John Hogg (Queensland, Deputy-President) Share this | Link to this | Hansard source

The President has received a letter from Senator Conroy proposing that a definite matter of public importance be submitted to the Senate for discussion, namely:

The Australian Government’s complacency on the roll-out of broadband infrastructure is holding back the Australian economy as evidenced by:

(a)

the OECD, the World Economic Forum and the World Bank all recognising Australia’s status as a broadband backwater;

(b)

media leaders from Fairfax and PBL identifying Australia’s antiquated broadband infrastructure as a constraint to their business; and

(c)

the collapse of Telstra’s plans to construct a fibre to the node network leaving Australia without a pathway to a fibre based upgrade of Australia’s broadband infrastructure.

I call upon those senators who approve of the proposed discussion to rise in their places.

More than the number of senators required by the standing orders having risen in their places—

I understand that informal arrangements have been made to allocate specific times to each of the speakers in today’s debate. With the concurrence of the Senate, I shall ask the clerks to set the clock accordingly.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

I rise to speak on a matter of public importance: Australia’s status as a broadband backwater and the refusal of the minister to even acknowledge the existence of the problem. In a week in which Australia’s antiquated broadband infrastructure was on the front pages of every newspaper in Australia, the Minister for Communications, Information Technology and the Arts was staunchly insisting that there was really no problem. Senator Coonan stated that Australians in metropolitan areas—and she named them; she said, ‘Sydney, Melbourne, Brisbane, Adelaide and Perth’—should be reasonably happy with their speed of broadband. She then stated that painting a bleak picture of internet speeds in Australia is misleading and that around four million Australians already have been connected to broadband, which she said was hardly an indictment on the state of broadband in Australia. That is Senator Coonan’s view of what is going on in her own portfolio.

It is difficult to know what the minister was more out of touch with—the voting public or the reality on the ground for Australia’s broadband infrastructure. The voting public was certainly none too impressed with the minister’s comments. In fact, her comments were jarring enough for the Age newspaper to ask its readers what they thought of the minister’s comments on a forum on its website. The torrent of complaints that reached this site in the next 24 hours was extraordinary and at times quite amusing. More than 100 readers wrote in to express their disgust at the minister’s statement. The readers were furious. It is instructive to read directly from a few of them just to demonstrate the arrogance of this government and this minister and how they have lost touch with ordinary Australians. Here are some of the quotes:

Coonan obviously lives inside a perspex bubble, tucked in the back of a cave, hidden under a large rock.

Another stated:

Helen Coonan is completely out of touch. I vehemently disagree with what she said.

Another said:

EVERYBODY is complaining about our laughably poor broadband: the IT industry, academia, the business sector, and these obscure people known as “the Australian public” to whom the Howard government never listens.

Another stated:

We’re complaining. Coonans not listening!!! Governments not acting!!!

Another simply said:

I. AM. COMPLAINING.

The message for the minister on this bulletin board was clear: it is time to start listening to the IT users of Australia and to provide some leadership to remedy Australia’s status as a broadband backwater. These complaints were not merely out of self-interest. These voters did not just want faster broadband to help them play video games or download movies. Instead, these voters understood the national significance of Australia’s backwards position on broadband. One reader made an astute comment on the broader national implications of the minister’s comments:

How are we as a country planning to remain competitive if we are chained to outdated technology? Helen Coonan can try to convince the public that all is well but in reality we are going to be left far far behind the rest of the world if a high-speed broadband system is not built. And it must be soon.

This reader is exactly right. That is what this debate is about. Australia will be left behind the rest of the world, unless the country receives a significant new investment in broadband infrastructure. If we do not receive this investment, the Australian economy will be the loser. This is not a dramatisation of the issue. Broadband is important. Broadband is a critical enabling technology that is currently driving substantial productivity gains around the world. True broadband will not only make Australian businesses more efficient than they already are but also open up completely new ways of operating—through things like VoIP, IPTV and virtual private networks. True broadband is also a crucial tool for the commercialisation of Australian intellectual property and content. True broadband will be the highway that Australian ICT and digital content companies use to deliver their products to the international marketplace. How many times in Australia have we heard the cry from all sides of politics, ‘If only we could commercialise our brilliant IP; if only it did not always have to go offshore to be developed’? Here is the first step in making sure that we can end that cry.

True broadband gives Australian knowledge economy companies the chance to break down the tyranny of distance and to connect with the global economy on an equal footing. True broadband is the infrastructure we need to stimulate the development of high-end digital content and other knowledge economy businesses in Australia. The federal government’s own broadband advisory group has stated that next generation broadband could produce economic benefits of up to $30 billion per annum to Australia. However, while Australia remains a broadband backwater, these benefits will remain unrealised. Unless the government recognises that Australia has a problem and then develops a plan for remedying this situation, these potential benefits will remain a dream. The minister is so out of touch, not just with the voters but also with the reality of Australia’s broadband performance, that she is continuing to ignore the problem. If the minister cared to look, she would see that the reality on the ground for the state of Australia’s broadband infrastructure is grim indeed.

Contrary to the minister’s comments, the situation is bleak. Do not take my word for it; listen to the chorus of international surveys deriding Australia’s broadband performance. The OECD ranks Australia 17th out of 30 countries for the take-up of 256K broadband. Despite growth off a low base, Australia’s relative position did not change from the previous year. The World Economic Forum ranks Australia 25th in the world in terms of available internet bandwidth; in addition, it ranks Australia’s network readiness at 15th and falling. A recent World Bank study confirms that Australia’s average ADSL speed, barely one megabit, is one of the slowest in the world and is behind countries like Britain, at 13 megabits; France, at 8.4 megabits; Germany, at 6.8 megabits; Canada, at 6.8 megabits; and the United States, at 3.3 megabits. That is right; we are struggling along at the bottom of the pack with, at best, a one-megabit average.

Prominent Australians who are suffering as a result of this situation have also expressed their concern. James Packer, Executive Chairman of Publishing and Broadcasting Ltd, recently described Australia’s broadband position as ‘embarrassing’. He further stated that there is a huge consumer demand for online video that is being held back by Australia’s antiquated broadband. Fairfax—publisher of the Age, the Sydney Morning Herald and the Financial Review and who has a very good website—in its submission to Senator Coonan’s media reform discussion paper, states that the encouragement of broadband is a critical element in Australia’s overall media policy. The submission goes on to state:

... internet speeds are slower and internet pricing is more expensive, than many other developed countries.

So, even if the minister will not admit there is a problem, plenty of other people, both in Australia and overseas, are willing to tell it like it is.

To remedy this situation and to bring Australia back into line with our international peers, Australia needs a massive investment in broadband infrastructure; Australia needs a national fibre-to-the-node network. Despite the minister’s furious spin, Telstra’s antiquated copper network will not be able to deliver the type of bandwidth that Australian businesses and consumers will need in a knowledge economy. This fact was rammed home in a recent report prepared by Tim Smeallie for Citigroup. This report evaluated the fallout of the collapse of the Telstra-ACCC FTN discussions. The report was clear about the technological limitations of Telstra’s existing copper network and ‘misguided reliance on ADSL2+ as a technology substitute for fibre’. That quote does not just blow a hole in but completely sinks the minister’s vision for a copper based future for Australian broadband. The report states:

It is physically impossible for ADSL2+ to deliver 24Mb/s on a mass market basis. Our analysis suggests a realistic average speed of approximately 3Mb/s assuming an average copper loop length of 2km.

A three-megabit solution for Australia’s broadband infrastructure needs is what Senator Helen Coonan, Prime Minister John Howard and the federal coalition government have on offer for Australia. When our international peers are moving to 20-, 30-, 50- and 100-megabit broadband infrastructure, the mob on the other side of the chamber want to tie our hands and feet together at three megabits. The Internet Industry Association noted recently that 80 per cent of Australians would need to have access to at least 10-megabit broadband by 2010—that is, 80 per cent of Australians will need to have access to at least 10-megabit broadband in four years time—in order to keep Australia competitive with our overseas rivals, and the minister is trying to tell us that Australia only needs three-megabit ADSL2+. Clearly, Telstra’s antiquated copper network is not up to the task. The reason that Telstra’s copper network is not up to the task is well identified and described by Citigroup’s technical experts. Citigroup finds:

... distance from the exchange, cross talk, home set-up [reduces speeds by up to 50%], and sub-sea backhaul.

The implications of forcing Australia to rely on ADSL2+ are clear:

Speeds <5Mb/s are insufficient to deliver high quality video products such as IPTV, Video on Demand and Replay TV.

These are the things that people want—the things that people in this country are crying out for—but we have a government that is saying: ‘You don’t really want that. You don’t really need true broadband. You don’t really need to be able to do fast downloads and videos or IPTV. You don’t need video on demand or replay TV.’ That is the government’s position. Citigroup concludes by saying, ‘We will have to wait until 2012 for true broadband, given delays on regulation and build, unless the government decides to intervene.’ That is right—Citibank, that doyen of socialism in the world, the largest investment bank in the world, says what is blindingly obvious to everybody in Australia except the government: government needs to step in and fix this mess.

While this out-of-touch minister is complacently advocating a do-nothing copper future for Australian telecommunications, our international competitors are rapidly moving to an optical fibre world. Countries like Korea, Japan, Hong Kong, Singapore, Canada, the United States and Germany are all currently rolling out optical fibre based networks that are even faster than Telstra’s proposal. Our international competitors understand that fibre is the future. Fibre based technology is taking off around the world, with 52.4 per cent growth in fibre connections in Korea last year. Japan already has 4.6 million fibre-to-the-home broadband subscribers. The case for a fibre future for Australia is clear.

There is one lonely voice on the government side from a member who understands, and that is the Liberal MP Mr Peter Lindsay. In comments reported by the media yesterday, Mr Lindsay stated that Telstra’s decision to abandon its fibre-to-the-node plans as a result of government policy was a ‘disaster’. Mr Lindsay, the lone person in the coalition who understands this debate—do not worry about the minister—went on to state:

As much as others argue that broadband can be provided without fibre-to-the-node, true broadband cannot be provided without it. Australians deserve top shelf broadband and that can only be delivered by fibre optic cable. Without it we will be held back.

I have to say that Mr Lindsay is 100 per cent right. But, as the minister indicated in question time today, she has had Mr Lindsay brought in and she has corrected his views. Poor Mr Lindsay. It is a horrible thought.

Australia does need top-shelf broadband, and this can only be delivered by fibre optic cable. Australian broadband users can only hope that Mr Lindsay is sending this message to Helen Coonan in the coalition party room. Maybe even a senator as smart as Senator Michael Ronaldson, who is speaking next, knows deep down, in his gut, that Australia needs fibre—that is, ADSL2+, if you are relying on Telstra. Are you relying on Telstra, one of your favourite companies, Senator Ronaldson? Do you want to sign up your life to Telstra’s ADSL2+, Senator Ronaldson? I think not. As I said, hopefully a few more courageous Liberals will be explaining the facts of life to Senator Coonan regarding what is going on in their electorates. The problem is not going to fix itself. In order to deliver this massive infrastructure investment, government leadership is required. Australia’s position in broadband is so dire that the government must take the lead to bring Australia back into line with our international competitors. The Internet Industry Association has correctly identified that the only way Australia can remain competitive with our international peers in broadband is through ‘significant and meaningful changes in attitude and leadership from the government and policy makers’. That is you, Senator Ronaldson.

This is the nub of the issue. Senator Helen Coonan is the minister for communications. Ensuring that Australia has access to world-class telecommunications infrastructure is her responsibility, but, like John Howard, she has no plan for Australia’s future. With the collapse of Telstra’s fibre-to-the-node plans, the minister has no plan to transition Australia to a fibre world. She has no plan for the future. After 10 years of pork-barrelling in rural and regional Australia, the Howard government does not know how to provide infrastructure leadership anymore. Instead of recognising the problem and trying to address it, the minister is in denial. As Kim Beazley, leader of the Labor Party, said this week, she is shepherding Australia down an IT goat track. She is shepherding the Australian economy onto an IT goat track while the rest of the world is building five-lane superhighways.

Three months ago, the minister was taking credit for Telstra’s fibre-to-the-node plans in her address to the World Congress on Information Technology. She went overseas and spruiked it. She told everybody in the world what a fantastic thing was going to happen—that is, that Telstra was going to roll out a fibre network. They were all her own words in a speech given in the United States. But, now that the plans have fallen apart, she is trying to convince Australians that we do not need this cutting edge technology, that we can get by.

Labor believes that government leadership to deliver 21st century infrastructure of this kind is necessary to sustain Australia’s economic prosperity for our children. Labor wants to give Australian businesses and families the best infrastructure available. In contrast to the minister’s inaction, Labor has been playing a leading role in the Australian telecommunications infrastructure debate. Late last year, Kim Beazley released Labor’s infrastructure blueprint. This blueprint set out a series of policies for remedying Australia’s current infrastructure shortcomings. This blueprint gave broadband infrastructure equal footing with roads, water and electricity infrastructure. So let us be clear: when Labor talks infrastructure, it is not just talking roads, it is not just talking ports and it is not just talking water or electricity—it is talking broadband, because this is the technology of the future.

Labor also posed a series of practical policies designed to improve Australia’s broadband performance. The blueprint committed Labor to setting targets for Australia’s utilisation of broadband in the areas of price, speed and accessibility and to providing the leadership to achieve these targets. It also committed Labor to conducting an audit of Australia’s existing optical fibre infrastructure, including unutilised ‘dark fibre’. Labor produced a plan—Labor’s Broadband Plan. The belief that government has a leadership role to play in the delivery of telecommunications infrastructure in Australia is the foundation of Labor’s Broadband Plan. Labor’s plan delivers this by committing to a series of regulatory reforms and public funding. Labor’s plan called for the creation of a joint venture company that would own and operate a national open access fibre-to-the-node network. The joint venture infrastructure owner would be separated from retailers to ensure competition.

In this regard, Labor’s plan has much in common with the subsequently released Optus-led G9 proposal. Investment certainty would be delivered. Labor’s plan also involves nation-building public investment to lift Australia out of the communications dark ages. Labor’s plan made available up to $2.7 billion in public funding to extend the reach of this fibre network to as many people as possible and to ensure 98 per cent of Australians have access to a minimum of six megabits per second broadband. (Time expired)

Michael Ronaldson (Victoria, Liberal Party) Share this | Link to this | Hansard source

I was unaware until Senator Trood brought it to the attention of the Senate today that Mark Latham in his book apparently indicated that when Senator Conroy was offered this shadow portfolio he was not too keen at all. It was a bad week when it was offered. If that was a bad week, this has been worse, because, unfortunately for Senator Conroy and Mr Beazley in the other place, they had nailed their colours to the fibre-to-the-node mast. I am afraid that a very large gale blew up and ripped those colours to shreds. Unfortunately for Senator Conroy and for Mr Beazley, they had effectively plucked out Telstra’s fibre-to-the-node proposal, deemed it to be their own and when it fell apart at the seams on Tuesday were effectively left in a policy vacuum.

I will give the Senate some quotes. I only have 10 minutes and not the 15 minutes I thought I had, so I will make this very brief. Senator Conroy quoted the Age. I will quote the Age as well. Alan Kohler in the Age headed his article ‘Telstra spits the dummy, but node news is not so bad news after all’. He wrote:

SO, TELSTRA has spat the dummy on fibre to the node (FTTN). Good. Now we can get back to the more interesting and important business of entrenching competition in the broadband we have—ADSL.

Telstra was obviously trying to use fibre to re-established its fixed-line monopoly, because ADSL competition has been starting to get out of control.

Optus, Primus, AAPT and iiNet have accelerated the installation of digital multiplexers in Telstra’s exchanges and have been planning a big competitive assault on Telstra’s broadband market share when the ACCC cuts copper access prices, which it is about to do.

There were other quotes, but time does not allow me to go through them. Telstra’s behaviour in relation to fibre to the node is quite disgraceful. It flows on from their quite disgraceful behaviour in relation to programs such as New Ground, which made available broadband to an extra 200,000 outer metropolitan Australians—which they could have done 12 or 18 months ago but refused to do—and their XTel program, which would have given about 14,000 regional and rural subscribers broadband. They have the equipment there. There are 200 pieces of equipment sitting there not being used. For Telstra to say that the ACCC’s unwillingness to recognise the actual cost of Telstra’s FTTN investment is the reason for the breakdown is absolute, patent nonsense. In fact, when setting access prices, the ACCC is required by law to take into account the cost of investment and the legitimate commercial interest of the infrastructure owner, including the investment risk faced by the owner and the need to provide incentives for investment.

The government’s telecommunications regulatory framework has created a competitive environment that has brought more choice, innovative new services and lower prices for Australian consumers and businesses. There are many companies, as I said before—iiNet, Internode, Primus, Optus and Austar, to name a few—who are already making substantial investments in next generation broadband services. On top of that, the government itself has invested a huge amount of taxpayers’ dollars in this area: the Broadband Connect funding of some $878 million, a competitive program which is delivering enormous benefits, and the $50 million Metropolitan Broadband Connect program. No government in this country’s history has put more money into this area. In fact, it was this government that broke Labor’s cosy duopoly, which held back telecommunications in this country for the 13 years they were in power.

I will briefly now go to Labor’s broadband policy. Senator Conroy was talking about a $2.7 billion investment from the Labor Party. The trouble is that Senator Conroy has no idea what the cost is; he has no idea at all. About a week after their policy launch, when they nailed their colours to the FTTN mast, Senator Conroy was asked what the cost of the rollout would be. He said, ‘Well, we’ll have to sit down and work it out.’ He has this magnificent, marvellous policy and he has to sit down and work out what the cost is! The only person who will pay the end result of that cost is the Australian taxpayer. Senator Conroy has been totally confused about broadband from the beginning, which probably reflects his reluctance to take up the portfolio in the first place. Firstly, he labelled broadband under 10 megabits per second as ‘fraudband’. Then his leader, Mr Beazley, came up with a plan for six megabits per second and suddenly Senator Conroy changed his mind. When it became clear that 12 megabits per second was widely available in metropolitan areas, the exact same areas where Telstra would have installed fibre to the node, Senator Conroy started talking about 100 megabits per second.

In this MPI, reference was made to OECD reports, and there was very selective quoting from Senator Conroy today. I know the Labor Party only mutter the word OECD under their breath now, because they are acutely aware of the rankings the OECD gives this country and the enormous credit it pays us for the structural reform and the robust macroeconomic framework we have introduced. Our living standards now surpass all the G7 countries except the United States. Today’s extraordinary employment figures are further proof of this government’s credentials.

In relation to broadband, Senator Conroy said we are at the bottom of the heap. Nothing could be further from the truth. I will quickly go through three of the points that he raised. The first point was about take-up. The reality is that Australia’s broadband take-up is growing at the fifth fastest rate in the world. We are growing faster than the US, the UK, Japan, Korea, Canada, France and Germany. It is hardly the backwater he refers to. We are surging ahead. The second point was in relation to penetration. Senator Conroy has made a number of claims. Yes, it is true we can improve—and that is what the government are doing; that is why we are spending hundreds of millions of taxpayers’ dollars—but we are improving rapidly. In the latest broadband penetration figures, which are behind what is currently happening, Australia is ahead of Germany, Italy, Ireland, Spain, Portugal, Greece and many others, and we are within just a few percentage points of Japan, the US and the UK. Indeed, the Economist Intelligence Unit, talking about e-ratings and other things, has said that Australia is among the big gainers in 2006 rankings. It says:

... Australia, Canada, the US and Western Europe have over the last two years made considerable leaps in broadband penetration and have effectively “caught up” with South Korea and Japan.

Those are the countries that have been painted by Senator Conroy as the world leaders. I repeat:

... made considerable leaps in broadband penetration and have effectively “caught up” with South Korea and Japan.

The third point that Senator Conroy refers to is the question of speed. He said we have the slowest broadband in the world. That is simply not true. I assume that Senator Conroy is being very cute with this and that he must be referring to the OECD ranking of speeds offered by incumbent telcos. Yes, Telstra’s ranking is about 25th, but Senator Conroy neglects to acknowledge that we are not living under Labor’s cosy telco duopoly and that we do not have to rely on the incumbent. Indeed, people are voting with their feet and are no longer relying on the incumbent. There are many competitors offering broadband speeds many times faster than the 1.5 megabit speeds offered by Telstra. The Labor Party have been in an absolute shambles over this matter since the fibre-to-the-node network approach to the ACCC failed. It is complete and utter chaos for them, for which they have no answers. (Time expired)

Lyn Allison (Victoria, Australian Democrats) Share this | Link to this | Hansard source

It is not an overstatement to say that telecommunications is vital for the national security and economic and social development of Australia. Australians now rely on e-commerce, e-health, e-education and e-banking. E-communications now dominate the lives of people everywhere, particularly in this place. The way we communicate with one another and the outside world now compared to five years ago is dramatically different. For many businesses, especially small businesses, efficient and effective communication systems are absolutely critical. High-speed internet is a prerequisite for engagement with the modern economy and society. A cost-effective, reliable communications system is critical for Australians living in rural and regional areas and particularly in remote areas. In fact, their only chance of overcoming the tyranny of distance, of isolation and of lack of services, particularly transport, comes down to the internet. The Australian Industry Group told the 2004 Senate broadband inquiry:

Broadband technologies will be the roads and railways of the 21st century, generating the next wave of economic expansion. Just as transport opened up new economic horizons in the last century, advanced communication networks will pave the way for productivity gains across global economies …

The Institution of Engineers told the same committee:

Assuming that broadband is adopted as universally as the telephone over the next 25 years, it has been estimated that broadband technology could produce economic benefits of $12 billion per annum to Australia.

And yet Australia still lags behind the OECD average for broadband penetration. According to the 2005 OECD communications outlook, Australian broadband subscribers jumped 41 per cent, with an average of 10.9 broadband subscribers for every 100 people—up from 7.7 last December. However, that is still well below the OECD average of 11.8 subscribers per 100 people. The increase did lift Australia’s ranking for broadband penetration among 30 OECD countries by four slots, to 17th position. But topping the league table was Korea, with 25.5 subscribers per 100 people, followed by the Netherlands, with 22.5; Denmark, with 21.8; Iceland, with 21.7; and Switzerland, with 20.3. Some would argue that this is all because of our large land mass. However, when you look at countries like Canada and the United States, they are well above our level. International Telecommunications Union statistics from 1 January this year only rank the top 15, and Australia is not in there, so very little has changed in the year since the OECD report. The Senate committee tabled its report in August 2004. This report said:

… many parts of the country, particularly in rural and regional areas but also in some suburban areas on the fringes of the major urban centres, do not have access to broadband Internet services …

Little has changed since that time. While some metropolitan customers are accessing broadband speeds of 1.5 megabits per second, as provided by Telstra ADSL, to 24 megabits per second, as claimed by those offering ADSL2+, plenty living five or six kilometres beyond the exchange and in regional areas cannot access these speeds.

While competition has improved in the telecommunications markets over the years—particularly in mobile phones—Telstra, with its ownership of the copper network and the HFC cable, is still the dominant player in most other telecommunications markets. As a result of the ownership of both the copper wire and the HFC cable, plus the lack of competition and Telstra’s strategy to maximise shareholders’ value, there has been no incentive for Telstra to invest in its infrastructure, including in high-speed broadband. Evidence shows that since privatisation began there has been a steady decline in infrastructure spending as a percentage of Telstra’s sales revenue. As a result of the government’s obsession with privatising Telstra and hence the infrastructure, the government has been forced to spend billions of dollars on encouraging competitors to invest in broadband infrastructure. However, those initiatives, such as Networking the Nation, were considered by many to be very poorly targeted, poorly implemented and largely a waste of resources.

The Democrats believe the major problem, and the reason why Australia is so far behind on broadband uptake, is the government’s light touch regulation and its failure to control Telstra. This government failure has resulted in one of Australia’s largest companies continuously putting up barriers to competition and reducing its investment in infrastructure. So it is a very sad and pathetic story, I am afraid.

Telstra’s pulling out of negotiations on fibre to the node was disappointing but not critical. In fact, Telstra’s fibre-to-the-node proposal, as you would expect, lets them keep their monopoly on the unbundled local loop. But, in the context of a long line of failures, like dragging their feet on ADSL 2 access and installation, stalling ACCC negotiations on the unbundled local loop, putting up barriers to competitor access to that loop and undercutting retail broadband price, we have a problem—a very big problem—in this country. Self-operational separation and self-regulation have monumentally failed. The government has been too weak and too ideologically driven to intervene, despite being a major shareholder. Now it is going to have to take some action. The Democrats have argued for the last five years that, if the government was going to sell Telstra, at the very minimum Telstra should be required to divest its ownership of the HFC cable. This has to happen to open up more competition in the market. The ACCC argued that, in protecting the revenue of both the copper wire and the HFC networks, investment will not be made, or will be delayed, in services that would cannibalise the revenue of the other network.

As predicted, the operational separation of Telstra is not working and is unlikely to. There is support in the industry for the aims of operational separation—there is no doubt about that—but not for the wishy-washy model that the government insisted on last year. The ACCC complained; the industry said it would be useless and, indeed, it was. Then Telstra is allowed to develop the plan itself. The minister and not the ACCC will oversee the development and implementation of the plan; the operational separation plan is not a licence condition; enforcement of a breach of operational separation by the ACCC is not available until after a rectification plan has been developed; there is no requirement that the ACCC be involved in the development of the draft plan, nor that the minister take advice from the ACCC with respect to that plan; the legislation does not allow the minister to designate new services; and the absence of a formal advisory role for the ACCC in the internal wholesale pricing and pricing equivalence regime, and the possible length of time involved in setting prices—these are just some of the criticisms that were levelled at the government at the time. And they have turned out to be appropriate.

The Democrats moved a raft of amendments to address those concerns but they were, of course, not supported by this government. We say that, if we want fair and transparent competition in the Australian telecommunications system, the government has to move down the path of structural separation—that is, it must separate the wholesale from the retail. The government has continually argued that the cost of structural separation would outweigh the benefits, but there is no real evidence for that and the government has not investigated whether or not this is the case—or, if it has, it has not told us.

The OECD recommended that its members consider structural separation as a means of promoting competition in utilities as an alternative to regulation. This was also supported by the National Competition Council. The Democrats do not always agree with everything that those bodies say but, on this issue, they are right. Another important reason why the government should, at a minimum, own the infrastructure is to guarantee fair access and some sort of parity for regional users. It is time, we say, for the government to bite the bullet, to structurally separate Telstra, to keep the infrastructure in government hands, to divest the HFC cable and to use the funds to roll out fibre.

Dana Wortley (SA, Australian Labor Party) Share this | Link to this | Hansard source

I rise to contribute to this debate on a matter of public importance, one that affects all Australians: the government’s lack of a plan to deliver a high-speed broadband communications network for Australia. A fibre-to-the-node network would be a significant step forward for our antiquated telecommunications infrastructure. It would be a great improvement. But if the people of Australia think it is on the horizon of this government today then they are going to be greatly disappointed, because the Howard government is not delivering. It does not have any idea of how to deliver world-class broadband infrastructure to Australia.

While the minister is prepared to marginally improve access to entry-level broadband in rural Australia, the Howard government has no plan whatsoever for delivering world-class broadband infrastructure to Australia’s cities and suburban areas. In fact, the Howard government is AWOL when it comes to telecommunications infrastructure. And it is time the minister stepped forward and took responsibility for Australia’s floundering position among the developed countries of the world. We are ranked 17th out of 30 countries surveyed by the OECD for take-up of 256 kilobits per second broadband.

The confirmation on Monday of this week that Telstra and the competitive watchdog, the ACCC, have fallen out over the rollout of fibre broadband infrastructure has left the government without any idea of how to bring internet speeds in Australia up to world class. Today, Korea, Japan, Hong Kong, Singapore, the United States, France, Germany and Italy all have broadband speeds of over 20 kilobits per second while Australia lags far behind. The irony is that broadband is all about increased speed and productivity, and here we have the minister applying the brakes on Australia’s ability to access new technology. Either that, or there is a problem finding the accelerator.

The decision made in this place on Australia’s IT capabilities over the next decade will be absolutely critical to our economic prosperity. Yet we on this side have serious and justifiable doubts about this government’s ability to make up where they failed in the past 10 years, and we do not stand alone with our concerns. In yesterday’s Sydney Morning Herald the director of the Technology and Innovation Management Centre at Queensland university and a world-recognised expert on innovation, Professor Mark Dodgson, said:

The impasse between Telstra and the ACCC and the Government is just a complete mess and it needs to be resolved …

                 …         …         …

The Government has to step up, if Telstra won’t. Broadband is the basic infrastructure that the economy needs, it’s just essential, like roads or railways. It is entry-level stuff.

And a telecommunications analyst, Paul Budde, is quoted as saying:

… Australia was “running three years behind [comparable nations] and it’s going to take five years to catch up.”

And the gap is, at this stage, still growing. The article also reports that analysts warned that, the longer Australia waited, the wider the gap between Australian businesses and overseas competitors would become. It also highlighted the plight of Simon Grover, who runs an internet business. Mr Grover says he is ‘frustrated by having to use simpler technology’ to allow clients from around the country, many of whom do not have broadband, to use the service. He said:

With a business like this, it obviously makes it a lot slower and harder ... We have plans to increase our online range, but slow broadband take-up rates just make the process more difficult.

He also said:

If more people had broadband it would be a different story …

With Labor it will be a different story because Labor do have a plan. While John Howard and Minister Coonan sit on the side of the road trying to make sense of the map that might lead them onto the information superhighway, Labor are lapping them at a steady speed. We do have a plan for delivering world-class telecommunications infrastructure for Australia and, while we have made clear our position on the regulatory changes necessary to facilitate a rollout of a fibre-to-the-node network, the Howard government’s position is to retain the status quo and leave Australia trailing behind the rest of the world.

Concetta Fierravanti-Wells (NSW, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on this matter of public importance in relation to the Telstra decision on fibre to the node. The fibre-to-the-node proposal relates to adding nodes to the broadband network to deliver ADSL2+ broadband in five capital cities, thereby excluding major regional areas like the Illawarra, where my electorate office is located. Telstra pulled out of their talks with the ACCC on a fibre-to-the-node network, even though they had been saying publicly that there were very few issues left to be resolved. It is puzzling why they would discontinue the talks when they seemed so close to a resolution.

Telstra cited the ACCC’s alleged unwillingness to recognise the actual costs of Telstra’s fibre-to-the-node investment as a reason for the breakdown. In fact, when setting access prices the ACCC is required by law to take into account the costs of the investment and the legitimate commercial interests of the infrastructure owner, including the investment risks faced by the owner and the need to provide incentives for investment. The ACCC has assured the government that it has always been prepared to consider fair and reasonable access terms, as indeed it is legally obliged to do. The government reviewed telecommunications regulatory arrangements only last year and specifically made legislative changes to further encourage investment and ensure investors’ risks were taken into account in regulatory decision making. There have been no substantive changes to the market since the 2005 review and Telstra remains in a strong position in many markets. However, at the end of the day, this is a commercial decision for Telstra.

The government’s telecommunications regulatory framework has created a competitive environment that has brought more choice, innovative new services and lower prices for Australian consumers and businesses. There are many companies—iiNet, Internode, Primus, Optus and Austar, to name a few—already making investments in next generation broadband services. Industry commentators estimate that as a result of these competitive investments very high speed broadband is already available to more than 50 per cent of customers.

In fact, Telstra also has other means of providing high-speed broadband apart from fibre to the node. At any time it chose to, Telstra could start using its longstanding investment in ADSL2+ equipment, which can deliver very fast broadband, in its exchanges. Indeed, I would urge them to do so. Telstra’s fibre proposal was only ever intended to target the five major capital cities of Sydney, Melbourne, Brisbane, Adelaide and Perth where there are already significant broadband speeds and ample competition. For instance, in the five capital cities where Telstra’s fibre network was to be deployed, multi-megabit broadband speeds are already available to most consumers via alternative platforms including ADSL2+, cable and wireless. When Telstra switches on its ADSL2+ network, which we hope is imminent, this number will rise exponentially.

At least nine service providers already offer ADSL2+ in the capital cities and major regional centres at very fast speeds. The competitive rollout of high-speed broadband infrastructure which is taking place will be complemented by the $1.1 billion Connect Australia package and the $2 billion communications fund established by the government. These programs will ensure people living in rural and regional Australia can access world-class telecommunications services both now and into the future. So any suggestion that Telstra’s decision to discontinue the talks with the ACCC somehow spells an end to the rollout of fast broadband infrastructure is misplaced.

Telstra’s decision has left Labor’s broadband policy in an absolute shambles. Only two years ago the Labor recommendations in a Senate inquiry report were that we should spend billions on guaranteeing dial-up internet speeds of 40 kilobits per second—up to 300 times slower than the speeds available on ADSL 2 enabled exchanges available in many parts of Australia. Mr Beazley pinched a publicly announced plan by Telstra as his only policy, and the whole house of cards was built on Telstra funding a fibre network in five capital cities. Without it, Labor’s policy falls down into a big hole.

Labor has been confused about broadband since the very beginning. First, Senator Conroy labelled any broadband under 10 megabits per second as ‘fraudband’. Then his leader came out with a plan for six megabits per second, and Senator Conroy suddenly changed his mind. And when it became clear that 12 megabits per second was widely available in metropolitan areas—the exact areas where Telstra would have installed fibre to the node—Senator Conroy started talking about 100 megabits per second. The ALP needs to make a decision and stick to it. The only card the opposition has got to play in the broadband debate is to misrepresent what the government says.

The minister has clearly said that, even in the absence of any metropolitan fibre network, Australians living in inner metropolitan areas can access faster broadband speeds of between 12 and 18 megabits per second if they can access ADSL2+ or, indeed, cable networks. The government’s longstanding policy of encouraging competition in telecommunications has delivered to metropolitan consumers a choice of broadband providers and speeds. Clearly, different people have different needs when it comes to broadband speeds, but for most people a connection of 1.5 megabits per second is currently adequate to deliver the services and downloads they want. Others may want faster connections, and these are currently largely available in the metropolitan areas that would have benefited from fibre. For instance, ADSL2+ and cable networks enable service providers to deliver a rich mix of data services to users, including high-quality video, audio, voice and text.

Barnaby Joyce (Queensland, National Party) Share this | Link to this | Hansard source

It is interesting to be here today and hear the Labor Party put forward a matter of public importance about telecommunications. It was actually fascinating to read it. I thought I would pull it apart and look at it. I will start with (c), where Senator Conroy’s MPI says:

the collapse of Telstra’s plans to construct a fibre to the node network leaving Australia without a pathway to a fibre based upgrade of Australia’s broadband infrastructure.

That just about sets down how the Labor Party see Australia. You see, the fibre-to-the-node network was going to connect Sydney to Sydney, Brisbane to Brisbane, and Melbourne to Melbourne. It did not actually connect Australia. It did not actually get to Newcastle or Wollongong. But this was the package that Senator Conroy thinks is a matter of public importance. Well, it is. It was so bereft of any moral function for what this nation needs that it is a matter of public importance.

It would be an absolute disgrace if the minister had allowed that to go through. I think it is actually an endorsement of the support of the Minister for Communications, Information Technology and the Arts for regional Australia. This clearly points out the sort of myopic, narrow view that the Labor Party has of Australia. It is the Australia of the people who have telecommunications, with no thought of the people who do not have it. It is a clear political ploy. It is a pitch to the voters, a pitch to the inner suburbs of Sydney—and good luck to you—but it is not a pitch to Australia. It is nothing about our nation.

It is interesting that they talk about a plan. They are big on plans in the Labor Party. Morris Iemma has a plan: he has a plan about how he is going to have a plan to make a plan. There are lots of plans, but we never actually see their plans; we never actually hear about them; we never actually see their acumen and have them lay out an argument, like the National Party did when it negotiated the $3.1 billion package. That is a plan—that is where the hard work is. We actually have that. We have put in the work.

We know what the Labor Party are going to do: they are going to snaffle up that money, grab it up—Gobbleguts is going to grab it up—and put it towards some nefarious outcome, which they obviously agree is going to be a fibre-to-the-node type plan. They would connect the capital cities. They would use the money that has been extracted to give some parity, some fairness, to the Australian people, to provide equality across the Australian continent, and say to people in Tamworth, Brewarrina, Longreach, Darwin, Tennant Creek and all those sorts of towns: ‘No, we don’t think you’re part of the Labor Party’s Australia. The Labor Party’s Australia exists in Sydney, the middle of Melbourne or the middle of Brisbane, but it doesn’t exist anywhere else. It doesn’t exist in Newcastle or Wollongong. In fact, we’re going to make it a matter of public importance to say that we’re disgusted that you would consider connecting the good workers of Wollongong. We’d make it a matter of public importance that the Labor Party thinks it’s disgusting that you would want to connect Newcastle. How dare the conservative side of politics want to connect Newcastle! How could they possibly consider that? Connect Tamworth? No, we could never have that!’ So it is no wonder that Minister Coonan would say, ‘No, fellas—go back.’

It is also interesting that, right at the beginning of the MPI, Senator Conroy talked about ‘the Australian government’s complacency on the rollout of broadband’. Maybe he does not want the Australian government to be involved in that telecommunications company anymore. Maybe that is the truth. Maybe the enabling legislation was a whole charade. The truth was that you were going to sell Telstra anyhow, weren’t you? That was always on the cards.

In fact, I would like to see someone walk into the chamber and say, ‘Should I ever get elected, I will make a commitment over my mother’s grave that I will put Telstra back into private hands,’ because I never hear that commitment. They dodge that issue and they are dodging that issue more and more, especially now they realise that 51.8 per cent of Telstra is still owned by the Commonwealth. But they have dropped that out of the conversation. They want to take Australia down a path. They want to have a bet each way.

Penny Wong (SA, Australian Labor Party, Shadow Minister for Corporate Governance and Responsibility) Share this | Link to this | Hansard source

Senator Wong interjecting—

Barnaby Joyce (Queensland, National Party) Share this | Link to this | Hansard source

Out they come now. The truth is coming out.