House debates

Tuesday, 5 July 2011

Bills

Telecommunications Legislation Amendment (Fibre Deployment) Bill 2011; Consideration in Detail

Bill—by leave—taken as a whole.

6:46 pm

Photo of Malcolm TurnbullMalcolm Turnbull (Wentworth, Liberal Party, Shadow Minister for Communications and Broadband) Share this | | Hansard source

by leave—I move amendments (1) to (11), as circulated in my name, together:

(1)   Clause 1, page 2 (before line 1), insert after item 3 in the table:

(2)   Schedule 1, item 10, page 4 (after line 23), insert:

    (3)   Schedule 1, item 10, page 6 (line 18), omit "the conditions (if any)", substitute "any technical standards and other conditions".

    (4)   Schedule 1, item 10, page 6 (line 25), after "specify" insert "technical standards and other".

    (5)   Schedule 1, item 10, page 6 (after line 26), insert:

    (4A)   The Minister must consult the ACMA and relevant industry bodies before making an instrument under subsection (4).

    (6)   Schedule 1, item 10, page 6 (line 28), after "paragraph (1)(b)" insert "or subsection (4)".

    (7)   Schedule 1, item 10, page 8 (line 10), omit "the conditions (if any)", substitute "any technical standards and other conditions".

    (8)   Schedule 1, item 10, page 8 (line 17), after "specify" insert "technical standards and other".

    (9)   Schedule 1, item 10, page 8 (after line 18), insert:

    (4A)   The Minister must consult the ACMA and relevant industry bodies before making an instrument under subsection (4).

    (10)   Schedule 1, item 10, page 8 (line 20), after "paragraph (1)(b)" insert "or subsection (4)".

    (11)   Schedule 1, item 10, page 9 (after line 4), insert:

    372CA Payments by NBN Co of installation costs for optical networks

    Scope

    (1)   This section applies in relation to the project area, or any of the project areas, for a real estate development project:

    (a)   that is compliant with Division 3; and

    (b)   in which a compliant optical network is installed by a person other than NBN Co.

    NBN Co to make installation payment

    (2)   The person or persons responsible for the real estate development project may apply to NBN for an amount of money representing the installation costs for such a network (an installation payment) in accordance with this section.

    (3)   Application for the installation payment for a network must be made within 3 months after the completion of the network.

    (4)   The person or persons responsible for the real estate development project must provide NBN Co with such information and access as NBN CO requires to satisfy itself that the network is a compliant optical network.

    (5)   NBN Co must make an installation payment for a network within 30 days after receiving the application for the payment.

    Amount of payment

    (6)   The amount of the installation payment must be in accordance with a scale of payments determined by the Minister for this subsection and published in the Gazette.

    (7)   The Minister must determine a scale of payments for the purposes of subsection (6) as soon as practicable.

    (8)   In determining a scale of payments, the Minister must take into account:

      (a)   the typical costs of installing such networks or elements of such networks (other than the cost of the optical fibre), including significant regional variations in costs; and

      (b)   the costs that NBN Co would have incurred (other than the cost of the optical fibre) had it undertaken such installations itself.

    Interpretation

    (9)   For this section, a project area of a real estate development project is compliant with Division 3 if:

      (a)   section 372E or 372F applied to installation of a fixed-line facility in the project area; and

      (b)   any fixed-line facilities installed in the project area that were subject to subsections 372E(2) or 272F(2) complied with those subsections.

    Note:   These subsections require that the facilities be fibre-ready and that the installation comply with an instrument under 372E(4) or 372F(4), subject to exemptions under section 372K.

    (10)   For this section, a compliant optical network of a project area of a real estate development project is a collection of optical fibre lines in the project area, each of which:

    (a)   is wholly or primarily used, or wholly or primarily for use, to supply one or more carriage services to either or both of the following:

    (i)   one or more end-users (whether or not identifiable) in one or more building units;

    (ii)   one or more prospective end-users (whether or not identifiable) in one or more building units; and

    (b)   is not on the customer side of the boundary of a telecommunications network; and

    (c)   is used, or for use, to supply a carriage service to the public; and

    (d)   for a line being deployed to a building lot— was installed in compliance with the conditions for such lines in an instrument under subsection 372B(4): and

    (e)   for a line being deployed to a building unit— was installed in compliance with the conditions for such lines in an instrument under subsection 372C(4).

    These amendments essentially do two things. Firstly, they require the minister, in setting technical standards, to consult with ACMA and the relevant industry bodies. Most importantly, they require the NBN to purchase what are described as 'installed optical networks' in developments at a price which will be essentially in accordance with a schedule determined by the minister, which we would expect would be an amount of money per residence or, in the case of multidwelling home units, per home units connected. The rationale for this is set out in the dissenting report to the report of the Joint Committee on the National Broadband Network that the minister was just referring to.

    It is fine for the minister to say that the opposition takes this view and that view. What we are seeking to address here is a problem that has been identified not by us but by the industry. The private sector fibre operators and fibre installation industry have come to us and to that committee and said that this bill—the way the NBN is going about this—will put them out of business. They have cited, as we have cited in the dissenting report, numerous statements by the government and the Minister for Broadband, Communications and the Digital Economy, Senator Conroy, about their commitment to competition, and the minister has spoken about that. But the reality is simply this: because the NBN will install its cable at no cost to the developer there is simply no role for the private sector—unless, of course, they are a subcontractor to the NBN. The other reality is that the NBN is a massive government monopoly which has already demonstrated to the property dev­elopment industry that it is far from timely in its responses to their requirements. There is a real concern among the development industry—and their evidence before the committee is all on the record—that the NBN will simply not respond in a timely way.

    So we have sought to craft a solution to a problem that has been presented to us by the industry. This, after all, is the task of this parliament: to seek to address the problems that the people of Australia present to us. What we propose here, in amendments (1) to (11), is simply a scheme where a developer will have the option, after putting in the pits and pipes, of waiting for the NBN to show up or, alternatively, engaging a suitably qualified contractor to install the fibre in accordance with the technical standards laid down in the appropriate way—so that fibre will be compliant with the standards that the NBN can live with—and then be able to be reimbursed by the NBN by effectively requiring the NBN to purchase it.

    This will provide a breath of life to the private sector fibre companies. It will also provide an ability for developers to be in control of their own destiny and to be in a position to have a contractor to put in the pits and pipes, put in the fibre and, as long as it is in compliance with the relevant standards, require the NBN to take it over. The next amendment deals with a different situation which I will speak on when we deal with that. This is important. It is important for the property sector. It is important for the private cable contracting sector. The minister refer­red to this sector as 'nascent'—they are 'just small businesses'. Frankly, I would say that a nascent industry is one that should be encouraged. On our side of the House, we believe in encouraging small businesses in the hope that they will become bigger ones, and I commend these amendments to the House.

    6:50 pm

    Photo of Anthony AlbaneseAnthony Albanese (Grayndler, Australian Labor Party, Leader of the House) Share this | | Hansard source

    I will speak on the first group of amendments, numbered (1) to (11), moved by the shadow minister. On the funding proposal it is worth making a few points. The term 'nascent' referring to the industry was used by the opposition in the committee. We were aware, however, that the implications of that in terms of capacity also have to be considered. Pending NBN Co.'s rollout of fibre, Telstra will provide interim services in smaller new develop­ments. This reflects the fact that it will simply not be viable to connect fibre in all new developments in the absence of a fibre network to connect to.

    NBN Co. has been created to roll out a national network methodically and effic­iently. Piecemeal provision in small, scat­tered developments will be more expensive. Under the scheme proposed by the opposition, there is a real risk that we will be left with a sea of costly networks that deliver variable, potentially substandard outcomes. In the long term this would be a significant cost to NBN Co. to integrate.

    I also want to refer to these amendments and the issue of the minister's power to specify conditions, because the issue has been misrepresented in the debate. The government has repeatedly said its preference is for industry to come up with appropriate codes and standards. The minister's powers are a fallback mechanism where these industry codes and standards do not yet exist. It is really not clear what the proposed amendments would add. The amendments say the minister can specify technical standards. That was already the case. The amendments also raise the question of what the opposition means by technical standards. Does it actually include an industry developed code made under part 6 of the Telecommunications Act, which is what industry wants? There is a risk that the reference may be interpreted as a reference to standards under part 21 of the Telecommunications Act. This would be an inappropriate reference given the scope of that part. Yet again the opposition fails to understand how the provisions in the bill work. Any instrument that the minister were to make would be interim, it would be subject to public consultation and, import­antly, it would be subject to disallowance. There is an accountability mechanism to the parliament built into this legislation, which is why the government will not be supporting these amendments.

    6:53 pm

    Photo of Malcolm TurnbullMalcolm Turnbull (Wentworth, Liberal Party, Shadow Minister for Communications and Broadband) Share this | | Hansard source

    The relevant section concerning the minister setting standards is set out in item 9 of the amendment we are discussing, which inserts a new proposed subsection (4A) which simply states that the minister must consult ACMA and relevant industry bodies before making an instrument under proposed subsection (4). If the government took the concerns of industry seriously, they might in good faith be able to suggest some changes to that wording or suggest some other form of words. But the fact of the matter is that we face a real problem. It is the height of arrogance for the government to give such a response to this industry, all of whose members and representative bodies have come before the committee and said they have a problem, that they object to the bill and that they support an amendment of this kind.

    The government is free to demonise and criticise the opposition as much as it likes and it does that every day. But the views or the concerns that we are speaking about here are not ones that have come out of some opposition tactics meeting, they have come from legitimate concerns from industry. The minister and his colleagues on the gover­nment benches should address those legitimate concerns. Why do they say that OptiComm, the greenfield operators, TransACT, HIA, UDIA and other organis­ations have all got it wrong? Are they suggesting that they do not know their own business? Are they suggesting—well, this probably is consistent with the Labor Party's philosophy—that government always knows best? Our view is that these people who come in good faith before this committee pointing out concerns with the legislation, seeking that the parliament respond in a constructive way, are entitled to be heard and their concerns addressed. If the government does not like our amendments, there is no pride of authorship from our point of view. This is not a work of poetry here. We are dealing with a genuine concern expressed by industry, and the government may not like our amendments but what is its solution to the concern that these people with their fibre contracting businesses and fibre installation businesses have in believing they will be driven out of business?

    The government can talk about competition and it can talk about level playing fields. Is it seriously saying that these men and women who came and testified before our committee do not understand their own industry, do not understand their own businesses, and their concerns are to be ignored? My question to the minister is, if he does not like this amendment, what is he going to do about the legitimate concerns of these Australian private sector businesses which have come before a committee of this parliament and said that this bill and this NBN are going to put them out of business and cost jobs, cost opportunities, lose profits for them, lose their capital and wipe private sector businesses out with all the strength and muscle of the Commonwealth taxpayers' purse? The question for the government is, if they do not like what we put on the table to resolve these problems, what is their solution? Or is it just the chilly indifference yet again of big government knows best?

    6:58 pm

    Photo of Michelle RowlandMichelle Rowland (Greenway, Australian Labor Party) Share this | | Hansard source

    I rise to oppose the amendments before us. This bill would not be improved by the amendments. The notion from those opposite is that if a compliant optical fibre network is installed in such a fibre ready facility NBN Co. will pay for the cost of installation. The intention, they say, is to enable developers whose development project has installed fibre network to have the option to require NBN Co. to purchase that network at a reasonable price and the minister will determine the costs. What this essentially means is that a third party, I suppose a developer, can apply to NBN Co. to be paid an amount of money representing the installation costs for such a network. Then it goes on. The way this is drafted, there are 30-day terms. There does not appear to be any right of NBN Co. refusal and so it becomes a mandatory purchase. Under subsection (5) of the proposed 372CA NBN Co. must make an installation payment for a network within 30 days after receiving the application for payment. There is no commerciality at all in this amendment. Since when has it been commercial to demand payment for what amounts to a compulsory acquisition, surely in the hundreds of thousands of dollars at least for a larger development, and require payment within a calendar month? It is simply absurd. Yesterday, the member for Wentworth described the department's response to his proposal as 'equivocal. It was not really a responsive answer at all.' Actually, I think he just described the moment when someone you are dealing with springs on you an absolutely absurd proposition. I can see right now the DBCDE folks trying to hold their tongues and not say what they really thought about it.

    So many questions actually come up when you examine this proposal and how it would work in practice. There is the question of who owns the network, and I doubt it is going to be the developer who actually owns the network. It appears to me that the network operator will continue to own it. You cannot own and operate networks that provide carriage services to the public unless you actually have a carrier licence.

    Those opposite have been scathing about the ministerial role in this. But I do point out that there is a residual power for the minister to make codes, as set out under part 6 of the Telecommunications Act, and a complem­entary rule already exists in the event that industry fails to devise one in the given subject area. Again, this potential role of the minister is not novel. It has always been the intention of the minister, and also the regulator, to enable the industry to devise its own standards. So it is quite strange that they are so scathing about the minister's potential role in this. But now they want the minister to determine the market price for a network installation and then publish a scale of rates in the gazette. Their position on this is totally inconsistent when it comes to the minister's role.

    This amendment is ill conceived and it is unnecessary. It would deprive the sector, including consumers and developers, of the certainty that the bill in its current form will provide. The change to the fibre-in-greenfields regime under our proposal that we have before the House today is this: competitors will compete to provide fibre installation to NBN Co. rather than to developers. So they still compete, but this time they are competing to provide to NBN Co. rather than to the developers. Instead of developers extracting an economic rent, consumers will not pay for fibre connectivity in and of itself. They will just pay for what they use from a retail service provider providing services under the NBN. It is strange that you will notice in this debate that the member for Wentworth came out here wanting to defend big business. I have heard nothing about consumers in all this and not a great deal at all about consumer certainty. We on this side seek to put consumers first. When we talk about certainty, we talk about certainty for new home buyers so that when they move into their dwelling they know it will already be fibre-ready. It also provides certainty for developers, because they will know their obligations.

    Not only is this amendment ill conceived but the dissenting report prepared by the member for Wentworth is fraught with inconsistencies. One of them I would like to point out is that we have just had a debate on whether or not a market is nascent. Well, on page 42 of his dissenting report he says:

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

    Yet on pages 44 and 47 he says it is a nascent market—so, a few pages later, it is a market just coming into existence. For amendments that are purported to have a competition basis, the member for Wentworth cannot even describe the state of competition.

    7:03 pm

    Photo of Paul NevillePaul Neville (Hinkler, National Party) Share this | | Hansard source

    I would like to support the opposition's case in this and echo what the shadow minister has said. We are not out here to destroy the government's bill. All we are asking to do is make it more efficient. What we are proposing is not inconsistent with what the minister himself proposed as recently as 9 December last year. This is not a century away; this is bit over six months ago. The minister said that these forms of competition would exist, but clearly they will not.

    Let us look at a scenario. The last speaker said we are not talking about the consumer. I am talking very much about the consumer, the person who buys a block of a land and builds a house and wants the services connected. Some councils will not allow that process to take place until all the services are connected, and we now require them to have the communications component of that installed. So we come to a situation where we have the water, gas, sewerage and everything else connected and we could have the developer put in the pits and pipes, but if NBN Co. and its designated subcontractor have not at that stage installed the fibre where do we go from there? Yes, it might be free, but how long do we wait for it? In the circumstance that NBN Co. or its designated subcontractor, Fujitsu, got well behind with this, you would get a bottleneck effect where states all over Australia could be waiting for months on end trying to reach some form of conclusion.

    In contrast to this, there are at least seven companies to consider, and these are not Johnny-come-latelys. These people have been in the communications market for the last 10 years or more providing identical services with fibre and other forms of broadband. They have been involved in the installation of pay TV and CCTV. They have provided a whole range of connections to all sorts of businesses and private premises. On their own admission, they go past 400,000 premises and they have another 350,000 under contract. These are people with the capacity to do it. And far from doing anything to damage the government's bill, it would not only keep those people in employment but speed up the efficiency with which the high-speed fibre can be rolled out. I repeat: what do you do if you reach a situation where you have all the other services in and you have your pits and pipes in but the NBN Co. is so far behind that it cannot provide the fibre connection? The only thing the developer can do in that instance is go to one of these companies and pay full tote odds with no hope of any sort of a refund.

    In the amendment, we propose that a single market mechanism presided over by the minister would come into play whereby the connection of the fibre would be paid for by NBN Co. If that were going on all over Australia over a period of time, what you would find is that there would be a brake on NBN Co. and its subcontractors for any excesses. If, from time to time, it was demonstrated by these seven operators—and others no doubt who would come into the field—that they can do the job as effectively and more cheaply, there would be downward pressure on costs not only for the developer but for NBN Co. and ultimately for the government and, still further down the line, for the taxpayer. What could possibly be wrong with that? I really ask the government to have another look at this. As the shadow minister said, we are not trying to impose some sort of philosophical mantra on you; we are just saying to look at a practical solution that might have these states wired up earlier rather than later.

    7:08 pm

    Photo of Ed HusicEd Husic (Chifley, Australian Labor Party) Share this | | Hansard source

    I want to deal with two things stemming from these amendments. The first is in relation to the future of the market and some of the scenarios that have been put forward by the member for Wentworth and the other is in relation to standards. The member for Wentworth used the term 'chilling indiff­erence'. I want to relay the experience that I have had of chilling indifference and that was in the late nineties representing Telstra workers as they saw the start of contracting out within that corporation. These were people working on pit and pipe who saw the jobs that they had being transferred to the private sector. By that I mean the individual workers were being told that that work would no longer be available for them because they would be made redundant, but that those people could go out and invest themselves in getting the boring equipment and the like and could go out and seek to perform work for Telstra on contract. That continued as well through the work that 'linies' or linesmen were doing on the individual connections in homes or even when working on the pillars in the streets. The chilling indifference was that Telstra did not really care about the fact that they had 40- and 50-year-old men at that stage in the late nineties being told that the work that they had been performing for the bulk of their working life would leave from underneath them and the conditions that they had enjoyed would go. I guess what happened over time is that the market developed the pit and pipe work—the work that was being done in the streets, on pillars and on connecting homes—which had been contracted out to a variety of companies, some large, and to individual contractors.

    The market is out there, and the suggestion that it will disappear or collapse overnight—and I take on board the point that there is a difference between copper and fibre—cannot be sustained by practical experience. The market is there. In getting ready for fibre, there is an army of registered training organisations that is now seeking to upskill those people moving from the limited copper future to a fibre future. That market exists. It will not disappear and it would be ludicrous to suggest that it would with the scale of the work that is being proposed as a result of the NBN rollout. If anything, the pressure is on to find enough skilled people to be able to deliver what is required for the project, bearing in mind—as has been identified—that this project will run past 6,000 homes a day when it hits full stride.

    The next issue is the suggestion that—if I can characterise it—NBN Co. would want to hoard this work. I come back to the point that the cables, the lead-in work, will need to be run past 6,000 individual homes. NBN has got enough on its plate not to be chasing individual greenfield sites. It will prefer to have the private market step in to do that work, given the need to connect up brownfield sites to ensure that they are cable-ready and ready to meet demand as it grows.

    In relation to the standards themselves, as has been highlighted by the member for Greenway, the fact of the matter is that the minister has a reserve power. The preference is for the industry to sort this out and to come up with a set of standards in relation to cabling and to the way that the work will be done. The preference is for the Commun­ications Alliance, of which NBN is a member, to set this standard up, but in the absence of a standard, which the industry has not been able to agree to, the government is asking the opposition in good faith to remain confident that the industry will get these standards and the government will assume the risk if the industry does not get it right. If the performance of the network does not meet the expectations of the public, it is the government and not the industry that will wear the blame. The bill, it is important to note, does not set out technical specifications for the infrastructure, but it does give the minister reserve power to make instruments to do so in relation to passive infrastructure and the optical fibre lines if the industry cannot get its act together. For the fibre infrastructure to be able to serve its purpose and operate at an appropriate level across the new developments, some degree of standardisation is going to have to be required to ensure that, as I said, performance meets expectations. I do not accept some of the positions that have been put forward by the opposition, and I urge the House to reject the amendments.

    Photo of Dick AdamsDick Adams (Lyons, Australian Labor Party) Share this | | Hansard source

    The question is that the amendments be agreed to. There being more than one voice calling for a division, in accordance with standing order 133(b) the division is deferred until after 8 pm.

    Debate adjourned.

    7:14 pm

    Photo of Malcolm TurnbullMalcolm Turnbull (Wentworth, Liberal Party, Shadow Minister for Communications and Broadband) Share this | | Hansard source

    I move opposition amendment (12):

    Schedule 1, after item 16, page 33 (after line 4), add:

    Part 3—Amendments relating to Parts 7 and 8 of the Telecommunications Act 1997

    Telecommunications Act 1997

    17 After subsection 141(1)

    Insert:

    (1A)   However, this section does not apply to a local access line that

    (a)   was installed in a project area of a real estate development project after the commencement of part 3 of schedule to the Telecommunications Legislation Amendment (National Broadband Network Measures—Access Arrangements) Act 2011; and

    (b)   was installed in compliance with any applicable provisions of part 20A; and

    (c)   was installed by a person that is not Telstra or NBN Co; and

    (d)   is owned by that person, or by a body corporate related to that person; and

    (e)   is operated by that person, or by a body corporate related to that person; and

    (f)   is used only to supply carriage services to end-users in the project area.

    18 Subsection 141(10), after the definition of national broadband network

    Insert:

    related, of bodies corporate, has the same meaning as in the Competition and Consumer Act 2010.

    20 Section 142A, after the definition of rail corporation

    Insert:

    related, of bodies corporate, has the same meaning as in the Competition and Consumer Act 2010.

    19 After subsection 143(1)

    Insert:

    (1A)   However, this section does not apply to a local access line that

    (a)   was installed in a project area of a real estate development project after the commencement of part 3 of schedule to the Telecommunications Legislation Amendment (National Broadband Network Measures—Access Arrangements) Act 2011; and

    (b)   was installed in compliance with any applicable provisions of part 20A; and

    (c)   was installed by a person that is not Telstra or NBN Co; and

    (d)   is owned by that person, or by a body corporate related to that person; and

    (e)   is operated by that person, or by a body corporate related to that person; and

    (f)   is used only to supply carriage services to end-users in the project area.

    This amendment amends the provisions of the Telecommunications Act which can be succinctly described as the 'cherry picking' provisions. They are designed to ensure that anyone who builds any fibre infrastructure after the relevant date, which is defined as 1 January 2011, must make a layer 2 bit stream service available in the same way as the NBN. There is a provision in the act that we are seeking to amend—section 141A—to enable the minister to exempt a specified network from section 141.

    We are seeking here to provide that networks installed in greenfields areas by cable providers, called greenfield operators, that are not Telstra or NBN Co. will be, by virtue of this amendment, exempted. The purpose of this is to enable that competitive independent broadband business to continue. If these amendments—the one we have just debated and this one—were both adopted it would give a developer these three very clear options: first, he or she would firstly install the pit and pipes—that is their obligation. Second, the developer could wait for the NBN to turn up and pull the fibre through those pits and pipes or, pursuant to our first amendment, engage an independent cable contractor to install technically compliant infrastructure which the NBN would then be, if the developer so chose, required to purchase at the rate determined by the minister. The third option for the developer is to enter into an agreement with an independent cable network operator—TransACT being probably the largest independent cable operator—to install the pits and pipes, pull the cable through and then provide an independent service along the same lines as it does in many areas, including this fair city, the capital of our great nation.

    This amendment will ensure that that competition will be able to continue. These are going to be relatively small networks, they do not pose any material risk or threat to the NBN, and this will enable that nascent—a word the minister liked, which I take as meaning 'young and promising and developing'—industry to continue to grow, as opposed to being utterly wiped out by the combination of the government's NBN policy and the provisions that we are seeking to amend—that is to say, parts 7 and 8 of the Telecommunications Act 1997.

    This amendment, again, is not something that has emerged from a political discussion on our side. It is an attempt to provide a solution to serious problems raised by serious people from the industry who believe that without a change of this kind they, their businesses and their employees are going to be put out of work. I commend this amendment, in the interests of competition, in the interests of jobs, to the House.

    7:19 pm

    Photo of Anthony AlbaneseAnthony Albanese (Grayndler, Australian Labor Party, Leader of the House) Share this | | Hansard source

    The government will be opposing this amendment. The level playing field arrangements were only passed by the parliament in late March. The coalition's proposed amendment fails to understand the origin, purpose and importance of these arrangements. Vertical integration and the lack of wholesale services in new developments have been a longstanding concern. Many competing operators have extolled the wholesale-only model.

    The government's approach ensures end users will enjoy NBN-like outcomes regardless of the network provider. It also ensures that NBN Co. operates on a level playing field so it can provide faster broadband access across Australia, an open access platform for competition across Australia and uniform national wholesale pricing. These will benefit all Australians, especially in regional Australia. Where a competing provider has legitimate concerns about the arrangements, there is scope for exemptions.

    In conclusion, the government considers that the opposition's proposed amendment is unnecessary and inappropriate and therefore we urge the House to oppose this amendment.

    7:20 pm

    Photo of Malcolm TurnbullMalcolm Turnbull (Wentworth, Liberal Party, Shadow Minister for Communications and Broadband) Share this | | Hansard source

    The minister's response is what I anticipated it to be, which is essentially 'trust me, I'm a politician', saying that the industry should take comfort in the fact that under section 141A of the principal act the minister has the ability to exempt a specified network from section 141. One would hope that some of these small networks would, in fact, be exempted. But, who is to say? They certainly will make an argument that they should be. It is far better for parliament to deal with it and put the matter beyond doubt, creating greater certainty and greater security for the industry that we are seeking here to protect.

    I should note—and this is made very clear in the dissenting report attached to the committee's report—that these competitive greenfield operators whose businesses we are seeking to preserve would continue to be subject to the other access requirements which apply under the telecommunications-specific provisions of the Competition and Consumer Act—that is to say, other retail service providers, as the dissenting report notes, wishing to serve residents of a development would have the legal right to obtain access over that network. So, seeking the statutory exemption under this amendment is not locking the door on these small independent networks to access from other retail service providers. The minister and his two colleagues on the government benches who have spoken tonight have failed to address the concerns raised by industry. I would ask them, very sincerely, to set aside their natural animosity towards the opposition and their natural desire to get on the political soapbox and talk about the joys and wonders of the NBN and all the blessings that its construction will deliver to what they trust will be a grateful nation and, instead, to think about the men and women with real businesses—with real employees and with real customers who are paying real tax to support all of us here in Canberra—who came in good faith to this committee and said, 'We have a problem with this bill; it is going to put us out of business.' We in the coalition, again in good faith, put together some amendments which we believed were solutions to those problems. As the disse­nting report notes, we ran them by the representatives of these companies and they were certainly supportive of them. If the government do not like these amendments—and they clearly do not—what we need to hear is the government's solution.

    What we need to hear is not the honourable member who spoke earlier trying to pick holes in the drafting—perhaps going back to her old profession as a solicitor—but an answer that deals with the mischief, the problem, the issue that these people have brought to the committee. They came with a problem. We have sought to address it. What is the government's position? Do they say that there is no problem and that those people are all suffering from some kind of collective delusion? Or do the government say they have another solution, another answer to their problem? If they have another answer, let us hear it. The people of Australia and this industry are sitting, with bated breath, waiting to hear what the government's alternative solution is. Or are these people, all of the people who submitted to our committee, deluded? Do they not understand their own businesses? Do the government believe that it would be better if the bureaucrats from the Department of Broadband, Communications and the Digital Economy were running their businesses for them? Do the government seriously believe these private sector firms, many of whom have been in business for a very long time and serve thousands of Australians with substantial broadband networks—and let's face it; they have much bigger fibre networks than NBN, which at this stage has more employees than it has customers—do not know their business? In short, if you do not like the amendment, what is your answer to the problems these people have raised?

    7:25 pm

    Photo of Michelle RowlandMichelle Rowland (Greenway, Australian Labor Party) Share this | | Hansard source

    I do not have any animosity towards industry. I do not have any animosity towards any particular fibre providers. What I do have animosity towards is the delay that is being caused to my constituents getting the NBN. Riverstone, as the site of the first Sydney metro rollout, should be getting the NBN on time—and it would if we were to enable this legislation to go through. I understand that the member for Wentworth probably does not have a lot of greenfields developments in his area—I am sure he is the first to admit that—but I do. North-west Sydney, the fastest growing corridor in Sydney, needs to have certainty that, for all those blocks being opened up around Riverstone, Schofield and Marsden Park, every single new residential dwelling will be fibre-ready when residents move in. That is the certainty they have been waiting for; that is the certainty they need.

    I take on board the member for Wentworth's comment that I read his amendments. I apologise for reading his amendments closely. I thought he might actually take that as a compliment. He has asked what the government's solution is to these problems he says he has identified. I will tell you what the solution is. In early 2009, I was advising—and I am on the record—certain telcos on these provisions about mandating fibre in greenfields estates. I was doing that when those provisions were in their first form, when the discussion paper was first put out. At that time, many problems were identified—myriad problems that needed to be sorted out. If you have a local government background, as I do, you will know that that not only requires developers and the fibre providers to be on board but also requires local government to understand what is going on and what their obligations are in the consent process and in the planning and development approvals process.

    Since 2009, we have come a very long way. Why is that? Why has there been continual updating of the government's position on fibre in new estates? It is because this government has been consultative with the industry. The improvements that have been made have brought us to a point where we have a bill before us which is ready to proceed, ready to provide the certainty which the industry and consumers are looking for. I recall the member for Wentworth yesterday saying that this amendment would enable the private sector cable companies to be exempted from the cherry picking provisions of this act if the fibre network they sought to build met certain conditions—not owned or operated by NBN Co. or Telstra. He said yesterday that they should be exempt from these cherry picking provisions because of their scale.

    We know that some of those opposite have very perverse views when it comes to cherry picking provisions elsewhere in NBN related legislation. When we dealt with the access arrangements measures, I noted at that time that the bill was designed to address certain cherry picking provisions. The anti-cherry-picking provisions meant that anyone building a fibre network had to provide wholesale access, which is again relevant to facilities based competition. There is a very sound reason for doing this and it is something that is relevant only to a ubiquitous fibre broadband network of the nature of the NBN—it is because it can ensure equal pricing. It ensures equal pricing regardless of where you live or work in Australia. I noted at that time that opposition to those provisions would be opposition to the national uniform pricing requirement imposed on NBN Co. The anti-cherry-picking provisions in the telco world are designed to counter inefficient investment.

    The NBN creates a national network where all players are created equal, and that extends to equal treatment whether those players are in the city or in the bush. I particularly take on board the comments of my friend the member for Hinkler. I am sure he would want to ensure that his constituents had the most level playing field that could be offered in getting access to high-speed broadband services. There is an impediment to that, which has been proved time and time again—those investors who seek to cherry pick in low-cost areas do so for one reason and one reason only, and that is for profit, regardless of who they are. Under the arrangements in this bill, supported by the access arrangements, investment is only incentivised where it is efficient. This is in contrast to the cherry picker, the person who is not charged with a mandate to serve the national interest, as the NBN is, but is interested only in making a profit. The easiest cherries to pick are the low-cost areas—not the bush, not outer metropolitan Sydney, which I represent. This cannot come soon enough. The only thing I am opposed to is delay.

    7:30 pm

    Photo of Malcolm TurnbullMalcolm Turnbull (Wentworth, Liberal Party, Shadow Minister for Communications and Broadband) Share this | | Hansard source

    I heard the member for Greenway refer in positive terms to facilities based competition. I remind her that the government of which she is an enthusiastic supporter, particularly on this policy, has just paid billions of dollars of taxpayers' money to Telstra and Optus so that they will not use the HFC networks, their cable networks, to provides facilities based competition with the NBN. You have to ask: how good a business is the NBN if the government has to pay billions of dollars to cable companies—Telstra and Optus in this case—not to compete with it? How good a business is the NBN if it has to have legislation, such as the legislation we are seeking to amend, to effectively prevent private sector operators like TransACT and OptiComm from providing competitive services? The truth is that the government's mission here is to stamp out competition.

    The member for Greenway was complaining about my remarks on the NBN, so let her put forward evidence to contradict this: no country in the world is setting out to eliminate facilities based competition in the way this government is here in Australia. In every other market where there is HFC cable available—it was invariably rolled out, as it was here, to provide pay television services—that HFC cable is providing competitive broadband and voice services. I mentioned in my remarks in the second reading debate yesterday that Korea and the United States are good examples. There are many others—the United Kingdom, most European countries; it is a very long list. Everywhere else in the world the benefits of facilities based competition are clear. That is what we are seeking to preserve, in a fairly narrow focus, in this amendment and of course generally in our critique of the NBN.

    If the honourable member does not want to respond to that challenge, let her respond to this. She can talk about the concerns of her residents and make the spurious claim that somehow or other the coalition is delaying the rollout of broadband to the electorate—of course that is exactly what she will do when, come the next election, nothing has been done by NBN; she will no doubt say it is the fault of the Liberal Party—but the question that she must address if she is seriously engaged in this debate, and she has been a member of the NBN committee, is what she says to those companies and organisations that came before us and made these complaints, raised these issues, that we are seeking to address. The minister will not address that and the member for Greenway seeks to present herself as an expert in this area, so what is her answer? Are they wrong; do they not know their own business? Or, if they are right and they do have a problem, what is her alternative solution?

    7:34 pm

    Photo of Michelle RowlandMichelle Rowland (Greenway, Australian Labor Party) Share this | | Hansard source

    I am happy to answer the member for Wentworth any day of the week. The answer is that facilities based competition in Australia failed. That is why we are in the position we are in. For so many years we had the ACCC do its infrastructure reports on telco infrastructure and the level of competition. Every single year it would come out and look at the concentration and the vertically integrated state of our communications industry.

    The member for Wentworth should also understand that there is another golden rule of telecommunications regulation, and that is to use existing facilities, physical infrastructure, wherever possible. That is why we have specific rules about things like telecommunications towers and a clear preference in the legislation for collocation before building new ones. That is why we have not only a declared services regime under the Telecommunications Act but also a regime for the sharing of physical infrastructure. By having this agreement in place with Telstra we are using the most efficient processes possible. I do not want people like the member for Gilmore having to complain time and again that the NBN is coming in and digging up her nature strip.

    The member for Wentworth talked about the infrastructure that all these other countries have and the infrastructure that already exists in Australia. If you take the HFC network, of course that is covering 30 per cent in Australia—but too bad if you miss out on that and you do not live on the east coast of Australia; too bad if you live in a rural area and do not have the benefit of that network. He talks about the US. The US is a classic example of a country that has a long history of cable investment. That is not the Australian model. One thing he misses in his remarks is that Australia has been recognised, even by the International Teleco­mmunications Union, as being absolutely unique and as needing an absolutely unique response when it comes to fulfilling not only our social responsibilities but also our economic responsibilities to the rest of Australia and to the Australian economy.

    The answer to the member for Wentworth is that, over the course of this fibre rollout conversation that has been going on between this government and industry, this govern­ment has listened to industry. That is why we have ended up with a bill that is ready to go through the parliament tonight and is able to provide certainty not only to the industry but also to consumers and to all those people in my electorate who are asking not why we are getting it but when. I know the member for Wentworth does not suffer from this problem because he has the privilege of representing an electorate that ranks very high in broadband accessibility by households. He is right up there with the best. But unfortunately the member for Hinkler's electorate is not and the member for Cowper's electorate is not. Greenway, which I represent, needs to do a lot better, and that is why this government has chosen Riverstone as the site of the first Sydney metro rollout. The member for Wentworth can try to make fun of my position all he likes, but he is merely leaving himself exposed as someone who is out of touch with reality and with the consumers of this country. We know he has one remit—to destroy the NBN—and that is exactly what he is seeking to do on this occasion.

    Photo of Kelvin ThomsonKelvin Thomson (Wills, Australian Labor Party) Share this | | Hansard source

    The question is that amendment (12), as circulated by the member for Wentworth, be agreed to. There being more than one voice calling for a division, in accordance with standing order 133(b) the division is deferred until after 8 pm.

    Debate adjourned.