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Thursday, 17 October 2002
Page: 5401


Senator MACKAY (2:46 PM) —My question is to Senator Alston, Minister for Communications, Information Technology and the Arts. Can the minister confirm that over recent years the sealant 3M encapsulant gel was used throughout Telstra's network to seal cable joints in order to weatherproof them in a program called Seal the CAN? Can the minister also confirm that, far from protecting the cable, this product in fact corrodes and even splits it, causing serious faults and outages? Can the minister confirm that there is now such an enormous backlog of work in fixing these problems that Telstra is using plastic bags as temporary protection for cable connections in some parts of Australia and that it will cost many millions to rectify the problems caused by the use of this sealant throughout the network?


Senator ALSTON (Minister for Communications, Information Technology and the Arts) —I can advise the Senate that Telstra has informed me that, as part of the general maintenance regime of its cable network, a weatherproofing gel is used to seal cable joints against water damage, and the product has been in use since 1997. The gel continues to be effective on 97 per cent of the joints, and issues that have arisen in recent times relate to the remaining three per cent and are being addressed. Problems arise when the gel is used on older air core cables which also contain moisture. Since March 2001, Telstra has issued work instructions to staff to cease using the gel on this type of cable due to improved methods of cable jointing. Use of the gel ceased altogether in April this year. The problem of degradation does not occur in other cables. Telstra further advised that moisture outside the cable has no effect on the gel and that reports that, with rainfall, the network will fall over are incorrect. Nevertheless, Telstra believes the product is at the end of its life cycle and has been replacing the gel when required.

Despite the figures on this that were bandied around in the media a week or so ago, I think it is quite incorrect to suggest that there is any such thing as an enormous backlog and that there will be very significant amounts involved. The cost is likely to be in the order of $75 million over the next three years, not the $187 million which was mentioned in the media and which relates more broadly to the CAN upgrade. The sealant is confined to only a very small proportion of the network and is a matter that is very much in hand at the present time.


Senator MACKAY —Mr President, I ask a supplementary question. Having slashed its work force by around 40,000 since 1997 and its capital expenditure budget by $800 million a year since 1997 to satisfy the share market, is Telstra now trying to pay for the cost of this blunder by, amongst other things, drastically increasing phone line rental fees for ordinary consumers?


Senator ALSTON (Minister for Communications, Information Technology and the Arts) —As the Senate knows, this is basically the strategy that is being used in the run-up to the Cunningham by-election; it has nothing to do with the facts of life. The facts are that Telstra's capex reduction, which was in the order of 18 per cent in the last year, compares more than favourably with that of a number of the RBOCs in the US, which have capex reductions of around 30 to 40 per cent because of surplus capacity. The use of sealant gels has nothing to do with the reduction in the work force. That reduction has everything to do with changing technology and a need to increase productivity, as Senator Mackay well and truly knows. Mr Tanner—who now seems to have more of an interest in education issues than he does in communications issues; I am not sure whether or not he is positioning himself for a bad result on Saturday—quite clearly does not understand the facts of life. Any changes as a result of the price cap arrangements are very much in the interest of consumers, as you well know. There is protection for low-income earners in spades, and there is more flexibility in the system. (Time expired)