Monday, 21 March 2011
National Broadband Network Companies Bill 2010; Telecommunications Legislation Amendment (National Broadband Network Measures — Access Arrangements) Bill 2011
Loath as I am to start by stating a negative, I feel compelled to do so. We in the coalition are not broadband deniers but we are NBN sceptics. There is a big difference. We in the coalition want all Australians to have access to faster, cheaper and reliable broadband but we have no faith at all in the government’s ability to achieve that through the NBN. So, yes—we are NBN sceptics and properly so.
Our concerns about the National Broadband Network Companies Bill 2011 and the Telecommunications Legislation Amendment (National Broadband Network Measures—Access Arrangements) Bill 2011 revolve around the way in which they undercut the government’s repeated reassurances about the NBN: firstly, that the NBN will be subject to examination, scrutiny and transparency; and secondly, that NBN Co. will deliver wholesale-only services and will not compete in the retail market. There are several aspects of these bills that directly undermine each of those repeated reassurances given by this government. I will focus on a couple of those aspects this morning.
The exemption—which others have mentioned—that it is proposed be given to utilities would allow utilities like gas and electricity service providers to access services directly from NBN Co. That exemption effectively would allow NBN Co. to step into what could otherwise be the shoes of retailers who would then provide those services on to utilities. In seeking this exemption, the utilities are seeking an exemption for the use of broadband for their own internal purposes. To justify the exemption, they use arguments such as: ‘We provide essential services, we are different and we do not need anyone else—for example, retail service providers—to add anything to or change anything from the sort of service that we can get direct from NBN Co.’ That is very well and good, but wouldn’t everyone like to have that sort of access without the necessity to have a retail service provider in the middle?
Little debate has been had about the fact that this exemption would not only apply to government owned utilities; it would also allow privatised utilities to access broadband directly from NBN Co. The arguments from the utilities, whilst very well intended on behalf of their members, are pretty much not more than: ‘We are special, we are different, we provide services upon which you rely very much and you would not like to do without us at any point in time.’ I am afraid the arguments are not much more sophisticated than that.
The consequences of granting the exemption would be that NBN Co. would be allowed to stand in the shoes of a would-be retail service provider. The Energy Networks Association, a peak body representing utilities, particularly in gas and electricity, has spoken of its doubt that retail service providers would be able to provide the sort of stuff that the energy networks need for their own internal broadband consumption. However, that was hotly contested at the inquiry to which Senator Cameron referred, by witnesses who gave evidence to the inquiry that they would, effectively, love to bid for that space and they want to be given the opportunity to demonstrate that they can provide the services that the utilities would value. But the trouble with the bill and the exemptions as written is that they would deprive retail service providers of that opportunity. So you have NBN stepping into the shoes of what would otherwise be retailers, directly undermining the government’s repeated reassurances that NBN will be wholesale only and will not compete in the retail sector.
Interestingly enough, the Energy Networks Association, which Senator Cameron would no doubt have included in his conga line of supporters for NBN, in stating in its submission its opposition to coalition amendments to get rid of the exemption, listed the following as one of its three reasons for supporting the exemption:
The federal opposition’s proposed amendments—
to get rid of the exemption—
may have the effect of deterring energy network businesses from using the National Broadband Network.
How does that define Energy Networks Association as one of a conga line of supporters for NBN? What they are effectively saying is, ‘If you do not provide the NBN to us on the terms and conditions we want, we do not want it at all.’ Later in their submission they said:
While each energy network business will make its own decisions regarding the most cost-effective and technically feasible communications technology for their requirements and circumstances, the NBN is an important candidate technology being considered by many energy businesses.
So, even if the exemption is granted, these guys are not even sure that they will want to use it. At the very best, they are saying: ‘Yes, we might use it if you give it to us on the terms and conditions that we want. But if you don’t give it to us on the terms and conditions that we want—in other words, if you don’t grant the exemption we want—then we probably won’t use the NBN at all.’ How is that support for a $43 billion taxpayer investment? It sounds pretty much like, ‘We’ll tolerate it if we have to,’ at best.
Another aspect of these bills which undermines the government’s repeated reassurances that the NBN will be transparent and that the NBN will be wholesale only and will not compete with the retail market is the proposal in these bills to give licences to carriage service providers. Witnesses to our Senate inquiry properly pointed out that there is nothing in the terms and conditions attached to being a carriage service provider that compels a body so licensed to on-sell those services to the public. Putting it another way, that means that there is nothing that forces a licensed carriage service provider to become a retailer, if you like, and to on-sell. That leaves open the door for a body to obtain a licence as a carriage service provider and access services from NBN Co. directly for its own internal use. Once again, if that were to eventuate it would mean that NBN Co. would be standing in the stead of other retail service providers. NBN Co. would be going way beyond being wholesale only and would be competing in the retail market, a second very clear breach of the government’s repeated reassurances that NBN will be wholesale only and will not compete with the retail market.
As to transparency, the provisions in the bill that we are supposed to believe will allow eventually privatisation of the NBN Co. and the NBN are so onerous as to say loudly and clearly—in capital letters written in lemon juice between the lines of the legislation; you just have to iron it and it will come out in brown—that the NBN will never be sold. The NBN cannot be privatised unless and until the relevant minister, whomever that may be, declares that the NBN is complete—how long is a piece of string; how long is this fibre going to be?—and fully operational. It requires the minister of the day to declare that the NBN is complete and fully operational. It also requires the finance minister to declare that the market conditions are suitable. Like I said, it is written in lemon juice. Just iron it and you will find that the NBN under this government is destined to never be sold. Why don’t they just fess up?
This government has the hypocrisy to suggest that if the NBN ever is privatised then it should properly be subject to a Productivity Commission review—finally; at last. It will probably never be realised under this government, because the NBN will not be privatised. But, if it were to be, they are saying that they might then, and only then, allow a Productivity Commission review—finally, some scrutiny. What hypocrisy from the government while it continues to evade pretty much any decent level of scrutiny. The NBN Co. CEO, Mike Quigley, has protested. He reckons that he has scrutiny enough, thanks very much. He told the Financial Review that he does not want every man and his dog having a look at the internals of his operation. It is not his operation; it is the operation of the Australian taxpayers and it deserves to be subject to the sort of scrutiny that every government owned enterprise is subject to.
Hence also our amendments in respect of the freedom of information laws, to ensure that the pup that this Labor government has sold the Greens in terms of so-called freedom of information reassurances is not realised, because that pup will turn into a dog and it will not result in any sort of freedom of information access to NBN Co. As my colleague Senator Birmingham has said, what activity of NBN Co. will not be deemed to be commercial in that environment? So much for transparency.
Transparency could have been made possible earlier by subjecting this expenditure of taxpayers’ money to scrutiny by the Public Works Committee. This Labor government, instead of debating its proposed exemption through the House of Representatives and achieving exemption that way—if the House of Representatives so decided—ran to its friend the Governor-General. The Governor General is, as I understand it, able to provide exemption to scrutiny from the Public Works Committee on prescribed bases which include, in a subsection of the Public Works Committee Act, where the Governor-General is satisfied that an authority of the Commonwealth is engaging in trading or other activities or is providing services in competition with other bodies. It goes on to say that the Governor-General may make regulations declaring that the act does not apply to that authority.
Of course, that is what the Governor-General went on to do. Why did she go on to do it? The explanatory statement attached to the message that went to the Governor-General from the government when they wanted to go in a way that did not subject their proposed exemption from the Public Works Committee to proper debate—for example, in the House of Representatives—claimed: ‘NBN Co. is trading and providing services in competition with privately owned telecommunications firms, including competing in the fixed-fibre broadband sector throughout Australia as a wholesale-only open access network provider.’
Propped up by the provisions of this bill, you have a government owned monopoly proposed to benefit from anti-cherry-picking provisions which would legislate out any prospective competition whatsoever to NBN Co. The anti-cherry-picking provisions would legislate away any possible competition from so-called privately owned telecommunications firms. How can this government stand up in front of the Australian people and seriously claim that NBN Co. is going to be providing services in competition with the private sector competing in fixed-fibre broadband as a wholesale-only open access network provider? Come on. The Australian taxpayer is stumping up for NBN and NBN Co., and NBN and NBN Co. are given legislative fiat to ride roughshod over any other competitor, dare they even think about it. These two bills make a mockery of the basis on which the government ran cap in hand to the Governor-General to seek—and subsequently be granted—exemption from scrutiny by the Public Works Committee. That exemption ought be reconsidered and it ought be seen as the hypocrisy from this government that it indeed is.
In concluding my contribution to the debate, I note with regret and deep concern the many aspects of these bills that undermine the government’s repeated reassurances that the NBN will be transparent, that it will be a wholesale-only service and will not compete with the retail sector. These bills do nothing to reinforce any of those promises. In fact, they shred them. On that note I will continue to fight for the coalition’s right to be NBN sceptics.