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Thursday, 24 March 2011
Page: 1988

Senator XENOPHON (6:24 PM) —I just want to respond to that, and if Senator Birmingham is not satisfied with that response then I am more than happy to elaborate on it. I think the appropriate thing to do is to go to the government’s amendments, which would have allowed authorised conduct for cross-subsidisation. Cross-subsidisation is important. For whoever is out there listening, this is about providing uniform pricing for an entry-level service, which is 12 megabits for download and one megabit for upload. It is important that, to achieve that, you have to have some level of cross-subsidisation, effectively, between the city and the country, and I think that is appropriate so that all Australians get that basic service at a reasonable price. But in the wording of the initial amendments that this amendment is seeking to change—again, I am not suggesting there was anything intentional about this; in fact, there was a concern about an unintended consequence—the government’s position was to say:

(a)   the price-related terms and conditions on which an NBN corporation supplies, or offers to supply, eligible services to one or more service providers or utilities are, to any extent—

that is the key word—

   attributable to cross-subsidisation; and

   (b)   either:


   (i)        the extent of that cross-subsidisa-tion is no greater than is reasonably necessary to achieve uniform national pricing of eligible services supplied by the NBN corporation to service providers and utilities; or


   (ii)       if a special access undertaking given by the NBN corporation is in operation—that cross-subsid-isa-tion is consistent with the special access undertaking;

   that cross-subsidisation is authorised for the purposes of subsection 51(1).

If there was anyone listening on ABC NewsRadio before I started speaking, I am sure they would be gone!

Senator Conroy —Come on, get a life!

Senator XENOPHON —Senator Conroy says I should get a life. This is an important piece of legislation, and it is very important that we get this right. The problem with having the words ‘to any extent attributable to cross-subsidisation’ is that they could potentially leave it open to NBN Co. to give preferential terms and conditions to one supplier and not another, which is contrary to the intent of the amendments that the coalition was broadly supportive of to get rid of price discrimination, which is key to this to ensure that there is a level playing field as much as possible.

These amendments make it clear that NBN needs to get conduct authorised not for cross-subsidisation but for uniform national pricing, and I think that is an elegant and smart way to resolve this, as Associate Professor Zumbo suggested. I think that is a very good way of dealing with it and resolving this impasse, and I think the government has agreed. It says:

If an NBN corporation engages in conduct that is reasonably necessary to achieve uniform national pricing of eligible services—

and it goes on to say that conduct can be authorised by the ACCC. ‘Reasonably necessary’ is much more precise, much narrower and much more specific than ‘to any extent attributable to cross-subsidisation’. That is, I fear, incredibly broad. The government has acknowledged that in relation to the amendment I have moved with Senator Ludlam. So this would make it clear that, if there is going to be authorised conduct, it has to be for the purpose of uniform national pricing, which implicitly, of course, involves cross-subsidisation. It is narrower, it is doing what I believe it was intended to do all along, and I think it protects those smaller carriers—other than Telstra—in order for them to be able to compete fairly. I am very happy to elaborate on that for Senator Birmingham should he wish me to do so.

Sitting suspended from 6.30 pm to 7.30 pm

Senator XENOPHON —To assist Senator Birmingham, the reason that the phrase ‘reasonably necessary’ is in the amendments I moved jointly with Senator Ludlam is that it is an objective standard requiring that the conduct needs to be undertaken so as to bring about uniform national pricing. There must be a necessary connection between the conduct and uniform national pricing.