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Thursday, 9 February 2012
Page: 548


Senator LUNDY (Australian Capital TerritoryParliamentary Secretary to the Prime Minister and Parliamentary Secretary for Immigration and Multicultural Affairs) (13:04): I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

TELECOMMUNICATIONS UNIVERSAL SERVICE MANAGEMENT AGENCY BILL 2011

The Telecommunications Universal Service Management Agency Bill 2011 is the cornerstone of a package that I am introducing today to achieve continuity of key telecommunications safeguards in the transition to the National Broadband Network. The other bills in the package are the Telecommunications Legislation Amendment (Universal Service Reform) Bill 2011 and the Telecommunications (Industry Levy Bill) 2011.

The regulatory arrangements for the universal service obligation (commonly known as the USO) were designed for a market where there was a vertically integrated operator of a national telecommunications network. Implementation of the Government's National Broadband Network policy will result in a fundamental change to the structure of the Australian telecommunications market as Telstra's near ubiquitous national copper fixed line network is progressively decommissioned as NBN Co rolls out its next generation fibre network.

We are moving to an environment where all retail service providers will be able to offer high quality voice and high-speed broadband services nationally using the National Broadband Network. It is appropriate that as we move to this new environment the model for delivering univer­sal service and other public policy telecommu­nications outcomes be reformed to facilitate the competitive supply of universal service and other public policy telecommu­nications outcomes. A regime that enables competitive supply arrange­ments will be of benefit to consumers and industry as it promotes more innovative, effective and efficient service delivery arrangements.

On 23 June 2011, the Government announced that it had entered into an agreement with Telstra to deliver universal service and other public interest services. As part of the reforms embodied in that agreement, the Government will establish a new agency, the Telecommunications Universal Service Management Agency to be known as TUSMA, which will manage the Telstra agreement and other contracts and grants (including the two existing contracts for the provision of the National Relay Service). TUSMA's remit is to ensure that all Australians continue to have reasonable access to universal service and other public interest telecommu­nications services.

The establishment of a statutory agency dedicated to the implementation and effective administration of telecommunications service agreements will promote high quality and efficient contract and grant management to maximise the benefit for consumers and manage risks appropriately, within a transparent and accountable legislative framework.

The Telecommunications Universal Service Management Agency Bill establishes TUSMA and sets out the governance structure of the agency, including its functions and powers in contracting for public policy outcomes. It creates a rigorous transparency and accountability frame­work for TUSMA's activities, and also establishes arrangements for the collection of levies from the industry.

The Bill provides that TUSMA will be established as a statutory agency under the Financial Management and Accountability Act 1997, and its CEO and staff will be employed under the Public Service Act 1999. The day to day administration of TUSMA will be the responsibility of the CEO, but decisions that affect industry and consumers will be made by a Chair and other appointed members who together will have the right mix of skills and experience to fulfil TUSMA's statutory objectives.

TUSMA will, on behalf of the Common­wealth, be able to enter into and manage contracts or make and manage grants for financial assistance. These contracts and grants must address clear policy objectives based on the current legislated objectives for the standard telephone service and payphone components of the USO, the National Relay Service and the emergency call service, and also cover the provision of programs to support the continuity of supply of carriage services during the transition to the NBN. TUSMA will be required in performing its functions and exercising its powers to take all reasonable steps to ensure that the policy objectives are achieved.

The Bill provides for the Minister, by legislative instrument, to make standards, rules or benchmarks for the universal service components of the agreement with Telstra, and for future contracts and grants. Service providers with whom TUSMA has a contract will be required to comply with standards, rules or benchmarks.

The Bill includes transitional provisions to ensure that TUSMA is responsible and accounta­ble for managing the Telstra agreement and the existing National Relay Service agreements.

TUSMA's reporting obligations will be extensive - not only will TUSMA be subject to existing reporting requirements under the FMA Act, but it will have additional obligations including maintaining public registers of grants and contracts and obligations to report annually to the Government and the Parliament on the performance of contracts and grants. The transparency and accountability provisions are important protections that will enable scrutiny and evaluation of TUSMA's performance.

The Government will commit base funding to TUSMA of $50 million over the two financial years 2012-13 and 2013-14, and $100 million per annum after that.

TUSMA's residual funding requirements will be met through a consolidated industry levy scheme which, from 1 July 2012, will replace the current USO and National Relay Service levies and also cover future funding for TUSMA's other responsibilities.

The accompanying Telecommunications (Industry Levy) Bill 2011 imposes an obligation on industry carriers to pay the levy. The Telecom­munications Universal Service Manage­ment Agency Bill covers arrangements for collecting the levy and determining liability.

The amount each telecommunications carrier has to pay towards the levy will be based, as is currently the case for the USO and NRS levies, on its eligible revenue as assessed by the Austra­lian Communications and Media Authority. The Australian Communications and Media Authority will remain responsible for collecting the levy and determining who must pay.

Transitional mechanisms are set out in the accompanying USO Reform Bill. The Government also made a commitment, when it announced the TUSMA arrangements in June this year, to review the levy arrangements and the need for any additional Budget funding, over and above the Government's committed base funding, during the course of the first two financial years of TUSMA's operation.

The Bill also provides for a review before 1 January 2018 of the Act, any legislative instruments made under the Act, and associated provisions of the Telecommunications Act 1997.

This is an important package of legislation. Together, the three Bills will provide certainty for all Australians that telecommunications consumer safeguards will continue to be delivered in the transition to the National Broadband Network, under transparent and accountable arrangements. The Telecommunications Universal Service Management Agency Bill 2011 contains the key measures in these reforms, by establishing an independent body that will transition the industry from regulated obligations to a more flexible service provider model that will promote greater efficiency, transparency and competition in public policy delivery.

 

TELECOMMUNICATIONS LEGISLATION AMENDMENT (UNIVERSAL SERVICE REFORM) BILL 2011

The Telecommunications Legislation Amendment (Universal Service Reform) Bill 2011 forms part of a package of legislation that I am introducing today to achieve continuity of key telecommunications safeguards in the transition to the National Broadband Network (NBN). The other bills in the package are the Telecommu­nications Universal Service Management Agency Bill 2011 and the Telecommunications (Industry Levy) Bill 2011.

This Bill plays an important supporting role to the overall reforms for the delivery of telecommunications safeguards, which are largely set out in the Telecommunications Universal Service Management Agency Bill 2011. TUSMA will focus on managing the delivery of key telecommunications services under contracts or grants that the community expects will continue to be delivered effectively and efficiently. TUSMA will be accountable to the industry and to Government through extensive reporting arrangements. The residual costs of TUSMA that are not met from Budget funding will be met through a new Industry Levy Scheme based on current USO levy arrangements. The new levy will be imposed by the Telecommunications (Industry Levy) Bill.

TUSMA is expected to be operational by 1 July 2012 so it can take over responsibility for the Commonwealth ' s agreement with Telstra to deliver universal service outcomes and other public interest services. The Government intends that there be an approximately two year period for concurrent operation of contract and regulatory requirements before phasing out USO regulation. Over time, the current regulated obligations to provide voice services and payphones will transition to a model that is similar to the current arrangements for the provision of the National Relay Service, in that the Commonwealth (through TUSMA) will contract with service providers for the supply of these important services, without imposing specific regulatory obligations.

This Bill amends the universal service regime in the Telecommunications (Consumer Protection and Service Standards) Act 1999 so that within two years of commencement of TUSMA operations, the Minister must consider whether it is appropriate to remove the current regulated USO on Telstra to make the standard telephone service and payphones reasonably accessible, and shift to a fully contractual model for provision of universal service outcomes.

The Government recognises the importance placed by many in the community on having access to basic voice services and payphones. Therefore the Bill provides that between 18 months and two years after the establishment of TUSMA, the Minister will be required to consider if Telstra:

has met relevant contractual and regulated obligations during the initial transitional period, and

will be likely to substantially comply with its ongoing contractual requirements for provision of standard telephone services and payphones.

The Minister will be required to separately consider the removal of the standard telephone service and payphone elements of current USO regulation. Each of these decisions will be subject to Parliamentary scrutiny and disallowance. In considering whether to lift USO regulation, the Minister will be required to obtain advice from both the TUSMA and from the communications regulator, the Australian Communications and Media Authority, as to Telstra's record of compliance with its contractual and regulatory obligations for the standard telephone service and for payphones. The Minister will also be able to consider any other relevant matters.

If the Minister considers that there are satisfactory contractual arrangements in place in relation to payphones, Telstra's regulated obliga­tions for payphones can then be removed across Australia. If the Minister considers that there are satisfactory contractual arrangements in place for the standard telephone service, Telstra's regulated USO obligations to supply the standard telephone service will be progressively removed in fibre areas as Telstra migrates customers from the Telstra copper network to the NBN fibre network in accordance with a final Migration Plan that has been approved by the ACCC. In areas where fibre is not being rolled out, and Telstra is not required to structurally separate, Telstra's regulated obligations to supply the standard telephone service will be removed. Linking the removal of USO regulation for the standard telephone service to the progressive NBN roll out in fibre areas and the migration of customers from Telstra's copper network to the NBN fibre network is consistent with the requirement that the package of Bills not commence operation unless Telstra is legally committed to implement structural separation.

If the conditions for regulatory removal are not met initially, the Bill provides the Minister with the power to defer consideration of whether regulation should be removed for an additional period of 18 months, with up to two such deferral declarations able to be made.

Removal of USO regulation in relation to the standard telephone service will not change the important safeguards (such as the Customer Service Guarantee) that apply to Telstra and all other providers of a standard telephone service.

The Bill makes a range of other transitional and consequential amendments to the Telecommunications Act 1997 and the Telecommunications (Consumer Protection and Service Standards) Act 1999. The Bill also makes transitional amendments to provide for the phasing out of the USO and NRS Levies (respectively) after 30 June 2012 given the transition to a new Telecommunications Industry Levy Scheme. This Bill also includes conse­quential amendments to ensure that the ACMA, as the communications regulator, has the ability to effectively enforce the new levy arrangements. The details for the assessment and collection of the new Industry Levy are included in the Telecommunications Universal Service Manage­ment Agency Bill 2011.

This is an important package of legislation. Together, the three Bills will provide certainty for all Australians that telecommunications consumer safeguards will continue to be delivered in the transition to the National Broadband Network, under transparent and accountable arrangements. The Telecommunications Legislation Amend­ment (Universal Service Reform) Bill makes necessary transitional changes to support the establishment of an independent body that will take the industry away from regulated obligations to a more flexible service provider model that will promote greater efficiency, transparency and competition in public policy delivery.

 

TELECOMMUNICATIONS (INDUSTRY LEVY) BILL 2011

The Telecommunications (Industry Levy) Bill 2011 is one of three bills that together will reform the delivery of universal service and other public interest services. The other bills in the package are the Telecommunications Universal Service Management Agency Bill 2011 and the Telecommunications Legislation Amendment (Universal Service Reform) Bill 2011.

The Telecommunications (Industry Levy) Bill 2011 works with the provisions in the Telecommunications Universal Service Management Agency Bill 2011, which set out a scheme for determining who must pay the levy, and for administering and enforcing that scheme. Under the Industry Levy Bill, if a person has a levy amount for an eligible levy period because of section 99 of the Telecommunications Universal Service Management Agency Bill, then levy is imposed on that amount and a person is liable to pay the levy.

The persons who will have a levy amount are defined in the Telecommunications Universal Service Management Agency Bill, and are telecommunications carriers or, if the Minister has made a legislative instrument to that effect, carriage service providers. Under the Telecom­munications Universal Service Management Agency Bill 2011, there is also provision for the Minister to exempt particular persons from being considered liable to pay levy.

The Minister for Broadband, Communications and the Digital Economy recently established a $25 million eligible revenue threshold for levy contributions, and it is the Government's policy that this important red tape reform will continue under the new legislative arrangements.

Debate adjourned.