Tuesday, 16 November 2010
Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2010
Consideration in Detail
I will just respond briefly to a couple of the points the member for Greenway made. She said that there had been in Australia a lack of infrastructure competition. In terms of fixed line, that is undoubtedly true. There has been some, but there is the opportunity now to have real and substantial infrastructure competition at the fixed line level. But that opportunity is being cancelled out by this legislation and the agreement which it supports whereby Telstra and in due course Optus and others, like Actew here in Canberra, will be prevented from using their cable networks to compete with the optical fibre network of the NBN.
With great respect to the honourable member, her proposition that HFC cable cannot compete with optical fibre is simply wrong. The reality is that technologies compete right across the board. In the United States there is competition in many markets between ADSL and twisted copper pairs, DOCSIS 3.0 standards and HFC cable—just as we have here—and GPON services and optical fibre networks, not to speak of competition from satellite and wireless. The picking of technological winners is a big mistake pretty much wherever you are, whether you are in the public or the private sector. From a government, political and policy point of view, we should be stipulating an objective and then being technologically agnostic about it.
The honourable member talked about, as a number of her colleagues have done today, the lack of access in urban electorates. They are generally outer urban electorates where, because of network decisions made in the past, there is architecture that makes it difficult, if not impossible, to deliver high-speed broadband over twisted copper pairs. These are pair gain systems and RIM systems. These are all generically black spots in internet access in the cities. Some of the Labor members have said today, ‘There are fast speeds in the honourable member for Wentworth’s electorate, but there are not so many fast speeds in my electorate.’ If that is so then surely the objective should be, in a cost-effective way, rectifying the black spots in the cities so that everybody has the same speed as the best speed in the cities and making an investment in rural electorates with the benefit of a substantial government subsidy, as both sides agree is required and appropriate.
The paradox is that nobody contends that nowhere in Australia is there adequate broadband. Not even the honourable member for Greenway is saying, ‘Nowhere in Australia is there adequate broadband.’ Yet this NBN is based on the premise that nobody has adequate broadband—not even the fastest areas in our cities—and we need a complete overbuild, a completely new network.
The issue of competition at the facilities level is absolutely critical. The OECD has made that point as strongly as it could, citing numerous references in the literature. There is no better way to keep prices down than to have competition between fixed line providers. That has been the universal experience. It is one of the things people have criticised Australia for not having. So here, when we are at the point of being able to achieve that, the government uses legislative power to prevent it from occurring, and it does so simply because it wants to create this massive government monopoly. You cannot stand in the way of the laws of physics; you cannot stand in the way of the laws of economics. If you have a massively overcapitalised, heavily capitalised, government monopoly or any monopoly, it will inevitably be drawn, compelled, to charge higher prices to recover an investment. The only thing that can keep it honest is competition. That competition is being precluded, prohibited, under this legislation and it will have the inevitable consequence that the digital divide—the divide in internet access between rich and poor—will get wider and we will have spent $43 billion of taxpayers’ money to make it deeper and more enduring.