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Environment and Communications Legislation Committee
Department of Infrastructure, Transport, Regional Development and Communications

Department of Infrastructure, Transport, Regional Development and Communications

CHAIR: We are up to outcome 5 in the Infrastructure, Transport, Regional Development and Communications portfolio, program 5.1, which is Digital technologies and communications services. Welcome, Minister. I call Senator Pratt.

Senator PRATT: Thank you, Chair. Good afternoon, Minister. I have a few questions about the direct .au domain. What is the role of the department in terms of domain spaces more generally?

Mr Windeyer : The department doesn't have a direct role. The management of the .au domain space is looked after by an organisation called auDA, who in a sense were given the job by government to administer the domain space. But it is not a government agency, and it is not a space that, therefore, the government has a direct role in.

Senator PRATT: Have you been consulted at length on direct .au changes?

Mr Windeyer : We are aware of the work auDA is doing with respect to direct registration. I'll pass to Ms Silleri to see if she has anything further to add.

Ms Silleri : We have been aware of auDA's move to introduce direct registration and we support their right to be innovative in the way they administer domain names in Australia.

Senator PRATT: Was the minister consulted on the changes? Was there any decision point for the minister in the process of this decision?

Ms Silleri : The minister is aware, but there was no decision point for the minister.

Senator PRATT: Can you explain what direct .au changes are and what they mean for businesses that own a traditional website?

Ms Silleri : Direct registration is allowing a domain name to be registered at the second level down, so not at a country code. It allows businesses to align with overseas jurisdictions. They could be called '', without having to align themselves with Australia's country code; so it provides more flexibility.

Mr Paterson : Another way to think of it is, instead of, say, '' it can be ''. It just takes it down that extra level.

Senator PRATT: Okay—which is the opposite, I think, of what you were explaining because '.com' is more international but things with a '.au' you would associate with Australia.

Mr Paterson : Yes, so it's a second level refined one.

Senator PRATT: What is the purpose of the change and what are the benefits?

Ms Silleri : The purpose of the change is to provide businesses with more opportunity to align internationally.

Senator PRATT: I can't understand how it aligns them internationally.

Ms Silleri : It is direct registration rather than being at country code level.

Senator PRATT: But isn't it country code because it is '.au'?

Mr Windeyer : Yes. I think the key point is that it gives choice and flexibility to businesses looking to register and operate domains in Australia. It's certainly something that is being done in other countries. Direct registration is not—

Senator PRATT: How is it more or less direct? If I've got '' or '', why do you perceive it as being more internationally aligned? I would have thought .com was more internationally aligned because the country code is non-existent.

Mr Windeyer : Yes. Perhaps then, for the purposes of the discussion—rather than using the term 'internationally aligned'—I think the basic point is that it allows a more direct path to a registration. It is shorter and more direct, and it allows you to go straight from the example to 'au', as it were, rather than going through .com, .net or .au.

Senator PRATT: So you would be confident that it is an Australian entity. But its use is not limited to Australian entities only, is it?

Mr Windeyer : That depends, in a sense, on the rules of the domain name administrator regarding what they expect of people looking to—

Senator PRATT: What would those rules be?

Mr Windeyer : I'd have to take on notice what the auDA rules are in terms of what they expect of someone who's in the .au space.

Mr Paterson : We can get you a copy of the rules.

Sena tor PRATT: Who's taking account of the public interest here, if it's a private commercial entity that's managing it?

Mr Windeyer : Since about 2001, auDA have been responsible for the regulation and administration of the domain name space. They make those regulatory calls and take into account a range of factors in doing so. So, in a sense, the answer to your question is that it's auDA. It's not that they are without oversight; they are—

Senator PRATT: Who oversees them?

Mr Paterson : I think it's important to note that auDA are a representative body representing the interests of the industry. They have approximately 6,000 members at the moment. They do operate independently. They have a constitution and a board, but their roles and functions are performed because the Australian government has given them responsibility for managing Australian domain names. For example, we sit on the board as observers and on the nominations committee as well, and we have access to their board papers.

Mr Windeyer : And we work with them on what I think are called the 'terms of endorsement', which relate to the operation that they're carrying out in Australia.

Senator PRATT: Do you think that domain name operators will be able to grow their revenue, as a result of this new domain space being opened up; and what do existing businesses need to do to protect their claim to their domain name so that someone doesn't claim '' if I've already got .com and

Mr Windeyer : I understand the question. Unless Ms Silleri or Mr Paterson know—

Mr Paterson : I feel that this goes to the verification process, and Ms Silleri might know more about that.

Senator PRATT: Do I have to pay again?

Ms Silleri : No.

Mr Paterson : No, you don't.

Ms Silleri : There is a verification process to prevent that exact scenario occurring.

Senator PRATT: How many websites are currently registered in the space? Are there estimates of how much revenue this creates for domain operators annually?

Ms Silleri : I don't have that information to hand, but I can get it for you on notice.

Senator PRATT: Do you have that?

Mr Paterson : I've got 3.4 million .au domain names at the moment. Perhaps I can correct some earlier evidence: auDA has 4,000 members, not 6,000.

Senator PRATT: I'm sorry;, did you say?

Mr Paterson : Currently there are over 3.4 million .au domain names. It could be .com, .gov or whatever, but for anything that ends in .au, there are 3.4 million.

Senator PRATT: So how many Australian domain names have .au? Maybe you could take on notice how many have .com and .edu that have .au after them.

Mr Paterson : We can take that on notice for you.

Senator PRATT: What happens if a business doesn't get to the priority allocation process by 24 March?

Ms Silleri : I'll need to take that process question on notice, but we can get that for you.

Senator PRATT: What's the current process? You can do it via the priority allocation process. If I'm just used to re-registering my name when my domain provider tells me to, are they going to prompt me automatically? What happens?

Ms Silleri : I'll take that on notice for you.

Senator PRATT: You can't tell me?

Mr Windeyer : We're very happy to get the information from auDA for you. But, given that we don't set these and are not in the day-to-day administering of the way that people get access to domain names, we'd have to go and talk to auDA to get that information.

Senator PRATT: I think it's a pretty big deal, if something goes awry, in terms of not being done effectively, because people could lose access to their domain name. You might have competing names already under, and someone is going to want to get to the .au first. What happens in those circumstances?

Mr Paterson : We'll take that on notice. I think it does get down to the validation and verification process that auDA do before they allocate a domain name to somebody else, in consulting with the people who have an associated domain name.

Senator PRATT: Is the department the observer on the board, or who is that observer?

Mr Paterson : The department is an observer on the board; it's either me or Ms Silleri.

Senator PRATT: Nevertheless, you're still telling me that you don't know what happens if a business doesn't get in by 24 March. Has this not been discussed at the board level?

Ms Silleri : Not at the board meetings that I've attended. That's a process type arrangement that will be set out; auDA will have guidance on it, and I'm happy to get that for you.

Senator PRATT: What public interest type issues has the department raised and sought to ensure are effectively managed, in terms of your role on the board?

Mr Windeyer : We will come back to you on notice with the range of considerations, including the public interest considerations, that have gone into—

Senator PRATT: I'm asking the first assistant secretary and the assistant secretary: in the context of your participation on the board, what issues has the department sought to raise?

Mr Paterson : The government's general oversight is through the terms of endorsement, as Mr Windeyer has said. We have 'observer' status on the board, so we're not voting board members. But we have a particular interest in issues, such as the uni. There are the university issues and there are issues that we may express a view on regarding some of the security situations around domain names as well where there's a clear public interest. I've been consulted regarding Indigenous place names, for example, in local languages and proposed work that auDA wants to do in that space as well.

Senator PRATT: Is there not a robust public interest in trying to work out who has a more legitimate claim to the .au domain in general?

Mr Paterson : I agree, but I think this is embedded within the policies that auDA would have regarding, as I've said, the verification processes that they would undertake before they would issue—

Senator PRATT: But you can't tell me what those policies are.

Mr Paterson : I don't have those policies in front of me.

Mr Windeyer : You've alluded—I think, quite rightly—to a new issue that has emerged as you go to direct registration, which is the relationship between the people that might exist already on and how that works going through into a direct registration for possibly a business not missing out on getting its domain. I think there is the general point about the sorts of issues that need to be considered in managing the .au domain, such as who we are comfortable with using .au and being associated with Australia. They're the sorts of things that auDA have experience with and have been doing on behalf of their members and on behalf of the Australian domain name space since 2001. There's a new set of issues particularly with direct registration. But the broader issue is about the use of .au and that is the thing that has been overseen by auDA now for quite some time.

Senator PRATT: They have overseen it for some time. If you had a problem with what they did and it needed some government oversight or regulation, the government seems to say, 'It's not our job at a policy level to interfere or even know'. What recourse does someone have if it's not resolved in a satisfactory way?

Mr Windeyer : I think, in the first instance, it's the same sort of recourse that has been available to users of .au domains for the last 20 years, which is through—

Senator PRATT: Yes, I understand that. Are you aware of whether people are satisfied with that recourse, or is it generally given that they've got no power because the government doesn't take an interest in it?

Mr Windeyer : I don't think that's the characterisation I would put around it.

Senator PRATT: Would you know if there was a problem?

Mr Windeyer : Yes, I think we would because—

Senator PRATT: How would you know?

Mr Windeyer : Because we do work and engage regularly with auDA. We are, as Mr Paterson has said, an observer on the board, and we do work through a process with them associated with developing their terms of endorsement. If there were significant complaints or concerns coming through to auDA as they were consulting on developing their new rules, we would obviously be aware of that. There is a broader oversight piece insofar as, if there are concerns that the Australian domain, or the .au domain, is not being appropriately managed—forgive me, but I don't have the precise words around it—there is a capacity to have some regulatory oversight set out. Arrangements are set out in the Telecommunications Act which do allow some direct regulation, if required. But, at this point and since auDA was established, that hasn't been necessary.

Senator PRATT: Thank you; I'll move on. I've got lots of questions, but I'm keen to make sure that we make the most of Senator McKenzie's presence here. While I seek some guidance on that, I will ask about the regional telecommunications review. It said that neutral host trials could validate a new model for providing mobile coverage to some of the remotest areas of Australia. My understanding is that, in partnership with Optus, they've secured funding to build seven towers in Queensland, which will form the base to conduct the neutral host trials. Where is that up to?

Senator McKenzie: I'll get the department to go to the details of the neutral host model. But I think what this trial highlights is the highly successful Mobile Black Spot Program which has delivered 1,270 mobile base stations to rural and regional Australia and has been transformative in terms of the level of connectivity for people who don't live in capital cities. But we've seen a step change in demand and we've also seen a lack of competition as a result of that program. It's sort of reached the end of its natural life, shall we say, and so we're looking at new ways and models to ensure access and a competitive rate are achieved.

Senator PRATT: In that context, does that mean that the issue of having an Optus tower in one community and a Telstra tower in another is overcome with this neutral host; or is that a different question?

Senator McKenzie: Absolutely, because—

Senator PRATT: I understand the problem.

Senator McKenzie: people out in rural and regional Australia can't get a $20-a-month mobile plan. So we're hoping that they'll have a drop in prices as a result of increased competition.

Senator PRATT: No. It was more that I wanted to make sure that you still had any coverage at all.

Senator McKenzie: Yes. We want to expand coverage and decrease prices. Do you want to hear about the trials?

Senator PRATT: No. I do want to come back to that, but I just wanted to ensure that I was able to direct some questions to you specifically, Minister, while you're at the table.

Senator McKenzie: I'll stay for this whole section. I don't have to rush back.

Senator PRATT: That's terrific to know. Have you been presented with any research about the demographic of customers who have chosen to remain on ADSL in regional and remote areas and what influences their network decisions?

Senator McKenzie: That's a really good question. I'm just looking at officials about the depth of research that we have around the choices that consumers make.

Mr Windeyer : I might ask Mr Mason to come to the table.

Mr P Mason : Thank you for the question. We have done some work in the past on the types of services that different demographics have. Recently we did a report or some research about behavioural economics, back in 2018, but probably, in relation to your specific question, we don't have the exact analysis that you're looking for. So I would say that the people who are remaining on ADSL are generally those obviously in the communities with that service available to them, and the option would generally be fixed wireless or satellite from NBN Co as the alternative. So either they can get ADSL from Telstra because that's been the incumbent product—this is in the NBN fixed wireless and satellite footprints—or alternatively they may have moved to NBN fixed wireless or satellite. The other comment that I would make is that, by its nature, ADSL is operated on a copper network, it's typically in a town and its reach goes to maybe five kilometres out of town at most.

Senator PRATT: What's your understanding about the spectrum capacity and customer experience challenges associated with the NBN fixed wireless network?

Mr P Mason : I think the customer experience on the NBN fixed wireless network is actually, by the reporting I've seen from NBN, holding up very well. It is certainly the case that in any wireless network there is a risk of congestion. But on the NBN network, the speeds being experienced on the fixed wireless network are holding up very well. They are considerably above the minimum design threshold that NBN is building to. Spectrum is potentially an issue in the event that congestion should become a problem. But, as I say, at the moment the network is performing well.

Senator PRATT: Minister McKenzie, can I ask: you're the one that tabled the report in parliament on 14 February?

Senator McKenzie: We were all in estimates but it was tabled.

Senator PRATT: You have referred the questions, though, to the officials at the table. What's your understanding of the customer experience and those challenges?

Senator McKenzie: I have a lived experience as somebody who doesn't live in a capital city. I also meet regularly with stakeholders, whether it's from the National Farmers Federation or BIRRR. We've set up consultative groups that I meet with regularly. So I'm getting feedback from right across the country, and not just on the NBN but on telecommunications more generally. The RTIRC review, as you would appreciate, is a review that parliament conducts every three years. It was set up to make sure that the telecommunications experience of rural and regional Australia was something that parliament considered regularly over time and could adjust its policy response irrespective of who is actually in government.

This latest review is the most heavily consulted review that has been undertaken, and I want to commend the committee on the work that they've done. I think a lot of that work, or most of it, was actually done via Zoom, and they were able to consult with industry groups, with individuals right across the country to provide us with a very detailed and appropriate response.

Senator PRATT: That doesn't go to the technical issues customers are experiencing. Can I ask, minister: the review has shown that the network might not keep pace with demand. What's your understanding of that challenge specifically?

Senator McKenzie: It means that we've seen a step change in demand over time. It goes to people working from home and putting a greater demand on the service provision and the data requirements. It goes to the need for natural disasters and emergency situations, making sure that our base stations have battery—

Senator PRATT: So you—

Senator McKenzie: I'm sorry, I'm trying to answer your question.

Senator PRATT: No. It's just so that you can—

Senator McKenzie: Technically, we need batteries for mobile stations that actually last long enough for the technicians to get to the base station to actually repair it in times of flood or fire. So they're the sorts of things technically that we're looking at.

Senator PRATT: Can I ask in that context—

CHAIR: Senator Pratt, this is rare, I know. You've been going for 20 minutes. I'm conscious that we might have to rotate the call and come back to you, given that we have other senators who would also like to ask questions.

Senator PRATT: I've only got four more in this bracket and then I'll move on.

CHAIR: Do you want to exhaust your questions? Do you prefer to do that?

Senator PRATT: Not for the whole but just for this topic. Minister Fletcher and Mitch Fifield both backed a report by the Bureau of Communications and Arts Research that said only two per cent of Australians will need peak speeds of 50 megabits per second by 2026. Do you agree with their views?

Senator McKenzie: I tend to think that what we've found, as we've rolled this telecommunications infrastructure out—the NBN and our Mobile Black Spot Program—is that rural and regional Australians have really taken the opportunity presented to them through this technology and ramped it up. They're competing with the globe, particularly in our core industries of agriculture, mining and manufacturing. Therefore, we've seen this increase in demand. So I think we're actually going to see an increase in demand for these types of services and speeds from rural and regional Australia. If you look at the shift that's undergone in the last, say, 12 months due to COVID, we're seeing people moving out of capital cities to the regions, and that's also something that we could never have foreseen in terms of increasing demand, and we need to make sure that our network can meet that demand and exceed it.

Senator URQUH ART: Minister—

Senator McKenzie: Senator Urquhart, you know how I feel about people moving out of capital cities into the regions.

Senator PRATT: I referred to the views from Minister Fletcher and Mitch Fifield.

Senator URQUHART: You have a different view from theirs, don't you?

Senator McKenzie: I'm also in a different political party.

CHAIR: Okay; just questions and answers.

Senator PRATT: Can you confirm whether the 2022 NBN corporate plan includes funding to upgrade the fixed wireless network from 4G to 5G?

Mr Windeyer : Senator—

Senator PRATT: That question was directed to the minister in the context of—

Senator McKenzie: I can direct the question to Mr Windeyer.

Mr Windeyer : Senator, I can tell you that I think NBN allocates roughly $200 million a year in investment in the fixed wireless network. I think it would be a question for NBN to know what their technology pathway is and when they propose to upgrade to 5G. I think what they are looking to do is continually invest in that network to make sure it can still deliver the speeds that they're currently offering and the majority or an awful lot of customers are looking for. So they are making sure that network can continue to deliver to people their 25 by-products and their 50 products. Where a new technology is needed for that, I think, is a question probably for NBN to answer.

Senator McKenzie: Are they on tonight?

CHAIR: They're on tonight, yes.

Senator PRATT: Minister, I refer to developments in private sector satellite capability. How does that influence your thinking about a regional broadband levy and its design and objectives going forward? Do you see a need for the levy to—

Senator McKenzie: Are you talking about low-orbiting satellites?

Senator PRATT: Yes.

Senator McKenzie: I think this is one of the most exciting things about this particular policy area. When we came to government and initiated this country's first-ever mobile black spot program and turned the NBN rollout from capital cities, under Labor, to rolling it out to people that didn't have any access to broadband, being in the regions, as a first point, the change in technology has just been exponential, and we're getting new products on the market all the time. If you look at what the objective should be and is, to increase access to broadband and telecommunications and also decrease the cost and make sure that it's a reliable service, options and different technologies are presenting themselves all the time. If you look at where low-orbiting satellites were five years ago to where they are now, the change is exponential. So I don't want to be technology specific. I think we need to solve the problem, which is making sure regional and rural Australians have access to 21st-century reliable and affordable telecommunications and broadband services.

Senator PRATT: How will the levy have to evolve to respond to that?

Senator McKenzie: I'll go to Mr Windeyer on that.

Mr Windeyer : Senator—

Senator PRATT: I want to ask the minister whether she's got any policy insights.

Senator McKenzie: I don't have total authority over the levy; that's Minister Fletcher's policy space. With that in mind, I'll go to the deputy secretary.

CHAIR: Let's get the answer. We're now moving on.

Senator PRATT: NBN Co has not increased its regional fixed wireless investment since it began receiving revenues from the levy. Why is that the case, Minister?

Mr Windeyer : NBN might be about to receive the first allocation under the levy—so I don't think that has actually started—but I think the point to bear in mind with the levy is that the vast proportion of that levee, in a sense, will be contributed to by NBN itself. So already over the life of the NBN, it has been contributing and, in a sense, internally cross-subsidising support for the rollout and the ongoing upgrade of the fixed wireless network.

CHAIR: We're going to rotate the call now, after that extensive period of questioning.

Senator PRATT: I've got a couple more and then I'll be done.

CHAIR: You've been going for almost half an hour; so we're going to rotate the call and we'll come back to you. Senator Hanson-Young.

Senator HANSON-YOUNG: I just want to go back to those questions in relation to streaming and SVODS, please. Just so that we're all on the same page, could you quickly summarise for me what the key difference between the tier 1 and the tier 2 listings will be?

Mr Penprase : Tier 1 would be purely a reporting framework; so entities that are designated under tier 1 would be required to report on their provision of and expenditure on Australian programming. That would essentially codify, in effect, the voluntary reporting arrangements that are in place and they'd be very similar and modelled on those, given that they've been developed over two years. Tier 2 would be entities that are designated under that part of the scheme, and they would face a requirement to invest a certain percentage of their Australian revenue on Australian programming. They would also have the reporting framework as well. But in addition to that, there would be a mandatory obligation to invest a certain proportion of their revenue on Australian programs.

Senator HANSON-YOUNG: And that's the five per cent?

Mr Penprase : Five per cent is a trigger. So under the proposed designation arrangements, if they fail to provide or meet a five per cent threshold, then the minister would have the capacity to designate them under tier 2. So five per cent may or may not be the number; it's a threshold or an enabling criterion for designation under tier 2. The reporting framework that sits for tier 1 would enable the decision-maker—in this case, the minister—to know what they're spending and to know what they're investing. So it's an informed process for determining whether they should be subject to an investment obligation.

Senator HANSON-YOUNG: But no-one is going to be required to invest more than five per cent?

Mr Penprase : The rate of investment will be a matter for that designation instrument; so it might be higher or it might be lower. The other thing that I should add is that it's intended to apply to large entities—not necessarily smaller or new entities but to larger entities—to meet a certain level of investment in Australian programming and to enable the minister to determine that they be subject to an investment obligation if they fail to meet that five per cent threshold.

Senator HANSON-YOUNG: Just going back to the conversation that we were having earlier, that tier 1 requirement for reporting will need legislation?

Mr Penprase : Yes.

Senator HANSON-YOUNG: And in order to establish the designation power for tier 2, would that need to be legislated as well?

Mr Penprase : Yes. We're not at the legislative design stage yet but we would imagine that it would come together as a holistic framework; so it would be encapsulated in one amending bill or one new bill to introduce the framework itself.

Senator HANSON-YOUNG: With the framework, clearly, there is one step and then the next. When could the earliest tier 2 designation be made?

Mr Penprase : Under the proposal, the scheme would require, before a tier 2 designation could occur, the entity in question to have been a tier 1 entity for at least a 12-month reporting cycle. That regulation can't be initiated immediately; the entity would be given an opportunity to demonstrate the level of investment that they're making. That's a proposal that is subject to consultation now, but its intent would be to provide for reporting first and, if necessary, enable the minister to move to a mandatory requirement, if that expectation proves not to drive the results that are being sought.

Senator HANSON-YOUNG: You said that you're not at the legislative drafting stages yet. Obviously, if we're honest about it, it is a bit of an odd cycle in the election and parliament time frame to be talking about new legislation, particularly something that hasn't been drafted yet. Have you been given any indication from the minister as to whether this legislation would be tabled before parliament is prorogued?

Mr Penprase : At this stage we are working on the consultation process, so we've had no further direction or instruction in relation to that. The consultation period runs until 24 April. Obviously, the outcomes of that consultation would feed through into our advice to government as to how to shape, or any potential changes to, the proposal as it stands.

Senator HANSON-YOUNG: One of the key questions that I'm getting from stakeholders—and you can understand where this is coming from in relation to that time frame of 24 April—is whether there is anything in this discussion paper and the response that in any way binds a future communications minister.

Mr Penprase : No, not at all.

Mr Atkinson : I might give a bit of context on that. This is a long-term issue. In a world of these sorts of markets, nothing lasts forever, and everything is changing. I think it's really important for us to have a good consultation process, and these issues will need to be addressed throughout the course of the year.

Mr Penprase : The other thing that is probably worth noting is that, with the voluntary reporting arrangement that has been running for two years now, we would hope and expect to continue that, irrespective.

Senator HANSON-YOUNG: That will be another layer?

Mr Penprase : With the goodwill of the entities involved, because it is voluntary, but we understand that they're comfortable with that reporting arrangement. For the 2021-22 financial year, they would report again to the ACMA in relation to that; and, in turn, the ACMA would put out another year's report. So it starts to build a dataset of what they're investing in Australian programs.

Senator HANSON-YOUNG: Okay. I assumed that was the case about the future, but it's important for some of these concerns to be addressed directly.

Mr Atkinson : It is one of those things. It's a longer term reform piece that we all need to focus on; it's just the ebbs and flows of the cycle.

Senator HANSON-YOUNG: Yes, of course. This next question goes back to this issue of who gets designated, what the process is there and this five per cent. Does this proposal allow for a minister to designate a level that is either higher than five per cent or lower than five per cent?

Mr Penprase : For designation of a tier 2 entity, that entity that would face a mandatory investment obligation, yes, it could be higher, it could be lower or it could be five per cent. The proposal as it stands allows the minister that discretion to take into account the circumstances at the time, the market conditions, the role of the player and that sort of thing.

Senator HANSON-YOUNG: So that designation would be individual to that entity. I'm just trying to flesh this out. You have a requirement to report that you're spending at least five per cent. If you end up being designated then you're designated to spend a certain percentage, and that could be five, it could be lower or it could be above, and you could have different entities designated at different levels.

Mr Penprase : Yes. There would be that scope within the designation process. In turn, the ability to designate a tier 2 entity would be triggered or enabled, if that particular entity failed to report, so they didn't report at all, or failed to invest at the five per cent level; there's that trigger. Certainly, the designation instrument would be specific to a particular entity, because the other entities on tier 1 may be investing that five per cent or more and they may be continuing to report without any particular concerns.

Senator HANSON-YOUNG: Is there a process for imploring the minister to act, if someone hasn't kept faith with being listed as a tier 1? Is there a review process? Obviously, we've got Senate estimates, but it shouldn't just be up to someone like me to say, 'This entity hasn't done what they said they would do.' What would be the process for imploring the minister to designate?

Mr Penprase : There would be the framework that sets out the criteria, we envisage, in the proposal—statutory criteria that the minister would need to consider—and, as I said before, we're not at the legislative design phase, but that type of designation is most likely to be a legislative instrument and, therefore, required to be tabled and subject to parliamentary disallowance. So there will be the usual processes associated with the making of delegated legislation which would be associated with this framework.

Senator HANSON-YOUNG: Just to be clear, where does Foxtel fit into all of this, seeing that they are not free to air and they do have a streaming service? A lot of people now just access Foxtel through the internet and through the app, as opposed to through the Foxtel box. Where do they fit in all of this?

Mr Penprase : The designation process would enable the minister to consider the service in hand. There will be a series of definitions, which are sketched out in the discussion paper, about what constitutes a subscription video-on-demand service. They need to have the majority of their revenue from subscription fees; they need predominantly to produce professionally produced content, so we're not trying to capture sites that have a majority of user-generated content, for example.

Senator HANSON-YOUNG: So not YouTube?

Mr Penprase : No; provided that YouTube doesn't change substantially and provide a majority of professionally produced, scripted content. Also, it's about leaning heavily on the existing definitions that are in the Broadcasting Services Act, which are familiar to the industry. The definition, for example, of an online content service, which is in schedule 8 to the Broadcasting Services Act, would, as proposed in the scheme, be the guts of what constitutes a service, so that existing definitions are used to the fullest extent possible.

Senator HANSON-YOUNG: Just to be clear, you've been given no direction or there's no intention—perhaps there is; I don't know—that Foxtel would have a carve-out from this process?

Mr Penprase : No. The proposal, as sketched in the discussion paper, would require the minister to consider certain criteria in assessing whether or not to designate an entity as a tier 1 or a tier 2 entity. But, with the proposal as it stands, there's no explicit carve-out, other than what's done by the definitions, which are, as I said, trying to utilise the existing definitions in the Broadcasting Services Act.

Senator DAVEY: Perhaps I could just clarify this: Foxtel is already regulated as a subscription television service and has a requirement for local content that doesn't already apply to SVODS; is that correct?

Mr Penprase : That's right. As a subscription television broadcasting licensee, they're subject to the licence framework for those licences and, yes, there's a new eligible drama expenditure requirement on Foxtel, and channel providers to services like Foxtel that provide drama content, to expend a certain amount of their drama budget on Australian drama.

Senator DAVEY: I've got a couple of final questions on this topic; then I'll go back to regional comms. I want to get an understanding. We know that the voluntary reporting arrangements have been in place for two years, and they have been quite widely accepted and adopted. Do we have an indication from that existing reporting of what percentage of revenue currently looks like being expended on local content?

Mr Penprase : No, not through the process of reporting through to the ACMA. The data that's provided to ACMA in that context deals with the amount of Australian programs that are on the service, the expenditure on that programming, but the commitments made to the entities included to publish information only at an aggregate level. A lot of this data is quite commercially sensitive for the players involved. What ACMA publishes in its report tends to aggregate up to the higher level so that those entities are comfortable. That is in itself a reflection of the commercial sensitivity for the entities involved, the fact that it's a relatively new reporting scheme and the fact that it's voluntary. To get the parties to be comfortable with what's being provided and what's being published, the reports by the ACMA are at a very aggregate level.

Senator DAVEY: With the discussion paper, the consultation paper that is out until April, I note that it has followed on from previous consultations and we had the industry green paper or white paper, so this is not the first consultation on this. Do we have modelling that indicates what five per cent would look like? What sort of spend on Australian content would that be equivalent to?

Mr Atkinson : Senator, we went through this in quite a bit of detail previously with Senator Hanson-Young, about the analysis that informed government decisions on that, but we don't have modelling in the way that you've described it.

Senator DAVEY: I'll leave that topic and go on to regional communications. I've got questions for the department and the minister. We've had the Mobile Black Spot Program in place since 2013, I believe. Can you tell us how many mobile base stations that program has delivered since 2013 and what that would look like in terms of square-kilometre coverage?

Mr Paterson : There have been 166 base stations delivered.

Mr Smurthwaite : It's 996.

Mr Paterson : I'm sorry. Thank you for the correction. Given that I got the number wrong, I'm going to refer to Mr Smurthwaite to give you the statistics.

Mr Smurthwaite : Your question asked about the amount of new coverage we've delivered through the program.

Senator DAVEY: Yes.

Mr Smurthwaite : For the first 951 of those 996—these are the ones we have final completion reports for—it's over 410,000 square kilometres.

Senator DAVEY: That's across regional and remote areas. Do we have a state breakdown? I'll understand if you need to take this on notice. Obviously, I'm interested in regional New South Wales, and I'm sure that Senator Hanson-Young is interested in South Australia, so do we have a state-level breakdown of the increased service areas?

Mr Smur thwaite : I can give you the number of base stations but not the breakdown by kilometres. I could take that on notice for you.

Senator DAVEY: Yes.

Mr Smurthwaite : So it's 320 base stations in New South Wales.

Senator DAVEY: That's great. From talking to stakeholders and former partners in the Mobile Black Spot Program, I understand that the low-hanging fruit has gone and it is getting increasingly less commercially attractive. What other programs are generally available to help connect some of our most regional and remote Australians?

Mr Paterson : One of our flagship programs is the Regional Connectivity Program. We've delivered some projects under round 1 already; the assessments process has been undertaken, the contracts have been signed and it's in the rollout phase. The applications for round 2 close on 18 February, this week. I'll refer to Mr Smurthwaite for more detail.

Mr Smurthwaite : The Regional Connectivity Program came out of the previous Regional Telecommunications Review. Round 1 of that was announced last year, with over 130 projects being funded from quite small communities with perhaps a single small-cell base station through to, for example, all of King Island and with Telstra's mobile service, including the backhaul, being upgraded. That's a significant project. We're also doing one across from Darwin to Nhulunbuy, which is a fibre upgrade, which will increase the capacity on the network by 20-fold—five gigabits per second to over 100. There's a range of other projects. We commissioned one in Western Australia last week in the Indigenous community of Kalumburu, which is a community wi-fi set-up, which provides free access to sites and internally. Community members who want to use the internet more broadly can simply purchase a data pin from the community store there.

Senator DAVEY: Is this the program where communities sit down and work on solutions that can be co-delivered but that are fit for purpose for the community? As you said, they may be a single small-cell base station and so are not limited just to phone service.

Mr Paterson : Absolutely. We include criteria around economic and social opportunities as well. We explicitly look at the benefits to that particular local community and we look to get endorsement from the councils and so forth so that it fits in with their plans for the community and where they want to take the community.

Senator DAVEY: We learned a lot through the Black Summer bushfires, when base stations were fried and we lost connection. NBN's Sky Muster, in little utes, went out into the regions and provided invaluable support for some of those regions. What are we doing to ensure that we have responses in place so that in the future communities aren't left disconnected?

Mr Paterson : We'll deal with this answer in two parts. Mr Smurthwaite and I are responsible for the Mobile Network Hardening Program, and I'll ask Mr Smurthwaite to talk to that. Then there are other aspects related to this, which I'll ask one of my colleagues to talk about. But the relevant program is called the STAND program.

Mr Smurthwaite : Under the network hardening element of that program, stage 1 was a commitment to upgrade base stations from our earlier first two rounds of the black spots program to ensure that they had at least 12 hours of battery backup. Since the third round of the program, that has been a mandatory criterion, so this was going back and fixing it up. We've now completed 461 of the upgrades, with a small number remaining for the next little while. Stage 2 of that program is not focused on our black spots program; it's a broader industry piece. That is around about the $6-million element, and we expect the outcomes of that program to be available shortly.

Mr Paterson : The second part of the program will look not only at things such as battery upgrades but also at things that will make base stations more resilient. So it could involve generators; it could involve levees because they're in a flood area; it could involve land clearing because they're in a bushfire area; or it could involve barriers to stop the radiant heat affecting the base station and so forth. We've tried to keep it as broad as we possibly can. I might ask Mr Kathage to talk about the other elements of the STAND program.

Mr Kathage : Along with Mr Smurthwaite, I administer other elements of the STAND package. I might first talk about the temporary facilities element. That's a $10-million grants program that's split into two parts. The first part is a $1.7-million grant program for NBN Co. You referred earlier, Senator, to NBN Co's Road Muster trucks, and this element did fund an additional five trucks. As part of the program, NBN Co took the opportunity to completely redesign the trucks, reflecting on why the community valued those trucks during the 2020 bushfires. The observation was that the trucks provided not only connectivity but also a place for the community to gather and access government services and so on. The new trucks are quite large and they have a place where people can sit down and access government services and so on. The second part of that program is the development of 12 Fly-Away Kits. They're small suitcase-sized kits. There are two suitcases that can be put into fixed-wing aircraft or helicopters and taken to places where they're needed the most. Of the five Road Muster trucks, five have been completed; and, of the 12 Fly-Away Kits, 12 have been completed. The other element of the program is that it was a competitive grants program to fund other temporary facilities. That competitive grants program has run its course. Contracts have been struck with telcos, including Telstra, Optus, TPG and NBN Co. That program did fund a whole range of different assets; I can go through them if you would like. The one to call out might be the NBN power cubes; so 40 power cubes were funded under the program and 39 have been completed at this point.

Senator McKenzie: Just explain, Tristan, what the power cubes do, because they sound cool but no-one really knows what you're talking about.

Mr Kathage : Envisage a shipping-container sized unit that contains a battery, and on the top of it there's a solar panel. That's connected to a fixed wireless cell and can provide power to the cell for a long time. As I said, 39 of those have been deployed and have already been used. I have information here from NBN Co which lists that one power cube was able to provide 25 hours of power to a fixed wireless station.

Senator DAVEY: What was the event that led up to the need for that; was it a flood?

Mr Kathage : Yes. That was a power mains failure, unknown in that case. One of our observations, as part of the 2020 bushfires, was that telecommunications networks can go down for a range of reasons. One of the reasons that was most prominent during that event was loss of power. That's why the power cubes are a really important tool in the arsenal that NBN Co has to deal with those kinds of events.

Senator McKenzie: During the 2019-20 bushfires we were putting out calls for people to evacuate along the coast. People needed to fill up their car and, because now you can't really pay for your petrol without access to telecommunications, we were finding that people couldn't evacuate in a timely way, and not because they didn't want to or weren't listening to emergency services, but because the telco had gone down. So this program is going to be a game-changer for the natural disaster season. Having them so transportable is so important.

Senator PRATT: What happened in the case of telecommunications going down in Donnybrook and Boyup Brook in the Western Australian bushfires recently; and why was the Corrigin phone line down for days, particularly noting the rollout of all these innovations?

Senator McKenzie: I can answer that question. That's a matter for the telecommunication provider itself, Telstra. I'm happy to contact Telstra and get that answer to you within the next 24 hours.

Senator PRATT: Okay. In that context, are any of those locations on your list of places that need backup power or remediation? It's great to hear about these solutions but, if you don't know where the problem is—

Senator McKenzie: We've done a lot of mapping to that extent.

Senator PRATT: Is Corrigin on the list?

Mr Paterson : We'll have to take that on notice.

Senator PRATT: Can you table the list of vulnerable places?

Mr Paterson : We can table the list of locations that are receiving funding.

Senator PRATT: No; I don't want the locations receiving funding; I want to know where the vulnerabilities are.

Senator McKenzie: She wants the locations that have the need. I think that's determined in different ways.

Mr Paterson : I'll have to take that on notice. I'm not sure that we have a list as such. We'll look into it, Senator.

CHAIR: Senator Urquhart, do you have any questions?

Senator URQUHART: Yes, I have a couple left for Senator McKenzie. Minister, finding 4 of the regional telecommunications review states that there is 'an urgent need to consider the future of the universal service obligation in order to provide reliable voice services to rural and remote customers'. What future technologies do you consider have the potential to deliver those reliable voice services; and can you provide an update on what has been learned from the alternative voice trials thus far?

Senator McKenzie: Yes. I had a hook-up with our stakeholder feedback group last week on that exact question. The review makes a very clear and salient point that the USO needs to be re-examined. So much has changed over the period of time between it coming into effect and how people use this technology and the rate of change in the technologies available in and of themselves, that we need to have a USO that's fit for purpose and that allows rural and regional Australians and their industries to capitalise on their strength and fully participate in what we know: the 21st century is a digital economy and a digital society. I think it was Bernard Salt who said that the great inequity going forward post-COVID will be who has access to, and the ability to use, telecommunications and digital services. I don't want rural and regional Australia to be left behind, and I'm sure you don't either. So, in terms of the alternative voice trials, we're considering a draft interim report at the moment. We've put that out to stakeholders to provide us with feedback, which they have done. The department is working on their feedback and it will be released shortly.

Senator URQUHART: Senator McKenzie, was there any discussion around what future technologies might have the potential to deliver those reliable voice services?

Senator McKenzie: There is a variety of technologies.

Senator URQUHART: What are they?

Senator McKenzie: I'll let the department go to the detail of those technologies because we're not going to be using copper landlines in 50 years time, which is what it has all been built around.

Mr P Mason : Thank you for the question, Senator Urquhart. You focused on the RTIRC report. I think the RTIRC report is focusing on the potential use of wireless technologies and satellite technologies, including low-earth orbit satellites. As we've discussed previously, there are basically three technological choices available at the moment: fixed line, terrestrial wireless or satellite services. It is stated government policy, I believe, that we need to have proven and reliable robust solutions before we move to new technological platforms.

That goes to what we've been trying to do with the alternative voice service trials. I think it goes to what the independent review is saying as well, that there are still other technologies, which we hoped we'd be able to trial voice services with, which didn't quite arrive in time, such as LEO sats, but we see those are now closer. You'll be aware that Starlink is up and running. Other platforms are in the offing. They're also recommending that there be trials of those technologies. I think it is quite important to underline that we need to be able to show to the people who rely on those services that these are very strong, robust, reliable services.

The other thing that's really worth drawing out at the moment—and it's kind of focused on in the report as well—is that people are making much greater use of mobile services than their fixed-line services. Most of the complaints, as you've heard today, are: 'Why can't we get our mobile services?' To the extent that we can look at leveraging mobile platforms to provide services that meet people's multiple needs, that would seem to be an advance.

Senator McKenzie: Just more detail on that: LEO sat providers didn't actually apply to be part of the trial. We could only trial those technologies and proponents that said, 'We'll see what we can do in this space'. That is one of the limiting factors going forward. Most of the technologies that are being trialled are already existent in the market, but we're trialling how we can use them differently: can we make them expand their offering over a larger area, for instance, because we don't want to remove something that is known and proven before we can guarantee Australians that they're going to have a reliable service?

Senator URQUHART: Just in terms of that report, you said there was a draft report and you were talking to stakeholders to put together a draft report. What's the time frame on that process?

Senator McKenzie: I think we're hoping to get a final report now—this is just from memory—in June.

Mr P Mason : At the end of the month.

Senator McKenzie: But there's an interim one coming out.

Senator URQUHART: In June, did you say?

Senator McKenzie: The trial will end on 30 June, and it's underway with 540 services. I thought the interim report—I might ask the department—was very shortly, because we just had that meeting.

Mr P Mason : You're absolutely right, Minister. It's a six-monthly report, so it's the halfway report. We would envisage it coming out within the next couple of weeks.

Senator URQUHART: I've got a number of questions on regional newspapers. I am sure that Senator McKenzie, if she is able to stay, is very welcome to stay.

Senator McKenzie: I am happy to stay.

Senator URQUHART: Great.

Senator McKenzie: I think I've got to go at 4.30.

Senator URQUHART: It won't take me that long.

Senator McKenzie: Have you been informed, Chair?

CHAIR: I think that's right, yes.

Senator URQUHART: I've only got about nine questions.

CHAIR: You're going through to the tea break.

Senator McKenzie: When's that, Chair?

CHAIR: 4.30. That means we have you for one more hour.

Senator URQUHART: If you are happy to stay, I'll go on with the matter. I will say, first of all, that I refer to committee question No. 35, which responds to Labor's repeated request for the list of 21 LGAs in Australia without coverage by a single local newspaper. We asked for that back in August 2020. I think it took about 18 months and six or seven follow-ups, but we've now got that list. So thank you to the department for supplying that list and for the work that went into compiling it, because it's quite a big list.

Mr Atkinson : Ms Sullivan's work.

Senator URQUHART: Thank you, Ms Sullivan.

Ms Sullivan : I think there were quite a few other people that actually did the work.

Senator URQUHART: I hope you got a nice gift for that!

Ms Sullivan : Showered with them!

Mr Atkinson : Senator, we're very careful about those things.

Senator URQUHART: I understand that. That was the correct answer. The department has provided the number and locations of newspapers but, given the amount of time that it has taken to get this far and given the minister has initiated a regional newspapers inquiry, will the department now table the full list of mastheads in each location?

Ms Sullivan : I will talk to our colleagues. The Bureau of Communications, Arts and Regional Research undertook that. I want to check with them in terms of the list.

Mr Windeyer : We can certainly check. I suspect we will have to take that on notice.

Dr Iu : We are happy to provide the list on notice.

Senator URQUHART: In each location.

Dr Iu : Yes, in each location.

Senator URQUHART: That's great; thank you. Mr Atkinson, why did it take the department well over 500 days, or 18 months, to supply that list of LGAs without coverage by a single local newspaper? What was the hold-up in that? Is that an acceptable length of time to leave a question unanswered?

Mr Atkinson : There was quite a lot to it. In the end we ended up doing a lot of the work ourselves, having to approach the work ourselves. If you recall, I think the original dataset was one that we had been pursuing that we then couldn't get access to and then needed to restart our approach to getting that information. I'm not sure whether someone wants to add any more detail to the process piece, but it was not a simple activity to have a dataset that's got integrity.

Ms Sullivan : That's the critical thing, Senator. One of the key things which we flagged before was the methodological issues around this. First of all, the evidence we were being asked for was the ACCC work. We couldn't receive that work from them, because they used their information-gathering powers. Their methodology was different to ours. For example, the ACCC—I flagged this in the question on notice, so I don't want to go on about it too much—surveyed just five companies and where those companies operated, which turned out to be, I think, about two-thirds of the local government areas across Australia. The methodology that the bureau used was to look at all local government areas in Australia. I guess, first of all, the number of LGAs that were covered was broader.

The other issue, which is probably the more substantial issue, is the fact that there is no single piece of register, so to speak, or simple point of information, for newspapers and online publications; whereas we actually regulate commercial broadcasters—so television, radio—and therefore there is a database with ACMA of everywhere they operate. No such thing exists for publications. As a result, the team drew on a range of databases, which is listed in that question on notice. It's in terms of seeking that information; it's not just going to one place to find it.

Senator URQUHART: Mr Atkinson, the department has administered millions of dollars in direct grants to news media publishers. Given that the department has only just compiled the list of newspapers, is it correct to assume that the department administered these grants without an evidence base about the number or location of newspapers in Australia?

Mr Atkinson : I wouldn't put it that way. I would say that we didn't have as complete a picture as we do now.

Mr Windeyer : Can I just add one thing to that? I think what's important is that, whilst we didn't have as complete a picture as we do now, noting that even that has caveats to it, for the purposes of administering the programs, they were open to all to apply. We didn't need to know who the potential applicants were. We responded to and administered the program on behalf of the people that applied to us.

Senator URQUHART: Minister, do you believe it's acceptable that it took the department 18 months to supply the committee with a list of 21 LGAs in regional Australia without coverage by a single local newspaper? Are you surprised that it took that long?

Senator McKenzie: As a minister from the Senate, I like my questions on notice to be in a timely fashion to allow senators of all persuasions to prosecute their issues in Senate estimates. The officials have given, obviously, their explanation and I accept that.

Senator URQUHART: Okay. But are you surprised that it took so long?

Senator McKenzie: No; I accept their explanation, but I'm glad they've got the list now.

Senator URQUHART: I'd say that they are too.

Senator McKenzie: It will assist them in their policy work in this area going forward.

Senator URQUHART: What evidence was brought to bear in deciding how to design and deliver grants for news media publishers in Australia? Was it done on a needs basis, for example? How does the department work out who and where to grant funding?

Mr Atkinson : I think Mr Windeyer already answered that a minute ago.

Mr Windeyer : That's sort of what I was referring to earlier. Ms Sullivan may be able to provide some further detail. There were some decisions made in terms of the funding programs about eligibility, but it was then open to applicants, and we would then assess them against the eligibility criteria.

Senator URQUHART: What are the eligibility criteria?

Mr Windeyer : The program I've got in mind for this conversation is the public interest news gathering program, the PING program, which is now closed. I don't have those guidelines in front of me, but we can certainly get that information for you, what the criteria were—unless Ms Sullivan has anything to add?

Ms Sullivan : I can touch on several of them, but I think it's probably more useful to table the guidelines.

Senator URQUHART: That's fine. On 2 December 2021, Anne Davies and Amanda Meade published an article in the Guardian entitled 'Regional Australian media outlets granted millions in federal support still slash journalist numbers'. This revealed that the government conducted federal seat analysis to determine which seats would benefit from a $50 million program, based on FOI documents. Why was a federal seat analysis relevant when you were determining which news media businesses got part of that $50 million grant under the PIN?

Ms Sullivan : May I answer that in the first instance? There was no federal seat analysis. We provided that information to the journalist who wrote that article. The federal seat piece is part of the SmartyGrants database. The department did the assessment. We had a committee within the department in my division. We made recommendations to the minister. When that information was put up to the minister, that column regarding federal electorates was not provided to the minister. I should also add that the minister ticked off on all our recommendations without any change. The only time that federal electorate information was used, after things had been signed off, was to inform local members. So at no stage was there any analysis done, nor was that information provided to the minister as part of the decision-making process.

Senator URQUHART: Thank you. As part of the government's response to the green paper, the minister has announced an additional $10 million for a journalist fund for regional cadetships. Who will administer this fund and set the eligibility criteria, and how will the allocation of grants be decided?

Ms Sullivan : In terms of the funding, we are still working through the detail of the guidelines and so forth. The minister will sign off on the guidelines. Based on previous experience, we would envisage—obviously, this is all subject to approval and so forth—that the department—

Senator McKenzie: This is a great program, giving young people opportunities in media and not having to go to big cities to do it.

Senator URQUHART: When you said you're working through the guidelines, what is the expected time frame for that to be finalised?

Ms Sullivan : In terms of the guidelines?

Senator URQUHART: Yes.

Ms Sullivan : There are going to be two parts: $8 million for cadetships and $2 million for training. It would be over coming weeks. The timing of that is a matter for the minister.

Senator URQUHART: Thank you. I've got more questions for the department around regional telecommunications. In a recent submission to the regional telecommunications review, Field Solutions Group said that neutral host trials could validate a new model by providing mobile coverage to some of the remotest areas of Australia. I understand they are in partnership with Optus and have secured funding to build seven towers in Queensland which will form the base to conduct the neutral host trials. Can you give me an update on where those neutral host trials are up to?

Senator McKenzie: We will get the officials to the table.

Mr Smurthwaite : All the projects under 5A are due for completion by June 2023. I understand, on those particular sites, that FSG is undertaking the site works, or the first detailed site works, this month, in February.

Senator URQUHART: And that's on all the sites?

Mr Smurthwaite : Not on all their funded sites but I believe on the seven you're referring to. Can I just check that for you?

Senator URQUHART: Yes, please; if you could that would be useful.

Mr Smurthwaite : They have definitely begun the site works.

Senator URQUHART: Can you tell me when did the funding for those trials formally commence and how do you assess the pace of progress to date?

Mr Smurthwaite : Those contracts have been in place actually two weeks now.

Senator URQUHART: That's when the funding formally commenced?

Mr Smurthwaite : Yes.

Mr Paterson : Yes. What happens is that the decision on the assessment process is announced and then we go into contract negotiations, which we have recently concluded. The contracts have a set payment framework which is related to performance indicators. Mr Smurthwaite, could you just take the senator through that very quickly, the performance indicators under the contract that attract payments.

Mr Smurthwaite : On the FSG1 there is what we call triple A. So this is the point where they get all their approvals in place: access and their approvals et cetera. That generates a payment. The majority payment is when the asset is completed and then there's a final payment made at the completion of all the projects under that round.

Mr Paterson : One of the things that have changed with the programs over time is we have increasingly moved to this triple A payment. So instead of getting as much money for mobilisation, you'd get a payment when you've actually got your paperwork done and you've done your urban planning to generate a bit of activity in that area.

Senator URQUHART: Has a software solution been developed to actually enable Optus users to roam on the FSG network or is that still in development?

Mr Paterson : That's a very good question. Mr Smurthwaite?

Mr Smurthwaite : It's existing material, technical products. I'd have to—

Senator URQUHART: What about the software solution that actually enables that to happen?

Senator McKenzie: I'm contacting Telstra for Senator Pratt. I'm more than happy to contact Optus and get back to you in the next 24 hours with that answer.

Senator URQUHART: Thank you. Can you tell me what do you know about the international experience with neutral host roaming in regional and remote areas?

Mr Paterson : We'll answer this between us, if that is all right.

Senator URQUHART: Sorry, maybe if I can add a little bit more, Mr Paterson. In what countries has the model appeared to have worked well? What market characteristics do those countries have? How does that contrast with the Australian environment?

Mr Paterson : Good question. I will ask Mr Smurthwaite to help me a little. New Zealand is a classic example. They've had a radio access network or a RAN model in train now for quite a few years. It's been funded with assistance from the New Zealand government as well as some spectrum allocations. There are certain market characteristics in New Zealand which are a little bit different from Australia. They tend to backhaul distances to connect the solutions to the network a little bit shorter. Some of the communities tend to be a little bit bigger and they tend to compete on coverage a little less in New Zealand than they do in Australia. Australia is often coverage and price, and New Zealand is often more price based. But having said that, the fundamentals of the technology are sound and they've been running that in New Zealand for quite a few years now.

They've also got a RAN-type model they're running in the UK, which is another good example. They do it a little bit differently. The technology isn't quite the same. And they're looking to roll it out into what I think they call not spots.

Mr Windeyer : They're the equivalent of a black spot. It is a 'not spot' in the UK.

Senator McKenzie: Not, because you don't have signal.

Mr Paterson : It's less advanced in the UK. Again, they've got spots of no coverage, because of commercial reasons. They want to give customers a choice of provider, and this technology enables them to use the same bit of equipment, which means you can get multiple providers into those markets. For more detail than that, we will have to take it on notice. But I'm happy to do that.

Senator URQUHART: Obviously New Zealand is much smaller, as I think you indicated. Are there other models? I am happy for you to take it on notice, but if there are other countries around that have the vastness at least?

Mr Paterson : When people talk neutral host models, there are different types of radio access network or other models—you are correct—and then, depending on your approach, the black spots have always had that co-location model, which is the sharing of the infrastructure itself. Our estimates of the costs are a little bit higher if you do it that way.

Senator URQUHART: I understand there are different ways that the neutral host can be implemented. One is for the neutral provider to have its own spectrum and service and offer a roaming service to mobile carriers. The operators would then lose end-to-end visibility of the network and aspects of the customer experience. The open RAN approach allows the neutral host to build and manage the physical components, with the mobile operator using software to provide a service over the wireless interface. A third model, I think, is one where an existing mobile carrier chooses to become the neutral host itself, offering other carriers dynamic access to its network.

So in terms of the Australian market and the economics of our industry, can you offer any reflections about which of these models, if any, has the best prospect in our domestic settings?

Mr Paterson : I'm going to add a fourth model, where actually you might run a neutral host RAN model on a base station but you might have another carrier who would like to access that base station and put their own equipment on it. So you could actually run a standard set of transmission equipment from one carrier and have another two carriers sharing a RAN network because sometimes—

Senator URQUHART: I don't think that would be very effective.

Mr Paterson : Observations as to which model would work best in Australia—

Mr Windeyer : Senator, as you have outlined, there are multiple different ways of achieving the broad objective, which is going to how do you get and expand coverage for users regardless of the retailer they're signed on to. There are lots of ways of doing that. I think the first one you mentioned is probably the one that is, in a sense, least sophisticated, the simple roaming model. All of the things that I think we are looking into—

Senator URQUHART: But is that the best one that is suited to our domestic settings?

Mr Windeyer : I don't think it's as easy as being able to generalise to say one's best and one isn't. In some respects it sort of depends on how the different carriers choose to deploy their networks and where, for example, in the overall network design and supply chain and mobile services they're best placed to cooperate. The different mobile network operators in Australia have run slightly different arrangements—that is, the extent to which they own their own infrastructure or sites, for example. That's just started shifting in recent times. As you would have noticed, both Telstra and Optus have entered into arrangements to divest themselves in part or bring other investors into their tower asset. And the technology shifted too, which changes the economics of what you can do at a radio access level.

Senator URQUHART: Can I then ask: has the department done any high-level work or research in understanding benefits and trade-offs of particular models or has this largely been left to the regional telecommunications committee?

Mr Windeyer : I think I'd say in some respects we'd largely leave it, in a sense, to the industry and how they choose to respond to the incentives we've set up in the programs in terms of what they want to come forward with.

Mr Paterson : But I would say we have done work to understand those technologies and how they've applied in different markets and the specifics of those markets—directly relevant to your question earlier—so that when we put programs out to market, like we do with 5A, and we actively promote neutral host models under the program, it was with some knowledge about how they applied and worked in other countries. And we've also given a little bit of thought around motivations. Different providers might be motivated differently to run different models. Neutral host models, for example, who get money from other people putting facilities on their base station might have different motivations from a carrier that is also serving their own customer base and so forth. So we've given a little bit of thought around those sorts of issues as well.

CHAIR: I might just get a sense from you here—

Senator URQUHART: I've got one question in this pack and then I've got some others, but just one on this particular topic.

Senator McKenzie: Senator, I just want to let you know the RTIRC review goes to this issue specifically, and one of the recommendations is around doing some trials so that we can actually get a service provision to the region that is fit for purpose for our continent and communities.

Senator URQUHART: We know that ubiquity is a key requisite to realise the full productivity dividend of 5G, especially as we get closer to machine-to-machine automation. So does the department have a view on whether open RAN models in the context of Australia's geography are an efficient pathway to densified 5G networks?

Mr Windeyer : At the risk of complicating this, the term 'open RAN' gets thrown around in a few different ways in the industry. I think you're using it in the context of thinking about an extension of the neutral host-type model, of having multiple providers offering services from the same location. Just to be clear, though, sometimes the open RAN conversation, when it's referring to 5G, is also talking about the standards used in the technology, which doesn't necessarily mean multiple providers use it but it means a provider can buy certain bits of equipment from one vendor and from a different vendor for the next bit of equipment. And the openness refers to the standards that allow those different vendors to plug into each other. So that's just by way of explanation of how open RAN is thrown around at times in the 5G context.

The other thing I suppose I would say in terms of your point about ubiquity and machine to machine, or actually the other thing I'd point out, is: in the digital-economy world we are seeing emerge, and in some instances particularly in regional areas, a lot of it becomes what's coming through in the Internet-of-Things world. I suppose the point I'm making, before even getting to the densification of 5G, is actually what we're looking for—and I think the RTIRC review touches on this—is actually availability of a variety of network types. 5G isn't necessarily the only technology that will support all the uses people are looking for. And it's worth keeping in mind we already in Australia have twice the area coverage of low-band width IOT networks as we do for mobile networks.

In terms of densification of 5G, that's really a question of where the density problem comes in. It is in built-up areas where congestion is a risk and we've got massive data use in small areas requiring thinking about network design with small cells and small radius; and hence you would have noted people talking about the fact that there will be a cell on every corner. That's an issue primarily in the built-up areas rather than a regional area and is dealt with by use of different spectrum types as well as different network deployment approaches.

I think the neutral host approach is less likely to come through in the densely populated areas just because the mobile network operators are all happy to run their own networks.

Senator LINES: Senator McKenzie, often you talk about black spots and how you fix them. I am just wondering if someone can tell us about Albany Highway in Western Australia, between Albany and Perth, where you've got almost zero mobile coverage and what's happening there?

Senator McKenzie: Thank you. I'm sure someone has got some information on WA specifically. If we don't have it we will get it to you.

Senator LINES: I just want Albany Highway.

Mr Paterson : We'll see if Mr Smurthwaite has got some information; otherwise we'll take it on notice.

Senator LINE S: I am sure Rick Wilson must have raised it. It's shocking.

Mr Paterson : But highways are—

Mr Windeyer : Just while Mr Smurthwaite is looking for some information we'll see what we've got. One thing I just point out, which is just to observe there, is that many of the programs you run today end up being driven by the choices made by the applicants about where they wish to apply for. So they're sort of two questions: have we seen applications for coverage on the highway; and then whether we've actually then found that they met the criteria—

Senator LINES: It is a major highway.

Mr Windeyer : Yes, I understand that.

Mr Paterson : I actually know that area reasonably well. We've tried to focus some of our criteria under recent programs more on highways because the economics of highways are that a carrier will tend to choose the locality with premises when they apply. So we've been trying to push these highways, which ideally are suited for neutral host models as well. If you are a tourist you want to be able to use your phone, whoever your carrier is. So we have been trying to drive that recently through program design. Did we have anything on Albany?

Mr Smurthwaite : I can only give you by state. That's the lowest breakdown.

Senator LINES: Just take it on notice.

Senator McKenzie: Rick Wilson has raised this with us, and we built a lot along that particular route. I'll take that on notice.

Senator LINES: The connectivity is almost zero; seriously.

Mr Paterson : We'll have that information, Senator; we'll get it for you.

Senator URQUHART: I've got some questions around the Code of Practice on Disinformation and Misinformation. In February 2021 the ACMA issued a media release welcoming the new Australian Code of Practice on Disinformation and Misinformation that was released by the Digital Industry Group—DIGI. Has the ACMA registered the Code of Practice on Disinformation and Misinformation?

Ms Sullivan : Senator, no. It's a voluntary code, so it doesn't require registration.

Senator URQUHART: Code registration is a term of art in the Commonwealth portfolio, which means the ACMA is empowered to formally register a code under a regulatory framework.

Ms Su llivan : Co-regulation is, yes. Co-regulation tends to be the predominant regulatory approach in terms of the Broadcasting Services Act and the Telecommunications Act. However, the disinformation code is actually an industry code and it's a voluntary code, so it's not required to be registered.

Senator URQUHART: So the ACMA isn't formally empowered in relation to misinformation and hasn't registered the code because they're not required to?

Ms Sullivan : They're not required to, no. They've had an oversight role in terms of working with DIGI. The code is owned by DIGI, which is an industry group of the digital industry.

Senator URQUHART: Can you tell me why the minister for communications, Paul Fletcher, states in his book—the book is called Governing in the Internet Age, and it was published in October 2021—that the ACMA has registered the Code of Practice on Disinformation and Misinformation? At page 41 of his book he states:

In February 2021 our media regulator, the Australian Communications and Media Authority, registered a voluntary Code of Practice on Misinformation and Disinformation that was developed by the digital industry.

In his book on internet governance is Mr Fletcher correct or incorrect in saying that the ACMA has registered the Code of Practice on Disinformation and Misinformation?

Mr Windeyer : As Ms Sullivan has explained—

Senator URQUHART: He's wrong.

Mr Windeyer : I don't know what Minister Fletcher meant in the use of that term in his book. All we can say is what we've said previously—that is, there is a formal registration process in some circumstances.

Senator URQUHART: So using that term that 'the ACMA has registered' is actually incorrect. Does the minister misunderstand the meaning of the term 'registered' or does he misunderstand the scope of the ACMA's powers in relation to this code?

Mr Windeyer : Senator, I am not sure that is a question that we can answer.

Senator McKenzie: Obviously, that's an opinion, and I'm sure the Chair has a view on how the standing orders are going to be applied in this regard.

Senator URQUHART: That's fine; I'll move on. Has the department brought this error to the attention of the minister, to clarify the status of things?

Mr Atkinson : On notice, we will have a look at the relevant page of the book and—

Senator URQUHART: You can do that, Mr Atkinson, but have you brought to his attention the error in terms of what he has said?

Mr Atkinson : This is the first I've heard of this suggestion. I'd like to examine the language of what ACMA is doing and get to the bottom of it before we—

Senator URQUHART: If I read his book, which I actually haven't, and I read the bit that said they have registered the Code of Practice on Disinformation and Misinformation, I would take that to mean that it's registered in some formal way. I don't know how else you can—

CHAIR: What exactly are you asking?

Senator URQUHART: I am asking whether it was incorrect or not.

CHAIR: You're asking whether the book—

Senator URQUHART: No, I am asking: has the department brought the error to the attention of the minister, to clarify the status of things?

CHAIR: I don't know. Has the department read the book?

Senator URQUHART: I think Mr Atkinson said he hadn't.

Senator McKenzie: The secretary said this is the first time they've heard it.

Senator URQUHART: So you haven't brought it to his attention because you weren't aware of it; is that right, Mr Atkinson?

Mr Atkinson : Yes.

Senator UR QUHART: Thank you. Could part of the reason why the minister has not formally empowered the ACMA in relation to disinformation and misinformation be that he thinks the ACMA is already empowered, or does he think that the ACMA has already registered the code?

Mr Atkinson : Senator, I couldn't speculate on that.

Senator McKenzie: Again, Senator, you're asking the officials for an opinion.

Senator URQUHART: Wouldn't it be useful if the ACMA were empowered to compel information from digital platforms about misinformation?

Mr Atkinson : If I just step back from the specifics of that, in terms of the spectrum of regulation, we often have industry codes of practice that industry signs up to that aren't registered and that actually form effective self-regulation of markets; then you move up through a spectrum of hard-led regulation, all the way through to legislated regulation. There are relative compliance pieces that fit underneath that. As you move through that spectrum, you actually create additional rigidity and inflexibility in markets. So there's a lot to be said for keeping market-based self-regulation if it works. I'm not sure in terms of your specific question, but in terms of where it's at at the moment, it's a legitimate model to have in place.

Mr Windeyer : I would add to that, picking up on Mr Atkinson's point, and actually noting the context in which it was first developed, that this is a territory that Australia is not alone in grappling with. I think the code that has been developed in Australia builds upon or takes into account lessons that have been learned in some other jurisdictions that are beginning to move into this space, without wanting to, as Mr Atkinson said, move into rigidly determined regulatory responses too quickly. However, one of the things that is built into that code is an expectation that it would be reviewed in roughly 12 months of it first coming into effect.

It is also worth noting that, with some of the elements of that code, whilst it was formally signed off or accepted by the industry in February, it only came into operation in about October, from memory, last year. So we're still in the early days of seeing its effect. There is an expectation of a review that DIGI itself has built into it.

Ms Sull ivan : Senator, by way of a final comment, the disinformation code, as you'd be aware, came out of the digital platforms inquiry et cetera. The government response to that said in the first instance to have a voluntary code—subject to the review process and so forth—would leave open the option to look at where it might want to go next. The government has previously signalled that not all options are off the table.

CHAIR: It is self-regulation; right?

Ms Sullivan : Yes.

Senator URQUHART: Mr Atkinson, picking up on your previous comment, you're not suggesting that empowering the ACMA to compel information from digital platforms is undesirable rigidity, are you?

Mr Atkinson : I didn't say that; I was speaking—

Senator URQUHART: I'm trying to understand what you said. I am not saying that you said that. I'm trying to clarify.

Mr Atkinson : The next step up would be moving to a more formal code.

Senator URQUHART: I understand that now. In response to questions on notice, the ACMA said:

In general it would be useful to obtain information that would enable the ACMA to assess compliance with platform commitments; for example, complaints handling data. ACMA does not currently have the powers to compel information from digital platforms about their approach or actions in relation to misinformation.

Why hasn't the Morrison government empowered the ACMA to obtain or compel information from digital platforms that would enable the ACMA to assess compliance with platform commitments on misinformation?

Mr Atkinson : That would be asking us to comment on government policy.

Senator URQUHART: Have you provided any advice to the minister on that particular—

Ms Sullivan : Under the government's response to the digital platforms inquiry, ACMA were given responsibility for overseeing development of the code by DIGI, which occurred. They had to provide a report to the minister by 30 June last year on the status of that code and any observations and recommendations for improvement. That report is currently with the government for consideration.

Senator URQUHART: On 12 February 2022 an article in the Sydney Morning Herald by Caitlin Fitzsimmons was headed '"Defend democracy": The race to tackle conspiracy theories ahead of federal election'. It outlines the corrosive impacts of misinformation on Australian elections. It describes thousands of protesters gathering at the national capital. Among them were calls for the Governor-General to sack the parliament and install an executive council to take over running elections from the AEC. It also mentions that both parliament and intelligence agencies have growing concern about misinformation and disinformation undermining Australian elections, amid growing distrust of elections in Western democracies internationally, especially in the United States. Are the minister and the department satisfied that their approach to misinformation and disinformation is adequate?

Mr Windeyer : I'll pass over to Ms Sullivan to respond to that. I think the key thing there is that the focus of the government around that is around the question of electoral integrity, of which misinformation is a relevant factor, and there's an awful lot of work and effort by multiple agencies, and Ms Sullivan can talk to that.

Mr Atkinson : Including with the AEC.

Ms Sullivan : Stood up before the last election, and it has been stood up again, is the Electoral Integrity Assurance Taskforce. There's also a board that sits above that. The board is chaired by the AEC and the Department of Finance. The task force is chaired by the AEC. Both of those governance structures have on them a range of the law enforcement intelligence agencies, AEC, Finance, Home Affairs, and we're also participants on that. The aim of that task force—it's probably better directed to the AEC—is to bring into one governance structure all of the relevant agencies who are all focused on the integrity of upcoming elections.

It's worth noting that the AEC also has a range of powers. In terms of disinformation, we're working very closely, as is Home Affairs, the three agencies together and with the platforms, about how disinformation is dealt with both in the lead-up to writs being issued and once the election campaign actually starts.

Senator URQUHART: On 30 June 2021 the ACMA provided a report to the minister on the broader impacts of misinformation in Australia and the adequacy of the voluntary code of practice on misinformation. When will the government release that report?

Ms Sullivan : The timing of that is a matter for government.

Senator URQUHART: For how long has the minister had the report?

Ms Sullivan : The report was provided to the minister by the ACMA on 30 June.

Senator URQUHART: Okay, so that was the same date.

Ms Sullivan : We have had a number of briefings with him since. It's quite a detailed report.

Senator URQUHART: Given there's a federal election coming up, and given that Australia's in the midst of a health pandemic which has been characterised by misinformation, can you tell me why the government won't release the report as a matter of urgency? Minister, you might be able to answer that one.

Senator McKenzie: I'll take that on notice.

Senator URQUHART: I've got another set of questions which I'll go to and try to get through quickly. Mr Atkinson, you said you hadn't read Mr Fletcher's book?

Mr Atkinson : I didn't say that, Senator.

Senator URQUHART: Have you read the book?

Mr Atkinson : No.

Senator URQUHART: Ms Sullivan, have you read the book?

Ms Sullivan : No. A number of my staff have, though, I can assure you, Senator.

Senator URQUHART: Mr Windeyer, have you read the book?

Mr Windeyer : No, I haven't, Senator.

Senator URQUHART: There you go; nobody has read the book.

Mr Atkinson : We've been very busy.

Senator URQUHART: I can see that. I've got a few questions on the green paper, which I'll try to get through really quickly. Mr Atkinson, the green paper on the future of television regulation was released in November 2020. The government's response to the green paper was released in February 2022, well over a year later. The response includes the establishment of a working group to help develop the industry's future regulatory structure and commission research on the future of the television industry. Can you tell me why it took the department well over a year to work out that there was a need for a working group? Why couldn't that have been decided earlier?

Mr Atkinson : The green paper process has been a big process. The market is in the midst of a significant transformation. It is best practice in a policy development sense to move through a traditional green paper/white paper model for these things, and to have mature public conversation that takes into account all the elements. We have a change in the free-to-air market, content requirements, the use of spectrum and an increase in other media like SVODs. We have a transitioning market that is incredibly complex with a lot of stakeholders and interest groups. So the long consultation process and the long conversation are important. Also there is an understanding, in terms of all the various elements where there are trade-offs in those markets, of what people's future business models will look like in two years, five years, 10 years. So, for everybody we are hearing from, there are a lot of options to work through. I expect this process to be ongoing over many years.

I am relatively comfortable. As with all these things, we would like to move faster and find a concrete answer but I would like to make sure that we get a system approach where we can find a win-win-win for all elements and reshape our system so that technology can be well utilised and we can efficiently allocate all of our resources, including the spectrum, and make sure that markets evolve into good, sustainable, accessible markets for Australians.

Senator URQUHART: How does delay of the introduction of a prominence regime impact Australian television networks?

Mr Atkinson : Prominence is one of the many issues that are part of this conversation; we need to look at all those things together. Mr Penprase will give more detail. My understanding is we are still looking at that.

Mr Penprase : The issue of prominence, or the placement of free-to-air television content on connected devices, was raised by the broadcasters, in particular. It was one of their key issues that came through in the latter stages of the green paper reform process. The government has indicated that it is willing to consider that issue. More work needs to be done in that space. The television manufacturers will have a view on the question of prominence, and the free-to-air broadcasters have taken a position. The minister has indicated that the government would like to consider the different views and the potential ways forward.

Senator URQUHART: What exactly are the terms of reference for the Future of Broadcasting Working Group? Who will comprise that working group?

Mr Penprase : The terms are being settled. The green paper indicated that the membership of the working group is likely to entail free-to-air broadcasters, infrastructure providers, television set manufacturers and government officials. Those matters, including the terms, we expect will be settled in the coming weeks.

Senator URQUHART: Will that working group examine radio as well as television?

Mr Penprase : At this point the working group is focused on television issues. The feedback that came through the green paper process was that the television sector needed more time to consider the issues and complexities raised around potential future transition pathways for the industry. The purpose of the working group is to provide a forum for those issues to be worked through collaboratively with industry and departmental officials.

Senator URQUHART: You said that the representatives on the working group were being finalised. The response says that 'the group will be established in early 2022'—that is not too far away, because we are early 2022 and that, 'It is expected that consideration of technology futures will be finalised by late 2023, although the group will ultimately determine the timing itself'. Is that correct?

Mr Penprase : That is what the statement indicated. The working group would be industry driven and led, as they raise the issues and concerns.

Senator URQUHART: Is that when the working group's proposal on prominence is expected to be finalised, as well?

Mr Penprase : The working group provides a vehicle to examine the prominence issue. The statement made clear that is one of the issues the government would expect the working group to take up and work through.

Senator URQUHART: The government response to the green paper refers to the 600-megahertz spectrum but does not mention a second digital dividend, or 'Digital Dividend 2', specifically—a passing reference in an SBS submission. So who has responsibility for devising a program of work to achieve a second digital dividend? Will the working group be responsible, or just an input to that?

Mr Penprase : It will ultimately be a matter for government as to any future process associated with spectrum use. The working group would explore technical issues, particularly around the use of spectrum, and the issues raised through the green paper process. The outcomes of that working group consultation will be an important input into future government decisions regarding a potential digital dividend.

Senator URQUHART: Will the department be undertaking planning for a second digital dividend in parallel to the work of the working group?

Mr Atkinson : Can I step back from the digital dividend for a second and go back to my point about the multiplicity of issues that come together? You have to think about the approach to provision and funding of Australian content at the same time. All of the aspects that are both costs and potential savings or dividends in this space are to be looked at together as part of that conversation. Prominence is one of those issues. There are a lot of trade-offs in the system; as we bring them together we can move to a sustainable space that all players in the conversation can be happy with in the end.

Senator URQUHART: When will the program of work for a second digital dividend be available? That is not factored in. Is there a plan for getting this plan?

Mr Atkinson : I am not sure where you have come up with a plan for a digital dividend.

Senator URQUHART: I asked you whether you would be undertaking planning for a second digital dividend in parallel to the work of the working group.

Mr Atkinson : Yes. I gave a general answer: my understanding is that you wouldn't be separating it out.

Senator URQUHART: You're not going to separate. Sorry; I misunderstood. I thought you were talking about an earlier question. At page 8 of the media policy statement there is a brief reference to 'anti-siphoning' with the statement: 'The government will separately consult relevant stakeholders on other potential areas of reform identified by industry such as the anti-siphoning scheme'. When and how will this be done? When will the review commence and conclude?

Mr Penprase : The statement indicates that the issue will be considered over the coming period. It is an important issue the industry would like considered. The current anti-siphoning list expires in April next year, which provides an appropriate endpoint for consideration by government of any changes to either the scheme or the list; obviously, the two are separable in a sense. It is not a formal review with a reporting time frame as such, but it is certainly a priority issue that we expect will be developed over the course of this year. We will be providing advice to government in due course.

Senator URQUHART: Who does the government regard to be relevant stakeholders for the purposes of this work?

Mr Penprase : The question of the acquisition of sports rights covers a broad range of stakeholders. You have those on the media sector side; so broadcasters on the one hand. Also, sports bodies have an interest in the way that any regulation of the acquisition of sports rights goes. The important bit sitting underneath is the consumers and their approaches, preferences, attitudes and behaviours towards the consumption of sports content.

Senator URQUHART: How will the consultation be undertaken? Will it be open and public?

Mr Penprase : Whether there is an open consultation process is to be developed; the proposal and the plans for that work have not been settled yet.

Senator URQUHART: I only have a few minutes, which I will try to fill up as much as I can with questions about the ACCC Review of NBN regulatory framework. Did the department participate in those working groups?

Mr Windeyer : Yes, the department did.

Senator URQUHART: In the summary statement published on the ACCC website it states: 'The overall conclusion reached in the working groups was that the NBN should move to a similar regulatory framework to that used for established utility business now that it has completed its rollout and is fully operational'. Does the department agree with this conclusion?

Mr Windeyer : To some extent this is obviously an exercise in the process being run by the ACCC. In a sense, it is between the ACCC and the NBN. We would agree that the time is right to revisit the regulatory framework and the arrangements that are in place with respect to the NBN, given where the network has got to and the maturity of the organisation.

Mr Atkinson : Given the different phase that the organisation is in, it is appropriate to relook at the regulatory framework.

Senator URQUHART: Just for my benefit, and maybe the rest of the committee, can you explain how that concept is applied in practice? If NBN Co were to move to a similar regulatory framework used for established utility businesses, what would that mean for how its pricing is overseen, and the role of the Special Access Undertaking and the role of the regulator?

Mr Windeyer : There is an existing Special Access Undertaking. In a technical sense, at the moment there is consideration as to what extent that should be varied, rather than a new one being established. Aspects of the existing arrangements, which have been well canvassed and publicly debated, point to areas where there is a chance for some adjustment. One of the most obvious is to bring the current undertaking into a form that covers all the various technologies now deployed by NBN. So we are talking about updating an undertaking and the pricing framework that is embedded within that undertaking, which was first settled the best part of 10 years ago. There are aspects where I think it can mature and change in terms of how it approaches pricing and the technologies and the extent to which it is comprehensively covering all of NBN's technologies. At the end of the day, what that looks like depends in part on the nature of the variation that NBN ultimately submits.

Senator URQUHART: Has the department engaged any outside assistance to advise it or NBN Co on the Special Access Undertaking process and submission?

Mr Windeyer : We have engaged advisers to assist.

Senator URQUHART: Whom have you engaged, at what cost, and why?

Mr Windeyer : We have engaged EY. I will take this on notice and get for you at what cost. This is not to advise NBN; it is solely for the purpose of advising the department. In a sense, it is to make sure that we have expertise we can tap into to understand the consequences or the effect of the things that are being considered by either the ACCC or the NBN.

Senator URQUHART: Thank you.

Senator McKenzie: Thank you.

Senator URQUHART: Thank you, Senator McKenzie.

CHAIR: Thank you, Minister. Thank you to the department. We will now suspend. We will return with SBS.

Proceedings suspended from 16:28 to 16 : 44