Nola Marino (Forrest, Liberal Party) Share this | Hansard source

I rise to speak on the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009. The reason the Labor government has proposed this legislation is that it is a typical post-media-announcement attempt to make its flawed NBN proposal actually viable. In the longer term regional, rural and remote areas will be affected by this legislation. The Labor government is prepared to ignore the concerns raised by the millions of Australians who are direct and indirect shareholders through the investment in Telstra by their superannuation funds and to ignore the concerns of employees and contractors that this legislation will have a severe and detrimental affect on them and their businesses.

Clearly, the government is ignoring the fact that Telstra was sold to shareholders. The announcement by the Prime Minister also urged even more Australians to buy bonds in a $43 billion National Broadband Network, assuring them that these bonds would be a good investment, asserting that the NBN would be commercially viable and claiming that its services would be affordable—all this without a business plan or cost-benefit analysis, particularly a regional cost-benefit analysis, and, I would say, a longer-term regional cost-benefit analysis. Was this a sales pitch, I wonder, to the Telstra shareholders who will be most affected by this bill? That is besides the people in regional and rural areas.

I note that Telstra pointed out another problem with this legislation in the West Australian on 15 October by stating:

Under the legislation, Senator Conroy can exempt Telstra from selling its stake in Foxtel and its high-speed cable if it voluntarily institutes the strictest form of separation of its wholesale and retail networks.

This bill also includes the provision to preclude Telstra from participating in future auctions for spectrum for higher-capacity mobile broadband services if it does not voluntarily separate and divest its cable network and Foxtel interests. In its submission to the Senate inquiry Telstra states:

Taking Telstra out of the market for next generation spectrum will make the mobile market less competitive and punish the telecommunications company that has not only led innovation but invested in the world’s fastest mobile wireless network … as a global leader in the mobiles market.

As I said, this bill seeks to prevent Telstra from acquiring specified bands of spectrum, which could be used for advanced wireless broadband services, unless it divests its hybrid fibre-coaxial cable network and interests in Foxtel. The bill also contains amendments to increase the powers of the ACCC under the Trades Practices Act and proposes changes to the universal service obligation and consumer service guarantee. What we are seeing is the government giving Telstra two bad options: to force the rollover of Telstra’s assets to the NBN and prevent Telstra being a genuine competitor for the NBN, and to compromise through that future markets to the detriment of Telstra shareholders and, ultimately, to the detriment of regional and rural consumers.

In spite of the issues surrounding the vertical integration of Telstra, it is this which supports the network access for people in country areas. What other telco can or will be able to afford to invest in infrastructure in regional and remote areas where commercial viability is not possible? It is often not possible. We know it will not be the NBN—it is only going to be provided to 90 per cent of the population, and towns with fewer than 1,000 people will miss out. Will the NBN then assume responsibility for maintaining the existing Telstra network in these areas? If not the NBN, then who will be responsible for the existing network? Will the NBN take up the universal service obligation when Telstra is no longer responsible? I understand that there is no government anywhere else in the world that has imposed such separation on any telecommunications infrastructure—critical infrastructure in regional areas.

The coalition strongly supports improved broadband services, but for very good reasons we have very serious concerns about this bill and the government’s entire approach to the proposed NBN. The coalition has never advocated the forced breakup of Telstra. We understand how important the existing infrastructure, and its maintenance and improved capacity, is to regional, rural and remote Australia. Until the introduction of this bill, it was not Labor’s policy to break up Telstra. The minister confirmed as recently as May this year that he had never advocated structural separation of the company, which leads one to believe that these amendments are proposed with the sole intent of making the government’s proposed National Broadband Network viable.

As we all know, this is the second piece of legislation linked to the NBN program; it is a program that the coalition is still not convinced can be delivered by the government at the proposed cost of $43 billion. One of the greatest concerns for all Australians, including those in my electorate of Forrest, is and should be the very serious concern regarding the costings of the NBN and the amount of funding that needs to be borrowed and repaid by taxpayers. Already, we have seen waste and mismanagement in the NBN process. Labor’s election commitment was a $4.7 billion promise that the network would be operating by the end of 2008. After 18 months of wasted time and, according to shadow minister Nick Minchin, $20 million of taxpayers’ money having been totally wasted on the flawed original broadband tender process, we now have the NBN mark 2. The coalition fully recognises the importance of universal access to fast, affordable and reliable broadband and we support the continued enhancement of broadband services, including the deployment of next generation network services. I, like my coalition colleagues, believe that Labor’s proposal to restrict Telstra’s access to spectrum is anticompetitive and it will literally erode competition for this highly competitive sector.

What changes in media regulation will be required for the technological changes brought about by the NBN and how in time will they affect free-to-air access? Also, for the world’s biggest network to be left to stagnate is unprecedented. Unlike Labor, the coalition believes a practical and realistic approach is needed to ensure that all Australians have access to fast, affordable, reliable—particularly in regional areas—well-maintained broadband services in the most cost-effective way for taxpayers. Leading analysts and those in the telecommunications industry are not all convinced that Labor’s NBN program can or will be delivered at the proposed cost of $43 billion. Ovum research director David Kennedy said that the rollout of such a network ‘would take up to 20 years’, not the eight claimed by Labor. Commentator Terry McCrann said of the plan:

It’s not crazy; it’s insane.

Former Optus executive Paul Fletcher said:

They may wonder where the traffic will come from to fill up the new network and generate the revenue streams necessary to earn a return on the $43 billion.

Paul Broad, the chief executive of Australia’s third biggest telco, AAPT, has serious doubts about the NBN. Commenting on the issue in the Adelaide Advertiser on 21 October, he said:

… the NBN will never be fully established and is a phenomenal waste of taxpayers’ money.

I recently met with telco people in my electorate and they informed me that in their view the proposed $43 billion will only cover approximately one-quarter of the cost of the NBN. As an example, again in my electorate, it was recently estimated that it would cost $1 million to run eight kilometres of fibre from a town site to a major industrial site. That is $1 million for just eight kilometres. This explains why the government is proposing through this bill to provide Telstra with two very bad options which by default will prevent the need for compulsory acquisition of Telstra’s infrastructure and assets and will therefore obviate the need to compensate Telstra and its shareholders for the acquisition.

The Labor government is currently spending a further $25 million of Australian taxpayers’ money on working up the NBN proposal. This comes on top of the apparent $20 million cost of the government’s failed original tender process. Government funding for broadband should be targeted at underserved areas. Telecommunications are of extreme importance in regional and rural areas where individual users and businesses are faced with the issues of distance, isolation and challenging local terrain. In my electorate of Forrest we are directly aware of the importance of telecommunications for social interaction and communications purposes, as well as it being a core necessity for business, contractors and all forms of commerce. In Western Australia 80 per cent of the state’s wealth is generated from the regions. My electorate is one of the key drivers of this wealth.

I note that the Glasson review also identified the important role that telecommunications plays in everyday life in regional Australia and the critical role that access to appropriate telecommunications services will play in the future prosperity and sustainability of regional communities. But there are 15 small towns in my regional and rural electorate that are likely to miss out on the broadband proposal because their population is less than 1,000. The combined population of these 15 towns is over 7,000 people, which means that over 7,000 people in my regional and rural electorate, where currently there may be fibre running to the nearest exchange, will be excluded from the government’s NBN. They are part of the 10 per cent of the population who will be excluded.

Minister Conroy has previously said that the 98 per cent of customers with fixed-line access would still have this access after the NBN was built. This is inconsistent with his statement that only 90 per cent of the population will receive the fibre-to-the-home network, which is the very same network he said is decaying on a daily basis. I wonder who will maintain those after the NBN. For regional and rural consumers this is a very serious concern. As I said earlier, for regional, rural and remote customers it raises the very serious question referred to in the Age today:

… who will maintain the fixed lines to the 8 percent who will not be covered by the fibre network.

It is a serious core issue for regional Australia. And I would ask how many of these fixed lines that will not be maintained are in my electorate?

The majority of Telstra’s existing copper network servicing rural, regional and remote areas costs millions. As Senator Nick Minchin asked:

Will the NBN company be required to run three networks—fibre, wireless and satellite as well as the copper network?

How will this affect Telstra’s existing community service obligation? Who will pay to maintain the network, services and system for regional, rural and remote customers, particularly the eight per cent of Australians who will miss out on the NBN? And what price will these customers pay for broadband services in the longer term? Will we see prices for NBN customers set each year in the federal budget? And what changes in media regulation will be required? We are aware of that one. These are very real questions and issues for my electorate. The Labor government is not considering the longer term issues.

The Senate Environment, Communications and the Arts Legislation Committee is currently examining this bill and the 99 submissions to the inquiry, a majority of which are strongly opposed to this legislation. The Labor government must not ignore the clear message and overwhelming concerns expressed in the submissions. In its submission to the Senate inquiry, the Australian Foundation Investment Co. stated:

We are very concerned that the bill appears to have been formulated with the objective of forcing Telstra down a path of the government’s choosing. We do not think that legislation should be used as a negotiating lever by the government to manoeuvre a publicly listed company—

a publicly listed company; that is what Telstra is—

into a position where it has no alternative but to agree to whatever the government requires or it will be substantially disadvantaged

And they are not alone. The Australian Shareholders’ Association also expressed their concerns, by stating:

If the forced structural separation of Telstra goes ahead as proposed by the Government, Telstra shareholders are likely to see significant destruction in the value of their investment.

It is extremely concerning that the government has so little regard for the rights of the 1.4 million shareholders who own shares in Telstra and the many others who through superannuation and other indirect investments own Telstra shares.

The coalition has consistently stated that the structure of the company is a matter for the company and its shareholders, yet there has been no cost-benefit analysis on the government’s proposal, no business plan and a severe lack of consultation with shareholders. Shareholders are Australian families and individuals—Australian people who are being ignored.

One Telstra contractor and shareholder from my electorate, Clinton, recently contacted my office regarding the forced break-up of Telstra. Clinton said that when the break-up of Telstra was announced there was a significant drop in his work volume from his usual five to six jobs a week to none. After two weeks it slowly came back to two to three jobs a week. He noted that this reduction in work volume has been felt right throughout Western Australia, with the metropolitan areas also experiencing a drop in their workload of approximately one third of the usual 100 to 150 jobs a week in maintenance and upkeep of Telstra lines. Clinton stated:

I am a Telstra shareholder and I have already been hit, but if the legislation is passed I will be hit again!

The coalition has a significant number of issues and concerns with this legislation. Whilst in government, it required the accounting and operational separation of Telstra, but it has never supported the calls for structural separation of the company. As I mentioned earlier, until now it has not been Labor’s policy to break up Telstra, but now they have to do it to make their $43 billion dollar taxpayer funded NBN proposal viable. Australian taxpayers will once again pay for this government’s decision. This legislation is predominantly about the government trying to force Telstra and its 1.4 million direct shareholders and millions of indirect shareholders to prop up Labor’s $43 billion project.

I need to know—and so do people in my electorate—that in 10 and 20 years time, people in my electorate of Forrest and all those in regional, rural and remote communities, and businesses, will have access to the core telecommunications infrastructure and affordable services that are an integral part of living and working in these areas. At this time I have no confidence that that will occur under this government or this proposal.

The coalition opposes this legislation until the implementation study is finalised early next year and we will seek to amend the bill substantially in the Senate should the debate proceed.

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