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Wednesday, 9 February 2011
Page: 259


Mrs PRENTICE (6:18 PM) —I rise to speak on the National Broadband Network Companies Bill 2010 and the Telecommunications Legislation Amendment (National Broadband Network Measures—Access Arrangements) Bill 2010. As I said when I first arrived in this place, the NBN Co. proposal is a grand promise produced to generate votes regardless of the real cost to taxpayers and regardless of the typical Labor shambles this monopoly will create. Yes, Australians will benefit from the provision of high-speed broadband across the nation; nobody disputes this. What is completely outrageous, however, is Labor’s claim that high-speed broadband can be produced only by an outdated, monopolistic telco model such as NBN Co.

The National Broadband Network Companies Bill before us governs the ownership, operations and legal status of NBN Co., Labor’s builder and operator of the broadband network. It limits NBN Co. to business activities directly related to supplying wholesale communications services and sets out some arrangements for its eventual privatisation. The telecommunications legislation amendment bill, on the other hand, amends the Competition and Consumer Act 2010 and the Telecommunications Act 1997. It requires NBN Co. to provide open and non-discriminatory access to retail carriers using its wholesale services and imposes similar access rules and NBN-compatible technical requirements on non-NBN fibre rollouts.

But it seems the government is intent on being blindsided. It is determined to build an enormously expensive, outdated telco monopoly model that will lack flexibility and management capacity to adapt to changing times and changing technologies. Its eyes are wilfully closed to sensible, market driven alternatives such as Brisbane City Council’s i3 project. Some would ask why. Why is Labor so blinkered? Perhaps because its politics gets in the way. More to the point, this is a program crafted and controlled by Labor mates, and we all know about Labor mates in my home state of Queensland.

We know this government is in crisis mode. Its promises are broken day by day, one by one, and broadband and the NBN are no exception to this. This government asks the community to trust it, but its record in government is that trust and the Labor Party are two separate and non-compatible planets. This government refused to publish a business plan for months on end and then produced a document that highlighted that it would cost taxpayers even more than its early estimates. The Gillard government estimates that NBN Co. will require around $27 billion in equity funding and will need to borrow a further $10 billion to roll out the network. In addition, if the NBN Co.-Telstra deal currently under negotiation is completed, NBN Co. and the government will make payments to Telstra worth $11 billion in present-day post-tax terms, equal to approximately $16 billion in actual transfers, for use of its conduits and migration of its customers. The commonly used $50 billion price tag for the NBN adds these sums—equity, debt and payments to Telstra—together. It is far too much and, quite simply, does not need to be anything like this amount.

Perhaps what is most alarming is that fibre can offer download speeds of up to one gigabit per second—1,000 megabits. However, in 2020 the NBN Co. business plan forecasts that two-thirds of users will pay for speeds no higher than today’s top ADSL speeds of 25 megabits per second over Telstra’s existing copper network. Fixed wireless and satellite download speeds will be around 12 megabits per second. This is yet more damning evidence of Labor’s NBN Co. charade. They are indeed giving us a B-grade option.

The coalition has proposed amendments to Labor’s bills to highlight the misguided nature of their agenda. We must ensure that NBN Co. remains legally defined as a public authority and remains subject to the full oversight of the Public Works Committee Act. Supporting our amendments will ensure this. The coalition amendments will also ensure that it is specified in specific language that NBN Co.’s supply of wholesale communications services be restricted to layer 2 products provided to retail service providers for the purpose of providing services to end customers. They will also strike out exemptions to the wholesale only rule for NBN Co. deals with utilities.

Along with my coalition colleagues, I am very concerned about several elements of Labor’s bill. This bill will prevent appropriate parliamentary and public scrutiny of NBN Co. Labor has always been determined to hide the real facts, and now they are determined to achieve it. At a time when we need to tighten our belts and rebuild devastated communities across the country—importantly, in my home state of Queensland and my electorate of Ryan—the government should engage with some of the many reputable companies providing broadband solutions in many countries throughout the world, including companies like Huawei, who have recently launched their Connecting communities white paper. This paper is an independent review of the impact of broadband communities in Britain and also for Australia. The report identifies significant health, education and environmental benefits of ever faster broadband in UK communities. Importantly, it shows that this can be achieved through private enterprise and without government made monopolies.

It was interesting to learn about their report and their experiences in the United Kingdom, where they are working to deploy the 21CN network. Huawei are also building next-generation broadband networks in Singapore, Malaysia, the UAE and Brunei. And, as I have previously mentioned in this House, the Brisbane City Council, through the leadership of Lord Mayor Campbell Newman, is introducing the i3 project. This project will provide residents and businesses with superfast optic broadband within four years at no cost to the ratepayers. It may even deliver a return to Brisbane ratepayers.

Australia cannot afford to waste $43 billion on this project when we have private enterprise prepared to do it for considerably less and to provide open access, encouraging competition and flow-on cost benefits to the consumer. It may be easy for the Gillard government to hit the taxpayers, but it is smarter to use established, well-credentialed private sector providers who have the skills and innovations to deliver these types of projects. The private sector is better placed to create investment and to drive efficient delivery of infrastructure.

The NBN will be the largest public works project in Australia’s history and, most alarmingly, the government has already rejected calls for it to be subjected to a cost-benefit analysis by Infrastructure Australia or review by the Productivity Commission. The question has to be asked: what are Minister Conroy and the Labor government trying to hide? In addition to this, only 160 pages of the 400-page NBN Co. business plan were made public. To top it off, the Labor government—shamefully—asked members of parliament who viewed the whole business case to sign confidentiality agreements. The NBN Co. is a monopoly, and the Gillard government intends to legally prevent any fixed line competition. How on earth can its business plan be commercial-in-confidence? This is just further evidence of a government that, to use Prime Minister Gillard’s words after she knifed the member for Griffith, has ‘lost its way’.

It concerns me greatly that this bill will seek to have the NBN Co. defined as a corporate body rather than as a public authority, thus exempting it from FOI laws. This is despite the fact that the NBN will be 100 per cent owned by the Commonwealth. This is not productive and furthermore does not provide the Australian community with any assurance that the government will not once again waste its money or that the government will even be accountable.

This bill, most worryingly, attempts to remove the NBN Co. from the oversight of the Public Works Committee Act 1969. Major government infrastructure projects have been subject to joint parliamentary committees since Henry Parkes introduced reforms in New South Wales in 1888 to end corruption. Apparently, that no longer suits the agenda of the Gillard government. Even the Snowy Mountains scheme was subject to extensive oversight by the federal, New South Wales and Victorian parliaments. But Labor wants its NBN Co. charade to go under the radar.

The coalition’s amendments also seek to ensure that ministerial directions to NBN Co. regarding NBN Co. asset transfers or divestiture, or regarding the provision or nonprovision of services, are subject to disallowance by the parliament. This is justified, given the government’s track record of attempting to prevent scrutiny and oversight of the NBN Co. to date.

This bill may also hurt private retail service providers by allowing the NBN Co. to extend its mandate. When the National Broadband Network policy was devised, and NBN Co. was set up, the Labor government assured the market that it would only provide a wholesale layer 2 bit-stream service to retail service providers, and would not deal directly with end customers. But the restrictions placed on NBN Co. in this bill are unclear in some places and unduly expansive in others. For instance, the NBN Co. will be able to supply network services directly to gas, water and electricity utilities, transport operators and road authorities, even though provision of such services to these entities is an existing and valuable business opportunity for Telstra, Optus and other carriers.

The bill does not specify in clear language that NBN Co. must limit its products to layer 2 services supplied to retail service providers for the purpose of providing services to end users. This concerns me greatly. This bill will also stop competition by preventing private competitors from entering the market. It is like giving all our roads to Ford and allowing them to regulate which cars can use the road.

The so-called level playing field provisions, or cherry-picker provisions, will mean that any company building a new network offering services of 25 megabits per second or higher will have to meet the same technical standards as NBN Co., make available the same basic layer 2 wholesale services as NBN Co. and allow competitors non-discriminatory access to their networks at prices set by the ACCC. By mandating prices and reducing returns, this will prevent private investment in new networks that could otherwise lead to many Australians getting faster broadband much sooner than if they wait for the NBN. It also stifles innovation in the telecommunications sector by mandating which technologies must be used. Yes, this is typical Gillard Labor, but it is simply not good enough when so much money is going to be wasted.

The coalition remains committed to the policy objective of providing all Australians with high-quality affordable broadband regardless of where they live. This means greatly improving services in regional and remote Australia and in the black spots that stop around one million premises in the cities from getting good connectivity. We have never walked away from this and never will. Furthermore, pouring $50 billion into the NBN at a time when reconstruction after natural disasters and a once in a century mining boom are desperate for resources and the economy is near full employment is a guaranteed way to ensure taxpayers do not receive value for money.

The Gillard Labor government has attempted to prevent parliamentary scrutiny and oversight of the NBN at every turn, even though taxpayers are funding the entire project. It is simply not good enough and the government stands condemned. To make matters worse, the government is now attempting to tie the hands of future parliaments by placing unreasonable impediments to a democratically elected future government choosing to pursue a better policy course for broadband. This is deeply reprehensible.

Given that the NBN is being rolled out and NBN Co. now exists, the coalition is moving these amendments to restrict its scope of operation to ensure it does not fall victim to the ‘mission creep’ that often infects public monopolies. Attempts to hinder parliamentary or public scrutiny of such an expensive and risky project are not reasonable and should not be supported.