Malcolm Turnbull (Wentworth, Liberal Party, Shadow Minister for Communications and Broadband) Share this | Hansard source

In response to the remarks of the Minister for Infrastructure and Transport, I am not sure whether the notes relate to another set of amendments but the point here is a very basic one. In Telstra’s submission to the Senate Environment and Communications Legislation Committee—and I do not agree with all of its submission but I do agree with this part of it—the point is made:

… nothing in section 9 requires that the fundamental characteristic of wholesale supply—participation in retail end-user markets via on-supply to the public—be present at all.

The key problem—

as its submission goes on—

is that statutory concepts of “carrier” and “carriage service provider” are … ill-suited to the important task of defining NBN Co’s scope of business.

There are a large number of licensed carriers who do not provide services to the public but hold carrier licences for other reasons. The Telstra submission goes on to point out:

There are a number of large entities that are already carriers or CSPs, and who could therefore be directly supplied by NBN Co under the proposed draft. For example, the current TIO membership (of which a CSP must be a member) includes:

• large corporate and business customers, including Woolworths, NEC Australia, Port of Brisbane and CBIT;
• educational institutions, including University of Queensland IT Services and Sebastopol College, a community college in Ballarat;
• Government agencies, including the Library Board of Victoria and South West Healthcare, which covers most Government health deliverers in south west Victoria; and
• local government …

The simple fact of the matter is that everybody in business, if they can manage it, would like to cut out the middleman. They will see the retail service providers—the private sector part of the telecommunications industry in this NBN world, if we get to it—as troublesome middlemen that they will not want to deal with, and we will discuss that further in the next amendment. The consequence will be that NBN, acting quite rationally in terms of its own commercial objectives, will creep further and further into the province of the retail service providers. What we will see is the gradual evolution of the NBN from being originally a wholesale carriage provider to becoming a wholesale carriage provider with a large retail, government and corporate business. In other words, the only part of the retail telecommunications business that it will not be undertaking is that to residential and small businesses. But all of the larger customers will be eligible for assault from NBN.

I make one other point. A company may become a carrier for the purpose of this—so eligible to be sold to by a carriage service provider, eligible to be dealt with by the NBN under this clause, simply because it is in the business of supplying telecommunications services of a completely different kind as part of its business. It might be a mobile reseller, for example. So there is a huge scope for the NBN to puncture through the limitations that, supposedly, the government wants to set up around it. This is going to become a telecommunications equivalent of Frankenstein. It will literally take over large sections of the telecommunications business in Australia and it will do so unfairly and unjustly because it benefits from a massive subsidy from the government. Remember that there is no level playing field between the NBN and anybody else because it has access to unlimited funds with no commercial or even realistic return on the capital expected.

This is a shocking invasion of the private sector, a shocking incursion on competition, and, if the government is serious about NBN being wholesale only, it should support this amendment, which, as I said, has broad support within the telecommunications sector.

Question negatived.

I move opposition amendment (6):

(6)    Clauses 10 to 16, page 15 (line 9) to page 17 (line 32), omit the clauses.

These clauses are just below the previous area of amendment I referred to. These provide express exemptions from the already sieve like restriction on the supply of eligible services referred to in clause 9. These provide complete exemptions in respect of a series of utilities. In other words, transport services, electricity supply bodies, gas supply bodies, water supply bodies, sewerage bodies, stormwater drainage services and road authorities can all deal directly with the NBN. So, for exactly the same reasons I articulated earlier, we are seeking to make that amendment in order to reinforce the importance of the wholesale-only nature of the NBN.

The utilities are very keen on these amendments of course, and what is interesting is that they are keen on them because, they say quite bluntly, they do not want to deal with the middleman. That is their language, literally. They see the RSPs—that is, Telstra, Optus and others—as being unnecessary, troublesome middlemen. The problem with that is, once you provide an exemption of that kind for these utilities, why shouldn’t any other large entity be able to have it?

The member for Chifley is shaking his head, and I know what he is going to say—that these services would only be used for providing smart grids. There are two points there. The provision of machine-to-machine telecommunications services is probably going to be the fastest growing area of telecommunications over the next few years. It will not be too long before most devices and most machines are connected to each other, and many of them, naturally—particularly those that are mobile—will be connected wirelessly. Nonetheless, that is a legitimate area of the telecommunications industry to be engaged in. These exemptions will have the effect of taking that away from the private sector in large measure and giving it to the exclusive preserve of the NBN. The simple fact is that we understand why Energy Australia, AGL or Sydney Water would rather not deal with a middleman. They would rather buy wholesale services directly from NBN. We understand that. But, in allowing them to do that, the government is seizing even more of the territory of the existing private sector telecommunications companies. It is for that reason—and it is exactly the same principle that I described earlier in respect of amendment (5)—that this amendment should be supported.

I perfectly respect the interests of the utilities, wanting to have the legislation drafted in a way that protects their commercial interests. But the House must remember that the object of the NBN, so we were told, was to provide a wholesale-only, common carrier that did not provide retail services and did not compete at the retail level with the private sector. Yet, both in the loopholes in clause 9 and now in these provisions, clauses 10 to 16, that we are seeking to excise, we are seeing a great opportunity for NBN to take over that part of the private sector’s business.

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