Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
STANDING COMMITTEE ON ENVIRONMENT, COMMUNICATIONS AND THE ARTS LEGISLATION COMMITTEE
04/08/2009
Telecommunications Legislation Amendment (National Broadband Network Measures No. 1) Bill 2009

CHAIR —I would like to welcome you. Thank you for coming along to talk to us today. I note that the Senate has resolved that an officer of a department of the Commonwealth or of a state shall not be asked to give opinions on matters of policy and shall be given reasonable opportunity to refer questions asked of the officer to superior officers or to a minister. This resolution prohibits only questions asking for opinions on matters of policy and does not preclude questions asking for explanations of policies or factual questions about when and how policies were adopted. Any claim that it would be contrary to the public interest to answer a question must be made by a minister and should be accompanied by a statement setting out the basis for the claim. Do you wish to make a brief opening statement before we go to questions?

Ms Spence —No, thanks.

CHAIR —Then we will go to questions.

Senator MINCHIN —I thank the officers of the department for appearing today to assist us with any questions we may have. I wonder if you could assist us first by just relating your experience with the current legislation and its operations with respect to the RFP process on the basis that this legislation essentially builds on that and expands it to accommodate the changed circumstances but that the framework and the architecture is the same. From your perspective, was all the relevant information required for the purposes of the RFP ultimately obtained to enable the RFP to proceed?

Ms Spence —I might ask Mr Mason if he can respond to that question.

Mr Mason —Yes, I will respond to that. As the committee would be aware, a number of subordinate instruments were made under part 27A as it existed at that time last year requiring carriers to provide information for the NBN process. I think one carrier provided information voluntarily before the required date. The regime provides for that kind of information to be accepted by an authorised information officer, who in this case was me. That was accepted. As a result, that information received protection under the regime.

Senator MINCHIN —Was that on the basis that it was received voluntarily?

Mr Mason —No, on the basis that it was accepted as being relevant information that warranted protection. Other information was provided by other telecommunications carriers. Technically it was provided under the framework. As a result, it was checked and it was accepted by the department as the appropriate information and it gained the protection of the scheme as well. In terms of the carriers who responded, all the carriers who were asked to provide information provided the information requested of them and in the form requested. That information was then provided to the RFP proponents who requested it. So it was their choice as to whether or not they wanted it.

Senator MINCHIN —Just to clarify, ultimately no information was acquired as a direct function of the exercise of a formal demand for the information? Ultimately all information was provided on a voluntary basis and without the force of law required; is that right?

Mr Mason —I noted that one carrier had provided information voluntarily. Whether or not it would have actually provided that information voluntarily without the legislation is unclear. Basically, as you would probably be aware from last year, there was a process by which the government sought to obtain information voluntarily. It turned out to be a longer process than was anticipated, and one of the issues was about how adequate protection was given to information that might be provided. Part of the solution to the problem was actually the enactment of the framework that provided the protection. So, ‘Would they have provided the information if they had not had the framework that provided the protection?’ is a little bit of a chicken-and-egg question, I guess. In relation to the other carriers, technically that information was provided under the framework of a mandatory basis, but I think it is well known that the telecommunications industry was generally well disposed to participating in the process last year.

Senator MINCHIN —Sorry, but did you say that one carrier provided information as a result of mandating the request?

Mr Mason —No, I said one carrier provided information voluntarily, and I believe that it provided the information voluntarily because it knew that it would get the protection of the legislative framework. For example, if information was otherwise provided voluntarily, it would depend, for example, on contractual arrangements being put in place, which may not have been acceptable to the Commonwealth. So the regime that was put in place last year does actually provide a legislative framework to protect the information, which is a very important aspect of the framework.

Senator MINCHIN —Sure. I am just trying to go to the point of the necessity or otherwise of the compulsory mechanism in the bill and to establish whether in fact any information was ultimately supplied only because it was compulsorily acquired, so to speak. What I am putting to you is that, ultimately, even though a formal notice was given, all the information was provided voluntarily. That is what I am just trying to find out.

Mr Mason —It is a little bit of a hypothetical question because the majority of the carriers who provided information did so under the legislative framework that was put in place. An instrument was issued asking them to provide the information, which they did, within the time frame specified. I would see that as responding to the mandating, regardless of the fact that they expressed a willingness to participate voluntarily.

I think the other thing that I would note in relation to this framework—the amendments that have been proposed—is, as the explanatory memorandum says, that the government’s preference is to obtain information cooperatively and commercially, and that the continuation of the framework is intended to be a safety net.

Ms Spence —I think it was just probably a bit of speculation on our part as to what carriers would or would not have done in the absence of the mandating.

Senator MINCHIN —I am just trying to get at the way this did work and might work in relation to the implementation study. It is one thing to have a framework which protects information provided, whether voluntarily or compulsorily. The issue is whether the information that was supplied was supplied voluntarily—that is, did you approach these companies and say: ‘This is the information we need for the RFP to proceed. We would like you to volunteer to provide this information. If you do so, it will, subject to clearance, receive the protection of this,’ as opposed to saying, ab initio, ‘Hand this over because if you don’t you will be subject to penalty.’

Mr Mason —As has been discussed previously, the government approached carriers last year and asked about them providing information voluntarily. In general, they said that they were happy to do so, and some initial steps down that path were taken. The problem that we had was in coming to agreement in relation to the protections for the information provided—that was the real sticking point. So, notwithstanding the fact that people said they were happy to provide information, it was basically subject to this caveat of getting adequate protection. Seeing that that could not be resolved, it was decided to make use of the legislation, and that solved the impasse, as it were, as well, because that provided the protection.

Senator MINCHIN —I see. When we had Telstra in earlier, they said that they had cooperated and provided all the information. I asked them, ‘Was any written instrument issued requiring the production of information?’ They said it had been but that they had provided it voluntarily anyway. I said, ‘Well, why was the instrument issued?’ They suggested that I ask you. What you are suggesting is that the instrument was issued in order to provide the requisite protection—not so much to compel the acquisition of information that would not otherwise have been produced but in order to provide that information with the protection which the supplier sought. Is that a fair summary of the situation?

Mr Mason —It is a reasonable summary of the situation. The instrument that was actually issued covered—I think, from memory—about 15 carriers. I would have to go back and check the records to be able to give definitive advice as to how many were absolutely happy to do it voluntarily and how many placed caveats on that. But another interpretation of the situation, as well, was: yes, Telstra were providing information voluntarily; whether or not they were providing all the information—again, I would want to go back to the files and check exactly, but I have a very clear recollection that the protections they were seeking for the information they were being asked to provide were a sticking point, and the enactment of the legislation provided the protections.

Senator MINCHIN —Sure. That is fair enough. I am still sticking with the original process, but this goes to a submission made to us that asked, ‘Would it not have been better with the RFP process, and perhaps be better with this, that information supplied voluntarily automatically attracts that protection?’ As I understand it, it only attracted it if it was supplied under the guise of the formal command. Why not provide that protection to information supplied voluntarily ab initio?

Mr Mason —I do not know that we have said that that process cannot apply. Just because—

Ms Spence —The same arrangements.

Mr Mason —In practice the same arrangements, because we have talked about the government preferring to obtain information if necessary by a cooperative and commercial process, but presumably the parties who would like to provide that information would still want to have protections for that information. From a practical perspective, it would seem to make sense that we make use of the legislative framework as opposed to negotiate contracts with potentially multiple information providers.

Senator MINCHIN —I am gratified that the preference is to try to seek this information voluntarily or cooperatively and commercially rather than to resort to law. I think that is appropriate. Wouldn’t that desire be enhanced or facilitated by satisfying suppliers of information that information they supplied voluntarily was automatically protected rather than having to invoke or go through what might be a facade of the issue of a written instrument compelling the supply of the information in order to attract the protection?

Mr Mason —Yes—sorry, the written instrument is not a facade in relation to giving protection.

Senator MINCHIN —No, I am sorry; I did not mean that. I meant that the written instrument of which you speak is one that compels the production of the information, is it not?

Mr Mason —Yes.

Senator MINCHIN —So why get to that stage in order to provide the protection which the suppliers of the information are seeking? Why not make that an automatic function under the legislation after supply of the information voluntarily?

Mr Mason —I understand the question, I think. The question really is: why have a compulsory scheme if the preference is to seek the information commercially or cooperatively and you can give the protection administratively?

Senator MINCHIN —Yes.

Mr Mason —The basic reason for the safety net is, as the explanatory memorandum states, to provide a safety net if for some reason a party who holds information that may be quite important or vital to the process is reluctant or unwilling to provide that information on a cooperative or commercial basis, and there may be a range of strategic reasons why that may happen. In relation to the provision of information voluntarily, as I understand the operation of the framework it will be open to the Commonwealth or the authorised information officer to accept information provided voluntarily and for it to continue to receive protection. So in some ways the regime does two things in particular: it offers protection to the information that is provided, whether voluntarily or on a mandatory basis, and equally it provides a mechanism to compel the provision of information if a party is unreasonably withholding that information.

Senator MINCHIN —Yes. I do not want to get bogged down on this point but if there is a preference for cooperative and commercial then that would be, in my view, facilitated if at the outset potential suppliers of information knew that by providing it voluntarily it was automatically protected. You said before in relation to the RFP that there was a concern about the security of the information. Why not do that right up front. That would encourage people to provide it cooperatively and commercially. You might still want the big stick. But why not facilitate a more cooperative arrangement by providing the protection right upfront?

Mr Mason —Yes, sorry, I forgot to answer that part of your question. The reason why there is not automatic protection is that there is a range of information which the Commonwealth does not necessarily accept as being commercially confidential or confidential information and a decision is actually required in relation to the range of information.

Senator MINCHIN —Yes, although you could reverse of the process I suppose. You could have an automatic protection but then subject it to exceptions or something.

Mr Mason —For example, many carriers publish maps of their trunk network architecture on the internet. If they submitted that then we would not want to give that a protection.

Senator MINCHIN —Again, I would like to ask about what happened to the information supplied under the RFP process and ultimately its passage from you to tenderers to that process—and I presume you have read Telstra’s submission, and item five of that submission which goes to this question. What arrangements were put in place to deal with that? Is it still sitting there with tenderers? If so, what legal obligations bind them? Is there a process for the destruction of this? Does Telstra have a point in relation to item five? Could you comment on that raft of questions.

Mr Mason —I think Telstra has a valid point in that the information that we could be seeking from information providers is potentially very sensitive information, and it needs to be treated very carefully. That has always been an understanding in relation to the scheme as it was originally implemented, and obviously in relation to the new bill as we seek to continue the scheme. Part 27 provides for the minister to make an instrument relating to the storage, handling and destruction of network information. That is used to enable very comprehensive rules to be put in place in relation to those kinds of things. There is such an instrument in existence in relation to last year’s process. So that would give the committee a very good understanding of the kinds of rules that we had in place there. It relates, for example, to the storage in a physical sense of information, and the storage in an electronic sense of information and how it should be handled—including in relation to its return to the department or its destruction. Those rules were actually developed in consultation with the Attorney-General’s department and other relevant national security agencies. Similarly, we would envisage an instrument for future use to be developed on the same basis.

Senator MINCHIN —Telstra goes to this issue of RFP proponents holding information supplied to them under the RFP and, in their view inadvertently as a result of this bill, being able to use that information to create or develop their own broadband network. Is that theoretically correct?

Mr Mason —That is not the intention of the bill and I do not believe it is correct. Those proponents do not have the information anymore—it has been recovered from them.

Senator MINCHIN —So you can say with confidence to this committee that every RFP tenderer has handed it back.

Mr Mason —They have handed back or they have destroyed it.

Senator MINCHIN —Do you audit that process to make sure that that occurs?

Mr Mason —We have not yet audited the process but they have confirmed that through statutory declarations.

Senator MINCHIN —Do you intend to do some sort of audit to ensure that in fact that is the case?

Mr Mason —It is under consideration. The instrument that I referred to before does provide for the facilities of proponents to be visited by Commonwealth officers.

Senator MINCHIN —In coming to this bill, I get the impression from submissions made to us that there was, effectively, no consultation with any carriers or utilities in the framing of this bill. Is that correct?

Mr Mason —Unfortunately, that is the case. We prepared the bill very quickly with a view to getting it into parliament during the last sitting. Yes, we would have preferred to have undertaken wider consultation but in practice it was not feasible in the time available to us.

Ms Spence —Although it is worth noting that the intention to introduce the legislation and to cover not just carriers was flagged in the national broadband network regulation reform discussion paper which was released on 7 April.

Senator MINCHIN —Although it is the case that there was considerable surprise, may I say, from utilities, particularly when rung by the media to say guess what, but I appreciate your answer. The government made its announcement on 7 April, this bill was introduced around 26 June, did it require 2½ months of preparation? You effectively had 2½ months notice, did you not?

Mr Mason —We had many other things to be working on as well.

Senator MINCHIN —Okay. Anyway I do appreciate your acceptance that it would have been preferable to have been able to consult on this bill and the reasons why that did not occur. To what extent have consultations occurred subsequently from your perspective in relation to this bill? Have you actively sought to consult with all the parties involved?

Mr Mason —Yes, Senator, I have met with the Energy Networks Association, the Water Services Association, the Australasian Railway Association, and we have had other meetings with carriers on a range of issues of which this was one of the items that they were free to talk to us about.

Senator MINCHIN —As a result of those discussions, is it possible that the government may wish to move amendments to this bill?

Mr Mason —We have not yet provided advice. One of the things we are interested in, obviously, is the committee’s report and other evidence provided to the committee.

Senator MINCHIN —To what extent, if any, have discussions commenced with potential suppliers of information about them supplying that information on, as you put it, a cooperative and commercial basis given that all this is, we understand, to be done with great haste and you were required to get this bill in early? Have you already commenced those discussions in the five weeks or so since the bill was introduced? If not, why not?

Ms Spence —There have been no detailed discussions on the detail of the sort of information that would be required. I think one of the key points that the bill refers to is that the information will be to assist the implementation study and the lead advisers will be appointed shortly.

Senator MINCHIN —Yes, I have heard that before.

Mr Mason —Can I just add to that. While there have been no detailed discussions, the discussions we have had with the parties we have met have gone into the kinds of things that we would envisage being covered by instruments, if it got to that stage, or the kinds of things that we imagine they would be approached about by the implementation study.

Senator MINCHIN —You are putting to me a catch-22 that you cannot really start seeking or outlining the sort of information, which you would like utilities and carriers to start preparing, until the lead adviser is appointed to the implementation study.

Ms Spence —We are saying that we have not had detailed discussions with the utilities about the specific information that we would be asking from them but we have given them some guidance on the nature of the information to be sought.

Senator MINCHIN —But the action point is the appointment of the lead adviser, is it, in terms of the formal commencement of specific discussions about the information that is needed?

Ms Spence —That is what I would expect, Senator.

Senator MINCHIN —In terms of that appointment, it is shortly?

Ms Spence —Yes, Senator.

Senator MINCHIN —I do not want to compromise you and I am conscious of the chair’s injunction, but one of the issues that has been raised and is of concern to us is that this bill seeks to cover two processes. One is the implementation study which we have discussed, but it is also to cover the NBN Co. and its suppliers as well which is a separate process. I do not want to go to policy questions because I presume it was a policy decision to do that but from your perspective presumably it would be entirely feasible, possible, practical, however you want to describe it, to have a regime in this instance which only applied with respect to the implementation study and the acquisition of information for the purposes of the implementation study and subsequently, if deemed necessary, provide further amendments to enable the acquisition of information for the purposes of the NBN company and its rollout?

Mr Mason —In some ways the regime that the government has proposed does, in fact, work in that way in that a decision will need to be made by the government for information to be provided to the NBN company, but it does not have a legislative trigger to that effect, as you have suggested.

Senator MINCHIN —I appreciate that a written instrument would be required under the auspices of this legislation, but this legislation does provide those auspices for a written instrument to seek or require information. All I am saying is that presumably you could have a bill or amendments to the existing legislation which go to the implementation study only and authorise written instruments to be enacted under it for the purposes of acquiring information for the implementation study, and subsequently have amendments to the bill to enable written instruments to be issued to deal with the NBN Co. itself. Would that be right?

Mr Mason —Technically I believe it could be drafted in that way.

Ms Spence —But that is not the way it is—

Senator MINCHIN —I appreciate that and I do not want to go to policy. I appreciate it was presumably a policy decision to do both.

Ms Spence —You are right, it was a policy decision.

Senator MINCHIN —I accept that. Is it also a policy decision not to make any provision in this bill for reimbursement of costs reasonably incurred in supplying information to the government for the purposes set out in the bill?

Mr Mason —It goes back to the way the regime as envisaged would work. Again the intention and preference is to obtain the information on a cooperative and commercial basis, so decisions parties make between themselves would be a matter for them to the extent that they would be compelled to provide information as a last resort. There is currently no mechanism for compensation in relation to costs.

Senator MINCHIN —But certainly you as the administrators of all this, as I understand it, do envisage that you would seek to have this information supplied cooperatively first without reliance on written instruments?

Mr Mason —Yes.

Senator MINCHIN —You said commercially and presumably that means there would be scope to enable suppliers of the information to be recompensed for any reasonable costs they incurred in supplying that information. Is that what you mean by commercial?

Mr Mason —Yes.

Senator MINCHIN —Who would be the parties to that? Are we talking about the lead advisers; would they be the ones, or would it be the department conducting these negotiations?

Mr Mason —We envisage it would be the implementation study part of the department.

Senator MINCHIN —Yes, and the advisers to it.

Mr Mason —Yes, and the advisers.

Senator MINCHIN —So as part of the budget for the implementation study there would be provision for commercial acquisition of information required?

Mr Mason —There is a budget for the study, yes.

Senator MINCHIN —And that budget contemplates purchasing on a commercial basis information needed in order to undertake the implementation study?

Mr Mason —It would need to.

Senator MINCHIN —Presumably only the department itself could authorise that expenditure, would that be right?

Mr Mason —That would be my understanding, yes.

Senator MINCHIN —Not KPMG or whoever it is?

Mr Mason —I think I should say that I am not privy to the appointment of lead advisers. I do not know exactly how their proposed contracts work and so forth. There are other things that are conceivable, I guess.

Senator MINCHIN —At this stage it is unclear whether the department or the lead advisers would be authorised?

Mr Mason —It is not clear to me; I do not know.

Ms Spence —We can take that on notice.

Senator MINCHIN —Thank you. I was interested in the reference to the inscription of some of these provisions to setting aside what might otherwise be common law obligations in relation to the provision of information. Do you understand the references I am making?

Mr Mason —Yes.

Senator MINCHIN —I think it was in relation to the setting of the periods which are in dispute for the consultation in the first instance in provision of information.

Mr Mason —The consultation period in relation to an instrument.

Senator MINCHIN —That is obligations on the part of the department, is it, that we are referring to there?

Mr Mason —Yes.

Senator MINCHIN —To what do you refer there?

Mr Mason —Generally, when instruments are prepared, there is a formal consultation process whereby parties affected by those have the opportunity to comment. It is guided to some extent by the legislative instruments.

Mr Markus —Although that does not seem to be targeted as such.

Mr Mason —As you would appreciate it is best practice regulation to consult. What the time frame does in this instance is to set a maximum otherwise parties could dispute the amount of time that they were given. The reason it sets that maximum is so we can get feedback on it within a set time as opposed to having a long process drawn out.

Senator MINCHIN —As a matter of law if a specific time period is provided, that waives any common law obligations on you in relation to allowing a party to be heard, does it, in relation to the matter? That is the advice you have received?

Mr Mason —They need to provide a feedback within that time, yes.

Senator MINCHIN —On that matter, because it has been raised by several witnesses, on the consultation period on the draft instrument relating to information, I gather it was three days under the RFP and you have extended that to five.

Mr Mason —Yes.

Senator MINCHIN —And that is because, why, this information is somewhat broader in scope?

Mr Mason —We appreciate that three days is a limited time. It was put in last year because we were working to a tight time frame again. We still appreciate that five days is of concern to some people but we thought it was better to extend it to the extent we could, and we thought that was a reasonable extension.

Ms Spence —We are working on the basis, Senator, that by the time it gets to the point that you are consulting on an instrument there would have been your commercial discussions with the utility or the carrier in question in terms of the nature of the information being sought. So it is not as though the draft instrument would be a total surprise.

Mr Mason —Further to that, the time frame is the mandatory time frame. It does not preclude informal discussions about instruments as well.

Senator MINCHIN —No, but it is a mandate without any discretion and, presumably, if they want longer they have not got it. You can then issue your written instrument at the conclusion of that five days.

Mr Mason —I would expect that parties with objections to the instruments would be able to articulate those concerns satisfactorily within five days.

Senator MINCHIN —Most witnesses have sought to have the bill amended to double that, to 10 working days. From your perspective is that a major concern to you?

Mr Mason —Obviously the longer the time frame is the longer any process that is necessary to seek information is extended. So it puts pressure on our time frames, yes.

Senator MINCHIN —Equally you will have heard evidence that what is now 10 days in the bill for the actual provision of the information is inadequate and there was a request that that be at least 20 working days. I presume you would have the same concerns?

Mr Mason —Yes. I would point out that the 10 days is the minimum amount of time, so a longer period can be provided. Yes, your conclusion is correct as to a 20 day minimum.

Senator MINCHIN —But if it is 10 days then I can imagine a minister being inclined to sign-off on 10 days. If you supply the information on the 11th day you are prima facie guilty of an offence under this bill, is that correct?

Mr Mason —It is a breach.

Senator MINCHIN —You have contravened the act. And the maximum penalty for contravening this act, as I understand, is $250,000?

Mr Mason —Yes. It depends on the nature of the party in some ways because for a carrier it is a carrier licence condition.

Senator MINCHIN —I am just reading part 31, civil penalties, section 570(3), body corporate not to exceed in any other case $250,000 for each contravention,

Mr Mason —Senator, that does sound correct but we might be best to check the reference. We will take that on notice.

Senator MINCHIN —Thank you. The other issue that attracts my interest is a request made by some for the bill to provide a mechanism by which suppliers of information are granted an immunity from civil action based on any inaccuracy in the information provided that may incur damages to a third party. Has that been considered and rejected? Has it not been considered at all? Are there difficulties from your point of view in such an immunity?

Mr Mason —It is an issue that we are very aware of. It was something that was actually considered last year in the context of part 27A generally. We understand the sensitivity from the perspective of information providers but the other side of it is that there does need to be an incentive, we think, for information providers to provide the best quality information that they can. We would be concerned if there was too much immunity or too great an immunity that they may be perhaps a little lax in checking the details or the accuracy of it, which could have consequences for network planning and so forth.

Having said that, we recognise that there are sometimes limitations to carrying databases. For example, some of the utilities have indicated a lot of their infrastructure is quite old and it may not be that well recorded. So that is the countervailing one. In terms of how that can be dealt with in practice, it needs a degree of understanding, I suppose, on the part of the Commonwealth in seeking information from the implementation study and potentially, if it gets that far, from the national broadband network company in relation to the quality of the information. It is potentially open to the information providers to state limitations to the information when they provide it, as well.

Senator MINCHIN —Yes, that is true. I know Senator Lundy expressed some surprise, but it is clear from evidence, particularly from utilities, that there is quite a bit of legacy network information that is stored on papyrus or something and not exactly well documented. Even with the best of endeavours, some of these utilities may have considerable difficulty supplying information which they could vouchsafe to be absolutely accurate. It would be unfortunate if they then paid a penalty for that. I understand you are sensitive to that, and that is something we may be able to pursue.

There are a couple of other things I want to mention. The Privacy Commissioner has suggested that there should be a privacy impact statement in relation to this bill. I presume that has not occurred; is that correct?

Mr Mason —We did consult with the privacy commission in the preparation of the bill. Notwithstanding the time frame issue, we approached some Commonwealth departments in the time we had. They made similar observations at that stage. We took the view that at the moment the bill provides a head of power; it does not specify what type of information may be sought. On that basis we considered it impractical to do a meaningful privacy impact statement—a privacy impact assessment, I think it is called  technically. We consider that such an impact assessment would be more appropriate at the stage at which an instrument was prepared, if such an instrument were prepared.

Senator MINCHIN —Would it be your intention to ensure that a privacy impact assessment was made in relation to any instrument that was ultimately drafted?

Mr Mason —Yes, it would. If you have had a look at the forms, it is a very long assessment process in some ways and it does tend to go to whether or not you are going to seek information of a personal nature. It may well be that that kind of information is not even sought. It is not envisaged at the moment, from my perspective.

Senator MINCHIN —There was also concern expressed, particularly by the energy networks, about the provision of this information not only to the ACCC. I can understand their nervousness and request that the bill be amended to restrict the purposes for which information could be supplied to the ACCC. Would you see that as a sensible provision or do you think their concerns are unwarranted? Has this occurred to you?

Mr Mason —I understand why they have the concern. I think it is very unwarranted. The legislation is drafted for information to be provided for the purposes of designing a network. Technically, you can prescribe other purposes, but I do not envisage that that is one that would ever be prescribed.

Ms Spence —The bill is very clear about what the intention is, so we would not have thought that it was necessary.

Senator MINCHIN —Although presumably there is nothing in the bill that prevents the ACCC using whatever information it does glean for whatever purpose.

Mr Mason —The information could be provided to the ACCC. The authorised information officer responsible for its disclosure would have to make a decision to do that. If it were released to the ACCC it would have to be solely in relation to the development of the national broadband network, the network that is intended to be built.

Senator MINCHIN —How does that caveat on the supply—

Mr Mason —In terms of the people to whom the authorised information officer can provide the information, that requires a conscious decision on the part of the authorised information officer, and the limitation on purposes is set out in the bill.

Senator MINCHIN —But he can provide the information.

Mr Mason —Yes. In fact, anybody who is provided with it can use it only for those purposes.

Ms Spence —So there are restrictions. Even if the decision was taken to provide it to the ACCC it could not be used for anything other than in relation to—

Senator MINCHIN —So you think there is sufficient protection in it now?

Ms Spence —We do.

Senator MINCHIN —There are a couple of things that occurred to me in relation to Telstra’s submission. Section 2.3 of their submission proposes that the bill set out rules governing the security arrangements rather than being as open ended as it is. This is not an unreasonable point and I think it is one you acknowledged in relation to the RFP—that the confidence of suppliers of information to do so cooperatively and commercially is considerably enhanced if they have some confidence in the security of the information they supply. Do you see any practical difficulties in doing what they have suggested?

Mr Mason —I think the practical difficulty would go to the degree of complexity that would be required in the drafting. The storage and handling instrument that was prepared last year goes to about 15 pages. So that is one issue. As you would be aware, drafters prefer to leave that level of detail to the subordinate legislation. The other issue we found last year in consultation with the relevant security agencies is that they like to ensure that information is treated in accordance with its level of sensitivity. If information is sought under this regime and it is of a lower level of sensitivity than perhaps might otherwise be expected, they may have less onerous obligations or they may think less onerous obligations are acceptable. So I guess the issue is that there is a degree of flexibility in relation to what information is sought.

Mr Markus —The kinds of matters that they are proposing be put in the principal legislation go to matters of detail that would not, in my experience, be found in primary Commonwealth legislation. Particularly for measures relating to software and particular technical means of securing information that might be likely to change from time to time, it would be unusual to have that level of detail in primary legislation.

Senator MINCHIN —Is it envisaged that the rules would be very similar to, or modelled upon, the existing 15-page document that you have?

Mr Mason —That would be the basis we would work from. We have already been talking to the Attorney-General’s Department as to whether they think it should be supplemented or changed in some ways.

Senator MINCHIN —The other matter they drew to our attention in a sense goes to the considerable concern, which I gather even other departments have expressed, about issues relating to competitive neutrality and the acquisition of information for a commercial enterprise—to wit, the NBN Co. They have suggested in section 3.3 of their submission that the bill should specify that it should only be information about the location, physical and functional characteristics of network facilities. Is that not unreasonable?

Mr Mason —It is quite clear that the bill needs to cover that type of information, but the bill does not limit itself to that type of information. I guess the issue is that it is not clear what the full range of information that might be desirable is. Having said that, it is not envisaged that the kind of information that Telstra has mentioned would be sought because, as you say, it would raise concerns from a commercial and competitive perspective. In terms of the safeguards in relation to the type of information that is sought, any request for information via the framework does need to be through an instrument. There needs to be consultation on that instrument, and that instrument is ultimately disallowable.

Senator MINCHIN —Yes, which is some comfort to us. But from your perspective—and certainly from what I understand—the information that is being sought does go to essentially, as they describe it, the location and physical and functional characteristics of network facilities. That is the whole purpose of this, is it not?

Mr Mason —Yes, that is the obvious purpose. But in many ways the type of information that might be sought will depend on the work of the implementation study.

CHAIR —Thank you very much for appearing before the committee today. We appreciate your assistance. There are a few questions from senators that you have taken on notice. Given the short timeline for preparing the report of this inquiry, would you be able to provide answers to those questions by 2 pm on Friday?

Mr Mason —Yes, that should be okay.

CHAIR —That concludes today’s proceedings. I thank all witnesses for their presentations.

Committee adjourned at 2.32 pm