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National Broadband Network Select Committee - 29/01/2014

CARPENTER, Mr Ian, Mayor, City of Greater Geraldton

[12:40]

ACTING CHAIR ( Senator Seselja ): I welcome Mayor Ian Carpenter from the City of Greater Geraldton. Do you wish to make a brief opening statement before we go to questions?

Mr Carpenter : Yes, please. Firstly, thank you very much for the opportunity to make a submission. The City of Greater Geraldton is a regional capital of Western Australia. The city is some 400 kilometres north of here. Our local government area covers an area of around 12,000 square kilometres and we have a population of about 40,000 people.

We are the largest local government outside of the Perth metropolitan area. When we found that the NBN large cable was going to come through Geraldton out to the Square Kilometre Array site we seized the opportunity to see what we could leverage off having that facility go through our territory. So, together with the Mid West Development Commission, we decided to see what we could do to help with the SKA bid. We had people on the committee who developed the bid. As you probably all know, that, in part, has now come to Australia. That is a great outcome, not only for Australia for particularly for our area.

We became aware that having this massive fibre pipe through our city would put us in a position of advantage, so we decided to develop a digital strategy for Geraldton and the mid-west. Through funding from Regional Development Australia, the Mid-West Development Commission, the Department of Commerce and the Northern Agricultural Catchments Council we employed a company to help us develop a strategy for our area so that we could take early advantage and, hopefully, take a good position in terms of putting ourselves ahead of everybody else. One of the things that we developed was a digital strategy. You have a copy of that in the pack that I handed out. That lays down the sorts of things that we saw that we could leverage off this massive pipe—that is what I will call it—that came to Geraldton.

If you look at the GDP of our area you will see that we are primarily a primary industry area. The primary industries are obviously agriculture, fishing and mining. The first two have issues with climate change. The third has some issues in terms of longevity: obviously, mines run out one day. So we were very careful to try and develop a strategy that would give us long-term employment in our area. That was the way we headed.

As a result of putting this strategy together we found out about a program that IBM are running across the world. That program is to provide their assistance to 100 cities across the world over three years. They provide a grant of some US$400,000 to help you look at how you might improve your lot—not only in terms of digital technology and so on, but in terms of developing strategies that will help your community as a result of that. We lodged an application for the Smarter Cities Challenge, and I am pleased to say that we were one of only two cities in Australia—the other being Townsville—that were accepted.

We did an enormous amount of work with IBM over about a three-week period. There was a lot of work leading up to that but we actually had six of their executives come to our city and help us develop a strategy that would best to utilise the digital technology that was on its way. The sorts of things that they came up with were to: create the foundation for a digital Geraldton, create a smart digital-services hub, develop innovative opportunities to become the renewable energy capital of Australia, and launch a leadership alliance to drive the results. That is the stuff that came out of the report.

To validate that report we engaged the services of what we call our community trustees, to make sure that we were heading down the right path and that that was what our community wanted. They did a lot of work with IBM and the local community, to understand the community's wishes, and at the end of the day they made a recommendation to our council that the advice given was the sort of action that we should be taking. Council adopted that. As a result of that, we began working with CSIRO, in particular, to see how we could leverage off, particularly, the NBN pipe that goes from Geraldton out to Boolardy Station, where the SKA site is going to be. We also have the Murchison Widefield Array operation out there, which is a great facility. It downloads, they tell me, these days, something like the equivalent of a stack of DVDs 70 kilometres high, every day. It just blows your mind, the amount of data that comes down. It demonstrates the facility that goes through.

Fortunately for us, they allocated a number of fibre pairs to us, which enabled us to get our Mullewa district office connected. Initially, it was going to go straight cross-country and miss Mullewa, so we were able to talk them into going via Mullewa and then up to Boolardy. As a result of that, we were also able to connect our airport. We were able to connect our works depot, our Aquarena and a number of other things, but I won't bore you with all those details. As a result of, particularly, the cable going past our airport, we are developing a technology area there. We have already spent about $5 million on developing that, in terms of earthworks, infrastructure and so on. We already have a commitment from a local IT company to build a data centre there. They have already built one in the centre of our city. So we are starting to see the benefits of what NBN can do for a community.

I get to the position of concern when I hear issues like the degraded copper network. The NBN, I think, was originally designed to help the general population and it seems to me, from what I am hearing—particularly from the people who preceded me, but from other sources as well—that we are going to get a system which is not as good as it possibly could be. I understand the issues of cost but I also think that we need to consider, if we take the cheaper option and delay putting fibre in until a later date, what it is going to cost and what we are going to spend on maintaining the existing copper network. That is my real concern.

The city, because of its location, is a point of interconnect for the whole of the north of Western Australia. It is an extremely important place, in terms of the distribution of cable and so on. At the moment, there is a lot of capacity in the current cable, which is not being utilised by the department of health and so on. As a result of us being able to hook our Mullewa district office into the network we have been able to put in a videoconferencing facility. It is very small community. That helps people from the local community, including a lot of Aboriginal people who unfortunately, as you know, have very poor levels of health compared to the rest of Australia. That facility can now be used for those people, bearing in mind they are a hundred kilometres away from a regional hospital. They can now connect with the city and connect with the Perth metropolitan area.

The other aspect I wanted to cover is higher education. We have a university centre which is set up on a very unusual model: it does not take services from one particular university but takes them from all over Australia. It does that very successfully but it relies on its students having very fast connections so that they can do their work from home. We do not have sufficient space at the university centre to accommodate all the people that work out of it; they can only come in there for limited times. They have done some calculations on what would happen if they had to relocate to Perth. It would take some $2 million annually out of our local economy, and that is obviously substantial.

The other issue I wanted to cover is that, quite apart from being the point of interconnect for the north of Western Australia, it is also towards the end of the south-west integrated system for electricity grid. That in itself creates problems. We are almost at capacity now and one of the things we are trying to facilitate is that Geraldton become a renewable energy centre. We have all the major types of renewable energy, with something like 100 wind towers, a 10 meg solar farm, all of which has gas running right through the middle of it for backup power. We also have good wave frequency if they want to go down that track. One of the things that you need when you start using higher levels of renewable energy is to develop a smart hub. They are dependent on very good communications back to every single household in the area and that is the direction we had hoped to be going. If we get a substandard service then I do not believe we can go that way. That will throw the spanner in the works, so to speak.

We are of the opinion that fibre to the home is a far better prospect in the long term. We understand it will cost more but I think it will be borne out in the reduced costs of maintenance over time. I will leave my submission there and let you know that I have tendered documents for you to look at. It was interesting to hear the previous speakers talk about some press in Geraldton. In this morning's paper there is an article headed 'Landlocked in a sea of NBN'. This is the story of a man who is surrounded by it but cannot get to it. From memory, NBN told us there would be about nine different areas to which it would be reticulated. Only a few of those have been done and our residents are starting to say, 'What is going to happen to me? These people over here have got the red-hot service and I have got a heap of rubbish.' That is the difficult our community is facing at the moment.

CHAIR: Mayor Carpenter, thank you very much for your opening statement. I let you continue because I think you anticipated certainly many of my questions well in advance. I would also like to thank you for the material you have provided today. I take this opportunity to congratulate the City of Greater Geraldton on your digital economy strategy, which shows a region taking genuine initiative. I think it is very useful evidence for us in the committee.

Mr Carpenter : One thing I did not mention was that we actually have set up a digital hub in Geraldton to train both local residents and businesses on the things that they can get out of the digital economy.

CHAIR: Perhaps I will go to one of the last points you raised, about changes that are now proposed in the construction, and I will reference the article you just brought to my attention: 'Landlocked in a sea of NBN'. I know the map provided by NBN for Geraldton has changed, with some four FSAMs disappearing off that map—

Mr Carpenter : I have not seen that.

CHAIR: in the last little while, and the title of the map is changing. In August 2013 the map was titled 'Geraldton fibre serving area' whilst the February 2014 map is called 'Geraldton fixed-line serving area'. Is the council aware of these developments?

Mr Carpenter : I have yet to see that. I am glad I have seen it now, because I can see some concern coming out of those residents in the Mount Tarcoola area. That is a very heavily populated area with very young families.

CHAIR: In fact, for the area of Mount Tarcoola, Tarcoola Beach, Strathalbyn and an area north of Strathalbyn there seem to be four FSAMs which have disappeared off the NBN Co. maps.

Mr Carpenter : All of those areas you are talking about are areas where there are young families, who are more likely to be wanting to use high-speed technology, so that concerns me.

CHAIR: Perhaps I could ask you to take on notice a response by the council to those changes and what the implications are with reference to your strategic plan. Obviously, given your evidence to date—

Mr Carpenter : I can probably sum it up in two words: very disappointed.

CHAIR: I certainly appreciate that. Also, through evidence to this committee, we have not been able to receive a guarantee from Dr Switkowski in relation to the areas that were identified on those maps previously for the fibre-to-the-premises rollout. They are no longer able to guarantee that, even though there was some speculation at some point, and previous statements were made, that for all premises on those maps the rollout would continue.

I would like to ask you a couple of questions about an area of your strategic plan which is obviously quite central to your regional economy, and that is in relation to building small business capacity and confidence, leveraging the strategic strength of having the NBN present in Geraldton and the region to promote new businesses and start-up businesses in the area. Can you elaborate on the strategy around promoting small business use of high-bandwidth networks and how you foresee that impacting positively in your local and regional economy?

Mr Carpenter : One of the things that regional areas and small towns always have to contend with is the competition that comes from capital cities, in terms of people travelling to the city to buy things that are not always available in rural and regional areas. These days, people are inclined to use the internet to find things and have them delivered. We are trying to encourage our local people to develop a digital presence so that instead of all that business going to metropolitan areas it stays within the local community. I think that is really important. That is what we are trying to train them to do.

Senator THORP: In your City of Greater Geraldton Economic Development Strategy 2013-23 I note that you say that a lot of your infrastructure is already strained—I am summarising—but that, through the NBN, Geraldton stands to obtain a significant regional advantage with the deployment of new, ubiquitous, state-of-the-art fibre-optic broadband infrastructure replacing traditional copper telephony across much of the Geraldton area.

I am aware that you were present during the evidence given by the previous witnesses from the CEPU. They are stating that the old copper infrastructure in WA is far from optimal. Would you agree that this statement in your economic development strategy, therefore, is still accurate?

Mr Carpenter : Yes, I would.

Senator THORP: We have talked about the changes that would occur with the fixed-line as opposed to optic-fibre areas. How would that affect services that the city of Geraldton can offer its constituents? You have this mosaic, if you like, of service delivery.

Mr Carpenter : The haves and the have-nots?

Senator THORP: Yes.

Mr Carpenter : Quite apart from the inequity of all of that, which I think is pretty poor, it certainly puts people at a disadvantage, and we would certainly be advocating to try to have that rectified. I can recall when NBN first came to the city and started talking about where they were going to provide fibre. We suggested places where we had approved new subdivisions and so on and that they had not considered. So there was a lot of work we did with them to try to identify places where they should be going.

There was also an area, which is on the map but not shown, called Narngulu, which is our industrial area. They are obviously going to be a very large user of digital technology—there are engineering firms and trucking firms and so on out there—so we suggested that they should consider laying fibre in the whole of that area. They decided not to and decided to go for fixed wireless. That is fine, because I think that can provide a good service, but I just find it a bit amazing that in an area where there are a lot of businesses they have elected not to go there.

Senator CONROY: It is great to see you again, Mr Carpenter.

Mr Carpenter : Thank you. I remember your coming to Geraldton for the opening of—

Senator CONROY: My apologies that I missed some of your presentations at the beginning. I think you are being quite modest. Your council and your community have won a number of awards because of its farsighted vision of what it is trying to do to turn Geraldton into a regional digital hub. I remember meeting the IBM team that awarded Geraldton a very significant award nationally for its vision. So I think you are being very modest about the ambitions of your area, because you have been a proponent of wanting to create that digital hub in Geraldton for some time. Could you tell us a little bit about what that award was for?

Mr Carpenter : The IBM award was an amount of US$400,000. But the important thing was that we were able to get six IBM executives from all around the world to come to our community and tell us what is being done in other places and about the sort of research that they are doing which can enhance the lives of people in regional areas. Quite apart from my role as Mayor of the City of Greater Geraldton, I am involved with two other groups. One is called the WA Regional Capitals Alliance. That alliance is drawn together to do some work with the University of Western Australia to try to assist the state government to develop policy. We are not just about getting money; we want to develop policy which will better suit regional and rural people. I am also involved with Regional Capitals Australia, which is a similar body and which is starting to work with the federal government. I am the deputy chair of both organisations at the moment, and I can tell you that these NBN issues are very hot topics right across Australia, with all of our members.

Senator LUDLAM: Thanks for taking the time to come down, and I would also like to add my voice in congratulating the city on your advocacy and to assure you that we will be continuing to advocate for that rollout to be concluded. One of the reasons that we wanted to invite you here is that you are the only regional capital in WA that has even the limited rollout that you have been given. We want to see that completed, obviously.

Mr Carpenter : So do we.

Senator LUDLAM: But I figured it would be useful to hear from people who could give us a view of what it is like to have this technology in place, not hypothetically but in real life. I think the last time I saw you was for the switch-on.

Mr Carpenter : That is right.

Senator LUDLAM: But the red button somehow got left on the road, so we had a virtual red button.

Mr Carpenter : Not our fault.

Senator LUDLAM: Absolutely not—no criticism of the city. But my lasting recollection of that day is when you stitched us into the community centre at Mullewa, with a mob of schoolkids and local people 100 kilometres away, and it was as though they were in the room. I just wonder whether you could give us a bit of an insight—start with the city and the administrative layer, if you like—into the practical differences that the technology has made to the way that the city and the region are run.

Mr Carpenter : Sure. As I noted earlier, we are 400 kilometres from the Perth metropolitan area, and from a government perspective we do a lot of business down in the city, which necessitates us mostly coming here. But, with the advent of the high-speed video link, we now do a lot of our work in that way. Everybody knows that you can talk to people on the phone or send them emails, but until you see the expression on their face you do not really know what they are thinking. I can see you going like this there! That is one of the greatest innovations, in my mind, about what that level of communication can do.

As I said, I have been pushing the state government to develop a sort of 'hub and spoke' model for local government where you could have all of the data storage in a central place—for example, Geraldton, because we are a point of interconnect. All of the programming and storage would be based in Geraldton, for example, but it might be Bunbury for the south-west. The smaller local governments around us—and there are far too many of those, I might add—have an issue with getting people out to their communities to fix up their hardware and software all the time. It is very expensive for them to do that. So if you have it all located in one place, near where all the technicians are, it is much more cost effective. They are just some of the things that come out of that. I think that, in particular, the telemedicine aspect is currently under-utilised in our area, and there are a million and one different things that you could do in that vein. I am just awed sometimes by the amount of things you can do across the net these days.

Senator LUDLAM: If it exists.

Mr Carpenter : If it exists.

Senator LUDLAM: If the infrastructure is there.

Mr Carpenter : I will just tell you a little story. Last night after a council meeting, one of my councillors came to me and said, 'With my NBN connection'—it is in the Rangeway area, which is clearly going to be covered by it, and they have already laid the cable past his place—'I am at No. 5, and it is interesting that Nos 1, 3, 7 and 9 can get it but I can't get it.' I said, 'Why not?' He said, 'They can't tell me.'

Senator LUDLAM: I was going to come to that. That is a very localised example, I guess. But since the election, when there was a very sharp and deliberate change of policy—we are still trying to establish what it is—what contact has the city had with NBN Co. or its various subentities?

Mr Carpenter : Prior to then, the amount of work that they did with us was excellent. They kept us well informed of rollout dates and all that type of stuff and where the particular areas where they were going to be laying the cable were. It was fantastic. As soon as the election came, it was like a guillotine; it just stopped.

Senator LUDLAM: That is an uncomfortable metaphor, but we can adopt that. That is nearly five months ago. What contact have you had with the corporation since then?

Mr Carpenter : I personally have had none, and as far as I know the officers of the city have not had any either.

Senator LUDLAM: Really? So all you get is in the public domain when they start removing FSAM areas from the maps?

Mr Carpenter : I was not aware of that until I saw it here today.

Senator LUDLAM: That is a bit mad.

Mr Carpenter : It is, isn't it?

Senator LUDLAM: Have you attempted to make contact with the company to find out what their intentions are for the region?

Mr Carpenter : To be honest, I have not. It sounds as if I had better, though.

Senator CONROY: Yes, I was going to say that you might want to give them a call.

Senator LUDLAM: It might be worthwhile. I can come back later if there are other senators with questions.

Senator SMITH: Welcome, Mayor Carpenter. I was curious to hear that you had not seen the map. You may then not also be aware that in the period 9 September to 28 January the number of brownfield premises passed in Geraldton has increased from 750 to 5,700. Were you aware of that?

Mr Carpenter : No, I was not. I am not sure that the fact that it passes their premises allows them to connect yet.

Senator SMITH: That is a very valid point and one that I referred to earlier in this hearing. There has been a threefold increase in the activations from 9 September to 28 January in the Geraldton area.

Mr Carpenter : Okay. I was in the second tranche of the rollout. I live right in the CBD area, and I have just been advised that I can connect.

Senator SMITH: Perhaps you could explain to me this comment in your submission: 'The success of the city's digital strategy is solely underpinned by the commitment of the federal government to roll out all three NBN infrastructure platforms.' Can you elaborate on that for me.

Mr Carpenter : That is too technical for my level of knowledge.

Senator CONROY: I think the satellite and fixed line—

Mr Carpenter : Yes, satellite and fixed. Sorry. I missed that one.

Senator SMITH: From your own submission, the adoption of various or mixed technologies is critical to the success of your digital strategy.

Mr Carpenter : If you are going to cover all of the people in Western Australia, not just Geraldton.

Senator SMITH: The 12,000 square kilometres that you referred to in your opening statement are very, very important.

Mr Carpenter : Yes, all three of them in that area.

Senator SMITH: Are you aware that the new government and the new minister have specifically committed to that mix of technology approach?

Mr Carpenter : Yes.

Senator CONROY: It is a different mix of technologies.

Mr Carpenter : I suppose my concern is the absence of fibre to the premises.

Senator SMITH: When did you expect the NBN rollout to be completed in Geraldton?

Mr Carpenter : From memory, I think it was going to take about 2½ or three years.

Senator SMITH: The strategic review that was just completed showed that in Western Australia only 157 premises had been activated. Did you think it might be necessary to revisit the rollout plan or the city's understanding of when that rollout was going to be completed based on the information that was made available in the strategic review?

Mr Carpenter : I guess so. But I suppose it is also important to say that, whilst you might be going past people's houses, you need to be able to get people to connect to it.

Senator SMITH: Absolutely. There were 157 people activated in Western Australia at 30 September last year.

Mr Carpenter : I understand the significance of that but—

Senator CONROY: Or brownfields.

Senator SMITH: That is right: brownfields. Was the city totally convinced, totally satisfied, that the rollout of the NBN in Geraldton was going to be completed on time?

Mr Carpenter : How long is a piece of string? I am not involved with the contracting industry. I do not know.

Senator RUSTON: Can I follow up. I do not think Senator Smith actually asked you whether you had evidence. I think what he asked you was whether the council was satisfied that it was going to occur, that you were satisfied the information that you had received, the evidence that you have been provided, the way that it was being rolled out would have given you comfort to believe that it was. So I do not think it is a technical issue.

Mr Carpenter : I guess I was, because there were lots of contractors running around—it was quite obvious; they were all over the city—laying the cable. So, yes.

Senator SMITH: The City of Geraldton was in a very unique situation, Mayor, because I am not sure others across the country who live in regional Australia had the same level of confidence. But, nonetheless, thank you very much.

Mr Carpenter : Just to follow up on what you were saying: the reason we developed our digital strategy was that we thought it was going to happen. It now appears that the rug may have been pulled.

Senator SMITH: Some of us at this hearing would argue that it is still going to happen. It is best demonstrated by the number of premises passed and the number activated since 9 September.

Senator CONROY: It is quite sad to see how desperate Senator Smith is to try and claim pre-election preparatory work as the coalition's rollout. This is the completion of Labor's planned rollout that is taking place, not any new work commissioned by the fixed-line serving area. In fact, what you see from that map up there, Mr Carpenter, is that areas that were previously going to receive fibre to the home—making sure that it was connected, to take up your point, a very important point—are no longer going to be receiving the best—

Mr Carpenter : Yes, and I am concerned about that.

Senator CONROY: Yes.

Senator SMITH: The suggestion that it has slowed since the election is not true, and that is demonstrated by NBN's own facts, which are on the public record.

CHAIR: The evidence speaks for itself! Senator Ruston.

Senator RUSTON: I just wanted to seek some clarification here, from your understanding. You have made a couple of comments here like 'they've elected not to go there' and that things have been 'taken off the map'. Now, my understanding was that the maps were reviewed to better reflect the general public's understanding of what 'under construction' meant. I am not sure that I am aware, or you are aware, that things are not going to go ahead. It is simply that they have gone back to the basic understanding of what people actually put down as 'under construction'. That is not to say that these places are not going to receive things, merely that it is under review, as Mr Turnbull made very clear in his election campaigning. That is not to say that these areas are not going to be connected. It is simply saying: it is being reassessed at the moment and, once it has been reassessed so that we can have the most efficient, most effective and fairest rollout under the coalition's policy, you will be advised. I am concerned that you are making statements like 'they've not elected to go there'.

Senator CONROY: And I am concerned you are now leading the witness, Senator Ruston. Let me read to you Dr Switkowski's comment to this committee. When I asked, 'Are you giving a commitment that the 500,000-odd people from whom the colour-coding was removed will still receive fibre to the premises,' this is what Dr Switkowski said:

No, I cannot give that commitment, because we are reprioritising the whole build program as we speak.

So don't try and pretend to Mayor Carpenter, 'Don't worry at all because you've been removed from the map'—

Senator RUSTON: Now you are verballing me. So, if it would be okay, could I continue my questioning?

CHAIR: Hang on. Before we cut across the table, Mayor Carpenter, would you like to respond to Senator Ruston's comments?

Mr Carpenter : Yes, I would. I understand plans have to be reviewed. What I do not understand is this: in our case, I think, as I said earlier, there were nine areas—and there were 1,800 connections per area or something like that, if I remember rightly—and they were going to do 1, 2, 3, 4, 5 and the first one was going to be rather slow because they had to move through and clean all the pipes out and do all the stuff that they had to do; but, as it went on, the contractors would get ahead of the people actually laying the cable so that when the people laying the cable got to section 2 they could go straight into it. So it was a sort of cascading arrangement, which would hopefully become more efficient as it went along, as people got more accustomed to doing what they were doing. So we had nine areas. We got to section 2, maybe 3, and then things started to slow down because, I guess, contracts had not been let—and, with the review, contracts are not going to get let, I suppose, until it gets sorted out. That is my concern.

CHAIR: Thank you very much, Mayor Carpenter, for appearing before the committee today. Your evidence is very valuable.

Mr Carpenter : Thank you very much.

Senator CONROY: Thanks for taking the time to come today.