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Monday, 9 December 2002
Page: 7470

Senator ALSTON (Minister for Communications, Information Technology and the Arts) (5:15 PM) —On the first point, core services were essentially identified as those where there has been continuing disputation in industry. In practice, those services are always where there is the greatest degree of difficulty in getting access to the existing network, particularly where you have bottleneck services and where you are beholden to the incumbent—those are classic opportunities for gaming. As a result, you want some cut-through arrangement. But you ought to proceed sparingly in the sense that it is not the job of the government or the regulator to try to resolve every dispute ahead of giving the parties commercial opportunities to sort matters out for themselves. It is a last resort situation where the minister is persuaded that there are ongoing difficulties which warrant the declaration of core services. The three that we did nominate are the ones where there have consistently been problems. That does not for a moment mean that you cannot add new services, and the bill specifically allows for that. But your example of ISDN is really an example of what many people would regard as yesterday's service, not tomorrow's service.

Senator Lundy —Telstra are saying it's tomorrow's service. They are trying to roll it out.

Senator ALSTON —I can remember being there in 1989 or 1990 when Ros Kelly was the minister and Telstra's ISDN service was launched with great fanfare. I do not think it has ever been taken up to the extent that it should have been, and I think that is because—

Senator Lundy —Because it was too expensive for Telstra.

Senator ALSTON —Yes, I think that is right. That is why the new regime does allow people to have disputes resolved more quickly. I think Optus might have complained about ISDN. If people were to come along and argue that this is the next classic example of bottleneck and that there is gaming going on, obviously we would give it serious consideration. But we thought we would nominate those three main areas where there have been a number of disputes to date.

As far as gaming is concerned, the whole rationale for eliminating the right of merits review to the ACT was to avoid the prospect of gaming. It has always been my view, despite Telstra's vigorous protestations to the contrary, that to have a situation where PSTN disputes could still not be finally resolved by way of a definitive judgment after five or more years—and, even if a decision had been forthcoming from the ACT, in theory it still could have been taken to about another three levels of courts—lends itself classically to gaming. We do not eliminate gaming by removing that merits review appeal right. All we do is truncate the appeals process to a limited extent. The idea of being able to go back and start all over again and to introduce new material, which is what led to our identification of this as a problem area, is quite unacceptable. The problem with future gaming is that you do not really ever know about it until people find ways of stalling the system or stringing things out. Gaming does not arise because someone says, `You've got a right to game.' It arises because what seems to be reasonable on the surface is misused. And people can misuse the courts. The classic example of that, if you remember, was in the early nineties when there was a licence hearing for a third free-to-air commercial television licence in Western Australia. It was in the interests of the incumbent to make life as difficult and expensive as possible for potential new entrants. As a result, there were something like 18 appeals at all levels—AAT, Federal Court, High Court and back again.

That is gaming. Do you therefore take away people's appeal rights? You cannot do that. But if you found, for example—and there is some evidence to support this, and again the Federal Court judges would not like it—that the Australian Competition Tribunal were taking forever to make a decision (the Sydney airports matter, which went to the ACT, took nearly two years) and that comes about because judges are getting around to it when they are ready or because they have a lot of other things on their plate and they do not regard this as having any particular priority and someone takes advantage of that knowing that it is likely to slow things down quite dramatically, then you may well say, `Enough is enough, we will have a new streamlined body.' So I am quite happy to say, here and now, for the benefit of the industry that if we see evidence of those sorts of practices we would look very seriously at some sort of cut-through to ensure that the system was not just dragging on and on.

I probably said to you before, Senator Lundy, that the best book to read on this is the Deal of the century which describes how MCI spent the first 10 years of its existence in court trying to get access to AT&T's network. That was a classic example of using the courts. Fortunately, MCI had the stomach and the pockets to be able to survive the exercise, but lesser players could not have done that. The American system seems to be almost unable to come to grips with that sort of gaming. We do not want that to happen here. I think we have been remarkably free of it. It is not a litigation industry at the present time, and it should not be. We have made three sets of changes over the last four or five years designed to speed up the process in various ways—finetuning, getting information out earlier, making sure that people have access to the system as quickly as possible and then speeding up the process. They are all anti-gaming measures, if you like, but you cannot say in advance where gaming is likely to surface. But when it does the trick is to ensure that you do not let it go on for too long.

Bill, as amended, agreed to.

Bill reported with amendments; report adopted.