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Thursday, 4 October 1984
Page: 1646

Mr FREE —by leave-In preparing this report the Expenditure Committee set out to examine Telecom's zonal charging policies for capital and provincial cities, given the changes in population growth and distribution since the original policies were established in the 1960s. The essence of the inquiry was to examine the adequacy of Telecom's response to the massive shifts in population to the outer metropolitan areas of the capital and provincial cities in the last 20 years. The inquiry focused on the social and economic consequences of Telecom's response to population growth and made a number of recommendations on action designed to improve Telecom's responsiveness.

The public demands a high degree of accountability and responsiveness from the nation's largest public enterprise. The community is entitled to expect that Telecom will carry out its charter effectively to meet the social, industrial and commercial needs of all the people of Australia. Community needs centre on the provision of effective telecommunications services at reasonable prices. Developments in telecommunications technology have substantially reduced the real cost of the provision of telephone services. The benefits of these developments should be passed on to subscribers in the form of reduced prices. Most people are more interested in having a cheap and efficient telephone service than a service that provides a multitude of sophisticated attachments. I believe in the old maxim that people really want from the telephone system three things: Firstly, a telephone; secondly, a telephone that works; and, thirdly, a telephone that works all the time.

Basic community requirements have been central to the Committee's examination of Telecom's charging policies. Telecom's existing charging policies have their origin in the 1960 community telephone plan. For capital cities the zonal arrangements resulted in local call zones of 40 kilometres from the General Post Office in Sydney and Melbourne and 32 kilometres in Brisbane, Adelaide, Perth and Hobart. These arrangements have remained unchanged for more than 20 years. A local call zone in the form of a circle centred on the GPO is totally inappropriate on two grounds: Firstly, the circle bears little relationship to technical considerations and secondly, communities of interest have developed along development corridors which have expanded way beyond the original circles drawn in 1960. In Sydney, for example, the circle centred on the GPO allows local calls, theoretically at least, for large expanses of ocean while development in that city of course has extended out to the west. The effect has been to establish a barrier between the growth areas of capital and provincial cities and the inner city commercial areas. High telephone charges have served as an impediment to a basic community need for those in the new growth areas, that is, the need to communicate. The social problems of isolation and loneliness have been made worse by an arbitrary line drawn on a map in 1960.

The existing telephone charging arrangements have also affected the Government' s economic policy objectives. Governments at all levels have introduced a range of measures designed to reduce the existing high levels of unemployment. High unemployment rates apply in areas outside capital city local call zones. Submissions to the Committee indicated that expensive telephone calls to potential employers are an added burden on job seekers in outer metropolitan areas. From a business viewpoint, new businesses trying to establish in outer metropolitan growth areas argued to the Committee that telephone costs affect competitiveness and serve to prevent decentralisation of industry.

The Committee concluded that Telecom's charging policies had not been sufficiently responsive to the needs of the Australian community in the 1980s. The Committee in its report has made a series of recommendations designed to improve that responsiveness. These include that Telecom should extend capital city local call zones to take account of rapid population growth in outer metropolitan areas; that reduced rates should be granted to subscribers adjacent to local zones; that charges should be reduced for short distance calls up to 50 kilometres; and that charging policies for provincial cities should be reviewed. Local call zones should be extended for provincial cities with high population growth, for example Gosford-Wyong, the Sunshine Coast and the Gold Coast. Reduced rates should apply for provincial cities linked with adjacent capital cities, for example, for calls between Wollongong and Sydney and Geelong and Melbourne.

The Committee does not favour the introduction of timed local calls. The Committee believes that all costs associated with extending local call zones should be financed from Telecom's internal sources. The Committee further believes that subscriber trunk dialling charge steps should be reduced to reflect the declining importance of distance in telecommunications. We believe the time of day rates should be adjusted to take into account congestion in the network at particular hours and days of the week. We recommend that telephone directories should be simplified and amalgamated to better reflect communities of interest.

We recommend that Telecom should accelerate the introduction of systems to provide itemised accounts and that a complaints bureau should be established in each Telecom State office. We recommend that information on zonal charging arrangements should be more readily available to the public. We recommend, as the Chairman mentioned in his remarks, that Telecom should undertake more social research. Finally, we recommend that the Prices Surveillance Authority reviews should be used to inform the community of the basis of Telecom's charging policies.

The Committee was conscious that Telecom's charging policies for metropolitan and provincial cities cannot be viewed in isolation from those for the rural community. The Committee took the opportunity during the public hearings to invite representatives from rural organisations to present their views.

In the course of the inquiry the Committee was made aware of the considerable dissatisfaction among rural people with Telecom's charging policies in rural areas. Rural organisations stressed that the introduction of Countrywide Calling in 1983 led to timed charging for many calls which had previously been untimed. While Telecom extolled the benefits of the scheme, particularly for longer distance calls, the major beneficiary appears to be Telecom itself which, while losing an estimated $1m per annum in revenue, managed to avoid $30m in capital costs.

The Committee recognised the special needs of rural subscribers who are highly dependent on the telephone for personal contact. Many of the Committee's recommendations in this report will benefit rural people. For example the Committee is of the firm view that Telecom should continue to subsidise loss- making rural services. Cross-subsidisation is consistent with Telecom's social obligations. Indeed, Telecom has a statutory duty to have regard to the special needs of those outside the cities. Telecom should vigorously pursue its obligations to the rural community. Given the serious concerns of the rural community, the Committee has decided that it should institute an inquiry into Telecom's charging policies in rural and remote areas. The terms of reference and invitations for submissions are expected to be announced in the near future.

In conclusion, I thank the 67 individuals and organisations who made submissions to the inquiry and the witnesses who gave evidence at public hearings in Sydney, Melbourne, Brisbane, Perth, Canberra, Penrith and Mornington . The Committee wishes to acknowledge the co-operation of the Australian Telecommunications Commission. We are particularly grateful for the assistance of Mr Keith West, the Manager of Trunk Network Services, who was made available by the Commission to assist the inquiry. As sub-committee Chairman, I thank my fellow committee members and the honourable member for Canning (Ms Fatin) and the honourable member for Flinders (Mr Chynoweth) who co-operated and assisted in the inquiry, and all those who made time available to fit the inquiry in with their busy schedules. Thanks are also due to the inquiry staff-Adrian Scott, David Worthy, Anne Hazelton, Peter Ratas, Betty Williams and Christina Brauer- for their work. They worked very long hours and displayed a professional enthusiasm in the preparation of the report. I am particularly grateful to Ross James, who was seconded from the Department of Communications to the Committee for the duration of the inquiry.

I believe that this report will make an important contribution to the development of a more responsive attitude by the Australian Telecommunications Commission to the needs of the Australian community. The report highlights the inadequate response by the Commission to population growth and distribution since the 1960s. Implementation of the Committee's recommendations would make a substantial improvement in Telecom's responsiveness to community needs.