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Wednesday, 9 February 2005
Page: 134

Mr STEPHEN SMITH (6:55 PM) —I am very pleased tonight to join the debate on the Australian Communications and Media Authority Bill 2004 and related bills and to respond on behalf of the opposition. I do so in my representative capacity, representing in this chamber the shadow minister for communications, Senator Conroy, who of course is in the other place. Labor supports this legislation as a necessary first step in addressing the increasing regulatory problems posed by the emergence of convergent technologies. It is a step towards addressing this issue—a much delayed one at that, but in the final analysis it is a step in the right direction.

Convergence is the process whereby digitisation and other technological innovations blur the boundaries between the delivery mechanisms available for services. As a result of convergence, consumers now have a multitude of ways in which to access telecommunications and media services. Today a person wanting to speak to a colleague or friend can choose whether to dial from a fixed line telephone, pick up a mobile phone or have the conversation over the internet through voiceover IP. A person wanting to read the morning news could pick up a newspaper, turn on a personal computer to log onto the net or get up to date by using their mobile phone. The number and variety of such permutations on the delivery of traditional services will only continue to grow with the high pace of technological change inherent in these industries.

As the march of technological progress continues and the commercial markets for convergent technologies evolve, regulatory distinctions based on the methods by which services are provided will become increasingly antiquated and inefficient. As such, the current regulatory approach in which legislation distinguishes between services based on the methods by which they are delivered—and through which regulators operate along these increasingly irrelevant divides—is in need of reform. To delay, or to only go halfway in these reforms, will inevitably result in the inefficient distortion of the development of markets for services provided using convergent technologies.

Regulatory barriers may deter businesses from making some commercially viable services available to consumers. Disparities in the regulatory treatment of services may also result in businesses investing in technologies merely because they enjoy a regulatory advantage in the marketplace instead of being superior products or services. These are not good outcomes for the Australian telecommunications and media industries, and they are not good outcomes for the Australian economy or the Australian people. These risks are further exacerbated by the importance of telecommunications and media markets in the modern Australian economy and the rapid pace of change exhibited in these industries.

Unfortunately, the pace of reform pursued by the government in this area has been light years behind the pace of technological innovation. This legislation is the government's first legislative attempt to deal with these challenges. Not one, but two discussion papers on these issues have preceded its introduction: the first, Options for structural reform in spectrum management, in2002 and the second, New institutional arrangements for the Australian Communications Authority and the Australian Broadcasting Authority, in 2003. It is legitimate to ask why there has been such a delay in implementing a sorely needed and relatively straightforward reform.

Governments of other countries, governments which are interested in and committed to allowing their countries' media and telecommunications industries to develop free from inappropriate government interference, addressed these challenges half a decade ago. For example, the Singapore government, active in its desire to promote the emergence of strong, local, telecommunications and media industries, undertook a merger of its equivalent regulators in 1999. The United Kingdom commenced a similar process in 1999 and ultimately merged its equivalent regulators in 2002. It is disappointing that it has taken half a decade for the Howard government to even follow the lead set by others.

As a result of the absence of leadership from the government on this issue, the existing regulators—the Australian Communications Authority and the Australian Broadcasting Authority—have responded to the emergence of convergent technologies in a necessarily ad hoc and reactionary way. This has led to inefficient overlaps in regulation and regulatory responsibility in some areas and gaps in the regulation of others. In its submission to the Senate committee considering this legislation, the Australian Consumers Association stated that the current regime had produced `some weird interim regulatory responses'. The Competitive Carriers Coalition stated:

The ACA has increasingly been seen as a follower rather than a leader in terms of regulatory guidance and oversight. This has caused significant duplication and regulatory burden on the industry as a whole.

The Competitive Carriers Coalition went on to describe the regulators' responses to the emergence of a recent convergent technology, voiceover IP telephony services, as being `poorly coordinated' and requiring industry participants to respond to separate inquiries from the ACA, the Department of Communications, Information Technology and the Arts, the Australian Competition and Consumer Commission and the Australian Communications Industry Forum. There has also been significant regulatory duplication in the regulation of mobile content, and unjustified inconsistencies between regulatory approaches to content provided over different mediums—for example, in the age verification requirements for adult content on mobile services compared with those of internet services.

However, after years of this ad hoc approach to convergence, the growing popularity of convergent technologies such as 3G mobile phones and voiceover IP have finally forced the government's hand. Now that these technologies are becoming commonplace, the government could no longer sit on its hands. And so we now have the Australian Communications and Media Authority Bill.

The bill is the government's first attempt to deal with these issues. The bill provides for an administrative merger of two existing regulators—the Australian Broadcasting Authority, ABA, and the Australian Communications Authority, ACA—to establish a unified communications regulator: the Australian Communications and Media Authority, or ACMA. As an issue of significant importance to the communications sector, Labor has referred this bill to the Senate Environment, Communications, Information Technology and the Arts Legislation Committee for inquiry so that the adequacy of the legislation can be assessed in detail.

Having said that, I should add that the primary inadequacy of the bill stems from the government's decision that this merger should be of a purely administrative nature. In accordance with this decision, the bill makes only nominal changes to the existing regulatory frameworks for telecommunications and media. The problem with this is that, while merging regulators will result in a unified approach to the administration of existing legislation, in many cases it is the substance of the underlying legislation itself that is causing inefficiency and regulatory uncertainty. In order to effectively deal with convergence, we should be moving towards a situation in which, all things being equal, regulation is technology neutral. This will require legislative, not simply administrative, reform. While the majority of submissions in response to each of the discussion papers that have been issued by the government have called for a comprehensive review of the underlying regulatory regime in this way, the government has taken the easy option and dodged the hard work necessary to implement the reforms.

In addition to the fundamentally inadequate philosophy of the bill, Labor also have a number of concerns about how the merger of the Australian Communications and Media Authority will occur. Firstly, we are concerned that allowing the authority to organise itself into divisions and to retain the current bureau offices of the ACA and the ABA will mean that the new authority will be a merged regulator in name only and will in fact continue to operate as two distinct regulators divided in accordance with the delineations of the legacy regulators. We will be exploring whether the organisational and geographic division of the new authority permitted under the bill will undermine the objectives of the merger, and we will pursue this through the Senate inquiry.

Another of Labor's concerns is that the explanatory memorandum and comments from the former Minister for Communications, Information Technology and the Arts, Senator Alston, indicate that the merger will be revenue neutral. This represents a significant organisational failure on the part of the government. We find it difficult to understand how the government could not manage any cost savings from a merger that would presumably integrate finance, human resources, and IT support functions of the ABA and the ACA. Telecommunications carriers who have made submissions to the Senate inquiry have rightly pointed out that this is a disappointing result for carriers, as under the current regulatory regime carriers bear the cost of the new authority's telecommunications functions through carrier licence fees. In light of the government's obligation to ensure that taxpayers' money is spent in the most efficient manner, the failure to achieve cost savings from this merger is a poor outcome.

Finally, I note that the Minister for Communications, Information Technology and the Arts has stated on a number of occasions that the government intends to engage in a review of the effectiveness of the telecommunications regulatory regime in conjunction with the performance of a scoping study for the full sale of Telstra. While it may suit the government's interests in maximising the share price of Telstra prior to sale to hold a private inquiry into the efficiency of the regulatory regime, a far better outcome could be achieved if this review were held in public and enabled interested parties to make submissions on the record on this matter. The government has missed a perfect opportunity to hold such a review as part of the consultation process for this bill.

The government is creating a new regulator for the communications sector six months before it intends to fully privatise Telstra. Why doesn't the government investigate whether the powers it is providing to the new regulator are appropriate to enable it to achieve its aims in the context of a fully privatised Telstra? Does the introduction of this bill at this stage mean that the government is satisfied that the new authority's powers are sufficient to regulate a fully privatised Telstra, or will we have to go through yet another review in order to ensure that the new authority is able to effectively deal in a regulatory sense with a fully privatised Telstra? The failure of the government to address these issues as part of the introduction of this bill again demonstrates the short-sightedness of the government in this area. Having said that, I also say that Labor supports the package of legislation. The package of legislation represents a modest improvement on the status quo, and I commend the package of legislative measures to the House.

(Quorum formed)