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Thursday, 10 March 2005
Page: 16

Senator CHERRY (10:44 AM) —I present the report of the Environment, Communications, Information Technology and the Arts References Committee, entitled A lost opportunity?, inquiring into the provisions of the Australian Communications and Media Authority Bill 2004 and related bills and matters, together with the Hansard record of proceedings and documents presented to the committee.

Ordered that the report be printed.

Senator CHERRY —I seek leave to move a motion in relation to the report.

Leave granted.

Senator CHERRY —I move:

That the Senate take note of the report.

This is a very important report, in my view, because it deals with the very important issue of appropriate regulation of the telecommunications and media industries in Australia. The government has proposed the merger of the Australian Communications Authority and the Australian Broadcasting Authority to form a new regulator called the Australian Communications and Media Authority, or ACMA, as the new acronym will be.

The committee considered that proposal and took evidence from 24 organisations over two days. It has considered the proposal in some detail. The committee came to the conclusion that, whilst the proposed merger of the two authorities has been welcomed by industry and consumer bodies, there has been a deep concern that the government has failed to deal with the underlying problems of holes in the regulatory framework of both the ABA and the ACA as they currently exist. Fundamentally, the two regulators are perceived to not have a sufficient pro-consumer focus and bias. Fundamentally, both organisations, the ABA and the ACA, rely very heavily on the self-regulation of industry by industry and, essentially, have a light touch approach to regulation.

Indeed, the Telecommunications Act prescribes self-regulation and a light touch as the required method of regulation of telecommunications. That works fairly well for technical issues, for technical standards, but when you get into areas of infrastructure, consumer protection, broadcasting standards and, more importantly, the enforcement of standards, that self-regulatory approach starts to fall down. That is one of the fundamental concerns which this committee has identified: that if we are going to have proper regulation of telecommunications and broadcasting in Australia then we need to ensure that there is much more emphasis in law on promoting consumer outcomes, better competition to promote consumer outcomes and less emphasis on leaving it to industry to sort out between the big players what the rules are going to be.

The ACMA is modelled on the British super-regulator Ofcom, which was established two or three years ago from a merger of five regulators of media, broadcasting and telecommunications in the UK. Yet Ofcom, as a model, has ended up with powers far in excess of what ACMA is proposed to have. In particular, Ofcom has a much stronger consumer emphasis. It has a content panel which deals with issues of broadcasting standards and ensuring that there is community input into broadcasting standards. It has a consumer panel to ensure that there is a consumer emphasis. It has a policy role of advising government on holes that are emerging in the regulatory framework and how that can be improved into the future. In addition, it has much stronger enforcement procedures. But, most importantly, it has a strong mandate from the parliament of Britain to regulate communications in the interests of consumers. That is what the committee found was missing from the ACMA Bill—that strong emphasis on consumer outcomes.

In evidence which we received from the ACA and the ABA, it became quite clear that—and certainly the acting chair of the ACA acknowledged it—the role of consumers in regulation had been missing in the ACA’s work since 1997. It is something that they are trying to address. Indeed, they have commissioned a report from a consumer panel on improving consumer representation in telecommunications issues. One of the recommendations of this committee report is that proposals to improve consumer representation be given urgent consideration by the ACMA and by the government because there is a major hole in the current regulation. Consumers are put last. It is time that consumers were put first and industry was put back in its proper place.

The recommendations of this committee include changing the Telecommunications Act and the Broadcasting Services Act to put more emphasis on consumer protection and the promotion of competition and less emphasis on industry self-regulation. The committee calls for a comprehensive strategic review of the entire regulatory framework by the ACMA over the next two years, modelled on the wide-ranging inquiry currently being undertaken by Ofcom in the UK. We need that if we are going to get the benefit of this merger in place. We need to look at the synergies that can be achieved between the two sectors with convergence. We need also to look at the holes in the current regulatory regime and look over the horizon at what the needs will be into the future. So that strategic review is a very important need and is the real lost opportunity in the current ACMA Bill.

We recommend a closer working relationship between the ACMA and the ACCC. We recognise that the ACCC needs additional resources to do its job of regulating telecommunications and that there needs to be a better understanding between the two authorities of the overlap between technical regulation and competition regulation, as one feeds the other. We call for the establishment of a content board, based on the UK model, to give the community more of a say in the development of broadcasting standards. We call for the broadening of the scope of the Telecommunications Industry Ombudsman to cover complaints right across the communications industry. We call for a Productivity Commission review of the possible structural separation of Telstra, because it is recognised that a fundamental problem in the regulation of telecommunications is the structural impediments to competition. Until we look at the pros and cons of structural separation, until we look at the pros and cons of alternative ways of dealing with those structural impediments to competition, regulation is never going to work in Australia. You cannot regulate a monopoly when that monopoly has undue market power. It is time for the government to take on board the recommendation on structural separation.

I should note that the committee made 18 recommendations. Four of the recommendations were reiterating recommendations we made in our inquiry into broadband last year. All 18 of the recommendations were endorsed by the Labor and Democrats members. Four were endorsed in full by the government members and seven were endorsed in principle by the government members. Seven, including the four relating to broadband and structural separation, were rejected by the government members. That shows the very strong support in this committee for a new approach to the regulation of telecommunications and media in Australia—an approach where consumers are put first and foremost in the eyes of the regulators and an approach that has the parliament saying to the regulators, ‘You must put consumers first, you must take competition more seriously and you must put less reliance on the industry club coming up with a self-regulatory model.’ It is interesting that all parties in the committee have recognised that need.

As we approach the debate about the future of Telstra, I think the government needs to take that message on board and develop a regulatory framework that puts consumers first and foremost, develops a strategic approach to telecommunications regulation that will change over time and ensures that we have regulators with the teeth to deal with the enormous size of the players in both telecommunications and media. I want to acknowledge the support of the committee secretariat, particularly Louise Gell and Jacqueline Dewar, in helping to produce this report. I thank the 24 organisations which made submissions to the inquiry. I commend the report to the Senate. I seek leave to continue my remarks later.

Leave granted; debate adjourned.