Malcolm Turnbull (Wentworth, Liberal Party, Shadow Minister for Communications and Broadband) Share this | Link to this | Hansard source

Let me say right at the very outset that every member of the coalition is passionately committed to the rollout of the availability of fast broadband to all Australians at affo­rdable prices. The debate about the National Broadband Network, of which this bill is a subset, is not a debate about the end. We agree on the end. We agree that all Austr­alians should have access to the benefits of broadband, of fast broadband and of access to the benefits of a digital economy. Our point of difference with the government lies in the means it is employing to achieve that end. In particular, with the way it is establishing the National Broadband Network.

The National Broadband Network is the largest infrastructure project in our country's history. Yet, despite coming into government in 2007 with a very clear and prominent pledge that no major infrastructure project would be undertaken without a rigorous cost-benefit analysis and with an equally prominent pledge that a specialist agency, Infrastructure Australia, would be set up to conduct those cost-benefit analyses, this government with this—the biggest infrast­ructure project in our history—continues to refuse to undertake any cost-benefit analysis. Again and again it shows itself to be utterly hypocritical on this issue. If the government were serious about rigorous economic analysis and dealing with taxpayers' dollars responsibly it would undertake that cost-benefit analysis and pose this question: what is the fastest and most cost-effective way to deliver fast broadband to all Australians and do so in a way that makes broadband more affordable?

I stress the point of affordability because naturally in this place we focus, quite properly, on the burden on the taxpayer: is the taxpayer getting value for money and could the objective of fast broadband across the nation be delivered at a lower cost to the taxpayer—could the taxpayer get more bang for their buck, in other words? But an equally important issue, and one that I would say is, if anything, of more importance, is whether broadband will be affordable so that those Australians who are not able to afford it today will be able to afford it in the future. The reality is—and we rely on the ABS, the Australian Bureau of Statistics, for this—that the largest group of Australians who do not have access to the internet today are those in households earning $40,000 or less a year. The biggest barrier to internet access is not technology; it is not some issue of network design. Sure, there are issues of network design that impact on the speeds people can achieve. But, in terms of basic access to the internet at any speed, the biggest barrier is income. Too many Australians cannot afford it. That is a fact.

Mr Husic interjecting—

The honourable member opposite shakes his head. He should have another look at the ABS statistics. The reality is that the NBN will not deliver more affordable broadband. If anyone doubts my contention, they do not have to rely on my remarks or indeed on the remarks of the many competitive telcos who make the point that this is going to result in more expensive broadband because it is a big government monopoly, heavily capitalised, which will inevitably not be subject to the price pressures of competition because it will have no competitors; they have only to look at page 105 of the NBN corporate plan and see there the forecast retail prices, which are equal to or indeed higher than many of the plans that are available today.

Of course it stands to reason. We know the factor that has brought down broadband costs over the last five years—by as much as half, according to the OECD, as I recall—has been the growing competition in the telecommunications sector. That competition at the facilities level, at the level of physical access into the premises, is going to be eliminated because the government not only is legislating to constitute the NBN as an effective fixed line monopoly but has paid billions of dollars of taxpayers' money to Telstra and to Optus not to use their HFC networks, their pay television hybrid fibre coaxial networks, to offer broadband or voice in competition with the NBN. Yet we know that those networks are capable of providing broadband services today, are providing broadband services today and are providing in some markets—in Melbourne in particular—broadband services at speeds of 100 megabits per second. When you look at other markets around the world—South Korea is always a good example; the United States is another—you see that HFC cables, pay TV cables, are being used to provide broadband services and in those markets provide the competition with the ADSL services provided over the copper networks owned by the telephone companies—or indeed competition with the fibre networks owned by telcos and other broadband providers, as is the case in Korea, where the fastest growth in broadband penetration has been over the HFC networks belonging to SK Telecom and LG.

This whole NBN scheme is going to be, tragically for the people of Australia, a lose-lose. It is more expensive than it needs to be. The government say we are not right on that score, but if they had the courage of their convictions they would have done the cost-benefit analysis which, if they are right, would demonstrate that this was in fact the most cost-effective way to set up a national broadband network. But, because they are afraid of asking the question, the Australian people can only reasonably assume that they fear what the answer will be and that they know it will be that they are spending tens of billions of dollars more than they need to. On the other side of the coin, we know that this network is going to provide not cheaper and more affordable broadband access but broadband access that is either just as expensive as current services or indeed more expensive, particularly for the higher speeds. This is an important point. I will not delay the House with the material that I published recently about the South Korean market, but it is very instructive to analyse the exper­ience there. Consumers in South Korea, which is arguably the most advanced economy in terms of broadband penetration and use of information technology, are not prepared to pay any significant sort of premium for higher speeds. When you look at the NBN corporate plan you see that a fundamental premise there is that Australians will pay very substantial premiums to go from 12 to 25, 50 and up to 100 megabits per second and higher. When you match that against experience in this market—indeed, Telstra's experience with its HFC cable in Melbourne and in particular the experience in South Korea or the comparable experience in the United States—you see that consumers are not prepared to pay significant premiums or, indeed, any premium in many cases for faster speeds. Why is that? It is because speed in and of itself—that is to say, 50 megabits per second, 100 megabits per second—is of no value to a consumer whatsoever. The value comes from the applications that run on it and that the speed enables to be run on it. If there are applications that can be run on a higher speed that can be run on a lower speed—that is to say, if everything a consumer wants can be run adequately, effectively, satisfactorily at a lower speed and at a lower price—that is the product they will take, and that is exactly what has happened.

This bill is all of a one with the goal of the government in creating this big monopoly, the NBN. It is designed to deal with the situation, the deployment of fibre, into greenfields developments. The coalition does not object to the policy objective of greenfields developments being, wherever possible, rolled out with fibre to the home. There is an incremental cost, as we have acknowledged in the dissenting report of the Joint Standing Committee on the National Broadband Network that was tabled today, but it is not a substantial incremental cost compared to the enormous cost of rolling out fibre to the home in brownfields areas. I should note, however, that much to my surprise when I was visiting South Korea recently I saw that, in some very new and very large residential greenfields develop­ments, fibre had not been cabled into the premises; in fact, the fibre network terminated in the basement and the buildings themselves were cabled with copper. I just offer that to the House and to those listening to this debate today as an example of the Korean experience, which, as I say, is very instructive because they have been further down this track than us.

Nonetheless, assuming we are going to go down this line of installing fibre in greenfields premises, I think ensuring that rollout is efficient and timely has a very important impact on Australia's telecomm­unications environment. The NBN estimates that 1.9 million greenfields premises—that is to say, households in new developments—will have to be connected to the NBN by 2020 and a quarter of a million by June 2013. The government has long argued that the greenfields market for fibre deployment is competitive. Given this competitiveness, even this government recognised that it would be ludicrous to do away with that market entirely and that private operators, it said, should be encouraged to roll out fibre to new developments. In its first policy consultation paper released in May 2009 on greenfields estates, the Department of Broadband, Communications and the Digital Economy stated:

The installation of FTTP is taking place in a competitive context, with developers typically contracting out the provision of infrastructure and services in developments. In areas where the FTTP infrastructure provider does not provide retail services, arrangements are increasingly being put in place to ensure partnerships exist with retail providers to deliver services to consumers.

In that paper, the department estimated that, at the time, around 120 greenfields estates were being prepared for fibre deployments, with more than 10 operators reaching an estimated 150,000 homes.

In 2009, Senator Conroy, the Minister for Broadband, Communications and the Digital Economy, set up a stakeholder reference group and his department held one-on-one consultations with operators to understand how to implement its greenfields policy. As late as a December 2010, the minister was still telling the industry it would be an integral part of a fibre rollout. The minister said:

It has been a consistent feature of the Government’s policy in new developments that there should be room for competing providers. This continues to be the case.

…   …   …

Providers can compete to provide infrastructure in new developments, for example, by offering more tailored solutions to developers or more expeditious delivery.

Sadly, those fine intentions have not been reflected in this bill. In common with every other aspect of this NBN project, it will see an effective market completely scrapped and all of the inherent risks and liabilities involved with rolling out fibre transferred to the taxpayer. The NBN Co. has said that once it has rolled out the optical fibre line it will take up ownership not just of the network but also of the pits and pipes that the developers have installed. Down the track this will take the cost of maintenance off the hands of developers and place it with the taxpayers, but the cost of providing the pits and the pipes lies with the developers. The NBN Co. are offering no upfront cost to developers when installing the optical fibre network. That is important because smaller fibre-to-the-premises developers do not have the luxury of spending taxpayers' money in the hope that 10 years down the track they may actually begin to recoup some of the money that has been invested. As OPENetworks stated in their submission to the joint committee:

NBN Co is the obvious first choice for Developers because NBN Co is the only provider that can fund the network build costs (that may otherwise have been paid by Developers to OPENETWORKS ...) and that funding is then able to be recovered by NBN Co charging RSPs higher operational prices.

OPENetworks have argued that this policy is in fact a violation of the competitive neutrality policy for government owned businesses, which holds that they should not exercise unfair advantage by reason of their government ownership over their private sector competitors. An appropriate applic­ation has been made to the Productivity Commission in that regard. What this legislation will do is make greenfields property developments more expensive and slower to bring to market, and stifle competition. The department said before the committee that a developer has the choice. He has to put in the pits and pipes, but he has the choice of going to a private sector fibre company or waiting for the NBN. The reality is that there is no choice because the NBN will provide the fibre for no cost to the developer whereas the developer would obviously have to pay a price to a private fibre company. Each of the representatives of the property sector and the greenfield operators have made the point to us that the business of putting in the pits and pipes and then waiting around for the NBN Co. to turn up is going to place considerable delays and expense on property developments. We have heard many complaints from the property sector about the delays occasioned by this. I am foreshadowing amendments that we will be moving later in this debate which will seek to rectify that particular problem.

The amendment we are going to move—and this has been detailed at some length in the dissenting report—will mean that a property developer, having dug the pits and pipes, can choose to have a private sector fibre provider to lay the fibre as long as it is done in accordance with the specifications, which should be stipulated by the industry, not by NBN. NBN obviously will have a big input into that but it should not be dictated by the NBN for exactly the same reason that, when telecommunications reform began some decades ago, Telstra's ability to set technical standards was taken away and moved to the regulator. The developer can employ this private sector company or what are called greenfield fibre operators. As long as they have installed that fibre in accordance with those specifications, the developer will be entitled to be remunerated by the NBN Co—in other words, it will require NBN Co. to buy that fibre setup from the developer for a tariff which will be set by the minister on a per residence basis, taking into account the relevant factors such as the cost of construction, NBN's costs and so forth.

What is the object of this amendment? This does not undermine in any way the objectives of the NBN. This means that a developer can get on with the job, get the fibre installed and be paid for it without having to wait around for the great big government monopoly to deign in its magnificence and wisdom to get around to this developer's problems. The reality is that a new development which does not have the fibre installed will be at an enormous disadvantage from a marketing point of view to another development that does have that fibre installed. So it is important that developers are able to get on with the job and get the fibre installed. This amendment will enable them to do just that.

We flagged this issue with the various developer's organisations and with the greenfield operators in the course of the joint standing committee inquiry. All of them supported it and welcomed it. We flagged it also with the department. Their response was essentially equivocal. It was not really a responsive answer at all. They did not seem to have a particularly strong view on it either way. The bottom line is that will make it easier for developers to get on with the job. It may well save the NBN Co. cost and expense and, if it encourages NBN Co. to move things along and be more timely in its construction of these networks, then that would be a very good thing as well.

The other amendment that we will move a little later in the course of this debate—and which we flagged in the dissenting report—would enable the private sector cable companies, greenfield operators, to be exempted from the cherry-picking provisions of this act if the fibre network they seek to build meets the following conditions: it is not owned or operated by NBN Co. or Telstra; it is installed in a new development; it is owned and operated by the same entity which builds it; and it delivers retail services only to the persons who reside in the development.

The purpose of this amendment is to enable the private sector greenfield cable operators to stay in business, to be able to put in a network they would then be able to operate as a small private network. They should be exempt from those cherry-picking provisions because of their scale. As we have said in the report, it would effectively maximise the options available to developers and to the greenfield operators. They could contract on the basis that the greenfield operator would build the network and operate it until such time as it was sold to the NBN Co. or they could contract on the basis that the greenfield operator would continue to operate it and there would be no sale to the NBN Co. at all. They would no doubt be under some risk that the NBN Co. might choose to overbuild them but one would hope that, when the rush of blood to the head of NBN Co. settles down a little, they will not be overbuilding brand new fibre optic networks, given the expense of doing so.

This amendment, coupled with the first amendment, will mean that a developer is in the position where he or she can employ the same company—and this is, as TransACT said in the inquiry, clearly the most efficient way to do it—to put in the pits and pipes, put in the cable and then either be paid for that cable by NBN Co. and, in effect, sell it to NBN Co. or for that cable-laying company to operate it as an independent cable network. That gives the developer a range of options. It does not put the developer at a disadvantage and it does not give the developer a disincentive from using the private sector. It means that the greenfields companies can continue in existence and can provide some real competition to the NBN.

I imagine that honourable members opposite will oppose this because they are opposed to competition, but at some point they have to match the rhetoric with the reality of the bill that is before the House. Their rhetoric has been that there is nothing in this bill that impedes competition in the greenfields developments. But a greenfields operator under the scheme in this legislation is at an insuperable disadvantage to the NBN Co. because the NBN Co.'s cable will be laid for free, at no cost to the developer, and the cost presumably will be recovered from charges made to retail service providers over time, whereas if the developer goes to hire somebody else to put in the fibre network they will have to pay them to do so. Naturally the preference bias will be in favour of the NBN Co.

I imagine that many developers would not be too troubled by that. Obviously the owners of the operators of these greenfields cable networks are very threatened by that. Many people in the industry have said that this bill will have the effect of putting them as an industry right out of business. In the absence of these amendments, I fear that that would be the case. Many developers might be quite happy just to let the NBN get on and do the job, but the experience has been of inordinate delays. All of us in this House who have been involved in the development sector or observed people in the development sector or are familiar with the conduct of big government owned monopolies or indeed big private companies know that they take their time. Many developers will be left waiting and waiting for the cable to be laid. The longer they wait, the longer it will be before the development is complete and the longer it will be before they can get it to market. All of them said to us in their evidence that they believe that the private sector can put in the infrastructure at a considerably lower cost than the NBN is likely to. The department turned up their nose at that and said they could not see any evidence for that. It really is not a question of evidence. One way or the other, let the market decide. If the private sector can do a better and cheaper job than NBN then no doubt developers will see that as an opportunity.

The amendments that we are proposing here will give developers real choice. They will ensure that cable is rolled out in greenfields developments in a more timely and efficient fashion. They will ensure that developers are not put in a 'Hobson's choice' situation where they can either wait and wait for the NBN to show up and lay cable at no cost to them or pay somebody else to do it out of their own pocket with no reimbursement to get it done sooner. And they give the greenfields cable operators—TransACT, Opticom and others—the chance to stay in business and to provide some competition. To honourable members opposite whose approval of these amendments we in the committee sought, but to no avail, I say to them once again that if they are serious about competition this is the opportunity to support amendments—which we will move later—which will provide some real competition.

There are many things that are unique about the NBN. The government members may regard this as a compliment. One is that there is no country in the world spending as much on a national broadband network as we are. Our spending, on any measure, is off the charts. There is no other country in the world that is establishing a new government owned monopoly to deliver broadband. Again, that is a world first—and not one that we should be too proud of. But just as importantly and most ominously there is no other country in the world that is seeking to eliminate facilities based competition. Take your pick. Anywhere else in the world governments are very anxious—and this is particularly the case in Korea and the United States—to ensure that there is always real competition among the fixed line services and that they are available to as many households as possible. The amendments I have foresh­adowed will go some way at least in new developments to achieving that. After the amendments are debated later, we will be commending them to the House and trust they will get the support of the House. (Time expired)

Michelle Rowland (Greenway, Australian Labor Party) Share this | Link to this | Hansard source

Firstly, since the member for Wentworth mentioned it, he knows perfectly well that he came to the committee with half-baked amendments full of square brackets saying, 'I will insert something here when I think about what to put in here.' So he should not come in here and make those assertions. Secondly, we waited about 10 minutes for him to give his usual spiel without even talking to the bill. As the member for Lyne said when he introduced the advisory report earlier today, the disagreements in this committee and in this report on the Telecommunications Legislation Amendment (Fibre Deployment) Bill 2011 actually come down to a question of policy and ideology more than anything else. That is borne out by the fact that we have had to sit here for the last half-hour and listen to the member for Wentworth say the same rhetoric he has said on every single occasion, crying these tears for affordability.

What did they do? What did he do when he was a member of a government which saw Australia going down the gurgler with respect to broadband rankings around the world? Australia became an absolute backwater in terms of internet accessibility and high-speed broadband. It has taken this government to pick up the mantle and actually turn that around. We know why he is saying these things. We know it is in his remit. We know that is his job. The sole purpose of him coming in here today and spending half an hour just bagging out the NBN is that he has been given the remit to destroy the NBN. On this point, I found he actually felt and looked rather uncomfortable on this occasion because he talked about HFC being available. He knows perfectly well that only 30 per cent of the country is covered by it and even then that is only if you are lucky enough to live on the eastern seaboard around metropolitan areas. He knows perfectly well when he mentions the United States that they have had a long history of ubiquitous cable investment. He talks about South Korea and again he knows perfectly well that the reason South Korea has become the internet economic miracle is government intervention and acceptance a decade ago of the need for broadband development. What were we in Australia doing in that time? Absolutely nothing.

The member for Wentworth talks about the value of broadband being in the applications rather than speed. Absolutely true, but the fact is that in order to deliver those applications you need bandwidth. Without bandwidth they are absolutely nothing. The member for Wentworth talks about facilities based competition. That is fine, but we know from not only the analyses that have been done by the ACCC since 1997 but also in the lead up to the NBN being announced that facilities based competition in Australia has failed. Why has it failed? Because Telstra as the incumbent operator was a vertically integrated company controlling both the wholesale and the retail levels, so the market failed.

What happens when markets fail? What do Labor governments do? We step in when the market fails and we rectify that failure. The member for Wentworth talks yet again about Australia going it alone on what it is doing in this area. I remind members that one of the key regulatory principles is that regulations should be specific to the needs of each country. What is the need for Australia right now? The need is to connect a country of vast geography and differing topology and a country which has definite broadband black spots that have not been addressed.

You do not have to take it from me. Take it from the ITU Secretary General of the United Nations, who visited Australia only in April this year and made the following comment:

Australia is a different country. Its geography and spread of the people, the level of telecommunications development and the level (of competition) between the operators—I will not say which one is a giant or not—all of those conditions, you do not find them elsewhere and therefore you do need to have the guts to tackle the problem.

That is exactly what this government is doing. Finally, the member for Wentworth constantly wants to throw around the word 'monopoly'. As everyone knows, the NBN is a wholesale-only network. How will it deliver competition to consumers? It does that by disinfecting the wholesale level so that the vertical integration disease is obscured to the extent that we can regulate the wholesale level and give a level playing field to retail operators with equivalent pricing and terms.

Now that I have dispensed with the member for Wentworth, I turn to the bill itself. This is a critical piece of legislation for the development of the National Broadband Network, particularly for the estimated nearly two million new premises that will be constructed across Australia during the rollout phase. The passage of this bill will provide something vitally important for all stakeholders including industry, consumers, local government and developers. What is that? It is certainty. For homebuyers, there will be certainty that their new dwelling will be fibre ready. For developers, there will be certainty as to their obligations to ensure ducts and lead-in are fibre ready.

I turn to some practical context of the bill. The practicalities of this bill are certainly not lost on me. While I doubt there will be substantial greenfields development in some electorates such as Wentworth and Bradfield in the immediate future, this is not the case in respect of west and north-west Sydney. During my time as a representative on Blacktown City Council and as its Deputy Mayor, I was party to decisions on many new development approvals and subdiv­isions. I am on the record as an advocate for the notion that, just as the local government planning and approvals process takes into account community needs such as parks, sporting amenities and childcare centres, access to advanced communication services must be viewed as an essential service with infrastructure backing that is akin to sewerage and electricity and made a condition of consent.

I have witnessed first hand—and too many of my constituents are living it today—the consequences of underinvestment in advanced communications infrastructure in our new greenfields estates. For many residents in suburbs such as Kellyville Ridge, The Ponds and even Stanhope Gard­ens in Glenwood, their primary reason for contact and advocacy with my office concerns their inability to access what are now regarded as entry level broadband products such as ADSL2+.

Even in older estates in Greenway, which were once greenfields or even brownfields developments, such as specific streets in the well-established suburb of Kings Langley, access to high speed broadband is a challenge. The timing of this particular dev­elopment meant that the Foxtel cable rollout passed by this area. This is not, as the member for Wentworth has attempted to assert on just about every occasion, a consequence of an income barrier. It is amusing enough that this furphy is being peddled by the same person who ran a fantastic dial-up ISP, which he sold in the dotcom boom and made either a cool $60 million or $40 million, according to recent reports—but who is counting? No, this lack of access is the consequence of chronic underinvestment in communications infrast­ructure in greenfields estates. You only need to look at the median house prices in Kings Langley, Kellyville Ridge and The Ponds, which are $545,000, $588,000 and $596,000 respectively, to understand that this is not merely a question of income. When one examines the electoral divisions ranked by the proportion of households with a broadband internet connection, there is not a single regional electorate with a percentage of households with broadband connections above 50 per cent. Indeed, far and away the tyranny of distance when it comes to broadband accessibility is borne out by the fact that nearly every rural and regional electorate lies in the bottom half of the scale. I am yet to receive an answer from anyone on the opposite side of the House explaining to me what they did over all their years in office to improve broadband development and accessibility for households in suburbs such as Mt Druitt, to develop broadband as a tool for social inclusion in disadvantaged regions or even to create a comprehensive policy for greenfields development. As an example of how confused their policy has been on this issue, one only needs to look at the so-called 'real action' plan they took to the last election. On page 4 of that policy it is stated:

The Coalition will conduct an urgent review of whether to mandate that all 'greenfields' connections must be fibre.

That leaves it up in the air whether there should be a fibre mandate, as opposed to copper, in new developments. Yet on page 17 of that same policy it states:

The Coalition believes that new dwellings should have a fibre connection rather than a copper connection.

So even in their own policy, the one they took to the last election, they could not make up their minds on their position. This confusion from those opposite continues in their ill-conceived proposed amendments to this bill, which I will happily deal with in the consideration in detail stage. In the mean­time, I note that page 42 of the dissenting report into the bill, which was tabled earlier today, states:

… the evidence the inquiry received demonstrates that there is a vigorous private market for the construction of fibre infrastructure in new developments.

The dissenting report goes on to say that the bill will end all that. That is simply not true. There is vigorous competition which will remain with the bill in effect. The change will be that the competitors will compete to provide fibre installation to NBN Co. rather than to developers. Instead of developers extracting an economic rent, consumers will not pay for fibre connectivity of itself. They will pay for what they use from a retail service provider providing services using the NBN. The constructors will obtain a normal return. The change is that there is no arbitrage opportunity, which those opposite, who like to say they are champions of competition, should embrace. No arbitrage opportunity and no abnormally high rents—the effect is good for consumers.

I turn to that part of the bill dealing with the proposed access regime—the proposed part 20A of the Telecommunications Act. I would like to make the point that the proposed regime is based on existing provisions in schedule 1 of the Telecomm­unications Act, none of which are novel. It provides a regime for carriers to secure access to fixed line facilities owned by non-carriers in order to ensure that fibre can be rolled out using these facilities. So it is indeed based on the existing schedule 1 of the Telecommunications Act. Access can be on terms that are commercially agreed or, failing agreement, one can agree on an arbitrator. The default arbitrator will be the ACCC. So, as can be seen, the access regime is completely in line with existing competition provisions under the Telecommunications Act itself.

The outcomes of this bill will be early and less costly access to fibre based broadband for residents of new developments, reduced costs for deploying fibre by ensuring that the ductwork infrastructure is indeed fibre-ready, reduced costs for deployment of fibre through access to non-carrier duct as well and cabling for new premises which ensures they can take advantage of the NBN. All of these things are well understood by consum­ers. They understand that the definitive agreements, signed the other week, between Telstra, Optus and NBN Co., mean that we will be able to fast-track using existing facilities and existing infrastructure in the most efficient way possible. This is well understood in my electorate, where River­stone is the site of the first Sydney metro rollout. The question I continually get there is not, 'Why we are doing this?'—not the question that the member for Wentworth seems to believe consumers keep asking over and over again. They are not asking why; they are asking when. It cannot come soon enough for these areas of west and north-west Sydney, which have suffered from chronic underdevelopment.

I turn now to the issue of NBN Co. operating as the wholesale provider of last resort. There is strong stakeholder support for this. It supports a consistent national approach in the future and, if alternative providers wish to compete with NBN Co., they are welcome to do so. I will finish by talking briefly about some of the proposed amendments. I could not resist the notion put forward by the member for Wentworth about NBN Co. being forced somehow to buy network from other providers. What is actually being proposed here is that a developer will arrange for NBN Co. to purchase that part of the network from the fibre provider. This is highly problematic. It seems to suggest the developer can force NBN Co. to buy another person's asset without their permission. That raises issues about acquisition of property.

I will end on that note, but I also particularly want to draw the House's attention to the significance of 20 July. Everyone should be putting that date in their diaries. On that day, the shadow minister will be addressing a CEDA forum on the topic 'Broadband Vision for Australia: The Opposition's Perspective'. This will be a pretty short speech. If you want to go to it, it is $270 a head, but I am happy to save any member here $270 and 10 minutes of their time by pointing out that we already know what the opposition's policy on broadband is—it is to destroy the NBN. The member for Wentworth has demonstrated that that is his remit and that that is what he will be trying to do. (Time expired)

Luke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

I welcome the opportunity to speak on the Telecommunications Legislation Amend­ment (Fibre Deployment) Bill. I think there is agreement in this House over the need for high-speed broadband, but the issue is how you get there and how you provide those services in the most efficient and effective way—a way that provides an acceptable return on funds invested, a way that ensures there is excellent competition in the market and a way that delivers services to Australians at a price they can afford. The purpose of this bill is to facilitate the installation of fibre into new developments and housing estates and to ensure that the telecommunication infrastructure placed in new developments meets the technical requirements of NBN Co.

There are four measures in this bill in total. Firstly, the bill enables the minister to specify new developments in which fixed lines for installation must be optical fibre lines and must comply with technical specifications. The bill calls this rule the optical fibre line requirement and requires NBN Co. to be the installer of last resort, where a developer does not choose a commercial provider. However, it is becoming clear that the terms of this legislation will see NBN Co. becoming the installer of first resort, rather than last.

Secondly, the bill requires that facilities installed in a development must be fibre-ready. This will be called the fibre-ready facility requirement and will ensure that passive infrastructure such as underground ducting and pits and pipes allow the ready deployment of optical fibre cabling. Thirdly, the bill prevents corporations from selling or leasing land or buildings in new develop­ments unless fibre-ready facilities have been installed. Finally, the bill implements a regime for carriers to secure access to fixed-line facilities such as pits and pipes owned by non-carriers to ensure fibre can be rolled out using those facilities. Access to these facilities will be on terms that are negotiated commercially by the respective parties, or determined by an agreed arbiter. The bill creates a mechanism whereby the Australian Competition and Consumer Commission will be the default arbiter where an alternative is not selected by the respective parties.

The coalition believes that the government has taken the same approach with this bill as it has with the entire NBN project. The government's approach is to establish a monopoly at a huge cost to the Australian taxpayer and destroy competition at every opportunity. Through NBN Co., the govern­ment is completely dismantling competition in the wholesale telecommunications ind­ustry—all so that the business case and the potential return of NBN Co. can be propped up. But, like all government monopolies, this approach simply creates a poor allocation of resources and massive cost blowouts for taxpayers. This legislation is being debated within an environment where NBN Co. is already facing these blowouts and delays to the rollout. We have seen the cost of installing the NBN into Tasmanian homes reach $7,500 per premise. On the mainland, NBN Co. suspended its construction tender in April because bids by companies familiar with the industry came in at around $8 billion above NBN Co.'s budget.

Most insulting of all to the Australian taxpayer is the announcement last week that the Gillard government will be paying billions of dollars to Telstra and Optus to transfer their customers from copper and wire infrastructure to the NBN. We have the situation where NBN Co. is paying the two largest wholesale operators billions of dollars all to acquire customers and charge them a higher price for broadband.

Yet, despite these billions of taxpayer dollars being spent, the NBN only has around 728 customers receiving the service for free. It is spending $132 million on the cost of employing around 1,000 NBN Co. staff members, with 51 executives earning over $300,000 a year. Within this context, we have this bill which will destroy the ability of fibre installation companies to compete with NBN Co. for the rights to install fibre in new developments.

The coalition agrees that it is desirable to encourage the installation of fibre in new developments. It has been a farcical situation allowed by this government, where Telstra has been required to install copper into smaller developments of less than 100 premises with the knowledge that the infrastructure will eventually be overbuilt by fibre. What a waste of money it is to overbuild infrastructure—no wonder Telstra has been reluctant to install copper and has left developments at a standstill while the government takes its time rectifying the situation.

The coalition completely welcomes the chance we have to ensure that fibre is installed in all new developments. However, we believe that the private sector has been facilitating the installation of fibre in new developments for many years and that this bill unfairly removes this competition to NBN Co. There is already an active and productive market between competitive greenfield operators, or CGOs, to secure contracts from developers for the purpose of installing fibre. This point was made clear in hearings of the Joint Parliamentary Comm­ittee on the National Broadband Network into this legislation. The industry group Greenfield Fibre Operators of Australia—which consists of seven installers of fibre including OPENetworks, Service Elements, TransACT, Comverge, Broadcast Engin­eering and Pivit—submitted to the comm­ittee:

GFOA companies have been competing with one another, Telstra Velocity, Opticomm, VicUrban, Multinet Broadband and other carriers/operators ... for over ten years.

... there is already a very healthy competitive market between experienced wholesale network carriers in Greenfields ... that is not acknowledged by Government.

The submission by GFOA also states that competition in the market has produced enormous reductions in the cost of installing fibre. In an environment where NBN Co. are using public funds to create a wholesale fibre network, surely the taxpayer should expect the government to pursue the lowest costs available. However, GFOA state:

Deployment of FTTP networks by GFOA carrier/operators are currently costing $1,500 per lot ... for networks where the functional performance specifications and standards equal or exceed the current functional performance specifications and standards of NBN Co networks that cost more than double the price to build.

In Tasmania during the installation of fibre for premises with pre-existing infrastructure, NBN Co. has spent an average of $7,500 per premise connected. Clearly a competitive market would allow cheaper costs and a better outcome for taxpayers. We hear the government give lip service to competition. According to the minister, this legislation will implement a regime where NBN Co. is the installer of last resort where the developer does not choose a competing installer. However, the bill effectively destroys any competition for two reasons. Firstly, developers can incur the expense of building trenches and fibre-ready facilities and then employ NBN Co. to install the fibre at zero additional cost to the developer. What possible incentive will a developer have to hire a competing fibre installer to roll out fibre when the developer can hire NBN Co. to do the same work at no cost?

The second way the government is ensuring an NBN Co. monopoly in installing fibre is by enforcing standards for a fibre-ready facility in greenfield estates. In practical terms, this means that the pit and duct infrastructure used to facilitate the installation of fibre must meet standards set by the minister and specified by NBN Co. So, we will have a situation where the dominant operator in the market will have the power to set the technical specifications and requirements that its competitors must meet. This was the situation prior to 1989, when the then Labor government transferred Telecom Australia to an independent body and started the process by which telecommunications were recognised in the Trade Practices Act and overseen by the ACCC. The impact of this bill should clearly be prohibited by the ACCC, which the government is effectively turning into a toothless tiger with regards to telecommunications regulation. Rather than implement NBN Co. as the installer of last resort, the provisions of this bill ensure that NBN Co. will be the installer of first resort because developers have absolutely no incentive to consider another installer. This point is felt strongly by existing private installers. For instance, TransACT submitted to the committee that:

... it appears to be the intent of the Government and NBN Co, that it plans and needs NBN Co to be the monopoly provider of FTTP in Greenfields developments;

The impact of the government's policy on new housing developments is that the competitive industry will simply cease to exist. The Greenfield Fibre Operators of Australia made this clear when they told the committee that the bill will simply put them out of business. So here we have a Labor government that claims to support competition and that a monopoly wholesale network is the only way to promote retail broadband competition, but is completely destroying competitive industries while it sets up the NBN Co. monopoly. This approach will have devastating effects not only on niche industries such as fibre installation but also on the entire telecom­munications industry in Australia. As the Victorian government recently said in its submission to the NBN inquiry being undertaken by the House of Representatives:

After over two decades of national economic and financial reform, the NBN proposal in its present form represents a very serious threat to the long-term competition in the telecommunications sector.

The Victorian government went on to say:

The increasingly apparent risk is that the commonwealth could, over time, fully replicate a dysfunctional telecommunications market structure that has hindered investments in the current broadband market. This would be the result if it simply replaces Telstra's market power with an NBN Co infrastructure monopoly with all the attendant inefficiencies and constraints on investment, innovation and future policymaking.

Through this bill, these predictions are already coming true in the market for fibre installation in new developments. We will see competition wiped out and NBN Co. installing fibre at a higher cost per lot than could be achieved by private enterprise, with the taxpayer footing the bill every step of the way.

The coalition will be introducing two amendments to protect competition and ensure that taxpayers benefit from the efficiencies of a competitive marketplace for fibre installations in new developments. We believe that the bill should be amended to remove the disincentive for developers to use private operators to install fibre infrast­ructure. The bill would be amended to enable developers, whose project has an installed fibre network in compliance with the minister's specifications, to have the option to require NBN Co.'s purchase of the network at a reasonable price. A reasonable price would be determined by the minister with consideration of current market prices and costs. The developer will then have an incentive to use private operators because the costs of doing so would be recouped from selling the network to NBN Co. Essentially, developers will face the same costs regardless of whether they employ a private operator or NBN Co. to install the fibre. By protecting competition in this manner, the government would be ensuring competitive pressures keep down the costs of installing fibre in new developments and taxpayers will benefit from getting the best market price for the installation of fibre. This amendment will also impose a cost discipline directly on NBN Co. If NBN Co.'s competitors can build connections at a lower charge than NBN Co., then there would be a cost saving to NBN Co. and to all taxpayers.

The second coalition amendment would see certain fibre networks exempt from the operations of parts 7 and 8 of the Telecommunications Act, which will require that all fibre networks must operate under the same technical standards as the NBN. The amendment will ensure that those networks not owned or operated by NBN Co. or Telstra, and where those networks only delivered retail services to persons residing in the development, would be exempt from these parts of the act. NBN Co. would still retain the option to build its own network in the development if it wished and would have access to the fibre-ready facilities which the developer is required to build, but the network would still be placed under the same access conditions as stipulated for NBN Co. This amendment would ensure that competition continues to exist for private networks in new developments and that developers are given maximum flexibility in choosing services for their future residents.

The warning signs are all there that this project will suffer from low demand, be months or years behind schedule and end up costing taxpayers billions above the $50 billion that they are already projected to be paying. The coalition urge the government to adopt our amendments to ensure that we can salvage at least some competition in the market while NBN Co. continues destroying all competitors in its wake.

Just two weeks ago we saw yet another example of NBN Co. destroying competition with its announcement of the terms of the Telstra agreement, presently valued at some $11 billion, and the announcement of the deal with Optus, proposing to spend $800 million to do nothing more than purchase customers from the network and take out competition. We believe that competition is the cornerstone of delivering lower prices for consumers. Why then are we going to use taxpayers' dollars when the only return on investment for those very taxpayers who are paying out the money to purchase customers is that they will be paying a higher price for their broadband?

It seems that only Labor could come up with such an interesting business proposal: to charge taxpayers, in the case of Optus, $800 million to purchase customers for no other reason than to charge those very same taxpayers more for their own broadband. We know that cost is a major impediment to many people accessing high-speed broadband, so we should be really focusing on delivering those services at the lowest possible price. Eliminating competition and creating an artificial monopoly are not ways to achieve that goal and are certainly counter to the objectives of good telecommunications policy and are counter to the objectives of the coalition.

Ed Husic (Chifley, Australian Labor Party) Share this | Link to this | Hansard source

It gives me great pleasure to talk on the Telecommunications Legislation Amend­ment (Fibre Deployment) Bill 2011 and reflect on some of the work of the Joint Committee on the National Broadband Network. It is a great honour to be on that committee for a number of reasons, only one of which is my deep and abiding interest in broadband. More particularly, at this point in time we are discussing some of the most exciting reforms that are taking place within this industry.

Over the course of the last two weeks, the deal that the government did between NBN Co., Telstra and Optus was fundamentally a groundbreaking reform which has been pursued for generations: decoupling Telstra from its network and ensuring fundamental competitive reform. This reform had escaped the nation and we managed to achieve it. In its wake, we will ensure that we will not revisit some of the debates about the needless duplication of networks when cable TV was being rolled out in the 1990s. We have singularly sidestepped that through this deal we have set up between NBN Co. and Telstra and Optus, which will ensure a more efficient use of our telecommunications network. It will transform the industry and ensure that we achieve fast and efficient broadband for nearly the entire continent. It is something that others only dream of but we will achieve. We will reshape the industry through this.

People cannot wait for access to this transformational technology. I have seen the enthusiasm firsthand. I notice one of my colleagues is on the other side of the chamber whom I worked with on the House of Representatives Standing Committee on Infrastructure and Communications. We visited various parts of the country and were able to see with our own eyes the excitement in the regions about the prospect of tapping into a new superfast broadband network and what it will do. For example, they will be able to retain young people in regional areas through better access to educational opportunities. Small businesses will have the chance to tap into new markets which up until this point have escaped them in the regions. We have the chance to deliver a service in parts of the country like the area of Sydney I represent where people thought they would never have access to such a system because, frankly, the market did not value investing in a network in the area based on their incomes. I think that is a disgraceful reflection of where we are at, and I will reflect on this stalemate later. I take great exception to some of the quoting of ABS statistics earlier by the member for Wentworth. It was quite misleading and I want to address that as it impacts on the electorate I am proud to represent.

People in the electorate of Chifley are eagerly awaiting the National Broadband Network not just for its speed, not just for what they will be able to download but for what they will be able to do. Just the other day I had the pleasure of visiting the Blacktown Computer Pals group, which is teaching senior Australians how to access computers in a way that they have never had the opportunity to do before. Wendy Lambert and all the volunteers that operate Blacktown Computer Pals do tremendous work in showing senior Australians the opportunities presented by this technology. The other day we were talking about some of the applications that will open as a result of access to the National Broadband Network and one that particularly caught them was the prospect of e-health so they will not be stuck waiting for specialists or GP support. They will get fast and easier access to medical assistance. They will be looked after in their older years. They know some of the applications and they cannot wait for this.

This bill is critical in ensuring that, as we connect up to 6,000 homes a day, the greenfield areas of Australia will be looked after just as efficiently as the brownfield areas. The bill will ensure that there is an optic fibre requirement, a fibre-ready facility requirement, a fibre-ready installation requirement and a facilities access regime. The bill was examined by the Joint Committee on the National Broadband Network. I would like to take the opportunity to congratulate the chair of the committee and the deputy chair—you, Madam Deputy Speaker D'Ath—for the work that ensured that this bill will be considered in a timely way. A lot of the states will depend on this bill going through the House and through the other place to ensure there is a mechanism to connect greenfield estates quickly. Having worked for an electricity distributor and having been a union official in the telecommunications industry, a lot of what has been considered by this bill is simply—without bursting anyone's balloon—unremarkable. Frankly, a lot of utilities have been working for many years with the developers to rollout networks—electricity, gas or telecommunications—in new estates. The reason I congratulate the chair and the deputy chair is outlined in the chair's forward to the report that was presented today which states:

Where the committee found areas of dispute, these were less about the Bill and more about the underlying policy that has led to this Bill.

We continually have these arguments, as represented in the chamber today, not about the bill itself but about the way we are going about bringing superfast broadband to this country through the NBN Co. and the reforms that we have put to this House. I believe the report put forward some very sensible and considered recommendations, for example advocating that internal customer protocols be put in place within NBN Co. to ensure that the time frame for issuing statements to developers is completed and benchmarked; that NBN Co. commit to specific time frames to publish its performance on fibre rollout—a sensible idea; and that there be an investigation into the possible impact on risk premiums of regular changes in development regulations—again, pretty sensible.

However, the coalition have sought, as evidenced today by the member for Wentworth, to engage in spurious claims about this bill. For example, they claim that rolling out the NBN will make it more expensive for homes. No-one who has bought new land and is intending to develop a property on that land would for one minute expect that any of the utilities connected to that property would come for free. They would expect to pay for a gas connection, for water and for electricity. They would expect some cost. That cost has been outlined in the explanatory memorandum—and I will come back to what I believe are the spurious costs being claimed in self-interest by industry. The cost outlined in the explanatory memorandum is about $800, which is in line with what would be expected for the other utilities that would have to be connected.

The opposition claim that the processes to be used by NBN Co. will be slow and bureaucratic. But the report has recom­mended some measures which I hope the government and the NBN will embrace to ensure that we can have a timely rollout. They claim, for example, that developers might have to wait too long. That was raised by the member for Wentworth earlier. Guess what? Sometimes developers do wait. They roll out aspects of the network, undertake the pit and pipe and wait for the utility to come through. As I said earlier, this is unrem­arkable. But the claim that is being put forward is that in some way NBN is doing something that hitherto has not been experienced by the sector. That is simply and patently ridiculous.

The other claim which was made through the course of the hearings was that NBN or the minister should not set standards. To some extent the member for Bradfield and I, despite the fact that we are on different sides of the chamber, actually agree that there is always a danger that monopolies set standards in a way that excludes competition. The preference would always be that the industry would set them. Who in the industry is responsible for setting these standards? The Communications Alliance, the sector itself. Up to this point, the sector has been unable to come up with standards in relation to the rollout of the network. The problem we have is that in arguing the minister should not set the standard the coalition is assuming that the industry will get its act together and effectively asking government to shoulder the risk if the industry is incapable of reaching agreement within itself. Mind you, NBN Co. is a member of the Communications Alliance. If they are unable to come up with a standard then what standard do we operate to? And when the faults start racking up because the performance of the network is not up to scratch, who will be responsible? Ultimately, the government will be, not the industry that was unable to come up with the standards in the first place.

During the course of the hearings, TransACT put forward to us that developers or contractors within the sector who have carriers licences should be enabled to roll out the network to the standards that they roll out to. I asked TransACT, which is a regional telecommunications provider that operates in the ACT, which standard it would operate to: would TransACT let the subcontractor put it in to their own standard or would TransACT require the subcontractor to work to TransACT's standard? The answer from TransACT was simple. It said, 'We want it to our standard.' Yet TransACT argued to the committee that NBN Co. should not be entitled to operate to the standard it sees fit in the absence of the industry standard. It says that TransACT should be entitled to operate to its own standard—something it would not allow for its own network. When we are trying to roll out a uniform network with standards whereby everyone can expect the network to perform in the same way we cannot have what I would argue—with no disrespect to TransACT, I will put it in very crude terms—is a self-interested position when it comes to the network.

The member for Wentworth wants things to be done in a timely way but he has flagged some unbelievable suggestions. For example, an article entitled 'Turnbull tests NBN Co-pays amendment for greenfields', which appeared on the iTnews website, talks about the fact that the member for Wentworth was arguing that NBN Co. basically would have to negotiate with each developer, as they roll out in their own estate, how much they would pay for the assumption of the network. On the one hand he wants the network to be built quickly and says that we should not force delay on developers, yet on the other hand he would force on us a delay in the negotiation process with developers one-on-one.

I also could not believe the claim the Housing Industry Association was making that it might cost up to $5,000 per premise to roll out the NBN on a greenfield site. When we quizzed them on that, they said that they were earlier estimates but then came back later and said, 'We've tested those out and that is what we believe to be the case.' But there was no evidence of what that was supposed to be. Frankly, we need to get the NBN rolling out as quickly as possible to reach the target of 6,000 homes a day.

In the time remaining I will address the spurious claim made by the member for Wentworth that he put amendments to the committee. That is a falsehood. He put forward, for example—and I am willing to table this—an incomplete amendment that had different sections. I will read directly:

Notice must be given to NBN Co. of the requirement … (some time before expected completion of the network? Within some time after completion?)

He put half-baked amendments that were not even complete to the committee dealing with the rollout of one of the most important pieces of infrastructure in the country. He could not even get that done yet suggests that he did. He talks about a cost-benefit analysis and comes back to it. I am going to give you a cost-benefit analysis that was carried out at the 2007 election: people basically looked at the 19 plans you guys could not get through; they liked our plan. The cost-benefit analysis was done in 2010: people did not like what you were putting forward; they liked what we were putting forward. The crossbenchers late last year also had a cost-benefit analysis. They liked our plan; they did not like yours. It is about time you stopped trying to stop the rollout of a network that is critical to the country. (Time expired)

Yvette D'Ath (Petrie, Australian Labor Party) Share this | Link to this | Hansard source

Is the member seeking to table a document?

Ed Husic (Chifley, Australian Labor Party) Share this | Link to this | Hansard source

I seek leave to table the coalition's appendix C, the text of the amendment to the fibre deployment bill that was put forward by the opposition.

Leave granted.

Paul Fletcher (Bradfield, Liberal Party) Share this | Link to this | Hansard source

I am pleased to speak on the Telecommunications Legislation Amendment (Fibre Deployment) Bill 2011, which is part of the overall policy architecture underlying the National Broadband Network and its specific objective is to ensure that new developments receive a fibre connection rather than a copper connection. In the broad, this is a sensible objective. But typical of the way the Rudd-Gillard government approaches virt­ually every policy issue, including those in the telecommunications sector, they have done an absolutely hopeless job of seeking to implement this objective because they have come up with a mechanism which is heavy handed, intrusive, damaging to competition, bureaucratic and unnecessarily expensive. They have done this through key provisions in this bill, which, amongst other things, specifically mandate that property develop­ers must meet certain requirements to install so-called fibre-ready infrastructure and also give the minister the power to impose technical standards, upsetting the long-established arrangements in the industry in which technical standards are set by agreement through the industry repres­entative body, the Communications Alliance.

In the brief time available to me I want to make three central points. Firstly, it does make sense, if your objective is to improve Australia's broadband infrastructure—an objective shared by all of us on all sides of this House—to focus your policy attention on new developments. The second point I want to make is that the particular method which this government has chosen to focus on this area is unfortunate in terms of its consequences for housing policy because it makes the process of building new housing developments slower and more complex than it otherwise needs to be. Thirdly, I want to make the point that these measures are very bad in terms of their consequences for competition in telecommunications—consi­stent with every other aspect of telecom­munications policy which this government has touched.

Let me turn firstly to the central point that it does make sense to focus on new developments. It is uncontentious between the major political parties and it is uncontentious amongst all who have looked into this issue that the marginal cost of installing a fibre connection over a copper connection is much lower in greenfields sites in new developments than it is in existing homes and buildings. It costs a lot more to go back and retrofit existing homes and buildings, ones which currently have a copper connection, with a fibre connection than the incremental cost of fibre over copper in new developments. It therefore makes sense, as we have been happy to acknowledge in a dissenting report, to encourage the building of fibre connections in new developments. It is a sensible thing to do. Indeed, housing stock in Australia increases by around one per cent each year, so simply by encouraging fibre in new developments you begin to achieve a gradual and steady increase in the percentage of homes which are connected to fibre. Indeed, even Telstra—not known to be a friend of competition—acknowledged, in its submi­ssion to the inquiry conducted by the Joint Select Committee on the National Broadband Network, that there is a growing competitive market for the delivery of fibre networks in new developments. They remarked as follows:

Traditionally as the USO provider we have been deploying copper based infrastructure at the request of developers. More recently a competitive fibre deployment industry had arisen and a number of providers, including Telstra, deployed fibre in many new developments under contract to the developer.

In other words, what we have is the market responding to demand and increasingly installing fibre infrastructure in new developments around Australia without the intervention or assistance of government. The Gillard government would no doubt find this an extraordinary proposition, but the market is, in fact, efficiently responding to demand and fibre is already being built in a material number of new developments around Australia. And what has been the response of the Gillard government? As usual they have rushed in to clamp the dead hand of government upon this nascent market. Their central planning instincts have been spurred by these developments and their policy settings choke off the market response, as I will come to in more detail in a moment.

Let me turn to make the second point I want to make. This bill is a bad idea when it comes to the question of housing policy. We all know that there is a looming housing shortage in Australia, and the last thing that we ought to be doing is imposing new complex bureaucratic requirements upon property developers. Unfortunately, that is precisely what the arrangements mandated by this bill do. They add expense and delay for those wishing to build new housing estates. Notwithstanding the government's rhetoric, in practical terms this bill gives developers a very strong financial disin­centive to deal with operators other than NBN Co. In turn, this leaves developers at the mercy of NBN Co.'s responsiveness and timeliness. NBN Co. will become a bottle­neck through which all property develop­ments must pass before they can be completed and brought to market. I confidently predict that the downstream consequences for Australians wishing to purchase new housing are likely to include increased delay and expense. Let me note the comments of the Housing Industry Assoc­iation when they appeared before the committee's inquiry:

The legislation needs to make it very clear who is responsible for the delivery and that there are certain obligations on the provider to do that in a very timely way, otherwise it will delay development.

The Housing Industry Association went on to say:

It should not take more than a couple of phone calls and a meeting to sort out it being put into the critical path of the development, otherwise those projects will be delayed whilst certain things are waiting for a provider to provide that infrastructure.

Unfortunately, the complex arrangements in this bill do not give the certainty that the Housing Industry Association is seeking. The unfortunate consequence is that there is likely to be a bottleneck as projects queue up to get the tick from the National Broadband Network Co.

Thirdly, let me turn to the most substantive point I want to make, which is that the approach in this bill is a very poor approach when it comes to the question of competition policy in telecommunications. The practical effect of this bill is to minimise competition and choice as to who will build fibre networks in greenfields locations in new developments. As a consequence, this bill represents a missed opportunity to impose effective, competitive and cost discipline on the National Broadband Network Co. If there is one thing we have seen in spades to date, it is that the National Broadband Network Co. certainly requires a healthy dose of competitive pressure. If it were the case that developers had a viable option to use a party other than NBN Co. to build out fibre networks in their develop­ments, then developers would be likely to choose parties other than NBN Co. if those parties were able to build a network for them more cheaply, more quickly and more conveniently. That, in turn, would produce a more efficient outcome if it meant that infrastructure in new developments were built at a lower cost than if all fibre in new developments were installed by NBN Co. under a monopoly. It would also have the incidental and not trivial benefit of getting live and operational fibre networks into new developments as they were being built rather than developers and, in turn, the people who will live in those developments, being forced to wait until a connection can be made at a time of NBN Co.'s convenience. Let me remind you, Madam Deputy Speaker D'Ath, that NBN Co.'s stated build time frame goes out to 2020. They are already months behind their plans.

So, under the model chosen by this government in which all paths run to NBN Co. unfortunately many Australians are going to be waiting a very long time to get a fibre connection, and it is richly ironic that there is already in place a private sector market which is successfully delivering fibre connections in new developments. Yet, this government's policy approach is to specific­ally impede, slow down and put hurdles in the way of the operation of that private market. The consequence is that many Australians moving into new developments will be waiting longer to get fibre connections than they would be if this meddling government had left the matter alone. Despite the empty commitments and despite the vapid rhetoric from the minister for broadband who claimed, 'Developers will be able to source fibre from competing fibre providers if they wish', the economic reality is that he and his government have set up arrangements under which developers are given a very strong financial incentive to deal with NBN Co. and a very strong financial disincentive to deal with anybody else.

According to the explanatory memor­andum, installing the fibre-ready infrastr­ucture, which is mandated by this legislation, costs around $800. There was also evidence provided to the committee that the full cost of installing a fibre connection is $1,500. Put these two numbers together and what you see is that the developer is up for an additional incremental cost of at least $700 per lot if the developer chooses to contract with a competitor to NBN Co. rather than, as the government wants it to do, just leave it and wait until NBN Co. comes along. Unfortun­ately those who will suffer will be Australians moving into new premises who would have expected, had the private sector market continued to operate, to have received a fibre connection. They will now be waiting a very long time in many cases, given the very long period over which NBN Co.'s operations are scheduled to occur.

Fundamentally the regime established by this bill is damaging to competition in the market for the provision of new fibre infrastructure and there are three reasons for that. Firstly, it exposes existing non-NBN operators, who are already in the marketplace providing fibre connections in new developments, to competition from a government funded competitor with enorm­ously deep pockets, which is prepared to install fibre at zero cost to any developer which has incurred the expense of building trenches and other fibre-ready facilities. In effect that makes it impossible for those competitors of NBN to continue to operate competitively with it.

Secondly, this bill is damaging to competition because the standards as to what constitutes a 'fibre-ready facility'—for example, a pit to be built in a new development—will in practical terms be set by the National Broadband Network Co. For example, proposed section 372W of the bill says that a fibre-ready facility is one which amongst other things satisfies such condit­ions as are specified by the minister. It is clear from the statement of expectations issued by the government last year that NBN Co. will be in the driver's seat in determining what the minister specifies because it says:

The Government expects NBN Co to provide guidance on technical specifications as early as possible.

The statement of expectations also says that NBN Co. would consult with the Comm­unications Alliance. But let us be absolutely clear and lay to rest this misleading claim being made by government members today that, in some way, the existing industry process will continue. That is absolutely not the case. Under the existing process the Communications Alliance makes the decisions. Under the new process NBN Co. will make the decisions and the Commun­ications Alliance will be required to rubber stamp them. There is plenty of experience as to the damage to competition that occurs when the dominant player is able to set technical standards. It was for that precise reason that, in 1989, the power to set technical standards was transferred from Telecom Australia to an independent body. This government in this bill, as in so many other ways, is going backwards in a very bad way when it comes to competition.

Thirdly, this bill is very damaging to competition in the market for the provision of fibre because it fundamentally undermines business models used by greenfield fibre operators today.

This bill needs profound amendment if it is not to seriously damage competition, and I commend to you the amendments that the coalition has moved.

Deborah O'Neill (Robertson, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in support of the Telecom­munications Legislation Amend­ment (Fibre Deployment) Bill 2011. In reflecting on the comments of the member for Bradfield, one would think that compet­ition is at the heart of this bill and the sole and only interest he has in the debate. The reality is that we are dealing with a very practical, real-life matter that will impact profoundly on the lives of Australians, and I am very pleased to support the bill put to the House.

This bill puts into legislation an election commitment to make sure that all new developments, subject to exceptions, are fibre friendly. That means that new resid­ential developments will be able to connect to a fibre-to-the-premises network without the need for further work being done to the premises. At its heart, this is an equity issue. The bill applies to developments conducted by corporations, which includes the vast majority of development and construction companies nationally. The bill certainly has application on the Central Coast, the region that I represent, and it has the capacity to significantly enhance employment and life outcomes for people living in new dwellings on the Central Coast.

Given that the National Broadband Net­work is a Commonwealth project des­igned to benefit the national economy, it is very desirable that this legislation be enforced under Commonwealth law. As with many other members of the House, the National Broadband Network has been a priority issue in my electorate and much of my work as a local member in this term of parliament has been to ensure that the potential of the NBN is effectively understood. I have been working very hard with local health, educ­ation and other business sector partners to help to bring about the earliest possible rollout in my electorate.

I have been meeting with key stakeholders on the NBN on a regular basis and have been campaigning for a priority rollout on the Central Coast. Key people driving this initiative in my area include Dave Abrahams, an IT specialist, who has become quite a champion of the NBN, Edgar Adams, a local business advocate and representative, and even Paul Budde, who consults intern­ationally on the NBN. Each of these men and other leaders in our community see that connecting the NBN to all premises, both new and established premises, is a critical part of ensuring that all Australians are able to move forward together as this technology becomes available. The National Broadband Network certainly arouses great interest in my electorate and it is seen by many local business owners and community leaders as a critical means by which to level the playing field between those living in regions such as mine and those living in the cities, represented by the member for Bradfield, and to come to some equitable arrangement in terms of access to the world economy.

The Central Coast is a region with unique challenges. It is a growing area, a place where small business is vital for the health of the local economy and where new develop­ments are coming online. On the Central Coast, small businesses provide services and employment for the people in our region. I am very proud of our local businesses and I am particularly proud of local IT companies that compete nationally and internationally to provide services. Many of these small and medium sized businesses operate from the Central Coast and provide local employment and opportunities for our residents. I certain­ly will support anything in this parliament that enables better participation and more local employment, and I herald the excel­lence of our local staff in engaging in this growing field.

In terms of the personal and business assets that we have on the Central Coast, I believe that the National Broadband Network will help us to develop and extend already successful businesses to further improve their success and, because of that, I support this bill which will enable a more effective rollout of the NBN in the region. In ensuring that development corporations install the carrying infrastructure of the NBN, the general rollout of infrastructure will certainly be more efficient and effective. The bill will also ensure that, after the National Broad­band Network has been rolled out, all new developments fulfil their responsibilities as to future applications of the internet in the delivery of health and education to homes through the installation of fibre-friendly infrastructure.

It is also vital that we are prepared for the reality that new businesses and new business models are yet to be born and that their infancy may be in small businesses, not in boardrooms with desks and those sorts of facilities, but in small home offices or in the new mobile world of local cafes in which entrepreneurs are increasingly doing busin­ess in open-to-view social settings. This is common-sense legislation. It is a move to equity because it will ensure that new residential premises, where new businesses may well be emerging, are able to take complete advantage of the NBN. The bill will also enable the cost of the NBN to be reduced in new residential developments because there will be access to non-carrier ductwork in those developments.

This bill represents an initiative to roll out the National Broadband Network in an efficient and effective way. No-one can deny that rolling out the NBN is a challenge in terms of infrastructure. But nation building infrastructure is always challenging; it is both visionary and practically challenging. It is always a challenge for any government to provide critical new infrastructure. We have only to look back at the challenges faced by governments that undertook commitments to roll out the railways across this great country of ours, the national road network to connect us across all of those miles and the Sydney Harbour Bridge and the Opera House. All those critical pieces of infrastructure involved having a vision for the future and a commitment to ensuring that the practical work was undertaken to enable them to come into being.

Infrastructure as comprehensive as the National Broadband Network is certainly ambitious, but it is also very responsible. It is ambitious in that it calls on our generation at this time to invest in the capacities of the next generation and to make the NBN a critically productive part of our economy. It is responsible because we know that, without access to this internationally empowering technology, we would be making a decision to exclude our people from participation in the global digital economy and workplace.

I often hear from, and read reports about, people from the conservative side of politics who assert, with misunderstanding, that this vital piece of infrastructure is not needed. But I am delighted to be part of this government, which has decided to undertake the challenge and commit itself to ensuring that the project is completed. I do hear from the other side of politics that we should not be bothered with this and that it will be a blow to competition. But competition will not support people in homes yet to be built if we do not support this legislation and put it in place to the advantage of new home dwellers. The NBN is certainly not just about upload capacity. It is far more sophisticated than that. It does a lot more than enable fast downloads of movies. It has the capacity to transform our economy and also to have a profound impact on social benefits for our community. In terms of its social impact, one of the critical things that we have seen just in the last couple of days is the capacity for medical appointments to be teleconferenced across large distances. Currently this can happen in established premises but this bill will address the reality of yet-to-be-built premises also having the capacity to delivery health services, and that needs to be considered in the development of this bill.

The national economy as a whole benefits from the economic growth and health of the nation's regional areas. The economic poten­tial of an area such as mine needs to be realised, and this can only be done that if we are able to engage with the global market. Another social benefit of the National Broadband Network is obviously education. In my area we have the benefit of quality public and private schooling. Our children certainly benefit from access to these quality schools. When they return home to their new houses in new developments they need to be able to access the internet. We need to get on with this job in a way that is equitable. University students on the Central Coast are also critically impacted by decisions made in this place about the rollout of the NBN. Currently students can access materials online and correspond with other students online, but they also need to be able to do this from the sites at their homes, in the new developments, and critically that is what this bill is dealing with.

High-speed broadband based on fibre-optic technology will be vital in enabling the development of a great future for Australia. It will provide regional schools with resources; it will provide regional commu­nities with access to health. This is a nation building initiative. It is going to have far-reaching consequences on which this parliament can look back with pride.

This bill enshrines the powers invested in the Australian Communications and Media Authority to develop standards in relation to third-party use of the network. The long-term success of the National Broadband Network is absolutely reliant on the successful interr­elation between owners of the infrastructure and the providers. The powers that have been invested in the ACMA and the ACCC will ensure that there is appropriate regulation and competition in the provision of these services from the National Broadband Network.

I support this bill because it demonstrates the government's commitment to ensuring a vital piece of infrastructure for Australia's future is completed and a success for all Australians. This goes exactly to a comment made by the member for New England: 'You do it once, you do it right and you do it with fibre'. I look forward to the day when the National Broadband Network has been constructed and our economy and society is advancing as a result, be it in new or established housing. I know that day will arrive, and I believe when it does my cons­tituents will benefit enormously. I commend this bill to the House.

Jane Prentice (Ryan, Liberal Party) Share this | Link to this | Hansard source

No-one disputes the benefits of a national broadband network. The coalition support high-speed broadband but what we do not support is the outdated monopoly telco model being run by the incompetence of NBN Co. The member for Robertson said that this will impact profoundly on the lives of Australians, and indeed it will because for generations we will be paying off the billions of wasted dollars spent on the NBN and the NBN Co.

For far too many years Australian consumers and businesses have suffered from over-priced telecommunications. I look back to over 30 years ago, indeed last cent­ury, when a subcommittee of the Sydney Chamber of Commerce decided they had to do something about the monopoly of Telecom Australia, as it was known then, and from that ATUG was born—the Aust­ralian Telecommunications Users Group. For many years, we saw ATUG and other industry bodies struggle to bring competition into the market, struggle to bring in some competition for products, service and pricing. Finally, just as we were achieving competition, we were handed back a last century model, a last century way of doing business—NBN Co. a monopoly. This is not the way forward and this is not the way other countries around the world are rolling out their telecommunications.

The amendment proposed by the member for Wentworth and the coalition is about greenfields sites. We already have an exam­ple in Townsville, in the seat of Herbert, where a developer is desperate to sign off on his new development but he cannot get anyone to lay the fibre in the conduits, which he has already provided. This is because NBN Co. have told him that it is not ready yet, but when it is ready it will roll over the top of what he has already done. So, once again, we have the bully-boy tactics of some of the people at NBN Co. They are threat­ening very good opportunities in greenfields sites and, furthermore, some of our redeveloped brownfields sites in Brisbane. Some years ago, the local government in South-East Queensland wrote to the federal minister seeking assistance in this area, and of course, as usual, the response was silence and it was deafening—absolutely no resp­onse let alone assistance. The local govern­ment wanted to get on with the job and do it then. But many of those areas will be left until 2020 before they can get competent communication facilities.

When we look at the greenfields sites we see the need for and the benefit from some of the smaller companies providing those facilities. We heard before about some of the innovation that could come from it. A trial was conducted in your area, Madam Deputy Speaker D'Ath, in Virginia in Brisbane. Fibre optic cable was rolled out from Virginia to Chermside at less than a third of the cost projected by NBN Co. We have seen NBN Co. sack the messenger, as in two of its officers, because they came up with a fibre rollout above their projected cost. Yet we had an example, which we offered to them to look at, of where we had done it for less than a third of their projected costs. I support the opportunity of private companies rolling out fibre. I think it will be a benefit. I think we might see some different methods of doing it.

It is very disappointing that NBN Co. have chosen to ignore some of the other models around the world, like Bournemouth, where this rollout has already occurred efficiently and effectively. There are opport­unities there. There are lessons to be learned but NBN Co. have the protection of the Gillard government and are not interested in doing anything cost effectively or efficiently because they do not have to worry about that and because they know the poor taxpayers will have their hands in their pockets to pay for the rollout cost.

There is no doubt that the rollout of NBN will be of benefit, but the problem we have is the way it is being done and the cost. I look at facilities such as a new industrial estate near the airport in Brisbane where we already have high-quality, high-standard fibre throughout the development. Yet NBN Co. have told them that they will roll over the top of it. It will not necessarily be with anything better—possibly with something inferior—but they are so determined to protect the monopoly to keep out other people that they are prepared to roll over and waste money on a product that is already in the ground and already operating.

That is the mentality we are trying to deal with in this bill. That is why the member for Wentworth has proposed some very reason­able amendments to facilitate assistance on some of these greenfield sites and new estates. They are not just in Herbert. They are in the western suburbs of Brisbane. They are areas where, if we were more relaxed about competition, we could benefit already and people could have it before the 2020 date.

The member for Wentworth mentioned South Korea, where fibre goes to the basement of the building. There are other methods as well. He mentioned copper. They have also have satellite and wireless. They do the extra mile waiting for the take-up so they can look at benefits going forward. We do not have to roll out the tens of billions of dollars solution that has been proposed.

It is a bit like giving all the roads to Ford and letting Ford control the model of the cars that go on them. That is the restriction we are putting on our consumers and on the industry. Once again we are consigning Australia back to the last century for communications, for overpricing. Once again we see that the Gillard government is all about grand plans, but always with other people's money. There is opportunity here for private enterprise to be involved but, no, we have to get the NBN Co. privatised, a monopoly that only they control. The only conclusion we can draw from the continual refusal to refer this for a cost-benefit analysis is that there is something more to hide because I cannot understand why you would not benefit from having a cost-benefit analysis, from seeing where we can save money, from seeing where we can partner with private enterprise and providing open access.

The world declared the music industry would fall over when Napster was introd­uced because there would be open access. Anyone could put up whatever they wanted. Yet we have seen it flourish and benefit from open access. I believe an open access, synchronous, ubiquitous NBN would be of benefit to all Australians. We need to work with private enterprise, not against them. We will get a better deal for taxpayers, a better deal for the users of communications and, hopefully, a better deal for Australia. I commend the amendments put forward by the coalition and I really hope for a better outcome.

Stephen Jones (Throsby, Australian Labor Party) Share this | Link to this | Hansard source

It is a great pleasure to witness the rollout of a historic nation-building infrastructure project like the National Broadband Network. It is a great privilege to be part of the Labor government that has the vision and courage to embark on a major reform and a major project such as this. It is a great privilege to support a major structural reform to Australia's telecommunications industry that simply would not have been brought about had we not embarked upon this project, a reform that is going to benefit consumers for decades to come.

The NBN will enable the Australian econ­omy to grow, to transform and to adapt into the economy of the future, thereby securing our prosperity. The NBN will provide Australia with world-class broadband techn­ology. It will open up a genuine choice of services and drive competitive prices for consumers, whether they live in capital cities or in regional Australia or in rural and remote areas.

In supporting this project and speaking on this Telecommunication Legislation Amend­ment (Fibre Deployment) Bill 2011, which is an important part of the package of legislation to roll out the NBN, it is an absolute pleasure to stare down the nay-sayers on the other side who have had nothing but carping negativity and criticism on this project from the very get-go. I will go through some of the carping criticism that we have experienced on this project to show where the nay-sayers have been proved wrong even at this very early stage in the delivery of the project.

They know that they are wrong. The shadow minister knows it, the member for Bradfield knows it, and everyone opposite who represents regional Australia in this place knows it because they would have received the phone calls, letters, emails and questions from constituents saying: 'I have heard about this NBN. When is it coming past our suburb? When is it coming into my house?' It is disappointing that the member for Gilmore, which adjoins my electorate of Throsby in the Illawarra and has been chosen as one of the pilot sites, instead of champion­ing this as a local representative, is out there day in, day out bagging it and showing her lack of understanding and support for what it means for the local region. It is not so for all the political representatives in the Kiama and broader South Coast area. There are many political representatives who are great champions of this project. It is a good news story for our region and for the people on the South Coast and in the Illawarra. I simply cannot understand why the nay-sayers spend so much time and energy talking it down.

The NBN will be a boon to electorates in regional areas like the Illawarra and the South Coast because it will quite simply bring economic, social and community infrastructure right into people's homes, thereby connecting them to the markets and to the entertainment not only of the capital cities but also the world. As an MP for a region that adjoins one of the pilot sites, it is a privilege to join with local organisations like Regional Development Australia Illaw­arra and the Kiama Municipal Council in imagining a broadband future for the region. Only recently new funding was announced to help local councils, including the Kiama Municipal Council, take full advantage of the National Broadband Network through the development and upgrade of innovative online service delivery to homes and businesses. Under the Digital Local Govern­ment program, which the minister announced a few weeks ago, the Kiama Municipal Council will receive in excess of $370,000 to develop digital solutions that can then be adapted by other councils and rolled out across the country as the NBN rolls out. I know from my conversations with the mayor, Sandra McCarthy, and other councillors on that council that they are very pleased to be involved in such an exciting and innovative project.

It is also a great privilege to play a small part in the facilitation of this project by speaking on and voting in favour of the legislation that marks each step of the steady progress towards providing fast, efficient and affordable telecommunications services for the Australian population and in particular regions like my own where there are still suburbs where people are unable to receive broadband services because of the way that the exchanges are configured, the lack of broadband capability from the local exchanges, the geography of the region and the build-up of many of the new suburbs and the way they were wired up to telecom­munications services using mainly RIM based technology.

When it comes to matters NBN, I am pleased to speak today in support of this bill, the Telecommunications Legislation Amend­ment (Fibre Deployment) Bill 2011, which will ensure that no more will we see suburbs built up without having access to fast, reliable broadband services because in the process of building up those suburbs we will be digging the pits and laying the pipes and the cable which will ensure that when people move into those new houses they will have the capacity to switch on broadband services from the very get go. That is perhaps something that some of those who live in electorates where they are not building new suburbs may not understand, but I can tell you that in the electorate of Throsby where we have two new suburbs in West Dapto and Albion Park going in it will make an incredible difference to people who move into those homes to know that they will be wired up from the very beginning. So I welcome it.

The telecommunications fibre deployment bill amends the 1997 act to do a number of things that affect the provision of utility infrastructure in new real estate develop­ments. The bill requires developers that are constitutional corporations to install fibre ready passive infrastructure. It requires this passive infrastructure in the long term footprint of the NBN project to be fibre ready. Penalties will apply if a constitutional corporation sells or leases land or a building situated in a new development unless fibre ready facilities have been installed, thereby creating the requirement that these facilities are there for the new suburbs when they are built.

The bill creates a power that enables the minister to specify new developments in which fixed lines which are installed need to be optical fibre. Finally, this bill enables the Australian Communications and Media Authority to make standards for customer equipment and cabling for use with the NBN and other superfast networks. The outcome of the legislation will be that residents of new developments will have early and less costly access to the NBN network when it is rolled out into these developments.

Those on the other side have identified the issue of cost in relation to this legislation. Nothing could be more costly when building a new suburb than overlooking the opport­unity when the trenches are being dug, the footpaths are being laid and all the other utilities are going into those houses in a new estate and saying, 'We will put electricity, gas and sewerage in there but what we will not do is connect you to the National Broadband Network. We will not be laying fibre optic cable into those suburbs because we have a blind spot when it comes to the National Broadband Network. We will leave it to the market or some other solution to lay cable in those areas.' Nothing could be more wasteful. Nothing could be more costly than saying, 'We will leave it until some other time or not at all.'

You can imagine the outrage of local residents having moved into their beautiful new suburb with new footpaths, new gardens and new grass laid down when all of a sudden it is decided to lay fibre optic cable into the suburb and in comes the trenching gear digging up concrete that has just been laid for footpaths or digging up grass that has just been laid or perhaps laying a new layer of overhead cable through these areas. They will all be scratching their heads and asking, 'Why on earth wasn't this done when the street was laid and the power was put in?' If we left it to the wisdom of those opposite, that is exactly what would be occurring. The propositions within this bill are nothing more than militant common sense. Unfortunately it is militant common sense that is not shared by those on the other side of the chamber.

I will take the opportunity to talk for a moment about the agreement between NBN Co. and Telstra and Optus, because it is good news for telecommunications customers. Definitive agreements have been executed that, together with Telstra's structural separ­ation undertaking, create a framework for Telstra's participation in the NBN. The NBN Co.-Telstra definitive agreements, including an interim access agreement, provide for the re-use of suitable Telstra infrastructure by NBN Co. and for Telstra to progressively structurally separate by decommissioning its copper network and broadband HFC network capability during the NBN fibre rollout and using the NBN to provide fixed line services to customers within the fibre footprint. The definitive agreements translate the financial heads of agreement signed on 20 June 2010 into detailed, legally-binding agreements. The NBN Co. has also negotiated a deal with Optus to migrate its HFC customers to the NBN. So what we have here really puts a huge hole in the argument that was being run by the member for Wentworth and many of those who have rallied to his call. I have to say that the member for Wentworth takes to this argument as a man with not too much enthusiasm. What those opposite have been saying for most of the last nine months is that this NBN is somehow going to be a great big white elephant, that it is going to be a communications service with no customers and that it is something we are overinvesting in because nobody is going to use it. The agreement that has been reached with Telstra and the agreement that is being reached with Optus show what an outrageous untruth that was and how they simply do not understand how this project is going to roll out.

As a result of these agreements we are going to see the migration of all of the fixed-line customers of Telstra and Optus onto the National Broadband Network. The National Broadband Network will be the backbone. The fibre-optic cable of the National Broadband Network and all those intercon­necting networks will be the telecom­munications network which is delivering fixed-line telecommunications services to those millions of existing Telstra and Optus customers. Far from being a vacant white elephant, from the very get-go as that migration occurs, those fixed-line customers who are currently having their telecom­munications service delivered through the ageing copper network are going to be migrated onto the optical fibre network, the modern NBN, and those services will be delivered. They will be enhanced services. Presumably Optus and Telstra will retain the retail relationship with their customers, but it will be the NBN which is delivering the telecommunications service.

This is good news. It is good news for the customers of Telstra and Optus but it is also good news for the country because it shows that there is a way forward, after in excess of 12 years, when literally nothing was happen­ing in terms of reforming the telecomm­unications regulatory system in this country, reforming the telecommunications market and investing in a fast, reliable, high-speed broadband network. Nothing was happening, particularly in electorates like mine. This legislation, together with the other reforms that have already been introduced, is seeing real reforms being rolled out to real people in real houses in real suburbs. The caravan is moving on and the dogs are barking. We know that there is a need and a hunger for it.

According to the OECD statistics regard­ing average broadband subscription prices, out of 33 countries Australia is the third most expensive country for very low-speed connections, the 14th most expensive for high-speed connections and the 12th most expensive for very high-speed connections. As a result of this legislation, together with the other package of reforms and the investment that is going on today in laying that cable and connecting those houses, we are reforming not only the technology but the telecommunications market. There will be more players in the market and the net result of this is going to be faster, more reliable, more ubiquitous broadband services for the people of Australia and for my electorate of Throsby, and that has to be a good thing. I commend the bill to the House.

Dan Tehan (Wannon, Liberal Party) Share this | Link to this | Hansard source

I rise this evening to talk about the Telecom­munications Legislation Amendment (Fibre Deployment) Bill, which once again demon­strates this government's ability to take an area of policy, an area of the economy, which is functioning and working well and to potentially turn it into a mess. The greenfields sector for the provision of fibre-optic services was an area which was working relatively well, and now we have a government which, unfortunately, is legisl­ating to make a mess of this area and, it would seem, to entrench monopolistic practice, which I do not think it can be argued is in anyone's interests.

We have had already a dissenting report from coalition members of the Joint Committee on the National Broadband Network, which examined the bill. Coalition members have called for three amendments for three main reasons, three very valid reasons. Firstly, the regime established by the bill is unnecessarily slow and bureau­cratic for property developers, so rather than speeding things up and creating less red tape this bill is going to have the potential to do the opposite. How we can come into this place and argue that we want to see optic fibre rolled out more slowly in greenfields sites and for there to be greater bureaucracy in the way it is rolled out beggars belief, but that seems to be what the government is proposing here.

The second reason that coalition members believe that the bill needs to be amended is that, as presently drafted, it represents a missed opportunity to take advantage of the existence of the competitive greenfields operators to impose effective competitive and cost discipline on NBN Co. It is especially worth highlighting the phrase 'to impose effective competitive and cost discipline on NBN Co.' I think we would all argue that we need to see that when it comes to NBN Co., because if we do not we are going to see the creation of one of the greatest white elephants this country has ever seen. In an area in particular where the market seemed to be working quite well, we now look like we are going to have a bill which will impose more uncompetitiveness and less cost discipline on the behemoth which this government is setting up in this area, NBN Co. The third reason that the coalition members believe the bill should be amended is that the regime established by the bill is damaging to competition in the market for the provision of new fibre infrastructure. So, rather than driving further competition into the sector, it is actually going to do the opposite. They are the three key reasons the coalition has problems with the Telecom­munications Legislation Amendment (Fibre Deployment) Bill. I will explain in a little more detail what these problems are and then raise another issue which is directly relevant—the rolling out of broadband to greenfield sites where we will not be able to provide optic fibre. That was being done under the Australian Broadband Guarantee program, which was meant to run for an additional 12 months. Sadly, the govern­ment, although it said on its website that it was to run for another year, has pulled the pin on it. We now have to rely on NBN Co. using satellite to provide services in this area. That has caused sovereign risk damage to those wireless providers that were operating under the Australian Broadband Guarantee—something which we have seen occur all too often with this government. It also means that consumers in areas where we will not see fibre to the premise are going to suffer because they are going to get delayed and inadequate services provided by satellite. I will touch on that in a bit more detail as well.

The NBN estimates that 1.9 million greenfield households will have to be connected to the NBN by 2020 and 250,000 households will have to be connected by June 2013. You would hope that what we get is less red tape and more competition to make sure that this occurs. The NBN has allocated more than $100 million to connect greenfield households. Once again, we do not see any detailed costings or analysis on how the NBN will allocate its money. It is just that we have a figure of more than $100 million to connect greenfield households within the first year of operation. In the first five months of 2011, NBN Co. received more than 1,480 applications from greenfield developers, representing approximately 133,000 premises to be connected across Australia. So there is demand for these premises to be connected. The problem is that the marginal cost of installing fibre in new housing developments is low compared to the benefits. The government's policy paper on greenfields estimated that the cost of rolling out a fibre-to-the-premise conn­ection is approximately $2,500, which is about $1,500 greater than the cost per premise of a broadband capable copper based connection. However, the increased cost will not always be paid upfront by homeowners. Traditionally, it has been split by developers and telecommunication providers who recoup costs through offering superior services.

Although we on this side support regulation that would ensure fibre to the premise is used in greenfield estates, there are several concerns. Changes to the market structure will ensue from the role of NBN Co. as a provider of last resort. However, NBN Co. has agreed to absorb the cost of rolling out fibre in greenfield sites—costing up to $3,000—which puts them at a competitive advantage to competitors who must come to an arrangement with devel­opers. Again, we have an area of competition where, by setting these rules, we ensure that NBN Co. has the advantage as the behemoth. As the white elephant that it has the potential to become, it will sadly be able to gouge and make sure that where there is competition it will be lessened.

There is also huge worry—and this is why the design of the bill does seem fraught and lacking—that the lack of consultation with industry will result in an eleventh hour decision that the NBN establishes technical standards that will be too onerous for small providers to meet. In a market where we need to encourage smaller providers, this government is sadly going to create a sit­uation where NBN Co., through onerous regulation, will be able to dominate the market. Part of the rationale that the gov­ernment gave for the NBN is that it would end the dominance of the vertically integrated Telstra. According to the ACMA Communications report 2009-10, Telstra boasts 82 per cent of the fixed line telephone market and 65 per cent of the DSL, which accounts for 82 per cent of fixed line internet connections.

The opening up of Telstra exchanges have to an extent diminished Telstra's dominance. The number of unbundled services offered by competing ISPs increased by 23 per cent between June 2009 and June 2010. Telstra's share of the market was reduced from 70 per cent to 65 per cent. However, the greenfield market is incredibly competitive. Of the 909,000 cable and fibre connections in Australia, more than 400,000 have been connected by small operators under the greenfield fibre operators of Australia. The government's own policy document on greenfield estates states:

The installation of FTTP is taking place in a competitive context, with developers typically contracting out the provision of infrastructure and services in developments.

Why then are we again looking to concen­trate commercial power in this market when the government's own documents say that we are seeing good competition here?

Once again we are seeing a government that seems to want to re-regulate, to create a large player to replace Telstra and, sadly, to impact on the small providers.

On that matter, I want to spend some time looking at what is happening with the Australian broadband guarantee, because we are going to see the same thing happen there as well. We have small competitors operating and providing services through wireless, yet the government is bringing forward the end of the Australian broadband guarantee program by 12 months, creating serious sovereign risk to these wireless providers in country areas. They have now decided that that will be replaced by NBN Co., who have now said that they are going to use satellite. It seems that they are not in a position to roll out the satellite services at the speed with which the wireless providers were under the Australian broadband guar­antee.

There is also no guarantee that an equivalence of service in terms of speed will be provided. It is commonly acknowledged, especially in country areas, that wireless is a far superior technology to satellite and is far more economical from an installation and maintenance perspective. So I would strong­ly urge the government to look again at this issue and urge against using satellite to infill or provide a quick fix for wireless areas whilst the NBN wireless network is built. We should see a continuation of the Australian broadband guarantee program, at least for another 12 months, until NBN Co. and the government can get their act together and we can see wireless once again being provided to those regional and rural areas which will otherwise suffer while this 12-month or potentially two- to three-year gap in satellite provision is filled by NBN Co.

This bill needs a serious examination. It needs to go to the Joint Committee on the National Broadband Network, which can look into all elements of it. Sadly, like many other pieces of policy we have seen from this government, in the end it is going to create more red tape rather than less, especially for smaller operators. It seems it is going to drive less competition into this sector rather than more, and this will occur in an area where competition, in the government's own words, has been working extremely well. It is also a shame that what we are going to see, through red tape and costs, is probably that NBN Co. will in the end be the major provider of services in this area and, sadly, will push competition out of this sector. That will be damaging to telecommunications providers and the industry. I call on the government to really think seriously about going back to the drawing board with this piece of legislation, going back to industry, making sure that they consult properly with industry and making sure that we get a piece of legislation which will actually lessen red tape and continue to see strong competition in an area where it already exists.

Andrew Leigh (Fraser, Australian Labor Party) Share this | Link to this | Hansard source

I would like to begin by telling a story that comes from one of the many mobile offices that I enjoy running through my electorate of Fraser. I was standing one morning at the Kippax shopping centre and a woman came up to me and said: 'There are two issues I want to talk to you about. The first one is that I am retired, I am now in my 80s and I'm concerned about the local bus network.' So we talked for a while about the local bus network, where the stops were located and how that worked for her. Then she said, 'The second issue that concerns me is superfast broadband.' She said: 'I like to communicate with my daughter using Skype, and the picture is really patchy at the moment. You keep on talking about this superfast broadband thing, but when are we going to get it? When am I going to get a video connection that allows me to connect with my daughter?'

What this brought home to me is that those opposite are just so out of touch when they think that superfast broadband is about tweens playing video games. Superfast broadband is a technology that will funda­mentally transform Australian society, and it will do that wherever you are on the age spectrum. That is why there are pensioners in my electorate, there are working age people and there are students who are enthusiastic about superfast broadband.

We know some of the ways in which superfast broadband is going to begin transforming our lives. We know, for example, that it will allow access to medical specialists. If you live in an area which does not have a particular medical specialist and you want the chance to see a podiatrist, say, then you will have the option through superfast broadband to do an online consult­ation with a specialist. Otherwise, you might have to wait in pain for weeks or months until a specialist comes through your town or you have a chance to travel to a place where they are. But with access to superfast broadband we will be able to use technology to deal with the challenge of distance.

With education, of course, superfast broadband is again a transformative techn­ology. I know from the institution where I used to work, the Australian National University, that we initially experimented with what it would be like to have experts do a video seminar. It turned out that the existing technology just was not snappy enough. It really did not feel like you were in the room with the presenter. We tried it once with my friend John Quiggin, who is at the bleeding edge of technology. John's present­ation was great, but it just did not work for those of us not in the room in the way it would have worked if he had been there. But as the connections get faster, as we get those 100 megabits a second speeds that are promised by some of this technology, we will get to technology where it will feel like you are in the room. That will fundamentally transform the research enterprise. It will change for the better the experience of being in an academic seminar. No longer will we need to rely on seminar speakers being in the same city; we will be able to immediately have a presenter from the best universities, whether they be in Boston or Beijing, brought in by superfast broadband. That will make Australian researchers more prod­uctive.

Superfast broadband will also transform the employment experience. At the moment, it is a challenge if you are a part-timer working in a team. People sometimes say to me that it is okay having one part-time worker in the team, but if you have two or three it is really hard for the team to get together and have a team meeting once a week. But one can easily imagine a situation under superfast broadband in which it is possible for a member of that team to be brought into the conversation, to join the team meeting, maybe for just half an hour in order to be part of the team, and to improve their promotion opportunities at the work­place. It allows the opportunity for part-time workers to be far more integrated into the workforce than they have been before. It offers the potential for people, rather than burning up time and putting out all those CO2 emissions when they fly to a meeting interstate, to use superfast broadband be part of that meeting, to use that new com­munications infrastructure to have quick conversations with people in other states and to make their small, medium or large business even more productive.

I was at a forum in Gungahlin, in the growth heart of my electorate of Fraser. The questions the Gungahlin Community Council asked about NBN Co. were not, 'Why we are having it?' or, as the member for Wannon might have asked, 'Couldn't wireless do the job?' Those questions were not asked. They asked, 'When are we going to get superfast broadband and could we speed up the process?' They are enthusiastic about the opportunities it offers for improving econ­omic growth and the standard of living in Gungahlin. They recognise that we should, as the member for New England once said so pithily: 'Do it once. Do it right. Do it with fibre.' They recognise, as the member for Wannon and many of those opposite do not, that wireless has saturation problems. It is all very well if you are the only person connected to the wireless signal—then the speeds might be alright. But as other people come onto the network, as we get the crowding that happens as more people join the network or the crowding that we get over the day as more people log on at peak times, then the network slows down, becomes congested and ceases to be effective. That is the real challenge of wireless. It is a fundamental technological point. I am always mildly surprised when those opposite seem to be unfamiliar with the simple idea that wireless signals have saturation problems. We on this side of the House are committed to a National Broadband Network which will transform Australia for the better and be a key economic reform which sits alongside the major economic reforms that the government is putting in place.

The bill before the House, the Telecom­munications Legislation Amendment (Fibre Deployment) Bill 2011, will require developers that are constitutional corpor­ations to install fibre-ready passive infrast­ructure—infrastructure that makes it possible to quickly install fibre networks. It requires passive infrastructure installed in new developments in the long-term NBN fibre footprint to be fibre ready. This of course is a common-sense reform, one that is important to have in place to ensure that as many Australians as possible are able to get access to the National Broadband Network. The legislation allows carriers to access fibre-ready passive infrastructure owned by non-carriers and provides for the ACCC to have a role as the default arbitrator. The legislation creates a power for the minister to specify, by legislative instrument, developments in which fixed lines must be optical fibre. Giving the minister that power will be important in ensuring that the fibre network works as well for Australians as it can. It will provide for exemptions from the requirem­ents to install fibre-ready facilities for optical fibre lines, it will provide for ACMA to develop technical standards that will cover interoperability, performance standards, and design features for superfast broadband rollout.

This legislation is critical to the government's policy of rolling out the National Broadband Network. It will ensure early and less costly access to fibre based broadband for residents in new develop­ments. New developments, of which I expect to have many in my electorate—Fraser having most of the growth suburbs in the ACT—will experience cheaper superfast broadband. Getting that superfast broadband will be absolutely critical to those new residents feeling that they are part of the fibre network, that they have the benefits of superfast broadband network and that they are part of a community.

I have doorknocked some of the outer suburbs of the Fraser electorate. I know that, sometimes when you are doorknocking a growth suburb, you get a sense of frustration from people. Whether it arises from the bus networks, the road networks or the electricity networks, the sense of frustration of those in growth suburbs is keenly felt. This legislation accepts that that is a real issue and it steps up to the plate. Through this legislation we are saying that residents of new developments should get access to superfast broadband and that they deserve access to superfast broadband, with the e-health, e-education and teleworking benefits that superfast broadband will provide. It will give us reduced costs for the deployment of fibre by access to non-carrier duct work, ensuring that, to the greatest extent possible, we can use existing ducts and pipes rather than having to dig new ducts. There is no point in digging up footpaths that do not need to be dug up. If there are ducts in place, we want to create the opportunities for NBN Co. to use those ducts. Of course, this bill is implementing measures announced almost two years ago. The financial impact is expected to be small and it will be met from NBN implementation funding. In conclusion, I stress that the legislation before the House today is very much of a piece with a set of reforms that the Gillard government is committed to. We are committed to making policy not for the snappy grab on the evening news but for the long game—long-term reform, not simplistic three-word slogans. Those long-term reforms contain things such as compulsory superannuation—superan­nuation that will provide retirement security for millions of Australians, ensuring that Australians have the security of knowing that they can retire in dignity. We are putting in place a set of education reforms that will transform productivity—reforms such as providing school accountability through the MySchool website, rewarding the best teach­ers through performance pay, moving to demand driven university funding, and providing trades training.

All of these root-and-branch reforms of the education system are about ensuring that in the long run we have an education system that delivers productivity, because we on this side of the House know that long-term growth in living standards comes fundam­entally from long-term growth in productivity. That is why we are so committed to these productivity-enhancing reforms such as superfast broadband and education.

Climate change is, of course, another area in which we are committed to the long term. We listen to the scientists. We listen to the economists. Of course, when the Leader of the Opposition does not like what he hears from the scientists, he is willing to go out into crowds of sceptics carrying unusual placards. When he does not like what he hears from the economists—and he is, of course, yet to find a single economist who will back his scheme of so-called direct action rather than a market based mechanism and carbon pricing—he says, 'Maybe that reflects on the quality of the Australian economics profession.' My former co-author, Joshua Gans, who won the medal for the best Australian economist under 40 a couple of years ago, put it best on his blog when, in response, he said that, no, that actually reflects on the quality of Australian opposition leaders.

Those opposite are opposed to fundam­ental long-term reform in the area of climate change. They are concerned instead with slogans. We on this side of the House are concerned with the long game, with ensuring that we price carbon and make the steady transition to a low-emissions Australia. We are committed to the highway network of the 21st century—the National Broadband Network—laying down an infrastructure that will be as critical to future generations as the road network and the rail network are to ours, an infrastructure that those opposite will oppose now but, I suspect, will look back upon in their dotage and think: 'How did I do that? How did I find myself on the wrong side of that debate? What was I thinking in saying that Australia should be stuck in the slow lane of the information superhighway?' I commend the bill to the House.

Steven Ciobo (Moncrieff, Liberal Party) Share this | Link to this | Hansard source

In this debate on the Telecommunications Legisl­ation Amendment (Fibre Deployment) Bill 2011, it is indeed a unique privilege for me to have the opportunity to follow the member for Fraser, for a number of reasons. One is to do with the very first example that the member for Fraser gave of why the 'superfast broadband', to use his words, that the Labor government is rolling out through NBN Co. is going to be such a revolution in this country. He said that it will enable those in remote areas to interact and have a consultation of sorts—a virtual consultation, if you will—with a specialist somewhere else, and that this is going to revolutionise the health industry. Otherwise—and he had to walk a very fine line here—that person could be left waiting for weeks to consult a specialist. I noticed he never referred to the fact that state Labor governments have presided over the at-times abysmal health system in this country, with various public hospitals having extraordinarily long waiting lists. That was conveniently left to one side.

Notwithstanding that, he made the point about this revolution that is coming as a result of superfast NBN broadband. He must not have been here in question time. Where were you, Member for Fraser, in question time? Had he been here listening he would have heard the Minister for Health and Ageing and the Prime Minister wax lyrical about the revolution in health. It was a matter of only a couple of days ago that the Prime Minister was in Darwin and the health minister was in Adelaide and they undertook a consultation between a specialist and a patient, one in Adelaide and one in Darwin. There is no NBN, but this happening now. In fact, the government was crowing about it in question time. There is no need for the expenditure of some $53 billion of taxpayers' funds to build the NBN; it is happening today. What an unfortunate choice the member for Fraser made for his very first example of how the NBN is going to change the way Australians will live.

I am also a little intrigued, following on from the member for Fraser, about the way in which the Labor Party seems to have taken to its beating bosom the notion that the NBN is going to be the greatest thing since sliced bread. We hear it from member after member as they trot out their various speaking points. They have the fever—the new religion—that the NBN is going to be the thing that changes the world. You can almost hear them all saying 'amen' in unison as the various members of the Labor Party stand up. It was fascinating to hear that it is not just fast broadband, high-speed broad­band or a somehow faster form of broadband. What we kept hearing from the member for Fraser, over and over again, were those two words that, almost for dramatic effect, he ran together: 'superfast broadband' he kept saying.

I am intrigued. There was an article only a week or so ago that spoke about the opport­unity there might be for new technologies to allow data transfer speeds of up to one terabit per second. We have the government talking about superfast broadband at 100 megabits per second. I would love to see the member for Fraser come back into the House, if we do have one-terabit data transfer rates, and talk about 'super-super fast-fast' broadband or some such thing. You can almost sense the excitement. I know I was excited listening to it, but I have to say, the Labor Party is like any good spiv with a silk tie. Unfortunately, the Labor Party is filled with salesmen. It is filled with salesmen rather than people who actually know what they are talking about.

We also heard the member for Fraser wax lyrical about saturation problems with wireless technology. A country of 22 million people potentially has saturation problems with wireless technology! I interjected, but I am not sure whether it was picked up by Hansard. I asked, 'What do they do in India and China?' The last time I checked, the populations of those countries were a little bit bigger than ours. And, the last time I checked, those countries had full access to mobile telephony and full access to data transfer. I think even Korea and Japan do, as well. So just maybe the argument that wireless technology cannot deliver these same outcomes is a little bit spurious. The reality is that, like everything from the Labor Party, it is a case of 'Sell the sizzle but not the sausage'. This party is the sausage factory extraordinaire. This Labor Party is just feeding in the rubbish and hoping that what it can sell is the sizzle. It will get up and speak in debates like this about how it is going to provide superfast broadband, about how it is going to help 80-year-old pensioners or about how it is going to be the glorious revolution of the health industry, despite the fact that their own minister and Prime Minister, at lunchtime and in question time today, highlighted that they are already doing the things that the member for Fraser was saying were only going to possible because of NBN Co. Do you know what else is possible? Not only are his examples redundant, not only will the NBN be potentially redundant—

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

Potentially redundant!

Steven Ciobo (Moncrieff, Liberal Party) Share this | Link to this | Hansard source

That's right, potentially redundant—but in my own electorate of Moncrieff on the Gold Coast—Australia's innovation city, as we are officially titled—we have Telstra rolling out 4G wireless technology today. I hope the member for Moreton knows what 4G wireless technology is.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

It's better than 3G, is it?

Steven Ciobo (Moncrieff, Liberal Party) Share this | Link to this | Hansard source

I am looking to see if he actually knows what I am talking about, because he is going to speak on this. Telstra is rolling out 4G wireless technology that allows—shock, horror!—100 megabits per second. That is what it is doing now through cellular telephony—100 megabits per second under 4G technology. And do you know what, Mr Deputy Speaker: it is not costing taxpayers a cent. It is not costing taxpayers a single, solitary cent for Telstra to roll out 4G technology with 100 megabits per second.

If you listen to the Labor Party, you might think: 'Look, Steve, you're getting a bit excited for no reason. We are going to have NBN. It is going to change the future of the Gold Coast. It is going to change the future of Australia's most service industry oriented city in the country. It is going to change the future of the sixth largest city in the country.' Unfortunately, the Gold Coast is not even slated for NBN rollout for the next six years. It will be six more years before it even thinks about rolling out fibre across the Gold Coast under NBN Co. This is coming from the Labor Party, which expects the Australian public to take it seriously when it gives us this kind of piffle. That is exactly what it is: a gigantic investment in ego. It all comm­enced with Kevin Rudd, the member for Griffith, when he was the Prime Minister of the country, and it has been continued by the current Prime Minister because it needed to be a matter of policy consistency. Heaven knows the Labor Party needs some policy consistency, and the reason we are now seeing Australian taxpayers being slugged to the tune of $30 billion to $50 billion is so the Labor Party can roll out its revolutionary fibre to the premises, FTTP, NBN.

When Labor talks about a revolution, there is a revolution all right. It will be the revolution of the children of today who are going to be encumbered with debt as a consequence of this junk policy from the Australian Labor Party. That is not to say the technology is all rubbish, not for one moment. Perhaps the member for Moreton should listen, because he might be able to understand the difference—

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I am about to point out a few.

Steven Ciobo (Moncrieff, Liberal Party) Share this | Link to this | Hansard source

Yes—between policy and technology. The reality is that there are benefits that flow from fibre to the node and, indeed, from fibre to the premises. There are benefits that flow. The coalition's problem is not with the technology per se but with the fact that the Australian Labor Party has effectively taken all of our eggs, when it comes to the technology, and put them in one basket. It has delivered a great big monopoly to NBN Co. At a time when the rest of the world has walked away from government publicly owned monopolies, we are embra­cing it lock, stock and barrel through the Australian Labor Party. You have really got to wonder why it would do it, because in all these highly saturated areas where there is a degree of population density—so every capital city, including centres like mine in the Gold Coast and other major regional towns like Cairns and Townsville—we have the ability for there to be a commercial rollout of this technology, for private providers to be in the space and for this technology to be made available.

Nowhere is this more apparent than with respect to greenfield sites, which this bill turns to. Nowhere is there a greater example of direct, private investment in greenfield sites than there is through the fact that there is a very large percentage, often in excess of 50 per cent of greenfield sites, that historically has seen the deployment of so-called pits and other fibre technologies through the development of the greenfield site by private operators. This bill actually goes some way towards making sure that that basically does not happen. The reason is that, because of the designation of NBN Co. as a provider of last resort, because NBN Co. will pick up the cost associated with greenfield sites and because NBN Co. will often wear the cost associated with pits, we now have an incentive for developers to simply walk away from these things—although it is legislated—knowing that NBN Co. will be undertaking those activities and doing it at taxpayers' expense.

I have no doubt that NBN Co. will be extraordinarily successful, for lack of a better term, with respect to greenfield sites. This is because any developer with half a brain will know there is no point in their hiring a private operator to undertake these activities or in their undertaking these activities themselves because taxpayers will subsidise the entire deployment of fibre at their greenfield site, thanks to this bill going through the parliament tonight. That is what the Labor Party is going to deliver them. There is little wonder that I and many Australians are deeply cynical about Labor's policy with respect to NBN Co. There is little wonder that we recognise that this is an investment in ego and not an investment in good policy. Good policy would dictate that there should be a level platform that enables the private sector to compete for those markets where it is commercially feasible to do so. Good policy would dictate that where there is not a commercial case to undertake this investment, that is when the government should step in. But that is not what we have from the Labor Party—that is coalition policy, it is not Labor's policy. Labor's policy is to say, 'It doesn't matter whether it's commercial or not. Taxpayers will under­score the entire project.'

For cities like the Gold Coast, where Telstra is already in the process of rolling out wireless technology providing 100 megabits per second, with no cost to taxpayers, and where the Australian Labor Party does not even have a schedule for NBN for six years, the Australian Labor Party says, 'No, you've got it all wrong, Steve. The taxpayers have got it all wrong. The NBN is the way to go because taxpayers will pay for it. It will be in excess of six years but, hey, it will have been worth it.'

I am unashamedly opposed to the complete waste of taxpayers' money that is NBN Co. Where it is not commercial for private providers to undertake that activity, fine—the Labor Party would carry me. But the reality is that in the vast majority of instances, it is commercially feasible, it is already happening, and the highest concentration of private providers in this space—who are about to have their throats slit by the Labor Party because of the passage of this bill—is with respect to the deployment of fibre-ready technologies in greenfield sites.

Labor members opposite, who are now sentencing to an economic death a number of employees with those private providers who used to undertake these activities, should know that that has happened because of the passage of this bill. They should know that that is what they are doing. They are making sure that private providers, who have demonstrated usually at least 50 per cent of the time with greenfields sites that they can undertake the job, will now no longer be in a position where it is economic for developers to engage those private providers and instead to have NBN Co. step in. That is the consequence of Labor Party policy and it is yet another example of how Labor has its policy priorities completely screwed up.

Furthermore, when you listen to the paltry excuses put forward as to why this needs to happen, when you hear the member for Fraser—one of the golden boys of the Labor Party—giving an example, which has been used by the minister today, which has already taken place, and not something that requires NBN Co., when you see the deploy­ment of technology by 100 per cent private money through Telstra on 4G wireless technology, it is little wonder that I and so many others are so deeply cynical about this government's spendathon when it comes to the absolutely reckless manner in which they are about to expend yet another $30 billion to $50 billion of taxpayers funds building a massive new government monopoly. This is not good policy and the Australian people will certainly not be grateful for the Labor Party undertaking this activity.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I thank the member for Moncrieff for his contribution. I was in his electorate last night at the National Awards for Excellence in School Music Education at the Gold Coast Convention and Exhibition Centre, which I think is in his electorate. It was quite a wonderful affair, handing out some awards on behalf of the Minister for School Education, Early Childhood and Youth, Mr Garrett. It is amazing to see how young musicians and music teachers can all link up around the world and take advantage of this emerging technology. I was glad to see that he was accepting of the advances that will come with technology.

The legislation before us, the Telecommunications Legislation (Fibre Deployment) Bill 2011, as you well know Deputy Speaker Sidebottom, is all about a common-sense approach to what goes on in new residential developments. I know there have been many new residential develop­ments on the Gold Coast strip, between my electorate and the Gold Coast—I see them when I drive down there. We are making sure that the nation is fibre-ready, that each of these new developments gets it right in terms of the ducts, the pits and the pipe—getting our ducts in a row, I guess—from one development to the next development.

This is a good, common-sense economic policy which is what underpins the entire NBN in the first place. It is all about making sure our future productivity is in an interconnected nation—beyond the major urban centres, beyond the Gold Coast and the glittering lights, and into the regions. While the member for Moncrieff can say, 'Yes, on the Gold Coast we are doing okay; we've got 4G', a good government governs for the entire nation. Obviously, there are some problems whenever you get a few people on the 4G system. It goes slower and the technologies of the future will be hamstrung—that is why we need to have these complementing each other. We need to look beyond the conurbations to the rural and regional areas and look at the opportunities that will come for all of Australia.

This is a practical measure that we have before us. Basically, all we are saying is that if any developers who are constitutional corporations—able to be controlled by the government—are building some infrast­ructure, they make sure it is fibre-ready. It is easier to do the pits and the pipe at the start of the development process rather than retrofitting something to a development, ripping up footpaths and all those sorts of things. These are an inconvenience and part of the burden that comes with an NBN program which is such a visionary scheme. It does make more sense to do it at the onset rather than later on.

This allows the carriers to access the fibre-ready passive infrastructure that is owned by the noncarriers and provides for the Australian Competition and Consumer Commission to have a role as the default arbiter. It applies to new real estate develop­ments because the fibre will be rolled out across the nation to 93 per cent of premises. It is important that we get it right in these new developments. There has been extensive consultation with the development industry about these reforms. It is not something that has been sprung on them; it has been able to be built into the price. As I said, this keeps the cost as low as possible for the ultimate consumer of the National Broadband Network.

Rather than just saying, 'Let the market rip', which seemed to be the approach by the member for Moncrieff, this is a common-sense approach with the gentle guiding hand of government saying, 'Why don't you do it early on, rather than just wait for the market to decide.' As we all know, with anything it is best to do it upfront rather than retrofitting. Even in a building such as this, which is only 21 or 22 years old, in the last year there have been problems in meeting the technology needs of a modern parliamentarian. Things change quite quickly, so it is best to have the capacity to deal with each new develop­ment—they need to be lined up so that the pipes and pits are ready to enable the NBN to be rolled out. This is a very practical response to rolling out the NBN.

I saw that the member for Moncrieff was quite overheated. Maybe he was a bit riled because of what we saw two weeks ago, with the NBN Co. representative standing alongside the Telstra and Optus represen­tatives, indicating that this is happening and that this is real. This is the biggest investment in infrastructure since the Snowy Mountains scheme—it is beyond the Snowy Mountains scheme. It is being rolled out now. I understand, Mr Deputy Speaker Sidebottom, that Braddon has benefited greatly from this. The benefits are more than just within the nation. The NBN is able to link the regions, link the cities, link them with the world and create business opportunities overseas.

We have seen a lot of signs and symbols lately. When I open my paper or when I watch the news at night, I see the Leader of the Opposition in a hard hat, stalking a manufacturing business—turning up and spreading his big fear campaign about the carbon tax. That is an important symbol, a visual symbol. It seems to be what the media is interested in. I assume there are people out there now stalking the retailers or manufact­urers of Queanbeyan and looking for an opportunity to say, 'We need the opposition leader to come along like he does in so many of these places.' I think it was the Ford Motor Company factory in Geelong where he turned up. He does not actually go in and talk to the workers; he just turns up, talks to middle management, puts the hard hat on and then off he goes. We get what he sees as the sign and symbol and then off he goes. It does not matter that the opposition's plan is actually to rip $500 million out of the car industry. He does not want to go in and talk about that; he just wants to run with a bit of a fear campaign.

While I am talking about signs and symbols, I note that where the NBN will be very useful is in schools. As a former teacher, I know how much things have moved on. I can remember the internet first coming into the classroom when I was in my last few years of teaching. Now you go to classrooms where the kids in grade 1 and even kids in prep are using computers in a way that is unbelievable. That is why you have to be prepared. Obviously, the NBN will complement our education policy—over $65 billion invested in education. Symbols are important when it comes to education. We have debates in here about education; we had one today. Over the years of the Howard government, we had those wonderful—more than 2,000—flagpoles rolled out throughout Australia. It is important that we give our flags a space; we all know how important a symbol that is. But compare that with the 2,000 libraries that the Labor Party rolled out or with the other investments in school halls, language centres, science laboratories—all those things are obviously much more than just symbols.

I have been following the broadband shenanigans opposite for quite a while. I know it is hard to get it right because the technology changes so quickly, but I think there were about 20 failed experiments. They kept having problems. I think one of the problems was that one of the rollouts was based on the planning assumption that Australia was as flat as the Netherlands, but then someone pointed out that there were some mountains and valleys and a few things like that in the Australian landscape. Even though we are the flattest continent, we do have some hills, especially in places like Brisbane.

I particularly remember when, some 12 or 18 months back, the Leader of the Opposition had an interview with Kerry O'Brien—it might actually have been the last interview he had with Kerry O'Brien—talking about the NBN. What was the Leader of the Opposition's major grasp of what the NBN would be used for? For sending e-mails, I think. I am sure he has moved on a little bit since then and does see the business opportunities, the productivity opportunities and the employment opportunities for rural areas, regional areas and our cities. It would be nice for him to go back to our national broadcaster and engage with people about the NBN. We hear that his instructions to his shadow spokesperson were very simple—to rip up the process, to just say no. It is funny—today I saw the Leader of the Opposition talk about having an $85 million plebiscite because he wants to consult with the people, but he will not talk to our national broadcaster about any topic, it seems.

Anyone who has been in this game long enough knows that the Australian economy faces challenges. We have a high dollar at the moment, so that makes it hard for our manufacturers to compete on the world market. Our labour costs are high compared with those of most of our near neighbours, so it is hard. There are pressures out there; pressures on manufacturing businesses, pressures on lots of sectors of the economy, even labour shortages in certain sectors. However, those opposite are basically suggesting that we go down the low road. Their answer to the question of how to bring those costs down is to attack wages. This is a short-term fix and will not provide any great productivity boost. The smarter way to approach the problem is the high road—to try and boost productivity. Obviously the NBN will provide a massive number of opportunities to boost productivity.

As a Queenslander, as someone from the most decentralised state in Australia, it would be ridiculous for me to stand here and say, 'My electorate is in inner-city Brisbane, so I will be all right. The bush can be forgotten.' That seemed to be basically what the member for Moncrieff was saying—let the market rip, and they will be right. The markets are there in the bigger cities, but obviously a good government looks after the country. I am from country Queensland myself, and apart from the NBN no-one is in any great rush to roll out to the country areas. I can understand why the Leader of the Opposition found it hard to consult with the member for New England and the member for Lyne about the advantages that the NBN would bring to them when he did not have an understanding of it. Anyone with a connec­tion to rural areas would understand the benefits that will flow.

I note that there was a dissenting report to the report presented by the member for Lyne. This dissenting report is 5,096 words—we could have saved a lot of time and effort if the Hon. Malcolm Turnbull had just said no. It would have been as simple as that. That was obviously going to be the tactic—just say no, do not go into any great detail. The dissenting report was basically 5,096 different ways to say no. Thankfully the committee has taken a bit more time to look over the issue and see the advantages and, as we see the NBN rolled out to the 93 per cent of premises that are preparing to take advantage of this massive piece of infras­tructure, I think this dissenting report will be seen in the proper light.

The bill basically contains four key measures in proposed part 20A. It enables the minister to specify new developments or classes of new development in which the fixed lines that are installed must be optical fibre lines. So there is the capacity there to take advantage of the local situation. Also, the bill provides that when fixed line facilities are being installed in a develop­ment, these facilities must be fibre-ready. That is a common-sense approach—do it up front and it is cheaper. It is a case of a stitch in time will save nine, rather than having all the problems that go with retrofitting and ripping up concrete. Third, the bill will have the effect of basically requiring constit­utional corporations to install fibre-ready facilities on or in close proximity to their developments. We do not want to have the rail lines all over again where we have different sizes and they do not match. This is the 21st century and we want to make sure that they all fit together for the benefit of the nation. (Time expired)

Don Randall (Canning, Liberal Party, Shadow Parliamentary Secretary for Local Government) Share this | Link to this | Hansard source

I am very pleased to speak on the Telecommunications Legislation Amend­ment (Fibre Deployment) Bill 2011. The NBN is an issue in my electorate and it is an issue around Australia. The electorate believes this is a very ham-fisted, expensive operation to deliver what could have been delivered by the private sector. Now the government is essentially renationalising communications in Australia. We are going back to the days of the PMG. We are almost in the business of renationalising telecomm­unications and phones, et cetera. The government wants to control and own everything that we operate now.

What brought this about? What made the Labor Party decide to spend somewhere between $30 billion and $50 billion? And why do I use such a wide range of figures? Because the government does do not know how much it will end up costing. It was not that long ago that we heard NBN Co., through its pristine-charactered Mr Quigley, say it could not get anyone to build the network, so it pulled the contracts. Nobody wanted to build it for the cost it was thought it could be built for. Of course there are going to blowouts. The people who saw this build as a cash cow are now suddenly running into a bit of heavy weather.

Why are we in the position we are in? Largely because the Labor Party, on taking office, fell out with Telstra. We did not like Sol Trujillo very much—I certainly did not and I said a lot of unkind things about him in this House, which were largely all true—but falling out with somebody does not mean you decide to totally uproot the system you have and then go and borrow a massive amount of money to renationalise telecom­munications in this country. President Obama had the same situation confronting him in the last 12 months and, rather than saying it was all too hard and he would get the government to build it, he allowed the private sector to roll out enhancements to the telecommunications system in the United States with a mix of technologies.

As previous speakers, including the member for Moncrieff, have said, we have put a lot of eggs in one basket. We have gone with fibre to the premises, which used to be called fibre to the node, and this is the most expensive option that could have been chos­en. Our shadow minister, the member for Wentworth, Malcolm Turnbull, knows something about this. He was one of the early entrants into this technology years ago, when he was a cofounder of an internet company, so his credentials in this area are quite good. He describes this as watching a slow-motion train wreck, and that is what is happening—it is a slow-motion train wreck on the roll-out and implementation of this program.

The sad thing is that the future mums and dads of Australia and their children will be paying for this slow-motion train wreck even although it did not need to happen. There could have been a fat controller at the signals to stop this slow-motion train wreck. The controller is not there because both the previous Prime Minister, Kevin Rudd, and the current Prime Minister have just given the Minister for Broadband, Comm–unications and the Digital Economy his head and allowed him to run rampant on this issue. I am in one of those curious electorates that causes problems for this particular rollout. I have high-density urban, outer metropolitan, semi-rural, rural, agricultural, hills, beach sides, small towns under 1,000 people—I have the whole gamut. That is why people in my electorate are very concerned about this issue. In fact, they have called public meetings on this and they have called me to meetings in their own houses to say: 'We are very concerned. What is happening to that Telstra line that goes past my house now? Will I still be connected to that or do I have to sign over?' When it first started people were not sure, but we know now that Telstra has received $11 billion in taxpayers' money from NBN Co. to take over its lines. Of course Telstra and its shareholders are happy because it is an absolute cash cow at the moment, but the good old taxpayers of Australia have forked out $11 billion to take over existing infrastructure. Whether it gets used or whether it is overlaid in certain areas, we do not know.

The incredible thing about this is that by having put all their eggs in one basket and given the number of years it will take to rollout, there is a real chance that eventually the technology we are talking about could be redundant by the time it gets to your home. In Piara Waters and Harrisdale in my electorate there is an area that is partly greenfields and partly constructed and Telstra have stopped putting infrastructure into that area. The residents there have asked me, 'I cannot get ready access, so what are you going to do?' With their old copper wire network and RIM technology, Telstra are feeding out a few ports here and there from their exchanges, but they are not committing to any significant build because they are saying to my constituents, 'We're not going to come and build anything new for you because the NBN's coming and we're not going to spend any money on something that is going to be overlaid in the next six, eight or 10 years.' As a result, they say, 'Here's a phone for you.' They give them a second-rate mobile phone to use because of the universal service obligation. It is just a short-term fix. It really is a bizarre situation.

The towns that are further out in my electorate and which have fewer than 1,000 residents will not get part of this. We just heard the member for Moreton give us a figure of 93 per cent. I thought it was a bit higher than that, but I take his figure of 93 per cent. A whole lot of small towns in my electorate, like Jarrahdale, Mundijong, Serpentine and Preston Beach, will not be getting any meaningful telephony or internet connection through the NBN. To me it is really quite wrong and sad for anyone who is in an outer urban area to not get those services, despite this massive spend.

Mandurah in my electorate is an example of how we need to address some of the original problems. It is about an hour from Perth and it is still on timed local calls. We are trying to get Telstra and the regulators to broaden the zone, but the town is still paying for timed local calls in this day and age. We heard from the member for Moncrieff telling us about how on the Gold Coast, Telstra, as a private operator, is currently running out lines that are capable of 100 megabits per second. I have an article here titled, 'Move aside NBN, the future's already here.' It says:

Australia's Academic and Research Network say they're doing what the NBN will do in a decade, today.

So NBN Co. is going to take a decade to get speeds of 100 megabits per second to your house, but here we have AARNET giving the NBN a run for its money because they are going to deliver those speeds now through something quite simple:

… the research network announced yesterday that it successfully boosted the delivery speeds of its existing fibre optic network simply by placing 40GB 'muxponders'—supersized transponders—onto either ends of the cable.

You put these muxponders at either end of the cable and you get these speeds over longer distances. So the technology is going to race ahead of the NBN, despite its cost. I have two cases in my electorate that bear going over again. I have raised these before and they have not been fixed. There is the case of the Carey Baptist College in Forrestfield in my electorate which needed decent speeds for the school. It has outgrown its own site right now and it is going to move onto another greenfield site further down the road, which will have its own issues of internet connection and telephones et cetera. The school has sought my help in getting faster speeds and better connections. I have pointed out that Telstra does not want to help anymore because the NBN is meant to be coming to this region. Interestingly, and I say this in the nicest way because Senator Sterle and I have an arrangement on these matters—we criticise each other and we have broad enough shoulders to handle each other's criticism—in an article on 21 June 2011 it was reported:

Labor Senator Glenn Sterle took a swipe at Canning MHR Don Randall over his claims Carey Baptist College’s broadband and internet problems were due to the National Broadband Network.

Mr Sterle said Mr Randall attempted to lay blame on the NBN despite knowing the problems had existed for more than a decade.

As I pointed out in this article, it was a free kick, Senator Sterle, because when this school was being constructed I was there to try to force Telstra to provide the services to the school. I assure you that if I had not involved myself in this the state office would have said: 'We have no arrangement. In fact, they'll have to pay for the infrastructure costs. This is a non-government school.' So they tried that on for a while and when we decided to put a bit of pressure on them at the national level they eventually came good. So thank you for the free kick, Senator Sterle. Paul Oates, the administrator from the school, pointed out that if I had not been involved, they would not have got it. But they are still struggling because there is this big disconnect: Telstra are not providing anything because, 'The NBN's coming' and the NBN are saying, 'We don't know if we are going to get there.' Even Mandurah, whom Senator Sterle refers to in this article, are saying that it is going to be one of the first places to be rolled out. Most of the infrastructure is in the ground in Mandurah but the speeds are not sufficient. They have already set a few dates when Mandurah will be rolled out and every one of them has been missed. They failed all the rollout dates for the particular location in Mandurah around Halls Head.

Finally, I point to an article in the local newspaper which is headed 'Phone delay frustrates'. Tilling Timber state manager, Jeremy Coleman, says that for 18 months he has been promised phone and internet. The developer in the industrial estate had put the infrastructure in the ground but they have no service because Telstra was not interested in connecting because, remember, 'The NBN's coming.' Telstra did not want to do it, so what did Tilling Timber have to do? They had to spend $36,000 to install an elaborate substitute to get phone and internet connections. They had to get a wireless link from Armadale's industrial park to the R&I building in Perth to get a connection and then that was rerouted through the office. It is the same with their phones. Other businesses out there decided they would not start building until this was sorted out. It was not until I got away from the state office of Telstra and I wrote to David Thodey, chief executive of Telstra, where I pointed out that there was infrastructure in the ground that I got the response that they would put copper wire in that particular area. Before I came into the chamber, I checked on Tilling Timber in this industrial area and I found that they still do not have their infrastructure and they are still not connected to the Telstra network, and they are waiting for other arrangements to be put in place.

This you beaut, fantastic huge NBN investment that could have been done privately with a mix of technologies like wireless and satellite is now going to have all its eggs in one basket. Instead of economical fibre to the node so that copper can be connected to the home, they have gone for the most expensive model, which could be redundant in years. Dare I say, this is one of the failings of this government: if it is not your money, spend it like the Watsons because it does not matter. That is why this government are in trouble electorally, because people do not believe they can deliver for them. (Time expired)

Janelle Saffin (Page, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in strong support of the Telecommunications Legislation Amend­ment (Fibre Deployment) Bill 2011 and I do so for the following reasons. Firstly, it gives effect to the general policy of establishing a nationally consistent, high-speed broadband network to 93 per cent of premises, including residential and others, to provide download internet speeds of 100 megabits per second, and provide fixed wireless to four per cent of premises and satellite to three per cent of premises, including households, at a speed of at least 12 megabits per second. The national network will similarly be open access and wholesale only. This legislation also speaks to a particular part of the NBN policy framework, fibre in new developments. The January ministerial statement articulated that:

NBN Co. ... would be the wholesale provider of last resort in new developments within or adjacent to its long-term fibre footprint and meet the associated cost of this obligation.

It is really important that this is legislated as new developments are rolled out to ensure we are not left behind. The Telecom–munications Legislation Amendment (Fibre Deployment) Bill amends the Telecom–munications Act and that supports the policy that fibre-to-the-premises infrastructure has to be installed in new developments. The bill also reflects the policy that NBN Co. will be the fibre provider of last resort. It adds a new part to the Telecommunications Act to support the rollout of the NBN. It will apply to all types of new developments, including the broadacre estates, the urban infill and urban renewal projects. It will generally apply to new developments in NBN Co.'s long-term fibre footprint.

There are other provisions in the bill that give effect to this key objective. It requires developers that are constitutional corpor­ations, and we know that has a particular legal meaning, to install fibre-ready passive infrastructure in developments. That is where the long-term fibre footprint of the NBN is. It provides ministerial authority to determine specifications for fibre-ready passive infrastructure, if required. It will allow carriers to access the passive infrastructure that is owned by non-carriers and also, importantly, it will provide for the Australian Competition and Consumer Commission to be the default arbitrator. Also, it will enable the minister to specify developments in which fixed lines must be optical fibre and determine specifications for such lines. And it has a number of other provisions in it that give effect to the key objective.

The bill gives effect to a particular part of our policy but it also gives effect to the whole policy on the NBN, so I will make some comments that go to the whole and to the general. I have been very active in my local community as a champion of early NBN rollout on the North Coast. One thing I was able to do was to bring together a large group of people who wanted the NBN first. Everybody wants the NBN; that is understandable. It is an eight-year rollout, so we cannot all be first, but if you were NBN-ready then you stood a good chance of getting one of the early rollouts, and we did that on the North Coast. The place was Coffs Harbour, which I call the 'nerve centre' of the NBN rollout.

I worked with the local university, Southern Cross University, in particular with Professor Peter Croll, who is still at the university working on this, to get a submission ready. I also worked with 14 local councils across the North Coast and with local businesses. We were able to put in a submission which said, 'We are NBN ready,' and it was recognised that we were able to take advantage of the rollout.

The NBN Co. CEO, in announcing the site, said that sites were selected on a range of technical and engineering criteria and that the engagement of local government and the receptiveness of communities to broadband initiatives were factors taken into consid­eration. We had those three key elements present: we had the technical and engineering criteria because of the spine that goes up the east coast, we had the engagement of local government—and it was really strong engagement—and we had receptive communities.

This shows how out of step the opposition are. They come in here and talk about the NBN as though it were something that people in Australia were not receptive to. People are receptive all across Australia. We have communities right across Australia saying: 'We want to be in the early rollout. When is it coming? Is it happening now?' Of course it cannot 'happen now' everywhere. It is happening as fast as possible, but it is a huge undertaking. As we have all said, it is akin to building the Snowy project, not only in its size but in what it means for our development and our future. Surveys in my area have found that local businesses—small businesses in particular—know that they need it to be competitive and to stay on top of things. It is not as if we were introducing something 'out there', which is what you would think in listening to the opposition talk about it. They talk about how people could have wireless, but that is ridiculous. Wireless cannot replace it, and I will come to that now.

In speaking about the general policy—and this goes to the whole debate—I will refer to some of the myths around the NBN. The website nbnmyths.wordpress.com brings this together very nicely under the heading 'The top 10 NBN myths debunked'. The first one is: 'The NBN will cost taxpayers $43 billion. We can't afford it and it's uncosted'. The website says:

False

First, the government investment is capped at $26-27 billion, not 43. The remainder will come from revenue and NBN Co’s private debt.

It then has a whole lot more to say about the claim, that the project was not studied and costed. What was the KPMG-McKinsey implementation study if the project was not studied and costed? It found that the network could be built for $42.8 billion—that was prior to the deal with Telstra—would not have any net cost to the government and would have an estimated net value of $40 billion in 2025, earning a return on invest­ment of six to seven per cent, which is more than enough to repay debt and equity used to build the project. It just makes good sense. The website cites the NBN business case summary, saying it revealed the total cost of the network to be lower than the initial $43 billion estimate. If people just read, all the information and facts are there.

The second myth that is debunked is: 'If it were viable, the private sector would build it'. That is completely false. The private sector have had a long time to build it and they have not done it, because the private sector do not usually initiate and undertake nation-building projects that are of benefit to the whole country, that provide the infrast­ructure for the whole country to take advantage of in health, education, small business, farming and agriculture—in a whole range of areas. The private sector could not and would not afford it. Are parts of the private sector going to join together and say, 'Yes, let's initiate this project worth over $40 billion'? That is a huge investment for any company and well beyond any telco I know of that is operating in Australia. The website says:

The private sector demand a ROI of at least 12%, because they need to earn a profit for their shareholders. The NBN has a projected 6-7% ROI—

which is a good return to cover any debt. The private sector just would not deal with that. It says:

… while this is well below commercial rates, it's quite acceptable for a Government, which is not seeking to earn a profit.

There are a few other myths, such as, 'We'll never need that much speed or data'. That is completely ridiculous. If you have a look at the increase in the speed of internet access in Australia and what we will have, you see the only way we can maintain this is with a fibre based system and a holistic one to start off with. There is another myth: no-one else in the world is installing such a system. That is false and ridiculous. Fibre to the premises or the home is currently being rolled out across Japan, South Korea, Hong Kong, Taiwan and China. It is ridiculous to say that it is not happening in other places. The OECD actually recommends that governments build fibre to the premises networks—so the OECD does recommend it. If national governments do not do it, then who will do it? It is one of those responsibilities that we have as a government to provide that infrastructure. South Korea have announced that they are now spending US$26 billion on upgrading their old 100 megabits per second FTTP network to deliver speeds of one gigabyte, the same as the Australian NBN. This is happening even though they already have a 4G wireless network.

One of the other myths is our internet speed is good enough. That is ridiculous. The facts speak for themselves. I do not even have to go through what the technical parts are. We know that is not true. When you have a look at average speeds, you see the dismal position of Australia's internet speeds. Then there is the other one: a wireless network that can be 4G, LTE, WiMax or DSL—ADSL2+/VDSL/HDSL—can provide the same speed for a fraction of the price. That is false. Much is claimed, usually by those with a vested interest—and that means a vested commercial interest or a political interest—to try to tear it down, because we know that is what the opposition do; they are not interested in nation-building projects like this. Much is claimed about the potential of wireless networks, with speeds such as 300 megabits per second being quoted. But this is highly deceptive, because those are peak speeds per tower, not realistically achievable speeds for individuals. If you have the 300 megabits per second tower and you have two users on it, then that speed would be halved to 150 megabits per second. A trial of 4G/LTE in 2009 showed that with just 20 people using any one tower the speed plummeted to just seven megabits per second. We know that distance, topography, buildings and weather also degrade those available speeds. All this information is available and it does not find its way easily into the debate because all you hear from the opposition is, 'No, we're just going to tear this down. We don't care about it.' They had 12 years to do it. Nineteen attempts failed miserably.

Jamie Briggs (Mayo, Liberal Party, Chairman of the Scrutiny of Government Waste Committee) Share this | Link to this | Hansard source

I rise to speak on the NBN bill, the Telecom­munications Legislation Amend–ment (Fibre Deployment) Bill 2011, which is before the House and which we are debating. I make the point at the beginning that the coalition, as we always have been, is supportive of fast broadband. It is a worthy and important goal. The development of fast broadband, especially the development of accessible fast broadband at cost-effective prices, is a great economic boon for our country. But we continue to make the point that it is not a case of picking winners in this debate but rather one of looking at a mixture of technologies, which is the important way to go into the future. Countries like the United States of America, with its President Obama, have realised that. We see here in Australia a government born out of central planning days, and we have just heard the member for Page walk us through her distrust of the private sector while talking about how the private sector will not build it because there is not enough return in it, although I note that, as I understand it, the standing policy of the Australian Labor Party is still to sell NBN Co. as soon as it is established. So somehow there has been a mistransmission over the talking points given to the member for Page, because her contribution was questioning the ability of the private sector to invest in networks such as this. She says the private sector would not build something like this. Well, they do build these sorts of networks all the time. In fact, they have built a mobile network.

Ms Saffin interjecting—

Member for Page, as you walk around with your mobile phone in your electorate, which is a regional electorate, you get to use your mobile phone and your wireless devices because the private sector built those towers. So it is interesting that the member for Page thinks that the government is all good and everything that is required needs to be built by the government. That is the view of those opposite, but, of course, we have trust in the private sector and we think the private sector provides services at a far more efficient and cost-effective rate than what government ever does.

Stephen Jones (Throsby, Australian Labor Party) Share this | Link to this | Hansard source

Except when it comes to climate change. Then you want to pick winners.

Jamie Briggs (Mayo, Liberal Party, Chairman of the Scrutiny of Government Waste Committee) Share this | Link to this | Hansard source

In fact, that is not true at all, Member for Throsby.

Kelvin Thomson (Wills, Australian Labor Party) Share this | Link to this | Hansard source

The member for Throsby will cease interjecting and the member for Mayo will not respond to interjections from the member for Throsby.

Jamie Briggs (Mayo, Liberal Party, Chairman of the Scrutiny of Government Waste Committee) Share this | Link to this | Hansard source

He was completely distracting me, Mr Deputy Speaker. You are right to be raising those issues. When it comes to this bill, I think it highlights how much the government has failed when it comes to this issue. It highlights very much how they find a reasonable idea and turn it into a complete shambles. That very much sums up the NBN itself. As I said at the beginning of my remarks, we support fast broadband, but this is spending billions and billions of dollars of taxpayers' money unnecessarily, excessively and imprudently. We have seen the risk this government is exposed to when it spends such large amounts of money. We have the very sad examples of the green loans and the Home Insulation Program and with that program the government were not even able to put roof insulation batts into people's houses without burning the houses down. We have had the school halls program where they managed to spend about double what the private sector could have spent on building them. We have seen recent examples of digital set-top boxes. They have been spending double the amount of money for which Gerry Harvey or another retailer could have provided them. So when this government gets involved in spending large amounts of money, the Australian people shiver with fear—and so they should. That is why we saw today economic figures indicating a lack of confidence by the Australian people in the economy with housing and consumer numbers plummeting. That is driven by a lack of confidence in a government that is not competent. This is another bill which highlights the lack of competence of this government. There are various aspects in this bill which relate directly to my electorate such as the $40 billion spend on a network, which the Auditor-General's report today reflected upon, that Infrastructure Australia has not even seen. Even though they are meant to be looking at the top infrastructure priorities, the NBN has not been referred to Infrastructure Australia and there has not been a cost-benefit analysis done. This bill touches on the deployment of fibre and that will have an impact in my electorate as it will happen in new housing developments.

I think the arguments articulated by the member for Wentworth and the member for Bradfield have been very well made. The dissenting report highlights the problem that the government is creating for itself. It is trying to centralise and take away the benefits of competition when it comes to new developments. The real effect of this will be higher costs for people building homes in new housing estates. I have many new housing estates in my area, particularly in Mount Barker and Strathalbyn. These are already contentious areas, particularly the Mount Barker development which was forced through by the state Labor government without any consultation with the local community. Now we are seeing the federal Labor government create laws which are going to make it more expensive for people to buy houses in these developments. That was a point well made by the member for Wentworth and the member for Bradfield and very well made in the dissenting report into this issue.

The other area I want to touch upon briefly is that, when it comes to the deployment of fibre into electorates like mine, it is not easy to put it underground. I note that the NBN Co. documents, which were released last December, indicated that they wished the government to allow them to override local council regulations to ensure that they could roll out the fibre overhead, or aerial as it is described. This is a major concern in an electorate such as mine. The Adelaide Hills is the most beautiful electorate in the country without doubt. It is quite obviously not appropriate to put the fibre in overhead cables in a bushfire-prone zone over the longer distances. I understand this will be the intention of the NBN Co. This is a concern in my community and people have been raising this issue with me. As I have a semi-regional and regional electorate, the longer distances will mean that when it actually does get to us—for towns over 1,000 if you believe the government's rhetoric—there will be overhead hanging fibre used. I think this is something that the government needs to address very quickly and swiftly.

I am not the only electorate with this sort of environment. I know the member for Bradfield has raised this issue in regard to his inner-city electorate. Of course it is a lot cheaper for NBN Co. to roll out the fibre overhead. No doubt the arrangements with Telstra may have changed that slightly, but I do not think they would have changed it all that much in an electorate like mine.

This is an issue which I will raise in my local community and ask them how they intend to react if the government decides to roll out overhead wires through the Adelaide Hills, particularly through the bushfire-prone areas where most of the overhead power lines have been removed and put underground. If it is the intention of the NBN Co. going forward to do the same thing in my area, it does raise significant questions about how the business model of the NBN Co. has been planned and what the associated costs will be with using either underground or overhead wires.

My electorate is a black spot area where government funding is required to ensure that there is an equality of service. It is a point that we have always made on this side of the House. In outer metro and regional areas, like my electorate and the electorates of the member for Grey and the member for Barker, there is a need for government intervention because the market fails in those areas, and we have said that all along. Quite clearly it does not fail in city areas, and this is where the big mistake of the government spending billions of dollars unnecessarily and imprudently creates a real risk for taxpayers with the waste that we will see through this spending.

We heard the member for Page earlier say that spending $26 or $27 billion is such a Labor Party thing to do. It is a billion dollars between friends, and we only have $106 billion of debt and a $50 billion deficit this year. This is a fundamental issue about the management of our country. If we look around the world today, one of the great challenges is our Western cousins who are in deep financial trouble because they have spent too much money over too many years. We have seen this Labor government use the public purse without any effort to ensure the money is spent properly and without any effort to ensure that their policies benefit the Australian community. Quite clearly in some areas of the country there needs to be spending to ensure that services are kept up to the level which other Australians get access to, but in the city areas this makes no sense at all. This is an overbuild of existing speed which the market will meet and has been meeting. To think that over the next 10 years we are going to spend billions and billions of dollars of Australian taxpayers' money laying out fibre in areas, which the market would have met, is ridiculous.

In addition to that we are seeing questions about how it will be happening in areas such as mine where clearly fibre is not the answer. In hilly areas I suspect that fibre is not the appropriate answer nor in regional areas because there is difficulty in laying it out or indeed whether you can lay it out at all. It will be interesting to see how NBN Co. deals with that issue. I will certainly be raising it in my local community. If the rollout is to occur in my electorate, in what parts of the electorate will it be, how will it be done and how is the NBN Co. planning to do it in the future? It is a concern. The member for Bradfield raised this concern in his electorate. He raised the point that communities do not want overhead cables anymore. Communities have been trying to move away from that, and there are very good safety reasons in my area for that to be the case. So when it comes to the deployment of fibre in the electorate of Mayo, I think there are legitimate questions to be answered by the government about how this rollout is planned.

The opposition see some merit in this bill. However, we have made some very prudent suggestions, which the member for Went­worth outlined earlier, to improve the bill and to reintroduce competition, which is a major concern when it comes to the NBN. The government have turned what was a competitive market, or 30 years of telecommunications policy about creating a competitive market, on its head by creating another government monopoly that will have the same challenges. I note that the member for Lyne last week made the point about government monopolies not having worked in the past and not being likely to work in the future, and I think that was a very good point. Where the government has gone with this policy is a major concern. It is spending far too much on a wrongheaded policy in areas where money does not need to be spent rather than focusing government effort on areas where money should be spent and allowing the market to meet the demand.

Quite obviously, part of the mix here is wireless. That is where people want portability. They want to be able to use their iPads and their phones and other devices around the place. At the same time, there is no doubt that there is a place for fixed lines, and that is where the market will meet that need. For the government to spend $40 billion odd of taxpayers' money—money that we do not have, borrowed money—makes no sense at all at a time when we already have over $100 billion in net debt and when we see around the globe the great problems that are being caused by governments accumulating debt. Those on the other side will say: 'Don't worry about it. We'll be back to surplus in a couple of years. We've got this wafer-thin surplus that is on the books thanks to the commodity boom and thanks to the high prices that other countries are paying for our products.' But we know that the debt this Labor government is accumulating will not be paid off by this government. It will not even attempt to pay it off because it keeps coming up with harebrained schemes on how to waste the money of Australians, such as spending twice the amount it should on school halls and burning down people's houses with its home insulation program.

I support the remarks of the member for Wentworth and the amendments he is proposing. I also put on the record the concern in my community about the prospect of having overhead cables laid out. That is an issue that I suspect, Mr Deputy Speaker, we will be talking about more often in this House in the coming months and years.

Sharon Grierson (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

I am pleased to stand here this evening to speak in favour of the Telecommunications Legislation Amendment (Fibre Deployment) Bill and in support of the continued rollout of the National Broadband Network. Having heard the member for Mayo, I must say that the repetition of incorrect statements on the government's record over and over again cannot go unchallenged. We have a debt level that is the envy of most nations in the world. It defies logic, intelligence and economic scrutiny that the other side continues to make those misstatements and mislead the public. In saying that, I have to say that the National Broadband Network is a major economic and social reform that will benefit the entire nation.

It is always worth restating our reform record, and it is worth restating it here. The federal Labor government has introduced a number of major reforms of which we on this side of the House feel rightly proud. Our first act in government was to ratify the Kyoto Protocol. In 2008, we apologised to the stolen generation. During 2008 and 2009, our responsible financial management avoided the worst of the global financial crisis and kept thousands of Australians in employment. That was verified again in the last couple of weeks by international bodies pointing out the success of Australia's approach to handling the global financial crisis. On 1 January this year, we introduced paid parental leave for the first time in this nation's history. Just two months ago, we introduced a historic $2.2 billion mental health package, an area sorely in need of attention. Within a matter of weeks, we will release full details of our plan to put a price on carbon.

But one of the reforms of which we are most proud, and should be most proud, is the rollout of the National Broadband Network. It is always worth remembering how we changed tack on this when the market failed to tender for it successfully. I heard the member for Mayo quote the Audit Office on this issue. Being privy to some information from the audits, yes, I think some of us do know that it was one of the biggest market failures imaginable. I would say that it was unimaginable, and I cannot say anymore. As I have said in this place before, this initiative will define this government and its vision for our nation. This initiative will change the way we work, connect and deliver important services, the way we develop and best utilise skilled workforces, the way we overcome skilled workforce shortages and the way we deliver important services such as education and health.

We want a nation that will embrace technology to maximise our economic competitiveness, create the jobs of the future and improve the quality of life of all Australians. We want to overcome the historical disadvantage of the tyranny of distance, both between us and our major trading partners and between our urban and regional, remote and rural centres.

The National Broadband Network will deliver affordable high-speed access to all Australians, irrespective of where they work or where they live. It will extend optical fibre to 93 per cent of premises, with speeds of 100 megabits per second—100 times faster than many Australians have access to today. This bill is a critical element in delivering the government's commitment to extend the NBN to all Australian households and, in this case, into new developments. This bill amends the Telecommunications Act 1997 to ensure that fibre-to-the-premises infrast­ructure will be installed in new development areas. When fixed-line facilities are being installed in a new development, part 20A of the bill will require that facilities be designed, manufactured and installed to allow for the ready deployment of optical fibre cabling. I see no resistance to this bill. I see new developments going into my own area, and part of their promotion is that they are fibre ready. It is a wonderful asset to communities and it is a wonderful asset to selling new developments. This bill will literally pave the way for the physical infrastructure to be in place for the rollout of optical fibre. In turn, this bill reflects the government's policy to be the fibre provider of last resort. So, while developers will be free to use other telecommunications providers, NBN Co. will provide fibre where developers do not wish to use another provider or where no other provider is prepared to deliver the service.

The passing of this bill by parliament is just one of a number of significant steps towards making the National Broadband Network a reality for all Australians. Indeed, we have already passed a number of historic milestones. Last year, the National Broad­band Network was switched on in Tasmania for the very first time. In May this year, the Prime Minister launched the National Broadband Network on the Australian mainland. Since then, the NBN Co. has announced its first and second release sites, which include locations in every single state and territory across Australia. Just last month, on 23 June, Prime Minister Gillard and Senator Conroy announced NBN Co.'s historic agreements with both Telstra and Optus. This paves the way for a very secure future for the telecommunications industry in this nation.

I have to mention my very own milestone when it comes to the NBN Co., and one that I am particularly proud of: the Smart Grid, Smart City initiative, a $100 million initiative, that trials better ways of managing the grid, linking renewables into the grid system and managing electricity use in homes et cetera. It came to my attention that the technologies being applied were not necessarily compatible with the Smart Grid, Smart City and the NBN Co. But that does not make sense, and I am very pleased to say that there are now standardised trials being undertaken by the NBN Co. and EnergyAustralia to make sure that those technologies are compatible and that those two programs can work together. If the Smart Grid, Smart City project is successful, the trial will be run out all around the nation and, of course, go international. NBN will be part of that now.

The sum total of these new agreements with Telstra and Optus is that NBN's network of optic fibre will be rolled out to every household and become the backbone of Australia's communications system. This will be a communications system of which Australians will be rightly proud—not the cut-price model proposed by the coalition that will do little to nothing for regional Australia. Instead, the NBN will provide a 21st century communications system for a 21st century Australian economy. The case for the NBN is, to all but those in the chamber opposite, utterly compelling.

It needs to be recalled that Labor's plan for the National Broadband Network stems from a decade of failure by the former coalition government and the market to deliver high-quality internet access to all Australians. The federal Labor government will not mimic the decade of neglect on telecommunications policy under which Australia suffered during the coalition years. As a Canberra Times editorial noted today, Australian internet usage is expected to increase sixfold in the coming five years. In fact, that editorial drew attention to Gungahlin, a very well-known area here, which does not have high-speed broadband. This is a whole, big new development that suffers for many reasons, but Telstra will not put in the fibre. I have an area like that in my electorate called Thornton. It is one of the biggest and fastest growing housing areas in the electorate. Again, because of a combination of factors, fast-speed broadband cannot be delivered there unless fibre is put in. Telstra has not been willing to do that, which is exactly why we are rolling out the NBN Co. proposal.

Our current infrastructure is barely adequate for our present needs, let alone the future requirements of a 21st century economy. Relying on wireless internet might seem to make sense from the comfortable vantage point of Mr Turnbull's electorate on the harbour in eastern Sydney, or Mr Abbott's electorate in Manly, where population densities and demand make sense for private enterprise to invest in decent wireless infrastructure, but that is ludicrous to those of us in regional Australia where there has been a tremendous failure by private enterprise to provide quality internet access and where there is little incentive to provide 3G services. Indeed, many private telecommunications providers already struggle to provide decent mobile phone coverage across the Hunter region, let alone decent 3G coverage.

The paucity of copper based internet services in my electorate, like much of regional Australia, is already very well known. It amazes me that the opposition keep quoting the benefits of wireless and flexibility. We all want access to that and we are all using it, but we all know that it has to be backed up by physical infrastructure, and that is what we are providing. In those areas where we struggle in peak times to access a wireless service because too many people are doing so at the same time, we know that it will only work with the infrastructure in place. That physical infrastructure is now being delivered all around Australia.

I am certain other colleagues in the House would attest that there is overwhelming support in the electorates of Newcastle and the Hunter for the rollout of the National Broadband Network. My office has been bombarded with messages from local residents urging its speedy introduction. To paraphrase the member for Greenway, who spoke earlier in this debate: the question from my constituents has not been should the NBN be rolled out, but when will it be rolled out to us and why can't it be rolled out faster? I often ask that question myself, because the people of Newcastle do understand the enormous social, economic and cultural benefits that the NBN will bring to a regional centre such as theirs.

I wonder whether coalition members have ever gone onto the NBN website. It has the most wonderful promotion of what the service will deliver. I recommend everybody go onto the website. If you cannot imagine it, go onto the website and see what the NBN Co. high-speed broadband will offer the individual and the nation. My electorate do know that the rollout of high-speed, world-class broadband in the Hunter will make us more competitive. It will erode the tyranny of distance with major capital cities. The towering sandstone hills of the Hawkesbury that now divide us from Sydney will be less of a barrier to developing new business and employment opportunities in Newcastle. The NBN will replace the ageing and unreliable copper networks presently available. It is always interesting to speak to people who have worked for the old Telecom or Telstra. Frequently, they cannot even find where that copper wire is now. The maps have long gone. When these people go into the new little towns in the regions, they have to ask or look around to try to find where on earth the copper is. One aspect of the NBN about which I am most excited is its potential to deliver very real dividends for the health of regional Australians. The Hunter New England Area Health Service, for example, which is headquartered in Newcastle, is responsible for health services in locations as far west as Tamworth and Armidale and as far north as Taree. I keep reminding members Messrs Oakeshott and Windsor just how much the people of Newcastle and the infrastructure of Newcastle have propped up their seats and made sure that as regional seats they have not missed out. That has included the delivery of e-health services from the Hunter New England Area Health Service in my electorate.

The universal availability of high-speed broadband will substantially improve the capacity of places like Tamworth, Armidale and Taree to deliver services and advice in these regions. For example, the Hunter New England Area Health Service, supported by the Digital Regions Initiative of the federal Labor government, is already undertaking a three-year program to deliver telehealth services to more than 200 patients in rural and regional communities and the NBN is supporting that initiative. Most importantly, this initiative connects patients directly to health professionals. The program targets chronic disease sufferers and links them in their own homes to monitoring, education and support services. This potential to connect health professionals with patients in their own homes is truly one of the most exciting features of the NBN for regional Australia.

Some members of the Liberal Party do know the benefits of the NBN system. I draw attention to a new state colleague, a Liberal Party state member in Newcastle, who during the election campaign said he supported the early rollout of the NBN, saying that the 'sooner' it was rolled out to Newcastle the 'better'. I strongly encourage the federal opposition to adopt that vision as well for their communities.

In coming years the federal coalition will have a lot of explaining to do. It has been missing in action on some of the biggest reform issues in this nation. It will need to explain to the community why it has injected a historically high level of negativity into Australian public life, it will need to explain to the community why its campaign of outright lies and exaggerations about the impact of a carbon price did not come to pass and it will need to explain to the community why it opposed the National Broadband Network and the enormous benefits it will provide to all Australians. I commend this bill to the House.

Barry Haase (Durack, Liberal Party) Share this | Link to this | Hansard source

I rise this evening to address the Telecommunications Legislation Amendment (Fibre Deployment) Bill 2011 and subsequent amendments. The NBN and the process of providing high-tech communications to all Australians—and I underline all Australians—has been the focal point of members of this House for some time. It is quite clear to Australians today that we have a solution to providing that service. Less than $10 billion will provide a very capable and adequate service to all Australians. There is that inclusive again—all Australians.

This best estimate $50 billion service is going to provide ultrahigh speed to 93 per cent of Australians. There is no guessing as to where those other seven per cent reside. They are in my own electorate of Durack. The members for Lingiari, Grey and Maranoa also have a few. There is a large part of this continent where fibre to the premises will never be provided. It is those seven per cent that I am concerned about tonight. Presently, we have a proposition akin to taking out a high-cost bank loan to buy a Lamborghini to go into town and pick up the mail each week. It is dumb, and everyone out there who has ever had to balance a budget and provide facilities at the same time for a family knows that it is dumb. You do not go ahead and borrow inordinate volumes of currency and subsequently push up interest rates across the country to invest in something that is simply not necessary. There are other ways to do this job—ways that we have espoused on and on but all to no avail, unfortunately, with this government who seem hell-bent on constructing monuments. The monument to the Prime Minister, the school halls fiasco, is well known. I believe the NBN fiasco will be well known in the future as a monument to the Minister for Broadband, Communications and the Digital Economy, Senator Conroy. But, at the end of the day, it is the taxpayers of Australia who will be footing the bill. You cannot justify borrowing the funds that are being talked about by this government with the taxpayer footing the bill in higher interest rates into the future simply because you want to build a monument.

There are many parts of my electorate where mobile phones are not available. There is no doubt, however, that wireless communications is the preferred commun­ication method in rural and remote Australia. I hazard a guess that it is also a trend that is catching on swiftly in metropolitan Australia. More and more internet users are demanding that their facilities be mobile. People do not want to be tied to a particular point to gain internet access. Apple found that last year when they released their new product. The iPad was sought after by thousands and sell-outs were swift. By comparison, when the NBN was turned on in Armidale, the government was battling to get any real paying customers to the occasion because Australians do not want to pay through the nose for something that has been rammed down their throats, that they have been told is something they have to have and, what is more, that they will pay for whether they like it or not. They do not like it. If we spent a fraction of the difference between $10 billion and $50 billion, $1 billion is $1,000 million. We talk about billions of dollars as though they simply fall off trees. They do not. In this case they are the dollars of hardworking Australians, for which they will be responsible into the future. If we talk about providing a service to all Australians that is adequate and affordable, we talk about spending about $10 billion.

This particular bill is a very specific bill that relates, in the main, to greenfields. Generally speaking, we accept that in the case of greenfields there is a lot to be done. If we have to have the NBN solution of fibre to the premises, that facility will be provided at a much lower cost if it is mandated to be rolled out in greenfield developments. Keep in mind that the best guesstimate is that by 2020 there will be some 1.9 million premises that will be part of greenfield developments. So it is a very substantial market that we are speaking of.

With the size of that market in mind, we in the coalition believe that amendments ought to be made to this legislation so as to provide for greater efficiencies and greater cost economies in the rolling out of services. We know through past history and experience that, wherever a monopoly is involved, costs have a habit of trending upwards unnecessarily. Presently we have well in excess of 1,000 employees in the NBN and something like 600-odd genuine customers. It is not a ratio that commercial Australia would find very sustainable. If you look at that fact today on the basis of this $50 billion expenditure proposition not being costed, with no triple bottom line analysis and no real transparency in the calculation of the price and the manner in which it will be spent, it is pretty unsatisfactory.

I go back to the amendments. Because of the broad scope and the numbers involved into the future, we firmly believe that operators in these greenfield developments ought to be exempt from the cherry-picking laws. We believe in that because there is room for competition here—and compe­tition, as has been experienced in the past, will bring the costs of providing that service down. Further, we wish to have an amendment that will provide for private operators that wish to set up a network in competition to NBN to have the opportunity via this legislation to do so. Furthermore, there was a commitment that those networks be able to sell out to NBN in a negotiated settlement at some point in time in the future. We on this side of the House believe in true competition. True competition is driven by market forces. Supply and demand is the best solution to any trade relationship. In this case, where you have the opportunity for the creation of a monopoly you equally provide the opportunity for inflated prices. Australians are already suffering that in the areas of groceries, fuel and electricity, and this is not the time to add another level of inflated prices through their internet participation.

We on this side of the House are quite resolved as to what should be the outcome for this bill. If the government will reasonably accept these very rational amendments, we will be happy to see the passage of the bill. In the meantime, I reiterate that the interest of Australians is simply to have a reasonable internet service. Those Australians who have almost no access to mobile phones today and no reliable internet service would be served extremely well with a high-tech, up-to-date wireless internet service that would provide for them to access markets. As an aside, I mention that those markets have, in the main, been shut down by the decision of this government in cancelling live beef exports to Indonesia. But I digress. We need in rural and remote Australia to have access to the internet because remote marketing is an important tool today. But we do not need to go into hock to this extent to provide that service. Rural folk are a fairly sensible lot. They do not believe that you spend above your means. They do not believe that you accumulate absolutely non-serviceable debt in order to brag that you have a Rolls Royce service that you will never, ever need. Therefore, the case remains that this is too much money spent without proper cons­ideration. Unless this legislation specifically relating to greenfields is rationally amended to allow some competition to maintain reasonable costs, those hardworking Austr­alians who want to use these services will be worse off.

Yvette D'Ath (Petrie, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in support of the Telecommunications Legislation Amendment (Fibre Deployment) Bill 2011. This bill was first introduced into the House in March 2011 and was referred to the Joint Committee on the National Broadband Network in May 2011. The committee sought to conduct an inquiry into this bill within a responsible time frame, considering the circumstances of the bill. This bill has been some time in the making. As noted in paragraph 1.1 of the committee's report on this bill, the bill:

… was preceded by a similar bill which was introduced into the Senate in March 2010, but lapsed on the proroguing of the 42nd Parliament. The Fibre Deployment Bill 2010 shared a similar purpose to the Bill under inquiry, that is, to ‘ensure fibre-ready and fibre infrastructure installation in new developments.’ This Bill differs from its predecessor in that the Fibre Deployment Bill 2010 ‘was more dependent on subordinate legislation for activation of the key provisions in the Bill’, while the current Bill includes those key provisions.

The government undertook extensive consultation on this bill now before the House, including releasing discussion papers and draft legislation. The government also considered the recommendations of the Senate Standing Committee on Environment and Communications report on the Telecom­munications Legislation Amendment (Fibre Deployment) Bill 2010. Based on that history, the industry and developers have been seeking certainty for over 12 months. There is no doubt that certainty is important for developers who each and every day are developing new estates and building homes for people across Australia.

It is this imperative for certainty that ensured that the Joint Committee on the National Broadband Network dealt with this matter within the timeframe set, thus allowing this bill to be debated before this House this week. When looking at the history of this bill, at the questions put to the witnesses by the opposition and the submissions put to the committee by various providers, the fact is that the issues raised do not fundamentally go to this bill. They go to the Liberal Party's opposition to the National Broadband Network and the government's policy to deliver a national broadband network.

The main purpose of this bill is to require developers of new estates to put in passive infrastructure like underground pipes into which a fibre provider can later put fibre. It is not concerned with putting an obligation on NBN Co. or anyone else to put in active infrastructure, fibre or, in limited cases, copper lines or wireless. The majority of submissions by the witnesses and the questions by the opposition during the inqu­iry into this bill went to active infrastructure. It was acknowledged by witnesses that the purpose of this bill is to legislate for fibre-ready infrastructure, not active infrastructure.

The committee's report also acknowledged that much of the evidence was outside the scope of the bill. The opposition also concentrated most of its time on issues not relating to this bill, and it continues to do so in this debate. This is predominately because the opposition is more interested in finding ways to oppose the government's policy than being opposed to the practical application of the rollout of fast broadband.

I will come to the Liberal Party's position shortly but, importantly, this bill amends the Telecommunications Act 1997 to support the government's policy that fibre-to-the-premises infrastructure should be installed in new developments. This bill is another step forward to delivering on the Labor govern­ment's commitment to roll out the National Broadband Network. As stated by the minister in his second reading speech on 7 April 2009, the Australian government announced its historic decision to establish a new company, NBN Co. Limited, to build and operate a new superfast national broadband network.

The NBN has an objective of connecting up to 93 per cent of all Australian homes, schools and workplaces with fibre based broadband services and connecting other premises in Australia with next-generation wireless and satellite broadband services. This bill in effect requires developers that are constitutional corporations to install fibre-ready passive infrastructure—that is, pit and pipe. It requires passive infrastructure installed in new developments in the long-term NBN fibre footprint to be fibre ready; it allows carriers to access fibre-ready passive infrastructure that is owned by non carriers, and provides for the Australian Competition and Consumer Commission to have a role as the default arbitrator.

It creates a power for the minister to specify by legislative instrument develop­ments in which fixed lines must be optical fibre and provides for exemptions from the requirements to install fibre-ready facilities or optical fibre lines. It also provides for the Australian Communications and Media Authority to develop technical standards to cover interoperability, performance stand­ards and design features for superfast broadband rollout on its own initiative or, if directed, by the minister, and makes other technical and administrative amendments. The bill will take effect on the later of the date of royal assent or 1 July 2011, which unfortunately has passed.

I would like to briefly touch on the standards because there has been much debate in relation to standards. Despite evidence from TransACT, OptiComm and Greenfield Fibre Operators of Australia of them being opposed to ministerial authority to set standards and specifications, and comments made that this should be left to the Australian Communications and Media Authority, there appears to be no real enthusiasm to do so.

There does appear to be some double standards, however, when TransACT in evidence stated that it would expect subcontractors to apply TransACT's standar­ds but it would not be acceptable for NBN Co. to expect the same. Firstly, it is important to note that this bill does not set out technical specifications for fibre infrastructure in new developments. What the bill does do is give the minister some powers to make instruments to do so with regard to passive infrastructure and to optical fibre lines in specified developments if necessary.

The Department of Broadband, Communications and the Digital Economy stated in its evidence that for fibre infrastructure to serve its purpose, for example to allow the ready deployment of fibre, and operate on an appropriate level in terms of speeds across the many new developments constructed in Australia each year, some degree of standardisation may be required. These provisions provide a reserve power to fast track this standardisation process if required, noting that normal standardisation can sometimes be time consuming and subject to gaming. The department went on to say:

The government's policy in relation to specifications was set out in the 9 December 2010 policy statement. NBN Co. will provide specifications for use where a developer wishes to use NBN Co. The specifications will also be provided to the Communications Alliance with a view to having these specifications endorsed for general use by industry as soon as possible.

This policy was also reflected in the government's statement of expectations for the NBN and NBN Co. It is clear that this bill and the government's policy, as reflected in the statement of expectations, is flexible. It does not impose specifications without consultation. However, it is reasonable if the industry itself does not develop a standard and it is considered appropriate to do so, that the minister has such powers.

The NBN is already being rolled out in Tasmania and we recently saw the start-up on the mainland of Australia. With the rollout of the NBN continuing to expand across the country over coming months and years, it is important that certain areas do not get left behind. Importantly, it is necessary to ensure that unnecessary costs are not incurred due to lack of planning. That is why greenfields sites are being addressed through this bill. It is important, as the NBN goes through our older suburbs and provides fast broadband, that new suburbs being built are not using pits and pipes which would not be suitable for smooth transition to fibre. That is why this bill is being introduced—to ensure our new developments are fibre ready.

I also note the comments from the members for Greenway and Chifley, who have much experience in this area, in particular the comments of the member for Chifley on the unremarkable nature of this bill. It is true that much attention has been paid to this bill and, as I outlined earlier, it has a history going back more than 12 months. However, what is being achieved through this bill is in no way unique. Just as developers ensure the infrastructure for water, electricity and roads in new estates, they will ensure infrastructure for fast broadband.

The Liberal Party has stated this is not their preferred model. It is clear from comments made by the shadow minister for communications and broadband, the member for Wentworth, that the opposition's policy is for a hybrid system of fibre, copper, wireless and satellite, with no particular strategy. It appears that the Liberal Party's policy is that they can provide faster broadband than people have now but not as fast as Labor's NBN policy, not as efficient, not a network which will be Australia wide and which will expand services across health, education, businesses and households, both rural and city. The selling point for the Liberal Party is: 'But it won't cost as much'. Well of course it will not cost as much, because it is not delivering an efficient fast broadband system which would be internationally competitive. It will still see many suburbs struggle to get any connection or work at a speed suitable for basic household use.

If the Australian public were listening to various opposition members in this debate, I think they would go away very confused. The member for Moncrieff was stating that we do not need NBN—that health services over fast broadband are happening now. At the same time, the member for Ryan is saying that there is no doubt that the country will benefit from the rollout of fibre across the country to deliver fast broadband but that, overall, it is bad for the country because it will cost money. The shadow minister is outlining proposed amendments, yet to be tendered, which allegedly seek to provide for competition because the providers do not want to miss out on the opportunities that come from the demand for fast broadband. At the same time, other opposition members are criticising the NBN rollout as a white elephant because apparently no householders are going to take up the option of connecting fast broadband to their premises. So on one hand providers are missing out and, on the other, nobody is going to take up broadband.

Then of course we have the shadow minister continually using South Korea as an alternative example of a country that is rolling out fast broadband but only to the basement. There are many similarities between Australia and South Korea—they are celebrating this year, as is Australia, Australian-Korean diplomatic relationships over the past 50 years. But when we compare the size of the countries and when we compare the living styles—the majority of their population live in high-rise apartments; the majority in Australia live in stand-alone houses—it is clear that the statements being relied on are just incorrect. The arguments are flawed.

In fact, when the shadow minister was asking questions about South Korea of Mr Harris, the Secretary of the Department of Broadband, Communications and the Digital Economy, Mr Harris said:

On the Korean issue, we had the Korea-Australia-New Zealand Broadband Summit in Hobart a few weeks ago. I asked the Korean communications commissioner about these issues … I asked the CEO of the Korean Communications Com­mission. He is a senior representative in creating the plans by which the Koreans are doing these investments.

He went on to state:

Korea has a Fibre-To-The-Home Council and is clearly running, in their advice to us, fibre-to-the-home network planning. They are doing fibre to the home. They are just sequencing it as we have done, fibre to the basement, as you have said, we have done some fibre to the node and we are keeping on going and now doing fibre to the home. It has not stopped. Their program continues and their objective is fibre to the home.

By all means we should look at international examples and learn from their experiences, but it is important that we do not get distracted by flawed arguments, such as that from the shadow minister. Although the opposition clearly do not understand the importance of a national fast broadband network and the benefits it can and will bring to many aspects of our economy and people's lives, the Labor Party and this Labor government do understand. That is why this Gillard Labor government is committed to passing this bill, committed to ensuring that fibre-ready infrastructure in our new developments and committed to seeing the rollout of the National Broadband Network. People in my electorate of Petrie understand the importance of such infrastructure. We have many black spots, even though we are metropolitan and outer metropolitan, where people cannot get broadband at all. People in my electorate understand the importance of the National Broadband Network. The Australian people understand the importance of such infrastructure. That is why this government is delivering on its promise to the Australian people and it is for this reason that I commend the bill to the House.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

I rise this evening to speak on the Telecommunications Legislation Amendment (Fibre Deployment) Bill 2011. This bill is designed to ensure that fibre-to-the-premises infrastructure, rather than traditional copper connections, is installed in new broadacre urban infill and urban renewal developments of more than 100 premises. The coalition does support regulations which would ensure that fibre to the premises is used in greenfields estates, but we still have concerns.

Firstly, we have concerns about changes to the market structure. Under the arrange­ments with developers, the NBN Co. will pay for the pits and pipes of new infrastructure, a cost that has traditionally been borne by developers. This will see existing providers become uncompetitive. Secondly, there appears to have been a lack of consultation with the industry and an eleventh-hour decision that the NBN establish technical standards which will be too onerous for small providers to meet. It is very important that we get clarity on this.

In the electorate of Maranoa, we have the Surat coal basin, with a huge development and growth that we have not seen since almost the early development of that part of Queensland. There are a number of developments going out there—greenfields sites. The developers of these sites have been in touch with me. They have been trying to operate and develop these housing estates, which are very much needed, but they have had this uncertainty hanging over them about who is going to pay for what—whether it is going to be the developer and, if so, whether they are going to be reimbursed, or whether it is going to be Telstra, and whether it has to be copper wire or optic fibre cable. Many of these developers have been frustrated because they could not get an answer out of either—the responsibility was being shifted. Obviously this legislation is long overdue and is supported by the coalition.

John Murphy (Reid, Australian Labor Party) Share this | Link to this | Hansard source

Order! It being 8 pm, the debate is interrupted in accordance with standing order 34. The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting. The member for Maranoa will have leave to continue speaking when the debate is resumed.