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Monday, 22 November 2010
Page: 1714

Senator CAROL BROWN (1:31 PM) —I rise to make a contribution on the Telecommunications Legislation Amend-ment (Competition and Consumer Safeguards) Bill 2010. This bill introduces measures that were in the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009, which was introduced in the parliament in September 2009. This new bill contains amendments to the original bill. The 2010 bill will make significant amendments to the Telecommunications Act 1997, the Trade Practices Act 1974 and the Telecommunications (Consumer Protection and Service Standards) Act 1999, plus other consequential amendments. We have before us a substantive regulatory reform package that will deliver a more efficient and effective telecommunications market with appropriate consumer safeguards.

The primary aims of the bill are: to address Telstra’s vertical and horizontal integration by providing stronger separation arrangements for Telstra, including a legislative framework to voluntarily structurally separate by migrating its consumers to the National Broadband Network, as agreed in the financial heads of agreement between Telstra and the NBN Co.; to strengthen the telecommunications-specific access regime to provide more certain and quicker outcomes for telecommunications companies; to streamline the anticompetitive conduct regime by removing procedural impediments that in the past have restricted the effective operation of the telecommunications-specific competition regime; and to strengthen consumer safeguard measures.

The case for telecommunications reform is clear. These amendments provide the opportunity to overcome the vertically integrated, privately owned monopoly that Telstra enjoys in the Australian telecommunications industry. These amendments make fundamental reforms to existing telecommunications regulations in an attempt to rectify the anticompetitive nature of the industry. We need to address the mistakes of the past and establish an effective and efficient regulatory framework for telecommunications. The way forward is a mix of strong measures to open up the sector, alongside appropriate safeguards and incentives for consumers. This bill will reshape regulations for the telecommunications sector and will allow us to deliver better and fairer outcomes for Australian consumers, businesses and the broader economy. These reforms will allow the sector to smoothly transition to the NBN. They will increase competition and they will improve consumer safeguards. I certainly hope that those opposite will vote to give consumers a fair go.

Telstra is one of the most integrated telecommunications companies in the world. It is extremely vertically integrated. Telstra currently owns the only fixed copper-wire network in Australia that connects to almost every premise in Australia, as well as the largest hybrid fibre-coaxial cable and mobile networks, and it has a 50 per cent stake in Australia’s largest television subscription provider, Foxtel. The proposed legislation will help promote greater competition in the industry by requiring Telstra to split its functions through a voluntary separation. The vertical separation will reduce incentives for discrimination against wholesale competitors and will result in increased competition. The legislation will also address Telstra’s horizontal integration across the copper, cable and mobile platforms. Separation allows for the open-access market structure, which we are delivering through the National Broadband Network.

The bill will provide more legislative and regulatory certainty for Telstra and its shareholders as it transitions into a retail company. Through these reforms, it is possible to create a win-win situation for Telstra, its shareholders and Australian consumers and businesses. These legislative changes will deliver much needed benefits for consumers while simultaneously protecting consumer interests. I know Senator Bushby, who is in the chamber, would be very supportive of any safeguards to support consumer interests, as he took up a case—as many did in my home state of Tasmania—involving Bruny Island, which we unfortunately have not had a good result on yet, under the current regime.

Senator Bushby interjecting—

Senator CAROL BROWN —I will declare a conflict of interest: I have a shack on Bruny Island. But I am sure Senator Bushby would be supportive of consumer safeguards.

By addressing Telstra’s integration across the fixed-line copper, cable and mobile platforms, and by delivering a structural separation of the company, consumers stand to benefit from the increased competition across the sector. With NBN Co. to be a wholesale-only communications provider with open-access arrangements, the rollout of the NBN is already reshaping the competitive dynamics of the communications sector.

Senator Conroy has already highlighted the beginnings of benefits to consumers and an increase in competition in my home state of Tasmania with the rollout of the NBN. We have seen introductory offers from internet service providers at prices as low as $30 for 25-meg download speeds. Other companies are offering packs for $90, which include all your broadband and phone calls. The equivalent Telstra package currently offered in Tasmania is around $130. This is clearly a result of the threat of entry of competition from the National Broadband Network. Competition will only increase with the ongoing rollout of the NBN and with the separation of Telstra. As Senator Conroy said when he first announced the proposed changes:

For years industry has been calling for fundamental and historic microeconomic reform in telecommunications.


Today we are delivering this outcome in Australia’s long term national interest.

This legislation presents an opportunity for Telstra to forge a new identity and will translate as a win-win outcome to be achieved by Telstra, its shareholders and by Australian consumers and businesses. This bill will address the longstanding deficiencies in the regulation of the sector and it will also drive growth, productivity, regional development, social equity and innovation. We will have proper regulation of the wholesale company and we will have proper scrutiny.

This legislation has been informed by the discussion paper on telecommunications reform which was released on the same day as the announcement of the National Broadband Network in April 2009. The discussion paper on telecommunications reform received a strong response, with 140 submissions received from a wide range of stakeholders. These submissions included all major telecommunications service providers, broadcasters, media companies, state and territory governments, the ACCC, disability and consumer groups, business organisations and unions. Their response was clear. Across all of the submissions, the unanimous feedback was that the telecommunications industry is uncompetitive, it does not assist consumers and it does not assist businesses. That is why we have initiated fundamental reform to the telecommunications industry, to address the high level of vertical integration amongst both Telstra’s wholesale and retail services. And, of course, these changes come alongside the rollout of the NBN—one of the largest infrastructure nation-building projects of our time, a project which will drive Australia’s future productivity and growth.

We must have the appropriate telecommunications regulation in place to ensure that the NBN is affordable and able to deliver high-quality services to businesses and consumers. The proposed changes to the telecommunications regulations have been met with a positive response from the Australian Competition and Consumer Commission. Speaking after the announcement of the proposed split of Telstra, Chairman of the ACCC, Graeme Samuel, praised the changes saying the public is best served by having a competitive telecommunications sector. Mr Samuel went on to say:

There are 21 million Australian consumers, about 16 million of them are using some form of telecommunications service and they are the big winners because, at long last, we’re seeing competition quite clearly infused into the telecommunications sector.

This legislation has widespread support across the telecommunications sector. I received a letter earlier this year—as I am sure other members of parliament did—from the Australian Communications Consumer Action Network, the Competitive Carriers Coalition, iiNet, Internode, Macquarie Telecom, Netspace Networks, Primus Telecom, TransACT Communications, Vodafone Hutchison Australia and the Australian Telecommunications Users Group. The letter, which related to the original bill and was co-signed by those 10 major groups, pleads the case for passing the bill with signatories arguing that we need these ‘comprehensive and coherent reforms’ to improve competition and consumer protection in Australia. These groups also emphasise the need to deliver these reforms for consumers in regional Australia. I read from the letter:

Australian consumers deserve and need these reforms, none more so than those in regional Australia. These Australians have been let down repeatedly by policies that have sought to paper over the symptoms of poor competition without addressing the root causes.

Through this legislation, we are bolstering consumer safeguards and protecting consumer access to affordable telecommunications services. The legislation retains and strengthens the universal service obligation. Telstra, as the universal service provider, therefore must ensure all Australians have reasonable access on an equitable basis to standard telephone services including payphones.

The customer service guarantee will be bolstered through minimum performance benchmarks to require telephone companies to meet or exceed the CSG requirement. If the standards are not being met, those companies will incur civil penalties. There will be additional priority assistance requirements for telephone companies. Through enhancing the powers of the Australian Communications and Media Authority, ACMA, to issue infringement notices, we will also have more effective enforcement of our bolstered consumer safeguards. The Senate Environment, Communications and the Arts Legislation Committee report also provided an endorsement of the legislation. The final report concluded:

The committee believes that the bill in its current form provides important and timely reforms to Australia’s telecommunications regulatory regime that will be of benefit to providers and consumers

The committee recommended that the bill should be passed.

We cannot let those opposite deny Australians better broadband and telecommunications services whilst they try to work out where they sit on the issue. Given that a few weeks ago Mr Malcolm Turnbull agreed at the Melbourne communications conference that ‘If vertical integration is the problem, then separation—structural or functional—is the answer’, we must ask how, in spite of these comments, those opposite still will not fully support the legislation that provides for the separation of Telstra. What is the reason for objecting to a bill which breaks down the telecommunications monopoly? Why oppose legislation which finally gives consumers and businesses a fair go? We need to act now to deliver fundamental reform to the telecommunications industry—reform which will benefit both consumers and businesses in the future. I commend the bill to the Senate.