Senate debates

Thursday, 24 March 2011

National Broadband Network Companies Bill 2010; Telecommunications Legislation Amendment (National Broadband Network Measures — Access Arrangements) Bill 2011

In Committee

Photo of Alan FergusonAlan Ferguson (SA, Deputy-President) Share this | | Hansard source

Is it the wish of the committee that the bills be taken as a whole?

4:00 pm

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

I wish to speak on this. There is an important question here for the minister to answer before we get into whether or not the bills should be considered as a whole or how we consider these two bills. That question is whether we have all of the amendments, all of the information and all of the detail before us here and now so that we can go through this. The challenge to you is for you to stand up and say that there will no more government amendments tabled during the course of this debate and no more amendments to government amendments from the government during the course of this debate. The challenge is for you to say that you have settled with this thing, these bills that you have been going on with since November last year when you first introduced them into the other place. That was on 25 November last year. You have had all of the time since then to get these bills right—all of those months.

This week, the bills were listed for debate on Monday—the beginning of the week. We came in here and started that debate. Then, presumably with your instruction, Minister Arbib adjourned that debate. We have not come back to it until this point in time. So the rest of Monday went by, Tuesday went by and Wednesday went by. Late on Wednesday, we were provided with the reams of amendments that your government is proposing to make. There are 28 pages of amendments across the two bills—hundreds of them in total—for us to consider. You have insisted that the Senate consider these bills today and, if need be, tomorrow, the day after and so forth. We want to be certain that these bills and amendments will be the bills and amendments that we will be considering. We want to be certain that there is no way that you are going to come in here and present further amendments. If you are going to do that, we might as well go through and consider each bill clause by clause.

More significantly, as I advocated during the discussion of hours, we would be wiser to simply refer these bills, and these amendments in particular, back to the legislation committee to let the stakeholders have their say to ensure that you have it right, because—quite clearly—to date you have not got it right. If you had got it right in the first place, you would not have had to amend one of these bills and reintroduce it subsequent to the first introduction in 2010. If you had got it right in the first place, you certainly would not have had to introduce 28 pages of amendments in the last couple of days.

These are the questions for you, Minister: have you settled the whole thing? Is this it? Will there be no further changes? Should we say, ‘Let us not debate it now; let’s wait until you get your house in order’? I want to know, and I think that every senator deserves to know, whether the government has its house in order on this issue now. This is important.

This is a $50 billion package. I know that you love to take people to task on that, Minister, but we all know that, when you consider government’s direct equity into the NBN Co. and the debt-raising activities that the NBN Co. will have to undertake and the payments that the NBN Co. and the government will ultimately make to Telstra, we are talking about a sum that reaches beyond $50 billion. This is a vast project. These bills have vast implications, implications for how the NBN Co. will work, how it will be scrutinised in future, whether it will be subject to the FOI Act—and we know that you are seeking to provide sweeping exemptions there—and whether it will be subject to the full scrutiny of this parliament. We already know that you are seeking to exempt it from the scrutiny of the Public Works Committee.

These bills have vast implications for the operations of the telecommunications market and the NBN Co. in particular. Will it be the wholesale only provider that you claim it will be? Will that be the case? If not, we need to get to the bottom of why not, of who they will be able to provide services directly to and why you think that breaching the wholesale only provider promise is justified. We will need to get to the bottom of why you think that you can go back on your word in that regard and set the NBN Co. up as a potential retail provider as well. We need to go back and find out what implications that will have for the operation of the telecommunications market in this country and whether or not you will be starting the NBN Co. off on the path of potentially being another vertically integrated telecommunications company, but one with a government legislated and mandated monopoly in the fibre space. We need to know whether you will be taking us back many years in this space because of your failure to get this right. These are vital issues and questions.

We need to understand whether these amendments will, as is being alleged, wind back the capacity of the ACCC to have decent oversight of critical things such as how the NBN Co. discriminates on price to its retail customers, how the NBN Co. bundles services or discriminates on the bundling of services to its customers and how the NBN Co. decides on points of interconnection. Will the ACCC have full and strong oversight in this regard or have you taken a step back to weaken it? These are questions that arise out of the amendments that you have tabled. They are questions that arise from the bills that are under debate. But, from what we understand, you are still trying to make your mind up as to whether this is the final equation—whether you have it all bedded down now or whether we are going to see further iterations as this debate goes on.

If we are going to see further iterations, it is just not good enough for this debate to go on. Every senator who has an interest in this deserves to be able to start this debate knowing exactly what the government is proposing and having a clear idea of what it is that you intend for this parliament, this Senate, to decide upon with these bills. You are the government. You are meant to be in charge of this agenda. So far, you have failed miserably in that regard. You came in here during the debate on the hours and proclaimed, as did Senator Ludwig, the vital importance of getting these bills through to allow the deal—the already delayed deal—with Telstra to proceed.

That deal has already been delayed. It may be at risk of further delay—I do not know—as a result of this legislation. But, if it is, there is nobody to blame but yourself and your government. You are masters of your own destiny in this regard. And, as I emphasised at the outset, these bills were first introduced way back in November last year. You have had not just days to get your house in order on this, not just weeks to get your house in order; you have had months to get your house in order on this. Now you come in here, on the last day of the last week of this session, and try to extend the hours—as you have successfully done—and expect us to roll through all of these amendments, of particular substance, to your legislation and expect, in some way, for the Senate to be happy. Well, we are clearly not happy about it. What we will be even less happy about is if we get halfway through this debate and discover that—wait, there are more amendments from the government; wait, there are more things that you need to fix up with your own legislation. Or, potentially, most amazingly, will be the likelihood that you will come in here with amendments to some of the amendments in your 28 pages of amendments. That is quite likely because, given the way you have got it wrong so far with the drafting of these bills, given the fact that you have seen it necessary to move these 28 pages of amendments, there is every likelihood that you are going to find, as this debate goes on—as no doubt will be pointed out in your consultations and discussions with industry stakeholders outside this building who are worried about these changes and who are concerned, like senators, that they have not had a chance to adequately consider these changes—that there are flaws and there are problems. That will push you into potentially having further amendments.

We think that it is not unreasonable for the Senate to expect to see the government’s final position at the start of the committee debate, that it is not unreasonable for us to know that you have actually got your house in order, made your mind up, locked it all in and settled where you are going at the start of the committee debate. So before we move on to this procedural motion about whether the bill be taken as a whole, I have one simple question, Minister: will there be any more amendments? Can you rule out bringing any further amendments to these bills into this chamber during the committee debate?

4:09 pm

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

What staggering hypocrisy—I mean, seriously. I have one simple question for you: is your policy position still to abolish the NBN? Is that still your position? It is your leader’s stated position. Is it still your position? It is staggering hypocrisy to actually suggest that, if an amendment came forward that would improve the legislation or correct a typo, it should not be brought forward. What staggering hypocrisy from those opposite.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

Senator Ian Macdonald interjecting

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

I have participated for not quite as long as you, Senator Macdonald, but I know that you have stood in this chamber during the committee stage and moved further amendments to bills. I know you have done that.

Photo of Mathias CormannMathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | | Hansard source

Senator Cormann interjecting

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Senator Cormann, unfortunately you have not, and are not likely to for some considerable period, especially once Malcolm takes over. But for you, Senator Birmingham, to actually come into this chamber and say no-one should be allowed to move an amendment that could improve legislation or correct an error is quite disingenuous. You have promised this chamber—I have had discussions—that we are going to be here until Saturday afternoon. That is just a game of the opposition seeking to delay and demolish the NBN. You are frauds when it comes to this debate. It is just fraudulent behaviour to suggest you are remotely interested in any amendment to any of the bills that are before—

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

Mr Temporary Chairman, because of the quite ridiculous rulings that have been made of late that ‘impertinence’ is unparliamentary—

Photo of Mark BishopMark Bishop (WA, Australian Labor Party) Share this | | Hansard source

Senator Macdonald, before you go any further, you just then reflected on the chair by commenting on his rulings. It should be withdrawn.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

I withdraw that. But there has been a ruling that calling someone impertinent is unparliamentary. Is Senator Conroy calling us, collectively, ‘frauds’ parliamentary?

The Temporary Chairman:

If Senator Conroy referred to the opposition collectively as ‘frauds’ he should not have.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

I withdraw. As I was saying, for those opposite to even remotely suggest they are interested in one single amendment, one single clause in this bill—you are voting against it! Do not come in here and pretend that you are the slightest bit interested in the amendment process. If there is an amendment that can come from the floor that improves this legislation, or corrects an error, then of course this chamber should consider it.

4:13 pm

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

Minister, you have taken a nice out clause there. You have said, ‘Well, if there is a typo that needs correcting, perhaps we should allow that’—

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

I said ‘improve’.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

You said ‘improve’ as well. Answer this question, then: is your department working on potentially more amendments? Are there more amendments still to come? Do you know that there are actually more amendments to come that you will proclaim will improve this bill? Are there further changes? Tell us whether, to the best of your knowledge, at this point in time, this is the final version of the bill; whether to the best of your knowledge, at this point in time, we have all of the amendments before us; and whether, to the best of your knowledge at this point in time, each one of these amendments is settled, unless something unforeseen comes up, unless there is an amendment that fixes a typo. Tell us whether there is work going on to produce further amendments or not. If you do not deny the fact that there is work going on, work happening to produce further amendments, then it will be quite clear that you are asking the Senate to start this process with one hand tied behind its back—not knowing exactly where you are going, not knowing exactly what it is that you are planning to undertake during this debate.

You are right—the opposition has fundamental problems with your National Broadband Network. We have made absolutely no secret of that, none at all. We have real concerns, and we have highlighted those again and again. Our concerns are valid and understandable. This is a vast, vast expenditure of taxpayer money. This is a vast interference in the way the telecommunications market operates in this country. This will have implications for many, many years to come. As I have said many times before, the debate is not about whether Australians should have access to fast, affordable, reliable broadband. That is something that we want, it is something that you proclaim to want and it is something that I think every senator in this chamber proclaims that they want to see happen. The debate is about how you give Australians access to fast, affordable broadband—how you make sure that that broadband is delivered in the most cost-efficient way for taxpayers, in the most effective way for the operation of the telecommunications market and in the best way to give consumers, in future, the best chance of accessing what is necessary for the technologies of today and of years ahead and accessing it at the lowest possible price.

We believe that your National Broadband Network is the wrong way to go about doing that. We believe that because it involves such vast sums of public money being spent to create a new, vast government-owned monopoly that will involve overbuilding and overlaying infrastructure in many areas that already have good broadband services. It will involve taking services out of the hands of, in many areas, a market that is actually working to provide good broadband services and duplicating or taking over those services in all of those areas, rather than focusing, as government should, on the areas of market failure—on the people who are actually missing out on broadband services. These are the areas we think government should get in and focus on. These are the areas in which you should be delivering your services.

The backhaul rollouts that have been undertaken focus on areas of geographic disadvantage. These are not unreasonable areas for government focus. But you are building a giant new government monopoly and building it in a way that takes away any competitive sense in large tracts of the Australian community and takes away from what is, in many parts of Australia, an already functioning broadband market. In many parts of Australia, people already have good, reliable broadband services—fast services—that are priced competitively. That seems to us to be the wrong direction for government to go.

That is why I do not shy away from the fact that, yes, we oppose the NBN, we oppose the spending of these billions of dollars of taxpayer money and we oppose the fact that you are going to borrow billions of dollars as a government—that your 100 per cent government-owned entity, NBN Co., is going to borrow billions of dollars on behalf of the government. All up, some $50 billion will be churned around in this.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Put a bit of substance in it at least, Simon! Come on—a bit of passion!

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

Minister, would you prefer it if I yelled at you the whole time? That is fine! I can give you a bit of passion if you want and plenty of substance to this argument as well. I can give you plenty of substance for the Australians who are going to be paying off the debt on this for many years to come. I can give you plenty of substance for the Australians who are going to be wondering why they have been burdened with this pipedream of yours and why they have been burdened with this white elephant from the government. I can give you plenty of substance to allow Australians to ask why the government is insisting on rolling this out up and down every street of Australia in the manner it is proposing, rather than focusing on delivering services where they are genuinely most needed. There is plenty of substance there.

As I said, I do not shy away from our opposition to this—not at all. Yes, we will be opposing these bills, but we have also approached these bills constructively. We have highlighted problems in these bills. Opposition senators who participated in the Senate inquiry into these bills highlighted concerns, some of which your amendments have at least attempted, in some ways, to actually address. While your government senators were happy to brush it under the carpet and propose that the bills be passed as they were, you clearly were not satisfied with that, because you have come out with 28 pages of amendments since then. The opposition has at least subjected these bills to far greater scrutiny than your own senators have. The opposition in the other place proposed and raised issues of concern and moved some amendments there as well. The opposition is proposing a raft of amendments here, because although we think this is a bad proposal—a flawed proposal—we are willing to put in the hard yards to try to make sure that it does as little harm as possible. That is what we are hoping to at least achieve from this process.

We want to hold you to your word. You say that this will be a wholesale only provider, and that is what we want to hold you to. We want to make sure that that is what it is. When you say that this will be subject to stringent competition rules, we want to hold you to that. When your government says that it wants to be open, accountable and transparent in its operations, that is what we want to hold you to. That is why we have proposed the amendments that we have proposed in this space. The folly of it all, of course, is that you have now proposed your own raft of amendments, most of which fail to deal with the concerns that we have highlighted, yet you come in here and want to have a debate about proposals that are substantially different from what they were this time yesterday. You want to have a debate about those all of a sudden, and you want it to be a debate of substance. What is not unreasonable is the fact that we asked the question whether, to the best of your knowledge, this is it—what we have before us. That is the question for you, Minister, as I put it at the outset: will you tell us whether your department is working on any further amendments or any further changes to the amendments before us—whether you know that there are other changes to come. Do not give us the glib answer, ‘We might correct a typo here,’ or that you ‘might’ do something else. Tell us the truth—is the work happening behind the scenes? Are senators going to be ambushed with yet more amendments and do you know that they are already on the way?

4:22 pm

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

Can I just reinforce Senator Birmingham’s question. I note that Senator Xenophon and Senator Fielding are not currently in the chamber during this process and neither are the Greens. Should we assume from that that they are being consulted?

Government Senators:

Government senators interjecting

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

I am talking about their being in the chamber, where you can speak to these amendments. I cannot see any of the crossbenchers or the Greens. That suggests to me that perhaps amendments are being discussed.

Photo of Mathias CormannMathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | | Hansard source

Senator Conroy must be on the phone to the department.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

Senator Conroy, I assume that you are ringing the department to get the answer.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

You ran out of things to say after one minute.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

Senator Conroy, I want you to listen to the question. Mr Temporary Chairman Bishop, I can talk about this bill for hours, but we are here in the committee stage. We want to get this bill dealt with. We want to have our amendments dealt with. We are asking the minister a question and the minister chooses to speak on the telephone and not listen to any of the questions being asked of him. How can he possibly answer the questions when he does not listen to them?

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Have you run out of things to say again?

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

I am asking you a question, Minister. I am expecting that you might do the Senate the courtesy of actually listening to questions so that you might answer them. This just shows contempt. There he is. He has hung up the phone, so he is listening.

Senator Conroy, can you please tell us if the department is currently working on additional amendments? If so, why are we bothering with this farce of a debate? Why don’t we just refer the amendments to a committee to be looked at? Let TransACT work out whether the amendments actually deal with the very genuine concerns they raised in the committee. Let Telstra and Optus work out whether the amendments genuinely deal with the concerns they raised. If other amendments are currently being drawn, please tell us so that we all know where we are going. It is pointless debating these amendments that you have put on the table if they are not the final amendments.

In deference to crossbench and Greens senators, I now report to the chamber that Senator Xenophon and Senator Ludlum are in the chamber taking part—

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

I rise on a point of order, Mr Temporary Chairman. It is not within standing orders for Senator Macdonald to mislead the chamber. Senator Ludlum has not left the chamber at any stage. The fact that Senator Macdonald could not notice him in the chamber does not mean that he is entitled to mislead the chamber or anyone listening to this debate into believing that he had left the chamber.

Photo of Mark BishopMark Bishop (WA, Australian Labor Party) Share this | | Hansard source

There is no point of order. Senator Macdonald has the call.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

Senator Xenophon has now explained to me his very good reason, which I will not disclose, for not being here. I do not care whether they are here or not. My only concern is whether they are around in the department drafting the next set of amendments. Clearly they are not. Perhaps their advisers are. That is all we want to know. Minister, if you could tell us that, you could curtail this debate quite considerably. Please confirm, as Senator Birmingham has asked you, whether or not additional amendments are currently being drafted. If they are, why are we proceeding with this farce of a debate? If they are not, let us get on with it and debate the amendments before us.

4:26 pm

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

There are days when I wish I could suffer from the same affliction as those opposite: the inability to remember what happened the day or the week before. I have watched the opposition—the then government—move amendments on the floor many times. I have seen amendments brought in. If they improve the bill, they are welcome—unlike the efforts by those opposite, which are simply to demolish, delay and destroy the NBN. That is all they are about. Credibility is absolutely zero when you want to cry crocodile tears here.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

So there are more amendments being done now.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

As I said, if there are amendments that can improve this bill then we will always consider them, and we are always open to consultation. I appreciate that Mr Turnbull has taken some time off from his full-time job of destabilising Mr Abbott to focus on the portfolio for a moment. He has moved to 90 per cent destabilising Mr Abbott and 10 per cent on the—

Photo of Mathias CormannMathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | | Hansard source

Malcolm Turnbull is doing a great job.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Yes, I can see why you would be smiling, Senator Cormann. I am pleased that Mr Turnbull has taken some time off from his full-time job of destabilising Mr Abbott to actually do a little bit of policy work. I am sure that even Senator Birmingham, who is very diligent in the pursuit of his portfolio areas and very diligent in representing Mr Turnbull in this area, gets tired of carrying Mr Turnbull. I know you got tired of carrying him, Senator Cormann. We are always open to consultation and amendments that will improve it.

Photo of Mathias CormannMathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | | Hansard source

That job should have been done before you brought it in.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Even if you came up with one right now, Senator Cormann, we would give it consideration. If you wanted to make a positive contribution with an amendment that improved this bill, Senator Cormann, I would even consider yours.

4:29 pm

Photo of Nick XenophonNick Xenophon (SA, Independent) Share this | | Hansard source

I just want to be upfront. I think the government and the opposition know that my negotiating style is to tell everybody—both sides at the same time—what I am doing. I think that is the best way to deal with things in this place. I just had a quiet private conversation with Senator Macdonald, and I am happy to repeat what I said to him to the chamber—that is, the government introduced some further amendments yesterday. They were not insubstantial amendments. There were two amendments that I have some concerns about in relation to the points-of-interconnection authorisation and also in relation to the bundling of services and how those services can be offered. Senator Birmingham would be familiar with those amendments, as would other colleagues and of course the government. I do have some concerns, principally in relation to those two amendments. I would like to discuss that further with my colleagues. In fact, I had a brief conversation with Senator Birmingham about those concerns. I want to reserve my position to, if necessary, move amendments.

Photo of Mathias CormannMathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | | Hansard source

So the government is not ready yet?

Photo of Nick XenophonNick Xenophon (SA, Independent) Share this | | Hansard source

I think the government’s position is clear, but I have the right, as Senator Cormann has the right, if need be to move amendments in relation to issues of concern as a result of the recent amendments. I am being completely upfront with all my colleagues in relation to this, and I think I have been consistent with respect to this. I want to reserve my position in relation to those issues. I do not think we will be getting to them for some hours, and I expect not by tonight—

Photo of Mathias CormannMathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | | Hansard source

So there is still some work going on behind the scenes?

Photo of Nick XenophonNick Xenophon (SA, Independent) Share this | | Hansard source

What I can tell you is that I have raised these issues with the government, the opposition and the Australian Greens. I have not had an opportunity to have a detailed discussion with Senator Fielding about this, but I will raise it with all parties concerned. I think that is being upfront about it. And, of course, you have some of the key stakeholders such as the Competitive Carriers Coalition, Optus and I think Macquarie Telecom who have expressed concerns about some recent amendments, and it is a question of working through those. I want to be upfront with the committee about this, and it may be that I reserve my position with a view to introducing further amendments in relation to those areas of concern.

4:31 pm

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

It is quite clear from what the minister has said and from what Senator Xenophon has said—and, indeed, Senator Xenophon is perfectly within his entitlements and his responsibilities as a crossbench senator to work through matters with the government—

Honourable Senator:

And the opposition.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

and the opposition and all parties, as Senator Xenophon does in a very dutiful way, to ensure that he is satisfied with the legislation as it progresses through the parliament. But the questions that the opposition have been asking the minister have not pertained to whether he is assisting crossbenchers or whether he is looking at crossbench amendments; they have pertained to whether the government are drafting further amendments of their own, whether the government are actually developing amendments of their own.

And it is quite clear from his obfuscation, from his failure to tell us whether what we have before us is, from the government’s perspective at this point in time, the complete set of amendments without further ones that he knows are already being prepared, already being drafted. It is quite clear that the government is trying to work on further ways to fix up its flawed legislation, to fix up the mistakes it made when it first drafted this legislation and brought it into the House in November last year, to fix up the mistakes it made when it brought back the legislation into the House this year and passed it through the House, to fix up the mistakes it made after it began the debate in this chamber on Monday and then realised that it could not go ahead with what it had before it—and to fix up the mistakes that it has no doubt made in the two bundles of amendments totalling 28 pages that we have already.

No doubt there are many mistakes that still need to be fixed up, and that is why the opposition has serious concerns about what you are doing here. That is why we want to make sure that you are held to some account on this and that there is thorough scrutiny. Thorough scrutiny, frankly, is not provided by us spending endless hour upon hour upon hour in here debating this. It is not what I would want to be doing. I am sure it is not what the minister wants to be doing or what anybody else wants to be doing. Thorough scrutiny can be had by giving a little breathing space, by ensuring that we step back from this debate to some extent and that we have a couple of days and an opportunity for everyone who has an interest in this to give decent analysis to the hundreds of amendments the government has proposed—ensuring that we have that breathing space so that everyone can consider it.

In an ideal world, the minister would have had these amendments ready to roll on Monday, in which case we would have had easily a couple of days to give them the consideration they deserve. We could have had the time in that window to talk to stakeholders, to make sure that everyone was comfortable that the amendments you are proposing are going to do the job that you say they will do. But, no, you were not ready on Monday—and that is not Senator Xenophon’s fault; it is not Senator Ludlam’s fault; it is not the opposition’s fault. The only blame for the fact that this debate has not progressed further this week is on your shoulders, Minister, and the shoulders of the government for not being ready to debate it when you said you were going to.

You had it listed first up on Monday morning. We all came in ready and rearing to go. We were there, happy to debate straight on from there. I was expecting to be clearing the diary for Monday and clearing the diary for Tuesday as we progressively went through it. Had you proposed amendments of such substance as these, perhaps we would have sought an adjournment of the debate for a day or two so that everyone could go away and consider them. But, no, you were not ready. You did not do any of those things. Instead, of course, it was last night that these amendments were dropped on the table. It was late yesterday that these amendments were dropped on the table.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

No, it wasn’t.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

In terms of the full package of amendments, Minister—

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

You should check when they were tabled in the chamber.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

Well, Minister, I have said this, and this point has been made numerous times already, and now is the only time that you are deciding to quarrel with it.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

I’m just pointing out that you’re wrong.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

You have had many opportunities previously to quarrel with it if you had wanted to. Now is the only time that you are pointing this out. The reality is—

Photo of Mark BishopMark Bishop (WA, Australian Labor Party) Share this | | Hansard source

Resume your seat, Senator Birmingham. Senator Conroy, you should not be interjecting on the speaker, and the speaker should be addressing his remarks to the chair.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

The reality is that you have had the opportunity during this week to get out there and do the job properly and you failed to do it, failed to actually ensure that these amendments can be properly considered. As I said before, the opposition thinks there should be some breathing space. There should be an opportunity for these amendments to be properly considered. If you have further amendments, if you have other amendments that you are working on as a government, then there should be an opportunity for them to be properly considered for a couple of days. If you have other amendments that are necessary for the government to secure the support of the crossbenchers to get this through, there should be an opportunity for them to be considered for a couple of days. There should be a transparent opportunity for anyone who has a stake in this to have a say, to look at it and to consider all of the amendments on the table for a couple of days at least.

In reality it would be far better if we had a bit longer than that, but I understand that the government is time pressured on this. I understand the government is desperate to ensure that this legislation passes quickly so that you can get on with your negotiations with Telstra, delayed and fraught though they may already be. So I understand the government has a sense of urgency in wanting to deal with this. But a couple of days is not too much to have asked for to ensure that these amendments of substance are thoroughly considered by all of the parties and stakeholders involved in this debate. A couple of days is not unreasonable in that regard. It is especially not unreasonable when the government is conceding that there will be further amendments to come, that we have not seen the last of the amendments, that there will be more—so we will have to continue to update our understanding and knowledge of what it is you are proposing without the opportunity to thoroughly go out and consult stakeholders.

The reality is that these bills are not going to become law this week. The House of Representatives, the members of the other place, are probably starting to file out now, or pretty close to it, I suspect. They are heading off home, heading off to whatever they are doing back in their electorates for the weekend. They will be coming back next week. It is not unreasonable to suggest that perhaps they should come back late next week rather than early next week, to provide for the opportunity to have those couple of days’ breathing space. It is not unreasonable to suggest that the Senate should do likewise—rather than debating this now, coming back in the middle of next week after having had a couple of days to give thorough and decent analysis to these bills and to the amendments you are proposing.

Photo of Mathias CormannMathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | | Hansard source

Come on, Steve, let’s come back next week. You’re not ready.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

As Senator Cormann says, it would give you an opportunity, Minister. It would give you another day or so to get your house in order, to make sure that you finalise the amendments that you want to move in relation to this legislation, to make sure that you actually had the final bill and the final package of amendments before us so that everyone can have an informed debate; so that we can all be informed by the various stakeholders in relation to this matter; so that we can know for sure, for certain, that your intentions are as you proclaim them to be in relation to this legislation—that you will be creating a wholesale only network in the guise of a national broadband network company and that the NBN Co., this national wholesale only network, will meet all of the criteria that you proclaim it needs to—and so that we can test it with the stakeholders, test it with the telco companies, test it with the consumer advocates and test it out there with the academics and the media. It would give us all that couple of days’ breathing space to make sure it lives up to what you say it does.

What we saw after your amendments were released yesterday were stories such as those today that say it does not live up to what you promised, that in fact there will not be comparable pricing for comparable services for people in the seven per cent as there will be in the 93 per cent and that people getting wireless or satellite services may well find themselves at a disadvantage—not just on speed but also on price, potentially—to those in the 93 per cent. You shake your head, Minister, but of course this was a story, this was news that came out—

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

In the Australian? Even you can’t keep a straight face.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

Nothing like wanting to vilify the media outlet. That is the standard stock approach of your side—

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Even you are laughing.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

I laugh because you are so predictable in your desire, if you cannot win the argument, to simply vilify the opponent. That is your simple approach and in this case you choose to do it against a newspaper. The questions have been asked. You shake your head, but it is not unreasonable for the questions to be asked, because these amendments were provided yesterday. The explanatory memorandum that is quoted in that newspaper story was released just yesterday. It is not unreasonable for people to be trying to digest what that means. If we had a couple of days’ breathing space to work it out and to ensure that we had confidence in knowing what it means, the Senate could come back and debate it with full confidence, confidence that your shake of the head, your assurances that people in the seven per cent will not be worse off, are actually to be taken—

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

It’s a complete fabrication.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

In which case, Minister, the challenge that I put to you, having failed to answer satisfactorily whether we have the final amendments before us and whether the government is planning further changes of its own volition to try to get its house in order, is that we take those couple of days’ breathing space, that we actually allow these amendments to go back to the Senate Environment and Communications Legislation Committee and give them the opportunity to consider this—not for weeks, not for a long inquiry, because I am willing to accept your arguments of urgency, but for just two or three working days—and to give them the opportunity to air these amendments, to shine a spotlight on them, to ensure that all the stakeholders get their say. Indeed, you can provide further amendments if need be into that process so that the whole package is thoroughly considered. Then we can come back here next Wednesday, have the proper debate and get it done. Our colleagues from the other place can come back on Thursday or Friday, have their debate and get it done, and you will have your legislation by the end of next week, I am sure, if you do the job properly. That is all—one week. It could take one week in total to actually give these amendments proper airing, proper consideration, thorough examination and a full opportunity for stakeholders to actually have their say. That is all it would take, a full one-week period in which the committee could have a few days, the Senate gets a couple of days and the House gets a day or two. Everyone gets the opportunity to give that consideration and make sure the job is done properly rather than rush in the manner that you are proposing.

So I indicate that it is my intention to move that the committee report progress so that the Senate can then debate a motion to allow these bills, and more particularly these amendments, to be referred to the committee for consideration. That will give the committee those couple of days in which it can air those amendments and get feedback from the carriers, consumer groups, academics, the department and the government—get all of the relevant information—and do the homework that you seem to be so unwilling to do. The committee will do the homework you are unwilling to do and make sure that all of your amendments live up to your commitments and promises—that they all make sense and will actually do the job of providing the NBN as you claim you want to build it—whilst doing the best we can within this framework to protect consumers, to protect the taxpayer’s dollar and to ensure that the best interests of all are protected.

Senator Conroy, there is no need to pretend this is some great delaying tactic, because it is not a delaying tactic. I have told you: bring the Senate back next week and we will deal with it next week, but give these substantive amendments—these hundreds of amendments—a day or two of airing. Actually give them the consideration they deserve. Give them that consideration. I assure you, Senator Conroy, that if you do this then by this time next week you will have it all done and dusted, I am sure. By this time next week it will have been sorted, but the bills will have had the proper consideration given to them. With that, I move:

That progress be reported.

4:47 pm

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Yet again: block, delay and demolish. Unbelievable! Those opposite are now moving the gag; closing down the debate. This is the height of hypocrisy.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

It’s not a gag!

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

You are closing the debate. You are seeking to close the debate yet again. This must be the 20th time that you have sought to block debate on an NBN bill. You are a bunch of frauds! You claim you want the chamber—

Photo of Mathias CormannMathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | | Hansard source

Mr Temporary Chairman, I raise a point of order. In fact, there are two points of order. Firstly, the minister has again referred to members of the opposition collectively as ‘a bunch of frauds’ and he should withdraw that, as you have previously asked him to withdraw. Secondly, he is misleading the Senate. Senator Birmingham made a very constructive suggestion, given that the minister is not ready to proceed with the debate because he does not have all his ducks in a row in relation to his amendments. There is no suggestion at all of blocking anything; the suggestion is that the Senate debates it so we can deal with this.

Photo of Mark BishopMark Bishop (WA, Australian Labor Party) Share this | | Hansard source

Senator Cormann, resume your seat. The first point of order I uphold; I ask the minister to withdraw.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

I sincerely apologise and withdraw.

The Temporary Chairman:

On the second point of order, there is no point of order. I am now informed that the motion is not a debatable motion, after having debated it.

Question put:

That progress be reported.

Bill—by leave—taken as a whole.

4:57 pm

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

I move opposition amendment (R5) on sheet 7049 revised:

(R1) Clause 9, page 15 (lines 4 to 8), omit the clause, substitute:

9  Supply of eligible services to be on wholesale basis

        (1)    An NBN corporation must not supply an eligible service to another person unless:

             (a)    the other person is a carrier or a service provider; and

             (b)    the eligible service is supplied on the basis that the other person, or a member of that person’s immediate circle, must:

                   (i)    re-supply the eligible service; or

                  (ii)    use the eligible service to supply a carriage service or content service to the public.

        (2)    For the purposes of this Subdivision, a service is supplied to the public if:

             (a)    it is used for the carriage of communications between 2 end-users, each of which is outside the immediate circle of the supplier of the service; or

             (b)    it is used for point-to-multipoint services to end-users, at least one of which is outside the immediate circle of the supplier of the service.

        (3)    In this section:

immediate circle has the meaning given by section 23 of the Telecommunications Act 1997.

This is one of the more substantial and significant amendments the opposition proposes and it is of particular substance and importance to this debate. Senator Conroy has said time and time again that it is to be a wholesale only network—that NBN Co. is to operate on a wholesale only basis. In fact, let us look through some of Senator Conroy’s quotes, even some of his recent quotes. In March 2010 Senator Conroy, talking on Lateline, said:

… the National Broadband Network Bill that we’ve put out is a draft exposure. In actual fact, puts regulations around the National Broadband Network.

If I can just digress for a moment in terms of it being an exposure draft, the number of changes the government has had to make to it shows just how much of a draft it was. He went on:

So it looks at what constraints would we need on a company that could ultimately become a wholesale monopoly. And so they’re important regulatory protections for all Australians so that in the future, when the National Broadband Network is up and running, that it has some regulations, powers for the ACCC to deal with the National Broadband Network, because there’s no point in creating—getting rid of one vertically integrated monopoly to create another—

vertically integrated monopoly. He continues:

So this bill around the National Broadband Network is actually an important bill to ensure that the NBN Company ultimately down the track is not able to abuse its position.

‘To abuse its position’—very important words from Senator Conroy and a very important sentiment. Notwithstanding the opposition’s concerns about the entire concept of the NBN, if you are to go down this path, we want to make sure and guarantee that NBN Co. cannot in future abuse its position. We do not want to find ourselves in the future in a situation where we have gotten rid of one vertically integrated monopoly to create another unregulated or poorly regulated monopoly.

We note that in the NBN implementation study, or at least those parts of it that we have seen, NBN Co. states that:

NBN Co’s wholesale-only, open access mandate is crucial to achieving the Government’s competition objectives. A great competition is held back in telecommunications in many markets around the world by a monopoly wholesaler offering better wholesale services to its own retail arm than to the retail businesses of competitors.

These are important points. These are critical points that the government has made time and time again. So it is of great concern to the opposition and industry that we have come along here to debate this bill, the National Broadband Network Companies Bill 2010, to discover that the government has not put an appropriate fence around what the NBN Co. can do in future.

I turn to the substance of this amendment—clause 9 in division 2 of the NBN Companies Bill. It is a pretty simple one. It states:

An NBN corporation must not supply an eligible service to another person unless the other person is:

(a) a carrier; or

(b) a service provider.

That is it. They are the only criteria of clause 9. The opposition is proposing to amend clause 9 in the means and ways listed on sheet 7049 revised. This amendment will provide a far clearer definition as to where and to whom services may be supplied. It will provide a far clearer definition to ensure that services are supplied on a wholesale basis and that services are supplied in a manner where, to paraphrase Senator Conroy, ultimately down the track NBN is not able to abuse its position.

The amendment we have proposed provides a lot more clarity and substance than the proposal in the government’s legislation. The amendment we have proposed provides that:

(1) An NBN corporation must not supply an eligible service to another person unless:

             (a)    the other person is a carrier or a service provider; and

             (b)    the eligible service is supplied on the basis that the other person, or a member of that person’s immediate circle, must:

                   (i)    re-supply the eligible service; or

                  (ii)    use the eligible service to supply a carriage service or content service to the public.

        (2)    For the purposes of this Subdivision, a service is supplied to the public if:

             (a)    it is used for the carriage of communications between 2 end-users, each of which is outside the immediate circle of the supplier of the service; or

             (b)    it is used for point-to-multipoint services to end-users, at least one of which is outside the immediate circle of the supplier of the service.

        (3)    In this section:

immediate circle has the meaning given by section 23 of the Telecommunications Act 1997.

The opposition has proposed this amendment that goes into far more detail as to what an eligible service supplied on a wholesale basis is because we think it is important that there is not mission creep or scope creep in what NBN Co. does and that when NBN Co. says it intends to be a wholesale only provider and the government says NBN Co. should be a wholesale only provider that is what actually happens, that is what the public gets and that is what consumers get. We think that is only fair and reasonable. We think it is important to hold the government to its word in this regard and that we ensure that NBN Co. are not able to step out of being a wholesale only provider and in doing so risk having that situation where down the track they are able to abuse their position so that we will have potentially gotten rid of one vertically integrated monopoly and instead created a poorly regulated monopoly that is able to step, in some way, into a field of vertical integration.

We heard during the Senate committee inquiry genuine concern from carriers that there were real prospects of NBN Co. supplying directly to end users of services and that there were real prospects that there were carriage service providers, companies and organisations, who already met the definition of being a carriage service provider who would be eligible under the government’s act, if it is passed, to be able to get services directly from NBN Co. We heard everything in that regard from library groups, local government groups, supermarket groups to potentially big banks. You can only imagine what would happen if NBN Co. were able to snatch all of those big customers—the supermarket groups, the big banks, the big companies, large local government entities and big library services—and provide services directly to any of these bodies. It would rip the more profitable aspects out of the retail market. It would leave the retail service providers providing smaller services to large numbers of people. It would take out some of the biggest customers and in the process NBN Co. would have stretched ‘way beyond’—your words—your promise throughout the entirety of this debate that NBN Co. would be a wholesale only provider. What would have happened is that they would be quite clearly providing retail services. They would be providing retail services because they would be providing to customers at the end point of that service. There is no denying that is what it would become in those circumstances. Indeed, in evidence to the Senate committee, it was clear that NBN Co. was quite happy with that situation, that they saw nothing wrong with the situation of them being able to provide services directly to end users. Under questioning from Senator Ludlam, the revelation became quite clear that NBN Co. saw nothing wrong in providing services directly to end users.

So, Minister, the question for you to answer here relates to this very narrow definition you have provided, where many entities, who will have absolutely no intention whatsoever of on-selling communications services but who are defined as carriage service providers, would actually be able to buy services direct from NBN Co. without on-selling them. Why should those companies be able to meet it? We have the example that was given of Woolworths, who meet the definition of a carriage service provider because of some of the mobile services that they sell—that is all. That is how they meet that definition. But if Woolworths were to find it cost effective to buy their services direct from NBN Co. there would be nothing in your legislation at present that would prevent them from doing so. They would be, therefore, a retail customer if that is all they were doing. If they were buying the service, if they were using it themselves, if they were not on-selling it, they would be a retail customer—a total retail customer.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

You are outrageous. Your party is meant to be about competition.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

You want to talk about competition, Minister?

Photo of Michael ForshawMichael Forshaw (NSW, Australian Labor Party) Share this | | Hansard source

Order! We have been going along very well, with no interruptions. Minister, it would help if you would refrain from making interjections. Senator Birmingham, you should not respond to them.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

Thank you for your guidance, Chairman. Perhaps if Senator Xenophon would come back and distract the minister for the next three minutes and 50 seconds, that would—

The Temporary Chairman:

Senator, I think you should return to your speech on the amendment.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

Minister, the question that needs to be answered in this committee stage in relation to this amendment is: why do you think it is reasonable, after all of your protestations along the way that this would be a wholesale only network, to provide that scope, to provide that window, to provide that opportunity for this mission creep to occur? What is wrong with closing that window off? What is wrong with ensuring that NBN Co. wholly, solely sells services to companies who have an intention of being retailers and on-selling those services? What is wrong with that occurring given your stated mission that this be a wholesale-only provider? Why would you want to provide that opportunity? Why would you want to risk it?

Minister, you have railed for many, many years against Telstra and the vertically integrated monopoly they had. You got the legislation through at the end of last year that in theory will see Telstra broken down, that will see that separation take place. The opposition acknowledged during that debate—Mr Turnbull has acknowledged many times—the importance of that separation. But why would you want to leave the slightest glimmer of possibility that the same mistakes of public policy will happen again? Why would you want to leave the slightest chance that the same thing could happen again? Why, Minister, would you not support a far, far tighter definition, as the opposition is proposing? The opposition is proposing a very clear, very detailed amendment—

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

You should be embarrassed—an anti-competitive amendment.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

So, minister, is this what you are wanting?

The Temporary Chairman:

Order! Senator Birmingham—

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

Chairman, I am being provoked.

The Temporary Chairman:

Would you resume your seat for a moment. I am going to end up hearing all this in stereo and it is very hard then to follow the debate, let alone for Hansard. Please, Minister, if you could refrain from interjecting, and, Senator Birmingham, if you could return to your speech and not respond directly to the minister, but through the chair, if you so wish.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

Through you, Chairman, the minister comments that this is an anticompetitive amendment. The question for the minister is: why does he seem to want NBN Co. to operate as a competitor in the retail space?

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

It’s not. You can’t just keep making up—

The Temporary Chairman:

Order! Minister, you will get an opportunity to respond. There is one minute and 18 seconds to go. Can we get to the end of Senator Birmingham’s speech with no more interjections or across-the-chamber discussion and see how we go from there.  

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

This is a matter that is important. It is a matter that has vexed the telecommunications carriers. It has also vexed those on the cross benches. It has concerned many people as to ensuring that the NBN Co. is what you say it will be. That is the crux of the amendment we are attempting to get agreement to in this regard. The opposition wants to hold you and your government to account in this, to account against your promises. It is a long, long time since you made your first grand promises on this—since we had fibre to the node, since we had all of that policy development from the government, a modest $4.7 billion project if my memory stands correctly. But ever since you moved to the fibre-to-the-home proposal you have been emphatic about it being a wholesale only network. We just want to make sure it is a wholesale only network. Through this amendment we are attempting to ensure that is the case, attempting to do nothing more than to hold you to your word and ensure that is what is delivered.

5:13 pm

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

The government does not support this amendment. The bill as drafted makes NBN Co. a wholesale only provider. The mechanism it uses is a restriction on selling to any party other than a carrier or carriage service provider or specified utility—that is, it cannot sell to end users. The proposed amendment puts a further restriction—this is what is critically important—on the parties that NBN Co. can supply. It leaves the requirement that NBN Co. supply only carriers or carriage service providers, but only those carriers or carriage service providers or a member of their immediate circle that supply a service to the public.

A couple of very important points need to be made in response to this. First, NBN Co. will only supply a service that by its nature is a wholesale service—for example, a layer 2 service on the fibre network. This is not a service that can be used by an end user as considerable resources and capability are required in order to turn a layer 2 service into an end-user or retail service. You cannot use the service that the NBN is providing without changing it and adding to it. But most importantly—and the hypocrisy of Senator Birmingham and those opposite—the restriction proposed by the opposition would prevent an arrangement that has been permitted by the Howard government’s own legislation since 1997—that a person can become a carrier even if that person wishes to supply services primarily to his or her own operations.

You are actually seeking to amend your own legislation to restrict people in a completely anticompetitive way. You are actually seriously proposing to this chamber to restrict your own previous legislation to be more anticompetitive. That is what you are proposing. It is quite an astonishing and astounding thing for the Liberal party, the supposed party of competition—although in the telco sector we know there have been a few black marks over the last 15 years. But seriously, this is your chance to shake off the chains and to shake off the anticompetitive position that you and your party have endorsed for 15 years. There is an opportunity to actually get on board for a pro-competition piece of legislation.

This amendment is also poorly drafted. It prevents carriers or service providers from using NBN Co. services for their own internal communications. For these reasons, the government does not support this anticompetitive and restrictive amendment.

5:17 pm

Photo of Nick XenophonNick Xenophon (SA, Independent) Share this | | Hansard source

I am not able to support the amendment moved by Senator Birmingham for a number of reasons. My understanding is that this relates to utilities. Is that correct Senator Birmingham? I think that is the position of this particular amendment.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

No, it is not.

Photo of Nick XenophonNick Xenophon (SA, Independent) Share this | | Hansard source

Oh sorry, it is not on utilities. But in terms of the ability of wholesale operators, I would be concerned and have some sympathy for Senator Birmingham’s amendment if this bill were to come out of this place with provisions to allow for price discrimination. If you remove the provisions on price discrimination then I think that takes away the reason or the rationale for, or the benefits of, this particular amendment. I think the appropriate way to deal with this bill is to ensure that the NBN offers the same deal and is required to offer the same terms and conditions to a carrier as it does to a retailer. It will then not make any difference; there will be a level playing field. I think it would enhance competition.

So I would simply like confirmation from the minister that, in the event the amendments I have tabled are passed—which would remove all vestiges of price discrimination—the position would be this: that the NBN Co. would have to offer the same terms and conditions to all parties that seek to access its services. I think that would provide a very strong safeguard for competition and ensure that there is a level and fair playing field.

5:19 pm

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

I indicate that the government will be supporting your amendments and that the answer to your question is yes.

Photo of Scott LudlamScott Ludlam (WA, Australian Greens) Share this | | Hansard source

The Australian Greens will not be supporting this amendment. This situation occurred before Senator Birmingham arrived here. It occurred before I arrived here as well, although I was not too far away. The coalition sold Telstra. The coalition left us with a market structure that we have inherited. The CCS bill that we spent two years mulling over and finally debated at the end of last year, and now this bill, are an attempt to fix that structure, which was landed upon us.

The ALP and the crossbenchers at the time voted against the privatisation of Telstra. Perhaps Senator Birmingham, if you had been here when that occurred, you would have crossed the floor and saved the day; we will never know. But your side left us with the market structure that we have today. It is extraordinary to then come in and get a lecture on setting up a wholesale-only, open-access network that we are hoping will be as free from contamination by retail activities as possible. And to hear that from the side that sold this vertically integrated thing down into the market, where it then did everything it could, what it was legally obliged to do—that is, maximise shareholder returns. The public interest went out the window, not because Telstra’s management were bad people but because they were legally obliged to do what they spent the last couple of years doing.

The Australian Greens are very concerned that this so-called scope-creep that has been discussed—I suspect we will hear a great deal about it over however long this debate spills out—does not occur. We agree with the principle, as it was outlined years ago, that this is to be a wholesale-only, open-access network. I believe the amendments that the coalition have put up are poorly drafted. I am not going to suggest, or anything of the sort, that there is malicious intent. Let us be very careful here about whether the amendments the coalition are going to bring forward into this debate are genuinely designed to improve this bill. I ask Senator Birmingham to answer the question—I know he does not have to—that if the amendments the coalition put forward were to get up, would he vote for this bill? Or is the coalition intending to trash this thing no matter what happens over the next couple of days? I would be genuinely interested to know that.

So we will not be supporting these amendments. I think the questions that Senator Xenophon raised are entirely appropriate and I foreshadow that the Australian Greens will be moving amendments at the appropriate time to make sure that when we are debating a real NBN rather than a hypothetical one we will know how these provisions are being used. I am interested to know, as I suspect everybody in this chamber is, about the degree to which this supposed scope creep actually occurs.

I think we need to make a very important distinction here: NBN Co. is selling a wholesale service, and we are then debating what kinds of entities it is able to sell to. I will have this argument in the case of utilities, carriage service providers and so on—people using these services for their own use—but the service that NBN Co. is selling to the market will be a wholesale service to everyone. I think that is a very important distinction to make. I may rise again if Senator Birmingham cares to address any of the issues that I have raised, but otherwise I will just state that the Australian Greens will not be voting for these amendments.

5:22 pm

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

I think I caught a good number of Senator Ludlam’s comments, if not all. In the earlier debate we had, where I pleaded for the government to provide some extra time for consideration of its detailed amendments to ensure that we got all of them right, I think I made it quite clear that the position of the opposition coming into this debate is that we are trying to put forward amendments in good faith, but that does not vary our position of opposition to the NBN and does not ultimately vary our position of opposition to these bills and what the government is trying to do around the NBN.

I am not attempting to hide anything there. I made it clear earlier and I make it clear again that our opposition is based on some of the fundamental concerns we have with the NBN. But along the way we are attempting to do our best to hold the government to account and ensure that—on the presumption that this will eventually pass and become law—it reflects what the government has said is its intention and that it does what is best for the consumer and the telco sector by providing the necessary outcomes.

Senator Ludlam heard, as did I, the evidence provided to the Senate committee. He heard the various terms on which parties raised concerns about this. Let me quote a couple of those areas of concern from the committee report.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Don’t quote yourself!

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

I am not quoting myself, Minister. I will let you know when I quote myself.

Photo of Michael ForshawMichael Forshaw (NSW, Australian Labor Party) Share this | | Hansard source

Order! If you do that, you will let him know through me.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

Certainly. In section 2.17 of the majority report of the committee it highlights:

Telstra argued that the statutory terms ‘carrier’ and ‘carriage service provider’ are ill-suited to define NBN Co’s scope of business. Firstly, a carrier licence can be easily obtained and there is no requirement to use it to supply services to the public …

Quoting from Telstra’s submission, the report says:

It is very easy for a customer to ‘convert’ from a retail customer to a carrier, because a carrier licence can be readily obtained with minimal investment requirements, and there is no requirement that a person who holds a carrier licence actually use a network unit to supply services to the public. Once an entity becomes a carrier, NBN Co can supply that person, and the services supplied can be self consumed (by the entity or within its corporate group). This is a simple loophole enabling a corporate customer to buy communications services directly from NBN Co without being a retailer.

That is the key problem that I highlighted before. I will just repeat the last sentence:

This is a simple loophole enabling a corporate customer to buy communications services directly from NBN Co without being a retailer.

So, in fact, being a retail customer of NBN Co.—

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

You want to tell them how to use it. That is the truth.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

Chairman, I am attempting not to be provoked. Minister, through you, Chairman, this bill is attempting to constrain—allegedly—what NBN Co. can do. This bill is meant to be about ring-fencing NBN Co. and putting a barrier around it to ensure that it is a genuine wholesale only provider. We think that that is a wise intention: if you are going to construct this thing it should be a wholesale only provider. That is not an unreasonable intention—in fact, that is exactly what the intention should be and you should be held to account on that.

That is what we believe should be the outcome from this legislation and that is why we are concerned about the definition you have given in the clause that relates to the supply of services on a wholesale basis. From the evidence provided, it appears that it is wide open to potential abuse. We would rather knock that abuse out from day one than risk the type of mission creep that is of concern and risk getting to a position where NBN Co. is able to abuse its position and pick-off profitable customers from the retail service providers.

If you want to set up NBN Co. as a genuine wholesale only business we invite you to narrow your definition to ensure that it is only a wholesale only provider. The minister seems to be putting his entire faith—not in his clause related to whether or not it is a wholesale only provider—in technical definitions of the type of service NBN Co. will provide but not who it will provide to. We do not think that that is good enough because there is still some debate to be had about whether those technical definitions are satisfactory.

Putting that aside, as the minister well knows, technology in this area shifts rapidly and the potential capacity of retailers to convert that layer 2 bitstream service in the future into something that they can use in a cost-effective manner may expand significantly. What if that happens? Why not make the ring fence tighter from day one? Why not ensure from the outset that you protect the market, NBN Co. and the consumer from having NBN Co. stray into this retail space? Just as Telstra highlighted in their evidence questions about the terms ‘carrier’ and ‘carriage service provider’, they equally highlighted questions in relation to the definition of service providers. In their submission Telstra argued:

An entity may become a [carriage service provider (CSP)] by reason of supply of one particular kind of service – for example, a supermarket chain that is a mobile reseller. Such an entity would operate under the CSP class licence, and – under the proposed NBN Companies Bill – could acquire all of its fixed services from NBN Co directly, even though they may be entirely unrelated to functions as a mobile reseller.

Nothing the minister has said provides the clarity or the comfort or the certainty that this bill, or any of the amendments he is proposing, will eliminate the potential for the misuse of these definitions, will eliminate the potential that NBN Co. could become effectively a provider of retail services. I again emphasise that just relying on the technological definitions, just relying on where NBN Co. may or may not be able to draw the line on exactly what technical services it provides, is not good enough, because the technology and the ability to use that and adapt to that and the cost of doing so will inevitably and invariably change in years to come.

What is important in this case, what is significant, is making sure that, if you are true to your word, if you genuinely mean what you have been saying in your implementation study, in all of your speeches in this place and in all of the documents that have been outlined, NBN Co. is actually as you have promised and stated time and time again—a wholesale-only network. A wholesale only network, by anyone’s definition, by the definition of any layman or anyone walking down the street, should surely be a network that provides services only to retailers who on sell them. It should be that simple. That is all the opposition in this amendment is trying to achieve—to distil it down to those basic few words.

If Senator Ludlam or Senator Xenophon have concerns with aspects of our amendment, let us look at them and let us fix the problems, or let us look at an alternative. What we should be expecting here is a very clear ring-fencing, as I have put it, of NBN Co. that ensures it is a wholesale-only network, as the government has promised. That is what we urge the chamber to support. The current definitions in the bill are not satisfactory in that regard; they do not provide that protection. I would urge the minister to outline exactly why he thinks this very open definition in clause 9 that he has is somehow going to prevent that.

It seems the minister has indicated he actually does not think it is going to prevent that and he does not think there is anything wrong with it. Well, if you do not think there is anything wrong with it, then please explain to us why you think, having proclaimed the virtues of NBN Co. being a wholesale-only network, it is appropriate for them to be able to sell services directly to end users. Tell us why you think that. Why have you changed your mind? Why do you want to provide capacity for NBN Co. to step into providing services direct to end users and therefore be a retail provider. Why do you think that that is a reasonable thing? Tell the Senate that; be honest about your intentions in this regard. If you let the bill go through in its current form without changes to this clause, without accepting the opposition’s amendment or proposing some other substantive alternative, your words that this is to be a wholesale-only network will ring hollow to anyone in the sector who cares to look at this bill. It will be clear to all that your intention is to allow NBN Co. to engage in this mission creep.

Why will that be your intention? I have no doubt that will be your intention because you need to get some return; you desperately need to somehow provide the capacity for NBN Co. to provide some return on the billions of dollars of taxpayers’ money that is being pumped into it. Quite possibly the only way you are going to be able to get that return is to allow them to engage in this sort of mission creep, to allow them to stretch their mandate beyond being a wholesale-only provider into providing these sorts of retail services. Is that the reason? Is that why you are happy to provide this unsatisfactory definition of wholesale-only services? Are you happy to leave it this open? Your hope, really, is that the only chance for NBN Co. to provide the returns to government that the government claims to be seeking is for it to actually stretch its mandate, is for it to cherry pick profitable retail customers off those retail service providers and make sure that it provides a service directly to them.

Is that what you are expecting? Is that what you think is going to be the outcome here? Is that why you are rejecting any means of tightening the definition of this? If it is, it shows just how unsatisfactory your approach to this whole issue is, just how hollow your words are, just how shameless the approach is when you say one thing about it being a wholesale only network but then when it comes to the legislation, when it comes to the nitty-gritty on how NBN Co. is going to work, you do something quite different by simply defining that it can provide services to a carrier or a service provider, knowing full well that the definition of those words will allow service provision to a whole range of other businesses and entities, will allow NBN Co. to get into providing direct services to retail customers. Why not support the opposition amendment that satisfactorily ring-fences it, that ensures—

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Just say it four more times and you’ll be there; your time will be up.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

A few interjections will help. Minister, why don’t you accept the reality here that your definition is inadequate, that your definition will see scope creep by NBN, that your definition leaves that wide open? Are you not accepting this because you are happy for that to happen from a budgetary perspective? Is it all about getting better return from NBN Co. somehow down the track? Is what you desire here somewhere? Is that what you are after?

The opposition has tried constructively here to propose an alternative amendment to this. We do not draft these amendments for fun, you know, Minister. We do not do it for fun at all. We have done it to ensure that there is something here to debate, to say, ‘Let’s make sure that we keep you to your word.’ If you want this to be a wholesale only network, the challenge is here. Support this amendment or come up with something else, but tell the chamber before we vote on this what the alternative is, to keep you to your word.

5:38 pm

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Congratulations, Senator Birmingham. You must have repeated the same speech three times to fill up that 15 minutes.

Photo of Mary FisherMary Fisher (SA, Liberal Party) Share this | | Hansard source

Give us an answer.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

I was unfair. It is the hokey-pokey. Look, I was unfair. I confess I was unfair to Senator Birmingham when I said he was quoting himself because, to my shock and horror, I discover in actual fact he was quoting Telstra. He was basically parroting Telstra’s line and they are saying that the bill should include a requirement that the NBN’s corporate customers must acquire the service for the purpose of on supply, not for their own consumption. So people should know exactly where the Liberal Party stand when it comes to competition in the telecommunications sector yet again: just do Telstra’s bidding. Senator Ludlam, we had hopes. There was a chance for the opposition to finally break free of their mindless anticompetitive pro-Telstra position, but again we have been disappointed.

Let me give you an alternative view from the same report that you are quoting Telstra from. The Australian Telecommunication Users Group also did not support limiting NBN Co. in this way. I quote:

… as we feel this will reduce the emergence of specialist service providers who may otherwise emerge to provide services in the mining sector, health sector, energy sector and the like.

That is what this amendment is really about: competition. You should hang your head in shame that you are in here wanting to tell corporations who pay for a legal service what they can do with it. At the end of the day that is what this is about. You want to tell them how they can use a service they buy. They can only buy a wholesale service. A company then has to decide what it wants to do with it. But, no, you on behalf of Telstra want to tell them what they can do with it. You are in here saying that they can only use it for one purpose and they cannot use it for another. Talk about anticompetitive. You have just been exposed again. I quote you again from ATUG:

We feel an amendment of the kind that you are suggesting on behalf of Telstra will reduce the emergence of specialist service providers who may otherwise emerge to provide services in the mining sector, the health sector, the energy sector and the like.

Photo of Mary FisherMary Fisher (SA, Liberal Party) Share this | | Hansard source

Tell us how that will happen, Minister.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

We will never know because they will not be allowed to.

Photo of Michael ForshawMichael Forshaw (NSW, Australian Labor Party) Share this | | Hansard source

Order! There are people listening to this debate. It is an important bill and whilst we have had some interjections it is now getting to the stage where it is impossible for me to hear the speaker and probably impossible to hear the interjector as well. Would you just return to your speech, Minister, and everybody calm down.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Thank, Mr Temporary Chairman. Let me be clear.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

I am very calm; I am almost going to sleep.

The Temporary Chairman:

I was not going to say anything about you, Senator Macdonald. You were acting perfectly there, but you just spoiled it.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

I believe you could not possibly be sleeping with that screaming banshee in your ear right behind you. It would not be possible. I say that in the kindest possible way. As Senator Fisher knows, I said that with a smile on my face.

Back to the more serious part of this debate: as I said, you want to tell a company after it buys a wholesale service what it can do with it. Could you be more Stalinistic in intervention? Could you be more anticompetitive if you tried? You are actually going to amend your own legislation to be anticompetitive. It is quite extraordinary behaviour by a party that claims it is pro-competition, that it is pro-small business, that it is pro-innovation but the same simple pro-Telstra, anticompetition lines are coming from those opposite.

5:43 pm

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

This is a matter which concerns not only the coalition but also many in Australia who are looking for a profitable commercial communications industry and network across Australia. As Senator Birmingham has very rightly pointed out—and as many of the witnesses to the committee hearings into these bills have said—there is a genuine concern that the NBN Co. will enter into the retail area.

One of the reasons that makes that suggestion believable is that on the current figures we have clearly the government is never going to get a commercial return on the $50-odd billion that it is spending on this. I appreciate and anticipate Senator Conroy’s objections that it is not $50 billion but, once you add up what they are going to pay to Telstra, in a global sense this is going to be a $50 billion investment by the taxpayer in this national broadband network.

I will just interpose on myself there to remind everyone that for about $5 billion a fast broadband service would already have been operating in Australia had the coalition won the 2007 election. We had issued contracts for a mix of fibre, wireless and satellite that would have provided a very fast broadband service to everyone in Australia at a cost of about $5 billion. It was gazumped by the Labor Party prior to the 2007 election by promising that they could provide a national broadband network for $4.7 billion—a little bit cheaper.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Senator Conroy interjecting

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

You remember it, Senator Conroy. It was your great policy, which was written for you by your then friends, Telstra, and you fell for it hook, line and sinker. You are moving your head; it should be up and down rather than side to side. You know what I am saying is exactly what happened. We know what it is like in opposition: you do not have many resources, so you grab your advice where you can get it. Telstra were only too pleased to give you a few clues and tell you they could do it in a proper way for about $4.7 billion, which in a way was similar to the OPEL contract, which had been at that time let by the previous government. If your government had not breached its contractual duties, a fast broadband service would have been up and operating in Australia about a year ago. Yet under your scheme we are going to have to wait for about eight years until we get anything closely resembling it.

You spent $20 million on one proposal and then scrapped it. Then you spent another $20 million on something else. You were throwing the money around. It is easy to do when it is not your money, of course, but that is typical of the Labor Party. Then when nothing fell into place we had Senator Conroy come up with the $50 billion proposal at taxpayers’ expense. That is one thing, but at the same time to say, ‘This will be a commercial operation and we’ll get a return on the taxpayers’ investment and there will be co-investment,’ is something else. We do not hear too much about these things at the moment. Go out to the market and see who wants to invest as a partner in this sort of project. Yet, Senator Conroy, that was your original proposal.

NBN was going to be partly government funded and partly funded by the market. Once anyone saw the figures you did not have to be a mathematician to work out that it would never make a profit, particularly if you do what you have been doing in Tasmania and give away the NBN services absolutely free. It will not cost them a cent in Tasmania until 1 July this year. No wonder it is a cheap service to users in Tasmania; they are not paying for it. They are being given it for free. How are you ever going to get a return on your investment if you are not charging anything for the $50 billion investment you are putting into it? Nobody believes it, not even you.

Senator Ludlam is at least honest and consistent about it. He never wants the entity to be privatised as he knows no private entity would ever invest in this because it will be a financial dud. It may work in the end. It may provide very fast broadband. But it will not provide it at a price that Australian consumers or Australian taxpayers will be able to afford. That is clearly why the government and NBN want to leave this little option open to be able to retail their services to certain defined, I concede, consumers.

I want to ask the minister: which government department or large entity does not currently take its broadband services and telephone services from one of the retail service providers? I do not know and I hope I am not giving away any secrets here, but I do not think Defence buy their services. I think they have their own network. That is stuff that is probably not relevant here. I think most other government departments, most big entities, most utilities currently get their services from someone else. That is a question; I am not asserting that. I am asking the minister as it is appropriate to do in this committee stage of the debate where senators, on behalf of the Australian taxpayers, are able to raise these questions. That is a question for you, Senator Conroy. Are there any government agencies not now buying their services through one of the retail service providers?

Having answered that and it will depend on your answer, of course—I do not claim to be an expert on this and that is why I am asking these questions, as is appropriate, as it is what this committee stage is all about—I then want to ask the minister: under his legislation as it stands as of three o’clock yesterday I think it was—we suspect that it is being amended as we speak—could any of those agencies, or utilities or big operations then get layer 2 services from NBN Co. and add to those layer services the additions that the retail service providers will add to provide a service to the general public?

Just to make sure that Senator Conroy understands, the question I am asking is: would those large entities—his department, say, or the Commonwealth government as a whole—be able to take the layer 2 services direct from NBN, add some value to them and then use the service without going near Vodafone, Telstra, Optus, Primus, iiNet or any of the other service providers? Perhaps, Senator Conroy, you could answer those two questions for me to make sure that I understand this appropriately. When you have answered them, I will then move on to say—I will not argue this now; I will come back to this once I have your answers—wouldn’t it be better if some amendments were adopted? I suggest the amendment we have moved, but, if not, then perhaps we and the Greens could get together and prepare an alternative amendment that might ensure that NBN is a wholesale-only company. Otherwise we could get to the situation that I think Senator Birmingham enunciated, and that is that you have a vertically integrated telco, as we have had in the past and which many people have said is inappropriate. Perhaps we could start with those two questions, and then I will refer to our amendment.

5:54 pm

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

I am not sure that where government agencies secure their services is actually relevant, and I am not sure I could get you that information in the near future even if I tried. If agencies want to become carriers, they can, just as they have always been able to under your legislation, Senator Macdonald. If a government department did acquire a licence or resupplied, it could acquire an NBN wholesale service and then transform it. It could only buy a wholesale service, because NBN will only sell wholesale services.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

Thank you for that. But the amendment we want to adopt would require, if a government department took a carrier licence—

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

As they could now.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

Don’t we need to then ensure that anyone taking a carrier licence must actually then retail services more broadly, not just to themselves? Otherwise the import of it is that NBN is dealing directly with a government department. And I suspect it would not be just a department; I suspect it would be, for example, the whole of the Commonwealth government or the whole of the Queensland government—

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Just as it could be now.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

That would take away from the business of the retail service providers. Senator Conroy, you said that they could do that now.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Exactly.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

As I understand it, Optus have not worried about that, Telstra have not worried about that and the other big telcos have not worried about that to date, but they are now worried and have been for some time that NBN Co. might actually be effectively operating in the retail market by selling its layer 2 services on in a retail sort of way. That is why they are concerned. Senator Conroy, you will no doubt—as you have in the past—get up and have a tirade against your old mates Telstra, who weren’t your old mates for a while, then they were back as your new mates and then they weren’t. I am not quite sure where you are at the moment in your relationship with Telstra, although if you believe what you read in the popular press Telstra are getting a bit tired of you. They have already put back their extraordinary general meeting from 1 July till sometime in September or October. With the amendments you dropped on the table yesterday, I suspect they are going to be even less enthused about taking something to their shareholders. If NBN Co. are going to be in a position where they can compete with Telstra, what is in it for Telstra? That realisation is coming out. That is why I think it is important to look at the amendment we have moved, which provides that:

        (1)    An NBN corporation must not supply an eligible service to another person unless:

             (a)    the other person is a carrier or a service provider; and

             (b)    the eligible service is supplied on the basis that the other person, or a member of that person’s immediate circle, must:

                   (i)    re-supply the eligible service; or

                  (ii)    use the eligible service to supply a carriage service or content service to the public.

The amendment we have moved goes on to define and clarify some of the terminology used and to define how you can determine whether a service is supplied to the public. You determine that if:

             (a)    it is used for the carriage of communications between 2 end-users, each of which is outside the immediate circle of the supplier of the service; or

             (b)    it is used for point-to-multipoint services to end-users, at least one of which is outside the immediate circle of the supplier of the service.

As I understand these amendments, they would address the concerns that we have had and they would address the concerns that the Greens have had. I have not heard Senator Xenophon on this point. I guess this issue would be of concern to him but, more importantly, of concern to—

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Telstra!

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

Is it only Telstra? I thought Optus were a bit—

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

You’re simply representing Telstra. Why don’t you try representing consumers?

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

I am not representing Telstra, Minister. I cannot think when I last spoke to anyone from Telstra—except the committee service, and that is all on the Hansard record. I think my only connection with Telstra is the mobile telephone that the government supplies to me. I think it is with Telstra—yes. That is my connection. I am not here to represent Telstra anyway. There is only one group of people I am here to represent, and that is the taxpayers of Australia. You are interjecting, Minister, and diverting me and taking me back to my lament that we lost the election sort of fair and square in 2007. I cannot say the same for 2010. In 2007 we lost it fair and square. But if we had not lost it, the OPEL contract would have been up and running and supplying a very fast broadband to places like—

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

OPEL lives!

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

Senator Conroy, I live in the bush. I live in a medium-sized country town up in North Queensland, and part of my portfolio responsibilities on behalf of the opposition is remote Australia. Had the OPEL contract proceeded, if it had not been cancelled capriciously by your government, we would have that fast broadband now. In fact, it would have been delivered to most of Australia a year or so ago. It would be a mix of things.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

It was a dog that couldn’t deliver.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

Mark my words, Minister, that is where you are going to end up. Your fibre-to-the home proposal gave you a lot of excitement: it gave you tingles up the spine. But as Mr Turnbull mentioned at the first meeting of the new joint committee this morning, he has just been to Korea and Singapore. They do not have fibre to the home there. They have fibre to the node. Even in these brand new, high-rise buildings there is fibre to the node and they send it out from there. You can dismiss that. It is only Singapore; it is only South Korea—two of the quickest and most technologically advanced communication nations in the world. They are already doing that. Hopefully, you will be able to have a look at Mr Turnbull’s video. He has offered to make it available to the committee. I am sure he would make it available to your department, because I think you might find it a bit instructive. This is what happens when you make these policies on the run. They sound good and, for a little while, you can talk a language that nobody else can talk and you can get away anything.

Photo of Scott LudlamScott Ludlam (WA, Australian Greens) Share this | | Hansard source

I have seen the video.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

You have seen the video—good.

Photo of Scott LudlamScott Ludlam (WA, Australian Greens) Share this | | Hansard source

Senator Ludlam interjecting

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

No fibre to the home.

Photo of Mark BishopMark Bishop (WA, Australian Labor Party) Share this | | Hansard source

Order! Senator Macdonald, could you please address your remarks to the chair and not engage in conversation with other senators.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

Thank you, Mr Chairman. Senator Conroy keeps attracting my response to his disorderly interjections. He has again diverted me from the question I was asking. So I might leave it there and get Senator Conroy to answer the questions that I asked earlier. I think Senator Fisher might have some questions as well.

6:03 pm

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

I am sorry, Senator Macdonald. I always enjoy your contributions. I would not necessarily have defined your OPEL lament as a question—perhaps a stream of consciousness. But when it comes to OPEL, I know that the next speaker is the master. This amendment prevents a carrier acquiring services for self-supply. This is a right they have today. You actually want to tell people, tell companies, how they can use a service. That is what you are proposing. I invite you, Senator Macdonald, to reflect on what you are actually proposing. You are saying that it is okay for a company to buy a wholesale service from NBN Co. and then they can on-sell it. That was not your position a while ago—not yours personally. At least you have come round to not wanting to be too embarrassingly anticompetitive. But once they have purchased it, you are deciding for them what they can do with it. That is actually what you are doing. That is something that they have the choice to do now. You are seeking to restrict your own former legislation to tell a company that buys a wholesale service what it can do. I do not think you could be more interventionist. Joe Stalin would be proud of you. Seriously, you want to tell them in a piece of legislation that you can do this with a legally purchased product from NBN Co. Senator Macdonald and Senator Fisher want to tell them what they can do with it.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

It’s got to on-sell them

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

You do. You want to say this thing is good; this thing is bad. That is something that they have the choice to do today. So I am not sure if there is anything else that I can address. I would love to debate with you the OPEL lament. I have also been lucky enough, as Mr Turnbull recently has, to have visited Singapore. I have met with all the companies providing the fibre-to-the-home build-out in Singapore. I have been to people’s homes and looked at what was going on. I have been to South Korea and talked with the people there who have been rolling out networks.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

Fibre to the node.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

It depends on whether you want to call it basement or node. You are being a little disingenuous. Let us go back to the Economist Intelligence Unit—that oxymoron for the particular publication in this instance—where it talked about how South Korea were rolling out a fibre-to-the-home proposal. Did Mr Turnbull not meet anyone involved in that rather large—I think to quote from the Economist Intelligence Unit—$24 billion project. This involves converting from the basement or node, if you want to use that word, to people’s flats—actually into their homes. Did he not meet anyone involved in that $24 billion project that is underway in South Korea? I am quoting those figures; I could be wrong. I am quoting that from the Economist Intelligence Unit so it is entirely possible that it is wrong, given the way that they incorrectly described our build. But perhaps Mr Turnbull did not meet any of those companies involved in that somewhat significant project in South Korea on his tour of telecommunications facilities.

Let me be clear: I have actually visited the fibre-to-the-home displays in Singapore; I have visited homes that are receiving it; I have visited the companies that are building it. So I am intrigued.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

It’s not the government, though, is it?

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

This is really funny: the South Korean government are still in shock to this day at the claim that they have had no involvement in the fibre project in South Korea. They are in shock. They are in shock at the suggestion that they had nothing to do with the fibre-to-the-home and the network build in South Korea. They are still in shock.

Singapore has a unique industry structure. The government has its own influence over various companies through various investment bodies. I think you know exactly what I am referring to, Senator Macdonald.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

They can’t believe that a government monopoly is doing this.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

They are building fibre-to-the-home. I met with the minister. I have discussed the tender process they went through for fibre-to-the-home.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

Are you telling the truth that he didn’t say to you, ‘Why is the government doing this?’ Didn’t he say that to you?

Photo of Mark BishopMark Bishop (WA, Australian Labor Party) Share this | | Hansard source

Senator Conroy, I urge you to address the chair and not have a conversation with Senator Macdonald.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

I will ignore Senator Macdonald but I will give the following information: no.

6:09 pm

Photo of Mary FisherMary Fisher (SA, Liberal Party) Share this | | Hansard source

Minister, you have accused the opposition with this amendment of doing the bidding of Telstra. That is pretty curious when, with your maintenance of your position on this aspect of the legislation, you are doing the bidding of NBN Co. Your government is doing the bidding, quite happily, of NBN Co. and its current master, Mr Mike Quigley, not only with this provision of this bill, which this opposition amendment seeks to change, but also in respect of Mr Quigley’s constant opposition to any reasonable scrutiny of his being in charge of a government owned entity expending significant amounts of taxpayers’ money. Far from the opposition doing the bidding of Telstra with this particular amendment, your government is doing the bidding of NBN Co. and its boss, Mike Quigley.

But it is worse than that. The fact that more than one person or body has a good idea does not discredit the goodness of that idea. There is no mortgage on a good idea. Great minds often think alike. Maybe in this particular respect, Minister, you could consider the fact that Telstra’s great mind just happens to think alike to the opposition’s great mind in this respect.

When you hang up the phone, Minister, you will probably remember that it is also true that fools seldom differ. Maybe that is why the government is choosing in this respect to do the bidding of NBN Co. and its boss, Mike Quigley—that is, the sad fact that fools seldom differ. You have also tried to suggest that this opposition amendment ‘tells them what to do with it’—I am not quite sure who ‘them’ is—and is therefore anticompetitive. You are deliberately missing the point. The effect of this opposition amendment is not to tell them, or indeed anyone, what to do with it. The intent of this opposition amendment is to tell them—to the extent that there is a ‘them’ defined by you—what they cannot do with it. It is hardly anticompetitive to say what they cannot do with—

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Senator Conroy interjecting

Photo of Mary FisherMary Fisher (SA, Liberal Party) Share this | | Hansard source

I am speaking your language, or at least trying to, Minister. How obfuscatory it is. You try to say that our amendment effectively tells ‘them’ what to do with it when in fact our amendment simply says one thing that they cannot do with it. That one thing is not to on-supply to the public. We do not dare to prescribe what and how about on-supply to the public. We are hardly telling them what to do with it. All that we are doing is saying what they cannot do with it—we get the amendment, Minister—and we are making it very clear that retail service providers continue to have a role in this market.

As for telling ‘them’ what to do with it, the government’s bill very clearly tells the retail service providers what to do with it and what to do with their business. Your government is very clearly telling the retail service providers they can stick it up their jumper. They can stick what has been their business right up their jumper because the government owned enterprise, NBN Co., is about to do things that would be a profanity, if I named them in this chamber, to the market. So, you will be very pleased to know that I shall refrain.

Minister, you have tried to say that as of today the market allows the very thing that this opposition amendment is trying to outlaw. You seem to be conveniently forgetting that your NBN proposition is to move from the market and scenario of today to a world of tomorrow—a totally different world of tomorrow. But it now may be even more different than we thought it was going to be because with this raft of amendments that you have tabled overnight. It really is quite an indecent proposal for this Senate to consider your 20-or-so pages of amendments, delivered overnight at this short notice. It is an indecent proposal because, Minister, deep in your heart of hearts you know that these amendments so turn on its head the underlying spirit of what was the companies bill that really you should have tabled a new bill. You should not be trying to amend the bill that is currently before the Senate. You should have gone back to the drawing board and started again.

In your heart of hearts you know you should have done that. But you know that were you to do that you would also have to start the process all over again and that might put a spanner in the spokes as to your need to reach an agreement with Telstra and the need for your government owned enterprise to get access to certain things that Telstra has. You also know you are not going to get a deal with Telstra until you have got legislation in some form or other through this chamber—and that needs to be quick smart. So, Minister, do not talk to us about telling them what to do with it when your bill very clearly tells the retail service providers what to do with it and what to do with their business and that is to stick it up their jumper—and that is putting it politely. Minister, my question is: what in the bill or the bill as proposed to be amended by the government stops NBN Co. from stepping into the shoes of would-be retail service providers in any circumstance? What provisions in the bill or in the amendments tabled by the government stop NBN Co. from being a retailer?

6:16 pm

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

It only sells wholesale services.

Photo of Mary FisherMary Fisher (SA, Liberal Party) Share this | | Hansard source

Minister, what is your definition of ‘wholesale’ and what is your definition of ‘retail’? It would help if you would refer to particular provisions in the bill or to the amendments that make this crystal clear.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

I have just consulted to get some specific detail for you. I refer to page 15. Under Division 2, ‘Rules about operations of NBN corporations’ there is ‘9, Supply of eligible services to be on wholesale basis’—a fairly straightforward sentence—and then there is a definition. Further on, on page 18, under Subdivision B, ‘Supply of other goods and services’ there are clauses 17, 18 and 19. I am sure there are others but I thought those would be a good start for you.

6:17 pm

Photo of Mary FisherMary Fisher (SA, Liberal Party) Share this | | Hansard source

Minister, does the fact that something that might be wholesale at the point in time at which it leaves, in this case, the hands of NBN Co. remain wholesale even if NBN Co., as in this case, is effectively stepping into the shoes of what would otherwise be a retailer who would then provide those services to another party?

6:18 pm

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

It cannot be used for telephony. It is a wholesale service. Even you were forced to use the words ‘effectively stepping into’. So even you are accepting that they are not supplying retail services; they are only supplying wholesale services. They are not a retailer. They are not moving into that market. The legislation is very specific on this. I see Senator Birmingham. Welcome back!

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

I am never far away, Minister. To follow on from the astute line of questioning of my colleague Senator Fisher, Minister, I would appreciate it if you could cite other examples where a wholesale service is defined on the product rather than on the nature of the fact that a wholesaler is usually a wholesaler who sells to a retailer. As I said in comments earlier, the general understanding that I think any layman or laywoman would have about the definition of wholesale is that wholesale, and wholesaling, is seen to be an instance of onselling a product to a retailer. You seem to be wanting to define wholesaling activity not as the onselling of a product but by the product that is being sold. These are markedly different definitional approaches. They are vastly different definitional approaches. What the coalition’s amendments are seeking to do is to take a very routine, standard, traditional approach to a wholesale-only service and define it by virtue of the fact that it be onsold. There is nothing terribly radical or new in that. It would be quite commonsensical and logical, I think, to anyone who cared to listen and consider the debate. What is perplexing in the debate is why you are attempting to define a wholesale service not by the sales actions of the company but by the product that is being offered. Why do you want to create a totally different understanding of wholesale services for NBN Co. compared with what anybody else would define to be a wholesale service activity?

6:21 pm

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

The question is not: why are we seeking to redefine something? You are seeking to close it down and dictate to companies who buy a legal wholesale service—it is legal because they have got themselves the licence—and tell them what to do. You are seeking to change the definitions in the existing bill. You are actually closing down a market. That is what you are doing. NBN Co. can only supply a wholesale service. I think even you would have to concede that. You may disagree with a definition about something else but I do not think you could argue that it is only supplying a wholesale service.

Now, if you want to talk about it being layer 2 or layer 3, I will accept that a layer 3 style service is needed when it is turned on before a RSP is part of the equation. When someone plugs it in and turns it on in their house, a little sign will come up that says, ‘You need to go and get a RSP service.’ I will accept that a layer 3 style component at the absolute minimum is necessary to tell a consumer to go and contact an RSP. If you want to talk about technology and layer 2 or layer 3, I would accept that as a legitimate criticism, although I think most people are comfortable with that.

You have to explain to this chamber why you want to dictate to a company that chooses to take out a carrier service licence that it cannot do something tomorrow that it can do today, because that is what your amendment will do. A company that could do something today will not be able to do it tomorrow because you have decided it. It could not be more anticompetitive. It is straight out of Telstra’s songbook, as I read out before. If you listened to someone other than Telstra—and I quoted the Australian Telecommunications Users Group—then perhaps you would have a slightly different perspective. I appreciate that you have been a wholly owned subsidiary of Telstra for so long that you cannot look in the mirror without seeing a big orange T on your forehead. But I want you to know that I still have hope for you, Senator Birmingham, because I know deep down under that tie there is a Liberal heart beating and a Liberal heart would actually support competition.

6:23 pm

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

Firstly, to the big orange T that may or may not be tattooed anywhere: the minister has raised concerns about the fact that I have quoted Telstra’s submission a couple of times in this debate—

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

No, you are parroting their position.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

‘Parroting their position’ is his stance. Why don’t I quote from the Optus chief executive then. Why don’t I quote what Mr O’Sullivan has to say. Let us see what he has to say. As you have invited me to distance myself from Telstra, Minister, I will go to their prime competitor in Optus. Let us see what he had to say:

“We and many in the industry have spent quite a bit of time recently working through the consultation process to provide feedback on the draft bills and the bill that is now before parliament,” Mr O'Sullivan told a business lunch in Sydney on Thursday.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

I have read it.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

I am sure you have. He went on:

To be frank these new amendments have thrown us a curve ball.

So we know that Optus is very concerned about the amendments that have been presented. In fact, Mr O’Sullivan goes on and says of the government’s amendments and approach in this legislation:

It’s hard to screw up the NBN. Getting the competition settings wrong is a good way to screw it up …

That is what he seems to think of your approach to date in regard to where you have taken this debate. He thinks you are screwing it up. Those are the words that Mr O’Sullivan has chosen to use.

In regard to this debate, you continue to come back to this perverse notion that somehow you can define a wholesale service on the basis of what it is they are selling, not the activity they are undertaking. That is not anybody’s understanding of a wholesale service except yours and the proposal you are putting forward.

Photo of Mary FisherMary Fisher (SA, Liberal Party) Share this | | Hansard source

And your silly bill.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

Senator Fisher is astute as always. Sometimes we have to put it in the most simple of terms—you and your silly bill.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Try to keep your eyes open when you refer to Senator Fisher.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

Minister, my eyes are wide open to the failures in your amendments and the failures in your bill. You want to define wholesale services in a wholly different way to what anybody else accepts as a normal or reasonable approach in this regard. You base it all on the concept that the technology being provided is not suitable for retail application. That is your sole line of defence, it seems, as to why you think that it is reasonable at present to accept your bill in its current terms.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

It is exactly the same as the current definition. You are changing the current definition.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

I would have thought, Minister, having been in this place for as long as you have been, you would understand that when we stand here to debate bills before the parliament, what we are usually doing is changing something. That is usually what happens in this place when a bill is before us. That is usually what happens when an amendment is being debated; we are changing something. This is not some new revolution to anybody else. I am not sure why you are amazed that an amendment may seek to change something. That is the very nature of amending something. Yes, we are seeking to change something. We are seeking to change it because we want it to apply in a way that conforms with what you have been saying—that this is to be a wholesale only service. I will say it again: technology will change and adapt and there is a potential that in the future many more businesses may find it viable to take a layer 2 bitstream service and to apply it to their own needs.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

And you want to stop them.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

Minister, if you are happy to stand up and say, ‘I am happy for the NBN Co. to become vertically integrated and to step into the retail space,’ then that is fine. Until you say that, if you are going to continue with the charade of pretending that you want this to be a wholesale only service on the one hand yet leaving a gaping gap wide open for NBN Co. to engage in retail service provision direct to customers on the other hand, then that is fine; be frank and honest about it. As long as you continue the charade of saying one thing but promulgating this bill that does something totally different, we will continue the debate arguing that you have got it wrong and that you should front up to that fact. Minister, please, I urge you to recognise that your definition of wholesale does not match anybody else’s.

6:29 pm

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

It is embarrassing when you have got so little substance in your debate that you have to try to misrepresent people. I know Mr O’Sullivan well. You sought to take some views that he gave today about amendments that were circulated yesterday and apply them to the debate on the exposure draft and the draft that existed to try to cover for the fact that you are doing nothing more than being an apologist for Telstra. Mr O’Sullivan was not commenting on the proposal that you tried to pretend he was commenting on. He was actually commenting on—

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

Senator Birmingham interjecting

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

You have taken his comments from today and backtracked them to something he was not talking about. It is very naughty of you to misrepresent Mr O’Sullivan like that.

Sitting suspended from 6.30 pm to 7.30 pm

7:30 pm

Photo of Mary FisherMary Fisher (SA, Liberal Party) Share this | | Hansard source

I have a question to ask of the minister before we proceed to the opposition amendment. It follows on from the earlier debate. The minister seems wholly entertained by his own concept of wholesale versus retail. Perhaps the minister is consulting the world according to Willy Wonka to find out what Willy Wonka reckons wholesale and retail are, because he might have worked out that he needs some help.

Photo of Eric AbetzEric Abetz (Tasmania, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | | Hansard source

He isn’t even here.

Photo of Mary FisherMary Fisher (SA, Liberal Party) Share this | | Hansard source

But I will proceed to ask my question anyway and hope that the minister can hear it somehow in his absence. Taking the point that the minister’s view seems to be that, when defining that which is wholesale and that which is retail, you focus on the good or the product supplied alone—

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

Mr Temporary Chairman, I rise on a point of order. I hate to interrupt Senator Fisher, because she is asking very valid questions. I regret to interrupt her but, sadly, the minister is not yet here to hear those valid questions. I see Senator McEwen looking anxiously towards the door—

Photo of Guy BarnettGuy Barnett (Tasmania, Liberal Party) Share this | | Hansard source

Senator Birmingham, I do not think that is a point of order.

Photo of Anne McEwenAnne McEwen (SA, Australian Labor Party) Share this | | Hansard source

Mr Temporary Chairman, I rise on a point of order. I understand that Senator Conroy is on his way. He has just been inadvertently delayed for a small period of time, so I will just take this opportunity to also address a question to the minister. Perhaps in his answer to Senator Fisher’s question he could deal with the issue of why passing this legislation is so important to the future of the telecommunications industry in Australia. We appreciate that the opposition have many questions to ask. I know that the minister has been seeking briefings from his department on the answers to some of those questions and that he will be providing those to the Senate as we proceed through this debate about the amendment moved by—

The Temporary Chairman:

Order! Senator McEwen, thank you for that. That is also not a point of order. Senator Fisher had the call and I will return to Senator Fisher because we have had no points of order.

Photo of Mary FisherMary Fisher (SA, Liberal Party) Share this | | Hansard source

Thank you—

Photo of Eric AbetzEric Abetz (Tasmania, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | | Hansard source

Mr Temporary Chairman, I rise on a point of order. I was wondering whether the minister would like to provide an apology to the chamber and an explanation for his late arrival.

The Temporary Chairman:

That is also not a point of order.

7:33 pm

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

I am happy to apologise for being a few minutes late. I was caught in a briefing on some important matters. I do sincerely apologise.

Photo of Mary FisherMary Fisher (SA, Liberal Party) Share this | | Hansard source

I will take the liberty of answering Senator McEwen’s question. The minister needs this legislation passed because without it he will not get a deal with Telstra and without a deal with Telstra the NBN is naught.

Minister, your attempted definition of wholesale versus retail seems to rely wholly and solely upon the nature of the product or service passed from one party to another without any regard to the nature or activities of the party or entity who supplies those services. Surely it is a combination of the two and surely, if there were to be more than a 50 per cent balance in one or the other, it would be in the nature of and activities of the entity, organisation or party which supplies those goods or services. To have a relationship you need at least two parties. You are essentially envisaging a scenario where you have only two parties—an NBN Co. and then a consumer who you are attempting to say obviates any place for a retailer in the relationship.

But let us compare this scenario with, for example, spare parts for a motor car. We could have a manufacturer of those spare parts who then supplies those spare parts to the next party. According to your definition, the manufacturer would be a wholesaler simply by virtue of passing on spare parts. However, if you have a manufacturer who supplies those spare parts to a second party, who then supplies those same spare parts with nothing done to them to a third party who then supplies those same spare parts to a fourth party who consumes those spare parts by putting them in a motor vehicle and driving away, that surely has to be this sort of scenario where at the very beginning you have a wholesaler and at the very end you have a consumer. Maybe the second step, but certainly the third and fourth steps, have to be retailers of a sort because they have passed on that good to another party who ultimately consumed that good. Surely that is more the test of wholesale versus retail in the relationship of the parties in the supply chain to one another in the context of what then happened to the good or service itself. I put to you, Minister, that it is simplistic for you to attempt to constrain a wholesale-retail relationship simply by saying, ‘The legislation defines it as such; therefore it is,’ particularly if what it is in the legislation turns on its head a common understanding in the everyday marketplace and also probably what has been the subject of case law over many years.

So, Minister, please give us an example of an analogous scenario which has a body not unlike an NBN Co. as a wholesaler supplying a service to another body, and where that body or person who then takes that good or service somehow must be a retailer—because NBN Co. in this analogy is not; in your world, NBN Co. is a retailer. Give us an analogy in the commercial world where your definition of wholesaler and retailer works.

7:38 pm

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

We have canvassed this and I have probably already answered this question half-a-dozen times in the last three hours. I have explained over and over again that the NBN is a wholesale only company. It is selling wholesale only services. You do not understand what a wholesale service is and that is not something that I am going to be able to explain tonight in the chamber. I could not possibly begin to explain it because I do not have the technical competence. I do not make any pretence whatsoever.

Photo of Bill HeffernanBill Heffernan (NSW, Liberal Party) Share this | | Hansard source

That’s bullshit.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Temporary Chairman Barnett, if you are deaf, then perhaps I could assist you in pointing out what Senator Heffernan has just shouted out across the chamber.

Photo of Bill HeffernanBill Heffernan (NSW, Liberal Party) Share this | | Hansard source

I said it’s bullshit.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

I am sure you actually heard it there again.

Photo of Guy BarnettGuy Barnett (Tasmania, Liberal Party) Share this | | Hansard source

Senator Heffernan, I heard that on that occasion.

Photo of Bill HeffernanBill Heffernan (NSW, Liberal Party) Share this | | Hansard source

I hope you did.

The Temporary Chairman:

I ask you to withdraw.

Photo of Bill HeffernanBill Heffernan (NSW, Liberal Party) Share this | | Hansard source

The term ‘bullshit’?

The Temporary Chairman:

Yes.

Photo of Bill HeffernanBill Heffernan (NSW, Liberal Party) Share this | | Hansard source

I withdraw ‘bullshit’. It’s crap.

The Temporary Chairman:

Order! That is also unacceptable, Senator Heffernan. I would also ask you to withdraw that because it reflects on the chair.

Photo of Bill HeffernanBill Heffernan (NSW, Liberal Party) Share this | | Hansard source

I withdraw that; it’s garbage.

Photo of Anne McEwenAnne McEwen (SA, Australian Labor Party) Share this | | Hansard source

Temporary Chairman, I raise a point of order. I note that Senator Heffernan is making interjections in the chamber, he is not in his chair and he is refusing to obey your order to withdraw that remark.

Photo of Anne McEwenAnne McEwen (SA, Australian Labor Party) Share this | | Hansard source

I think Senator Heffernan should return to his seat and if he has got a comment to make in the debate he should make it in the appropriate fashion.

The Temporary Chairman:

I have asked Senator Heffernan to withdraw both his initial—

Photo of Bill HeffernanBill Heffernan (NSW, Liberal Party) Share this | | Hansard source

I withdraw ‘bullshit’, ‘crap’ and ‘it’s garbage’.

The Temporary Chairman:

Excuse me, Senator Heffernan, I am speaking. I have asked you to withdraw your first comment—

Photo of Bill HeffernanBill Heffernan (NSW, Liberal Party) Share this | | Hansard source

Which one was that?

The Temporary Chairman:

Which was ‘bullshit’.

Photo of Bill HeffernanBill Heffernan (NSW, Liberal Party) Share this | | Hansard source

I withdraw ‘bullshit’.

The Temporary Chairman:

I have asked you to withdraw that unreservedly, and then I have asked you to withdraw the second comment—

Photo of Bill HeffernanBill Heffernan (NSW, Liberal Party) Share this | | Hansard source

I withdraw ‘crap’.

The Temporary Chairman:

which I took as a reflection on the chair. I have asked you to withdraw it.

Photo of Bill HeffernanBill Heffernan (NSW, Liberal Party) Share this | | Hansard source

Yes, ‘crap’. But it’s garbage.

The Temporary Chairman:

Senator Heffernan, I have asked you to withdraw the second statement.

Photo of Bill HeffernanBill Heffernan (NSW, Liberal Party) Share this | | Hansard source

I’ve withdrawn that.

The Temporary Chairman:

Thank you..

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

I did not think he ultimately ended up withdrawing his reflection on the chair, but I will leave you to handle that.

The Temporary Chairman:

He has.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Senator Fisher, I do not know that I am going to be able to help you much further. We have been kicking this exact same issue around for two to three hours and I do not know that I am going to be able to help you any further.

Question put:

That the amendment (Senator Birmingham’s) be agreed to.

7:49 pm

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

by leave—I move government amendments (2) to (16) on sheet BR280.

(2)   Clause 10, page 15 (after line 17), after subclause (1), insert:

     (1A)    Paragraph (1)(a) does not apply to a carriage service supplied to Airservices Australia unless the carriage service is supplied on the basis that Airservices Australia must not re-supply the carriage service.

(3)    Clause 10, page 15 (after line 28), after subclause (2), insert:

     (2A)    Paragraph (2)(a) does not apply to a carriage service supplied to a State or Territory transport authority unless the carriage service is supplied on the basis that the State or Territory transport authority must not re-supply the carriage service.

(4)    Clause 10, page 16 (after line 5), at the end of the clause, add:

        (4)    Paragraph (3)(a) does not apply to a carriage service supplied to a rail corporation unless the carriage service is supplied on the basis that the rail corporation must not re-supply the carriage service.

(5)    Clause 11, page 16 (line 7), before “Section”, insert “(1)”.

(6)    Clause 11, page 16 (after line 15), at the end of the clause, add:

        (2)    Paragraph (1)(a) does not apply to a carriage service supplied to an electricity supply body unless the carriage service is supplied on the basis that the electricity supply body must not re-supply the carriage service.

(7)    Clause 12, page 16 (line 17), before “Section”, insert “(1)”.

(8)    Clause 12, page 16 (after line 26), at the end of the clause, add:

        (2)    Paragraph (1)(a) does not apply to a carriage service supplied to a gas supply body unless the carriage service is supplied on the basis that the gas supply body must not re-supply the carriage service.

(9)    Clause 13, page 16 (line 28), before “Section”, insert “(1)”.

(10)  Clause 13, page 17 (after line 4), at the end of the clause, add:

        (2)    Paragraph (1)(a) does not apply to a carriage service supplied to a water supply body unless the carriage service is supplied on the basis that the water supply body must not re-supply the carriage service.

(11)  Clause 14, page 17 (line 6), before “Section”, insert “(1)”.

(12)  Clause 14, page 17 (after line 13), at the end of the clause, add:

        (2)    Paragraph (1)(a) does not apply to a carriage service supplied to a sewerage services body unless the carriage service is supplied on the basis that the sewerage services body must not re-supply the carriage service.

(13)  Clause 15, page 17 (line 15), before “Section”, insert “(1)”.

(14)  Clause 15, page 17 (after line 24), at the end of the clause, add:

        (2)    Paragraph (1)(a) does not apply to a carriage service supplied to a storm water drainage services body unless the carriage service is supplied on the basis that the storm water drainage services body must not re-supply the carriage service.

(15)  Clause 16, page 17 (line 26), before “Section”, insert “(1)”.

(16)  Clause 16, page 17 (after line 32), at the end of the clause, add:

        (2)    Paragraph (1)(a) does not apply to a carriage service supplied to a State or Territory road authority unless the carriage service is supplied on the basis that the State or Territory road authority must not re-supply the carriage service.

I table two supplementary explanatory memoranda relating to the government amendments to be moved to the National Broadband Network Companies Bill 2010 and the Telecommunications Legislation Amendment (National Broadband Network Measures—Access Arrangements) Bill 201. The memoranda were circulated in the chamber on 23 March 2011.

While the companies bill as drafted makes it clear that services supplied by an NBN corporation to a utility must be for the sole use of the entity concerned and for the purposes of their own particular lines of business, these amendments are being made to reinforce these restrictions given concerns expressed by industry. Clause 9 of the companies bill provides the general rule that an NBN corporation must not supply an eligible service to another person unless the other person is a carrier or a carrier service provider. Clauses 10 to 16 of the bill set out exemptions to the general rule with each of those exemptions relating to the provision of eligible services to the specified utilities. Amendments (2) to (4), (6), (8), (10), (12), (14) and (16) make it clear that the exemption does not apply unless the services are supplied on the basis that the utility must not resupply the service. Amendments (5), (7), (9), (11), (13) and (15) are minor consequential technical amendments. Concerns have been expressed that utilities could use wholesale services sourced from NBN Co. to offer retail services to the public. While this is clearly not the case, given the concerns that have been expressed and to put the matter beyond any doubt, these amendments make it clear that the services cannot be resupplied and are solely for internal use.

7:51 pm

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

I thank the minister for his explanation of these amendments. We note that these amendments are an attempt by the government to address some of the issues that industry and the opposition have expressed concerns about. This is an area not altogether unrelated to the debate we have had over the last few hours about whether the NBN is genuinely a wholesale only provider or not. In this instance, the government seems to think that where it has provided exemption to the NBN on providing services to other entities it is reasonable to put a condition on those exemptions that would prohibit the on-supply or resupply of the service by those entities.

Strangely, the government just voted against a very similar proposal that would have done it for anybody who accesses the NBN service. It is a very peculiar inconsistency in the government’s approach, but we are quite used to such inconsistencies from the government. The opposition are not convinced these amendments go far enough. We have amendments of our own which will be debated following this; however, we will support these amendments as a second-best solution to the government’s flawed approach.

7:53 pm

Photo of Scott LudlamScott Ludlam (WA, Australian Greens) Share this | | Hansard source

I do not propose to speak for very long on these amendments. I think they are a fairly straightforward attempt to calm some of the nervousness that has been expressed in the debate so far about what kind of customers NBN Co. will be able to supply. The amendments, as the Australian Greens read them, simply remove some of the ambiguity that has arisen over the uses to which utilities can put the services they are buying from NBN Co.

I know it is perhaps a little bit unorthodox to produce lists of specific entities, and I know drafters are generally a little reluctant to do that kind of thing in case you leave people out, but I think in general the intention here is reasonably sensible. So the Australian Greens will be supporting these amendments.

I might just put a question to Senator Birmingham. Does coalition support for these amendments indicate that you will be changing your position or withdrawing some of your amendments down the track? I am not sure if I heard your statements correctly.

7:54 pm

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

For the benefit of Senator Ludlam, we intend to continue with our proposed amendments.

Photo of Scott LudlamScott Ludlam (WA, Australian Greens) Share this | | Hansard source

I will confirm then that the Australian Greens will be supporting these amendments. I am wondering if the government is proposing to put any other speakers or if the minister will close the debate by putting the question after I sit down?

The Temporary Chairman:

Senator Ludlam, the question is that amendments (2) to (16) on sheet BR280 be agreed to. That is the question and then we have a number of other amendments to work through.

7:55 pm

Photo of Scott LudlamScott Ludlam (WA, Australian Greens) Share this | | Hansard source

Thank you, Temporary Chairman. I am very happy that the Australian Greens will be supporting the amendments on this sheet.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

I thank Senator Ludlam for the Greens’ support. I know the whole chamber is looking forward to hearing from other senators on this. Senator Birmingham, I am shocked but pleased by the sensible approach that you are taking on this. I am interested in why you do not think these amendments are enough. I think they are pretty direct and straightforward, and they confirm what we stated upfront was always the intention. I am interested if you would like to tell me—and I am quite serious when I say this—why they are deficient. Do you intend to assist in that for a moment?

7:56 pm

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

Out of politeness, I indicate to Senator Conroy that I will be happy to elaborate on my arguments when I move my amendments in a moment.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

I look forward to your contribution, Senator Birmingham. It is important that we clear this up. The government’s stated intent was always to ensure that utilities could not resupply the broader community in a retail sense. We believe that to be fair. It is what we set out to achieve, and we believe the original legislation did that. But the point has been made by a range of senators that the industry did have concerns that this was not clarified enough and we welcome the support of the chamber in clarifying this to ensure that people do not feel that the legislation is deficient. We welcome the opportunity to ensure that the government’s aims are absolutely clear in this bill.

7:57 pm

Photo of Mary FisherMary Fisher (SA, Liberal Party) Share this | | Hansard source

We say it is deficient because you are still intending, depending on what you do with our next amendment, to allow utilities to acquire directly. If you are going to agree to our next amendment then you are probably going to heed our call about the deficiencies. We look forward to you acquiescing to our next amendment, which Senator Birmingham will move.

7:58 pm

Photo of Nick XenophonNick Xenophon (SA, Independent) Share this | | Hansard source

I want to give an explanation of the reasons I do not support the opposition’s position. The Telecommunications Act currently states that utilities can do things that make them carriers or carriage service providers without requiring a carrier’s licence. The government’s provisions in this bill are therefore consistent with existing legislation. Further, the government will clarify in its amendment relating to access to utilities that it may only be used for internal uses and not for the resupply of the carriage service. I support the government’s position on utilities because by enabling utilities to directly access NBN Co. they will be able to introduce smart technologies, such as electricity networks and road monitoring capabilities, which telecommunications providers may not necessarily offer.

I understand that the opposition is concerned about the blurring between wholesale and retail if you allow utilities to access NBN Co. But, under the legislation, utilities will not be accessing NBN Co. for everyday telecommunications services but only for necessary and desirable uses that will enhance its ability to improve monitoring systems and innovate smart technology, which in turn will benefit the consumer of those utilities. Utilities are not end users and the government’s amendment makes it explicit that they may not resupply the carriage service. For those reasons, I cannot support the opposition’s position in relation to this.

Question agreed to.

8:00 pm

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

The opposition oppose clauses 10 to 16 in the following terms:

(2)    Clauses 10 to 16, page 15 (line 9) to page 17 (line 32), clauses 10 to 16 TO BE OPPOSED.

I move this, noting the comments that Senator Xenophon has made and the comments that the minister has made already about the amendments that the government has moved to do with these issues. But it does come back for the opposition to a point of principle. The point of principle is the very basic one that we have spent a very long time already debating in this place, and that is whether the NBN is genuinely a wholesale only network. What the government has written in here is a raft of exemptions—exemptions for transport authorities, electricity supply authorities, gas supply bodies, water supply bodies, sewerage services bodies, stormwater drainage services bodies and state or territory road authorities. There is a raft of exemptions in each of those categories. We would start from the principle and the premise that it would be better for the government, who proclaim that these exemptions might be necessary—they do not say that these exemptions are necessary—to curtail the NBN as much as possible from day one to ensure that its mandate is restricted as much as possible from day one. That will ensure that it is ring fenced—and I have used that phrase before—from broadening its scope or range of activities outside of being a wholesale only provider.

We would further note that, while the arguments have been put that these types of entities, these utilities, may need to access the type of service that the NBN Co. is offering or that the NBN Co. may be able to develop a special offering for these utilities, we equally would argue that the retail service providers may be able to develop a special offering needed by these utilities. We do not see that it is necessary to start out on this process of developing the NBN and of setting its operational framework in place by weakening it by providing exemptions from day one, from the get go. It would make far more sense for the government to not have these exemptions and for the government to be open to hearing sound and rational arguments that can be put to the public on a case-by-case basis as to why perhaps there should be some exemptions some time in the future. But as to giving blanket exemptions now, although the government’s amendments that were just moved tighten it a little and at least stop these entities from onselling, we see no reason why, at the outset, these entities should have immediate and ready access. That is why the opposition maintains its opposition to these exemptions within the bill.

8:03 pm

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

The government does not support this amendment. The general rule is that the NBN Co. supply only carriers and carriage service providers. But NBN Co. can also supply to specified utilities for limited purposes. There are three reasons for permitting supply to utilities. First, under existing legislation, utilities can do things that otherwise make them carriers or carriage service providers without being classified as carriers and carriage service providers under the Telecommunications Act. The bill simply seeks to allow NBN Co. to treat them as carriers and carriage service providers when it comes to the supply of services. Second, these arrangements will support the growth of smart infrastructure management in Australia, including smart management of energy supply. I would have thought, Senator Birmingham, that you would have been very supportive of that. Third, it puts pressure on telcos to provide utilities with the services that they need.

The bill imposes tight limitations on the way the utilities use NBN Co. sourced services. They must use them for the sole purpose of carrying communications necessary to monitor and administer their own networks. Utilities cannot use these services to provide retail services to end users. To clarify this matter, the government has proposed its own amendment, which makes it clear that a utility cannot resupply a service that it has bought from NBN Co. Utilities and transport authorities will still need to purchase normal communications services, like telephony or broadband internet, from retail providers. Services that NBN Co. makes available to utilities should also be available to other carriers and carriage service providers and they could offer these to utilities if they wished.

This opposition amendment would deprive utilities of the benefits of arrangements that they have now, as well as undermining efforts to develop smart infrastructure and reducing incentives for carriers. That is why the government does not support it. Let me now go to the Senate committee report.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

Are you killing time, Stephen?

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

No, I want to be clear so that you understand what it is that you are actually advocating. You are again being anti-competitive. Your position demonstrates that you have a large yellow T tattooed on more than your forehead, possibly.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

I thought that it was orange.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Yellow, orange.

Photo of Sue BoyceSue Boyce (Queensland, Liberal Party) Share this | | Hansard source

Senator Conroy, please direct your remarks through the chair.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

I accept your admonishment, Madam Acting Temporary Chairman. Utility stakeholders supported the exemption. For example, the Energy Networks Association said:

Maintenance of this exemption is very important to the ability of electricity and gas network businesses to meet 21st century expectations around affordability, reliability and quality of energy supplies.

That is the key here. There are those in this chamber and those out there in the broader community who are trying to drag the country into the 21st century. And there are those sitting here fighting over a 20th century regulatory framework and fighting to try and hold Australians back—hold companies back—from getting access to the 21st century technology that will allow them to deliver to the broader efficiencies of the Australian economy.

Smart Grid Australia said:

Removing these exemptions would require electricity utilities to have to deal with a carrier (or service provider) in working through network design and architecture issues to connect with NBN Corporation’s communications network. This is an impractical and unworkable proposition ...

This is the sector—this is the industry—saying that your solution is impracticable and unworkable. So try and see if you can scrape that orangey-yellow T off your forehead and join the 21st century.

Photo of Alan FergusonAlan Ferguson (SA, Deputy-President) Share this | | Hansard source

The question is that clauses 10 to 16 stand as printed.

Question put:

8:14 pm

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

In light of the passage of government amendments (2) to (16) from sheet BR280, the opposition withdraws amendments (6A), (6C), (6E), (6G), (6I), (6K), (6M), (6O) and (6Q) listed on the running sheet.

Photo of Sue BoyceSue Boyce (Queensland, Liberal Party) Share this | | Hansard source

So that is all the amendments (6A) to (6Q) on sheet 7049, revised. Is that correct?

8:15 pm

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

That is correct.

The Temporary Chairman:

What about the other amendments: (6B), (6D), (6F), (6H) et cetera through to (6R)?

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

I only wish we were teaching the alphabet here. We also withdraw amendments (6B), (6D), (6F), (6H), (6J), (6L), (6N), (6P) and (6R) on sheet 7049, revised.

The Temporary Chairman:

We now move to clause 18.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

I move opposition amendment (6S) on sheet 7049, revised, standing in my name:

(6S)  Clause 18, page 18 (line 7), omit the clause, substitute:

18  Services not to be supplied

                 An NBN corporation must not supply a service to another person unless that service is an eligible service.

I move this amendment in an attempt to once again try to ensure that the words and claims of the government in regard to the NBN Co. are actually honoured and ensure that when they claim it will be limited in its activities to a certain sphere of operation that that indeed is the case.

In this regard it is a relatively simple tightening of the wording used. Currently clause 18 in subdivision B under the heading of ‘Non-communications services not to be supplied’ reads very simply:

An NBN corporation must not supply a non-communications service to another person.

The opposition is proposing an amendment to clause 18 such that it would read under a revised heading of ‘Services not to be supplied’:

An NBN corporation must not supply a service to another person unless that service is an eligible service.

An eligible service, as the minister would know, is a service as defined and approved by the ACCC for provision by NBN Co. to retail service providers. This is an attempt by the opposition to ensure that we do not have NBN Co. supplying non-eligible services, non-approved services, to other persons or other bodies in this case. Minister, I hope that you and the crossbenches see that this is a sensible, rational amendment and one that should not cause particular duress if the NBN Co. is to operate in the manner in which you proclaim that it will. I hope that you will support this amendment.

8:18 pm

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Alas, I am afraid I must disappoint Senator Birmingham. This amendment would remove the ability of NBN corporations to supply certain limited communication services that are not eligible services within the meaning of that term in the Competition and Consumer Act 2010. It is appropriate that NBN corporations be permitted to provide certain other communication services, such as services that are ancillary or incidental to the supply of eligible services. These provisions of the bill place limits on the scope of the services NBN corporations may provide while still ensuring they can operate effectively to supply all necessary services to wholesale customers. For this reason the government opposes this amendment. Clauses 17 to 19 in the bill limit NBN Co’s activities to communication services and goods.

8:19 pm

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

I have noted what the minister has said in this regard. He has cited an argument that there are certain non-eligible services that may need to be provided. He suggested that these may be services that are in some way analogous or incidental to the primary services to be provided. What he has not done, however, is provide an explanation of or an example of just what such services that are not approved eligible services may be that warrant NBN Co. once again having this flexibility in the bill.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

I am advised of two examples: billing services and duct access are sorts of things that we would deem to be incidental—things like that.

8:20 pm

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

I note the minister’s comment: billing services and duct access. On either of those fronts I wonder how they fit within your current definition of a non-communications service. That would seem to me to suggest that you are providing communication services, not billing services, to customers. So if you are going to cite that as an example, it does not seem to be an example that is congruent with the bill as it currently stands.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

On page 9 of the definitions it states:

non-communications service means a service other than:

              …              …              …

(c) a service that is ancillary or incidental to the supply by an NBN corporation of an eligible service …

I think that, if you clarify your question, we can ensure we are not at cross-purposes. But that is the definition.

8:21 pm

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

I am looking at the definition here of a non-communications service. It means a service other than a service that is ancillary or incidental to the supply by an NBN corporation of an eligible service. So in fact non-communications service does not necessarily mean that NBN Co. cannot provide a service that seems unrelated to communications. It just means that the way a non-communications service has been defined in the act provides a fairly broad reach of opportunity to say that pretty much anything that is ancillary or incidental to the supply of an eligible service is therefore an appropriate service for NBN Co. to be supplying.

The opposition is not convinced that any reasonable consideration or interpretation of the act would not ensure that, were our amendment to be approved, things that are incidental or ancillary would logically be considered part of an eligible service. However, we would have thought that that is a sensible approach to, again, enable us to be certain, be confident and prevent any semblance of mission creep by NBN Co.—any sense that they may start to provide services other than genuine ACCC-approved eligible services.

8:23 pm

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

I will read from the EM, page 72, in the middle of the last paragraph down the bottom:

The reference in the definition of non-communications services to ancillary or incidental services is intended to clarify that an NBN corporation may supply a range of supplementary services to customers that enable the customer to supply services to end-users. Examples of this are facilities access services (such as leasing of duct or conduit space) or access to an NBN corporation’s operational and business support 73 systems (to facilitate service ordering, provisioning and billing). The reference to ancillary or incidental services is also intended to permit NBN corporations to engage in the provision of minor services necessary in the conduct of a business, such as subleasing of surplus office space.

I hope that gives a broader picture and possibly allays your concerns, Senator Birmingham.

8:24 pm

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

It gives a broader picture, yes; it allays my concerns, no. It gives a broader picture and in doing so gives a better understanding of how NBN Co. may potentially be being set up to have alternative revenue streams to the primary revenue streams that would come purely from providing eligible services as part of a wholesale only access network, the type the minister has claimed NBN Co.’s remit to be. The opposition stands by its amendments and by its belief that it is far better, far wiser and far more sensible to ensure that NBN Co. has a clearly defined, explicit, limited remit and is not able to stray into providing other services that are not part of its core objectives.

8:25 pm

Photo of Barnaby JoyceBarnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | | Hansard source

I think it is important to get a couple of things on the record. Quite obviously, we can see where the numbers are on this. It is going to go through and I suppose the sooner issues are brought to a head, the better. It seems inevitable. But there are a couple of things that I think should be put on the record to do with service provision and a whole range of issues. There are a whole range of queries and now is as good a time as any to ask them.

When we first had a look at this, Baulderstone Hornibrook said they would build a service across the nation for $7 billion—that was for the whole lot. We are always rather amazed at the extent of inflation. The question I want the minister to answer, just so we can finally clarify this, is: how much is this actually going to cost to build? How much is the entity actually borrowing to do this? If the commercial plan, unbeknownst to you or to anybody else, does not stand up, is the taxpayer underwriting this and having to pick up the bill and pay it all back? Why are you building a service of fibre to the home when you could provide it to the node and provide a wireless service from there and really trim your costs? And why are you providing a service in cities? Why did you not start at the outside—in the country, where the service is not—and put the optic fibre around the optic fibre trunk lines around the country and then concentrate on the cities at a later stage? You might have even been able to get the market to look after if for you and avoid the costs.

8:26 pm

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

I would love to spend the evening relitigating the NBN. I think the cost of the build came in at 36, roughly. I am sure you remember—

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

$36 billion.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Yes, $36 billion. I am not for a moment trying to take away from that, Senator Macdonald. I have not come prepared to debate those particular details. I would not want to give you misleading information on those. A range of those questions I will happily take on notice. They are not actually relevant to the bill. They are relevant to the general debate. I accept that they are legitimate questions to ask, but I have not come with information on the detailed corporate business plan. The disappointment is: why do you want to deliver a second-rate service to you traditional base? Why do you want your traditional base to be locked into a second-rate wireless network when we are going to build a world-best broadband network, Senator Joyce? Why are you prepared to let the Liberals twist your arm and make you betray your constituency? You came here as someone who wanted to represent your constituency against the oppression of the Liberal Party, yet you have folded to it like a deck of cards. You got on that front bench and, as soon as you got on that front bench, you became a tame cat like the rest of them. I am not going to waste the chamber’s time by debating at length with you the broad principles of the NBN. If you would like to talk about the legislation, I will happily spend as much time as you would like discussing the actual legislation, but I do not think it is a great use of the chamber’s time tonight to relitigate all the issues we have litigated over many, many hours in the chamber previously.

Photo of Sue BoyceSue Boyce (Queensland, Liberal Party) Share this | | Hansard source

Senator Conroy, I remind you that the use of the second person, ‘you’, is best avoided in the chamber.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

My apologies.

8:29 pm

Photo of Barnaby JoyceBarnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | | Hansard source

Going back to the questions, how much is the entity borrowing? That has nothing to do with relitigation. It is something you should know; you are the minister. If it falls over, does the taxpayer have to pick up the tab? Why are you building a fibre service to the home when you could have built it to the node? And why are you providing it in cities where there is already a market to provide it? Perhaps you could just tell us how much it is borrowing, what happens if it falls over, who picks up the tab and is the taxpayer underwriting it, just so we can get it on the record. Have you ever stood up for anything? Have you ever crossed the floor on anything, Minister, in your life?

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Was he addressing—

Photo of Sue BoyceSue Boyce (Queensland, Liberal Party) Share this | | Hansard source

I hoped that Senator Joyce had heard what I said about the use of the second person, but perhaps you could demonstrate how it is best done, Senator Conroy.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

I will do my very best to follow your wise counsel, Madam Temporary Chairman.

The Temporary Chairman:

Thank you.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Again, Senator Joyce, the information you are seeking is publicly available. It has been litigated—through you, Madam Temporary Chairman—many times in this chamber, in both question time and Senate estimates and in the debate on the substance of the bill in December. None of your questions are relevant to the bill, Senator Joyce. If you would like some further information on the bill, I am happy to assist you.

8:30 pm

Photo of Barnaby JoyceBarnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | | Hansard source

I will just start with one. I will ask for the third time. Do you know how much the entity is actually borrowing, Minister? Do you have any clue whatsoever how much the entity is borrowing? And I just want to know: if it falls over, does the taxpayer have to pick up the tab?

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

As I said, the questions you are asking are not relevant and should be ruled out of order. I invite you to show to which clause of this bill—and we are on a specific clause—or how those questions are relevant, Senator Joyce. As I said, I will happily debate the NBN and the amount of debt that the company may be borrowing till the cows come home, but tonight we are here to debate this clause and this bill. I am just not going to waste the chamber’s time. I am drawing a line, Senator—through you, Madam Temporary Chairman. I am happy to discuss the bill and the clauses at length. I am not going to waste the chamber’s time being drawn into a conversation in which the questions have no relation to the bill before us or the clauses before us.

8:31 pm

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

Not that Senator Joyce needs my assistance at all in this regard, but I would just make the point to the minister that this amendment, like many of the amendments we have discussed, goes to whether the scope of NBN Co. is being expanded in any way—whether indeed you are leaving the door ajar, or wide open, potentially, for NBN Co. to be able to expand its activities. Of course, we all know what expanding its activities is about. That of course will be about making the dodgy finances of NBN Co. stack up better in the long run and giving the government some mild chance of not confronting the type of circumstances that Senator Joyce is asking you about—and they are reasonable circumstances to ask about. This bill is the fundamental piece of legislation that this parliament is going to debate about NBN Co., about how it is going to work, how it is going to operate, and—to the points that Senator Joyce makes—how it is going to be funded and paid for.

8:33 pm

Photo of Barnaby JoyceBarnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | | Hansard source

If the minister cannot provide the most basic answer to a quite simple question which should be at the forefront of his mind—and unfortunately the minister has a bad habit of not knowing what is in his own bill—I think it is very important at this juncture. We can go back into our rooms and watch this on television, and I am quite happy to do that. All he has to do is tell us how much the entity is borrowing. It goes to the point of the capacity to finance it and it goes to the service delivery. It is all interconnected; he knows that. It is a very simple question: does the taxpayer pick up the tab if the whole thing falls over? Watching tonight, that is what they want to know.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

I always enjoy debating Senator Joyce on many aspects of the NBN, but Senator Joyce is fully aware that his questions have no relevance to this bill. I am not going to be drawn into a lengthy debate about why we built a fibre-to-the-home network as opposed to a fibre-to-the-node network. It is a wonderful debate. I will debate you. Let us go on Sky. Let us go on A Current Affair. Let us go anywhere you want, Senator Joyce—through you, Madam Temporary Chairman.

Photo of Barnaby JoyceBarnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | | Hansard source

Madam Temporary Chairman, I raise a point of order on relevance. The questions are quite specific. How much is the entity borrowing? If it falls over, does the taxpayer have to pick up the tab, pick up the bill?

Photo of Sue BoyceSue Boyce (Queensland, Liberal Party) Share this | | Hansard source

There is no question of relevance, Senator Joyce.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Senator Joyce is asking a hypothetical question on an issue not relevant to this bill. As I said, I am not going to waste the chamber’s time, Senator Joyce. We have an important bill. Senator Birmingham has already indicated that this is a substantial bill. I invite you to ask a question on the substance of the bill. You are asking a hypothetical question, Senator Joyce.

8:35 pm

Photo of Barnaby JoyceBarnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | | Hansard source

You cannot get more simple than an answer which was either going to be yes, the taxpayer picks up the bill, or no, they do not. You cannot get anything simpler than that, Minister. You have two options. You have a 50 per cent chance of getting the answer right even if you know nothing, but you will not give the answer. You obviously have no idea of how much the entity is actually borrowing.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

I am sure Senator Joyce did not really want me to answer it, but—

Photo of Sue BoyceSue Boyce (Queensland, Liberal Party) Share this | | Hansard source

Sorry, are you making a point of order or speaking on the amendment?

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

No, I am speaking to—

The Temporary Chairman:

Thank you.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

I am just assisting the minister. The minister does not know the answer, but yes, Senator Joyce, quite clearly the taxpayers will pick up the bill—

Photo of Barnaby JoyceBarnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | | Hansard source

$27 billion in borrowing.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

$27 billion in borrowing. It was said that this was going to be a commercial operation, you might remember. They were going to make a profit. They were going to bring in private enterprise partners, you might recall. How many of them are rushing to invest in this? Of course they would not because they know it is a white elephant financially. Senator Joyce, I am sorry; you really were not asking me to answer it, but the minister seems incapable so I was just helping the minister with the right information.

8:36 pm

Photo of Scott LudlamScott Ludlam (WA, Australian Greens) Share this | | Hansard source

I feel as though Senator Birmingham started off very much on topic on this amendment, and we were speaking to an opposition proposal to prevent the kind of scope creep that has been discussed in this public debate for a good long period of time. Since then, we have just drifted completely off topic. This is really more or less nothing at all to do with the amendment that is before the chair.

I just indicate very briefly, for reasons I sketched out right at the opening of this debate, that we do not believe there is some vast conspiracy to turn the NBN into some Soviet-style retailer and completely move outside the mandate.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

That is what you want, isn’t it?

Photo of Scott LudlamScott Ludlam (WA, Australian Greens) Share this | | Hansard source

I find that highly objectionable. I do not actually think that that is afoot. What we do plan on introducing to these bills later in the debate is some kind of transparent review so that we actually know whether this is going on. The problem we have at the moment is that the government has proposed a hypothetical national broadband network, the opposition has attacked a hypothetical broadband network, the industry is circling around trying to work out how their business models are impacted by this hypothetical network, and nobody actually knows how this is going to play out in reality.

On this amendment, and I will refer to this a couple of times as we move through it, we are seeking to have some kind of transparent record of how this network is operating as it is built. Is there scope creep occurring? Are electricity utilities becoming covert retail service providers? Heaven forbid. Are the legitimate interests of the telco providers, who by and large still support the passage of this legislation, being trespassed upon? I do not think anybody in this chamber can say for certain how these issues will be resolved until we start to see the market perform. Predictions of how competition policy is going to impact on any given sector are notoriously unreliable. We believe the redrafting, as far as this clause is concerned anyway, that the government has proposed is about right in terms of the way the utilities will interact with the broadband network. I will state now for the record that the Greens will not be supporting this opposition amendment and we hope that we can get back vaguely on topic.

8:39 pm

Photo of Nick XenophonNick Xenophon (SA, Independent) Share this | | Hansard source

I know I beat Senator Joyce to the call, but that is a rare event when I do. Further to what Senator Ludlam has said, I indicate that I do not support the opposition’s amendments but I do share concerns about the issue of scope creep, as it has been described. I think the government has clarified what the intent of that scope will be. I do not want to put Senator Ludlam on the spot and he may want to take this on notice for later on in the debate: if it is apparent that the intent of the current framework of the bill when the market is operating is not working as intended, despite the best drafting possible, does that mean that the Australian Greens after 1 July will be seeking to revisit these issues as a matter of some urgency?

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

The horse has bolted.

Photo of Nick XenophonNick Xenophon (SA, Independent) Share this | | Hansard source

Not necessarily. The idea is that we can have it as rigorous as we can now, but if there are any unintended consequences with respect to this, will the Australian Greens undertake to revisit any unintended consequences with some urgency?

8:40 pm

Photo of Scott LudlamScott Ludlam (WA, Australian Greens) Share this | | Hansard source

If Senator Joyce is okay to yield, I will respond briefly because I think it is an entirely fair question, and maybe I did not spell it out in my comments a few moments ago. There are a number of live issues here. We believe the government, in consultation with industry and other parties, corporate and otherwise, over the last couple of years have put in quite a bit of work to try to work out how this market structure is actually going to function. This has never been done before in Australia. We have had a vertically integrated government owned incumbent and we have never had a wholesale only provider before. We have never tried to do this. I think it is somewhat unlike what has been tried elsewhere in the world; every experience is different.

I do not necessarily propose on 1 July to open up this package of bills again and try to fix things because I think it is going to take a little bit of time. Right now in early 2011 we have a handful of first release sites, we have a handful of proposed second release sites, but we do not actually have an NBN. We have a hypothetical national broadband network. The government says it is going to work one way and every stakeholder who has expressed a view thus far believes it is going to work in one way or another—but nobody actually knows. In this instance I can absolutely commit to Senator Xenophon and the rest of the chamber that if it is going sideways we will absolutely revisit it—

Photo of Nick XenophonNick Xenophon (SA, Independent) Share this | | Hansard source

What kind of timeframe?

Photo of Scott LudlamScott Ludlam (WA, Australian Greens) Share this | | Hansard source

I guess Senator Xenophon’s question goes to what Senator Macdonald said before: that the horses have bolted, and what is the point of fixing this after the market structure has blown out or people are being squeezed out. I think that is a difficult question to answer because the time lines will be different for different aspects of the bill. We will know whether freedom of information provisions are being abused within 12 months because if the commission is being pelted with malicious FOI requests or ones that are being knocked back one after another, we will know that straightaway.

I think there are several aspects of this, including issues like scope creep, and it will take some time to tell. If NBN Co. is starting to grow out of its box and move into a space that it clearly was not intended for, we are proposing rolling reviews on a fairly regular basis that will transparently tell us that that is happening and when it is happening. So I can commit that we are not proposing simply to set and forget. As part of his agreement with the government late last year, Senator Xenophon proposed the establishment of a joint standing committee that would oversee the rollout of this project—that would be its whole job; that is all it would do—and I feel that would be a very important vehicle in determining whether the reality was matching what was in the business plan, what was in the minister’s speech and what we were told this entity would do. I am not planning on going anywhere in the next little while. I hope these issues do not need to be revisited but if they do we will certainly be there to perform that function.

8:43 pm

Photo of Barnaby JoyceBarnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | | Hansard source

To my knowledge, you can correct me if I am wrong, the cost of the network is approximately $36 billion. The entity is borrowing $27 billion and will need to borrow a further $10 billion to roll out the network. That will be picked up by the taxpayer if it falls over. It will have disastrous effects on the Australian economy if that happens. You are building it as fibre to the home because you got sucked in. You are rolling it out in the cities and not in the country because you live in the seven per cent of the country and you have lost interest in the rest—it is purely hypothetical until we have to pick up the tab. The tab is coming; it is going to be massive and it is going to be a complete and utter disaster.

Question put:

That the amendment (Senator Birmingham’s) be agreed to.

8:52 pm

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

by leave—I move government amendments (17) and (18) on sheet BR280 together:

(17)  Clause 24, page 21 (line 18), after “Communications Minister”, insert “and the Finance Minister”.

(18)  Clause 24, page 22 (lines 9 and 10), omit subclause (4).

Subclause 24(1) of the companies bill provides that the communications minister may, in writing, set up the functional separation principles that apply in regard to the manner in which the functional separation of an NBN corporation is to be achieved and maintained. Amendment (17) inserts the words ‘and the finance minister’ after ‘communications minister’ in subclause 21(4) of the companies bill. The purpose of this amendment is simply to require both shareholder ministers to jointly make such a determination. This is consistent with clause 25 of the bill, which requires both ministers to make a functional separation requirements determination that reflects the joint shareholder responsibility of the ministers for NBN Co. Amendment (18) is a minor technical consequential change.

8:53 pm

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

As I noted in granting leave for these amendments to be moved together, these are very significant amendments, I say with tongue planted firmly in cheek. However, I have noticed during question time, divisions and other opportunities today the number of occasions on which the finance minister appears to have been providing guidance and counsel to the communications minister. I did not notice Senator Wong here in the last division, but I am sure she is monitoring proceedings very closely, disappointed though she would be. Indeed, perhaps if Senator Joyce wanted to get decent answers to the questions he was posing about government debt—

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Ask Penny!

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

indeed, perhaps he could ask Senator Wong. I think Senator Joyce would differ in your suggestion that Senator Wong would necessarily give answers to questions on government debt. She may give more informative or entertaining responses, Minister, than when you open up the laptop in question time, but I doubt that we would get greater fact in the answers than you provide. But the fact that these amendments specifically enhance the role of the finance minister in making decisions around the operation of the NBN and NBN corporations and put the finance minister, as the equal shareholder, on an equal footing with the communications minister does make sense. It particularly makes sense given the enormous levels of debt that this project involves and the role that the finance minister will have in helping to raise that debt and managing that debt in years to come.

8:56 pm

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

Senator Birmingham has indicated that we will be supporting these amendments. But I inquire of the minister: why is it appropriate that two ministers certify in relation to functional separation, as I read the clause? Why isn’t there some other perhaps more independent assessment—with respect to whoever may be the communications minister and finance minister of the time? It could be someone who, with respect, might have a little bit more of an understanding of whether the functional separation is appropriate or otherwise.

Photo of Sue BoyceSue Boyce (Queensland, Liberal Party) Share this | | Hansard source

Senator Conroy? Senator Macdonald asked a question. Do you wish to answer?

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

I am sorry, Senator Macdonald. I thought you were sitting down because you were tired.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

I was asking you a question, Minister. I was hoping you would give me an answer, but perhaps you did not hear the question. You were busy on the telephone. If you would like, I can repeat it.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

That would be good. I would be very grateful.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

This is going to be a long debate if we have to repeat every question because you are on the telephone.

Photo of Barnaby JoyceBarnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | | Hansard source

Maybe he doesn’t know the answer.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

No, I won’t go there, Senator Joyce. I was just saying that Senator Birmingham has indicated the opposition have no objection to adding the finance minister to the joint decision making on functional separation. But I just wonder why there is not some outside authority who determines functional separation rather than leaving it, with respect, to whoever might be the communication minister or finance minister at the time. It could be someone who might have a bit better of an idea of what it is all about.

8:58 pm

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

This is a debate that we have had publicly quite a bit. At first Telstra are involved in the process. Ultimately, if the ACCC is unhappy then the minister makes a final determination. All we have done there is add that the finance minister joins with the communications minister to make that final determination. The ACCC and the regulators will have a role in advising the joint ministers, as opposed to what currently happens where they advise only the one minister. So there is a role for the regulators involved in giving advice on this.

8:59 pm

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

As I say, that is adding another minister to the communication minister, regardless of who the individuals are who might hold those roles at a given time. In discussing this bill today, I raised this question. The ACCC, as you indicated, have a view on it, although it is a view that is apparently not shared by others. Why is it left effectively to two politicians to determine whether a company is functionally separated or not? It just seems to me to be inappropriate to be anointing ministers with those decisions. My question is: why wouldn’t some independent, knowledgeable person—I say this with respect for whoever the individuals might be—make the decision rather than leaving it effectively to two politicians?

9:01 pm

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

As I have indicated, it is two politicians, consistent with and in consultation with advice from regulators. I am not sure I could add much more than that. That was the process.

Question agreed to.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

I move opposition amendment (7) on sheet 7049 revised:

(7)    Page 36 (after line 4), after clause 41, insert:

41A  Restrictions on services higher than Layer 2

        (1)    An NBN corporation must not supply an eligible service that is higher than Layer 2 in the Open System Interconnection (OSI) Reference Model.

        (2)    The Minister may, by legislative instrument, exempt a specified eligible service from the operation of subsection (1).

        (3)    The Minister must not make or vary an instrument under subsection (2) unless the Minister is satisfied that the instrument complies with the following network layer principles:

             (a)    an NBN corporation should not supply services at a layer in the network hierarchy of the national broadband network that is higher than Layer 2 unless the relevant demand cannot be satisfied by means of the provision of a service at Layer 2;

             (b)    an NBN corporation should not supply services at a layer in the network hierarchy of the national broadband network other than the lowest technically feasible layer;

             (c)    an NBN corporation should not compete for the supply of services if competition for the supply of the same or equivalent services already occurs, or if there is a reasonable prospect that competition for the supply of the same or equivalent services will occur;

             (d)    the proposed exemption will assist to promote competition in downstream wholesale and retail markets.

        (4)    Before making or varying an instrument under subsection (2), the Minister must:

             (a)    cause to be published on the Department’s website a notice that:

                   (i)    sets out the draft instrument or variation; and

                  (ii)    gives the reasons why the Minister is satisfied that the instrument or variation complies with the network layer principles; and

                 (iii)    invites persons to make submissions to the Minister about the instrument or variation within 14 days after the notice is published; and

             (b)    ask the ACCC to give advice to the Minister, within 28 days after the publication of the notice, about the instrument or variation; and

             (c)    consider the advice and any submissions.

The amendment is related to placing a restriction on services higher than layer 2. It inserts after clause 41 in the bill a new clause, 41A, that outlines these restrictions. I would hope this is an amendment that the minister would welcome, because we have learnt from the debates we have had tonight and earlier this afternoon on the provision of wholesale only services that the minister seems to place almost the entire emphasis on the type of service that is being sold as being the preventative mechanism to stop NBN Co. from moving up the value chain and from engaging in some type of scope creep, or mission creep as it has been termed by many.

Given the minister has rejected out of hand, and unfortunately the chamber has rejected, amendments that the opposition sought to move that would have more clearly defined the wholesale only operations of NBN Co. and would have sought to ensure that NBN Co. was a wholesaler in the generally understood parlance of the term and generally accepted notion of the term ‘wholesaler’—that is, someone who takes a product and sells it to a retailer who onsells it to an end user—the government has left open numerous opportunities for NBN Co. to directly sell products to end users.

But the minister’s defence throughout this debate as to why he thinks it is acceptable in his definition of a wholesale only carrier for NBN Co. to sell direct to an end user has been based entirely on the type of service that is being provided. That type of service that he says is being provided is a layer 2 bitstream service. However, the bill does not provide for absolute clarity around that type of service. The bill does not provide a guarantee that NBN Co. will not engage in mission creep in who it sells to. It also has the potential to engage in mission creep in what it is selling. If we cannot close at least one of those doors, we have a real problem.

The minister has not allowed us to close the door in relation to who NBN Co. is selling to, so instead we seek the support of the chamber to close the door in relation to what it is selling. But, just as the minister made it clear in previous comments that he was not going to attempt to define for the chamber the technical specifications and differences between a layer 2 bitstream service and higher value services, I am not about to attempt to do that. Importantly, the amendment does not attempt to do that. The amendment makes it clear that in fact what it does is empower the minister through the capacity of regulatory power to put a restraint on NBN Co. from moving up the value chain in this regard. This is about empowering the minister to be able to do what he says this legislation is about and to be able to ensure that NBN Co. is providing what he has defined to be the wholesale only service, even though he wants to define ‘wholesale’ in terms of the product that is provided. That is fine; here is his opportunity to define wholesale in terms of the product that is provided. This amendment seeks to do that. In seeking to do that, it therefore again is an attempt by the opposition to keep the government to its word to the public, the industry, consumers and the parliament about what its mission for the NBN Co. is.

Why is it important to ensure that the product of NBN Co. has a limited offering? It is important because we want the minister to foster maximum competition at the retail end. We want to make sure that NBN Co. is not shutting out the potential for innovation and product development by retail service providers. We want to make sure that it is offering a flat, uniform service that is available to retail service providers for them to be able to innovate, value add and provide competitive outcomes.

This is an amendment designed, Minister, to empower you so that, in the operation of this act, ultimately you will be able to ensure that the mandate that you claim to be giving NBN Co. is adhered to by NBN Co., that it is the mandate that they operate by, without the potential need to come back to this chamber in future years and seek tighter amendments because you suddenly discover they have strayed outside their brief; they have strayed into areas that you wish they had not. I know that these are technical areas and issues, but equally I know that Senator Ludlam and others have looked at these issues. I hope they recognise that there is some value in providing the minister with this power and, in doing so, providing the minister with the capacity and opportunity to ensure that he and future ministers can keep NBN Co. to the mandate that you have told all of us today and many times prior you believe the government is giving them and wants them to operate within.

9:08 pm

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Although I think this is a very constructive and thoughtful amendment, I suggest there is an alternative way to do what you are seeking to do. I do not think it actually needs a legislative fix, which is why the government is not support this amendment. NBN Co.’s corporate plan and the government’s statement of expectations very clearly set out that NBN Co. will operate at layer 2 of the network stack, but for good reason the bill does not include that restriction. I appreciate the point you made that you have not sought to be too inflexible. A simple black-and-white layer 2 rule is inflexible and could be counterproductive in terms of the services provided to customers. This was even recognised by Telstra in its submission to the Senate committee that examined the bills.

Once the market situation is clearer and should such certainty be required, clause 41 of the bill provides for the minister to make licence conditions on which services NBN Co. must and must not supply. With suitable carve-outs, a restriction of the type contemplated by this amendment would most appropriately be dealt with by a carrier licence condition if the need arose. During the next four months the government will consider placing a condition on NBN Co.’s carrier licence to restrict it to layer 2. The coalition’s revisions to the amendment it moved in the house do not address these fundamental issues. The revisions to the amendment would allow the minister to exempt a specified eligible service by legislative instrument subject to public consultation. This function is already met by clause 41 of the bill. So I think it is a very constructive amendment, Senator Birmingham, and I do actually think this is an important issue for us to follow closely. As I have said, I have indicated the government will consider placing a condition on NBN Co.’s carriers licence.

As I did mention earlier in the debate, there is a capacity for a minor layer 3 function to be able to flash up on the screen that the individual consumer needs to go and get an RSP. So we need to actually have a minute amount of layer 3 capacity just to make the actual connection serviceable. I hope that genuinely can help with your concern and that perhaps you may not feel the need to even go ahead with this amendment given our indications, which are essentially that we can do it without this.

9:10 pm

Photo of Scott LudlamScott Ludlam (WA, Australian Greens) Share this | | Hansard source

I suspect Senator Birmingham was about to reply directly; I thought it might be useful to put the position of the Australian Greens on the record at this stage. I went back and had a quick look at the submission that Telstra put to the committee—the one that the minister referred to briefly in his contribution. Telstra wrote an amendment. I do not know whether it is exactly word for word what Senator Birmingham is proposing tonight; I would not suspect that other people are doing the coalition’s homework under any circumstances at all. But in the submission they put that accompanied their proposed amendment they did state:

Telstra acknowledges that in limited circumstances, it may be necessary for NBN Co to engage with certain functions at Layer 3 in order to provide Layer 2 services to RSPs.

So there is even an acknowledgment there from Telstra. They went on to sketch one carve-out. So if it is a satellite service, for example, perhaps Telstra proposed a specific amendment to catch that. My point of view is that this is perhaps one of the very rare instances in this NBN debate where the coalition and the government are not actually all that far apart and the intentions are more or less the same, and I will associate the Australian Greens with that. It does undermine the entire principle of NBN Co. if it is working its way up the stack or up the value chain. I do not think anybody is seriously contemplating that it should be able to do that, but for purely technical reasons it is not possible to legislate a black-and-white boundary between the two kinds of service that NBN Co. might choose to offer.

I am a bit concerned at the amendment that Senator Birmingham has proposed. There again there is another carve-out. There are ways dealing with exemptions. But to me it sounds like a recipe for terrible micromanagement by the minister if he has to sign off on every one of these variations to the instrument. To me it feels as though there is potentially unnecessary intervention there by the minister. So we will not be supporting this amendment, although we do support the intention and we believe that the bill as drafted probably does take care of that potential for scope creep vertically, if you will. Again, this is another issue—and I am probably going to reference this a few times during the evening and tomorrow—where we want that reported. We want some transparency around what kind of entities and how often NBN Co. has gone and done that. We think this is probably not particularly a deal breaker for the coalition, but we will be voting with the government on this occasion.

9:13 pm

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

As I understand it the minister’s response, he is saying, ‘You do not need this because we can include it as a carrier licence condition.’ I cannot quite understand Senator Ludlam’s reason for not supporting the coalition. This amendment states:

(2)           The Minister may, by legislative instrument, exempt a specified eligible service from the operation of subsection (1).

So we are acknowledging, as Senator Ludlam indicated, and as Telstra and others have said in their submissions, that there may need to be some additional services to layer 2. We are just saying that it should be the parliament that determines this, and that is why this amendment here puts it in. Senator Conroy is saying that the parliament does not need to do it because we can, if we want to, make it a carrier licence condition. That is right: you might do that, but then you might not decide to do that.

This amendment would involve the parliament agreeing that the NBN corporation cannot supply higher than layer 2, except by the minister by legislative instrument, which I assume would be disallowable in the chamber. So it gives the parliament and the people of Australia the ability to oversight this, rather than leaving it to the minister, as I understand his objection, saying, ‘You do not need to do that because we will include it, or we may include it, as a condition of the carrier licence being issued.’ But I repeat: they may not include it as a condition. I am surprised that the Greens and the Independents cannot allow the parliament to have oversight of this rather than just leaving it to the government to make a decision. The end result, as Senator Conroy rightly said, is the same if the government does impose that condition. But if they do not impose that condition then the restrictions on better than layer 2 are perhaps a bit looser. I would have hoped that the Greens and the Independents would have supported the parliament having that role. Being a legislative instrument—and being disallowable—does allow the parliament to have that oversight rather than leaving it to the possibility of the minister including it as a condition of the carrier licence.

9:16 pm

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

I thank the minister, Senator Ludlam and Senator Macdonald for their comments on this amendment. I particularly thank the minister for his comments on clause 41, the carrier licence conditions, and the expectations of the government in regard to developing and imposing some conditions in this space. The coalition welcomes that commitment, we note it, we bank it and we look forward to seeing it honoured. It is important in these debates for commitments like that to be noted and to be recorded so that all understand where they are going in this space.

I equally note Senator Ludlam’s approach—a little from column A, a little from column B—and I appreciate that he is attempting to work with the government and show some good faith to the government in regard to the development of this bill. I also appreciate his comment that he is hoping in the future to see some provisions that surround the disclosure of some of these arrangements and matters. If there are further amendments to come we certainly look forward to seeing them, getting to them and seeing just what shape and form they take. We hope that the Greens and the other crossbenchers, if they are working with the government on such disclosure amendments, ensure that they are rigorous, comprehensive and cover many of the concerns that we have discussed.

Notwithstanding the assurances of the minister and the comments of others, the opposition, as Senator Macdonald has indicated, does believe that our amendment still has value and that it is important. We believe that to be the case largely because we are approaching this, as we have with numerous other amendments, from a position of caution going into this debate. We think it is better, wiser and more sensible to ensure that risks are minimised, that doors are closed rather than left ajar and that we actually have a very tight framework in place for the operation of  NBN Co. from day one. If the government then needs to open the door a little to create some exemptions and to find the space to have a bit of extra flexibility, we can do that. But, to start with, the parliament should be ensuring that this entity is living by the principles that the government has set out and works within the mandate that the government has stated time and time again. We believe that when we look at this there is a real concern that NBN Co. could move up the value chain and could start to operate outside of that mandate. We trust the government will act to ensure that does not occur, in the way that Senator Conroy has outlined, but we would rather not have to finish this debate operating on trust. We would rather conclude this debate operating on certainty. We think the industry, the sector and consumers all deserve to be able to conclude this debate operating on a level of certainty as well, rather than on just a level of trust.

That is why we think that the amendments we have proposed that provide for a clearer definition, but equally provide the minister with a capacity by means of legislative instrument to have some exemptions, give the right balance between security and confidence. They also ensure that NBN Co. will not move up the value chain and engage in mission creep of any sort whilst providing the flexibility that may be necessary for the minister, the government and NBN Co. to operate in a sensible way into the future. This is probably going to be a point of principle on which we differ, but it is fundamental to the approach the opposition has taken. It is consistent through most of the amendments that we have moved to date and it is consistent in the fact that we are arguing, in so many of these instances, for an approach where we expect NBN Co. to be operating very firmly within its mandate. This legislation is the means to define that mandate and to curtail that mandate. We should not be leaving wriggle room, we should not be leaving room for expansion and we should not be leaving room for doubt in the future. We should be creating certainty tonight and tomorrow and however long it takes to pass these bills. We should be ensuring they leave a certain framework and environment, and not a framework that allows NBN Co. to expand its scope or mission into the future.

That is why I would again implore the chamber to look favourably upon these amendments. As the minister has indicated, and I welcome his indication, they are offered in a constructive way. We have taken on board concerns from the debate in the House of Representatives and made sure that more flexible amendments are put forward in this place. We think that it is a stronger, better and more secure way for the parliament to ensure it gets what the minister says he is going to give us. This is so we do not wake up in two, three, four, five or 10 years time to find that we have a new government owned monopoly that is starting to sell, or has been selling, in markets that none of us thought or wanted to see happen, and as a result we have a whole new problem in the telco sector.

Question put:

That the amendment (Senator Birmingham’s) be agreed to.

9:30 pm

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

I move government amendment (19) on sheet BR280:

Clause 48, page 39 (line 31), omit “30 June 2018”, substitute “31 December 2020”.

This amendment alters the date by which the NBN must be declared by the communications minister to be built and fully operational under subclause 48(1). Clause 48 of the National Broadband Network Companies Bill 2010 provides that the communications minister must declare that the NBN should be treated as built and fully operational during the period starting at the commencement of the section and ending at 30 June 2018. Amendment (19) changes this end date to 31 December 2020 to make the time frame consistent with the corporate plan of NBN Co. Ltd, dated 15 December 2010, which indicates that the rollout of the NBN will be complete by 31 December 2020.

9:31 pm

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

I note this change of date in the bill by the minister, which changes the period of the initial declaration by the minister from an end date of 30 June 2018 to an end date of 31 December 2020. While I must confess I had colleagues chatting around me at the time and did not hear all of the minister’s brief explanation, I am curious as to whether the minister could inform the house as to what has precipitated this 18-month extension?

9:32 pm

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

As I mentioned—and I appreciate that you were also consulting colleagues and that there were some very noisy people around you, Senator Birmingham—this is consistent with the corporate plan. The build has expanded, because we undertook, when we went from 90 per cent to 93 per cent, to incorporate an extra three per cent of homes. We also took on board greenfields, which meant that we were picking up a million-odd extra homes as part of those two decisions. We have well over a million homes extra in the 93 per cent and the greenfields, and that is what is behind this change. This was announced in December last year.

9:33 pm

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

That last addition by the minister may provide at least some modicum of clarity, because I was scratching my head at the explanation, thinking that I have been dealing with 93 per cent figures for quite some period of time and that we had an expansion of greenfields for a period of time and that none of that appeared to be terribly new. It still seems odd, Minister, that this was not perhaps fixed up through an amendment in the other place before it came here, but I shall take your word for it that this has been known for some period of time and is of little consequence when compared to the more substantive amendments related to Commonwealth ownership provisions that the opposition will be moving in a moment.

9:34 pm

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

We announced well before the election that we would move from 90 per cent to 93 per cent. Greenfields was a decision made much later in the course of the year. The corporate plan was then released publicly towards the end of December. This updates the legislation based on the corporate plan. There was a sequence of events and this legislation is just catching up with those.

Photo of Mary FisherMary Fisher (SA, Liberal Party) Share this | | Hansard source

Minister, you are proposing to extend by a year and a half—from June 2018 to December 2020—what was before this extension essentially a 10-year plan, as I understand it. You are extending a 10-year plan to an 11½-year plan.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

No.

Photo of Mary FisherMary Fisher (SA, Liberal Party) Share this | | Hansard source

Sorry; my apologies. I got that wrong. You are extending an eight-year plan. I sorted that out without even hearing you, Minister, through the hubbub around you. Okay, so you are extending an eight-year plan to a 9½-year plan. That is an extra year and a half out of eight years, and 1.5 over eight does not make an extra three per cent. You are saying that you need an extra year and a half to cope with an additional three per cent—to go from 90 per cent to 93 per cent. That does not really add up for me, even taking into account the greenfield sites. If that is the rationale—

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Senator Conroy interjecting

Photo of Michael ForshawMichael Forshaw (NSW, Australian Labor Party) Share this | | Hansard source

Minister, please.

Photo of Mary FisherMary Fisher (SA, Liberal Party) Share this | | Hansard source

Is there a point of order, Chair?

The Temporary Chairman:

No, you are on your feet and you are still speaking. While Senator Fisher is on her feet and speaking, unless someone wants to raise a point of order, other senators should not rise. I am trying to make sure that you get to finish your questions or comment, Senator Fisher, and then the minister can make his reply.

Photo of Mary FisherMary Fisher (SA, Liberal Party) Share this | | Hansard source

Thank you, Chair. Your former union days serve you well.

The Temporary Chairman:

Senator, just stick to what you want to ask and do not make any reflections upon the chair, past or present.

Photo of Mary FisherMary Fisher (SA, Liberal Party) Share this | | Hansard source

An appropriate point, Chair. Thank you. Minister, if you are seriously arguing that, together with the greenfields sites, it is the government’s extended promise in increasing coverage from 90 per cent of homes to 93 per cent of homes—an additional three per cent—that might be consistent with an additional three per cent in terms of the time frame. By my probably other than perfect and crude computations, one and a half years out of eight years is something closer to 20 per cent than three per cent. Can you explain how in fact there is almost a seven-fold increase rather than a pure or crude, if I can use the word, three per cent increase?

9:37 pm

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Just very quickly: no, Senator Fisher—through you, Mr Temporary Chairman—the maths you have done is accurate but the greenfields and the three per cent are what lead to the extra time. It is a combination of both of those things, and they are a much larger number. We have changed the division that you have done.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

In dealing with this amendment I just want to make the point that, had the OPEL contract been honoured, Australia would by now have a national fast broadband network. What this amendment does is talk about when the minister may declare that the network is built and fully operational. Whether is it is 2018 or 2020 I guess matters little. What it does highlight to the people of Australia is that the minister will have 9½ years to declare that the whole thing is fully operational. The minister may well get up and say, ‘That is the outside date; we could declare this in two year’s time’—well, you could, but if you had any thought that that might be the case, why are you extending this period by another 18 months with this amendment?

You talk about greenfields sites. This just demonstrates to me that not even the minister—who I have to say has been consistently optimistic; nobody else knows why—believes that the whole network will eventually be declared to be built and fully operational. But even the minister is not prepared to put two bob on the fact that it will be built and fully operational before 2020 if you go by this amendment. It is has been like this from day one. The minister first said, ‘Look we can build this for $4.7 billion’—$4.7 billion! It is now—

Photo of Mary FisherMary Fisher (SA, Liberal Party) Share this | | Hansard source

Multiply by 10!

9:40 pm

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

Add everything together and it is up around $55 billion—$4.7 billion to $55 billion. To the people of Australia who might be listening to this: you have to pay that! Someone has to pay this $55 billion. The minister originally said it would be built quickly. Even when this bill was put down he said, ‘At the very latest it will be 30 June 2018, and everyone will have it.’ Now, with this amendment that the government is putting forward, we are extending it by another 18 months, to 31 December 2020. So not even the minister is confident that this is going to be built and fully operational any time before 31 December 2020.

My only lament, again, is that we lost the 2007 election fairly and squarely—not the 2010 election but the 2007; that was the decision of the people—and there was a legally binding contract in place, the OPEL contract, and this government came in and just wiped it. I said to those involved in the OPEL contract, ‘Why didn’t you take them on?’ They said, ‘You know, you can’t fight with the government’—particularly one as focused as this one; I was going to say narrow minded, but I won’t—so they just rolled over. But had that gone through, everyone in Australia would have had that fast broadband network by today. By this amendment we are pushing back by another 18 months, to 31 December 2020, the time up until which the minister has the opportunity of declaring it built and fully operational.

If the minister has a response, I will be happy to hear it. But I suspect it is probably not a contribution that the minister could properly respond to. It is the fact of the matter; it is their legislation. They said it will not be finished until June 2018, but we are not even confident about that now, so we are going to blow it out to 31 December 2020. I think that is a very telling amendment by the government which just demonstrates clearly what this whole fiasco is about.

9:43 pm

Photo of Mary FisherMary Fisher (SA, Liberal Party) Share this | | Hansard source

If I might ask the minister, whether, in the process of answering Senator Macdonald’s question, he could also detail—

Photo of Michael ForshawMichael Forshaw (NSW, Australian Labor Party) Share this | | Hansard source

Order! Senator Fisher, excuse me, but there is a little bit too much audible conversation on my right.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

Yeah, throw them out!

The Temporary Chairman:

If you want to stay here a lot longer, that is where you will end up on that one!

Photo of Mary FisherMary Fisher (SA, Liberal Party) Share this | | Hansard source

If the minister could, in answering Senator Macdonald’s question, also, in passing, detail for me whether he is saying, in addition to the three per cent which is warranted from the government’s increased coverage promise from 90 to 93 per cent of Australian homes, that the other part of the computation relates to greenfields sites, and that the three per cent plus the greenfields sites—if I understand the minister correctly—justifies the increase in the quantum of years of close to 20 per cent, that being an additional year and a half over eight years. Could the minister please detail the numbers that he has used to justify the greenfields sites, adding to the three per cent to come up with an additional year and a half, so that I can help my homespun maths?

9:44 pm

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

I do not know that I can add much more to assist your homespun maths, Senator Fisher. The estimate is that to achieve all of these things it will need another year and a half given the volume of the extra work that has been undertaken due to a string of new policy decisions that were made after the original eight-year date. The eight years then bounced up to whatever year it was and then we have amended it to incorporate the extra year and a half. But we announced this last December.

9:45 pm

Photo of Mary FisherMary Fisher (SA, Liberal Party) Share this | | Hansard source

Minister, what is the detail of the estimates, what is the detail of the new work and how does that underpin the new policy decision. Give us the maths, please.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

I can get an exact calculation of what the three per cent is for you, Senator Fisher, but I do not have it handy. I am not sure that anything I say could help you with your homespun maths.

9:46 pm

Photo of Mary FisherMary Fisher (SA, Liberal Party) Share this | | Hansard source

For the purposes of tonight let us accept the three per cent, but it is the extent to which you are saying greenfields justifies the beyond three per cent addition of years to take it up to an extra one and a half years. How do you do that maths? You must have had some way to come up with other than wind.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Given how you are coming up with yours, Senator Fisher, I would agree with you that I have not done it that way. I can seek some information from NBN Co. on that for you and hopefully get back to you during the course of the debate.

Question agreed to.

9:47 pm

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

by leave—I move opposition amendments (1) to (4), (8), (10), (12), (14) and (15) on sheet 7049 revised:

(3)    Clause 3, page 3 (lines 8 to 22), omit paragraph (1)(b).

(4)    Clause 4, page 5 (lines 9 to 26), omit the fourth and fifth dot points.

(5)    Clause 5, page 7 (line 2), omit the definition of Commonwealth ownership provisions.

(6)    Clause 5, page 7 (lines 14 to 16), omit the definitions of declared pre-termination period and declared sale deferral period.

(7)    Clause 43, page 37 (lines 5 to 22), omit the first and second dot points.

(8)    Heading to Subdivision B, page 39 (lines 6 and 7), omit the heading, substitute:

Subdivision B—Productivity Commission Inquiry

(9)    Clause 49, page 41 (lines 19 to 22), omit subclause (1), substitute:

        (1)    This section applies if it is proposed to enter into an NBN Co sale scheme and there has not been a previous reference to the Productivity Commission under this section.

(10)  Clause 52, page 46 (lines 10 and 11), omit “unless the Commonwealth ownership provisions have ceased to have effect”, substitute “until 15 sitting days after the Parliamentary Joint Committee on the Ownership of NBN Co has reported to both Houses of the Parliament”.

(11)  Clause 53, page 46 (lines 16 and 17), omit “unless the Commonwealth ownership provisions have ceased to have effect under section 51”, substitute “until the completion of 15 sitting days after the Parliamentary Joint Committee on the Ownership of NBN Co has reported to both Houses of the Parliament, under paragraph 3(1)(b) of Schedule 2, on the Committee’s examination of the report of the Productivity Commission inquiry mentioned in section 49”.

I seek the guidance of the chair as to whether I should move amendments (9), (11) and (13) noting that they will need to be put separately.

Photo of Michael ForshawMichael Forshaw (NSW, Australian Labor Party) Share this | | Hansard source

That will just be a separate question that is related to the outcome of the first set of amendments we referred to.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

This package of amendments—and I will not burden the chamber with the detail of each of them—relate very much to the fundamental issue of Commonwealth ownership of the NBN Co. I see Senator Ludlum already with a wry smile on his face and a little shake of the head in my direction. I know that these amendments pain Senator Ludlum and I know in fact that these provisions in the bill even pain Senator Ludlum to a degree, because it would no doubt be his preference if instead there were a simple, clear statement of prohibition on the sale of NBN Co. That is fine. I respect anybody who comes into this place who has a view and puts that view with passion based on their principles and philosophical belief, no matter how greatly I may differ from them in regard to that.

We have here a deal done by the government with Senator Ludlum and the Greens, and good on them for getting the concessions that they wanted in this legislation. But unfortunately for Australians and for the operation of the telco industry in Australia and for Australian taxpayers in particular, these amendments that Senator Ludlum has so carefully helped to craft pretty much seem to make it almost impossible for the Commonwealth to ever sell the NBN. I know that that is something that Senator Ludlum will welcome and be grateful for, if that is the case, but the opposition does not welcome it. We do not think that through this bill we should be seeking to tie the hands of future governments. We do not think that it is reasonable to present a situation where, essentially, the NBN cannot be sold. In particular we have, as my colleagues highlighted in the debate on the previous amendment, this question around whether or not the NBN can be sold until it is complete. The question that remains over whether and what it is to say that the NBN is complete. We have a series of definitions that are attempted to be given here, but many people are not unreasonably sceptical of whether this project will ever reach a point at which it can be declared to be complete. It is a project that will take many, many years and there will be several different elections in that time—we hope, on our side of the fence, just one change of government in that time—and we will see many changes to government policy and many different approaches in years to come, yet we have this very prescriptive process put in place here. We do not think it is appropriate to tie the hands of future governments in this way. We think there is a chance that the future capital investment that NBN Co. will need may ultimately not be forthcoming and that the direction of this project, as is so often the case with this government, or with future governments, could change. So we seek to delete these provisions that tie the Commonwealth’s hands. We seek to eliminate the opportunity for the government hand-in-hand with the Greens and at the instigation of the Greens to try to make this very much a permanent government monopoly. We do not think that is the right thing for Australia, especially not for Australia’s taxpayers.

I do note, and we will come to aspects of this debate, that part of the requirements for the sale as well as a declaration that it be complete is to have a Productivity Commission inquiry into the potential sale of the NBN. In principle, that is not something that the opposition would object to. Of course, one of our qualms about this is that we have been calling for a Productivity Commission inquiry into the building of the NBN and calling for it consistently for a long, long period of time.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

Not to mention a cost-benefit analysis.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

As Senator Macdonald rightly points out, not to mention a cost-benefit analysis as well. Indeed, we would hope that the Productivity Commission inquiry would undertake a thorough and rigorous cost-benefit analysis into the building of this NBN. There are amendments that I will come to later to once again try to encourage that. But we do note the strange hypocrisy whereby the government and the Greens think it is reasonable to come into this process of debating these bills and say that in relation to terminating the NBN as a Commonwealth entity, in relation to privatising it, there is a good case at that point to have a Productivity Commission inquiry. Yet the government—and the Greens, whenever they have been given the opportunity to vote on this matter—have consistently argued that there not be a Productivity Commission inquiry into actually spending billions upon billions of taxpayer dollars building this thing. That is the question. It is very strange that the government would want to have a Productivity Commission inquiry at one end of this process but not have one at the other end.

We think that future governments—future parliaments—will of course set the terms on which NBN Co. may ultimately be sold. That is not an unreasonable thing. That is what we would expect to ultimately happen in the many, many years ahead, potentially, if indeed we were to wait until this thing were complete. But there is no reason to leave these provisions, proscriptive as they are, in place—no reason at all, aside from the government’s desire to have a deal that stands in place with the Greens. This is a government desperately conceding a few points that will hamper future governments so that it can get its way today with the Greens. It is not acceptable, and that is why we seek to remove these various provisions and provide the amendments I have moved.

Photo of George BrandisGeorge Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | | Hansard source

Mr Temporary Chairman, I draw your attention to the state of the chamber.

(Quorum formed)

9:58 pm

Photo of Scott LudlamScott Ludlam (WA, Australian Greens) Share this | | Hansard source

In the 30 seconds remaining before we reconvene tomorrow, I suppose I do not have time to fully express the depth of my feelings about the points Senator Birmingham put on the record. For the record’s sake, I will say that we will be opposing these coalition amendments. I think they are half-baked, counterproductive and remarkably cynical and are probably just to express a deeply felt intention not to learn anything at all from the privatisation of Telstra. Anyway, I quite look forward to resuming my remarks when the building is a bit more awake in the morning.

9:59 pm

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Perhaps I could indicate that I called, prior to the sale of Telstra—as was an agreed outcome with all the national competition reforms—for a Productivity Commission inquiry prior to the sale of an asset. That was actually something the Howard government refused to do, which is why I have always enjoyed the demands from those opposite that the Productivity Commission be involved in the NBN debate. They specifically refused to comply.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

You asked me for that.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

I asked for it prior to the sale, so I am quite comfortable supporting the position on the agreement.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

Why did you change your position then?

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

I have a completely considered position: prior to sale, there should have been an inquiry. But you were a complete hypocrite on this.

Progress reported.

Sitting suspended from 10.00 pm to 9.00 am Friday 25 March