Thursday, 25 November 2010
Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2010
We are considering the first series of opposition amendments. It is reasonably obvious that there are discussions going on between the respective leaders in the Senate, and I expect them to return to the chamber shortly. In the meantime, I would like to continue my comments in relation to the amendments and their broader legislative context.
Prior to our brief dinner break, I was reflecting on the preconditions that led to the need for addressing the structural nature of telecommunications. The bill that we are considering, the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2010, seeks to make the adjustments to the structure of the telecommunications sector in Australia as a precondition for the effective operation of the National Broadband Network policy. The policy is, as everybody knows, a wholesale-only, fibre-to-the-home, open-access, independently regulated network. The elegance in that visionary policy lies within the structural separation of the wholesale and retail arms.
Much comment has been made about the impact of the National Broadband Network on the competitive regime. In essence, the telecommunications competition problems that we have endured in the past are a product of vertical integration within the telecommunications market and the way that that has evolved over time. In particular, one of the persistent problems was the hold with which the residual incumbent, Telstra, was able to leverage the vertical that existed in their market. Vast tracts of regulation were designed to try and redress the anti-competitive characteristics of that industry structure. That, of course, led to much legislation, starting with, in my recollection, the Telecommunications Act 1997.
There were several Senate inquiries and there was a great deal of negotiation about the details of that act, but the characteristic of the problem was that regulations were never able to solve the anti-competitive impact. There was a lot of regulatory gaming and lip-service on the problem by the government, who were obsessed with their privatisation agenda. From opposition, there were several efforts by Labor to strengthen the competition regime, none of which were able to make a real difference because we never had the comprehensive numbers in the Senate to make a real impact. So there were many years of disappointment about the failure of the competition regime to drive the kind of investment that we needed to get a telecommunications network of high enough bandwidth to service all Australians for the future.
That is where the NBN policy came in. We recognised that those preconditions of an underinvested copper network were not going to service our future needs, so we did what any sensible government would do: we tested the market to see if there could be a private sector response to address the problem. In testing the market, we found that the market was incapable of responding to the infrastructure needs of this country. It was in the knowledge of the market failure that we constructed the National Broadband Network policy. Initially it was a fibre-to-the-node policy. I think it is important to acknowledge—as I have not yet done so in this lengthy debate—that it was the coalition’s broadband select committee that highlighted and raised concerns about the strength of a fibre-to-the-home network as opposed to a fibre-to-the-node network. We took evidence in the broadband select committee that a fibre-to-the-node network would not be as future proof as a fibre-to-the-home network could be. Hence, a modification to our policy, informed by the failure of the market but also by several months of further inquiry about the strength of a fibre-to-the-home network, during which it was universally acknowledged as the only way for us to proceed. That is how our National Broadband Network policy as it is currently constructed came to be announced. I am incredibly proud of it because it does—