Friday, 26 November 2010
Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2010
I indicate that this has probably been the toughest of the amendments for us to consider. It has many things in it that are very, very attractive to the government. I understand the sentiment and I understand why the Greens are moving this, and I have spoken to many of the people who have encouraged them to, but, on balance, after much consideration—and I know this will disappoint some people in the industry—we will be opposing this amendment.
As has been said, the amendment proposes that either party to an access agreement may cancel that access agreement where it is inconsistent with the terms of an access determination, binding rules of conduct or a special access undertaking which comes into force after the access agreement is made. The amendment is based on concerns raised by the Competitive Carriers Coalition that Telstra could compel access seekers into accepting an unfavourable access agreement in order to guarantee supply of a declared service. However, the revised part at 11C will not operate in this way. Access seekers will not be forced to agree to unfair access agreements. Instead, they will be able to require Telstra to provide them with access to its network on the terms and conditions set out in the relevant access determination. This is clearly set out in the revised terms of proposed section 152AY. In other words, once a final access determination is made, access seekers will only sign agreements with Telstra where it is in their commercial interests to do so. This amendment would have the effect of removing any incentive for Telstra or any other access provider to make commercial agreements with access seekers, as they would know that access seekers could simply walk away from the access agreement when it suited them.
The amendment does not recognise that parties may incur costs and obtain benefits at different stages of an agreement. For example, an access agreement may require the access provider to make investments to upgrade its network capacity or infrastructure. In return, the access seeker would commit to obtaining supply of a service on particular terms, such as a price that reflected the investment or for a fixed term or a guaranteed minimum capacity. It is precisely these types of mutually beneficial arrangements that the access agreement provisions seek to allow and that this amendment would stifle.
The amendment also carries an unacceptable risk in the case of agreements in force before the bill commenced that it would involve an acquisition of property other than on just terms, for which compensation would be payable by the government. However, to address a transitional issue the bill already provides that access seekers can lodge a dispute in relation to access agreements until such time as the first final access determination is made for that service. But I do acknowledge the very legitimate concerns in industry, and I will be keeping a very close eye on how this plays out in reality. I am sure that other senators will also be watching that.