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

The Radiocommunications Amendment Bill 2010 was first introduced into this House on 16 June. On 30 September the Senate referred the bill for inquiry and report on 17 November this year. In the late 1990s the Australian government commenced auctioning a number of spectrum licences to support a market based approach to the licensing of radio frequency spectrum. As we know, spectrum is a valuable but finite resource; however, it is instantly reusable. Spectrum licences provide explicit and continuing rights of access to defined parts of the radio frequency spectrum in defined geographic areas for a stated period—normally 15 years. Although there has been limited use of these provisions, spectrum licences are also fully tradeable and can be shared through third-party authorisations.

Australia was among the first countries in the world to issue licences on this basis. Today, many of these licences are being used by telecommunications carriers to provide mobile phone and wireless access services to millions of Australians. The first of the key spectrum licences will expire in 2013, with the remainder expiring by 2017. Because Australia was an early adopter of auctions as a means of allocating spectrum, there is relatively little international experience on the best approaches to spectrum licence reissue.

On 4 May 2010 the Minister for Broadband, Communications and the Digital Economy, Senator Conroy, announced the Australian government’s approach to the reissue of current 15-year radio frequency spectrum licences. In April 2009, the Department of Broadband, Communications and the Digital Economy issued a public discussion paper, Public interest criteria for reissue of spectrum licences. In May this year the department commenced information gathering discussions with a number of spectrum licence holders to inform decisions on possible spectrum licence renewal.

The coalition is in broad agreement with the industry and the government that the majority of the amendments proposed in this bill will lead to greater efficiencies in the issuing of spectrum licences; however, key experts in the industry are concerned with aspects of the amendments, particularly around the coexistence of class and spectrum licences. The first concern relates to the value of a shared spectrum asset. The bill’s explanatory memorandum states:

New and developing technologies have the potential to greatly increase the technical and productive efficiency of spectrum use. These new technologies may be authorised by the ACMA under class licences. Such technological developments will potentially allow devices to share spectrum by utilising a variety of technically sophisticated methods to avoid harmful interference with other services and will be subject to the ACMA being satisfied that:

• unacceptable levels of interference will not occur to the operation of radiocommunications devices operated, or likely to be operated, under spectrum licences; and
• it is in the public interest to issue class licences, in spectrum designated or reallocated for spectrum licences, to authorise devices with the new sharing technology.

These changes impact on dozens of telecommunications carriers who provide mobile phone and wireless access services to millions of Australians. Wireless services are what people are gravitating to in great numbers and they are growing at around six or seven times the rate of fixed line services. The market has strong demand for wireless, particularly wireless data services.

The carriers who are servicing this growing demand invest very significant capital for the exclusive but highly competitive use of licensed spectrum, and permitting other users to access that spectrum dilutes the value of these assets. The bill and the explanatory memorandum fail to provide certainty for these carriers about how their assets will be valued if class licences proceed and spectrum is shared.

The industry’s other main concern is that the bill does not go far enough to clarify what is or is not unacceptable interference and how ACMA will manage that interference. The Australian Mobile Telecommunications Association is the peak industry body representing Australia’s mobile telecommunications industry. AMTA is concerned about the terms and conditions of reissued spectrum licences that would permit other uses encroaching on the licensed spectrum assets held by its members. The main issue is that there is a high level of anxiety about possible interference. AMTA summarises the concerns of its members as follows: there is not a sufficiently clear framework of principles and procedures for ACMA to follow when determining what qualifies as unacceptable interference in spectrum that a carrier has purchased; there is no simple mechanism to measure, manage or rectify adverse outcomes of coexistent use; and if adverse impacts occurred, the business impact on the primary licence holder could be significant and long lasting. According to the minister’s second reading speech:

Incumbent licensees have consistently called for greater certainty about licence reissue.

Without such certainty it is claimed that there will be a reluctance to maintain investment in infrastructure and service provision with potential adverse impacts on coverage and service quality.

The government is correct in pointing out the importance of certainty but these two concerns I have raised need to be resolved to provide the certainty that the industry needs before making substantial investments in spectrum, and I respectfully encourage the Senate committee currently conducting its inquiry to look very closely at these matters.

I would also seek to draw the attention of the House, and indeed of the Senate committee, to the changes the bill proposes to make to certain ministerial determinations making them no longer disallowable instruments. The bill amends the act concerning written directions by the minister to ACMA about determinations made by ACMA regarding spectrum access charges. The amendment will specifically provide that such a direction is not a legislative instrument, according to the explanatory memorandum which says:

The intention of this amendment is to protect commercially sensitive pricing information relating to the reissue of 15 year spectrum licences. By giving a written ministerial direction to the ACMA … which is not a legislative instrument and not subject to disallowance, it will protect this information during licence reissue discussions.

Removing parliamentary oversight on ministerial decisions is always a very serious decision for a parliament to make. I look forward to the Senate inquiry and report which I hope will clarify why the government thinks it needs to take this step.

There is no doubt that there is a lot happening in the spectrum space at present. I note that ACMA last week released a discussion paper which aims to provide stakeholders with background information on the digital dividend reallocation, including its close relationship with broadcasting planning, and the proposed steps for the reallocation, both legislative and technical. This consultation offers industry stakeholders the opportunity to shape and inform ACMA’s thinking at an early stage about various aspects of the upcoming digital dividend allocation.

The coalition understands that this area of communications policy is moving very rapidly. We are not interested in delay. As I said earlier, the growth of broadband wireless subscriptions has gone literally off the chart—they have been growing at a much faster rate than anybody expected—and of course the 4G and LTE wireless technologies coming down the track very soon will allow much greater speeds and make wireless an even bigger connectivity competitor. We have moved from an era, not very long ago, when most people would have regarded a fixed line as a necessity and a wireless mobile device as an optional extra. We now have more wireless devices than we have fixed line connections, and increasingly wireless connectivity is becoming the necessity and fixed line is becoming an option that people choose not to take up at all—hence the continuing and accelerating decline in fixed line connections. Wireless spectrum is right at the heart of the information revolution. I note in the context of the debate about broadband that in the United States the focus on greater broadband connectivity is very much directed at the opportunities which 4G and LTE wireless technology offer for ubiquitous, affordable and fast broadband.

We are not interested in delaying this legislation. We have put forward some concerns that have been raised by the industry. I trust the Senate committee will look at them very carefully. We are concerned to ensure that the carriers, the industry, the investors and above all the consumers get the certainty they need to continue to supply and receive better wireless services. We look forward to the report from the Senate committee and we hope the findings of that inquiry will take into account the matters I have mentioned. It may be that there will be some amendments moved in the Senate to reflect these concerns and the conclusions of the Senate committee. Subject to the reservations I have outlined, I commend the bill to the House.

Michelle Rowland (Greenway, Australian Labor Party) Share this | Link to this | Hansard source

Some members might not be aware that this proposed piece of amending legislation, the Radiocommunications Amendment Bill 2010, really is of the utmost practical significance to everyone in this place and to everyone we know. That is because mobile communications use spectrum as a fundamental input. This bill deals directly with the ability of mobile communications providers to continue utilising those parts of the radiocommunications spectrum that are currently authorised by their respective spectrum licences. Spectrum is in one of those special categories of scarce resources—it is finite and it is used but not consumed, and therefore it must be subject to an allocation system that recognises its value and directs how it can be used but at the same time provides sufficient flexibility so that the value of its use can be maximised by the person who is authorised to use it.

It is hard to believe it is approaching 15 years since Australia granted its first spectrum licences under the processes set out in the landmark legislative reforms of the early 1990s in radiocommunications and telecommunications. We have come an incredibly long way. Lives have been transformed, new jobs and new industries have been created and the digital dividend is now approaching. We are now approaching what a lot of people call 4G, or long-term evolution. We are able to maximise the reutilisation of what is called the sweet spot in radio spectrum bands that can be used for things we would not have imagined 15 years ago. There has been some discussion in this place about how far we have come on different issues in the communications space. There has been discussion about why we need, for example, 100 megabits per second broadband.

The lesson that I think has been drawn from radiocommunications and from what mobile spectrum has been used for in the last 15 years is that we should never underestimate the future. This is demonstrated by the development of mobile technologies, uptake, the development of competition in the sector with the managed duopoly of the early 1990s and then the open carrier licensing and carriage service provider authorisations, the development of resellers, mobile virtual network operators, prepaid options—and the list goes on.

I point to the Access Economics June 2010 report, Economic contribution of mobile telecommunications in Australia. It is instructive in showing how much this single part of the sector contributes to Australian society. The mobile telecommunications industry contributed $17.4 billion to the Australian economy in 2008-09. As at 30 June last year, there were 24.22 million mobile subscribers in Australia. There has been a huge growth in mobile data. The GSM Association has charted the enormous growth in mobile data, and in Australia 3G has finally overtaken 2G or 2.5G.

I doubt the members in this place at the time licence terms were established could have foreseen what technological and consumer regulatory frameworks would look like when those licences expired. Like many others in this place and in our communities, I am constantly fascinated by how far we have come and how much we take for granted. I remember very early on in my career as a telco regulatory lawyer going to a briefing about on-the-horizon issues in the early 2000s. I had someone telling me that in a few years we would be looking at our mobile device much more than we would hold it to our ear. I could not comprehend what he was talking about. I recall drafting intercarrier service schedules in the early 2000s for the exchange of SMSs between carriers, and I could not think why anyone would want to communicate with another person in 120 characters. I remember the first time I used a laptop with an inbuilt modem. And who could have foreseen the development of what now looks like a whole new market in applications for smart phones?

One thing has remained constant: the basic building blocks of the radiocommunications regulatory landscape in Australia enabled those adaptive technologies to develop and thrive. Other aspects of the communications sector have proven to be more challenging, and it has long been recognised that the structure of the telecommunications industry is in dire need of reform. We will continue to discuss at another time in this place the next stage of telco reform in this country. That next stage has issues that the rest of the world has been grappling with too, such as the importance of getting the regulatory environment right so that we avoid the shortcomings of the past and future-proofing against the risks to competition and the long-term interests of end users in the future as far as possible. We have had more than a decade of near constant inquiry into the state of competition in the telco sector. Both technological developments and the delivery of strategic policy for the public good will require a fundamental transformation of the industry’s structure, which will culminate in the separation of the wholesale and services layers of our own next generation broadband network.

I think it is useful to reflect on the regulatory journey which has led Australia to this point in terms of the bill we are looking at today. The current spectrum licences held by wireless operators, including carriers which provide public mobile telecommunications services, were allocated via an option process which started in the late 1990s using the procedural framework set out in chapter 3 of the Radiocommunications Act 1992. Those licences could be granted for a term of up to 15 years. I think there was foresight in the methodology granted to the Spectrum Management Agency at that time in the exercise of its powers. In addition to the ability to grant long-term tenure to maximise certainty for licence holders, spectrum licenses were required to include a set of technically logical core conditions. Those conditions included the relevant parts of the spectrum in which the operation of the radiocommunications device would be authorised under the relevant licence, the geographic area within which the operation of the device would be authorised and the maximum permitted level of radio emissions outside the boundaries of the licence.

Today, we are witnessing what is actually a historic milestone in the management of radcoms frequency in Australia, because those spectrum licences originally allocated in the late 1990s are now approaching the end of their term. We are about to activate a provision in the Radiocommunications Act—namely, division 4 of part 3.2—which has lain there patiently for 18 years, waiting to be activated, and we have come to this point of reissuing spectrum licences. The people who sat in this place 18 years ago conferred powers on the minister of the day and the regulatory authority to do certain things when this day arrived. Honourable members have come and gone, the regulatory agency has changed in structure and name and here we are today, taking the next step to activate this particular section of the statute and provide some long-term business and investment certainty to existing spectrum licence holders.

Spectrum planning is a multifaceted activity and it is conducted within an overarching international framework. In most countries, including Australia, planning starts at the international level through participation in the International Telecommunications Union. The spectrum licence regime under the Radiocommunications Act 1992 has served us well. Indeed, since the road to liberalisation of telecommunications in Australia began in 1991, I think it is fair to say that the principles of sound regulatory practice in the radcoms sector, consistent with the objects of the legislation and international practice, have been consistently maintained. These include: to maximise, by ensuring the efficient allocation and use of the spectrum, the overall public benefit derived from using the radiofrequency spectrum; to encourage the use of efficient radiocommunications technologies so that a wide range of services of an adequate quality can be provided; to provide an efficient, equitable and transparent system of charging for the use of spectrum; and to provide a regulatory environment that maximises opportunities for the Australian communications industry in domestic and international markets.

I want to make some brief comments about the spectrum-licensing framework to give some context for the amending bill before us. There are various forms of spectrum categories, and users need licences for each type. They are apparatus licensing, spectrum licensing and class licensing. Under the apparatus licence regime, a licence is granted for a specific use of both technology and transmitter characteristics which use the allocated spectrum. An apparatus licence is allocated for a year and there is no presumption of renewal of an apparatus licence. Spectrum licences are different. Under the spectrum licence regime, the licence is granted for any use of the allocated spectrum, provided that the boundary conditions set out in the licence are met. Typically, these boundary conditions limit the geographic extent of the licence and the adjacent channel interference requirements. Spectrum licences are usually allocated for a period of 15 years and licensees are able to permit other users to share their spectrum, and spectrum licences are also tradeable. Class licences are different again. Under the class licence regime, a licence is granted for a class of devices within the specified frequency band. The class is technically described in the class licence and class licence spectrum is used for a range of common services that you and I would use every day, Mr Deputy Speaker, such as garage door openers, CB radios and WiFi.

I want to talk briefly now about the consultation on the renewal process which has led to this bill. As I mentioned, unlike other categories of licences, spectrum licences have generally carried a presumption of renewal. In light of the impending expiry date of the existing spectrum licences, the department issued a discussion paper in early 2009. The focus of this consultation was the criteria for spectrum licences to be reissued upon expiry and the terms of that reissue. There are two grounds in the legislation that enable reissue of a spectrum licence. There is section 82(1)(a), which enables the reissue of a licence if it was used in the provision of a service included in a class of services determined by the minister. The practical effect of this approach is that the minister may determine that it would be in the public interest for a specified class of existing licence holders to have their spectrum licences renewed. And there is section 82(1)(b), which enables the reissue to occur if the Australian Communications and Media Authority is satisfied that special circumstances exist, as a result of which it again would be in the public interest for that person to continue to hold the licence. The practical effect of this approach is that ACMA may determine it is in the public interest for a particular licence to be reissued.

The discussion paper noted two policy choices for whether and how existing spectrum licences should be reallocated or renewed. These were whether spectrum licences should be reissued to the existing licensees by ACMA in accordance with the section 82 procedures or whether reallocation of the spectrum licence should be undertaken using a price based method. One of the key elements in the consultation was the question: what would constitute ‘public interest’ for the purpose of a spectrum licence being reissued? This was not a straightforward question and was problematic for several reasons: there had never been a ministerial determination to specify a class of services as being recognised as being in the public interest for spectrum licence renewal, a public interest test had never previously been exercised in this area before, there had never been challenges to the minister or the ACMA’s powers that could provide precedent value and there was scant guidance in the radcoms act itself as to what would constitute the relevant public interest criteria.

The discussion paper set out five possible public interest criteria, which were expressed not to be mutually exclusive or exhaustive. These were: promoting the highest value use for spectrum, investment in innovation, competition, consumer convenience and determining an appropriate rate of return to the community. Following this detailed consultation, the minister was able to announce in March 2010 a decision to undertake a process to provide long-term reissue of existing spectrum licences, including an appropriate price for their renewal. Under this bill, spectrum licence renewal will be contingent upon licensees satisfying the public interest test, which most respondents agreed with in consultation, and those criteria will be considered before the ACMA is given any directions on the spectrum access charges that will apply on renewal.

There are other elements to this bill that are worth noting for the improvements they provide in promoting investment certainty for incumbent licensees. These include flexibility given to the ACMA in its renewal process and removing the time limit of two years within which the ACMA can initiate reissue or renewal of 15-year spectrum licences. There will be provision for the coexistence of class licensed and spectrum licensed services within the same spectrum, but with the safeguard that such coexistence will not result in unacceptable levels of interference. I noted the member for Wentworth saying earlier that interference is an industry concern. Of course, minimising interference is fundamental to the efficient operation of the radcoms spectrum. I will say two things about that. The first is that one of the ACMA’s jobs is to manage interference, including interference disputes that are raised with it. So it will actually be nothing new for the ACMA to be dealing with any issues of interference. I would also point out, as noted by the Minister for Broadband, Communications and the Digital Economy in his announcement on 4 March 2010, that a 15-year spectrum licence pathway would be commencing and that the conditions of this coexistence would be to allow two or more wireless services to share the same spectrum, subject to the development of provisions to mitigate unacceptable levels of interference. This could be in the form of some regulatory guidance or direction. But, as I said, the management of interference is nothing new for the regulator; that is its job. I am confident that the concerns of industry will be heard by the regulator and will be addressed by the regulator.

Finally, I will give a clarification on ministerial directions that may be given to the ACMA about spectrum access charges to be payable upon reissue of specific spectrum licences. The intention here is that the minister will consult with the Treasurer, the Minister for Finance and Deregulation and the Prime Minister in establishing the value of 15-year spectrum licences and take into account the public interest before giving a direction to the ACMA. This is ongoing sensible management of a scarce, valuable resource, which should be supported by all members.

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 the Radiocommunications Amendment Bill 2010. The bill contains a number of amendments to the management of spectrum licences and determinations on spectrum made by the Minister for Broadband, Communications and the Digital Economy. There is no question that the government understands the importance of spectrum licensing to the communications industry.

Since parliament has resumed, Labor has reintroduced their Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2010 that threatens to prevent Telstra from bidding on spectrum releases unless Telstra structurally separates its fixed line business. This decision by the government is effectively holding Telstra to ransom in an attempt to make the National Broadband Network viable by eliminating potential competitors. The coalition does not agree with holding Telstra to ransom by denying spectrum and forcing Telstra to divest its Foxtel assets. However, the government’s decision demonstrates the importance of spectrum availability and the ability of communications companies to bid for and access bands of spectrum. This importance highlights the need for government to continue reviewing how the Australian Communications and Media Authority and the parliament manage spectrum licensing.

The provisions in this bill come in the wake of the government’s announcement in March this year that spectrum licence reissue will be considered for those existing 15-year spectrum licences providing services to significant numbers of Australian consumers. The legislation contains a number of amendments to spectrum management. Firstly, the amendments aim to give the ACMA more flexibility in the time it takes to commence processing for re-issuing spectrum licences. Specifically, the bill removes the two-year restriction on ACMA regarding when it can publish a notice that a licence is to be reissued and issue a draft spectrum licence containing licence conditions. The bill also allows ACMA to issue class licences in the same radio frequency spectrum as expired or reissued licence allocations. This will allow spectrum access to new technologies that have the potential to share spectrum. However, ACMA must be satisfied that unacceptable levels of interference will not occur to the operation of radiocommunications devices operated under the spectrum.

Finally, the legislation will amend provisions relating to ministerial determinations and directions with regard to issuing spectrum. Currently, ministerial determinations are disallowable instruments. The bill will convert future determinations into legislative instruments that are not subject to disallowance, although the determinations will still be published on the Federal Register of Legislative Instruments. Removing the disallowable status of determinations is something being sought by the government because the spectrum licence reissue process is currently being renewed. During this process, a number of determinations may be necessary in order for ACMA to reissue licences. The bill’s explanatory memorandum states:

Future investment certainty for incumbent licensees is central to successful licence re-issue discussions.

The amendments within this bill are designed to provide certainty to incumbent licensees or competing companies who wish to bid for spectrum. Some in the communications industry have indicated that the change to ministerial determinations will streamline the licence reissue process. These concerns are valid, but preventing ministerial determinations from receiving parliamentary scrutiny is another example of Labor avoiding scrutiny of its communications policies.

The parliament should have the fundamental right to oversee government projects, particularly those which are spending billions of dollars in taxpayers’ funds, such as Labor’s communications policy. The National Broadband Network is the largest taxpayer funded investment in Australian history. Under the network, around four per cent of Australians will need to access the network by accessing spectrum through a wireless network providing speeds of up to 12 megabits per second. In order to provide this service over the NBN, the government will need to acquire and use a suitable range of spectrum to deliver the required speeds specified by the government. The 4G spectrum ranges are becoming available and the government will be auctioning spectrum licences in the future. NBN Co. will also need to access this spectrum to deliver its intended speeds to the section of regional Australians covered by wireless.

The coverage requirements stipulated by the government mean that specific conditions will be placed on spectrum licensees. For example, the McKinsey implementation study recommended:

Government should add carrier license conditions—

to the upcoming 4G spectrum auction—

to require network operators to implement future technology upgrades in rural/regional areas in parallel with metropolitan areas and should review options to include data rate and coverage requirements.

If the minister is to place conditions on spectrum licensees with relation to the NBN, it is important that the parliament be given the opportunity to scrutinise any ministerial direction on spectrum.

But this has become a pattern for this government. Labor is simply intent on avoiding scrutiny and transparency in its communications policies. The coalition is calling for a joint select committee and an analysis of the NBN by the Productivity Commission. It is reasonable to expect that a government committed to transparency would have no problem with additional scrutiny on such an important project. The track record of this government is that very little actually goes right. The Rudd-Gillard government has wasted over $10 billion in its first term and the NBN alone has the potential to exceed this level of waste if Labor is left without scrutiny. By establishing a gigantic monopoly that is exempt from the Trade Practices Act, the government is asking Australian taxpayers to trust it when it has done very little in its first term to earn that trust.

This is an eight-year, $43 billion project that does not have a cost-benefit analysis. The government is trying to rush it through with no scrutiny in the same way it rushed to try to implement the Home Insulation Program, the Green Loans Program and the Prime Minister’s BER scheme—and we all know what happened with those: wasted taxpayers’ money and failed schemes. Labor simply cannot be trusted with money. Australia has been forced into record levels of debt and deficit in this Labor government’s first term because Labor cannot be trusted to spend money wisely. This Labor government has wasted and mismanaged $2.4 billion through the pink batts disaster, and a further $8 billion with the school halls rip-off program. We saw a $1.2 billion blow-out in the school laptops program and another $850 million wasted on solar homes.

Spectrum management and broadband services are so important to the Australian economy, and to regional areas more generally, that oversight cannot be left in the hands of a Labor government that has mismanaged multibillion dollar programs. This is why the parliament must be able to monitor the government’s programs in communications and particularly the $43 billion that will be spent on the NBN. The National Broadband Network is the largest taxpayer funded program in Australia’s history. Taxpayers have a fundamental right to know that government programs can be completed on time and are financially viable. There is a big question mark concerning the financial viability of the NBN. Also at issue is whether other models would be better able to deliver the sorts of services proposed.

In order to improve its viability, Labor is actively removing any competitive pressures on the NBN which could provide incentives for efficiency and technological progress. Telstra and Optus will be actually contractually prevented from competing with the NBN. They will not be able to provide telephone or broadband services across their HFC pay TV cables, which are capable of delivering 100 megabits per second and pass 30 per cent of Australian premises.

NBN Co. is forcing every Australian who wants a home phone, and every business, onto its network. There will be no competition and a guaranteed level of demand once customers are forced onto the network. This business structure provides no benefits from the efficiencies and innovation that can be gained from competition. Yet the government continues to argue that the network will provide productivity gains to all Australians and that the network is an economic reform. If this is the case, then why will the government not commit to a Productivity Commission review? The only possible reason for denying such a review is that the government knows that the NBN model is not financially viable.

Even though the government is forcing customers onto the NBN and establishing a monopoly, it knows that its model is not financially viable. Unless Labor commits to transparency and stops preventing facts about the NBN Co.’s business model from being revealed, the parliament must continue to assume that there are grave doubts about the future of the NBN and its financial viability.

The government must show more transparency in its communications policy. How else can we improve services to regional areas, many of which are relying on efficient access to spectrum? An independent cost-benefit analysis is important to ensure that regional and rural areas which are lacking in broadband services can be identified. The analysis would identify the black spots and the target areas for improvement, and a joint select committee of parliament could monitor the rollout and ensure that services in those rural and regional areas were being improved.

The legislation introduced by the coalition this week will require the Productivity Commission to complete an analysis of the availability of broadband services across Australia, identifying those suburbs and regions where current service is of a lesser standard or higher price than the best services available in the capital cities. This analysis is important because the government has left many questions unanswered on its policies in relation to broadband and spectrum usage in rural and regional Australia. For example, the government has declared that wholesale prices will be the same for regional service providers and that this will ensure that Australians living in regional areas pay the same cost as those living in our cities. The Prime Minister promised in September:

Whether you’re on the broadband in Tamworth or on the broadband in CBD Sydney … the wholesale price for your broadband will be the same …

She repeated this promise in the House on Tuesday, 26 October.

It is an expensive task for NBN Co. to install 70,000 kilometres of transit backhaul to set up the network in rural and regional areas. As such, the McKinsey implementation report into the NBN recommends:

NBN Co transit backhaul services should be specified and priced separately from access services …

According to the report, around 20 per cent of premises will require access to transit backhaul to connect to the NBN. The revenue expected from providing this backhaul access is estimated to be $100 million each year. The government needs to detail how the uniform wholesale price will be implemented and whether it will include access to transit backhaul. If so, how will this impact upon the viability of the NBN as a commercial enterprise? These issues can only be clarified with more scrutiny and more transparency, which seems to go contrary to Labor’s communications policies. Unless Labor ends this pattern of avoiding scrutiny, as evidenced by this bill, the parliament can only assume that it has something to hide.

Whilst this bill attempts to improve spectrum management, the removal of binding parliamentary scrutiny on ministerial determinations demonstrates problems with Labor’s whole approach to communications. If Labor do not allow their communications policies and the NBN to be examined by an independent cost-benefit analysis, and if they do not allow the rollout to be overseen by a select parliamentary committee, the results will be disastrous for communications and Australian taxpayers.

This is why the coalition has some concerns about this bill. The government must be prevented from avoiding scrutiny. As I have outlined, the coalition is particularly concerned about the provisions which remove parliamentary scrutiny from ministerial determinations. The importance of spectrum to providing improved services to regional areas demonstrates why parliament must be able to oversee how spectrum is managed. We have to ensure that decisions on spectrum licensing will not be left to the minister for broadband and the mismanagement of this Labor government.

The bill has been referred to the Senate Standing Committee on Environment and Communications for report before the end of the year. The coalition will consider the outcomes of that committee and the impact that this bill will have on spectrum management. The coalition will pay close attention to the committee’s review of the scrutiny of ministerial determinations and will reserve the right to reconsider the bill in the Senate.

Stephen Jones (Throsby, Australian Labor Party) Share this | Link to this | Hansard source

I support the Radiocommunications Amendment Bill 2010, which will amend the Radio Communications Act 1992. It will provide greater flexibility to the regulator and more effectively manage the allocation and reallocation of spectrum licences and importantly provide greater certainty for the industry, particularly those companies that hold mobile telecommunications carrier licences. As the member for Cowper has correctly identified, this bill is part of our broader plan to ensure that we have modern and effective telecommunications infrastructure in this country. It is a part of our plan to ensure that we have the infrastructure that will drive productivity, encourage investment, create jobs and ensure that our country is set up to prosper from the next wave of technological change and the challenges in our region and around the globe in the future.

We are committed to ensuring that we have modern telecommunications infrastructure and an efficient allocation of spectrum in this country because we understand that modern telecommunications infrastructure and the effective management of spectrum not only drive investment and productivity but are the backbone around which community building occurs, by bringing communications into our homes and into our schools and making the world a smaller place. It shows that we have a plan for telecommunications and communications in this country, in stark contrast to those opposite.

The member for Cowper made a number of criticisms of the steps that we have taken to modernise telecommunications infrastructure in this country after only three years of government, in stark contrast to the 19 failed broadband plans of the former government, which did nothing to deliver enhanced or improved telecommunications facilities to constituents in the member for Cowper’s electorate or to the citizens in my electorate. We have a plan for the industry. We have a plan for more than just the privatisation of a company.

This bill will provide certainty in the allocation of spectrum and it will do that by the adoption of five critical principles. It will ensure the allocation of spectrum to the highest value use or uses. It will enable and encourage spectrum to move to its highest value of use or uses. It will ensure that the management authority will use the least cost and least restrictive approach to achieving its policy objectives. It will ensure, to the extent possible, that there will be both certainty and flexibility. Finally, it will balance the cost of interference and the benefits of greater spectrum utilisation. The bill proposes to amend the Radio Communications Act to give the regulator more flexibility and to remove the two-year time limit before which ACMA can initiate discussion on the reissue or renewal of the 15-year spectrum licences. This provides more certainty to those holders of current licences, which is critical in ensuring that we have continuity of investment and continuity of employment within those companies.

When the telecommunications industry in this country began to be deregulated in 1991, and three mobile carriage licences were issued and spectrum allocated to the holders of those mobile carriage licences, we could not have imagined the development in technologies that would ensue. The original brick size mobile phones that were carried around in briefcases have been replaced by minute handsets. When SMS services were originally included as a package for modern mobile phones, people did not know what they were to be used for, but now they are the mainstay of telecommunications and mobile telecommunications.

What we know from this is that the telecommunications industry is rapidly changing and that we cannot predict the way that it will change into the future, but we have to put in place the infrastructure to ensure that we are well placed to manage those changes and to get the growth in productivity and employment that will be available as technology changes into the future. This bill is a part of our plan. It will provide greater flexibility to the regulator and certainty to the industries and companies in the sector. I commend the bill to the House.

Paul Fletcher (Bradfield, Liberal Party) Share this | Link to this | Hansard source

In making some comments on this bill that is before the House today, the Radiocommunications Amendment Bill 2010, I wish to address three principal areas: firstly, why radiocommunications is important; secondly, what this bill does and what views we in the opposition have on the provisions of this bill; and, thirdly, to what extent the bill does reflect some fundamental tensions and inconsistencies in the views that have been put forward by the Labor government about communications policy. I put to you, Mr Deputy Speaker, that it reflects and reveals a remarkable number of gaping inconsistencies.

Let me start by talking about why radiocommunications is important. As we have heard from previous speakers, radiofrequency spectrum is a finite resource and it turns out that this finite resource is, firstly, enormously valuable to society in terms of providing very useful services and, secondly, of great value to the organisations which obtain the right to use that spectrum to deliver communications services, be they mobile, fixed wireless, digital or analog television or any other such services. Therefore this raises a problem: how ought we efficiently and fairly allocate the use of radiofrequency spectrum given that it is a vital national resource which is in limited supply and given that it presents significant financial benefits to those who are fortunate enough to gain access to that spectrum?

Historically, it was allocated by administrative fiat and, as we saw in Australia in the 1950s, a small number of fortunate companies and individuals were made very well off indeed by being granted television licences. A similar experience occurred around the world when spectrum was allocated in this administrative fashion. Over time policymakers began to think that there might be a better way to do it and, as we have heard from a number of speakers today, in fact Australia was at the forefront of a different approach to public policy in the allocation of radiofrequency spectrum. Economists began to argue that it would be a good idea to allocate spectrum through the use of auctions, so as to allow spectrum to go to its highest value use and also allow the community, through government, to capture a share of the economic value of that spectrum through the prices charged to companies which successfully bid for that spectrum.

We have had a long series of auctions of spectrum in Australia over the last 15 to 20 years, starting, as we have heard, with the allocation of the 900-megahertz spectrum for GSM licences, which was not by an auction. It was part of the opening up of telecommunications to competition in the early nineties. Then we had the 800-megahertz spectrum and then the 2-gigahertz spectrum and a whole range of other spectra allocated which are used for a range of services today: second- and third-generation mobile and also fixed broadband services, such as, for example, the 2.3- and 2.4-gigahertz bands. So we have had a public policy process in Australia which has been successful, but it has carried with it the seeds of some problems because the spectrum licences that were allocated were allocated for a term of 15 years. At the time that this was done, it was thought, naturally enough, that 15 years was very distantly in the future so there was not really a necessity to think very carefully about what might need to be done when the 15-year period expired.

We are now facing that expiry. That will start to happen between 2013 and 2017 in relation to spectrum licences currently on issue. That presents a problem because there is a presumption in the act that the spectrum will be reallocated by auction. Potentially, this presents the prospect of very significant public inconvenience if spectrum which is today used by a party which may be serving millions of customers is reallocated through auction. The consequences would be quite complex. Of course, weighed against that are all the good arguments in favour of using auctions. Therefore the essence of this bill is to take an approach to reallocation which allows a range of factors to be considered and also to give ACMA some additional flexibility as to the timing in which it commences a reallocation process. That is reasonably uncontentious.

This brings me to the second part of what I want to talk about, which is what this bill does and the coalition’s attitude to that. As I have indicated, the variation in ACMA’s powers to give it more flexibility in terms of timing is uncontentious. What is considerably contentious is the proposal that the reallocation determination issued by the minister should no longer be a disallowable instrument. The importance of public policy in this area suggests very strongly that parliament ought to retain the capacity to oversee the actions of a member of the executive—in this case the Minister for Broadband, Communications and the Digital Economy—so we view with considerable scepticism the proposal that that reallocation determination should no longer be a disallowable instrument. Other aspects of the bill are not so contentious—for example, the proposal that ACMA should have the power to issue class licences over spectrum which is also the subject of spectrum licences. This recognises developments in technology and the fact that it may now be technologically possible to allocate spectrum both to the holder of a spectrum licence and to other users in a way which does not interfere with the rights of the holder of the spectrum licence.

We have seen other examples of the practices in allocating spectrum change over time with technological developments. For example, when analog television first came into operation in Australia in the fifties, there were 7-megahertz guard bands which applied between each allocation of spectrum to a broadcasting licensee. The reason for that was that, with the technology at that time, there was a risk of interference if you simply allocated one block of spectrum and then the immediate next block of spectrum was also allocated. With the introduction of digital television in Australia, we have been able to reuse those bands of spectrum, which until now have been lying fallow, because today’s technology means that you do not face that same risk of interference. So the fundamental notion of changing the evolving regulatory framework by which we allocate spectrum, having regard to the improvements in technology and the capacity now to use spectrum in more flexible ways, is a sensible policy and it has our support. However, as I have indicated, we do not share the government’s confidence in the capacity of its minister to make reallocation determinations without being subject to the necessary scrutiny of parliament.

The third point I want to touch on is the extent to which this bill reveals—perhaps inadvertently—the fundamentally conflicted attitudes of the Labor Party when it comes to communications policy. The first area of conflict is that we have seen in the approach to the National Broadband Network a tremendous faith in centralisation, a tremendous faith that government knows best. A government which could not even competently give away pink batts apparently has the knowledge and capacity, mystifyingly, to build a network bigger and more ambitious than any private sector company has ever built, a network that will go all around Australia using a technology which has never been used for this purpose in Australia—all to be delivered on time and on budget. Wouldn’t it be remarkable if we could all share that faith in the capacity of government to do this thing?

On this side of the House we do not share that faith. We continue to believe that the best approach to telecommunications policy is to give primacy to the market and to competition. That is the philosophy which, interestingly, underlies the whole regime for allocating radio communications spectrum. The whole principle which underlies the approach in the act which is amended by this bill is that you allocate spectrum using a competitive process and it will go to its highest value use. Very importantly, spectrum licences are not technology specific. The user of the spectrum is free to use it for the purpose which he, she or it believes will be the most productive. We rely upon the auction process to identify who believes they have the highest value use for the spectrum. If they believe that using it to deliver broadband services over third generation mobiles—or over the shortly arriving fourth generation—then it is open to them to put in a high bid and take advantage of the capacity to get that spectrum. A philosophy that relies upon competition and the market is what underpins our approach to radio communications spectrum allocation. There is a rich irony in the fact that this government are putting forward a bill to amend the act that is consistent with the philosophy which underlies our approach to allocating radiofrequency spectrum at the same time as they are using a naively centralising approach—a government-knows-best approach—when it comes to the overall question of broadband.

But that is not the only area where this bill reveals the fundamentally conflicted attitudes within the Labor Party. The second thing that reveals a fundamental degree of confusion is their attitude to wireless. Minister Conroy said in a press release earlier this year:

Wireless spectrum is a valuable public asset.

We heard in a speech in the second reading debate from the minister representing the minister in this House that many of the licences to be allocated under this bill ‘are now used by telecommunications carriers to provide mobile phone and wireless access services to millions of Australians’.

So there is recognition that wireless is an enormously important service of enormous value. We can expect as a nation to raise very significant amounts of money from private sector players when it comes to the re-allocation process. This is a recognition that all of us could agree with but, regrettably, when it comes to the politics of broadband, all recognition of truth and of fact based assessment of reality goes out the window and it all gets down to grubby politics. This is what Stephen Conroy had to say on Lateline on 18 August. Criticising the former shadow minister Tony Smith, he said:

He still won’t answer you how many people he is going to condemn to a wireless network that can’t deliver the services that Australians are increasingly going to need and demand over the coming years.

I am confused. What does Minister Conroy believe? Does he believe that wireless is an enormously valuable public asset, that wireless services are of high value in delivering broadband, mobility and other things or does he believe when he is engaged in grubby politics that wireless is something to which Australians are to be condemned? He cannot have it both ways. The fact that this bill which highlights the central, vital importance of wireless communications is being introduced reveals fundamentally the stark hypocrisy of Stephen Conroy in the approach he took in the last election in putting forward a particular perspective on broadband. It is very, very disappointing that something as fundamentally important as telecommunications and broadband policy in this country is being compromised by the grubby political attitude which this present government is bringing to bear.

Let me quote from somebody else who has been a significant cheerleader of the government’s national broadband program. I am talking about Professor Rod Tucker of the Institute for a Broadband-Enabled Society. He wrote an article which appeared in the Age on 10 August in which he said:

Critics claiming wireless is all we’ll need are living in the past.

Again, this is part of an attack on wireless for political purposes that seems to be wholly inconsistent with the central thesis of this bill with which we fully agree, which is that wireless is of vital importance. Mr Deputy Speaker Georganas, I am sure it would be evident to you from that brief description the fundamental inconsistencies and attitudes delivered by the Labor Party.

I might also quote what Senator Conroy said on 10 August. He said the coalition’s plan to focus on wireless ignores the advice of industry experts and that:

It will consign Australia to the digital dark ages.

This is very confusing stuff. Is wireless a good thing or a bad thing? It is very hard to tell from Minister Conroy. If this is the kind of political approach we are seeing to an area of vital public policy, is it any wonder that we view with enormous scepticism the proposal that this minister ought to have the power to make a re-allocation determination without it being subject to the scrutiny of parliament. We are very concerned about that and that is a matter which requires very careful consideration.

Debate (on motion by Ms Roxon) adjourned.