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Wednesday, 24 August 2011
Page: 5315

Senator BIRMINGHAM (South Australia) (11:10): Thank you, Mr Acting Deputy President Furner. I think this is the first time I have spoken while you have been in the chair and I congratulate you on your appointment to this position. I rise to speak on the Telecommunications Legislation Amendment (Fibre Deployment) Bill 2011. The coalition is strongly committed to providing Australians with fast and reliable broadband services. However, we believe that the provision of these services should be at the lowest possible cost and certainly should not come via the wasteful destruction of competing platforms. Those opposite, by contrast, seek to construct a $50 billion monopoly provider which locks out competition and locks Australia into a new National Broadband Network, with little regard for emerging and future technologies. It is a grand, shiny promise, but under the facade it is, quite frankly, a disaster that we cannot afford and a burden for the future of Australia.

As we all know, the NBN is a financial black hole funded by debt with completely implausible underpinnings, which will never live up to the scant financial details that have been published by this government. That is little wonder; this is one of the most secretive projects this country has seen. I suspect once, or if, Australians ever get to know the whole financial truth about the NBN they will be horrified. Labor promised of course, before the 2007 election, to 'let the sun shine in' on government. The shutters have been well and truly locked shut on this one. The sun does not shine in on the NBN, which is being provided with all means and all manner of ways to keep its operations and expenses as secret as possible. The NBN seems to be beset by problems, but the government take the three monkeys approach to this one: they see no evil, they hear no evil and they speak no evil about the NBN. Instead, day after day in question time Senator Conroy comes in here and reads an email he has had from an occasional constituent telling us how wonderful they think the opportunity for faster broadband may be. That is not the debate; the debate is whether this the best way to provide faster broadband.

As Labor look the other way—and I guess they do have so many debacles on their hands—they just do not admit that there could be alternative or better approaches to this back-of-the-envelope NBN cooked up by Senator Conroy and the former Prime Minister Mr Rudd. But this is an issue that certainly will not go away, because the problems will become more and more obvious as the rollout continues. Senator Conroy disagrees. He argues that this is the best way to do it. But of course in having the courage of his convictions he has failed to subject the NBN to a fair, thorough and independent cost-benefit analysis—to test it and to see whether indeed this is the best way, the most efficient and cost-effective way, to deliver faster broadband services to Australians. He will not do that because he knows that it just does not stack up. Instead, he tries to deflect all attention by continually attacking the opposition.

Senator Conroy, like the opposition, knows Australians want affordable, fast and reliable broadband services. That is something I think everybody in this place is in agreement with. As a coalition we are committed to delivering that, but Labor seem to have forgotten the affordable component. Fast and reliable is one thing; affordable for consumers is another. What we are going to see, it seems, under this NBN are dramati­cally escalating price rises for consumers when it comes to very fast connections. Yes the government may be trying to put caps in place for the base level connection, but the base level connection is not the premise on which they have sold this policy. It is the very fast connections with which they have sold this policy, and yet we are seeing those very fast connections subject to significant price rises. Just this week it has been exposed that NBN Co. want to have price rises of five per cent above inflation for those peak speeds. They have said they need this feasibility because they are subject to 'considerable demand uncertainty'. They are NBN Co.'s own words, and they go on:

Demand uncertainty remains in relation to issues such as the price payable by end-users for broadband services over time ...

Certainly Labor has forgotten the issue of affordability when it comes to consumers. Of course they have also forgotten the issue of affordability when it comes to taxpayers. Taxpayers face a cost of some $50 billion in the end, either through government genera­ted debt or NBN Co. generated debt—and NBN Co. is a 100 per cent government-owned entity so, whichever way you look at it, 100 per cent of the debt that NBN Co. will raise will be attributable to the government. We have a government that out of this $50 billion is going to pay Telstra and Optus to shut down their existing fibre networks. Think about the logic of that—existing networks will be paid to be shut down so we can build something else. This country will be paying for something that already exists so that we can build right over the top of it. Frankly, when you hear logic like that, it is little wonder so many Australians have lost confidence in this government.

Competition at the platform level is equally important to ensure consumers see the low prices that competition usually brings. As I and others have mentioned many times before, consumers are already voting increasingly with their feet, moving to wireless broadband services. With the rollout of 4G services in major cities that is planned and underway, I expect this trend to continue and it will continue to undermine the bizarre take-up assumptions on which the NBN was built and which they now seem to concede are subject to such uncertainty.

This bill specifically deals with the rollout of fibre into new housing developments. We all know that the rollout of fibre is incredibly expensive, and the question in this bill is why would the government seek to again destroy competition in the broadband sector, this time by locking competitors to the NBN Co. out of the greenfield installation market. You would have thought the government should be seeking the most efficient and cost-effective ways to roll out its monolithic NBN. But, considering the regard it holds taxpayers in, it is no surprise that it seems to be happy to simply waste billions of dollars.

The government has previously said that the greenfield market should be competitive. Indeed, it has said it is competitive—the Department of Broadband, Communications and the Digital Economy is on the record as stating in regard to the greenfield market:

The installation of FTTP is taking place in a competitive context, with developers typically contracting out the provision of infrastructure and services in developments.

Even Senator Conroy himself said just last December:

Providers can compete to provide infrastructure in new developments—for example, by offering more tailored solutions to developers or more expeditious delivery.

Yet the government seems to want to change all of the ground rules and tear up the competition that exists in this marketplace. The government's figures suggest that by 2013 some 250,000 houses on greenfield sites will be built, growing to 1.9 million by 2020. They will have to be connected to the NBN under this government's plan. Many companies currently offer fibre deployment services in greenfield developments. So, we have a situation where we have demand—there are greenfield developments constantly underway and they are forecast for the future; and we have supply—we have companies already providing and building broadband services on these greenfield sites. We have suppliers eager and able to compete to fulfil the demand. But, as is often the case, this government, which acknowledges that this competitive market exists, is saying one thing—that it wants to keep a competitive market—but when it comes to how this legislation will operate it is doing quite the opposite. It is just another example of our not being able to trust this government's word.

This bill provides developers with a choice but, when you look at the operation of it, it is really a Clayton's choice. Developers, in establishing greenfield housing developments, can either fund the fibre deployment in those housing developments through a private provider or they can wait for the NBN Co., as the provider of last resort, to do it for free. With the NBN Co. as a provider of last resort, which will see it pay for key services to be delivered—a cost traditionally borne by the developers—many of those developers will seek to offload those costs on to taxpayers and the NBN Co. Far from being a provider of last resort, because the NBN Co. is offering the cheapest deal to developers, it will of course become the first choice for many of these greenfield sites and developers. Make no mistake, the result of this will be the decimation of the existing greenfield fibre deployment sector. This is Labor's bizarre version of competition—you compete but we the government will offer it for free. We all know what the outcome of that will be. Perhaps Senator Conroy would have realised this anti-competitive bill would kill Australian businesses if he had actually listened to the stakeholder reference group. Senator Conroy promised to listen to stakeholders while developing this policy, but if he did listen he certainly paid no attention to what they said.

On behalf of the coalition I will be moving amendments to address some of the very serious problems, and particularly the anti-competitive problems, in this bill. I will be moving to ensure that industry can establish specifications for the laying of fibre and not simply have to meet NBN Co. specifications, and that NBN Co. provide pits, pipes and fibre on a competitive basis. This will enable private providers to compete and to continue to offer their services to developers, knowing there is an industry specification that suits all in the industry that they need to meet and, equally, that NBN Co. will not have an unfair competitive advantage over them. This is a sensible amendment which will ensure that Senator Conroy's nice words about competition are matched in this legislation and with NBN Co. in reality.

The amendment we are pursuing will speed up the provision of fibre, with developers not being forced to wait for NBN Co. to do it for free when they finally get around to it. It will allow developers to get on with the job of providing fibre-ready premises and developments to purchasers. You would think this is something the government would want—to get the job done as quickly as possible in as many develop­ments as possible, not to provide the potential backlog that comes with waiting for the monopoly service provider to be the sole provider of last resort service.

While the government should support this, the industry and stakeholders actually do. The Urban Development Institute of Australia said, in relation to the coalition's alternative approach, that this is a 'pragmatic suggestion'. It said:

Whatever brings around greater certainty for purchasers of those properties that all the utilities are actually there and are available and can be handed over to them and the greater that certainty is, the better it will be.

In relation to the coalition's alternative approach, OptiComm stated:

… there would be some advantages in what you are saying to what is currently proposed. That allows diversity in the greenfield.

Transact, one of the major providers of such services already operating right here in the ACT, said that they would support that type of amendment to the legislation. We want private sector greenfield cable operators to be able to stay in business and continue to provide services to their customers. That is why I will also be moving an amendment to enable these operators to stay in business by exempting them from the government's anticompetitive, so-called cherry-picking rules.

We would like to see fibre deployments in new developments not owned or operated by NBN Co. or Telstra but instead owned and operated by the same entity who built them, and an entity able to have and provide retail services by such a competitive greenfield operator to people living in that development. This will provide developers with maximum flexibility and will maintain their important existing business models. This, of course, is not anticompetitive. It will not shut other retail service providers. Such competitive greenfield operators would continue to be subject to the other access requirements which apply under the telecommunication specific provisions of the Competition and Consumer Act. Other retail service providers wishing to serve such residents in a development would have the legal right to access the network of these greenfield operators and to obtain access over their network. It is simply a sensible change to make sure that these operators will not have their business model, which involves being able to build and provide services in these greenfield sites, shut down by virtue of being forced to comply with requirements that the NBN Co. is having to comply with—a much larger, much bigger national entity that is being established in a vastly different way from these smaller and often localised entities. This approach will certainly improve efficiency and flexibility, and I hope that both of these amendments will be supported by all sides of this chamber.

The coalition believe that it is quite sensible and quite logical that this legislation seeks, in greenfield services, to provide for the rollout of fibre. We understand that. Whilst it may be marginally more expensive than a copper rollout, in the long term we think that in greenfield sites it does make sense. But we think it is vitally important that you preserve the competition that can exist in these greenfield sites. It is absolutely critical that private companies that have been rolling out, are rolling out and would like to continue to rollout their own fibre services in these greenfield sites are able to do so and are not effectively shut out of doing so because of an anticompetitive regime that makes its cheaper and easier for developers to simply opt for NBN Co. to do the work instead. It is a fundamental point of difference. Whilst the government are saying they are standing up for competition in this regard, they are far from standing up for competition in this regard. While saying that they do not want NBN Co. to have a monopoly in greenfield developments, they are in effect setting up a situation where, by default, NBN Co. will end up with a monopoly in greenfield developments. It is just a constant case of this government saying one thing and in effect doing another and, in doing so, having serious adverse consequences that Australia will pay for for many years to come.

The real risk with NBN Co., and the NBN as it is proposed, is that it will limit innovation, limit diversity and limit competition in the provision of broadband services around Australia. The very model has the potential to limit that, but this legislation, in particular, dealing as it does very specifically with greenfield sites, with new developments, quite transparently has the potential to limit innovation, competition and best practised most affordable standards in those developments. I hope that senators, especially senators on the crossbenches, will see the sense in preserving competition in this sector. While the NBN has a solid anticompetitive track record, hopefully this is one area where the Senate and the parliament can stop it from killing off competition. The amendments the coalition will move will deliver flexibility and efficiency for developers, speed up the rollout and take some of the burden of rolling out fibre in new developments off NBN Co. so that they can concentrate on other areas and so that householders and those who purchase land get the benefits of having fibre-ready properties sooner and, hopefully, cheaper as well. NBN Co. can perhaps get on with making this dog of a plan that it has at least work as best it possibly can and, hopefully, at the lowest cost to both consumers and taxpayers.