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Monday, 22 November 2010
Page: 1707


Senator LUNDY (Parliamentary Secretary for Immigration and Citizenship and Parliamentary Secretary to the Prime Minister) (12:51 PM) —It is my great pleasure to rise to speak in the second reading debate on the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2010. I listened very carefully to Senator Birmingham’s contribution, and I think it is important to highlight some of the fundamental contradictions in the coalition’s position. On the one hand, the opposition claimed that there is a need to separate all matters associated with the National Broadband Network and NBN Co. from the telecommunications structure—to separate the structure of the industry, the regulatory environment, from the matters of substance that are contained in this bill.

This is contradictory. The two are invariably associated because the telecommunications industry structure needs to adjust to accommodate a wholesale-only open-access fibre-to-the-home network—that is, the NBN. It is essential that the competition and consumer safeguards bill accompany the progress of the National Broadband Network policy. To argue for a complete separation of the issues denies that there is an association between the progression of the policy and the build of the National Broadband Network. This legislation is motivated to facilitate the structural adjustment the industry needs to make to sustain this excellent model of an open-access, wholesale-only, independently regulated fibre-to-the-home network.

The argument that we should separate the two issues is just another tactic in the opposition’s attempt to delay consideration of this legislation and the National Broadband Network. In a previous contribution—in relation to, I think, a general business notice of motion—I covered what I thought the political motivation of the opposition was in that regard, and it was not auspicious. I thought it exposed the opposition’s complete lack of vision in relation to the internet, telecommunications and the network for the future.

Another contradiction is their ‘go fast-slow down’ approach. Almost every question time the government receives questions about how many people have been connected to the National Broadband Network. The question is asked with a pejorative, accusatory tone: ‘How come so few are connected to the National Broadband Network?’ In responding to that, we inform the coalition that far more people than they purport are actually connected. So, in the chamber the coalition is pleased to place pressure on the government for more NBN connections. ‘Why aren’t there more?’ is the implication of their questioning. Yet, in the debate on this bill and their utterances outside of question time, their argument is, ‘We don’t need to go so fast.’ We just heard very clearly from Senator Birmingham, from the Liberal opposition, that we ought not to proceed, we ought to delay—we ought to have a Productivity Commission inquiry before we progress, we ought to have a cost-benefit analysis before we undertake this build.

There is a profound contradiction in what they convey in the public arena of question time and what they convey elsewhere. As I stated recently, local Liberal members are clamouring for the NBN to come to their communities. Yet, in this formal debate, when the rubber hits the road and it is about progressing legislation to facilitate the regulatory environment so that all of these policies can progress, they want to stifle, inhibit, delay, block. There is no reconciling those two positions. I think this exposes the very shallow political opposition to the National Broadband Network and to this legislation, which facilitates the regulatory regime.

The idea that Telstra is very much under duress brings up another contradiction. If what the opposition is saying is true—that this bill somehow facilitates the establishment of a new monopoly—which, quite frankly, ignores the fact that there is independent regulation associated with it, why would Telstra be under duress? We know, colleagues, that Telstra fought for the retention of their monopoly for many years. To imply that they would somehow be under duress to participate in a future monopoly defies belief. The fact is that Telstra and NBN Co. have entered into a practical agreement, which the coalition clearly lauded and encouraged. They criticised Labor for the process not occurring—now that it has occurred, it is suddenly problematic.

I am speaking on this bill today as an ACT senator. I have strong views on, and a strong history in the area of, public policy. I want to make it very clear that my comments relate to my experience. I would like to turn to a little bit of history in the telecommunications debate. Senator Macdonald does not fall into the following category, but some of his colleagues would. This discussion has been going on for a long time. Senator Macdonald would have been participating in the debates about the privatisation of Telstra, the various Estens reports about regional telecommunications services and so forth for a really long time and would have an appreciation—even though, obviously, a different political view—of how hard it is to get the telecommunications regulation and policy right in this country. Some members of the coalition who appear not to be apprised of this history seem to think there is a simple solution. Senator Birmingham’s in his contribution said very clearly, ‘Surely there’s a way that we can just organise this, commission a report and fix the policy so everybody’s happy.’ Well, Senator Birmingham, the coalition government had many years, 13 years, of government in which to do that. Some 14 different Senate inquiries across telecommunications, information and communication technologies, and internet have occurred over those years. Many more reports were commissioned by the former government about the challenge of regional telecommunications services and what was needed to provide universal, affordable access. And there has been recommendation upon recommendation—some accepted by the previous government and some rejected. None of them fixed the problem.

The only thing that will fix the problem is Labor’s vision and policy for a national broadband network, which is informed in part by a series of successive Senate inquiries into various bills and into the general issue of broadband. One of those inquiries was by the broadband select committee, which I think at one point you were chair of, Senator Macdonald.


Senator Ian Macdonald —Yes; that is true.


Senator LUNDY —Indeed. This broadband select committee took a great deal of evidence which served, in some part, to inform the development of our policy. One of the areas it informed the policy was in the great strength of the fibre-to-the-premises model of a national broadband network. We have learnt, through the evolution of policy, certainly in my time in parliament, that all of these inquiries and reports have informed how difficult it was to get the policy right. So when Labor announced a national broadband network that was open access, fibre to the home—and 93 per cent of that, fibre to the premises—wholesale only and independently regulated, it was the right model for Australia. That model recognised that we needed a network that was future proof. It recognised that the copper network that is currently in place was finite in its capacity.

We heard it described, as I have said many times before, by representatives of Telstra and many of the colleagues in this place, as ‘five minutes to midnight’. We also know, again through many inquiries, that the copper network is riddled with pair gain systems which prohibit the expansion of the ADSL-style high-bandwidth services and that there is a choke point that is being experienced currently in many Australian communities. How that choke point manifests itself is that people who want a broadband-style service like ADSL2+ cannot get it. There is no capacity in the system and they are placed on waiting lists and told repeatedly, by Telstra and other service providers trying to connect those customers, that there is no physical infrastructure available within that network.

Some on the coalition side point to wireless as somehow being a solution, but it is worthwhile placing on the record again—as the minister has, many times—the capacity constraints of the wireless network. It too has finite capacity. The style of that network means that the more people use the wireless network the less bandwidth each person gets because it has to be shared around. We know that wireless has these capacity constraints, and to continually introduce wireless as being somehow analogous or alternative to a fibre-to-the-premise network represents a complete misunderstanding of the physical attributes of these networks.

It is absolutely a statement of fact to say that the science is in on the future-proof nature of fibre-to-the-premise network. Light based or fibre optic technology has the capacity to increase its bandwidth as the technology at either end of that fibre continually improves. We are very pleased to hear the news from the NBN Co. that whereas our policy requires 100 megabits, their network will be able to deliver a gigabit in terms of bandwidth speeds. That is evidence of the future-proof nature of the fibre to the home network.

This legislation, the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2010, forms a critical part of the landscape because it addresses the issue of what is needed in the competition regime and what is needed to protect consumer interests. Most of the provisions in this bill, introduced back in 2009, were obstructed by the Senate and we are now still trying to debate this bill. We are seeking the support of the Senate in doing so. The measures in the bill position the telecommunications industry to make a smooth transition to the National Broadband Network. As I said, the changes to the bill reflect the announcement earlier this year of an agreement with NBN Co. on the migration of fixed-line services. So the bill now reflects that up-to-date situation.

These are very important agreements to progress the National Broadband Network. The reintroduction of the bill provides for much of the legislative framework to support the arrangement to deliver the structural reform of the sector. I will just run through some of the features of the structural reform contained in this bill. The structural reform restructures the telecommunications market and promotes greater competition and consumer benefits. These are outstanding issues; they have been outstanding for a long time and they need to be addressed. It seeks to strengthen the telecommunications-specific access regime to provide more certain and quicker outcomes for telecommunications companies. It seeks to streamline the anticompetitive conduct regime by removing procedural impediments that in the past have restricted the effective operation of the regime and it seeks to strengthen the consumer safeguard measures. The bill represents a balance between providing Telstra with sufficient certainty to progress with structural separation while, at the same time, protecting access seekers and consumers in that transition. It sets out a framework for Telstra to seek approval from its shareholders.

All of these issues are important and I think it is worth saying that many of them have existed for a very long time. Those of my colleagues who have been around for a while will remember the endless debates about the regulatory gaming that has occurred in the telecommunications sector and would understand the importance of these adjustments to the competition regime. They would also understand that having a wholesale-only open-access independently regulated National Broadband Network is the ultimate solution to what has been a very fraught sector, whereby Telstra’s presence as a residual monopoly within that sector has prevented the kinds of investments that only the government, through the NBN policy, can progress.

We experienced market failure and the minister’s very diligent efforts to test the market in responding to the needs of this nation were exemplary and very thorough. It was in response to that market failure that our policy for a national broadband network emerged. I am very proud of that. It was visionary policy that has captured the attention of governments around the world who grapple with similar problems of people clamouring for affordable universal broadband access. The respective telecommunications industries are incapable of providing that on a ubiquitous basis and governments seem to find some constraint in responding to the needs of their populations, usually by virtue of the efforts of the incumbents in the markets to protect their own patch. In Australia, Telstra has shown that it is incapable of making the future-proof style of investments that could have characterised our progress in the digital age through the late nineties and the early part of this decade. As we know, through the policy failures of the former government this did not happen.

In closing, I return to the point of why we need a national broadband network. Senator Birmingham and other coalition senators always return to this fundamental question. It is an interesting characteristic that only now the Leader of the Opposition and his shadow ministers have raised the question. The characterisation of the debate up until we announced our national broadband network policy was which party could do it better, which party could do it faster and which party could do it most efficiently. The political debate was characterised by whose policy settings were going to get us as a nation there first. The coalition said this was the objective, whether it was Senator Coonan’s contributions as the former Minister for Communications, Information Technology and the Arts or the more recent utterances of the coalition. We want to have as many people as possible on as high a bandwidth as affordable in this country. That would be good for our economy. That would be good for our society.

Why is it only after the announcement of a national broadband network policy that will get us to all of those places that we have recognised we want to be that suddenly the opposition says, ‘We’re not so sure that is where we want to be,’ and starts this contradictory debate that is effectively a tactic in delaying, stifling, inhibiting and ultimately trying to block the progress of the National Broadband Network and its associated telecommunications amendments. It is unfortunate. I think it speaks to the character of the opposition at the moment and I know that there are many people who believe in the National Broadband Network and who want to see it proceed. We have a great opportunity to progress the issue today.

I make it clear that I am speaking as the senator for the Australian Capital Territory, as a member of the Senate who has had a longstanding interest, and not in my executive capacity as a parliamentary secretary. I am contributing to this debate very much as a member of the Senate with an abiding interest in telecommunications policy.