Patrick Secker (Barker, Liberal Party) Share this | Link to this | Hansard source

The original question was that this bill be now read a second time. To this, the honourable member for Dunkley has moved as an amendment that all words after ‘that’ be omitted with a view to substituting other words. The immediate question is that the words proposed to be omitted stand part of the question.

Ms Catherine King (Ballarat, Australian Labor Party) Share this | Link to this | Hansard source

I rise to support the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009. The Australian Labor Party has been around since 1891. As our nation’s oldest political party, we have a very long history. When we look back at the history of this party, we see that an important characteristic has always remained true: the Australian Labor Party is the party of nation-building. We are seeing this through our investment in education, road, rail and housing across the country. It is now even more apparent with the delivery of our election commitment to build a national broadband network. This election commitment involves an investment by the government of some $4.7 billion. The commitment to build a national broadband network is one of the biggest projects the nation has seen since Prime Minister Ben Chifley introduced the Snowy hydro scheme. It is a huge undertaking and a very complicated task.

Many communities are currently constrained by inadequate broadband access and we as a government are keen to get things moving. Those same communities have also suffered from a telecommunications industry that has lacked adequate competition. What those opposite proposed in relation to providing broadband services, by way of a wireless network, to regional and rural communities was, frankly, quite laughable. Not only was the proposal of those opposite extremely unreliable but it was an inadequate option for rural and regional Australia.

On the other hand, major stakeholders have shown great interest in the rollout of the National Broadband Network. They are excited by the possibilities that the National Broadband Network will bring to our local communities. In my own community, local councils—many of whom had discussions with Minister Conroy when he visited the Ballarat electorate last month—want to be part of developing the network. I have signalled to Senator Conroy that I am keen to work with him on how these measures will benefit regions in my district.

With the bill before the parliament today we have taken another step in our task of revolutionising our nation’s telecommunications industry. The importance of the government’s reforms on growing regional Australia should not be underestimated in relation to the broadband. Discussions between Senator Conroy, local stakeholders across the Ballarat electorate and me displayed only a snapshot of the possibilities that come with a national broadband network—possibilities that will enable small businesses and regional communities to compete on a global scale. In order to make this national broadband network a reality, the telecommunications industry in Australia needs significant change—change that the Australian people have needed for some time.

Under this bill before the parliament today, the government is moving to create greater competition across the telecommunications sector, strengthen consumer safeguards and reduce red tape. Much of the attention and debate that has arisen since this bill was introduced has focused on our proposed changes to the structure of the telecommunications sector. We have seen a huge focus on this because industry knows, and consumers know, that what we are proposing is significant reform to a sector that has been constrained for a long period of time.

With this bill we are amending the Telecommunications Act 1997 to require Telstra to functionally separate unless they voluntarily structurally separate. The Rudd government’s reforms to Australia’s telecommunications sector are about implementing a system that is in the long-term interest of the Australian people. The level of Telstra’s integration within the telecommunications industry is currently highly uncompetitive. The fixed line copper network that connects almost every household is owned by Telstra. The largest cable network is owned by Telstra. The largest mobile phone network is owned by Telstra. Half of the largest pay TV provider is controlled by Telstra. Telstra’s ownership in the telecommunications industry is significant. The competitive benefits of such concentrated ownership are not easy to find. The Rudd government is working to reinvigorate sound competition across the telecommunications sector with the proposals in this bill. Our amendments in the bill work to achieve this. Our amendments address the level of Telstra’s integration in the sector to promote competition and address the failure of the previous government to act over the past decade. The current arrangements not only fail consumers but fail to promote competition for small and large business. This is no more apparent than across regional and rural Australia—and many areas in my own electorate.

Our measures are working to place Australia in line with telecommunications across other developed countries. In comparison to OECD countries, Australia is sitting in the bottom half in terms of broadband take-up. This is astounding, considering that local businesses across my electorate tell me that they need adequate technology just to survive, and particularly to be competitive in this global financial crisis. Clearly the level of technology on offer cannot meet these requirements. Not only do we have a lower level of broadband take-up but those who choose to take it up are paying high prices for low-speed connections. It is really a damning indictment of Telstra—which, frankly, has had a monopoly over telecommunications services for such a long time period of time—that we have such a woeful broadband network and that government is now required to step up to the plate in order to provide the much-needed infrastructure that will boost Australia’s economy.

The Rudd government has proposed the separation of Telstra as the company currently has an interest in favouring its own retail arm. These changes are all about introducing competition. Under our changes, Telstra may undertake, with the ACCC, to voluntarily separate its retail and wholesale services. In fact, it is the federal government’s preference that Telstra choose to do this voluntarily. If Telstra does not separate voluntarily then it will be required to do so on functional lines.

This bill seeks to promote competition and to overcome the former government’s missed opportunities in telecommunications. The bill also amends the Trade Practices Act to improve access and strengthen anticompetitive measures by amending the ACCC’s regulatory powers. As part of these measures, we are streamlining the process of access to telecommunications services. These changes were given strong support by the submissions received as part of the consultation process. The ACCC will now be able to set price and non-price terms for three to five years for declared services. Measures in this bill will also give the ACCC the ability to act quickly on breaches of the law. This can now be achieved as we have removed the requirement for the ACCC to consult with a party prior to issuing a competition notice.

The bill also seeks to strengthen the ability to enforce consumer safeguards. Consumers should have access to telecommunications services that are not only of a high quality but also affordable. High-quality and affordable telecommunications services are something that many of the residents in my own electorate have argued for, certainly since I was elected in 2001. This bill will ensure that the quality and affordability of services provided by Telstra will be maintained during the transition to the National Broadband Network.

This bill ensures that consumers and small business, especially in regional Australia, are no longer forgotten. At present, consumer protection measures include the universal service obligation, the customer service guarantee and the priority assistance arrangements. But the government has received a clear message, from a number of reviews, that these consumer safeguards need strengthening, and this legislation is seeking to achieve this. We are putting forward rules to improve the regulation of payphones, to maintain the minimum performance benchmarks and to give the Australian Communications and Media Authority greater powers.

The last point of this package I would like to recognise is the provision to reduce the level of regulation. The government has made a firm decision to work with industry to reduce red tape across the Australian economy, and this bill is another example of the government’s commitment. To achieve this we are doing a number of things. This bill will amend the Telecommunications (Carrier Licence Charges) Act 1997 to provide an exemption for carriers whose annual revenues are below $25 million from paying an annual carrier licence charge. These carriers will not be required to contribute to the universal service and national relay service levies. This is a positive move forward for carriers and consumers. As part of this package the government has also introduced changes to reporting requirements. If performance benchmarks are met, reporting requirements under the customer service guarantee, the priority assistance arrangements and the network reliability framework will be reduced. We will also be repealing unnecessary accounting and operational separation requirements once Telstra has been separated.

The Australian people are tired of inaction from governments on addressing the myriad issues that exist across the telecommunications sector. Frankly, people are fed up. The reforms that the government has outlined in this bill reflect the most significant changes to the telecommunications sector in over a decade. The package will introduce a new dynamic to that sector. We are committed to the promotion of competition and to quality services for the Australian people both in the suburbs and in regional areas. The task ahead is a tough one but incredibly important, certainly for regional Australia. The government has set a significant policy agenda in the area of telecommunications.

The Liberal Party, in government for over a decade, failed to deliver much-needed reform to the telecommunications sector. As a result, consumers and small businesses have been the real losers. Even now, with these changes in the pipeline, the coalition are not supportive of these reforms. Earlier today we heard the member for Dunkley speak on this bill and describe our position as rash, unjustified and irrational. On the other hand, we had Senator Joyce saying that he wishes they had introduced such reforms when they were in government. It is a bit hard for the government to work out what the coalition’s position is, not only on this bill but on a number of bills before us at the moment. Yet in the House of Representatives today we have heard little support for this bill from those opposite.

It beggars belief that the Liberal Party still hold such archaic views. Either they are too ashamed to state that they failed to act or the party are out of touch with the needs of everyday households. The third possibility is that the members opposite cannot reach a common policy agreement on this vital issue. And what do they do when they cannot reach agreement? They do not try and sort it out, talk to each other and reach agreement; they try, through the processes of parliament, to delay much-needed reform. Unfortunately, that is what we are seeing again here today with this bill. Personally, though, I suspect it is a mix of all of the above.

I, on the other hand, support these reforms to position Australia’s telecommunications industry for the 21st century. Members of the Rudd government are in common agreement and support of this 21st century measure. Regional Australia is looking forward to the National Broadband Network and supports many of the measures that are in this bill. I commend this bill to the House.

Kay Hull (Riverina, National Party) Share this | Link to this | Hansard source

It pains me to stand in this House today to talk about this bill, the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009, because of a speech I made in the House on Thursday, 8 September 2005. It was a speech wherein I explained the reasons why I would not be supporting the government that I was part of at that time but would be voting against the sale of Telstra. And I did vote against the sale of Telstra, for the very reasons that I espoused in my speech that day. I said:

What my electorate of Riverina and what most Australians want is a reliable and low-cost communication system that provides equity of access and affordable access. I believe that the simplest way to achieve this would be to retain Telstra’s infrastructure as a public utility and to split off its retail business.

It was clear to me at that time that we were privatising a monopoly. It was my view what we should have been doing what former communications minister Kim Beazley should have done when the former Labor government corporatised Telstra: Telstra should have been structurally separated then. It would have been the right and proper thing to have done then. Now, so many years down the track, the Labor Party understand that this was something that was required.

In that 2005 speech I gave the reasons for my view that we should structurally separate Telstra’s retail and wholesale infrastructure. Sad to say—and I wish it were not true—everything that I outlined in my speech came true for the people of the Riverina. I am not sure how privatisation worked for people in the city but I can most certainly say that for the people in the country it was not the best decision that the former government made.

Unfortunately, selling Telstra then became part of Labor policy. They agreed that Telstra should be sold and that it should not be structurally separated—as they had with corporatisation back when Kim Beazley was minister for communications. As recently as May 2009, the former Labor minister said that he had never advocated structural separation of the company.

In this debate we are being asked to support something although we know very little about its outcomes and what it actually envisages for rural and regional Australia. People might think that I would be a natural supporter of this piece of legislation, but in fact the horse has bolted. The gate is open, the horse has bolted and it is very difficult to put the horse back in the paddock in the same state that it was. That is why I stand here to raise my significant concerns about what we are facing.

The fact is we are being asked to support a bill that seeks to prevent Telstra from acquiring specified brands of spectrum which could be used for advanced wireless broadband services unless it structurally separates and divests itself of its hybrid fibre-coaxial cable network and its interest in Foxtel. We are also being asked to support the changes to the USO and the customer service guarantee, the CSG, without understanding exactly what those changes will deliver to regional people. That is not surprising, because this government has spent not one dollar on communications in my electorate since its election in 2007. But I am expected to accept the government has only good intentions where regional people are concerned.

What we have in fact is a series of policy blunders over the two years that this government has been in power. The government promised a $4 billion broadband rollout that was supposed to be up and running, I think, by last December. That was shelved. The OPEL model was shelved because it was not good enough. There was some sort of wireless performance issue and, for the ADSL2 exchange upgrades, wireless was not good enough. Then the government proposal was for a $4.7 billion rollout of a wonderful communications network that was going to reach 98 per cent of the population! That was their election promise. That was shelved, and then it was replaced. They said: ‘We’re going to give you another broadband scheme now. The $4.7 billion that we anticipated would get to 98 per cent of the population, which was our election promise to you, is now a $43 billion program that is going to reach 90 per cent of the population.’

Now we have a $25 million implementation study for the government’s proposed NBN. It is due in February. They say to me, as a representative of regional people, ‘Trust me; I will still love you tomorrow.’ I do not have any faith in these promises. Everyone in this House talks about broadband. Everyone says that we are talking about fast and reliable broadband services, state-of-the-art communications et cetera. These things do not get dropped out of midair. They do not just get dropped into place and happen as soon as we decide it is going to happen.

Who looks after the many people that I, Labor Party members and other members on this side of the House represent who are still on pair gains and RIMs? Competitors are coming through my office saying: ‘Now have we got a deal for you for regional Australia. We have not come to you before because you do not have the critical mass and there is not enough money in it for us to deliver services to you. We are interested in you now; we were not interested in you until all of this came about.’ They left us swinging on the end of the branch, with the bough ready to break. They have never been too interested in providing us with services, but now they have a deal for us.

I asked about all of the people who are now reliant on copper wire and who will continue to be reliant on copper wire for a very long time, regardless of what happens with the proposed NBN $43 billion plan. As I said, it will not get dropped out of midair. I have seen quotes in newspapers that say it will take from eight years to 18 years to roll out. Who will look after the people on copper wire? Who will look after the people with the pair gains and RIMs? What are these competitors going to do when they come in? Are they going to replace the pair gains? Are they going to build the infrastructure to replace the RIMs systems? No, they are not. They do not want to enter into those areas either. They have told me clearly that they would require subsidisation to do that, and I have no evidence in front of me in this bill of any intent to subsidise the people in the Riverina that I represent who are living on pair gains and RIMs and have inadequate services already.

I am not talking about in every gum tree in Australia and I am not talking about in communities of 50 or 100 people; I am talking about communities of 60,000 people and 30,000 people. They are in subdivisions where they are on pair gains and RIMs. You cannot deliver the technology that we are being promised. It is going to be some time till we have fibre optics running through our communities to every house. If we force this separation on Telstra, why should Telstra uphold, maintain and keep this system running and operational? Who is going to look after the people who have no other choices?

When government members from regional communities tell us what great competition this is going to lead to and what lower prices this will lead to they conveniently forget all of these points. In reality, this will be a long way away for those people because it takes such a long time to build these networks. I have been hearing rubbish on broadband speed and the rollout. It just simply is not the reality. There has to be a reality check and understanding here as to what is actually going to happen and who is going to be responsible.

In the past I have been in the position of having to vote against my own government—and it was not pleasant for me to do so—because it was something that I felt strongly about. I am sure I will never see the day when a Labor member walks across the floor and votes against their government. I can guarantee you that; I am sure of that. This legislation that has been presented in this House has so much rubbish and rhetoric attached to it. There are no real clear guidelines and understanding as to how it will work in reality and who is going to look after the people who do not get a service dropped from the sky in a short amount of time. Who is going to look after them, and why should they?

Where are the safeguards? Where are the safety nets? Where are the guarantees? What is going to happen with the CSO? What is going to happen with the USO? We know that there will be changes to the USO in this legislation. We know that there will be changes to the CSO. How can we be confident that the regional people will be looked after? We have seen the $2.4 billion rural Communications Fund disbanded and taken away by this Labor government. That was put in place to continue to upgrade services and maintain the adequacy of regional services. That money was to be invested in continually building those services. In the flick of an eye the Labor Party came in and took it away. It was absorbed into their city-centric process. I feel that regional Australia has been continually sold out.

It is my view that we should sit down and clearly assess how this new model for telecommunications in Australia will deliver quality services and technology to regional Australians. What will be the time frame for that to be delivered? Who is going to ensure the continuation of the maintenance and upgrades of services until the system is rolled out? How much money is going to be given to the companies and to the providers to ensure that this is being done? Telstra are the monopoly provider; there is no doubt about it. I am not here advocating on behalf of Telstra. I am here advocating on behalf of the people who are absolutely reliant on Telstra. Can I tell you this? They will continue to be reliant on Telstra because there will be no new group of people rushing into the electorate in the Riverina that I represent to offer these services. They will want to wait until it is all there for them so they will not have to make big-dollar investments. The critical mass is not there. The return to their shareholders will simply not be there; it is not in their best interests. We will not have the high returns of the critical mass that you might have in Sydney, Newcastle or Wollongong. They just will not be there.

Even now, with the NBN, none of the communities with populations under 1,000 are covered—and this is a $43 billion program. We have gone from the Labor promise of 98 per cent of Australians being covered for under $4.7 billion—and they promised state-of-the-art, high-tech delivery—to a cost of $43 billion to cover 90 per cent of Australians. I simply cannot figure that. Are we supposed to let them say: ‘Trust us. We know what we’re doing’? Sincerely, that is a very big ask on anyone’s part. Any attempt to abolish the universal service obligation legislation and put into the minister’s hands the responsibility for determining what should or should not be in the USO should be opposed. I just do not think that would be a sensible outcome.

I have been told by various people who have come through my office that the ACCC powers will be strengthened in our best interests. For goodness sake. I said this in my speech on 8 September in 2005: the ACCC will be the group of people looking to ensure accountability in services. That is what the former government did. They said, ‘Well, the ACCC is going to be given more power and services to make sure all of this happens.’ The fact is that the ACCC was a toothless tiger. It could not do anything when Telstra was government owned, so I do not know how it will do anything now that it is privately owned. We could not make Telstra accountable then, when it was majority government owned. I said in my speech that I just could not understand how the ACCC was going to do anything about the monopoly pricing that the sale of Telstra was going to lead to. The people I represented were totally reliant on Telstra giving them the services. True to form, the ACCC has done absolutely nothing.

Now we say that it is a bit like GroceryWatch and Fuelwatch, that we are going to give the ACCC all these powers. We are going to put in a fuel commissioner and he is going to have all these powers. I still see the same discrepancy in prices for fuel in my electorate compared with other areas. You get the ACCC in to do an investigation and they say, ‘Oh, well, we really can’t do anything about it; we don’t have the powers.’ Yet we are supposed to believe that Graeme Samuel and the ACCC are going to look after our interests after this major plan supposedly succeeds. I have been too long burnt by the promise of riches to come. I have had the most enormous disillusionment about promises about the riches to come to regional Australia. It seems to me that every time somebody wants to do something, they all decide to make an industry of regional Australia. They say, ‘Have we got a deal for you.’ This Labor government is a classic at it. It is no different from anybody else. It speaks with a forked tongue. There is no commitment to regional Australia and that is proven by the very fact that we are simply non-existent outside of dispatch box rhetoric. They say, ‘Oh, this is going to be good for regional Australia.’ They say that as if that is the seal of the deal.

I have said that Labor has already stolen our $2.4 billion from the Communications Fund. It was our guarantee that we would have quality services provided to regional areas. We have a major issue to confront here. In essence, as I stand here, it is extraordinary that we are saying two years later, ‘We don’t know exactly what we’re going to do with communications but trust us; we will deliver to you.’ That is not good enough. It is not good enough for regional Australia. I have no intention of being wooed by any false promises in the interests of the electorate of Riverina. I have not been wooed in the past; I certainly will not be wooed right now. It would be a mistake, an absolute mistake, if this bill were allowed to pass in the House without the proper scrutiny that it needs for the benefit of regional people.

Sharon Grierson (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

I rise to support the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009. It is the legislative precursor to the most important facilitation to maximise individual potential, community potential and social and economic potential in our nation’s history. This is the legislation that begins an exciting journey of cultural change. It will change how we manage every aspect of our lives, how we connect with others, how we express our creativity and how we store, document, exchange and access all forms of human activity and human knowledge. The telecommunications legislation amendment bill is designed to reshape regulation in the telecommunications sector in the interests of consumers, business and the economy more broadly. Put simply: this bill will position the telecommunications industry to make a smooth transition into the new environment of the National Broadband Network, as the network is rolled out around the country. It will provide flexibility for Telstra, letting the company make its own choice as to how it will shape its future. It will also streamline the regulatory framework of the industry, protecting consumers and enhancing competition.

People like me can feel the bonds and chains that have constrained our ICT sector finally loosening and, hopefully, falling away forever to liberate what is a wonderful industry. Most importantly, it paves the way for the rollout of the National Broadband Network, one of the most integral parts of the Rudd government’s blueprint for our nation’s future. The NBN will increase innovation and competition, and it will elevate customer standards and access. The implementation of the NBN will be one of the greatest infrastructure projects of our time—a modern-day Snowy Mountains hydro-electric scheme. I know the NBN will lay the foundation for generations of future development.

Just to run quickly through the facts: the National Broadband Network will connect 90 per cent of all Australian homes, schools and workplaces with broadband services with speeds of up to 100 megabits per second—a hundred times faster than those currently used by many households and businesses. It will connect all other premises in Australia with next-generation wireless and satellite technologies that will deliver broadband speeds of 12 megabits per second. It will directly support up to 25,000 local jobs every year, on average, over the eight-year life of the project. Crucial to all of this, of course, is the future role of Telstra.

It is fair to say that there have been very different views expressed on the best way forward for Telstra and its shareholders. As it stands, Telstra is one of the most highly integrated telecommunication companies in the world across a range of telecommunications platforms. It holds a virtual monopoly of the telecommunications industry. It owns the only fixed-line copper network, connected to almost every house in Australia. It owns the largest mobile phone network in Australia. It owns half of the largest pay TV provider in Australia, Foxtel. It owns the BigPond broadband network and the Sensis online directory.

The Rudd government believes that the failure to address the issues of Telstra’s high-level of integration has resulted in the current regulatory arrangements effectively stifling competition. The regulatory arrangements have failed consumers—consumers like the residents of Thornton, a suburb in my electorate, who for years have struggled to gain anything more than the most basic broadband internet connections. Many commentators have argued that the wide reach of Telstra has contributed to Australia continually lagging behind other developed economies on the availability, price and quality of telecommunication services and, I have to say, I agree.

Significant structural reform of the telecommunication sector has been a failing, one that lies front and centre at the feet of the Howard government. The former Howard government were guilty of delay and indecision. They were the dinosaurs of their age. I digress to reflect on my first year as a member of this House. I came in after the World Trade Centre bombing and destruction. I joined the ICT committee and I also joined the science and innovation committee. They were areas dear to my heart. I remember a government bureaucrat—a bureaucrat who advised the Howard government—and telling us at an inquiry that SMS was just a fad—it would never catch on—and that mobile phones with cameras in them would always be just a small niche market. I remember saying to him at the time, ‘I would love one dollar for every SMS text message that is sent and every phone camera image that is taken in this country.’ I hope that we do not employ that person. People like that were dinosaurs and they had no vision. For me, having been an educator and a principal, technology and innovation were just vital to everything I had done.

The World Trade Centre takes me back to watching how young people experienced that. I watched the television all night for my information. Young people were on my computer talking to people in New York. They do not trust media—they get their information first hand and direct. It was a terrible time for me. I can understand the member for Riverina’s disappointment because the Howard government certainly let everyone in this nation down when it came to be playing a part in the future and being part of what should have been for this country a great accelerator of everything we value and believe in.

A recent World Economic Forum ranked Australia 17^th in the world for availability and usage of ICT. It is not getting any better—it did not get any better under Howard—and it certainly has meant that competition levels for ordinary businesses in Australia are diminished. As the Prime Minister said today, though, we do not want to stay in the carrier pigeon age. We do not want to always be behind international ICT development or behind the demands of the Australian people. We want change and we want vision. But we do not see any change or vision from the new Liberal Party leader, Mr Turnbull. Again, with the amendments put forward today, we see more of the same old approach—delay, indecision.

Telstra, though, is a vertically integrated company and as such they provide both wholesale and retail services. As a result of that vertical integration, Telstra has both the incentive and the ability—already—to favour its own retail business over its wholesale customers. This system has not served us well. The overwhelming message from the industry and from the regulator, the ACCC, is that the current arrangements to address the issues arising from Telstra’s vertical integration are inadequate. Most of the industry and the ACCC have called for stronger functional or structural separation measures.

This telecommunications regulatory reform package before the House today represents the most significant reform to the telecommunications regime since open competition was introduced in 1997. It will lead to better outcomes, more competition, more choice and more innovation for consumers and business. The rollout of the NBN will be of enormous benefit to the ordinary people of Australia. In particular, it will benefit regional Australia, including remote and rural communities. It will bring, finally, some equality in access and opportunity.

For many years now residents have suffered from poor internet connections due in large part to ADSL being a distance-limited technology. That is, ADSL can only be offered effectively if the residence is within a certain distance of a telephone exchange. This has resulted in places like Thornton and Shortland in my electorate having so much trouble sustaining effective ADSL coverage due to distance and topographical factors. We do remember the pair gains, the RIMS, the 150 signatures—they were always just band-aid solutions. Telstra were, of course, aware of those issues, and they are aware of the subsequent importance of the effective rollout, too, of the NBN and its importance to so many people.

Appearing before the Senate Select Committee on the National Broadband Network in 2008, Mr David Quilty, Group Managing Director of Public Policy at Telstra, had this to say:

… probably the most important benefit of—

the NBN

of all—

is—

that we will be moving from what are distance limited technologies where the speeds that end users get decline the further you get from the exchange, to a fibre environment where everybody in the footprint will be able to get a guaranteed minimum speed.

He went on to say:

The idea of haves and have nots will hopefully disappear. That is the case in metropolitan areas as well as in regional areas because people in the suburbs, as you know, suffer from those distance limitations and also in some cases are not able to get services because exchanges are full or there are various broadband blockers, as we call them, that are in place that do not enable ADSL. … that is one of the critical reasons why an NBN is so important and why it should be proceeded with expeditiously.

I have to say I agree. So we do have some consensus from Telstra that NBN is an integral part of Australia’s future. For this rollout to be most effective, the legislation must be enabled here.

It is imperative that Telstra voluntarily structurally separate. As Minister Conroy has noted, structural separation can happen in a number of ways. There does not need to be the creation of a whole new company through which Telstra hives off its fixed-line assets. Telstra could transfer all of its traffic to the NBN and sell, or cease to use, its fixed-line assets. This would still result in full structural separation in time.

There has been, of course, a great discussion around these issues. I agree with several of the commentators regarding Tesltra’s future, such as Paul Budde and Richard Webb, just to name two. Busting the Telstra monopoly, I think, is a good thing. Strengthening the ACCC regarding competition in the market is a good thing. Increasing market access increases competition, and that is a good thing. Retaining government interest in infrastructure is a good thing. And what do they say about Telstra? They say that structural separation of the wholesale and retail businesses is also a good thing.

I am not a shareholder in Telstra—not directly; I do not know what super funds are doing with my money, particularly—but I do sympathise with shareholders who have seen the Telstra share price decrease. Encouraged by the Costello-Howard government to invest after privatisation, they have seen major losses under the three amigos, under the global financial crisis, and now around uncertainty regarding Telstra’s future. Until a clear decision is made, shareholders will be nervous. What is the best case for shareholders? I have to say that my view concurs with Adele Ferguson. Her article in the Australian on 16 September said it very well. Telstra should try to make the government’s approach work best for its shareholders. Like others, Ferguson suggested the best way forward would be structural separation, selling the copper network into the government’s NBN company in return, perhaps, for a stake in the NBN, and bundling its then 50 per cent share in Foxtel, BigPond and Sensis to create a separate clean digital media group with the size and capability to effectively take on the TV groups in Australia. If I were a shareholder of Telstra, that would surely excite me. Telstra could float a new business like that in an improving market, retaining a controlling share and cross-feeding customers into its retail business. So the advantages and the opportunities to Telstra and its shareholders are significant. But of course we will wait and see. I am pleased to hear, though, from the minister that negotiations are proceeding. I know the outcome is one that Telstra employees—Telstra Country Wide in my electorate—are keenly interested in.

Major provisions of the bill are aimed at increasing competition and consumer protection, and that is very much needed as well. The bill also reflects the government’s ongoing commitment to protect consumers’ access to affordable and high-quality telecommunication services. The government did carefully consider the Regional Telecommunications Independent Review Committee’s report of September 2008. But this package of reforms actually strengthens the regulator’s ability to enforce existing consumer safeguards that are in place. All of these measures that go to advancing competition and consumer protection are of great merit.

I do want to say that, as the elected representative of the people of Newcastle, the most important aspect of this bill is the groundwork it lays for the most efficient rollout of the most effective NBN in my own region, Newcastle and the Hunter. Like every colleague here in the House, I suppose, I would love to see Newcastle as one of the first areas to benefit from the NBN rollout. That is something my Labor colleagues—the member for Shortland, the member for Charlton and the member for Hunter—are particularly supportive of. I make particular note of the member for Hunter, Joel Fitzgibbon, who has set up a working group to best position our region for the NBN rollout. That came about as a result of a Keep Australia Working forum held recently in his electorate. We are working together with the state government, with Regional Development Australia and with industry to certainly advance our position and make sure that there are incentives for everyone to see that Newcastle and our region are early receivers of the NBN.

I say that not in a flippant way. I do not say it in just a greedy way. Newcastle is a very exceptional place. During the financial crisis we have achieved unemployment levels at the moment of 4.2 per cent. We recently had visitors from the Latrobe Valley to look at how we have done it. Economic growth is very real and very prosperous in our region at the moment. If you recall, we have just passed the 10-year anniversary of the closing of the BHP steelworks. People thought we were doomed. We were never doomed, because we had always, for many years before, known that innovation, knowledge and excellence were ways to the future. We have successfully diversified our economy across health, education, the financial sector, manufacturing—all sectors, particularly research and innovation. We already have quite an extensive fibre network that links our major public hospital to our university, to the CSIRO Energy Transformed Flagship. I see at the centre table Mr Snowdon, who recently visited. We were in the John Hunter Hospital having explained to us that because of that fibre network linking to Tamworth in the New England area doctors in the John Hunter Hospital in Newcastle can be observing an operation happening in Tamworth, telling them how to do it, giving them the cautions, giving them advice, mentoring and making sure those operations are carried out in the best possible way. It is exciting; the opportunities are unbelievable. We have been doing it for a while and we are really convinced that it has been part of the success of the economy of our region. We want that to continue.

I also have a very innovative private entrepreneur who put fibre some years ago into the Honeysuckle Development Corporation land around the harbour, into the main street and throughout the CBD. I am concerned for those private entrepreneurs in regional Australia who just got out and did it. I think that in government we need to be mindful that there are not just the big players; there are young, innovative companies that have done some amazing things around trying to improve telecommunications in regional Australia.

Under the previous government we in regional Australia experienced the black holes in the network. In my electorate the most disadvantaged residents are those in the Thornton area. They face every barrier possible to accessing high-speed broadband and experience high-speed frustration every day. Working with Telstra Country Wide, wireless download speeds from 550 kilobits per second to three megabits per second are now possible. For that I am very grateful for the cooperation I have always received from Telstra, but at peak times of usage those speeds plummet.

The member for Paterson, Mr Baldwin, stood in this House and ranted and raved about what the member for Newcastle and the Rudd government have not done for the people of Thornton. It just does not cut it with me, with the people of Thornton or with the people of Newcastle. They understand the opportunity lost by 12 years of a Liberal coalition government, a government that the member for Paterson was a part of. They understand and share the frustration that the Rudd government has experienced in inheriting an ICT lemon. They understand and share the disappointment we felt when the ‘Three Amigos’ adopted a testosterone fuelled approach and refused to cooperate to establish a new network with the government. They also celebrated when the Rudd government said, ‘Enough is enough; we won’t settle for anything less than the best model for telecommunications in this country. We will not just settle for fibre-to-the-node, downgrading the service to meet volumes; we will deliver fibre-to-the-home all around Australia.’ For the people of Newcastle and Thornton that means high-speed broadband to their house every minute of every day.

In conclusion, post this legislation’s successful transition through the parliament the Australian telecommunications landscape will never be the same again. That certainly will be a good thing. I can only say: thank goodness; this change is so long overdue, so needed. I welcome this legislation.

Nola Marino (Forrest, Liberal Party) Share this | Link to 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.

David Bradbury (Lindsay, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in support of the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009. This is a very significant bill for the House because the measures contained within it are some of the most important measures that will be passed by this parliament. I am confident they will be passed and that is because when each and every member of this parliament—whether it be in this place or in the Senate—reflects upon their duty to the people that have elected them to this place they will come to the inescapable conclusion that these measures are the right measures to embark upon.

It has been a very unsatisfactory regulatory arrangement that we have had in place in the telecommunications sector in this country, for many years. That has been widely acknowledged.

Jamie Briggs (Mayo, Liberal Party) Share this | Link to this | Hansard source

Set up by Kim Beazley!

David Bradbury (Lindsay, Australian Labor Party) Share this | Link to this | Hansard source

I take the member’s interjection. It has been a series of unsatisfactory regulatory arrangements that have been in place over the course of a number of governments. But the difference between those governments that have come before and this government is that this government is prepared to make the significant microeconomic reform that is needed to deliver a telecommunications industry in this country that will foster innovation, drive down prices and deliver a competitive framework. This will ultimately give consumers and small business—business generally but, in particular, small business—access to a telecommunications sector that is competitive and delivers the best outcomes for those groups.

The current situation—if you listen to those on the other side—is clearly some sort of nirvana, when it comes to the current telecommunications regulatory environment. In fact, the reality of what we are dealing with is far from that. If we have a look at the process of consultation that the government embarked upon after making its NBN announcement earlier this year, we see that there were numerous submissions made. An overwhelming majority—in fact, nearly all of those submissions—identified the inadequate and unsatisfactory nature of the current regulatory arrangements. These measures are responding to the inadequacy of those arrangements. These measures, for the first time, are demonstrating on the part of this government a preparedness to make the hard decisions—the big decisions—that will set up the telecommunications industry and our economy into the future.

If we look at what some of those submissions said, we see that the inescapable conclusion that I think was best identified by the ACCC was that Telstra remains one of the most integrated telecommunications companies in the world. There are a range of issues that are to be debated as part of this legislation. The National Broadband Network, albeit not inextricably connected to this legislation, is an important element of the debate that is to be had. The NBN is the plan that we will roll out across this country. It will deliver high-speed broadband and do what the previous government so abysmally failed to do. They have a very poor record when it comes to broadband.

Jamie Briggs (Mayo, Liberal Party) Share this | Link to this | Hansard source

Mr Briggs interjecting

David Bradbury (Lindsay, Australian Labor Party) Share this | Link to this | Hansard source

They want to object and they want to stand in the way. They want to delay and block our plan, but they had 11½ years to deliver their plans. In fact, they had 18 failed broadband plans, and they still failed to deliver broadband at the level and the speed that Australians expect.

The broadband record that we inherited is very poor. It is a record that this government is determined to improve upon. If we look at some of the OECD statistics, we see that Australia is in the bottom half of OECD countries in terms of broadband take-up—16th out of 30 countries. Australians pay more for their broadband than most OECD countries. On that measure, we are 20th out of 29 countries. In terms of average monthly subscriptions, Australia is the fourth most expensive when it comes to low-speed connections and the fifth most expensive for medium-speed connections. That is the state of affairs in broadband that this government inherited. It is not good enough. We are determined to make good on our pre-election commitments to roll out a national broadband network. We will do that.

If it was not already clear to people before we went through the process of consulting in relation to regulatory reform in the telecommunications industry, it is now crystal clear that the current arrangements need to be reformed. It is not as if the government is without support on these matters. I find it somewhat amusing, but I think it also demonstrates a little bit of honesty, that Senator Joyce has come out and reaffirmed that it is the National Party’s position that they support structural separation. The Herald Sun reported on 16 September:

Senator Joyce said the Nationals would discuss their position in the coming days but added that the party had always supported the structural separation of Telstra.

“We have no problem with a company in the marketplace that is too powerful being broken into two to assist competition,” he said.

That sounds pretty clear to me. It seems a bit inconsistent with some of the offerings from those opposite in this debate. As recently as this morning in the Australian Senator Joyce again reaffirmed his position. He said in relation to the coalition’s dogged, and very frustrating, determination to delay this process:

“I’ve got no real problem with delay” …

“But I’m not convinced we’ll listen closely to the argument that structural separation is not a good idea. I strongly believe it’s something that we should have done.”

I think, at the end of the day, that will be the conclusion that most members who have a good look at the current regulatory arrangements will arrive at. The current arrangements are broken, and not just in the eyes of Telstra’s competitors, consumers and businesses. We do not have to go back all that far to see that many people who were associated with Telstra shared that view.

It is interesting that the big argument that is being put forward by those opposite is that they have become the great defenders of shareholder value when it comes to Telstra shares. Forget about your obligation to all of those constituents that you represent, including consumers and small businesses, who are trying to access the services.

Jamie Briggs (Mayo, Liberal Party) Share this | Link to this | Hansard source

Mr Briggs interjecting

David Bradbury (Lindsay, Australian Labor Party) Share this | Link to this | Hansard source

We are here, it seems, just to protect the interests of Telstra shareholders. I think there is a legitimate debate to be had about whether or not these proposals will in fact be detrimental to Telstra shareholders. I think there are some good reasons why Telstra could in the long run become a better company and could deliver better shareholder value as a result of these changes. I will come to that in a moment. That view is not without support amongst those that know a little bit more than the member for Mayo when it comes to valuing shares in the marketplace.

Jamie Briggs (Mayo, Liberal Party) Share this | Link to this | Hansard source

Mr Briggs interjecting

David Bradbury (Lindsay, Australian Labor Party) Share this | Link to this | Hansard source

When it comes to shareholder value, I simply make the observation that Senator Minchin, who is the opposition spokesperson on these matters, has become the white knight for Telstra, defending shareholder value. I put a fair bit of effort into searching the Hansard record—and perhaps the member for Mayo will have some record to the contrary—for any previous comments from Senator Minchin in defence of shareholder value. I thought a good place to start might be to go back to when he was a minister of the Crown, the finance minister, and the T2 share offer came into effect. At that point shares were at $7.80. I noticed that, when T3, which was also undertaken by those opposite, came into effect, shares had dropped to $3.30—less than half the value of the shares just a few years earlier. You would have thought that, with this massive erosion of shareholder value, someone so principled in his defence of the value of Telstra shares would have had something to say. Yet I cannot find a single comment. No doubt the member for Mayo, when he makes his contribution—and I look forward to that—will bring forward some evidence to the contrary on that point.

When it comes to shareholder value, just a few years ago, in the course of my research when trying to find some of those comments that I thought Senator Minchin may well have made, I saw some comments that were made by an executive of Telstra at the time, Phil Burgess, when what are largely the current set of regulatory arrangements were in place. He had a few things to say in relation to shareholder value. In fact, when he was commenting on shareholder value he brought his mother into the picture. I am sure she is a lovely woman—I do not know her personally—but he made an observation that might have been of some import to those people who were considering at the time whether or not to invest in Telstra. He observed that he would not recommend Telstra shares to his mum. That is an extraordinary thing for an executive of a company to say about his own company, so you would have to think that there was something pretty serious threatening or jeopardising the value of Telstra shares as they were then.

I thought, ‘I’ve got to find out what it is that was such a threat to Telstra shares that an executive of Telstra would come forward and say that he would not even recommend to his own mum to buy a share in that company. Then I found the quote from Mr Burgess:

‘Our struggle—

that is, the struggle of Telstra—

is against a repressive, intrusive, draconian, punitive system of regulation.’

He is not known for his colourful language, but he went on to say:

‘if you put a baby in a cage with a tiger and the tiger eats the baby, you shouldn’t be surprised’

I am not even going to try and interpret the metaphor, but the point remains: so bad is the current set of regulatory arrangements that even those who benefit from them—

Jamie Briggs (Mayo, Liberal Party) Share this | Link to this | Hansard source

The ones you set up.

David Bradbury (Lindsay, Australian Labor Party) Share this | Link to this | Hansard source

The ones that we set up, says the member for Mayo—and the ones that clearly were retained for the entire period of the previous government, for a large part of which he was a senior adviser to the government. The reality is that I am not here to defend those that set up this failed system. We are here to introduce an improved system. There are those that will defend the failed system and then, when their defence can no longer be maintained, will say, ‘We didn’t set it up; you set it up.’

Jamie Briggs (Mayo, Liberal Party) Share this | Link to this | Hansard source

Aren’t you proud of the Hawke and Keating record? Have you walked away from it?

David Bradbury (Lindsay, Australian Labor Party) Share this | Link to this | Hansard source

We are proud of the Hawke and Keating record, but they did not get it right on this one. But, by the same token, they delivered some major reforms to the Australian economy. Whether it was floating the dollar, deregulating the financial markets or liberalising our trading arrangements, they made the tough decisions in the way that this government will make tough decisions of the sort that it is proposing. This is one of the most significant microeconomic reforms that this government has put before this parliament. Those opposite have been left behind, their only argument being that they are the great defenders of Telstra shareholder value.

Jamie Briggs (Mayo, Liberal Party) Share this | Link to this | Hansard source

No, and the taxpayer.

David Bradbury (Lindsay, Australian Labor Party) Share this | Link to this | Hansard source

Well, I think we have demonstrated—

Janelle Saffin (Page, Australian Labor Party) Share this | Link to this | Hansard source

I remind the member for Mayo that he is on the speakers list and he will get a go shortly. So just contain yourself for a little while, please, so I can hear. Thank you.

David Bradbury (Lindsay, Australian Labor Party) Share this | Link to this | Hansard source

On the issue of shareholder value, I think it is worth noting the views of some market economists and some people who are better placed than many of us to assess what impact these arrangements might have on Telstra and its share price. On 17 September this year I saw in the Australian Financial Review:

Analysts at Macquarie Equities Research upgraded the stock to ‘outperform’ from ‘neutral’ while maintaining a $3.60 target price, saying the government’s regulatory reforms would allow for clarity and force a deadline by which a deal between the government and Telstra over the NBN would be reached.

‘Should Telstra reach a deal with the government, it may be able to recover significant value,’ said Macquarie analyst Andrew Levy in a note to clients.

That is a very good point. The difficulty and uncertainty surrounding the current regulatory arrangements have not been a positive for the share value of Telstra shareholders. The member for Mayo may wish to contest that point, but I would be very surprised if he were prepared to contend that these current regulatory arrangements are delivering the best outcomes for consumers and businesses. Frankly, they are not—and that is what is driving this reform. But I make that point in relation to shareholder value because that seems to be the one fig leaf behind which those on the other side are seeking some cover.

I also saw in the Financial Review of the same day a little piece entitled ‘What they said’. It is worth looking at. Goldman Sachs, which is a great authority in this place, particularly since the member for Wentworth joined us, said:

The announcement could mark the last of the adverse regulatory news flow for Telstra. While full resolution is unlikely until the end of the year, we are nearing greater certainty.

Obviously Goldman Sachs sees some opportunity for an optimistic outlook heading into the discussions between the government and Telstra and beyond. Credit Suisse said:

In order for the government to deliver its policy objective, it needs Telstra on side. So, despite the large regulatory stick, we still see plenty of scope for Telstra to extract value from NBN negotiations.

Merrill Lynch said:

Assuming Telstra agrees to the gradual structural separation and is allowed to acquire future spectrum and keep Foxtel, there are no changes to our earnings forecasts or valuation.

UBS said:

Structural separation, if it emerges, should help crystallise the value of assets and Telstra’s dominant fixed-line customer base. Additionally, separation should release Telstra from regulatory shackles.

I would suggest there was a little hyperbole in Mr Burgess’s commentary, but they are the sorts of shackles that he was referring to.

I put it to the House that, far from being a great detriment to Telstra, these reforms also provide great opportunity. As a nation we need to keep our eye on the big picture, which is ensuring that we have a telecommunications sector that is open and competitive—one that encourages innovation, one that allows consumers to access those products on that market as cheaply as possible and one where the market is as efficient as possible.

Citigroup were confident of a favourable outcome under the new management team. However, there is still a lot of uncertainty. Morgan Stanley said:

Telstra’s negotiating position appears to be far better than the current stock price implies, and we believe a more moderate outcome will emerge.

Deutsche Bank said:

We estimate the cost of structural separation is about $2.5 billion, but vending assets in return for a minority stake in NBN and transfer of $8.5 billion of debt could prove attractive.

These are hardly the sounds of the death knell of Telstra and hardly any support for this proposition that the Telstra share prices are going to take a hit of the sort that is being promoted by those on the other side.

I would like to draw the House’s attention to a couple of other comments that really go to this issue of the opportunities it creates for Telstra. I see in the article Reinvention Essential for Telco’s Future in the Australian Financial Review on 6 April:

There are potentially positive dimensions to structural separation for Telstra. A new wholesale division could be formed with capitalisation contributed by government and even in partnership with other telecommunications players.

This is obviously speculating on various options before the government’s announcement was made. It continues:

This business would be heavily regulated but would also be low-risk with predictable returns.

           …         …         …

It would still maintain significant market power because of its scale and brand. Its prospects of competitive success in this business must be considered good. With lower prices and better services, new waves of demand will be unleashed.

These are the sorts of opportunities that exist. We want to work with Telstra to deliver separation either structurally in a voluntary way or functionally. It will deliver a more open and competitive framework. (Time expired)

Jamie Briggs (Mayo, Liberal Party) Share this | Link to this | Hansard source

It is a great honour to follow the member for Lindsay. I respect his authority on these subjects and I know that, in the past, he has focused very much on these issues. He has a great understanding and depth of knowledge about this and it is a great opportunity to follow him in this debate. I appreciate the fact that he has put his point of view to the parliament and it is a point of view that I largely disagree with.

I support very much the second reading amendment, moved to put off the debate of the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009 until we have the results of the implementation study into the NBN mark 2. I think it is mark 2 we are at. I am sure there will be mark 3, 4, 5 and maybe 6 to come, but it would make a lot of sense to wait for that study to be done, given the government has put a significant amount of effort into the study. It is a confused position we are in because we heard again today in question time that the whole concept of a business plan, for the ‘small’ figure of $42 billion, has not yet been put together, which is quite extraordinary I would have thought. The member at the table, Mr Gray, in his previous role in a very large multinational company would not have been able to get away with that. Nonetheless, we will continue.

What this is about is the government’s complete and utter inability to get Telstra to play ball with them on their National Broadband Network. That is exactly what this bill is about. It is the sword over the neck of Telstra by using the availability of the next-generation spectrum, which Telstra will be very keen to participate in the auction of when this minister turns off the analog signal for TVs in a couple of years time.

We know from international examples that the sale of the spectrum will yield extraordinary amounts of money. There is a very good reason for that. It is because it is in a very high quality spectrum and it will allow Telstra, if Telstra are successful in bidding for it—you would think they would be very keen to at least get part of that—to expand their very capable Next G network, which is already delivering very good speeds.

I am sure many members in this place who use their Blackberries around the country—I am sure most now have Blackberries—are taken by just how quick the speeds are. There is a good reason for that—it is because Telstra have invested a lot of money in their Next G network, which delivers very good service. That is the truth of it. I know my electorate still has black spots or occasional dropouts because of the topography of the Adelaide Hills and the Fleurieu Peninsula, but the speed of delivery is actually very good. Telstra will want access to the additional spectrum because it will allow them to ramp up those services, which questions the very need for the fixed line service that the government is running around bragging about, saying how important it will be.

My electorate of Mayo—which is 20 kilometres in parts and 30 kilometres in other parts stretching far out from the city of Adelaide, which is a lot closer to a major city than some of the members’ electorates in this place—will not get this NBN under any circumstances. I know Senator Minchin, our opposition spokesman on this, and who is doing a very good job, has highlighted the point that towns with a population under 1,000 people will miss out on the NBN and will be given a second-rate service. I contest that it will be lot more than that. I contest that all of my electorate will miss out on this because it will just not be economically viable, and we have not seen any evidence to the contrary thus far.

The reason we are debating this bill today is that the government made a promise before the last election that it could never keep. It made a promise because it fitted in with the political opportunity at the time, which was to expose the previous government as being old and out of touch compared to the newfangled, technological age Prime Minister being put forward in the Kevin 07 campaign. It was a very clever political campaign, and I suspect the member at the table had a bit to do with thinking about how it was run and won. All credit to them; it was a very good campaign. This issue fitted in with it perfectly because it was a future-looking infrastructure issue. But the truth is there was no detail put into the work behind it. It was a campaign promise made with the figure of $4.7 billion plucked from the air: ‘This sounds like a good idea: 98 per cent of the country for 12 megs per second.’

That was not then possible to implement post the election. They had to seriously sit down and work out what they were going to. Rather than say, ‘Actually, we might have made a mistake here; we shouldn’t have got rid of the coalition’s OPEL plan to cover the underserviced areas’—which, had they continued with it, would have meant that today we would have faster broadband in my electorate and in many regional electorates throughout Australia—they cut that. They needed the money and cut that plan. Instead they announced this National Broadband Network mark 2. We heard the Minister for Finance and Deregulation today talking about just how important a superfast internet was and so forth.

The reason that we have this bill is because Telstra did not want to cooperate with this whole idea, and if you do not have Telstra playing ball on this issue you do not have a plan. That is the truth of it, because Telstra have the network, of course; they have the asset; they have the means to deliver it. So the government had to do something. They found that Telstra was strangely not willing to be part of a $42 billion plan for which there is no business case, which no-one knows how to do and which does not make a lot of sense. What they have done is ask, ‘What would be the most attractive thing that Telstra would be looking for into the future?’ and then threaten it through a piece of legislation.

It is an extraordinary attack on a business in our country. For a government to use the power of this place to attack a private company is extraordinary. Telstra is now actually a private company, of course. The previous government sold Telstra. Those opposite, who are supposedly completely committed to microeconomic reform, as we heard from the member for Lindsay, opposed that every step of the way—as they did pretty much every piece of legislation in the previous 11½ years. So you have a private company that is being attacked through legislative means by a government. You have a very large group of shareholders who will lose value with no compensation—not that we know of at this point in time; I suspect that in the end they will get very good compensation. So who loses in the end? The taxpayer.

The reason that Telstra is as integrated as it is is because the previous Labor government, with the communications minister, the Hon. Kim Beazley, the new Ambassador to the United States of America, made the decision to have Telstra as one entity. That is why the company is the size that it is today. It was the next government, the Howard government, that sold Telstra as it was. It sold Telstra as an integrated company, including the network asset and the retail arm. I believe that if we could again have our time in the early 1990s we would separate Telstra from its network and its retail operations. We should have done so. We made a mistake in the early part of the 1990s.

But the problem with these things is that you cannot unscramble the egg, because somebody will get hurt. The member for Lindsay claimed that all we are talking about here are the shareholders. I do not agree with that at all. The taxpayer will carry the can on this, because there will be a huge compensation bill for the government to pay on this. Our Constitution protects private companies at least to that extent. I am not sure that we can even change that here. So the taxpayer will lose on this, and all because this minister has absolutely failed to come up with a decent broadband plan. This is slogans above reality.

What we saw was a very clever political campaign run against the previous government. That has now run into the reality of the brick wall of government, where they cannot do what they said that they wanted to do. Who will pay? Sure, the shareholders of Telstra will pay. But it will be the taxpayers who will pay. They will be the people who carry the can on this. That is the great tragedy in what the government is trying to do here.

It is absolutely outrageous that in our free and open democratic country the government would use the parliament to threaten, bully and legislate a company into submission. No-one is saying at all that our regulations as to the telecommunications industry are perfect. I would agree. I went through a little bit of this in the last 12 months of the previous government, and it is a minefield. The role of the ACCC is a very difficult one and it has been challenged over a long period of time. Telstra have not helped themselves. They are an easy company to attack and to use as a whipping boy. They do things like creating the recent $2.20 fee. That was, frankly, a dumb decision for a company like Telstra to make. They encourage community mirth. However, that is not to say that we should in this place then legislate them out of existence or legislate them so that they behave in the way that this government wants them to behave. You simply should not do that. It is a dangerous path, in my view, that we are going down in doing this.

This government will regret the decisions of this minister. This minister has fundamentally failed to recognise the realities of what he is trying to do with this piece of legislation. I support very much the shadow minister’s approach to this issue. The government would be very wise to wait for its implementation study—or its scoping studies—to be finalised, which I understand will be early next year. It is not that long a time to wait. What they are hoping for, I suspect, is for this legislation to not have to be used. What they are actually hoping for is for Telstra to come to them on bended knee saying: ‘We’re sorry. We know we’ve misbehaved. We’ll be better in the future and we’ll play ball.’ To that extent, the new management team seems to have a more reasonable approach to public policy than the previous management team; that is for sure.

It was interesting to see the member for Lindsay defending a former government relations officer at Telstra previously. I am not sure that his constituents would agree with him on that. I also noticed that the member for Lindsay talked about different advisers’ or analysts’ recommendations about what will happen with the Telstra share price. He quoted one in particular, but he did not fully go through what exactly they had said. They also said that the NBN cannot be delivered until 2025. I am not sure that the member for Lindsay got the full briefing note on that one.

I also noticed—if we are going to talk about people’s views on this in the national newspapers—that in the Australian Financial Review on 14 October there was an article which said:

Investors Mutual is an Australian equities specialist that has more than $3 billion in funds under management for a range of clients across the country. It has a conservative investment style with a long-term focus and aims to deliver consistent returns for its clients.

We are strongly of the view that the Telecommunications Legislation Amendment Bill 2009 is not in the best interests of Australia’s population of 21 million and is certainly not in the best interests of Telstra’s 1.4 million shareholders.

That is one. Another view is from Peter Swan, who is an academic at the University of New South Wales. The Labor Party used to like academics and what they had to say. He was a little stronger with his language in the Australian newspaper on 16 September, where he wrote an opinion piece. The headline was ‘Rudd playing Ned Kelly with Telstra,’ and he said:

Shareholders will be the biggest losers from the government’s unconstitutional moves against the telco.

He compared the government’s behaviour—they were his words, not mine—to Latin American dictatorships and an Asian country which we have a very strong trading relationship with. There are a range of views on this, as there always are on investment decisions and so forth, so I think the member for Lindsay needs to be a little careful in relying on just a couple.

The inescapable truth is that the government has not come to grips, at this point in time, with just how much money this will cost them. If they force Telstra to structurally separate there will be a massive compensation claim—and all because of their flawed NBN mark II. So we think they need to go back to the drawing board on this. We think this approach of using this place to try to belt Telstra into submission is wrong. We think there is a better way to go about broadbanding this country. If that is what it is about then there is a better way to go about it.

The government’s approach in this place is to accuse the opposition of being laggards on the issue of broadband or of not understanding the speed, the cost, the commitment and the need for it in Australia. They compare us to countries like the Slovak Republic, which I think is about 79,000 square kilometres in size. My electorate is about 9,500 square kilometres, so I am not sure we are actually comparing apples with apples in that respect—to use that much overused metaphor. If you look at countries like the United States and Canada you find that Australia actually compares reasonably well. And you have to compare us with countries like those, you see, because of the tyranny of distance. It is the great challenge of Australia.

You cannot have the same system across Australia. You cannot have a fibre network that services all of Australia. It is just not economical; it is just not possible. You need a range of technologies, and that is what we have always argued. There are places—I said this last time we talked about broadband in this place and a couple of interesting emails were posted—in Australia, many of them in capital cities, where you can get the best speeds available today. There are not enough of those places. Sure, we need some more investment, but there will investment because the companies will be attracted. That is the very nature of the market. In the big cities that will not be a problem. The issue is, of course, in the under-serviced areas like my electorate and many electorates like mine around the country—the outer metro and regional electorates, like that of the member of Mallee. The member for Mallee represents that great township of Mildura, which has always had challenges. When I was growing up there, there were two TV stations. Those are the places where government needs to invest to ensure that those citizens keep up with reasonable speeds at reasonable costs. That is where the focus for broadband in Australia should be.

Having a large integrated company actually helps with that. It helps ensure that you can service under-serviced areas through funding black-spot types of programs or assisting with the funding of technologies which help keep those places comparable with their city cousins. So I think there is a mistake in the way that the government is using this as a political bludgeoning tool instead of recognising the policy reality that is broadband in Australia.

As I said at the start, the developing speed of the 3G network that Telstra, Optus and others are implementing is clearly part of the answer into the future. It will be more attractive for people to use wireless technology at reliable and fast speeds, and that all relies on that spectrum being available for the companies to use. That is where this legislation is most vicious—it uses what is an attractive and necessary technology for the future as the gun at the head of parliament to force a policy outcome that this government wants for political reasons. They talked themselves into a problem with their promise originally—before the last election. It was a mistake. It was very clever politically but it was never possible policy-wise. It was a five-page document, from memory. At least there was a document in that respect. On this policy there is not even a business plan. There is $42 billion, with the taxpayer footing the bill.

Those opposite allege that our interests here are with the shareholders only. That is simply not true. Sure, we are representing over one million shareholders, including people in my electorate who are very worked up about this, but we are actually representing the best interests of the Australian taxpayer and the best interests of the Australian consumer when it comes to broadband, because the government is wrong-headed on this issue. They are going down the wrong path. They are using the parliament in an inappropriate fashion. It is a dangerous step for us to take. I oppose the decision of this government and I support very much our amendments on this bill.

Brett Raguse (Forde, Australian Labor Party) Share this | Link to this | Hansard source

I acknowledge the last speaker and certainly some of the concerns raised. But I felt rather depressed by the end of that particular contribution, because you would expect some youthful exuberance over the government’s moving forward and what we are trying to do as a major part of infrastructure rollout and the business models that sit behind that.

The concerns and fears probably need to be considered, but really the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009 is about the future. It is about moving forward and taking ourselves from a position where our telecommunications systems do not work. There is a lot of history involved, and to a large degree it is about political positions that have been taken in the past, to the point where Telstra has become very political in its own structures. This government has taken action to get some clarity about the business model and the way the business model needs to be proposed for the future. In fact, we can almost suspect that things had stalled rather radically. I have spoken many times in this chamber about issues relating to telecommunications and certainly to Telstra and their response and non-response to a whole range of issues.

So this telecommunications legislation that I rise to talk about tonight is very important, not only for the people of my electorate but certainly for the country. I will give a bit of detail about the bill before I talk about some of my own observations, some of the effects and what I believe are some of the benefits of this particular approach.

As I said, this legislation is very much about improving competition. It strengthens our consumer safeguards and removes redundant red tape. This is very much like the analogy of the old Holden, which I think I have used before in this chamber. You have put on the dual exhaust, you have put on the triple carbies, you have put on the headers and have even put on a foxtail, but you find that the car still uses too much fuel and continually needs maintenance. That is the old system that we have. There is a point at which you decide that you have to get rid of the old Holden and invest in a new super-fast vehicle. Essentially that is what we are doing as a government. But to do that we need to consider the business structure and the level of competition that should go with that particular structure.

The choices of successive governments to move to a privatised telecommunications system have changed the nature of telecommunications in Australia. While many people in my electorate question these decisions to this day, we must make the best of the environment in which we find ourselves. An effective privatised telecommunications system requires effective competition. The nature of fixed-line telecommunications has always presented a fundamental challenge in this regard, because it is impossible for a company to economically justify installing its own wire throughout our large country. This has meant that most fixed-line service competition continues to occur at the retail level. To differing extents, these retailers remain dependent on the substantial Telstra-owned infrastructure we all enjoy—or have difficulties with.

Of particular note is that Telstra also competes at the retail level. The transition to a privatised system has therefore presented a myriad of challenges to providing effective competition. This legislation targets the systematic and developing challenges of telecommunications in Australia.

Currently Telstra has formidable market power in Australian telecommunications through fixed-line copper, cable, pay TV and mobile phone and retail assets. This part of the reform targets Telstra’s motivation to favour its retail arm over its other retailers. This bill seeks to ensure that Telstra splits its network operations and wholesale functions from the remaining components of Telstra. The preferred approach of the government is for Telstra to structurally separate voluntarily, but options are left open should this not occur.

The separation of Telstra’s wholesale and retail businesses must be considered within the broader context of the National Broadband Network. The NBN company is to be a wholesale-only telecommunications provider with open-access arrangements. This structure will allow effective and efficient competition amongst retailers. The government is open minded on the model used for Telstra’s structural separation. One of the more interesting options involves Telstra gradually moving its fixed-line network to the NBN, which would result in a wholesale-only network not controlled by any retail company. I believe that this particular approach would probably be a great outcome for Australian consumers.

While the big news in this bill relates to vertical separation, meaning separating wholesale and retail components, the bill also proposes horizontal separation. Reforms in this area are to tackle the market power wielded by Telstra’s copper, cable and mobile assets. It is proposed that Telstra’s acquisition of wireless signal spectrums be dependent on structural separation and, if deemed necessary, on Telstra’s divesting itself of its hybrid fibre coaxial cable network and Foxtel interests.

Telstra sometimes gets an unfair cop about the state of broadband and other telecommunications services in Australia. We live in a large, decentralised, hot, sparsely populated part of the world. The SCAX huts do not just appear in the middle of nowhere. They require expensive planning, equipment and continual maintenance. On this ground alone Australia’s communications systems are not directly comparable to those of the UK or most OECD countries. The fact that we have some effective communications systems in Australia at all is a credit to Telstra’s past work, particularly going back to the days of PMG and Telecom Australia.

It is important to note that Telstra’s actions in the current system are mainly a reflection of that system. As a private company Telstra’s prime responsibility is to its shareholders, and its actions reflect this commercial reality. Telstra and other industry players will always seek to maximise their position within the provided regulatory framework. It is our role as a government to ensure that this framework provides the best results for the Australian people.

Other changes include competition reforms of the Trade Practices Act. Changes to the Trade Practices Act are proposed to manage competition issues in relation to the telecommunications access regime. Telstra’s competitors have long been frustrated by issues of access to infrastructure such as local telephone exchanges. The ACCC has received more than 150 access disputes when, incredibly, only three disputes have arisen over other regulated industries. The changes in this area aim to clarify pricing terms and conditions for declared services, putting in place binding rules of conduct for services and immediate remedies for violation of these rules, determining fixed principles to apply beyond access to termination durations, removing merits, reviewing certain regulatory decisions made by the ACCC, removing the ACCC requirement to consult with a party prior to issuing a competition notice and clarifying the application of competition notices to content services.

These changes will clarify where telecommunications industry players stand and allow the government to act more quickly and decisively when issues arise. Furthermore, they will limit the ability of industry participants to stall compliance when it comes to competition issues.

Another component involves the strengthening of consumer protections. A number of telecommunications industry consumer safeguards are currently in place: the universal service obligation, or USO, which applies to the supply of telephone and payphone services; the Customer Service Guarantee, or CSG, which contains performance requirements and penalties for when these requirements are not met; and priority assistance arrangements for individuals with a diagnosed life-threatening medical condition.

The proposed changes in this area are to modernise consumer protection regulation. Modifications to the USO are proposed to make it a requirement of Telstra to supply a basic service with specific connection and repair periods, reliability requirements and performance benchmarks. Telstra payphone and universal service requirements will be tightened, with ACMA to have more of a say on whether a payphone is removed. As telecommunications service quality standards have been falling, minimum performance requirements will be put in place for the CSG. Civil penalties and infringement notices imposing fines are proposed to manage noncompliance. New time frames for connections and repairs will apply to wholesale service providers. The intention of these changes is to minimise the ability of retailers to blame wholesalers for poor retail service.

Consumers may still choose a service where the CSG does not apply. However, it is proposed that they will have to fill out a standard form of agreement to waive their service provider of CSG obligations. This will help ensure people are aware of the implications of their choice to forfeit CSG consumer protections. All telecommunications providers will now be required to offer priority assistance to customers or inform customers of providers that offer this service. This will ensure that people who need an ultrareliable service are aware of and able to access a priority assistance service.

The fourth component includes removal of red tape. The government has had a hard look at the existing regulation structure to ensure that unnecessary and redundant regulation is removed. The proposed changes include: small carriers are to be exempted from an annual carrier licence charge, universal service live charge and national relay service charge; reduced CSG and priority assistance reporting if performance benchmarks are achieved; redundant Telstra reporting to be scrapped once separation has occurred; and the removal of the Telstra requirement to enable consumers to achieve 19.2 kilobits per second internet services.

That last change may appear unusual on face value. However, 19.2 kilobits per second is less than three kilobytes per second. By modern standards, a three kilobyte per second internet connection is also not good enough. So modern internet speed demands, along with the variety of products and options available now, render this requirement redundant. Individuals in situations where they struggle to reach 19.2 kilobits per second are likely to also have difficulties receiving ADSL broadband. However, the Australian broadband guarantee initiative, where the federal government provides subsidised wireless or satellite services, provides assistance to people in this situation. It is an option for the future to put a higher speed data requirement in place through the universal service obligations. The challenge in this area is that imposing this requirement on any particular company would place that company at a competitive disadvantage. Inevitably, there would need to be compensation to a company or companies affected.

Within the electorate of Forde there are significant telecommunications issues, and I have spoken about those a number of occasions. They range from cows chewing temporary copper line solutions in Running Creek through to difficulties accessing ADSL2+ in new areas of the electorate. Some of the strangest and most perplexing issues my office has had to deal with relate to the relationship between wholesale and retail telecommunications companies. The strangest issues tend to arise from the interface between Telstra Wholesale and retailers. I am sure many members in this House have had ongoing issues about getting information, and the fact that one company controls the access to that information makes it very difficult to break through. I will give some examples.

Mr Bob Whitten recently came into my office with what appeared to be a relatively simple problem at his end. Bob was trying to sort out an ADSL service for a property near Yatala, which is less than 40 kilometres out of Brisbane. Two things made this case unusual. Firstly, a basic ADSL service had been on the property for two years before he attempted to access the ADSL2+ service, but he was then being told he could not receive the ADSL2+ and nor could he receive the ADSL, which he had been receiving for two years, because he was on a pair gain phone line. The pair gain explanation was as much as Bob could be told by his retailer. In turn, this explanation was all the retailer appeared to be able to get from Telstra Wholesale. This was an amazing situation when you consider that the pair gain explanation probably was to do with some sort of hub or splitting box, that essentially he had the service and it was later taken up. But despite the efforts of my office and his own inquiries, we could not get to the bottom of it and his service completely dropped out. We could not inquire with Telstra as the service was provided by a retailer other than Telstra. We were told to go to another phone number, but that number simply gave us an understanding of who our local retailer was, so we were going round and round in circles. In the end, all we could do was speculate on what the issue was. Our best guess was once the system reached capacity it could no longer work for anybody, so that was where we sat: with no service.

Overall correspondence from constituents has been that resolving Telstra infrastructure problems through the retailers other than Telstra is difficult. In Munruben, a lady called Carol spent months seeking answers to an intermittent ADSL problem through her retailer iPrimus, but it was not resolved. In Buccan, which is a very close suburb to Beenleigh, another consumer attempted to get a landline service with retailer Dodo and was stalled indefinitely by Telstra simply because they were not prepared to lay the specific cables and lines. In the end that person gave up and put in a satellite phone when only 50 metres up the road people had a normal landline service.

In my experience in our office, the main difference between being a Telstra retail customer and a customer of other retailers is one of information. Better information and advice on wholesale issues appears to be available through Telstra Retail rather than other retailers. Structural separation of Telstra will place all retailers on an equal playing field. What we need to ensure is that this is a responsive and effective playing field. Retailers and customers need to be able to access timely, valuable and accurate feedback on these wholesale issues. The wholesale entity will need to have appropriate drivers to ensure this occurs. In light of the concerns experienced in the electorate, whatever business model we propose as a government—and I believe this is a good business model—will provide the impetus to allow further competition and the cleaning up of a system that has been broken for a long time. The member for Lindsay spoke at length about his experiences in his electorate. I think we have all experienced the same problems and getting them resolved is always very difficult.

I acknowledge that not all people are supportive of this legislation, and we have heard the varying arguments in this chamber, particularly on structural separation. However, to allow the current arrangements to continue would exacerbate the problems. It is like knowing that you are sick and need medical assistance but pretending you are not ill. Eventually, illness will catch up with you, and I think that is what has happened with our telecommunications system. This legislation will cause some short-term pain to Telstra. However, either now or in the future, the structural separation of Telstra is going to be necessary for Australia’s privatised telecommunications system to deliver for consumers. The Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009 is critical legislation that will modernise telecommunications regulation, improve competition, strengthen consumer safeguards and remove redundant red tape. I therefore commend this bill to the House.

Luke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

I welcome the opportunity to speak on this very important legislation in the House tonight because telecommunications is the very linchpin of doing business in regional and rural areas. Without world-class telecommunication systems you cannot operate businesses in a regional area. Many businesses in my electorate depend on telecommunications as their lifeline. Many consulting engineers, architects and other professionals email their designs and developments to clients they may not have met, clients who are perhaps on the other side of the world. Such is life in rural and regional areas these days. It is very much about the provision of services as well as the provision of goods, and quality telecommunications is the key to ensuring that regional businesses can compete with metropolitan businesses and businesses around the world. So I certainly welcome the opportunity to speak on this legislation, as it has the potential to impact on virtually every person that I represent in this place.

The Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009 amends a number of acts and has three major parts. The first part deals with the structural separation of Telstra. The second part deals with access and anticompetitive conduct regimes under part XI of the Trade Practices Act. The third part of the legislation deals with consumer safeguards such as the universal service obligation, the customer service guarantee and priority assistance.

The first section of the legislation deals with the vertical and horizontal integration of Telstra. In effect, this legislation gives Telstra two options. The company can voluntarily structurally separate its retail and network arms. If, however, it chooses not to do this, the government will enforce the functional separation of Telstra and make it impossible for the company to access specified bands of spectrum which could be used for advanced wireless services. This approach is puzzling, as the government has not previously raised structural separation as an option. In fact, as recently as May 2009, Minister Conroy told a Senate estimates hearing that he had never advocated the structural separation of Telstra. Telstra has some 1.4 million shareholders, many of whom are small-time investors, self-funded retirees or holders of self-managed super funds. These people had no idea in 2007 that the Labor Party intended to use these bullying tactics to the detriment of their investment. The government has no mandate to do this. It may be that Kevin Rudd and the Labor Party have no idea what they are doing in heading down this path. In 2007, Labor’s policy was to scrap the Howard government’s OPEL program, which was providing high-speed broadband services in rural and regional areas—a program that would have been completed by now. But what do we have in its place? We have a scheme that is still in its very early stages, a scheme which depends on the carving up of the major telecommunications carrier, a scheme which has been ill thought out and a scheme whose viable future we are yet to see.

The government merely destroyed OPEL and then proposed to build a $4.7 billion fibre-to-the-node network using taxpayers’ money. After realising that their grand fibre plan would not attract private investment, the government went back to the hollow men’s whiteboard and came up with a much grander scheme—the $43 billion National Broadband Network. It is quite incredible, really. The government could not get a sufficient number of businesses to invest with the government in their original fibre-to-the-node plan, so their response was to build a much grander plan, a $43 billion plan. It begs the question: how can this much larger plan be viable when the more limited plan was not? How can a much larger plan, funded by the taxpayer, be viable when there was little interest from the commercial sector in the commercial tender processes, resulting in the government being unable to fly its fibre-to-the-node plan? Is this a prudent investment of $43 billion of taxpayers’ money? Has there been proper consideration of the opportunity cost of capital? Has there been proper analysis? I will dwell on this a little later.

The primary purpose of this bill is to ensure that there are no major competitors to the government’s National Broadband Network plan. Ultimately, the structural separation of Telstra would pave the way for the renationalisation of Telstra’s fixed-line network, as it would be gradually absorbed into the NBN. Even the CEO of the Competitive Carriers Coalition confirmed this in Senate estimates hearings when he said:

If you suggested to me that the NBN was likely to succeed in the absence of this legislation I would suggest that’s a pretty big bet.

It would be a pretty big bet this project would actually fly without this legislation. There is no doubt that the primary purpose of this move by the government is to set up a telecommunications industry for the development of the NBN.

The second part of the legislation amends access and anticompetitive conduct regimes in parts XIB and XIC of the Trade Practices Act. Part XIC of the Trade Practices Act provides that, if parties cannot agree on the terms of access to a declared service, either party can notify the ACCC of the dispute. The ACCC must then arbitrate the dispute. The terms and conditions of access are then set by the ACCC in an arbitration determination for those parties only. This legislation amends the TPA to allow the regulator to set upfront prices and access conditions for declared services. The government claims that this will create a benchmark which access seekers can fall back on while still allowing parties to negotiate, although there is concern about this change within the industry.

Part XIB of the Trade Practices Act allows for the ACCC to issue a part A competition notice to a carrier in the event that the ACCC believes that the carrier has been involved in anticompetitive conduct. Currently, the ACCC must give notice to the carrier that it intends to issue a part A competition notice and allow the carrier to respond to this notice within a given time frame. The legislation before the House would remove the requirement of the ACCC to give notice before issuing a part A competition notice. According to the explanatory memorandum, the bill also explicitly provides that the ACCC is not required to observe any requirements of procedural fairness in relation to the issue of a part A competition notice. The government claims that this is to prevent the delay of enforcement proceedings due to extended consultation and litigation on procedural grounds. But any removal of procedural fairness must surely be cause for concern and give unprecedented power to the ACCC.

The third part of this legislation deals with the USO, CSG and priority assistance. These issues are of particular importance in my electorate as many properties and homes are in hard-to-reach places and would not have reasonable services if it were not for the universal service obligation and customer service guarantee. The bill amends the Consumer Protection Act to allow the minister to determine what standard of services must be provided under the USO. According to the explanatory memorandum, it is intended that the performance standards mandated by the USO will include maximum periods of time for new connections and fault repairs.

The legislation also allows the minister to determine USO arrangements as they apply to the supply, installation, maintenance and location of payphones. The customer service guarantee requires telephone companies to meet minimum performance standards or provide customers with financial compensation when these standards are not met. ACMA reporting seems to indicate that industry performance is declining when compared to the customer service guarantee requirements, which suggests that the current arrangements are not providing enough incentive for the industry to maintain or improve service quality. There is a concern that the USO and the CSG may be determined by the minister and not the parliament.

The burning issue is: what assurance can I have that the interests of my constituents in regional Australia will be protected? In this bill there is a strong focus on the outdated technology of payphones, yet there is neglect in relation to obligations with regard to leading-edge technologies and emerging technologies. If regional Australia is going to compete, we have to have a guarantee of service that relates to the very latest technologies, not overarching concern merely with outdated technologies such as payphones.

The bill strengthens priority assistance provisions. They are very important provisions indeed. Priority assistance provisions are available to people with a life-threatening illness who need access to a phone at all times. Priority assistance customers are entitled to faster connection and fault repair services. The bill would force all home carriers to either offer a priority assistance service or notify customers of providers from whom they can purchase a priority assistance service if necessary. This may have the effect of encouraging more carriers to develop a priority assistance program. That is certainly a welcome improvement.

Despite the fact that I have reservations about elements of this bill, as the shadow minister for competition policy and consumer affairs I support the idea of introducing more competition into the telecommunications market. After all, it was the coalition that sold Telstra and allowed competition into the market. We can see the benefits of this move. The options and possibilities available to the consumer are now much greater than 20 years ago. Competition has driven the introduction of new technology and has forced carriers to reduce prices and produce innovative products.

The big question is whether government forced separation of Telstra is the best way to promote competition in this industry. While structural separation remains an option, vertically integrated telecommunications companies are not unusual. If the government were genuinely interested in improving competition in the industry, it would surely give serious consideration to improving the regulatory regime governing access to Telstra’s legacy networks as an alternative to forcing the structural separation of the company. Telstra’s competitors are understandably supportive of this bill as they see it as an opportunity to gain greater access to Telstra’s network. The Australian Telecommunications Users Group has also indicated its strong support for the bill, as has the Competitive Carriers Coalition—an association comprised of several major telecommunications companies.

Overall, my main concern is ensuring that my constituents have access to quality telecommunications services at a reasonable price. I am also mindful that many of my constituents are Telstra shareholders and that their investment should not be damaged by this government decision. The way in which the government has gone about implementing these changes leaves a lot to be desired. For some reason, the minister is determined to ram through this legislation before the parliament before the end of the year, despite not knowing how the National Broadband Network is going to be implemented. The government is currently carrying out a national broadband network implementation study, which is due for completion in February. Without knowing exactly how the National Broadband Network will work, it seems premature to mandate wholesale changes to the telecommunications industry. It is quite bizarre that the minister would not wait until the completion of this study.

The minister’s time frame is also puzzling in light of the fact that Telstra is currently locked in negotiations with the government about the best way to deliver the National Broadband Network. The CEO of Telstra, David Thodey, has indicated to me that Telstra is negotiating with the government and NBN Co. to come up with a commercial arrangement about Telstra’s involvement in the National Broadband Network. Mr Thodey has advised that Telstra is working towards achieving a satisfactory outcome by the end of the year. Why is there such a rush? With this in mind, it seems premature for the government to force through these changes.

As an absolute minimum, it seems prudent to wait until Telstra has concluded its negotiations with the government and until the implementation study is finalised before concluding debate on this legislation. The minister’s haste to implement this legislation, regardless of the outcome of his discussions with Telstra, can only mean that he is not actually negotiating with Telstra in good faith—quite clearly so—in which case he is showing a gross lack of respect and honesty, or he is using this legislation as a threat to encourage Telstra to accept his terms in relation to the National Broadband Network. If this is the case, he is showing blatant disregard for the purpose and role of the parliament.

Michael Pascoe summed up the problem perfectly in his article in Communications Day on 16 September, when he said:

That Conroy is taking a cricket bat to the heads of Telstra shareholders when he’s yet to work out just how his National Broadband Network thingy might really function is simply thuggish. Conroy has talents—

well, we can debate that—

but calm and reasoned administration tends not to be mentioned as one of them.

Delaying the bill until February will have no impact on consumer measures in this bill because they are not listed to commence until July 2010. Delaying the legislation may actually be of benefit because the explanatory memorandum suggests that the USO measures may have to be altered once the implementation study is completed.

One very specific concern I have with the structural separation aspect of the bill is the impact it is likely to have on Telstra shareholders, in particular the Telstra shareholders I represent. As I mentioned previously, there are 1.4 million shareholders, most of whom are small investors or retirees. In addition to these direct shareholders there are millions of investors who hold shares in Telstra through superannuation funds. The minister has indicated that he believes that structural separation can be achieved without harming Telstra shareholders. However, the Australian Shareholders Association chief executive, Stuart Wilson, was scathing in his assessment of the plan. He said:

I think it’s a giant kick in the teeth for Telstra shareholders; it severely damages the earnings potential of the company and there’s really not one good thing for shareholders to come out of the proposed legislation.

It is hard to see how this massive change to the operation of Telstra will not have a significant impact on the value of its shares, and this is an issue which must be addressed by the minister.

Another issue of significant concern is the government’s willingness to meddle with a public company in this way. Passing this legislation could have the effect of significantly diminishing Australia’s standing as an attractive place to invest. If the government is successful in forcing Telstra to separate, investors will rightly ask whether the government has plans to meddle with other companies—a very good point. At present Australia is seen as an attractive place in which to invest. We have a strong banking system, a valuable relationship with our trading partners, a strong resources sector and, until now, investment friendly governments. This legislation may harm that reputation and may harm our economy if it is passed in its current form.

The government has a poor record when it comes to communications. The centrepiece of Labor’s 2007 election policies was a $4.7 billion national broadband network which was to reach 98 per cent of Australia’s population. That plan was then scrapped. Instead, we now have the National Broadband Network, which is going to cost $43 billion and reach 90 per cent of the population—and, I might say, it will be regional customers, such as the people I represent, and such as the people the member for Mallee, who is in the chamber, represents, who will miss out. The Prime Minister made it clear that the National Broadband Network would not be extended to towns with a population of fewer than 1,000 people. The ABS identifies 25 communities in my electorate that have fewer than 1,000 people, such as Moonee Beach, Corindi Beach, Smithtown, Gladstone, Frederickton, Scotts Head and Gulmarrad. They will all miss out, yet their taxes will be used to build the National Broadband Network. There are also countless smaller communities and farms that will be bypassed by the National Broadband Network—but, as I said, their taxpayers’ dollars will be used to build a network they will have no access to.

I recognise the need for additional compensation to the telecommunications industry in regard to the loss of value in Telstra. What is going to happen? Will there be a claim for damages against the government in relation to this? Who is going to pay for the diminished value to Telstra shareholders that will result from this ill-conceived legislation? We have very much a market orientated communications system in this country, with the private sector working efficiently and effectively to deliver telecommunications services. Under this legislation we have the development of the 21st century version of the Postmaster General, where we have government control of a National Broadband Network. It will probably be very much a backward step insofar as delivery of services goes. Governments have a history of being unable to deliver services as efficiently and as effectively as the private sector, yet this government seems hell-bent on pushing the private sector out of the way and replacing it with a government owned and controlled monopoly. I certainly have some serious concerns about this legislation.

Julie Collins (Franklin, Australian Labor Party) Share this | Link to this | Hansard source

I am pleased to rise in support of the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009. The significant amendments included in this bill will deliver a regulatory reform package which I believe is critical in reshaping the telecommunications sector in this nation. I believe it will provide better protections for consumers, it will provide increased competition and it will also encourage innovation.

The bill is making amendments to the Telecommunications Act 1997, the Trade Practices Act 1974 and the Telecommunications (Consumer Protection and Service Standards) Act 1999. As I have said, these amendments will deliver a significant reform package which will improve the existing telecommunications network but which will also help us in the future in terms of a transition to the NBN and what that will mean in the future. This reform package will have a positive impact on all areas of Australia but particularly on areas like those I represent, which are rural and regional areas. In Tasmania at present we do not have what I would call free competition in the marketplace, with the ability for people to vote with their feet when they are dissatisfied with the existing services. That ability is just not there.

Consumers will really benefit from this bill, as it proposes to strengthen the consumer protection framework. It will help reduce the failing service quality which has been experienced by consumers for some time. In my electorate office we receive many regular inquiries from constituents who are frustrated by the lack of service from Telstra on a range of products including landlines, mobile phones and the internet. I look forward to seeing more safeguards being put in place to assist in improving the quality of service delivery, especially as we move forward with telecommunications—and we all know that telecommunications do move forward at a rapid place.

What has really concerned me in this debate has been hearing about the opposition’s decision to try and block and defer this important legislation and not to vote on it. I do not really understand why, if they are so opposed to it, they do not want to vote on it now. But, clearly, they are trying to delay debating this bill; they are trying to stop a decision being made. That will stop Australians from getting access to better products and better services. All the opposition are showing is that they are divided and they cannot come to a decision about what they want to do with this bill. They had 11½ years to devise a broadband plan, as we know; and they had 18 failed broadband plans during that 11½ years in government. Clearly, they are not sure what they want to do when it comes to telecommunications in this country and they are still divided on the direction they want to go.

We know that consumers are demanding ever-increasing bandwidth and access to the internet. But, as they do, they are also demanding a vast improvement in service quality. We are beginning to see this transition from digital technologies, particularly in areas of health and education. In my state of Tasmania we are very pleased to be the first state to receive the National Broadband Network rollout. I have spoken to many community groups about the advances in tele-health and education services, particularly online classrooms in rural and regional areas.

On the same day that the government announced its intention to go forward and deliver the NBN we also made public our intention to reform the existing telecommunications regulatory system. We released our discussion paper, National Broadband Network: Regulatory Reform for 21st Century Broadband, with the intent of canvassing options and opinions for regulatory reform. I understand that the discussion paper did receive a strong response and that those who responded included major telecommunications service providers, broadcasters, media companies, state and territory governments, the ACCC, disability and consumer groups, business organisations and even unions. The overwhelming response received from these key stakeholders was that the current regulatory system does not work effectively to achieve the goals that it is supposed to. It is failing us all; it is failing businesses and consumers and it is failing everybody who wants access to telecommunications in this country, particularly in rural and regional areas. It is these opinions from experts in the industry that we take into account when we look at regulatory reform. The crux of this bill revolves around a package of reforms that will deliver efficient telecommunications that are underpinned by appropriate consumer safeguards.

We all know that Telstra remains one of the most integrated telecommunications companies in the world. Not only does it own the fixed line copper network in Australia that connects to almost every home and business but it also owns the largest hybrid fibre-coaxial cable network and the largest mobile network. On top of this Telstra has a 50 per cent stake in Australia’s largest subscription provider, Foxtel. We believe that the failure to address Telstra’s level of integration has meant that current regulation has failed to promote effective competition. Certainly, for consumers in my home state there is very little competition. The lack of competition in the telecommunications sector has resulted in Australia lagging well behind other developed economies on a range of telecommunications indicators. We know that that is the case in terms of our broadband speed at the moment and it is also the case in terms of access to innovative new products.

Telstra is a provider of wholesale services as well as a provider of retail services. The vertical integration held by Telstra means it has both the incentive and the ability to favour its own retail business over its wholesale customers. The overwhelming message from the industry and key stakeholders is that these current arrangements are just not suitable and the vertical integration can only be described as inadequate.

We have also heard from those on the opposite side some discussion about this bill in relation to Telstra and whether or not government should intervene and force it to separate. But Telstra does have a choice here. We have a clear preference for Telstra to structurally separate of its own accord—to act in a voluntarily capacity. Such an outcome would be consistent with the wholesale-only, open-access market structure that is to be delivered through the broadband network and through other telecommunications options. The other option for Telstra, if it does not voluntarily structurally separate, is that it will be required to separate along functional lines. Whether it is functional separation or structural separation Telstra does have a choice. At the end of the day it will result in increased levels of competition, which is better for consumers, better for the mums and dads that I represent, better for the small businesses that I represent and better for the schools in my electorate.

We also know that it is supported by the ACCC. In terms of increasing the level of competition, the ACCC supports some form of separation measure. We know that it supports functional separation as the next best option to structural separation. In addition to its vertical integration, Telstra is horizontally integrated, as it owns and operates a range of different platforms, including copper, cable and mobile.

At the core of these bills are two key amendments. Firstly we aim to improve competition across the telecommunications sector. Secondly, we aim to implement consumer protection measures as a way of improving service quality. Looking at how it is done in other developed countries, there are restrictions in place on entities preventing them from owning both cable and traditional fixed-line networks.

Reforms to the current regulatory framework are overdue. We know from expert opinion from key stakeholders and those in the industry that the current regulatory framework is ineffective. The ACCC will be central to the changes we seek to make through the passage of this bill; it will be given powers to act swiftly when it believes anticompetitive conduct is occurring in the telecommunications market.

I would like to turn now to my home state of Tasmania. There are some significant issues for consumers in Tasmania. You have heard from me before that there is a severe lack of competition. I have spoken about the concerns my constituents have and the fact that my office has quite a large number of telecommunications complaints. But in Tasmania Telstra has a very high market share, particularly in landline services and particularly in rural and regional areas. An increase in competition between telecommunications companies would mean that people would have different options when it comes to service provision and customer care. In Tasmania people find it much harder to vote with their feet and move between carriers and service providers, because often there is only one carrier who will service a particular area, and we all know that that is Telstra. For the same reasons, when you look at the landline and mobile phone coverage in Tasmania there are not a lot of alternative options. Where there is no market competition people are forced to use the only available carrier rather than having access to choice. The amendments in this bill will promote competition across Australia, including Tasmania. It will correct the anticompetitive situation that currently exists within the telecommunications industry in my home state.

One of the changes we are seeking is to protect consumers’ access to affordable telecommunications services. The package of reforms contained in this bill strengthen consumer safeguards by lessening the risk of Telstra reducing service quality around its copper network specifically prior to the rollout of the NBN. One of the fundamental things with the universal service obligation, which the government has decided to retain on Telstra for voice telephony and payphones, is the opportunity to access reliable basic telephone services. We have already seen Telstra begin to remove payphones from around the country. I want to tell you a story about an island in my electorate in Tasmania, Bruny Island, where I was alerted by some of the property owners on the island that Telstra had removed three payphones, one in the far north, one in the far south and one in the tourist centre of Adventure Bay. Upon contacting Telstra I was advised that one of the phones had been removed accidentally and would be put back and one of them had been removed quite fairly. The third one was removed and, even though they put a sign in it, nobody contacted them when Telstra was told that it is actually 20 minutes away from another phone. Worse than that, the island has extremely patchy mobile phone service, if any service at all. If someone were to have an accident in the south of the island they would not be able to get to a payphone. There is certainly an issue with payphones in Tasmania.

Debate interrupted.