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Wednesday, 26 March 2014
Page: 3174


Mr FLETCHER (BradfieldParliamentary Secretary to the Minister for Communications) (11:55): I am very pleased to rise to speak on the Omnibus Repeal Day (Autumn 2014) Bill 2014 and the other two bills being debated by the House this morning. The omnibus repeal day bill contains a very significant number of measures in the communications portfolio. Indeed, schedule 2 of the bill runs from page 6 to page 50 and all of those measures deal with the communications portfolio.

In the brief time available to me today, I want to make three points about the measures in the bill: the first is that the communications sector is subject to a substantial regulatory burden and that reflects a number of factors, including the passage of time since key legislative measures in the sector came into effect—particularly the 1 July 1997 commencement of the Telecommunications Act 1997. The second point I want to make is to highlight a number of the provisions in the bill which will deliver tangible reductions in the regulatory burden applicable to participants in the communications sector. And, thirdly, I want to make the point that over time there will be additional deregulatory measures in the communications portfolio.

Firstly, let me turn to the proposition that the communications sector is one in which participants face a heavy regulatory burden. That proposition justifies the belief that it is timely to ask whether the policy objectives which underpin particular regulatory measures in the sector remain valid, because if those policy objectives do not remain valid then, of course, the case for retaining those regulations is a very weak one.

I would argue that there are three reasons why communications as a sector is subject to a particularly heavy regulatory burden, and in particular why there is scope for re-examining that regulatory burden at this time and identifying whether there are efficiencies which can be secured. The first proposition is that communications, by its nature, is a sector that is heavily regulated for reasons that I will explain. Secondly, we have seen several successive waves of regulations over the last two to three decades and they have generated some inconsistency and some redundancy. Thirdly, I want to highlight the changes in the underlying technology which are driving changing business structures and which also drive a need for changing regulations.

If I first make the point that the communications sector is intrinsically a heavily-regulated sector that tends to suggest that the scope for deregulatory measures is going to be higher in a sector where you are starting with a very high level of regulation. Let's look at some of the reasons why we do start with a high level of regulation in communications.

Firstly, the key business assets in this sector tend to be intangibles granted by governments, such as the right to use spectrum, or the right to broadcast a television or a radio signal. It is also an industry where, necessarily, the players often need to work together, and so there is regulation to set the standards under which those interworking arrangements occur. For example, in telecommunications: if the A-party—to use the industry jargon—is on Optus and the B-party is on Telstra, then if the A-party wants to make a call to the B-party there needs to be cooperation. There needs to be interworking between Telstra and Optus and, indeed, all the other participants in the industry; and there is extensive interworking, and much of that is the subject of a regulatory framework.

An additional factor underpinning the extensive regulation in the sector is the essential nature of many of the services that are provided in the sector. That tends to mean that there is extensive regulation that deals with the availability of those services, the price at which they are provided and so on. Another factor which has meant this sector is heavily regulated is that many businesses in the communications sector were at one point government owned but have subsequently become privatised. I could point to what used to be Telecom, which is now Telstra, and AUSSAT, which became part of what is now Optus.

The second reason why there is good potential for finding deregulatory initiatives in this sector is that over the last two to three decades you have had several successive waves of regulation which, over time, have necessarily and inevitably produced a degree of inconsistency and, in many cases, overregulation. We could look to history. In 1991 we saw legislation which first exposed the then Telecom to competition. In 1997 we saw legislation which opened up the telecommunications sector to full competition. In 1999 we saw legislation which provided for the arrival of digital television and the allocation of new spectrum to the existing operators. We had, of course, between 1996 and 2007, several successive acts authorising the privatisation of Telstra and we had the tsunami of regulation which accompanied the establishment of the National Broadband Network.

Overlay that with the fact that, in addition to several waves of regulation, we also have multiple layers at which regulation can occur—be it through legislation; regulations and determination made by the minister of the day; determinations made by the regulator, the Australian Communications and Media Authority; or self-regulatory measures such as the codes that are made by the Communications Alliance, previously known as the Australian Communications Industry Forum, which are then given formal status once approved by ACMA. So you have several layers of regulation, and that combines with the several successive waves over time of regulation. There are ample examples of internal inconsistency, redundancy and scope for efficiency.

Another factor which is particularly pervasive in communications is the change in technology and the way that that is driving changes to business structures. That means that regulation increasingly needs to be reviewed to determine whether it continues to be appropriate. We have seen an explosion of mobile communications. The mobile network is the default network over which many Australians make their phone calls—fixed-line is what you use if you cannot get a mobile service.

We have seen the internet explode from being a niche hobby-like area of activity for academics and a few technical specialists 20 years ago to now being a mass-market consumer service. We have seen the dominance of internet protocol, so that voice is increasingly now just an application delivered over internet protocol like all kinds of other data applications—no more analogue voice; that has an increasingly reduced presence.

Mobiles now deliver data services just as much as they deliver voice services. We have seen the arrival of over-the-top services. For example, whereas under the GSM standard for mobiles the short messaging service—SMS—was an intrinsic part of the standard, now short message services are typically delivered by over-the-top IP applications like iMessage on iPhones or stand-alone applications like Viber. So we have seen enormous technological change and technological convergence so that players in all parts of the sector are competing with each other and competing with new classes of players.

When every newspaper has a website which also carries video and is competing against websites from around the world, how valid are detailed regulatory constructs which divide media businesses into different categories of print, radio and television? So, with all these factors in play, it is very timely indeed to ask whether the regulatory constructs of 20 or more years ago remain appropriate or whether there is a need for some change and some removal of unnecessary regulation.

That brings me to the second fundamental point I want to make today. There are key measures in the omnibus bill before us today which lighten the regulatory burden in communications and do so in a way which recognises the application of some of the factors I have spoken about. For example, currently there is a requirement that telecommunications providers must give a so-called standard form of agreement to consumers. That is a requirement under the 1997 act, and the policy intent is good—to give consumers information about the services that they require.

However, there is a separate requirement, which was introduced fairly recently, under the telecommunications consumer protection code, that providers must give consumers what is called a critical information summary. That is an easy-to-understand short-form summary of the services. That means that the original requirement to provide a standard-form agreement is outdated and unnecessary and can be removed to lighten the regulatory burden without in any way disadvantaging consumers who are still getting this information under the critical information summary arrangements. That is an illustration of several of the points I have highlighted in my remarks—that, with the passage of time and the multiple layers of regulation, there are ample opportunities for inconsistencies, duplication or redundancy between them.

Another set of measures in the bill before the House this morning that I want to highlight are the measures which streamline the requirements to lodge telecommunications access agreements with the Australian Competition and Consumer Commission, the ACCC. Today, every time an industry participant—in the jargon: a carrier or a carriage service provider—reaches an agreement with another industry participant, or varies that agreement, there is a requirement to provide to the ACCC within 28 days the full text of that agreement. That is very burdensome. Telstra says it produces over 70,000 pages of these agreements to the ACCC a year.

The underlying policy intent—that the ACCC be able to keep an eye on the various deals that are being done in pursuit of the important objective of maintaining and strengthening competition in communications—is not under challenge here. What is being questioned is the particular form of the measure, and what the bill proposes—in fact, what the bill gives effect to—is that there will now be a requirement on industry participants simply to provide a quarterly list of all the contracts they have entered into.

So there is no automatic provision of 70,000 pages; a brief list goes to the ACCC and, if it requires further information, it can always ask for the full text of the agreement. It is another good example of regulation which has become overly burdensome, imposing cost and compliance requirements which can be stripped back and streamlined without in any way compromising the underlying objective.

Another measure I could speak about is the duplicate requirements which exist under the Telecommunications (Consumer Protection and Service Standards) Act 1999 for Telstra to have in place a universal service obligation standard marketing plan and a policy statement. That provision is redundant. It replicates other requirements which apply to Telstra and it can usefully be removed. There are plenty of other examples in this legislation, in schedule 2 of this bill, of specific measures which will lighten the regulatory burden but without compromising the policy objective or the key consumer or other protections, whatever the objective might be.

My final point in the time available to me is that the measures in the bill today are only the first part of what we seek to achieve in the Communications portfolio. I have talked about the fact that Communications is a heavily regulated portfolio. Indeed, during the Rudd-Gillard-Rudd years, a government which could not be characterised as being run by small-government people—they were big-government people; they loved big government; they loved more regulation—when it came to communications, the pages of new regulations kept flooding out, particularly in relation to the national broadband. So we have had for several years in the communications sector a steady, rapid, daunting and burdensome increase in regulation. This government is determined to turn that around to reduce the regulatory burden on the communications sector and capture the efficiency benefits that can therefore be realised. This is a high priority.

The measures in today's omnibus bill from the communications sector are just a first step. I am very pleased to say that we are removing through these measures over 1,000 pages of burdensome regulation in the communications sector. We believe that the measures in this bill, together with other regulatory measures being taken at the same time through delegated legislation, regulation and so on, are expected to save the sector around $35 million a year. So this is an important set of measures to reduce regulatory burden, but there is more to come.

As I have highlighted, there is good reason to believe there is significant potential to reduce the regulatory burden in the communications sector. It is a heavily regulated sector. We have had several successive waves of regulation over the past two to three decades and we have seen significant changes in technology. Today's measures are a first step on the agenda of this government to reduce the regulatory burden in the communications sector, improve efficiency and deliver better outcomes to businesses in the sector and the consumers of the services the sector provides.