per cent of Australians. According to then opposition communications spokesman Stephen Conroy back in 2007, the coalition had done a terrible job. He said that the Howard government had 'comprehensively bungled its responsibilities' to facilitate the rollout of a fibre-to-the-node network. Labor apparently had a much better plan and Stephen Conroy was there to announce it, together with two people who have now disappeared from Labor's frontbench—Kevin Rudd and Lindsay Tanner.

The plan was to build a fixed broadband network to 98 per cent of the population in five years. Five years on, what has been achieved by Minister Conroy? He has certainly splashed a lot of taxpayers' money up against the wall. The government owned National Broadband Network Company has been a financial black hole. Its latest annual report says it has received $1.36 billion in equity, funded entirely by taxpayers, and racked up losses exceeding $400 million. Yet according to the company's most recent disclosure in January this year, a grand total of 2,315 homes are receiving a service on its fixed broadband network—less than one tenth of one per cent of the 10 million premises the network is supposed to serve. So there is a stark contrast between what Senator Conroy promised and what he has delivered.

He promised the new network would be substantially private sector funded, with public funding capped at $4.7 billion. He is now building a 100 per cent taxpayer funded and government owned network, the total cost of which looks likely to balloon to well in excess of $50 billion. He promised a competitive selection process, but hopelessly mismanaged it before abandoning it in early 2009. He promised a fixed network to 98 per cent of the population, but NBN is now rolling out wireless and satellite in rural and remote areas, with only a smaller percentage to get a fixed connection. And he told us that his network would end Australia's 'broadband backwater' status. In October 2006, for example, Senator Conroy in a media release fulminated that:

The latest OECD broadband statistics show Australia's ranking in the use of broadband remains mired at 17th out of 30 surveyed countries.

Yet in June 2011, in the most recently published version of the OECD survey, where does Australia now rank in fixed broadband penetration? Twenty-first—on the very metric which Stephen Conroy said was the one against which his fixed broadband plan should be judged, Australia has dropped in the broadband penetration ranking. At the same time there have been very nasty anticompetitive side effects as the minister has tried to shore up NBN Co.'s hopeless business case. He has legislated to ban any new entrant from building a new high-speed broadband network to serve the consumer and small business market unless the operator adopts NBN Co.'s wholesale-only business model. This is a restriction on competitive entry the likes of which has not existed since telecommunications was deregulated in Australia in 1997. He has also legislated to sanction anticompetitive deals between NBN Co. and Telstra on the one hand, under with Telstra will receive $11 billion, and NBN Co. and Optus on the other, under which Optus will receive $880 million in exchange for those two companies agreeing to cease serving consumers and small businesses over their existing fixed line broadband networks, many of which, in the case of the hybrid fibre coax networks, are already capable, either today or with a modest upgrade, of delivering speeds of 100 megabits per second. These deals would be illegal under Australian competition law as agreements between competitors to reduce competition were they not specifically sanctioned by the legislation introduced by Minister Conroy.

In 2007, Labor's broadband policy document promised that the party would 'turn around Australia's broadband performance and put Australia back into the fast lane of the information superhighway'. Labor has fallen very far short of meeting this lofty ambition. For all the money it has spent, fixed broadband development and take-up has stalled and the private sector has largely halted fixed broadband investment. It is hard to avoid any conclusion but the obvious: Stephen Conroy has delivered five wasted years in Australian broadband policy.