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Wednesday, 9 March 2005
Page: 70

Senator MOORE (2:42 PM) —My question is addressed to Senator Coonan, the Minister for Communications, Information Technology and the Arts. Is the minister aware of a recent research report by Citigroup Smith Barney on prospects for competition in the Australian broadband market? Doesn’t this report conclude:

... the broadband end-game will resemble more of a monopoly or an oligopoly with Telstra dominating both the retail and the wholesale market, assuming no major changes to the regulatory regime ...

How does the minister respond to the report’s conclusion that, in the future, 79 per cent of Australian broadband consumers would be served by Telstra DSLAMs and that Telstra would have 85 to 90 per cent of the market? In light of this report and the recent broadband competition notice disaster, will the minister now accept that the current regime is failing to promote sustainable competition in our Australian broadband market?

Senator COONAN (Minister for Communications, Information Technology and the Arts) —I thank Senator Moore for the question. I wonder whether Senator Moore really believes that there has been a broadband disaster. If she does, I really wonder whether she has been watching and listening over the past few months, during which time broadband in this country has simply grown exponentially. The number of broadband users has grown from something like—and I do not have the precise figure in front of me—400,000 in March 2003 to 1.5 million; that is the most recent figure. It cannot be said that Telstra has all of that market.

What Senator Moore may not understand is that the government has assisted the market to ensure that broadband can be rolled out to Australian consumers in non-commercial areas where otherwise there would be no incentive for any provider, including Telstra, to provide it. That is the government’s Higher Bandwidth Incentive Scheme, or HiBIS. That means that an incentive can be provided to any provider who is prepared to roll out broadband anywhere in Australia. In fact, broadband can be provided over any platform. It can be provided over satellite; it can be provided over cable; it can be provided over ADSL; it can be provided over wireless. In fact, the last time I looked there were something like 29 registered HiBIS providers. While Telstra is certainly the most dominant in rolling out broadband—simply because it is the only one with a network in certain non-commercial areas—that certainly does not mean that there is no competition and that other providers are not able to do that.

Senator Conroy —So Citigroup have it wrong?

The PRESIDENT —Senator Conroy, continually interjecting is disorderly. I remind you that you have an opportunity to ask a question shortly.

Senator COONAN —I was saying that Senator Moore’s conclusion—which she apparently bases on some report, and I do not know whether Smith Barney have the latest figures—is not borne out by the latest information that I have, which suggests that not only is broadband growing apace but also providers other than Telstra can roll it out over any platform and also have access to the government’s incentive scheme. It is an open program. In fact, it is limited to Telstra being able to avail itself of 60 per cent of the funds relating to the roll-out. That relates very much to the fact that there simply are no competitors in some of the non-commercial areas where people, quite rightly, expect services. Telstra is the only one who is able to provide them.

As to regulation more generally, I am very glad to have the opportunity to repeat some aspects of my previous answer. While the competition regime has by and large served us well—and there is evidence to suggest that—that is not to say that the time is not right for us to ask some questions about the emergence of new technology and whether the current regulatory regime responds adequately to the services that new technology provides and to the new competitors who are able to provide those services. This very much relates to the roll-out of future networks. Even Telstra has in fact recently invested in another network, the Hutchison network. They are the first dominant telco in the world to have done that. The conclusions that were rolled up in Senator Moore’s question are certainly not borne out by the facts.

Senator MOORE —Mr President, I ask a supplementary question. I do believe that there is a broadband disaster, Minister. I refer you to some further comments by Senator elect Barnaby Joyce on Radio National this morning. Is the minister aware that Mr Joyce said that the current regime leaves Telstra’s competitors in an ‘invidious position’ of reliance on Telstra? How does the minister respond to Mr Joyce’s statement that remedying this position through structural separation was ‘a key position’ for the National Party and that ‘we have to go in to fight on this issue’? How does the minister intend to fight Mr Joyce, and maybe some other members of the National Party, on this issue?

Senator COONAN (Minister for Communications, Information Technology and the Arts) —I thank Senator Moore for the supplementary question. I am very upset that she still thinks that broadband is a disaster despite there being absolutely no evidence to suggest that. I have just provided some pretty comprehensive evidence that she is wrong about that. I am also absolutely intrigued to think that Senator Moore, not knowing what she is talking about, is now taking her cue from Senator elect Barnaby Joyce. I think she has to work out where to access some basic information that will enable her to frame a question that is based on fact instead of a bit of political scuttlebutt.