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Wednesday, 29 February 2012
Page: 1168

Senator CONROY (VictoriaMinister for Broadband, Communications and the Digital Economy, Deputy Leader of the Government in the Senate and Minister Assisting the Prime Minister on Digital Productivity) (10:52): Firstly, can I thank all of those who have made a contribution. I welcome the opposition's constructive approach in supporting these bills, albeit with some reservations, and I am sure we will have a healthy discussion during the committee stage. We do welcome the support for the bills.

The package of three bills, the Telecommunications Universal Service Management Agency Bill 2011, the Telecommunications Legislation Amend­ment (Universal Service Reform) Bill 2011 and the Telecommunications (Industry Levy) Bill 2011, will provide a flexible, accountable and transparent model for delivering and funding public policy objectives in the telecommunications sector. The reforms contained in the bills being considered are aimed at ensuring continuity of key consumer safeguards through the transition to the National Broadband Network and into the future. These include ensuring reasonable access to standard telephone services and payphones, the National Relay Service and the emergency call service. The bills address important unfinished business dating back to the privatisation of Telstra. They provide for increased transparency and rigour in the delivery of basic consumer safeguards. Under this approach, the realistic costs of delivering these important services will be appropriately recognised.

The Telecommunications Universal Service Management Agency—or TUSMA, as it has now become known as—Bill 2011 will establish a new entity to support continuity of key telecommunications safeguards in the transition to the National Broadband Network. TUSMA will be a small statutory agency with responsibility for the delivery of the universal service obligation—or USO, as it is more commonly known—and other public interest telecommunications services. The opposition has suggested that TUSMA will employ an army of bureaucrats. This is clearly absurd, given that TUSMA's administration costs are expected to be around $5 million per annum. It will be focused on efficient and effective contract management, despite the claims of those opposite. TUSMA will have the benefit of industry knowledge and experience, and incentives, to ensure contracts are efficiently and effectively managed. TUSMA will enter into and administer contracts and grants for these services in accordance with the policy objectives set out in the TUSMA Bill.

The creation of TUSMA is necessary because the rollout of the wholesale-only National Broadband Network and yesterday's historic acceptance of Telstra's structural separation undertaking will fundamentally change the structure of the Australian telecommunications market. These changes will see Telstra's near ubiquitous national copper fixed line network progressively decommissioned as NBN Co. rolls out its next generation fibre network. These changes will empower TUSMA to require carriage service providers to provide information or documents to TUSMA that are relevant to the achievement of the voice-only migration policy objective.

The current USO regulatory arrangements that are imposed on Telstra were designed for a market where there was a vertically integrated operator of a national telecommunications network. The new National Broadband Network environment will enable all retail service providers to offer high-quality broadband services nationally. Therefore, in this environment it is appropriate to introduce a more competitive and open model for delivering universal service and other public policy telecommunications outcomes. These new arrangements will benefit both consumers and industry by promoting more innovative, effective and efficient service delivery arrangements. They will also clearly separate policy, regulatory and contractual functions respectively between the department, the Australians Communications and Media Authority—ACMA—and TUSMA. As such, TUSMA will be fulfilling different objectives to the ACMA. TUSMA will be subject to rigorous transparency and accountability requirements. This will help ensure that costs to industry do not increase unnecessarily.

The agreement with Telstra includes a range of incentives to promote cost savings. Further, a structured program of reviews provides opportunities for voice and payphone services to be provided more efficiently. In relation to concerns that TUSMA's scope should not increase unnecessarily, the legislation does provide some flexibility so that the services it delivers can be modified as circumstances change. Despite, again, the opposition's claims to the contrary, any proposed changes will be subject to clear parliamentary oversight and scrutiny.

The Telecommunications Legislation Amendment (Universal Service Reform) Bill 2011 amends the universal service regime in the Telecommunications (Consumer Protec­tion and Service Standards) Act 1999. The amendments mean that within approximately two years of commencement of TUSMA's 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. Subject to Telstra's record of compliance with its contractual and regulatory obligations, the minister may then make declarations that will commence the process for lifting regulation and shifting to a contractual model for the provision of universal service outcomes.

The Telecommunications (Industry Levy) Bill 2011 provides for the imposition of a new levy. This levy will replace two existing separate industry levies and will contribute to meeting TUSMA's costs for delivery of the USO and other public policy telecommunications outcomes. For the first time, government will also be making a substantial contribution towards TUSMA's costs and the delivery of key com­munications public interest safeguards. The government's budget contribution will be at least $50 million in 2012-13 and 2013-14 and $100 million each financial year thereafter. The government has also committed to increase its base funding in the first two financial years so that contributors to the industry levy, with the exception of Telstra, will not face an increase to that aggregate funding contribution. Furthermore, the government has also committed to review the levy arrangements and the need for any additional budget funding above its committed base funding during the course of the first two years of TUSMA's operation.

The TUSMA bill creates a rigorous oversight and accountability framework. The new legislation will provide for TUSMA to have a board structure and require the minister to ensure that TUSMA includes members who have substantial experience and knowledge of and significant standing in the operation of the telecommunications industry and business or financial management. These members will be expected to take a strong role in managing the costs of TUSMA activities. TUSMA will also maintain publicly available registers of the contracts and grants it administers and report annually to the minister on all significant matters relating to the performance of contractors and grant recipients. It will prepare a corporate plan every three years as well as a comprehensive annual report. It will provide reports or information to the minister on specified matters relating to the performance of TUSMA's functions and undergo a comprehensive review for 1 July 2018.

This accountability framework, together with the existing reporting requirements for statutory agencies under the FMA Act, will help give stakeholders the confidence that TUSMA will use its funding to fulfil its functions and policy objectives in an efficient, effective and appropriate manner. TUSMA will also be able to share information with other agencies and persons such as the ACCC and the ACMA.

I want to address a couple of the arguments that have been put forward by those opposite. They have argued that the government did not follow due process in negotiating its contract with Telstra for the delivery of the USO and other public interest services. However, Telstra is the primary universal service provider under legislation and is the only telecommunications provider with a national, ubiquitous fixed line network that can be used to ensure the continuity of key telecommunications services during the transition to the National Broadband Network. I would also note that there have been contestability arrangements under the USO since 2001, but no alternative providers have sought to supply services under these arrangements to date. People who are currently receiving key services need certainty that their services will not be disrupted, possibly for a long time, while a new USO provider rolls out a network or finalises negotiations for access to infrastructure.

TUSMA's 20-year agreement with Telstra to deliver key services such as standard phone services and public payphones will ensure continuity of basic safeguards for Australians and will strengthen the safety net for rural and regional Australia. I know there are some on the other side of the chamber who strongly claim to support basic safeguards for rural and regional Australia and a safety net. So we welcome their support for this bill. The agreement with Telstra does not—

Senator Williams interjecting

Senator CONROY: You are buying back the copper, mate. That is not bad. Buying back the copper—that is a classic. The agreement with Telstra does not preclude contestability for other key services that TUSMA will deliver under the contract. Seriously, you are renationalising the copper. What a cracker of a policy. The opposition has claimed that other services will not be subject to contestable arrangements. This is simply not true. Existing national relay service contracts are due to expire shortly and a competitive process will need to be run by TUSMA before 1 July 2013. The government has also committed to TUSMA undertaking a competitive process for the emergency call service within five years. By introducing a more contestable and flexible model for providing the USO these bills will promote greater efficiency, transparency and competition in the delivery of the telecommunications services that Australians rely on while preserving key consumer safeguards.

So I do commend these bills to the Senate but it is important to take into account that the National Broadband Network is being heavily contested. Senator Williams is going to slide out of the chamber now—sliding away from his commitments to regional and rural Australians, but they will be heartened by the fact that you want to renationalise. Did he check with you, Senator Fisher? Malcolm Turnbull yesterday announced that he is renationalising the copper. He said he will instruct the National Broadband Network company to take over Telstra's copper lines—renationalising it. That is what he announced, seriously. You should not let him blog—not live blog. It is really tragic. Renationalising the copper—I love it. Did he clear that with anyone, Senator Birmingham? Did anybody see it at all? Did anybody at all know what he was doing yesterday? That is billions of dollars that he has committed to give to Telstra to buy an asset that is dying in the ground, that is literally disintegrating in the ground, and he is going to give them billions of dollars for it. Even when they tried that on us we would not be in it. Fair dinkum, it is a cracker of a policy. I cannot wait to hear more about it. I look forward to seeing how much—

Senator Birmingham interjecting

Senator CONROY: We are bypassing them. We are paying for them to come across and we are renting their ducts. We would never have been mugs enough to buy their copper. Buying their copper! Goodness me! Did you hear that, Senator Ludlam? I know you are back in the chamber now, and I will wind up in a moment. Did you know that the Liberal-National Party announced yesterday they are renationalising the copper network?

Senator Ludlam: Communists.

Senator CONROY: I think that needs to go on the record. Senator Scott Ludlam for the Greens just called the Liberal Nationals 'communists'. That has to go on the record. With that thought in mind—

Senator Mason interjecting

Senator CONROY: You will be voting for this, apparently, Senator. You spent your entire political life, to your credit, fighting communism. You thought you had led the destruction of communism only to discover that once you got back into bed with those rural socialists they'd get ya! And now we have a policy to renationalise copper. So I will leave it at that, Senator Ludlam, and look forward to the chamber's support for these bills.

The ACTING DEPUTY PRESIDENT ( Senator Moore ): I know all those comments were made through the chair.

Senator CONROY: They absolutely were.

Question agreed to.

Bills read a second time.

Debate adjourned.