Tuesday, 16 November 2010
Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2010
Consideration in Detail
If I can respond to the remarks made by members that have just spoken, let me first thank the members for New England and Lyne for their kind words. I would rather have had their kind votes; however, their kind words are appreciated.
The member for Lyne said that this is an ugly way to go about achieving structural separation. He is absolutely right. It is also unprecedented, unjust and unnecessary, and it comes with an enormous cost to the taxpayer that will not deliver what we seek to achieve with telecoms reform, which is universal and affordable broadband. There is no question that the NBN can achieve broadband services across Australia. Universality is, perhaps, the easy part. Affordability, however, is really looming as one of the biggest issues. Honourable members are keenly aware of the digital divide and the fact that internet services are more readily available at higher speeds in the cities than they are in the regions. It is one of the reasons we had a scheme to address that in 2007. If we had been re-elected, it would all be in place. It is a pity the Labor government did not pick that up. But the biggest digital divide—overwhelmingly the biggest digital divide—is based on income. The difference between home internet usage in the metro cities compared with the rest of Australia is 76 per cent in the cities to 63 per cent or thereabouts everywhere else. Internet usage in households with an income of $40,000 a year or less is 43 per cent, whereas for households with incomes over $120,000 it is 95 per cent, and in fact once you move into middle incomes it rapidly gets up very close to the high 80s and 90s.
The real digital divide is based on income and affordability, and this scheme is massively expensive. It is creating a monopoly, and the amendment that we will come to under the heading of competition is absolutely critical. The government knows that it is creating a monopoly that is obnoxious to the provisions, purpose and intent of the Trade Practices Act and our consumer and competition act, and that is why it wants to exempt it from that act, to deem it to be authorised without any proper inquiry. The OECD was scathing in its criticism—and the OECD was mediating the views of the Treasury, I might say—of the way in which the NBN/Telstra deal prevents the use of the HFC cable network, which is a potentially competitive cable network passing 30 per cent of Australian households, being used to compete with the NBN. Were that allowed to compete, as I have no doubt it would were this transaction to go before the ACCC under section 51 of the Trade Practices Act, you would have real competition and, inevitably, downward pressure on internet access prices.
As the OECD keenly observed, the only justification for eliminating competition is to support the economics of the NBN. But we have to ask ourselves the question: what are we trying to do? Are we trying to create a massive government owned monopoly and then use all of the power of government and parliament to prevent anyone competing with it so it can charge higher prices? That is what state governments used to do years ago and were roundly criticised for. This is what we have had 25 years of microeconomic reform to turn back, and now we are turning back the clock. This is like a state government in the old days having a state government owned railway and passing laws to prevent people carrying goods on trucks, on the road, so it did not compete with the railway. That is what this is about and the simple bottom line here is that yes, we agree on separation and yes, we agree on universal and affordable broadband, but it has never been established that this is either the fastest or the most cost-efficient and effective way of delivering it. And that is why, both through these amendments and indeed through our proposed reference to the Productivity Commission, we are trying to impose some rigour and accountability on this whole sorry saga of the NBN.