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Monday, 28 February 2011
Page: 1628

Mr BALDWIN (6:17 PM) —I rise today to address the National Broadband Network Companies Bill 2010 and the Telecommunications Legislation Amendment (National Broadband Network Measures—Access Arrangements) Bill 2010. The National Broadband Network Companies Bill is designed to limit the operations of NBN Co., which is the Commonwealth-owned builder and operator of the fibre internet network. It also seeks to establish the framework through which the NBN Co. will eventually be privatised. Similarly, the telecommunications legislation amendment bill proposes changes to current legislation to ensure that NBN Co. gives equal access to all retail carriers. Collectively, these bills are designed to push ahead with the rollout of the Gillard Labor government’s white elephant, the National Broadband Network. What we know about the NBN is that it will take at least eight years to roll out—more like 15 to 20 years—it will cost the taxpayer at least $50 billion dollars and it will reach 93 per cent of Australian premises.

To translate those figures, what we have here is the single largest taxpayer-funded infrastructure project in our nation’s history. Yet despite the massive commitment of our money made by the Gillard Labor government, seven per cent of those taxpayers who fork out will not even get access to it. Worse still, we have not been supplied with a cost-benefit analysis, and there are serious doubts about whether the internet services promised will actually be cheaper than what is currently available.

The problems do not stop there. As I mentioned, the NBN will take eight years to roll out, and that is if it is done on time and on budget. But can we really expect that to happen? Of course not. Remember, the Rudd-Gillard Labor government is the same one that wasted billions of dollars on a failed and tragic home insulation scheme. This is the government that wasted billions of dollars building dodgy school halls that were not as good as the buildings knocked down to make way for them. This is the government that is so incompetent at controlling our borders we now have a record number of people risking their lives on unsafe boats run by illegal people smugglers. But let us be generous and give Prime Minister, Julia Gillard, the benefit of the doubt.

Eight years is a long time in technology. Allow me to provide some examples. Eight years ago Windows released its new operating system XP 2003. Since then we have since had Windows Vista and Windows 7. Eight years ago Apple launched its first iTunes store. Today, the iTunes store accounts for more than 70 per cent of all worldwide online digital music sales. Eight years ago Apple’s premium product was the iBook laptop. It has since created the iMac G5, Mac mini, iPod nano, iPod touch, iPhone, iPhone 3G, iPhone 4, and most recently the iPad. Eight years ago your average USB thumb drive was eight megabytes. Today you can pick up a one terabyte portable memory device for around the same price. That is about 131,000 times more capacity. Are we seriously supposed to believe that the NBN will be up-to-date if it is finally delivered in almost a decade from now?

Journalists have also raised issues with the Gillard Labor government’s NBN plan, including concerns over cost, relevance, access and competition. I refer to an article by Mitchell Bingemann published in the Australian on 8 February in which he compares the Australian approach to that in the United States. He writes:

THE Labor government is betting its $36 billion National Broadband Network can only be built by government and must rely almost universally on a fibre optic network.

But last month US President Barack Obama in his State of the Union address went in the reverse direction, promising the American people a nationwide wireless network among other technoligical solutions built by the private sector. The question is does Obama know something Communications Minister and NBN champion Stephen Conroy does not?

…            …            …

The project is bold, ambitious and expensive, but it is also one that was devised in haste, bereft of industry or public consultation, or considered against the demand for other broadband technologies such as wireless internet access. The US plan in contrast was forged through extensive public workshops which drew more than 10,000 online and in-person attendees and generated some 23,000 comments totaling about 74,000 pages from more than 700 parties.

The article goes on to reference President Barack Obama, who says that it is America’s free enterprise system which drives innovation. He said:

That’s what planted the seeds for the internet. That’s what helped make possible things like computer chips and GPS. Just think of all the good jobs—from manufacturing to retail—that have come from these breakthroughs.

Finally, Bingemann quotes Peter Cox, a respected media and telecommunications analyst, who says:

We want a clever and educated Australia and we know broadband helps this. We can encourage Australia down this path by providing fibre to all major and small businesses but this doesn’t mean we need fibre to every home. We can achieve the outcomes that are required at a much lower cost by changing the mix of technologies the government is prescribing.

The bottom line is that you don’t need to spend anywhere near what we are spending to achieve the NBN goals. The issue is not about us building fibre or wireless networks, it’s about getting that mix right at the right cost.

The issues raised by Bingemann are wide reaching, and it is extremely important that we get a proper explanation before any further money is spent on the NBN rollout. The Gillard Labor government needs to provide detailed, costed and relevant answers to the questions raised. Why is this project best delivered by government and not through private enterprise? Why do we need fibre to every home? Will enough people take up the service to actually make it affordable and viable?

A telecommunications analyst at the Royal Bank of Scotland, Ian Martin, raised another important point in an article entitled ‘Tied to cable yet future is wireless’ which was published in the Australian on 8 February. He wrote:

The US wireless broadband initiative has left some supporters of the NBN nonplussed. Why couldn’t Obama see, as Kevin Rudd did, with Julia Gillard’s endorsement, that a government-owned, wholesale-only, fibre to the home network was the better vision to “underpin future productivity growth and our international competitiveness”?

For one thing, Obama couldn’t afford it. Even a fibre access network to 80 per cent of US households would cost $US80 billion to $US100 billion. It’s unthinkable that congress would have supported that kind of budget spending. Nor would it have supported a similar role for government in owning and operating a fibre access network. And structural separation of access networks was tried and failed in the US in the 1980s.

More important, President Obama chose to support wireless broadband over fibre access because it has more to offer. Bearing in mind that the backbone of wireless networks is typically a fibre core, it’s wireless broadband, not fixed broadband, that is growing with advances in wireless network capability, wireless devices and applications. Obama’s firefighter is downloading the design of a burning building on to a handheld device, not knocking on a neighbour’s door to plug a laptop into the local fibre network. In fact, they would probably download it in the fire truck on the way to the building.

The point Martin is making is that wireless technology is more accessible than fibre infrastructure, and I agree with him. As the member for Paterson I am often travelling throughout my electorate. Further, when I am away on shadow portfolio business I rely on the internet to stay in touch with constituents via email. Using my Blackberry or my iPad, both utilising wireless technology, allows me the freedom to do what I do. There are no cables and no compatibility issues; you just turn on your device and you are connected to the digital world. That is of extreme value to consumers, and that is why the best internet plan for Australia should be a mix of technologies, not a restrictive fibre network which will cost billions of dollars to deliver to 93 per cent of premises regardless of their needs.

Today’s consumers do not want to have to plug in. They want to connect wirelessly with the push of a button from wherever they are, regardless of whether they are sitting at a table, standing in line waiting for a coffee or on the street watching for their bus. That is why new products on the market, such as the iPad, do not even have a standard cable socket through which to connect to cable internet. How does the government explain the increase in the number of households that have mobile phones only? The fixed line is a restrictive and dying trend, and the figures back this up. According to a Telstra report on 29 September 2010, its wireless broadband business grew 109 per cent per year over three years. In just one financial year, between 2009 and 2010, the number of wireless broadband subscribers in Australia rose from two million to 3.5 million, and that does not even include smart phones.

Do we really want to be building a cable network when the rest of the world is going wireless? One answer we have been given by the Gillard Labor government concerns the physical delivery of the NBN. We know that some cables will go underground, while others will need to be placed overhead. This raises serious concerns for my constituents, who deserve to know how their properties and those nearby will be affected. If Labor is determined to push ahead with its NBN, the legislation package needs to be tightened to ensure full public accountability.

When governments deliver infrastructure it is crucial that the right balance is struck between the delivery of services and the physical location of any structures. Failure to do so creates anxiety for the local community. Public consultation must therefore take place. One need only look at the current situation in Corlette, in my electorate of Paterson, to see what I am talking about. In Corlette, Telstra has proposed to build a new mobile phone tower on Port Stephens Council land. Many nearby residents of the planned tower only found out about the development application through a letter sent by council little more than a week before comments were due. Further, council’s submission period was over the Christmas holidays, when the majority of residents were either dealing with family matters or away on holidays. As a result, dozens of people have contacted my office furious, frustrated and upset. After a phone call to council, the submission period was extended by one week. However, more needs to be done to ensure the public has its full and rightful say in public infrastructure projects such as this.

The Labor government must heed the lessons of the past. 2011 appears to be the year of big new taxes. If the Gillard Labor government gets its way, we will have a flood tax, a carbon tax and a mining tax—and it is only February. Prime Minister Gillard and Mr Swan have to resort to these taxes because they cannot manage the money they already have. They took a $20 billion surplus, which we the coalition worked hard to save for a rainy day, and wasted it. Then they worked us into a massive national debt which will peak at $94.4 billion according to the latest Mid Year Economic and Fiscal Outlook.

Simply put, taxpayers cannot afford to fund a $50 billion broadband network—not when they are crying out for basic improvements in health, roads and other areas, and especially not when a wireless OPEL network that would have required less than $1 billion from the government would have been completed by mid-2009. In my electorate of Paterson a tiny fraction of that $50 billion would pay for the road upgrades that are desperately needed to protect lives on the Bucketts Way and the Lakes Way and on the roads between Paterson, Vacy and Gresford, between Nelson Bay and Fingal Bay and on main road 301.

A tiny fraction of that money would deliver the life-saving medical equipment needed by patients in my electorate, such as dialysis machines and a chemotherapy unit at Forster-Tuncurry and more public hospital beds on the Tomaree Peninsula. A tiny fraction of that money would deliver the digital television upgrades we so desperately need to guarantee the delivery of local news, advertising, entertainment and community announcements. Labor has delivered none of these things because, as we are told, there is no federal funding available. That is why Labor needs to re-examine its NBN and offer us a more cost-effective solution to our broadband needs that combines the use of wireless and fibre.

A paper released on 9 February this year by the Economist Intelligence Unit, one of the world’s most respected research organisations, shows that the NBN will cost Australian taxpayers 24 times as much as the scheme in South Korea. Despite the excessive cost, it will deliver only one-10th of the speed. The Australian newspaper explained the report in further detail in its 9 February article:

The report assesses the plans of 40 countries to enable high speed broadband development, assessing the target speeds, rollout time frame, cost and regulatory provisions to deliver a final ranking.

The research body marks Australia down in its government broadband index because of “the huge cost to the public sector” of the NBN.

It also loses points due to limited private-sector involvement, high government intervention and the exclusion of state and municipal authorities from the plan.

The report highlights the disparity between the cost of the network - estimated at 7.6 per cent of annual government revenue - and the cost of the South Korean network, which is estimated at less than one per cent.

The report does score the NBN highly for having a target speed of 100 megabits per second, but it says Sweden, Finland, Estonia and France have all set similar targets with much lower costs.

Clearly even international commentators are aware of the Gillard Labor government’s waste.

There are many questions that remain regarding the NBN, as I have detailed today. Until those answers are provided to the people of Paterson and the Australian public in general, the NBN should be put on hold. That is why the public works and public authority exemptions within this legislation need to be erased. We cannot afford any reduction in the ability of parliament to publicly scrutinise NBN Co. When the Labor government was elected last year, Prime Minister Gillard promised that it would be an open, honest and accountable government. I call on her to deliver on that promise. The task should be simple if she has nothing to hide.