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Monday, 9 December 2002
Page: 7374

Senator LUNDY (1:35 PM) —I would like to clarify again what the amendments are about. The amendments are about removing the ministerial direction and what prevails is the long-term interest of end users test. It is very strange for the amendments to be presented in the way that Senator Harris has chosen to present them because, as I explained in my earlier comments, the intent of the bill overall is to make sure that carriers have the opportunity, through the anticipatory undertakings, to plan for the future. That is exactly the opposite of what Senator Harris is saying the amendments will do.

The amendments strengthen the provisions and remove the opportunity for what we are concerned about—political interference. The bill will have the effect of providing the anticipatory undertakings regime, which is what Senator Harris is passionately arguing is the core outcome of this bill. I think we need to acknowledge that rural and regional Australia is currently in dire need of support. The fact is that the infrastructure in rural and regional Australia, which effectively has been in the hands of a monopoly— Telstra's—for some time, is not getting better; it is actually getting worse. I think it would be a very positive outcome if the provisions of this bill were implemented so as to allow other competitors a far greater ability to determine the value of their investment in advance by determining anticipatory access undertakings.

I do not accept for a second the argument that to do such would undermine Telstra's position in the market and would make it less likely that Telstra will in fact make those investments. That does not follow, and it is not supported by the evidence that we have before us. For many years Telstra have been in a position to make the choice to invest in rural and regional Australia, and they have chosen not to. They have chosen not to in a way that has left rural and regional services not only depleted but deficient—knowingly so, as has been recently documented, albeit in a perhaps less strident way than it could have been, in the Estens report. I believe that there is probably even some genuine intent by the coalition government here to try to strengthen the competition regime with a view to encouraging alternative investors to Telstra and, through that, hopefully encouraging Telstra to make the sorts of investments necessary.

I do not accept the argument, Senator Harris, that to remove ministerial direction lessens that; I actually think it strengthens that. You are arguing that ministerial direction would come by way of encouraging rural and regional investment and that not to have ministerial direction there would somehow undermine that. I think the opposite will occur. I think there is a potential risk that ministerial involvement will actually strengthen Telstra's position at the expense of competition—and that is my concern. So I think we are coming at this from a fundamentally different premise. I have alleged on many occasions that I think the government and Telstra are far too close and that indeed they work together to prop up Telstra's position in the market to the detriment of competition and services, particularly in rural and regional Australia. That is why we are moving these amendments, because we think that at this point in time political interference is moving in that direction. I accept where you are coming from if you are arguing the case that you believe ministerial direction actually strengthens competition and will in fact improve services in the bush. But, quite frankly, I think the evidence has shown us otherwise. I think we want to achieve the same thing— improving rural and regional services—but we are at odds over the role that ministerial direction will play. I think that is why you feel the way you do about our amendments, but I hope that clarifies our intent with this amendment. As an opposition we have more faith in the independence of the ACCC in using the long-term interests of end users test than we have in ministers involving themselves in the decision making of the ACCC. So I hope that clarifies your concerns about Labor's position.

I would like to go to another matter that relates to the impact that the anticipatory undertakings have on pay TV. It is worth while laying out for the Senate in committee a number of the major concerns expressed during the consideration of this bill and the inquiry into this bill. One of the major concerns expressed not just by the Seven Network but also by Fairfax included the implications of this bill for pay TV. What we found out, of course, was that the anticipatory undertakings and exemption provisions of this bill did have a direct impact at the time on the negotiations that were occurring in relation to the Foxtel-Optus content-sharing deal. In fact, the successful passage of this bill enabled a crucial part of the Foxtel-Optus content-sharing deal to occur. The crucial part was that these anticipatory undertakings are a prerequisite for Foxtel's willingness to digitise their pay TV network. I, as well as many parties, have certainly expressed serious concern about this, because it is only with the successful passage of this bill that Foxtel will have the opportunity to seek anticipatory exemptions under these provisions so as to create an environment— effectively a six-months access holiday or up to 100,000 subscribers upon the digitisation of the pay TV network.

The government and other parties have been asked to excise the aspects of this bill that would relate to pay TV. Labor have not seen it as being appropriate for us to do that at this time, primarily because the ACCC will have to go through that formal process of listening to the arguments presented by Foxtel as to whether or not those anticipatory exemptions should be granted to digitise their service. So there will effectively be an opportunity for the ACCC to decide whether or not they believe anticipatory exemptions are an appropriate condition for the digitisation of the pay TV network. Foxtel have made it clear that they do see them as a prerequisite, hence our concern that there appears to be a too-cute-by-half aspect to the negotiations on the part of Foxtel and certainly by Telstra, given that they own that hybrid fibre coaxial—HFC—pay TV network and given their involvement in Foxtel. The minister has said on the record:

... I have requested the ACCC to report to me in January 2003 on the wider competition implications of emerging industry structures in the Pay TV sector, including implications for the telecommunications sector.

He has done this in the hope that this report will cast `further light on this issue'. Given the context of this bill providing the preconditions of the ACCC's formal contemplation of an exemption for a period of time or of set conditions for a future digitised Foxtel network, I would like to ask the minister about his key concerns over the emerging relationship between Telstra and the Foxtel network, particularly in the context of digitisation. I put it to you, Minister, that concerns have been expressed about Telstra's place in the pay TV market and that you yourself have commented about the concerns over that structure.

I ask the minister to give some assurance to the Senate that the structure of pay TV and its relationship with this bill will not in any way serve either to reduce competition in pay TV or to set in place unfair conditions in pay TV. Indeed, could the minister elucidate further his concerns about what he has called the implications of emerging industry structures in pay TV? I have to say that I interpret these as being concerns about new verticals and old verticals being re-established in the new digital pay TV regime, particularly when the regulatory authorities in most other jurisdictions around the world have sought to prevent a residual monopoly extending from telecommunications into other areas of carriage and infrastructure, such as pay TV. I would be very interested if you expressed your concerns, Minister, and provided the Senate with some assurance that this will not lead to any uncompetitive environment or suppression of true competition in our pay TV network, particularly the future digitised pay TV network.