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Wednesday, 8 February 2012
Page: 232


Mr NEVILLE (HinklerThe Nationals Deputy Whip) (11:28): I too welcome you to the role and hope it will be as satisfying for you as it will be for us backbenchers.

We are talking today about the Telecommunications Universal Service Management Agency Bill 2011, the Telecommunications Legislation Amendment (Universal Service Reform) Bill 2011 and the Telecommunications (Industry Levy) Bill 2011, which will change the telecommunications regulatory environment in preparation for the continued rollout of the NBN. The first of these bills is the Telecommunications Universal Service Management Agency Bill 2011, which provides the government's framework for the new USO system and will change the way the universal service obligations are delivered and funded. The bill establishes a new agency, the Telecommunications Universal Service Management Agency, or TUSMA, which will operate as a statutory body and will be responsible for the implementation and administration of contracts and grants, which will be the primary method of delivering universal telecommunications services in Australia.

Let me say at this point—right at the beginning—that I am ambivalent about this. I say 'ambivalent' because the coalition's dislike of the NBN in its current form is well known. We have to accept that the government has had its basic NBN legislation passed and therefore it has to set out a regime commensurate with the new system. Having said that, the regime has to be something that is within the bounds of fair play and is not going to be inordinately more expensive than what we have at present—or it should not be. You would think that, if the NBN is going to deliver all the marvellous things that the government and its members have said it will, things would be cheaper and more efficient, not more expensive. The member for Bradfield pointed that out very eloquently in his speech today when he pointed out that the non-Telstra telecommunications providers will be paying infinitely more by way of levy under the new system than under the old.

TUSMA will be charged with ensuring that voice-only customers are shifted onto the NBN fibre network before Telstra's copper network is decommissioned. It will also have to support research and development to make sure that public interest services such as traffic lights and public alarm systems can be shifted across to the NBN without disruption. Part 2 of the bill relates to the scope of grants and contracts which TUSMA will administer and provides for the minister, subject to the scrutiny of parliament, to set standards and benchmarks for those grants and contracts. The agency will also maintain a register of all contracts and grants and oversee the performance and compliance of contractors and grant recipients.

Part 3 of the bill sets out TUSMA's corporate structure, accountability and reporting requirements and provides for TUSMA to maintain a register of public interest telecommunications grants and contracts. The organisation will also have to provide a report to the minister every year detailing the performance of contractors and grant recipients during that period. That information must also be published in TUSMA's annual report to parliament. The bill also provides for a review of the USO arrangements before January 2018. That seems a bit far off, but at least it is there.

Parts 5 and 6 of the bill relate to funding arrangements for TUSMA. I ask at this point whether another bureaucracy within the telecommunications bureaucracy is necessary. Time will tell whether it is. The USO funding for standard phone services and pay phones is currently carried out by way of revenue based on a levy; the National Relay Service is funded by a similar levy. However, this will change under these new arrangements, with TUSMA set to receive government funding which will be topped up by an industry levy. All in all, the government is set to give Telstra $230 million a year for the provision of a standard telephone service, with another $40 million for the payphone service. This funding will not be adjusted for inflation, but it may be increased or decreased depending on the policy of the government of the day. Telstra will also receive $20 million each year to operate the emergency call service; however, the provision of the service will be put out to tender within five years. If no suitable tenders are received, Telstra will continue in its role as the provider of the emergency call service. TUSMA will also manage contracts for the operation of the National Relay Service, which currently costs around $17 million a year.

I will touch briefly on the NRS. It is a service that is not as high profile or sexy as some of the others, but it is crucial for many Australians who have a hearing or speech impairment. The NRS is operated on an Australia-wide basis and incorporates teletypewriter, or TTY, technology, which involves individual relay officers translating typed text to speech and speech into typed text, and provides the voice-over system to a wide range of Australians. Industry funds the cost of the NRS contracts through a levy arrangement similar to the USO scheme. This funding arrangement will change as the levy is consolidated with the one relating to the provision of the USO. Let us hope that the service does not drop in quality.

The NRS is a remarkably effective way for hearing and speech impaired people to use modern telephony to stay in touch with friends, family, business contacts and public entities. One of the most important things a government can do is provide an efficient and reliable telecommunications service for people with special needs. We must get the ongoing operation of the NRS right, because our ageing population means that there will be much more demand for its services into the future. In my own electorate, which has the highest over-65 profile in Australia, the need is self-evident. It is crucial that, as we transfer them to other operators, we do not allow these services to be weakened in any way.

Going further on the costs associated with TUSMA, it is estimated that around $15 million will be spent each year in migrating voice-only customers to the NBN, while $20 million will be spent over two years to migrate public interest services to the NBN. Tallying up these figures brings the total expected liability for TUSMA to around $340 million each year—a huge increase on the $145 million provided to Telstra in 2010-11 for the USO. That is the point that the member for Bradfield made very eloquently this morning. Whether it is by direct government subsidy or by going through the non-Telstra providers, ultimately we the taxpayers are going to pay for it: indirectly, in our taxes, or directly, in increased phone charges. That is unavoidable if you are going to more than double the cost of providing the service.

There has long been contention surrounding the costs associated with delivering the USO, and the increased costs associated with this bill give rise give rise to some scepticism. As the chairman of the standing committee on communications in earlier times, I can vouch for that, because one of the great unknowns was the real cost of the USO. The increased subsidy to Telstra and the expansion of services to be funded via the industry levy mean that all carriers will be paying a much higher levy. The government says that to provide some lead time it will cap the levy on carriers for the first two years so that their overall liability does not increase. Again, what happens after that?

In the remaining minutes I have I want to talk about the circumstance in my own electorate. It is not, strictly speaking, a USO matter, but it is germane to the debate we are having today. During the floods 12 months ago, an underriver cable from Bundaberg city to North Bundaberg became dislodged, floated to the surface, was damaged and, progressively during the year that has just gone, became more and more crackly and unusable. Then in December last year there was a great failure throughout the suburb of North Bundaberg. One estimate says that 900 people were affected, but Telstra told one operator that I dealt with that they were dealing with 2,400 households—which I find an extraordinary figure.

What happened, of course, is that they lost phone services or data services, and in some cases both. This went on for six weeks or more. The impacts were quite extraordinary. Imagine a service station without its EFTPOS facilities, or a real estate agent without regular phones—because they live on their phones. Imagine a major developer trying to juggle works and sales programs without a phone, a pony club secretary trying to arrange events involving nominations from out of town, or a supermarket struggling with communications while trying to do orders and the like. This was a very serious thing. Virtually a whole suburb of Bundaberg was without phone services.

But the attitude of Telstra was quite remarkable. At no stage did they send out a letter to the whole of North Bundaberg—which we do as members of parliament when something happens in a particular suburb. No, that did not happen. They did not send out a news release. People found out only when they rang Telstra, and they had to go to one of those 1300 numbers. The call could take anything from 30 to 45 minutes to be answered, and then it was answered from a foreign country. Now I am not in racist mode today; please do not misinterpret my comments. But the people in these overseas countries did not understand the significance of what was going on. When you are trying to explain what is happening in an Australian town in an Australian flood circumstance, you require people with whom you can communicate clearly. This becomes even more important when you want to ring a 000 service and you cannot get through.

Some of the people told me that they felt that Telstra did not use this as an opportunity to find alternative methods of communications for people while they fixed this cable but rather as an opportunity to sell some of their other, more expensive, services. In one case someone was using the Apple iPhone as a modem. This particular person had a limit of one gigabit per month on their phone. Once that one gigabit was exceeded, it was 25c per megabit. As he pointed out, if he went up to two megabits it was going to cost him another $250 a month. Telstra seemed to think that was quite a good idea. I would have thought that the principle put into play there should have been that when a phone went out Telstra would give the person a mobile phone on a temporary basis. But, no, that did not happen in this instance.

It took a long time for anything to happen. Eventually people got a letter from Telstra—on 27 January—backdating to 3 January advice that Telstra felt it was exempt from the telecommunications customer service guarantee standard. The rationale was that because this was some sort of act of God it was not liable and would not have to make the customer service payments. Telstra seemed more interested in going out and covering its own backside rather than in providing its customers with alternative means of communications. If that is the case, how can it be trusted with the USO?

Debate adjourned.