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Monday, 15 November 2010
Page: 2245


Ms ROWLAND (5:13 PM) —I am very pleased to rise and speak in support of the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2010. I will address, firstly, some of the issues that have been raised by the member for Wentworth, who has come in here again and said that we all have the same objective. We do not, because on this side our objective is not a solution that would have been great in the year 2000, not 12 megabits per second. Our objective is universal, ubiquitous broadband that will last and that will drag us into the 21st century. I will say in relation to his notion that he has a new plan that it is very interesting. Yet again, I point out that this is the coalition’s policy—it is still on their website—and, if it is such a great idea to have the separate network company that he is proposing to set up, they had 12 years to do it. They had 12 years and they specifically dodged the issue, and all of a sudden it is a great idea.

I will address some of the other issues at a later time with respect to the amendments and I look forward to reviewing those proposed amendments very closely. But one thing that made my ears prick up first of all was some ideas of reinstatement of merits review. If I recall, in 2002 the removal of merits review from a number of aspects of the negotiate-arbitrate model was specifically Howard government policy, enacted and supported by this side, because of the continual gaming of the regulatory system, locking things up in merits review in the Competition Tribunal for years. For years, things were banked-up in the Competition Tribunal. We never had lower prices. At times they should have been delivered because of this level of gaming, and yet we hear about merits review being reinstated.

On the issue of the United States and some of the other countries that the member for Wentworth has mentioned, the last country I am going to take advice from on this point is the US. Here is a country with a minimum broadband target of four megabits per second and they have a regulator that has stepped back from wholesale regulation. When the rest of the world is pursuing wholesale regulation to ensure a competitive level playing field, the FCC is stepping back. It is a basket case in terms of competition. You go to regions in the US and you find they have no competition in broadband whatsoever. They have got a USO system that went bankrupt. The last people that I am going to take advice from is them—or maybe the second last, because New Zealand is a country that only a couple of years ago finally established telco-specific competition law. Do you know what they used to do when they had disputes? They used to go to the Privy Council—the Privy Council for God’s sake! So the last people I am going to take advice from are these countries that the member for Wentworth has mentioned.

He talks about what technology is going to be here in 20 years time. Well, unless someone wants to prove me wrong, in 20 years time, nothing is going to get faster than the speed of light. Once you lay the fibre networks the only things you need to replace are the electronics on the end. You have the backbone there that will last far more than 20 years, far more than this mishmash of a bit of wi-fi, a bit of copper. It is still copper—you can keep upgrading it but it is still copper.

The member for Wentworth talks about facilities based competition. Hasn’t that worked in Australia! The market really has delivered on that point. The member for Bradfield came in here the other week and said that the market should be able to deliver competition. Note to self: it has not. If you look at any report in Australia about the state of competition, facilities based competition has been nonexistent for years. Yet he comes into this place and says that the market will deliver and that, yes, we have a digital divide. We do have a digital divide but, yet again, what did the opposition do when they were in government to address it? Enlighten me. I wish to be enlightened because I know the answer is sweet nothing. I say to members opposite: do not come in here and preach to me about affordability; do not come in here and preach to me when we have got whole areas of the Blacktown local government area that are white on maps of internet penetration—where there is simply no internet. That is what was delivered under the previous government. The way that you deal with this is through retail competition delivered only through a wholesale open-access model, delivering pricing that actually drives competition at the retail level.

As a former practitioner in this area, I was involved in countless inquiries into how the regulatory system in Australia works, countless inquiries into parts XIB and XIC of the Trade Practices Act. At the end of it, even after all the reforms that occurred since 1991, the thing that we have to deal with is that it is still an inadequate system to deal with a broadband future. ICT, being the driver of total factor productivity, needs fundamental reform of the telco sector in order to work. This is an historic piece of legislation that addresses some of the fundamental problems that have plagued the telco sector since liberalisation of the industry commenced in 1991. There are many parts to this bill, and I will provide some context, but in the time I have I will concentrate on some specific aspects.

In 2001, the Productivity Commission released its report into telco-specific competition law. It investigated the need to establish a regulatory regime that would be relevant and robust for the future telecommunications environment and that would enhance overall community welfare. This was a two-year, very wide-ranging process and, as members would be aware, this led to the implementation of the Telecommunications Competition Bill 2002. Although the Productivity Commission recommendations and the subsequent legislative changes were significant, one cannot help but lament that this was a lost opportunity to implement reforms that would have led to the structural separation of Telstra’s wholesale and retail sectors. At the time, I did indeed lament that this was a lost opportunity.

As I noted in 2004 when I discussed ICT policy in Australia—A failure to converge, a failure to recognise convergence or a failure to care?—following on the conference of the World Summit on the Information Society, which was held in Geneva in late 2003, I questioned whether Australia actually had an ICT policy that was comparable with the WSIS outcomes. It led me to the conclusion that Australia did not have an ICT strategy at all at a federal level. I concluded by arguing that Australia’s failure to adopt a coherent ICT strategy resulted in ICT policy settings that were inappropriate and unsustainable. I was proved right that these were wasted years. These were years when we should have been laying the policy ground work for a high-speed broadband network to actually make sure that Australia did not fall behind other countries in our region.

I mentioned that the opposition, when in government, specifically dodged the issue of structural separation. Do not take it from me, take it from the Productivity Commission’s terms of reference. The terms of reference specified that, in line with government policy, the inquiry would not encompass the structural separation of Telstra. So the Howard government failed to enact, failed to even look at, a much needed microeconomic reform that would have laid the foundation for the rollout of a national broadband network. That is just one example of the total disregard for broadband by the government of that time. They did not believe in it then, they do not believe it now and their failure to act on regulatory reform and broadband policy has hurt Australia’s global performance. Do not take it from me, take it from the facts. The member for Wentworth talks about the OECD. We are ranked 17th out of 31 OECD countries in terms of fixed broadband uptake; we are ranked 50th for broadband speeds. We do not even have one city in all of Australia in the top 100 in the world for broadband speeds. Unless we build the NBN, there is absolutely no way we will be able to increase our international competitiveness. We will just keep falling behind. Only recently a broadband quality survey saw Australia fall from 18th to 21st in the world broadband rankings.

As I said, what we really need to do is to understand what the NBN is: a fibre network which, once laid, will enable smart electronics at each end to use those pipes in a way that we cannot predict. We have not even imagined yet what those things will be able to do, but the most important thing is that the backbone will be there so that when these applications are invented you can use the pipes for whatever purpose you seek. When we talk about being technically agnostic, I agree we should be talking about being technically agnostic—at the ends. Who am I to argue with the physics of the speed of light, of an electromagnetic pulse going down this conduit?

What frustrates me, and what I know frustrates people all over my electorate—and I know so many people who have been following this debate—is how Australia is constantly not held up as one of the countries that can boast about what it has done in broadband. I refer to a report in the Sydney Morning Herald last Wednesday, 10 November, which talked about Korea. Korea, of course, has been in the news, and I think this is an excellent article. As it says:

We can learn a lot about broadband networks from this Asian powerhouse …

…           …           …

While Australia debates the merits of the broadband network, South Korea resolved to provide widespread high-speed internet more than a decade ago and now tops the world in broadband access. Just like education or high-speed rail, broadband is viewed as another type of infrastructure that gives the economy an edge.

It gives the economy an edge. It is not good enough for a modern, innovative and competitive economy that Australia is doing so badly.

Essentially, we got liberalisation right in the late eighties and early nineties. We had an independent regulator. We set up the current policy settings to be able to have different pieces of legislation to enable competition, to let in new players and to ensure that in the end we had an open carrier model here in Australia. But one thing we did not get right was that, from the mid-nineties onwards, it was as though convergence never happened. It is as though we did not end up thinking we needed an ICT policy. This progress that we see in our region is not going to happen in Australia of its own accord. We need to execute fundamental reform, and that is why this legislation is so important. It is overdue. It has been discussed for nearly two decades, but this is reform that will transfer Australia from the deficiencies of the 20th century regulatory structure to a regulatory structure for the 21st century. It will create much-needed infrastructure competition in the telco sector—infrastructure competition that simply has not happened and will not happen. It is reform that ensures we do not commit the mistakes of the past when it comes to the regulation of telecommunications in Australia.

This bill will be part of shaping the regulatory regime that will be applied to the NBN. By implementing structural separation of Telstra, this legislation deals with the greatest outstanding reform of our telco sector whilst providing the basis for the NBN to operate as an open access model. The open access model is essential for the delivery of faster, more affordable broadband services. I do not just speak as a former practitioner in this area. I also speak as an effective representative of my residents, and I would like to mention Mr Glen Meeves, who lives in Kings Park in my electorate of Greenway. He is well aware of the benefits of the NBN. In a letter recently published in the Sydney Morning Herald, he noted:

… lightning-fast broadband … is also a matter of social justice and equity. We cannot build the finest educational and medical facilities in every population centre, but world’s best practice in internet makes the physical absence irrelevant.

I totally agree with that.

I would also like to talk about the inability of the previous government to keep up with what has been needed for so long by new residents in greenfields estates. I have recently received this email from a resident who has moved into a new development in the north of my electorate called The Ponds. She wrote:

We are new residents in the new development of The Ponds and have been told by Telstra, Optus, iiNet and TPG that we cannot get broadband internet at all … It also baffles me that my house has been built next to a house in Kellyville Ridge which has been there for 5 years now, yet I cannot get broadband internet even though I am literally next door!

It is a disgrace that, as with so many forms of critical infrastructure that have bypassed greenfield developments in the past, policymakers in Australia have to date failed to undertake proper planning for the future communications needs of residents in our growth suburbs. What did those opposite do to address this when in government? What forward planning did they do? Again, it was sweet nothing. There was no ICT policy. It was 12 years in the digital backwaters. The convergence debate came and went and we just watched it go by.

I also note that the reforms in this bill are supported by Telstra. I refer the House to a media release issued by Telstra’s CEO, David Thodey, in which he states:

… we support the passage of the Bill …

We believe the interests of Telstra shareholders would be best served by the Bill being passed this year so that a definitive agreement on our involvement in the NBN can be reached quickly.

I am happy to take that on board as well. It is certainty that the sector needs. Indeed, this is the level of certainty that the sector needs in order to ensure that we have broadband delivered in a ubiquitous manner on a level playing field.

In the time allotted to me, I cannot go into all the details of many of the other very important elements of this bill such as reforms to the USO, the CSG or the infringement penalty regime. Certainly they are very important. I have been in touch with consumer groups on many occasions on these points. They should be very well received and I commend the bill to the House.