Senate debates

Wednesday, 28 October 2009

Business

Consideration of Legislation

5:30 pm

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Hansard source

Believe it or not, Senator Minchin, someone has done a little more work than you. There was almost unanimous support for the measures in the response to the regulatory reform discussion paper we released on 7 April. The government have listened to these views and we are now taking action. Every day that we delay these reforms is a day of higher prices and less choice for consumers and businesses—less choice and less innovation. It will delay stronger powers for the ACCC to act on anticompetitive behaviour. It will delay the strengthening of consumer safeguards around the provision of voice and payphone services.

Since the measures in the bill were announced on 15 September there has been overwhelming support for these reforms. The Australian Information Industry Association CEO, Ian Birks, representing Australia’s $100 billion per year information technology industry, warned just last week: ‘Obviously, any kind of slowdown in the acceptance of the legislation and the delivery of the NBN has a detrimental effect on how quickly we can achieve the benefits of a digital economy.’ The Australian Telecommunications Users Group said last week: ‘ATUG believes these changes are needed now to deliver better outcomes for end users, better prices, service and innovation.’ A joint industry statement released late last week by Optus, iiNet, Transact, Internode, Vodafone, Primus, Macquarie Telecom and Netspace said:

The communities that will benefit most are those that are most disadvantaged by the lack of competition today, especially rural communities that have seen their choice of communications provider diminish in recent years in the face of resurgent Telstra market power. On the other hand, the cost of a delay is real, immediate and an impost on all Australians. Delaying the passage of the legislation until next year would mean benefits would not flow until 2011 at the earliest. There is also a risk that the legislation might never be passed if the opportunity we are presented with today is not seized.

It is the government’s view that Telstra’s high level of integration has hindered the development of effective competition in the sector. Telstra is one of the most highly integrated telecommunications companies in the world across a range of telecommunications platforms. Its level of vertical integration raises concerns about the extent to which Telstra has the ability and incentive to favour its own retail business over its wholesale customers when providing access to various services—and you know it is true, Senator Minchin. It also owns the only fixed line copper network that connects almost every house, as well as the largest cable network, half of the largest pay TV provider and the largest mobile phone network. The OECD has concluded that Telstra’s horizontal integration has reduced the development of facilities based competition in Australia in comparison to other countries and has contributed to Telstra’s domination in the market. The reforms in the bill address these concerns while still providing Telstra with the flexibility to choose its own path.

The bill also includes the measures necessary to rebalance the regulatory framework, which has been criticised over the years as being overly cumbersome and unable to deliver sufficient certainty to drive proper investment in infrastructure. The operation of this regime has long been problematic. Access seekers have been frustrated by constant delays and disputes. More than 150 access disputes have been lodged with the ACCC in relation to telecommunications, compared to a total of only three disputes across all other regulated sectors. In order to correct this clear imbalance, the bill proposes reforms to the telecommunications access regime that will make the process more streamlined and less vulnerable to opportunistic procedural delays. This will provide greater certainty to both access providers and access seekers.

The failure of the regulatory regime is directly impacting on consumers. As recently as last week the Telecommunications Industry Ombudsman released its statistics for the 2008-09 financial year. These statistics indicated a further deterioration in the level of customer service in the telco sector, with a 54 per cent rise in total complaints. There was a 57 per cent increase in internet related complaints and a 40 per cent increase in landline related complaints.

The reforms in the bill are particularly important for consumers and small businesses, including those in rural and regional Australia who rely on these services greatly and are disproportionately affected by the inadequacies of the existing regulations. In developing this package, we have considered the report by the Regional Telecommunications Independent Review Committee, chaired by Dr Bill Glasson, set up by the previous government of which Senator Minchin was a member. The regional review committee’s final report urged the government to consider the separation of Telstra and measures to deal with its horizontal integration, including owning an HFC cable network. So the very committee set up by those opposite said, ‘Go out and do this,’ and those opposite are now turning their backs on their own committee. The regional review committee emphasised that measures to deliver competitive choice to consumers should be pursued as a policy goal and that this is an important element of providing regional Australians with equitable services.

The regional review committee’s report also urged the government to design measures to strengthen the USO and provide a stronger mechanism to deal with the removal of payphones and increase incentives for providers to meet the customer service guarantee standards. There is clear evidence that people in regional and rural Australia stand to gain from the reforms. The most recent ACMA published report for the March 2009 quarter found that, for payphones provided under the universal service obligation, only 59 per cent of faulty payphones in remote areas were repaired within the three-day period specified in Telstra’s standard marketing plan. This compares to 82 per cent repaired within two days in rural areas and 91 per cent repaired within one day in urban areas. For new fixed telephone connections, 84 per cent were provided by the universal service provider within the customer service guarantee time frame for remote areas. This compares to 90 per cent in urban areas. Arguing against considering this bill is arguing against the need to address this unacceptable level of service provided to consumers and businesses in regional Australia.

As I indicated to the Senate yesterday, the government has supplied all of the information it can responsibly supply to comply with the order. I understand the concerns of Senator Ludlam and the crossbenchers because the previous government abused the process of commercial-in-confidence to hide what they were up to. It was unacceptable. I understand very much why there are concerns about this and there are important issues at stake here. Even as I accidentally tabled information which should not have been tabled, information that was blacked out, it demonstrated exactly why the government has concerns it has in this area. Telstra was required to make a statement to the Stock Exchange after inadvertent information came to light, but both of the issues can be separated out. I accept and acknowledge that commercial-in-confidence has been abused in the past and senators are right to ask questions about this and want to ensure that they are getting genuine commercial-in-confidence excluded and not material that the government does not want. I absolutely accept that.

One of the other issues that was raised is the processes that will be followed going on from this. I give a commitment to the chamber that the government will not be looking to bring on the second reading debate until the first week back after the break. The second reading debate will take place then. I will be in Egypt at a UN conference that week, so we will not be seeking a vote that week. We will be seeking a vote the following week when I return. I want to outline for all that there are some natural constraints as well as some Senate procedure constraints about the process.

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