Senator LUNDY (11:54 PM) —My understanding was that, in fact, Senator Boswell was listed to speak next. But, with respect to comments made by my colleague Senator Carr, it is quite obvious that we are not going to hear from these people in this debate, or certainly on the second reading, which is a great shame because we know that the National Party and anyone in this place who represents those in rural and regional Australia have a grave consideration to make in their voting on this bill. I say that because rural and regional Australia is suffering and is at a disadvantage with respect to the privatisation of Telstra.

A privatised Telstra will face a conflict of interest that cannot be resolved. Is their priority the needs of all Australians or in fact the wants of their shareholders? I do not believe that these two points can coexist. Because of the high level of cross-subsidisation that is essential for a country the size of Australia, Telstra shareholders will not be willing to accept reduced profits to maintain a standard telecommunications service for remote and regional consumers.

Our geography means that equity and access to an affordable telecommunications service require two things. They require a legislative framework that provides for a universal service obligation, a community service guarantee, sanctions maintained by a regulatory authority and, indeed, fines if services are not up to scratch, but they also need a government that has a will to represent the public interest.

The attention required by our rural and regional areas can be delivered only through the ministerial responsibility and hoping that that minister acts in the interests of the public. It is this public interest that cannot be horse traded within the context of this debate on this bill to sell off the rest of Telstra. Will it be left to the taxpayers, the majority of whom will not own Telstra shares, to pay for the service that a publicly owned national carrier should be delivering or, under a privatised Telstra, will the dividend be redirected in some way to subsidise it?

There is no way under a fully privatised Telstra that Telstra would tolerate a continued enhancement of the regulatory framework that can, under the government's proposals, only serve to even more greatly regulate what is theoretically a sector that has been deregulated. This presents an interesting conflict for the government. On the one hand it talks about deregulation, it talks about allowing Telstra to compete freely in a competitive market and encourage other players to come in, yet what do we hear today? We hear today that the government is actually going to introduce a plethora of requirements, of further regulations, to ensure Telstra provides for the interests of those it has neglected.

So we have a government talking about deregulation, about privatisation, on the one hand and yet, to maintain the level of service required, we know that it can only do that by re-regulating. The nature of that re-regulation, obviously, is completely contingent upon the will of the government of the day. We know through overseas experience that telecommunications carriers do not tolerate a high level of regulation, particularly if it impinges upon their ability to extract a profit from their given market. We have seen time and time again, particularly in the US, examples where carriers have challenged legislation that has put in place, or has attempted to put in place, a requirement on them to either service a levy or provide some sort of base level community service. I am gravely concerned that this is the direction in which we are heading with respect to Telstra, if it is privatised.

There is one particular case in the US that I think is worth mentioning. A few years ago, President Clinton tried to legislate for a USO-style levy for the provision of a high bandwidth backbone to educational institutions throughout the US. The levy was designed to spread the cost across all carriers and provide an essential service in enhancing the access of all American students to the Internet. But what happened? Do you think he had any luck? No, the carriers basically challenged him in court and they won. It was not possible because the corporate entities that were required to provide this service had the legal muscle, the clout, with which to defeat the government in their efforts.

Sitting suspended from midnight to 9.30 a.m. (Friday, 9 July 1998)