Monday, 21 March 2011
National Broadband Network Companies Bill 2010; Telecommunications Legislation Amendment (National Broadband Network Measures — Access Arrangements) Bill 2011
Once again we see the opposition in their negative carping mode in this debate on the National Broadband Network Companies Bill 2011 and the Telecommunications Legislation Amendment (National Broadband Network Measures—Access Arrangements) Bill 2011. They are not prepared to accept the proposition that NBN Co. will deliver massive change, massive improvements to productivity and massive benefits to the Australian community. Again we see—and I am surprised that Senator Birmingham is engaging in this—the misinformation that is coming out about cost. As a threshold issue, Senator Birmingham raised the issue of cost and then he finished with a $50 billion figure that he plucked out of the air because it sounds a bit scary.
The reality is that the cost of building the NBN without Telstra coming in as a partner was $43 billion. That was confirmed by McKinsey-KPMG in their implementation study. The government released that study in May 2010. It also indicated that, with NBN coming on board, the cost is $35.9 billion. This is a huge amount of money, but this is a huge project. It has huge potential and huge gains for the Australian economy.
Greenhill Caliburn, who evaluated the NBN corporate plan, found that the plan provided the government with a reasonable basis on which to make a commercial decision about NBN Co. So this is not some flight of fancy by the government; this is about us saying that this is the approach that will deliver the benefits to the community in relation to broadband across this country. What Greenhill Caliburn said is that the NBN Co.’s corporate plan has been completed to high professional standards, providing the level of detail and analytical framework that would be expected from a large listed public entity evaluating an investment opportunity of scale. It is an investment opportunity of scale that is providing opportunities for the whole country. Yet what do we get from the opposition—negative, carping criticism and nitpicking. They cannot bring the arguments to bear as to why this should not go ahead so they resort to carping criticism.
The two bills that we are dealing with, which are known in shorthand as the NBN Co. bill and the NBN access bill, are extremely important to allow this project to go ahead. We have heard the opposition and we have heard the issues that they are raising. In my view those issues are carping, negative, minor criticisms about whether there is a wholesale-only approach to the NBN—the argument that there would be mission creep. I have to say to you: I bet lots of people want the mission of the NBN to succeed, and if that mission can be as wide as possible in delivering decent NBN access to the community they would be quite happy that that creeps out across the community in a very quick, efficient and effective way.
In relation to the anti-cherry-picking proposals—again, typically from the opposition in their support of their big business mates, this time Telstra and Optus—they want them to be able to go in and carve out the best parts of the NBN, which would make it extremely expensive to have one wholesale price around the country. So it is typical: when big business get into the ear of the opposition, they just concede and they run big business’s line, and that is what Senator Birmingham has been doing this morning. I will come to the issue of volume discounting later. The issues of scrutiny and privatisation are, again, issues that are at the margins of delivering such a magnificent benefit to the people of Australia.
The government has established the NBN to address not only an industry failure but a longstanding market failure in this country. Senator Birmingham stands up here and says, ‘Well, we could do it some other way.’ I say: you had 11½ years to find another way to do this and you failed miserably, you failed completely and you failed terribly in providing any support for broadband across this country. What did that failure do? It left this country lagging against other advanced countries in the OECD and around the world—lagging behind broadband speeds, lagging behind the capacity to provide information in the community and information across business, lagging on productivity and efficiency. The coalition failed miserably across the whole economy. Not just on broadband but on productivity and efficiency, the coalition were complete failures. They were complete failures on providing the jobs of the future—the jobs that are important to position our economy and provide opportunities for future generations to engage. What do we get when the Labor Party and the government deal with this issue? We get negative, carping criticism. There has been failure from the opposition in the past on health, on education and on regional development. The evidence to the committee was that this will revolutionise health and education services across the country and provide fantastic opportunities for regional Australia. That is what the wholesale platform that is the NBN will provide to this country—opportunities for the future for business and opportunities for a better society.
We are ensuring that there will be effective retail competition, something that the coalition in 11½ years again failed to deliver. NBN Co. will operate on a wholesale-only, open and equivalent access basis. We understand the need for competition. We understand that that competition has to be at the retail level. That is what should be done. Because the coalition failed over 11½ years to deal with the wholesale aspect of the provision of broadband to the community, we have dealt with that. This bill provides the basis for delivering the NBN across the country.
The National Broadband Network Companies Bill 2011 limits the NBN Co. to a focus on wholesale-only telecommunications activities. It is clear in the bill. It sets out the Commonwealth ownership arrangements and provides for the eventual sale of the Commonwealth’s stake in the NBN once the NBN rollout is complete. It provides a thorough process, including parliamentary scrutiny, to deal with these issues. The bill works in tandem with the NBN access bill. The NBN access bill establishes a new access equivalency and transparency obligation for NBN Co. and it provides a level regulatory playing field for all operators providing superfast broadband services. The bill works in tandem with the NBN Companies Bill and the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill.
On 10 February this year, the Senate referred the National Broadband Network Companies Bill 2010 and the Telecommunications Legislation Amendment (National Broadband Network Measures—Access Arrangements) Bill 2010 to the Senate Environment and Communications Legislation Committee, which I chair, for inquiry and report. Our committee report was tabled last Thursday, 17 March. The committee advertised its inquiry and invited submissions from key industry players. We held public hearings in Canberra and in Sydney. We state in our report that submitters and witnesses were unanimous about the importance of the passage of the bills. There was not the negative, carping criticism that we get from the coalition but enthusiasm, support and appreciation for the fact that this government has done something that the coalition could not do in 11½ years in government: provide access to broadband right across the country.
The submitters and witnesses stressed the importance of broadband for business, health, education and research purposes, especially in the rural and regional areas. We heard from education and small business groups. The Group of 8, a coalition of leading Australian universities, described many possibilities for the NBN. They said:
High-speed broadband network provides the capacity for distant doctors or patients—or midwives for that matter—to have real-time interactions with specialist colleagues in an urban setting if they need it. … Broadband connectivity allows clinicians, wherever they are, to engage in things like grand rounds—when patients of interest are discussed in teaching hospitals, people who are not physically in that building can connect in real time and participate in the questions and answers …
There was no equivocation from the universities or from the professors of medicine in the universities. There was no carping criticism from them. They want this. They know that it is delivering. They know the opportunities that it will provide them with. They are desperate to get this. That is the difference between the people who stand to benefit from this and the coalition and their carping, negative approach.
Also, the inquiry heard from the Association of Catholic School Principals of New South Wales. I quote from them:
E-learning is truly already a reality in our schools. We have moved from paper to e-books to personalised learning and now to e-publishing in a relatively short time. Scalability is necessary to allow us to continue to grow, as I said, and to provide 21st century skills …
The NBN will provide that scalability. The NBN will provide an opportunity for our schools to grow. The NBN will provide an opportunity for our students to have access to the best tutors anywhere in this country—the best tutors anywhere in the world—on specific projects. The education professionals understand the importance of the NBN, even if the coalition do not.
The Council of Small Business Organisations of Australia talked about the greater bulk of small businesses wanting access to affordable high-speed broadband—for competitive reasons as much as anything else. They know the benefits that this will provide. They know that it is affordable. They know it is needed. They know it is necessary for the future of our economy and the future for our kids.
In their evidence, the ACTU said:
An NBN program which provides for universal access and a universal wholesale price, we say, would be the best method to ensure that Australians have equality of access to broadband technology.
And equality of access to broadband technology is so important. It should not just be for those that can afford the high prices that have predominated under the coalition. It should not be for those in big business who use broadband. It should be for everyone, because working-class kids in this country should have the same access as do the children of the privileged in this country. They should have access to telecommunications and broadband networks that provide them with the opportunity to use their skills, their intelligence and their capacity in an equal way to kids who have parents who can afford to buy that process now.
Notwithstanding the broad support for the bills—and it was very broad support—there were a number of concerns raised by some of the current telcos. Well, why wouldn’t they raise their concerns? They are vested interests that the coalition continue to pander to. I have to say that, when I heard Telstra waxing lyrical about the problems of a vertically integrated NBN, I thought to myself, ‘The hypocrisy of Telstra talking about vertical integration and lack of competition! The hypocrisy!’ Telstra are the organisation that the coalition built, with the Mexican gang up there running Telstra and telling the coalition what they would accept and what they would not accept—standing over the coalition when they were in government and telling them that they were not going to allow broadband access across the country. The coalition were stood over and done over by Telstra. We were not stood over, we were not done over, and we have stood up for the Australian public. We will not pander to the vested interests of Telstra, Optus or anyone else in relation to this process.
There are a number of issues detailed in the report, but they generally cover the wholesale obligations of NBN, including the wholesale supply exemptions for utilities. This is because NBN Co. is allowed to sell access to utilities for services that enable the utilities to monitor their own networks. As the minister said in the debate in the other place, the exemption is needed because, under the existing legislation, utilities may do things that would otherwise make them carriers or carriage service providers without being classified as carriers or carriage service providers. The bill simply allows NBN Co. to treat them as carriers or carriage service providers.
The exemption will also support the growth of smart infrastructure management, including smart management of electricity supply, and the exemption will put pressure on telcos to give utilities the services they need—the services that they did not get under the coalition, the services that were so-called spear carriers for competition. The coalition could never provide the competition. They could never provide the services to the utilities. The utilities have had an exemption for years because, under the coalition, they were incapable of providing the dynamism in the telecommunications sector that would provide those services to the utilities.
The committee supported the utilities exemption, noting that the utilities will still have the choice to purchase network management services from retail service providers or through other intermediaries. The challenge is out there now for Telstra and Optus to meet the commercial needs of the utilities. If they can meet the commercial needs of the utilities then the argument that the utilities should have access will disappear because it will be there based on market opportunities.
There were concerns raised about the definition of services that the NBN Co. can provide. We took the view that it is potentially problematic to define this sort of highly technical matter in primary legislation. Nevertheless, the government’s instructions to NBN Co. are extremely clear that the company will offer open and equivalent access to wholesale services at the lowest levels in the network stack necessary to promote efficient and effective retail competition via layer 2 bitstream services.
Concern was also raised by those opposite about the conditions for selling NBN Co. Under this legislation, the minister must declare that the NBN is built and fully operational. There has to be a report from the Productivity Commission. There has to be a parliamentary joint committee that examines the report, and the finance minister must determine that conditions are suitable for sale. I have to say that the conditions agreed to by the Senate provide a reasonable balance between flexibility for government and the NBN Co. and regulation in the public interest.
Another issue raised in submissions was concern that, under the proposed amendments, NBN Co. could offer volume discounts that would favour the largest service providers; however, a volume discount cannot be offered by NBN Co. unless it is in accordance with the arrangements set out in a special access undertaking which had been approved by the ACCC.
Part 3 of the bill relates to level-playing-field arrangements. The level-playing-field arrangements are intended to ensure that NBN Co. will remain commercially viable while meeting its stated objective of providing fixed-line fibre access to 93 per cent of Australian homes. Peak groups such as the Telecommunications Users Group and the Internet Society of Australia believe that the arrangements would be in the best interests of the end users and the NBN as a whole.
I conclude by saying that this legislation is important. This legislation is about dragging us into the 21st century. This legislation is about dealing with the incapacity of the previous government to deliver national broadband services across this country.