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Thursday, 28 October 2010
Page: 2018

Mr HARTSUYKER (11:25 AM) —I welcome the opportunity to speak on the Radiocommunications Amendment Bill 2010. The bill contains a number of amendments to the management of spectrum licences and determinations on spectrum made by the Minister for Broadband, Communications and the Digital Economy. There is no question that the government understands the importance of spectrum licensing to the communications industry.

Since parliament has resumed, Labor has reintroduced their Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2010 that threatens to prevent Telstra from bidding on spectrum releases unless Telstra structurally separates its fixed line business. This decision by the government is effectively holding Telstra to ransom in an attempt to make the National Broadband Network viable by eliminating potential competitors. The coalition does not agree with holding Telstra to ransom by denying spectrum and forcing Telstra to divest its Foxtel assets. However, the government’s decision demonstrates the importance of spectrum availability and the ability of communications companies to bid for and access bands of spectrum. This importance highlights the need for government to continue reviewing how the Australian Communications and Media Authority and the parliament manage spectrum licensing.

The provisions in this bill come in the wake of the government’s announcement in March this year that spectrum licence reissue will be considered for those existing 15-year spectrum licences providing services to significant numbers of Australian consumers. The legislation contains a number of amendments to spectrum management. Firstly, the amendments aim to give the ACMA more flexibility in the time it takes to commence processing for re-issuing spectrum licences. Specifically, the bill removes the two-year restriction on ACMA regarding when it can publish a notice that a licence is to be reissued and issue a draft spectrum licence containing licence conditions. The bill also allows ACMA to issue class licences in the same radio frequency spectrum as expired or reissued licence allocations. This will allow spectrum access to new technologies that have the potential to share spectrum. However, ACMA must be satisfied that unacceptable levels of interference will not occur to the operation of radiocommunications devices operated under the spectrum.

Finally, the legislation will amend provisions relating to ministerial determinations and directions with regard to issuing spectrum. Currently, ministerial determinations are disallowable instruments. The bill will convert future determinations into legislative instruments that are not subject to disallowance, although the determinations will still be published on the Federal Register of Legislative Instruments. Removing the disallowable status of determinations is something being sought by the government because the spectrum licence reissue process is currently being renewed. During this process, a number of determinations may be necessary in order for ACMA to reissue licences. The bill’s explanatory memorandum states:

Future investment certainty for incumbent licensees is central to successful licence re-issue discussions.

The amendments within this bill are designed to provide certainty to incumbent licensees or competing companies who wish to bid for spectrum. Some in the communications industry have indicated that the change to ministerial determinations will streamline the licence reissue process. These concerns are valid, but preventing ministerial determinations from receiving parliamentary scrutiny is another example of Labor avoiding scrutiny of its communications policies.

The parliament should have the fundamental right to oversee government projects, particularly those which are spending billions of dollars in taxpayers’ funds, such as Labor’s communications policy. The National Broadband Network is the largest taxpayer funded investment in Australian history. Under the network, around four per cent of Australians will need to access the network by accessing spectrum through a wireless network providing speeds of up to 12 megabits per second. In order to provide this service over the NBN, the government will need to acquire and use a suitable range of spectrum to deliver the required speeds specified by the government. The 4G spectrum ranges are becoming available and the government will be auctioning spectrum licences in the future. NBN Co. will also need to access this spectrum to deliver its intended speeds to the section of regional Australians covered by wireless.

The coverage requirements stipulated by the government mean that specific conditions will be placed on spectrum licensees. For example, the McKinsey implementation study recommended:

Government should add carrier license conditions—

to the upcoming 4G spectrum auction—

to require network operators to implement future technology upgrades in rural/regional areas in parallel with metropolitan areas and should review options to include data rate and coverage requirements.

If the minister is to place conditions on spectrum licensees with relation to the NBN, it is important that the parliament be given the opportunity to scrutinise any ministerial direction on spectrum.

But this has become a pattern for this government. Labor is simply intent on avoiding scrutiny and transparency in its communications policies. The coalition is calling for a joint select committee and an analysis of the NBN by the Productivity Commission. It is reasonable to expect that a government committed to transparency would have no problem with additional scrutiny on such an important project. The track record of this government is that very little actually goes right. The Rudd-Gillard government has wasted over $10 billion in its first term and the NBN alone has the potential to exceed this level of waste if Labor is left without scrutiny. By establishing a gigantic monopoly that is exempt from the Trade Practices Act, the government is asking Australian taxpayers to trust it when it has done very little in its first term to earn that trust.

This is an eight-year, $43 billion project that does not have a cost-benefit analysis. The government is trying to rush it through with no scrutiny in the same way it rushed to try to implement the Home Insulation Program, the Green Loans Program and the Prime Minister’s BER scheme—and we all know what happened with those: wasted taxpayers’ money and failed schemes. Labor simply cannot be trusted with money. Australia has been forced into record levels of debt and deficit in this Labor government’s first term because Labor cannot be trusted to spend money wisely. This Labor government has wasted and mismanaged $2.4 billion through the pink batts disaster, and a further $8 billion with the school halls rip-off program. We saw a $1.2 billion blow-out in the school laptops program and another $850 million wasted on solar homes.

Spectrum management and broadband services are so important to the Australian economy, and to regional areas more generally, that oversight cannot be left in the hands of a Labor government that has mismanaged multibillion dollar programs. This is why the parliament must be able to monitor the government’s programs in communications and particularly the $43 billion that will be spent on the NBN. The National Broadband Network is the largest taxpayer funded program in Australia’s history. Taxpayers have a fundamental right to know that government programs can be completed on time and are financially viable. There is a big question mark concerning the financial viability of the NBN. Also at issue is whether other models would be better able to deliver the sorts of services proposed.

In order to improve its viability, Labor is actively removing any competitive pressures on the NBN which could provide incentives for efficiency and technological progress. Telstra and Optus will be actually contractually prevented from competing with the NBN. They will not be able to provide telephone or broadband services across their HFC pay TV cables, which are capable of delivering 100 megabits per second and pass 30 per cent of Australian premises.

NBN Co. is forcing every Australian who wants a home phone, and every business, onto its network. There will be no competition and a guaranteed level of demand once customers are forced onto the network. This business structure provides no benefits from the efficiencies and innovation that can be gained from competition. Yet the government continues to argue that the network will provide productivity gains to all Australians and that the network is an economic reform. If this is the case, then why will the government not commit to a Productivity Commission review? The only possible reason for denying such a review is that the government knows that the NBN model is not financially viable.

Even though the government is forcing customers onto the NBN and establishing a monopoly, it knows that its model is not financially viable. Unless Labor commits to transparency and stops preventing facts about the NBN Co.’s business model from being revealed, the parliament must continue to assume that there are grave doubts about the future of the NBN and its financial viability.

The government must show more transparency in its communications policy. How else can we improve services to regional areas, many of which are relying on efficient access to spectrum? An independent cost-benefit analysis is important to ensure that regional and rural areas which are lacking in broadband services can be identified. The analysis would identify the black spots and the target areas for improvement, and a joint select committee of parliament could monitor the rollout and ensure that services in those rural and regional areas were being improved.

The legislation introduced by the coalition this week will require the Productivity Commission to complete an analysis of the availability of broadband services across Australia, identifying those suburbs and regions where current service is of a lesser standard or higher price than the best services available in the capital cities. This analysis is important because the government has left many questions unanswered on its policies in relation to broadband and spectrum usage in rural and regional Australia. For example, the government has declared that wholesale prices will be the same for regional service providers and that this will ensure that Australians living in regional areas pay the same cost as those living in our cities. The Prime Minister promised in September:

Whether you’re on the broadband in Tamworth or on the broadband in CBD Sydney … the wholesale price for your broadband will be the same …

She repeated this promise in the House on Tuesday, 26 October.

It is an expensive task for NBN Co. to install 70,000 kilometres of transit backhaul to set up the network in rural and regional areas. As such, the McKinsey implementation report into the NBN recommends:

NBN Co transit backhaul services should be specified and priced separately from access services …

According to the report, around 20 per cent of premises will require access to transit backhaul to connect to the NBN. The revenue expected from providing this backhaul access is estimated to be $100 million each year. The government needs to detail how the uniform wholesale price will be implemented and whether it will include access to transit backhaul. If so, how will this impact upon the viability of the NBN as a commercial enterprise? These issues can only be clarified with more scrutiny and more transparency, which seems to go contrary to Labor’s communications policies. Unless Labor ends this pattern of avoiding scrutiny, as evidenced by this bill, the parliament can only assume that it has something to hide.

Whilst this bill attempts to improve spectrum management, the removal of binding parliamentary scrutiny on ministerial determinations demonstrates problems with Labor’s whole approach to communications. If Labor do not allow their communications policies and the NBN to be examined by an independent cost-benefit analysis, and if they do not allow the rollout to be overseen by a select parliamentary committee, the results will be disastrous for communications and Australian taxpayers.

This is why the coalition has some concerns about this bill. The government must be prevented from avoiding scrutiny. As I have outlined, the coalition is particularly concerned about the provisions which remove parliamentary scrutiny from ministerial determinations. The importance of spectrum to providing improved services to regional areas demonstrates why parliament must be able to oversee how spectrum is managed. We have to ensure that decisions on spectrum licensing will not be left to the minister for broadband and the mismanagement of this Labor government.

The bill has been referred to the Senate Standing Committee on Environment and Communications for report before the end of the year. The coalition will consider the outcomes of that committee and the impact that this bill will have on spectrum management. The coalition will pay close attention to the committee’s review of the scrutiny of ministerial determinations and will reserve the right to reconsider the bill in the Senate.