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Environment and Communications Legislation Committee
24/03/2017
Estimates
COMMUNICATIONS AND THE ARTS PORTFOLIO
Department of Communications and the Arts

Department of Communications and the Arts

CHAIR: It being 1.30, this hearing will resume and we move to program 1.1, Digital Technologies and Communication Services. I invite questions.

Senator URQUHART: Dr Smith, I wanted to confirm that it is the department that creates NBN electorate briefs, using data provided by NBN Co, at the request of the minister.

Dr Smith : I will ask Mr Robinson to respond to that but, yes, that is my understanding.

Mr Robinson : Yes, that is correct.

Senator URQUHART: In correspondence dated 23 December 2016, to my FOI request, the department indicated that these electorate briefs contain confidential or commercially sensitive information. Can you tell me if that is correct?

Mr Robinson : That is correct.

Senator URQUHART: Why is that information sensitive or commercial? What is the basis of that?

Mr Robinson : That may vary, but I think it would include the precise—I would actually have to take that on notice; my apologies.

Senator URQUHART: I have the letter here. I am happy to give that to you to have a look at to tell me why it is commercially—

Mr Robinson : If I can get you an answer perhaps later, I will do my best to do so.

Senator URQUHART: I really would like to have that answered. If you are saying that information is confidential or commercially sensitive, then I do not understand how you do not know that.

Mr Robinson : I will try to get you an answer as soon as I can.

CHAIR: Can I clarify—is this commercial-in-confidence information?

Senator URQUHART: No. The department indicated to me that they contained confidential or commercially sensitive information. My question was: why is it sensitive or commercial? I am not asking about the information; I am asking why. As I understand, Mr Robinson does not know why—and I do not understand how you do not know, Mr Robinson.

Mr Robinson : As I said, I will take it on notice and I will try to get you an answer within the course of this hearing, if I can.

Senator URQUHART: So you will get me an answer to tell me why you do not know?

Mr Robinson : No; I think your question is: what type of information is in the briefing that could be commercially sensitive?

CHAIR: Mr Robinson, if your staff listening to this could endeavour to get that information as soon as possible, that would be appreciated.

Mr Robinson : Sure.

Senator URQUHART: For what purpose are NBN electorate briefs created?

Mr Robinson : They are prepared for the use of the minister and the minister's office, for a general briefing about the rollout of the project.

Senator URQUHART: They are for the minister and his office?

Mr Robinson : Yes.

Senator URQUHART: Are you aware that previous electorate briefs were released without redactions?

Mr Robinson : Yes. I would note, on that, the format and type of information in briefings have changed over time, so, each request we get, we compare with the information that is currently available. That information has varied over time as the rollout has changed.

Senator URQUHART: The briefs are created for the minister and his office to provide an update—I think that is what you said. Is that correct?

Mr Robinson : Yes.

Senator URQUHART: Who are they then provided to?

Mr Robinson : They are provided to the minister and his office.

Senator URQUHART: Minister, can you tell me who they are provided to when they get to your office?

Senator Fifield: It would be to the relevant advisers in my office.

Senator URQUHART: Just to the advisers?

Senator Fifield: That would be the people in the office.

Senator URQUHART: So the people in your office, your advisers?

Senator Fifield: The relevant advisers in my office.

Senator URQUHART: So not to MPs?

Senator Fifield: I would have to check.

Senator URQUHART: You must know whether those briefs—

Senator Fifield: I would have to check. There are many contacts to my office from colleagues, and I am not necessarily aware of each and every bit of information that is conveyed to them or necessarily the format, so that is something I will check.

Senator URQUHART: Are you in a position to do that now this afternoon? I am sure you have got some staff that are listening in.

Senator Fifield: I am sure I have staff listening in so we will see what we can do.

Senator URQUHART: Are you saying then that if we FOI-ed your office, the electoral briefs would not have been sent to MPs?

Senator Fifield: That is not what I said. What I said is I do not necessarily know the format of information that is provided to members of parliament from my office in each and every circumstance across a range of agencies.

Senator URQUHART: If you could find out in the course of this afternoon, that would be helpful. In attachment A of the department's latest response to my FOI request from yesterday, the filename of the electorate brief is '25 November 2016 update for the NBN rollout' and then it has got the electorate name. However, the dates for each file are listed as 30 November 2016. So can you explain why the file names are 25 November 2016 and 30 November 2016?

Ms Godden : I do not know the answer to that but we can take that on notice.

Senator URQUHART: I have the document here. There are two dates—25 November 2016 and then 30/11/2016. I would actually like to know the answer today. Are you able to come back to me today?

Ms Godden : We will do our best, yes.

Senator URQUHART: What were the exact dates that the minister requested electorate and state and territory briefs between 1 March 2016 and 2 July 2016?

Mr Robinson : We will have to take that on notice as well. It may not have been specific dates that electorate briefing was requested. It may have been just material provided as normal course of business.

Senator URQUHART: So you may not necessarily have received a request for it; you may have just issued it. Is that what I am understanding you are saying?

Mr Robinson : That may be the case, yes.

Senator URQUHART: I am interested in what were the exact dates that the minister requested electorate and state and territory briefs between 1 March 12016 and 2 July? But if you could also provide me with the dates that you provided that to the minister's office as well as a general course of what you would normally do.

Mr Robinson : Okay.

Senator URQUHART: Are you able to get back to me this afternoon with that information?

Mr Robinson : I think that request will probably take us longer. We will have to check the record, which is now about a year ago or a bit less than a year ago, so that will probably take longer.

Senator URQUHART: How many electorate briefs would you have provided in a 12-month period?

Mr Robinson : I do not know.

Senator URQUHART: Is it reasonably regular? How often do you actually provide them as a matter of course to the minister without the minister's office actually asking for them?

Mr Robinson : We will take this but my recollection is we previously told the committee that we do actually have these available. They are updated periodically and they are just available for use.

Senator URQUHART: Sorry—I am not following you. My question was: how often do you provide them to the minister's office as just a regular update? Is there a frequency of that? Is it spasmodic? What is the process?

Mr Robinson : I will take it on notice.

Senator URQUHART: No. Come on, Mr Robinson. You must be able to answer—

Mr Robinson : I do not know the answer.

Senator URQUHART: You must be able to answer how often you provide briefs to the minister's office as a regular course, as opposed to when his office requests them. I am asking a general question.

Senator Fifield: I can understand Mr Robinson needing to take that on notice because there are literally thousands of briefs that come up to the office.

Senator URQUHART: I am asking about NBN briefs, Minister. I am not asking about thousands of other briefs.

Senator Fifield: No; I appreciate that.

Senator URQUHART: This is specifically an area of NBN that we are now questioning the department on. I would have expected that the officers would have had people who work in that area here behind them maybe, or in another room, given that we are here questioning on NBN. I do not know why you are avoiding answering the question.

Senator Fifield: I do not think Mr Robinson is avoiding the question.

CHAIR: I think your question, Senator Urquhart, is very clear. I have listened to the minister's response, and I do not think it is unreasonable for Mr Robinson to take that on notice so that he provides you with the correct response, as there are thousands of briefs and thousands of opportunities. I do not think it is avoiding the question. I think he just wants to get it right. Again, if one of the officials who are watching this can provide it today, that would be good, but I do not think it is unreasonable to make sure they get the numbers right.

Senator URQUHART: I am not arguing that they get the numbers right. I have asked a generic question about how often the department provides the minister's office with updates on the NBN as a regular occurrence, apart from—which I understand Mr Robinson is going to try and find out this afternoon—the times that the minister's office has actually requested them.

CHAIR: But if you asked that question of an official from any department—as the minister said on another question—there are many ways of communicating to the office in writing—

Senator URQUHART: No; these are briefs. These are written briefs that come out from the department.

Senator DUNIAM: But I think he said he is taking it on notice.

Senator URQUHART: I understand that, but I have a real concern that we are here with the department talking about NBN, and Mr Robinson—I understand—as the deputy secretary, is not all over everything, but I would have thought, given that we are just dealing with NBN in this section, that the appropriate officials from the department would have been here to answer the question. Are those officials here, Mr Robinson, or not?

Mr Robinson : Obviously we have other officials here, but the reason I am taking it on notice is that I think there would be specific requests, possibly—as you have asked about; there might be material provided as routine provision of material—provided but not requested; there might be material that is available and was just accessed without actually having been provided. So there is a whole bunch of categories, and I would like to check all of that and provide you with the best possible answer.

Senator URQUHART: I understand that, but I am asking you: how many times, as a matter of course, does the department provide the electorate briefs to the minister's office without the minister's office requesting them?

Mr Robinson : And I would like to take it on notice.

Senator URQUHART: So you do not know that?

CHAIR: Senator Urquhart, I think this is becoming somewhat repetitious because you have asked the same question several times—

Senator URQUHART: Yes, I know, because I find it—

CHAIR: I understand the editorial component—

Senator URQUHART: I am only talking about the state and territory briefs.

CHAIR: I think it is very clear to all of us what you are seeking. You have now sought that three or four times, and Mr Robinson has undertaken to take it on notice to provide a correct answer.

Senator URQUHART: I just find it very frustrating and concerning that we are here with the department, talking about NBN, and Mr Robinson is not able to provide me with the electorate brief update, nor do they have officials in the room that can provide that information.

CHAIR: But the way you have just characterised your question then is not what I interpreted your question to be on the last three times you asked that question. You have just called it an electorate brief, whereas you actually want to know how often things have gone to the minister's office—

Senator URQUHART: No, I am talking about electorate briefs. That is what my whole questioning is around at this stage. How many times has the department sent electorate briefs to the minister's office as a general update? How many times has the minister's office specifically requested updates? They were the two basic questions. Mr Robinson has actually indicated that there are other times when information is sent, or whatever, and he will provide further detail on that. I am putting forward my frustration on the fact that this is NBN. The department are here. I would have thought there would have been officials from NBN here to actually answer the questions.

CHAIR: NBN is coming up shortly, so as Mr Robinson—

Senator URQUHART: Yes, but they do not deal with the electorate briefs.

CHAIR: We can keep repeating the same thing over and over, which I do not think is a very good use of our time, but Mr Robinson has, I think, quite clearly and very appropriately, taken the question on notice. If he can provide it today, he will. If not, it will be done in the normal course of events. Is that correct, Mr Robinson?

Mr Robinson : Yes.

Senator URQUHART: I have a number of other questions that I am going to ask, because I want that information as well. What were the exact dates that the minister requested electorate and state and territory briefs between 2 July 2016 and the last briefs on the 25th or the 30th—because I am not sure what that date was—2016?

Mr Robinson : I will have to take that on notice.

Senator URQUHART: Has the minister requested further electorate and state and territory brief updates since 25 or 30 November 2016?

Mr Robinson : I will take it on notice.

Senator URQUHART: That is not 12 months ago.

Mr Robinson : I can only say that requests come in different forms in to different people, and I would just need to check the record and we would need to check with a number of staff and the whole lot. I will just have to do that.

Senator URQUHART: Is there a reason, Minister, that you requested briefs in late November, given that we requested the last published briefs in estimates in October, but you requested further briefs to be created on the same day as the estimates spillover? I think it was 18 October, from memory. Is there something that you do not want us to see in the pre-election briefs? It is less than a month apart, really.

Senator Fifield: I will take that on notice, because my office, on my behalf, puts hundreds of information requests to the department over any given period of months. I would have to take that on notice.

Senator URQUHART: So you do not know—

Senator Fifield: I do not just—

Senator URQUHART: You do not know why you requested briefs last November, when there were some provided in October?

Senator Fifield: It is not the case that I just do one thing a day, such as, 'Today, I am going to ask the department for a brief on X.' That is not the way it works.

Senator URQUHART: I am just trying to understand why—

Senator Fifield: I am not being difficult; it is just that I do not think you have an appreciation of the paper flows, the requests, the volume and how they are transmitted. I do not have a complete knowledge in my head of every one of the hundreds of requests across my portfolio agencies that are made on a particular day or month.

Senator URQUHART: I understand yours—I do not understand the department's position of not bringing something here—

CHAIR: They just need the recipients of them—

Senator Fifield: Whatever request we might make is received by the department.

Senator URQUHART: No, I am sorry; I am saying that I can understand your position in not knowing the hundreds of briefs, but I am disappointed and I think I have made that point twice—I am not going to go over it again—but I am just interested in—

Senator Fifield: Okay, but if you are asking about particular briefs on particular dates, I can understand why the department would need to check their records on those things. It would not matter if it was this subject, or if it was the number of briefs that the department has provided me on fibre-to-the-node rollout. The department would not be able to tell you, off the top of their heads, how often that happened or the dates that it occurred. You can pick almost any area and, when you are getting to that level of granularity, the department would need to check its records.

Senator URQUHART: I will move on to the Mobile Black Spot Program. Can you provide me with a list of the round 3 base stations that have already been announced?

Mr Paterson : On the list of round 3 base stations—as you would be aware, it was an election commitment—locations were announced last year. I do not have a list with me, but I can take that on notice. I am happy to get it to you.

Senator URQUHART: Are you able to do that today?

Mr Paterson : I will check.

Senator URQUHART: Thank you. When will the rest of round 3 be announced?

Mr Paterson : Round 3 is a round that is based upon election commitments, so it is focused on that list.

Senator URQUHART: There was a media release of 22 December 2016 that said:

Fifteen new mobile base stations have been switched on in time for Christmas ...

Is that correct?

Mr Paterson : I believe so. I do not have the media release in front of me, but I believe that would be the case.

Senator URQUHART: The Mobile Black Spot Program was a 2013 federal election commitment, wasn't it, Minister? Is that correct?

Mr Paterson : Round 1 was.

Senator Fifield: Round 3.

Senator URQUHART: Yes, round 3. How many of the 499 base stations awarded funding from round 1 of the Mobile Black Spot Program have been switched on, as of today?

Senator Fifield: It is 100-plus.

Mr Paterson : As of a week ago, it was 124. We are rolling out between two and five per week. To get a number for today, I would have to take that on notice, but we would be getting close to 130 today, I would expect.

Senator URQUHART: Given that a number of them were electorate commitments, does that mean that Labor electorates will not get any in round 3?

Mr Paterson : My understanding is there were election commitments that do relate to Labor electorates, but I do not have that information with me.

Senator URQUHART: Do you know which ones?

Mr Paterson : It will be clear from the list, but I do not have that information in front of me.

Senator URQUHART: You can provide that?

Mr Paterson : Yes. You will get the list by location, but I think we could run it by electorate as well. That should be possible. There is the crossbench as well. Mr Robinson just reminded me that it is not just Labor and coalition; there is also the crossbench.

Senator URQUHART: The department's grant reporting says that grants of $94,000,800 and $140,000 were made to Telstra and a grant of $15,199,860 was made to Vodafone for round 1. Does that mean that money has been paid to Telstra and Vodafone?

Mr Paterson : No, Senator.

Senator URQUHART: Can you explain to me how that works?

Mr Paterson : Yes. That is the contract value for the base stations that have been awarded round 1 funding. That money has not actually gone to Telstra or Vodafone as yet, but we are required to publish how much those contracts are worth. Those are the total grants, but the grants to that value have not been made.

Senator URQUHART: Why does this grant add up to $110 million and not the $100 million referred to on the department's website?

Mr Paterson : That would be GST.

Senator URQUHART: So GST is the extra $10 million?

Mr Paterson : Yes.

Senator URQUHART: Why is the grant term for this grant to Telstra under the black spot program for 156 months? That is about 13 years, isn't it?

Mr Paterson : I am just working this out in my head. The way the program operates is that, under round 1, there is a three-year rollout period, but Telstra is required to operate and maintain those base stations for 10 years. So, even though they are not given funding during that 10-year operation and maintenance period, that is the term of the contract.

Senator URQUHART: The last base station will be completed in 2028?

Mr Paterson : No, Senator. Under round 1, all the base stations will be completed by 30 June 2018, next year. As I said earlier, we are doing between two and five a week at the moment, so we are at the sharp end of the rollout now. There will be a lot of escalation in rollout over the next 12 months.

Senator URQUHART: If all of those from round 1 are completed by 2018, why has that $94 million been granted to Telstra until 2028?

Mr Paterson : Because that is the contract term. Because there is a 10-year commitment for them to operate and maintain a base station. It is a rolling commitment.

Senator URQUHART: So once they finish then there is 10 years after that.

Mr Paterson : Yes, and it applies from the time the last base station is rolled out. So if the last one is turned on on 30 June 2018, you have 10 years from that date.

Senator URQUHART: In your answer to question on notice No. 11 from last Senate estimates on 18 November regarding the retention of taxpAyres' money in the Mobile Black Spot Program, your response was that the Commonwealth retains the funds for the program and makes part payments to the carriers upon completion of each base station. How much of the $100 million of Commonwealth money from round 1 has actually been paid to each of the mobile carriers so far for the base stations that have been built this financial year?

Mr Paterson : I have 2015-16 information. I will have to take on notice the 2016-17 information. It might just help if I very quickly go through the way the funding profile works. The carriers are given a mobilisation payment on signing of the contracts. This is so they can go off and acquire the land and so forth. That is usually around 10 to 20 per cent of the total payment. They are then given between 70 and 80 per cent on asset completion. I will talk about that a little bit more. That is when the base station is actually operational. We retain funding, 10 per cent, at the end of the program, which they get when rollout is completed. For each individual base station, the process that is followed is that they will give us the invoice, if you like. If it is on target, they will get the money for that asset completion, which will be that 70 or 80 per cent number that I talked about; if it is below, the funding is put aside and we work out whether we are going to use it to spend on those base stations that are over or whether it gets returned to the Commonwealth. Then, for the base stations that are actually over budget, they need to inform us and seek permission before they proceed to build. But the process is to make sure that the money that we keep to the end of the program is kept there, so that we retain more money than they have, if you like.

With regard to 2015-16, I can read the numbers out if you like. There was a mobilisation payment to Telstra of $9,480,000—that is GST inclusive. There was a mobilisation payment to Vodafone of $3,039,000. There is a little bit of rounding here, but only by a thousand or so. So that is a total of about $12,519,000 in mobilisation payments. That is that upfront payment. Asset completion payments for Telstra were $819,486. There were no asset completion payments for Vodafone. They have completed 15 base stations, but they have not invoiced us yet. There are a lot of base stations that have been completed that we are not invoiced for, but I am not uncomfortable with the Commonwealth retaining that funding for a little bit longer.

Senator URQUHART: Mr Paterson, in response to a question at last estimates you told us that any underspends from the program go into a fund.

Mr Paterson : That is correct.

Senator URQUHART: What fund is that, and what percentage of the grant is currently in that fund?

Mr Paterson : Unfortunately, the percentage of the funding in that fund I will have to take on notice. The way the fund operates, though, as I touched upon a moment ago, is that when there is an underpayment from a base station coming in below the funding, that money is put in that fund. We have not taken any money out of that fund yet for base stations that are over cost. I might just explain that one of the strong rationales for establishing that fund is that a lot of these base stations have quite substantial state contributions. Rather than lose those state co-contributions, we have set up a mechanism where we can leverage that state money to maybe build additional base stations.

Senator URQUHART: I refer to an article in The Australian this morning about the Mobile Black Spot Program. Is it true that in round 1 at least one extra operator was able to add their gear to the 499 base stations funded under the program?

Mr Paterson : No, that is not correct. I will explain the arrangements. Unfortunately, it is a complex program, so I do apologise if I have to keep going through the detail. With the co-location provisions as they work under the program, if a carrier says they are willing to have somebody else co-locate on their tower, they get extra points for it. What that means is that, at the point at which they are awarded funding, they go out and it is called a nomination period. So any other carrier can come in and say, 'We want to co-locate on that facility.' That is a six-week period under round 1 and an eight-week period under round 2. You then go to a negotiation period, where the carriers get together and negotiate co-location arrangements. But the key with the program is that the carrier who wishes to co-locate does so at incremental cost, so they leverage off the Commonwealth funding, if you like. Then, if they cannot reach agreement, they go to dispute resolution. When you negotiate it, a lot of it depends on what tower you are talking about. Some of these facilities you could have two carriers co-located on. If it is, say, a strong metal lattice tower, you could have two carriers co-locate on it and they may be willing to share the same transmitter array. In some instances, only one carrier might be willing to co-locate or it might be that they are using an existing facility and you can put one carrier on, but, if you put another carrier on, you have to build a bigger tower. So it is very site specific.

Senator URQUHART: So it is dependent on the size of the tower?

Mr Paterson : Exactly. What we have done under round 2, though, to help drive the co-location outcomes is negotiate minimum technical requirements with each carrier. What I mean by that is that we have tried to fast-track the negotiations. For example, if Vodafone wanted to co-locate on a Telstra tower, Telstra has already agreed that they will permit co-location at incremental cost for this type of equipment and, if Vodafone wants anything extra, for example, it would then need to negotiate that. That is the difference between the two rounds.

Senator URQUHART: The article talked about round 2 allowing multiple operators, and you have outlined that. Do you know how many of the 265 round 2 base stations will allow for an additional operator and how many will allow for more than two operators?

Mr Paterson : I know some of that information. One of the keys on round 2 is that there were a number of small-cell locations that were funded. If you are not aware, just think of a small cell as a smaller base station—macro cell is your standard one; small cell is smaller. They are not conducive to co-location because they are a smaller build, but they are very useful in very remote areas with satellite backhaul and Indigenous communities and so forth. I think there are about 49 there that it would not be suitable for. There are 213 base stations under round 2 that may enable co-location, but some of those might be brownfield sites and there might be additional costs associated with them.

Senator URQUHART: Do you know what the additional costs are? Do they vary?

Mr Paterson : It depends on the location. Normally, if you go to a brownfield site, it might be, say, a water tower or a small tower. The way it works under the program is that, say, Optus would go to Vodafone and say, 'We want to co-locate on that. You're paying X amount and the Commonwealth is paying Y. We will now build a joint tower and we will pay all the extra costs.' So how much they pay for those types of locations depends on the infrastructure there is at the moment.

Senator URQUHART: In answer to question on notice number 36, you told the committee that 46 base stations from round 1 would be co-located with NBN fixed wireless towers. Does that co-location with NBN change the cost of the base station? Is it cheaper or more expensive for the Commonwealth to co-locate with NBN fixed wireless?

Mr Paterson : Co-location is, in almost all cases, cheaper for the Commonwealth. That is why we encourage it and that is why we have put those mechanisms in the program. On the NBN one: if they have nominated it as a co-location in their application, that is in the costings they give us. If they co-locate after the event, because they have reached an agreement or NBN Co has announced a new area, then, again, that is money that the carrier does not get; we put it in that fund.

Senator URQUHART: NBN Co have told us that there are 203 NBN fixed wireless base stations located within 10 kilometres of a round 1 black spot location. That means that there are about another 157 potential opportunities to co-locate with NBN that I think have been missed. Are you aware that residents, particularly in regional areas, are growing concerned about the number of telecommunications towers being built in their areas, so why would you miss 157 potential opportunities to co-locate?

Mr Paterson : You mentioned a distance there, which I missed. But it gets down to, firstly, where the NBN tower actually is. A fixed wireless network is not the same as a mobile network. Often, even though towers might be in the same vicinity, it does not suit the carrier's coverage rollout to put it on the fixed wireless tower. They might already have existing coverage to the west of the town and they need to build their own tower on the other side of the hill to get the south of the town, so the NBN tower will not help. That is often the case. Sometimes the NBN towers themselves are not conducive to co-location because of the structure and the build. Then it is a decision about: is it cheaper for the carriers to negotiate a better fixed wireless tower with NBN? Sometimes it is actually cheaper for them to build their own tower.

Senator URQUHART: You talked about the 213 towers that may enable co-location in round 2. What does the department have to do to make that happen, or do you leave it to the operators to determine that?

Mr Paterson : We have put the mechanisms in the contracts and in the guidelines for the program to encourage co-location. That is another reason we have that fund. It is a motivation to the carriers to co-locate financially because they will save money that may then be able to be spent on further network expansion. Whereas, if we did not have that fund and we ran an old style program, if you like, where they get paid for the tower and that is it, there is no financial motivation. So we are trying to drive it through financial motivation. Then we have all those arrangements where they have to publish where the towers are going, so that all the other carriers know the time periods, the notification, the specification and minimum technical requirements—all those things are there to drive co-location.

Senator URQUHART: So what are the mechanisms that are in the contract?

Mr Paterson : There is the fund mechanism I have talked about. There are the minimum technical requirements under round 2. There are the notification and negotiation periods. There is a specific dispute resolution process under the contract where the carriers, if they cannot reach agreement, come to the Commonwealth. We nominate an independent arbiter, and the rulings are binding on that. We have also negotiated cheaper pricing on the backhaul. This is not a normal thing. Industry does a lot of co-location anyway, but this is program-specific. We have said that, for the backhaul we build under the program—so, what we pay for—you will get that at a discount if you co-locate on a tower. So they get cheaper backhaul. We have negotiated arrangements around power access, shared space, the type of equipment, extra supplementary equipment et cetera. There are a whole range of measures in the contracts.

Senator URQUHART: Were there any minimum technical requirements in round 1?

Mr Paterson : No, there were not.

Senator URQUHART: Was that a mistake?

Mr Paterson : I think it is a lesson more than a mistake. There is that dispute resolution process under round 1. The intention was that if you cannot reach a commercial arrangement then we have set up an arrangement to resolve it. I think there has been a bit of reluctance by the carriers to go to dispute resolution because it is binding. There is always a bit of nervousness if you are a commercial enterprise and you enter into a binding arrangement. I think it is a lesson learnt, and we have really pushed hard to bring that as an improvement into round 2.

Senator URQUHART: Can you tell me on how many of the 46 NBN fixed wireless towers Telstra is co-locating?

Mr Paterson : I will have to take that on notice. I might be able to find out today, if my people are listening.

Senator URQUHART: And how many for Optus and Vodafone as well.

Mr Paterson : Yes. Okay. I do not know if we have that information. If we have, we will give it to you today. If not, we will find out for you.

Senator URQUHART: That would be great. Thank you. Do you know how often the dispute resolution process has been used?

Mr Paterson : It has not been used at all.

Senator URQUHART: It has not. So you do not know how it works because you have not had to use it?

Mr Paterson : I know how it is meant to work, but it has not been used yet.

Senator URQUHART: You have not had a trial.

Mr Paterson : The way it is meant to work is that, if they cannot reach agreement, they come to the Commonwealth. There is an arrangement around who we nominate. It has to be somebody who is technically proficient but also understands the commercial realities of it.

Senator URQUHART: Effectively, at this stage, if there are any arguments, they have been sorted out before they get to that point?

Mr Paterson : Correct.

Senator URQUHART: Minister, I just want to ask you: it is correct, isn't it, that one of the objectives of the Mobile Black Spot Program is to increase competition so that those living in regional Australia can choose from more than one service provider to get reasonable coverage?

Senator Fifield: The objectives are to expand coverage and competition.

Senator URQUHART: So how is that goal for increasing competition in regional Australia reflected in the Mobile Black Spot Program guidelines?

Senator Fifield: I will ask the officer to advise.

Mr Paterson : Competition is reflected in two ways through the program: the first one is the co-location provisions we have just talked about, where you get a choice of provider. The other one is that, while there are no actual points awarded for this under the assessment criteria, existing customers of a carrier may benefit from the expansion of that carrier's network. By that I mean: say you are a Telstra customer, and they are expanding their network. We do not give Telstra any points on the assessment for all the extra coverage their customers are getting, if it is coverage that another carrier has. But it is of benefit to the Telstra customers. One of our KPIs is that we measure how many consumers in blackspot areas benefit through a choice of provider, either through co-location or through coverage from multiple carriers.

Senator URQUHART: Given that taxpAyres money is being used to build these towers, will public interest dictate that it should be easier and cheaper to co-locate on towers built under this program, or is that more difficult and more expensive?

Mr Paterson : So, is your question: is it better and easier to co-locate under the program?

Senator URQUHART: Yes.

Mr Paterson : You mentioned The Australian article earlier. I actually read that before I came up. I note that Andrew Sheridan from Optus has made a statement today saying that co-location is a reality within the industry, but the program itself has made it much easier to co-locate. I believe he would be saying that because we have set out: you have to tell other carriers the period of time before you build so that they can get involved in your design process—and we specify the costs that are involved and minimum equipment and so forth. I hope that answers your question.

Senator URQUHART: Minister, given that you flicked that to the department, do you care about mobile coverage in regional Australia?

Senator Fifield: I do. I thought it was appropriate to ask Mr Paterson, as the person with direct oversight of the program, to speak to that. But clearly—

Senator URQUHART: I am sorry—

Senator Fifield: Clearly I care, clearly this government cares, clearly the Prime Minister cares, because we have established a Mobile Black Spot Program. Under six years of the previous Labor government there was no Mobile Black Spot Program, so we had to create a program from scratch. There was not a single dollar spent by the previous Labor government on the Mobile Black Spot Program, so I think that demonstrates the fact that this government does care about mobile coverage. It is the purpose of round 1, round 2 and round 3.

Senator URQUHART: I am raising that on the basis of the co-location failure, I suppose, in round 1—499 base stations.

Senator Fifield: There are refinements that have been made for subsequent rounds. Co-location is not something that can just be mandated—take an NBN fixed wireless tower, for instance. NBN fixed wireless towers need a line of sight. That is what determines their location. The location for a mobile phone tower has different technical requirements. Sometimes those will align, and that is good. In terms of one carrier co-locating with another carrier, that opportunity is there. Again, it does not necessarily work for a particular carrier to do that in a location, but it is something that is encouraged and it is something we are endeavouring to facilitate through the program.

Senator URQUHART: In an ideal world, where the government achieves the policy objectives it sets for itself, how would one translate the competition objective into co-location clauses within the funding agreements between the Commonwealth and the mobile network providers?

Senator Fifield: I will ask Mr Paterson to talk to that.

Mr Paterson : The key issue is addressed in some of the commentary I made earlier around those co-location arrangements within the contract themselves. All the conditions within the guidelines have been reflected in the contracts themselves to drive that co-location outcome. I might just note as well, I said we had 124 under round 1 out of 499 base stations. That means there are still 375 base stations where co-location can still, potentially, occur.

Senator URQUHART: Could you explain how the Upper Brookfield base station in the City of Brisbane LGA met the eligibility guidelines for round 2?

Mr Paterson : I believe I know the one you are talking about. This is one that is in an outer metropolitan area, right on the edge. When it was awarded funding, the only thing we assessed was the coverage within eligible areas for the program. Anything outside an eligible area was not counted in our assessment.

Senator URQUHART: Is the City of Brisbane an eligible area under the guidelines?

Mr Paterson : Major urban areas of more than 100,000 people are not eligible if the tower is in that area; any coverage within that area is not counted. It does not really matter if the tower is a kilometre to the left or a kilometre to the right. We only count the coverage in eligible areas.

Senator URQUHART: The principles of equal distribution set out in paragraph 9.5.4—and I am sure you know what these say—of the guidelines for round 2, state:

The department will ensure subject to receipt of a valid application for a proposed base station in the electorate that funding is recommended for at least one proposed base station in each eligible federal electorate.

Were the electorates of Franklin and Bass in Tasmania eligible, and how many mobile base stations were recommended for Franklin and Bass in round 2?

Mr Paterson : Unfortunately, I do not have this by electorate; I only have it by location. That means I would have to extract that data to tell you how many are within particular electorates. In answer to the first part of the question: if it is an electorate that comprises areas that are not a major urban centre of more than 100,000 they are definitely eligible. In regard to how many base stations are in round 2 by electorate, unfortunately, I only have it by location. I would have to go through and check it against—

Senator URQUHART: Can you provide that to us?

Mr Paterson : We can definitely provide it. Hopefully, my guys will work on it now. I cannot make any guarantees because we have taken a few on notice already, but we will see what we can do.

Senator URQUHART: I would appreciate that. Chair, I have finished. I will hand over to Senator O'Neill who I know has some questions.

Senator O'NEILL: Thank you.

Mr Robinson : Chair, I said I would do my best to answer some of the questions that were asked earlier.

CHAIR: Well done, Mr Robinson.

Senator URQUHART: Thank you. We appreciate it.

Mr Robinson : Senator, you asked some questions about dates on the material that I think you FOI'd. I am advised that 30 November is when the report was printed, but that report is based on data from NBN for 25 November. And you asked about what type of information would be commercially sensitive in these electorate briefs. An example I have been given is that, over time, those briefings have included individual building level data, which includes information on take-up rates within buildings. NBN operates in a highly competitive market, so that sort of information is highly commercially sensitive to them.

Senator URQUHART: Thank you.

CHAIR: Senator Duniam.

Senator DUNIAM: With the NBN Co half-year results, I just wonder if you would be able to summarise, from the department's perspective, the state of the rollout and overall company performance.

Mr Robinson : At the moment, rollout is progressing well. There are over 4.3 million premises that are able to order a service, and more than 1.9 million premises have an active NBN service. By mid this year, the forecast is that half of all premises in Australia will be able to order a service. I know NBN are here later in the day; they can probably say more. But they are tracking pretty well. It is an ambitious sort of ramp-up profile, but they are tracking pretty well to that number by the middle of this year. They report on their financial numbers quarterly—you asked about the midyear report.

Senator DUNIAM: Yes, that is right—the half-yearly results.

Mr Robinson : At a high level, they are tracking against budget pretty well.

Senator DUNIAM: So, everyone is pleased. That is good to hear. There has been some reporting about the factors that can affect fixed-line broadband speeds. Does the department have a perspective on this at all?

Mr Robinson : Yes. Actually, it has had a lot of commentary. The ACCC has made some comments about it, and NBN Co also have been very vocal about it. It is an area that is not as well understood in the community as we had all hoped, and we are all trying to communicate better about it. Clearly, with the network that the NBN is building—or replacing, in effect—which is really the so-called last mile or the local area networks, that improvement will reduce a speed constraint.

But there are other constraints or barriers that can apply as well. It can include the customer equipment within the building. An individual might sign up to the NBN, but if their own wi-fi equipment is not good then they will have speed issue. It could include the international transfer links. If someone was downloading information from an international network somewhere which had capacity constraints, then that would affect speed. Importantly, it can also be affected by the provisioning that RSPs do for data. RSPs make their own decisions about the amount of data they need to provide for on NBN services, and that can be variable. Some are providing more than others. That can definitely affect speed.

The department would say to customers, 'If you are unhappy, you should test the speeds you are getting if you are connecting to an NBN service. If you have concerns about the speeds you are getting, talk to the RSP.' At a practical level, I would say perhaps talk to your neighbours and see what their experience is, and, if they are on a different RSP and getting a different service, then you might want to have a chat with your RSP and look at perhaps changing. The speed experience is affected by a whole range of things beyond just the NBN network.

Senator DUNIAM: Yes, Mr Morrow gave us a great diagram at the last estimates outlining all of the factors that might impact on that. But I am interested in the department's point of view. Thank you very much. That's it there—it is a very good diagram.

CHAIR: It is a handy reference.

Senator O'NEILL: I have a couple of questions regarding revenge porn for Minister Fifield. In November 2016, you and Minister Cash announced a public consultation process. It proposed a civil penalties regime targeting both the perpetrators and the sites. Did the government engage in any consultation with the women's sector prior to announcing that consultation?

Senator Fifield: We have announced that we will be issuing a discussion paper.

Senator O'NEILL: That is probably the answer to my next question, but did you consult with the women's sector before that announcement?

Senator Fifield: I will take on notice exactly what consultation occurred. As you would appreciate, it is an area in a sense that Minister Cash and I share together. Our intention is for there to be good consultation that will occur after we release a discussion paper in the near future.

Senator O'NEILL: Could you identify any stakeholders who have expressed support for a civil penalties regime?

Senator Fifield: I will take that on notice. I just do not have that file with me here at the moment.

Senator O'NEILL: This question is for the department—

Senator Fifield: Sorry, did you ask specifically in relation to women's groups or stakeholders more generally?

Senator O'NEILL: Any stakeholders with regard to the civil penalties regime.

Senator Fifield: The Law Council is one that immediately comes to mind.

Senator O'NEILL: Will you provide others on notice?

Senator Fifield: Yes.

Senator O'NEILL: Can you name any women's groups?

Senator Fifield: I will get that information for you.

Senator O'NEILL: Will the department of communications be coordinating the consultation process after the release of the—are you calling it a draft?

Senator Fifield: A discussion paper.

Mr Eccles : Yes.

Senator O'NEILL: Have you done any work to that end?

Mr Eccles : Sorry, what do you mean by 'any work'?

Senator O'NEILL: If you are coordinating a consultation process, what work have you undertaken to that end?

Senator Fifield: The draft discussion paper is close to finality.

Senator O'NEILL: When will it be released?

Mr Eccles : Shortly.

Senator O'NEILL: Within the month?

Mr Eccles : That is a matter for government, but it is not far away.

Senator O'NEILL: Minister, can you indicate when that will happen?

Senator URQUHART: Imminent.

Senator Fifield: Sorry?

Senator URQUHART: I was just going to say imminent.

Senator Fifield: It will not be long to wait. But the whole purpose of the discussion paper is to engage in consultation.

Senator O'NEILL: Back to the department, when will the process of the consultation begin and what work have you undertaken to prepare for that?

Ms Owens : I have carriage of this particular policy issue. We have consulted across different agencies on the paper itself, and it is in final draft format. We have just recirculated its back to those agencies who have provided us with comment, and once they are happy it will be going up to the minister's office for his approval for—

Senator O'NEILL: Can you indicate which agencies you are engaging with?

Ms Owens : Yes. There is the Attorney-General's Department; the Office for Women, in Prime Minister and Cabinet; the eSafety Commissioner; and the AFP.

Senator O'NEILL: Are there any community groups?

Ms Owens : Not to date. The process is to develop the paper internal to government and then to put the paper out for community groups to make comment on. The paper itself poses many questions to which we hope the community groups will give us the answers.

Senator O'NEILL: Has there been any community input prior to the release?

Ms Owens : No.

Senator O'NEILL: I want to go to the spectrum review. My question follows up on February's explanation about the delay to the release of the exposure draft owing to the sector wanting further discussion and needing to avoid getting something wrong. Minister, what are the key benefits, in your own words, of reforming Australia's spectrum management framework? Is it an exercise in deregulation or something more?

Senator Fifield: It is severalfold. As part of the spectrum review, we will be looking to try to have a consolidated spectrum licensing framework. It also provides the opportunity to review spectrum pricing and also public holdings of spectrum and how they are used.

Senator O'NEILL: So you see it as more than deregulation?

Senator Fifield: Deregulation, I guess, implies—well, it can imply—a reduction of government oversight and responsibility, which is not the intention. I think we are looking at it in a deregulatory sense in that we hope it is a more straightforward and a more coherent licensing framework.

Senator O'NEILL: Could you explain to me how moving to a single licence system changes things.

Senator Fifield: I think one of the things that having a single licence system can do is make it more straightforward to deploy spectrum for different purposes.

Senator O'NEILL: In what way, and how does that change from what we currently have?

Senator Fifield: If you have one particular licensing regime for a particular band of spectrum and a different sort of licensing regime for another, that can make it more complex to address issues of reallocating spectrum, for instance.

Senator O'NEILL: Is that the policy problem that you are trying to solve here with the single licence system, or is there more to it than that?

Senator Fifield: I will ask Mr Robinson to add.

Mr Robinson : Senator, I think—

Senator O'NEILL: I am interested in the minister's rationale for this.

Senator Fifield: I have asked Mr Robinson to add.

Mr Robinson : The department did the review, and the review document was made public, but I think that the history is important. Basically, my understanding is that, back in about the 1980s—

Senator O'NEILL: Can I just stop you there, Mr Robinson. Clearly this is going to be a long explanation, and I am very short on time. I would be happy to receive information from you on notice. Thank you very much.

Mr Robinson : Okay.

Senator O'NEILL: Minister, the department's legislative proposal consultation paper released in March last year says:

The proposed approach in preparing draft legislation is to—

among other things—

clarify the role for Government, the Australian Communications and Media Authority (ACMA) and spectrum users;

What roles of the government and the ACMA in spectrum management require clarification?

Senator Fifield: If you want to know what it is that we will be proposing, that will not be too far away when we release the exposure draft.

Senator O'NEILL: What was the policy problem that required this clarification, Minister Fifield?

Senator Fifield: There are certain regulatory things that ministers are required to do, and one of the issues is looking at whether those things are appropriately done by a minister or whether they are appropriately done by ACMA, for instance.

Senator O'NEILL: How will this role clarification that you are talking about improve the management of the radio frequency spectrum for the country?

Mr Robinson : I would say on this that there were examples given in the spectrum review at the time that there are a large number of administrative processes that are required to be potentially done by the minister, and the intent—the detail will be in the draft legislation—is to have the government focus on policy and the ability to look after public interest type use of spectrum and have the power to do so but to make sure the administrative tasks are done where they are best placed to be done, which is in the ACMA. So that is an example of it.

The current legislation is exceptionally clunky, slow and difficult. As another example, on enforcement, the ACMA's enforcement powers are all based on criminal law type penalties. If someone is using the spectrum inappropriately then it is a criminal law issue, which means it has all the evidentiary burdens and associated problems with taking enforcement action. We are trying to make sure that the enforcement arrangements are proportionate to the issue so that we can have a better enforcement regime. They are the sorts of distinctions. We are just trying to make sure the roles are clear and the powers are in the spots they should be at the right level of detail.

Senator O'NEILL: Minister, will that description of your intention from the deputy secretary make the system more flexible or more certain or both?

Senator Fifield: Will it make it more flexible or more certain or both? Well, we are not wanting to introduce uncertainty and we do want to have a spectrum licensing regime that is easily understood and that lends itself to adaptation. At the moment, we have some parts of the spectrum which are managed under licences on a very different basis to other parts. Having consistency means that it will be easier for government to address changes in use that it might want to do that may be sensible to do.

Senator O'NEILL: How many departmental staff are working on the spectrum review implementation?

Mr Robinson : Our spectrum branch has approximately 17 staff and we estimate that 14 or 15 of those are involved in the spectrum review work .

Senator O'NEILL: At the moment, there are lots of high- and moderate-value spectrum which is currently unallocated or unused—is that correct?

Mr Robinson : I am not sure that is correct. I think you said a lot of high-value spectrum is unallocated or unused. The most of the spectrum that is unallocated or unused is in fact lower value spectrum. Going forward, part of the purpose is to make the arrangements more flexible for the high-value spectrum so that we can get the best use from it so it happens more efficiently.

Senator O'NEILL: What spectrum bands are free at the moment?

Mr Robinson : I would have to take that on notice. There are wide bands that are actually free and the reason for that is that their practical use is currently quite limited.

Senator O'NEILL: I might have to put a few more questions on notice with regard to that.

CHAIR: Thank you very much. I now call officers from the NBN Co.