Carol Brown (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

As I rise to make a contribution to this debate I am very pleased to once again have an opportunity to put on record my support of the National Broadband Network. I am proud to be part of a government that recognises the importance of bringing Australia's broadband services into the 21st century. As we move towards a digital economy we need to remain competitive in our region, and this is why we are delivering the NBN. No matter what the location, the NBN will ensure high-speed broadband to everywhere in Australia. All homes, schools and businesses will be included.

Fibre-to-the-premises technology, with speeds of one gigabit per second, will connect 93 per cent of premises. Satellite and wireless technology will service the rest of Australia and provide faster and affordable broadband. To put it in layman's terms, what we are talking about is broadband speed a thousand times faster than the speed that many people currently receive. Rural and regional communities, such as my home state of Tasmania, have already started to benefit from the NBN and will continue to prosper and thrive with the assistance of high-speed broadband. The NBN is the single largest infrastructure investment made by an Australian government. It will deliver a once-in-a-generation improvement of our telecommunications infrastructure and it will benefit all Australians. It is cutting-edge technology that will transform our economy and create new ways of connecting with each other and the world.

There have been Australian and international studies that have shown broadband to be one of the strongest ways to increase social and economic development. The Connecting Communities review by a global telecommunications solutions provider looked at the benefits of broadband in the United Kingdom and what this means for Australia. The findings were that high-speed broadband is directly related to strong regional areas and attracting and retaining employees, and also contributes to a low-carbon future. It can be summed up as being 'transformational for Australia'.

We know that, as a significant nation building project, the NBN will end up paying for itself. The advantages it will provide are incredibly widespread and touch on every facet of our lives, including health, education and business. At a grassroots level it will mean that local businesses can develop and get in touch with new markets and that people will be able to access health care without having to leave their homes.

I would like to share a story from my home state of Tasmania, which I know you will be interested in, Mr Deputy President, that highlights the benefits of the NBN. It involves a sign-writing business in Midway Point, which was one of the three towns in the initial rollout. Midway Point is in the electorate of Lyons and is represented by Dick Adams, who is a strong supporter of the NBN and a great advocate for his community. This business has seen an increase in its capacity to attract customers thanks to the NBN. As the broadband speed is faster and more reliable, large artwork files can now be sent and retrieved in a matter of seconds, which is a dramatic improvement and has increased the number of clients wanting to do business with it. The NBN means that distance is no longer an impediment to running a successful business, which is crucial for businesses in regional and rural Australia. This is just one example of the many success stories that highlight how the NBN is changing lives and creating opportunities.

Midway Point is joined by Scottsdale and Smithton as the towns where NBN services are currently available in Tasmania, and work has either commenced or will com­mence in 12 months on a number of other locations. These locations are George Town, Deloraine, Triabunna, Sorell, Somerset, St Helens, Launceston, South Launceston, Bellerive, Hobart, Kingston and Claremont. In Tasmania it is estimated that within 12 months 15,000 homes will have access to the NBN, with work planned to start on an extra 76,000 in the coming year.

Despite hearing stories about the very positive impact the NBN is having on people out there in the community, those opposite are hell bent on preventing Australians from having a world-class, affordable broadband service. If they were serious about ensuring Australians are able to access world-class telecommunications infrastructure, they would support the NBN rollout, as it is supported throughout the community.

This government wants everyone to have access to high-speed broadband, no matter where they live, and we are committed to delivering it for all Australians. As we continue this mission, the Telecom­munications Universal Service Management Agency Bill 2011, the Telecommunications Legislation Amendment (Universal Service Reform) Bill 2011 and the Telecom­munications (Industry Levy) Bill 2011 are part of a package of legislation aimed at enabling the continuity of key telecom­munications safeguards. These bills are part of the next stage in the government's reform agenda for the telecommunications industry. The bills seek to reform the arrangements for the delivery of universal service and public policy outcomes. This will aid the evolution to the NBN and a more competitive telecommunications market.

Breaking this package down, the Telecommunications Universal Service Management Agency Bill provides the governance, funding and accountability framework for this new statutory agency. It will ensure that universal service outcomes and other important services for the community will still be delivered in a new competitive circumstance. The new entity will guarantee that all Australians have sufficient access to a standard telephone service and payphones, guarantee the continuing delivery of the Emergency Call Service and the National Relay Service, and guarantee that appropriate safeguards are in place to support voice-only customers transferring to an NBN fibre service as Telstra's copper network is decommissioned. It will also ensure that technological solutions will be developed to support the continuity of public interest services such as public alarm systems and traffic lights. These are vital ways to ensure the continuity of basic services to Australians in light of the changes to the telecommunications industry that will take place with the rollout of the NBN, including the gradual decom­missioning of Telstra's copper customer access network. The government is committed to reducing the disruption for industry and the wider community by keeping these basic safeguards.

Telstra will be required to keep its copper network to deliver voice services outside NBN fibre areas and will also be the retailer of last resort for voice-only services over the NBN fibre network. As well as providing accessible basic services, the legislation will also ensure that the new agency operates in an accountable and transparent manner. It will be required to keep a publicly available register with key terms and services to be provided under all contracts and grants, as well to as prepare annual reports and corporate plans. There will be a review before 1 January 2018 to consider how effective the agency has been. The estimated total cost of the agency is $340 million per year for its first two years and around $330 million per year following that. To help with these costs the government is contributing at least $50 million in funding per year for the first two financial years and $100 million per year after that.

The Telecommunications Legislation Amendment (Universal Service Reform) Bill chiefly amends telecommunications legislation to assist the new arrangements for delivery of universal service outcomes within the telecommunications sector and to facilitate the establishment of the new agency and the changeover to new levy arrangements. An important part of the bill is the proposal of a robust framework for contracting with service providers for the delivery of universal service outcomes and related public interest services in the telecommunications sector. The Telecom­munications (Industry Levy) Bill is a bill that ensures the government can raise the consolidated industry levy. This package of legislation further progresses the work the government is doing to reform the telecom­munications industry and continue with the rollout of the NBN. The government is committed to giving all Australians access to affordable and high-speed broadband services. The NBN is critical infrastructure that will connect Australians with each other and the world, and I commend the bills to the Senate.

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

I rise to speak on the Telecommunications Universal Service Management Agency Bill 2011 and related bills. But, with the indulgence of the Senate, I will just touch on a couple of other matters initially. Firstly, because I may not have a chance on the record at any other time today to say this, I note that today, being the last day of February, is the culmination of Ovarian Cancer Awareness Month. Knowing that Senator Conroy's office would be monitoring this, as this is his legislation, I note the participation of Senator Conroy and in particular his wife, Paula, in the ovarian cancer breakfast held in Parliament House this morning, and I note in this place, appropriately, the memories that many have of my predecessor in this Senate seat and your predecessor, Mr Deputy President, as Liberal Party whip, Senator Jeannie Ferris, who did so much to raise awareness of ovarian cancer during her battle, which she ultimately succumbed to, with ovarian cancer.

This legislation has come on a little earlier than anticipated because of the filibustering tactics the Greens are employing on the radioactive waste legislation—a shameful tactic from the Greens, who do not seem to recognise the importance to Australia of ensuring that we have a central repository for radioactive waste in this country. I note that having brought this debate on, though, this has moved out into an area of legislation where there is some broad agreement of principle and some concern over detail.

The universal service obligation is an important tenet and feature of Australia's telecommunications policy. It requires that basic telecommunications services, including home telephone services, business telephone services and payphones, be accessible to all Australians in a fair and equitable basis at an affordable price. The universal service obligation is especially important for telecommunications consumers in rural and regional Australia, as it ensures that basic telco services are available where it may not otherwise be economically viable for telecommunications companies to provide them. Without this subsidy, the tyranny of distance would be all the greater for many rural Australians who may not be able to afford basic services. For this reason, the coalition strongly support the USO. We have always done so, and we continue to do so. It is consistent with our overall support for communications services of the highest standard and order in rural and regional Australia.

Our support has not just been for the USO. If we look at what we had in place at the end of the Howard government, we see that we had in place a number of measures that were designed to provide a better standard and to continually raise the standard and the bar of telco services for rural and regional Australians. I think immediately of the regional telecommunications fund—$2 billion that had been set aside to be able to provide a constant source of funding to upgrade services to rural and regional Australians. Sadly, that fund is no more because, like all available piggy banks under this government, it has been raided and spent. It was spent in this case on the National Broadband Network, which thus far is not exactly rolling out vast new services in rural and regional Australia at a rapid pace.

Indeed, if we compare the NBN and where it is up to in its provision of, especially, wireless services to regional communities with what the coalition had in place at the end of the Howard government, we will see that we were on track to deliver wireless services to regional communities within a few years. They would have already had services under the OPEL contract that would have provided for better regional telecommunications services today than they currently have. That would have been delivered under a contract signed by the previous government and funded by the previous government and that would already have been operational today. Instead, we continue to hear promises but see delays from the government as it rolls out the NBN. We hear promises but there are delays and therefore consumers in rural and regional Australia are still waiting to see the genuine benefits of this claimed NBN.

Telstra currently delivers the universal service obligation. Being a former monopoly provider and the owner of much of Australia's fixed line telecommunications infrastructure, Telstra's role in this is understandable. Current regulation requires Telstra to provide basic services at an equitable rate. To compensate Telstra for this obligation, all telco carriers are levied, with the majority of funds raised provided to Telstra to offset the cost of their undertakings in this area. Presently the levy raised is approximately $145 million. This legislation also affects the provision of the Emergency Call Service and the National Relay Service. The National Relay Service delivers voice-equivalent services to Australians with speech or hearing impairments through voice-to-text and text-to-voice technologies. The NRS, I understand, costs around $17 million under its current contract provider.

Telstra has argued for some time that the fees levied from service providers which it receives to compensate it for the cost it incurs in relation to the provision of the USO are insufficient. Unsurprisingly, Telstra's retail competitors, who are levy payers, have opposed any increase to the levy. This legislation provides ultimately a convenient escape from this argument between companies. The government commissioned the Castalia report, an independent expert report, to consider this matter. It found that the cost of providing the USO combined with the cost of the NRS and provision of public payphones amounted to at least $250 million and up to $300 million annually. While this will in theory end the argument between Telstra and other retail service providers, it opens up a new potential front for argument between retail telco service providers and the government and in particular the new Telecommunications Universal Service Management Agency, TUSMA. We have seen that already with many of the other retail service providers in the telco space questioning the validity of the Castalia report and the costs and doubting whether the sums involved are indeed appropriate. While the current USO was appropriate while Telstra was the owner and operator of Australia's fixed line telecommunications network, with the changed environment foreshadowed by the government through their NBN and of course the planned ripping out of the copper network right around Australia—if, indeed, this ever does occur given the appallingly slow or extravagantly expensive rollout of the NBN to date—it makes sense to plan to alter the arrangements of the USO to fit with the government's overall policy direction. This bill is before us largely because Labor is seeking to create the NBN—a massive government owned communications infrastructure monopoly that will stifle competition and innovation in Australia's telecommunications sector, but that should not be any surprise to anybody given that private ownership, efficiency, competition and business innovation are anathema to what this government stands for. Nonetheless, as the government intends to limit facilities based competition by ripping copper line from the ground and implementing its new regulatory regime with a monopoly fibre provider, we must address the provision of the important services contained in the USO.

On the coalition side we expect transparency and competition in government tenders for services. The question here is whether the processes set out through this legislation and already undertaken by the government as part of the new TUSMA arrangement actually meet with those expectations of the coalition. This process sees the costs of services revealed and openly and transparently funded by both taxpayers and the retail service providers—not to mention it removes a somewhat onerous regulatory requirement from a private business: Telstra. This is all something that our party welcomes. If only the NBN as a whole was as transparent and up-front about the costs, subsidies and competitive impacts of this unprecedented government intervention.

While I welcome the increased transparency of the amount involved and the replacement of the USO and NRS levies with a single levy and the funding arrangements for it, there is of course, as always with Labor, a catch. As we have seen so openly this week, there is always more than meets the eye. Whenever Labor seeks to simplify, the outcome is always more complex. Whenever Labor seeks to cut costs, the outcome is always more expensive. Whenever Labor seeks to reduce regulation, the outcome is always a new bureaucracy. Labor talks of efficient government and transparent government, but it is of course addicted to bloated, big, inefficient government.

These bills sadly provide for more of the same in some ways. These bills create yet another new bureaucracy. We all know Labor has never seen a bureaucracy that it did not like. This time it is the Telecom­munications Universal Service Management Agency, or TUSMA—a mouthful if you do not take the acronym. TUSMA will be created to do what the Australian Communications and Media Authority already does in part—that is, assume responsibility for the USO. I am not sure why the minister lacked confidence in the ACMA to administer all of the operation of the USO, and perhaps he can explain this for us when he sums up. Indeed, perhaps he needs some extra positions to appoint some of his Labor mates to. Maybe we will even see Senator Arbib bobbing up and helping with the USO in his next life. As I understand it, the ACMA will of course continue to collect the industry levy, which will fund the USO. I understand that ACMA has staff of around 40 engaged in the responsibility for the USO and associated aspects. TUSMA will oversee the new regime and it will come at an administrative cost of around $5 million.

I mentioned earlier that the coalition, by our very nature, expect open and transparent tenders for government services, so it is therefore disappointing that, far from taking the opportunity to put the USO and NRS services out to a competitive, open tender, the government have entered into a 20-year contract with Telstra. We all know that Telstra's cooperation and acquiescence to the NBN model is essential for the success of the NBN model. Obviously in this case we see that, even with the USO contract, it does appear to have the image, as suggested by many, of being wrapped up as a potential little sweetener valued at around $2.7 billion over 10 years for Telstra.

One of the TUSMA jobs is to enter into contracts for the delivery of the USO. That begs the question that, if one of their core jobs is to enter into contracts for delivery of the USO but the government has already agreed to the first 20 years worth of contracts, perhaps the new bureaucratic agency is going to have a rather quiet first 20 years. Indeed, the Department of Broadband, Communications and the Digital Economy said as much during the inquiry into these bills. Departmental deputy secretary Mr Quinlivan stated:

These measures were agreed to support the government's broader package of telecom­munications reforms, implementation of the NBN and, most importantly in this context, the structural separation of Telstra.

We see an admission there from the department that this is not a pure approach about simply the provision of universal services to rural and regional Australians; this of course is all embedded in the government's approach to the implemen­tation of the NBN and the structural of separation of Telstra. Yesterday, the ACCC approved a much revised structural separa­tion undertaking between the government and Telstra—a structural separation undertaking that at least now does not include some of the remarkable provisions that NBN Co. and the government had sought to impose upon Telstra in the first place. Those conditions would have seen them limited to the manner in which they conducted competition for their non-fixed line businesses and non-fibre businesses and would have seen them not able to effectively promote their wireless services against NBN Co.'s monopoly services, because so scared is the government of any semblance of competition against its NBN model. I do not begrudge Telstra receiving this contract. It probably is at the current point in time the best placed of Australia's service providers to deliver it, given, of course, that it continues to be with the copper line being the product provided to the overwhelming majority of Australian premises. It is the owner of that service and the one best placed to ensure its maintenance and continuance into the future. We have the strange situation under the NBN model and under this proposal that the copper line is going to have to be maintained in certain parts of Australia for an indefinite period of time. Whilst the government proposes to rip up, switch off and disconnect the copper line services for 93 per cent of Australian premises—if, of course, it ever gets that far with its NBN—there is a question mark that remains for the remainder and an uncertainty as to how the services under the USO are going to be provided to those remaining households into the future in a cost-effective manner for all involved. The problem that we have, however, with the Telstra contract, with the report that was undertaken and with the approach going forward is that we will never know for sure if due process really was followed. Certainly we know that there was no real open tender conducted at this stage of events.

Senator Conroy, as the responsible minister, has quite an interesting history when it comes to tenders. I reflect on NBN stage 1 and the tender that was undertaken at that stage to provide the fibre-to-the-node broadband service. Fibre to the node was what the Labor government was originally elected promising. This was, if my memory is correct, a $4.7 billion promise.

Joe Ludwig (Queensland, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

Did you buy the copper?

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

Senator Ludwig wants to ask if we have bought the copper. As I just reflected, Senator Ludwig, large parts of Australia—including large parts of rural and regional Australia, critical to your portfolio—are in theory going to continue to be reliant on copper services under this proposal for an indefinite period of time into the future. But Senator Conroy went through that $4.7-ish billion contract for NBN stage 1, for fibre-to-the-node services, only, having spent millions of dollars on that tender, to have to abandon and scrap it, having wasted countless hours of government and private sector time, and to come up with a new model that just shifted the decimal place across by one so that we ended up with something closer to a $50 billion proposal. Clearly it was not a big deal to the government, because equally, as we all know, it was all dreamt up on the back of a serviette, or both sides of a serviette, or both sides of an envelope or a drinks coaster, on that famous VIP flight between Melbourne and Brisbane.

Senator Conroy, of course, continued his interesting history with tender processes in the recent Australia Network contract debacle that the government engaged in, which once again saw millions of dollars and countless hours of government and private sector time wasted on a botched tender process that is now the subject of dual investigations by the Australian Federal Police and the Auditor-General's office. But I digress. Senator Conroy has so many problems and debacles that I could not possibly cover them all now, so I shall return to the issue of TUSMA.

The coalition is concerned that telecommunications service providers, and ultimately consumers and taxpayers, will end up potentially paying more as a result of TUSMA and the arrangements in place. TUSMA's running costs will be paid and borne in part by taxpayers, at least over the immediate future, and of course by the telecommunications industry through the levy structure, with the government initially providing a flat $100 million contribution to provide the gap between existing levy arrangements and the expected funding necessary for the new USO arrangements. Of course, the industry levy structure in the future has the risk and the fear that there is a lack of incentive to rein in costs, and that has created fears that many retail service providers expressed to the Senate inquiry: they feared that the hit to industry and the costs to consumers will continue to grow and grow. Perhaps, if the government had conducted proper consultations on this matter, the reform would not have caused the concern in the telco sector that we heard about through the Senate inquiry. There was genuine concern about the consultation process and the government's admissions, effectively, that this was all wrapped up before the final legislation was developed. So we come to this process wanting to support the USO and accepting that a new model is necessary given the government's policy direction but with concerns about the bureaucracy and costs which will be expressed later. (Time expired)

Doug Cameron (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I am pleased to rise to support the Telecommunications Universal Service Management Agency Bill 2011, the TUSMA Bill, and also the Telecommunications Legislation Amendment (Universal Service Reform) Bill 2011, or the reform bill, and the Telecommunications (Industry Levy) Bill 2011, or the levy bill. This legislative package delivers on the reforms to the universal service obligation announced by the government in June 2010 when Telstra entered into the financial heads of agreement with NBN Co. that set in motion Telstra's structural separation. I am pleased that that structural separation was approved by the ACCC yesterday. It is something that those opposite could never achieve in 11½ years of government. The bills will allow the progressive migration of Telstra's customers to the NBN Co.'s fibre network, a network that takes Australia into the modern age of telecommunications.

The three bills the government proposes to introduce to parliament—the TUSMA Bill, the Telecommunications Legislation Amend­ment (Universal Service Reform) Bill and the Telecommunications (Industry Levy) Bill—represent further steps in the govern­ment's reform agenda for the telecom­munications industry. Together the bills form a legislative package to reform the long-term arrangements for the delivery of universal service outcomes and related public policy outcomes, which will facilitate the transition to the National Broadband Network and a more competitive and open telecom­munications market. These bills are part of the broad package delivering the NBN, and the resulting retail competition will certainly be a boon to all Australian consumers.

The TUSMA Bill will provide the governance, funding, and reporting/account­ability framework for this new statutory agency to make sure that universal service outcomes and other key public interest services continue to be delivered effectively in this new competitive environment. TUSMA will have responsibility for putting in place contracts or grants so that all Australians continue to have reasonable access to a standard telephone service and payphones—it is absolutely essential that payphones still be available in many regional areas and absolutely essential that consumers have access to standard telephone services. I want to make it clear that people will not be forced into any complex or confusing service arrangement with any of the providers. Australians will have reasonable access to standard telephone services and payphones.

It is also important that calls to the Emergency Call Service will continue to be handled and transferred to the relevant emergency service organisation. We have witnessed some of the most devastating disasters in this country over recent years, and the government is well aware that we have to continue to provide an Emergency Call Service under these new proposals. TUSMA will also be responsible for ensuring that the National Relay Service continues to provide voice-equivalent services for those with a hearing or speech impairment. This government is absolutely committed to ensuring that people who have impediments, either physical or mental, have access to reasonable and decent services. That is what building a good society is about.

Appropriate consumer safeguards will be in place to support voice-only customers migrating to an NBN fibre service as Telstra's copper network is decommissioned. I have heard a lot of talk about why the copper network should be maintained, but I have also heard in my position as chair of the Senate Environment and Communications Legislation Committee about the problems with the copper network—why the copper network is decaying around the country, why the copper network is costing more and more to maintain and why we need to make sure that we do migrate to an NBN fibre service that ensures the telecommunications security and telecommunications initiatives that a modern country needs to take its place in an international economy that is becoming more and more productive and more and more competitive. We need the NBN to deliver in that area. So customers who remain fixed-line voice-only customers after migration will have appropriate safeguards.

Technological solutions will be developed as necessary to support continuity of public interest services—for example, public alarm systems and traffic lights. We all know what happens when traffic lights go down—it causes absolute chaos. It is a productivity issue, it is a social issue, people cannot get home, and companies end up losing production if there are traffic jams and traffic chaos, especially in our bigger cities. Technological solutions will be developed to support continuity of these public interest services.

A key focus for the government is to minimise disruption for consumers and industry by maintaining basic safeguards as the NBN fibre network is rolled out and replaces the old copper network. Telstra is being required to maintain its copper network to deliver voice services outside NBN fibre areas. There are some areas where the copper network is rolled out where the NBN fibre will not go in, but for voice the government is requiring Telstra to maintain that copper network. Importantly, under the agreement Telstra made with the government, announced on 23 June 2011, Telstra will also be required to be the 'retailer of last resort' for voice-only services over the NBN fibre network.

The TUSMA legislation will ensure that basic telecommunications services remain available to all Australians and that the new agency responsible for delivering these services operates efficiently, transparently and with a high degree of accountability. The TUSMA Bill creates a rigorous oversight and accountability framework for TUSMA's activities. This includes a requirement that it maintain a publicly available register with key terms and services to be provided under all contracts and grants it makes. TUSMA will also be required to prepare annual reports and corporate plans and its operations will be reviewed before 1 January 2018 to consider how effective the agency has been in achieving its policy objectives.

Because of the complexity and sensitivity of many of the issues TUSMA will deal with, decisions that affect industry and consumers will be made collectively by a chair and members who together will have an appropriate mix of industry experience. TUSMA will be a statutory agency estab­lished under the Financial Management and Accountability Act 1997 and its CEO and staff will be employed under the Public Service Act 1999. The arrangements for remuneration, disclosure, termination and delegation for the CEO and members of TUSMA generally reflect the standard approach under Commonwealth legislation, as set out in the Australian Communications and Media Authority Act 2005.

The TUSMA Bill enables existing consumer safeguard instruments made under the Telecommunications (Consumer Protec­tion and Service Standards) Act 1999 to form the basis of contract standards or benchmarks for voice and payphone services provided under the Telstra agreement

he minister can also determine key performance standards or benchmarks for other contracts entered into or grants made by TUSMA.

It is expected that TUSMA will have total costs of $340 million per year for its first two years and around $330 million per year after that. To help it meet these costs and alleviate the burden on industry, the government for the first time is making a significant contribution of at least $50 million in budget funding per year for the first two financial years of TUSMA's operations and $100 million per year after that. The government is also consolidating the universal service obligation and the national relay service levies into a single levy. To provide a smooth transition for industry, arrangements will be put in place for 2012-13 and 2013-14 so non-Telstra contributors do not have to contribute more than their aggregate liability for the USO and NRS levies in 2011-12. The contribution of each participant towards the proposed new levy will be based, as is currently the case, on its eligible revenue as assessed by the Australian Communications and Media Authority, and they will remain responsible for collecting it. Arrangements will be put in place so smaller carriers with eligible revenue of less than $25 million will not be required to contribute to the new levy, consistent with current thresholds for the USO and NRS levies.

I turn to the Telecommunications Legislation Amendment (Universal Service Reform) Bill 2011. The bill primarily amends telecommunications legislation to support the new arrangements for delivery of universal service outcomes within the telecommunications sector, and facilitates the establishment of TUSMA and the smooth transition to new levy arrangements. The government has previously committed to removing USO regulation. A key aspect of the bill is a proposed framework so that after a transitional period the minister may remove USO regulatory obligations from Telstra and move to a complete contractual delivery model. USO regulation can only be removed if the minister is satisfied within two years after commencement that there are satisfactory contractual arrangements in place. The minister will be required to take into account Telstra's record of compliance with its contract and regulatory obligations and any other relevant matters. Separate decisions are required in relation to the standard telephone service and payphone elements of the USO and each decision is subject to disallowance by parliament.

If there are satisfactory contract arrangements in place, the payphones element of USO regulation will be removed across Australia; and STS USO regulation will be removed in areas that will not be covered by the NBN fibre network. STS regulation in NBN fibre areas will be progressively removed as the NBN fibre network is rolled out and Telstra implements structural separation in those areas by closing down its copper network. Even if STS USO regulation is progressively removed, the existing regulated customer service guarantee that applies to all providers of the standard telephone service will continue to apply to telephone services provided by Telstra under the TUSMA contract.

I now turn to the Telecommunications (Industry Levy) Bill. The Telecom­munications (Industry Levy) Bill is a short bill that ensures that the government can raise the consolidated industry levy. I chaired the inquiry of the Senate Standing Com­mittee on Environment and Communications into the bill and our report was tabled last Friday. Despite some concerns about the industry levy proposed in the bill, the telecommunications industry representatives supported the structural separation of Telstra and agreed that their positions in the market will be more competitive as the NBN is implemented. That is a key point. This is the industry conceding that there will be more competition as NBN is implemented—not less, as the argument has been put by the coalition. As a consequence of submissions from the Telecommunications Industry Ombudsman, the committee recommended that TUSMA and the TIO enter into the necessary agreements to share certain information to assist TUSMA's monitoring and reporting responsibilities and that the TUSMA bill be amended to enable TUSMA to disclose information to the Telecommunications Industry Ombudsman. This is about transparency and openness in the industry and for customers to have confidence that the whole approach is working not just for the industry but for the community.

Our inquiry also heard from the Australian Communications Consumer Action Network. As a consequence of what they had to say, we recommended that the TUSMA Bill be amended to make it a criterion for one of the appointments to TUSMA to be a person with experience or knowledge of consumer affairs—again, an important part of ensuring that there is confidence in the whole NBN approach.

These bills before the Senate today are a part of building one of Australia's biggest infrastructure programs ever. That infrastructure program, the NBN, is about delivering affordable high-speed broadband to all Australians, no matter where they live. The NBN is already in use in Tasmania, Armidale, suburban Melbourne and Kiama. Recently, it was announced that Australia's two largest telecommunications companies, Telstra and Optus, had signed up to the NBN, and we had yesterday an announce­ment that the ACCC has given final approval to develop the NBN. That is a major landmark for the nation's telecommunica­tions industry. The National Broadband Network is a key nation-building infra­structure project. The project will deliver significantly improved broadband services for all Australians at affordable prices. It will connect our cities, our regional centres and our rural communities—something that the coalition never imagined and could never achieve in 11½ years of government. This reforms Australia's telecommunications sector.

The NBN is critical to our future digital productivity growth. It will deliver high-speed, reliable broadband to every home and business in Australia. The NBN will provide access to high-speed broadband to 100 per cent of Australian premises. Ninety-three per cent of those premises will have access to a high-speed fibre network capable of providing broadband speeds of up to 1 gigabit per second. Seven per cent of Australian premises will have access to next-generation fixed wireless and satellite technologies providing peak speeds of 12 megabits per second. For a country like Australia, with its massive area to cover, with the concentration of populations on the coastal fringes of our country, to be able to act to provide high-speed broadband to the whole country is a nation-building exercise. It is one of the best infrastructure projects this country has ever seen and it allows Australia to improve its productivity, to improve its communications and to take its place as a modern society as the rest of the world continues to adopt broadband infrastructure.

But the NBN is just a platform; it is the use of the NBN that will enable our businesses to develop new and efficient ways of doing things—new and efficient ways of improving productivity and improving communications. The NBN infrastructure supports the evolution of the Australian economy by inspiring a new wave of digital innovation that will change and improve the way Australians live, receive services and connect with the world. It will drive productivity improvement across Australian businesses by improving logistics, expanding customer bases and creating new ways of working. It will transform service delivery, increasing efficiency and effectiveness in areas such as health, education and government services. Why should Aust­ralians in the regional areas of this country not have access to the best medical advice? The NBN delivers that. This is a transforming approach by this government. It will transform the economy, it will transform health delivery, it will transform education, it will transform every aspect of the economy.

These bills before the parliament today help that process to come to fruition. These are major initiatives by the government and they should be supported by the whole parliament.

Scott Ludlam (WA, Australian Greens) Share this | Link to this | Hansard source

I enjoyed hearing Senator Cameron's remarks, and I will follow on in a similar vein. The Greens will rise, as the coalition has done, to support these bills. The Telecommunications Universal Service Management Agency Bill 2011 and the package of other measures in the related bills that come with it are really the last legislative pieces of the puzzle for the National Broadband Network rollout. This is something that I have taken a keen interest in since I arrived here. It has been one of the defining issues, obviously, in the communications portfolio. This last piece, effectively, of the regulatory framework is certainly deserving of support.

The bills create a new statutory agency to deliver basic voice, payphone and other public interest telecommunications services at an ongoing cost to the taxpayer of $100 million per year. We heard evidence during the hearings Senator Cameron referred to in the committee that he chairs that maybe we should not be doing that anymore. Some sections of industry think, 'In an NBN world, why should we be keeping the copper network up and why should we be providing these services to people when the age of broadband is here?' The fact is that the age of broadband is not yet here. Certainly in Canberra we get services and in Melbourne we get services. In regional areas and in some outer suburban areas where costs have been cut over the last couple of years, in fact services are terrible. So it is extremely important that we maintain the universal service obligation. We believe, actually, that it should be extended—that it should be brought into the 21st century. But at the very least, while the NBN project rolls out, there is the need to preserve and protect services and to make sure that they are not cut, particularly in areas where services have never been great in the first place.

The bills also mandate reviews in the future to assess exactly how well the USO is being delivered in an NBN world. This is an issue that will need to be revisited. We welcomed input into the Senate inquiry from consumers and from end users who convinced the committee on the need for a consumer affairs representative on the TUSMA board. As Senator Cameron outlined, that was one of the recommendations that the committee took up and has proposed. I understand that the government is interested in pursuing that amendment. The Australian Greens obviously believe that the USO should be brought into the 21st century. It is not merely voice telephony and public payphones. Really what we are talking about in this age is fast data services.

The broadband network is one of the most important infrastructure projects that this country has seen. The network, once established, will bring us closer to the rest of the world and it will be the envy of many countries, given that 93 per cent of the population will have fibre coverage to homes, schools and businesses and other premises. The other seven per cent of Australia's population will have data services through wireless and satellite. It will not be as good as you can get in the metro areas, but it is a huge step change in advance of what we have been able to deliver to people thus far.

Given convergence and the increasing reliance on data services to conduct business in the daily lives of so many people, data services have become an essential service just as much as public telephony has been for many years. We welcome the work of advocates like ACCAN for remembering that this is about people. We have tended to come in here on NBN bills and have long and exotic debates about engineering problems and about competition policy, and we tend to forget that these services are about people. The really interesting questions are around what we will do with the services when they do become ubiquitous.

Some issues with the bill were raised during the committee process. Some of the smaller telcos do not believe that they should continue to pay for the USO. They think that if Telstra is out there maintaining this infrastructure then either the price tag for providing those services should be lower or they should be somehow exempt from contributing. We believe, in line with the general principal, that the areas that are easy to service—the big cities, where the profit margins can be made—should cross-subsidise services in regional areas. I do not think it should be controversial that services should be cross-subsidised in the USO. Effectively, it is one way of doing that for areas where services are patchy. We disagree with the smaller telcos and some of the providers in that instance. We think it is important to maintain the USO.

Perhaps in 10 or 20 years it will be obsolete. Perhaps by then we will have closed the copper network down and we will be providing fast data services and there will be no need for the hardline. But I would imagine that, even though people certainly are abandoning fixed-line services in homes and are transitioning across to mobiles, it is still an essential service. The copper infrastructure still has value and it still provides services that cannot be delivered, at least in 2012, through other forms of technology.

In their evidence, Macquarie and Optus certainly argued that the NBN should render the USO obsolete. Why don't we revisit that question in a decade. Provided the coalition do not destroy the project, do not rip it up or do not flog the pieces off to private industry in an attempt to somehow balance their budget black hole, we should have a piece of infrastructure that will be providing ubiquitous, fast data services to most Australians and will also be generating a return to the Australian people. That is important to remember. In the obsession with privatising essential public services and monopoly infrastructure, we are building an asset. The reason it is off budget is that we are building an asset that will return a small premium back to the taxpayer as it is paying off its debts.

ACCAN, representing end users in the committee hearings, argued for a more integrated approach to providing disability access to telecommunications services. They propose that a range of services be brought under the TUSMA umbrella to be managed in a more integrated way than they are at the moment. We were told at the hearings that the minister was contemplating it but that it was too early and the bills would need to be passed first, so we do not have resolution on that. It is something I think this chamber should pursue. People who are interested in telecommunications and in making them available to people with any form of disability should uphold the mandate that we are extending these services to all Australians. We cannot forget that perhaps this is only part of the job.

Competitors to Telstra have argued that it is not appropriate for the government to simply contract out USO services to Telstra for the next 20 years as a consequence of the deal that was done between the government and Telstra to enable the NBN to go ahead. I have some sympathy for that point of view, because we know that this deal was done behind closed doors in an effort to get Telstra on board and that the universal service obligation had to go somewhere. I think it is appropriate that it has been brought back into public hands, but of course the industry noted—I think correctly—that all we are doing is simply contracting these services straight back out to Telstra, mostly, because they still hold the copper asset.

The bill as drafted does, however, maintain a 20th-century incarnation of the USO, but only for access to voice services. This is something the Australian Greens will be pursuing. I do not think that in the 21st century it is appropriate to contemplate a universal service obligation being simply a voice service. We have moved on. The government has quite correctly proposed a huge investment in telecommunications in this country precisely to provide fast data services to people. Therefore, I think the USO itself, and what we understand by the term 'universal service', should be updated and brought into the 21st century. We will revisit those issues.

The committee made a number of recommendations—it only made three—and I think we should propose a fourth: that the Telecommunications Universal Service Management Agency and the TIO, the Telecommunications Industry Ombudsman, enter into a memorandum of understanding to formalise arrangements for the TIO to provide information to TUSMA for the purposes of TUSMA's monitoring and reporting responsibilities. That is just common sense. If the government moves that amendment we will certainly be supporting it.

Recommendation two was that the bill be amended to make it a criterion for one of the appointments to the membership of TUSMA to be a person with substantial experience or knowledge and significant standing in the field of consumer affairs. Again, the Greens believe that that is entirely reasonable, and we were persuaded by the evidence given by ACCAN in their advocacy work for the people who will actually use this technology.

The committee then recommended that the bills be passed. The Australian Greens believe that we need to revisit the idea of what the USO is. What is the universal service obligation? It is not simply a voice service in the 21st century; it is something more than that. We believe those issues should be revisited.

Yesterday we saw a huge piece of the puzzle fall into place outside this chamber concerning the bills that we passed well over a year ago now relating to the structural separation of Telstra—to separate out its wholesale and retail arms. Having that agreement signed off by the regulator was an incredibly important piece of the puzzle. The regulator had been holding out for a better deal for Telstra's competitors, for the smaller carriers and for the aggregators, who will take services from the NBN. That is a question about how the competitive landscape looks over the eight- or nine-year rollout of the NBN. It was tremendously important to get that agreement on the books. It removes a significant impediment to the volume rollout. Mr Quigley of NBN Co. told a budget estimates committee the week before last that the delaying of regulatory approvals by the ACCC was having a material impact on the volume rollout—on when we actually scale the build up and start rolling past not thousands but tens and then hundreds of thousands of premises. This was being held up because the ACCC and Telstra had not been able to come to an agreement.

So, what do we have? We have the regulator on board. We have Telstra on board, despite their fierce resistance to the bills. We have to coalition on board for the structural separation undertaking. Mr Turnbull confirmed that for us yesterday. They made it sound like the idea of disaggregating the wholesale and retail arms of Telstra had been their idea all along. The fact is that the coalition held up that proposal and that bill for a year. It cost us a year in the rollout, because former senator Nick Minchin was simply in here advocating for what he thought was the best interests of Telstra. As it has turned out, the best interest of Telstra is to take its place as a retail incumbent in an NBN world with a huge expansion of a customer base into regional areas, where services have never been provided before, and to get out and compete in the marketplace as a private entity. We do not think Telstra should have ever been privatised, but since it was it should play by the rules that everybody else has to play by.

We still do not know when exactly the coalition is going to drop its strange objection to the rollout. I do not understand why or how the National Party—and Senator Williams is in the chamber with us this morning—has stayed silent while its coalition partners try to wreck a proposal to bring world-class telecommunications to regional areas. What on earth are you doing?

I think it is high time the opposition simply dropped its destructive opposition to this project. It creates a degree of uncertainty amongst the NBN engineers, the people building the project and, most importantly, the people in the communities scheduled to get the services when you have the shadow spokesperson or the Leader of the Opposition marching around the landscape saying they are going to destroy the project. It is unbelievable. Let us simply get on with it.

I look forward to the committee stage of the debate on these bills. I look forward to seeing, hopefully, the government taking up some of the proposals that were put to it by the committee. I thank the committee staff and secretariat and the other members of the committee for their contributions, and we look forward to the passage of the bills.

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

Following on from my colleague Senator Birmingham, can I say the coalition of course supports the implementation and continuation of the universal service obligation. The coalition reluctantly recognises the need to rejig that obligation, given that this government seems so bloody-minded as to continue to implement its National Broadband Network. In that context the coalition accepts the need to deal with this legislation.

The problem we have with it is that we simply do not trust the government to deliver, given that it is insisting on creating a new bureaucracy to deal with the universal service obligation and given that there is, arguably, already in place—in ACMA—a body that could be given the task of doing it, particularly given that the new body will not have any incentive to constrain its own costs. It will be funded to the tune of a flat $100 million, with any costs over and above that to be raised by an industry levy. That is, it will be paid for by participants in the industry. Ultimately, those costs will be passed on to consumers. And whilst TUSMA, the new agency, will be constrained by its policy objectives, the Telecommunications Universal Service Management Agency Bill 2011 gives the minister the discretion to expand the tasks TUSMA has—for example, on a public interest basis.

The Australian Communications Consumer Action Network has already recommended that the objectives of TUSMA be expanded—for example, to provide for people with a disability. That may well be a very good cause, and one can imagine the pressure to be put on the good minister—the minister for technology and gadgets—to expand the objectives of TUSMA to cover that. That is but one example of the sorts of ways in which the role of TUSMA may be expanded, with consequent and significant cost implications.

So why don't we trust the government to deliver? When the government first announced a version of its National Broad­band Network dream it was, as Senator Birmingham correctly said, a $4.7 billion promise for fibre to the node. When the tender fell in a heap, that promise was aborted and replaced by the promise that this government is now struggling to implement: the promise of a $43 billion fibre-to-the-home network. But the rollout of the NBN has been plagued by delays, secrecy, overspending and lack of transparency. Just a fortnight ago at estimates we were told that NBN Co. is falling well short of the fibre targets that NBN Co. projected—

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

No, you weren't—don't tell fibs!

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

in 2010, Minister, you know it well, for 2012. The minister attempted to downplay those projections on the basis that they were based on assumptions that have not been realised. It may well be—

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

'It may'; don't let the facts get in the way.

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

It may well be that the delay in reaching a deal with Telstra has impacted on those targets. It may well be that the delivery of fibre to greenfields sites was passed from NBN Co. back to Telstra. So it may well be that critical assumptions upon which NBN Co.'s 2010 projection was based—

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

Have changed.

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

It may be that those assumptions have changed. But the fact remains, Minister, that NBN Co. has still not met the targets projected in its 2010 corporate plan.

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

It couldn't.

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

Minister, it matters little that it couldn't; it projected that it would, if these assumptions came to bear. It was the government's task to ensure that these assumptions did come to bear so that you could deliver on your overall promise for the NBN. But not only did NBN Co. fail to deliver on its projection, it has spectacularly failed to deliver—or should I say demonstrably failed, because 'spectacu­larly' is meant to be a good word, and it is not good that they have failed to deliver.

The NBN Co. corporate plan, published in 2010, promised that fibre would pass by some 260,000 premises by June of this year. Yet, to date, just under 19,000 premises have been passed with fibre. And passing them with fibre is just the first step, because then they have to bother with getting connected. Some 19,000 of some 260,000 is only seven per cent of the target. That is a compelling 93 per cent shortfall from target, or some 240,000 premises, that NBN Co. has to address in the next four months—which it will not do, of course—in order to realise the target that it set two years ago. Because the assumptions failed to be met, NBN Co. did not pass fibre by one house in the last six months of last year. The ACCC's approval of the technical criteria in recent days will now free up the rollout of the NBN. We look forward to that changing. But we have little confidence that NBN Co.—or this government—will be able to deliver many of the targets that it puts before the Australian people.

The government is continuing to make it difficult for not only the opposition and other parliamentary parties but the Australian people themselves to work out whether or not the taxpayer is getting value for money with the rollout of the NBN. In answer to a specific question during the committee inquiry about the TUSMA model for the delivery of the USO and the negotiations with Telstra about the Telstra agreement, particularly as to whether future payments from TUSMA, the new agency, to Telstra under the Telstra agreement were a financial gain to Telstra, the department said:

This is a vexed question that you have obviously had quite a few people raise with you, as they have with us over the full course of these negotiations.

Of course, coalition senators, as part of what Senator Cameron said was 'my inquiry', considered at one point—as the minority on the committee inquiry chaired by Senator Cameron—that the negotiations were deficient. But leaving that aside for the moment, the department said:

This is a vexed question … We think that we did a good job in negotiating a price with Telstra. … As to the actual cost of delivering them—

the services—

all I can say is that the negotiations with Telstra were very difficult. Whether there is a margin in there for Telstra I simply do not know. Telstra would not tell us and they did not tell you. Nobody else knows, so I cannot answer your question definitively. All I can say is that we did our best to negotiate a minimum price and we had some independent reassurance.

The total lack of transparency in developing the TUSMA model and negotiating the agreement with Telstra to contract to deliver the USO is a fundamental concern given this government's track record on the rollout of the rest of the NBN, but it is hardly a surprise. I said earlier that Telstra has no incentive to constrain costs. From 2014 to 2015 the government's contribution—so read for that from the taxpayers—will be a flat $100 million and any blowout in TUSMA's costs will be recoverable through an industry levy with those costs ultimately to be passed on to consumers.

I also said earlier that we struggle to understand the necessity to create a new bureaucracy. As my good colleague Senator Birmingham said, this government has never met a bureaucracy that it did not love. Not only do we struggle to understand that, and I do not think that is to do with our IQ; it is particularly hard to understand that given that the government has largely removed the need for the new agency, TUSMA, to make decisions about contracts to deliver the USO for the next 20 years because that is done and dusted with this bill. It is only after the next 20 years that it is opened up to competition for others to deliver.

In the time that is remaining I want to raise some of the evidence that was given to the committee. For example, there is that from Macquarie Telecom, which said it was concerned about many aspects of the bills before the committee which included the limited capacity for industry participation in negotiations or consultation, the flawed basis upon which the universal service obligation was now based and the scope of universal service, which is an issue that I addressed earlier. The Optus evidence was interesting. Optus said that the universal service obligation bills were a missed opportunity because, in Optus's view, significant structural changes were having to happen because of the deployment of the NBN so the traditional USO network was no longer required—correct. Optus was saying that the most efficient and effective response would have been to either remove or significantly scale back that framework, hence a missed opportunity. They also talked about the increase in the cost of delivery of the USO from $160.5 million per year to $340 million per year without any additional consumer benefit and said, more so, that proposed changes to costing and funding were not, in Optus's view, competitively neutral given that Telstra's supply costs would be unchanged whilst the payments it got, which were funded by its competitors through the levy and passed on to consumers, would be significantly increased under the new arrangements. Optus also reinforced the concerns that TUSMA simply added a new level of bureaucracy and cost to the delivery of the USO which may lead to consequent cost increases and there being a barrier to long-term reform, given the fact that the minister had the ultimate discretion to expand the statutory functions that TUSMA was to perform.

Telstra was at pains to say that it supported the USO bills in the context of facilitating the implementation of the agreement and as part of Telstra's broader participation in the rollout of the NBN. But it did observe that the bills in their entirety would, in Telstra's view, increase adminis­trative costs and it said it had some concerns within its own house with respect to delegations and discretions, particularly those in the lap of the minister. Other comments from other witnesses, such as ACCAN and the Telecommunications Industry Ombudsman, have been raised by colleagues, in particular Senator Ludlam.

So it is given these contexts that the coalition continue to be concerned. Whilst we totally support the universal service obligation and the need to recharacterise it as the government continues to attempt to deliver on its National Broadband Network promises, we have little confidence that the government will do so in an effective and efficient way. That having been said, we reluctantly support this legislation.

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

Firstly, can I thank all of those who have made a contribution. I welcome the opposition's constructive approach in supporting these bills, albeit with some reservations, and I am sure we will have a healthy discussion during the committee stage. We do welcome the support for the bills.

The package of three bills, the Telecommunications Universal Service Management Agency Bill 2011, the Telecommunications Legislation Amend­ment (Universal Service Reform) Bill 2011 and the Telecommunications (Industry Levy) Bill 2011, will provide a flexible, accountable and transparent model for delivering and funding public policy objectives in the telecommunications sector. The reforms contained in the bills being considered are aimed at ensuring continuity of key consumer safeguards through the transition to the National Broadband Network and into the future. These include ensuring reasonable access to standard telephone services and payphones, the National Relay Service and the emergency call service. The bills address important unfinished business dating back to the privatisation of Telstra. They provide for increased transparency and rigour in the delivery of basic consumer safeguards. Under this approach, the realistic costs of delivering these important services will be appropriately recognised.

The Telecommunications Universal Service Management Agency—or TUSMA, as it has now become known as—Bill 2011 will establish a new entity to support continuity of key telecommunications safeguards in the transition to the National Broadband Network. TUSMA will be a small statutory agency with responsibility for the delivery of the universal service obligation—or USO, as it is more commonly known—and other public interest telecommunications services. The opposition has suggested that TUSMA will employ an army of bureaucrats. This is clearly absurd, given that TUSMA's administration costs are expected to be around $5 million per annum. It will be focused on efficient and effective contract management, despite the claims of those opposite. TUSMA will have the benefit of industry knowledge and experience, and incentives, to ensure contracts are efficiently and effectively managed. TUSMA will enter into and administer contracts and grants for these services in accordance with the policy objectives set out in the TUSMA Bill.

The creation of TUSMA is necessary because the rollout of the wholesale-only National Broadband Network and yesterday's historic acceptance of Telstra's structural separation undertaking will fundamentally change the structure of the Australian telecommunications market. These changes will see Telstra's near ubiquitous national copper fixed line network progressively decommissioned as NBN Co. rolls out its next generation fibre network. These changes will empower TUSMA to require carriage service providers to provide information or documents to TUSMA that are relevant to the achievement of the voice-only migration policy objective.

The current USO regulatory arrangements that are imposed on Telstra were designed for a market where there was a vertically integrated operator of a national telecommunications network. The new National Broadband Network environment will enable all retail service providers to offer high-quality broadband services nationally. Therefore, in this environment it is appropriate to introduce a more competitive and open model for delivering universal service and other public policy telecommunications outcomes. These new arrangements will benefit both consumers and industry by promoting more innovative, effective and efficient service delivery arrangements. They will also clearly separate policy, regulatory and contractual functions respectively between the department, the Australians Communications and Media Authority—ACMA—and TUSMA. As such, TUSMA will be fulfilling different objectives to the ACMA. TUSMA will be subject to rigorous transparency and accountability requirements. This will help ensure that costs to industry do not increase unnecessarily.

The agreement with Telstra includes a range of incentives to promote cost savings. Further, a structured program of reviews provides opportunities for voice and payphone services to be provided more efficiently. In relation to concerns that TUSMA's scope should not increase unnecessarily, the legislation does provide some flexibility so that the services it delivers can be modified as circumstances change. Despite, again, the opposition's claims to the contrary, any proposed changes will be subject to clear parliamentary oversight and scrutiny.

The Telecommunications Legislation Amendment (Universal Service Reform) Bill 2011 amends the universal service regime in the Telecommunications (Consumer Protec­tion and Service Standards) Act 1999. The amendments mean that within approximately two years of commencement of TUSMA's operations the minister must consider whether it is appropriate to remove the current regulated USO on Telstra to make the standard telephone service and payphones reasonably accessible. Subject to Telstra's record of compliance with its contractual and regulatory obligations, the minister may then make declarations that will commence the process for lifting regulation and shifting to a contractual model for the provision of universal service outcomes.

The Telecommunications (Industry Levy) Bill 2011 provides for the imposition of a new levy. This levy will replace two existing separate industry levies and will contribute to meeting TUSMA's costs for delivery of the USO and other public policy telecommunications outcomes. For the first time, government will also be making a substantial contribution towards TUSMA's costs and the delivery of key com­munications public interest safeguards. The government's budget contribution will be at least $50 million in 2012-13 and 2013-14 and $100 million each financial year thereafter. The government has also committed to increase its base funding in the first two financial years so that contributors to the industry levy, with the exception of Telstra, will not face an increase to that aggregate funding contribution. Furthermore, the government has also committed to review the levy arrangements and the need for any additional budget funding above its committed base funding during the course of the first two years of TUSMA's operation.

The TUSMA bill creates a rigorous oversight and accountability framework. The new legislation will provide for TUSMA to have a board structure and require the minister to ensure that TUSMA includes members who have substantial experience and knowledge of and significant standing in the operation of the telecommunications industry and business or financial management. These members will be expected to take a strong role in managing the costs of TUSMA activities. TUSMA will also maintain publicly available registers of the contracts and grants it administers and report annually to the minister on all significant matters relating to the performance of contractors and grant recipients. It will prepare a corporate plan every three years as well as a comprehensive annual report. It will provide reports or information to the minister on specified matters relating to the performance of TUSMA's functions and undergo a comprehensive review for 1 July 2018.

This accountability framework, together with the existing reporting requirements for statutory agencies under the FMA Act, will help give stakeholders the confidence that TUSMA will use its funding to fulfil its functions and policy objectives in an efficient, effective and appropriate manner. TUSMA will also be able to share information with other agencies and persons such as the ACCC and the ACMA.

I want to address a couple of the arguments that have been put forward by those opposite. They have argued that the government did not follow due process in negotiating its contract with Telstra for the delivery of the USO and other public interest services. However, Telstra is the primary universal service provider under legislation and is the only telecommunications provider with a national, ubiquitous fixed line network that can be used to ensure the continuity of key telecommunications services during the transition to the National Broadband Network. I would also note that there have been contestability arrangements under the USO since 2001, but no alternative providers have sought to supply services under these arrangements to date. People who are currently receiving key services need certainty that their services will not be disrupted, possibly for a long time, while a new USO provider rolls out a network or finalises negotiations for access to infrastructure.

TUSMA's 20-year agreement with Telstra to deliver key services such as standard phone services and public payphones will ensure continuity of basic safeguards for Australians and will strengthen the safety net for rural and regional Australia. I know there are some on the other side of the chamber who strongly claim to support basic safeguards for rural and regional Australia and a safety net. So we welcome their support for this bill. The agreement with Telstra does not—

Senator Williams interjecting—

You are buying back the copper, mate. That is not bad. Buying back the copper—that is a classic. The agreement with Telstra does not preclude contestability for other key services that TUSMA will deliver under the contract. Seriously, you are renationalising the copper. What a cracker of a policy. The opposition has claimed that other services will not be subject to contestable arrangements. This is simply not true. Existing national relay service contracts are due to expire shortly and a competitive process will need to be run by TUSMA before 1 July 2013. The government has also committed to TUSMA undertaking a competitive process for the emergency call service within five years. By introducing a more contestable and flexible model for providing the USO these bills will promote greater efficiency, transparency and competition in the delivery of the telecommunications services that Australians rely on while preserving key consumer safeguards.

So I do commend these bills to the Senate but it is important to take into account that the National Broadband Network is being heavily contested. Senator Williams is going to slide out of the chamber now—sliding away from his commitments to regional and rural Australians, but they will be heartened by the fact that you want to renationalise. Did he check with you, Senator Fisher? Malcolm Turnbull yesterday announced that he is renationalising the copper. He said he will instruct the National Broadband Network company to take over Telstra's copper lines—renationalising it. That is what he announced, seriously. You should not let him blog—not live blog. It is really tragic. Renationalising the copper—I love it. Did he clear that with anyone, Senator Birmingham? Did anybody see it at all? Did anybody at all know what he was doing yesterday? That is billions of dollars that he has committed to give to Telstra to buy an asset that is dying in the ground, that is literally disintegrating in the ground, and he is going to give them billions of dollars for it. Even when they tried that on us we would not be in it. Fair dinkum, it is a cracker of a policy. I cannot wait to hear more about it. I look forward to seeing how much—

Senator Birmingham interjecting—

We are bypassing them. We are paying for them to come across and we are renting their ducts. We would never have been mugs enough to buy their copper. Buying their copper! Goodness me! Did you hear that, Senator Ludlam? I know you are back in the chamber now, and I will wind up in a moment. Did you know that the Liberal-National Party announced yesterday they are renationalising the copper network?

Scott Ludlam (WA, Australian Greens) Share this | Link to this | Hansard source

Communists.

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

I think that needs to go on the record. Senator Scott Ludlam for the Greens just called the Liberal Nationals 'communists'. That has to go on the record. With that thought in mind—

Senator Mason interjecting—

You will be voting for this, apparently, Senator. You spent your entire political life, to your credit, fighting communism. You thought you had led the destruction of communism only to discover that once you got back into bed with those rural socialists they'd get ya! And now we have a policy to renationalise copper. So I will leave it at that, Senator Ludlam, and look forward to the chamber's support for these bills.

Claire Moore (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

I know all those comments were made through the chair.

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

They absolutely were.

Question agreed to.

Bills read a second time.

Debate adjourned.