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Thursday, 18 November 2004
Page: 112


Senator LUNDY (4:48 PM) —It is my pleasure to follow Senator Eggleston in this debate so that I have the opportunity to verbal him as he verballed me in saying that somehow I lauded the coalition's programs. Most of them are a complete farce. Having participated in many of the inquiries into telecommunications and broadband in this country, Senator Eggleston probably has a better idea than most in this place of the devastating state of affairs in rural and regional telecommunications. That said, it has been fascinating to see the two-faced approach that The Nationals have been taking to this issue of Telstra. Their face when inwardly focused on this chamber—and I presume their own party room—says very clearly, `We support the privatisation of Telstra.' But outside this building and facing their constituency, facing the residents in rural and regional Australia, the face of The Nationals says, `Shock, horror. We're going to work really hard to try to get services up to scratch, and no, they are not good enough yet.' The Nationals cannot have it both ways. They cannot have a face for this place and a face for the rest of their constituents when they are outside of this place; it does not work like that and their hypocrisy has been thoroughly exposed.

The debate about whether or not services are up to scratch is a very interesting one, and I find it quite astounding that the Minister for Communications, Information Technology and the Arts seems to have embarked upon a new exercise of determining for herself whether or not services are up to scratch by making a series of regional visits. I say it is extraordinary because it is true that the coalition government some time ago determined that services were up to scratch. They have already determined that, and we need to look no further than comments made by the Prime Minister. Also comments made by the minister representing the minister in Senate estimates and certainly comments by the department in the transcript of those Senate estimates all point to the fact that the government, the coalition government, has already determined that services are up to scratch. This means that what we are now observing is a complete furphy. Any notion that the coalition government is now going to ask, `Gee, are services up to scratch?' is completely farcical.

What we do know is that programs such as HiBIS, as discussed by previous senators, and CCIF are in fact not, according to the Senate estimates hearings, part of the formal Estens response. I note with great interest how misleading Senator Coonan has been today in citing and quoting the actual budget allocations to both the HiBIS and CCIF as somehow being directly linked to Estens. The fact is that the government has placed on the record that they do not see those broadband programs as formal responses to the Estens recommendations. What does that mean? It means they do not have to be completed before the sale of Telstra. It means they are not a prerequisite to the services in rural and regional Australia being assessed as up to scratch. But because this government is about duping their poor old Nationals colleagues, it does not really matter. Facts tend not to matter.

What we know is that the Estens recommendations were weak. Any claim that they are being fulfilled can be ridiculed to the extreme because most of the recommendations made very little change in the bush anyway. I will go into the details shortly. Certainly the expenditure in the budget programs like HiBIS and CCIF that have been promoted as helping to future proof the network has got nothing to do with Estens as far as the political commentary and rhetoric so far are concerned. That means we know that broadband is not a prerequisite for the coalition government's determination that services are up to scratch. This is astounding. It is 2004. We are four years into the 21st century, and the coalition government do not consider broadband to be an essential telecommunications service—so much so that they are not going to insist on its universality or on any degree of penetration in rural and regional areas before they sell off the rest of Telstra—before they determine those services are up to scratch.

It is certainly interesting that on Senator Coonan's farcical tour she went straight back to Mr Estens and asked his opinion. The word `shemozzle' is probably going to be used quite a bit in this general business debate today. But that is appropriate because I suspect the minister was trying to give Mr Estens another chance to say the right thing on the record, because in evidence given in the previous inquiries into these matters Mr Estens was less than complimentary about the process and procedures to date. In fact, he said then that they were not up to scratch. So Senator Coonan trots out and says, `We'll give you another chance; say it right this time.' But, no, the joke is on Senator Coonan because Mr Estens said again, `I'm not playing your game. I'm not going to play this silly game of the coalition's and look like a fool in front of all my mates out in the country and say it's up to scratch. It's a shemozzle.' More than anything else it stands as a grave indictment that the very person who authored the report, whom the coalition government is trying to hang their privatisation credentials on, will not come to the party because he knows it is a joke. He knows it is a joke and he is not prepared to toe the line. I acknowledge that and think it is a credit to Mr Estens.

Prior to the election, in the Senate chamber it was the new minister, Senator Coonan, who actually put on the record what the whole issue is about here. Senator Coonan stated for the first time as a coalition minister for communications that the objective of the coalition government was to fatten up Telstra in anticipation of privatisation. Her job, in other words, was to ensure that the share price of Telstra stayed high so the market conditions would be right for selling it off. I have been arguing for such a long time that this has been the situation.


Senator Coonan —You just make things up.


Senator LUNDY —Senator Coonan, I will respond to your interjection because I think you should read the Senate Hansard of your response to that question. You laid it on the line. I already knew about it because it was plain to see but you were the first one to lay it on the table and I think Australians should thank you for that because for the first time you conceded the real agenda. What does that mean for Australians? It means that everything that this government says about Telstra, their role in the market and the quality of service is completely compromised. They have a conflict of interest—that is, the government is more interested in Telstra's profit margin and its ability to keep its share price high enough so that people will buy the shares if it is privatised under their agenda. That is the conflict of interest.


Senator Coonan —Haven't you been moved out of this portfolio because you do not know what you are talking about?


Senator LUNDY —I will respond to that interjection too, Senator Coonan. I know you would really like me to be out of this portfolio but the fact is that consumer issues are always going to be part of telecommunications and these issues are always going to be absolutely critical to the interests of all Australians, both here in the ACT and around the country. I thank Senator Coonan for her candidness because now it is easy to backtrack and look at the government's pathetic behaviour in their attempt to purport to be caring about competition policy, the regulatory environment, the price control regime and the consumer service guarantee. All these elements that the government have paid a great deal of lip service to have meant very little, because Telstra's performance is getting worse. As I said the other day, we need to look no further than the very independent analysis of the Telecommunications Industry Ombudsman to see just how bad that performance has become. It is not getting better; it is getting worse.

I would like to go back to the Estens report because it is important to follow through on that, given that it has been held up as the benchmark for what is considered to be up to scratch. There is a particular recommendation that I would like to refer to. This is an issue that I have been going on about for quite some time, and very proudly so, because if it were not for the work that Labor has done Telstra would still not be telling consumers about the existence of pair gain or line splitting technology in their network. It was only through the intervention of a complaint I made to the ACCC that Telstra were forced to admit to their consumers—their customers—that they actually used this technology which in some cases not only blocked broadband but inhibited dial-up Internet connection speed. There is one recommendation in the Estens review relating to pair gains. Recommendation 4.2 says:

Telstra should be required to demonstrate that it has an effective strategy to address any dial-up data speed issues arising from poorly performing pair gain systems.

So one would have expected, from reading that recommendation, that the pair gain systems would have been removed, but the hilarious thing is that Telstra have now said that they will only replace poorly performing pair gain systems when they break or when they get too congested. Do you know what? This is okay by the government. That recommendation has no teeth so the hundreds of thousands of people, primarily in rural and regional Australia, who are affected by quite insidious technology called pair gains—particularly the 6/16 type—are not going to have an improvement to their service. They will never get broadband. In fact, only six of the 16 customers on these technology systems can get dial tone at any one time. This technology is archaic and, even after recommendations from Estens, Telstra are refusing to remove these systems. And the government says that that is okay. Is that up to scratch? I think not. It shows that this government is prepared to say, `Telstra, whatever you say, we're not going to worry about it because we don't really care about rural and regional customers. We care about our political agenda and we just need to give a bit of lip service to do over the dopey Nats who will accept it without question if we put enough pressure on them.' How ridiculous is that?

The pathetic, slimy out that Telstra have used to prevent urgent replacement of these insidious pair gain systems—which, as I said, prevent the availability of actual dial tone beyond six calls at any one time—is to say that they do not affect dial-up speed, because that is the technical wording of that particular recommendation. So once you are online the recommendation is ignored. I wonder if Mr Estens understands how that recommendation was treated. I wonder if Mr Estens believes the spirit of that recommendation has been adopted by Telstra. I wonder if Mr Estens thinks that the government have any credibility at all given the way they have treated this report. The sad thing is that this recommendation was misleading. It gave people the impression that these problems were going to be fixed. They were not. You cannot help but think that when Telstra vetted this little document on behalf of the government they had a good giggle about this one. The recommendation and the response to it really does make fools of all of the National Party members and, sadly, robs Australian telecommunications consumers in rural and regional Australia of any hope of being removed from these systems which are not suitable in the 21st century and not suitable if you are using any type of data service whatsoever.

I would like to conclude on the issue of price caps. A report was recently put out on this issue. Not so long ago, it was clear that the government was thinking about changes in price caps. Senator Coonan was trying a defensive manoeuvre on this issue today in question time. I am sure Telstra were saying that they did not need the price caps anymore. I was interested to hear Senator Coonan reasserting the fact that we do need them. Senator Coonan and the government have an opportunity now to respond to some of the draft recommendations in the review of Telstra's price control arrangements. That report is nothing but a grave indictment of a system that is not currently working. The recommendations include, amongst other things, staying with the price cap on untimed local calls and certainly pursuing new initiatives with respect to line rentals. I cannot not comment on the fact that Senator Eggleston was using all these statistics to say how telecommunications prices have improved. The glaring one that everyone has felt right around the country was of course the massive hikes in line rentals. So I was very pleased to see in this draft report a recommendation to have a separate basket, an additional price cap control, on line rentals, to prevent Telstra from continuing to exploit their monopoly hold on the local loop copper. They still make a lot of money out of that.

There are a number of other important recommendations, including that future price control arrangements should penalise Telstra where service quality has deteriorated. Wouldn't that put the wind up Telstra and get them to actually focus on service delivery? We know, because of the Australian telecommunications network inquiry, how massively deficient Telstra are in maintaining their network. This recommendation puts forward the prospect that they will certainly not get the treatment they are looking for under price caps. This process would build in incentives, and put pressure on them, to actually maintain the quality of service.

I started on this point, and I will conclude on it as well: this report from the ACCC shows that the government programs are failing across competition policy and regulatory policy. We know why: they have a conflict of interest with the privatisation agenda. But also we know that the promise of social programs and programs to look after consumers generally is failing. I would like to conclude by quoting the ACCC:

The ACCC ... considers that, while the inclusion of targeted measures to deliver benefits to ... potentially disadvantaged consumers has been a good initiative of the current price control arrangements, the current low-income package—

does not always deliver such benefits. In fact, some consumers may be worse off under such packages. What an indictment of all the spin and rhetoric this government has put forward. Even the low-income packages put forward under this scheme, under its so-called protections for consumers, have no teeth because it is coming up with less than optimal outcomes for consumers. The alternative for this government, instead of persisting with this conflicted agenda, is to front up and address things like competition policy and regulatory policy, to accept that its hopeless conflict is unsustainable, to accept that the only way to remove that conflict of interest is to get rid of the privatisation agenda and remove its need to fatten up Telstra's bottom line, and to take the appropriate stance on getting the teeth into the regulatory and competition policy guidelines. That is the right thing to do. That is what the ACCC think should be done, and they are right.