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Wednesday, 9 February 2011
Page: 248


Ms ROWLAND (5:33 PM) —We start the new parliamentary year where we left off. Over the break some things did not change. The first thing that did not change is Australia’s world ranking when it comes to broadband. We are now trailing countries like Estonia, Latvia, the Czech Republic and Slovakia. We are edging closer to copper surely hitting its use-by date. Another thing has not changed. There has been no progress from those opposite on having a policy. I thought maybe over the break they would have developed a policy. But no, it was so good the first time around that it is still on their website. It was such a hot seller the first time around, they have still got it.

The member for Wentworth has foreshadowed some amendments. I look forward to discussing those in detail. We have again heard his constant catchcry that the NBN is some anticompetitive monopoly. He talked about existing networks being able to provide at less cost what the NBN can provide. I want to correct him on one technology point. He talked about cable. Cable is like spectrum; it is a shared resource and its capacity is not anywhere near that of fibre.

Why is it necessary for the government to take this course? Because the market has failed. Infrastructure based competition in Australia has failed. NBN Co. will be subject to the most rigorous, bespoke regulatory tools that are contained in the National Broadband Network Companies Bill 2010 and cognate bills and the legislation we passed last year. It would not be complete without going back to the cost-benefit analysis argument. I am actually very happy to take advice on this point from Vint Cerf, one of the fathers of the internet. He said recently that he is jealous of what we are developing here in Australia and he acknowledges that it is impossible to quantify all the nonprice benefits that the NBN will offer, because of all the future benefits that we do not even know about yet.

I refer the member for Wentworth to existing studies that have in fact attempted to quantify, as best as possible, the benefits. These are public documents, and I urge those opposite to read them. In health alone the benefits will be between $2 billion and $4 billion per year. The NBN will pay for itself. That is per year in health alone.

We had the member for Wentworth talk about the lack of oversight of the NBN rollout. He has a short memory. He forgets that late last year one of the last things we did was establish a joint committee on the NBN, which will report on a six-monthly basis. Its membership will mirror that of the Joint Committee of Public Accounts and Audit. So to suggest there is no oversight of the NBN rollout process is a complete furphy.

I ask those here: why is it necessary for Australia to make such a substantial investment in broadband? Why are we going down this path? Because we had 12 years and close to 20 failed plans from those opposite, who still did not come up with a new plan over the break. That is why we are in this territory.

The member for Wentworth also mentioned people criticising the NBN. Yet again, I prefer to rely on the father of the internet, Vint Cerf, who called the NBN ‘a stunning investment’. He said:

I consider this to be a stunning investment in infrastructure that in my view will have very long-term benefit. Infrastructure is all about enabling things and I see Australia is trying to enable innovation.

For one of the world’s leading minds in technological innovation not only to call the NBN ‘stunning’ but to envy us for what we are doing is all the evidence I need that this project is worth backing.

I will address some of the other issues that the member for Wentworth raised regarding the amendments he foreshadowed. I find it absolutely incredible for him to walk in here and lecture us about freedom of information. The previous, Liberal government was in fact responsible for ensuring that a number of entities which were established were exempt from FOI requests. They include Medibank Private and the Australian Rail Track Corporation. These were both exempt from the authority of FOI. So to complain that NBN Co. lacks oversight and accountability also shows that the member opposite does not even understand the workings of NBN Co. as a company. It is plain to me that he is not aware of the provisions contained in the Commonwealth Authorities and Companies Act 1997, to which NBN Co. is subject.

As a Commonwealth company, under this act NBN Co. is required to submit financial reports, directors’ reports and auditors’ reports on all its operations. The Minister for Finance and Deregulation has the power to require interim reports. These reports must be tabled. Its directors are required to develop a corporate plan at least once a year. That corporate plan, for the information of those present, is now on its website. It is required to present this to the relevant minister. The simple fact of the matter is that the existing statutory structure allows for full scrutiny and accountability on the part of NBN Co. and its activities. This is not about accountability, just as the member for Wentworth’s pleadings about financial accountability were not about financial accountability at all. They were all about delaying.

I will also say, on the point of FOI, that it is not as though Mr Quigley, the CEO of NBN Co., has not been prepared to attend every Senate estimates hearing that has been relevant to NBN Co.’s operation. In reality, even if NBN Co. were not subject to FOI rules, it is certainly possible to use FOI rules for all the government entities dealing with it. It is entirely reasonable for NBN Co. to seek to protect from discovery certain information which is commercial-in-confidence. The other thing we need to bear in mind is that just because something is subject to FOI does not itself grant access to the documents being sought. I again make the point that there are mechanisms other than FOI to which NBN Co. is subject.

I will also address the issue of regulatory creep which was raised. What I will say is this: the notion that NBN Co. will seek to move beyond its status as a layer 2 wholesale-only service provider is something that I consider to be absolutely absurd. The amendments to the trade practices legislation in December and the government’s own statement of expectations make it clear that there is no expectation of anything other than NBN Co. being a wholesale provider of layer 2 ethernet. In fact, this is the very design that NBN Co. has been working to. It has not gone and designed a network whose architecture is based on anything other than layer 2 ethernet. So why on earth it would possibly want to go off and start doing something different from what it has already designed absolutely beggars belief. From the outset, over a year ago, I recall NBN Co.’s public presentations making it abundantly obvious that it wants to occupy the lowest tier in the stack, the lowest tier possible. That is reaffirmed by the statement of expectations.

I also want to say something about privatisation. It is interesting that the member for Wentworth thinks that the provisions in the bill regarding privatisation have been designed to make it impossible to sell. I find it absolutely laughable that those opposite come in here wanting to make it easier to privatise NBN Co. and remove the very sensible protections that have been devised for its privatisation. The people opposite are the same people who monumentally botched the sale of T2 and T3 in those massive fire sales for mum and dad investors, who all got burnt because it was simply an exercise in maximising revenue. The government will put in place a managed process, will act in the national interest and will not leave the stakeholders, the citizens of Australia, with a bungled sale. That is why we will ensure that parliamentary scrutiny is applied to the sale of the NBN.

There are provisions in the bill to ensure that the government plays an important role in the sale when it does sell down its interests. The important issue is that we step away from NBN Co. when the environment is right. The steps in this assessment include reference to the Productivity Commission. There is a parliamentary committee recommendation, and the minister will determine whether it is appropriate to sell down. Importantly, the finance minister will need to declare that favourable market conditions exist for a sale. This is critical. There is the ability to determine what is an unacceptable ownership or control situation. It is an important constraint on the ownership of NBN Co.

Why are these provisions here? They are here because they reflect NBN Co. as a national piece of utility infrastructure. No prudent legislature would allow its biggest piece of national utility infrastructure to be privatised without considering the potential future structure of the sector. That is what we are doing in these provisions. We are thinking about the role of government early in the process and the role of the private sector later in the process. It is a well thought out process for a transaction, not a quick flog. These are necessary measures to protect us from what the previous, coalition government did to Telstra, which had one of the most unproductive outcomes. These provisions will ensure that the sell-down process is managed and protected and does not just become a race to sell.

I will also address the issue of the so-called cherry-picking provisions that the member for Wentworth seeks to amend. Firstly, I note his concern that the provisions will put the brakes on private investment and that this undermines competition. My first response is that there is sweet little to put the brakes on in many parts of Australia, because of the failure of infrastructure based broadband competition, which necessitated the NBN being instigated in the first place.

It is at this point that I would like to raise the subject of a meeting I held. Last Friday, I held a street corner meeting with residents in Kellyville Ridge, in my electorate, who had consistently complained to me about their total inability to get broadband in this new estate. In this new estate, which is barely three years old, they are unable to get broadband or any signals in order for modern devices to function. Here is an example of some of the representations I have received from residents in this area:

I was interested to receive your letter regarding limited broadband access in Kellyville Ridge … I can’t make the meeting—

I will tell you about my meeting in a minute—

but fully support any progress you can make to improve service.

My wife and I … can only use wireless broadband and our mobiles from the front, upstairs balcony of our house.

I … have no choice on service provider …

He goes on to say, of the service providers they use for wireless broadband:

None of these work with any level of efficiency.

And this is important:

I find it extremely frustrating that in this day and age in Sydney’s largest growth area, we cannot access quality broadband/mobile service.

I totally agree with that constituent. And isn’t it interesting that when I hold a street corner meeting on a Friday afternoon in Kellyville Ridge, when I think it was still about 30 degrees, I had residents queuing up to ask me, ‘When is the NBN coming?’ and queuing up to tell me the problems they have in accessing broadband?

So, to the member for Wentworth, who came in here and started lecturing the House about why we do not need the NBN, I suggest he goes out and talks to those people. I suggest he tries to understand that there are parts of Sydney which have not benefited from infrastructure based competition, just as many regions of Australia have not benefited.

The bill is designed to address certain cherry-picking provisions. The non-cherry-picking provisions mean that anyone building a fibre network must provide wholesale access. Yet again, this is relevant to facilities based competition. The NBN will cover 100 per cent of the population, the vast majority of that being by fibre, and there will be differing costs of the network in different parts of the country. The ubiquitous nature of the NBN raises the issue of cross-subsidisation between high-cost and low-cost areas, and the imperative that NBN Co. can best cover the cost of services in higher-cost areas such as regional areas and the bush.

There is a very sound reason for this, something that only a ubiquitous fibre broadband network of the nature of the NBN can do: it can ensure equal pricing, regardless of where you live or work in Australia—equal pricing. Opposition to these provisions is opposition to equal pricing and the uniform national pricing requirement imposed on NBN Co. It means that the incentive to invest in purely lucrative areas will be diminished as a result of this bill. Again, this reflects the true nature of the network. It is one ubiquitous access network with internal cost-recovery mechanisms, it looks far more like a utility than a standard wholesaler and it is formulated to ensure that services in the bush are affordable and achieve NBN Co.’s mandate of uniform national wholesale pricing.

Indeed, these provisions are designed to counter inefficient investment. The NBN creates a national network where all players are created equal, and that equal treatment extends to whether they are in the city or in the bush. Those investors who seek to cherry-pick in low-cost areas do so for one reason: for profit. But, under the new arrangements in this bill, investment will be incentivised only where it is efficient. This is in contrast to the cherry-picker, the person who comes in not charged with a mandate to serve the national interests—unlike the NBN—but interested only in making a profit, and the easiest cherries to pick are in those low-cost areas, not in the bush and not on the outskirts of north-west Sydney.

In conclusion, I look forward to the debate that will arise later in this place. Before parliament rose at the end of the last sittings, I issued a challenge to members to go back and talk to the people in their electorates and listen to what they think about the NBN. I certainly did that. That is why I am able to stand here today and contribute to the debate on this bill in a positive manner. (Time expired)