House debates

Thursday, 13 February 2020


Telecommunications Legislation Amendment (Competition and Consumer) Bill 2019, Telecommunications (Regional Broadband Scheme) Charge Bill 2019; Second Reading

11:43 am

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

I rise to speak on the Telecommunications Legislation Amendment (Competition and Consumer) Bill 2019 and the Telecommunications (Regional Broadband Scheme) Charge Bill 2019. I move:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House:

(1) notes that:

(a) evidence provided to the Senate indicates that NBN Co reduced regional investment by $200 million between 2018 and 2022 relative to the 2019 Corporate Plan;

(b) this decrease in regional investment was concealed in the 2020 NBN Co Corporate Plan; and

(c) NBN Co has given three contradictory and unsatisfactory explanations as to why investment in regional networks was reduced;

(2) further notes significant concerns that the Government is introducing a broadband tax in the name of regional funding, while reducing regional investment in broadband networks in the NBN 2020 Corporate Plan; and

(3) calls on the Government to restore the funding allocation for investment in regional NBN networks".

Labor supports the establishment of a statutory infrastructure provider regime outlined in this bill. The proposed framework will provide additional certainty that, as we move beyond the initial rollout of the National Broadband Network, every Australian premise can continue to access a high-speed broadband connection. This is a natural extension of the arrangements Labor put in place nearly 10 years ago through a statement of expectations issued to the NBN board. The statement of expectations required NBN Co to make high-speed broadband available to all Australians regardless of where they live or work. This will continue to happen and this bill provides that certainty.

It is not lost on anybody that after more than a decade in power through the 1990s and 2000s the Liberal-National Party had left Australia in a broadband backwater. It was Labor who carved out the principle that all Australians should have access to modern communications infrastructure. It was Labor who stood up for the regions not with rhetoric but with a considered policy to deliver universal access to high-speed broadband, universal pricing and investment to make that a reality. The Liberals and Nationals tried to prevent it. They did nothing to promote competition. They did nothing to promote investment. They privatised Telstra as a vertically integrated monopoly. The only thing promoted by the Liberals over that sorry period was stagnation and higher prices in our regions. Labor, in government, put an end to that mediocrity.

One of the things that galls me is that the government is today seeking to progress a broadband tax—supposedly, in the name of regional funding. Yet we recently learned that in the 2020 corporate plan, regional investment in the NBN was actually reduced by $200 million. This is despite NBN Co incorporating revenues from this unlegislated levy into their corporate plan. It raises a legitimate question: why is this government progressing a broadband tax in the name of regional funding while cutting regional NBN investment at the same time? Why did the government try to conceal this funding reduction in the NBN corporate plan? The fact is that the information that would've revealed this funding reduction was left out, despite it being regularly published in the previous corporate plans. We only found out because the Senate sought access to the data, which clearly shows a $200 million reduction of capital expenditure in the fixed wireless network.

The legislation we in the House are considering today seeks to introduce a new broadband tax on the telecommunications sector. On 28 November 2019, the Senate referred the Telecommunications (Regional Broadband Scheme) Charge Bill to the Senate Environment and Communications Legislation Committee for inquiry. But before I go into the bill, it's important we cover some of the history.

Prior to the 2013 election, Malcolm Turnbull and others were encouraging private companies to compete directly with the government owned entity. They didn't do this out of principle; they did this because they wanted to wreck the NBN. They wanted it to fail because it was a Labor conception. Then, 10 days after the 2013 election, TPG announced it wanted to expand a fibre-to-the-basement network in inner city areas to up to half a million homes. As you would expect, this created alarm, both within NBN Co and subsequently within the government. They understood—as anyone with common sense understood—that if TPG began cherrypicking profitable parts of the fixed-line NBN footprint, then the economics of the project would come unstuck. This was not in the interests of taxpayers, and it was not in the public interest, given that the NBN ship had already sailed. The concept of what was to become the proposed broadband levy was given to the government initiated Vertigan review in 2014, which examined different options to offset NBN's losses in fixed-wireless and satellite networks.

The Minister for Communications, Cyber Safety and the Arts claimed that the government adopted this levy because it was a recommendation of the Vertigan review. He said:

The legislative package to be introduced shortly implements the recommendations of the Vertigan Review which reported in 2014.

That is not entirely accurate. Allow me to quote what the Vertigan review actually said:

By far the best option for funding any ongoing subsidy would be through consolidated revenue. Among other advantages, that would allow Parliament and the public to assess in an ongoing way the benefits of using taxpayer funds for this purpose rather than others. However, should that option not be adopted, the panel recommends that, if an ongoing subsidy is required and its minimum amount can be reliably determined, a single, annual, broad‐based industry levy, covering both voice and broadband services, be imposed to fund that subsidy. This would be similar to the current arrangements for the Universal Service Obligation (USO), which are outlined in Appendix 3.

So let's make two things clear. First, the Vertigan review did not recommend a levy on the industry and consumers as its first preference. Its preference was funding from consolidated revenue. Second, the levy recommended by the review was a broad based levy. The bill before us does not propose a broad based levy. What the government have done is design a levy with a narrow base in order to produce a high charge. They have done this for the purpose of preventing competition. Then the industry has had to put up with the unedifying spectacle of the minister writing an op-ed pretending that this bill is about being pro-competition. This brings me to an important point.

The coalition has built an inferior NBN for $51 billion. It has cost more to build than the original fibre network. It costs more to operate. It offers slower speeds. It's less reliable. It requires more funding to upgrade. It would not have been necessary under the original plan. It is more exposed to competition. As of a fortnight ago, Australia had fallen to 68th in the world for broadband speeds and fourth-last in the OECD, according to the Speedtest Global Index.

Even as recently as yesterday, the ACCC took what can only be described as a direct swing at the performance of fibre to the node, following its latest broadband speed monitoring report. I point out that fibre to the node is actually the most prevalent fixed-line technology in regional Australia. The ACCC stated—and it wasn't subtle; it was very direct:

… many high speed fibre to the node (FTTN) connections still don't come close to performing as promised. The results show that about a quarter of those consumers on FTTN connections, who are paying for high-speed 50 Mbps and 100 Mbps plans, still did not receive anywhere near their full plan speeds, at any time.

Mr Sims, the ACCC chairman, went on to say:

This Measuring Broadband Australia data clearly shows that too many consumers with FTTN connections are not receiving the speeds they are paying for.

So the very valid question that Australian consumers should be asking, including those in rural and regional Australia is: why has this government built a $51 billion network that is still not delivering the speeds that Australians are paying for?

I note that at a speech to CEDA last year the minister said:

We are going to need to rely on and boost competition to make sure that our fixed networks continue to upgrade and stay in tune with world developments.

Yet the legislation proposed by the minister directly contradicts that statement. It actually achieves the opposite. It's the sort of doublespeak that the industry is sick and tired of and that consumers are sick and tired of. The industry expects better than this.

The government is asking this sector to believe this legislative package, headlined by a new broadband tax, should be seen as a gift to improve competition. While it might be inconvenient to concede that the primary reason the government instigated the levy was to deter TPG from cherrypicking inner-city basements, given the negative impact this would have on the economics of the NBN, most of industry and Labor support that objective. I've always been upfront about that. I believe it's in the interests of taxpayers and in the long-term interests of the project. Yet, from the outset, the government have been too insecure to acknowledge this as an objective of their policy. Instead, to give the appearance of having a more neutral purpose, the levy was expanded into greenfields networks.

The greenfields networks don't cause revenue leakage to NBN Co. In fact, if it wasn't for operators like OptiComm, peak funding for the NBN build would be higher than it is today because the NBN would have had to fund construction in those areas by itself. How does this supposedly pro-market, pro-investment Liberal Party reward them? With a tax on their operations and on their customers. Furthermore, the levy was also extended to enterprise markets. Not only is there no revenue leakage for NBN Co but we have a situation where NBN Co often causes revenue leakage to the incumbent. This was captured well in a submission by Optus, which noted:

… the provision of services to enterprise and government customers over non-NBN networks does not displace any NBN Co revenue or preclude NBN Co from making sufficient revenue from its metro connections to internally cross-subsidy the fixed wireless and satellite networks.

Labor's focus was on introducing a legislative amendment to help grandfather existing greenfields networks built before 1 July 2019 until the policy could be revisited at a later time. We did not consider the retrospective application of the levy to be fair, as greenfields did not pass the test of causing revenue leakage to NBN Co.

So, as I recently noted, I was surprised to see the minister, in an opinion piece, characterise this exemption as a pro-competitive measure agreed between the government and Labor. It is almost as though the government, which has no credibility on this matter, is trying to cling to Labor and claim that we're on some sort of unity ticket when it comes to competition policy. The fact is this: the greenfield exemption was a Labor amendment that had the backing of crossbench senators. To imply that it was worked up and somehow agreed between the major parties is a disingenuous description of what occurred. The government chose to adopt this amendment because Labor had secured the votes to pass it. Further, if the government considers the ALP amendment to be pro-competitive then what does that say about the original bill?

On that note, I'll run through some of the comments made by the industry itself—firstly, from Vodafone:

Not only will the RBS perpetuate the trend of opaque and anticompetitive telecommunications policy, it will chill investment in both fixed and mobile telecommunications infrastructure …

Senator Urquhart, at the Senate committee's public inquiry on the bill, asked Opticom:

… Will the broadband levy increase or decrease the incentives that you have to invest?—


… It would decrease.

Again, Senator Urquhart, at the hearing, asked of Telstra:

… will the proposed levy increase or decrease the incentives that private sector carriers have to invest in their own fibre infrastructure?—


… I think logically it would decrease those incentives …

In its submission to the Senate inquiry, Vocus stated:

The likely effect of limiting the RBS charge base exclusively to fixed-line high-speed broadband services will be to further incentivise private-sector investment in mobile and fixed-wireless services (which will increasingly be capable of undercutting NBN prices, as they will not be subject to the RBS levy), and to further disincentivise investment in fixed-line services …

Internet Australia, in its submission, stated:

In many respects the new RBS is anti-competitive in structure and scope, and designed more to prop-up the NBN funding regime than to enable open and transparent infrastructure competition to improve and advance broadband service availability in regional and remote areas.

I now want to run through Labor's position on the bills.

For starters, Labor supports the Telecommunications Legislation Amendment (Competition and Consumer) Bill. By and large, it's sensible, and, for the reasons I outlined earlier, Labor will support it. The broadband levy that is being proposed by this government is highly regrettable. The criticisms levelled at the government's levy design by the ACCC, the Productivity Commission and industry are fair criticisms. It is distortionary. It is anti-competitive. It has been poorly designed. It does present legitimate implementation issues. It is all of those things. That is why Labor pursued an amendment—which has been incorporated into the bill—to reduce the impact of the levy on greenfield consumers. But I want to put on the record that we do have outstanding concerns about the levy, as do many others in the sector.

Our first concern is a lack of transparency in relation to the modelling upon which this levy is based. Explanations given by public officials about why the model has not been updated have been unsatisfactory. I genuinely do not understand why the government simply don't do this. There's broad agreement that the modelling on which the levy is based is out of date. They've had two solid years to update it, and at every opportunity that reasonable request has been ignored. The BCR issued its first consultation in May 2015, with the government responding in December 2016. As a result, the legislation we are now debating is based on work performed half a decade ago when NBN's fixed-wireless and satellite network rollouts were still in their infancy. Today, some five years later, the fixed-wireless and satellite networks are largely complete. The real-world costs are better understood, particularly in relation to fixed wireless, which has been more expensive than originally envisaged. The existing costings are out of date, and there is general agreement that they should be updated.

Taking all this into account, Labor will introduce an amendment in the Senate to require an updated RBS model to be produced. We will consider putting this exercise in the hands of the ACCC. The modelling should be independent, transparent and based on the best available data. Stakeholders have a right to expect the highest standard of transparency in relation to a taxation bill. There was broad support for this additional transparency during the public inquiry.

The second concern relates to the grant-making mechanism. Both NBN and non-NBN networks will be subject to a levy that is collected by the ACMA and then paid back to NBN Co through a departmental grant. In accounting terms, we are not talking a trivial amount of money. All up, the levy is $800 million per annum. The question is: what happens when that $800 million flows into NBN? What we do know is that NBN Co does not need $800 million a year to operate and upgrade the fixed-wireless and satellite network going forward. It does not even need close that to that amount. The question is: where does that access money go? The answer is that the surplus, in effect, goes wherever NBN Co wants it to go. The money comes in and likely will be washed through an account with an endless pool of historical non-commercial losses. An NBN accountant, presumably, then takes out a pen, signs a piece of paper and declares the excess revenue offset a historical loss that NBN Co probably never intended to recover anyway. Then the money goes straight back into the core business.

There is no requirement to spend the surplus tax revenue on regional networks, even though that is the impression this bill has created for some stakeholders. If NBN Co wants to direct it towards the HFC cost blowouts, then that's where it will go. If they want to spend it on IT systems, that's where it will go. In practice, this all appears to be permitted.

This is not a criticism of NBN Co itself. Rather, it is an observation that the bill before the House is not a regional funding mechanism. It is an administrative charade. It deters cherrypicking and raises a bit of new revenue. Yet look at how much legislative complexity and red tape has been created to give the illusion that it is a funding mechanism. How did the government manage to develop such a nonsense? This is the same directionless overreach that undid the spectrum review. It's the same mediocrity that plagued the USO review, whose only output was a new acronym. The sector deserves better than this. Consumers deserve better. Regional Australia deserves better.

The final concern I have is about who bears the burden of the enterprise levy. This government is imposing a wholesale tax on telecommunications providers supplying enterprise markets. Enterprises are arguably the only bunch getting a good deal out of the NBN under the multi-technology mix. Prices for enterprises are coming down because of NBN having entered an already crowded market of competitors, yet the best idea this government could come up with was a levy on the incumbent telcos. The competition in the enterprise market means that providers are strongly competing to win customers or to avoid losing them. This makes it difficult for the levy to be passed through to enterprises, which have more of a capacity to pay it. NBN Co stated before the public inquiry that they do not price the levy into their enterprise products because their pricing is dictated by the market. This suggests that the industry will likely bear the brunt of this levy. So we have a situation where consumers will pay higher prices as a result of the government's tax, whereas the telecommunications industry will likely take the brunt on behalf of large enterprises. That simply doesn't seem right. In my view the industry should not have to absorb the government's enterprise tax from their bottom line. We can't see an immediate or effective legislative solution to this, but it's an issue that the government is urged to give consideration to.

In conclusion, as I have noted, for Labor to oppose the levy outright would hurt the long-term economics of the NBN, which is not in the public interest, and this is consistent with our position in the previous term of the parliament. That is why Labor pursued an amendment to reduce the impact of the levy on greenfield consumers, which has been incorporated into the bill, and will continue to reserve the right to pursue other measures, as I've indicated, when this matter comes before the Senate.

Photo of Sharon BirdSharon Bird (Cunningham, Australian Labor Party) Share this | | Hansard source

Is the amendment seconded?

Photo of Ms Catherine KingMs Catherine King (Ballarat, Australian Labor Party, Shadow Minister for Infrastructure, Transport and Regional Development) Share this | | Hansard source

I second the amendment.

12:05 pm

Photo of Tim WattsTim Watts (Gellibrand, Australian Labor Party, Shadow Assistant Minister for Communications) Share this | | Hansard source

I'm pleased to be able to rise in this debate on two separate but related bills, the Telecommunications Legislation Amendment (Competition and Consumer) Bill 2019 and the Telecommunications (Regional Broadband Scheme) Charge Bill 2019. Labor supports the Telecommunications Legislation Amendment (Competition and Consumer) Bill and the establishment of the statutory infrastructure provider regime outlined in it. The regime will provide additional certainty that, as we move beyond the initial NBN rollout, every Australian home and small business will continue to have the right to access a high-speed broadband connection. You'd hardly expect Labor to have an issue with this, given that it flows naturally from the arrangements that we put in place a decade ago through the statement of expectations issued to the NBN Co board. The statement of expectations at that time required NBN Co to make high-speed broadband available to all Australians, regardless of where they live or work, and this bill provides certainty that that will continue.

Labor wants today what it wanted a decade ago when we conceived of the National Broadband Network. We want every home and every small business in this country to have access to reliable, affordable, high-speed broadband. When the Rudd government was elected in 2007, Australian internet speeds and access badly languished. They really languished. The average connection speed was about two megabits per second, which ranked us shamefully low in global speeds. Today the internet is profoundly woven into our lives. It's very hard to overstate its influence. In the 1980s the author and journalist Tom Wolfe coined the phrase 'Masters of the Universe' to describe the potency of a new generation of young, ambitious Wall Street bankers. Today the new 'Masters of the Universe' reside in Silicon Valley.

The Howard government, though, apparently never saw this coming. The internet launched five years before that government was first sworn in, and they proceeded to ignore this increasingly central phenomenon for more than a decade. The Rudd government's sorry inheritance in 2007 was a telecommunications infrastructure in this country that had badly suffered through neglect and indifference, infrastructure that lacked a vision and imagination leading its rollout, infrastructure so inadequate that Australia was handicapped, and not just economically. It was what the Rudd government sought to address through the National Broadband Network. It was Labor that asserted the principle of universal access to modern technology—to fast, reliable internet.

Those opposite were fiercely opposed to this principle. Those opposite called it delusional. We really had to drag them, kicking and screaming, into the future. Labor understood the importance of the internet. We understood that it was world-changing technology, and the fact that we lagged behind much of the world in our access to it was an imperative to be remedied by the government. Labor understood its influence and acknowledged that its influence would only grow, sometimes in ways that we couldn't yet imagine. It would change the way that we consumed, sold, exported, imported, taught, learnt and communicated. It would change the way we listened to music and watched films. It would change the way we created and received news and would have ramifications for health, finance and even dating. It would have ramifications, really, for every component of our lives. This is how fundamental the underlying infrastructure was.

The Howard government, however, didn't care, didn't know or didn't understand. Labor is proud of the vision the Rudd government offered to Australians in the form of the National Broadband Network—proud, particularly, of its principle of universal access. So the National Broadband Network was born. It was an ambitious, nation-changing project, but one with a simple motto: do it once and do it right. That meant connecting the vast majority of homes in this country with high-quality fibre-to-the-home connections. Fibre is quick and enduring. It lasts and is futureproof. The network was simply too important to be compromised by political expediency or ignorance, but, unfortunately, that's exactly what has happened. In 2020 we have a network that is badly compromised. Having neglected the internet up to 2007, the coalition government has now neglected the National Broadband Network. Those opposite aren't great friends with the future.

In 2013 the degradation of the NBN began when the coalition was elected. This occurred with forewarning to the Australian public. When Tony Abbott gave Malcolm Turnbull the communications portfolio in 2010, he told the Australian public that Malcolm Turnbull would 'demolish the NBN'. Those were his written instructions and, sadly, he got to it when they won the 2013 election. It was one of the few election promises that they really did keep.

When Malcolm Turnbull came into the communications portfolio with the ignorant boast that he could deliver Australia a completed network much faster and much cheaper, he was wrong. He was badly wrong. The Abbott-Turnbull-Morrison government stopped an at-scale national rollout of the NBN. It stopped an at-scale rollout of a high-quality, futureproof, fibre-to-the-home network in favour of what they called a multitechnology mix—'a dog's breakfast' might be a better description for it—in which a patchwork of legacy networks were sweated throughout the country to cover the nation. They didn't just set out to retain the ageing legacy copper wiring for a fibre-to-the-node network deployment but actively started buying new copper to roll out across the nation, putting Australia on our own as the country investing in the past. It was like a nation greeting the arrival of the automobile age by purchasing new fleets of horses and carriages. They did it anyway and they boasted of saving money, except that they didn't. If your home wasn't utilising the old copper system, it was serviced by a mix of inferior fibres of HFC and the like. This requires future upgrading, unlike in the original plan. And guess what? The multitechnology mix is costing big dollars. NBN Co has calculated the multitechnology mix will cost $200 million more per year to maintain and operate while reducing revenue for NBN Co by $300 million compared to the original fibre-to-the-premises plan—that's an absurd half a billion dollars in the NBN Co's economics.

The legacy of the coalition government in this place is perverse. They promised to offer Australians a network that was completed more quickly than that proposed by the previous Labor government and offered faster speeds and lower cost, but it struck out on all three fronts. The decision to badly compromise the network has actually cost Australians more. We now have a poorer network at a greater cost. We've seen evidence for this this very week. The ACCC's latest broadband speed monitoring report is a scathing indictment of the Abbott-Turnbull-Morrison government's multitechnology mix. In a statement accompanying the release of the report, the ACCC couldn't have been clearer when it stated:

… many high speed fibre to the node (FTTN) connections still don't come close to performing as promised. The results show that about a quarter of those consumers on FTTN connections, who are paying for high-speed 50 Mbps and 100 Mbps plans, still did not receive anywhere near their full plan speeds, at any time.

The ACCC Chairman, Rod Sims, went on to say:

This Measuring Broadband Australia data clearly shows that too many consumers with FTTN connections are not receiving the speeds they are paying for …

This is the faster, cheaper NBN that the coalition government has delivered. It's a perverse outcome and a perverse legacy.

In 2013 the coalition was elected on a promise to complete the NBN in three years time at a cost of $29.5 billion. It was fanciful. Fast forward to 2020 and it's still not complete and the price tag is now more than $50 billion. That is $20 billion over budget and four years behind the schedule the Abbott-Turnbull-Morrison government promised the Australian public. It's a $51 billion network that can't even deliver the broadband speeds that Australians are paying for. Get this: in 2007, when Labor inherited the badly neglected telecommunications infrastructure bequeathed to it by the Howard government, Australia's internet speeds had roughly ranked 50th in the world. Today we're 68th, according to Ookla's global index. It's really poor company; it's the definition of a perverse outcome.

To add insult to injury, those opposite have neglected our regions. They watched NBN Co build too few regional wireless towers, so existing ones became overburdened, increasing congestion and slowing connections to regional mobile users. They did this to save money when their costs started mushrooming, and they bragged about it. What they didn't brag about, incredibly, was what we discovered in October last year—that NBN Co had cut $200 million from the fixed wireless network for the regions. This information wasn't publicly disclosed; indeed, it was deliberately hidden from where you would expect to find it, in the corporate plan. It wasn't disclosed until we came across this information in answers to a question on notice. This is typical of a government without a plan and a Prime Minister who can't be straight with the Australian public.

What's happening here is that the regions are being neglected so the government can desperately try to bandage their haemorrhaging costs, which brings us to the second bill before the House, the Telecommunications (Regional Broadband Scheme) Charge Bill 2019. I've worked in the Australian telecommunications sector, in one role or another, for near on a decade. If there's one thing that I've learnt from this space it's that, when you're dealing with the complex technological and regulatory legacies of this sector, when you change something in one spot you generally break something in another. The Australian telco sector, as it stands today, reflects decades of technology and policy trade-offs. These trade-offs interact with each other, so changes in the way that things work in one area have consequences for superficially unrelated areas elsewhere.

A good example of this is the trade-off between costs and pricing for telecommunications services in our cities and our rural and regional areas. When Labor conceived of its plan for a national broadband network, it understood the simple fact that in a country this large, with very low population densities in some parts of it, the costs for delivering services to our regions would be significant. The cost of a regional connection would be high, but we wanted it to remain affordable, so we rolled the NBN out based on a cross-subsidy model—that is, that metropolitan areas would pay a little more than their service costs so that the regions could acquire a service at a cost that was affordable. This cross-subsidy model generated $700 million and reflected the historic way that we've managed the higher costs in the bush against those in the cities in the Australian telco sector. It's an egalitarian settlement—perhaps not the most optimal form, from a purist's perspective, but the most workable in an Australian context.

There are those opposite, however, who have always wanted to play the purist in this space and unwind this egalitarian settlement. It was disappointing that, prior to the 2013 election, the Liberals encouraged other companies to deploy networks and compete directly against the NBN, in full knowledge that this would undercut the NBN Co business model—the city-regional cross-subsidy that has formed the basis of the Australian settlement on telecommunications policy for decades. But the ideologues in the Liberal Party have always chafed at this settlement, and they periodically break out from this settlement and start pushing positions that would break it and force the bush to wear the higher costs of telecommunications services on their own. Indeed, before the last election the minister repeatedly flirted with the desirability of infrastructure competition with NBN Co in the cities. What the National Party thought about this flirtation by the Liberal Party with breaking this NBN cross-subsidy, to the detriment of rural and regional Australia, remains unknown. Presumably they were too busy fighting each other to notice it at the time. But the minister played footsy with a development that would sabotage the NBN Co business model, and now they are introducing this new broadband tax to protect themselves from the consequences of their own flirtation. Now the minister wants to impose a new broadband tax on Australians who are on those competing networks that he wants encouraged. Like his leader, the minister can't be straight about this. But Labor will be upfront about what this bill actually does.

The bill will apply a new broadband tax of $7.10 per month on households and businesses connected to a non-NBN Co broadband network. It will add at least $84 to the annual bill for up to 500,000 residential and business services. This coalition tax on broadband is a new thing. It wasn't originally part of anyone's plan for the NBN. As I said earlier, the previous Labor government didn't contemplate having a broadband tax on top of an internal cross-subsidy. It was one or the other, not both. Yet now the Abbott-Turnbull-Morrison government wants both.

You might ask what has changed to prompt this. Well, you can observe what hasn't changed. The cost of a fixed wireless and satellite network had not changed at the time this new broadband tax was proposed. The cost is effectively what was forecast. What has changed is the damage that the Abbott-Turnbull-Morrison government's multitechnology model has done to the financials of the NBN Co. According to NBN Co's own analysis, this inferior multitechnology mix will cost $200 million more per annum to maintain and operate and will generate $300 million less per annum.

The effect of this new broadband tax will primarily be to add a price signal that deters duplication of NBN Co infrastructure in the cheaper city areas, enabling the cherry-picking of NBN Co revenues that can be applied to ensure universal access to broadband in rural and regional areas. I can understand the rationale for this. It is fair enough and it is why we're letting this bill go through the chamber unopposed. The shadow minister raised issues with this that we will address in the Senate. We will confront it at that time. That will be an issue for the Senate at that time.

12:20 pm

Photo of Brian MitchellBrian Mitchell (Lyons, Australian Labor Party) Share this | | Hansard source

I rise to speak on the Telecommunications Legislation Amendment (Competition and Consumer) Bill 2019 and cognate bill, and the shadow minister's amendment. A reliable broadband network has become critical for the majority of Australians, as the member for Gellibrand has noted. We rely on the internet for work, for banking, for communication, for leisure and for shopping. It has become a vital, intertwined, ingrained part of our connection to our community and to the wider world. Unfortunately, too many people in Australia, especially in regional Australia, do not have the same ability as those in the city to enjoy the benefits of the internet—what we call the digital divide. Unfortunately, under this government the divide has become wider, not narrower, as a result of the lack of telecommunications infrastructure and regional black spots. More needs to be done to ensure that every Australian who wants to access the internet can have it.

I've spoken many times in this place on the government's record on the NBN. The NBN is a national telecommunications infrastructure program, which was instituted by Labor, and which, as the member for Gellibrand has noted, the then opposition leader, Tony Abbott, instructed his shadow communications minister, Malcolm Turnbull, to 'demolish' if they were to come to government. It is one of the few promises they have sought to deliver, because that is indeed what they have done to the NBN. They have demolished the foundations of what should be one of this country's greatest infrastructure builds. They have absolutely smashed it. I will come to the how of that later.

The legislation before the House today does two key things. It legislates certainty that all premises in Australia can continue to access broadband beyond the NBN rollout. It legislates a guarantee similar to the telecommunications guarantee we've legislated, which ensures that every Australian has access to a telephone line. This does the same for broadband. This gives it certainty. Labor supports this. We always have. These bills also, perhaps controversially, introduce a telecommunications levy of $7 per month onto the bills of households and businesses that get their broadband from non-NBN networks. This cost, of course, will go to the wholesalers, but, as we know, they'll pass that cost on to their customers—so, $84 a year in higher internet fees for people who get their internet from non-NBN providers. Labor is supporting that—with some reluctance I must say. We know we need to support this, to be a constructive opposition. The NBN Co business fundamentals demand it because of the changes that this government has wrought on NBN Co. Under Labor, this levy would not have happened—this internet tax would not have happened, because we had baked-in cross-subsidisation internally. We would not have required this. In his speech, the member for Gellibrand, with his deep background in telecommunications, explained, perhaps much more eloquently than I can, the reasons for this. He explained that we would not have done this because we had baked-in cross-subsidisation beforehand. But, under this government, there is internal subsidisation, and now they are going to slug consumers as well.

The truth of the matter is that there needs to be a legislative standard in Australia where we guarantee universal access to broadband, no matter where you live, particularly as we near the point where NBN Co is likely to be privatised. We need to ensure that coverage is not motivated by making money but is instead about ensuring there is a comprehensive network that ensures accessibility, no matter where you live. I represent an electorate that is remote and regional and I get complaints every day, still, about people's lack of access to the NBN, whether it is slow service or the like. I've got a range of what the government calls multi-technology-mix customers in my electorate, with fibre to the node. I've got constituents with fibre to the premises, which was rolled out under Labor. I don't get any complaints from them, let me tell you. I don't get any complaints from people in fibre-to-the-premises areas. I do get complaints from people in fibre-to-the-node areas, because the copper's degraded or they're too far from the exchange, or because of the slow service. I certainly get complaints from people on the fixed-wireless service—the towers—because essentially there are too many people on those towers, and of course internet use has increased so much over even the past five years, with 4K coming in, and HD, and people are streaming services and businesses have higher use of data.

Businesses and homes that are on fixed-wireless towers are just crunching the availability of hardware on those towers, and what we are seeing is the constant need to upgrade fixed wireless, and it just can't keep up with the demand, because this government has underinvested in fixed wireless. The fact that they secretly took $200 million out of the fixed-wireless network is an absolute disgrace—the shortcomings of the fixed-wireless network. If any aspect of the NBN system needs more investment, it's fixed wireless. Yet they took $200 million out of it and didn't want to tell the public about it until it came up in Senate estimates. I think a Tasmanian senator, Senator Anne Urquhart, had a principal role in that, and hats off to her for winkling that out of the NBN.

There remains plenty to do with the NBN. Under this government NBN speeds in this country have slipped, to see Australia now 68th in the world. We are behind countries like Kazakhstan and like Cape Verde, in Africa. Just think: Australian tourists go overseas, to developing nations, and get much better service in those countries than they do here in Australia. It is an absolute indictment on this government's lack of regard for telecommunications and particularly the NBN. In what should have been a game changer in terms of accessibility and speed, the NBN promises have been a disappointing disaster—another demonstration of how the Liberals simply have not grasped the opportunities that modern telecommunications can deliver, and not just for households and consumers. Sometimes as politicians we get wrapped up talking about movie streaming and leisure for people in their homes. But there is the cost to the economy, to business, of not having a fully serviced NBN with fibre at the heart of it. It is a terrible shame.

As the member for Gellibrand mentioned, in 2007, when Labor came to power under Kevin Rudd, the average internet speed was two megabits per second. That's unthinkable now. Yet I remember the then opposition leader, Tony Abbott, saying, 'We'll never need more than five or six'—I think he said five or six, or some ridiculously slow speed; that we'd never need more than that. And we've well eclipsed it. On that side of the chamber they regarded Labor's then promise of universal access to be 'delusional'. That's what they called it—delusional. They just didn't get it. So, from 1996 to 2007, when they were in government, they did nothing, as the internet was taking off around the world and the importance of the internet became more clear to people. I was working in the media at that time, and I saw firsthand how the internet became more integral to our newspapers' operations, first for information gathering and then for sending pages via the internet to the printer. That's how quickly it developed. Yet over the period of that government they did absolutely nothing in terms of fixing the internet infrastructure for this nation.

So, in 2007, Kevin Rudd came along, saw what needed to happen and, from a standing start of nothing, the NBN was created. Of course, these things take time to develop. The genesis of the NBN took time. So that got underway. There were a few hiccups along the way, with asbestos being found in the Telstra pits. A lot of regulatory changes were required. Then Tony Abbott came along as the opposition leader and ordered Malcolm Turnbull to demolish Labor's NBN, because he wanted to make a political point. Frankly, Tony Abbott just didn't get it. I can sort of forgive Tony Abbott, to some degree, because he literally did not understand the importance of the internet. But I won't forgive Malcolm Turnbull, because he did understand. He did understand the importance of the internet, but he was more interested in his own political future than the future of the nation. He knew how important fibre was going to be at the heart of the internet. We know that he personally invested in fibre overseas, whereas here at home he was quite happy to foist upon the nation a substandard multitechnology mix that had, at its heart, 19th century copper.

So they didn't get it then. Over the period of this government, what we've seen happen with the NBN is a complete underinvestment—an absolute underinvestment in technology and an underinvestment in political will to give Australians the internet and the broadband that they deserve. In remote and regional Australia the digital divide is just getting worse and worse. Under Labor, regional areas were the first to get fibre to the premises: places like Sorell in Tasmania, my state, and the town of Smithton, places you wouldn't have thought would be the first to get the latest technology available. That's where fibre-to-the-premises internet was rolled out. We did that for this reason: we said that the regions deserve to have the same internet speeds and quality as the cities do.

I think people in this country are used to the idea that, whenever something new and flash comes along, it's always the cities that get it first. It's always Sydney, Melbourne, Brisbane and Perth. They tend to get the best stuff first. That's where most people live, so they get the flash stuff. Labor in 2007 said: 'Hang on. We want to close the digital divide. Let's give it to the regions first. Let's make sure the regions get the best internet, because the cities have got pretty passable ADSL at the moment. They've got pretty good internet. They can get by for a while, but those people in the regions have nothing. So let's put the good internet out there.'

Labor was howled down by those opposite. Those opposite, who claim to represent regional Australia, were the first to howl it down. They said: 'This makes no business sense. This costs so much more.' But what we have found out, of course, is that their claims about Labor's NBN costing so much more than what their system would cost is an absolute lie. They have foisted upon this nation an NBN of different technologies—copper based, cable, you know, all sorts of technologies that they've rolled out—which are substandard, certainly substandard compared to what Labor would have introduced. Labor would have had 93 per cent of the population getting full fibre. Yet their NBN has ended up costing about the same as what Labor's would have cost. The Labor NBN would have come in at around $50 billion. That's exactly where we've landed with this mob, with what is even now a substandard mix. No sooner is the NBN starting to be finished, four years behind schedule and $20 billion over budget, than they're already having to upgrade. They're already having to go back into the pits and renew the copper. They're already having to fix things up. Homes and businesses that are on fibre to the node are finding that it's not servicing their needs, so they're having to call in the technicians and say, 'Look, we need better internet.' They're having to pay through the nose to get the better fibre to the premises. The costs of the substandard internet that those opposite have foisted upon this nation will be much greater than if they'd simply continued with Labor's fibre-to-the-premises rollout.

It's one of the greatest infrastructure failures in the history of this nation—how far this government has put this country behind, not just for households but for the economy and the opportunity costs for the regions. Businesses are not able to expand in the regions, because they are dependent on good internet. They have to go to the cities because that's the only place where you can get the fibre to the premises that they need to compete in the world. It's a litany of failures on that side. We support the bill before the House, but we also have the amendment, just to point out some of those failures.

I want to quickly mention this broadband levy. As I said, it is a Liberal government broadband tax. It's a $7-per-month tax on internet services. It will impact consumers. They're levying against the providers, but it will impact consumers and businesses. It will especially impact people in the regions and first home buyers. They say they are doing this to protect regional broadband. If they were really interested in protecting regional broadband then they wouldn't have stripped out $200 million from fixed wireless, which was an absolute disgrace. And they've done nothing, absolutely done nothing, as NBN Co has overloaded the fixed wireless towers in regional areas, leading to slow speeds and congestions.

We support these bills, but this government should not escape the deserved odium for what they have done to what should be one of the greatest infrastructure achievements of this country, which they have just demolished—in their own words—and turned it into an absolute disgrace.

12:35 pm

Photo of Helen HainesHelen Haines (Indi, Independent) Share this | | Hansard source

I rise to speak briefly in support of these bills, with a few stories of reservation. With the NBN rollout at 98 per cent, and due for completion in June this year, the last parts of rural and regional Australia—the so-called hard-to-reach places—are finally being connected. The NBN provides significant economic and social benefits in regional communities. It boosts productivity, employment and innovation. When I visit small businesses and large producers in Indi I am always impressed by how quickly these people pick up on the opportunities of the NBN. I've seen online recruiting agencies for rural practitioners. I've seen jewellery manufacturers. I've seen rural telehealth to support emergency departments in far remote places of my electorate. I've seen people engaging in online learning who otherwise would not have had the opportunity to get a university degree, and I'm really happy about that. But we have to keep an eye on NBN. We have to make sure that the quality of our NBN services is, indeed, what we truly need in rural Australia and is equal to what other Australians receive.

The poor quality of telecommunications in rural and regional Australia is a long story. I won't tell you the whole story, but it is a long story. Historical underinvestment and metro-specific policy over decades means rural and regional communities are still struggling for reliable access and lagging behind in digital literacy. Nowhere has the legacy of this underinvestment, and the subsequent fragility of these services, been more evident than in our recent bushfires. With mobile phone towers and radio transmitters incinerated, whole communities were isolated for weeks.

With the rollout of NBN almost complete, the conversation will shift now from access—the hardware, the line to the premises, the satellite installed on the roof—to quality. Does this service do what I need it to do? Is it affordable? Rural and regional Australians know that being connected is only the first step. Historically we pay a high price for poor-quality services. As the government moves now to deliver these telecommunications reforms, we need to ensure that the product actually meets the needs of the customers outside the capitals and allows regional Australians to fully participate in the digital age.

Today I will address the two parts of these bills which go directly to these issues. Constituents in Indi access the internet via fixed wireless and satellite networks at rates many times the national average. Indeed, my own home, only three kilometres out of Wangaratta, receives internet this way. These methods suit rural areas with low population density, where it's not cost-effective to install a physical line. But, still, these arrangements are expensive, costing an estimated $9.8 billion over the next 30 years. The regional broadband scheme, which this bill introduces, sets up a funding arrangement for these services by requiring carriers to pay $7.10 per month for each premises with superfast broadband. This change is an improvement on the current system, where NBN cross-subsidises the investment through opaque internal accounting.

I'm pleased that advocates for rural and regional telecommunications support this move. These include the Australian Communications Consumer Action Network; the Country Women's Association; the Isolated Children's Parents' Association and the Regional, Rural and Remote Communications Coalition, whose members include the National Farmers' Federation and Better Internet for Rural, Regional and Remote Australia. I am concerned, however, that the new fee imposed by the scheme will increase the cost of broadband. It's up to the carriers and retailers to decide whether to pass this charge on to the consumers. The government has reassured us that 95 per cent of consumers will not experience a price rise, and for the remaining five per cent, competition will put downward pressure on these prices. I sincerely hope this is in fact the case and that the goal of equitable cost-sharing is not used as an excuse to price-gouge customers, customers like those in my electorate.

Access to the internet is becoming as essential to daily life as access to electricity or water. It's now the government's main channel for interacting with citizens. This includes Centrelink reporting, the ATO and myGov. Yet this access is meaningless if it's unaffordable, particularly for low-income families. Coverage has to be universal not just on paper but in the reality of people's lives.

I welcome the second part of these bills. That's the introduction of the statutory infrastructure provider obligations on NBN Co and other carriers. These obligations will ensure that all Australian premises are able to access superfast broadband services of 25 megabits per second or better. If it's not reasonable to connect premises via fixed line, the provider must provide a fixed-wireless or satellite technology solution. On fixed-wireless services, voice services for consumers must be supported.

All people in Australia currently have guaranteed access to a telephone voice service through the Universal Service Obligation. This change helps build on that and provides consumers with certainty that all people in Australia, no matter where they live, have access to high-speed NBN. This news will be very welcome to constituents of mine who access the NBN via satellite or fixed wireless, but I must say that these services still fall far below what they need, and I'd like to share just a couple of their stories.

A constituent who lives near Cudgewa wrote to me expressing his frustration with the service he receives by satellite, the only NBN service available for his property. He and his partner are both undertaking university study by distance, online, to further their careers. They both actively volunteer with community groups and committees. But the current monthly data caps placed on NBN satellite customers mean they routinely run out of data. This places them at a huge disadvantage with regard to their ongoing education and involvement with the community groups that they serve. They've tried getting a bigger package, but they can't purchase any additional data, due to the NBN Fair Use Policy. As he told my office:

I'll cut to the chase, I truly feel like a second class citizen, I am disadvantaged simply due to my location, as I stated those in very close proximity to us have access to far better technology at a fraction of the cost. Whilst we are left short every month, I feel for those in more remote areas who rely on this technology for their children's education.

Another example is the experience of the Outdoor Education Group, or OEG. They're based in Eildon. OEG provide challenging, hands-on experiences for schoolkids, giving them the opportunity to get outdoors and go beyond their comfort zones through activities such as rafting, bushwalking, camping and high- and low-rope courses. OEG is hugely successful. It has over 200 staff, a revenue of $20 million and camps right across Australia. To date, they've educated and cared for two million students. As you can imagine, when you're operating between locations and corralling hundreds of children, fast and reliable internet is absolutely essential not just for business but for safety. In their location of Eildon, fixed-wireless internet is the service available to them. Yet, in a 10-day period last September, for seven days there was no connection during business hours. The accountholder was not notified, and there was no clear advice on when the disruption would end. Staff were forced to hotspot using their phones, which meant they couldn't access the internal server, severely impacting on their productivity. The outages are completely unacceptable. As OEG told my office:

… This seems unbelievable to me and totally discourages businesses from operating in regional areas, NBN do not answer to anyone and are being very quiet about what is going on and what has been causing the issues I have mentioned, especially moving into summer and being in a bushfire prone area of the state.

I don't believe a reasonable person could expect a business to run efficiently with these vague notifications, particularly an organisation that is regularly conducting interviews and meetings via the internet.

That was a direct quote. The NBN has also recently reduced OEG's upload speeds by 50 per cent. Upload speed is crucial, as most of their work is done between different offices, and they rely on cloud based applications, with data frequently uploaded as work is saved. After a meeting between myself, NBN and OEG, I was pleased that NBN agreed to schedule outages before OEG's busy period, commencing in February this year. OEG is a huge, successful employer which has made rural and regional Australia its home base. We want and we need more of these businesses outside of our capital cities so our regions can prosper. Extensive issues with NBN outages cause headaches and difficulties for regional businesses. How many other potential businesses decide that they simply wouldn't take the risk of moving to regional Australia?

Of course, I can't stand here and talk about NBN without at least mentioning mobile phone black spots too, because they still remain. The famous Oxley Bush Market, which celebrated its 40th anniversary in November 2019 and last month won the Rural City of Wangaratta's Community Event of the Year, struggled with connectivity issues, which meant using EFTPOS to sell wares was a gamble. How much more commerce could the 175 stallholders conduct if they just had reliable reception? I conclude by saying that I'm a member of the Joint Standing Committee on the National Broadband Network and I am absolutely committed to keeping a close eye on the rollout of the NBN to ensure rural and regional Australians not only get NBN but also get the quality NBN they need.

12:45 pm

Photo of Tony ZappiaTony Zappia (Makin, Australian Labor Party) Share this | | Hansard source

I note with interest that there are no government members who wish to speak on this legislation, the Telecommunications Legislation Amendment (Competition and Consumer) Bill 2019 and the Telecommunications (Regional Broadband Scheme) Charge Bill 2019. The two most significant national projects the Morrison government was entrusted to deliver for all Australians were the NBN and the National Disability Insurance Scheme. Both have been dismal failures of this government. They were national rollouts that the previous Labor government had done the groundwork for. Indeed, all of the difficult work in respect of the preparation was already done. The failure of the Morrison government to roll out both the NDIS and the National Broadband Network on time and on budget, and to meet community expectations, highlights this government's incompetency. This is a government now in its third term. It has had plenty of time to settle in, to carry out whatever reviews it thought it needed at the time it came into office and to deliver on the election promises it made to the Australian people. It has failed to do so.

Under this government, now in its seventh year, the NBN rollout is a mess, with consumers raising concerns and frustrations about NBN connections and services every day. The coalition decided, in their wisdom, to change Labor's National Broadband Network rollout, claiming the coalition rollout would enable the NBN to be delivered faster and cheaper. After seven years they have failed on both counts. Costs have blown out to $51 billion, the rollout is four years behind schedule and the service is failing to meet community standards on so many fronts. I have lost count of the number of people who have contacted my office over the years with NBN difficulties.

The Morrison government's National Broadband Network rollout has been badly designed, which is why this legislation is now before the House. They are trying to fix another problem—the problem of funding. That also goes to the services that are being provided, and it's a funding problem that arises because of the very structure of their rollout. In today's society an internet connection is no longer a luxury. It's not an option; it is a necessity. Nearly all business, including government services, is transacted through the internet. Without the internet you cannot get on with your normal daily life anymore.

The two major entities that have responsibility for enabling National Broadband Network connectivity are Telstra and NBN Co. Both have been the subject of thousands of complaints each year to the telecommunications ombudsman. In 2018-19 there were 132,387 complaints. Some might argue that those complaints have dropped from the previous year. My view is that, if the complaint numbers have dropped, it's simply because people have given up complaining, because they know that it ultimately results in no action. Both Telstra and NBN Co have a monopoly over their service sector and can be very difficult to deal with, particularly for people with limited communication skills or who are not familiar with new technology.

I was recently contacted by a local person who has extensive knowledge in the telecommunication sector, a person who has spent considerable time not only to put together his thoughts on the NBN—and Telstra, for that matter—but also to look at things that could be done to improve the services. He listed for me 12 issues that need to be addressed, and I'm going to go through them, one at a time.

First: poor technical support from overseas call centres, staffed by people who often have limited training and no understanding of the Australian context. Frequently, there are deficiencies in their technical language capabilities. Second: physical cabling failures and limitations within the copper network used for the last section of the fibre-to-the-node technology. Third: high prices for services compared with other countries. Fourth: packaging of services by providers into bundles which cannot be broken down into separately priced items to permit customers to make a fair comparison with their competitors. Fifth: obfuscation of costs and constraints in marketing of products and services and in contracts, which might be discovered by consumers only when a problem arises. Can I say, that seems to be a common problem. When a problem arises and someone then goes back to their contract, they suddenly find out that the problem that they have encountered is not the responsibility of their provider or of NBN or of Telstra, and there is a backwards-and-forwards process in respect to who it is that they need to get on side to fix the problem.

Sixth: providers often phase out bundles as the contracts expire and replace them with much more expensive options. Seventh: selling services such as internet access with speed boost, yet failing to purchase sufficient bandwidth from NBN Co to meet the demand of their customers—again, a common problem. Eighth: providers refusing to provide access to technical data on the modems and equipment they provide to customers, limiting options for consumers to solve problems themselves or to turn to third parties for technical support. On that issue alone, I fail to understand why the technical data relating to modems and other telecommunications equipment is not made available to all people so that people can either get on with doing their own repairs and maintenance or whatever it is or get a technician of their choice to come in and do it, yet that is not the case. Ninth: failure to disclose the full ramifications when transferring to the NBN, including the potential need to rewire existing home or business telephone networks, with limits on how many handsets can be connected to the modem and limitations with location of phone outlets. Again, I see homes and I speak to people who have connected to the NBN and then suddenly find that they cannot have the same phone system in their home that they had before the NBN connection. Tenth: consumers are also not always aware that in most cases standard landline services will not work during a power outage, and the previous speaker spoke about that in her own community, as a result of the bushfires. It's a serious problem, because many of the people who are now connected are older people who rely on their telephone, and not only to make calls; quite often they might have the emergency alarm systems also connected through the same system and, if it fails, there is no way of anyone knowing if they are in need. Eleventh: some users who only want a basic landline service end up paying more than they need to for bundles with large data allowances. Twelfth: when encountering technical difficulties, consumers often get caught between their internet service provider and NBN Co, with each saying the problem is the other's fault. I referred to that earlier, and it seems to be one of the most common problems we encounter, certainly in my community. The difficulty in navigating through all of the various parties is something that I can only empathise with consumers about. It is sometimes near impossible to get through to them. Indeed, some of the people who have come to my office have done so as a last resort because they have exhausted all of the options they believe they have in getting the problem resolved. And, inevitably, after they come to my office, we're able to get someone from NBN to perhaps coordinate the services required and get the issue resolved. But it's never easy.

Other issues that have also been raised with me, or my office, include that, when switching over to the NBN—which many consumers have needed to do to maintain their phone or internet access—some have had to choose between paying a higher monthly cost or accepting a service that is inferior to what they had. Many consumers who received the NBN by HFC experienced significant delays in the rollout, or technical problems. Consumers sometimes experienced lengthy delays trying to transfer to the NBN and sometimes lost phone or internet services for extended periods during the transfer.

Lastly, often home security systems or personal alarms are not compatible with the NBN and would not function in the event of a power outage. I realise they can get a battery back-up in some cases, but, again, if you're not familiar or conversant with new technology, you might not have done that. Whilst there is an NBN scheme to assist with the costs of replacement, there are some limitations and there will still be some out-of-pocket costs to the consumers. Many of these issues have been caused by or exacerbated as a consequence of the government's multi-technology mix rather than Labor's original plan for fibre-to-the-premises coverage, which would have covered around 93 per cent of the nation.

Other speakers have referred to the internet speeds. The New Daily recently reported that Australia's broadband internet ranked fourth slowest in the OECD world—fourth slowest. In global internet speed rankings, Australia has fallen to 68th of 177 countries. These are recent figures; these are not old figures. Whilst the government might dismiss those figures and come back with some excuse as to how they are not correct and the like, I say to the government that the reality is that there have now been too many reports showing that people are not getting the internet speeds or quality of service that they were led to expect.

Reliable, high-speed, world-class internet services are important for the nation and they're important for business productivity and efficiency. They are an essential service. They should no longer be treated as something that consumers have choices about; it is part of the world and the life that we live. If we cannot deliver the services that both residents and businesses need, we as a nation cannot move forward, and nor can we be competitive with the rest of the world. This legislation, I know, tries to address some problems. But, quite frankly, this government stands condemned for the failure to roll out the service that this country needs in 2020 and the failure to deliver on the promises it made to the Australian people.

12:58 pm

Photo of Paul FletcherPaul Fletcher (Bradfield, Liberal Party, Minister for Communications, Cyber Safety and the Arts) Share this | | Hansard source

I am pleased to sum up the debate on the Telecommunications Legislation Amendment (Competition and Consumer) Bill 2019 and the Telecommunications (Regional Broadband Scheme) Charge Bill 2019, and I express my thanks to all parliamentary colleagues who have spoken in this debate.

These bills implement a comprehensive three-part package to improve the regulatory framework for the supply of high-speed broadband, by amending separation rules and creating new supply and funding arrangements. These bills will improve the provision of high-speed broadband in Australia, firstly, by making carrier separation rules for high-speed residential networks more effective but also more flexible and giving carriers greater scope to invest in superfast networks and to compete. Secondly, they improve the provision of high-speed broadband by introducing new statutory infrastructure provider obligations on NBN Co and others to support the ongoing delivery of high-speed broadband services. Thirdly, these bills establish the Regional Broadband Scheme, which will provide transparent and equitable long-term funding for NBN Co's satellite and fixed-wireless services in regional and remote areas.

Access to the National Broadband Network is estimated to have contributed $1.2 billion to Australia's GDP in 2017, excluding the stimulus effect of the rollout. Once complete, the NBN is projected to boost Australia's GDP by $10.4 billion per annum.

The government's reform package embodied in these bills is designed to allow all Australians to participate and share in the social and economic benefits of one of our country's largest infrastructure projects. Consumers will benefit from the statutory infrastructure provider measures, the purpose of which is that all Australians can access high-speed quality internet services. The rules set out baseline standards for the services: peak download speeds of at least 25 megabits per second and peak upload speeds of at least five megabits per second. The services also need to support voice communication on fixed-line or fixed-wireless networks.

Consumers in regional Australia will benefit from the Regional Broadband Scheme, which establishes a transparent and equitable long-term funding arrangement for NBN Co's fixed-wireless and satellite networks. These networks are improving business, social, educational and health outcomes for regional and remote Australia. The Regional Broadband Scheme will require all carriers to pay $7.10 per month for each premises on their network with a high-speed fixed-line broadband service. This charge is capped at $7.10, indexed to CPI, to provide greater regulatory and investment certainty and to support market competition.

The Regional Broadband Scheme will level the playing field by spreading the cost of Australia's investment in regional and remote broadband services equitably across NBN Co and NBN comparable networks. Importantly, the costs of NBN Co's fixed-wireless and satellite networks are built into NBN Co's existing pricing model over time, so establishing the Regional Broadband Scheme will not produce any one-time price shock for NBN customers. In combination with the statutory infrastructure provider regime, the Regional Broadband Scheme will give confidence to residents of regional and remote Australia that essential affordable broadband services will be available to them and will remain available in the future.

The package of measures set out in these bills strengthens competition, but it recognises that in a competitive market all participants should contribute towards the cost of providing loss-making broadband services in regional and remote Australia. There has been recognition of the potential need for a levy to support the provision of loss-making broadband services in regional and remote Australia since the initial implementation study for the NBN was carried out in 2010. The Labor Party and representatives of that party have been on the record saying that they accept that a levy might need to be introduced. In its 2010 Statement of Expectations to NBN Co the then Labor government said it was considering introduction of a levy to prevent opportunistic cherrypicking.

The package of measures set out in these bills delivers important outcomes for consumers, and that is why these bills are supported by consumer groups and by regional stakeholders, including the National Farmers Federation and the Regional, Rural and Remote Communications Coalition. These bills also deliver important outcomes for industry, with more opportunities for competition at both the network and retail levels. These important reforms are a critical step towards all Australians having access to the affordable, high-speed quality internet services they need to fully participate in today's digital society. I commend these bills to the House.

Photo of Tony SmithTony Smith (Speaker) Share this | | Hansard source

The original question was that this bill be now read a second time. To this the honourable member for Greenway has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. So the immediate question before the House is that the amendment moved by the member for Greenway be agreed to.