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Monday, 5 June 1989
Page: 3332


Senator POWELL(4.46) —This package of telecommunications Bills has been promoted as one of the most significant reforms in Australian telecommunications since the formation of Telecom Australia in 1975. We all have our views on that. I suggest to the Senate that Senator Alston, on behalf of the Liberal-National coalition, would like to gut at least Telecom. The Government is simply after a few entrails by way of this package. On the other hand the Australian Democrats would like to see Telecom as a healthy, vitalised body and a major player in the telecommunications revolution which has already started in this information era.

As the Senate will be aware, the package arises from the Government's May 1988 statement called Australian Telecommunications Services: A New Framework, which was itself the product of a major review of telecommunications policy. I think it is worth paying some attention to that statement. In his foreword to the statement, the then Minister for Transport and Communications, Senator Gareth Evans, noted the Government's emphasis on micro-economic policy reform-the structural readjustment of industry with a view to establishing and sustaining longer term growth. The statement emphasised goals of efficiency and competitiveness, balanced with the important social objectives associated with the central role of the telephone in the Australian community. More particularly, the policy articulated a number of objectives for its telecommunications policy. Those objectives were as follows: firstly, to ensure universal access to standard telephone services throughout Australia on an equitable basis and at affordable prices, in recognition of the social importance of these services; secondly, to maximise the efficiency of the publicly owned telecommunications enterprises, Telecom, the Overseas Telecommunications Commission (OTC) and Aussat Pty Ltd, in meeting their objectives, including fulfilment of special community service obligations and the generation of appropriate returns on investment; thirdly, to ensure the highest possible levels of accountability and responsiveness to customer and community needs on the part of the telecommunications enterprises; fourthly, to provide the capacity to achieve optimal rates of expansion and modernisation of the telecommunications system, including the introduction of new and diverse services; fifthly, to enable all elements of the Australian telecommunications industry-manufacturing, services, information provision-to participate effectively in the rapidly growing Australian and world telecommunications markets; and, sixthly, to promote the development of other sectors of the economy through the commercial provision of a full range of modern telecommunications services at the lowest possible prices.

Some of the statement's policy directives were implemented on 1 January this year, but major changes have really had to wait for translation into this legislation and, in particular, for the new administrative body, the Australian Telecommunications Authority, or Austel, to take over the present regulatory functions of Telecom. Upon the passage of the earlier legislation, the Australian Democrats went on record as being quite disturbed that the steps that were taken initially last year were taken without Austel being in place. We welcome this aspect of the legislation most warmly. I will have some more to say about that in a few moments.

No-one would argue that the implications of this package for both business and consumers, in what is a technologically complex and rapidly evolving industry, are quite enormous. In addition, the pressures emerging from each of these areas are in conflict in some respects and, as I said earlier, this is reflected in the postures adopted earlier by the different political parties in this place. The Government has deregulated as far as it dares at this stage. As we have heard in the past, and no doubt will hear again in the future, the Opposition wants to go much further down the deregulatory path-more and more so under the privatising hand of Senator Alston. The Australian Democrats want to ensure that this major public utility is recognised and protected as such and is structured in a way that efficiency is promoted and the interests of consumers and the general public are properly served.

While it is inevitable that no perfect solution can be found-and this package certainly needs clarification in a number of areas-the Democrats believe that the new regime will go a long way towards ensuring faster and clearer decision-making on new services and equal treatment for competing telecommunications service providers. Telecom's business competitors will no doubt take issue with that assessment on our behalf, but the operation of private networks and the ability to compete in value added services are extended under the deregulation in this legislation.

At this point I would like to outline the key elements of the major Bill, the Telecommunications Bill, which are central to the whole package. They are: the establishment of the Australian Telecommunications Authority, Austel, as the telecommunications industry regulator, with both technical and economic regulatory functions; the definition of those telecommunications services which will, for reasons of network development and social objectives, be reserved to Telecom, OTC and Aussat; the creation of a streamlined licensing regime for other services which, combined with safeguards against discriminatory behaviour by the carriers, will allow free and fair competition in the provision of value added services and the efficient operation of approved private networks; the assurance of fair and open competition in the customer equipment market; and the provision of mechanisms to ensure that consumer interests are protected and the Government's social objectives achieved by the telecommunications industry.

From every point of view in that important range of measures the role of Austel is absolutely critical. As the new industry regulator outside the ambit of the carriers, Austel's operations will have a far-reaching impact on both the competition and consumer protection aspects of telecommunications in this country. We have a prospective chairman in Robin Davey. It is of concern to the Australian Democrats that the two further major appointments to be made in the two deputy chairmen must cover the full range of responsibilities, interests and expertise which will achieve all the policy directions outlined by the Government, particularly the consumer protection aspects about which we are so concerned. I will have a little more to say about that later.

Austel is expected to have about 70 people on its staff and will be closely involved in all aspects of the industry-from regulation, policing the monopoly rights of the big players to ensure that legitimate competition is not crushed, to setting standards for equipment to be attached to the communications network. One of Austel's prime roles-this is of particular concern to the Australian Democrats-is that of a consumer watchdog, monitoring and reporting on the performance of the carriers in their delivery of reserved services. Part of this role encompasses the administration of the Government's formula for price capping basic services to ensure that the average price of a basket of basic telecommunications services will fall in real terms. Effective price control is high on the agenda of the Australian Democrats' concerns, as it has been for the Australian Federation of Consumer Organisations and others representing the interests of consumers. As this legislation is dealt with, we want to emphasise that Australia must avoid the problems which arose in Britain when its Oftel, the equivalent of Austel was set up and which took four years to correct.

Assurances were given in the May 1988 statement and I will be seeking specific comments from the Minister for Foreign Affairs and Trade during the committee stage following last week's announcement of the formula. It has been a disappointment to some of us that we are looking at the price capping system with one basket comprising the formula. Given that the Government has made that decision, we believe that close scrutiny must be the order of the day. Voices from outside Austel will be heard where there is concern or if it looks as though we are getting into some of the problems which were experienced in the United Kingdom. If necessary, measures should be taken to redress the situation earlier than in the three-year time frame set. We do have the experience to guide us and we will be calling on the Government to use that experience and to ensure that we do not get into significant problems in this country.

Austel also has the responsibility of reporting to government on Telecom's performance in meeting its community service obligations, including its responsibility to provide universal service and other socially necessary services, such as public telephones. It has been noted by more than one commentator that there is a growing realisation of the centrality of telecommunications in many aspects of social and economic life. This was acknowledged by the then Minister in his May 1988 statement.

The Australian Government is not the only government to have undertaken a major review of the communications sector, motivated by the very many new technological developments and the enormous potential for more. In fact, late last month I attended a Commission for the Future conference in Melbourne. It was quite clear from many of the presentations that public perceptions about this issue are quite extensive. At one presentation in particular verbal information was given to people at the workshop concerning the pilot stage of a very important research project which is currently being undertaken by Telecom. The presentation pointed out that public perceptions about the role of Telecom and, in particular, its community service obligations were really probably much further ahead of most politicians' perceptions of the public's view.

It is clear that the public's view centres on a number of different areas; first of all on the technical components of the facilities which are involved. The public appears to believe that automatically universal access to local, subscriber trunk dialling (STD) and international subscriber dialling (ISD) facilities ought to be considered as part of the community service obligation. The public also expressed a very high consensus on the fact that itemisation of calls should be a basic component of a fair and efficient telephone service. As a parliamentarian, one of the most frequent complaints I receive, particularly in my role as communications spokesperson for the Democrats, is that itemisation of calls is not available. According to the brief information which we were given on a preliminary basis, this is an issue of high priority in the community. It is also interesting, though, to note in this context that itemisation appears to have been considered to be more important for STD calls than for ISD calls. This reflects something which was also reported on; that is, that as a service is diffused and more widely used in the community it then becomes considered more readily as a service to which there ought to be universal access.

The second area was the service component-people breaking down their approach to telecommunications services and simply saying that they require a fast and efficient service. I do not think that any politician is surprised at that. The third area was access. There seemed to be quite a high consensus of view that value added services of the kind which this legislation is designed to encourage, such as data transmission and so on, ought to be available to everybody who wants or needs it. The feeling in the general public seems to be that access to the newer types of service should be available, but on a user pays basis.

It is interesting-here I refer to a point I made a few moments ago-that as the service becomes more widely used it is apparent that it becomes more generally considered a basic service. Some examples given were some forms of data transmission and in particular the facsimile service. An increasing number of people believe that these sorts of services ought to be considered part of the basic service. It is important to note this in the context of this legislation. In fact, the more a service is widely diffused through the community the more it becomes considered something to which there ought to be universal access-in other words, part of Telecom's community service obligation. These findings are particularly significant because one of the points that the Australian Democrats wish to make most strongly about community service obligations is that we must do nothing in this legislation to prohibit the future possibility that any definition of community service obligations will be able to take account of the changing perceptions in the community.

I interpolate some other comments that were made at the Commission for the Future workshop, which indeed brought together people from the academic sector, the political spectrum and so on in the telecommunications industry. It was said that in the whole consideration of community service obligations and in the context of this upcoming legislation we really need to think differently-from the Democrats' point of view that is a certainty-about these issues than we are, largely anyway, across the political spectrum at the moment. The point was made in general terms, in policy terms, by several people at the conference that-of course, we have just heard one speech by Senator Alston and we will hear one next by Senator Austin Lewis, which will confirm this view-we are in a reductionist era where we are limiting our views of many of these issues and community service obligations no less to the sort of economic side of the question. One speaker at the conference actually referred to that approach as silly. I suggest that it is in fact quite disastrous.

The Democrats say that to determine what ought to be the community service obligation of a public service provider such as Telecom we should establish first what kind of society we want and, in the case of telecommunications specifically, what kind of society we want in the area of telecommunications and information. We should then establish the economic ground rules and indeed establish the economy to provide that kind of society-not the other way around. As we in the Democrats have often said, and will continue to say-and I am delighted that another participant, although not a Democrat, at that conference said-we cannot and must not separate the social, economic and political aspects of issues such as these.

I find it disturbing that, particularly in the past few months and particularly this week here in this place, we have been going through a whole process of altering and, unfortunately we feel, moving towards the dismantling of public service organisations. If there is a change of government there is certainly no question of altering and dismantling public service instrumentalities and institutions-public community service bodies-in this country. What is being offered in their place? Senator Alston and his ilk, when referring to community service obligations made available through cross-subsidy up until now, tell us, `Let the organisation define how much it costs and then let the Government put it up front as a Budget item'-in other words, move away from the community service concept to a welfare service concept. They want the Government and Telecom to say how much it costs to serve country people, poor people, old people and deaf people and then put that figure up front as a welfare service every year as part of the political football of the Budget.

I think that we have to change our ways of thinking in this and a whole lot of other areas. We have to recognise the value of community service. In the case of this legislation specifically we must, as I said before, make sure that we take no action that will limit any possible interpretation or implementation of community service obligations of Telecom or any other public service organisation as the community at that time may wish to define it.

Given the sort of work that is coming out of the pilot project which Telecom has undertaken and which I have referred to briefly, it also seems that politicians need to open their eyes and ears a little more and listen to the public. If they did this they would not be trying to limit those definitions, as they are on both sides of the chamber, but most particularly the Opposition, thereby limiting the service available to all in the community. This is a matter of general concern to the Democrats. As I have said, in this place we are constantly talking about the need for these sorts of public services not to be sold off. The telecommunications industry is one that is burgeoning and one in which a great deal of money is to be made. There is nothing inherently wrong with that but we are saying that, as it develops and as that money is made, no-one in this community should be any less better served and everybody should be able to expect to be better served as time passes and as the telecommunications industry develops.

Going through my files on this issue I came across an article by Ian Davis in the Canberra Times of February last year. He talked about what happens when we let our community service infrastructure break down. Quite early in the article he states:

The roads of the British Empire-as of the Roman empire before it-were not simply well constructed public services . . . they were also a military asset.

He then goes on to point out what happens when public services, which are a vital part of any growing, well balanced economy, break down. It is interesting to note the ones that he refers to. Honourable senators should think of the list:

The breakdown in the sewerage system, which has led to the deterioration of Sydney's magnificent ocean beaches . . . the inability of telephone exchanges . . . to cope with demand for lines at times of peak demand-

This is the sort of problem we are trying to address in this legislation. He continues:

. . . the progressive deterioration of agricultural land in the Murray River basin . . . the lack of an adequate airport in Sydney . . .

He then talks about the problems on the waterfront caused by inadequate facilities. He goes on to talk about Sydney's gas mains and so on. I make this point directly from the article. It states:

. . . characteristic of the infrastructure of an economy is that it exists to support other economic or social activities rather than as an end in itself; that it has a relatively high initial capital cost; relatively long life; and should be managed and paid for on a long-term basis.

That sort of message is one that we really ought to recognise. We are talking about an investment in a public facility and a public utility which is there to serve the people, not there to serve the economy in the first instance.

I would also like to put on the record a comment made again last year by a former chief financial adviser to the Queensland Government, Sir Leo Hielscher. He spoke very strongly against the headlong rush into privatisation. I do so because of that rush, which is now being led from the front bench by Senator Alston and which, if it succeeds, inevitably will be to the detriment of the isolated and the less well-off in our community. Sir Leo said, inter alia:

. . . public bodies should be privatised only if they could better provide the services required.

And you have to remember that if you privatise a government instrumentality, you have to make it much more efficient and much more profitable to achieve an equivalent result . . .

As a private company, it will have to pay tax and then dividends, so it needs to make a lot more profit.

And so the article continued. Those are some of the points which, it appears, the Opposition is all too readily able to ignore. Those comments were made by a very longstanding public servant, having served a Queensland National Party government for many years.

It is significant that the Opposition's main complaint about the legislation is that it does not live up to the rhetoric contained in the May statement and even in some of the commentary, including the second reading speech of the Minister for Immigration, Local Government and Ethnic Affairs (Senator Robert Ray). Having looked closely at the legislation, we take considerable comfort from that fact. It is almost worth saying that it appears to those in the Australian Labor Party who are concerned, as are the Australian Democrats, about the issues of public and community service and access and equity in our democratic system, of which telecommunications is such an integral part, as too is the media-a battle which we have fought and been rolled on by the combined Government and Opposition-that rhetoric is all that has survived since the May statement. We take comfort from that. At the committee stage we will try to pin down some of those elements of the statements vis-a-vis those in the legislation in order to further comfort ourselves and others in the community who are concerned about possible deprivation, possible negative results of the legislation. In general terms, we believe that there has been sufficient movement since the 1988 May statement to introduce legislation, a package of which is before us today and which we have not felt moved to oppose. However, we do need some clarification at the committee stage of a number of areas, particularly the definitions of community service obligations.

We too have been critical, as have others in the community, about the very short time available for comment on the exposure draft of the legislation. While appreciating the process, only a few working days were available to us and others in the community who were concerned about the legislation. While the Government claims wide consultation, and to a degree can justify that claim, it is very important to note that only a relatively short period was allowed. However, since and during that time the Government took cognisance of a great many of the concerns of people in the community.

The Australian Democrats will not support the second reading attachments put forward by the Opposition, although probably we could do so. One of Senator Alston's second reading amendments asks the Senate to add the words:

but the Senate criticises the Government for its failure to specify or detail the exact nature of extent of the community services obligations of Telecom.

We could make a similar complaint, but we would be making it for the opposite reasons. Since it is not an infrequent occurrence for the Democrats to find themselves on the same side as the Opposition for all the wrong reasons, it is unnecessary for us to do so on this occasion because it would mean that I would have to reiterate all that I have said. If there is any need to seek more detail on the nature and extent of the community service obligations of Telecom, we will do so at the committee stage. However, we believe that, having looked at the whole package of legislation as well as at the Minister's statements in his second reading speech and the explanatory memorandum, in large measure we would not want to make that criticism.

Finally, I emphasise that that is very much dependent, as is the whole package, upon the workings of Austel, and that is very much dependent upon the appointments yet to be made at Austel. We believe that with appropriate appointments it will be a body able to advise government adequately. Government must take account of the community views which are coming through in research and publicly. In general terms, we support the passage of the legislation.