Julian Leeser (Berowra, Liberal Party) Share this | Hansard source

I'm no fan of Telstra. If BHP is known as the big Australian, then surely Telstra is the big un-Australian because of its appalling treatment of its own customers. Unfortunately, we can't stop Telstra restructuring its business, but we do have the ability to ensure we can maintain ownership of Telstra and that, in a restructured environment, Telstra, the Australian telecommunications company, maintains its obligations with respect to the Australian community.

The Telstra Corporation and Other Legislation Amendment Bill 2021 ensures that in any restructure, Telstra's regulatory obligations, such as the current consumer protection obligations that exist, are reapportioned to the appropriate entity. It also provides a power for the minister to respond to any future changes to Telstra's corporate structure by including or excluding Telstra entities as needed to apply the existing regulatory regime to them. The bill also includes a series of powers that would allow the minister to direct a Telstra entity to assist another Telstra entity to fulfil a regulatory obligation or certain contractual obligations. This legislation will uphold Telstra's current regulatory obligations to Australians by maintaining regulatory equivalency for Telstra's successor entities.

I wish we could have prevented Telstra's restructure until such time as it had improved mobile services to customers who pay bills in communities like mine. I wish we could have prevented the restructure unless it improved its appalling customer service to all Australians. Unfortunately, Telstra doesn't need parliament's approval for restructure. However, without these legislative changes we couldn't ensure the important obligations imposed would remain in force. Let's be clear: Telstra's restructure is not about better mobile service or better customer service; it's just about shareholder windfall. Unfortunately, there are no drivers for Telstra to improve its appalling customer service. I will return to this issue later in my remarks.

Telstra's restructure splits the company into three separate legal entities under a parent company to be called Telstra Group. InfraCo Fixed will own and operate their passive physical infrastructure assets: the ducts, fibre, data centres, subsea cables and exchanges that underpin their fixed telecommunications network. InfraCo Towers will own and operate the physical mobile tower assets. The corporate spin from Telstra says ServeCo will focus on how they create and innovate products and services for their customers and deliver the best possible customer service experience—whatever that means. The restructure raises issues beyond the poor performance of Telstra's mobile and customer service and their preternatural talent for spin over delivery.

As a member of the Parliamentary Joint Committee on Intelligence and Security, I want to say something about telecommunications and our national security. Who controls our telecommunications companies is an increasingly important question. Australia needs to have Australian owned telecommunications companies. This isn't a case of economic nationalism; it's because telecommunications infrastructure is critical infrastructure for Australia. We cannot allow malicious actors, including state actors, to access these networks and use our telecommunications infrastructure to harm our nation.

Just last month, Mike Burgess, the Director-General of Security, said:

I remain concerned about the potential for Australia's adversaries to … preposition malicious code in critical infrastructure, particularly in areas such as telecommunications and energy. Such cyberenabled activities could be used to damage critical networks in the future—

Mr Burgess said the attacks would 'undermine' Australia's 'sovereignty, democratic institutions, economy and national security' capabilities, while also warning espionage and foreign interference attempts by multiple countries remain 'unacceptably high'. It's in this context we must be very careful about who controls and owns telecommunications infrastructure. I therefore welcome Minister Fletcher's actions in preserving the foreign ownership limits on Telstra and its successor companies through this bill.

The arrangements in this bill prevent more than 35 per cent of key Telstra subsidiaries being sold to a group of foreign interests. The bill maintains that the headquarter location of Telstra and its successor entities is in Australia and prevents more than five per cent of Telstra being sold to a single foreign person. This legislation is important to ensure Telstra remains in Australian hands and under Australian control. The foreign ownership arrangements for the bill align with the government's view that the appropriate oversight mechanisms must be maintained for Australia's critical telecommunications assets. This is particularly important given the role Telstra plays in the communications market in this country, essentially operating as a monopoly provider in many parts of the country. The Foreign Investment Review Board regime, which was enhanced by the Morrison government earlier this year, will also continue to protect our critical national assets, including our telecommunications networks.

I want to say something about Telstra's tower business and what this legislation seeks to regulate. Nothing is more important to increasing competition in consumer choice in the telecommunications sector than providers sharing infrastructure. This is particularly when the infrastructure has been erected with public funds. It's vital, therefore, that obligations currently placed on Telstra which require them to provide other carriers with access to telecommunications transmission towers apply in the same way post restructure.

A key set of obligations placed on Telstra is the facilities access regime, which requires that carriers provide other carriers with access to bottleneck infrastructure. The tower access framework is designed to support competition in the telecommunications market by providing other telecommunications carriers with access to tower infrastructure. Telstra's restructure has revealed a loophole within the current tower access framework whereby they could potentially shift their tower assets to a subsidiary that they own to avoid their obligations. And, given Telstra's history of being a monopoly provider and then as a private company continuing to behave like a monopolist, I think this issue is a real concern. Despite all the public subsidies Telstra received, it fights every opportunity to increase competition and share its infrastructure with its competitors. On so many occasions when Telstra is asked to share, it lawyers up and fights proposals. Such behaviour has led one industry participant to remark that Telstra is a law firm masquerading as a telecommunications company.

I'm pleased to say, therefore, that this bill addresses this issue and extends the framework so that all entities within a carrier group that meet a 15 per cent ownership threshold must also provide access to telecommunications towers. The provisions in this bill would be dormant for the first six months following passage to allow the Australian Competition and Consumer Commission to undertake a review of the 15 per cent ownership threshold and provide advice to the minister for communications. The bill seeks to ensure the current tower access framework continues to apply, which, in turn, should promote competition and better telecommunications options for all Australians. It's critical that carriers can access each other's towers to provide the best possible service to customers. Any change could impact the connectivity and services available, which are already substandard in large parts of my electorate and in regional, rural and remote areas in Australia.

Earlier this year, Telstra sold 49 per cent of its tower business for $2.8 billion. The majority of the proceeds from the deal will go to shareholders, with only a very small proportion being invested into network improvements. I've condemned Telstra repeatedly for its failures to more substantially reinvest in rolling out more towers to provide services to those customers who keep paying its bills, and an increasing number of my colleagues across the country agree that this is a major problem.

This bill is also important because, if we don't get the regulations right, Telstra's restructure poses a risk that services Australians rely on might not be available. We could see Telstra stop maintaining the universal service obligation. We could see Telstra no longer required to meet important consumer safeguards. And we could see Telstra not required to provide the triple 0 emergency service facility that it provides and on which all Australians depend. This is something no-one wants to see and a reason why this bill is so important.

Despite significant change in the telecommunications industry over the last decade, Telstra still plays a key role in large parts of Australia. Its role has been reinforced by a range of regulated consumer service safeguards, including the universal service obligation that guarantees delivery of basic telephone and payphone services in areas across Australia as well as the operation of the triple 0 emergency call service. Delivery of the USO and the triple 0 service is further supported by a contract with Telstra, the Telstra USO performance agreement, which also provides for Telstra's ongoing use of copper to deliver telephone services. While Telstra has given clear and repeated undertakings it will continue to deliver on these obligations, this bill makes sure they continue to operate by reapportioning them to ServeCo.

The bill also gives the Commonwealth visibility regarding the assets and contracts ServeCo needs to continue to deliver on these obligations, and a new ministerial directions power should the Commonwealth become concerned that Telstra may fail to fulfil these longstanding obligations. While Telstra has given undertakings it will continue to deliver these obligations, the bill makes sure it follows through with its promise. To reinforce this, the bill provides powers for the minister and, in some cases, ACMA to direct a Telstra subsidiary to meet its obligations or assist in the delivery of obligations to another Telstra subsidiary. ACMA's directions power allows it to ensure its compliance and enforcement activities continue to apply to entities within the Telstra group where satisfied that the relevant entity has failed, is failing or is likely to fail to fulfil an obligation. Similarly, the ministerial directions power allows the minister to direct an entity to assist a Telstra successor company to fulfil obligations where the minister, in this case, is of the view the entity has failed, is failing or is likely to fail to meet those obligations. The powers provide for penalty for failure to comply with a direction.

In short, the purpose of the bill is to maintain the Commonwealth's policy interest in protecting customers, promoting competition and supporting Telstra's public interest roles in Australia and our communications system, and ensuring they are not diminished as a result of the restructure. It's for these reasons I support the bill.

I want to talk a little bit about some other matters that Telstra and the other telecommunications companies are involved in, because telco reform is more than just this bill. As I outlined, I haven't had much good to say about Telstra, and with good reason. Telstra and the NBN's failure to serve my constituents and their inaction to rectify terrible phone and internet reception is putting people's lives at risk. This is despite all the public money on offer to support telcos investing in infrastructure. Telstra like to remind us they're just another public company, but they receive so much public money that it's a hard claim to maintain in any real sense. The campaign we ran in the Berowra electorate, highlighting the parlous state of peri-urban mobile communications, led to Minister Fletcher creating the pilot $16.4 million Peri-Urban Mobile Program, or PUMP, designed to address mobile black spots in bushfire prone communities like mine on the edge of Australia's cities. PUMP will provide grant funding to mobile network operators and infrastructure providers to deploy new mobile phone infrastructure to address mobile coverage in peri-urban areas. I want to put on the record my thanks to Minister Fletcher for his ongoing support in addressing issues faced by my constituents through programs like PUMP. Recent bushfires and floods have shown the importance of reliable mobile services during natural disasters. Shortly the PUMP guidelines will be released, and this program will be opened.

PUMP is a test for the telcos. In some respects it's their last chance. Unlike the last round of the Mobile Black Spot Program, where the telcos applied for zero towers—I repeat, zero towers—in my community, PUMP is their last chance to show whether they care about Australians in communities like mine. My message to Telstra and the other telcos is: if you want to show you are serious, apply for lots of towers in my community and others under PUMP. The Morrison government has done its job by putting money on the table to support telco investment in infrastructure. It's time the telcos did their job and delivered telco services to people across the country paying their bills.

The alternative future for the telco sector has been outlined in my private member's bill, the Telecommunications Reform (Telstra, NBN and Other Providers) Bill 2021. It is currently on exhibition as an exposure draft, recently released by me and supported by 18 colleagues from right across the country A growing number of colleagues are telling me they, too, support the aims of my private member's bill. It's a bill designed to create better infrastructure, better customer service and more accountability for telecommunications companies. Unfortunately, the response from the telco sector shows they just don't take these issues seriously. The telco response should surprise no-one. They effectively said two things: first, 'There's nothing to see here'—they think they're doing a great job—and, second, that the bill asks far too much of them. What the telco sector has failed to do is to recognise that there is a real problem. If there weren't a real problem, why would 18 members of parliament from across the country band together to try to achieve real change?

My bill has been welcomed by consumer groups. Choice's Alan Kirkland said: 'It's unacceptable for people who live in a major city like Sydney not to have mobile coverage in their home, and even worse in a bushfire-prone area. We find it puzzling that the telco industry, particularly Telstra, has been able to get away with substandard service for so long.' Professor Alan Fels, former chairman of the Australian Competition and Consumer Commission, agreed that more needs to be done in the telco space. He said: 'For many years the telco industry has failed to make access to mobile phone services universally available, even in a number of suburbs. Yet such access is an essential service and vital in emergencies. After waiting for so long, it is clear that the only solution is legislation, backed by sanctions compelling it.' Those are the words of Professor Fels. Phone and internet are an essential service that Australians rely on. On a good day, connectivity problems make people seethe with anger. On a bad day, it's simply a matter of life and death. The response from the public has shown me we're on the right track, and I will continue to fight for better telco services for my community.

In conclusion, I wish that Telstra would restructure their business so they actually improve service for customers who are paying their bills, not the size of their executives' pay packets. Telecommunications are more important now than ever. The COVID-19 pandemic has changed the way we live and work, the way we study, the way we access health care and the way we stay in touch with our loved ones. Unlike Labor, the coalition has improved telecommunications in many communities across Australia by delivering the Mobile Black Spot Program, and it will soon deliver the announced Peri-Urban Mobile Program. This bill ensures that the hard-won gains and accountabilities already applying to Telstra are maintained, and I commend the bill to the House.

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