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Thursday, 5 December 2013
Page: 1757


Mr TURNBULL (WentworthMinister for Communications) (11:54): I thank all members who have participated in debate on the Telecommunications Legislation Amendment (Submarine Cable Protection) Bill 2013. As honourable members know, submarine cables ensure that Australia is connected to the rest of the world. They are the vital sinews in our global telecommunications infrastructure. The bill before the House will improve the operation of the submarine cable protection regime and will ensure our regime continues to be best practice, and that the protection it affords to submarine cables is maintained. The recommendations made by the Australian Communications and Media Authority to improve the operation of the regime following its review form the basis of the amendments in the bill, along with other proposals that will further enhance the regime protecting submarine cables connected to Australia.

It is somewhat serendipitous that we are debating this bill now in December, as this is also the 50th anniversary of the official opening of the undersea COMPAC cable. The COMPAC coaxial cable forms part of a global submarine and terrestrial telecommunications network linking the nations of the Commonwealth. It was officially opened on 3 December 1963 by the Queen, after which the prime ministers of Australia, the United Kingdom, Canada and New Zealand participated in a conference call. The cable was landed in Australia in my own electorate of Wentworth right at Bondi Beach. It significantly increased the capacity and reliability of communications between Australia, Europe and North America, and provided Australia with a better link to the global communications network. It was delivered by the cooperative efforts of telecommunications authorities of the four nations under the direction of a management committee headed by Australia's TA Housely, the general manager of the Overseas Telecommunications Commission. The project has been described in Mr Housley's biography as 'probably the most important milestone in Australian international telecommunications since the landing of the first telegraph cable at Port Darwin in 1871'.

COMPAC was complemented by the SEACOM cable, completed in 1967 to improve communications capacity with South-East Asia. Both were part of an overarching plan better to integrate Australia with the rest of the world. At a cost plan of 33½ million pounds, it was a large investment. That is something well worth remembering, particularly given the significant changes in telecommunications in the intervening 50 years. I was reminded of this anniversary by members of the Overseas Telecommunications Veterans Association who worked on the project. I acknowledge here the important contribution they and others who have worked in telecommunications in the past have made to our nation's advancement. Their achievements over many years—then and continuing—are ones that all Australians can be very proud of.

After 50 years, there are few things that are the same. The Queen, who opened the cable and initiated it with the first call, is still the Queen—

Honourable members interjecting

Mr TURNBULL: despite the efforts of some of us.

Ms Hall: She is still there, Malcolm!

Ms King interjecting

Mr TURNBULL: I note these protestations of royal loyalty from the opposition benches! The Prime Minister will be very gratified to hear them! Submarine cables are still a crucial part of our telecommunications infrastructure—and that is another continuity—and our reliance on them is greater than ever. As I said in my second reading speech, the technologies have changed dramatically. Coaxial cables were a great innovation developed in the 1950s by British Telecom but the arrival of fibre optics has completely transformed the capacity for carrying data traffic around the world and indeed across nations, to every corner of our economy and our society.

Another very big change has been the emergence of the private sector in providing this sort of telecommunications infrastructure. Prior to the late 1990s, subsea cables of this kind, whether they were coaxial or subsequently fibre, were constructed by consortia of telecommunications carriers. They were generally described therefore as club cables.

In Australia, all of these cables were club cables until 2008. It was then that a number of privately owned cables, including PIPE International's, for example, started to be built. Today, Australia's submarine cables are operated by the private sector. The main players are Southern Cross Cable, which operates the cable of that name; PIPE International, which operates PPC1; Telstra, which operates APNG-2; and Telstra Endeavour, SingTel and Reach, which operate the SEA-ME-WE 3 cable.

The private sector has responded very well to growth in the demand for international submarine cable capacity and is well aware of the potential for future traffic growth. That is not to say that mistakes cannot be made in investment in subsea cables. There was a catastrophic—catastrophic for the investors—overinvestment in subsea cable capacity in the late 1990s. I remember that very well, having been on the board of Reach at the time. There was a dramatic overexpansion of capacity and almost all, if not all, of those ventures went into bankruptcy. But of course the cables remained and over time that capacity has been filled. Having learnt that lesson, the private sector has been much more careful about new projects and we have seen some further investments, especially on the Perth to Singapore route, being announced by the Nextgen Group, SubPartners and Trident.

Several cables off the east coast of Australia have also been foreshadowed. SubPartners and Hawaiki Pty Ltd have announced proposals to construct cables connecting Australia and the United States. Telstra, Vodafone NZ and Telecom NZ have recently announced a joint venture to build an additional cable between Australia and New Zealand.

Similarly, on the domestic front, we need to consider the relative roles of the private sector and the public sector in delivering telecommunications in Australia. One of the most lamentable blunders of the Labor government was to turn its back on a generation of reform in telecommunications and to re-establish the Postmaster General, in effect, by creating a new government-owned entity to build a monopoly telecommunications network in the form of the NBN.

While this bill is not directly about the NBN, I note that opposition members spoke about it at some length and I see the shadow minister, the honourable member for Blaxland, is here. I want to address some of the remarks that he made. He said:

Labor's argument is, if fibre is the end game, if we are going to need it, then just like the submarine fibre cables which are the focus of this legislation, we should plan for the future and build it now. Japan, South Korea and Singapore are all investing in fibre to the premises.

The issue with the NBN is not about the technical capacities of fibre-optic cables. No-one is arguing that there is the capacity to carry more data, more cost effectively, on fibre than on, for example, coaxial cables. The question is: what is the most cost-effective solution for the last 400 or 500 metres into the customer's premises? It is sometimes referred to as a 'last mile' question but, in fact, we are talking about a much shorter length. The problem with a ubiquitous fibre-to-the premises rollout is not that it has some technical deficiencies; it has some great technical capacity. But the problem is that it costs so much and it takes so long to build. That is why I have always said if time and money were of no account, in an ideal world and in that fantasy world where time and money do not matter you would have fibre everywhere. Why not? But there are a lot of other things you would have in that fantasy world too. We do not live in a fantasy world. So the object and the responsibility of governments is obviously to deliver infrastructure in a cost-effective way.

The member for Blaxland's remarks are so revealing because they show a complete ignorance or indifference to the time value of money. Without arguing whether fibre to the premises is, ultimately, going to be essential, even accepting that at some point in time there will be a demand for it, any rational person would make an investment as close as possible to the point where the demand will actually arise. Because, if you invest $100 million today on which you can only get a return when there is demand for it in 10 years time, you have decided to get no return on that $100 million investment for a decade. And then, if you are talking about technology, you are essentially saying: we are going to meet the demands of a decade or two decades hence with the technology of today. So whether you are looking at it in a rational financial fashion or whether you are recognising the enormous value of optionality in matters of technology, common sense says that you should build your infrastructure to meet the demands of today and those that you can foresee in the medium term. For longer term demands, if you have the capacity, as you clearly do with telecommunications, to invest closer to the date when that demand arises, then do so then. You save a huge amount of money and you are investing in the technology of the future, not in the technology of the day.

The government, as honourable members know, has promised that it will deliver the National Broadband Network sooner, cheaper and more affordably than would be the case under Labor's plan. Next week we will be publishing the strategic review that the company is in the process of finalising. That will give a clear-eyed and objective appraisal of the state of the project as it is, how much it will cost and how long it will take to complete on the previous government's specifications and what options are open to the company, and hence the government, to complete it in a more cost-effective fashion. That is completely at odds with the approach of the previous government. If honourable members want some reference to that, I refer them to a remark by the former NBN CEO, Mike Quigley, the day before yesterday. He said, in response to complaints that because NBN Co. had missed all its targets he should have been more conservative in setting his targets—a fair comment, you would think:

You do think, should I have been more conservative? But the timescales are already set for you, the time frames are already put out there for you so there's not much you can do.

From Mr Quigley's own lips he said he was given targets and timetables and time frames by the government for political purposes because they wanted to look good from an electoral point of view. He knew he could not meet them, but there was nothing he could do about it.

There has been a complete transformation in the relationship between the government and the NBN Co. since the election. I have said to the NBN Co.: 'Don't tell me what you think I want to hear. You tell me what you honestly, hand on heart, believe you can deliver, at what cost and in what time frame. Give us those factual options and then we as a government will make policy decisions.' Paying people a lot of money to tell you what you want to hear is one of the worst investments, as we have seen from the woeful performance of the previous government on the NBN.

I have just responded to the remarks about the NBN. This bill, I believe, has the support of the opposition. The second reading amendment before the chamber is obviously a stunt and has no merit, but the bill nonetheless is a very important reform and I commend it to the House.

The DEPUTY SPEAKER ( Mr Broadbent ): The immediate question is that the opposition amendment be agreed to.

Question negatived.

Original question agreed to.

Bill read a second time.