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Telecommunications Legislation Amendment (National Broadband Network Measures No. 1) Bill 2009

CHAIR —Thank you, Mr Hughes, for coming along to talk to us today. The committee has received your submission as submission No. 3. Do you wish to make any amendments or alterations to your submission?

Mr Hughes —No, but I would like to make a statement.

CHAIR —Please do so.

Mr Hughes —Thank you for the opportunity to appear before the committee and describe the rail industry’s position on the telecommunications legislation amendment bill. The Australasian Railway Association represents all the major rail interests in Australia. This includes track owners, operators, suppliers, manufacturers and contractors. It also includes public and private rail, freight and passenger rail and urban and regional rail.

The rail industry currently employs over 100,000 people in Australia. Governments, both Commonwealth and state, together with the private sector, are currently committed to investing $36 billion in railways. Rail in Australia is experiencing a vital renaissance as the prospect of oil supply uncertainty, climate change and congestion all lead to a greater use of rail as the transport mode of choice.

The rail industry is concerned about the uncertainty and potential impact of this legislation. There are also issues which may relate to the introduction of the NBN as a project which we have also identified but which may be separate to the telecommunications legislation amendment, which we would like to raise as well, since the differentiation is not clear.

The rail industry is concerned about the lack of dialogue with government on this issue, which potentially has very significant impacts to the industry directly and to Australia as a whole. The wider observation is that there are too many government policy activities underway at the same time, and they are being pursued with undue haste. The result is the risk of poor policy decisions, which were evident recently, and the inability of industries to contribute at the level required to effectively contribute to policy development. There is simply not the time or capacity available in the industry. In this case the legislation was not discussed with the industry and the time frame for response was too short.

Getting back to the legislation, railways are vital for the nation as a whole. Safety is the No. 1 priority for railways, business, the community and ultimately governments. This is evident with every rail crash which are universally reported on television and newspapers, as we saw from just last week. The rail industry believes that every death and injury is avoidable and we need the best safety systems and technology in place to ensure this occurs. Railways also provide for public security such as antiterrorism as an integral part of their rail safety management.

It is worthwhile understanding that rail safety is legislated differently to some other utilities. All railways whether track managers or train operators are independently regulated by individual state rail safety regulators. Every railway must demonstrate it has the people, systems and processes in place to ensure safety to the satisfaction of the safety regulators. It is fundamental to the way we operate. Current national investment in level crossings and other rail infrastructure and incidents such as the Waterfall and Glenbrook crashes demonstrate that governments and the community demand improvements to safety. At the very least, safety of rail cannot be degraded; it is simply not acceptable.

There are four areas where the rail industry is concerned that the telecommunications legislation amendment could impact on railway operations. Firstly, access to physical rail corridors and facilities, secondly, access to telecommunications systems, thirdly, interruptions to operations, and fourthly, costs to business. Let me describe each of these simply.

Rail corridors are effectively a controlled environment. Railways are not like road reserves which have uncontrolled access. All people who enter the rail corridor are either controlled or are doing so illegally. Each railway has arrangements in place to manage people and activities in both categories. If the NBN company requires access to rail locations it must be done in a controlled manner or the railways will breach their rail safety accreditation. Every NBN worker will require full rail safety worker accreditation as well as full drug and alcohol testing. If access is provided there can be considerable costs to railways to ensure safe access by providing training, induction, supervision and information. If the railways and the safety regulators believe that safety is being degraded, it will close down railways.

Railways use telecommunications facilities for train protection and control. Telecommunications systems are essential for the safe and efficient operation of railways. In simple terms—no communications, no trains. Therefore rail communications must be reliable. They must not be subject to interference, delay or interruption. The rail industry describes telecommunications as vital. This means that communications are essential or railways cannot operate.

The rail industry is concerned that the telecommunications legislation amendment will allow the NBN company access to rail telecommunications systems and thereby degrade system efficiency or reliability. This cannot be allowed. Any work in rail reserves or on associated rail facilities and systems such as telecommunications systems, including the gathering of information, must be done in a managed way to ensure safety and to minimise the interruptions to rail operations. This will apply to the NBN company or the railway will breach its safety accreditation. In the worst case the railway might have to cease train operations while such work occurs.

All three of these issues can introduce costs to the railways directly and to their customers. These issues can degrade safety and interrupt operations. Interruptions result in operational costs, cost increases to customers, reduced service and reliability, and downstream costs to business. Ultimately, it can degrade rail system performance resulting in adverse community and environmental effects. In short, the nation suffers as a whole.

There are however additional administrative costs, which I want to raise, which may also occur in the provision of information to the NBN company. According to the legislation, railways will be required to provide information on land infrastructure and other facilities under their control. I am sure that you will appreciate that there are millions of pieces of information which may be requested varying from digital location information to the size of ducts. There are over 44,000 kilometres of rail track in Australia and countless stations, terminals, offices, yards, sidings, depots and other facilities. A simple question such as the boundaries of land under railway control represents an enormous amount of work to answer with any degree of accuracy. Yet this is exactly what the rail industry fears could be required under the legislation. If such information is required without due regard to reasonableness or compensation, it will impose an unacceptable burden on the industry.

The rail industry does not have confidence that the telecommunications legislation amendment provides protection for railways or the safety of the general public. This risk is evident by past experience of telecommunications companies in Australia. I expect that all utilities and many private landowners have had the experience of a telecom company demanding access or other work which impacts negatively on them. Unfortunately those adversely affected have no recourse to protection because the telecom is operating under Commonwealth law.

The rail industry needs the telecommunications legislation amendment to be amended to provide protection from adverse impacts. The industry needs legislation to guarantee the primary authority for railways control of its vital communications systems to ensure safe operations. Thank you for considering the industry’s concerns. I am happy to answer any questions you may have.

Senator MINCHIN —Thank you very much for that very comprehensive and very useful submission, Mr Hughes. I will just begin again by asking you when and how you learned about this bill, which, as you say, you are quite concerned about. How did you come to know about this bill, and when?

Mr Hughes —I cannot give you the date that we heard about it. I received a contact from someone in the media asking for my comment on it.

Senator MINCHIN —Presumably, that was after it had been introduced into the Senate.

Mr Hughes —I do not know when it was introduced so I cannot tell you the timing.

Senator MINCHIN —But certainly you were not advised by the department or by anyone from within the government about this bill, nor was there any approach to you either by way of consultation or notification prior to its introduction, to your knowledge?

Mr Hughes —That is correct.

Senator MINCHIN —What has happened subsequently between your association and this department of communications in relation to the bill itself and/or the acquisition of the information which the government is seeking concerning, in the first instance, the implementation study and, secondly, the company itself? What has occurred in the five weeks since this bill was introduced?

Mr Hughes —The only communication that I have had with the department or other arms of government was one meeting with officers of the department and I found the officers helpful, constructive and positive. However that only occurred recently—

Senator MINCHIN —When was that?

Mr Hughes —That was yesterday.

Senator MINCHIN —Was that meeting at your instigation or theirs?

Mr Hughes —It was at theirs.

Senator MINCHIN —At that meeting did they seek then to outline the sort of information which they would be seeking from your members? What was the real purpose of the meeting?

Mr Hughes —The purpose of the meeting was to dialogue our issues and clarify any detail.

Senator MINCHIN —So it was really in response to your submission, was it?

Mr Hughes —I would say so, yes. They did not outline the type of information which might be requested. They were sympathetic to the position which we had put in the submission which I clarified slightly differently, and they talked about the process of providing the information which we have not had the time to review in terms of the instruments and so forth.

Senator MINCHIN —Are you aware, in the last five weeks, of any more direct approaches from the department, or the government generally, to members of your association with respect to the acquisition of this information that they seek on a voluntary cooperative basis?

Mr Hughes —The officers told me that they had approached the Department of Infrastructure, Transport, Regional Development and Local Government and through that department had had discussion with the Australian Rail Track Corporation, the government owned national track owner. But I know of no other contacts with railways with regard to this information.

Senator MINCHIN —And yet we are told that this is all terribly urgent and important. One difficulty I have with your submission is the overlapping of two issues. This bill purports to be about the provision of a stick for the obtaining of, in a sense, network information. There is a genuflection to a desire to obtain this information voluntarily and cooperatively but if that is not possible then ‘here is the big stick’. So that is at one level and you express concerns about that, but in your submission you do go on to talk about what I assume to be physical access to your network, which I guess is a separate issue. Our job with this bill is to look at the issues it raises in relation to the potentially forcible acquisition of network information. I guess it is a separate issue, but a very important one, as to the use of that information to physically access your members’ facilities. Do you understand the distinction that we have to draw?

Mr Hughes —I do. The point is what information is going to be required and how it is going to be acquired. There are many ways to acquire information. One of them is by physical observation. Sometimes you can even do that by taking photographs or whatever it might be but if it comes to the point where an NBN worker decides that they really need to eyeball a location then there is a physical access issue. I also draw the distinction, as I mentioned in my opening remarks, about open access to locations. If the NBN company wants to survey a road, they can go out and survey the road. They can do it directly or hire a surveyor and go out there because it is an uncontrolled access environment. But you cannot do that with railways. So it is not necessarily obvious to the NBN company that if they are looking for certain information they are going to have ease of ability to acquire it, and sometimes it may require physical location on that area.

Senator MINCHIN —But this bill is about seeking information, presumably in electronic format, about the layout of your network. Isn’t it the case that you are going on to ask the question of what they might then do with that information?

Mr Hughes —No, I am not actually saying that. We do not make the assumption that it is electronic information. There is a lot of information which is not electronic. It can be physical. It can be the old linen blueprint drawings. It can be data in all sorts of different manners. Sometimes it is descriptive; it is text, pictures.

Senator FISHER —Google maps.

Mr Hughes —Yes, Google maps. I know of one railway which has photographed its whole network.

CHAIR —Did you ask the department yesterday whether there was an expectation that the NBN company employees would survey railway lines or whether in fact the NBN company would ask your members to provide that information, in whatever format it is? Or are we just speculating about hordes of NBN employees going out and looking at railway lines?

Mr Hughes —I did not ask that question, but the uncertainty is that the legislation does not describe how that information is to be provided.

CHAIR —But at the same time it also does not say that there is an expectation that NBN company employees will traipse all over railway lines. Maybe we should clarify with the department what exactly they are going to get the information from.

Senator MINCHIN —The point of this information is to give the minister a power to command you to provide information that he requests. That is the purpose of this bill. It goes to the point that the chair is making; that is one set of issues altogether. You are really drawing to our attention another related potential problem of ‘NBN Co’ or other government employees, of their own volition, seeking to acquire that information and potentially putting themselves or the railway safety at risk. But there would be another set of laws that govern that now. If Telstra wants to put copper down alongside a railway line, presumably there is a set of laws that govern that sort of access now that would equally govern ‘NBN Co’ workers. Is that not the case? This bill is only about a power of the minister to order you or your members to deliver up information to the government.

Mr Hughes —I think it is a fair point. I have not gone through all of the legislation and checked whether that is the case. Therefore, I am reluctant to presume or assume what situations occur.

Senator MINCHIN —Can you briefly describe to us how the law at state and/or federal level currently governs access to railways? Are there in existence special exemptions for anything to do with telecommunications that gives them rights that other companies, citizens or organisations do not have in relation to railways.

Mr Hughes —I do not know that information but I could find that out for you.

Senator MINCHIN —But presumably, in the context of what you are talking about, there are. When you say that people cannot just go and walk along a railway line, is that because of relevant state laws that make it an offence to walk alongside a railway track? What governs that now?

Mr Hughes —The way the rail safety legislation works is that the railways have to manage their risks to the satisfaction of the safety regulator. So the railway will say, ‘There is a risk that people will wander down our rail tracks and therefore these are the mitigations that we will put in place to ensure that safety is not compromised,’ and they will submit that to the rail safety regulator as part of their safety management system or SMS.

Senator MINCHIN —But presumably railway owners and operators have the legal authority to prohibit trespass onto existing rail corridors?

Mr Hughes —Yes.

Senator MINCHIN —Although you are right, there are in the existing telecommunications legislation certain rights granted to telecommunications carriers to access facilities. I want to explore this a bit. What is the current experience with Telstra, as the current operator of the fixed-line network, and the railways? To what extent does Telstra make use of railway assets for its existing communications network? Do they cause you difficulties at the moment?

Mr Hughes —I do not have that information. I suspect that national telecommunications companies do not make wide use of railway areas because of the risks that I have introduced. I also understand that railways are cooperative with respect to telecommunications and do not seek to interfere in any way; however, those two operations need to occur in the same area.

CHAIR —Is it common for railways to have telecommunications infrastructure now?

Mr Hughes —Absolutely.

CHAIR —Such as the overhead cables that often go down the railway line.

Mr Hughes —Not overhead cables. There are a variety of telecommunications facilities. Some of it is just through radio frequency and some of it is fibre optic. In the old days it used to be copper, and there is probably still some copper out there, but that is being replaced by more modern systems. One of the railways I understand runs their telecommunications down the rail line; that is down the track itself. So there is a variety of options.

Senator MINCHIN —Just to pursue that, what you are concerned about is that ultimately any use of railway facilities by NBN Co. to lay optical fibre could well interfere with your own dedicated communications systems. Is that correct?

Mr Hughes —That is correct. Or the rail operations itself; the tracks and other facilities.

Senator FISHER —Would it not also increase the incentive for third parties to access your property and map the physical location? In response to Senator Minchin you were talking about your safety management systems and how it is against the law in many cases for people to do just that. Surely you are assessing the adequacy of the existing legislation as of today. But if it were the case that there were also national broadband network infrastructure built alongside, does your organisation think there would be an added incentive for third parties to try and do what they may? For example, across the Nullarbor. So there may be increased attempts with which your organisation and the rail authorities have never had to deal with before.

Mr Hughes —If there is any new activity in the rail reserve there is obviously an increased level of activity in the rail reserve. One of the things that we have to be careful about as well is rail safety, which is currently regulated by the states, and this is Commonwealth legislation. Therefore we have to be careful about the primacy of Commonwealth legislation over state legislation, and we have not assessed that possibility.

Senator MINCHIN —From your understanding of the nature of your members, do you believe they would be prepared to voluntarily and cooperatively come to arrangements with the government for the supply of this information on a recompensed basis without the threat of force as is contained in this bill?

Mr Hughes —I believe that railways have no interest in introducing undue impediments to an NBN company. It is not the railways business to interfere. There is no advantage, there is no incentive and there is no reason to do so, and past experience is that railways have been cooperative with many other utilities and activities, and I expect that that would continue in the future.

Senator MINCHIN —You did say in your submission that you would expect further consultation with your industry before the legislation is actually passed. Is that still your position? Did your meeting with the department yesterday resolve the outstanding issues for you or would you still be of the view—and put the view to this committee—that the Senate should not pass this bill until you have had the opportunity to have further consultation with the government?

Mr Hughes —Yes, we would. As I said in the introductory remarks we believe that the legislation should be amended to include protections from unreasonable impacts on railways and from unreasonable costs. Sometimes the simple questions can be enormously costly to answer and can take a significant amount of time depending on what that request might be. Partly depending on, for instance, the state of the information, and where information is not accurately known, whether it has to be acquired in some way by the railway or another provider directly.

Senator MINCHIN —From the point of view of the Senate’s consideration of this bill you at the very least would like to see, I presume from your comments, an amendment that required the government to recompense utilities such as yours for reasonable costs incurred in meeting these requests?

Mr Hughes —Correct.

CHAIR —Can you just clarify that your members would be recompensed, not the—

Senator MINCHIN —Yes, sorry.

Mr Hughes —Yes.

Senator MINCHIN —I used the word ‘utilities’. There were two quite specific issues which you may have heard raised earlier about the consultation time frames—the initial five-day time frame for consultation on the draft instrument setting out what information is required and then 10 days for the supply of information. The witnesses we have heard from and submissions that we have seen want at least a doubling of those time frames. Would you concur with that proposition?

Mr Hughes —Yes.

Senator MINCHIN —Also, as I raised with the previous witness, there is this interesting issue—and I do not know whether you have looked at this—that, if you are going to be forced to provide information that may be, for reasons beyond your control, not as accurate as you would like, should the bill should actually provide some immunity from any civil action based on any inaccuracy in that information? Is that something you would like to see in the bill?

Mr Hughes —I have not looked at that issue directly. It is certainly something which I think we should look at, but I do not have a conclusion about it. It seems unreasonable on the face of it if a utility acts in good faith and to the best of its ability to provide the information required that it should be penalised when it is doing the best it can.

Senator FISHER —You talked in response to Senator Minchin’s question about the degree of consultation, and your website lists about 25 track owners and a lot of smaller tourism and heritage operators. Were you speaking on behalf of those organisations and entities as well in your answer to Senator Minchin about consultation?

Mr Hughes —Yes, I was.

Senator FISHER —So you are able to say that they have not been separately consulted by the government, the department or anyone in respect of the bill?

Mr Hughes —I do not have a definitive response from all of those railways, but the ones I have been in contact with have had no direct contact with the department, with the possible exception of ARTC.

Senator FISHER —In your opening statement you talked about how communications were essential for the railways. Is it possible that the government’s proposal could be good for railways?

Mr Hughes —It could be. I would have to figure out why or how. Anything is possible, I guess. For instance, if the NBN company was after certain information which was not available but was willing to contribute to the cost of the acquisition of that information then it might be in the interest of the railways to acquire that information which would have an internal benefit.

Senator FISHER —But then surely it goes to the other issues that you have talked about—the use for which that information is being provided, the use to which the information is then put and the degree of potential interruption or interference with rail services that might result from that?

Mr Hughes —Correct.

Senator FISHER —Other submissions have talked about the absence of and necessity for a cost-benefit analysis essentially of the whole of life of this proposition. Have you seen anything like that? What is your organisation’s view of those suggestions?

Mr Hughes —Railways will collect data and information where they see that there is value in doing so. That should be on a whole-of-life proposition. But they do that only with respect to their own internal issues; they do not collect information for others because they pretty much operate on a commercial basis—even the public railways.

CHAIR —Thank you very much, Mr Hughes, for the submission the association made to this inquiry and for taking the time to appear before the committee this morning. We appreciate your assistance. Thank you. We will now break for lunch.

Proceedings suspended from 11.45 am to 12.32 pm