Senate debates

Thursday, 25 November 2010

Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2010

In Committee

5:18 pm

Photo of Kate LundyKate Lundy (ACT, Australian Labor Party, Parliamentary Secretary for Immigration and Citizenship) Share this | Hansard source

I would like to take a few minutes to respond to that contribution. I guess it is embarrassing to the opposition that the whole design of the National Broadband Network and the associated bills we are debating today is about the structure of industry. I think it is very important to understand that even the opposition spokesperson, Malcolm Turnbull, understands the relationship between structural separation and competition in telecommunications. The fact of the matter is that to structurally separate the telecommunications industry and build a wholesale-only, open-access fibre-to-the-home network to permit a competitive environment for retail service providers on that wholesale network is the absolute epitome of providing a competitive environment for telecommunications. In his contribution, Senator Trood lacked sufficient appreciation of a structurally separated telecommunications industry to even grasp the fundamentals of what we are debating today. Unfortunately, this is the character of the conversation that is occurring in this place.

I reiterate that we are investing in a National Broadband Network that will construct a world-class competitive environment. It is the model that nations aspire to but cannot have because of the way their incumbent telecommunications monopolies have embedded themselves in the market and protect their interests, in part, through a vertical relationship between wholesale and retail. The strength of our model is in fact the wholesale-only investment in the fibre-to-the-home network. Even a basic understanding of the debate before us today would have prevented Senator Trood and others from making such garbled presentations on the issues. This is the character of the debate. We are still waiting to hear a senator opposite address the opposition’s own amendments in any detail and with any understanding of the implications of the amendments or of what they are seeking to achieve. At the moment, there is basically a slogan about ‘removing the gun to Telstra’s head’. But, as I explained previously, that is not necessary anymore because of the changes that have occurred in the legislation.

I have undertaken to point out a couple of other points to expose the flaws in the arguments put by members of the opposition. Senator Trood’s speech was interesting because he tried to mount an argument that Labor was somehow responsible for reregulating not only the telecommunications sector but the economy in general. He put forward a fairly inconsistent presentation using quotes from the Weekend Australian as evidence of this reregulation. In fact, it is the opposite: by addressing the structure of the telecommunications industry in Australia we are able to resolve the mountainous regulation put in place by the former government, which attempted to over-regulate but found it very difficult—it was unsuccessful—because the industry structure had a vertical integration element that helped perpetuate the residual monopoly that Telstra had in our market, pushing the prices up.

These issues have been debated at length in this place for well over a decade. I remember well the telecommunications competition bills of 1997, which were the piece de resistance of the then new Howard government. I remember the mountain of legislation that sought to put in place what they claimed was the appropriate regulatory framework to stimulate competition. Senate inquiry after Senate inquiry demonstrated that the coalition’s attempt to regulate telecommunications failed dismally. Telstra was able to gain those regulations, retain its dominant position in the market and keep prices high. This was sustained because of the previous government’s motivation to help Telstra keep its price high in the interest of privatisation.

So I ask the opposition: get your speakers to come in here and address the issues at hand, the amendments that we are currently debating, with at least a basic understanding of what it is to structurally separate the telecommunications industry and the relationship that has with stimulating competition at the retail level, and we might be able to have a discussion that even listeners of this debate will be able to follow with some cohesion.

My final comment relates to mobile telecommunications and competition. There has been competition there, but the coalition cannot claim too much credit for that either. The competition in that sector was stimulated well before the Howard government and we have seen mobile telecommunications competition proliferate. So to argue that somehow there is an example in mobile telecoms and that this is analogous with what we need to do in the fixed infrastructure, the National Broadband Network, again exposes quite a hapless misunderstanding of what the regulatory environment of telecommunications needs to be. This is evidence of disjointed and inconsistent arguments being put by the coalition. I know they are poorly briefed, I know this stuff has a long history and I know it is subject to some quite detailed amendments being moved, but at least get your speakers to address the amendment.


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